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EXHIBIT 99.B.1
EX-99.B.1 Agreement and Declaration of Trust
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VARIABLE INVESTORS SERIES TRUST
AGREEMENT AND DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST made at Springfield,
Massachusetts, this 23rd day of December, 1986, by the Trustees hereunder, and
by the holders of shares of beneficial interest to be issued hereunder as
hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of
an investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Name
Section 1. This Trust shall be known as "Variable Investors Series Trust"
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required by the context
or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended from
time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV;
(c) "Shares" mean the transferable units of interest into which the
beneficial interest in the Trust shall be divided from time to time or, if
more than one series or class of Shares is authorized by the Trustees, the
units into which each series or class of Shares shall be divided from time
to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the
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third sentence of Section 2(a) (42) of the 1940 Act, whichever may be
applicable) shall have the meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors a managed
investment primarily in securities, commodities and debt instruments.
ARTICLE III
SHARES
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one or more series
as the Trustees may, without Shareholder approval, authorize. Each series shall
be preferred over all other series in respect of the assets allocated to that
series. The Shares of any series may be issued in two or more classes, as the
Trustees may, without Shareholder approval, authorize. Unless the Trustees have
authorized the issuance of Shares of a series in two or more classes, each Share
of a series shall represent an equal proportionate interest in the assets and
liabilities of the series with each other Share of the same series, none having
priority or preference over another. If the Trustees have authorized the
issuance of Shares of a series in two or more classes, then the classes may have
such variations as to dividend, redemption, and voting rights, net asset values,
expenses borne by the classes, and other matters as the Trustees have
authorized. The number of Shares authorized shall be unlimited, and the Shares
so authorized may be represented in part by fractional shares. The Trustees may
from time to time divide or combine the Shares of any series or any class of a
series into a greater or lesser number without thereby changing the
proportionate beneficial interests represented by such Shares in the series.
Ownership of Shares
Section 2. The ownership of shares shall be recorded on the books of the
Trust or its transfer or similar agent. No certificates certifying the ownership
of shares shall be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and similar matters.
The record books of the Trust as kept by the Trust or any transfer or similar
agent of the Trust, as the case may be, shall be conclusive as to who are the
Shareholders of each series and as to the number of Shares of each series and
class held from time to time by each shareholder.
Investments in the Trust; Assets of the Series
Section 3. The Trustees shall accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they from time to time authorize.
All consideration received by the Trust for the issue or sale of shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
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whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so handled upon the books
of account of the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having become
a Shareholder shall be held to have expressly assented and agreed to the terms
hereof and to have become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
ARTICLE IV
THE TRUSTEES
Election
Section 1. The number of Trustees shall be fixed by the Trustees, except
that, subsequent to any sale of Shares pursuant to a public offering, there
shall be not fewer than three Trustees. Any vacancies occurring in the board of
Trustees may be filled by the Trustees if, immediately after filling any such
vacancy, at least two-thirds of the Trustees then holding office shall have been
elected to such office by the Shareholders. In the event that at any time fewer
than a majority of the Trustees then holding office were elected to such office
by the Shareholders, the Trustees shall call a meeting of Shareholders for the
purpose of electing Trustees. Each Trustee elected by the Shareholders or by the
Trustees shall serve until the next meeting of Shareholders and until the
election and qualification of his or her successor, or until he or she sooner
dies, resigns or is removed. At any meeting called for such purpose, a Trustee
may be removed with or without cause, by vote of a majority of the outstanding
Shares. The initial Trustees, each of whom shall serve until the first meeting
of Shareholders at which Trustees are elected and until his or her successor is
elected and qualified, or until he or she sooner dies, resigns or is removed,
shall be Xxxxxx X. Xxxxxxx and such other persons as the Trustee or Trustees
then in office shall, prior to any sales of Shares pursuant to a public
offering, appoint. By note of a majority of the Trustees then in office, the
Trustees may remove a Trustee with or without cause.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
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Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the power and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent or a Shareholder services agent,
or both, provide for the distribution of Shares by the Trust, through one or
more principal underwriters or otherwise, set record dates for the determination
of Shareholders with resect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depository or a nominee or nominees or otherwise;
(f) To allocate assets, liabilities and expenses of the Trust to a
particular series or class of Shares or to apportion the same among two or
more series or classes of Shares, provided that any liabilities or
expenses incurred by a particular series of Shares shall be payable solely
out of the assets of that series;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security of
which is or was held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer, and
to pay calls or subscriptions with respect to any security held in the
Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall
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deem proper, and to agree to pay, and to pay, such portion of the expenses
and compensation of such committee, depositary or trustee as the Trustees
shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust on any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(k) to borrow funds;
(l) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust property or any part thereof to secure any of or all of such
obligations;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such
person as Shareholder, Trustee, officer, employee, agent, investment
adviser or manager, principal underwriter, or independent contractors,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify
such person against such liability; and
(n) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including
the purchasing of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as otherwise
provided herein or from time to time in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
the Trustees (a quorum being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office.
