As filed with the Securities and Exchange Commission on February 26, 1997.
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. ___)
Filed by the registrant [x]
Filed by a party other than the registrant []
Check the appropriate box:
[x] Preliminary proxy statement
[] Definitive additional materials
[] Definitive additional materials
[] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE WRIGHT MANAGED INCOME TRUST
(Name of Registrant as Specified in Its Charter)
THE WRIGHT MANAGED INCOME TRUST
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[x] No filing fee is required.
THE WRIGHT GROUP OF FUNDS
Wright Investors' Service Distributors, Inc.
Wright International Financial Center
Bridgeport, CT 06604-4720
THE WRIGHT MANAGED INCOME TRUST
Wright U.S. Treasury Fund
Wright U.S. Treasury Near Term Fund
Wright Total Return Bond Fund
Wright Current Income Fund
Wright U.S. Treasury Money Market Fund
Dear Fellow Shareholder:
I am writing to let you know that a special meeting of your Fund's shareholders
will be held in April to vote on several important proposals that affect your
fund and your investment in it. As a shareholder, you have the opportunity to
voice your opinion on these matters. This package contains information about the
proposals and the materials to use when voting by mail.
Please take a few minutes to read the enclosed materials and cast your vote on
the proxy card(s) enclosed in the package. Please vote promptly. It is extremely
important, no matter how may shares you own.
This is an opportunity to voice your opinion on matters that affect your fund.
Voting promptly helps save money. If we do not receive enough votes, we must
resolicit shareholders in an attempt to increase voter participation. This is a
costly process paid for by your fund and, ultimately, by you. For your
convenience, we have enclosed a postage-paid envelope.
All of the proposals for approval have been reviewed by your fund's Board of
Trustees, whose primary role is to protect your interests as a shareholder. In
the Trustees' judgement, the proposals are fair and reasonable and they
recommend that you vote in favor of each proposal.
Proposals 1 and 2. The primary purpose of these proposals is to permit the fund
to pool its assets with other mutual funds in an investment structure called the
master-feeder fund structure. Pooling of assets is expected to give your fund
more opportunity for decreased operating expenses and greater investment
flexibility.
Proposal 3. This proposal will permit your Trustees to amend and restate the
Trust's governing document. This will allow the Trustees greater flexibility in
managing the day to day affairs of the Trust and reduce the need for future
shareholder meetings which can be costly to your fund. The amended and restated
declaration of trust will also authorize the Trustees to adopt the multiple
class distribution system for the Trust.
Proposal 4. If shareholders approve this Proposal, your fund's Rule 12b-1 plan
will be amended to permit the fund to pay the Trust's distributor a fee of 0.25%
of the fund's average annual net assets. The fee is currently set at 0.20% of
such assets. The Trustees believe that the change in the rate of the
distribution fee is likely to result in higher levels of sales and lower levels
of redemption of your fund's shares. This means that the fund will achieve net
positive cash flow
and increase the likelihood of gain in the fund's asset size. This Proposal
does not apply to the Wright U.S. Treasury Money Market Fund.
Proposal 5 will permit revision of the fund's investment restrictions to
conform them to the current requirements of the Investment Company Act and more
modern industry practice.
Proposal 6 is to elect the Trustees to the Board of Trustees to supervise the
Trust's activities and review contractual arrangements with companies that
provide the Trust with services. Each nominee except [name] currently serves as
a Trustee for all the Wright funds.
Proposal 7 is to ratify the selection of Deloitte & Touche LLP as the Trust's
independent public accountants for the current fiscal year.
Voting by mail is quick and easy. Everything you need is enclosed.
I encourage you to exercise your right as a shareholder in the fund and vote
promptly. To cast your vote, simply complete the proxy card(s) enclosed in this
package. Be sure to sign the card(s) before mailing in the postage-paid envelope
provided.
If you have any questions before you vote, please call us at 1-800-888-9471. We
will be glad to help you get your vote in quickly. Thank you for your
participation in this important initiative for your fund.
Sincerely,
Peter M. Donovan
President
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
===============================================================================
THE WRIGHT MANAGED EQUITY TRUST
Wright Selected Blue Chip Equities Fund
Wright Junior Blue Chip Equities Fund
Wright Quality Core Equities Fund
Wright International Blue Chip Equities Fund
THE WRIGHT MANAGED INCOME TRUST
Wright U.S. Treasury Fund
Wright U.S. Treasury Near Term Fund
Wright Total Return Bond Fund
Wright Current Income Fund
Wright U.S. Treasury Money Market Fund
24 Federal Street
Boston, Massachusetts 02110
Notice of Special Meetings of Shareholders
To Be Held April 15, 1997
Special Meetings of Shareholders of the series (each, a "Fund" and
together, the "Funds") of The Wright Managed Equity Trust (the "Equity Trust")
and The Wright Managed Income Trust (the "Income Trust" and together with the
Equity Trust, the "Trusts") will be held at the principal offices of the Trusts,
24 Federal Street, Boston, Massachusetts, 02110, on Tuesday, April 15, 1997
commencing at 10:00 a.m. (Boston time). The Special Meetings of the Funds are
expected to be held concurrently and are referred to together as the "meeting."
The meeting is being held for the following purposes:
1. To consider and act upon a proposal to adopt a new investment
policy to authorize each Fund to invest all of its investable
assets in a corresponding series of an open-end management
investment company (each, a "Portfolio") having substantially
the same investment objective, policies and restrictions as
the Fund, and to adopt a supplemental investment restriction
to permit such investment;
2. To consider and act upon proposals to authorize each Trust, on
behalf of its respective Funds that are investing in
corresponding Portfolios, to vote as a holder of interest in
the Wright Blue Chip Master Portfolio Trust (the "Portfolio
Trust") to (a) elect Trustees of the Portfolio Trust; (b)
ratify the selection of Deloitte & Touche, LLP as the
independent accountant of the Portfolio Trust; and (c) approve
the investment advisory agreement between the Portfolio Trust,
on behalf of each corresponding Portfolio, and Wright
Investors' Service, Inc.
3. To consider and act upon a proposal to authorize the Trustees
to adopt an Amended and Restated Declaration of Trust on
behalf of each Trust, which will, among other things, permit
the establishment of multiple classes of shares of the Funds.
4. To consider and act upon a proposal to approve an amendment
to each Fund's Rule 12b-1 distribution plan to set the
distribution fee payable under the plan at 0.25% the Fund's
average daily net asset value attributable to the Fund's
existing shares. THIS PROPOSAL DOES NOT AFFECT WRIGHT U.S.
TREASURY MONEY MARKET FUND.
5. To consider and act upon a proposal to amend or eliminate
certain of each Fund's fundamental investment restrictions.
6. To consider and act upon a proposal to elect Trustees for each
Trust to hold office until their respective successors have
been duly elected and qualified.
7. To consider and act upon a proposal to ratify the Trustees'
selection of Deloitte & Touche, LLP as the independent
auditors of each Trust.
8. To consider and act upon any matters incidental to the
foregoing purposes and any other matters which may properly
come before the meeting or any adjourned session thereof.
These Proposals are discussed in greater detail in the accompanying
Proxy Statement.
The meeting is called pursuant to the By-Laws of each Trust. The
Trustees have fixed the close of business on February 21, 1997 as the record
date for the determination of the shareholders of each Fund entitled to notice
of and to vote at the meeting and any adjournment thereof.
By Order of the Boards of Trustees
H. Day Brigham, Jr., Secretary
March , 1997
IMPORTANT - SHAREHOLDERS CAN HELP THE TRUSTEES AVOID THE NECESSITY AND
ADDITIONAL EXPENSE TO THEIR FUND OF FURTHER SOLICITATIONS TO INSURE A QUORUM BY
PROMPTLY RETURNING THE ENCLOSED PROXY. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES AND IS INTENDED FOR YOUR CONVENIENCE
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
===============================================================================
THE WRIGHT MANAGED EQUITY TRUST
(the "Equity Trust")
Wright Selected Blue Chip Equities Fund
Wright Junior Blue Chip Equities Fund
Wright Quality Core Equities Fund
Wright International Blue Chip Equities Fund
THE WRIGHT MANAGED INCOME TRUST
(the "Income Trust")
Wright U.S. Treasury Fund
Wright U.S. Treasury Near Term Fund
Wright Total Return Bond Fund
Wright Current Income Fund
Wright U.S. Treasury Money Market Fund
(collectively, the "Funds")
PROXY STATEMENT
For Special Meetings of Shareholders
A proxy is enclosed with the foregoing Notice of the Special Meetings
of the Shareholders of the Funds, to be held on Tuesday, April 15, 1997, for the
benefit of shareholders who do not expect to be present at the meeting. This
proxy is solicited on behalf of the Board of Trustees of each Trust, and is
revocable by the person giving it at any time prior to exercise by a signed
writing filed with the Funds' transfer agent, First Data Investors Services'
Group, P.O. Box 5153, Westborough, Massachusetts 01551-5123, by executing and
delivering a later dated proxy, or by attending the meeting and voting his or
her shares in person. Each shareholder may specify the manner in which he or she
desires the proxy to be voted upon the matters referred to in the proxy; in the
absence of such specification, the proxy will authorize the persons named as
attorneys, or any of them, to vote in favor of each such matter. This proxy
material is first being mailed to shareholders on or about March , 1997.
The Trustees have fixed the close of business on February 21, 1997, as
the record date ("Record Date") for the determination of the shareholders
entitled to notice of and to vote at the meeting and any adjournment(s) thereof.
Shareholders at the close of business on the Record Date will be entitled to one
vote for each full share held and to a proportionate share of one vote for each
fractional share held. The number of shares of beneficial interest (excluding
fractions thereof) of each Fund outstanding as of the Record Date is set forth
in EXHIBIT A.
The persons who held of record more than 5% of the outstanding shares
of a Fund as of the Record Date are set forth in EXHIBIT B. To the knowledge of
each Trust, no other person owns (of record or beneficially) more than 5% of the
outstanding shares of a Fund.
Although each Trust is participating separately in the meeting, proxies
are being solicited through the use of this combined Proxy Statement.
Shareholders of Funds that are series of the same Trust will vote separately as
to those Proposals which uniquely affect their respective Funds and together on
those Proposals that affect the Trust as a whole. Voting by shareholders of one
Fund or Trust will not affect voting by shareholders of another Fund or Trust.
Shareholders of the Funds are being asked to vote on the Proposals as
follows:
Proposal Shareholders Entitled to Vote on Proposal
1. For each Trust: Each Fund voting separately.
2(a). For Equity Trust: Each of Wright Selected Blue
Chip Equities Fund, Wright
Junior Blue Chip Equities Fund
and Wright International Blue
Chip Equities Fund voting
separately.
For Income Trust: Each of Wright U.S. Treasury
Fund, Wright U.S. Treasury
Near Term Fund and Wright
Current Income Fund
voting separately.
2(b). For Equity Trust: Each of Wright Selected Blue
Chip Equities Fund, Wright
Junior Blue Chip Equities Fund
and Wright International Blue
Chip Equities Fund voting
separately.
For Income Trust: Each of Wright U.S. Treasury
Fund, Wright U.S. Treasury
Near Term Fund and Wright
Current Income Fund
voting separately.
2(c). For Equity Trust: Each of Wright Selected Blue
Chip Equities Fund, Wright
Junior Blue Chip Equities Fund
and Wright International Blue
Chip Equities Fund voting
separately.
For Income Trust: Each of Wright U.S. Treasury
Fund, Wright U.S. Treasury
Near Term Fund and Wright
Current Income Fund
voting separately.
3. For each Trust: All Funds voting together.
4. For Equity Trust: Each Fund voting separately.
For Income Trust: Each Fund (except Wright U.S.
Treasury Money Market Fund)
voting separately.
5(a). For each Trust: Each Fund voting separately.
5(b). For each Trust: Each Fund voting separately.
5(c). For each Trust: Each Fund voting separately.
5(d). For each Trust: Each Fund voting separately.
5(e). For each Trust: Each Fund voting separately.
5(f). For each Trust: Each Fund voting separately.
5(g). For each Trust: Each Fund voting separately.
5(h). For each Trust: Each Fund voting separately.
5(i). For each Trust: Each Fund voting separately.
5(j). For each Trust: Each Fund voting separately.
6. For each Trust: All Funds voting together.
7. For each Trust: All Funds voting together.
The Trustees know of no matter other than those mentioned in Proposals
1 through 8 of the Notice which will be presented at the meeting. If any other
matter is properly presented at the meeting, it is the intention of the persons
named as proxies in the enclosed proxy to vote the proxies in accordance with
their judgment in regard to such matter.
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
===============================================================================
PROPOSAL 1.
TO IMPLEMENT AN INVESTMENT POLICY TO PERMIT EACH FUND TO INVEST ALL OF ITS
ASSETS IN A CORRESPONDING PORTFOLIO
SUMMARY. The Trustees have approved, and are submitting to the
shareholders of each Fund for approval, the adoption of a new investment policy
for each Fund to permit each Fund to invest all of its investable assets
("Investable Assets") in the corresponding series (the "Portfolio") of The
Wright Blue Chip Master Trust (the "Portfolio Trust"). Each Portfolio will have
substantially the same investment objective, policies and restrictions as its
corresponding Fund. The adoption of the new investment policy by each Fund is
subject to approval by that Fund's shareholders. If this Proposal is approved by
a Fund's shareholders, the Trustees will be authorized to invest that Fund's
Investable Assets in the corresponding Portfolio, thereby converting the Fund to
the master-feeder fund structure.
The Trustees recommend that shareholders of each Fund vote to approve Proposal
1. The Trustees believe that a Fund's conversion to the master-feeder fund
structure may be advantageous to the shareholders of a Fund in several respects.
Please see "Recommendation of the Board of Trustees" below for a discussion of
the Trustees' recommendation.
NEW INVESTMENT POLICY. The Trustees recommend that the shareholders of
each Fund approve the adoption of a new investment policy for that Fund, i.e.,
to authorize the investment of all of the Fund's Investable Assets in the
corresponding Portfolio. Each Portfolio is a series of the Portfolio Trust, a
newly formed trust to be registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"). Each
Portfolio has substantially the same investment objective, policies and
restrictions as the corresponding Fund. Each Fund would seek its investment
objective by investing in the corresponding Portfolio, rather than through
direct investments in securities. The Portfolio in turn would invest in
securities in accordance with its investment objective, policies and
restrictions. Interests in the Portfolios are not available for purchase
directly by members of the general public.
Each Fund will convert to the master-feeder fund structure by
exchanging all of its Investable Assets (securities and cash) as well as certain
other assets (including receivables for securities sold and interest on
securities) for an interest in the corresponding Portfolio. The value of a
shareholder's investment in a Fund will be the same immediately after the Fund's
investment in the corresponding Portfolio as immediately before that investment.
Of course, the value of a shareholder's investment in the Fund may fluctuate
thereafter.
THE INVESTMENT ADVISER AND ADMINISTRATOR. The Winthrop Corporation
("Winthrop") is currently the investment adviser to each Fund pursuant to
investment advisory contracts (the "Existing Advisory Agreements") between each
Trust, on behalf of its Funds, and Winthrop. Pursuant to a service agreement
between Winthrop and its wholly-owned subsidiary, Wright Investors' Service,
Inc. ("Wright), Wright, acting under the general supervision of the Trustees,
furnishes each Fund with investment advice and management services. Under the
Existing Advisory Agreements, each Trust pays advisory fees on behalf of its
Funds to Winthrop as set forth in the table on page __ of this Proxy Statement.
To the extent that a Fund invests all of its Investable Assets in the
corresponding Portfolio, the Fund would no longer directly require investment
advisory services. For this reason, if shareholders of a Fund adopt the new
investment policy described in this Proposal and the Trustees authorize the
conversion of that Fund to the master-feeder fund structure, Winthrop will no
longer receive advisory fee payments under the applicable Existing Advisory
Agreement. However, the Existing Advisory Agreement will remain in effect.
The Portfolio Trust will enter into an investment advisory agreement
with Wright on behalf of the Portfolios (the "Proposed Advisory Agreement")
pursuant to which Wright will provide investment advice and management services
to each Portfolio. For its services under the Proposed Advisory Agreement,
Wright will be paid an advisory fee equal to and calculated in the same manner
as the advisory fee currently being paid pursuant to the Existing Advisory
Agreement as set forth in the table on page of this Proxy Statement. No increase
in the schedule of advisory fee rates is proposed. Each Fund will, therefore,
indirectly bear its proportionate share of the advisory fees paid by the
corresponding Portfolio pursuant to the Proposed Advisory Agreement. For
information about Wright and the identity of its directors, see the discussion
under Proposal 2(c) of this Proxy Statement.
Upon the exchange of its Investable Assets for an interest in the
corresponding Portfolio, each Trust, on behalf of its Funds, will continue to
retain the services of Eaton Vance Management ("Eaton Vance") under
administration agreements (the "Administration Agreements"). Under the
Administration Agreements, Eaton Vance supervises the overall administration of
each Fund. Eaton Vance's services include recordkeeping, preparation and filing
of documents required to comply with federal and (to the extent applicable)
state securities laws, supervising the activities of the custodian and transfer
agent, providing assistance in connection with the Trustees' and shareholders'
meetings and other administrative services necessary to conduct each Fund's
business. Eaton Vance does not provide investment management or advisory
services to the Funds. For its services to the Funds, Eaton Vance receives
monthly administration fees at the annual rates (as a percentage of average
daily net assets) set forth in the table below. If Proposal 1 is approved, the
administration fee for each Fund would be based upon the assets of the
corresponding Portfolio attributable to the Fund. Accordingly, the Fund's actual
administration fee paid would not change. The Trustees of the Trusts may
determine in the future to alter, by increasing or decreasing, the compensation
of Eaton Vance for its services under the Administration Agreement, but have no
current intention to do so.
ANNUAL % ADMINISTRATION FEE RATES
Under $100 Mil. to $250 Mil. to Over
$100 Mil. $250 Mil. $500 Mil. $500 Mil.
- -------------------------------------------------------------------------------
The Wright Managed Equity Trust
0.20% 0.06% 0.03% 0.02%
- -------------------------------------------------------------------------------
The Wright Managed Income Trust
0.10% 0.04% 0.03% 0.02%
- ------------------------------------------------------------------------------
The Wright U.S. Treasury Money Market Fund
0.07% 0.03% 0.03% 0.02%
- -------------------------------------------------------------------------------
COMPARATIVE EXPENSES. The Table of Comparative Expenses set forth on
EXHIBIT C to this Proxy Statement shows the actual expenses of each Fund for the
fiscal year ended December 31, 1996, and a pro forma adjustment thereof assuming
that each Fund had invested all of its Investable Assets in the Portfolio for
the entire period then ended. The pro forma adjustment includes the estimated
costs of converting a Fund to the master-feeder fund structure and the estimated
costs of this proxy solicitation ($ ). The pro forma adjustment assumes that:
(i) there were no holders of interests in the corresponding Portfolio other than
the Fund; and (ii) the average daily net assets of the Fund and the Portfolio
were equal to the actual average daily net assets of the Fund during the period.
Wright has voluntarily agreed to limit the master-feeder aggregate
annual operating expenses of each Fund and the corresponding Portfolio
(excluding brokerage commissions, taxes and extraordinary expenses) to the
expense limits in effect as of the date of each Fund's conversion to the
master-feeder fund structure. Wright may discontinue or modify such limitation
in the future at its discretion, although it has no current intention to do so.
If a Fund is converted to the master-feeder fund structure, actual
Total Operating Expenses to be incurred may vary from the pro forma Total
Operating Expenses indicated on the Table of Comparative Expenses due to changes
in a Fund's expenses and net asset value between December 31, 1996 and the
conversion date. Assuming that the Fund was the only holder of an interest in
the corresponding Portfolio and that the Fund was fully invested therein, the
net asset value per share, distributions per share and net investment income per
share of the Fund would have been approximately the same on a pro forma basis as
the actual net asset value, distributions and net investment income per share of
the Fund during the period indicated on the Table of Comparative Expenses.
TAX CONSIDERATIONS. Each Trust will obtain an opinion of counsel to the
effect that its contribution of a Fund's Investable Assets to the corresponding
Portfolio in exchange for an interest in the Portfolio will not result in the
recognition of gain or loss to the Fund for federal income tax purposes.
Management of each Trust currently intends to proceed with the transfers only
upon the availability of an opinion of tax counsel. There can be no assurance
that such an opinion will be available.
