EXHIBIT 1 (a)
DECLARATION OF TRUST
OF
VAN KAMPEN MERRITT SELECT SECTOR MUNICIPAL TRUST
DECLARATION OF TRUST made as of September 9, 1993, 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"), and by the holders of shares of beneficial interest
to be issued hereunder as hereinafter provided;
WHEREAS, the Trustees desire to establish a trust for the investment
and reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in the
trust assets be divided into transferable shares of beneficial interest, as
hereinafter provided;
NOW, THEREFORE, the Trustees hereby declare that all money and
property contributed to the trust established hereunder shall be held and
managed in trust for the benefit of holders, from time to time, of the shares of
beneficial interest issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME, PRINCIPAL OFFICE, RESIDENT AGENT AND DEFINITIONS
Section 1.1 Name, Principal Office and Resident Agent. The name of
the trust created hereby is the "Van Kampen Merritt Select Sector Municipal
Trust" (the "Trust").
The post office address of the principal office of the Trust is One
Parkview Plaza, Oakbrook Terrace, Illinois 60181. The name of the resident agent
of the Trust in the Commonwealth of Massachusetts is C T Corporation System, a
Delaware corporation, and the post office address of the resident agent is 2
Oliver Street, Boston, Massachusetts 02109.
Section 1.2 Definitions. Wherever they are used herein, the
following terms have the following respective meanings:
(a) "By-Laws" means the By-Laws referred to in Section 3.8 hereof,
as from time to time amended.
(b) The terms "Commission," "Interested Person" and "Majority
Shareholder Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42)
of the 1940 Act, whichever may be applicable) have the meanings given them in
the 1940 Act.
(c) "Common Shareholder" means a record owner of outstanding Common
Shares.
(d) "Common Shares" means the common shares of beneficial interest
in the Trust as described in Section 6.1 hereof and includes fractions of Common
Shares as well as whole Common Shares.
(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. Reference in this
Declaration of Trust to "Declaration," "hereof," "herein" and "hereunder" shall
be deemed to refer to this Declaration rather than the article or section in
which such words appear.
(g) "Investment Adviser" means a party furnishing services to the
Trust pursuant to the contract described in Section 4.1 hereof.
(h) The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended from time to time.
(i) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof, whether domestic or foreign.
(j) "Preferred Shareholder" means a record owner of outstanding
Preferred Shares.
(k) "Preferred Shares" means the preferred shares of beneficial
interest in the Trust as described in Section 6.1 hereof and includes fractions
of Preferred Shares as well as whole Preferred Shares.
(l) "Shareholder" means a record owner of outstanding Shares.
(m) "Shares" means the units of beneficial interest in the Trust as
described in Section 6.1 hereof and includes fractions of Shares as well as
whole Shares.
(n) "Transfer Agent" means a party furnishing services to the Trust
pursuant to the contract described in Section 4.3 hereof.
(o) The "Trust" means the trust created hereby.
2
(p) The "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.
(q) The "Trustees" means the persons who have signed the
Declaration, so long as they shall continue in office in accordance with the
terms hereto, and all other persons who may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such person or
persons in their capacity as trustees hereunder.
(r) "Underwriters" means the parties, other than the Trust, to the
contract described in Section 4.2 hereof.
ARTICLE II
TRUSTEES
Section 2.1 Number of Trustees. The number of Trustees shall
initially be three (3), and after a registration statement under the Securities
Act of 1933, as amended, covering the first public offering of securities of the
Trust shall have been filed, the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed by a majority of
the Trustees, provided, however, that, following the date such registration
statement shall have become effective (the "effective date"), the number of
Trustees shall in no event be less than three (3) nor more than eleven (11),
except as such number shall be increased in connection with the rights of the
holders of the Preferred Shares to elect a majority of the Trustees, as provided
for in Section 2.2 hereof. No reduction in the number of Trustees shall have the
effect of removing any Trustee from office prior to the expiration of his term
unless the Trustee is specifically removed pursuant to Section 2.2 of this
Article II at the time of the decrease. The three (3) initial Trustees shall be:
Dennis J. McDonnell
One Parkview Plaza
Oakbrook Terrace, IL 60181
Edward C. Wood III
One Parkview Plaza
Oakbrook Terrace, IL 60181
Weston B. Wetherell
One Parkview Plaza
Oakbrook Terrace, IL 60181
Section 2.2 Term of Office of Trustees. The Board of Trustees shall
be divided into three classes. The number of Trustees in each class shall be as
nearly equal as practicable, as determined from time to time by resolution of
the Board of Trustees. The term of office of the first class shall expire on the
date of the first annual meeting of Shareholders or special meeting in lieu
thereof following the effective date. The term of
3
office of the second class shall expire on the date of the second annual meeting
of Shareholders or special meeting in lieu thereof. The term of office of the
third class shall expire on the date of the third annual meeting of Shareholders
or special meeting in lieu thereof. Upon expiration of the term of office of
each class as set forth above, the number of Trustees in such class, as
determined by the Board of Trustees, shall be elected for a term expiring on the
date of the third annual meeting of Shareholders or special meeting in lieu
thereof following such expiration to succeed the Trustees whose terms in office
expire. Subject to the rights of the Preferred Shareholders, the Trustees shall
be elected by the Common Shareholders owning of record a plurality of the Common
Shares voting as a class at an annual meeting of the Shareholders or special
meeting in lieu thereof called for that purpose, except as provided in Section
2.3 of this Article; provided, however, that the Preferred Shareholders owning
of record a plurality of the Preferred Shares voting as a class at an annual
meeting of the Shareholders or special meeting in lieu thereof called for such
purpose, shall elect at least two (2) Trustees at all times, and, provided
further, that the Preferred Shareholders owning of record a plurality of the
Preferred Shares voting as a class shall elect at least a majority of the
Trustees, which number of Trustees shall be increased appropriately in order to
effectuate such rights after giving effect to resignations of Trustees, if (i)
at any time the dividends on the Preferred Shares shall be unpaid in an amount
equal to two (2) full years dividends on the Preferred Shares, with such
representation to continue until all dividends in arrears shall have been paid
or otherwise provided for, or (ii) pursuant to the designations and powers,
preferences and rights, and the qualifications, limitations and restrictions of
the Preferred Shares as determined in accordance with Section 6.1 hereof. Each
Trustee elected shall hold office until his successor shall have been elected
and shall have qualified; except that (a) any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b) any Trustee
may be removed (provided the aggregate number of Trustees after such removal
shall not be less than the number required by Section 2.1 hereof) with cause, at
any time by written instrument, signed by at least two-thirds of the remaining
Trustees, specifying the date when such removal shall become effective
(provided, however, that the Trustees elected by any one class of shares shall
have no power to so remove any Trustees elected by another class of Shares); (c)
any Trustee who requests in writing to be retired or who has become
incapacitated by illness or injury may be retried by written instrument signed
by a majority of the other Trustees, specifying the date of his retirement; and
(d) any Trustee may be removed at any meeting of Shareholders by a vote of
two-thirds of the outstanding shares of the class or classes of shares of
beneficial interest that elected such Trustee. Upon the resignation or removal
of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute and
deliver such documents as the remaining Trustees shall require for the purpose
of conveying to the Trust or the remaining Trustees any Trust property held in
the name of the resigning or removed Trustee. Upon the incapacity or death of
any Trustee, his legal representative shall execute and deliver on his behalf
such documents as the remaining Trustees shall require as provided in the
preceding sentence.
