AGREEMENT AND DECLARATION OF TRUST
CONSECO FUND GROUP
TABLE OF CONTENTS
Page
RECITAL
ARTICLE I
THE TRUST
SECTION 1.1 Name . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Location . . . . . . . . . . . . . . . . . 2
SECTION 1.3 Nature of Trust . . . . . . . . . . . . . 2
SECTION 1.4 Definitions . . . . . . . . . . . . . . . 2
ARTICLE II
POWERS OF TRUSTEES
SECTION 2.1 General . . . . . . . . . . . . . . . . . 3
SECTION 2.2 Investments . . . . . . . . . . . . . . . 4
SECTION 2.3 Legal Title . . . . . . . . . . . . . . . 4
SECTION 2.4 Disposition of Assets . . . . . . . . . . 5
SECTION 2.5 Taxes . . . . . . . . . . . . . . . . . . 5
SECTION 2.6 Rights as Holder of Securities . . . . . . 5
SECTION 2.7 Delegation; Committees . . . . . . . . . . 6
SECTION 2.8 Collection . . . . . . . . . . . . . . . . 6
SECTION 2.9 Expenses . . . . . . . . . . . . . . . . . 6
SECTION 2.10 Borrowing . . . . . . . . . . . . . . . . 7
SECTION 2.11 Deposits . . . . . . . . . . . . . . . . . 7
SECTION 2.12 Allocation . . . . . . . . . . . . . . . . 7
SECTION 2.13 Valuation . . . . . . . . . . . . . . . . 7
SECTION 2.14 Fiscal Year . . . . . . . . . . . . . . . 7
SECTION 2.15 Concerning the Trust and Certain
Affiliates . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.16 Power to Contract . . . . . . . . . . . . 9
SECTION 2.17 Insurance . . . . . . . . . . . . . . . . 9
SECTION 2.18 Pension and Other Plans . . . . . . . . .10
SECTION 2.19 Seal . . . . . . . . . . . . . . . . . . .10
SECTION 2.20 Charitable Contributions . . . . . . . . .10
SECTION 2.21 Indemnification . . . . . . . . . . . . .10
SECTION 2.22 Remedies . . . . . . . . . . . . . . . . .10
SECTION 2.23 Separate Accounting . . . . . . . . . . .10
SECTION 2.24 Further Powers . . . . . . . . . . . . . .11
ARTICLE III
ADVISER AND DISTRIBUTOR
SECTION 3.1 Appointment . . . . . . . . . . . . . . .11
SECTION 3.2 Provisions of Agreement . . . . . . . . .11
ARTICLE IV
INVESTMENTS
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SECTION 4.1 Statement of Investment Objectives
and Policies . . . . . . . . . . . . . . . . . . . 11
SECTION 4.2 Restrictions . . . . . . . . . . . . . . .11
SECTION 4.3 Percentage Restrictions . . . . . . . . .12
SECTION 4.4 Amendment of Investment Objectives
and Policies and of Investment
Limitations . . . . . . . . . . . . . . .12
ARTICLE V
LIMITATIONS OF LIABILITY
SECTION 5.1 Liability to Third Persons . . . . . . . .12
SECTION 5.2 Liability to Trust or to Shareholders . .12
SECTION 5.3 Indemnification . . . . . . . . . . . . .12
SECTION 5.4 Surety Bonds . . . . . . . . . . . . . . .15
SECTION 5.5 Apparent Authority . . . . . . . . . . . .15
SECTION 5.6 Recitals . . . . . . . . . . . . . . . . .15
SECTION 5.7 Reliance on Experts, etc. . . . . . . . .15
SECTION 5.8 Liability Insurance . . . . . . . . . . .15
ARTICLE VI
CHARACTERISTICS OF SHARES
SECTION 6.1 General . . . . . . . . . . . . . . . . .15
SECTION 6.2 Division of Beneficial Interest . . . . .16
SECTION 6.3 Evidence of Share Ownership . . . . . . .17
SECTION 6.4 Death of Shareholders . . . . . . . . . .18
SECTION 6.5 Repurchase of Shares . . . . . . . . . . .18
SECTION 6.6 Trustees as Shareholders . . . . . . . . .18
SECTION 6.7 Redemption and Stop Transfers for Tax
Purposes; Redemption to Maintain
Constant Net Asset Value . . . . . . . . .18
SECTION 6.8 Information from Shareholders . . . . . .19
SECTION 6.9 Redemptions . . . . . . . . . . . . . . .19
SECTION 6.10 Suspension of Redemption; Postponement
of Payment . . . . . . . . . . . . . . . .19
SECTION 6.11 Power of Trustees to Change Provisions
Relating to Shares . . . . . . . . . . . .20
SECTION 6.12 Establishment and Designation of
Series and Classes . . . . . . . . . . . .21
ARTICLE VII
RECORD AND TRANSFER OF SHARES
SECTION 7.1 Share Register . . . . . . . . . . . . . .24
SECTION 7.2 Transfer Agent . . . . . . . . . . . . . .24
SECTION 7.3 Owner of Record . . . . . . . . . . . . .24
SECTION 7.4 Transfers of Shares . . . . . . . . . . .25
SECTION 7.5 Limitation of Fiduciary Responsibility . .25
SECTION 7.6 Notices . . . . . . . . . . . . . . . . .25
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ARTICLE VIII
SHAREHOLDERS
SECTION 8.1 Meetings of Shareholders . . . . . . . . .25
SECTION 8.2 Quorums . . . . . . . . . . . . . . . . .26
SECTION 8.3 Notice of Meetings . . . . . . . . . . . .26
SECTION 8.4 Record Date for Meetings . . . . . . . . .26
SECTION 8.5 Proxies, etc. . . . . . . . . . . . . . .26
SECTION 8.6 Reports . . . . . . . . . . . . . . . . .27
SECTION 8.7 Inspection of Records . . . . . . . . . .27
SECTION 8.8 Shareholder Action By Written Consent . .27
SECTION 8.9 Voting Rights of Shareholders . . . . . .27
ARTICLE IX
TRUSTEES
SECTION 9.1 Number and qualification . . . . . . . . .27
SECTION 9.2 Term and Election . . . . . . . . . . . .28
SECTION 9.3 Resignation and Removal . . . . . . . . .28
SECTION 9.4 Vacancies . . . . . . . . . . . . . . . .29
SECTION 9.5 Meetings . . . . . . . . . . . . . . . . .29
SECTION 9.6 Officers . . . . . . . . . . . . . . . . .30
SECTION 9.7 By-laws . . . . . . . . . . . . . . . . .30
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ARTICLE X
DISTRIBUTIONS TO SHAREHOLDERS AND
DETERMINATION OF NET ASSET VALUE AND NET INCOME
SECTION 10.1 General . . . . . . . . . . . . . . . . .31
SECTION 10.2 Retained Earnings . . . . . . . . . . . .31
SECTION 10.3 Source of Distributions . . . . . . . . .31
SECTION 10.4 Net Asset Value . . . . . . . . . . . . .31
SECTION 10.5 Power to Modify Valuation Procedures . . .32
ARTICLE XI
CUSTODIAN
SECTION 11.1 Appointment and Duties . . . . . . . . . .32
SECTION 11.2 Central Certificate System . . . . . . . .33
ARTICLE XII
RECORDING OF DECLARATION OF TRUST
SECTION 12.1 Recording . . . . . . . . . . . . . . . .33
ARTICLE XIII
AMENDMENT OR TERMINATION OF TRUST
SECTION 13.1 Amendment or Termination . . . . . . . . .33
SECTION 13.2 Power to Effect Reorganization . . . . . .35
SECTION 13.3 Other Amendments . . . . . . . . . . . . .35
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Governing Law . . . . . . . . . . . . . .35
SECTION 14.2 Counterparts . . . . . . . . . . . . . . .35
SECTION 14.3 Reliance by Third Parties . . . . . . . .35
SECTION 14.4 Provisions in Conflict with Law or Regulations36
SECTION 14.5 Section Headings . . . . . . . . . . . . .36
SECTION 14.6 Construction of 1940 Act . . . . . . . . .36
SECTION 14.7 Action of Prospectus or Proxy Statement .36
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ARTICLE XV
DURATION OF TRUST
SECTION 15.1 Duration . . . . . . . . . . . . . . . . .37
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CONSECO FUND GROUP
AGREEMENT AND DECLARATION OF TRUST
This Agreement and Declaration of Trust is made the 20th
day of September, 1996 by the Trustee(s) hereunder and holders
of shares of beneficial interest issued hereunder and to be
issued hereunder as hereinafter provided.
WITNESSETH that:
W H E R E AS, the Trustee(s) desire to establish an
unincorporated voluntary association commonly known as a
business trust, as described in the provisions of Chapter 182
of the General Laws of Massachusetts, for the principal
p u r p ose of the investment and reinvestment of funds
contributed thereto; and
WHEREAS, the Trustee(s) desire that such trust be a
registered open-end investment company under the Investment
Company Act of 1940; and
WHEREAS, it is proposed that the beneficial interest in
the trust s assets shall be divided into transferable shares
of beneficial interest, which shall be evidenced by the Share
Register maintained by the trust or its agent, as hereinafter
provided;
NOW, THEREFORE, the Trustee(s) hereby declare that they
will hold all property of every type and description which
t h e y are acquiring or may hereafter acquire as such
Trustee(s), together with the proceeds thereof, in trust, to
manage and dispose of the same for the benefit of the holders
of record from time to time of the Shares being issued and to
be issued hereunder and in the manner and subject to the
provisions hereof.
ARTICLE I
THE TRUST
1.1 Name. The name of the trust created by this
Declaration of Trust shall be Conseco Fund Group (hereinafter
called the "Trust") and so far as may be practicable the
Trustees shall conduct the Trust s activities, execute all
documents and sue or be sued under that name, which name (and
the word "Trust" wherever used in this Declaration of Trust,
except where the context otherwise requires) shall refer to
t h e Trustees in their capacity as Trustees, and not
individually or personally and shall not refer to the
officers, agents, employees or Shareholders of the Trust or of
such Trustees. Should the Trustees determine that the use of
such name is not practicable, legal or convenient, they may
use such other designation or they may adopt such other name
for the Trust as they deem proper and the Trust may hold
property and conduct its activities under such designation or
name.
1.2 Location. The principal office of the Trust shall
be located within or without the Commonwealth Massachusetts,
as the Trustees may from time to time determine.
1.3 Nature of Trust. The Trust shall be of the type
commonly termed a business trust. The Trust is not intended
to be, shall not be deemed to be and shall not be treated as,
a general partnership, limited partnership, joint venture,
corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be
solely in that capacity in accordance with the rights
conferred upon them hereunder. The Trust is intended to have
the status of a registered open-end investment company under
the Investment Company Act of 1940 and of a "regulated
investment company" as that term is defined in Section 851 of
the Internal Revenue Code of 1954, and this Declaration of
Trust and all actions of the Trustees hereunder shall be
construed in accordance with such intent.
1.4 Definitions. As used in this Declaration of Trust,
the following terms shall have the following meanings unless
the context hereof otherwise requires:
(a) 1940 Act" shall mean the Investment Company Act
of 1940, as amended from time to time.
(b) "Adviser" and "Distributor" shall mean any
Person or Persons appointed, employed or contracted
with by the Trustee under the applicable provisions
of Section 3.1 hereof.
(c) "Affiliate" shall have the same meaning as the
term Affiliated Person under the 1940 Act.
(d) "Assignment," "Commission," and "Prospectus"
shall have the meanings given them in the 1940 Act.
(e) "Declaration of Trust" shall mean this Agreement
a n d Declaration of Trust as may be amended,
restated, or modified from time to time. References
in this Declaration of Trust to "Declaration,"
"hereof," "herein," "hereby" and "hereunder" shall
be deemed to refer to the Declaration of Trust and
shall not be limited to the particular text,
article, or section in which such words appear.