Payment of Expenses by Trust
Section 4. The Trustees are authorized to pay or to cause to be paid out
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur; provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or arising
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in connection with a particular series of Shares, as determined by the Trustees,
shall be payable solely out of the assets of that series.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of Shares and of the
Trust shall at all times be considered as vested in the Trustees.
Advisory, Management and Distribution
Section 6. Subject to a favorable Majority shareholder Vote, the Trustees
may, at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with Monarch Investment Management
Corporation, a Massachusetts corporation, or any other corporation, trust,
association or other organization (the "Adviser"), every such contract to comply
with such requirements and restrictions as may be set forth in the By-Laws; and
any such contract may contain such other terms interpretive of or in addition to
said requirements and restrictions as the Trustees may determine, including,
without limitation, authority to determine from time to time what investments
shall be purchased, held, sold or exchanged and what portion, if any, of the
assets of the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with Monarch Securities, Inc. or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter, or distributor or agent of or for any
corporation, trust, association, or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, shareholder services or other agency contract may have been
or may hereafter be made, or that any organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that
(ii) any corporation, trust, association or other organization with
which an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, shareholder services or other agency
contract may have been or may hereafter be made also has an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, shareholder services or other agency contract with one or
more other corporations, trusts, associations, or other organizations, or
has other business or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Voting Powers
Section 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any Adviser as provided in Article IV, Section 6, (iii) with respect
to any termination of this Trust to the extent and as provided in Article IX,
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Section 4, (iv) with respect to any amendment of this Declaration of Trust to
the extent and as provided in Article IX, Section 7, (v) to the same extent as
the stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
and (vi) with respect to such additional matters relating to the Trust as may be
required by law, this Declaration of Trust, the By-Laws or any registration of
the Trust with the Securities and Exchange Commission (or any successor agency)
or any state, or as the Trustees may consider necessary or desirable. Each whole
Share shall be entitled to one vote as to any matter on which it is entitled to
vote and each fractional Share shall be entitled to a proportionate fractional
vote. Notwithstanding any other provision of this Declaration of Trust, on any
matter submitted to a vote of Shareholders, all Shares of the Trust then
entitled to vote shall be voted in the aggregate and not by individual series;
except (1) when required by the 1940 Act, Shares shall be voted by individual
series; and (2) when the Trustees have determined that the matter affects only
the interests of one or more series or classes of Shares, then only Shareholders
of such series or classes of Shares, as the case may be, shall be entitled to
vote thereon. Shares may be voted in person or by proxy. A proxy with respect to
Shares held in the name of two or more persons shall be valid if executed by any
one of them unless at or prior to exercise of the proxy the Trust receives a
specific written notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration of Trust or by By-Laws to be taken by Shareholders.
Voting Power and Meetings
Section 2. Meetings of Shareholders of the Trust or of any series or class
of Shares may be called by the Trustees or such other person or persons as may
be specified in the By-Laws and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class of Shares as herein provided or upon any
other matter deemed by the Trustees to be necessary or desirable. Meetings of
Shareholders of the Trust or of any series or class of Shares shall be called by
the Trustees or such other person or persons as may be specified in the By-Laws
upon written application by shareholders holding at least 10% of the outstanding
Shares of the Trust, if Shareholders of all series are required hereunder to
vote in the aggregate and not by individual series or class of Shares at such
meeting, or of any series or class of Shares, as the case may be, if
Shareholders of such series or class of Shares are entitled hereunder to vote by
individual series of class of Shares at such meeting, requesting that a meeting
be called for a purpose requiring action by the Shareholders as provided herein
or in the By-Laws. The Shareholders shall be entitled to at least seven days
written notice of any meeting of the Shareholders.
Quorum and Required Vote
Section 3. Thirty per cent (30%) of the Shares entitled to vote shall be a
quorum for the transaction of business at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust permits or requires
that holders of any series or class of Shares shall vote as a series or class,
as the case may be, then thirty percent (30%) of the aggregate number of Shares
of that series or that class entitled to vote shall be necessary to constitute a
quorum for the transaction of business by that series or class. Any lesser
number, however, shall be sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration of Trust or by By-Laws, a
majority of the Shares voted shall decide any questions and a plurality shall
elect a Trustee, provided that where any provision of law or of this Declaration
of Trust permits or requires that the holders of any series or class of Shares
shall vote as a series or class, as the case may be, then a majority of the
Shares of that series or that class voted on the matter shall decide that matter
insofar as that series or subseries is concerned.