As a separate regulated investment company under the Internal Revenue
Code of 1986, as amended (the "Code"), each Fund does not pay federal income or
excise taxes to the extent that it distributes to shareholders its net
investment income and net realized capital gains in accordance with the timing
and other requirements imposed by the Code. Under current law, as long as each
Fund qualifies as a regulated investment company for federal income tax
purposes, the Funds are not liable for any income, corporate excise or franchise
taxes in the Commonwealth of Massachusetts. Each Portfolio will be organized and
intends to conduct its operations in a manner such that it also will not be
required to pay any federal or Massachusetts income or excise taxes.
DESCRIPTION OF THE PORTFOLIO TRUST. Each Portfolio is a series of the
Portfolio Trust, a master trust fund organized under New York law. The
investment objective of each Portfolio is the same as the investment objective
of the corresponding Fund. Each Portfolio seeks to achieve its investment
objective through investments limited to the types of securities in which the
corresponding Fund is authorized to invest. The investment restrictions and
policies of each Portfolio are such that each Portfolio may not invest in any
security or engage in any transaction which would not be permitted by the
investment restrictions and policies of the corresponding Fund if the Fund were
to invest directly in such a security or engage directly in such a transaction.
The investment objectives of each Portfolio and its corresponding Fund are
not fundamental policies. The approval of each Portfolio's investors (i.e., the
corresponding Fund and other holders of interests in each Portfolio) would be
required to change any of the fundamental investment policies or restrictions;
however, any change in nonfundamental investment policies or restrictions would
not require such approval. If a Portfolio proposed to change materially its
investment objective, the Trustees of the corresponding Fund would either make a
corresponding change to its investment objective or withdraw its investment in
the Portfolio. Each Fund would be able to withdraw its investment in the
corresponding Portfolios at any time if the Trustees determine that it is in the
best interests of a Fund to do so (including if the Fund's and the Portfolio's
investment objectives were not substantially the same). Upon any such
withdrawal, the Trustees would consider what action might be taken, including
investing all the Investable Assets of the affected Fund in another pooled
investment entity having substantially the same investment objective as the Fund
or the retention of an investment adviser to manage directly the Fund's assets
in accordance with its investment objective (as is presently the case).
Like each Fund, the corresponding Portfolio determines its net asset
value on each day on which the New York Stock Exchange is open. The net asset
value is determined as of the close of regular trading on the New York Stock
Exchange (currently 4:00 p.m., New York City time). Each Portfolio's net asset
value is computed by determining the value of the Portfolio's total assets (the
securities it holds plus any cash or other assets, including interest accrued
but not yet received), and subtracting all of the Portfolio's liabilities
(including accrued expenses).
Each Fund's net asset value is determined at the same time and on the
same days that the net asset value of the corresponding Portfolio is calculated.
Each Fund's net asset value per share is calculated by determining the value of
the Fund's assets (e.g., its investment in the corresponding Portfolio and any
other assets), subtracting all of the Fund's liabilities (including accrued
expenses), and dividing the result by the total number of shares outstanding at
such time.
Interests in the Portfolio Trust have no preemptive or conversion
rights, and are fully paid and non-assessable. The Portfolio Trust normally will
not hold meetings of holders of such interests except as required under the 1940
Act. The Portfolio Trust would be required to hold a meeting of holders in the
event that at any time less than a majority of its Trustees holding office have
been elected by holders. The Trustees of the Portfolio Trust continue to hold
office until their successors are elected and have qualified. Holders holding a
specified percentage of interests in the Portfolio Trust may call a meeting of
holders in the Portfolio Trust for the purpose of removing any Trustee. A
Trustee of the Portfolio Trust may be removed upon a majority vote of the
interests held by holders in the Portfolio Trust qualified to vote in the
election. The 1940 Act requires the Portfolio Trust to assist its holders in
calling such a meeting. Upon liquidation of a Portfolio, holders of interests in
the Portfolio would be entitled to share pro rata in the net assets of the
Portfolio available for distribution to holders.
Each holder in a Portfolio is entitled to a vote in proportion to its
percentage interest in the Portfolio. Except as described below, whenever a Fund
is requested to vote on matters pertaining to the corresponding Portfolio, the
Fund will hold a meeting of its shareholders and will cast its votes
proportionately as instructed by Fund shareholders that voted at the Fund
meeting. Fund shareholders who do not vote at the Fund meeting will not affect
the Fund's votes at the Portfolio meeting. The percentage of the Fund's votes
representing Fund shareholders not voting will be voted by the Trustees of the
Trust in the same proportion as the Fund shareholders who do, in fact, vote.
Subject to applicable statutory and regulatory requirements, a Fund
would not be required to request a vote of its shareholders with respect to (a)
any proposal relating to the corresponding Portfolio, which proposal, if made
with respect to the Fund, would not require the vote of the shareholders of the
Fund, or (b) any proposal with respect to the corresponding Portfolio that is
identical in all material respects to a proposal that has previously been
approved by shareholders of the Fund. Any proposal submitted to holders in the
Portfolio that is not required to be voted on by shareholders of the
corresponding Fund would nonetheless be voted on by the Fund and by the Trustees
of the Portfolio Trust.
Investments in a Portfolio may not be transferred, but a holder may
withdraw all or any portion of its investment at any time at net asset value.
Each holder in a Portfolio, including the corresponding Fund, will not be
individually liable under the Portfolio Trust's declaration of trust for the
obligations of the Portfolio, but may lose the full amount of its interest in
the Portfolio to the extent the Portfolio's liabilities exceed its assets. In
addition, it is possible that holders in a Portfolio might be held personally
liable as partners for the Portfolio's obligations, notwithstanding that the
Portfolio Trust's declaration of trust disclaims such liability on the part of
any holder. However, because the Portfolio Trust's declaration of trust
disclaims interest holder liability and provides for indemnification against
such liability, the risk of an interest holder in a Portfolio incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and the Portfolio itself was unable to meet
its obligations. Thus, it is unlikely that a Fund
would experience liability from the new investment structure itself. In any
event, shareholders of each Fund will continue to remain shareholders of a
Massachusetts business trust, and the risk of shareholders incurring liability
by reason of being shareholders of a Fund is remote.
The Portfolio Trust has its own Board of Trustees, including a majority
of Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Portfolio Trust (the "Independent Trustees"). The nominees for election as
Trustees of the Portfolio Trust are identical to the present Trustees and
nominees for election as Trustees of the Trusts and are listed in Proposal 2(a)
of this Proxy Statement. Pursuant to the Portfolio Trust's declaration of trust,
the Trustees have the power to establish and alter the number and the terms of
office of the Trustees (subject to certain removal procedures, including vote by
holders of interests), to appoint successor Trustees and to fill vacancies,
including vacancies existing by reason of an increase in the number of Trustees,
provided that always at least a requisite majority of the Trustees has been
elected by the holders of interests. Generally, meetings of holders of interests
of the Portfolio Trust for the purpose of electing Trustees will not be held.
PROPOSED SUPPLEMENT TO INVESTMENT RESTRICTIONS. The Trustees of each
Trust have approved, subject to shareholder approval, a supplemental provision
to be added to the investment restrictions of each Fund to permit each Fund to
invest its investable assets in a corresponding Portfolio. Such an investment
might otherwise be deemed to be prohibited by certain of the Funds' investment
restrictions. (See Investment Restrictions (3), (5) and (7) in EXHIBIT D). The
Trustees propose that each Fund adopt an additional fundamental investment
policy as follows:
NOTWITHSTANDING THE INVESTMENT POLICIES AND RESTRICTIONS OF THE FUND,
THE FUND MAY INVEST ALL OR PART OF ITS INVESTABLE ASSETS IN AN OPEN-END
MANAGEMENT INVESTMENT COMPANY WITH SUBSTANTIALLY THE SAME INVESTMENT
OBJECTIVE, POLICIES AND RESTRICTIONS AS THE FUND.
Trustees' Evaluation and Recommendation
The Trustees recommend that shareholders of each Fund vote to approve
Proposal 1. The Trustees believe, based primarily on their discussions with
Winthrop and Wright, that the master-feeder fund structure will permit other
collective investment vehicles having different distribution arrangements to
invest in the Portfolio Trust. Since certain of these other vehicles might not
otherwise invest in the Funds due to tax and other reasons, additional assets
should be attracted to the corresponding Portfolios, thus increasing each
Portfolio's asset base. This anticipated larger asset base will be advantageous
to the shareholders of the corresponding Fund. The following and other factors
were considered by the Board in approving each Fund's conversion to the
master-feeder fund structure.
First, because certain expenses of operating an investment portfolio
are relatively fixed, those expenses should decline as a percentage of net asset
value as a result of an increased asset base following the conversion to the
master-feeder fund structure. Currently, each Fund bears these expenses alone.
After the conversion, these expenses would be borne in whole or in part by the
corresponding Portfolio and shared pro rata by the Fund and other investors, if
any, in that Portfolio.
Second, to the extent that each Portfolio will have a larger asset base
than that of the corresponding Fund, greater diversification of its investment
portfolio can be achieved than is currently possible for the Fund. Greater
diversification is expected to benefit shareholders of the Fund and other
investors in the corresponding Portfolio because it may reduce the negative
effect which the adverse performance of any one portfolio security may have on
the performance of the entire investment portfolio.
Third, the larger anticipated size of each Portfolio would permit the
purchase of investments in larger denominations than the corresponding Fund
currently is able to purchase.
Although these benefits could be realized by the direct growth of each
Fund's assets, the Trustees believe that growth is more likely to be achieved
through investments in the corresponding Portfolio by entities in addition to a
Fund. There can, however, be no assurance that either an increase in assets of
each Portfolio or the benefits described above will be realized and no such
benefits are anticipated until other investors invest their assets in a
Portfolio.
The Trustees also recognized that Wright could benefit from the
proposed master-feeder fund structure because this structure could enable Wright
to increase its assets under management through the development of new vehicles
to attract investor assets to Wright. These additional investors may include
other investment companies or advisory accounts advised by Wright. In addition,
this structure could attract corollary advisory and related fees to Wright with
less economic risk of limited success in early years.
The Trustees believe that over time the aggregate per share expenses of
each Fund and the corresponding Portfolio should not be more than the expenses
that would be incurred by each Fund if it continued to retain the services of an
investment adviser and invested directly in securities, although there can be no
assurance that any expense savings will be realized. The Trustees also
considered risks associated with an investment in the corresponding Portfolio.
The Trustees believe that each Portfolio's investment policies and restrictions
involve substantially the same risks as are associated with the corresponding
Fund's direct investment in securities.
In recommending that the shareholders authorize the conversion of each
Fund to the master-feeder fund structure, the Trustees have taken into account
and evaluated the possible effects that increased assets in the Portfolio may
have on the expense ratio of each Fund and Wright's voluntary expense
limitation. After carefully weighing the costs involved against the anticipated
benefits of converting each Fund to the master-feeder fund structure, the
Trustees recommend that the shareholders of each Fund vote to approve
Proposal 1.
Based on their consideration, analysis and evaluation of the above
factors and other information deemed by them to be relevant to this Proposal,
the Trustees, including the Independent Trustees, have concluded that it would
be in the best interests of each Fund and its shareholders to approve the
adoption and implementation of a new investment policy and the supplement to the
investment restrictions to enable each Fund to invest all of its Investable
Assets in a corresponding Portfolio.
To the extent required by applicable law or the respective Trust's
Declaration of Trust, the approval by Fund shareholders of this Proposal will
authorize the Trustees of each Trust to implement each Fund's conversion to the
master-feeder fund structure. If this Proposal is approved by the shareholders,
and the Trustees are satisfied with certain tax matters discussed above, the
Trustees intend to convert Wright Selected Blue Chip Equities Fund, Wright
Junior Blue Chip Equities Fund, Wright International Blue Chip Equities Fund,
Wright U.S. Treasury Fund, Wright U.S. Treasury Near Term Fund, and Wright
Current Income Fund (the "Feeder Funds") to the master-feeder fund structure on
or about the close of business on April 30, 1997 or such later date as the
Trustees may approve. The Trustees have no current intention to convert the
other Funds (the "non-Feeder Funds") to the master-feeder fund structure at the
present time. The Trustees believe that there is a reasonable expectation that
at least one other entity will invest with the Feeder Funds in the corresponding
Portfolios, thereby increasing the likelihood that the Feeder Funds will
experience the economic benefits of conversion to the master-feeder fund
structure. The Trustees have no present expectation with respect to the
non-Feeder Funds, and for this reason, do not recommend conversion of the non-
Feeder Funds at this time. Shareholder approval of
this Proposal will authorize the Trustees to undertake such a conversion at
some other future date whether or not another entity is expected to invest with
a non-Feeder Fund in a corresponding Portfolio. If the Trustees authorize the
conversion of any non-Feeder Fund at a future date, Wright will give
shareholders of the Fund 30 days' written notice of the proposed conversion.
Required Vote
Approval by the shareholders of a Fund of Proposal 1 requires the
affirmative "vote of a majority of the outstanding voting securities" (the
"Majority Shareholder Vote") of that Fund. Under the 1940 Act, this means that
to be approved, the Proposal as it relates to a Fund must receive the
affirmative vote of the lesser of (a) 67% of the shares of that Fund present at
the meeting if the holders of more than 50% of the outstanding shares of that
Fund are present or represented by proxy at the meeting, or (b) more than 50% of
the outstanding shares of that Fund. In the event the shareholders of one or
more of the Funds fail to approve this Proposal, Winthrop would continue to act,
and receive compensation for acting, as the investment adviser for that Fund,
which would continue to invest directly in securities.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE TO
APPROVE PROPOSAL 1.
PROPOSALS 2(a), 2(b) and 2(c)
AUTHORIZATION TO VOTE AS A PORTFOLIO INVESTOR
Shareholders of the Feeder Funds are being asked to vote on certain
matters because the Portfolio Trust is expected to ask the Feeder Funds as
initial interest holders in the corresponding Portfolios to vote on such
matters. Any vote is expected to take place just after the Feeder Funds' initial
investment in the Portfolios. Specifically, it is expected that the Portfolio
Trust will ask its interest holders to vote to:
(a) Elect a Board of Trustees of the Portfolio Trust;
(b) Ratify the selection of Deloitte & Touche, LLP as the
independent accountants of the Portfolio Trust; and
(c) Approve the Proposed Advisory Agreement between the Portfolio
Trust, on behalf of each Portfolio, and the investment
adviser, Wright.
Each Trust on behalf of its respective Feeder Funds will cast its votes
on each matter in the same proportions as the votes cast by the Feeder Funds'
shareholders. At the present time, it is anticipated that there will be at least
two holders of interests with respect to each Portfolio. However, each Feeder
Fund is expected initially to own substantially all of the interests in the
corresponding Portfolio.
Proposal 2(a): Authorization to Elect Trustees of the Portfolio Trust
Unless marked to the contrary, the enclosed proxy card will be used to
authorize each Trust, on behalf of its respective Feeder Funds, to vote for the
election of the eight (8) nominees indicated below as Trustees of the Portfolio
Trust. Each nominee currently serves as a Trustee of each Trust. Each Trustee
elected will hold office until his successor is elected and qualified, as
provided in the Portfolio Trust's declaration of trust. Each nominee has
consented to serve as a Trustee of the Portfolio Trust if elected at the
meeting. If, for any reason, any nominee should not be available for election or
able to serve as a Trustee, the proxies will exercise their voting power in
favor of the substitute nominee, if any, as the Trustees may designate. The
Trustees have no reason to believe that it will be necessary to designate a
substitute nominee. An asterisk after a nominee's name indicates that the
nominee, if elected, will be an interested person of the Portfolio Trust.
The following table sets forth each nominee's principal occupation or
employment during the past five years.
Name, Age and Position with the Principal Occupation or Employment
Portfolio Trust During Last Five Years
Peter M. Donovan* President, Chief Executive Officer and Director of
(age 54) Wright and Winthrop; Vice President, Treasurer and
Trustee a Director of Wright Investors' Service Distributors,
Inc.
H. Day Brigham, Jr. Retired. Formerly, Vice President of Eaton Vance,
(age 70) Boston Management Research ("BMR"), Eaton Vance
Trustee Corporation ("EVC") and Eaton Vance and Director,
Eaton Vance and EVC.
Winthrop S. Emmet Retired New York City Attorney at Law; Trust
(age 86) Officer, First National City Bank, New York, NY
Trustee (1963-1971).
Leland Miles President Emeritus, University of Bridgeport (1987-
(age 73) present); President, University of Bridgeport (1974-
Trustee 1987); Director, United Illuminating Company.
A.M. Moody III* Senior Vice President, Wright and Winthrop;
(age 60) President, Wright Investors' Service Distributors, Inc.
Trustee
Lloyd F. Pierce Retired Vice Chairman (prior to 1984 - President),
(age 78) People's Bank, Bridgeport, CT; Member, Board of
Trustee Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company;
Chairman, Board of Directors, COSINE.
Raymond Van Houtte President Emeritus and Counselor of The Tompkins
(age 73) Country Trust Co., Ithaca, NY (since January 1989);
Trustee President and Chief Executive Officer, The Tompkins
County Trust Company (1973-1988); President, New
York State Bankers Association (1987-1988); Director,
McGraw Housing Company, Inc., Deanco, Inc., Evaporated Metal
Products and Ithaco, Inc.
[Name]
[Age]
Nominee
Remuneration of Trustees and Officers
The following table estimates the amount of compensation to be paid to
the Portfolio Trust's Independent Trustees for the fiscal year ending December
31, 1997. In addition, each Trustee will be reimbursed for out-of-pocket
expenses associated with attending Trustee meetings. The non- Independent
Trustees, Messrs. Donovan and Moody, and each officer of the Portfolio Trust are
interested persons of Wright, are compensated by Wright or its affiliates and
will receive no compensation from the Portfolio Trust for their services.
Compensation from the Portfolio Trust
Total Compensation
From All Funds in
Independent Trustee Portfolio Trust Complex (1)
H. Day Brigham, Jr. $ $ 0
Winthrop S. Emmet 6,250
Leland Miles 5,000
Lloyd F. Pierce 6,250
Raymond Van Houtte 6,250
(1) For the fiscal year ended December 31, 1996. The Wright Group of
Funds included 33 mutual funds as of December 31, 1996.
Executive Officers
Prior to May 1, 1997, it is expected that the Trustees of the Portfolio
Trust will elect the following persons as officers of the Trust: Peter Donovan
as President, A.M. Moody III as Vice President, Judith Corchard as Vice
President and James L. O'Connor as Treasurer. Information about Mr. Donovan and
Mr. Moody, who are nominees for election as Trustees, is provided in the table
above. Information about Ms. Corchard and Mr. O'Connor is provided in the table
on page of this Proxy Statement.
Required Vote
Election of the Trustees of the Portfolio Trust requires the
affirmative vote of a plurality of the outstanding interests of the Portfolio
Trust voting together.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE FEEDER FUNDS VOTE TO APPROVE
PROPOSAL 2 (a).
Proposal 2 (b): Ratification of Selection of Accountants.
The Trustees of the Portfolio Trust, including a majority of the
Independent Trustees, have selected Deloitte & Touche, LLP to act as independent
public accountants for the Portfolio Trust for the Trust's 1997 fiscal year
ending December 31. Deloitte & Touche, LLP has advised the Portfolio Trust that
it has no direct or indirect financial interest in the Portfolio Trust. The
Trustees' selection is subject to ratification by the Portfolio Trust's holders,
including the Feeder Funds. Because the Feeder Funds will vote in accordance
with the instruction of their shareholders, the enclosed proxy card provides
space for instructions directing the proxies named therein to vote for, against,
or abstain from ratifying that selection. Deloitte & Touche, LLP will be
afforded the opportunity to be available at the meeting to respond to
appropriate questions relating to the proposed examination of the Portfolio
Trust's financial statements.
The Board of Trustees of the Portfolio Trust, including all the
Independent Trustees, unanimously recommend that shareholders of each Feeder
Fund ratify the selection of Deloitte & Touche, LLP as independent public
accountants of the Portfolio Trust.
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE SHAREHOLDERS OF THE FEEDER FUNDS
VOTE TO APPROVE PROPOSAL 2 (b).
Proposal 2 (c): Approval of the Proposed Advisory Agreement
Between the Portfolio Trust and Wright
Wright Investors' Service, Inc. ("Wright"), 1000 Lafayette Boulevard,
Bridgeport Connecticut 06604, is expected to serve as investment adviser to each
Portfolio pursuant to the Proposed Advisory Agreement between Wright and the
Portfolio Trust, on behalf of each Portfolio, and to manage each Portfolio's
investments and affairs subject to the supervision of the Trustees of the
Portfolio Trust. Wright is a Connecticut corporation incorporated in [ ], and is
registered as an investment adviser under the Investment Advisers Act of 1940.
