SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
FRANKLIN MUTUAL RECOVERY FUND
A DELAWARE STATUTORY TRUST
(Original Agreement and Declaration of Trust was adopted January 31, 2003;
Amended and Restated Agreement and Declaration of Trust was adopted May 8, 2003;
Second Amended and Restated Agreement and Declaration of Trust adopted May 21,
2007.)
TABLE OF CONTENTS
PAGE
ARTICLE I.
NAME; OFFICES; REGISTERED AGENT; DEFINITIONS......2
Section 1. NAME............................................2
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Section 2. OFFICES OF THE TRUST............................2
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Section 3. REGISTERED AGENT AND REGISTERED OFFICE..........2
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Section 4. DEFINITIONS.....................................2
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ARTICLE II.
PURPOSE OF TRUST..................................4
ARTICLE III.
SHARES............................................8
Section 1. DIVISION OF BENEFICIAL INTEREST.................8
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Section 2. OWNERSHIP OF SHARES............................10
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Section 3. SALE OF SHARES.................................10
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Section 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY....10
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Section 5. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS Election...11
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Section 6. ESTABLISHMENT AND DESIGNATION OF SERIES AND CLASSES
11
(a) ASSETS HELD WITH RESPECT TO A PARTICULAR SERIES 11
(b) LIABILITIES HELD WITH RESPECT TO A PARTICULAR SERIES
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OR CLASS....................................12
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(c) DIVIDENDS, DISTRIBUTIONS AND REPURCHASES....13
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(d) VOTING......................................13
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(e) EQUALITY....................................14
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(f) FRACTIONS...................................14
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(g) EXCHANGE PRIVILEGE..........................14
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(h) COMBINATION OF SERIES OR CLASSES............14
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(i) DISSOLUTION OR TERMINATION..................15
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Section 7. INDEMNIFICATION OF SHAREHOLDERS................15
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ARTICLE IV.
THE BOARD OF TRUSTEES............................15
Section 1. NUMBER, ELECTION, TERM, REMOVAL AND RESIGNATION.15
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Section 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A MEETING......16
Section 3. POWERS; OTHER BUSINESS INTERESTS; QUORUM AND REQUIRED
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VOTE.............................................16
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(a) POWERS......................................16
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(b) OTHER BUSINESS INTERESTS....................18
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(c) QUORUM AND REQUIRED VOTE....................18
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Section 4. PAYMENT OF EXPENSES BY THE TRUST...............18
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Section 5. PAYMENT OF EXPENSES BY SHAREHOLDERS............19
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Section 6. OWNERSHIP OF TRUST PROPERTY....................19
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Section 7. SERVICE CONTRACTS..............................19
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ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS.........20
Section 1. VOTING POWERS..................................20
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Section 2. QUORUM AND REQUIRED VOTE.......................20
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Section 3. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING...21
Section 4. RECORD DATES...................................22
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Section 5. ADDITIONAL PROVISIONS..........................23
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ARTICLE VI.
NET ASSET VALUE; DISTRIBUTIONS; REPURCHASES; TRANSFERS
23
Section 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
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DISTRIBUTIONS....................................23
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Section 2. REPURCHASE OF SHARES WITH SHAREHOLDER CONSENT..25
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Section 3. REPURCHASE OF SHARES WITHOUT SHAREHOLDER CONSENT25
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Section 4. TRANSFER OF SHARES.............................26
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ARTICLE VII.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF AGENT
26
Section 1. LIMITATION OF LIABILITY........................26
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Section 2. INDEMNIFICATION................................27
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(a) INDEMNIFICATION BY TRUST....................27
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(b) EXCLUSION OF INDEMNIFICATION................27
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(c) REQUIRED APPROVAL...........................28
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(d) ADVANCEMENT OF EXPENSES.....................28
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(e) OTHER CONTRACTUAL RIGHTS....................28
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(f) FIDUCIARIES OF EMPLOYEE BENEFIT PLAN........28
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Section 3. INSURANCE......................................28
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Section 4. DERIVATIVE ACTIONS.............................29
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ARTICLE VIII.
CERTAIN TRANSACTIONS.............................29
Section 1. VOTE REQUIRED..................................29
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Section 2. DISSOLUTION OF TRUST OR SERIES.................29
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Section 3. MERGER OR CONSOLIDATION; CONVERSION; REORGANIZATION.
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30
Section 4. RECLASSIFICATION OF THE TRUST..................32
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Section 5. PRINCIPAL HOLDER TRANSACTIONS..................32
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Section 6. MASTER FEEDER STRUCTURE........................33
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Section 7. ABSENCE OF APPRAISAL OR DISSENTERS' RIGHTS.....33
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ARTICLE IX.
AMENDMENTS.......................................33
Section 1. AMENDMENTS GENERALLY...........................33
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Section 2. SPECIAL AMENDMENTS.............................34
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ARTICLE X.
MISCELLANEOUS....................................34
Section 1. REFERENCES; HEADINGS; COUNTERPARTS.............34
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Section 2. APPLICABLE LAW.................................34
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Section 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.34
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Section 4. STATUTORY TRUST ONLY...........................35
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Section 5. Use of the Names "Franklin," "Xxxxxxxxx," "Fiduciary
Trust," and/or "Institutional Fiduciary Trust"...35
SECOND AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
FRANKLIN MUTUAL RECOVERY FUND
THIS SECOND AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST is
made as of this 21st day of May, 2007, by the Trustees hereunder, and by the
holders of Shares issued or to be issued by Franklin Mutual Recovery Fund (the
"Trust") hereunder, and (i) incorporates herein and makes a part of this Second
Amended and Restated Agreement and Declaration of Trust the resolutions of the
Board of Trustees of the Trust adopted prior to the date set forth above,
pursuant to the Agreement and Declaration of Trust, dated as of January 31,
2003, as amended and/or restated (the "Original Declaration") and the Amended
and Restated Agreement and Declaration of Trust dated May 8, 2003, as amended or
restated to date (the "A&R Declaration"), regarding the establishment and
designation of Series and/or Classes of the Shares of the Trust, and any
amendments or modifications to such resolutions adopted through the date hereof,
as of the date of the adoption of each such resolution, and (ii) amends and
restates the A&R Declaration pursuant to Article IX of such A&R Declaration, as
hereinafter provided.
WITNESSETH:
WHEREAS the Trust was formed on February 4, 2003 by the filing of a
Certificate of Trust with the office of the Secretary of State of the State of
Delaware pursuant the Original Declaration;
WHEREAS the Original Declaration was replaced by the A&R Declaration;
WHEREAS the Trust was formed to carry on the business of a closed-end
management investment company as defined in the 1940 Act;
WHEREAS the Trust is authorized to divide its Shares into two or more
Classes, to issue its Shares in separate Series, to divide Shares of any Series
into two or more Classes and to issue Classes of the Trust or the Series, if
any, all in accordance with the provisions hereinafter set forth;
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Delaware statutory trust in accordance with the
provisions of the Delaware Statutory Trust Act, as amended from time to time,
and the provisions hereinafter set forth;
WHEREAS the Board of Trustees desires to clarify certain provisions in the
A&R Declaration; and
WHEREAS pursuant to the provisions of the A&R Declaration, the Board of
Trustees desires to amend and restate the A&R Declaration in the manner
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that:
(i) the A&R Declaration is amended and restated in its entirety in the
manner herein set forth;
(ii) the Trustees will hold all cash, securities and other assets that
they may from time to time acquire in any manner as Trustees hereunder IN TRUST
and will manage and dispose of the same upon the following terms and conditions
for the benefit of the holders from time to time of Shares created hereunder as
hereinafter set forth; and
(iii)this Declaration of Trust and the By-Laws shall be binding in
accordance with their terms on every Trustee, by virtue of having become a
Trustee of the Trust, and on every Shareholder, by virtue of having become a
Shareholder of the Trust, pursuant to the terms of the Original Declaration, the
A&R Declaration and/or this Declaration of Trust and the By-Laws.
ARTICLE I.
NAME; OFFICES; REGISTERED AGENT; DEFINITIONS
Section 1. ....NAME. This Trust shall be known as "Franklin Mutual Recovery
Fund" and the Board of Trustees shall conduct the business of the Trust under
that name, or any other name as it may from time to time designate.
Section 2. ....OFFICES OF THE TRUST. The Board may at any time establish offices
of the Trust at any place or places where the Trust intends to do business.
Section 3. ....REGISTERED AGENT AND REGISTERED OFFICE. The name of the
registered agent of the Trust and the address of the registered office of the
Trust are as set forth in the Trust's Certificate of Trust.
Section 4. ....DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) "1940 ACT" shall mean the Investment Company Act of 1940 and the rules and
regulations thereunder, all as adopted or amended from time to time;
(b) "AFFILIATE" shall have the same meaning as "affiliated person" as such
term is defined in the 1940 Act when used with reference to a specified
Person, as defined below.
(c) "BOARD OF TRUSTEES" or "BOARD" shall mean the governing body of the Trust,
that is comprised of the number of Trustees of the Trust fixed from time
to time pursuant to Article IV hereof, having the powers and duties set
forth herein;
(d) "BY-LAWS" shall mean By-Laws of the Trust, as amended or restated from
time to time in accordance with Article VIII therein. Such By-Laws may
contain any provision not inconsistent with applicable law or this
Declaration of Trust, relating to the governance of the Trust;
(e) "CERTIFICATE OF TRUST" shall mean the certificate of trust of the Trust
filed on February 4, 2003 with the office of the Secretary of State of the
State of Delaware as required under the Delaware Statutory Trust Act, as
such certificate has been or shall be amended or restated from time to
time;
(f) "CLASS" shall mean each class of Shares of the Trust or of a Series of the
Trust established and designated under and in accordance with the
provisions of Article III hereof or the applicable provisions of the
Original Declaration or the A&R Declaration;
(g) "CODE" shall mean the Internal Revenue Code of 1986 and the rules and
regulations thereunder, all as adopted or amended from time to time;
(h) "COMMISSION" shall have the meaning given that term in the 1940 Act;
(i) "DSTA" shall mean the Delaware Statutory Trust Act (12 DEL. C. ss. 3801,
et SEQ.), as amended from time to time;
(j) "DECLARATION OF TRUST" shall mean this Second Amended and Restated
Agreement and Declaration of Trust, including resolutions of the Board of
Trustees of the Trust that have been adopted prior to the date of this
document, or that may be adopted hereafter, regarding the establishment
and designation of Series and/or Classes of Shares of the Trust, and any
amendments or modifications to such resolutions, as of the date of the
adoption of each such resolution;
(k) "GENERAL LIABILITIES" shall have the meaning given it in Article III,
Section 6(b) of this Declaration of Trust;
(l) "INTERESTED PERSON" shall have the meaning given that term in the 1940
Act;
(m) "INVESTMENT ADVISER" or "ADVISER" shall mean a Person, as defined below,
furnishing services to the Trust pursuant to any investment advisory or
investment management contract described in Article IV, Section 7(a)
hereof;
(n) "NATIONAL FINANCIAL EMERGENCY" shall mean the whole or any part of any
period during (i) which an emergency exists as a result of which disposal
by the Trust of securities or other assets owned by the Trust is not
reasonably practicable; (ii) which it is not reasonably practicable for
the Trust fairly to determine the net asset value of its assets; or (iii)
such other period as the Commission may by order permit for the protection
of investors;
(o) "PERSON" shall mean a natural person, partnership, limited partnership,
limited liability company, trust, estate, association, corporation,
organization, custodian, nominee or any other individual or entity in its
own or any representative capacity, in each case, whether domestic or
foreign, and a statutory trust or a foreign statutory or business trust;
(p) "PRINCIPAL UNDERWRITER" shall have the meaning given that term in the 1940
Act;
(q) "SERIES" shall mean each Series of Shares established and designated under
and in accordance with the provisions of Article III hereof, or in
accordance with the applicable provisions of the Original Declaration or
the A&R Declaration;
(r) "SHARES" shall mean the transferable shares of beneficial interest into
which the beneficial interest in the Trust have been or shall be divided
from time to time, and shall include fractional and whole Shares;
(s) "SHAREHOLDER" shall mean a record owner of Shares pursuant to the By-Laws;
(t) "TRUST" shall mean Franklin Mutual Recovery Fund, the Delaware statutory
trust formed under the Original Declaration and by filing of the
Certificate of Trust with the office of the Secretary of State of the
State of Delaware;
(u) "TRUST PROPERTY" shall mean any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of
the Trust, or one or more of any Series thereof, including, without
limitation, the rights referenced in Article X, Section 5 hereof;
(v) "TRUSTEE" or "TRUSTEES" shall mean each Person who signs this
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Declaration of Trust as a trustee and all other Persons who may, from
time to time, be duly elected or appointed, qualified and serving on the
Board of Trustees in accordance with the provisions hereof and the
By-Laws, so long as such signatory or other Person continues in office
in accordance with the terms hereof and the By-Laws. Reference herein
to a Trustee or the Trustees shall refer to such Person or Persons in
such Person's or Persons' capacity as a trustee or trustees hereunder
and under the By-Laws; and
(w) "VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES" shall have the
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meaning provided under Subsection 2(a)(42) of the 1940 Act or any
successor provision thereof, which Subsection, as of the date hereof, is
as follows: the vote, at a meeting of the Shareholders, (i) of
sixty-seven percent (67%) or more of the voting securities present in
person or represented by proxy at such meeting, if the holders of more
than fifty percent (50%) of the outstanding voting securities of the
Trust are present or represented by proxy; or (ii) of more than fifty
percent (50%) of the outstanding voting securities of the Trust,
whichever is the less.
