THIRD AMENDED AND RESTATED
BYLAWS
OF
PIMCO CORPORATE OPPORTUNITY FUND
(Amended and Restated as of December 11, 2008)
ARTICLE 1
AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
1.1 PRINCIPAL OFFICE OF THE TRUST. A principal office of the Trust
shall be located in New York, New York. The Trust may have other principal
offices within or without Massachusetts as the Trustees may determine and
authorize.
1.2 AGREEMENT AND DECLARATION OF TRUST. These Third Amended and
Restated Bylaws (the "Bylaws") shall be subject to the Agreement and Declaration
of Trust, as amended or restated from time to time (the "Declaration of Trust"),
of PIMCO Corporate Opportunity Fund, the Massachusetts business trust
established by the Declaration of Trust (the "Trust"). Capitalized terms used in
these Bylaws and not otherwise defined herein shall have the meanings given to
such terms in the Declaration of Trust.
ARTICLE 2
MEETINGS OF TRUSTEES
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as the annual meeting of the Shareholders (as defined in the
Declaration of Trust).
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer or the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to the Trustee of a special
meeting to send notice by mail at least forty-eight hours, or by telegram, telex
or telecopy or other electronic facsimile transmission method at least
twenty-four hours, before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her, before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
ARTICLE 3
OFFICERS AND CHAIRMAN OF THE TRUSTEES
3.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
President, a Treasurer, a Secretary, a Chief Compliance Officer and such other
officers, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may but need not be a Trustee or a
Shareholder. Any two or more offices may be held by the same person.
3.2 ELECTION. The President, the Treasurer, and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at the same meeting at which the President, Treasurer
and Secretary are elected, or at any other time. If required by the 1940 Act,
the Chief Compliance Officer shall be elected or appointed by a majority of the
trustees, as well as a majority of the Trustees who are not Interested Persons
of the Trust ("Independent Trustees"), and otherwise in accordance with Rule
38a-1 (or any successor rule) under the 1940 Act, as such rule may be amended
from time to time ("Rule 38a-1"). Vacancies in any office may be filled at any
time.
3.3 TENURE. The Chairman of the Trustees, if one is elected, the
President, the Treasurer, the Secretary and the Chief Compliance Officer shall
hold office until their respective successors are chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed with or without cause
or becomes disqualified, provided that, if required by the 1940 Act, any renewal
of the Chief Compliance Officer shall be in accordance with Rule 38a-1. Each
other officer shall hold office and each agent of the Trust shall retain
authority at the pleasure of the Trustees.
3.4 POWERS. Subject to the other provisions of these Bylaws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were
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organized as a Massachusetts business corporation and such other duties and
powers as the Trustees may from time to time designate.
3.5 CHAIRMAN OF THE TRUSTEES. There shall be an office of the Chairman
of the Trustees, which shall serve of behalf of the Trustees, but shall not be
an officer of the Trust. The office of the Chairman of the Trustees may be held
by more than one person. Any Chairman of the Trustees shall be elected by a
majority of the Trustees, as well as a majority of the Independent Trustees if
required by the 1940 Act. If required by the 1940 Act, any Chairman of the
Trustees shall be an Independent Trustee and may, but need not, be a
shareholder. The powers and the duties of the Chairman of the Trustees shall
include any and all such powers and duties relating to the operations of the
Trustees as, from time to time, may be conferred upon or assigned to such office
by the Trustees or as may be required by law, provided that the Chairman of the
Trustees shall have no individual authority to act for the Trust as an officer
of the Trust. In carrying out the responsibilities and duties of the office, the
Chairman of the Trustees may seek assistance and input from other Trustees or
Committees of the Trustees, officers of the Trust and the Trust's investment
adviser(s) and other service providers, as deemed necessary or appropriate. The
Trustees, including a majority of the Independent Trustees if required by the
1940 Act, may appoint one or more persons to perform the duties of the Chairman
of the Trustees, in the event of his absence at any meeting or in the event of
his disability.
3.6 PRESIDENT; VICE PRESIDENT. The President shall be the chief
executive officer. Any Vice President shall have such duties and powers as may
be designated from time to time by the Trustees or the President.