Please see EXHIBIT E to this Proxy Statement for a list of each Director and
officer of Wright.
Wright is a leading independent international investment management and
advisory firm which, together with its parent, The Winthrop Corporation
("Winthrop"), has more than 30 years' experience. Its staff of over 150 people
includes a highly respected team of 65 economists, investment experts and
research analysts. Wright manages assets for bank trust departments,
corporations, unions, municipalities, eleemosynary institutions, professional
associations, institutional investors, fiduciary organizations, family trusts
and individuals as well as mutual funds. Wright operates one of the world's
largest and most complete databases of financial information on 13,000 domestic
and international corporations. The estate of John Winthrop Wright is the
controlling shareholder of Winthrop. At the end of 1996, Wright managed
approximately $4 billion of assets.
In recommending that the shareholders of each Feeder Fund authorize the
Portfolio Trust on behalf of the corresponding Portfolios to approve the
Proposed Advisory Agreement, the Trustees considered and evaluated, among other
things, the staff and professional personnel of Wright, comparative fees charged
to other investment companies by other investment advisers; comparative
performance results; and expense ratio data comparing each Feeder Fund (as the
equivalent of the corresponding Portfolio for this purpose) with other
investment companies of similar size and with similar investment objectives.
Before making this recommendation, the Trustees conducted a review of the
various documents, reports and other materials submitted to them by Wright,
information that they were familiar with as Trustees, and information obtained
from independent sources such as Lipper Analytical Services, Inc.
TERMS OF THE PROPOSED ADVISORY AGREEMENT. The terms of the Proposed
Advisory Agreement are substantially the same as the terms of the Existing
Advisory Agreements, except the identity of the investment adviser, the date of
execution and the initial term. The following description of the terms of the
Proposed Advisory Agreement is qualified in its entirety by reference to the
copy of the Proposed Advisory Agreement attached to this Proxy Statement as
EXHIBIT F.
ADVISORY FEES AND EXPENSE LIMITATION. The rate at which advisory fees
are payable by the Portfolio Trust on behalf of each Portfolio under the
Proposed Advisory Agreement is the same as the rate at which the advisory fees
are payable by the Trusts on behalf of the respective Feeder Funds under the
Existing Advisory Agreements. The advisory fees under the Existing Advisory
Agreements and under the Proposed Advisory Agreement are payable by each Feeder
Fund or the corresponding Portfolio, as the case may be, at a rate equal on an
annual basis to a stated percentage of the average daily net assets of the
Feeder Fund or the Portfolio, as the case may be, as follows:
ANNUAL % ADVISORY FEE RATES
--------------------------------
$250 Mil. Aggregate Fee Rate Paid for
Under $100 $100 Mil. to to $500 $500 Mil. to Over $1 Net Assets the Fiscal Year
Mil. $250 Mil. Mil. $1 Billion Billion at 12/31/96 Ended 12/31/96
- -----------------------------------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip 0.55% 0.69% 0.67% 0.63% 0.58% $ %
Equities Fund (WBC)
Wright Junior Blue Chip 0.55% 0.69% 0.67% 0.63% 0.58%
Equities Fund (WJBC)
Wright International Blue 0.75% 0.79% 0.77% 0.73% 0.68%
Chip Equities Fund (WIBC)
Wright U.S. Treasury Fund (WUSTB) 0.40% 0.46% 0.42% 0.38% 0.33% (1)
Wright U.S. Treasury Near 0.40% 0.46% 0.42% 0.38% 0.33%
Term Fund (WNTB)
Wright Current Income Fund (WCIF) 0.40% 0.46% 0.42% 0.38% 0.33%
<FN>
(1) To enhance the net income of the Fund, Wright made a reduction of its advisory fee in the amount of $ or from
--------
% to %.
----- ----
</FN>
Upon conversion of each Feeder Fund to the master-feeder fund
structure, the Feeder Fund will cease the payment of advisory fees to Winthrop.
The advisory function will be performed by Wright under the Proposed Advisory
Agreement. Thus, although a Feeder Fund will not directly pay any advisory fees
to Wright, it will indirectly bear its proportionate share of the advisory fees
paid by the corresponding Portfolio to Wright pursuant to the Proposed Advisory
Agreement.
As discussed in Proposal 1, Wright has voluntarily agreed to limit the
master-feeder aggregate annual operating expenses of each Fund and the
corresponding Portfolio (excluding brokerage commissions, taxes and
extraordinary expenses) to the expense limits in effect as of the date of each
Fund's conversion to the master-feeder fund structure. Wright may discontinue or
modify such limitation in the future at its discretion, although it has no
current intention to do so.
ADVISORY SERVICES. Pursuant to the Proposed Advisory Agreement and
subject to the supervision and approval of the Trustees of the Portfolio Trust,
Wright is responsible for providing continuously an investment program for each
Portfolio, consistent with each Portfolio's investment objective, policies and
restrictions. Specifically, Wright will determine
what investments shall be purchased, sold or exchanged by each Portfolio,
if any, and what portion, if any, of each Portfolio's assets will be held
uninvested and make changes in each Portfolio's investments. Wright will also
manage, supervise and conduct the other affairs and business of each Portfolio
and matters incidental thereto, including supervision of each Portfolio's
administrator, if any.
APPROVAL AND TERMINATION PROVISIONS. If approved by the affirmative
vote of a "majority of the outstanding voting securities" (as described in
Proposal 1) of the Portfolio ("Majority Investor Vote"), the Proposed Advisory
Agreement will remain in full force and effect until February 28, 1999, and will
continue in full force and effect as to each Portfolio indefinitely thereafter,
but only as long as such continuance is specifically approved at least annually
(i) by a vote of a majority of the Trustees of the Portfolio Trust cast in
person at a meeting called for the purpose of voting on such approval, or (ii)
by a Majority Investor Vote for that Portfolio. The Proposed Advisory Agreement
may be terminated at any time without penalty by a vote of a majority of the
Independent Trustees of the Portfolio Trust, by a Majority Investor Vote for
that Portfolio or by Wright on 60 days' written notice to the other party. In
addition, the Proposed Advisory Agreement will terminate immediately and
automatically if assigned.
STANDARD OF CARE. The Proposed Advisory Agreement further provides that
Wright will not be liable for any loss incurred in connection with the
performance of its duties, or action taken or omitted under the Proposed
Advisory Agreement in the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties thereunder, or for any losses which may
be sustained in the acquisition, holding or sale of any security or other
investment.
EXPENSES. Subject to the expense limitation discussed above, each
Portfolio and the corresponding Feeder Fund, as the case may be, will each be
responsible for its respective costs and expenses not expressly stated to be
payable by Wright under the Proposed Advisory Agreement or the administration
agreements with the administrator. Among other expenses, the Portfolio will pay
investment advisory fees; bookkeeping, interest pricing and custodian fees and
expenses; expenses of notices and reports to interest holders; and expenses of
the Portfolio's administrator. Each corresponding Feeder Fund will pay fees and
disbursements of the Feeder Fund's transfer agent and dividend disbursing agent
or registrar, shareholder servicing fees and expenses; and expenses of
prospectuses, statements of additional information and shareholder reports which
are furnished to shareholders. Each Feeder Fund and each corresponding Portfolio
will pay legal and auditing fees; registration and reporting fees and expenses;
and Trustees' fees and expenses. Expenses of the Trusts or the Portfolio Trust
which relate to more than one of their respective series are allocated among
such series by Wright in an equitable manner, primarily on the basis of relative
net asset values.
Required Vote
Approval of the Portfolio Trust's Proposed Advisory Agreement with
Wright on behalf of each Portfolio requires a Majority Shareholder Vote of each
Feeder Fund. In the event that the shareholders of one or more of the Feeder
Funds fail to approve this Proposal, the Trustees of the Trusts and the
Portfolio Trust will consider what further action should be taken.
THE TRUSTEES OF THE TRUSTS, INCLUDING A MAJORITY OF THE INDEPENDENT
TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF EACH FEEDER FUND VOTE TO
APPROVE PROPOSAL 2(c).
PROPOSAL 3.
TO APPROVE AMENDED AND RESTATED DECLARATIONS OF TRUST
SUMMARY The Declarations of Trust (collectively, the "Current
Declarations") of the Equity Trust and the Income Trust have not changed
significantly since they were last amended and restated in 1984. The Current
Declarations are proposed to be amended and restated (as amended and restated,
the "Amended Declarations") to provide the Trustees of each Fund with greater
flexibility to manage their respective Funds. This enhanced flexibility may
result in more efficient operation of the Funds and lower costs.
The Amended Declarations will permit the Funds, upon authorization by
the Board of Trustees, to issue and sell one or more classes of shares of
beneficial interest of the Funds and any series of the Trusts created in the
future. The Amended Declarations will include all changes noted below that are
necessitated or made appropriate by the proposed plan to implement the issuance
of multiple classes of shares. In addition, the Amended Declarations contain
more modern provisions than the Current Declarations. In connection with the
amendments to the Current Declarations, the Trustees will amend the By-Laws of
the Trusts to conform them to the Amended Declarations. The Amended
Declarations, each of which is substantially in the form attached to this Proxy
Statement as EXHIBIT G, will become effective on May 1, 1997 if approved by the
shareholders. The description of the Amended Declaration of each Fund is
qualified in its entirety by the full text of the proposed Amended Declaration
set forth as EXHIBIT G to this Proxy Statement.
MULTIPLE CLASSES OF SHARES The Amended Declarations will specifically
authorize the Trustees to create multiple classes of shares of each Fund. If
Proposal 3 is approved, the multiple class structure will be implemented by
designating the currently issued and outstanding shares of each Fund (except
Wright U.S. Treasury Money Market Fund ("Money Market Fund")) as Standard Shares
and authorizing one additional class of shares of each Fund (except Money Market
Fund and Wright Total Return Bond Fund), the Institutional Shares. At this time,
the Trustees intend to authorize the implementation of the multiple class
distribution system for all Funds, except the Money Market Fund. The Trustees
may at some future date authorize the implementation of multiple classes for the
Money Market Fund. The Trustees currently intend to designate the existing
shares of the Total Return Bond Fund as Standard Shares, but not authorize the
issuance of a second class of shares for this Fund.
The Standard Shares will be offered for sale without a front-end or
deferred sales charge. Standard Shares will be offered for sale subject to a
Rule 12b-1 plan that provides for the payment of distribution fees to the
Distributor as a percentage of the Fund's assets attributable to the Standard
Shares. If shareholders approve the amendment to the Funds' Current Plans, as
described in Proposal 4, the fees payable pursuant to each Fund's Current Plan
will increase to 0.25% of the Fund's average daily net assets attributable to
the Standard Shares. If shareholders do not approve the amendment described in
Proposal 4, the fees payable pursuant to each Fund's Current Plan applicable to
Standard Shares will continue to be up to 0.20% of such assets.
The Institutional Shares will be offered for sale without a front-end
or deferred sales charge to certain institutional investors able to meet the
high minimum investment requirement.
The Trust has adopted a service plan (the "Service Plan" ) which allows
each Fund to reimburse the Distributor for payments to intermediaries for
providing account administration and personal and account maintenance services
to their customers who are beneficial owners of shares. The services provided by
these intermediaries may include acting, directly or through an agent, as the
sole shareholder of record, maintaining account records for customers,
processing orders to
purchase, redeem or exchange shares for customers, responding to inquiries
from prospective and existing shareholders and assisting customers with
investment procedures. The amount of the service fee payable under the Service
Plan with respect to each class of shares of the Fund may not exceed 0.25%
annually of the average daily net assets attributable to the respective classes.
The two classes of each Funds' shares would each represent interests in
the same series of shares and portfolio of investments, and would be identical
in all respects, except that (a) Standard Shares would be charged a distribution
fee under the Rule 12b-1 distribution plan; (b) Institutional Shares would not
have a Rule 12b-1 distribution plan; (c) Standard Shares shareholders would have
exclusive voting rights with respect to the applicable Rule 12b-1 distribution
plan; (d) Standard Shares and Institutional Shares may bear different expenses
related to the cost of holding shareholder meetings required by the exclusive
voting rights applicable to each class; (e) Institutional Shares would have no
voting rights with respect to the Rule 12b-1 distribution plans of Standard
Shares; (f) although each class would have a Service Plan providing for maximum
fees of 0.25%, the fees actually paid by each class may differ; (g) the two
classes would have different exchange privileges; and (h) the designation of the
two classes of shares would be different.
Except for the class designation and the allocation of certain costs,
fees and voting rights as described above, each class of shares issued after May
1, 1997 will be identical in all other respects to the currently issued and
outstanding shares of each Fund.
Under a multiple class structure, the Distributor could tailor its
marketing and distribution activities to a broader segment of the investing
public and will be able to maintain and expand the sales activities and services
currently provided to smaller individual customers, while simultaneously
expanding their marketing and sales activities to attract substantial
institutional investors. The Trustees believe that shareholders would benefit
from the availability of a number of distribution options in a single Fund.
Unless the Funds have the ability to make the multiple class structure
available, the Funds will be at a competitive disadvantage relative to other
mutual funds which feature, or are in the process of implementing, similar
distribution arrangements. To the extent that the Funds are able to maintain and
expand their current shareholder and asset base through a multiple class
structure, the shareholders may benefit from the adoption of the Amended
Declarations.
Material Differences Between the Current Declarations and the Amended
Declarations
Both Current Declarations are substantially similar to each other. The
Amended Declarations are substantially identical to each other. Set forth below
is a description of the material differences among the Current Declarations and
the Amended Declarations.
Current Declarations Amended Declarations
(i) A Fund may involuntarily redeem (i) A Fund may involuntarily redeem
shares if a shareholder account shares if (a) the value of such
does not have a value of at least shares held is less than the
$1,000. minimum amount as established by the
Trustees or (b) the aggregate value
of the assets of any series or class
of shares is less than the
minimum amount determined by the
Trustees to be necessary for
maintaining the series or class as
a viable economic entity.
(ii) A Fund will terminate either upon (ii)A Fund will terminate (a) either
(a) the merger, consolidation or upon (i) the affirmative vote of
sale of all or substantially all of the shareholders holding two-thirds
Fund's assets, if approved by the of the Fund's shares outstanding and
holders of two-thirds of the entitled to vote at any share-
outstanding shares of the Fund, holder's meeting or (ii) by a
except that if the Trustees written instrument, without a
recommend such sale of assets, the meeting, consented to by the holders
approval by the vote of a majority of two-thirds of the Fund's
of the Fund's outstanding shares outstanding shares, provided that if
which are entitled to vote will be such termination is recommended by
sufficient or (b) upon liquidation the Trustees, a Majority Shareholder
and distribution of the assets of Vote shall be sufficient
the Fund, if approved by a authorization or (b) by a written
majority of its Trustees or by the instrument, majority of the
vote of a majority of the Fund's Trustees, to be followed by a
outstanding shares. written notice to the shareholders
stating that a majority of the
Trustees has determined that the
continuation of the Trust or the
Fund or a class thereof is not in
the best interest of the
shareholders.
(iii) A Trust's Current Declaration may (iii) A Trust's Amended Declaration may
be amended by a vote of a be amended by written instrument
majority of the Trustees and a without a meeting signed by a
majority of the outstanding shares majority of Trustees and authorized
of the Trust affected by the by a Majority Shareholder Vote of
amendment, or by any larger vote those shareholders which are
that may be required by law in affected by the amendment and
any particular case. The Trustees which are entitled to vote thereon.
may amend each Trust's Current A Trust's Amended Declaration may
Declaration without a shareholder also be amended by a majority vote
vote if such amendments do not of Trustees without approval or
have a material adverse effect on consent of shareholders of the
the interests of shareholders or to Trust, to,among other things,
conform the Current Declaration to change the name of the Trust
the requirements of the law. or make such other changes as do
not have a material adverse effect
on the financial interests of
shareholders or to conform the
Declaration to requirements of the
law, except that no such amendment
may impair the exemption from
personal liability of shareholders,
Trustees, officers, employees or
agents of the Trust or permit
assessments upon shareholders.
(iv) A Fund may merge, consolidate or (iv) A Fund or other series may merge,
sell all or substantially all of its consolidate or sell all or
assets as authorized by a majority substantially all of its assets
of the Trustees and by an upon the authorization of the
affirmative vote or written consent Trustees and without any
of shareholders holding two-thirds authorization, vote or consent
of the Fund's shares outstanding of the shareholders.
and entitled to vote; provided
however, that a vote or written
consent of shareholders holding a
majority of the Fund's shares
outstanding and entitled to vote
will be sufficient authorization if
the merger, consolidation or sale is
recommended by the Trustees.
(v) No comparable provision (v) In the event of a negative net income
of any series or class of shares, the
Trustees of a Trust (such as the
Money Market Fund) may, among
other things, offset each
shareholder's pro rata amount of
such negative amount from the
accrued dividend account of each
shareholder or reduce the number of
outstanding shares of a Fund (such
as the Money Market Fund) or class
in each shareholder account.
(vi) Each whole share of a Fund is (vi)As determined by the Trustees,
entitled to one vote as to any without shareholder vote or consent,
matter on which it is entitled to on any voting matter, either each
vote and fractional shares are whole share of a Fund is entitled to
entitled to a proportional vote. one vote and fractional shares to a
Each vote represents a pro rata proportional vote, or each dollar of
beneficial interest in the assets net asset value of the Fund is
allocated to that Fund. entitled to one vote and fractional
dollars to a proportional vote.
In addition to the material differences described above, there are other
substantive and stylistic differences between the Amended Declarations and the
Current Declarations. You are urged to review the form of Amended Declaration
attached to this Proxy Statement as EXHIBIT G. Except as described in this Proxy
Statement, approval of the Amended Declarations will not result in changes in
the Trustees, officers, investment programs and services or any operations and
services of the Trusts or their respective Funds that are described in the
Funds' current Prospectuses.
Trustees' Evaluation and Recommendation
At a meeting of the Trustees of each Trust held on January 22, 1997, the
Trustees approved, and voted to recommend to shareholders that they approve, a
proposal to amend and restate their respective Current Declarations. In taking
this action and making this recommendation, the Trustees considered the
likelihood that the Amended Declarations will result in more efficient and
economical operation of the Funds by giving the Trustees more flexibility to
manage the Funds and adapt the Amended Declarations to changes in applicable
law, industry developments and other changes. This greater flexibility should
reduce the need for costly and time-consuming proxy solicitations and
shareholders' meeting.
Vote Required
Approval of Proposal 3 with respect to each Trust requires the
affirmative vote of a majority of the outstanding voting securities of the
respective Trust. If the proposed changes are not approved by the shareholders,
each Current Declaration will continue in its existing form. Alternatively, the
Trustees may consider submitting to shareholders at a future meeting other
proposals to amend and restate the Current Declarations.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH TRUST APPROVE THE
AMENDMENT AND RESTATEMENT OF THEIR CURRENT DECLARATION AND ADOPT THE
AMENDED DECLARATION FOR THEIR TRUST.
PROPOSAL 4.
TO APPROVE AN AMENDMENT TO DISTRIBUTION PLANS TO
INCREASE DISTRIBUTION FEES
On January 22, 1997, the Trustees of each Fund (except Wright U.S.
Treasury Money Market Fund), including all of the Independent Trustees,
approved, and voted to recommend to each Fund's shareholders that they approve,
an amendment to each Fund's distribution plan adopted pursuant to Rule 12b-l
under the 1940 Act (each, a "Current Plan" and together, the "Current Plans")
(as amended, the "Amended Plans"). See EXHIBIT H for the form of the Amended
Plans. The discussion of the Amended Plans in this Proxy Statement is qualified
in its entirety by reference to the form of the Amended Plans.
SUMMARY. The amendment would increase the maximum amount payable pursuant
to each Current Plan from 0.20% to 0.25% annually of each Fund's average daily
net assets, effective May 1, 1997. In approving the amendment, the Trustees
determined that the increased fee is likely to result in higher levels of sales
and lower levels of redemptions of each Fund's shares than would otherwise be
the case. This in turn should assist in the goal of achieving net positive cash
flow into each Fund and an increase in a Fund's asset size. There can be no
assurance, however, that a Fund will achieve a net positive cash flow or an
increase in asset size.
THE CURRENT PLANS. The Current Plans sets forth the terms and conditions
on which each Fund pays distribution fees and personal and account maintenance
fees to Wright Investors' Service Distributors, Inc. (the "Distributor") in
connection with the provision by the Distributor of certain services to each
Fund and its shareholders. The terms of the Current Plans authorize each Fund to
engage in any activity primarily intended to result in the sale of its shares.