ARTICLE II.
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the business
of a registered management investment company registered under the 1940 Act,
directly, or if one or more Series is established hereunder, through one or more
Series, investing primarily in securities, and to exercise all of the powers,
rights and privileges granted to, or conferred upon, a statutory trust formed
under the DSTA, including, without limitation, the following powers:
(a) To hold, invest and reinvest its funds, and in connection therewith, to
make any changes in the investment of the assets of the Trust, to hold
part or all of its funds in cash, to hold cash uninvested, to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, mortgage, transfer, exchange, distribute, write
options on, lend or otherwise deal in or dispose of contracts for the
future acquisition or delivery of fixed income or other securities, and
securities or property of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, shares, units of
beneficial interest, preferred stocks, negotiable or non-negotiable
instruments, obligations, evidences of indebtedness, money market
instruments, certificates of deposit or indebtedness, bills, notes,
mortgages, commercial paper, repurchase or reverse repurchase
agreements, bankers' acceptances, finance paper, and any options,
certificates, receipts, warrants, futures contracts or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein or in
any property or assets, and other securities of any kind, as the
foregoing are issued, created, guaranteed, or sponsored by any and all
Persons, including, without limitation, states, territories, and
possessions of the United States and the District of Columbia and any
political subdivision, agency, or instrumentality thereof, any foreign
government or any political subdivision of the U.S. Government or any
foreign government, or any international instrumentality, or by any bank
or savings institution, or by any corporation or organization organized
under the laws of the United States or of any state, territory, or
possession thereof, or by any corporation or organization organized
under any foreign law, or in "when issued" contracts for any such
securities;
(b) To exercise any and all rights, powers and privileges with reference to
or incident to ownership or interest, use and enjoyment of any of such
securities and other instruments or property of every kind and
description, including, but without limitation, the right, power and
privilege to own, vote, hold, purchase, sell, negotiate, assign,
exchange, lend, transfer, mortgage, hypothecate, lease, pledge or write
options with respect to or otherwise deal with, dispose of, use,
exercise or enjoy any rights, title, interest, powers or privileges
under or with reference to any of such securities and other instruments
or property, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said
instruments, and to do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any of such
securities and other instruments or property;
(c) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or
write options with respect to or otherwise deal in any property rights
relating to any or all of the assets of the Trust or any Series, subject
to any requirements of the 1940 Act;
(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such Person or Persons as the
Trustees shall deem proper, granting to such Person or Persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(e) To exercise powers and right of subscription or otherwise which in
any manner arise out of ownership of securities and/or other property;
(f) To hold any security or property in a form not indicating that it is
trust property, whether in bearer, unregistered or other negotiable
form, or in its own name or in the name of a custodian or subcustodian
or a nominee or nominees or otherwise or to authorize the custodian or a
subcustodian or a nominee or nominees to deposit the same in a
securities depository, subject in each case to proper safeguards
according to the usual practice of investment companies or any rules or
regulations applicable thereto;
(g) To consent to, or participate in, any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which
is held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and
to pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or against
the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(k) To endorse or guarantee the payment of any notes or other obligations
of any Person; to make contracts of guaranty or suretyship, or otherwise
assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such insurance as
the Board of Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies
insuring the assets of the Trust or payment of distributions and
principal on its portfolio investments, and insurance policies insuring
the Shareholders, Trustees, officers, employees, agents, Investment
Advisers, Principal Underwriters, or independent contractors of the
Trust, individually against all claims and liabilities of every nature
arising by reason of holding Shares, 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 Trustee, officer, employee,
agent, Investment Adviser, Principal Underwriter, or independent
contractor, to the fullest extent permitted by this Declaration of
Trust, the By-Laws and by applicable law;
(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such retirement
and other benefits, for any or all of the Trustees, officers, employees
and agents of the Trust;
(n) To purchase or otherwise acquire, own, hold, sell, negotiate,
exchange, assign, transfer, mortgage, pledge or otherwise deal with,
dispose of, use, exercise or enjoy, property of all kinds;
(o) To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage,
subdivide, and generally to deal and trade in real property, improved and
unimproved, and wheresoever situated; and to build, erect, construct,
alter and maintain buildings, structures, and other improvements on real
property;
(p) To borrow or raise moneys for any of the purposes of the Trust, and
to mortgage or pledge the whole or any part of the property and franchises
of the Trust, real, personal, and mixed, tangible or intangible, and
wheresoever situated;
(q) To enter into, make and perform contracts and undertakings of every
kind for any lawful purpose, without limit as to amount;
(r) To issue, purchase, sell and transfer, re-acquire, hold, trade and
deal in stocks, Shares, bonds, debentures and other securities,
instruments or other property of the Trust, from time to time, to such
extent as the Board of Trustees shall, consistent with the provisions of
this Declaration of Trust, determine; and to re-acquire and repurchase,
from time to time, its Shares or, if any, its bonds, debentures and other
securities;
(s) To engage in and to prosecute, defend, compromise, abandon, or adjust,
by arbitration, or otherwise, any actions, suits, proceedings, disputes,
claims, and demands relating to the Trust, and out of the assets of the
Trust to pay or to satisfy any debts, claims or expenses incurred in
connection therewith, including those of litigation, and such power
shall include without limitation the power of the Trustees or any
appropriate committee thereof, in the exercise of their or its good
faith business judgment, to dismiss any action, suit, proceeding,
dispute, claim, or demand, derivative or otherwise, brought by any
Person, including a Shareholder in the Shareholder's own name or the
name of the Trust, whether or not the Trust or any of the Trustees may
be named individually therein or the subject matter arises by reason of
business for or on behalf of the Trust;
(t) To exercise and enjoy, in Delaware and in any other states, territories,
districts and United States dependencies and in foreign countries, all of
the foregoing powers, rights and privileges, and the enumeration of the
foregoing powers shall not be deemed to exclude any powers, rights or
privileges so granted or conferred; and
(u) In general, to carry on any other business in connection with or
incidental to its trust purposes, to do everything necessary, suitable or
proper for the accomplishment of such purposes or for the attainment of
any object or the furtherance of any power hereinbefore set forth, either
alone or in association with others, and to do every other act or thing
incidental or appurtenant to, or growing out of, or connected with, its
business or purposes, objects or powers.
The Trust shall not be limited to investing in obligations maturing before
the possible dissolution of the Trust or one or more of its Series. Neither the
Trust nor the Board of Trustees shall be required to obtain any court order to
deal with any assets of the Trust or take any other action hereunder.
The foregoing clauses shall each be construed as purposes, objects and
powers, and it is hereby expressly provided that the foregoing enumeration of
specific purposes, objects and powers shall not be held to limit or restrict in
any manner the powers of the Trust, and that they are in furtherance of, and in
addition to, and not in limitation of, the general powers conferred upon the
Trust by the DSTA and the other laws of the State of Delaware or otherwise; nor
shall the enumeration of one thing be deemed to exclude another, although it be
of like nature, not expressed.
ARTICLE III.
SHARES
Section 1. DIVISION OF BENEFICIAL INTEREST.
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(a) The beneficial interest in the Trust shall be divided into Shares, each
Share without a par value. The number of Shares in the Trust authorized
under the Original Declaration, the A&R Declaration and hereunder, and
of each Series and Class as may be established from time to time, is
unlimited. The Board of Trustees may authorize the division of Shares
into separate Classes of Shares and into separate and distinct Series of
Shares and the division of any Series into separate Classes of Shares in
accordance with the 1940 Act. As of the effective date of this
Declaration of Trust, any new Series and Classes shall be established
and designated pursuant to Article III, Section 6 hereof. If no
separate Series or Classes of Series shall be established, the Shares
shall have the rights, powers and duties provided for herein to the
extent relevant and not otherwise provided for herein, and all
references to Series and Classes shall be construed (as the context may
require) to refer to the Trust.
(i) The fact that the Trust shall have one or more established and
designated Classes of the Trust, shall not limit the
authority of the Board of Trustees to establish and
designate additional Classes of the Trust. The fact that
one or more Classes of the Trust shall have initially
been established and designated without any specific
establishment or designation of a Series (i.e., that all
Shares of the Trust are initially Shares of one or more
Classes) shall not limit the authority of the Board of
Trustees to later establish and designate a Series and
establish and designate the Class or Classes of the Trust
as Class or Classes, respectively, of such Series.
(ii) The fact that a Series shall have initially been established and
designated without any specific establishment or designation of Classes
(I.E., that all Shares of such Series are initially of a single Class)
shall not limit the authority of the Board of Trustees to establish and
designate separate Classes of said Series. The fact that a Series shall
have more than one established and designated Class, shall not limit the
authority of the Board of Trustees to establish and designate additional
Classes of said Series.
(b) The Board of Trustees shall have the power to issue authorized, but
unissued Shares of beneficial interest of the Trust, or any Series and
Class thereof, from time to time for such consideration paid wholly or
partly in cash, securities or other property, as may be determined from
time to time by the Board of Trustees, subject to any requirements or
limitations of the 1940 Act. The Board of Trustees, on behalf of the
Trust, may acquire and hold as treasury shares, reissue for such
consideration and on such terms as it may determine, or cancel, at its
discretion from time to time, any Shares reacquired by the Trust. The
Board of Trustees may classify or reclassify any unissued Shares of
beneficial interest or any Shares of beneficial interest of the Trust or
any Series or Class thereof, that were previously issued and are
reacquired, into one or more Series or Classes that may be established
and designated from time to time. Notwithstanding the foregoing, the
Trust and any Series thereof may acquire, hold, sell and otherwise deal
in, for purposes of investment or otherwise, the Shares of any other
Series of the Trust or Shares of the Trust, and such Shares shall not be
deemed treasury shares or cancelled.