Action by Written Consent
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Section 4. Any action taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Additional Provisions
Section 5. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES,
AND DETERMINATION OF NET ASSET VALUE
Distributions
Section 1. The Trustees may, but need not, each year distribute to the
Shareholders of each series or class of Shares such income and gains, accrued or
realized, as the Trustees may determine, after providing for actual and accrued
expenses and liabilities (including such reserves as the Trustees may establish)
determined in accordance with good accounting practices. The Trustees shall have
full discretion to determine which items shall be treated as income and which
items as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series or class of Shares, if any be
made, may be made in one or more payments, which shall be in Shares, in cash or
otherwise and on a date or dates and as of a record date or dates determined by
the Trustees. At any time and from time to time in their discretion, the
Trustees may distribute to the Shareholders of any one or more series or classes
of Shares as of a record date or dates determined by the Trustees, in Shares, in
cash or otherwise, all or part of any gains realized on the sale or disposition
of property of the series or classes of shares or otherwise, or all or part of
any other principal of the Trust attributable to the series or classes of
Shares. Each distribution pursuant to this Section 1 shall be made ratably to
each Shareholder of a series or class of Shares in such proportion as the net
asset value of the Shares held by such Shareholder bears to the total net assets
of the series or class of Shares on the applicable record date thereof, provided
that no distribution need be made on Shares purchased pursuant to orders
received, or for which payment is made, after such time or times as the Trustees
may determine. Any such distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with Section 7 of Article VI of
this Declaration of Trust.
Redemptions and Repurchases
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust or at a principal office of
a transfer agent appointed by the Trust, redeem his Shares for the net asset
value thereof determined and computed in accordance with the provisions of this
Section 2 and the provisions of Section 7 of Article VI of this Declaration of
Trust.
Upon receipt by the Trust or its transfer agent of such written request
for redemption of Shares, such Shares shall be redeemed at the net asset value
per share of the appropriate series or class of Shares, if applicable, next
determined after such Shares are tendered in proper order for transfer to the
Trust or determined as of such other time fixed by the Trustees as may be
permitted or required by the 1940 Act, provided that no such tender shall be
required in the case of Shares for which a certificate or certificates have not
been issued, and in such case such Shares shall be redeemed at the net asset
value per share of the appropriate series or class of shares, if applicable,
next determined after such demand has been received or determined at such other
time fixed by the Trustees as may be permitted or required by the 1940 Act.
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The obligation of the Trust to redeem its shares as set forth above in
this Section 2 shall be subject to the conditions that during any time of
emergency, as hereinafter defined, such obligation may be suspended by the Trust
by or under authority of the Trustees for such period or periods during such
time of emergency as shall be determined by or under authority of the Trustees.
If there is such a suspension, any Shareholder may withdraw any demand for
redemption and any tender of Shares which has been received by the Trust during
any such period and any tender of Shares, the applicable net asset value of
which would but for such suspension be calculated as of a time during such
period. Upon such withdrawal, the Trust shall return to the Shareholder the
certificates therefore, if any. For the purposes of any such suspension, "time
of emergency" shall mean, either with respect to all Shares or any series or
class of Shares, any period during which:
a. the New York Stock Exchange is closed other than for
customary weekend and holiday closings; or
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations of the
Securities and Exchange Commission, either that trading on the New York
Stock Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not
reasonably practicable or (ii) it is not reasonably practicable for the
Trust fairly to determine the current value of its net assets; or
c. the suspension or postponement of such obligations is permitted
by order of the Securities and Exchange Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
Payment in Kind
Section 3. Subject to any generally applicable limitation imposed by the
Trustees, any payment on redemption of shares may, if authorized by the
Trustees, be made wholly or partly in kind, instead of in cash. Such payment in
kind shall be made by distributing securities or other property constituting, in
the opinion of the Trustees, a fair representation of the various types of
securities and other property then held by the series of Shares being redeemed
(but not necessarily involving a portion of each of the series' holdings) and
taken at their value used in determining the net asset value of the Shares in
respect of which payment is made.