Each Fund is authorized to engage in such activities directly, or through other
persons with whom a Fund enters into agreements. See EXHIBIT I for information
about fees paid by each Fund to the Distributor for the fiscal year ended
December 31, 1996, and the dates on which each Current Plan was (i) first
approved by the Trustees and (ii) most recently approved.
Distribution fees are used to compensate the Distributor for expenses
primarily intended to result in sales of shares of each Fund, including, but not
limited to, compensation paid to and expenses (including overhead) incurred by
officers, Trustees, employees or sales representatives of the Trust, including
telephone expenses, the printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of sales literature and
advertising of any type. The expenses covered by the Fund's Current Plans may
include payments to any separate distributors under agreement with the Funds for
activities primarily intended to result in the sale of the Funds' shares.
Under the Current Plans, each Fund pays up to an aggregate of 0.20%
annually of its average daily net assets for distribution fees.
THE AMENDED PLANS. Under the Amended Plans, each Fund would pay up to an
aggregate of 0.25% annually of its average daily net assets for distribution and
personal and account maintenance services. Under the Amended Plans, each Fund
would be authorized to pay for the following distribution services and expenses,
without limitation: compensation to and expenses incurred by dealers or
wholesalers retained by the Distributor (collectively, the "Authorized Dealers")
and the officers, employees and sales representatives of Authorized Dealers and
of the Distributor; allocable overhead, travel and telephone expenses; the
printing of prospectuses and reports for other than existing shareholders; the
preparation and distribution of sales literature and advertising; and all other
expenses (other than personal and account maintenance
services as defined in the Service Plan) incurred in connection with
activities primarily intended to result in the sale of a Fund's shares.
A Comparative Fee Table is set forth in EXHIBIT J showing the amount of
fees and expenses paid by each Fund under the Current Plans and the amount of
fees and expenses each Fund's shareholders would have paid indirectly if the
Amended Plans had been in effect. The information in the table is an estimate
based on actual expenses for each Fund's fiscal year ended December 31, 1996.
The expenditures under the Current and Amended Plans are calculated and
accrued daily and paid monthly or at such other intervals as the Trustees
determine. Pursuant to the Amended Plans, the Distributor must provide the
Trustees at least quarterly with a written report of the amounts expended by
each Fund under the Amended Plans and the purpose for which such expenditures
were made together with such other information as from time to time is
reasonably requested by the Trustees. The Trustees review such reports on a
quarterly basis. In the event the Distributor is not fully compensated for
payments made or other expenses incurred by it under the Amended Plans, these
expenses are not carried forward from the date such expenses were incurred. Any
fees paid to the Distributor during a fiscal year and not expended or allocated
by the Distributor for actual or budgeted distribution and service activities
during that year are not returned to the Funds.
The expenditures made pursuant to the Current Plans and the Amended
Plans, and the basis upon which such expenditures are made, are determined by
each Fund in accordance with Rule l2b-1 under the 1940 Act (the "Rule") and the
Conduct Rules of the National Association of Securities Dealers, Inc. (the "NASD
Rules"). If any amendment to the Rule or the NASD Rules is adopted, the Trustees
will consider what, if any, modification of the Amended Plans or a Fund's
distribution practices may be appropriate.
The Amended Plans will continue in effect until February 28, 1998 and for
successive annual periods provided that each Amended Plan is approved at least
annually by a vote of the majority of the Trustees, including a majority of the
Independent Trustees who have no direct or indirect financial interest in the
operation of the Amended Plan or in any agreement related to the Amended Plan.
Each Fund may terminate its Amended Plan at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees who have no direct or
indirect financial interest in the operation of the Amended Plan or in any
agreement related to the plan, or a Majority Shareholder Vote of the affected
Fund. No material amendment to an Amended Plan will be effective unless it is
approved by a vote of a majority of the Trustees, including a majority of the
Independent Trustees who have no direct or indirect financial interest in the
operation of the Amended Plan or in any agreement related to the Amended Plan.
Each Amended Plan requires that amendments which would materially increase the
amount of the payments permitted thereunder be approved by a Majority
Shareholder Vote of the affected Fund.
Trustees' Evaluation and Recommendation
In connection with their decision to approve the proposed Amended Plans and
to recommend to each Fund's shareholders that they do the same, the Trustees,
including all of the Independent Trustees, reviewed all information which they
deemed necessary to arrive at an informed determination. Among the matters
considered by the Trustees were: (1) the potential costs and benefits of the
Amended Plans to shareholders, including the fact that higher payments made to
the Distributor would increase the level of expenses incurred by shareholders:
(2) whether the Amended Plans would assist the Distributor in marketing shares
of the Funds and reduce the level of share redemptions; (3) the advantages to
the Funds and their shareholders that might result from growth in a Fund's
assets, including economies of scale, reduced expense ratios, and greater
portfolio diversification; and (4) the fact that net positive cash flow into
each Fund could facilitate portfolio
management by eliminating the need to liquidate favorable portfolio
positions in order to generate sufficient cash to satisfy redemption requests.
The Trustees found the fees to be paid under the Amended Plans reasonable
in view of the services that the Distributor provides and the anticipated
expenses that the Distributor will incur in distributing and marketing each
Fund's shares. The Trustees determined that the higher Rule l2b-l fee payable
under the Amended Plans will enable the Distributor to compensate broker-dealers
in an amount comparable to the compensation they receive in connection with
sales of shares of comparable mutual funds.
The Trustees also recognized and considered that possible benefits may be
realized by Wright as a result of the proposed amendment to the Current Plans.
If a Fund's net assets grow more rapidly as a result of the implementation of
the Amended Plans, the investment advisory fees payable to Wright (which fees
are calculated as a percentage of a Fund's net assets) will also increase.
As a result of their consideration of the above factors and other
relevant matters, the Trustees of each Trust, including a majority of the
Independent Trustees who have no direct or indirect financial interest in the
operation of the Amended Plans or in any agreement related to the Amended Plans,
concluded, in the exercise of their reasonable business judgment and in light of
their fiduciary duties under the 1940 Act, that the amendment to the Current
Plans was likely to benefit each Fund and its shareholders and recommended that
the proposed amendment be submitted to shareholders for their approval. The
amendment will not become effective as to a particular Fund unless approved by
that Fund's shareholders.
Required Vote
Approval of this proposal by a Fund's shareholders requires an
affirmative Majority Shareholder Vote of that Fund's outstanding shares. If
shareholders of one or more of the Funds do not approve the Amended Plan(s) with
respect to such Funds, the Current Plan(s) will continue in effect and the
Trustees will consider what further action, if any, to take.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH FUND VOTE FOR THE PROPOSAL TO
APPROVE THE AMENDMENT TO EACH FUND'S PLAN UNDER RULE 12b-1.
PROPOSAL 5.
TO APPROVE THE RECLASSIFICATION OR AMENDMENT
OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
The 1940 Act requires mutual funds (including the Funds) to have certain
investment restrictions which can be changed only by a shareholder vote. Mutual
funds may also elect to designate other restrictions which may be changed only
by a shareholder vote. Both types of restrictions are often referred to as
"fundamental" restrictions. Some fundamental restrictions previously adopted by
the Funds reflect certain regulatory, business or industry conditions which are
no longer in effect. Accordingly, the Trustees authorized a review of the Funds'
fundamental restrictions to simplify, standardize and modernize those
restrictions that are required to be fundamental. The Trustees have recommended
that the fundamental restrictions be amended. Certain of the Funds' fundamental
investment restrictions are not now required by the 1940 Act or any regulatory
agency to be stated policies of a Fund, and the protections that those
restrictions afford the
Funds are found in other statutory and regulatory policies applicable to
the Funds and the Trustees have recommended that these restrictions be
eliminated as fundamental policies of the Funds. If approved, the proposed
changes will not affect the current management of a Fund's portfolio. Moreover,
the changes will be made regardless of whether the other Proposals in this Proxy
Statement are approved. Disclosure regarding the current policies may be found
in the Prospectus of each Fund.
The numerical references to the Funds' investment restrictions correspond
to the paragraphs in EXHIBIT D. If Proposal 5 is approved, the restrictions may
be reordered and renumbered.
Amendment to Certain Restrictions
The Trustees propose that Restrictions (1), (3), (5), (6) and (7) be
amended to conform to the current requirements of the 1940 Act. The Trustees
propose that Restrictions (8) and (9) be rewritten as described in EXHIBIT D,
but that the substantive provisions of these Restrictions not be amended.
Restriction (1) concerning borrowing and senior securities will be
amended to permit borrowing and the issuance of senior securities to the extent
consistent with the 1940 Act. The positions of the staff of the Commission on
borrowing and senior securities have evolved in recent years with the
development of new investment strategies, such as reverse repurchase agreements.
Each Fund would like the ability to consider the use of new investment
techniques consistent with the 1940 Act as interpretations of the 1940 Act are
further developed.
Restriction (3) will be amended to apply each Fund's policy of not
investing more than 5% of total assets in the securities of any one issuer and
more than 10% of such assets in the voting securities of any one issuer to only
75% of the Fund's total assets. As currently stated, restriction (3) applies to
100% of a Fund's total assets. The change will provide each Fund with an
opportunity, with respect to 25% of its total assets, to purchase more than the
stated percentages of a portfolio security if the investment adviser determines
that such a purchase would be of benefit to the Fund.
Restriction (5) will be amended to reclassify as nonfundamental each
Fund's policies with respect to short sales and the purchase and sale of
options. There is no requirement in the 1940 Act that these policies be
fundamental. The current restriction on margin purchases will be retained as
fundamental and modified to clarify that each Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities.
Restriction (6) will be amended to clarify that the Funds may engage in
the purchase or sale of financial futures contracts and options on futures and
are permitted to invest in securities secured by real estate and securities of
companies which invest or deal in real estate. Restriction (6) will be restated
as two separate fundamental restrictions.
Restriction (7) is being amended to comply with the staff's current
position that the asset limit applicable to a Fund's investments in a certain
industry to permit concentration in that industry should be equal to or in
excess of 25% of the Fund's total assets.
Elimination of Certain Restrictions
The Trustees propose that Restrictions (2), (4), (10), and the portion of
Restriction (5) pertaining to warrants, be eliminated as fundamental
restrictions. These restrictions were at one time required under various state
"Blue Sky" laws and/or federal laws, but are no longer required to be policies
of a Fund.
Restriction (2) prohibits pledging, mortgaging or hypothecating the
assets of a Fund to an extent greater than 1/3 of the total assets of the Fund
taken at market value. State law no longer requires pledging restrictions.
Restriction (1) (as proposed to be amended) sets forth each Fund's policies with
respect to borrowing and will be retained as a fundamental restriction.
Restriction (1) requires each Fund to comply with the requirements of the 1940
Act with respect to any borrowing activity.
Restriction (4) prohibits a Fund from purchasing a security if
individuals affiliated with the Fund own beneficially more than 5% of that
security. These transactions are circumscribed by the 1940 Act's provisions on
affiliated transactions. The code of ethics of Winthrop and Wright requires them
to monitor transactions with each Fund.
Restriction (5) prohibits the purchase of warrants. Denying a Fund the
opportunity to purchase securities represented by warrants may prevent a Fund
from capitalizing on an appropriate investment opportunity.
Restriction (10) prohibits the purchase from or sale to any affiliated
person, in a principal transaction, of portfolio securities of the Fund. These
principal transactions are circumscribed by the 1940 Act's provisions on
affiliated transactions. The code of ethics of Winthrop and Wright requires it
to monitor transactions with each Fund.
Trustees Evaluation and Recommendation
The Trustees have considered various factors and believe that this
Proposal will increase investment management flexibility and is in the best
interests of each Fund and its shareholders. By reducing to a minimum those
restrictions that can be changed only by shareholder vote, each Fund would be
able to avoid the costs and delay associated with a future shareholder meeting.
In addition, the Trustees believe that the investment adviser's ability to
manage the Funds' portfolios in a changing regulatory or investment environment
will be enhanced and, accordingly, that investment management opportunities will
be increased.
Vote Required
Approval of Proposal 5 with respect to each Fund requires the Majority
Shareholder Vote described in Proposal 1 above. If the Proposal is not approved
with respect to a Fund, that Fund's current fundamental restrictions will remain
in effect and a shareholder vote will be required before the Fund can engage in
activities prohibited by a current fundamental restriction.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE IN FAVOR OF THE
AMENDMENT OR ELIMINATION OF CERTAIN OF THEIR FUND'S INVESTMENT
RESTRICTIONS.
PROPOSAL 6
ELECTION OF TRUSTEES OF EQUITY TRUST AND INCOME TRUST
At a meeting on January 22, 1997, the Trustees of each Trust, including
the Independent Trustees, voted to approve, and voted to recommend to the
shareholders of their respective Funds that they approve, a proposal to elect
eight (8) Trustees (the "nominees") to the Boards of Trustees of the Trusts. All
of the nominees, except Mr/Ms [name], currently serve as Trustees. Information
concerning the nominees and other relevant information is discussed below.
A shareholder using the enclosed form of proxy may authorize the proxies
to vote for the nominees representing his or her shares or may withhold from the
proxies authority to vote for the nominees representing his or her shares. If no
contrary instructions are given, the proxies will vote FOR the nominees. Each of
the nominees has consented to his or her nomination and has agreed to serve if
elected. If, for any reason, any nominee should not be available for election or
able to serve as a Trustee, the proxies will exercise their voting power in
favor of the substitute nominee, if any, as the Trustees may designate. The
Trusts have no reason to believe that it will be necessary to designate a
substitute nominee.
The following table sets forth each nominee's principal occupation or
employment during the past five years and the date each of them, except Mr./Ms.
[Name], first became a Trustee of each Trust and the number of shares of
beneficial interest of the Funds beneficially owned by each nominee, directly or
indirectly, as of the Record Date. An asterisk after a nominee's name indicates
that the nominee is an interested person of the Trusts.
Name, Age and Position Principal Occupation or First Became Shares of Beneficial
with Each Trust Employment During Last a Trustee Interest
Five Years
Peter M. Donovan* President, Chief Executive
(age 54) Officer and Director of Wright
President and Trustee and Winthrop; Vice President,
Treasurer and a Director of
Wright Investors' Service
Distributors, Inc.
H. Day Brigham, Jr.* Retired. Formerly, Vice
(age 70) President of Eaton Vance, BMR,
Vice President, Secretary EVC and EV and Director, EV
and Trustee and EVC.
Winthrop S. Emmet Retired New York City Attorney
(age 86) at Law; Trust Officer, First
Trustee National City Bank, New York,
NY (1963-1971).
Leland Miles President Emeritus, University of
(age 73) Bridgeport (1987-present);
Trustee President, University of
Bridgeport (1974-1987); Director,
United Illuminating Company.
A.M. Moody III* Senior Vice President, Wright
(age 60) and Winthrop; President, Wright
Vice President and Investors' Service Distributors,
Trustee Inc.
Lloyd F. Pierce Retired Vice Chairman (prior to
(age 78) 1984 - President), People's Bank,
Trustee Bridgeport, CT; Member, Board
of Trustees, People's Bank,
Bridgeport, CT; Board of
Directors, Southern Connecticut
Gas Company; Chairman, Board
of Directors, COSINE
Raymond Van Houtte President Emeritus and
(age 73) Counselor of The Tompkins
Trustee County Trust Co., Ithaca, NY
(since January 1989); President and Chief
Executive Officer, The Tompkins County Trust
Company (1973-1988); President, New York State
Bankers Association (1987-1988); Director,
McGraw Housing Company, Inc., Deanco, Inc.,
Evaporated Metal Products and Ithaco, Inc.
[Name]
[Age]
Nominee
The Board of Trustees of each Trust held five meetings during the last
completed fiscal year and no Trustee attended fewer than 75% of the aggregate of
(1) the total number of meetings of the Trustees of each Trust; and (2) the
total number of meetings held by all committees of the Trustees on which he
served. Messrs. Emmet, Miles, Pierce and Van Houtte are members of the Special
Nominating Committee of the Trustees of each Trust. The Committee's function is
selecting and nominating individuals to fill vacancies, as and when they occur,
among those Trustees who are not Independent Trustees. The Trusts do not have a
designated audit committee since the full Board of Trustees of each Trust
performs the functions of such committee.
Executive Officers
The table below lists the executive officers of the Trust not named in
the table above, and the date on which each officer became an officer of the
Trust.
Name, Age and Position Principal Occupation During the First Became an
with Each Trust Past Five Years Officer of the Trust
- --------------------------------------- --------------------------------------- ---------------------------------------
Judith Corchard Executive Vice President,
(age 58) Investment Management: Senior
Vice President Investment Officer; Chairman of
the Investment Committee and
Director of Wright and Winthrop.
James L. O'Connor Vice President of Eaton Vance,
(age 52) BMR and EV, Officer of various
Treasurer investment companies managed
by Eaton Vance or BMR.
Remuneration of Trustees and Officers
The following table provides information regarding the compensation paid
by the Trusts and the other investment companies in the Wright Funds complex to
the Independent Trustees for their services for each Trust's most recently
completed fiscal year. The non-Independent Trustees, Messrs. Donovan, Brigham
and Moody, and each officer of the Trusts were interested persons of Winthrop
and Wright, were compensated by Wright or its affiliates and received no
compensation from the Trusts for their services.
Aggregate Compensation From Each Trust for Last Fiscal Year
Independent Trustee Equity Trust Income Trust Total Compensation
From All Funds in
Complex
Winthrop S. Emmet $1,250 $1,250 $6,250
Leland Miles 1,250 1,250 5,000
Lloyd F. Pierce 1,250 1,250 6,250
Raymond Van Houtte 1,250 1,250 6,250
Required Vote
The election of the Trustees of each Trust requires the affirmative vote
of a plurality of the outstanding shares of the respective Trust voting
together.
Trustees' Recommendation
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH TRUST ELECT
EACH OF THE NOMINEES TO SERVE AS A TRUSTEE OF THE RESPECTIVE TRUST
PROPOSAL 7
RATIFICATION OF SELECTION OF THE INDEPENDENT PUBLIC ACCOUNTANTS
The Trustees of each Trust, including a majority of the Independent
Trustees, have selected Deloitte & Touche, LLP to act as independent public
accountants for the Trusts for each Trust's 1997 fiscal year ending December 31.
Deloitte & Touche, LLP has advised the Trusts that it has no direct or indirect
financial interest in either of the Trusts. This selection is subject to the
ratification by the Trust's shareholders. The enclosed proxy card provides space
for instructions directing the proxies named therein to vote for, against, or
abstain from ratifying that selection. A representative of Deloitte & Touche,
LLP has been afforded the opportunity to be available at the meeting to respond
to appropriate questions relating to the examination of the Trusts' financial
statements.
Vote Required
The ratification of Deloitte & Touche, LLP as the independent public
accountants of each Trust requires the approval of a Majority Shareholder Vote
of each Trust's shareholders voting together as a class.
Trustees Recommendation
The Boards of Trustees, including all the Independent Trustees,
unanimously recommend that shareholders ratify the selection of Deloitte &
Touche, LLP as independent public accountants of the Trusts.
NOTICE TO BANKS AND BROKER/DEALERS
Each Trust on behalf of its Funds has previously solicited all Nominee
and Broker/Dealer accounts as to the number of additional proxy statements
required to supply owners of shares. Should additional proxy material be
required for beneficial owners, please forward such requests to: First Data
Investor Services Group, Wright Group of Funds, Proxy Department, P.O. Box 9122,
Hingham, MA 02043-9717.
ADDITIONAL INFORMATION
The expense of preparing, printing and mailing this proxy material and
the cost of soliciting proxies on behalf of the Boards of Trustees will be borne
ratably by the Funds. Proxies will be solicited by mail and may be solicited in
person or by telephone or telegraph by the Trust's officers, by personnel of its
investment adviser, by the transfer agent, First Data Investor Services Group,
by broker-dealer firms or by a professional solicitation organization. The
expenses connected with the solicitation of these proxies and with any further
proxies that may be solicited by the Trusts' officers, by the investment
adviser's personnel, by the transfer agent, First Data Investor Services Group,
or by broker-dealer firms, in person, by telephone or by telegraph will be borne
ratably by each Fund. The cost of the proxy solicitation is expected to be $ for
Equity Trust and $ for Income Trust. The Funds will reimburse banks,
broker-dealer firms, and other persons holding shares registered in their names
or in the names of their nominees, for their expenses incurred in sending proxy
materials to and obtaining proxies from the beneficial owners of such shares.