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(f) "Person" shall mean and include individuals,
corporations, limited partnerships, general
partnerships, joint stock companies or associations,
joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts
or other entities whether or not legal entities and
governments and agencies and political subdivisions
thereof.
(g) "Securities" shall mean any stock, shares,
voting trust certificates, bonds, debentures, notes,
or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise
or, in general, any instruments commonly known as
"securities" or any certificates of interest, shares
or participations in temporary or interim
certificates for, guarantees of, or any right to
subscribe to, purchase or acquire any of the
foregoing.
(h) "Shareholders" shall mean, as of any particular
time, all holders of record of outstanding Shares at
such time.
(i) "Shares" shall mean the equal proportionate
transferable units of interest into which the
beneficial interest in the Trust or in the Trust
property belonging to any series of the Trust or in
any class of Shares of the Trust (as the context may
require) shall be divided from time to time, as
described in Article VI.
(j) Series Company shall mean the form of
registered open-end investment company described in
Section 18(f)(2) of the 1940 Act or in any successor
statutory provision.
1. The term Series refers to series of
Shares established and designated under or
in accordance with the provisions of
Article VI;
2. The term Multi-Class Series refers to
x x xxxx of Shares established and
designated as Multi-Class Series under or
in accordance with the provisions of
Article VI; and
3. The terms Class and Class of Shares
refer to the division of Shares
representing any Multi-Class Series into
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two or more classes in accordance with the
provisions of Article VI.
( k ) Trust Property" shall mean, as of any
p a rticular time, any and all property, real,
personal, or otherwise, tangible or intangible,
which is transferred, conveyed or paid to the Trust
or Trustees and all income, profits and gains
therefrom and which at such time is owned or held
by, or for the account of, the Trust or the
Trustees.
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ARTICLE II
POWERS OF TRUSTEES
2.1 General. The Trustees shall have, without other or
further authorization, full, exclusive and absolute power,
control and authority over the Trust Property and over the
business of the Trust to the same extent as if the Trustees
were the sole and absolute owners of the Trust Property and
business in their own right, and with such powers of
delegation as may be permitted by this Declaration of Trust.
The Trustees may do and perform such acts and things as in
their sole judgment and discretion are necessary and proper
for conducting the business and affairs of the Trust or
promoting the interests of the Trust and the Shareholders.
The enumeration of any specific power or authority herein
shall not be construed as limiting the aforesaid power or
authority or any specific power or authority. The Trustees
shall have the power to enter into commitments to make any
investment, purchase or acquisition, or to exercise any power
authorized by this Declaration of Trust. Such powers of the
Trustees may be exercised without order of or resort to any
court.
2.2 Investments. The Trustees shall have power, subject
in all respects to Article IV hereof,
(a) to conduct, operate and carry on the business
of an investment company; and
(b) for such consideration as they may deem proper,
to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, hold, pledge,
sell, assign, transfer, exchange, distribute or
otherwise deal in or dispose of negotiable or
n o nnegotiable instruments, obligations,
e v i d ences of indebtedness, bankers
acceptances, certificates of deposit or
i n debtedness, commercial paper, securities
subject to repurchase agreements and other
money market securities, including, without
limitation, those issued, guaranteed or
sponsored by the United States Government or
i t s agencies or instrumentalities, or
international instrumentalities, or by any of
the several states of the United States of
A m e rica or their political subdivisions,
agencies or instrumentalities, or any bank or
savings institution, or by any corporation
organized under the laws of the United States
or of any state, territory or possession
thereof, or by corporations organized under
foreign laws; marketable straight debt
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securities; securities (payable in U.S.
dollars) of, or guaranteed by, the government
of Canada or of a Province of Canada; common
s t ock, securities convertible into common
stock, purchase rights, warrants and options;
and nothing herein shall be construed to mean
the Trustees shall not have the foregoing
powers with respect to any Securities in which
the Trust may invest in accordance with Article
IV hereof.
In the exercise of their powers, the Trustees
shall not be limited, except as otherwise
provided hereunder, to investing in Securities
maturing before the possible termination of the
Trust, nor shall the Trustees be limited by any
law now or hereafter in effect limiting the
investments which may be held or retained by
trustees or other fiduciaries, but they shall
have full authority and power to make any and
all investments within the limitations of this
Declaration of Trust, that they, in their
a b solute discretion, shall determine, and
without liability for loss, even though such
investments shall be of a character or in
amount not considered proper for the investment
of trust funds.
2.3 Legal Title. Legal title to all the Trust Property
shall be vested in the Trustees as joint tenants and held by
and transferred to the Trustees, except that the Trustees
shall have power to cause legal title to any Trust Property to
be held by, or in the name of, one or more of the Trustees
with suitable reference to their trustee status, or in the
name of the Trust, or in the name of any other Person as
nominee, on such terms, in such manner and with such powers as
the Trustees may determine, so long as in their judgment the
interest of the Trust is adequately protected.
The right, title and interest of the Trustees in and to
the Trust Property shall vest automatically in all persons who
may hereafter become Trustees upon their due election and
qualification without any further act. Upon the resignation,
removal or death of a Trustee, he (and in the event of his
death, his estate) shall automatically cease to have any
right, title or interest in or to any of the Trust Property,
and the right, title and interest of such Trustee in and to
the Trust Property shall vest automatically in the remaining
Trustees without any further act. Such vesting and cessation
of title shall be effective whether or not conveyancing
documents have been executed and delivered.
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2.4 Disposition of Assets. Subject in all respects to
Article IV hereof, the Trustees shall have power to sell,
lease, exchange or otherwise dispose of or grant options with
respect to any and all Trust Property free and clear of any
and all trusts, at public or private sale, for cash or on
terms, without advertisement, and subject to such res-
trictions, stipulations, agreements and reservations as they
shall deem proper, and to execute and deliver any deed or
other instrument in connection with the foregoing. The
Trustees shall also have the power, subject in all respects to
Article IV hereof, to:
(a) rent, lease or hire from others for terms which
may extend beyond the termination of this
Declaration of Trust any property or rights to
property, real, personal or mixed, tangible or
intangible, and, except for real property, to
own, manage, use and hold such property and
such rights;
(b) give consents and make contracts relating to
Trust Property or its use;
(c) g r ant security interests in or otherwise
encumber Trust Property in connection with
borrowings; and
(d) release any Trust Property.
2.5 Taxes. The Trustees shall have power to pay all
taxes or assessments, of whatever kind or nature, imposed upon
or against the Trust or the Trustees in connection with the
Trust Property or upon or against the Trust Property or income
or any part thereof, to settle and compromise disputed tax
liabilities and, for the foregoing purposes, to make such
returns and do all other such acts and things as may be deemed
by the Trustees to be necessary or desirable.
2.6 Rights as Holder of Securities. The Trustees shall
have the power to exercise all the rights, powers and
privileges appertaining to the ownership of all or any
Securities or other property forming part of the Trust
Property to the same extent that any individual might, and,
without limiting the generality of the foregoing, to vote or
give any consent, request or notice or waive any notice either
in person or by proxy or power of attorney with or without
power of substitution, to one or more Persons, which proxies
and powers of attorney may be for meetings or action generally
or for any particular meetings or action, and may include the
exercise of discretionary powers.
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2.7 Delegation; Committees. The Trustees shall have
power, consistent with their continuing exclusive authority
over the management of the Trust, the conduct of its affairs
and the management and disposition of Trust Property, to
delegate from time to time to such one or more of their number
(who may be designated as constituting a Committee of the
Trustees) or to officers, employees or agents of the Trust the
doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Trustees
or as their attorney or attorneys or otherwise as the Trustees
may from time to time deem expedient.
2.8 Collection. The Trustees shall have power to
collect, sue for, receive and receipt for all sums of money or
other property due to the Trust, to consent to extensions of
the time for payment, or to the renewal of any Securities or
obligations; to engage or intervene in, prosecute, defend,
compound, compromise, abandon or adjust by arbitration or
otherwise any actions, suits, proceedings, disputes, claims,
demands or things relating to the Trust Property; to foreclose
a n y Security or other instrument securing any notes,
debentures, bonds, obligations or contracts, by virtue of
which any sums of money are owed to the Trust; to exercise any
power of sale held by them, and to convey good title
thereunder free of any and all trusts, and in connection with
any such foreclosure or sale, to purchase or otherwise acquire
title to any property; to be parties to reorganization and to
transfer to and deposit with any corporation, committee,
voting trustee or other Person any Securities or obligations
of any corporation, trust, association or other organization,
the Securities of which form a part of the Trust Property, for
the purpose of any reorganization of any such corporation,
trust, association or other organization, or otherwise, to
participate in any arrangement for enforcing or protecting the
interests of the Trustees as the owners or holders of such
Securities or obligations and to pay any assessment levied in
connection with such reorganization or arrangement; to extend
the time (with or without security) for the payment or
delivery of any debts or property and to execute and enter
into releases, agreements and other instruments; and to pay or
satisfy any debts or claims upon any evidence that the
Trustees shall think sufficient.
2.9 Expenses. The Trustees shall have power to incur
and pay any charges or expenses which, in the opinion of the
Trustees, are necessary or incidental to or proper for
carrying out any of the purposes of this Declaration of Trust,
and to reimburse others for the payment therefor, and to pay
appropriate compensation or fees from the funds of the Trust
to themselves as Trustees and to Persons with whom the Trust
has contracted or transacted business. The Trustees shall fix
the compensation of all officers, employees and Trustees. The
8
Trustees may be paid reasonable compensation for their general
services as Trustees and officers hereunder, and the Trustees
may pay themselves or any one or more of themselves such
compensation for special services, including legal services,
as they in good faith may deem reasonable and reimbursement
for expenses reasonably incurred by themselves or any one or
more of themselves on behalf of the Trust. Each Series or
Class must pay the expenses directly attributable to it.
However, to the extent that the Trustees can effect cost
savings by the sharing of expenses they are authorized to do
so. Such general administrative expenses will be allocated on
the basis of the asset size of the respective Series or Class.
2.10 Borrowing. The Trustees shall have power to borrow
money only to the extent, for the purposes and in the manner
authorized by Article IV hereof.
2.11 Deposits. The Trustees shall have power to deposit
any monies or Securities included in the Trust Property with
o n e or more banks, trust companies or other banking
institutions whether or not such deposits will draw interest.
Such deposits are to be subject to withdrawal in such manner
as the Trustees may determine, and the Trustees shall have no
responsibility for any loss which may occur by reason of the
f a i lure of the bank, trust company or other banking
institution with whom the monies or Securities have been
deposited.
2.12 Allocation. The Trustees shall have power to
determine whether monies or other assets received by the Trust
shall be charged or credited to income or capital or allocated
between income and capital, including the power to amortize or
fail to amortize any part or all of any premium or discount,
to treat any part or all the profit resulting from the
maturity or sale of any asset, whether purchased at a premium
or at a discount, as income or capital or apportion the same
between income and capital, to apportion the sale price of any
asset between income and capital and to determine in what
manner any expenses or disbursements are to be borne as
between income and capital, whether or not in the absence of
the power and authority conferred by this Section 2.12, such
assets would be regarded as income or as capital or such
expense or disbursement would be charged to income or to
capital; to treat any dividend or other distribution on any
investment as income or capital or apportion the same between
income and capital; to provide or fail to provide reserves for
depreciation, amortization or obsolescence in respect of any
Trust Property in such amounts and by such methods and for
such purposes as they shall determine, and to allocate to the
share of beneficial interest account less than all of the
consideration received for Shares and to allocate the balance
9
thereof to paid-in capital, all as the Trustees may reasonably
deem proper.
2.13 Valuation. The Trustees shall have power to
determine in good faith, conclusively, the value of any of the
Trust Property and of any services, Securities, assets or
other consideration hereafter to be acquired or disposed of by
the Trust, and to revalue the Trust Property.