(c) Subject to the provisions of Section 6 of this Article III, each Share
shall entitle the holder to voting rights as provided in Article V
hereof. Shareholders shall have no preemptive or other right to
subscribe for new or additional authorized, but unissued Shares or other
securities issued by the Trust or any Series thereof. The Board of
Trustees may from time to time divide or combine the Shares of the Trust
or any particular Series thereof into a greater or lesser number of
Shares of the Trust or that Series, respectively. Such division or
combination shall not materially change the proportionate beneficial
interests of the holders of Shares of the Trust or that Series, as the
case may be, in the Trust Property at the time of such division or
combination that is held with respect to the Trust or that Series, as
the case may be.
(d) Any Trustee, officer or other agent of the Trust, and any organization
in which any such Person has an economic or other interest, may acquire,
own, hold and dispose of Shares of beneficial interest in the Trust or
any Series and Class thereof, whether such Shares are authorized but
unissued, or already outstanding, to the same extent as if such Person
were not a Trustee, officer or other agent of the Trust; and the Trust
or any Series may issue and sell and may purchase such Shares from any
such Person or any such organization, subject to the limitations,
restrictions or other provisions applicable to the sale or purchase of
such Shares herein and the 1940 Act.
Section 2. OWNERSHIP OF SHARES. The ownership of Shares shall be recorded on
the books of the Trust kept by the Trust or by a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of the
Trust and each Series and each Class thereof that has been established and
designated. No certificates certifying the ownership of Shares shall be issued
except as the Board of Trustees may otherwise determine from time to time. The
Board of Trustees may make such rules not inconsistent with the provisions of
the 1940 Act as it considers appropriate for the issuance of Share certificates,
the transfer of Shares of the Trust and each Series and Class thereof, if any,
and similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders of the Trust and each Series and Class thereof and as to the
number of Shares of the Trust and each Series and Class thereof held from time
to time by each such Shareholder.
Section 3. ....SALE OF SHARES. Subject to the 1940 Act and applicable law, the
Trust may sell its authorized but unissued Shares of beneficial interest to such
Persons, at such times, on such terms, and for such consideration as the Board
of Trustees may from time to time authorize. Each sale shall be credited to the
individual purchaser's account in the form of full or fractional Shares of the
Trust or such Series thereof (and Class thereof, if any), as the purchaser may
select, at the net asset value per Share, subject to Section 22 of the 1940 Act,
and the rules and regulations adopted thereunder; PROVIDED, HOWEVER, that the
Board of Trustees may, in its sole discretion, permit the Principal Underwriter
to impose a sales charge upon any such sale. Every Shareholder by virtue of
having become a Shareholder shall be deemed to have expressly assented and
agreed to the terms of this Declaration of Trust and to have become bound as a
party hereto.
Section 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving to Shareholders only the rights
provided in this Declaration of Trust, the By-Laws, and under applicable law.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust Property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Subject to Article VIII, Section 2
hereof, the death, incapacity, dissolution, termination, or bankruptcy of a
Shareholder during the existence of the Trust and any Series thereof shall not
operate to dissolve the Trust or any such Series, nor entitle the representative
of any deceased, incapacitated, dissolved, terminated or bankrupt Shareholder to
an accounting or to take any action in court or elsewhere against the Trust, the
Trustees or any such Series, but entitles such representative only to the rights
of said deceased, incapacitated, dissolved, terminated or bankrupt Shareholder
under this Declaration of Trust. Neither the Trust nor the Trustees, nor any
officer, employee or agent of the Trust, shall have any power to bind personally
any Shareholder, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money other than such as the
Shareholder may at any time personally agree to pay. Each Share, when issued on
the terms determined by the Board of Trustees, shall be fully paid and
nonassessable. As provided in the DSTA, Shareholders shall be entitled to the
same limitation of personal liability as that extended to stockholders of a
private corporation organized for profit under the General Corporation Law of
the State of Delaware.
Section 5. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS ELECTION. The Board
of Trustees shall have the power, in its discretion, to make such elections as
to the tax status of the Trust and any Series as may be permitted or required
under the Code, without the vote of any Shareholder.
Section 6. ESTABLISHMENT AND DESIGNATION OF SERIES AND CLASSES. The
establishment and designation of any Series or Class shall be effective, without
the requirement of Shareholder approval, upon the adoption of a resolution by
not less than a majority of the then Board of Trustees, which resolution shall
set forth such establishment and designation and may provide, to the extent
permitted by the DSTA, for rights, powers and duties of such Series or Class
(including variations in the relative rights and preferences as between the
different Series and Classes) otherwise than as provided herein. Each such
resolution shall be incorporated herein upon adoption, and the resolutions that
have been adopted prior to May 21, 2007 regarding the establishment and
designation of Series and/or Classes of Shares of the Trust pursuant to the
applicable provisions of the Original Declaration and the A&R Declaration, and
any amendments or modifications to such resolutions through the date hereof, are
hereby incorporated herein as of the date of their adoption. Any such resolution
may be amended by a further resolution of a majority of the Board of Trustees,
and if Shareholder approval would be required to make such an amendment to the
language set forth in this Declaration of Trust, such further resolution shall
require the same Shareholder approval that would be necessary to make such
amendment to the language set forth in this Declaration of Trust. Each such
further resolution shall be incorporated herein by reference upon adoption.
Each Series shall be separate and distinct from any other Series, separate
and distinct records on the books of the Trust shall be maintained for each
Series, and the assets and liabilities belonging to any such Series shall be
held and accounted for separately from the assets and liabilities of the Trust
or any other Series. Each Class of the Trust shall be separate and distinct from
any other Class of the Trust. Each Class of a Series shall be separate and
distinct from any other Class of the Series. As appropriate, in a manner
determined by the Board of Trustees, the liabilities belonging to any such Class
shall be held and accounted for separately from the liabilities of the Trust,
the Series or any other Class and separate and distinct records on the books of
the Trust for the Class shall be maintained for this purpose. Subject to Article
II hereof, each such Series shall operate as a separate and distinct investment
medium, with separately defined investment objectives and policies.
Shares of each Series (and Class where applicable) established and
designated pursuant to this Section 6, or the corresponding provision of the
Original Declaration or the A&R Declaration, shall have the following rights,
powers and duties, unless otherwise provided to the extent permitted by the
DSTA, in the resolution establishing and designating such Series or Class:
(a) ASSETS HELD WITH RESPECT TO A PARTICULAR SERIES. All consideration
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received by the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which 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 be held with respect to
that Series for all purposes, subject only to the rights of creditors
with respect to that Series, and shall be so recorded upon the books 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 held with respect to" that Series. In the
event that there are any assets, income, earnings, profits and proceeds
thereof, funds or payments which are not readily identifiable as assets
held with respect to any particular Series (collectively "General
Assets"), the Board of Trustees, or an appropriate officer as determined
by the Board of Trustees, shall allocate such General Assets to, between
or among any one or more of the Series in such manner and on such basis
as the Board of Trustees, in its sole discretion, deems fair and
equitable, and any General Asset so allocated to a particular Series
shall be held with respect to that Series. Each such allocation by or
under the direction of the Board of Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(b) LIABILITIES HELD WITH RESPECT TO A PARTICULAR SERIES OR CLASS. The
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assets of the Trust held with respect to a particular Series shall be
charged with the liabilities, debts, obligations, costs, charges,
reserves and expenses of the Trust incurred, contracted for or otherwise
existing with respect to such Series. Such liabilities, debts,
obligations, costs, charges, reserves and expenses incurred, contracted
for or otherwise existing with respect to a particular Series are herein
referred to as "liabilities held with respect to" that Series. Any
liabilities, debts, obligations, costs, charges, reserves and expenses
of the Trust which are not readily identifiable as being liabilities
held with respect to any particular Series (collectively "General
Liabilities") shall be allocated by the Board of Trustees, or an
appropriate officer as determined by the Board of Trustees, to and among
any one or more of the Series in such manner and on such basis as the
Board of Trustees in its sole discretion deems fair and equitable. Each
allocation of liabilities, debts, obligations, costs, charges, reserves
and expenses by or under the direction of the Board of Trustees shall be
conclusive and binding upon the Shareholders of all Series for all
purposes. All Persons who have extended credit that has been allocated
to a particular Series, or who have a claim or contract that has been
allocated to any particular Series, shall look exclusively to the assets
of that particular Series for payment of such credit, claim, or
contract. In the absence of an express contractual agreement so
limiting the claims of such creditors, claimants and contract providers,
each creditor, claimant and contract provider shall be deemed
nevertheless to have impliedly agreed to such limitation.
Subject to the right of the Board of Trustees in its discretion to
allocate General Liabilities as provided herein, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular Series, whether such Series is now authorized and
existing pursuant to the Original Declaration or the A&R Declaration, or is
hereafter authorized and existing pursuant to this Declaration of Trust, shall
be enforceable against the assets held with respect to that Series only, and not
against the assets of any other Series or the Trust generally and none of the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other Series
thereof shall be enforceable against the assets held with respect to such
Series. Notice of this limitation on liabilities between and among Series has
been set forth in the Certificate of Trust filed in the Office of the Secretary
of State of the State of Delaware pursuant to the DSTA, and having given such
notice in the Certificate of Trust, the statutory provisions of Section 3804 of
the DSTA relating to limitations on liabilities between and among Series (and
the statutory effect under Section 3804 of setting forth such notice in the
Certificate of Trust) are applicable to the Trust and each Series.
Liabilities, debts, obligations, costs, charges, reserves and expenses
related to the distribution of, and other identified expenses that should or may
properly be allocated to, the Shares of a particular Class may be charged to and
borne solely by such Class. The bearing of expenses solely by a particular Class
of Shares may be appropriately reflected (in a manner determined by the Board of
Trustees) and may affect the net asset value attributable to, and the dividend,
repurchase and liquidation rights of, such Class. Each allocation of
liabilities, debts, obligations, costs, charges, reserves and expenses by or
under the direction of the Board of Trustees shall be conclusive and binding
upon the Shareholders of all Classes for all purposes. All Persons who have
extended credit that has been allocated to a particular Class, or who have a
claim or contract that has been allocated to any particular Class, shall look,
and may be required by contract to look, exclusively to that particular Class
for payment of such credit, claim, or contract.
(c) DIVIDENDS, DISTRIBUTIONS AND REPURCHASES. Notwithstanding any other
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provisions of this Declaration of Trust, including, without limitation,
Article VI hereof, no dividend or distribution including, without
limitation, any distribution paid upon dissolution of the Trust or of
any Series with respect to, nor any repurchase of, the Shares of any
Series or Class of such Series shall be effected by the Trust other than
from the assets held with respect to such Series, nor, except as
specifically provided in Section 7 of this Article III, shall any
Shareholder of any particular Series otherwise have any right or claim
against the assets held with respect to any other Series or the Trust
generally except, in the case of a right or claim against the assets
held with respect to any other Series, to the extent that such
Shareholder has such a right or claim hereunder as a Shareholder of such
other Series. The Board of Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine which items
shall be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) VOTING. All Shares of the Trust entitled to vote on a matter shall vote
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in the aggregate without differentiation between the Shares of the
separate Series, if any, or separate Classes, if any; provided that (i)
with respect to any matter that affects only the interests of some but
not all Series, then only the Shares of such affected Series, voting
separately, shall be entitled to vote on the matter, (ii) with respect
to any matter that affects only the interests of some but not all
Classes, then only the Shares of such affected Classes, voting
separately, shall be entitled to vote on the matter; and (iii)
notwithstanding the foregoing, with respect to any matter as to which
the 1940 Act or other applicable law or regulation requires voting, by
Series or by Class, then the Shares of the Trust shall vote as
prescribed in such law or regulation.