All proxy cards solicited by the Boards of Trustees that are properly
executed and received by the Secretary prior to the meeting, and which are not
revoked, will be voted at the meeting. Shares represented by such proxies will
be voted in accordance with the instructions thereon. If no specification is
made on the proxy card, it will be voted FOR the matters specified on the proxy
card. For each Trust, shares represented in person or by proxy (including shares
which abstain or do not vote with respect to the Proposals presented for
shareholder approval) will be counted for purposes of determining whether a
quorum is present at the meeting. Abstentions from voting will be treated as
shares that are present and entitled to vote for purposes of determining the
number of shares that are present and entitled to vote with respect to all
Proposals, but will not be counted as a vote in favor of any Proposal.
Accordingly, an abstention from voting has no effect on the voting in
determining whether Proposals 2(a) or 6 has been adopted but has the same effect
as a vote against the other Proposals. If a broker or nominee holding shares in
"street name" indicates on the proxy that it does not have discretionary
authority to vote as to a Proposal, those shares will not be considered as
present and entitled to vote as to that Proposal. Shareholders should note that
while votes to abstain and "broker non-votes" will be counted toward
establishing a quorum, passage of any Proposal being considered at the meeting
will occur only if a sufficient number of votes are cast for the Proposal.
Accordingly, votes to abstain, broker non-votes and votes against will have the
same effect in determining whether a Proposal is approved.
In the event that sufficient votes by the shareholders of any Fund in
favor of any Proposal set forth in the Notice of this meeting are not received
by the meeting date, the persons named as attorneys in the enclosed proxy may
propose one or more adjournments of the meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of the
holders of a majority of the shares present in person or by proxy at the session
of the meeting to be adjourned. The persons named as attorneys in the enclosed
proxy will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of the Proposal for which further solicitation of
proxies is to be made. They will vote against any such adjournment those proxies
required to be voted against such Proposal. A shareholder vote may be taken on
one or more of the Proposals in this Proxy Statement prior to any such
adjournment if sufficient votes have been received and it is otherwise
appropriate. The costs of any additional solicitation and of any adjourned
session will be borne ratably by the Funds.
EACH FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE FUND'S ANNUAL
REPORT AND ITS MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT TO
ANY SHAREHOLDER UPON REQUEST. SHAREHOLDERS DESIRING TO OBTAIN A COPY OF SUCH
REPORTS SHOULD DIRECT ALL WRITTEN REQUESTS TO: H. DAY BRIGHAM, JR., SECRETARY,
THE WRIGHT GROUP OF FUNDS, 24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110, OR
SHOULD CALL WRIGHT SHAREHOLDER SERVICES AT 1-800-225-6265.
SUBMISSION OF SHAREHOLDER PROPOSALS. The Trusts do not hold annual
shareholders' meetings. Shareholders wishing to submit proposals for inclusion
in a proxy statement for a subsequent shareholders' meeting should send their
written proposals to the Secretary of the respective Trust, 24 Federal Street,
Boston, Massachusetts 02110. Proposals must be received in advance of a proxy
solicitation to be included and the mere submission of a proposal does not
guarantee inclusion in the proxy statement because certain federal securities
law rules must be complied with.
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
March , 1997
EXHIBIT A
Shares of Beneficial Interest Outstanding as of the Record Date
The Wright Managed Equity Trust
The Wright Managed Income Trust
EXHIBIT B
Persons Owning More than 5% of Outstanding Shares of a Fund
as of the Record Date
The Wright Managed Equity Trust
Funds 5% Owners
The Wright Managed Income Trust
Funds 5% Owners
EXHIBIT C
Table of Comparative Expenses (Proposal 1)
Wright Wright Wright
Selected Blue Chip Junior Blue Chip International Blue Chip
Equities Fund (WBC) Equities Fund (WJBC) Equities Fund (WIBC)
Actual Proforma Actual Proforma Actual Proforma
Expenses Expenses Expenses Expenses Expenses Expenses
- ------------------------------------------------------------------------------------------------------------------
Annualized Fund Operating Expenses
(as a percentage of average net assets)
Investment Adviser Fee 0.63% 0.63% 0.54% 0.54% 0.77% 0.77%
Rule 12b-1 Distribution Expense
(after expense limitation) 0.20% 0.20% 0.00%(1) 0.00%(2) 0.20% 0.20%
Other Expenses (including administration
fees)(3) 0.21% 0.22% 0.66% 0.66%(2) 0.33% 0.34%
- -------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(after expense limitations) 1.04% 1.05% 1.20%(1) 1.20%(2) 1.30% 1.31%
- -------------------------------------------------------------------------------------------------------------------
<FN>
(1) The Adviser and Distributor have limited the Total Operating Expense
of WJBC. Absent this agreement, the Rule 12b-1 Distribution Expense and Total
Operating Expenses of WJBC would be .20% and 1.41%, respectively. If credits
resulting from cash balances maintained with Investors Bank & Trust Company were
reflected in the table above, the Total Operating Expenses for WJBC would be
1.15%.
(2) The Adviser and Distributor intend to limit the Total Operating Expense of
WJBC. Absent this agreement the proforma Rule 12b-1 Distribution Expense, Other
Expenses and Total Operating Expense would be .20%,.67% and 1.42%. After credits
from cash balances maintained with Investors Bnak & Trust Company are reflected
in the proforma table the Total Operating Expenses would be 1.15%.
(3) Administration fees for WBC, WJBC and WIBC were .12%,.20% and .12%, respectively.
</FN>
Wright Wright Wright
U.S. Treasury U.S. Treasury Current
Fund Near Term Fund Income Fund
(WUSTB) (WNTB) (WCIF)
- ------------------------------------------------------------------------------------------------------
Actual Proforma Actual Proforma Actual Proforma
Expenses Expenses Expenses Expenses Expenses Expenses
- ------------------------------------------------------------------------------------------------------
Annualized Fund Operating Expenses
(as a percentage of average net assets)
Investment Adviser Fee (after
fee limitation) 0.40% 0.40%(1) 0.42% 0.42% 0.40% 0.40%
Rule 12b-1 Distribution Expense
(after expense
limitation) 0.18% 0.18%(1) 0.20% 0.20% 0.20% 0.20%
Other Expenses (including
administration fees)(2) 0.36% 0.36%(1) 0.19% 0.20% 0.28% 0.29%
Total Operating Expenses
(after reductions) 0.94% 0.94%(1) 0.81% 0.82 % 0.88% 0.89%
- -------------------------------------------------------------------------------------------------------
<FN>
(1) The Adviser and the Distributor have temporarily and voluntarily agreed
to limit the total operation expenses of WUSTB. Absent this agreement, the
Investment Adviser Fee, the Rule 12 b-1 Distribution Expense and Total Operating
Expenses would be .40%, .20% and .95% for WUSTB. If credits resulting from cash
balances maintained with Investors Bank & Trust Company were reflected in the
table above, the Total Operating Expenses for WUSTB and WNTB would be .87% and
.81%, respectively.
The Adviser and Distributor intend to limit the total operating expense of
WUSTB. Absent this agreement the proforma Rule 12b-1 Distribution Expense,
Other Expenses and Total Operating Expense would be .20%, .37% and .96%. After
credits from cash balances maintained with Investors Bank & Trust Company are
reflected in the proforma table the Total Operating Expense would be .90%.
(2) Administration fees for WUSTB, WNTB, WTRB and WCIF were .10%, .08%, .09%
and .10%, respectively.
</FN>
Example of Fund Expenses
The following is an illustration of the total transaction and operating
expenses that an investor in each Fund would bear over different periods of
time, assuming an investment of $1,000, a 5% annual return on the investment and
redemption at the end of each period:
Wright Wright Wright Wright
Selected Blue Chip Junior Blue Chip Quality Core International Blue Chip
Equities Fund (WBC) Equities Fund (WJBC) Equities Fund(WQC) Equities Fund (WIBC)
- -----------------------------------------------------------------------------------------------------------------------------
1Year $ 11 $ 12 $ 11 $ 13
3Years 33 38 34 41
5Years 57 66 59 71
10Years 127 145 131 157
- -----------------------------------------------------------------------------------------------------------------------------
Wright Wright Wright Wright Wright
U.S. Treasury U.S. Treasury Total Return Current U.S. Treasury
Fund Near Term Fund Bond Fund Income Fund Money Market Fund
(WUSTB) (WNTB) (WTRB) (WCIF) (WTMM)
- ----------------------------------------------------------------------------------------------------------------------------
1 Year $ 10 $ 8 $ 8 $ 9 $
3 Years 30 26 26 28
5 Years 52 45 46 49
10 Years 115 100 103 108
- ---------------------------------------------------------------------------------------------------------------------------
The Example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary.
EXHIBIT D
Amendments to Investment Restrictions
No. Current Restrictions Amended Restrictions
Each Fund may not: Each Fund may not:
- -----------------------------------------------------------------------------------------------------------------------------
1 Borrow money in excess of 1/3 of the current market Borrow money or issue senior securities except
value of the net assets of a Fund (excluding the amount as permitted by the Investment Company Act of 1940.
borrowed) and then only if such borrowing is incurred In addition, a Fund may not issue bonds,debentures or
as a temporary measure for extraordinary or emergency senior equity securities, other than shares of
purposes or to facilitate the orderly sale of portfolio beneficial interest;
securities to accommodate redemption requests; or
issue any securities of a Fund other than its shares of
beneficial interest except as appropriate to evidence
indebtedness which the Fund is permitted to incur.
To the extent that a Fund purchases additional port-
folio securities while such borrowings are outstanding,
that particular Fund may be considered to be leverag-
ing its assets, which entails the risks that the costs
of borrowing may exceed the return from the securi-
ties purchased. (The Trust anticipates paying interest
on borrowed money at rates comparable to a Fund's
yield and the Trust has no intention of attempting to
increase any Fund's net income by means of borrow-
ing);
2 Pledge, mortgage or hypothecate its assets to an extent No similar restriction.
greater than 1/3 of the total assets of a Fund taken at
market;
3 Invest more than 5% of a Fund's total assets taken at With respect to 75% of the total assets of a Fund,
current market value in the securities of any one purchase the securities of any issuer if such purchase
issuer(1) or allow a Fund to purchase more than would cause more than 5% of its total assets (taken at
10% of the voting securities of any one issuer; market value) to be invested in the securities of such
issuer, or purchase securities of any issuer if such
purchase would cause more than 10% of the total voting
securities of such issuer to be held by the Fund, except
obligations issued or guaranteed by the U.S.Government,
its agencies or instrumentalities;
4 Purchase or retain securities of any issuer if 5% of the No similar restriction.
issuers securities are owned by those officers and
Trustees of the Trust or its manager, investment adviser or
administrator who own individually more than 1/2 of 1% of the issuer's
securities;
5 Purchase securities on margin or make short sales Purchase securities on margin (but a Fund may obtain
except sales against the box, write or purchase or sell such short-term credits as may be necessary for the
any put options, or purchase warrants;(2) clearance of purchase and sales of securities);
6 Buy or sell real estate, commodities, or commodity Purchase or sell real estate, although a Fund may
contracts unless acquired as a result of ownership of purchase and sell securities which are secured by real
securities;(3)(4) estate and securities of companies which invest or deal
in real estate;
Purchase or sell commodities or commodity contracts
for the purchase or sale of physical commodities other
than currency, excluding financial futures contracts
and options on these financial futures contracts;
7 Purchase any securities which would cause more Make an investment in any one industry if such invest-
than 25% of the market value of a Fund's total assets ment would cause investments in such industry to
at the time of such purchase to be invested in the equal or exceed 25% of the Fund's total assets taken
securities of issuers having their principal business at market value at the time of such investment
activities in the same industry, provided that there is (other than securities issued or guaranteed by
no limitation in respect to investments in obligations the U.S.Government or its agencies or instrumentalities);
issued or guaranteed by the U.S. Government or its
agencies or instrumentalities;(5)
8 Underwrite securities issued by other persons Underwrite or participate in the marketing of securities
except insofar as the Trust may technically be of others;
deemed an underwriter under the Securities Act
of 1933 in selling a portfolio security;
9 Make loans, except (i) through the loan of a portfolio Make loans to any person except by (a) the acquisition
security, (ii) by entering into repurchase agreements of debt securities and making portfolio investments,
and (iii) to the extent that the purchase of debt instru- (b) entering into repurchase agreements,or (c) lending
ments for a Fund in accordance with the Fund's in- portfolio securities;
vestment objective and policies may be deemed to
be loans;(6)
10 Purchase from or sell to any of its Trustees or No similar restriction.
officers, its manager, administrator or investment
adviser, its principal underwriter, if any, or the officers or
directors of said manager, administrator, investment adviser or
principal underwriter, portfolio securities of any Fund.
11 No similar restriction. Notwithstanding the investment policies and restrictions
of a Fund, a Fund may invest its assets in an
open-end management investment company with
substantially the same investment objective, policies
and restrictions as the Fund.
<FN>
(1) WUSTMM: Restriction (3) contains an additional clause --" (other than
securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities).
(2) WUST, WUSTNT, WTRB and WCI; Restriction (5) contains an additional clause
--"except with respect to securities held by any Fund investing primarily
in U.S. government securities or in securities the interest on which is
exempt from federal income tax."
(3) WIBC: Restriction (6) contains an additional clause -- except that the
Fund may purchase and sell futures contracts on securities, indices,
currency and other financial instruments and options on such contracts.
(4) WUST,WUSTNT,WTRB,WCI and WUSTMM: Restriction (6) applies only to real estate.
(5) WUST, WUSTNT, WTRB and WCI: Restriction (7) contains an additional clause
-- "and utility companies, gas, electric, water and telephone companies
are considered as separate industries; except that, with respect to any
Fund which has a policy of being primarily invested in obligations whose
interest income is exempt from federal income tax, the restriction shall
be that the Trust will not purchase for that Fund either (i) pollution
control and industrial development bonds issued by non-governmental users
or (ii) securities whose interest income is not exempt from federal
income tax, if in either case the purchase would cause more than 25% of
the market value of the assets of the Fund at the time of such purchase
to be invested in the securities of one or more issuers having their
principal business activities in the same industry."
WUSTMM: Restriction (7) contains an additional clause -- "and utility
companies, gas, electric, water and telephone companies are considered separate industries."
(6) WUST, WUSTNT, WTRB and WCI: Restriction (9) does not permit loans of
portfolio securities and repurchase agreements.
</FN>
EXHIBIT E
Wright Investors' Service, Inc.
Additional Information about Wright.
DIRECTORS AND OFFICERS. The following table provides information about the
directors and executive officers of Wright. The address for each is 1000
Lafayette Boulevard, Bridgeport, CT 06604-4720.
Name Principal Occupation or Employment
EXHIBIT F
Form of
INVESTMENT ADVISORY CONTRACT
CONTRACT made this day of 1997, between [NAME OF TRUST], a New York
trust (the "Trust"), and WRIGHT INVESTORS' SERVICE, INC., a Connecticut
corporation (the "Adviser"):
1. Duties of the Adviser. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and, except as otherwise provided in an administration
agreement, to administer its affairs, subject to the supervision of the Trustees
of the Trust, for the period and on the terms set forth in this Contract. The
Adviser will perform these duties with respect to any and all series of shares
("Portfolios") which may be established by the Trustees pursuant to the Trust's
Declaration of Trust. Portfolios may be terminated and additional Portfolios
established from time to time by action of the Trustees of the Trust.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each Portfolio and
to furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the
Portfolios and for administering the Trust's affairs and to pay the salaries and
fees of all officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its Portfolios. As investment adviser to the Portfolios, the
Adviser shall furnish continuously an investment program and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of each Portfolio's assets shall be held uninvested, subject always to
the applicable restrictions of the Declaration of Trust, By-Laws and
registration statement of the Trust under the Investment Company Act of 1940,
all as from time to time amended. The Adviser is authorized, in its discretion
and without prior consultation with the Trust, but subject to each Portfolio's
investment objective, policies and restrictions, to buy, sell, lend and
otherwise trade in any stocks, bonds, options and other securities and
investment instruments on behalf of the Portfolios, to purchase, write or sell
options on securities, futures contracts or indices on behalf of the Portfolios,
to enter into commodities contracts on behalf of the Portfolios, including
contracts for the future delivery of securities or currency and futures
contracts on securities or other indices, and to execute any and all agreements
and instruments and to do any and all things incidental thereto in connection
with the management of the Portfolios. Should the Trustees of the Trust at any
time, however, make any specific determination as to investment policy for the
Portfolios and notify the Adviser thereof in writing, the Adviser shall be bound
by such determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Portfolios, all actions which it deems necessary or
desirable to implement the investment policies of the Trust and of each
Portfolio.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of a Portfolio with brokers or dealers
selected by the Adviser, and to that end the Adviser is authorized as the agent
of the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of a Portfolio or
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to seek to
execute portfolio security transactions at prices which are advantageous to the
Portfolios and (when a disclosed commission is being charged) at reasonably
competitive commission rates. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who also
provide brokerage and research services and products (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser. The
Adviser is expressly authorized to cause the Portfolios to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second sentence of this
paragraph, the Adviser is authorized to consider, as a factor in the selection
of any broker or dealer with whom purchase or sale orders may be placed, the
fact that such broker or dealer has sold or is selling shares of the Portfolio
or the Trust or of other investment companies sponsored by the Adviser.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Trust on behalf of each
Portfolio shall pay to the Adviser on the last day of each month a fee equal
(annually) to the percentage or percentages specified in Annex A of the average
daily net assets of such Portfolio throughout the month, computed in accordance
with the Trust's Declaration of Trust, registration statement and any applicable
votes of the Trustees of the Trust.
In case of the initiation or termination of the Contract during any
month with respect to any Portfolio, each Portfolio's fee for that month shall
be reduced proportionately on the basis of the number of calendar days during
which the Contract is in effect and the fee shall be computed upon the average
net assets for the business days the Contract is so in effect for that month.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust
will pay all of its expenses other than those expressly stated to be payable by
the Adviser hereunder, which expenses payable by the Trust shall include,
without limitation (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, repurchase and
redemption of interests, (viii) expenses of printing offering documents for
distributing to investors (ix) expenses of reports and notices to
interestholders and of meetings of interestholders and proxy solicitations
therefor, (x) expenses of reports to governmental officers and commissions, (xi)
insurance expenses, (xii) fees, expenses and disbursements of custodians and
subcustodians for all services to the Trust (including without limitation
safekeeping of funds and securities, keeping of books and accounts and
determination of net asset value), (xiii) fees, expenses and disbursements of
transfer agents and registrars for all services to the Trust, (xiv) expenses for
servicing interestholder accounts, (xv) any direct charges to interestholders
approved by the Trustees of the Trust, (xvi) compensation of and any expenses of
Trustees of the Trust who are not "interested" Trustees as such term is defined
in the Investment Company Act of 1940, (xvii) the administration fee payable to
the Trust's administrator, and (xix) such nonrecurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
interestholders of the Trust are or may be or become interested in the Adviser
as directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as an interestholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Wright" or "Wright Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser provided, however, that any such subadvisory agreement shall be subject
to such approval by the Trustees and shareholders of the Trust as shall be
required under the Investment Company Act of 1940.
7. Duration and Termination of this Contract. This Contract shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect as to each Portfolio up
to and including February 28, 1999 and shall continue in full force and effect
as to each Portfolio indefinitely thereafter, but only so long as such
continuance after February 28, 1999 is specifically approved at least annually
(i) by the vote of a majority of the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of that Portfolio and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust, in each case cast in person at a meeting called for
the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Portfolio, without the
payment of any penalty, by action of its Board of Directors or Trustees, as the
case may be, and the Trust may, at any time upon such written notice to the
Adviser, terminate this Contract as to any Portfolio by vote of a majority of
the outstanding voting securities of that Portfolio. This Contract shall
terminate automatically in the event of its assignment.
8. Amendments of the Contract. This Contract may be amended as to any
Portfolio by a writing signed by both parties hereto, provided that no material
amendment to this Contract shall be effective as to that Portfolio until
approved (i) by the vote of a majority of those Trustees of the Trust who are
not interested persons of the Adviser or the Trust cast in person at a meeting
called for the purpose of voting on such approval and (ii) by vote of a majority
of the outstanding voting securities of that Portfolio.
9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of interestholders of the Trust, and the Adviser hereby agrees that it
shall have recourse only to the Trust for payment of claims or obligations as
between the Trust and Adviser arising out of this Contract and shall not seek
satisfaction from the interestholders or any interestholder of the Trust. No
Portfolio shall be liable for the obligations of any other Portfolio hereunder.
10. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Portfolio" shall mean the vote of the
lesser of (a) 67 per centum or more of the shares of the particular Portfolio
present or represented by proxy at a meeting of interestholders of the Portfolio
if the holders of more than 50 per centum of the outstanding shares of the
particular Portfolio are present or represented by proxy at the meeting, or (b)
more than 50 per centum of the outstanding interests of the particular
Portfolio, or such other vote as may be required from time to time by the
Investment Company Act of 1940.