2.14 Fiscal Year. The Trustees shall have power to
determine the fiscal year of the Trust and the method or form
in which its accounts shall be kept and, from time to time, to
change the fiscal year or method or form of accounts.
2.15 Concerning the Trust and Certain Affiliates.
(a) The Trust may enter into transactions with any
Affiliate of the Trust or the Adviser or any
Affiliate of any Trustee, director, officer or
employee of the Trust or of the Adviser if (i)
each such transaction has, after disclosure of
such affiliation, been approved or ratified by
the affirmative vote of a majority of the
Trustees, including a majority of the Trustees
who are not Affiliates of any Person (other
t h an the Trust) who is a party to the
transaction with the Trust, (ii) such
transaction is, in the opinion of the Trustees,
on terms fair and reasonable to the Trust and
the Shareholders and at least as favorable to
them as similar arrangements for comparable
t r ansactions (of which the Trustees have
knowledge) with organizations unaffiliated with
the Trust or with the Person who is a party to
the transaction with the Trust, and (iii) such
transaction is in accordance with the 1940 Act
or an exemption granted thereunder.
(b) Except as otherwise provided by this
Declaration of Trust and in the absence of
fraud, a contract, act or other transaction,
between the Trust and any other Person, or in
which the Trust is interested, is valid and no
Trustee, officer, employee or agent of the
Trust has any liability as a result of entering
into any such contract, act or transaction even
though (i) one or more of the Trustees,
officers, employees or agents of the Trust is
d i r ectly or indirectly interested in or
affiliated with, or are trustees, partners,
directors, employees, officers or agents of
such other Person, or (ii) one or more of the
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Trustees, officers, employees or agents of the
Trust, individually or jointly with others, is
a party or are parties to, or directly
i n t erested in, or affiliated with, such
contract, act or transaction, provided that (A)
such interest or affiliation is disclosed to
the Trustees and the Trustees authorized such
contract, act or other transaction by a vote of
a majority of the unaffiliated Trustees, or (B)
such interest or affiliation is disclosed to
the Shareholders, and such contract, act or
transaction is approved by the Shareholders.
(c) Any Trustee or officer, employee or agent of
the Trust may acquire, own, hold and dispose of
Shares for his individual account, and may
exercise all rights of a holder of such Shares
to the same extent and in the same manner as if
he were not such a Trustee or officer, employee
or agent. The Trustees shall use their best
efforts to obtain through the Adviser or other
Persons a continuing and suitable investment
program, consistent with the policies and
objectives of each Series or Class. Any
Trustee or officer, employee or agent of the
Trust may, in his personal capacity, or in a
capacity as trustee, officer, director,
s t o ckholder, partner, member, adviser or
employee of any Person, have business interests
and engage in business activities in addition
to those relating to the Trust, which interests
and activities may be similar to those of the
Trust and include the acquisition, syndication,
holding, management, operation or disposition,
of his own account or for the account of such
Person, and each Trustee, officer, employee and
agent of the Trust shall be free of any
o b l igation to present to the Trust any
investment opportunity which comes to him in
any capacity other than solely as Trustee,
officer, employee or agent of the Trust, even
if such opportunity is of a character which, if
presented to the Trust, could be taken by the
Trust.
Subject to the provisions of Article III
hereof, any Trustee or officer, employee or
agent of the Trust may be interested as
Trustee, officer, director, stockholder,
partner, member, adviser or employee of, or
otherwise have a direct or indirect interest
in, any Person who may be engaged to render
11
advice or services to the Trust, and may
receive compensation from such Person as well
as compensation as Trustee, officer, employee
or agent of the Trust or otherwise hereunder.
None of the activities referred to in this
paragraph shall be deemed to conflict with his
duties and powers as Trustee, officer, employee
or agent of the Trust. To the extent that any
other provision of this Declaration of Trust
conflicts with, or is otherwise contrary to,
t h e provisions of this Section 2.15 the
provisions of this Section shall be deemed
controlling.
2.16 Power to Contract. Subject to the provisions of
Sections 2.7 and 3.1 hereof with respect to delegation of
authority by the Trustees, the Trustees shall have power to
appoint, employ or contract with any Person (including one or
more of themselves) and any corporation, partnership or trust
of which one or more of them may be an Affiliate, subject to
the applicable, requirements of Section 2.15 hereof as the
Trustees may deem necessary or desirable for the transaction
of the business of the Trust, including any Person, who, under
the supervision of the Trustees, may, among other things:
serve as the Trust s investment adviser and consultant in
connection with policy decisions made by the Trustees; furnish
reports to the Trustees and provide research, economic and
statistical data in connection with the Trust s investments;
act as consultants, accountants, technical advisers,
a t torneys, brokers, underwriters, corporate fiduciaries,
e s c row agents, depositories, custodians or agents for
collection, insurers or insurance agents, transfer agents or
registrars for Shares or in any other capacity deemed by the
Trustees necessary or desirable; investigate, select, and, on
behalf of the Trust, conduct relations with Persons acting in
such capacities and pay appropriate fees to, and enter into
appropriate contracts with, or employ, or retain services
performed or to be performed by, any of them in connection
with the investments acquired, sold, or otherwise disposed of,
or committed, negotiated, or contemplated to be acquired, sold
or otherwise disposed of; substitute any other Person for any
such Person; act as attorney-in-fact or agent in the purchase
or sale or other disposition of investments, and in the
handling, prosecuting or settling of any claims of the Trust,
including, the foreclosure or other enforcement of any lien or
security securing investments; and assist in the performance
of such ministerial functions necessary in the management of
the Trust as may be agreed upon with the Trustees or officers
of the Trust.
2.17 Insurance. The Trustees shall have the power to
purchase and pay for, entirely out of Trust Property,
12
i n surance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, including
t h e Adviser 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
independent contractor, including any action taken or omitted
that may be determined to constitute negligence. However,
such policies shall not pay or reimburse any director,
officer, investment adviser or principal underwriter for any
liability arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties. Such
policies are to set forth a reasonable and fair means for
determining whether payment or reimbursement shall be made.
2.18 Pension and Other Plans. The Trustees shall have
the power to pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
o u t pension, profit-sharing, savings, thrift and other
r e t i r ement, incentive and benefit plans, trust, and
provisions, including, without limitation, 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.
2.19 Seal. The Trustees shall have the power to adopt and
use a seal for the Trust, but, unless otherwise required by
the Trustees, it shall not be necessary for the seal to be
placed on, and its absence shall not impair the validity of,
any document, instrument or other paper executed and delivered
by or on behalf of the Trust.
2.20 Charitable Contributions. The Trustees shall have
the power to make donations, irrespective of benefit to the
Trust, for the public welfare or for community fund, hospital,
charitable, religious, educational, scientific, literary,
civic or similar purpose and, in time of war or other national
emergency, in aid thereof.
2.21 Indemnification. In addition to the mandatory
indemnification provided for in Section 5.3 hereof, the
Trustees shall have power, to the extent permitted by law, to
i n d e m nify or enter into agreements with respect to
indemnification with any Person with whom the Trust has
d e alings, including, without limitation, any investment
adviser, including the Adviser, or any principal underwriter,
including the Distributor, or independent contractor, to such
extent as the Trustees shall determine.
13
2.22 Remedies. Notwithstanding any provision in this
Declaration of Trust, when the Trustees deem that there is a
significant risk that an obligor to the Trust may default or
is in default under the terms of any obligation to the Trust,
the Trustees shall have power to pursue any remedies permitted
by law which, in their sole judgment, are in the interests of
the Trust, and the Trustees shall have the power to enter into
a n y investment, commitment or obligation of the Trust
resulting from the pursuit of such remedies as are necessary
or desirable to dispose of property acquired in the pursuit of
such remedies.
2.23 Separate Accounting. The Trustees shall establish
the books and records for each Series and maintain such
records separately as if each Series were a separate legal
entity.
2.24 Further Powers. The Trustees shall have power to do
all such other matters and things and execute all such
instruments as they deem necessary, proper or desirable in
order to carry out, promote or advance the interests of the
T r ust although such matters or things are not herein
specifically mentioned. Any determination as to what is in
the best interests of the Trust made by the Trustees in good
faith shall be conclusive. In construing the provisions of
this Declaration of Trust, the presumption shall be in favor
of a grant of power to the Trustees. The Trustees will not be
required to obtain any court order to deal with the Trust
Property.
ARTICLE III
ADVISER AND DISTRIBUTOR
3.1 Appointment. The Trustees are responsible for the
general investment policy of the Trust, the distribution of
its Shares and for the general supervision of the business of
the Trust conducted by officers, agents, employees, investment
advisers, distributors or independent contractors of the
Trust. However, the Trustees are not required personally to
conduct all of the business of the Trust and, consistent with
their ultimate responsibility as stated herein, the Trustees
may appoint, employ or contract with an investment adviser
(the "Adviser") and/or a distributor and underwriter for the
Trust s Shares (the "Distributor"), and may grant or delegate
such authority to the Adviser and/or Distributor (pursuant to
the terms of Section 2.16 hereof) or to any other Person the
services of whom are obtained by the Adviser or Distributor,
as the Trustees may, in their sole discretion, deem to be
necessary or desirable, without regard to whether such
authority is normally granted or delegated by trustees.
14
3.2 Provisions of Agreement. The Trustees shall not
enter into any agreement with the Adviser or Distributor
pursuant to the provisions of Section 3.1 hereof unless such
agreement is consistent with the provisions of Section 15 of
the 1940 Act.
ARTICLE IV
INVESTMENTS
4.1 Statement of Investment Objectives and Policies.
The Trustees shall be guided in their actions by the
Investment Objectives and Policies as set forth in the most
current effective registration statement for the Trust as
filed with the Securities and Exchange Commission. Because
the Trust is divided into separate Series, the Trustees shall
supervise the investments and the record- keeping for each
Series within the Trust as if it was a separate legal entity.
In addition to any other power granted to the Trustees, the
Trustees may, as they deem appropriate, provide for additional
Series or Classes in a manner consistent with the Investment
Company Act.
4.2 Restrictions. Notwithstanding anything in this
Declaration of Trust which may be deemed to authorize the
contrary, the Trust, with respect to each Series, shall
c o nduct its affairs in accordance with the Investment
Limitations (Restrictions) as set forth in the most current,
effective registration statement for the Trust as filed with
the Securities and Exchange Commission.
4.3 P e r c entage Restrictions. If the percentage
restrictions as set forth in the Investment Limitation
described in Section 4.2 above are adhered to at the time of
each investment, a later increase or decrease in percentage
resulting from a change in the value of a Series assets is
not a violation of such investment restrictions.
4.4 Amendment of Investment Objectives and Policies and
of Investment Limitations. The Investment Objectives and
policies and the Investment Limitations are deemed to be
fundamental policies and may not be changed without the
approval of the holders of a majority of the outstanding
voting Shares of each Series affected which, for purpose
herein, shall mean the lesser of (i) 67% of the Shares repre-
sented at a meeting which more than 50% of the outstanding
S h ares are represented or (ii) more than 50% of the
outstanding Shares. A change in policy affecting only one
Series may be effected only with the approval of a majority of
the outstanding Shares of such Series.
ARTICLE V
LIMITATIONS OF LIABILITY
15
5.1 Liability to Third Persons. No Shareholder shall be
subject to any personal liability whatsoever, in tort,
contract or otherwise, to any other Person or Persons in
connection with the Trust Property or the affairs of the
Trust; and no Trustee, officer, employee or agent of the Trust
shall be subject to any personal liability whatsoever, in
tort, contract or otherwise; to any other Person or Persons in
connection with Trust Property or the affairs of the Trust,
e x c ept for that arising from his bad faith, willful
misconduct, gross negligence or reckless disregard of his
duties or for his Failure to act in good faith in the
reasonable belief that his action was in the best interest of
the Trust; and all such other Persons shall look solely to the
Trust Property for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee or agent, as such, of
the Trust is made a party to any suit or proceedings to
enforce any such liability, he shall not on account thereof be
held to any personal liability.