Section 2.3 Resignation and Appointment of Trustees. The term of
office of a Trustee shall terminate and a vacancy shall occur in the event of
the death, declination, resignation, removal, retirement, bankruptcy,
adjudicated incompetence or
4
other incapacity to perform the duties of the office of a Trustee. In the case
of an existing vacancy, including a vacancy existing by reason of an increase in
the number of Trustees, the remaining Trustees shall fill such vacancy by
appointing such other person as they in their discretion shall see fit. Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees then in office. Any such appointment shall not become effective,
however, until the person named in the written instrument of appointment shall
have accepted in writing such appointment and agreed in writing to be bound by
the terms of this Declaration. An appointment of a Trustee may be made by the
Trustees then in office and notice thereof mailed to Shareholders as aforesaid
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. The power of
appointment is subject to the provisions of Section 16(a) of the 1940 Act.
Section 2.4 Vacancies. The death, declination, resignation,
retirement, removal, bankruptcy, adjudicated incompetence or incapacity to
perform the duties of a Trustee, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms of this
Declaration. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in Section 2.3, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the Declaration,
subject to the rights of the holders of the Preferred Shares to elect a Trustee
to fill such vacancy in accordance with the terms and provisions hereof. A
written instrument certifying the existence of such vacancy signed by a majority
of the Trustees shall be conclusive evidence of the existence of such vacancy.
Section 2.5 Delegation of Power to other Trustees. Any Trustee may,
by power of attorney, delegate his power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided that in no
case shall less than two (2) Trustees personally exercise the powers granted to
the Trustees under this Declaration except as herein otherwise expressly
provided. Nothing in this Section 2.5 shall apply to, or limit the ability of
any Trustee to grant, any power of attorney for the purpose of executing any
registration statement filed with the Commission, or amendment thereto, relating
to Shares.
Section 2.6 Meetings. Meetings of the Trustees shall be held from
time to time upon the call of the Chairman, if any, the President, the Secretary
or any two Trustees. Regular meetings of the Trustees may be held without call
or notice at a time and place fixed by the By-Laws or by resolution of the
Trustees. Notice of any other meeting shall be mailed not less than 48 hours
before the meeting or otherwise actually delivered orally or in writing not less
than 24 hours before the meeting, but may be waived in writing by any Trustee
either before or after such meeting. The attendance of a Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting has not been lawfully called or
convened. The Trustees may act with or without a meeting. A quorum for all
meetings of the Trustees
5
shall be a majority of the Trustees. Unless provided otherwise in this
Declaration of Trust, any action of the Trustees may be taken at a meeting by
vote of a majority of the Trustees present (a quorum being present) or without a
meeting by written consent of a majority of the Trustees.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons in any action to be taken may be
counted for quorum purposes under this Section and shall be entitled to vote to
the extent not prohibited by the 1940 Act.
Section 2.7 Officers. The Trustees shall annually elect a President,
a Secretary and a Treasurer and may elect a Chairman. The Trustees may elect or
appoint or may authorize the Chairman, if any, or President to appoint such
other officers or agents with such powers as the Trustees may deem to be
advisable. A Chairman shall, and the President, Secretary and Treasurer may, but
need not, be a Trustee.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1 General. 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, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business 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 and execute all such instruments as the Trustees deem necessary,
proper or desirable in order to promote the interests of the Trust although such
things are not herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of the Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
The enumeration of any specific power herein shall not be construed
as limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2 Investments. (a) The Trustees shall have the power to:
6
(i) operate as and carry on the business of an investment company,
and exercise all of the powers necessary or appropriate to the conduct of such
operations;
(ii) To subscribe for, invest in, hold for investment, or reinvest
in, securities, including common and preferred stocks; warrants; bonds,
debentures, bills, time notes and all other evidences of indebtedness;
negotiable or non-negotiable instruments; government securities, including
securities of any state, municipality or other political subdivision thereof, or
any governmental or quasi-governmental agency or instrumentality; and money
market instruments including bank certificates of deposit, finance paper,
commercial paper, bankers acceptances and all kinds of repurchase agreements, of
any corporation, company, trust, association, firm or other business
organization however established, and of any country, state, municipality or
other political subdivision, or any governmental or quasi-governmental agency or
instrumentality;
(iii) 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, to write (or sell) and purchase put
and call options on any such securities and to pledge any such securities and
repurchase agreements;
(iv) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements;
(v) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including futures contracts and options thereon, cash, and any
interest therein;
(vi) To borrow money or otherwise obtain credit and in this
connection issue notes or other evidence of indebtedness; to secure borrowings
by mortgaging, pledging or otherwise subjecting as security the Trust Property;
to endorse, guarantee, or undertake the performance of any obligation, contract
or engagement of any other Person and to lend Trust Property;
(vii) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have 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; to guarantee or
become surety on any or all other contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm; and
(viii) to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any
7
power hereinbefore set forth, and to do every other act or thing incidental or
appurtenant to or connected with the aforesaid purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
(b) The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust, nor shall the Trustees be
limited by any law limiting the investments which may be made by fiduciaries.
Section 3.3 Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine. 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. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 3.4 Issuance and Purchase of Securities. The Trustees shall
have the power to issue, sell, purchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and subject
to the provisions set forth in Articles VI, VII and VIII hereof, to apply to any
such repurchase, retirement, cancellation or acquisition of Common Shares or
Preferred Shares any funds or property of the Trust whether capital or surplus
or otherwise, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts governing business corporations.
Section 3.5 Delegation; Committees. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees or
agents of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the same extent as such
delegation is not prohibited by the 1940 Act.
Section 3.6 Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the 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 3.7 Expenses. The Trustees shall have the power to incur and
pay any expenses which in the opinion of the Trustees are necessary or
incidental to carry out any of the purposes of the Declaration, and to pay
reasonable compensation from the
8
funds of the Trust to themselves as Trustees. The Trustees shall fix the
compensation of all officers, employees and Trustees.