3.7 TREASURER; ASSISTANT TREASURER. The Treasurer shall be the chief
financial and accounting officer of the Trust, and shall, subject to the
provisions of the Declaration of Trust and to any arrangement made by the
Trustees with a custodian, investment adviser, sub-adviser or manager, or
transfer, shareholder servicing or similar agent, be in charge of the valuable
papers, books of account and accounting records of the Trust, and shall have
such other duties and powers as may be designated from time to time by the
Trustees or by the President. Any Assistant Treasurer shall have such duties and
powers as may be designated from time to time by the Trustees or the President.
3.8 SECRETARY; ASSISTANT SECRETARY. The Secretary shall record all
proceedings of the Shareholders and the Trustees in books to be kept therefor,
which books or a copy thereof shall be kept at the principal office of the
Trust. In the absence of the Secretary from any meeting of the Shareholders or
Trustees, an Assistant Secretary, or if there be none or if he or she is absent,
a temporary secretary chosen at such meeting shall record the proceedings
thereof in the aforesaid books. Any Assistant Secretary shall have such duties
and powers as may be designated from time to time by the Trustees or the
President.
3.9 CHIEF COMPLIANCE OFFICER. The Chief Compliance Officer shall
perform the duties and have the responsibilities of the chief compliance officer
of the Trust, including if required by the 1940 Act any such duties and
responsibilities imposed by Rule 38a-1, and shall have such other duties and
powers as may be designated from time to time by the Trustees.
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3.10 RESIGNATIONS. Any officer may resign at any time by written
instrument signed by him or her and delivered to the Chairman of the Trustees,
if any, the President or the Secretary, or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time. Except to the extent expressly provided in a written agreement
with the Trust, no officer resigning and no officer removed shall have any right
to any compensation for any period following his or her resignation or removal,
or any right to damages on account of such removal.
ARTICLE 4
COMMITTEES
4.1 QUORUM; VOTING. Except as provided below or as otherwise
specifically provided in the resolutions constituting a Committee of the
Trustees and providing for the conduct of its meetings, a majority of the
members of any Committee of the Trustees shall constitute a quorum for the
transaction of business, and any action of such a Committee may be taken at a
meeting by a vote of a majority of the members present (a quorum being present)
or evidenced by one or more writings signed by such a majority. Members of a
Committee may participate in a meeting of such Committee by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.
With respect to a Valuation Committee of the Trustees, one or more of
the Committee members shall constitute a quorum for the transaction of business.
Except as specifically provided in the resolutions constituting a
Committee of the Trustees and providing for the conduct of its meetings, Article
2, Sections 2.2 and 2.3 of these Bylaws relating to special meetings shall
govern the notice requirements for Committee meetings, except that it shall be
sufficient notice to a Valuation Committee of the Trustees to send notice by
telegram, telex or telecopy or other electronic means (including by telephone
voice-message or e-mail) at least fifteen minutes before the meeting.
ARTICLE 5
REPORTS
5.1 GENERAL. The Trustees and officers shall render reports at the
time and in the manner required by the Declaration of Trust or any applicable
law. Officers and Committees shall render such additional reports as they may
deem desirable or as may from time to time be required by the Trustees.
ARTICLE 6
FISCAL YEAR
6.1 GENERAL. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, and the subsequent fiscal
years shall end on such date in subsequent years.
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ARTICLE 7
SEAL
7.1 GENERAL. The seal of the Trust shall, subject to alteration by the
Trustees, consist of a flat-faced die with the word "Massachusetts," together
with the name of the Trust and the year of its organization cut or engraved
thereon; provided, however, that unless otherwise required by the Trustees, the
seal shall not be necessary to be placed on, and its absence shall not impair
the validity of, any document, instrument or other paper executed and delivered
by or on behalf of the Trust.
ARTICLE 8
EXECUTION OF PAPERS
8.1 GENERAL. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts and other obligations made,
accepted or endorsed by the Trust shall be executed by the President, any Vice
President, the Treasurer or by whomever else shall be designated for that
purpose by vote of the Trustees, and need not bear the seal of the Trust.
ARTICLE 9
ISSUANCE OF SHARE CERTIFICATES
9.1 SHARE CERTIFICATES. Except as provided in Article 11 hereof, each
Shareholder shall be entitled to a certificate stating the number of Shares (as
defined in the Declaration of Trust) owned by him or her, in such form as shall
be prescribed from time to time by the Trustees. Such certificates shall be
signed by the President or any Vice President and by the Treasurer or any
Assistant Treasurer. Such signatures may be by facsimile if the certificate is
signed by a transfer agent, or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall cease to be such officer
before such certificate is issued, it may be issued by the Trust with the same
effect as if he or she were such officer at the time of its issuance.