5.2 Liability to Trust or to Shareholders. No Trustee,
officer, employee or agent of the Trust shall be liable to the
Trust or to any Shareholder, Trustee, officer, employee or
agent of the Trust for any action or failure to act
(including, without limitation, the failure to compel in any
way any former or acting Trustee to redress any breach of
trust) except for his own bad faith, willful misfeasance,
gross negligence or reckless disregard for his duties.
5.3 Indemnification.
(a) T h e Trust shall indemnify and hold each
Shareholder harmless from and against all
claims and liabilities, whether they proceed to
judgment or are settled or otherwise brought to
a conclusion, to which such Shareholder may
become subject by reason of his being or having
been a Shareholder, and shall reimburse such
Shareholder for all legal and other expenses
reasonably incurred by him in connection with
any such claim or liability. The rights
accruing to a Shareholder under this Section
5.3 shall not exclude any other right to which
such Shareholder may be lawfully entitled, nor
shall anything herein contained restrict the
right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even
t h o ugh not specifically provided herein;
provided, however, that the Trust shall have no
liability to reimburse Shareholders for taxes
assessed against them by reason of their
o w nership of Shares, nor for any losses
16
suffered by reason of changes in the market
value of Shares.
(b) (1) As used in this subsection (b) of this
Section 5.3, the following terms shall have the
meanings set forth below:
(i) the term indemnitee shall mean
a n y present or former Trustee,
officer or employee of the Trust, any
present or former Trustee or officer
of another trust or corporation whose
securities are or were owned by the
Trust or of which the Trust is or was
a creditor and who served or serves
in such capacity at the request of
the Trust, any present or former
investment adviser, sub-adviser or
principal underwriter of the Trust
a n d the heirs, executors,
administrators, successors and
assigns of any of the foregoing;
x x xxxxx, whenever conduct by an
i n d emnitee is referred to, the
conduct shall be that of the original
indemnitee rather than that of the
heir, executor, administrator,
successor or assignee;
(ii) the term covered proceeding
shall mean any threatened, pending or
completed action, suit or proceeding,
w h e t h e r civil, criminal,
administrative or investigative, to
which an indemnitee is or was a party
or is threatened to be made a party
by reason of the fact or facts under
which he or it is an indemnitee as
defined above;
(iii) the term disabling conduct
shall mean willful misfeasance, bad
faith, gross negligence or reckless
disregard of the duties involved in
t h e conduct of the office in
question;
(iv) the term covered expenses
shall mean expenses (including
attorney s fees), judgments, fines
a n d amounts paid in settlement
actually and reasonably incurred by
17
an indemnitee in connection with a
covered proceeding; and
( v ) the term adjudication of
liability shall mean, as to any
covered proceeding and as to any
indemnitee, an adverse determination
as to the indemnitee whether by
j u d gment, order, settlement,
conviction or upon a plea of nolo
contendere or its equivalent.
(2) T h e Trust shall not indemnify any
indemnitee for any covered expenses in any
c o vered proceeding if there has been an
adjudication of liability against such
indemnitee expressly based on a finding of
disabling conduct.
(3) Except as set forth in (2) above, the
T r ust shall indemnify any indemnitee for
covered expenses in any covered proceeding,
whether or not there is an adjudication of
l i a b ility as to such indemnitee, if a
determination has been made that the indemnitee
was not liable by reason of disabling conduct
by (i) a final decision of the court or other
body before which the covered proceeding was
brought; or (ii) in the absence of such
decision, a reasonable determination, based on
a review of the facts, by either (A) the vote
of a majority of a quorum of Trustees who are
neither interested persons , as defined in the
1940 Act nor parties to the covered proceeding
or (B) an independent legal counsel in a
written opinion; provided that such Trustees or
counsel, in reaching such determination, may
but need not presume the absence of disabling
conduct on the part of the indemnitee by reason
of the manner in which the covered proceeding
was terminated.
(4) Covered expenses incurred by an indemnitee
in connection with a covered proceeding shall
be advanced by the Trust to an indemnitee prior
t o t he final disposition of a covered
proceeding upon the request of the indemnitee
for such advance and the undertaking by or on
behalf of the indemnitee to repay the advance
unless it is ultimately determined that the
i n demnitee is entitled to indemnification
thereunder, but only if one or more of the
18
following is the case: (i) the indemnitee shall
provide a security for each undertaking; (ii)
the Trust shall be insured against losses
arising out of any lawful advances; or (iii)
there shall have been a determination, based on
a review of the readily available facts (as
opposed to a full trial-type inquiry) that
t h e re is a reason to believe that the
indemnitee ultimately will be found entitled to
indemnification by either independent legal
counsel in a written opinion or by the vote of
a majority of a quorum of trustees who are
neither interested persons as defined in the
1940 Act nor parties to the covered proceeding.
(5) Nothing herein shall be deemed to affect
the right of the Trust and/or any indemnitee to
acquire and pay for any insurance covering any
or all indemnitees to the extent permitted by
t h e 1 940 Act or to affect any other
indemnification rights to which any indemnitee
may be entitled to the extent permitted by the
1940 Act.
5.4 Surety Bonds. No Trustee shall, as such, be
obligated to give any bond or surety or other security for the
performance of his duties.
5.5 Apparent Authority. No purchaser, lender, transfer
agent or other Person dealing with the Trustees or any
officer, employee or agent of the Trust shall be bound to make
any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by such officer,
employee or agent or make inquiry concerning or be liable for
the application of money or property paid, loaned or delivered
to or on the order of the Trustees or of such officer,
employee or agent.
5.6 Recitals. Any written instrument creating an
obligation of the Trust shall be conclusively taken to have
been executed or done by a Trustee or Trustees or an officer,
employee or agent of the Trust only in their or his capacity
as Trustees or Trustee under this Declaration of Trust or in
the capacity of officer, employee or agent of the Trust. Any
written instrument creating an obligation of the Trust shall
refer to this Declaration of Trust and contain a recital to
the effect that the obligations thereunder are not personally
binding upon, nor shall resort be had to the private property
of, any of the Trustees, Shareholders, officers, employees or
agents of the Trust, but the Trust Property or a specific
portion thereof only shall be bound, and may contain any
further recital which they or he may deem appropriate, but the
19
omission of such recital shall not operate to impose personal
liability on any of the Trustees, Shareholders, officers,
employees or agents of the Trust.
5.7 Reliance on Experts, etc. Each Trustee and each
officer of the Trust shall, in the performance of his duties,
be fully and completely justified and protected with regard to
any act or any failure to act resulting from reliance in good
faith upon the books of account or other records of the Trust,
upon an opinion of counsel or upon reports made to the Trust
by any of its officers or employees or by the Adviser,
accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether such counsel or expert may
also be a Trustee.
5.8 Liability Insurance. The Trustees shall, at all
times, maintain insurance for the protection of the Trust
Property, its Shareholders, Trustees, officers, employees and
agents in such amount as the Trustees shall deem adequate to
cover all foreseeable tort liability to the extent available
at reasonable rates.
ARTICLE VI
CHARACTERISTICS OF SHARES
6.1 General. The ownership of the Trust Property of
every description and the right to conduct any business
hereinbefore described are vested exclusively in the Trustees,
and the Shareholders shall have no interest therein other than
the beneficial interest conferred by their Shares, and they
shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor
can they be called upon to share or assume any losses of the
Trust or suffer an assessment of any kind by virtue of their
ownership of Shares, except as provided in Section 10.5
hereof. The Shares shall be personal property giving only the
rights specifically set forth in this Declaration of Trust.
6.2 Division of Beneficial Interest. The beneficial
interest in the Trust shall at all times be divided into an
unlimited number of transferable Shares, having no par value.
The Shares of the Trust shall be issued in one or more Series
or Classes, as the Trustees may, without Shareholder approval,
authorize. The Shares shall have the characteristics set
forth in (a) through and including (f) below. The Trustees
may from time to time divide or combine the Shares of each
Series or Class into a greater or lesser number without
thereby changing the proportionate beneficial interest of that
Series or Class in the assets belonging to that Series or
Class, attributable to that Series or Class, or in any way
affecting the rights of Shares of any other Series or Class.
20
Except as provided in Section 6.12 of this Article VI, with
respect to Shares of Multi-Class Series, no Share shall have
priority of preference over another. Contributions to the
Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000ths of a Share or multiple thereof.
The Board of Trustees may classify unissued Shares into one or
more additional Series or Classes which shall, together with
the issued Shares of each Series or Class, have such
designations as the Trustees may determine and shall, subject
to any applicable rule, regulation or order of the Commission
or other applicable law or regulation, have the
characteristics set forth in (a) through and including (f)
below.
(a) All consideration received by the Trust for the
issue or sale of Shares of each Series or
Class, 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 whatever form the same may be, shall, for
all purposes, irrevocably belong to the Series
or Class with respect to which such assets,
payments, or funds were received by the Trust,
subject only to the rights of creditors, and
shall be so handled upon the books of account
of the Trust. Such assets, income, earnings,
profits and proceeds thereof, any asset derived
from any reinvestment of such proceeds, in
whatever form the same may be, are herein
referred to as assets belonging to such
Series or Class.
(b) Dividends or distributions on Shares of any
Series or Class, whether payable in Shares or
cash, shall be paid only out of earnings,
surplus or other assets belonging to such
Series or Class.
(c) In the event of the liquidation or dissolution
of the Trust, Shareholders of each such Series
or Class shall be entitled to receive, as a
class, out of the assets of the Trust available
for distribution to Shareholders, but other
than general assets not belonging to any
p a r t icular Series or Class, the assets
belonging to such Series or Class; and the
assets so distributable to the Shareholders of
any such Class shall be distributed among such
Shareholders in proportion to the number of
Shares of such Series or Class held by them and
21
recorded on the books of the Trust. In the
event that there are any general assets not
belonging to any particular Series or Class and
available for distribution, such distribution
shall be made to the holders of Shares of all
Series and Classes in proportion to the asset
value of the respective Series or Class.
(d) The assets belonging to any such Series or
Class shall be charged with the liabilities in
respect to such Series or Class and shall be
c h arged with their share of the general
liabilities of the Trust. The determination of
the Trustees shall be conclusive as to the
a m o unt of liabilities, including accrued
expenses and reserves, and as to the allocation
of the same as to a given Series or Class, and
as to whether the same, or general assets of
the Trust, are allocable to one or more Series
or Class. The liabilities so allocated are
herein referred to as liabilities belonging
to such Series or Class.
(e) At all meetings of Shareholders, each
Shareholder of each Share of each Series or
Class shall be entitled to one vote for each
Share, irrespective of the Series or Class,
standing in his name on the books of the Trust,
except that where a vote of the holders of the
Shares of any Series or Class, or of more than
one Series or Class, voting by Series or Class,
is required by the 1940 Act and/or
Massachusetts law as to any proposal, only the
holders of such Series or Class(es), voting by
Series or Class, shall be entitled to vote upon
such proposal and the holders of any other
Series or Class(es) shall not be entitled to
vote thereon. Any fractional Share, if any
such fractional Shares are outstanding, shall
carry proportionately all the rights of a whole
Share, including the right to vote and the
right to receive dividends. There shall be no
cumulative voting rights with respect to any
Shares or Series or Class of the Trust.
(f) When the Trust has more than one Series or
Class: (i) the redemption rights provided to
the holders of the Trust s Shares in Section
6.9 shall be deemed to apply only to the assets
belonging to the Series or Class in question;
a n d (ii) the net asset value per Share
computation as provided for in Section 10.4
22
shall be applied as if each Series or Class
w e r e the Trust as referred to in such
computation, but with its assets limited to the
assets belonging to such Series or Class and
its liabilities limited to the liabilities
belonging to such Series or Class.