Section 3.8 Manner of Acting; By-Laws. Except as otherwise provided
herein or in the By-laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of all the Trustees.
The Trustees may adopt By-laws to the extent such power is not reserved to the
Shareholders.
Notwithstanding the foregoing provisions of this Section 3.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body.
Section 3.9 Miscellaneous Powers. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees 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; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Common Shareholders and Preferred Shareholders,
Trustees, Officers, employees, agents, investment advisers, distributors,
selected dealers or independent contractors of the Trust against all claims
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 liability; (e) establish pension, profit sharing, Share
purchase and other retirement, incentive and benefit plans for any Trustees,
officers, employees or agents of the Trust; (f) make donations, irrespective of
benefit to the Trust, for charitable, religious, educational, scientific, civil
or similar purposes; (g) to the extent permitted by law, indemnify any person
with whom the Trust has dealings, including the Investment Adviser, Underwriter,
Transfer Agent, Custodian and selected dealers to such extent as the Trustees
shall determine; (h) guarantee indebtedness or contractual obligations of
others; (i) determine and change the fiscal year of the Trust and the method by
which its accounts 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.
9
Section 3.10 Principal Transactions. Except in transactions
permitted by the 1940 Act or rules and regulations adopted by the Commission, or
any order of exemption issued by the Commission, the Trustees shall not, on
behalf of the Trust, buy any securities (other than Common or Preferred Shares)
from or sell any securities (other than Common or Preferred Shares) to, or lend
any assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have any
such dealings with the Investment Adviser, Underwriter or Transfer Agent or with
any Interested Person, or firm or company in which such Person is an Interested
Person, as broker, legal counsel, registrar, transfer agent, dividend disbursing
agent or custodian.
ARTICLE IV
INVESTMENT ADVISER, UNDERWRITER AND TRANSFER AGENT
Section 4.1 Investment Adviser. Subject to a Majority Shareholder
Vote of both the Common Shareholders and the Preferred Shareholders voting
without regard to class, the Trustees may in their discretion from time to time
enter into one or more investment advisory or management contracts whereby a
party to such a contract shall undertake to furnish the Trust such
administrative, management, investment advisory, statistical and research
facilities and services, and such other facilities and services, if any, as the
Trustees shall from time to time 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 delegate to the Investment
Adviser authority (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges of assets of the Trust on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales, loan or exchanges
pursuant to recommendations of the Investment Adviser (and all without further
action by the Trustees). Any such purchases, sales, loans and exchanges shall be
deemed to have been authorized by all of the Trustees.
Section 4.2 Underwriter. The Trustees may in their discretion enter
into a contract providing for the sale of shares of beneficial interest of the
Trust whereby the Trust may either agree to sell such Shares to the other
parties to the contact or appoint such other party the underwriter for such
Shares. The contract shall be on such terms and conditions as the Trustees may
in their discretion determine not inconsistent with the provisions of this
Article IV or the By-laws; and such contract may also provide for the sale of
Shares by such other parties as principal or as agent of the Trust and may
provide that such other party may enter into agreements with registered
securities dealers to further the purpose of the distribution of such Shares.
Section 4.3 Transfer Agent. The Trustees may in their discretion
from time to time enter into a transfer agency and Shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and Shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration or the By-laws. Such services may be provided
by one or more Persons.
10
Section 4.4 Parties to Contract. Any contract of the character
described in Section 4.1, 4.2 or 4.3 of this Article IV or any Custodian
contract, as described in the By-laws, may be entered into with any Person,
although one or more of the Trustees or officers of the Trust may be an officer,
partner, director, trustee, Shareholder, or member of such other party to the
contract, and no such contract shall be invalidated or rendered voidable by
reason of the existence of any such relationship; nor shall any Person holding
such relationship be disqualified from voting upon or executing any such
contract; nor shall any Person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article IV or the By-laws. The same
Person may be the other party to contracts entered into pursuant to Sections
4.1, 4.2 and 4.3 above or custodian contracts, and any individual may be
financially interested or otherwise affiliated with Persons who are parties to
any or all of the contracts mentioned in this Section 4.4.
Section 4.5 Compliance with 1940 Act. Any contract entered into
pursuant to Sections 4.1 and 4.2 shall be consistent with and subject to the
requirements of Section 15 of the Investment Company Act of 1940 (including any
amendment thereof or other applicable Act of Congress hereafter enacted) with
respect to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 5.1 No Personal Liability of Shareholders, Trustees, etc. No
Shareholder of the Trust 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. No Trustee, officer, employee or agent of the Trust shall
be subject to any personal liability whatsoever to any Person, other than the
Trust or its Shareholders, in connection with Trust Property or the affairs of
the Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard for his duty to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust, is
made a party to any suit or proceeding to enforce any such liability, he shall
not, on account thereof, be held to any personal liability. The Trust shall
indemnify and hold each Shareholder harmless from and against all claims and
liabilities to which such Shareholder may become subject by reason of his being
or having been a Shareholder, and shall reimburse such Shareholder for all legal
and other expenses reasonably incurred by him in connection with any such claim
or liability. The rights accruing to a Shareholder under this Section 5.1 shall
not exclude any other right to which such Shareholder may be lawfully entitled,
nor shall anything herein contained restrict the right of the Trust to indemnify
or reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
11
Section 5.2 Non-Liability of Trustees, etc.
Subject to Section 5.3(b) below, no Trustee, officer, employee or
agent of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way a
former or acting Trustee to redress any breach of trust) except for his own bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
involved in the conduct of his office.
Section 5.3 Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in paragraph
(b) below:
(i) every person who is or has been a Trustee or officer of the
Trust shall be indemnified by the Trust to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding shall apply
to all claims, actions, suits or proceedings (civil, criminal, administrative or
other, including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or
officer:
(i) against any liability to the Trust or its Shareholders by reason
of a final adjudication by the court or other body before which the proceeding
was brought that he engaged in willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust;
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(i) or (b)(ii)
resulting in a payment by a Trustee or officer, unless there has been either a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his officer by the court or other body approving the
settlement or other disposition or a reasonable determination, based upon a
review of readily available facts (as opposed to a full trial-type inquiry) that
he did not engage in such conduct:
12
(A) by vote of a majority of the Disinterested Trustees acting on
the matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or
(B) by written opinion of independent legal counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a Person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors, administrators,
and assigns of such Person. Nothing contained herein shall affect any rights to
indemnification to which personnel of the Trust other than Trustees and officers
may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any
claim, action, suit, or proceeding of the character described in paragraph (a)
of this Section 5.3 shall be advanced by the Trust prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not entitled to
indemnification under this Section 5.3, provided that either
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising out of
any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act on
the matter) or an independent legal counsel in a written opinion shall
determine, based upon a review of readily available facts (as opposed to a full
trial type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 5.3, a "Disinterested Trustee" is one (i)
who is not an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by any rule, regulation or order of
the Commission), and (ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or had been pending.