(e) EQUALITY. Each Share of any particular Series shall be equal to each other
Share of such Series (subject to the rights and preferences with respect
to separate Classes of such Series).
(f) FRACTIONS. A fractional Share of a Series shall carry proportionately all
the rights and obligations of a whole Share of such Series, including
rights with respect to voting, receipt of dividends and distributions,
repurchases of Shares and dissolution of the Trust or that Series.
(g) EXCHANGE PRIVILEGE. The Board of Trustees shall have the authority to
provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series in accordance
with such requirements and procedures as may be established by the Board
of Trustees, and in accordance with the 1940 Act.
(h) Combination of Series or Classes.
(i) The Board of Trustees shall have the authority, without the approval,
vote or consent of the Shareholders of any Series, unless
otherwise required by applicable law, to combine the
assets and liabilities held with respect to any two or
more Series into assets and liabilities held with respect
to a single Series; PROVIDED that upon completion of such
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combination of Series, the interest of each Shareholder,
in the combined assets and liabilities held with respect
to the combined Series shall equal the interest of each
such Shareholder in the aggregate of the assets and
liabilities held with respect to the Series that were
combined.
(ii) The Board of Trustees shall have the authority, without the approval, vote
or consent of the Shareholders of any Series or Class, unless otherwise
required by applicable law, to combine, merge or otherwise consolidate the
Shares of two or more Classes of Shares of a Series with and/or into a
single Class of Shares of such Series, with such designation, preference,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, terms and conditions of repurchase and other
characteristics as the Trustees may determine; provided, however, that the
Trustees shall provide written notice to the affected Shareholders of any
such transaction.
(iii) The transactions in (i) and (ii) above may be effected through
share-for-share exchanges, transfers or sales of assets, Shareholder
in-kind repurchses and purchases, exchange offers, or any other method
approved by the Trustees.
(i) DISSOLUTION OR TERMINATION. Any particular Series shall be dissolved
--------------------------
upon the occurrence of the applicable dissolution events set forth in
Article VIII, Section 1 hereof. Upon dissolution of a particular
Series, the Trustees shall wind up the affairs of such Series in
accordance with Article VIII Section 1 hereof and thereafter, rescind
the establishment and designation thereof. The Board of Trustees shall
terminate any particular Class and rescind the establishment and
designation thereof: (i) upon approval by a majority of votes cast at a
meeting of the Shareholders of such Class, provided a quorum of
Shareholders of such Class are present, or by action of the Shareholders
of such Class by written consent without a meeting pursuant to Article
V, Section 3; or (ii) at the discretion of the Board of Trustees either
(A) at any time there are no Shares outstanding of such Class, or (B)
upon prior written notice to the Shareholders of such Class; PROVIDED,
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HOWEVER, that upon the rescission of the establishment and designation
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of any particular Series, every Class of such Series shall thereby be
terminated and its establishment and designation rescinded. Each
resolution of the Board of Trustees pursuant to this Section 6(i) shall
be incorporated herein by reference upon adoption.
Section 7. INDEMNIFICATION OF SHAREHOLDERS. No shareholder as such shall be
subject to any personal liability whatsoever to any Person in connection with
Trust Property or the acts, obligations or affairs of the Trust. If any
Shareholder or former Shareholder shall be exposed to liability, charged with
liability, or held personally liable, for any obligations or liability of the
Trust, by reason of a claim or demand relating exclusively to his or her being
or having been a Shareholder of the Trust or a Shareholder of a particular
Series thereof, and not because of such Shareholder's actions or omissions, such
Shareholder or former Shareholder (or, in the case of a natural person, his or
her heirs, executors, administrators, or other legal representatives or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled to be held harmless from and indemnified out of the assets of
the Trust or out of the assets of such Series thereof, as the case may be,
against all loss and expense, including without limitation, attorneys' fees,
arising from such claim or demand; PROVIDED, HOWEVER, such indemnity shall not
cover (i) any taxes due or paid by reason of such Shareholder's ownership of any
Shares and (ii) expenses charged to a Shareholder pursuant to Article IV,
Section 5 hereof.
ARTICLE IV.
THE BOARD OF TRUSTEES
Section 1. NUMBER, ELECTION, TERM, REMOVAL AND RESIGNATION.
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(a) In accordance with Section 3801 of the DSTA, each Trustee shall
become a Trustee and be bound by this Declaration of Trust and the By-Laws
when such Person signs this Declaration of Trust as a trustee and/or is
duly elected or appointed, qualified and serving on the Board of Trustees
in accordance with the provisions hereof and the By-Laws, so long as such
signatory or other Person continues in office in accordance with the terms
hereof.
(b) The number of Trustees constituting the entire Board of Trustees may
be fixed from time to time by the vote of a majority of the then Board of
Trustees; PROVIDED, HOWEVER, that the number of Trustees shall in no event
be less than one (1) nor more than fifteen (15). The number of Trustees
shall not be reduced so as to shorten the term of any Trustee then in
office.
(c) Each Trustee shall hold office for the lifetime of the Trust or until
such Trustee's earlier death, resignation, removal, retirement or
inability otherwise to serve, or, if sooner than any of such events, until
the next meeting of Shareholders called for the purpose of electing
Trustees or consent of Shareholders in lieu thereof for the election of
Trustees, and until the election and qualification of his or her
successor.
(d) Any Trustee may be removed, with or without cause, by the Board or
Trustees, by action of a majority of the Trustees then in office, or by
the Shareholders, upon the vote of the holders of 75% of the Shares
entitled to vote.
(e) Any Trustee may resign at any time by giving written notice to the
secretary of the Trust or to a meeting of the Board of Trustees. Such
resignation shall be effective upon receipt, unless specified to be
effective at some later time.
Section 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A MEETING. To the
extent not inconsistent with the provisions of the 1940 Act, any action that may
be taken at any meeting of the Board of Trustees or any committee thereof may be
taken without a meeting and without prior written notice if a consent or
consents in writing setting forth the action so taken is signed by the Trustees
having not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all Trustees on the Board of
Trustees or any committee thereof, as the case may be, were present and voted.
Written consents of the Trustees may be executed in one or more counterparts. A
consent transmitted by electronic transmission (as defined in Section 3806 of
the DSTA) by a Trustee shall be deemed to be written and signed for purposes of
this Section. All such consents shall be filed with the secretary of the Trust
and shall be maintained in the Trust's records.
Section 3. POWERS; OTHER BUSINESS INTERESTS; QUORUM AND REQUIRED VOTE.
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(a) POWERS. Subject to the provisions of this Declaration of Trust, the
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business of the Trust (including every Series thereof) shall be managed
by or under the direction of the Board of Trustees, and such Board of
Trustees shall have all powers necessary or convenient to carry out that
responsibility. The Board of Trustees shall have full power and
authority to do any and all acts and to make and execute any and all
contracts and instruments that it may consider necessary or appropriate
in connection with the operation and administration of the Trust
(including every Series thereof). The Board of Trustees shall not be
bound or limited by present or future laws or customs with regard to
investments by trustees or fiduciaries, but, subject to the other
provisions of this Declaration of Trust and the By-Laws, shall have full
authority and absolute power and control over the assets and the
business of the Trust (including every Series thereof) to the same
extent as if the Board of Trustees was the sole owner of such assets and
business in its own right, including such authority, power and control
to do all acts and things as it, in its sole discretion, shall deem
proper to accomplish the purposes of this Trust. Without limiting the
foregoing, the Board of Trustees may, subject to the requisite vote for
such actions as set forth in this Declaration of Trust and the By-Laws:
(1) adopt By-Laws not inconsistent with applicable law or this
Declaration of Trust; (2) amend, restate and repeal such By-Laws,
subject to and in accordance with the provisions of such By-Laws; (3)
fill vacancies on the Board of Trustees in accordance with this
Declaration of Trust and the By-Laws; (4) elect and remove such officers
and appoint and terminate such agents as it considers appropriate, in
accordance with this Declaration of Trust and the By-Laws; (5) establish
and terminate one or more committees of the Board of Trustees pursuant
to the By-Laws; (6) place Trust Property in custody as required by the
1940 Act, employ one or more custodians of the Trust Property and
authorize such custodians to employ sub-custodians and to place all or
any part of such Trust Property with a custodian or a custodial system
meeting the requirements of the 1940 Act; (7) retain a transfer agent,
dividend disbursing agent, a shareholder servicing agent or
administrative services agent, or any number thereof or any other
service provider as deemed appropriate; (8) provide for the issuance and
distribution of shares of beneficial interest in the Trust or other
securities or financial instruments directly or through one or more
Principal Underwriters or otherwise; (9) retain one or more Investment
Adviser(s); (10) repurchase Shares on behalf of the Trust and transfer
Shares pursuant to applicable law; (11) set record dates for the
determination of Shareholders with respect to various matters, in the
manner provided in Article V, Section 4 of this Declaration of Trust;
(12) declare and pay dividends and distributions to Shareholders from
the Trust Property, in accordance with this Declaration of Trust and the
By-Laws; (13) establish, designate and redesignate from time to time, in
accordance with the provisions of Article III, Section 6 hereof, any
Series or Class of the Trust or of a Series; (14) hire personnel as
staff for the Board of Trustees or, for those Trustees who are not
Interested Persons of the Trust, the Investment Adviser, or the
Principal Underwriter, set the compensation to be paid by the Trust to
such personnel, exercise exclusive supervision of such personnel, and
remove one or more of such personnel, at the discretion of the Board of
Trustees; (15) retain special counsel, other experts and/or consultants
for the Board of Trustees, for those Trustees who are not Interested
Persons of the Trust, the Investment Adviser, or the Principal
Underwriter, and/or for one or more of the committees of the Board of
Trustees, set the compensation to be paid by the Trust to such special
counsel, other experts and/or consultants, and remove one or more of
such special counsel, other experts and/or consultants, at the
discretion of the Board of Trustees; (16) engage in and prosecute,
defend, compromise, abandon, or adjust, by arbitration, or otherwise,
any actions, suits, proceedings, disputes, claims, and demands relating
to the Trust, and out of the assets of the Trust to pay or to satisfy
any debts, claims or expenses incurred in connection therewith,
including those of litigation, and such power shall include, without
limitation, the power of the Trustees, or any appropriate committee
thereof, in the exercise of their or its good faith business judgment,
to dismiss any action, suit, proceeding, dispute, claim or demand,
derivative or otherwise, brought by any person, including a shareholder
in its own name or in the name of the Trust, whether or not the Trust or
any of the Trustees may be named individually therein or the subject
matter arises by reason of business for or on behalf of the Trust; and
(17) in general delegate such authority as it considers desirable to any
Trustee or officer of the Trust, to any committee of the Trust, to any
agent or employee of the Trust or to any custodian, transfer, dividend
disbursing, shareholder servicing agent, Principal Underwriter,
Investment Adviser, or other service provider.