6.3 Evidence of Share Ownership. Evidence of Share
ownership shall be reflected in the Share register maintained
by or on behalf of the Trust pursuant to Section 7.1 hereof,
and the Trust shall not be required to issue certificates as
evidence of Share ownership; provided, however, that the
Trustees may, in their discretion, authorize the use of cer-
tificates as a means of evidencing the ownership of Shares by
setting forth in the Trust s By-laws or in a resolution,
provisions for the form of certificates and regulations
governing their execution, issuance and transfer. Subject to
Section 6.7 hereof, such certificates shall be treated as
negotiable and title thereto and to the Shares represented
thereby shall be transferred by delivery thereof to the same
extent in all respects as a stock certificate, and the Shares
represented thereby, of a Massachusetts business corporation.
6.4 Death of Shareholders. The death of a Shareholder
during the continuance of the Trust shall not terminate this
Declaration of Trust nor give such Shareholder s legal
representatives a right to an accounting or to take any action
in the courts or otherwise against other Shareholders or the
Trustees or the Trust Property, but shall simply entitle the
legal representatives of the deceased Shareholder to require
the recordation of such legal representative s ownership of or
rights in the deceased Shareholder s Shares, and, upon the
acceptance thereof, such legal representative shall succeed to
all the rights of the deceased Shareholder under this
Declaration of Trust.
6.5 Repurchase of Shares. The Trustees may, on behalf
of the Trust, purchase or otherwise acquire outstanding Shares
from time to time for such consideration and on such terms as
they may deem proper. Shares so purchased or acquired by the
Trustees for the account of the Trust shall not, so long as
they belong to the Trust, receive distributions (other than,
at the option of the Trustees, distributions in Shares) or be
entitled to any voting rights. Such Shares may, in the
discretion of the Trustees, be canceled and the number of
Shares issued thereby reduced, or such Shares may, in the
discretion of the Trustees, be held in the treasury and may be
disposed of by the Trustees at such time or times, to such
party or parties and for such considerations as the Trustees
may determine.
23
6.6 Trustees as Shareholders. Any Trustee in his
individual capacity may purchase and otherwise acquire or sell
and otherwise dispose of Shares or other Securities issued by
the Trust, and may exercise all the rights of a Shareholder to
the same extent as though he were not a Trustee.
6.7 Redemption and Stop Transfers for Tax Purposes;
Redemption to Maintain Constant Net Asset Value. If the
Trustees shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of Shares or other
Securities of the Trust has or may become concentrated in any
person to an extent which would disqualify the Trust as a
regulated investment company under the Internal Revenue Code,
then the Trustees shall have the power by lot or other means
deemed equitable by them (i) to call for redemption a number,
or principal amount, of Shares or other Securities of the
Trust sufficient, in the opinion of the Trustees, to maintain
or bring the direct or indirect ownership of Shares or other
Securities of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue
Shares or other Securities of the Trust to any Person whose
acquisition of the Shares or other Securities of the Trust in
question would, in the opinion of the Trustees, result in such
disqualification. The redemption shall be effected at a
redemption price determined in accordance with Section 6.9.
The Shares of the Trust shall also be subject to
r e demption pursuant to the procedure for reduction of
outstanding Shares set forth in Section 10.5 hereof in order
to maintain the constant net asset value per Share.
6.8 Information from Shareholders. The holders of
Shares or other securities of the Trust shall, upon demand,
disclose to the Trustees in writing such information with
respect to direct and indirect ownership of Shares or other
Securities of the Trust, as the Trustees reasonably deem
necessary, to comply with the provisions of the Internal
Revenue Code, or to comply with the requirements of any other
taxing authority.
6.9 Redemptions. All outstanding Shares may be redeemed
at the option of the holders thereof, upon and subject to the
terms and conditions provided in this Declaration of Trust.
The Trust shall, upon application of any Shareholder, redeem
or repurchase from such Shareholder outstanding Shares for an
amount per Share determined by the application of a formula
adopted for such purpose by the Trustees (which formula shall
be consistent with the 1940 Act and the rules and regulations
promulgated thereunder); provided that such amount per Share
shall not exceed the cash equivalent of the proportionate
interest of each Share in the assets of the Trust at the time
of the purchase or redemption. The procedures for effecting
24
redemption shall be as adopted by the Trustees and set forth
in the Prospectus from time to time.
6.10 Suspension of Redemption: Postponement of Payment.
The Trustees may suspend the right of redemption or postpone
the date of payment for the whole or any part of any period
(i) during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, (ii) during which
trading on the New York Stock Exchange is restricted, (iii)
during which an emergency exists as a result of which disposal
by the Trust of Securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Trust
to determine fairly the value of its net assets, or (iv)
during any other period when the Securities and Exchange
Commission (or any succeeding governmental authority) may for
the protection of security holders of the Trust by order
permit suspension of the right of redemption or postponement
of the date of payment on redemption; provided that applicable
rules and regulations of the Commission (or any succeeding
governmental authority) shall govern as to whether the
conditions prescribed in (ii), (iii) or (iv) exist. Such
suspensions shall take effect at such time as the Trustees
shall specify but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment
until the Trustees shall declare the suspension at an end,
except that the suspension shall terminate in any event on the
first day on which said stock exchange shall have reopened or
the period specified in (ii), (iii), or (iv) shall have
expired (as to which in the absence of an official ruling by
said Commission or succeeding authority, the determination of
the Trustees shall be conclusive). In the case of a
suspension of the right of redemption, a Shareholder may
either withdraw his request for redemption or receive payment
based on the net asset value existing after the termination of
the suspension.
6.11 Power of Trustees to Change Provisions Relating to
Shares.
(a) Notwithstanding any other provisions of this
Declaration of Trust and without limiting the
power of the Trustees to amend the Declaration
of Trust as provided elsewhere herein, the
Trustees shall have the power to amend this
Declaration of Trust, at any time and from time
to time, in such manner as the Trustees may
determine in their sole discretion, without the
need for Shareholder action, so as to add to,
d e l ete, replace or otherwise modify any
provisions relating to the Shares contained in
this Declaration of Trust for the purpose of
25
r e sponding to or complying with any
regulations, orders, rulings or interpretations
of any governmental agency or any laws, now or
hereafter applicable to the Trust, provided
that before adopting any such amendment without
Shareholder approval the Trustees shall
determine that it is consistent with the fair
and equitable treatment of all Shareholders.
(b) The Trustees may designate or establish Series
or Classes of Shares. The establishment and
designation of any Series or Class of Shares
shall be effective upon the adoption by vote or
written consent of a majority of the then
Trustees of a resolution setting forth such
establishment and designation and the relative
rights and preferences of such Series or Class
a n d such eligibility requirements for
i n v e stment therein as the Trustees may
determine, or as otherwise provided in such
resolution. Without limiting the generality of
the foregoing, the Trustees may, for the above-
stated purposes:
(i) create one or more Series or Classes of
Shares (in addition to any Series or
Class(es) already existing or otherwise)
with such rights and preferences and such
eligibility requirements for investment
therein as the Trustees shall determine
and reclassify any or all outstanding
Shares as shares of particular Series or
C l a sses in accordance with such
eligibility requirements;
(ii) amend any of the provisions set forth in
paragraphs (a) through (i) of Section 6.12
of this Article VI;
(iii) combine one or more Series or Classes
of Shares into a single Series or
Class on such terms and conditions as
the Trustees shall determine;
(iv) c h a nge or eliminate any eligibility
requirements for investment in Shares of
any Series or Class, including without
limitation, the power to provide for the
issuance of Shares of any Series or Class
in connection with any merger or
consolidation of the Trust with another
trust or company or any acquisition by the
26
Trust of part or all of the assets of
another trust or company;
(v) change the designation of any Series or
Class of Shares;
(vi) change the method of allocating dividends
among the various Series and Classes of
Shares;
(vii) a l locate any specific assets or
liabilities of the Trust or any
specific items of income or expense
of the Trust to one or more Series or
Classes of Shares;
(viii) terminate any Series or Class of
Shares by written notice to the
Shareholders of such Series or Class;
and
(ix) specifically allocate assets to any or all
Series or Classes of Shares or create one
or more additional Series or Classes of
Shares which are preferred over all other
Series or Classes of Shares in respect of
assets specifically allocated thereto or
any dividends paid by the Trust with
r e s pect to any net income, however
determined, earned from the investment and
reinvestment of any assets so allocated or
otherwise and provide for any special
voting or other rights with respect to
such Series or Classes.
6.12 Establishment and Designation of Series and Classes.
Shares of each Series shall have the following rights and
preferences relative to Shares of each other Series, and
Shares of each Class of a Multi-Class Series shall have such
rights and preferences relative to other Classes of the same
Series as are set forth below, together with such other rights
and preferences relative to such other Classes as are set
forth in any resolution of the Trustees establishing and
designating such Class of Shares:
(a) Assets Belonging to Series. Subject to the
provisions of paragraph (c) of this Section
6.12:
All consideration received by the Trust
for the issuance or sale of Shares of a
particular Series, together with all assets in
27
w h i ch such consideration is invested or
reinvested, all income, earnings, profits and
proceeds thereof from whatever source derived,
including without limitation, any proceeds
derived from the sale, exchange or liquidation
of such assets, and any funds or payments
derived from any reinvestment of such proceeds
in whatever form the same may be, shall
irrevocably belong to that Series for all
p u rposes, subject only to the rights of
creditors, and shall be so recorded upon the
b o o k s of account of the Trust. Such
consideration, assets, income, earnings,
profits and proceeds thereof, from whatever
source derived, including without limitation,
any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or
payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are
herein referred to as assets belonging to
that Series. In the event that there are any
assets, income, earnings, profits and proceeds
thereof, funds or payments which are not
r e adily identifiable as belonging to any
p a r ticular Series (collectively General
Assets ), the Trustees shall allocate such
General Assets to, between or among any one or
more of the Series established and designated
from time to time in such manner and on such
basis as they, in their sole discretion, deem
fair and equitable, and any General Asset so
allocated to a particular Series shall belong
to that Series. Each such allocation by the
Trustees shall be conclusive and binding upon
t h e Shareholders of all Series for all
purposes.
(b) Liabilities Belonging to Series. Subject to
the provisions of paragraph (c) of this Section
6.12:
The assets belonging to each particular
X x xxxx shall be charged solely with the
liabilities of the Trust in respect to that
Series, expenses, costs, charges and reserves
attributable to that Series, and any general
liabilities of the Trust which are not readily
identifiable as belonging to any particular
Series but which are allocated and charged by
the Trustees to and among any one or more of
the Series established and designated from time
to time in a manner and on such basis as the
28
Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs,
charges and reserves so charged to a Series are
herein referred to as liabilities belonging
t o that Series. Each allocation of
l i abilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive
and binding upon the holders of all Series for
all purposes.
(c) Apportionment of Assets etc. in Case of Multi-
Class Series. In the case of any Multi-Class
Series, to the extent necessary or appropriate
to give effect to the relative rights and
preferences of any Classes of Shares of such
Series, (i) any assets, income, earnings,
profits, proceeds, liabilities, expenses,
c h arges, costs and reserves belonging or
attributable to that Series may be allocated or
attributed to a particular Class of Shares of
that Series or apportioned among two or more
Classes of Shares of that Series; and (ii)
Shares of any Class of such Series may have
priority or preference over Shares of other
C l a sses of such Series with respect to
dividends or distributions upon termination of
the Trust or termination of such Series or
Class or otherwise, provided that no Share
shall have any priority or preference over any
other Shares of the same Class and that all
dividends and distributions to Shareholders of
a particular Class shall be made ratably among
all Shareholders of such Class according to the
number of Shares of such Class held of record
by such Shareholders on the record date for any
dividend or distribution or on the date of
termination, as the case may be.