Section 5.4 No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 5.5 No Duty of Investigation; Notice in Trust Instruments,
etc. No purchaser, lender, transfer agent or other Person dealing with the
Trustee or any officer, employee or agent of the Trust shall be bound to make
any inquiry concerning the validity of any transaction purporting to be made by
the Trustee 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, Common Share or Preferred Share, other security of the
Trust 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 the
Declaration or in
13
their capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Common Share or Preferred Share,
other security of the Trust or undertaking made or issued by the Trustees shall
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 under any
such instrument are not binding upon any of the Trustees or Shareholders,
individually, but bind only the trust estate, and may contain any further
recital which they or he may deem appropriate, but the omission of such recital
shall not operate to bind the Trustees or Shareholders individually. The
Trustees shall seek diligently at all times to maintain insurance for the
protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
Section 5.6 Reliance on Experts, etc. Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by the Investment Adviser, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1 Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest with
par value of $.01 per share (the "Shares"). The Board of Trustees of the Trust
may authorize separate classes of shares together with such designations and
powers, preferences and rights, qualifications, limitations and restrictions as
may be determined from time to time by the Board of Trustees. The number of
shares of beneficial interest authorized hereunder is unlimited. All shares
issued hereunder including, without limitation, shares issued in connection with
a dividend in shares or a split of shares, shall be fully paid and
non-assessable.
Pursuant to the powers vested in the Board of Trustees by this
Section 6.1, the Board of Trustees hereby authorizes the issuance of an
unlimited number of Common Shares of beneficial interest, par value $.01 per
share (the "Common Shares") together with 100,000,000 shares of beneficial
interest, par value of $.01 per share (the "Preferred Shares").
The designations and powers, preferences and rights, and the
qualifications, limitations and restrictions of the Common Shares are as set
forth in this Declaration of Trust.
14
The designations and powers, preferences and rights, and the
qualifications, limitations and restrictions of the Preferred Shares are as
follows:
The Preferred Shares shall be issued from time to time in one or
more series with such distinctive serial designations and (i) may have such
voting powers, full or limited; (ii) may be subject to redemption at such time
or times and at such price or prices; (iii) may be entitled to receive dividends
(which may be cumulative or noncumulative) at such rate or rates, on such
conditions, and at such times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes of shares; (iv) may have
such preferences or other rights upon the dissolution of, or upon any
distribution of the assets of, the Trust; (v) may be made convertible into, or
exchangeable for, shares of any other class or classes or of any other series of
the same or any other class or classes of shares of the Trust, at such price or
prices or at such rates of exchange and with such adjustments; (vi) shall have
such other relative, participating, optional or other special rights,
qualifications, limitations or restrictions thereof, all as shall hereafter be
stated and expressed in the resolution or resolutions providing for the issue of
such Preferred Shares from time to time adopted by the Board of Trustees
pursuant to authority so to do which is hereby expressly vested in the Board;
and are as further set out in this Declaration of Trust.
Section 6.2 Rights of Shareholders. The ownership to the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest conferred by their Shares, and they shall have no right to call
for any partition or division of any property, profits, rights or interests of
the Trust nor can they be called upon to assume any losses of the Trust or
suffer any assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights in the Declaration
specifically set forth. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
determine with respect to any class or series of Shares.
Section 6.3 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,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners and members of a joint stock
association.
Section 6.4 Issuance of Shares. The Trustees in their discretion
may, from time to time without 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 best, 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 Shares held in the
treasury. The Trustees may
15
from time to time divide or combine the Shares or any class or series into a
greater or lesser number of such series without thereby changing the
proportionate beneficial interests in the Trust. Contributions to the Trust may
be accepted for whole Shares and/or 1/1,000ths of a Share or integral multiples
thereof.
Section 6.5 Register of Shares. A register or registers shall be
kept at the principal office of the Trust or at an office of the Transfer Agent
which shall contain the names and addresses of the Shareholders and the number
of Shares held by them respectively and a record of all transfers thereof. Such
register shall be conclusive as to who are the holders of the Common Shares and
Preferred Shares and who shall be entitled to receive dividends or distributions
or otherwise to exercise or enjoy the rights of Common Shareholders and
Preferred Shareholders. No Shareholder shall be entitled to receive payment of
any dividend or distribution, nor to have notice given to him as herein or in
the By-laws provided, until he has given his address to the Transfer Agent or
such other officer or agent of the Trustees as shall keep the said register for
entry thereon. The Trustees, in their discretion, may authorize the issuance of
Share certificates and promulgate appropriate rules and regulations as to their
use.
Section 6.6 Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with any certificate or
certificates (if issued) for such Shares and such evidence of the genuineness of
each such execution and authorization and of other matters as may reasonably be
required. Upon such delivery the transfer shall be recorded on the register of
the Trust. Until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or register nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the
death, bankruptcy, or incompetence of any Shareholder or otherwise by operation
of law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent; but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees not any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 6.7 Notices. Any and all notices to which any Shareholder
may be entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Shareholder of record at his
last known address as recorded on the register of the Trust.
Section 6.8 Treasury Shares. Shares held in the treasury shall,
until reissued pursuant to Section 6.4, not confer any voting rights on the
Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
16
Section 6.9 Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Section 2.2 hereof, (ii)
with respect to any investment advisory or management contract as provided in
Section 4.1, (iii) with respect to termination of the Trust as provided in
Section 9.2, (iv) with respect to any amendment of the Declaration to the extent
and as provided in Section 9.3, (v) with respect to any merger, consolidation,
conversion or sale of assets as provided in Sections 9.4, 9.5, and 9.7, (vi)
with respect to incorporation of the Trust to the extent and as provided in
Section 9.5, (vii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, (viii) with respect to such
additional matters relating to the Trust as may be required by the Declaration,
the By-laws or any registration of the Trust as an investment company under the
1940 Act with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable and (ix) with respect to those
matters set forth in the designations and powers, preferences and rights, and
the qualifications, limitations and restrictions of the Preferred Shares, as
determined in accordance with Section 6.1 hereof. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, the Declaration or the By-laws to be taken by
Shareholders. The By-laws may include further provisions for Shareholders votes
and meetings and related matters.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
The Trustees, in their absolute discretion, may prescribe and shall
set forth in the By-laws or in a duly adopted vote of the Trustees such bases
and times for determining the per share net asset value of the Common Shares or
net income, or the declaration and payment of dividends and distributions, as
they may deem necessary or desirable.