Notwithstanding the foregoing, in lieu of issuing certificates for
Shares, the Trustees or the transfer agent may either issue receipts therefor or
may keep accounts upon the books of the Trust for the record holders of such
Shares, who shall in either case be deemed, for all purposes hereunder, to be
the holders of certificates for such Shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
9.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction
or the mutilation of a share certificate, a duplicate certificate may be issued
in place thereof, upon such terms as the Trustees shall prescribe.
9.3 ISSUANCE OF NEW CERTIFICATES TO PLEDGEE. A pledgee of Shares
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially
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describes the debt or duty that is intended to be secured thereby. Such new
certificate shall express on its face that it is held as collateral security,
and the name of pledgor shall be stated thereon, who alone shall be liable as a
Shareholder and entitled to vote thereon.
9.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. Notwithstanding
anything to the contrary in this Article 9, the Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each Shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not effect the ownership of
Shares in the Trust.
ARTICLE 10
SHAREHOLDERS' VOTING POWERS AND MEETINGS
10.1 VOTING POWERS. The Shareholders shall have power to vote only (i)
for the election or removal of Trustees as provided in Article IV, Sections 1
and 3 of the Declaration of Trust and Article 11 hereto, (ii) with respect to
any Manager or sub-adviser as provided in Article IV, Section 8 of the
Declaration of Trust to the extent required by the 1940 Act, (iii) with respect
to certain transactions and other matters to the extent and as provided in
Article V, Sections 2 and 3 of the Declaration of Trust and Article 11 hereto,
(iv) with respect to any termination of this Trust to the extent and as provided
in Article IX, Section 4 of the Declaration of Trust and Article 11 hereto (for
the avoidance of any doubt, Shareholders shall have no separate right to vote
with respect to the termination of the Trust or a series or class of Shares if
the Trustees (including the Continuing Trustees) exercise their right to
terminate the Trust or such series or class pursuant to clauses (ii) and (y) of
Article IX, Section 4 of the Declaration of Trust), (v) with respect to any
amendment of the Declaration of Trust to the extent and as provided in Article
IX, Section 7 of the Declaration of Trust and Articles 11 and 12 hereto, (vi) to
the same extent as the stockholders of a Massachusetts business corporation as
to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vii) with respect to such additional matters relating
to the Trust as may be required by law, the Declaration of Trust, these Bylaws
or any registration of the Trust with the Securities and Exchange Commission (or
any successor agency) or any state, or as the Trustees may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote, except as otherwise provided in the Declaration
of Trust, these Bylaws, or required by applicable law. Except as otherwise
provided in the Declaration of Trust or these Bylaws or required by applicable
law, all Shares of the Trust then entitled to vote shall be voted in the
aggregate as a single class without regard to classes or series of Shares. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy. A proxy with respect to Shares held in the name of two or
more persons shall be valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. The placing of a Shareholder's name on a proxy
pursuant to telephonic or electronically transmitted instructions obtained
pursuant to procedures reasonably designed to verify that such instructions have
been authorized by such Shareholder shall constitute execution of such proxy by
or on behalf of such
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Shareholder. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until Shares of a
particular class or series are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, the Declaration of Trust
or these Bylaws to be taken by Shareholders as to such class or series.