The powers of the Board of Trustees set forth in this Section 3(a)
are without prejudice to any other powers of the Board of Trustees set forth in
this Declaration of Trust and the By-Laws. Any determination as to what is in
the best interests of the Trust or any Series or Class thereof and its
Shareholders made by the Board of 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 Board of Trustees.
(b) OTHER BUSINESS INTERESTS. The Trustees shall devote to the affairs of
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the Trust (including every Series thereof) such time as may be necessary
for the proper performance of their duties hereunder, but neither the
Trustees nor the officers, directors, shareholders, partners or
employees of the Trustees, if any, shall be expected to devote their
full time to the performance of such duties. The Trustees, or any
Affiliate, shareholder, officer, director, partner or employee thereof,
or any Person owning a legal or beneficial interest therein, may engage
in, or possess an interest in, any business or venture other than the
Trust or any Series thereof, of any nature and description,
independently or with or for the account of others. None of the Trust,
any Series thereof or any Shareholder shall have the right to
participate or share in such other business or venture or any profit or
compensation derived therefrom.
(c) QUORUM AND REQUIRED VOTE. At all meetings of the Board of Trustees, a
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majority of the Board of Trustees then in office shall be present in
person in order to constitute a quorum for the transaction of business.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the departure of Trustees from the
meeting, if any action taken is approved by at least a majority of the
required quorum for that meeting. Subject to Article III, Sections 1
and 6 of the By-Laws and except as otherwise provided herein or required
by applicable law, the vote of not less than a majority of the Trustees
present at a meeting at which a quorum is present shall be the act of
the Board of Trustees.
Section 4. PAYMENT OF EXPENSES BY THE TRUST. Subject to the provisions of
Article III, Section 6 hereof, an authorized officer of the Trust shall pay or
cause to be paid out of the principal or income of the Trust or any particular
Series or Class thereof, or partly out of the principal and partly out of the
income of the Trust or any particular Series or Class thereof, and charge or
allocate the same to, between or among such one or more of the Series or Classes
that may be established or designated pursuant to Article III, Section 6 hereof,
as such officer deems fair, all expenses, fees, charges, taxes and liabilities
incurred by or arising in connection with the maintenance or operation of the
Trust or a particular Series or Class thereof, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses, fees, charges, taxes and liabilities associated with the
services of the Trust's officers, employees, Investment Adviser(s), Principal
Underwriter, auditors, counsel, custodian, sub-custodian, transfer agent,
dividend disbursing agent, shareholder servicing agent, and such other agents or
independent contractors and such other expenses, fees, charges, taxes and
liabilities as the Board of Trustees may deem necessary or proper to incur.
Section 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Board of Trustees shall
have the power, as frequently as it may determine, to cause any Shareholder to
pay directly, in advance or arrears, an amount fixed from time to time by the
Board of Trustees or an officer of the Trust for charges of the Trust's
custodian or transfer, dividend disbursing, shareholder servicing or similar
agent which are not customarily charged generally to the Trust, a Series or a
Class, where such services are provided to such Shareholder individually, rather
than to all Shareholders collectively, by setting off such amount due from such
Shareholder from the amount of (i) declared but unpaid dividends or
distributions owed such Shareholder, or (ii) proceeds from the repurchase by the
Trust of Shares from such Shareholder pursuant to Article VI hereof.
Section 6. OWNERSHIP OF TRUST PROPERTY. Legal title to all of the Trust
Property shall at all times be vested in the Trust, except that the Board of
Trustees shall have the power to cause legal title to any Trust Property to be
held by or in the name of any Person as nominee, on such terms as the Board of
Trustees may determine, in accordance with applicable law.
Section 7. SERVICE CONTRACTS.
(a) Subject to this Declaration of Trust, the By-Laws and the 1940 Act, the
Board of Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive investment advisory or investment management
services for the Trust or for any Series thereof with any corporation,
trust, association or other organization, including any Affiliate; and
any such contract may contain such other terms as the Board of Trustees
may determine, including without limitation, delegation of authority to
the Investment Adviser to determine from time to time without prior
consultation with the Board of Trustees what securities and other
instruments or property shall be purchased or otherwise acquired, owned,
held, invested or reinvested in, sold, exchanged, transferred,
mortgaged, pledged, assigned, negotiated, or otherwise dealt with or
disposed of, and what portion, if any, of the Trust Property shall be
held uninvested and to make changes in the Trust's or a particular
Series' investments, or to engage in such other activities, including
administrative services, as may specifically be delegated to such party.
(b) The Board of Trustees may also, at any time and from time to time,
contract with any Person, including any Affiliate, appointing it or them
as the exclusive or nonexclusive placement agent, distributor or
Principal Underwriter for the Shares of beneficial interest of the Trust
or one or more of the Series or Classes thereof, or for other securities
or financial instruments to be issued by the Trust, or appointing it or
them to act as the administrator, fund accountant or accounting agent,
custodian, transfer agent, dividend disbursing agent and/or shareholder
servicing agent for the Trust or one or more of the Series or Classes
thereof.
(c) The Board of Trustees is further empowered, at any time and from time to
time, to contract with any Persons, including any Affiliates, to provide
such other services to the Trust or one or more of its Series, as the
Board of Trustees determines to be in the best interests of the Trust,
such Series and its Shareholders.
(d) None of the following facts or circumstances shall affect the validity
of any of the contracts provided for in this Article IV, Section 7, or
disqualify any Shareholder, Trustee, employee or officer of the Trust
from voting upon or executing the same, or create any liability or
accountability to the Trust, any Series thereof or the Shareholders,
provided that the establishment of and performance of each such contract
is permissible under the 1940 Act, and provided further that such Person
is authorized to vote upon such contract under the 1940 Act:
(i) the fact that any of the Shareholders, Trustees, employees or officers
of the Trust is a shareholder, director, officer,
partner, trustee, employee, manager, Adviser, placement
agent, Principal Underwriter, distributor, or Affiliate
or agent of or for any Person, or for any parent or
Affiliate of any Person, with which any type of service
contract provided for in this Article IV, Section 7 may
have been or may hereafter be made, or that any such
Person, or any parent or Affiliate thereof, is a
Shareholder or has an interest in the Trust, or
(ii) the fact that any Person with which any type of service contract provided
for in this Article IV, Section 7 may have been or may hereafter be made
also has such a service contract with one or more other Persons, or has
other business or interests.
(e) Every contract referred to in this Section 7 is required to comply with
this Declaration of Trust, the By-Laws, the 1940 Act, other applicable law
and any stipulation by resolution of the Board of Trustees.
ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. VOTING POWERS. Subject to the provisions of Article III, Section
6 hereof, the Shareholders shall have the power to vote only (i) on such matters
required by this Declaration of Trust, the By-Laws, the 1940 Act, other
applicable law and any registration statement of the Trust filed with the
Commission, the registration of which is effective; and (ii) on such other
matters as the Board of Trustees may consider necessary or desirable. Subject to
Article III hereof, the Shareholder of record (as of the record date established
pursuant to Section 4 of this Article V) of each Share shall be entitled to one
vote for each full Share, and a fractional vote for each fractional Share.
Shareholders shall not be entitled to cumulative voting in the election of
Trustees or on any other matter.
Section 2. QUORUM AND REQUIRED VOTE.
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(a) A majority of the Shares entitled to vote at a Shareholders' meeting,
which are present in person or represented by proxy, shall constitute a
quorum at the Shareholders' meeting, except when a larger quorum is
required by applicable law or the requirements of any securities
exchange on which Shares are listed for trading, in which case such
quorum shall comply with such requirements. When a separate vote by one
or more Series or Classes is required, a majority of the Shares of each
such Series or Class entitled to vote at a Shareholders' meeting of such
Series or Class, which are present in person or represented by proxy,
shall constitute a quorum at the Shareholders' meeting of such Series or
Class, except when a larger quorum is required by applicable law or the
requirements of any securities exchange on which Shares of such Series
or Class are listed for trading, in which case such quorum shall comply
with such requirements.
(b) Subject to any provision of this Declaration of Trust, the By-Laws, the
1940 Act or other applicable law that requires a different vote: (1) in
all matters other than the election of Trustees, the affirmative "vote
of a majority of the outstanding voting securities" (as defined herein)
of the Trust entitled to vote at a Shareholders' meeting at which a
quorum is present, shall be the act of the Shareholders; and (2)
Trustees shall be elected by not less than a plurality of the votes cast
of the holders of Shares entitled to vote present in person or
represented by proxy at a Shareholders' meeting at which a quorum is
present. Pursuant to Article III, Section 7(d) hereof, where a separate
vote by Series and, if applicable, by Classes is required, the preceding
sentence shall apply to such separate votes by Series and Classes.
(c) Abstentions and broker non-votes will be treated as votes present at a
Shareholders' meeting; abstentions and broker non-votes will not be
treated as votes cast at such meeting. Abstentions and broker non-votes,
therefore (i) will be included for purposes of determining whether a
quorum is present; and (ii) will have no effect on proposals that require
a plurality for approval, or on proposals requiring an affirmative vote of
a majority of votes cast for approval.
Section 3. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of Shareholders may be taken without a
meeting if a consent or consents in writing setting forth the action so taken is
or are signed by the holders of a majority of the Shares entitled to vote on
such action (or such different proportion thereof as shall be required by law,
the Declaration of Trust or the By-Laws for approval of such action) and is or
are received by the secretary of the Trust either: (i) by the date set by
resolution of the Board of Trustees for the shareholder vote on such action; or
(ii) if no date is set by resolution of the Board, within 30 days after the
record date for such action as determined by reference to Article V, Section
4(b) hereof. The written consent for any such action may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
when taken together shall constitute one and the same instrument. A consent
transmitted by electronic transmission (as defined in the DSTA) by a Shareholder
or by a Person or Persons authorized to act for a Shareholder shall be deemed to
be written and signed for purposes of this Section. All such consents shall be
filed with the secretary of the Trust and shall be maintained in the Trust's
records. Any Shareholder that has given a written consent or the Shareholder's
proxyholder or a personal representative of the Shareholder or its respective
proxyholder may revoke the consent by a writing received by the secretary of the
Trust either: (i) before the date set by resolution of the Board of Trustees for
the shareholder vote on such action; or (ii) if no date is set by resolution of
the Board, within 30 days after the record date for such action as determined by
reference to Article V, Section 4(b) hereof.
Section 4. RECORD DATES.
(a) For purposes of determining the Shareholders entitled to notice of, and
to vote at, any meeting of Shareholders, the Board of Trustees may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees,
and which record date shall not be more than one hundred and twenty
(120) days nor less than ten (10) days before the date of any such
meeting. A determination of Shareholders of record entitled to notice
of or to vote at a meeting of Shareholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Trustees may fix a new record date for the adjourned meeting and shall
fix a new record date for any meeting that is adjourned for more than
sixty (60) days from the date set for the original meeting. For
purposes of determining the Shareholders entitled to vote on any action
without a meeting, the Board of Trustees may fix a record date, which
record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Trustees, and which record
date shall not be more than thirty (30) days after the date upon which
the resolution fixing the record date is adopted by the Board of
Trustees.
(b) If the Board of Trustees does not so fix a record date:
(i) the record date for determining Shareholders entitled to
notice of, and to vote at, a meeting of Shareholders shall
be at the close of business on the day next preceding the
day on which notice is given or, if notice is waived, at
the close of business on the day next preceding the day on
which the meeting is held.