ARTICLE VIII
CUSTODIANS
The Trustee shall at all times employ one or more custodians,
meeting the qualifications for custodians for portfolio securities of investment
companies contained in the 1940 Act, as custodian with respect to the Trust. If
so directed by a majority Shareholder Vote of each the Common Shares and the
Preferred Shares voting as separate classes, the custodian shall deliver and pay
over all property of the Trust held by it as specified in such vote.
The Trustees may also authorize each custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian
17
and upon such terms and conditions, as may be agreed upon between the custodian
and such sub-custodian and approved by the Trustees, provided that in every case
such sub-custodian shall meet the qualifications for custodians contained in the
1940 Act.
ARTICLE IX
DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
Section 9.1 Duration. Subject to possible termination in accordance
with the other provisions of Article IX hereof, the trust created hereby shall
continue without limitation of time.
Section 9.2 Termination of Trust.
(a) Trust may be terminated (I) by the affirmative vote of the
holders of not less than seventy-five percent (75%) of each of the Common Shares
and the Preferred Shares outstanding and entitled to vote, voting as separate
classes, at any meeting of Shareholders, or (II) by an instrument in writing,
without a meeting, signed by a majority of the Trustees and consented to by the
holders of not less than seventy-five percent (75%) of each of such Common
Shares and Preferred Shares. Upon the termination of the Trust:
(i) The Trust 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
and all of the powers of the Trustees under this Declaration shall continue
until the affairs of the Trust shall have been wound up, including the power to
fulfill or discharge the contracts of the Trust, collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property to one or more persons at public or private sale
for consideration which may consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its liabilities, and to do all
other acts appropriate to liquidate its business; provided, that any sale,
conveyance, assignment, exchange, transfer or other disposition of all or
substantially all of the Trust Property shall require Shareholder approval in
accordance with Section 9.4 hereof; and
(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, in cash or in kind or partly in cash
and partly in kind, among the Shareholders according to their respective rights,
including any preferential rights of Preferred Shares to receive such
distribution.
(b) After termination of the Trust and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests of
all Shareholders shall thereupon cease.
18
Section 9.3 Amendment Procedure.
(a) Except as provided in paragraph (c) of this Section 9.3, this
Declaration may be amended by a Majority Shareholder Vote of each of the Common
Shares and the Preferred Shares, voting as separate classes, or by an instrument
in writing, without a meeting, signed by a majority of the Trustees and
consented to by the holders of not less than a majority of each of the Common
Shareholders and the Preferred Shareholders, voting as separate classes. The
Trustees may also amend this Declaration without the vote or consent of
Shareholders to change the name of the Trust, to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision hereof,
to make any changes deemed necessary to effectuate the designations and powers,
preferences and rights, and the qualifications, limitations and restrictions
adopted by the Trustees with respect to the Preferred Shares pursuant to Section
6.1 hereof, or if they deem it necessary to conform this Declaration to the
requirements of applicable federal laws or regulations or the requirements of
the regulated investment company provisions of the Internal Revenue Code, but
the Trustees shall not be liable for failing so to do.
(b) No amendment, except pursuant to Section 6.1, may be made under
this Section 9.3 which would change any rights with respect to any Shares by
reducing the amount payable thereon upon liquidation of the Trust or by
diminishing or eliminating any voting rights pertaining thereto, except with the
vote or consent of the holders of two-thirds of the class of Shares so effected
outstanding and entitled to vote. 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 assessment upon Shareholders.
(c) No amendment may be made under this Section 9.3 which shall
amend, alter, change or repeal any of the provisions of Sections 9.2, 9.3, 9.4,
9.6 and 9.7 unless the amendment effecting such amendment, alteration, change or
repeal shall receive the affirmative vote or consent of seventy-five percent
(75%) of each the Common Shareholders and the Preferred Shareholders, voting as
separate classes. Such affirmative vote or consent shall be in addition to the
vote or consent of the holders of Shares otherwise required by law or by the
terms of any class or series of Preferred Shares, whether now or hereafter
authorized, or any agreement between the Trust and any national securities
exchange.
(d) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time .as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration
19
may be terminated or amended in any respect by the affirmative vote of a
majority of the Trustees or by an instrument signed by a majority of the
Trustees.
Section 9.4 Merger, Consolidation and Sale of Assets. Subject to
Section 9.7, the Trust may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of the Trust Property, including its good will, upon such
terms and. conditions and for such consideration when and as authorized at any
meeting of Shareholders called for the purpose by the affirmative vote of the
holders of not less than two-thirds of the Common Shares and the Preferred
Shares outstanding and entitled to vote, voting as separate classes or by an
instrument or instruments in writing without a meeting, consented to by the
holders of not less than two-thirds of each such class of Common Shares and
Preferred Shares, provided, however, that if such merger, consolidation, sale,
lease or exchange is recommended by the Trustees, the vote or written consent of
the holders of a majority of the Common Shares and the Preferred Shares
outstanding and entitled to vote, voting as separate classes shall be sufficient
authorization 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.
Section 9.5 Incorporation and Reorganization. Subject to Section 9.7
with the approval of the holders of a majority of the Common Shares and
Preferred Shares outstanding and entitled to vote, voting as separate classes
the Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction, or any other trust,
partnership, association or other organization to take over all of the Trust
Property or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such corporation, trust, partnership, association or
organization in exchange for the shares or securities thereof or otherwise and
to lend money to, subscribe for the shares or securities of, and enter into any
contracts with any such corporation, trust, partnership, association or
organization or any corporation, partnership, association, trust, or
organization in which the Trust holds or is about to acquire shares or any other
interest. The Trustees may also cause a merger or consolidation between the
Trust or any successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted by law, as
provided under the law then in effect. Nothing contained herein shall be
construed as requiring approval of Shareholders for the Trustees to organize or
assist in organizing one or more corporations, trusts, partnerships,
associations or other organizations and selling, conveying or transferring a
portion of the Trust Property to such organization or entities.
Section 9.6 Conversion to Open-End Company. Notwithstanding any
other provisions of this Declaration or the By-Laws, an amendment to this
Declaration that makes the Shares a "redeemable security" (as that term is
defined in the 1940 Act) shall be required to be approved by at least (a) a
majority of the Trustees, including a majority of the Trustees who are not
Interested Persons; and (b) a Majority Shareholder Vote of each the Common
Shareholders and the Preferred Shareholders, voting as separate classes.