10.2 VOTING POWER AND MEETINGS. Except as provided in the next
sentence, regular meetings of the Shareholders for the election of Trustees and
the transaction of such other business as may properly come before the meeting
shall be held, so long as Common Shares are listed for trading on the New York
Stock Exchange, on at least an annual basis, on such day and at such place as
shall be designated by the Trustees. In the event that such a meeting is not
held in any annual period if so required, whether the omission be by oversight
or otherwise, a subsequent special meeting may be called by the Trustees and
held in lieu of such meeting with the same effect as if held within such annual
period. Special meetings of the Shareholders or any or all classes or series of
Shares may also be called by the Trustees from time to time for such other
purposes as may be prescribed by law, by the Declaration of Trust or by these
Bylaws, or for the purpose of taking action upon any other matter deemed by the
Trustees to be necessary or desirable. A special meeting of Shareholders may be
held at any such time, day and place as is designated by the Trustees. Written
notice of any meeting of Shareholders, stating the date, time, place and purpose
of the meeting, shall be given or caused to be given by a majority of the
Trustees and a majority of the Continuing Trustees at least seven days before
such meeting to each Shareholder entitled to vote thereat by leaving such notice
with the Shareholder at his or her residence or usual place of business or by
mailing such notice, postage prepaid, to the Shareholder's address as it appears
on the records of the Trust. Such notice may be given by the Secretary or an
Assistant Secretary or by any other officer designated for such purpose by the
Trustees. Whenever notice of a meeting is required to be given to a Shareholder
under the Declaration of Trust or these Bylaws, a written waiver thereof,
executed before or after the meeting by such Shareholder or his or her attorney
thereunto authorized and filed with the records of the meeting, shall be deemed
equivalent to such notice. Notice of a meeting need not be given to any
Shareholder who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to such Shareholder. No ballot shall be required
for any election unless required by a Shareholder present or represented at the
meeting and entitled to vote in such election. Notwithstanding anything to the
contrary in this Section 10.2, no matter shall be properly before any annual or
special meeting of Shareholders and no business shall be transacted thereat
unless in accordance with Section 10.6 of these Bylaws.
10.3 QUORUM AND REQUIRED VOTE. Except when a larger quorum is required
by any provision of law or the Declaration of Trust or these Bylaws, thirty
percent (30%) of the Shares entitled to vote on a particular matter shall
constitute a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or the Declaration of Trust or these
Bylaws permits or requires that holders of any class or series of Shares shall
vote as an individual class or series, then thirty percent (30%) (unless a
larger quorum is required as specified above) of Shares of that class or series
entitled to vote shall be necessary to constitute a quorum for the transaction
of business by that class or series. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a reasonable
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time after the date set for the original meeting, without the necessity of
further notice. Except when a different vote is required by any provision of law
or the Declaration of Trust or these Bylaws, a plurality of the quorum of Shares
necessary for the transaction of business at a Shareholders' meeting shall
decide any questions and a plurality of Shares voted shall elect a Trustee,
provided that where any provision of law or of the Declaration of Trust or these
Bylaws permits or requires that the holders of any class or series of Shares
shall vote as an individual class or series, then a plurality of the quorum of
Shares of that class or series necessary for the transaction of business by that
class or series at a Shareholders' meeting shall decide that matter insofar as
that class or series is concerned.
10.4 ACTION BY WRITTEN CONSENT. Any action taken by Shareholders may
be taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of law or the Declaration of Trust or these Bylaws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
10.5 RECORD DATES. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 90
days before the date of any meeting of Shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the Shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only Shareholders of record on such record date shall have the
right notwithstanding any transfer of Shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any of such
purposes close the register or transfer books for all or any part of such
period.
10.6 ADVANCE NOTICE OF SHAREHOLDER NOMINEES FOR TRUSTEES AND OTHER
SHAREHOLDER PROPOSALS.
(a) As used in this Section 10.6, the term "annual meeting"
refers to any annual meeting of Shareholders as well as any special meeting
held in lieu of an annual meeting as described in the first two sentences
of Section 10.2 of these Bylaws, and the term "special meeting" refers to
all meetings of Shareholders other than an annual meeting or a special
meeting in lieu of an annual meeting.
(b) The matters to be considered and brought before any annual or
special meeting of Shareholders shall be limited to only such matters,
including the nomination and election of Trustees, as shall be brought
properly before such meeting in compliance with the procedures set forth in
this Section 10.6. Only persons who are nominated in accordance with the
procedures set forth in this Section 10.6 shall be eligible for election as
Trustees, and no proposal to fix the number of Trustees shall be brought
before an annual or special meeting of Shareholders or otherwise transacted
unless in accordance with the procedures set forth in this Section 10.6,
except as may be otherwise provided in these Bylaws with respect to the
right of
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holders of preferred shares of beneficial interest, if any, of the Trust to
nominate and elect a specified number of Trustees in certain circumstances.