11. Use of the Name "Wright". The Adviser hereby consents to the use by
the Trust of the name "Wright" as part of the Trust's name and the name of each
Portfolio should the Trust desire to adopt such name in the future; provided,
however, that such consent shall be conditioned upon the employment of the
Adviser or one of its affiliates as the investment adviser of the Trust. The
name "Wright" or any variation thereof may be used from time to time in other
connections and for other purposes by the Adviser and its affiliates and other
investment companies that have obtained consent to use the name "Wright." The
Adviser shall have the right to require the Trust to cease using the name
"Wright" as part of the Trust's name and the name of each Portfolio if the Trust
ceases, for any reasons, to employ the Adviser or one of its affiliates as the
Trust's investment adviser. Future names adopted by the Trust for itself and its
Portfolios, insofar as such names include identifying words requiring the
consent of the Adviser, shall be the property of the Adviser and shall be
subject to the same terms and conditions.
[NAME OF TRUST] WRIGHT INVESTORS' SERVICE, INC.
By: _____________________________ By:_________________________________
Authorized Officer Authorized Officer
ANNEX A
ANNUAL ADVISORY FEE RATES
ANNUAL % ADVISORY FEE RATES
- ---------------------------------------------------------------------------------------------------------------------------
$100 Mil. $250 Mil. $500 Mil.
Under to to to Over
$100 Mil. $250 Mil. $500 Mil. $1 Bil. $1 Bil.
- ---------------------------------------------------------------------------------------------------------------------------
Selected Blue Chip Equities Portfolio 0.55% 0.69% 0.67% 0.63% 0.58%
Junior Blue Chip Equities Portfolio 0.55% 0.69% 0.67% 0.63% 0.58%
International Blue Chip Equities Portfolio 0.75% 0.79% 0.77% 0.73% 0.68%
U.S. Treasury Portfolio 0.40% 0.46% 0.42% 0.38% 0.33%
U.S. Treasury Near Term Portfolio 0.40% 0.46% 0.42% 0.38% 0.33%
Current Income Portfolio 0.40% 0.46% 0.42% 0.38% 0.33%
- ---------------------------------------------------------------------------------------------------------------------------
EXHIBIT G
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
THE WRIGHT [NAME OF TRUST]
24 Federal Street
Boston, Massachusetts 02110
DECLARATION OF TRUST made this day of , 1997 by the undersigned (together
with all other persons from time to time duly elected, qualified and serving as
Trustees in accordance with the provisions of Article II hereof, the
"Trustees");
WHEREAS, pursuant to a declaration of trust executed and delivered on
[date] and amended and restated on [date] (the "Original Declaration"), the
Trustees established a trust for the investment and reinvestment of funds
contributed thereto:
WHEREAS, the Trustees divided the beneficial interest in the trust assets
into transferable shares of beneficial interest, as provided therein;
WHEREAS, the Trustees declared that all money and property contributed to
the trust established thereunder be held and managed in trust for the benefit of
the holders, from time to time, of the shares of beneficial interest issued
thereunder and subject to the provisions thereof;
WHEREAS, the Trustees desire to amend and restate the Original
Declaration;
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements contained herein, the undersigned, being all of the trustees of the
trust, hereby amend and restate the Original Declaration as follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is The Wright
[NAME OF TRUST] (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings.
(a) "Administrator" means the party, other than the Trust, to a
contract described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.5 hereof, as
from time to time amended.
(c) "Class" means any division or Class of Shares within a Series or
Fund, which Class is or has been established within such Series or Fund in
accordance with the provisions of Article V.
(d) "Commission" has the meaning given it in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust, as amended from time
to time. Reference in this Declaration of Trust to "Declaration," "hereof," and
"hereunder" shall be deemed to refer to this Declaration rather than exclusively
to the article or section in which such words appear.
(g) "Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities
belonging and allocated thereto.
(h) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(i) The term "Interested Person" has the meaning specified in the 1940
Act subject, however, to such exceptions and exemptions as may be granted by the
Commission in any rule, regulation or order.
(j) "Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(k) The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended
from time to time.
(l) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, firms, joint ventures and other entities, whether or not
legal entities, as well as governments, instrumentalities, and agencies and
political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(m) "Principal Underwriter" means the party, other than the Trust, to
a contract described in Section 3.1 hereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o) "Series" individually or collectively means such separately managed
component(s) or Fund(s) of the Trust (or, if the Trust shall have only one such
component or Fund, then that one) as may be established and designated from time
to time by the Trustees pursuant to Section 5.5 hereof.
(p) "Shareholder" means a record owner of Outstanding Shares. A
Shareholder of Shares of a Series shall be deemed to own a proportionate
undivided beneficial interest in such Series equal to the number of Shares of
each Series of which he is the record owner divided by the total number of
Outstanding Shares of such Series. A Shareholder of Shares of a Class within a
Series shall be deemed to own a proportionate undivided beneficial interest in
such Class equal to the number of Shares of such Class of which he is the record
owner divided by the total number of Outstanding Shares of such Class. As used
herein the term "Shareholder" shall, when applicable to one or more Series or
Funds or to one or more Classes thereof, refer to the record owners of
Outstanding Shares of such Series, Fund or Funds or of such Class or Classes of
Shares.
(q) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any Series (as
the context may require) which may be established by the Trustees, and includes
fractions of Shares as well as whole Shares. "Outstanding Shares" means those
Shares shown from time to time on the books of the Trust or its Transfer Agent
as then issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held in the
treasury of the Trust.
(r) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(s) "Trust" means The Wright [NAME OF TRUST]. As used herein the term
Trust shall, when applicable to one or more Series or Funds, refer to such
Series or Funds.
(t) The "Trustees" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in this capacity or their
capacities as Trustees hereunder.
(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees, including any and all assets of or allocated to any
Series or Class, as the context may require.
(v) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Series or Class of Shares, the term "vote" when
used in connection with an action of Shareholders shall include a vote taken at
a meeting of Shareholders or the consent or consents of Shareholders taken
without such a meeting. Except as such term may be otherwise defined by the
Trustees in connection with any meeting or other action of Shareholders or in
conjunction with the establishment of any Series or Class of Shares, the term
"vote of a majority of the outstanding voting securities" as used in Sections
8.2 and 8.4 shall have the same meaning as is assigned to that term in the 1940
Act.
ARTICLE II
TRUSTEES
Section 2.1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees and they shall have all powers and
authority necessary, appropriate or desirable to perform that function. The
number, term of office, manner of election, resignation, filling of vacancies
and procedures with respect to meetings and actions of the Trustees shall be as
prescribed in the By-Laws of the Trust.
Section 2.2. General Powers. The Trustees in all instances shall act as
principals for and on behalf of the Trust and the applicable Series thereof, and
their acts shall bind the Trust and the applicable Series. The 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 they may consider necessary, appropriate
or desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited in any way by present or future laws, practices or
customs in regards to trust investments or to other investments which may be
made by fiduciaries, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
promote, implement or accomplish the various objectives and interests of the
Trust and of its Series of Shares. The Trustees shall have full power and
authority to adopt such accounting and tax accounting practices as they consider
appropriate for the Trust and for any Series or Class of Shares. The Trustees
shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, and with such full powers
of delegation as the Trustees may exercise from time to time. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without The
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign governments, and to do all such
other things as they deem necessary, appropriate or desirable in order to
promote or implement the interests of the Trust or of any Series or Class of
Shares although such things are not herein specifically mentioned. Any
determination as to what is in the best interests of the Trust or of any Series
or Class of Shares made by the Trustees in good faith shall be conclusive and
binding upon all Shareholders. In construing the provisions of this Declaration,
the presumption shall be in favor of a grant of plenary power and authority to
the Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
Section 2.3.Investments.The Trustees shall have full power and authority:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities including, but not limited to, stocks, profit-sharing
interests or participations and all other contracts for or evidences of equity
interests, bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, bills, notes and all other contracts for or
evidences of indebtedness, money market instruments including bank certificates
of deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality thereof, by the
government of any foreign country, by any State, territory or possession of the
United States, by any political subdivision or agency or instrumentality of any
State or foreign country, or by any other government or other governmental or
quasi-governmental agency or instrumentality, domestic or foreign; to acquire
and dispose of interests in domestic or foreign loans made by banks and other
financial institutions; to deposit any assets of the Trust in any bank, trust
company or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, coins and currency of all countries; to engage in "when
issued" and delayed delivery transactions; to enter into repurchase agreements,
reverse repurchase agreements and firm commitment agreements; to employ all
types and kinds of hedging techniques and investment management strategies; and
to change the investments of the Trust and of each Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any Trust Property or any of
the foregoing securities, instruments or investments; to purchase and sell (or
write) options on securities, currency, precious metals and other commodities,
indices, futures contracts and other financial instruments and assets, and enter
into closing and other transactions in connection therewith; to enter into all
types of commodities contracts, including without limitation the purchase and
sale of futures contracts on securities, currency, precious metals and other
commodities, indices and other financial instruments and assets; to enter into
forward foreign currency exchange contracts and other foreign exchange and
currency transactions of all types and kinds; to enter into transactions in
interest rate, currency and other swaps, swaptions, and interest rate caps,
floors and collars; and to engage in all types and kinds of hedging and risk
management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act with
respect thereto; and to do all acts and things for the preservation, protection,
improvement and enhancement in value of all such securities and assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or kind
of property, real or personal, including domestic or foreign currency, and any
right or interest therein.
(f) To borrow money and in this connection issue notes, commercial paper
or other evidence of indebtedness; to secure borrowings by mortgaging, pledging
or otherwise subjecting as security all or any part of the Trust Property; to
endorse, guarantee, or undertake the performance of any obligation or engagement
of any other Person; and to send all or any part of the Trust Property to other
Persons.
(g) To aid, support or assist by further investment or other action any
Person, any obligation of or interest in which is included in the Trust Property
or in the affairs of which the Trust or any Series has any direct or indirect
interest; to do all acts and things designed to protect, preserve, improve or
enhance the value of such obligation or interest; and to guarantee or become
surety on any or all of the contracts, securities and other obligations of any
such Person.
(h) To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do everything
necessary, appropriate or desirable for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power referred to in this
Declaration, either alone or in association with others, and to do every other
act or thing incidental or appurtenant to or arising out of or connected with
such business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have full
power in their discretion, without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Fund), or to dispose of part or all of the Trust Property (or part or all of the
assets of any Fund) and invest the proceeds of such disposition, in securities
issued by one or more other investment companies registered under the 1940 Act.
Any such other investment company may (but need not) be a trust (formed under
the laws of the State of New York or of any other state) which is classified as
a partnership for federal income tax purposes.
Section 2.4. Legal Title. Legal title to all the Trust Property shall be
vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Series, or in
the name of a custodian, subcustodian, agent, securities depository, clearing
agency, system for the central handling of securities or other book-entry
system, or in the name of a nominee or nominees of the Trust or a Series, or in
the name of a nominee or nominees of a custodian, subcustodian, agent,
securities depository, clearing agent, system for the central handling of
securities or other book-entry system, or in the name of any other Person as
nominee. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee. Upon
the termination of the term of office, resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees.
Section 2.5. By-Laws. The Trustees shall have full power and authority to
adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and to amend and repeal such By-Laws. Unless the By-Laws specifically
require that Shareholders authorize or approve the amendment or repeal of a
particular provision of the By-Laws, any provision of the By-Laws may be amended
or repealed by the Trustees without Shareholder authorization or approval.
Section 2.6. Distribution and Repurchase of Shares. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both. The
Trustees shall have full power and authority to cause the Trust and any Series
and Class of Shares to finance distribution activities in the manner described
in Section 3.7, and to authorize the Trust, on behalf of one or more Series or
Classes of Shares, to adopt or enter into one or more plans or arrangements
whereby multiple Series and Classes of Shares may be issued and sold to various
types of investors.
Section 2.7. Advisory Board. The Trustees shall have full power and
authority to establish advisory boards and to appoint members thereto. Any such
advisory board shall have the duties assigned to it by the Trustees and shall be
as set forth in the By-Laws. The Trustees may terminate any advisory board in
their sole discretion.
Section 2.8. Delegation. The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers, advisory
board members, employees or agents of the Trust or to other Persons the doing of
such things and the execution of such agreements or other instruments either in
the name of the Trust or any Series of the Trust or the names of the Trustees or
otherwise as the Trustees may deem desirable or expedient.
Section 2.9. Collection and Payment. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
Section 2.10. Expenses. The Trustees shall have full power and authority
to incur on behalf of the Trust or any Series or Class of Shares and pay any
costs or expenses which the Trustees deem necessary, appropriate, desirable or
incidental to carry out, implement or enhance the business or operations of the
Trust or any Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Series or Class of Shares, and to credit all or any part of the profit, income
or receipt (including without limitation any deferred sales charge or fee,
whether contingent or otherwise, paid or payable to the Trust or any Series or
Class of Shares on any redemption or repurchase of Shares) to the principal or
capital of the Trust or any Series or Class of Shares.
Section 2.11. Manner of Acting. Except as otherwise provided herein or in
the By-Laws, the Trustees and committees of the Trustees shall have full power
and authority to act in any manner which they deem necessary, appropriate or
desirable to carry out, implement or enhance the business or operations of the
Trust or any Series thereof.
Section 2.12. Miscellaneous Powers. The Trustees shall have full power
and authority to: (a) distribute to Shareholders all or any part of the earnings
or profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Series or Class of Shares, the amount
of such distributions and the manner of payment thereof to be solely at the
discretion of the Trustees; (b) employ, engage or contract with such Persons as
the Trustees may deem desirable for the transaction of the business or
operations of the Trust or any Series thereof; (c) enter into or cause the Trust
or any Series thereof to enter into joint ventures, partnerships (whether as
general partner, limited partner or otherwise) and any other combinations or
associations; (d) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees or other Persons as they consider appropriate, and appoint from their
own number, and terminate, any one or more committees which may exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
(e) purchase, and pay for out of Trust Property, insurance policies which may
insure such of the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, principal underwriters, distributors or
independent contractors of the Trust as the Trustees deem appropriate against
loss or liability arising by reason of holding any such position or by reason of
any action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such loss or liability; (f) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (g)
indemnify or reimburse any Person with whom the Trust or any Series thereof has
dealings, including without limitation the Investment Adviser, Administrator,
Principal Underwriter, Transfer Agent and financial service firms, to such
extent as the Trustees shall determine; (h) guarantee the indebtedness or
contractual obligations of other Persons; (i) determine and change the fiscal
year of the Trust or any Series thereof and the methods by which its and their
books, accounts and records shall be kept; and (j) adopt a seal for the Trust,
but the absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust or any Series thereof.
Section 2.13. Litigation. The Trustees shall have full power and
authority, in the name and on behalf of the Trust, to engage in and to
prosecute, defend, compromise, settle, 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 or any Series thereof
to pay or to satisfy any liabilities, losses, debts, claims or expenses
(including without limitation attorneys' fees) incurred in connection therewith,
including those of litigation, and such power shall include without limitation
the power of the Trustees or any committee thereof, in the exercise of their or
its good faith business judgment, to dismiss or terminate any action, suit,
proceeding, dispute, claim or demand, derivative or otherwise brought by any
Person, including a Shareholder in his own name or in the name of the Trust or
any Series thereof, whether or not the Trust or any Series thereof 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 or any Series thereof.
ARTICLE III
CONTRACTS
Section 3.1. Principal Underwriter. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more contracts
providing for the sale of the Shares. Pursuant to any such contract the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
discretion determine; and any such contract may also provide for the repurchase
or sale of Shares by such other party as principal or as agent of the Trust.
Section 3.2. Investment Adviser. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more investment
advisory agreements with respect to one or more Series whereby the other party
or parties to any such agreements shall undertake to furnish the Trust or such
Series investment advisory and research facilities and services and such other
facilities and services, if any, as the Trustees shall consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration, the Trustees may
authorize the Investment Adviser, in its discretion and without any prior
consultation with the Trust, to buy, sell, lend and otherwise trade and deal in
any and all securities, commodity contracts and other investments and assets of
the Trust and of each Series and to engage in and employ all types of
transactions and strategies in connection therewith. Any such action taken
pursuant to such agreement shall be deemed to have been authorized by all of the
Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
Section 3.3. Administrator. The Trustees may in their discretion from
time to time authorize the Trust to enter into one or more administration
agreements with respect to one or more Series or Classes, whereby the other
party to such agreement shall undertake to furnish to the Trust or a Series or a
Class thereof with such administrative facilities and services and such other
facilities and services, if any, as the Trustees consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
Section 3.4. Other Service Providers. The Trustees may in their
discretion from time to time authorize the Trust to enter into one or more
agreements with respect to one or more Series or Classes of Shares whereby the
other party or parties to any such agreements will undertake to provide to the
Trust or Series or Class or Shareholders or beneficial owners of Shares such
services as the Trustees consider desirable and all upon such terms and
conditions as the Trustees in their discretion may determine.
Section 3.5. Transfer Agents. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Series
thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
Section 3.6. Custodian. The Trustees may appoint a bank or trust company
having an aggregate capital, surplus and undivided profits (as shown in its last
published report) of at least $2,000,000 as the principal custodian of the Trust
(the "Custodian") with authority as its agent to hold cash and securities owned
by the Trust and to release and deliver the same upon such terms and conditions
as may be agreed upon between the Trust and the Custodian.
Section 3.7. Plans of Distribution. The Trustees may in their discretion
authorize the Trust, on behalf of one or more Series or Classes of Shares, to
adopt or enter into a plan or plans of distribution and any related agreements
whereby the Trust or Series or Class may finance directly or indirectly any
activity which is primarily intended to result in sales of Shares or any
distribution activity within the meaning of Rule 12b-1 (or any successor rule)
under the 1940 Act. Such plan or plans of distribution and any related
agreements may contain such terms and conditions as the Trustees may in their
discretion determine, subject to the requirements of the 1940 Act and any other
applicable rules and regulations.
Section 3.8. Affiliations. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of or has
any interest in any Person or any parent or affiliate of any such Person, with
which a contract or agreement of the character described in Sections 3.1, 3.2,
3.3, 3.4, 3.5 or 3.6 above has been or will be made or to which payments have
been or will be made pursuant to a plan or related agreement described in
Section 3.7 above, or that any such Person, or any parent or affiliate thereof,
is a Shareholder of or has an interest in the Trust, or that
(ii) any such Person also has similar contracts, agreements or plans with
other investment companies (including, without limitation, the investment
companies referred to in the last paragraph of Section 2.3) or organizations, or
has other business activities or interests, shall not affect in any way the
validity of any such contract, agreement or plan or disqualify any Shareholder,
Trustee or officer of the Trust from authorizing, voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Advisory
Board Members, Officers and Employees. No Shareholder 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 or any Series thereof. All Persons
dealing or contracting with the Trustees as such or with the Trust or any Series
thereof shall have recourse only to the Trust or such Series for the payment of
their claims or for the payment or satisfaction of claims, obligations or
liabilities arising out of such dealings or contracts. No Trustee, advisory
board member, officer or employee of the Trust, whether past, present or future,
shall be subject to any personal liability whatsoever to any such Person, and
all such Persons shall look solely to the Trust Property, or to the assets of
one or more specific Series of the Trust if the claim arises from the act,
omission or other conduct of such Trustee, advisory board member, officer or
employee with respect to only such Series, for satisfaction of claims of any
nature arising in connection with the affairs of the Trust or such Series. If
any Shareholder, Trustee, advisory board member, officer or employee, as such,
of the Trust or any Series thereof, is made a party to any suit or proceeding to
enforce any such liability of the Trust or any Series thereof, he shall not, on
account thereof, be held to any personal liability.
Section 4.2. Trustee's Good Faith Action; Advice of Others; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any advisory
board member, officer, agent, employee, consultant, investment adviser or other
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, shareholder servicing or accounting agent of the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee. The Trustees may take advice of counsel or other experts with respect
to the meaning and operation of this Declaration and their duties as Trustees,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. In discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the records,
books and accounts of the Trust and upon reports made to the Trustees by any
advisory board member, officer, employee, agent, consultant, accountant,
attorney, investment adviser or other adviser, principal underwriter, expert,
professional firm or independent contractor. The Trustees as such shall not be
required to give any bond, surety or other security for the performance of their
duties. No provision of this Declaration shall protect any Trustee or officer of
the Trust against any liability to the Trust or its Shareholders to which he
would otherwise be subject by reason of his own willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
Section 4.3. Indemnification. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Series thereof of the Shareholders, Trustees, advisory board
members, officers and employees of the Trust and of such other Persons as the
Trustees in the exercise of their discretion may deem appropriate or desirable.