20
The Trust shall notify the holders of all capital securities of the
approval, in accordance with the preceding paragraph of this Section 9.6, of any
amendment to this Declaration that makes the Shares a "redeemable security" (as
that term is defined in the 1940 Act) no later than thirty (30) days prior to
the date of filing of such amendment with the Secretary of State of the
Commonwealth of Massachusetts; provided, however, that such amendment may not be
so filed until the later of ninety (90) days following the date of approval of
such amendment by the holders of Shares in accordance with the preceding
paragraph of this Section 9.6 or thirty (30) days following the date on which
notice of the approval of such amendment is first given to Shareholders.
Section 9.7 Certain Transactions.
(a) Notwithstanding any other provision of this Declaration and
subject to the exceptions provided in paragraph (d) of this Section, the types
of transactions described in paragraph (c) of this Section shall require the
affirmative vote or consent of the holders of seventy-five percent (75%) of the
Common Shares and Preferred Shares outstanding and entitled to vote, voting as
separate classes when a Principal Shareholder (as defined in paragraph (b) of
this Section) is a party to the transaction. Such affirmative vote or consent
shall be in addition to the vote or consent of the holders of Shares otherwise
required by law or by the terms of any class or series of Preferred Shares,
whether now or hereafter authorized, or any agreement between the Trust and any
national securities exchange.
(b) The term "Principal Shareholder" shall mean any corporation,
person or other entity which is the beneficial owner, directly or indirectly, of
more than five percent (5%) of the outstanding Shares and shall include any
affiliate or associate, as such terms are defined in clause (ii) below, of a
Principal Shareholder. For the purposes of this Section, in addition to the
Shares which a corporation, person or other entity beneficially owns directly,
(a) any corporation, person or other entity shall be deemed to be the beneficial
owner of any Shares (i) which it has the right to acquire pursuant to any
agreement or upon exercise of conversion rights or warrants, or otherwise (but
excluding share options granted by the Trust) or (ii) which are beneficially
owned, directly or indirectly (including Shares deemed owned through application
of clause (i) above), by any other corporation, person or entity with which it
or its "affiliate" or "associate" (as defined below) has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of Shares, or which is its "affiliate", or "associate" as those terms
are defined in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934 as in effect on August 1, 1988, and (b) the
outstanding Shares shall include Shares deemed owned through application of
clauses (i) and (ii) above but shall not include any other Shares which may be
issuable pursuant to any agreement, or upon exercise of conversion rights or
warrants, or otherwise.
(c) This Section shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any subsidiary of
the Trust with or into any Principal Shareholder.
21
(ii) The issuance of any securities of the Trust to any Principal
Shareholder for cash.
(iii) The sale, lease or exchange of all or any substantial part of
the assets of the Trust to any Principal Shareholder (except assets having an
aggregate fair market value of less than $1,000,000, aggregating for the purpose
of such computation all assets sold, leased or exchanged in any series of
similar transactions within a twelve-month period).
(iv) The sale, lease or exchange to the Trust or any subsidiary
thereof, in exchange for securities of the Trust of any assets of any Principal
Shareholder (except assets having an aggregate fair market value of less than
$1,000,000, aggregating for the purposes of such computation all assets sold,
leased or exchanged in any series of similar transactions within a twelve-month
period).
(d) The provisions of this Section shall not be applicable to (i)
any of the transactions described in paragraph (c) of this Section if the Board
of Trustees of the Trust shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
consistent with such transaction, or (ii) any such transaction with any
corporation of which a majority of the outstanding shares of all classes of
stock normally entitled to vote in elections of directors is owned of record or
beneficially by the Trust and its subsidiaries.
(e) The Board of Trustees shall have the power and duty to determine
for the purposes of this Section on the basis of information known to the Trust,
whether (i) a corporation, person or entity beneficially owns more than five
percent (5%) of the outstanding shares, (ii) a corporation, person or entity is
an "affiliate" or "associate" (as defined above) of another, (iii) the assets
being acquired or leased to or by the Trust or any subsidiary thereof,
constitute a substantial part of the assets of the Trust and have an aggregate
fair market value of less than $1,000,000, and (iv) the memorandum of
understanding referred to in paragraph (d) hereof is substantially consistent
with the transaction covered thereby. Any such determination shall be conclusive
and binding for all purposes of this Section.
ARTICLE X
SHAREHOLDERS
Section 10.1 Meetings of Shareholders. An annual meeting of the
Shareholders for the election of Trustees and for the transaction of such other
business as may properly be brought before the meeting shall be held if the
holding of such a meeting is required by law or by the rules of any exchange on
which Shares are listed for trading, on the second Thursday of May of each year,
or at such other date, at such place within or without the Commonwealth of
Massachusetts at such time as the Trustees shall designate from time to time. A
Special Meeting of Shareholders may be called at any time by a majority of the
Trustees and shall be called by any Trustee for any proper purpose upon written
request of Shareholders of the Trust holding in the aggregate: with respect to
22
matters not requiring voting by the Common Shareholders and Preferred
Shareholders as separate classes, not less than 51% of the outstanding Common
Shares and Preferred Shares voting as single class, such request specifying the
purpose or purposes for which such meeting is to be called; with respect to
matters requiring voting by the Common Shareholders and Preferred Shareholders
as separate classes, not less than 51% of the outstanding Common Shares and not
less than 51% of the outstanding Preferred Shares, unless some other percentage
for the Preferred Shares is set forth in the designation pursuant to Section 6.1
hereof, voting as separate classes, such request specifying the purpose or
purposes for which such meeting is,to be called; or, in the case of a meeting
for the purpose of voting on the question of removal of any Trustee or Trustees,
upon written request of the class of Shareholders entitled to vote on the
removal of such Trustee or Trustees holding in the aggregate not less than 10%
of the outstanding Shares of such class; or, in the case of a meeting for the
purpose of voting on the question of removal of the independent public
accountants of the Trust, upon written request of Common Shareholders and
Preferred Shareholders voting as a single class, holding in the aggregate not
less than 10% of the outstanding Common Shares and Preferred Shares. Any Special
Meeting shall be held within or without the Commonwealth of Massachusetts on
such day and at such time as the Trustees shall designate.
Section 10.2 Voting. Shareholders shall have no power to vote on any
matter except matters on which a vote of Shareholders is required by applicable
law, this Declaration or resolution of the Trustees. There shall be no
cumulative voting in the election or removal of Trustees.