(ii) the record date for determining Shareholders entitled to
vote on any action by consent in writing without a meeting
of Shareholders, (1) when no prior action by the Board of
Trustees has been taken, shall be the day on which the
first signed written consent setting forth the action taken
is delivered to the Trust, or (2) when prior action of the
Board of Trustees has been taken, shall be at the close of
business on the day on which the Board of Trustees adopts
the resolution taking such prior action.
(c) For the purpose of determining the Shareholders of the
Trust or any Series or Class thereof who are entitled to
receive payment of any dividend or of any other
distribution of assets of the Trust or any Series or Class
thereof (other than in connection with a dissolution of the
Trust or a Series, a merger, consolidation, conversion,
reorganization, or any other transactions, in each case
that is governed by Article VIII of the Declaration of
Trust), the Board of Trustees may:
(i) from time to time fix a record date, which record date
shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall not
be more than sixty (60) days before the date for the
payment of such dividend and/or such other distribution;
(ii) adopt standing resolutions fixing record dates and related
payment dates at periodic intervals of any duration for the
payment of such dividend and/or such other distribution;
and/or
(iii) delegate to an appropriate officer or officers of the Trust
the determination of such periodic record and/or payments
dates with respect to such dividend and/or such other
distribution.
Nothing in this Section shall be construed as precluding the Board of Trustees
from setting different record dates for different Series or Classes.
Section 5. ADDITIONAL PROVISIONS. The By-Laws may include further provisions
for Shareholders' votes, meetings and related matters.
ARTICLE VI.
NET ASSET VALUE; DISTRIBUTIONS;
REPURCHASES; TRANSFERS
Section 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
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Distributions.
(a) Subject to Article III, Section 6 hereof, the Board of Trustees shall
have the power to determine from time to time the offering price for
authorized, but unissued, Shares of beneficial interest of the Trust or
any Series or Class thereof, respectively, that shall yield to the Trust
or such Series or Class not less than the net asset value thereof, in
addition to any amount of applicable sales charge to be paid to the
Principal Underwriter or the selling broker or dealer in connection with
the sale of such Shares, at which price the Shares of the Trust or such
Series or Class, respectively, shall be offered for sale, subject to any
other requirements or limitations of the 1940 Act.
(b) Subject to Article III, Section 6 hereof, the Board of Trustees may,
subject to the 1940 Act, prescribe and shall set forth in the By-Laws,
this Declaration of Trust or in a resolution of the Board of Trustees
such bases and time for determining the net asset value per Share of the
Trust or any Series or Class thereof, or net income attributable to the
Shares of the Trust or any Series or Class thereof or the declaration
and payment of dividends and distributions on the Shares of the Trust or
any Series or Class thereof, as it may deem necessary or desirable, and
such dividends and distributions may vary between the Classes to reflect
differing allocations of the expenses of the Trust between such Classes
to such extent and for such purposes as the Trustees may deem
appropriate.
(c) The Shareholders of the Trust or any Series or Class, if any, shall be
entitled to receive dividends and distributions, when, if and as
declared by the Board of Trustees with respect thereto, provided that
with respect to Classes, such dividends and distributions shall comply
with the 1940 Act. The right of Shareholders to receive dividends or
other distributions on Shares of any Class may be set forth in a plan
adopted by the Board of Trustees and amended from time to time pursuant
to the 1940 Act. No Share shall have any priority or preference over
any other Share of the Trust with respect to dividends or distributions
paid in the ordinary course of business or distributions upon
dissolution of the Trust made pursuant to Article VIII, Section 1
hereof; provided however, that
(i) if the Shares of the Trust are divided into Series thereof,
no Share of a particular Series shall have any priority or
preference over any other Share of the same Series with
respect to dividends or distributions paid in the ordinary
course of business or distributions upon dissolution of the
Trust or of such Series made pursuant to Article VIII,
Section 1 hereof;
(ii) if the Shares of the Trust are divided into Classes
thereof, no Share of a particular Class shall have any
priority or preference over any other Share of the same
Class with respect to dividends or distributions paid in
the ordinary course of business or distributions upon
dissolution of the Trust made pursuant to Article VIII,
Section 1 hereof; and
(iii) if the Shares of a Series are divided into Classes thereof,
no Share of a particular Class of such Series shall have
any priority or preference over any other Share of the same
Class of such Series with respect to dividends or
distributions paid in the ordinary course of business or
distributions upon dissolution of such Series made pursuant
to Article VIII, Section 1 hereof.
All dividends and distributions shall be made ratably among all Shareholders of
the Trust, a particular Class of the Trust, a particular Series, or a particular
Class of a Series from the Trust Property held with respect to the Trust, such
Series or such Class, respectively, according to the number of Shares of the
Trust, such Series or such Class held of record by such Shareholders on the
record date for any dividend or distribution; provided however, that
(iv) if the Shares of the Trust are divided into Series thereof,
all dividends and distributions from the Trust Property
and, if applicable, held with respect to such Series, shall
be distributed to each Series thereof according to the net
asset value computed for such Series and within such
particular Series, shall be distributed ratably to the
Shareholders of such Series according to the number of
Shares of such Series held of record by such Shareholders
on the record date for any dividend or distribution; and
(v) if the Shares of the Trust or of a Series are divided into Classes
thereof, all dividends and distributions from the Trust
Property and, if applicable, held with respect to the
Trust or such Series, shall be distributed to each Class
thereof according to the net asset value computed for
such Class and within such particular Class, shall be
distributed ratably to the 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.
Dividends and distributions may be paid in cash, in kind or in Shares.
(d) Before payment of any dividend there may be set aside out of any funds
of the Trust, or the applicable Series thereof, available for dividends
such sum or sums as the Board of Trustees may from time to time, in its
absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Trust, or any Series thereof, or for
such other lawful purpose as the Board of Trustees shall deem to be in
the best interests of the Trust, or the applicable Series, as the case
may be, and the Board of Trustees may abolish any such reserve in the
manner in which the reserve was created.
Section 2. REPURCHASE OF SHARES WITH SHAREHOLDER CONSENT.
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(a) The Trust may repurchase Shares on the open market or such Shares as are
tendered by any Shareholder for repurchase pursuant to a repurchase
offer or tender offer, if any, made by the Trust periodically or from
time to time, upon the presentation by the Shareholder of a proper
instrument of transfer together with a request directed to the Trust,
its transfer agent or other duly authorized agent, that the Trust
repurchase such Shares, or in accordance with such other procedures for
repurchase as the Board of Trustees may from time to time authorize; and
the Trust will pay therefore a price that meets the requirements of
Section 23 of the 1940 Act, and the rules and regulations adopted
thereunder, and that is in accordance with the terms of such repurchase
offer, tender offer, this Declaration of Trust, the By-Laws and other
applicable law. The obligations of the Trust set forth in this Section
2 are subject to the provision that such obligations may be suspended or
postponed under the circumstances provided in the 1940 Act or other
applicable law, and such suspension or postponement may thereafter be
terminated, by the Board of Trustees, by the vote required under the
1940 Act or other applicable law.
(b) The repurchase price may in any case or cases be paid wholly or partly
in kind if the Board of Trustees determines that such payment is
advisable in the interest of the Trust or the applicable Series.
Subject to the foregoing, the fair value, selection and quantity of
securities or other property of the Trust or the applicable Series so
paid or delivered as all or part of the repurchase price shall be
determined by or under authority of the Board of Trustees. Subject to
applicable law, the Trust or the applicable Series shall not be liable
for any delay of any corporation or other Person in transferring
securities or other property selected for delivery as all or part of any
payment in kind.
Section 3. ....REPURCHASE OF SHARES WITHOUT SHAREHOLDER CONSENT. The Trust shall
have the right at its option and at any time, subject to the 1940 Act and other
applicable law, to repurchase Shares of any Shareholder at a price that meets
the requirements of Section 23 of the 1940 Act, and the rules and regulations
adopted thereunder, and that is in accordance with the terms of this Declaration
of Trust, the By-Laws and other applicable law: (a) if at such time, such
Shareholder owns Shares having an aggregate net asset value of less than an
amount determined from time to time by the Trustees; or (b) to the extent that
such Shareholder owns Shares equal to or in excess of a percentage of the Shares
determined from time to time by the Trustees.
Section 4. TRANSFER OF SHARES. Shares shall be transferable in accordance
with the provisions of the By-Laws.
ARTICLE VII.
LIMITATION OF LIABILITY
AND INDEMNIFICATION OF AGENT
Section 1. LIMITATION OF LIABILITY.
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(a) For the purpose of this Article, "Agent" means any Person who is or was
a Trustee, officer, employee or other agent of the Trust or is or was
serving at the request of the Trust as a trustee, director, officer,
employee or other agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise; "Proceeding"
means any threatened, pending or completed action or proceeding, whether
civil, criminal, administrative or investigative; and "Expenses" include
without limitation attorneys' fees and any expenses of establishing a
right to indemnification under this Article.
(b) An Agent shall be liable to the Trust and to any Shareholder for any act
or omission that constitutes a bad faith violation of the implied
contractual covenant of good faith and fair dealing, for such Agent's own
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Agent (such conduct referred to
herein as "Disqualifying Conduct"), and for nothing else.
(c) Subject to subsection (b) of this Section 1 and to the fullest extent that
limitations on the liability of Agents are permitted by the DSTA, the
Agents shall not be responsible or liable in any event for any act or
omission of any other Agent of the Trust or any Investment Adviser or
Principal Underwriter of the Trust.
(d) No Agent, when acting in its respective capacity as such, shall be
personally liable to any Person, other than the Trust or a Shareholder to
the extent provided in subsections (b) and (c) of this Section 1, for any
act, omission or obligation of the Trust or any Trustee thereof.
(e) Each Trustee, officer and employee of the Trust shall, in the
performance of his or her 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 Investment Adviser, the
Principal Underwriter, any other Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care
by the Trustees, officers or employees of the Trust, regardless of
whether such counsel or expert may also be a Trustee. The officers and
Trustees may obtain the advice of counsel or other experts with respect
to the meaning and operation of this Declaration of Trust, the By-Laws,
applicable law and their respective duties as officers or Trustees. No
such officer or Trustee shall be liable for any act or omission in
accordance with such advice, records and/or reports and no inference
concerning liability shall arise from a failure to follow such advice,
records and/or reports. The officers and Trustees shall not be required
to give any bond hereunder, nor any surety if a bond is required by
applicable law.
(f) The failure to make timely collection of dividends or interest, or to
take timely action with respect to entitlements, on the Trust's
securities issued in emerging countries, shall not be deemed to be
negligence or other fault on the part of any Agent, and no Agent shall
have any liability for such failure or for any loss or damage resulting
from the imposition by any government of exchange control restrictions
which might affect the liquidity of the Trust's assets or from any war
or political act of any foreign government to which such assets might be
exposed, except, in the case of a Trustee or officer, for liability
resulting from such Trustee's or officer's Disqualifying Conduct.
(g) The limitation on liability contained in this Article applies to events
occurring at the time a Person serves as an Agent whether or not such
Person is an Agent at the time of any Proceeding in which liability is
asserted.
(h) No amendment or repeal of this Article shall adversely affect any right or
protection of an Agent that exists at the time of such amendment or
repeal.
Section 2. INDEMNIFICATION.