Any such indemnification may be mandatory or permissive, and may be insured
against by policies maintained by the Trust.
Section 4.4. No Duty of Investigation. No purchaser, lender or other
Person dealing with the Trustees or any officer, employee or agent of the Trust
or a Series thereof shall be bound to make any inquiry concerning the validity
of any transaction purporting to be made by the Trustees or by said officer,
employee or agent or be liable for the application of money or property paid,
loaned, or delivered to or on the order of the Trustees or of said officer,
employee or agent. Every obligation, contract, instrument, certificate, Share,
other security of the Trust or a Series thereof or undertaking, and every other
act or thing whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking made or issued by the Trustees may
recite that the same is executed or made by them not individually, but as
Trustees under the Declaration, and that the obligations of the Trust or a
Series thereof under any such instrument are not binding upon any of the
Trustees or Shareholders individually, but bind only the Trust Property or the
Trust Property of the applicable Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
Section 4.5. Reliance on Records and Experts. Each Trustee, advisory
board member, officer or employee of the Trust or a Series thereof shall, in the
performance of his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the records, books and accounts of the Trust or a Series thereof, upon an
opinion or other advice of legal counsel, or upon reports made or advice given
to the Trust or a Series thereof by any Trustee or any of its officers or
employees or by the Investment Adviser, the Administrator, the Custodian, the
Principal Underwriter, Transfer Agent, accountants, appraisers or other experts,
advisers, consultants or professionals selected with reasonable care by the
Trustees or officers of the Trust, regardless of whether the person rendering
such report or advice may also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder and the number of Shares of each Series or Class thereof that may be
issued hereunder is unlimited. The Trustees shall have the exclusive authority
without the requirement of Shareholder authorization or approval to establish
and designate one or more Series of Shares and one or more Classes thereof as
the Trustees deem necessary, appropriate or desirable. Each Share of any Series
shall represent a beneficial interest only in the assets of that Series. Subject
to the provisions of Section 5.5 hereof, the Trustees may also authorize the
creation of additional Series of Shares (the proceeds of which may be invested
in separate and independent investment portfolios) and additional Classes of
Shares within any Series. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend or distribution in
Shares or a split in Shares, shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust Property
of every description and the right to conduct any business of the Trust are
vested exclusively in the Trustees, and the Shareholders shall have no interest
therein other than the beneficial interest conferred by their Shares, and they
shall have no right to call for any partition or division of any property,
profits, rights or interests of the Trust or of any Fund nor can they be called
upon to share or assume any losses of the Trust or of any Fund or suffer an
assessment of any kind by virtue of their ownership of Shares. The Shares shall
be personal property giving only the rights specifically set forth in this
Declaration. The Shares shall not entitle the holder to preference, preemptive,
appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Series or Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association, limited
liability company, corporation, bailment or any form of legal relationship other
than a Massachusetts business trust. Nothing in this Declaration shall be
construed to make the Shareholders, either by themselves or with the Trustees,
partners or member of a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time and without any authorization or vote of the Shareholders,
issue Shares, in addition to the then issued and outstanding Shares and Shares
held in the treasury, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem appropriate or desirable, except that only Shares
previously contracted to be sold may be issued during any period when the right
of redemption is suspended pursuant to Section 6.9 hereof, and may in such
manner acquire other assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares of the Trust or, if the
Shares be divided into Series or Classes, of any Series or any Class thereof of
the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or fractional Shares as the Trustees may in their discretion
determine. The Trustees may authorize the issuance of certificates of beneficial
interest to evidence the ownership of Shares. Shares held in the treasury shall
not be voted nor shall such Shares be entitled to any dividends or other
distributions declared with respect thereto.
Section 5.5. Series and Class Designations. Without limiting the
exclusive authority of the Trustees set forth in Section 5.1 to establish and
designate any further Series or Classes, it is hereby confirmed that the Trust
consists of the presently Outstanding Shares of the following Series: [NAME THE
SERIES] (the "Existing Series"). The Existing Series consist of [NAME THE
CLASSES]. The Shares of any Series and Classes thereof that may from time to
time be established and designated by the Trustees shall be established and
designated, and the variations in the relative rights and preferences as between
the different Series and Classes shall be fixed and determined, by the Trustees
(unless the Trustees otherwise determine with respect to Series or Classes at
the time of establishing and designating the same); provided, that all Shares
shall be identical except that there may be variations so fixed and determined
between different Series or Classes thereof as to investment objective, policies
and restrictions, sales charges, purchase prices, determination of net asset
value, assets, liabilities, expenses, costs, charges and reserves belonging or
allocated thereto, the price, terms and manner of redemption or repurchase,
special and relative rights as to dividends and distributions and on
liquidation, conversion rights, exchange rights, and voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Series or Classes as the context may require. As to any division of Shares
of the Trust into Series or Classes, the following provisions shall be
applicable:
(i) The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more other Series or one or more
other Classes that may be established and designated from time to time. The
Trustees may hold as treasury shares (of the same or some other Series or
Class), reissue for such consideration and on such terms as they may determine,
or cancel any Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii) All consideration 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, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable tax laws, and shall be so recorded on the books of account of the
Trust. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees or their delegate shall
allocate them among any one or more of the Series established and designated
from time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. Each such allocation by the Trustees or
their delegate shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have any claim
on or right to any assets allocated or belonging to any other Series.
(iii) Any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees or their delegate to and
among any one or more of the Series established and designated from time to time
in such manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The assets belonging to each particular Series shall be
charged with the liabilities, expenses, costs, charges and reserves of the Trust
so allocated to that Series and all liabilities, expenses, costs, charges and
reserves attributable to that Series which are not readily identifiable as
belonging to any particular Class thereof. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees or their delegate shall be
conclusive and binding upon the Shareholders of all Series and Classes for all
purposes. The Trustees shall have full discretion to determine which items are
capital; and each such determination shall be conclusive and binding upon the
Shareholders. The assets of a particular Series of the Trust shall, under no
circumstances, be charged with liabilities, expenses, costs, charges and
reserves attributable to any other Series or Class thereof of the Trust. All
Persons extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that particular
Series for payment of such credit, contract or claim.
(iv) Dividends and distributions on Shares of a particular Series or
Class may be paid or credited in such manner and with such frequency as the
Trustees may determine, to the holders of Shares of that Series or Class, from
such of the earnings or profits, surplus (including paid-in surplus), capital
(including paid-in capital) or assets belonging to that Series, as the Trustees
may deem appropriate or desirable, after providing for actual and accrued
liabilities, expenses, costs, charges and reserves belonging and allocated to
that Series or Class. Such dividends and distributions may be paid daily or
otherwise pursuant to the offering prospectus relating to the Shares or pursuant
to a standing vote or votes of the Trustees adopted only once or from time to
time or pursuant to other authorization or instruction of the Trustees. All
dividends and distributions on Shares of a particular Series or Class shall be
distributed pro rata to the Shareholders of that Series or Class in proportion
to the number of Shares of that Series or Class held by such Shareholders at the
time of record established for the payment or crediting of such dividends or
distributions.
(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata Share of distributions
of income and capital gains made with respect to such Series or Class net of
liabilities, expenses, costs, charges and reserves belonging and allocated to
such Series or Class. Upon redemption of his Shares or indemnification for
liabilities incurred by reason of his being or having been a Shareholder of a
Series, such Shareholder shall be paid solely out of the funds and property of
such Series of the Trust. Upon liquidation or termination of a Series or Class
thereof of the Trust, a Shareholder of such Series or Class thereof shall be
entitled to receive a pro rata Share of the net assets of such Series based on
the net asset value of his Shares. A Shareholder of a particular Series of the
Trust shall not be entitled to commence or participate in a derivative or class
action on behalf of any other Series or the Shareholders of any other Series of
the Trust.
(vi) On any matter submitted to a vote of Shareholders, the Shares
entitled to vote thereon and the manner in which such Shares shall be voted
shall be as set forth in the By-Laws or proxy materials for the meeting or other
solicitation materials or as otherwise determined by the Trustees, subject to
any applicable requirements of the 1940 Act. The Trustees shall have full power
and authority to call meetings of the Shareholders of a particular Class or
Classes of Shares or of one or more particular Series of Shares, or otherwise
call for the action of such Shareholders on any particular matter.
(vii) Except as otherwise provided in this Article V, the Trustees shall
have full power and authority to determine the designations, preferences,
privileges, sales charges, purchase prices, assets, liabilities, expenses,
costs, charges and reserves belonging or allocated thereto, limitations and
rights, including without limitation voting, dividend, distribution and
liquidation rights, of each Class and Series of Shares. Subject to any
applicable requirements of the 1940 Act, the Trustees shall have the authority
to provide that the Shares of one Class shall be automatically converted into
Shares of another Class of the same Series or that the holders of Shares of any
Series or Class shall have the right to convert or exchange such Shares into
Shares of one or more other Series or Classes of Shares, all in accordance with
such requirements, conditions and procedures as may be established by the
Trustees.
(viii) The establishment and designation of any Series or Class of Shares
shall be effective upon the execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation and the relative
rights and preferences of such Series or Class, or as otherwise provided in such
instrument. The Trustees may by an instrument subsequently executed by a
majority of their number amend, restate or rescind any prior instrument relating
to the establishment and designation of any such Series or Class. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration in accordance with Section 8.4 hereof, and a copy of each
such instrument shall be filed in accordance with Section 10.1 hereof.
Section 5.6. Assent to Declaration of Trust and By-Laws. Every
Shareholder, by virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to all the terms and provisions of this
Declaration and of the By-Laws of the Trust.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) Shares of the Trust shall be
redeemable, at such times and in such manner as may be permitted by the Trustees
from time to time. The Trustees shall have full power and authority to vary and
change the right of redemption applicable to the various Series and Classes of
Shares established by the Trustees. Redeemed or repurchased Shares may be resold
by the Trust. The Trust may require any Shareholder to pay a sales charge to the
Trust, the Principal Underwriter or any other Person designated by the Trustees
upon redemption or repurchase of Shares in such amount and upon such conditions
as shall be determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or Class
thereof at the price determined as hereinafter set forth, upon the appropriately
verified written application of the record holder thereof (or upon such other
form of request as the Trust may use for the purpose) deposited at such office
or agency as may be designated from time to time for that purpose by the
Trustees. The Trust may from time to time establish additional requirements,
terms, conditions and procedures, not inconsistent with the 1940 Act, relating
to the redemption of Shares.
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall prescribe. The amount of any sales charge or redemption fee
payable upon redemption of Shares may be deducted from the proceeds of such
redemption.
Section 6.3. Payment. Payment of the redemption price of redeemed Shares
shall be made in cash or in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act, as may be specified from time to
time in the then effective Prospectus relating to such Shares, subject to the
provisions of Sections 6.4 and 6.9 hereof. Notwithstanding the foregoing, the
Trust or its agent may withhold from such redemption proceeds any amount arising
(i) from a liability of the redeeming Shareholder to the Trust, or (ii) in
connection with any federal or state tax withholding requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 7.1 hereof, the Trust shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
have received payment) to have Shares redeemed and paid for by the Trust or a
Series shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice at the office or
agency where his
application or request for redemption was made, withdraw his
application or request and withdraw any Share certificates on deposit.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Principal Underwriter or another agent designated for
the purpose, by agreement with the owner thereof at a price not exceeding the
net asset value per share determined as of such time as the Trustees shall
prescribe. The Trust may from time to time establish the requirements, terms,
conditions and procedures relating to such repurchases, and the amount of any
sales charge or repurchase fee payable on any repurchase of Shares may be
deducted from the proceeds of such repurchase.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in their
sole discretion, may cause the Trust to redeem all of the Shares of one or more
Series or Classes thereof held by any Shareholder if (a) the value of such
Shares held by such Shareholder is less than the minimum amount established from
time to time by the Trustees or (b) the aggregate value of the assets of any
Series or Class is less than the minimum amount determined by the Trustees to be
the minimum for maintaining and operating the Series or Class as a viable
economic entity.
Section 6.7. Disclosure of Holding. The holders of Shares or other
securities of the Trust shall upon demand disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares or
other securities of the Trust as the Trustees deem necessary to comply with the
provisions of the Internal Revenue Code of 1986, or to comply with the
requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series or Class thereof pursuant to the provisions of
Section 7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Fund
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust or a Fund fairly to determine the value of its net
assets, or (iv) as the Commission may by order permit for the protection of
security holders of the Trust. Such suspension shall take effect at such time as
the Trust shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there shall be
no right of redemption or payment on redemption until the Trust shall declare
the suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or the
period specified in clauses (ii) or (iii) shall have expired (as to which in the
absence of an official ruling by the Commission, the determination of the Trust
shall be conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his application or request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET
VALUE, NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust or of each Series or Class thereof shall be determined on
such days and at or as of such time or times as the Trustees may determine. Any
reference in this Declaration to the time at which a determination of net asset
value is made shall mean the time as of which the determination is made. The
power and duty to determine net asset value may be delegated by the Trustees
from time to time to the Investment Adviser, the Administrator, the Custodian,
the Transfer Agent or such other Person or Persons as the Trustees may
determine. The value of the assets of the Trust or any Series thereof shall be
determined in a manner authorized by the Trustees. From the total value of said
assets, there shall be deducted all indebtedness, interest, taxes, payable or
accrued, including estimated taxes on unrealized book profits, expenses and
management charges accrued to the appraisal date, amounts determined and
declared as a dividend or distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred by or allocated to
the Trust or any Series or Class thereof. The resulting amount, which shall
represent the total net assets of the Trust or Series or Class thereof, shall be
divided by the number of Shares of the Trust or Series or Class thereof
outstanding at the time and the quotient so obtained shall be deemed to be the
net asset value of the Shares of the Trust or Series or Class thereof. The Trust
may declare a suspension of the determination of net asset value to the extent
permitted by the 1940 Act. It shall not be a violation of any provision of this
Declaration if Shares are sold, redeemed or repurchased by the Trust at a price
other than one based on net asset value if the net asset value is affected by
one or more errors inadvertently made in the pricing of portfolio securities or
other investments or in accruing or allocating income, expenses, reserves or
liabilities. No provision of this Declaration shall be construed to restrict or
affect the right or ability of the Trust to employ or authorize the use of
pricing services, appraisers or any other means, methods, procedures, or
techniques in valuing the assets or calculating the liabilities of the Trust or
any Series or Class thereof.
Section 7.2. Dividends and Distributions. (a) The Trustees may from time
to time distribute ratably among the Shareholders of the Trust or of a Series or
Class thereof such proportion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Series held by the Trustees as they may deem appropriate or desirable. Such
distributions may be made in cash, additional Shares or property (including
without limitation any type of obligations of the Trust or Series or Class or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time.
The Trustees may always retain from the earnings or profits such amounts as they
may deem appropriate or desirable to pay the expenses and liabilities of the
Trust or a Series or Class thereof or to meet obligations of the Trust or a
Series or Class thereof, together with such amounts as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business or operations of the Trust or such Series. The Trust
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or other distribution plans as the Trustees may deem
appropriate or desirable. The Trustees may in their discretion determine that an
account administration fee or other
similar charge may be deducted directly from the income and other
distributions paid on Shares to a Shareholder's account in any Series or Class.
(b) The Trustees may prescribe, in their absolute discretion, such bases
and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c) Inasmuch as the computation of net income and gains for federal
income tax purposes may vary from the computation thereof on the books of
account, the above provisions shall be interpreted to give the Trustees full
power and authority in their absolute discretion to distribute for any fiscal
year as dividends and as capital gains distributions, respectively, additional
amounts sufficient to enable the Trust or a Series thereof to avoid or reduce
liability for taxes.
Section 7.3. Constant Net Asset Value; Reduction of Outstanding Shares.
The Trustees may determine to maintain the net asset value per Share of any
Series or Class at a designated constant amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Series or Class as dividends payable
in additional Shares of that Series or Class or in cash or in any combination
thereof and for the handling of any losses attributable to that Series or Class.
Such procedures may provide that, if, for any reason, the income of any such
Series or Class determined at any time is a negative amount, the Trust may with
respect to such Series or Class (i) offset each Shareholder's pro rata share of
such negative amount from the accrued dividend account of such Shareholder, or
(ii) reduce the number of Outstanding Shares of such Series or Class by reducing
the number of Shares in the account of such Shareholder by that number of full
and fractional Shares which represents the amount of such excess negative
income, or (iii) cause to be recorded on the books of the Trust an asset account
in the amount of such negative income, which account may be reduced by the
amount, provided that the same shall thereupon become the property of the Trust
with respect to such Series or Class and shall not be paid to any Shareholder,
of dividends declared thereafter upon the Outstanding Shares of such Series or
Class on the day such negative income is experienced, until such asset account
is reduced to zero, or (iv) combine the methods described in clauses (i), (ii)
and (iii) of this sentence, in order to cause the net asset value per Share of
such Series or Class to remain at a constant amount per Outstanding Share
immediately after such determination and declaration. The Trust may also fail to
declare a dividend out of income for the purpose of causing the net asset value
of any such Share to be increased. The Trustees shall have full discretion to
determine whether any cash or property received shall be treated as income or as
principal and whether any item of expense shall be charged to the income or the
principal account, and their determination made in good faith shall be
conclusive upon all Shareholders. In the case of stock dividends or similar
distributions received, the Trustees shall have full discretion to determine, in
the light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
provisions contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Series or Class thereof or the
income of the Series of Class thereof, or for the declaration and payment of
dividends and distributions on any Series or Class of Shares.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
SERIES OR CLASS; MERGERS; AMENDMENTS
Series 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation of authority pursuant to the terms of this
Declaration or of the By-Laws.
Series 8.2. Termination of the Trust or a Series or a Class. (a) The
Trust or any Series or Class thereof may be terminated by: (1) the affirmative
vote of the holders of not less than two-thirds of the Shares outstanding and
entitled to vote at any meeting of Shareholders of the Trust or the appropriate
Series or Class thereof, or by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the Shares of the Trust or
a Series or Class thereof, provided, however, that, if such termination is
recommended by the Trustees, the vote of a majority of the outstanding voting
securities of the Trust or a Series or Class thereof entitled to vote thereon
shall be sufficient authorization; or (2) by means of an instrument in writing
signed by a majority of the Trustees, to be followed by a written notice to
Shareholders stating that a majority of the Trustees has determined that the
continuation of the Trust or a Series or a Class thereof is not in the best
interest of the Trust, such Series or Class or of their respective Shareholders.
Such determination may (but need not) be based on factors or events adversely
affecting the ability of the Trust, such Series or Class to conduct its business
and operations in an economically viable manner. Such factors and events may
include (but are not limited to) the inability of a Series or Class or the Trust
to maintain its assets at an appropriate size, changes in laws or regulations
governing the Series or Class or the Trust or affecting assets of the type in
which such Series or Class or the Trust invests, or political, social, legal or
economic developments or trends having an adverse impact on the business or
operations of such Series or Class or the Trust. Upon the termination of the
Trust or the Series or Class,
(i) The Trust, Series or Class shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust,
Series or Class and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust, Series or Class shall have been
wound up, including the power to fulfill or discharge the contracts of the
Trust, Series or Class, collect its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining Trust Property
or assets allocated or belonging to such Series or Class to one or more persons
at public or private sale for the consideration which may consist in whole or in
part of cash, securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust property or the remaining property of the
terminated Series or Class, in cash or in kind or in any combination thereof,
among the Shareholders of the Trust or the Series or Class according to their
respective rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Massachusetts
Secretary of State an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties with respect to the Trust or the terminated Series or
Class, and the rights and interests of all Shareholders of the Trust or the
terminated Series or Class shall thereupon cease.
Section 8.3. Merger, Consolidation or Sale of Assets of a Series. A
particular Series may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees and
without any authorization, vote or consent of the Shareholders; and any such
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the statutes of the Commonwealth
of Massachusetts. The Trustees may also at any time sell and convert into money
all the assets of a particular Series. Upon making provision for the payment of
all outstanding obligations, taxes, and other liabilities, accrued or
contingent, of the particular Series, the Trustees shall distribute the
remaining assets of such Series among the Shareholders of such Series according
to their respective rights. Upon completion of the distribution of the remaining
proceeds or the remaining assets, the Series shall terminate and the Trustees
shall take the action provided in Section 8.2(b) hereof and the Trustees shall
thereupon be discharged from all further liabilities and duties with respect to
such Series, and the rights and interests of all Shareholders of the terminated
Series shall thereupon cease.