(d) Dividends, Distributions, Redemptions and
Repurchases. Notwithstanding any other
p r ovisions of this Declaration, including
without limitation, Article X, no dividend or
distribution (including without limitation, any
distribution paid upon termination of the Trust
or of any Series or Class) with respect to, nor
any redemption or repurchase of, the Shares of
any Series or Class shall be effected by the
Trust other than from the assets belonging to
such Series or attributable to such Class, nor
shall any Shareholder of any particular Series
or Class otherwise have any right or claim
against the assets belonging to any other
29
Series or attributable to any other Class
except to the extent that such Shareholder has
s u c h a right or claim hereunder as a
Shareholder of such other Series or Class.
(e) Voting. Notwithstanding any of the other
provisions of this Declaration, including,
w i thout limitation, Article VIII, the
Shareholders of any particular Series or Class
shall not be entitled to vote on any matters as
to which such Series or Class is not affected.
O n a ny matter submitted to a vote of
Shareholders, all Shares of the Trust then
entitled to vote shall be voted by individual
Series, unless otherwise required by the 1940
Act or other applicable law.
(f) Equality. Except to the extent necessary or
appropriate to give effect to the relative
rights and preferences of any Classes of Shares
of a Multi-Class Series, all the Shares of each
particular Series shall represent an equal
proportionate interest in the assets belonging
to that Series (subject to the liabilities
belonging to that Series), and each Share of
any particular Series shall be equal to each
other Share of that Series. All the Shares of
each particular Class of Shares within a Multi-
Class Series shall represent an equal
proportionate interest in the assets belonging
to such Series that are attributable to such
Class (subject to the liabilities attributable
t o such Class), and each Share of any
particular Class within a Multi-Class Series
shall be equal to each other Share of such
Class.
(g) Fractions. Any fractional Share of a Series or
Class shall carry proportionately all the
rights and obligations of a whole share of that
Series or Class, including rights with respect
t o voting, receipt of dividends and
distributions, redemption of Shares and
termination of the Trust.
(h) Exchange Privilege. The Trustees shall have
the authority to provide that the holders of
Shares of any Series or Class shall have the
right to exchange said Shares for Shares of one
or more other Series or Classes of Shares in
a c cordance with such requirements and
30
p r ocedures as may be established by the
Trustees.
(i) Combination of Series. The Trustees shall have
the authority, without the approval of the
Shareholders of any Series unless otherwise
required by applicable law, to combine the
assets and liabilities belonging to any two or
m o r e Series into assets and liabilities
belonging to a single Series or Class.
(j) Certain Redemptions of Shares. The Trustees
shall have the authority, without the approval
of the Shareholders of any Series unless
o t herwise required by applicable law, to
establish and modify the minimum investment
level for each Series or Class of Shares and to
require Shareholders to maintain at least the
minimum investment level. If any Shareholder
f a i ls to maintain at least the minimum
investment level, his or her Shares may be
subject to mandatory involuntary redemption in
a c c ordance with the instructions of the
Trustees.
ARTICLE VII
RECORD AND TRANSFER OF SHARES
7.1 Share Register. One or more registers shall be kept
by or on behalf of the Trustees, under the direction of the
Trustees, which shall contain the names and addresses of the
S h a r eholders and the number of Shares held by them
respectively and a record of all transfers thereof. A
separate register shall be maintained for each Series and
Class. Each such register shall be conclusive as to who are
the holders of the Shares. Only Shareholders whose ownership
of Shares is recorded on such register shall be entitled to
vote or to receive distributions or otherwise to exercise or
enjoy the rights of Shareholders. No Shareholder shall be
entitled to receive any distribution, nor to have notice given
to him as herein provided, until he has given his address to a
transfer agent or such other officer or agent of the Trust as
shall keep the register for entry thereon.
7.2 Transfer Agent. The Trustees shall have power to
employ, within or without the Commonwealth of Massachusetts, a
transfer agent or transfer agents and, if they so determine, a
registrar or registrars. The transfer agent or transfer
agents may keep the register(s) and record therein the
original issues and transfers of Shares. Any such transfer
agents and registrars shall perform the duties usually
performed by transfer agents and registrars of certificates
31
and shares of stock in a corporation, except as modified by
the Trustees.
7.3 Owner of Record. Any person becoming entitled to
any Share in consequence of the death, bankruptcy or insol-
vency of any Shareholder, or otherwise, by operation of law,
shall be recorded as holder of such Shares. But until such
record is made, the Shareholder of record shall be deemed to
be the holder of such Shares for all purposes hereof and
neither the Trustees nor any transfer agent or registrar nor
any officer or agent of the Trust shall be affected by any
notice of such death, bankruptcy, insolvency or other event.
7.4 Transfers of Shares. Shares shall be transferable
on the records of the Trust (other than by operation of law)
only by the record holder thereof or by his agent thereunto
duly authorized in writing upon delivery to the Trust or a
transfer agent of the Trust of a duly executed instrument of
transfer, together with such evidence of the genuineness of
execution and authorization and of other matters as may
reasonably be required by the Trust or the transfer agent.
Upon such delivery, the transfer shall be recorded on the
register(s) of the Trust. But until such record is made, the
Shareholder of record shall be deemed to be the holder of such
Shares for all purposes hereof and neither the Trustees nor
the Trust nor any transfer agent or registrar nor any officer
or agent of the Trust shall be affected by any notice of the
proposed transfer. This Section 7.4 and Section 7.3 hereof
are subject in all respects to the provisions of Section 6.7
hereof.
7.5 L i m itation of Fiduciary Responsibility. The
Trustees shall not, nor shall the Shareholders or any officer,
transfer agent or other agent of the Trust, be bound to see to
the execution of any trust, express, implied or constructive,
or of any charge, pledge or equity to which any of the Shares
or any interest therein are subject, or to ascertain or
inquire whether any sale or transfer of any such Shares or
interest therein by any such Shareholder or his personal
representative is authorized by such trust, charge, pledge or
equity, or to recognize any Person as having any interest
therein except the Persons recorded as such Shareholders. The
receipt of the Person in whose name any Share is recorded, or,
if such Share is recorded in the names of more than one
Person, the receipt of any one such Persons or of the duly
authorized agent of any such Person shall be a sufficient
discharge for all money, Securities and other property
payable, issuable or deliverable in respect of such Share and
from all liability to see the proper application thereof.
7.6 Notices. Any and all notices to which Shareholders
hereunder may be entitled, and any and all communications,
32
shall be deemed duly served or given if mailed, postage
prepaid, addressed to Shareholders of record at their last
known post office addresses as recorded on the Share register
provided for in Section 7.1 hereof.
ARTICLE VIII
SHAREHOLDERS
8.1 M e e t ings of Shareholders. Meetings of the
Shareholders (to mean, hereafter, only Shareholders of the
C l a ss(es) or Series as may be appropriate under the
circumstances) may be called at any time by a majority of the
Trustees and shall be called by any Trustee upon written
request of Shareholders holding in the aggregate not less than
ten (10%) percent of the outstanding Shares having voting
rights, such request specifying the purpose or purposes for
which such meeting is to be called. Any such meeting shall be
held within or without the Commonwealth of Massachusetts on
such day and at such time as the Trustees shall designate. In
the event that the number of Trustees elected by vote of the
Shareholders shall, at any time, fall below a majority a
Special Meeting shall be called at the earliest practicable
time for the election of Trustees; provided, however, that
such meeting shall, in any event be held within sixty (60)
days of the date of the number of Trustees elected by vote of
the Shareholders falls below a majority.
8.2 Quorums. The holders of a majority of outstanding
Shares, entitled to vote at such a meeting, present in person
or by proxy shall constitute a quorum at any meeting of
Shareholders.
8.3 Notice of Meetings. Notice of all meetings of the
Shareholders entitled to vote at such a meeting, stating the
time, place and purposes of the meeting, shall be given by the
Trustees by mail to each Shareholder at his registered
address, mailed at least ten (10) days and not more than sixty
(60) days before the meeting. Only the business stated in the
notice of the meeting shall be considered at such meeting.
Any adjourned meeting may be held as adjourned without further
notice.
8.4 Record Date for Meetings. For the purposes of
determining the Shareholders who are entitled to vote or act
at any meeting or any adjournment thereof, or who are entitled
to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to
time close the transfer books for such period, not exceeding
thirty (30) days, as the Trustees may determine; or without
closing the transfer books, the Trustees may fix a date not
more than sixty (60) days prior to the date of any meeting of
Shareholders or other actions as a record date for the
33
determination of Shareholders entitled to vote at such meeting
or any adjournment thereof or to be treated as Shareholders of
record for purposes of such other action, except for dividend
payments which shall be governed by Section 10.1, and any
Shareholder who was a Shareholder at the time so fixed shall
be entitled to vote at such meeting or any adjournment
thereof, even though he has since that date disposed of his
Shares, and no Shareholder becoming such after that date shall
be so entitled to vote at such meeting or any adjournment
thereof or to be treated as a Shareholder of record for
purposes of such other action.
8.5 Proxies, etc. At any meeting of Shareholders, any
holder of Shares entitled to vote thereat may vote by proxy,
provided that no proxy shall be voted at any meeting unless it
shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may
direct, for the verification prior to the time at which such
vote shall be taken. Pursuant to a resolution of a majority
of the Trustees, proxies may be solicited in the name of one
or more Trustees or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote and each
full Share shall be entitled to one vote and fractional Shares
shall be entitled to fractional votes. When any Share is held
jointly by several persons, any one of them may vote at any
meeting in person or by Proxy in respect of such Share, but if
more than one of them shall be present at such meeting in
person or by Proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall
not be received in respect of such Share. 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. If the holder of any such Share is a minor or a
person of unsound mind, and subject to guardianship or to the
legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote
may be given in person or by proxy.
8.6 Reports. The Trustees shall, to the extent required
by the 1940 Act, cause to be prepared at least annually a
report of operations containing a balance sheet and statements
of income and undistributed income of the Trust prepared in
conformity with generally accepted accounting principles and
an opinion of an independent certified public accountant on
such financial statements based on an examination of the books
and records of the Trust, and made in accordance with
generally accepted auditing standards. A signed copy of such
report and opinion shall be filed with the Trustees, and
copies of such reports shall be mailed or delivered to all
Shareholders within the time required by the 1940 Act. The
34
Trustees also shall, to the extent required by the 1940 Act,
furnish to the Shareholders, at least semi-annually, an
interim report containing an unaudited balance sheet of the
Trust as at the end of such semi-annual period and a statement
of income and surplus for the period from the beginning of the
current fiscal year to the end of such semi-annual period.
8.7 Inspection of Records. The records of the Trust
shall be open to inspections by Shareholders to the same
extent as is permitted shareholders of a Massachusetts
business corporation.
8.8 Shareholder Action By Written Consent. 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) consent to the
action in writing and the 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.
8.9 Voting Rights of Shareholders. The Shareholders (or
such Class(es) or Series of Shareholders as may be appropriate
under the circumstances) shall be entitled to vote only upon
the following matters: (a) election of Trustees as provided in
Section 9.2 and Section 9.4 hereof; (b) amendment of the
Declaration of Trust or termination of this Trust as provided
in Section 4.4 and Section 13.1 hereof; (c) reorganization of
this Trust as provided in Section 13.2 hereof; and (d) all
matters for which the approval of the Shareholders of the
Trust is required by the Investment Company Act of 1940, as
amended. Except with respect to the foregoing matters
specified in this Section 8.9, no action taken by the
Shareholders at any meeting shall in any way bind the
Trustees.