Redemptions at the Option of the Trust
Section 4. The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof as determined in
accordance with Section 7 of Article VI of this Declaration of Trust; (i) if at
such time such Shareholder owns fewer Shares than, or Shares having an aggregate
net asset value of less than, an amount determined from time to time by the
Trustees; or (ii) to the extent that such Shareholder owns Shares of a
particular series or class of Shares equal to or in excess of a percentage of
the outstanding Shares of that series or class determined from time to time by
the Trustees; or (iii) to the extent that such Shareholder owns Shares of the
Trust representing a percentage equal to or in excess of such percentage of the
aggregate number of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
Dividends, Distributions, Redemptions and Repurchases
Section 5. No dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any series) with respect
to, nor any redemption or repurchase of, the Shares of any series shall be
effected by the Trust other than form the assets of such series.
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Additional Provisions Relating to Redemptions and Repurchases
Section 6. The completion of redemption of Shares shall constitute a full
discharge of the Trust and the Trustees with respect to such shares, and the
Trustees may require that any certificate or certificates issued by the Trust to
evidence the ownership of such Shares shall be surrendered to the Trustees for
cancellation or notation.
Determination of Net Asset Value
Section 7. The term "net asset value" of the Shares of each series or
class of Shares shall mean: (i) the value of all the assets of the applicable
series or class of Shares; (ii) less total liabilities properly allocated to
such series or class of Shares; (iii) divided by the number of Shares of such
series or class of Shares outstanding in each case at the time of each
determination. The "number of Shares of such series or class of Shares
outstanding" for the purposes of such computation shall be exclusive of any
Shares of such series or class of Shares to be redeemed and not then redeemed as
to which the redemption price has been determined, but shall include Shares of
such series or class of Shares presented for repurchase and not then repurchased
and Shares of such series or class of Shares to be redeemed and not then
redeemed as to which the redemption price has not been determined and Shares of
such series or class of Shares the sale of which has been confirmed. Any
fractions involved in the computation of net asset value per share shall be
adjusted to the nearer cent unless the Trustees shall determine to adjust such
fractions to a fraction of a cent.
The Trustees, or any officer or officers or agent of this Trust designated
for the purpose of the Trustees, shall determine the net asset value of the
Shares of each series and class of Shares, and the Trustees shall fix the times
as of which the net asset value of the Shares of each series and class of Shares
shall be determined and shall fix the periods during which any such net asset
value shall be effective as to sales, redemptions and repurchases of, and other
transactions in, the Shares of such series or class of Shares, except as such
times and periods for any such transaction may be fixed by other provisions of
this Declaration of Trust or by the By-Laws.
In valuing the portfolio investments of any series for determination of
net asset value per share of such series, securities for which market quotations
are readily available shall be valued at prices which, in the opinion of the
Trustees, or any officer or officers or agent of the Trust designated for the
purpose by the Trustees most nearly represent the market value of such
securities, which may, but need not, be the most recent bid price obtained from
one or more of the market makers for such securities; other securities and
assets shall be valued at fair value as determined by or pursuant to the
direction of the Trustees. Notwithstanding the foregoing short-term debt
obligations, commercial paper, and repurchase agreements may be, but need not
be, valued on the basis of quoted yields for securities of comparable maturity,
quality and type, or on the basis of amortized cost. In determination of net
asset value of any series or class of Shares, dividends receivable and accounts
receivable for investments sold and for Shares sold shall be stated at the
amounts to be received therefor; and income receivable accrued daily on bonds
and notes owned shall be stated at the amount to be received. Any other assets
shall be stated at fair value as determined by the Trustees or such officer,
officers or agent pursuant to the Trustees' authority, except that no value
shall be assigned to good will, furniture, lists, reports, statistics or other
noncurrent assets other than real estate. Liabilities of any series or class of
Shares for accounts payable for investments purchased and for Shares tendered
for redemption and not then redeemed as to which the redemption price has been
determined shall be stated at the amounts payable therefor. In determining net
asset value of any series or class of Shares, the person or persons making such
determination on behalf of the Trust may include in liabilities such reserves,
estimated accrued expenses and contingencies as such person or persons may in
its, his or their best judgment deem fair and reasonable under the
circumstances. Any income dividends and gains distributions payable by the Trust
shall be deducted as of such time or times on the record date therefor as the
Trustees shall determine.
The manner of determining the net assets of any series of class of Shares
or of determining the net asset value of the Shares of any series or class of
Shares may from time to time be altered as necessary or
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desirable in the judgment of the Trustees to conform to any other method
prescribed or permitted by any applicable law or regulation.
Determinations under this Section 7 made in good faith and in accordance
with the provisions of the 1940 Act shall be binding on all parties concerned.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
Compensation
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, adviser or
principal underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, but nothing herein contained shall protect
any Trustee against any liability to which he or she would otherwise be subject
by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Trustees, Officers, etc.