Section 8.4. Amendments. The execution of an instrument setting forth the
establishment and designation and the relative rights and preferences of any
Series or Class of Shares (or amending, restating or rescinding any such prior
instrument) in accordance with Section 5.5 hereof shall, without any
authorization, consent or vote of the Shareholders, effect an amendment of this
Declaration. Except as otherwise provided in this Section 8.4, if authorized by
the vote of a majority of the outstanding voting securities of the Trust the
financial interests of which are affected by the amendment and which are
entitled to vote thereon (which securities shall, unless otherwise provided by
the Trustees, vote together on such amendment as a single class), the Trustees
may amend this Declaration by an instrument signed by a majority of the Trustees
then in office. No Shareholder not so affected by any such amendment shall be
entitled to vote thereon. The Trustees may (by such an instrument) also amend or
otherwise supplement this Declaration of Trust, without any authorization,
consent or vote of the Shareholders, to change the name of the Trust or any Fund
or to make such other changes as do not have a materially adverse effect on the
financial interests of Shareholders hereunder or if they deem it necessary or
desirable to conform this Declaration to the requirements of applicable federal
or state laws or regulations or the requirements of the Internal Revenue Code of
1986, but the Trustees shall not be liable for failing to do so. Any such
amendment or supplemental Declaration of Trust shall be effective as provided in
the instrument containing its terms or, if there is no provision therein with
respect to effectiveness, upon the signing of such instrument by a majority of
the Trustees then in office. Copies of any amendment or of any supplemental
Declaration of Trust shall be filed as specified in Section 9.1 hereof. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
Notwithstanding any other provision hereof, until such time as Shares are
issued and sold, this Declaration may be terminated or amended in any respect by
an instrument signed by a majority of the Trustees then in office.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Filing of Copies, References, Headings and Counterparts. The
original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. A copy of this instrument, or any amendment hereto, and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State and with any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may rely on a
certificate by a Trustee or an officer of the Trust as to whether or not any
such amendments or supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by a Trustee or an officer
of the Trust to be a copy of this instrument or of any such amendment hereto or
supplemental declaration of trust.
In this instrument or in any such amendment or supplemental declaration
of trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument shall be executed in any number of counterparts each of which shall
be deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may hereafter be referred to in lieu of the original Declaration and
the various amendments and supplements thereto.
Section 9.2. Applicable Law. The Trust set forth in this instrument is
made in The Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 9.3. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration 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 provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the current Trustees of
the Trust, have executed this instrument this day of , 1997.
- -------------------------------- ------------------------------
Peter M. Donovan A.M. Moody III
as Trustee, and not individually as Trustee, and not individually
1000 Lafayette Boulevard 1000 Lafayette Boulevard
Bridgeport, CT 06604 Bridgeport, CT 06604
- -------------------------------- ------------------------------
H. Day Brigham, Jr. Lloyd F. Pierce
as Trustee, and not individually as Trustee, and not individually
24 Federal Street 125 Gull Circle North
Boston, MA 02110 Daytona, Beach, Fl 32119
- -------------------------------- ------------------------------
Winthrop S. Emmet Raymond Van Houtte
as Trustee, and not individually as Trustee, and not individually
Box 327 One Strawberry Lane
West Center Road Ithaca, NY 14859
West Stockbridge, MA 01266
- -------------------------------- ------------------------------
Leland Miles
as Trustee, and not individually
Tide Mill Landing
2425 Post Road, Suite 10
Southport, CT 06490
THE STATE OF CONNECTICUT
County, Connecticut
Then personally appeared the above-named Peter M. Donovan and A.M. Moody III,
being Trustees then in office of The Wright [NAME OF TRUST], who acknowledged
the foregoing instrument to be their free act and deed.
Before me,
------------------------------------
Helen B. Iwasczyszyn
My Commission Expires 8/31/00
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk County, Massachusetts
Then personally appeared the above-named H. Day Brigham, Jr., being a
Trustee then in office of The Wright [NAME OF TRUST], who acknowledged the
foregoing instrument to be his free act and deed.
Before me,
------------------------------------
Janet E. Sanders
My Commission Expires
EXHIBIT H
Form of
Standard Shares Distribution Plan
of
[NAME OF TRUST]
WHEREAS, [Name of Trust] (the "Trust") engages in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, Wright Investors Service Distributors, Inc. the "Distributor")
acts as distributor of the shares of beneficial interest of the Trust's series
set forth in Schedule I (each, a "Fund" and together, the "Funds");
WHEREAS, the Trust, on behalf of each Fund, intends to pay distribution
expenses with respect to the Funds' Standard Shares;
WHEREAS, the Trust has entered into a distribution contract with the
Distributor, whereby the Distributor renders services to the Trust in connection
with the offering and distribution of each Fund's Standard Shares; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Standard Shares Distribution Plan
will benefit each Fund and the Fund's Standard Shares shareholders.
NOW, THEREFORE, the Trust hereby adopts this Standard Shares
Distribution Plan (the "Plan") on behalf of each Fund in accordance with Rule
12b-1 under the Act and containing the following terms and conditions:
1 The Trust, on behalf of each Fund, is authorized to reimburse the
Distributor for distribution services performed and expenses incurred by the
Distributor in connection with each Fund's Standard Shares. The amount of such
compensation paid during any one year shall not exceed .25% of the average daily
net assets of a Fund attributable to the Standard Shares. Such compensation
shall be calculated and accrued daily and paid monthly.
2 Distribution services and expenses for which the Distributor may be
reimbursed by a Fund's Standard Shares pursuant to this Plan include, without
limitation: compensation to and expenses incurred by dealers or wholesalers
retained by the Distributor (collectively, the "Authorized Dealers") and the
officers, employees and sales representatives of Authorized Dealers and of the
Distributor; allocable overhead, travel and telephone expenses; the printing of
prospectuses and reports for other than existing shareholders; the preparation
and distribution of sales literature and advertising; and all other expenses
(other than personal and account maintenance services as defined in the Trust's
Service Plan) incurred in connection with activities primarily intended to
result in the sale of a Fund's Standard Shares.
3 This Plan shall not take effect with respect to each Fund until after
it has been approved by both (a) a majority of (i) those Trustees of the Trust
who are not "interested persons" of the Trust (as defined in the Act) and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Rule 12b-1 Trustees") and (ii) all of the
Trustees then in office, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan and (b) a majority of the outstanding voting
Standard Shares of the Fund.
4 Any agreements related to this Plan shall not take effect until
approved in the manner provided for approval of this Plan in paragraph 3(a).
5 This Plan shall continue in effect until February 28, 1998 and from
year to year thereafter for so long as such continuance is specifically approved
at least annually in the manner provided for approval of this Plan in paragraph
3(a).
6 The persons authorized to direct the disposition of monies paid or
payable by a Fund pursuant to this Plan or any related agreement shall be the
President or any Vice President of the Trust. Such persons shall provide to the
Trustees and the Trustees shall review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
7 This Plan may be terminated at any time with respect to each Fund by
vote of a majority of the Rule 12b-1 Trustees, or by vote of a majority of the
outstanding voting Standard Shares of the Fund. If the Plan is terminated or not
continued by the Trustees and no successor plan is adopted with respect to each
Fund, the Fund shall cease to make distribution payments to the Distributor with
respect to the Standard Shares.
The term "vote of a majority of the outstanding voting Standard Shares
of a Fund" shall mean the vote of the lesser (a) 67 per centum or more of the
Fund's Standard Shares present or represented by proxy at the meeting if the
holders of more than 50 per centum of the outstanding Standard Shares are
present or represented by proxy at the meeting, or (b) more than 50 per centum
of the Fund's outstanding Standard Shares, or such other definition as may be
required from time to time pursuant to the Act.
8 This Plan may not be amended to increase materially the limit upon
distribution expenses provided in paragraph 1 or to change the nature of such
expenses provided in paragraph 2 hereof unless such amendment is approved in the
manner provided for approval in paragraph 3 hereof.
9 While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
10 The Trust shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a period of
not less than six years from the date of this Plan, or of the agreements of such
reports, as the case may be, the first two years in an easily accessible place.
11 It is the opinion of the Trust's Trustees and officers that the
following are not expenses primarily intended to result in the sale of each
Fund's Standard Shares: fees and expenses of registering the Standard Shares
under federal or state laws regulating the sale of securities; and fees and
expenses of registering the Trust as a broker-dealer or of registering an agent
of the Trust under federal or state laws regulating the sale of securities; and
fees and expenses of preparing and setting in type the Trust's registration
statement under the Securities Act of 1933. Should such expenses be deemed by a
court or agency having jurisdiction to be expenses primarily intended to result
in the sale of a Fund's Standard Shares, they
shall be considered to be expenses contemplated by and included in this
Distribution Plan but not subject to the limitation prescribed in paragraph 1
hereof.
IN WITNESS WHEREOF, the Trust has executed this Distribution Plan on
___________, 1997.
[NAME OF TRUST]
By:_____________________________
President
Attest:
- ------------------------------
Secretary
Schedule I
[Name of Trust]
[All affected series of the Trust]
EXHIBIT I
Current Rule 12b-1 Distribution Plans
Fees Paid Fees Paid Date Date
to the Distributor as a % Current Plan Current Plan
as of of First Most Recently
December 31, 1996 Net Assets Approved approved
- -------------------------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip Equities Fund $ 456,819 .20% 8/02/84 1/22/97
Wright Junior Blue Chip Equities Fund -- -- 8/02/84 1/22/97
Wright Quality Core Equities Fund $ 63,297 .16% 5/01/85 1/22/97
Wright International Blue Chip Equities Fund $ 477,861 .20% 7/15/87 1/22/97
Wright U.S. Treasury Fund $ 75,732 .19% 8/02/84 1/22/97
Wright U.S. Treasury Near Term Fund $ 280,119 .20% 8/02/84 1/22/97
Wright Total Return Bond Fund $ 218,218 .20% 8/02/84 1/22/97
Wright Current Income Fund $ 129,541 .20% 2/02/87 1/22/97
- -------------------------------------------------------------------------------------------------------------------------
EXHIBIT J
Table of Comparative Rule 12b-1 Expenses (Proposal 4)
Wright Wright Wright Wright
Selected Blue Chip Junior Blue Chip Quality Core International Blue Chip
Equities Fund (WBC) Equities Fund (WJBC) Equities Fund (WQC) Equities Fund (WIBC)
Current Amended Current Amended Current Amended Current Amended
Plan Plan Plan Plan Plan Plan Plan Plan
- ---------------------------------------------------------------------------------------------------------------------------
Annualized Fund Operating Expenses
(as a percentage of average net assets)
Investment Adviser Fee 0.63% 0.63% 0.54% 0.54% 0.45% 0.45% 0.77% 0.77%
Rule 12b-1 Distribution Expense
(after expense limitation)(1) 0.20% 0.25% 0.00% 0.00% 0.16% 0.16% 0.20% 0.25%
Other Expenses (including administration
and shareholder service fees)(2) 0.21% 0.21% 0.66% 0.66% 0.46% 0.46% 0.33% 0.33%
- ---------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(after expense limitations)(1) 1.04% 1.09% 1.20% 1.20% 1.07% 1.07% 1.30% 1.35%
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The Adviser and the Distributor have temporarily and voluntarily agreed
to limit the Total Operating Expenses of WJBC and WQC. Absent this agreement,
the Rule 12b-1 Distribution Expense and Total Operating Expenses of WJBC and WQC
would be 0.20% and 1.41%, and 0.20% and 1.11%, respectively. If credits
resulting from cash balances maintained with Investors Bank & Trust Company were
reflected in the table above, the Total Operating Expenses for WJBC and WQC
would be 1.15% and 1.05%, respectively.
With respect to the Amended Plan proforma, the Adviser and the Distributor
intend to limit the total operating expense of WJBC and WQC. Absent this agreement
the proforma Rule 12b-1 Distribution Expense and Total Operating Expense would
be .25% and 1.45% respectively for WJBC, and .25% and 1.15% respectively for WQC.
After reflecting credits from cash balances maintained with Investors Bank & Trust
Company in the proforma table, the Total Operating Expenses for WJBC and WQC would be
1.15% and 1.05% respectively.
(2) Administration fees for WBC, WJBC, WQC and WIBC were 0.12%, 0.20%, 0.20% and 0.12%, respectively.
</FN>
Wright Wright Wright Wright
U.S. Treasury U.S. Treasury Total Return Current
Fund Near Term Fund Bond Fund Income Fund
(WUSTB) (WNTB) (WTRB) (WCIF)
- ---------------------------------------------------------------------------------------------------------------------------
Current Amended Current Amended Current Amended Current Amended
Plan Plan Plan Plan Plan Plan Plan Plan
- ---------------------------------------------------------------------------------------------------------------------------
Annualized Fund Operating Expenses
(as a percentage of average net assets)
Investment Adviser Fee
(after fee reduction)(1) 0.40% 0.40% 0.42% 0.42% 0.41% 0.41% 0.40% 0.40%
Rule 12b-1 Distribution Expense
(after expense reduction)(1) 0.18% 0.18% 0.20% 0.25% 0.20% 0.25% 0.20% 0.22%
Other Expenses (including administration
and shareholder service fees)(2) 0.36% 0.36% 0.19% 0.19% 0.22% 0.22% 0.28% 0.28%
- ---------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(after reductions)(1) 0.94% 0.94% 0.81% 0.86% 0.83% 0.88% 0.88% 0.90%
- ---------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The Adviser and the Distributor have temporarily and voluntarily agreed
to limit the Total Operation Expenses of WUSTB. Absent this agreement, the
Investment Adviser Fee, the Rule 12 b-1 Distribution Expense and Total Operating
Expenses would be 0.40%, 0.20% and 0.95% for WUSTB. If credits resulting from
cash balances maintained with Investors Bank & Trust Company were reflected in
the table above, the Total Operating Expenses for WUSTB, WNTB,WTRB and WCIF
would be 0.87%, 0.81%,.82% and 0.87%,respectively.
The Adviser and Distributor intend to limit the total operating expense of
WUSTB and WCIF. Absent this agreement the proforma Rule 12b-1 Distribution
Expense, Other Expenses and Total Operating Expense would be .25%,.35% and 1.00%
for WUSTB and .25%, .29% and .94& for WCIF. After credits from cash
balances maintained with Investors Bank & Trust Company are reflected in the
proforma table the Total Operating Expense would be .87% for WUSTB and .89% for WCIF.
(2) Administration fees for WUSTB, WNTB, WTRB and WCIF were 0.10%, 0.08%, 0.09% and 0.10%, respectively.
</FN>
Example of Fund Expenses
The following is an illustration of the total transaction and operating
expenses that an investor in each Fund would bear over different periods of
time, assuming an investment of $1,000, a 5% annual return on the investment and
redemption at the end of each period:
Wright Wright Wright Wright
Selected Blue Chip Junior Blue Chip Quality Core International Blue Chip
Equities Fund (WBC) Equities Fund (WJBC) Equities Fund (WQC) Equities Fund (WIBC)
- --------------------------------------------------------------------------------------------------------------------------------
Current Amended Current Amended Current Amended Current Amended
Plan Plan Plan Plan Plan Plan Plan Plan
- --------------------------------------------------------------------------------------------------------------------------------
1Year $ 11 $ 11 $ 12 $ 12 $ 11 $ 11 $ 13 $ 14
3Years 33 35 38 38 34 34 41 43
5Years 57 60 66 66 59 59 71 74
10Years 127 133 145 145 131 131 157 162
- --------------------------------------------------------------------------------------------------------------------------------
Wright Wright Wright Wright
U.S. Treasury U.S. Treasury Total Return Current
Fund Near Term Fund Bond Fund Income Fund
(WUSTB) (WNTB) (WTRB) (WCIF)
- ---------------------------------------------------------------------------------------------------------------------------
Current Amended Current Amended Current Amended Current Amended
Plan Plan Plan Plan Plan Plan Plan Plan
- ---------------------------------------------------------------------------------------------------------------------------
1 Year $ 10 $ 10 $ 8 $ 9 $ 8 $ 9 $ 9 $ 9
3 Years 30 30 26 27 26 28 28 29
5 Years 52 52 45 48 46 49 49 50
10 Years 115 115 100 106 103 108 198 111
- ---------------------------------------------------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary.
Form of Proxy
THE WRIGHT MANAGED [NAME] TRUST
(the "Trust")
Wright [NAME] Fund
(the "Fund")
SPECIAL MEETING OF THE SHAREHOLDERS - APRIL 15, 1997
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) H. Day
Brigham, James L. O'Connor and A.M. Moody III with full power of substitution in
each, to vote all the shares of beneficial interest of the above-referenced Fund
which the undersigned is (are) entitled to vote at the Special Meeting of
Shareholders (the "Meeting") of the Fund to be held at 24 Federal Street,
Boston, Massachusetts, on April 15, 1997 at 10:00 a.m., Boston time, and at any
adjournment or adjournments All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting, or, if only one votes and acts,
then by that one. Receipt of the Proxy Statement dated March , 1997 is hereby
acknowledged.
If not revoked, this proxy shall be voted:
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date , 1997
NOTE: Signature(s) should agree with name(s) printed herein. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title as such. If a corporation, please sign in full corporate name by president
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
----------------------------------
Signature(s)
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE YOUR FUND THE
EXPENSE OF ADDITIONAL MAILINGS.
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSALS 1, 2(a), 2(b), 2(c), 3, 4,
5(a), 5(b), 5(c), 5(d), 5(e), 5(f), 5(g), 5(h), 5(i), 5(j), 6 and 7. AS TO ANY
OTHER MATTER, SAID PROXY OR PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST
JUDGEMENT. Please vote by filling in the appropriate boxes below, as shown,
using blue or black ink or dark pencil. Do not use red ink.
(1) To approve a new investment policy to permit the implementation
of a master-feeder fund structure.
FOR [] AGAINST[] ABSTAIN[]
(2) To authorize the Trust on behalf of the Fund to vote to:
(a) elect eight (8) Trustees of The Wright Blue Chip Master
Portfolio Trust ("Portfolio Trust") to serve until their
successors have been duly elected and qualified. The
nominees are:
Peter M. Donovan
H. Day Brigham, Jr.
Winthrop S. Emmet
Leland Miles
A. M. Moody, III
Lloyd F. Pierce
Raymond Van Houtte
[Name]
FOR [] FOR all [] VOTE []
all of the nominees WITHHELD
the above except for all the
nominees those whose nominees
named name(s) are named
above lined through above
or otherwise
struck out
(b) ratify the selection of Deloitte & Touche, LLP as the
independent accountants of the Portfolio Trust.
FOR [] AGAINST [] ABSTAIN []
(c) to approve the investment advisory agreement between the
Portfolio Trust and Wright Investors' Service, Inc.
FOR [] AGAINST [] ABSTAIN []
(3) To approve an Amended and Restated Declaration of Trust
for the Trust.
FOR [] AGAINST [] ABSTAIN []
(4) To amend the Fund's Rule 12b-1 distribution plan to
increase the distribution fee.
FOR [] AGAINST [] ABSTAIN[]
(5) To amend or eliminate certain of the Fund's fundamental
investment restrictions with respect to:.
(a) Borrowing money.
FOR [] AGAINST [] ABSTAIN []
(b) Pledging or mortgaging assets.
FOR [] AGAINST [] ABSTAIN[]
(c) Diversification of assets.
FOR [] AGAINST [] ABSTAIN []
(d) Securities transactions with affiliated persons.
FOR [] AGAINST [] ABSTAIN []
(e) Margin transactions, short sales, options
transactions and warrants.
FOR [] AGAINST [] ABSTAIN []
(f) Buy or sell real estate and commodities.
FOR [] AGAINST [] ABSTAIN []
(g) Concentration of assets.
FOR [] AGAINST [] ABSTAIN []
(h) Underwriting securities.
FOR [] AGAINST [] ABSTAIN []
(i) Making loans.
FOR [] AGAINST [] ABSTAIN []
(j) Securities transactions with affiliated persons.
FOR [] AGAINST [] ABSTAIN []
(6) To elect eight Trustees to hold office until their
respective successors have been duly elected and
qualified. The nominees are:
Peter M. Donovan
H. Day Brigham, Jr.
Winthrop S. Emmet
Leland Miles
A. M. Moody, III
Lloyd F. Pierce
Raymond Van Houtte
[Name]
FOR [] FOR all [] VOTE []
all of the nominees WITHHELD
the above except for all the
nominees those whose nominees
named name(s) are named
above lined through above
or otherwise
struck out
(7) To approve the selection of Deloitte & Touche, LLP as
the independent auditor of the Trust.
FOR [] AGAINST [] ABSTAIN[]
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.