(c) For any matter to be properly before any annual meeting, the
matter must be (i) specified in the notice of meeting given by or at the
direction of a majority of the Trustees and a majority of the Continuing
Trustees pursuant to Section 10.2 of these Bylaws, (ii) otherwise brought
before the meeting by or at the direction of a majority of the Continuing
Trustees (or any duly authorized committee thereof), or (iii) brought
before the meeting in the manner specified in this Section 10.6(c) by a
Shareholder of record entitled to vote at the meeting or by a Shareholder
(a "Beneficial Owner") that holds Shares entitled to vote at the meeting
through a nominee or "street name" holder of record and that can
demonstrate to the Trust such indirect ownership and such Beneficial
Owner's entitlement to vote such Shares, provided that the Shareholder was
the Shareholder of record or the Beneficial Owner held such Shares at the
time the notice provided for in this Section 10.6(c) is delivered to the
Secretary.
In addition to any other requirements under applicable law and the
Declaration of Trust and these Bylaws, persons nominated by Shareholders for
election as Trustees and any other proposals by Shareholders may be properly
brought before an annual meeting only pursuant to timely notice (the
"Shareholder Notice") in writing to the Secretary. To be timely, the Shareholder
Notice must be delivered to or mailed and received at the principal executive
offices of the Trust not less than forty-five (45) nor more than sixty (60) days
prior to the first anniversary date of the date on which the Trust first mailed
its proxy materials for the prior year's annual meeting; PROVIDED, HOWEVER, with
respect to the Trust's first annual meeting, the Shareholder Notice must be so
delivered or mailed and so received on or before January 1, 2004; PROVIDED
FURTHER, HOWEVER, if and only if the annual meeting is not scheduled to be held
within a period that commences thirty (30) days before the first anniversary
date of the annual meeting for the preceding year and ends thirty (30) days
after such anniversary date (an annual meeting date outside such period being
referred to herein as an "Other Annual Meeting Date"), such Shareholder Notice
must be given in the manner provided herein by the later of the close of
business on (i) the date forty-five (45) days prior to such Other Annual Meeting
Date or (ii) the tenth (10th) business day following the date such Other Annual
Meeting Date is first publicly announced or disclosed.
Any Shareholder desiring to nominate any person or persons (as the
case may be) for election as a Trustee or Trustees of the Trust shall deliver,
as part of such Shareholder Notice: (i) a statement in writing setting forth (A)
the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Trust owned of record or beneficially by each
such person or persons, as reported to such Shareholder by such nominee(s); (C)
any other information regarding each such person required by paragraphs (a),
(d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), adopted by the Securities and Exchange Commission
(or the corresponding provisions of any regulation or rule subsequently adopted
by the Securities and Exchange Commission or any successor agency applicable to
the Trust); (D)
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any other information regarding the person or persons to be nominated that would
be required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitation of proxies for election of Trustees or
directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder; and (E) whether such Shareholder believes
any nominee is or will be an "interested person" of the Trust (as defined in the
Investment Company Act of 1940, as amended) and, if not an "interested person,"
information regarding each nominee that will be sufficient for the Trust to make
such determination; and (ii) the written and signed consent of the person or
persons to be nominated to be named as nominees and to serve as Trustees if
elected. In addition, the Trustees may require any proposed nominee to furnish
such other information as they may reasonably require or deem necessary to
determine the eligibility of such proposed nominee to serve as a Trustee. Any
Shareholder Notice required by this Section 10.6(c) in respect of a proposal to
fix the number of Trustees shall also set forth a description of and the text of
the proposal, which description and text shall state a fixed number of Trustees
that otherwise complies with applicable law, these Bylaws and the Declaration of
Trust.
Without limiting the foregoing, any Shareholder who gives a
Shareholder Notice of any matter proposed to be brought before a Shareholder
meeting (whether or not involving nominees for Trustees) shall deliver, as part
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such Shareholder
favors the proposal; (iii) such Shareholder's name and address as they appear on
the Trust's books; (iv) any other information relating to the Shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Trust owned beneficially and of record by such Shareholder; (vi)
any material interest of such Shareholder in the matter proposed (other than as
a Shareholder); (vii) a representation that the Shareholder intends to appear in
person or by proxy at the Shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the Shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the Shareholder; and (ix) in the case of a
Beneficial Owner, evidence establishing such Beneficial Owner's indirect
ownership of, and entitlement to vote, Shares at the meeting of Shareholders. As
used in this Section 10.6, Shares "beneficially owned" shall mean all Shares
which such person is deemed to beneficially own pursuant to Rules 13d-3 and
13d-5 under the Exchange Act.