Section 1. The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the merits
in any such action, suit or other proceeding not to have acted in good faith in
the reasonable belief that such Covered person's action was in the best
interests of the Trust and except that no Covered Person shall be indemnified
against any liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from time to
time by the Trust in advance of the final disposition of any such action, suit
or proceeding upon receipt
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of an undertaking by or on behalf of such Covered Person to repay amounts so
paid to the Trust if it is ultimately determined that indemnification of such
expenses is not authorized under this Article; provided that (a) such covered
Personal shall provide security for his undertaking, (b) the Trust shall be
insured against losses arising by reason of such Covered Person's failure to
fulfill his undertaking, or (c) a majority of the Trustees who are disinterested
persons and who are not Interested Persons (provided that a majority of such
Trustees then in office act on the matter), or independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(but not a full trial-type inquiry), that there is reason to believe such
Covered Person ultimately will be entitled to indemnification.
Compromise Payment
Section 2. As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication in a decision
on the merits by a court, or by any other body before which the proceeding was
brought, that such Covered Person either (a) did not act in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust or (b) is liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office, indemnification shall
be provided if (a) approved as in the best interest of the Trust, after notice
that it involves such indemnification, by a least a majority of the Trustees who
are disinterested persons and are not Interested Persons (provided that a
majority of such Trustees then in office act on the matter); upon a
determination, based upon a review if readily available facts (but not a full
trial-type inquiry) that such Covered Person acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust and is not liable to the Trust of its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office, or (b) there has been
obtained an opinion in writing of independent legal counsel, based upon a review
of readily available facts (but not a full-trial type inquiry) to the effect
that such Covered Person appears to have acted in good faith in the reasonable
belief that such Covered Person's action was in the best interests of the Trust
and that such indemnification would not protect such Covered Person against any
liability to the Trust to which such Covered Person would otherwise be subject
by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. Any approval
pursuant to this Section shall not prevent the recovery from any Covered Person
of any amount paid to such Covered Person in accordance with this Section as
indemnification if such Covered Person is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable belief
that such Covered Person's action was in the best interests of the Trust or to
have been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which any such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall include
such person's heirs, executors and administrators, and a "disinterested person"
is a person against whom none of the actions, suits or other proceedings in
question or another action, suit, or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this article shall
affect any rights to indemnification to which personnel of the Trust, other than
Trustees and officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of such person.
Shareholders
Section 4. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expense arising from
14
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
Trustees, Shareholders, etc. Not Personally Liable: Notice
Section 1. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series of Shares shall look only to the
assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or officers or officer or Shareholders or Shareholder
individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be
liability for his or her own wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee, and for nothing else, and shall not be liable for errors or judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
Section 3. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares of each series entitled
to vote or by the Trustees by written notice to the Shareholders Any series of
Shares may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated as may be determined by the
Trustees, the Trust shall in accordance with such procedures as the Trustees
consider
15
appropriate reduce the remaining assets to distributable form in cash or shares
or other securities, or any combination thereof, and distribute the proceeds to
each Shareholder of the series involved, ratably according to the aggregate net
asset value of Shares of such series or class of Shares held by such Shareholder
on the date of termination.
Filing of Copies, References, Headings
Section 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of The Commonwealth of Massachusetts and
with the Clerk of the City of Springfield, as well as any other governmental
office where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder; and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein"'
"hereof"' and "hereunder"' shall be deemed to refer to this instrument as
amended or affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts, each of which shall be
deemed an original.
Applicable Law
Section 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Amendments
Section 7. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
so to do by a vote of Shareholders holding a majority of the Shares of each
series entitled to vote, except that an amendment which shall affect the holders
of one or more series of Shares but not the holders of all outstanding series
shall be authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each series affected and no vote of Shareholders of a series
not affected shall be required. Any amendment which shall affect the holders of
Shares of any class of a series but not the holders of all Shares of such series
shall be authorized by vote of the Shareholders holding a majority of the Shares
of such class entitled to vote, and no vote of Shareholders of the classes not
affected shall be required. Amendments having the purpose of changing the name
of the Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
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IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal in
the City of Springfield, Massachusetts, for himself and his assigns, as of the
day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X Xxxxxxx
THE COMMONWEALTH OF MASSACHUSETTS
Hampden, ss. December 23, 1986
Then personally appeared the above-named Xxxxxx X. Xxxxxxx, and
acknowledged the foregoing instrument to be his free act and deed, before me.
/s/ Xxxxxxxxx X. Xxxxxx
--------------------------------
Notary Public
My commission expires:
(Notary's Seal)