Section 10.3 Notice of Meeting and Record Date. Notice of all
meetings of Shareholders, stating the time, place and purposes of the meeting,
shall be given by the Trustees by mail to each Shareholder of record entitled to
vote thereat at his registered address, mailed at least 10 days and not more
than 60 days before the meeting. Only the business stated in the notice of the
meeting shall be considered at such meeting. Any adjourned meeting may be held
as adjourned without further notice. For the purposes of determining the
Shareholders who are entitled to notice of and to vote at any meeting the
Trustees may, without closing the transfer books, fix a date not more than 60
days prior to the date of such meeting of Shareholders as a record date for the
determination of the Persons to be treated as Shareholders of record for such
purposes.
Section 10.4 Quorum and Required Vote. The holders of a majority of
outstanding Shares of each class or series or combined class entitled to vote
thereat of the Trust present in person or by proxy shall constitute a quorum at
any meeting of the Shareholders for purposes of conducting business on which a
vote of Shareholders of the Trust is being taken. Subject to any provision of
applicable law, this Declaration or resolution of the Trustees specifying a
greater or lesser vote requirement for the transaction of any item of business
at any meeting of Shareholders, the affirmative vote of a majority of the Shares
of any class or series present in person or represented by proxy and entitled to
vote on the subject matter shall be the act of the Shareholders of such class or
series with respect to such matter.
23
Section 10.5 Proxies, etc. At any meeting of Shareholders, any
holder of Shares entitled to vote thereat may vote by properly executed proxy,
provided that no proxy shall be voted at any meeting unless it shall have been
placed on file with the Secretary, or with such other officer or agent of the
Trust as the Secretary may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of a majority of the
Trustees, proxies may be solicited in the name of one or more Trustees or one or
more of the officers or employees of the Trust. Only Shareholders of record
shall be entitled to vote. Each full Share shall be entitled to one vote and
fractional Shares shall be entitled to a vote of such fractions. When any Share
is held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Share, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Share. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving invalidity shall rest on the challenger.
If the holder of any such Share is a minor or a person of unsound mind, and
subject to guardianship or to the legal control of any other person as regards
the charge or management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may be given in
person or by proxy.
Section 10.6 Reports. The Trustees shall cause to be prepared at
least annually and more frequently to the extent required by law a report of
operations containing a balance sheet and statement of income and undistributed
income of the Trust prepared in conformity with generally accepted accounting
principles and an opinion of an independent public accountant on such financial
statements. Copies of such reports shall be mailed to all Shareholders of record
within the time required by the 1940 Act. The Trustees shall, in addition,
furnish to the Shareholders at least semi-annually to the extent required by
law, interim reports containing an unaudited balance sheet as of the end of such
period and an unaudited statement of income and surplus for the period from the
beginning of the current fiscal year to the end of such period.
Section 10.7 Inspection of Records. The records of the Trust shall
be open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation.
Section 10.8 Shareholder Action by Written Consent. Any action which
may be taken by Shareholders by vote may be taken without a meeting if the
holders entitled to vote thereon of the proportion of Shares of the class or
classes required for approval of such action at a meeting of Shareholders
pursuant to Section 10.4 consent to the action in writing and the written
consents be filed with the records of the meetings of Shareholders. Such consent
shall be treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE XI
MISCELLANEOUS
24
Section 11.1 Filing. This Declaration and any amendment hereto shall
be filed in the office of the Secretary of the Commonwealth of Massachusetts and
in such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Each amendment so filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein, and unless such amendment or such certificate sets forth some
later time for the effectiveness of such amendment, such amendment shall be
effective upon its filing. 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 and
shall upon filing with the Secretary of the Commonwealth of Massachusetts, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
Section 11.2 Governing Law. This Declaration is executed by the
Trustees and delivered in The Commonwealth of Massachusetts and with reference
to the laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.
Section 11.3 Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 11.4 Reliance by Third Parties. Any certificate executed by
an individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying: (a) the number or identity of Trustees or Shareholders,
(b) the due authorization of the execution of any instrument or writing, (c) the
form of any vote passed at a meeting of Trustees or Shareholders, (d) the fact
that the number of Trustees or Shareholders present at any meeting or executing
any written instrument satisfies the requirements of this Declaration, (e) the
form of any By-Laws adopted by or the identity of any officers elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.
Section 11.5 Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code of 1986, or any amendments or successor
statute thereto, or with other applicable laws and regulations, the conflicting
provision shall be deemed not to constitute and never to have constituted a part
of the Declaration; provided, however, that such determination shall not affect
any of the remaining provisions of the Declaration or render invalid or improper
any action taken or omitted prior to such determination.
25
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
apply only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
Section 11.6 Use of the Names "Van Kampen Merritt". Van Kampen
Merritt Inc. ("Van Kampen") has consented to the use by the Trust of the
identifying words or names "Van Kampen Merritt" or "VKM" in the name of the
Trust. Such consent is conditioned upon the employment of Van Kampen its
successors or any affiliate thereof, as investment advisor or distributor of the
Trust. As between the Trust and itself, Van Kampen controls the use of the name
of the Trust insofar as such name contains "Van Kampen Merritt" or "VKM". The
names or identifying words "Van Kampen Merritt" or "VKM" may be used from time
to time in other connections and for other purposes by Van Kampen or affiliated
entities. Van Kampen may require the Trust to cease using "Van Kampen Merritt"
or "VKM" in the name of the Trust if the Trust ceases to employ, for any reason,
Van Kampen, an affiliate, or any successor as investment advisor or distributor
of the Trust.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
/s/ Weston B. Wetherell /s/ Dennis J. McDonnell
- ------------------------------------ -----------------------------------
Weston B. Wetherell Dennis J. McDonnell
Being all the members of the Board
/s/ Edward C. Wood, III of Trustees of the Trust
- ------------------------------------
Edward C. Wood, III
State of Illinois )
) ss
County of Cook )
Then personally appeared before me Dennis J. McDonnell, Edward C.
Wood, III and Weston B. Wetherell who acknowledged the foregoing instrument to
be their free act and deed and the free act and deed of the Trustees of Van
Kampen Merritt Select Sector Municipal Trust.