(d) For any matter to be properly before any special meeting, the
matter must be specified in the notice of meeting given by or at the
direction of a majority of the Trustees and a majority of the Continuing
Trustees pursuant to Section 10.2 of these Bylaws. In the event the Trust
calls a special meeting for the purpose of electing one or more Trustees,
any Shareholder may nominate a person or persons (as the case may be) for
election to such position(s) as specified in the Trust's notice of meeting
if and only if the Shareholder provides a notice containing the information
required in the Shareholder Notice to the Secretary required with respect
to annual meetings by Section 10.6(c) hereof, and such notice is
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delivered to or mailed and received at the principal executive office of
the Trust not later than the close of business on the tenth (10th) day
following the day on which the date of the special meeting and of the
nominees proposed by the Trustees to be elected at such meeting are
publicly announced or disclosed.
(e) For purposes of this Section 10.6, a matter shall be deemed
to have been "publicly announced or disclosed" if such matter is disclosed
in a press release reported by the Dow Xxxxx News Service, Associated Press
or comparable national news service, in a document publicly filed by the
Trust with the Securities and Exchange Commission, or in a Web site
accessible to the public maintained by the Trust or by its investment
adviser or an affiliate of such investment adviser with respect to the
Trust.
(f) In no event shall an adjournment or postponement (or a public
announcement thereof) of a meeting of Shareholders commence a new time
period (or extend any time period) for the giving of notice as provided in
this Section 10.6.
(g) The person presiding at any meeting of Shareholders, in
addition to making any other determinations that may be appropriate to the
conduct of the meeting, shall have the power and duty to determine (i)
whether a nomination or proposal of other matters to be brought before a
meeting and notice thereof have been duly made and given in the manner
provided in this Section 10.6 and elsewhere in these Bylaws and the
Declaration of Trust and (ii) if not so made or given, to direct and
declare at the meeting that such nomination and/or such other matters shall
be disregarded and shall not be considered. Any determination by the person
presiding shall be binding on all parties absent manifest error.
(h) Notwithstanding anything to the contrary in this Section 10.6
or otherwise in these Bylaws, unless required by federal law, no matter
shall be considered at or brought before any annual or special meeting
unless such matter has been approved for these purposes by a majority of
the Continuing Trustees and, in particular, no Beneficial Owner shall have
any rights as a Shareholder except as may be required by federal law.
Furthermore, nothing in this Section 10.6 shall be construed as creating
any implication or presumption as to the requirements of federal law.
ARTICLE 11
STATEMENT CREATING FIVE SERIES OF AUCTION MARKET PREFERRED SHARES
A series of Auction Market Preferred Shares, Series M: 4,520 preferred
shares of beneficial interest, par value $0.00001 per share, liquidation
preference $25,000 per share plus an amount equal to accumulated but unpaid
dividends (whether or not earned or declared) thereon, is hereby designated
"Auction Market Preferred Shares, Series M." Each share of Auction Market
Preferred Shares, Series M (sometimes referred to herein as "Series M AMPS") may
be issued on a date to be determined by the Board of Trustees of the Trust or
pursuant to their delegated authority; has an Initial Dividend Rate and an
Initial Dividend Payment Date as shall be determined in advance of the issuance
thereof by the Board of Trustees of the Trust or pursuant to their delegated
authority; and has such other preferences, voting powers, limitations
11
as to dividends, qualifications and terms and conditions of redemption as are
set forth in these Bylaws. The Series M AMPS shall constitute a separate series
of preferred shares of beneficial interest of the Trust, and each share of
Series M AMPS shall be identical.