(a) INDEMNIFICATION BY TRUST. The Trust shall indemnify, out of Trust
------------------------
Property, to the fullest extent permitted under applicable law, any
Person who was or is a party or is threatened to be made a party to any
Proceeding by reason of the fact that such Person is or was an Agent of
the Trust, against Expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred in connection with such
Proceeding if such Person acted in good faith or in the case of a
criminal proceeding, had no reasonable cause to believe the conduct of
such Person was unlawful. The termination of any Proceeding by
judgment, order, settlement, conviction or plea of nolo contendere or
its equivalent shall not of itself create a presumption that the Person
did not act in good faith or that the Person had reasonable cause to
believe that the Person's conduct was unlawful.
(b) EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the
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contrary contained herein, there shall be no right to indemnification
for any liability arising by reason of the Agent's Disqualifying
Conduct. In respect of any claim, issue or matter as to which that
Person shall have been adjudged to be liable in the performance of that
Person's duty to the Trust or the Shareholders, indemnification shall be
made only to the extent that the court in which that action was brought
shall determine, upon application or otherwise, that in view of all the
circumstances of the case, that Person was not liable by reason of that
Person's Disqualifying Conduct.
(c) REQUIRED APPROVAL. Any indemnification under this Article shall be made
-----------------
by the Trust if authorized in the specific case on a determination that
indemnification of the Agent is proper in the circumstances by (i) a
final decision on the merits by a court or other body before whom the
proceeding was brought that the Agent was not liable by reason of
Disqualifying Conduct (including, but not limited to, dismissal of
either a court action or an administrative proceeding against the Agent
for insufficiency of evidence of any Disqualifying Conduct) or, (ii) in
the absence of such a decision, a reasonable determination, based upon a
review of the facts, that the Agent was not liable by reason of
Disqualifying Conduct, by (1) the vote of a majority of a quorum of the
Trustees who are not (x) "interested persons" of the Trust as defined in
Section 2(a)(19) of the 1940 Act, (y) parties to the proceeding, or (z)
parties who have any economic or other interest in connection with such
specific case (the "disinterested, non-party Trustees"); or (2) by
independent legal counsel in a written opinion.
(d) ADVANCEMENT OF EXPENSES. Expenses incurred by an Agent in defending any
-----------------------
Proceeding may be advanced by the Trust before the final disposition of
the Proceeding on receipt of an undertaking by or on behalf of the Agent
to repay the amount of the advance if it shall be determined ultimately
that the Agent is not entitled to be indemnified as authorized in this
Article; provided, that at least one of the following conditions for the
advancement of expenses is met: (i) the Agent shall provide a security
for his undertaking, (ii) the Trust shall be insured against losses
arising by reason of any lawful advances, or (iii) a majority of a
quorum of the disinterested, non-party Trustees of the Trust, or an
independent legal counsel in a written opinion, shall determine, based
on a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the Agent ultimately will
be found entitled to indemnification.
(e) OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article shall affect
any right to indemnification to which Persons other than Trustees and
officers of the Trust or any subsidiary thereof may be entitled by
contract or otherwise.
(f) FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not apply to
------------------------------------
any Proceeding against any trustee, investment manager or other
fiduciary of an employee benefit plan in that Person's capacity as such,
even though that Person may also be an Agent of the Trust as defined in
Section 1 of this Article. Nothing contained in this Article shall
limit any right to indemnification to which such a trustee, investment
manager, or other fiduciary may be entitled by contract or otherwise
which shall be enforceable to the extent permitted by applicable law
other than this Article.
Section 3. INSURANCE. To the fullest extent permitted by applicable law, the
Board of Trustees shall have the authority to purchase with Trust Property,
insurance for liability and for all Expenses reasonably incurred or paid or
expected to be paid by an Agent in connection with any Proceeding in which such
Agent becomes involved by virtue of such Agent's actions, or omissions to act,
in its capacity or former capacity with the Trust, whether or not the Trust
would have the power to indemnify such Agent against such liability.
Section 4. DERIVATIVE ACTIONS. Subject to the requirements set forth in
Section 3816 of the DSTA, a Shareholder or Shareholders may bring a derivative
action on behalf of the Trust only if the Shareholder or Shareholders first make
a pre-suit demand upon the Board of Trustees to bring the subject action unless
an effort to cause the Board of Trustees to bring such action is excused. A
demand on the Board of Trustees shall only be excused if a majority of the Board
of Trustees, or a majority of any committee established to consider the merits
of such action, has a material personal financial interest in the action at
issue. A Trustee shall not be deemed to have a material personal financial
interest in an action or otherwise be disqualified from ruling on a Shareholder
demand by virtue of the fact that such Trustee receives remuneration from his or
her service on the Board of Trustees of the Trust or on the boards of one or
more investment companies with the same or an affiliated investment adviser or
underwriter.
ARTICLE VIII.
CERTAIN TRANSACTIONS
Section 1. VOTE REQUIRED.
(a) Notwithstanding any other provision of this Declaration of Trust to the
contrary and subject to the exceptions provided in this Article VIII,
each of the transactions described in this Article VIII (other than
transactions with respect to a particular Series) shall require the
approval of the Board of Trustees and the affirmative vote of the
holders of not less than 75% of the Shares entitled to vote to approve,
adopt or authorize such transaction unless such action has been
previously approved, adopted or authorized by the affirmative vote of
two-thirds (66 2/3%) of the Board of Trustees, in which case the
Shareholder vote set forth in Article V, Section 2(b)(1) shall be
required.
(b) Notwithstanding any other provision of this Declaration of Trust to the
contrary, each of the transactions described in this Article VIII with
respect to a particular Series shall require the approval of the Board
of Trustees and the affirmative vote of the holders of not less than 75%
of the Shares of that Series entitled to vote to approve, adopt or
authorize such transaction unless such transaction has been previously
approved, adopted or authorized by the affirmative vote of two-thirds
(66 2/3%) of the Board of Trustees, in which case the "affirmative vote
of a majority of the outstanding voting securities" (as defined herein)
of the particular Series entitled to vote at a Shareholders' meeting of
such Series at which a quorum is present, shall be required.
Section 2. DISSOLUTION OF TRUST OR SERIES. The Trust and each Series shall
have perpetual existence, except that the Trust (or a particular Series) shall
be dissolved:
(a) With respect to the Trust or a particular Series, upon the vote of the
Board of Trustees and the Shareholders of the Trust or the particular
Series, as applicable, as set forth in Section 1 of this Article VIII; or
(b) With respect to the Trust or a particular Series, upon the occurrence of a
dissolution or termination event pursuant to any other provision of this
Declaration of Trust or the DSTA; or
(c) With respect to any Series, upon any event that causes the dissolution of
the Trust.
Upon dissolution of the Trust (or a particular Series, as the case may be), the
Trustees shall (in accordance with Section 3808 of the DSTA) pay or make
reasonable provision to pay all claims and obligations of the Trust and/or each
Series (or the particular Series, as the case may be), including all contingent,
conditional or unmatured claims and obligations known to the Trust, and all
claims and obligations which are known to the Trust, but for which the identity
of the claimant is unknown. If there are sufficient assets held with respect to
the Trust and/or each Series of the Trust (or the particular Series, as the case
may be), such claims and obligations shall be paid in full and any such
provisions for payment shall be made in full. If there are insufficient assets
held with respect to the Trust and/or each Series of the Trust (or the
particular Series, as the case may be), such claims and obligations shall be
paid or provided for according to their priority and, among claims and
obligations of equal priority, ratably to the extent of assets available
therefor. Any remaining assets (including, without limitation, cash, securities
or any combination thereof) held with respect to the Trust and/or each Series of
the Trust (or the particular Series, as the case may be) shall be distributed to
the Shareholders of the Trust and/or each Series of the Trust (or the particular
Series, as the case may be) ratably according to the number of Shares of the
Trust and/or such Series thereof (or the particular Series, as the case may be)
held of record by the several Shareholders on the date for such dissolution
distribution; provided, however, that if the Shares of a Series are divided into
Classes thereof, any remaining assets (including, without limitation, cash,
securities or any combination thereof) held with respect to such Series shall be
distributed to each Class of such Series according to the net asset value
computed for such Class and within such particular Class, shall be distributed
ratably to the Shareholders of such Class according to the number of Shares of
such Class held of record by the several Shareholders on the date for such
dissolution distribution. Upon the winding up of the Trust in accordance with
Section 3808 of the DSTA and its termination, any one (1) Trustee shall execute,
and cause to be filed, a certificate of cancellation, with the office of the
Secretary of State of the State of Delaware in accordance with the provisions of
Section 3810 of the DSTA.
Section 3. MERGER OR CONSOLIDATION; CONVERSION; REORGANIZATION.
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(a) MERGER OR CONSOLIDATION. Pursuant to an agreement of merger or
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consolidation, the Board of Trustees may cause the Trust to merge or
consolidate with or into one or more statutory trusts or "other business
entities" (as defined in Section 3801 of the DSTA) formed or organized
or existing under the laws of the State of Delaware or any other state
or the United States or any foreign country or other foreign
jurisdiction. Any such merger or consolidation shall require approval
by vote of the Board of Trustees and Shareholders as set forth in
Section 1 of this Article VIII. By reference to Section 3815(f) of the
DSTA, any agreement of merger or consolidation approved in accordance
with this Section 3(a) may, without a Shareholder vote, unless required
by the 1940 Act or the requirements of any securities exchange on which
Shares are listed for trading, effect any amendment to this Declaration
of Trust or the By-Laws or effect the adoption of a new governing
instrument if the Trust is the surviving or resulting statutory trust in
the merger or consolidation, which amendment or new governing instrument
shall be effective at the effective time or date of the merger or
consolidation. In all respects not governed by the DSTA, the 1940 Act,
other applicable law or the requirements of any securities exchange on
which Shares are listed for trading, the Board of Trustees shall have
the power to prescribe additional procedures necessary or appropriate to
accomplish a merger or consolidation, including the power to create one
or more separate statutory trusts to which all or any part of the
assets, liabilities, profits or losses of the Trust may be transferred
and to provide for the conversion of Shares into beneficial interests in
such separate statutory trust or trusts. Upon completion of the merger
or consolidation, if the Trust is the surviving or resulting statutory
trust, any one (1) Trustee shall execute, and cause to be filed, a
certificate of merger or consolidation in accordance with Section 3815
of the DSTA.
(b) CONVERSION. The Board of Trustees may cause (i) the Trust to convert to
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an "other business entity" (as defined in Section 3801 of the DSTA)
formed or organized under the laws of the State of Delaware as permitted
pursuant to Section 3821 of the DSTA; (ii) the Shares of the Trust or
any Series to be converted into beneficial interests in another
statutory trust (or series thereof) created pursuant to this Section 3
of this Article VIII, or (iii) the Shares to be exchanged under or
pursuant to any state or federal statute to the extent permitted by
law. Any such statutory conversion, Share conversion or Share exchange
shall require approval by vote of the Board of Trustees and the
Shareholders of the Trust or the particular Series, as applicable, as
set forth in Section 1 of this Article VIII; PROVIDED, HOWEVER, that in
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all respects not governed by the DSTA, the 1940 Act, other applicable
law or the requirements of any securities exchange on which Shares are
listed for trading, the Board of Trustees shall have the power to
prescribe additional procedures necessary or appropriate to accomplish a
statutory conversion, Share conversion or Share exchange, including the
power to create one or more separate statutory trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust may
be transferred and to provide for the conversion of Shares of the Trust
or any Series thereof into beneficial interests in such separate
statutory trust or trusts (or series thereof).