ARTICLE IX
TRUSTEES
9.1 Number and Qualification. The number of Trustees
shall be fixed from time to time by resolution of a majority
of the Trustees then in office, provided, however, that the
number of Trustees shall in no event be less than three (3) or
more than fifteen (15). A vacancy on the Board of Trustees
may be filled by the appointment of an individual having the
qualifications described in this Section 9.1 made by a
resolution of a majority of the Trustees then in office, so
long as two-thirds of the members of the resulting Board of
Trustees have been elected by vote of the Shareholders. The
appointment of a new Trustee shall not become effective,
however, until the individual named in the resolution of
35
appointment shall have accepted in writing such appointment
and agreed in writing to be bound by the terms of this
Declaration of Trust. No reduction in the number of Trustees
shall have the effect of removing any Trustee from office
prior to the expiration of his term. Whenever a vacancy in
the number of Trustees shall occur, until such vacancy is
filled as provided in Section 9.4 hereof, the Trustees or
Trustee continuing in office, regardless of their number,
shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this
Declaration of Trust. A Trustee shall be an individual at
least twenty-one (21) years of age who is not under legal
disability. The Trustees, in their capacity as Trustees,
shall not be required to devote their entire time to the
business and affairs of the Trust.
9.2 Term and Election. Each Trustee named herein, or
elected or appointed as provided in Section 9.1 and 9.4 hereof
shall (except in the event of resignations or removals or
vacancies pursuant to Sections 9.3 or 9.4 hereof) hold office
until his successor has been elected and has qualified to
serve as Trustee. Election of Trustees shall be by a
plurality of the votes cast. The election of any Trustee
(other than an individual who was serving as a Trustee
immediately prior to such election) pursuant to this Section
9.2 shall not become effective unless and until such person
shall have in writing accepted his election and agreed to be
bound by the terms of this Declaration of Trust. Trustees
may, but need not, own Shares.
9.3 Resignation and Removal. Any Trustee may resign
(without need for prior of subsequent accounting) by an
instrument in writing signed by him and delivered or mailed to
the Chairman, the President or the Secretary (referred to in
Section 9.6 hereof) and such resignation shall be effective
upon such delivery, or at a later date according to the terms
of the notice. Any of the Trustees may be removed (provided
the aggregate number of Trustees after such removal shall not
be less than the number required by Section 9.1 hereof) with
cause, by the action of two-thirds (2/3) of the remaining
Trustees. Upon the resignation or removal of a Trustee, or
his otherwise ceasing to be a Trustee, he shall execute and
deliver such documents as the remaining Trustees shall require
for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning
or removed Trustee. Upon the incapacity or death of any
Trustee, his legal representative shall execute and deliver on
his behalf such documents as the remaining Trustees shall
require as provided in the preceding sentence.
No natural person shall serve as Trustee after the
holders of record of not less than two-thirds of the
36
outstanding Shares of beneficial interest in the Trust have
declared that he be removed from that office either by
declaration in writing filed with the Custodian of the
securities of the Trust or by votes cast in person or by proxy
at a meeting called for the purpose.
T h e T rustees shall promptly call a meeting of
Shareholders for the purpose of voting upon the question of
removal of any such Trustee or Trustees if requested in
writing so to do by the record holders of not less than ten
(10) per centum of the outstanding Shares.
Whenever ten or more Shareholders of record, who have
been such for at least six months preceding the date of
application, and who hold in the aggregate either Shares
having a net asset value of at least $25,000 or at least one
(1) per centum of the outstanding Shares, whichever is less,
shall apply to the Trustees in writing, stating that they wish
to communicate with other Shareholders with a view to
obtaining signatures to a request for a meeting for the
purposes of removing Trustee(s) and accompanied by a form of
communication and request which they wish to transmit, the
Trustees shall, within five (5) business days after receipt of
such application, either
(a) afford to such applicants access to a list of
the names and addresses of all Shareholders as
recorded on the books of the Trust; or
(b) inform such applicants as to the approximate
number of Shareholders of record, and the
a p proximate cost of mailing to them the
proposed communication and form of request.
If the Trustees elect to follow the course specified in
(b) above, upon the written request of such applicants,
accompanied by a tender of the material to be mailed and of
the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all Shareholders of record
at their addresses as recorded on the books, unless within
five (5) business days after such tender the Trustees shall
mail to such applicants and file with the Securities and
Exchange Commission, together with a copy of the material to
be mailed, a written statement signed by at least a majority
of the Trustees to the effect that in their opinion either
such material contains untrue statements of fact or omits to
state facts necessary to make the statements contained therein
not misleading, or would be in violation of applicable law,
and specifying the basis of such opinion.
9.4 Vacancies. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of the death,
37
resignation, bankruptcy, adjudicated incompetence or other
incapacity to exercise the duties of the office, or removal of
a Trustee. No such vacancy shall operate to annul this
Declaration of Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust, and title
to any Trust Property held in the name of any Trustee alone,
jointly with one or more of the other Trustees or otherwise,
shall, in the event of the death, resignation, removal, bank-
ruptcy, adjudicated incompetence or other incapacity to
exercise the duties of the office of such Trustee, vest in the
continuing or surviving Trustees without necessity of any
further act or conveyance. In the case of an existing vacancy
(other than by reason of increase in the number of Trustees)
the holders of at least a majority of the Shares entitled to
vote, acting at any meeting of Shareholders called for the
purpose, or a majority of the Trustees continuing in office
acting by resolution, may fill such vacancy, and any Trustee
so elected by the Trustees shall hold office until his
successor has been elected and has qualified to serve as
Trustee. Upon the effectiveness of any such appointment as
provided in this Section, the Trust Property shall vest in
such new Trustee jointly with the continuing or surviving
T r ustees without the necessity of any further act or
conveyance; provided, however, that no such election or
appointment as provided in this Section 9.4 shall become
effective unless or until the new Trustee shall have accepted
in writing his appointment and agreed to be bound by the terms
of this Declaration of Trust.
9.5 Meetings. Meetings of the Trustees shall be held
from time to time upon the call of the Chairman, the
President, the Secretary or any two Trustees. Regular
meetings of the Trustees may be held without call or notice at
a time and place fixed by the By-laws or by resolution of the
Trustees. Notice of any other meeting shall be mailed or
otherwise given not less than forty-eight (48) hours before
the meeting but may be waived in writing by any Trustee either
before or after such meeting. The attendance of a Trustee at
a meeting shall constitute a waiver of such meeting except
where a Trustee attends a meeting for the express purpose of
objecting to the transaction of any business on the ground
that the meeting has not been lawfully called or convened.
The Trustees may act with or without a meeting. A quorum for
all meetings of the Trustees shall be a majority of the
T r ustees. Subject to Section 2.15 hereof and unless
specifically provided otherwise in this Declaration of Trust,
any action of the Trustees may be taken at a meeting by vote
of a majority of the Trustees present (a quorum being present)
or, without a meeting, by written consents of a majority of
the Trustees. Any agreement, or other instrument or writing
executed by one or more of the Trustees or by any authorized
Person shall be valid and binding upon the Trustee and upon
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the Trust when authorized or ratified by action of the
Trustees as provided in this Declaration of Trust.
Any committee of the Trustees, including an Executive
Committee, if any, may act with or without a meeting. A
quorum for all meetings of any such committee shall be a
m a j o r ity of the members thereof. Unless otherwise
specifically provided in this Declaration of Trust, any action
of any such committee may be taken at a meeting by vote of a
majority of the members present (a quorum being present) or,
without a meeting, by written consent of a majority of the
members.
With respect to actions of the Trustees and any committee
thereof, Trustees who are affiliated within the meaning of
Section 2.15 hereof or otherwise interested in any action to
be taken may be counted for quorum purposes under this Section
9.5 and shall be entitled to vote to the extent permitted by
the 1940 Act.
All or any one or more Trustees may participate in a
meeting of the Trustees or any committee thereof by utilizing
conference, telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other and, to the extent permitted under the 1940
Act, participation in a meeting pursuant to such
communications shall constitute presence in person at such
meeting. The minutes of any meeting of Trustees held by
utilizing such communications equipment shall be prepared in
the same manner as those of a meeting of Trustees held in
person.
9.6 Officers. The Trustees shall elect a Chairman from
among their number and shall appoint a President, Secretary
and Treasurer and such other officers as they deem necessary
or appropriate to carry out the business of the Trust. Such
officers shall be appointed and hold office in accordance with
By-law provisions.
9.7 By-laws. The Trustees may adopt and, from time to
time, amend or repeal By-laws for the conduct of the business
of the Trust, and in such By-laws may define the duties of the
respective officers, agents, employees and representatives.
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ARTICLE X
DISTRIBUTIONS TO SHAREHOLDERS AND
DETERMINATION OF NET ASSET VALUE AND NET INCOME
10.1 General. The Trustees may, from time to time,
declare and pay to the Shareholders, in proportion to their
respective ownership of Shares, out of the earnings, net
profits or surplus (including paid-in capital), capital or
assets in the hands of the Trustees, such dividends or other
distributions as they may determine. Except as otherwise
permitted by paragraph (c) of Section 6.12 of Article VI in
the case of Multi-Class Series, distributions of each year s
income of each Series shall be made pro rata to Shareholders
of a Series in proportion to the number of Shares of such
Series held by each of them. The declaration and payment of
such dividends or other distributions and the determination of
earnings, profits, surplus (including paid-in capital) and
capital available for dividends and other purposes shall lie
wholly in the discretion of the Trustees and no Shareholder
shall be entitled to receive or be paid any dividends or to
receive any distribution except as determined by the Trustees
in the exercise of said discretion. The Trustees may, in
addition, from time to time in their discretion, declare and
pay as dividends or other distributions such additional
amounts, whether or not out of earnings, profits and surplus
available therefor, sufficient to enable the Trust to avoid or
reduce its liability for Federal income taxes, inasmuch as the
computations of net income and gains for Federal income tax
purposes may vary from the computations thereof on the books
o f the Trust. Any of all such dividends or other
distributions may be made, in whole or in part, in cash,
property or other assets or obligations of the Trust, as the
Trustees may in their sole discretion from time to time
d e t ermine. The Trustees may also distribute to the
Shareholders, in proportion to their respective ownership of
Shares, additional Shares issuable hereunder in such manner
and on such terms as they may deem proper. Any or all such
dividends or distributions may be made among the Shareholders
of record at the time of declaring a distribution or among the
Shareholders of record at such later date as the Trustees
shall determine.
10.2 Retained Earnings. The Trustees, except as provided
in Section 10.1 hereof , may always retain from the net
profits such amount as they may deem necessary to pay the
debts or expenses of the Trust, to meet obligations of the
Trust, to establish reserves or as they may deem desirable to
use in the conduct of its affairs or to retain for future
requirements or extensions of the business of the Trust.
10.3 Source of Distributions. Shareholders shall receive
annually a statement in writing advising the Shareholders of
40
the source of the funds so distributed so that distributions
of ordinary income, return of capital and capital gains income
will be clearly distinguished.
10.4 Net Asset Value. The net asset value of each
outstanding Share of the Trust shall be determined once on
each business day, as of the close of trading on the New York
Stock Exchange or at any other time as the Trustees, by
resolution, may determine and which is in compliance with the
1940 Act. The method of determination of net asset value
shall be determined by the Trustees and shall be set forth in
the Prospectus. The power and duty to make the daily
calculations may be delegated by the Trustees to the Adviser,
the Custodian, the Transfer Agent, the Distributor or such
other person as the Trustees by resolution may determine. The
Trustees may suspend the daily determination of net asset
value to the extent permitted by the 1940 Act.
10.5 P o w er to Modify Valuation Procedures.
Notwithstanding any of the foregoing provisions of this
Article X, the Trustees may prescribe, in their absolute
discretion, such other bases and times for determining the per
share net asset value of the Trust s Shares or net income, or
the declaration and payment of dividends and distributions as
they may deem necessary or desirable to enable the Trust to
comply with any provision of the 1940 Act, or any rule or
regulation thereunder, including any rule or regulation
adopted pursuant to Section 22 of the 1940 Act by the
Commission or any securities association registered under the
Securities Exchange Act of 1934, or any order of exemption
issued by said Commission, all as in effect now or as
hereafter amended or modified.