Before me,
/s/ Sue Ann Beardsley
-------------------------------
Notary Public
My Commission Expires: May 25, 1994
26
CERTIFICATE OF AMENDMENT
OF
DECLARATION OF TRUST
Pursuant to Chapter 182 Section 2 of the Massachusetts General Laws
Van Kampen Merritt Select Sector Municipal Trust, a voluntary
association with transferable shares organized and existing under and by virtue
of the laws of the Commonwealth of Massachusetts (the "Trust"), DOES HEREBY
CERTIFY:
FIRST: That the Directors considered a proposal to change the
Trust's name to delete the word "Merritt" and substitute the words "American
Capital." Subsequently, the Directors unanimously adopted a resolution setting
forth a proposed amendment to the Declaration of Trust, declaring said amendment
to be advisable. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the proper officers of each Trust be, and each of them
hereby is authorized and directed, in the name and on behalf of such
Trust, to take all actions to cause to be prepared and filed all other
documents, to make all expenditures and to execute all instruments by them
to be necessary or desirable in effectuating a name change for each Trust
to delete the word "Merritt" and substitute the words "American Capital",
including without limitation the preparation of an amendment to each
Trust's Declaration of Trust, notification to the exchanges, the
employment or retention of all such counsel, accountants and experts as
may be deemed advisable by them, and the taking of such actions, the
execution and filing or delivery of such documents, and the performance of
such acts by them shall be conclusive evidence of their approval thereof
and the approval thereof and authority therefor by and from such Trust.
SECOND: That the proper officers of the Trust have authorized and
directed that the Declaration of Trust be amended by changing the first
paragraph of Article I thereof so that as amended, said paragraph shall be and
read as follows:
Section 1.1 Name, Principal Office and Resident Agent. The name of
the trust created hereby is the Van Kampen American Capital Select Sector
Municipal Trust.
THIRD: That such name change shall become effective as of the close
of business on Friday, December 29, 1995.
27
IN WITNESS WHEREOF, Van Kampen Merritt Select Sector Municipal Trust
has caused this Certificate of Amendment to be executed in its name this 29 day
of December, 1995.
VAN KAMPEN MERRITT SELECT SECTOR
MUNICIPAL TRUST
By: /s/ Dennis J. McDonnell
-------------------------------
Name: Dennis J. McDonnell
Title: Trustee
28
CERTIFICATE OF AMENDMENT
TO THE
DECLARATION OF TRUST
OF
Van Kampen American Capital Select Sector Municipal Trust
Pursuant to 950 CMR 109.04 of the Massachusetts General Law
1. The name of the trust is Van Kampen American Capital Select
Sector Municipal Trust (the "Trust") and its Declaration of Trust was originally
filed with the Commonwealth of Massachusetts on September 10, 1993.
2. Pursuant to this Certificate of Amendment, the name of the Trust
will be changes to "Van Kampen Select Sector Municipal Trust". To effect this
change, Article 1. of the Declaration of Trust is hereby amended to read as
follows:
1. The name of the Trust is: Van Kampen Select Sector
Municipal Trust ("Trust").
3. Such name change shall become effective as of the close of
business on Friday, August 28, 1998.
IN WITNESS WHEREOF, this Certificate of Amendment has been duly
executed this 6th day of August, 1998
/s/ Wayne W. Whalen
-------------------------------
Name: Wayne W. Whalen
As Trustee and not individually
29
CERTIFICATE OF AMENDMENT
TO THE
DECLARATION OF TRUST
OF
Van Kampen Select Sector Municipal Trust
Pursuant to 950 CMR 109.04 of the Massachusetts General Law
1. The name of the trust is Van Kampen Select Sector Municipal Trust
(the "Trust") and its Declaration of Trust was originally filed with the
Commonwealth of Massachusetts on September 9, 1993.
2. Pursuant to this Certificate of Amendment, the number of Trustees
of the Trust shall be increased to fifteen (15). To effect this change, Article
II, Section 2.1 of the Declaration of Trust is hereby amended to read as
follows:
ARTICLE II
TRUSTEES
Section 2.1 Number of Trustees. The number of Trustees shall initially be
three (3), and after a registration statement under the Securities Act of
1933, as amended, covering the first public offering of securities of the
Trust shall have been filed, the number of Trustees shall be such number
as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that, following the date such
registration statement shall have become effective (the "effective date"),
the number of Trustees shall in no event be less than three (3) nor more
than fifteen (15), except as such number shall be increased in connection
with the rights of the holders of the Preferred Shares to elect a majority
of the Trustees, as provided for in Section 2.2 hereof. No reduction in
the number of Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term unless the Trustee is
specifically removed pursuant to Section 2.2 of this Article II at the
time of the decrease.
3. Such amendment shall become effective as of the close of business
on Friday, July 11, 2003.
IN WITNESS WHEREOF, this Certificate of Amendment has been duly
executed this 11th day of July, 2003
/s/ Wayne W. Whalen
-------------------------------
Name: Wayne W. Whalen
As Trustee and not individually
30
CERTIFICATE OF AMENDMENT
TO THE DECLARATION OF TRUST
OF
VAN KAMPEN SELECT SECTOR MUNICIPAL TRUST
(THE "TRUST")
1. The Declaration of Trust amended by this document was
originally filed with the Secretary of the Commonwealth of Massachusetts on
September 9, 1993.
2. Pursuant to this Certificate of Amendment, the principal
place of business of the Trust shall be changed to 1221 Avenue of the Americas,
New York, New York 10020. To effect the aforesaid amendment, Article 1, Section
1.1, of the Declaration of Trust of the Trust, relating to the principal office
of the Trust, is amended to read as follows:
ARTICLE I
NAME, PRINCIPAL OFFICE, RESIDENT AGENT AND DEFINITIONS
Section 1.1 Name, Principal Office and Resident Agent. The
name of the trust created hereby is the "Van Kampen Select Sector Municipal
Trust" (the "Trust").
The post office address of the principal office of the Trust
is 1221 Avenue of the Americas, New York, New York 10020. The name of the
resident agent of the Trust in the Commonwealth of Massachusetts is CT
Corporation System, a Delaware corporation, and the post office address of the
resident agent is 101 Federal Street, Boston, Massachusetts 02110.
ARTICLE II
TRUSTEES
Section 2.1 of the Declaration of Trust with respect to the
names of the Trustees is hearby amended by removing Dennis J. McDonnell, One
Parkview Plaza, Oakbrook Terrace, Illinois 60181 and adding Mitchell M. Merin,
1221 Avenue of the Americas, New York, New York 10020.
3. Such amendment shall become effective as of the close of
business on June 15, 2004.
4. The amendment herein provided for was authorized in
accordance with law.
IN WITNESS WHEREOF, the undersigned has signed these presents
all on June 15, 2004.
/s/ Wayne W. Whalen
--------------------------------
Name: Wayne W. Whalen
As Trustee, and not individually
ACKNOWLEDGEMENT
STATE OF ILLINOIS)
) SS
COUNTY OF COOK )
On this 15th day of June, 2004, before me personally appeared
Wayne W. Whalen, to me known to be the person described in and who executed the
foregoing instrument, and acknowledged that he executed the same as his free act
and deed.
/s/ Kurt Balder
-----------------------------
Notary Public
My commission expires: 3/8/06
2