(c) REORGANIZATION. The Board of Trustees may cause the Trust to sell,
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convey and transfer all or substantially all of the assets of the Trust
("sale of Trust assets") or all or substantially all of the assets
associated with any one or more Series ("sale of such Series' assets"),
to another trust, statutory trust, partnership, limited partnership,
limited liability company, corporation or other association organized
under the laws of any state, or to one or more separate series thereof,
or to the Trust to be held as assets associated with one or more other
Series of the Trust, in exchange for cash, shares or other securities
(including, without limitation, in the case of a transfer to another
Series of the Trust, Shares of such other Series) with such sale,
conveyance and transfer either (a) being made subject to, or with the
assumption by the transferee of, the liabilities associated with the
Trust or the liabilities associated with the Series the assets of which
are so transferred, as applicable, or (b) not being made subject to, or
not with the assumption of, such liabilities. Any such sale, conveyance
and transfer shall require approval by vote of the Board of Trustees and
the Shareholders of the Trust or the particular Series, as applicable,
as set forth in Section 1 of this Article VIII. Following such sale of
Trust assets, the Board of Trustees shall distribute such cash, shares
or other securities ratably among the Shareholders of the Trust (giving
due effect to the assets and liabilities associated with and any other
differences among the various Series the assets associated with which
have been so sold, conveyed and transferred, and due effect to the
differences among the various Classes within each such Series).
Following a sale of such Series' assets, the Board of Trustees shall
distribute such cash, shares or other securities ratably among the
Shareholders of such Series (giving due effect to the differences among
the various Classes within each such Series). If all of the assets of
the Trust have been so sold, conveyed and transferred, the Trust shall
be dissolved. In all respects not governed by the DSTA, the 1940 Act,
other applicable law or the requirements of any securities exchange on
which Shares are listed for trading, the Board of Trustees shall have
the power to prescribe additional procedures necessary or appropriate to
accomplish such sale, conveyance and transfer, including the power to
create one or more separate statutory trusts to which all or any part of
the assets, liabilities, profits or losses of the Trust may be
transferred and to provide for the conversion of Shares into beneficial
interests in such separate statutory trust or trusts.
Section 4. RECLASSIFICATION OF THE TRUST. The Board of Trustees may cause
the Trust to be converted from a "closed-end company" to an "open-end company"
(as those terms are defined, respectively, in Sections 5(a)(2) and 5(a)(1) of
the 1940 Act). Such reclassification of the Trust shall require approval by vote
of the Board of Trustees and Shareholders as set forth in Section 1 of this
Article VIII.
Section 5. PRINCIPAL HOLDER TRANSACTIONS.
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(a) The following transactions shall require approval by vote of the Board of
Trustees and Shareholders as set forth in Section 1 of this Article VIII:
(i) Issuance of any securities of the Trust to any Principal Holder (as
defined below) for cash; or
(ii) Sale, lease, or exchange to the Trust, in exchange for securities of the
Trust, of any assets of any Principal Holder (except assets having an
aggregate fair market value of less than $1,000,000, aggregating for the
purpose of such aggregate amount, all assets sold, leased or exchanged in
any series of similar transactions within a twelve-month period).
(b) For purposes of this Section 5, the term "Principal Holder" shall mean
any Person or group (within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934, as amended (the "1934 Act")), that is
the beneficial owner, directly or indirectly, of more than ten percent
(10%) of the Shares of the Trust and shall include any affiliate or
associate, as such terms are defined in clause (2) below, of a Principal
Holder, but shall not include FRI or any affiliated person of FRI. For
the purposes of this Section 5, in addition to the Shares which a
Principal Holder beneficially owns directly, a Principal Holder shall be
deemed to be the beneficial owner of any Shares (1) which the Principal
Holder has the right to acquire pursuant to any agreement or upon
exercise of conversion rights or warrants, or otherwise or (2) which are
beneficially owned, directly or indirectly (including Shares deemed
owned through application of clause (1) above), by any other Person or
group with which the Principal Holder or its "affiliate" or "associate,"
as those terms are defined in Rule 12b-2, or any successor rule, under
the 1934 Act, has any agreement, arrangement, or understanding for the
purpose of acquiring, holding, voting, or disposing of Shares, or which
is its "affiliate" or "associate" as so defined. For purposes of this
Section 5, calculation of the total Shares of the Trust shall not
include Shares deemed owned through application of clause (1) above.
(c) The Board of Trustees shall have the power and duty to determine for the
purposes of this Section 5, on the basis of information known to the
Trust whether (i) a Person or group beneficially owns more than ten
percent (10%) of the Shares, (ii) a corporation, person or entity is an
"affiliate" or "associate" (as defined above) of another, and (iii) the
assets being acquired or leased by or to the Trust have an aggregate
fair market value of less than $1,000,000 (as defined above). Any such
determination shall be conclusive and binding for all purposes of this
Section 5 in the absence of manifest error.
Section 6. MASTER FEEDER STRUCTURE. If permitted by the 1940 Act, the Board
of Trustees, by vote of a majority of the Trustees, and without a Shareholder
vote, may cause the Trust or any one or more Series to convert to a master
feeder structure (a structure in which a feeder fund invests all of its assets
in a master fund, rather than making investments in securities directly) and
thereby cause existing Series of the Trust to either become feeders in a master
fund, or to become master funds in which other funds are feeders. Any such
conversion shall require approval by vote of the Board of Trustees and/or the
Shareholders of the Trust or the particular Series, as applicable, as set forth
in Section 1 of this Article VIII.
Section 7. ABSENCE OF APPRAISAL OR DISSENTERS' RIGHTS. No Shareholder shall
be entitled, as a matter of right, to relief as a dissenting Shareholder in
respect of any proposal or action involving the Trust or any Series or any Class
thereof.
ARTICLE IX.
AMENDMENTS
Section 1. AMENDMENTS GENERALLY. Subject to the provisions of Section 3(a)
of Article VIII and Section 2 of this Article IX, this Declaration of Trust
may be restated and/or amended at any time, by an instrument in writing, by
action of the Board of Trustees, without approval of the Shareholders. The
Certificate of Trust shall be restated and/or amended at any time by the Board
of Trustees, without Shareholder approval, to correct any inaccuracy contained
therein. Any such restatement and/or amendment of the Certificate of Trust
shall be executed by at least one (1) Trustee and shall be effective
immediately upon its filing with the office of the Secretary of State of the
State of Delaware or upon such future date as may be stated therein.
Section 2. SPECIAL AMENDMENTS. Notwithstanding any other provision of this
Declaration of Trust or the By-Laws, the amendment or repeal of Article IV,
Sections 1, 2 and 3, Article V, Article VII, Article VIII and this Article IX
of this Declaration of Trust shall require the approval of the Board of
Trustees and the affirmative vote of holders of at least two-thirds (66 2/3%)
of the Shares entitled to vote, unless such action has previously been
approved, adopted or authorized by the affirmative vote of two-thirds (66
2/3%) of the Board of Trustees, in which case the Shareholder vote set forth
in Article V, Section 2(b)(1) shall be required.
ARTICLE X.
MISCELLANEOUS
Section 1. REFERENCES; HEADINGS; COUNTERPARTS. In this Declaration of Trust
and in any restatement hereof and/or amendment hereto, references to this
instrument, and all expressions of similar effect to "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as so restated and/or
amended. Headings are placed herein for convenience of reference only and shall
not be taken as a part hereof or control or affect the meaning, construction or
effect of this instrument. Whenever the singular number is used herein, the same
shall include the plural; and the neuter, masculine and feminine genders shall
include each other, as applicable. Any references herein to specific sections of
the DSTA, the Code or the 1940 Act shall refer to such sections as amended from
time to time or any successor sections thereof. This instrument may be executed
in any number of counterparts, each of which shall be deemed an original.
Section 2. APPLICABLE LAW. This Declaration of Trust is created under and is
to be governed by and construed and administered according to the laws of the
State of Delaware and the applicable provisions of the 1940 Act and the Code.
The Trust shall be a Delaware statutory trust pursuant to the DSTA, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a statutory trust.
Section 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
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(a) The provisions of this Declaration of Trust are severable, and if the
Board of Trustees shall determine, with the advice of counsel, that any
of such provisions is in conflict with the 1940 Act, the Code, the DSTA,
or with other applicable laws and regulations, the conflicting provision
shall be deemed not to have constituted a part of this Declaration of
Trust from the time when such provisions became inconsistent with such
laws or regulations; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of Trust
or render invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of this Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision in such jurisdiction and shall not in
any manner affect such provision in any other jurisdiction or any other
provision of this Declaration of Trust in any jurisdiction.
Section 4. STATUTORY TRUST ONLY. It is the intention of the Trustees to
create hereby a statutory trust pursuant to the DSTA, and thereby to create the
relationship of trustee and beneficial owners within the meaning of the DSTA
between, respectively, the Trustees and each Shareholder. It is not the
intention of the Trustees to create a general or limited partnership, limited
liability company, joint stock association, corporation, bailment, or any form
of legal relationship other than a statutory trust pursuant to the DSTA. Nothing
in this Declaration of Trust shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 5. USE OF THE NAMES "FRANKLIN," "XXXXXXXXX," "FIDUCIARY TRUST,"
AND/OR "INSTITUTIONAL FIDUCIARY TRUST". The Board of Trustees expressly agrees
and acknowledges that the names "Franklin," "Xxxxxxxxx," "Fiduciary Trust," and
"Institutional Fiduciary Trust" are the sole property of Franklin Resources,
Inc. ("FRI"). FRI has granted to the Trust a non-exclusive license to use such
names as part of the name of the Trust now and in the future. The Board of
Trustees further expressly agrees and acknowledges that the non-exclusive
license granted herein may be terminated by FRI if the Trust ceases to use FRI
or one of its Affiliates as Investment Adviser or to use other Affiliates or
successors of FRI for such purposes. In such event, the nonexclusive license may
be revoked by FRI and the Trust shall cease using the names "Franklin,"
"Xxxxxxxxx," "Fiduciary Trust," "Institutional Fiduciary Trust" or any name
misleadingly implying a continuing relationship between the Trust and FRI or any
of its Affiliates, as part of its name unless otherwise consented to by FRI or
any successor to its interests in such names.
The Board of Trustees further understands and agrees that so long as FRI
and/or any future advisory Affiliate of FRI shall continue to serve as the
Trust's Investment Adviser, other registered open- or closed-end investment
companies ("funds") as may be sponsored or advised by FRI or its Affiliates
shall have the right permanently to adopt and to use the names "Franklin",
"Xxxxxxxxx," "Fiduciary Trust" and/or "Institutional Fiduciary Trust" in their
names and in the names of any series or Class of shares of such funds.
[SIGNATURES ON NEXT PAGE.]
IN WITNESS WHEREOF, the Trustees of Franklin Mutual Recovery Fund named
below do hereby make and enter into this Agreement and Declaration of Trust as
of the date first written above.
/s/ Xxxxxx X. Xxxxxx /s/ Xxx Xxxxx Xxxxx
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Xxxxxx X. Xxxxxx, Trustee Xxx Xxxxx Xxxxx, Trustee
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxx X. XxxXxxxxxx
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Xxxxxx X. Xxxxxxxxx, Trustee Xxxxx X. XxxXxxxxxx
/s/ Xxxxxxx Xxxxxx XX /s/ Xxxxxx X. Xxxx
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Xxxxxxx Xxxxxx XX, Trustee Xxxxxx X. Xxxx, Trustee
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxx, Trustee Xxxxx X. Xxxxxxxxx, Trustee