ARTICLE XI
CUSTODIAN
11.1 Appointment and Duties. The Trustees shall, at all
times, employ a bank or trust company organized under the laws
of the United States of America or one of the several states
thereof having a capital, surplus and undivided profits of at
least two million dollars ($2,000,000) as Custodian with
authority as its agent, but subject to such restrictions,
limitations and other requirements, if any, as may be
contained in the By-laws of the Trust and the 1940 Act:
(a) to hold the securities owned by the Trust and
deliver the same upon written order;
(b) to receive and receipt for any monies due to
the Trust and deposit the same in its own
banking department or elsewhere as the Trustees
may direct;
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(c) to disburse such funds upon orders or vouchers;
(d) if authorized by the Trustees, to keep the
books and accounts of the Trust and furnish
clerical and accounting services; and
(e) if authorized to do so by the Trustees, to
compute the net income of the Trust;
all upon such basis of compensation as may be agreed upon
between the Trustees and Custodian. The Trust may also employ
the Custodian as its agent for other purposes.
The Trustees may also authorize the Custodian to employ
one or more Sub-Custodians from time to time to perform such
of the acts and services of the Custodian and upon such terms
and conditions, as may be agreed upon between the Custodian
and such Sub-Custodian and approved by the Trustees, provided
that, in every case, such Sub-Custodian shall be a bank or
trust company organized under the laws of the United States of
America or one of the several states thereof and having
capital, surplus and undivided profits of at least two million
dollars ($2,000,000).
11.2 Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the
Trustees may direct the Custodian to deposit all or any part
of the Securities owned by the Trust in a system for the
central handling of Securities established by a national
securities exchange or a national securities association
registered with the Commission under the Securities Exchange
Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act,
pursuant to which system all securities of any particular
Class or Series of any issuer deposited within the system are
treated as fungible and may be transferred or pledged by
b o o k k eeping entry without physical delivery of such
securities, provided that all such deposits shall be subject
to withdrawal only upon the order of the Trust.
ARTICLE XII
RECORDING OF DECLARATION OF TRUST
12.1 Recording. This Declaration of Trust and any
amendment hereto shall be filed in the office of the Secretary
of the Commonwealth of Massachusetts and may also be filed or
recorded in such other places as the Trustees deem approp-
riate. Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that
such action was duly taken in a manner provided herein; and
unless such amendment or such certificate filed with the
Secretary of the Commonwealth of Massachusetts sets forth some
42
earlier or later time for the effectiveness of such amendment,
such amendment shall be effective upon its filing with the
Secretary of said Commonwealth. An amended Declaration,
containing the original Declaration and all amendments there-
tofore made, may be executed any time or from time to time by
a majority of the Trustees and shall, upon filing with the
Secretary of the Commonwealth of Massachusetts, be conclusive
e v i dence of all amendments contained therein and may
thereafter be referred to in lieu of the original Declaration
and the various amendments thereto.
ARTICLE XIII
AMENDMENT OR TERMINATION OF TRUST
13.1 Amendment or Termination. The provisions of this
Declaration of Trust may be amended or altered (except as to
the limitations on personal liability of the Shareholders and
Trustees and the prohibition of assessments upon Share-
holders), or the Trust (or any Series or Class of Shares) may
be terminated, at any meeting of the Shareholders called for
the purpose, by the affirmative vote of the holders of a
m a jority of the Shares of such Series or Class then
outstanding and entitled to vote, or by an instrument or
instruments in writing, without a meeting, signed by a
majority of the Trustees and the holders of a majority of such
Shares; provided, however, that the Trustees may, from time to
time by a two-thirds (2/3) vote of the Trustees, and after
fifteen (15) days prior written notice to the Shareholders,
amend or alter the provisions of this Declaration of Trust,
without the vote or assent of the Shareholders, to the extent
deemed by the Trustees in good faith to be necessary to
conform this Declaration to the requirements of the regulated
investment company provisions of the Internal Revenue Code or
the requirements of applicable federal laws or regulations or
any interpretation thereof by a court or other governmental
agency of competent jurisdiction but the Trustees shall not be
liable for failing so to do. Notwithstanding the foregoing,
(i) no amendment may be made pursuant to this Section 13.1
which would change any rights with respect to any outstanding
Shares of the Trust (or such Series or Class, as the case may
be) by reducing the amount payable thereon upon liquidation of
the Trust or by diminishing or eliminating any voting rights
pertaining thereto, except with the vote or written consent of
the holders of two-thirds (2/3) of the outstanding Shares
entitled to vote thereon; and (ii) no amendment may be made
with respect to the investment restrictions contained in
Section 4.2 hereof without the affirmative vote of the holders
of a majority (as defined in the 1940 Act) of the Shares of
the Class of stock affected by such change. Upon the
termination of the Trust or any one or more Series or Classes
of Shares, as the case may be, pursuant to this Section 13.1:
43
(a) The Trust (or such Series or Class, as the case
may be) shall carry on no business except for
the purpose of winding up its affairs.
(b) The Trustees shall proceed to wind up the
affairs of the Trust (or such Series or Class,
as the case may be) and all of the powers of
the Trustees under this Declaration of Trust
shall continue until the affairs of the Trust,
Series or Class shall have been wound up,
including the power to fulfill or discharge the
contracts of the Trust, Series or Class,
collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all
or any part of the remaining Trust Property
(belonging to the Trust or to such Series or
Class, as the case may be) to one or more
p e r s ons at public or private sale for
consideration which may consist in whole or in
part of cash, securities or other property of
any kind, discharge or pay its liabilities, and
do all other acts appropriate to liquidate its
business; provided that any sale, conveyance,
assignment, exchange, transfer or other
disposition of all or substantially all of the
Trust Property (belonging to the Trust or to
such Series or Class, as the case may be) shall
require approval of the principal terms of the
transaction and the nature and amount of the
consideration by affirmative vote of not less
than a majority of all outstanding Shares (of
the Trust, Series or Class, as the case may be)
entitled to vote.
(c) After paying or adequately providing for the
payment of all liabilities, and upon receipt of
s u c h releases, indemnities and refunding
agreements, as they deem necessary for their
protection, the Trustees may distribute the
remaining Trust Property (belonging to the
Trust, Series or Class, as the case may be), in
cash or in kind or partly of each, among the
Shareholders (of the Trust, Series or Class, as
the case may be) according to their respective
rights.
Upon termination of the Trust, Series or Class, as the
case may be, and distribution to the Shareholders as herein
provided, a majority of the Trustees shall execute and lodge
among the records of the Trust an instrument in writing
setting forth the fact of such termination, and the Trustees
shall thereupon be discharged from all further liabilities and
44
duties hereunder (with respect to the Trust or such Series or
Class, as the case may be), and the right, title and interest
of all Shareholders (of the Trust, Series or Class, as the
case may be) shall cease and be canceled and discharged.
A certification in recordable form signed by a majority
of the Trustees setting forth an amendment and reciting that
it was duly adopted by the Shareholders or by the Trustees as
aforesaid or a copy of the Declaration, as amended, in
recordable form, and executed by a majority of the Trustees,
shall be conclusive evidence of such amendment when lodged
among the records of the Trust.
Notwithstanding any other provision hereof, until such
time as a Registration Statement under the Securities Act of
1933, as amended, covering the first public offering of Shares
shall have become effective, this Declaration of Trust may be
terminated or amended in any respect by the affirmative vote
of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
13.2 Power to Effect Reorganization. The Trustees, by
vote or written approval of a majority of the Trustees, may
s e l e ct or direct the organization of a corporation,
association, trust or other organization with which the Trust
may merge, or which shall take over the Trust Property and
carry on the affairs of the Trust, and after receiving an
a f firmative vote of not less than a majority of the
outstanding Shares entitled to vote at any meeting or
Shareholders, the notice for which included a statement of
such proposed action, the Trustees may effect such merger or
may sell, convey and transfer the Trust Property to any such
corporation, association, trust or organization in exchange
for cash or shares or securities thereof, or beneficial
interest therein upon making provision for the payment of
T r ust liabilities, by assumption by the transferee or
otherwise; and thereupon the Trustees shall terminate the
Trust and deliver such cash, shares, securities or beneficial
interest ratably among the Shareholders of this Trust in
redemption of their Shares.
13.3 Other Amendments. Amendments having the purpose of
changing the name of the Trust (or any Series of the Trust) or
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. 45
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Declaration Trust is executed
by the Trustees and delivered in the Commonwealth of Massa-
chusetts and with reference to the laws thereof, and the
rights of all parties and the validity, construction and
effect of every provision hereof shall be subject to and
construed according to the laws of said Commonwealth and
r e f erence shall be specifically made to the Business
Corporation Law of the Commonwealth of Massachusetts as to the
construction of matters not specifically covered herein or as
to which an ambiguity exists.
14.2 Counterparts. This Declaration of Trust may be
simultaneously executed in several counterparts, each of which
so executed shall be deemed to be an original, and such
counterparts, together, shall constitute but one and the same
instrument, which shall be sufficiently evidenced by any such
original counterpart.
14.3 Reliance by Third Parties. Any certificate
executed by an individual who, according to the records of the
Trust, or of any recording office in which this Declaration
may be recorded, appears to be a Trustee hereunder, certifying
to: (a) the number or identity of Trustees or Shareholders,
(b) the due authorization of the execution of any instrument
or writing, (c) the form of any vote passed at a meeting of
Trustees or Shareholders, (d) the fact that the number of
Trustees or Shareholders present at any meeting or executing
any written instrument satisfies the requirements of this
Declaration of Trust, (e) the form of any By-law adopted by or
the identity of any officers elected by the Trustees, or (f)
the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as
to the matters so certified in favor of any person dealing
with the Trustees or any of them and the successors of such
person.
14.4 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are
severable and if the Trustees shall determine,
with the advice of counsel, that any one or
more of such provisions (the "Conflicting
Provisions") are in conflict with the regulated
investment company provisions of the Internal
Revenue Code or with other applicable federal
or state laws and regulations, the Conflicting
Provisions shall be deemed never to have
constituted a part of this Declaration of
Trust; provided, however, that such
46
determination by the Trustees shall not affect
or impair any of the remaining provisions of
this Declaration of Trust or render invalid or
improper any action taken or omitted
(including, but not limited to, the election of
Trustees) prior to such determination.
(b) If any provisions of this Declaration of Trust
shall be held invalid or unenforceable in any
j u r i s d iction, such invalidity or
unenforceability shall attach only to such
provision in such jurisdiction and shall not in
a n y manner affect or render invalid or
unenforceable such provision in any other
jurisdiction or any other provision of this
Declaration of Trust in any jurisdiction.
14.5 Section Headings. Sections headings have been
inserted for convenience only and are not a part of this
Declaration of Trust.
14.6 Construction of 1940 Act. Whenever any action is
taken under this Declaration of Trust under any authorization
to take action which is permitted by the 1940 Act, such action
shall be deemed to have been properly taken if such action is
in accordance with the construction of the 1940 Act then in
effect as expressed in no action letters of the staff of the
Commission or any release, rule, regulation or order under the
1940 Act or any decision of a court of competent jurisdiction,
notwithstanding that any of the foregoing shall later be found
to be invalid or otherwise reversed or modified by any of the
foregoing.
14.7 Action of Prospectus or Proxy Statement. Any action
which may be taken by the Trustees under this Declaration of
Trust or its By-laws may be taken by the description thereof
in the then effective prospectus relating to the Shares under
the Securities Act of 1933 or in any proxy statement of the
Trust rather than by formal resolution of the Board.
ARTICLE XV
DURATION OF TRUST
15.1 Duration. Subject to possible termination in
accordance with the provisions of Article XIII hereof, the
Trust created hereby shall continue without limitation of
time.
IN WITNESS WHEREOF, the undersigned Trustee(s) of the Trust
have caused these presents to be executed as of the ____ day
of September, 1996.
47
Position
Name With Trust Address
/s/Xxxxxxx X. Xxxxx, Xx. Chairman of the 0000 Xxxxx Xxxxxx
Xxxxxxx X. Xxxxx, Xx. Board of Trustee Dallas, TX 75230
49