A series of Auction Market Preferred Shares, Series T: 4,520 preferred
shares of beneficial interest, par value $0.00001 per share, liquidation
preference $25,000 per share plus an amount equal to accumulated but unpaid
dividends (whether or not earned or declared) thereon, is hereby designated
"Auction Market Preferred Shares, Series T." Each share of Auction Market
Preferred Shares, Series T (sometimes referred to herein as "Series T AMPS") may
be issued on a date to be determined by the Board of Trustees of the Trust or
pursuant to their delegated authority; has an Initial Dividend Rate and an
Initial Dividend Payment Date as shall be determined in advance of the issuance
thereof by the Board of Trustees of the Trust or pursuant to their delegated
authority; and has such other preferences, voting powers, limitations as to
dividends, qualifications and terms and conditions of redemption as are set
forth in these Bylaws. The Series T AMPS shall constitute a separate series of
preferred shares of beneficial interest of the Trust, and each share of Series T
AMPS shall be identical.
A series of Auction Market Preferred Shares, Series W: 4,520 preferred
shares of beneficial interest, par value $0.00001 per share, liquidation
preference $25,000 per share plus an amount equal to accumulated but unpaid
dividends (whether or not earned or declared) thereon, is hereby designated
"Auction Market Preferred Shares, Series W." Each share of Auction Market
Preferred Shares, Series W (sometimes referred to herein as "Series W AMPS") may
be issued on a date to be determined by the Board of Trustees of the Trust or
pursuant to their delegated authority; has an Initial Dividend Rate and an
Initial Dividend Payment Date as shall be determined in advance of the issuance
thereof by the Board of Trustees of the Trust or pursuant to their delegated
authority; and has such other preferences, voting powers, limitations as to
dividends, qualifications and terms and conditions of redemption as are set
forth in these Bylaws. The Series W AMPS shall constitute a separate series of
preferred shares of beneficial interest of the Trust, and each share of Series W
AMPS shall be identical.
A series of Auction Market Preferred Shares, Series TH: 4,520
preferred shares of beneficial interest, par value $0.00001 per share,
liquidation preference $25,000 per share plus an amount equal to accumulated but
unpaid dividends (whether or not earned or declared) thereon, is hereby
designated "Auction Market Preferred Shares, Series TH." Each share of Auction
Market Preferred Shares, Series TH (sometimes referred to herein as "Series TH
AMPS") may be issued on a date to be determined by the Board of Trustees of the
Trust or pursuant to their delegated authority; has an Initial Dividend Rate and
an Initial Dividend Payment Date as shall be determined in advance of the
issuance thereof by the Board of Trustees of the Trust or pursuant to their
delegated authority; and has such other preferences, voting powers, limitations
as to dividends, qualifications and terms and conditions of redemption as are
set forth in these Bylaws. The Series TH AMPS shall constitute a separate series
of preferred shares of beneficial interest of the Trust, and each share of
Series TH AMPS shall be identical.
A series of Auction Market Preferred Shares, Series F: 4,520 preferred
shares of beneficial interest, par value $0.00001 per share, liquidation
preference $25,000 per share plus
12
an amount equal to accumulated but unpaid dividends (whether or not earned or
declared) thereon, is hereby designated "Auction Market Preferred Shares, Series
F." Each share of Auction Market Preferred Shares, Series F (sometimes referred
to herein as "Series F AMPS") may be issued on a date to be determined by the
Board of Trustees of the Trust or pursuant to their delegated authority; has an
Initial Dividend Rate and an Initial Dividend Payment Date as shall be
determined in advance of the issuance thereof by the Board of Trustees of the
Trust or pursuant to their delegated authority; and has such other preferences,
voting powers, limitations as to dividends, qualifications and terms and
conditions of redemption as are set forth in these Bylaws. The Series F AMPS
shall constitute a separate series of preferred shares of beneficial interest of
the Trust, and each share of Series F AMPS shall be identical.
11.1 DEFINITIONS. (a) Unless the context or use clearly indicates
another or different meaning or intent, in Article 11 of these Bylaws the
following terms have the following meanings, whether used in the singular or
plural:
"'AA' Financial Composite Commercial Paper Rate" on any date means (i)
(A) the Interest Equivalent of the 7-day rate (in the case of a Dividend Period
which is a 7-Day Dividend Period or shorter), the 30-day rate (for Special
Dividend Periods greater than 7 days but fewer than or equal to 31 days), the
60-day rate (for Dividend Periods greater than 31 days but fewer than or equal
to 61 days) and the 90-day rate (for Dividend Periods greater than 61 days but
fewer than or equal to 91 days) on commercial paper on behalf of issuers whose
corporate bonds are rated AA by S&P, or the equivalent of such rating by another
Rating Agency, as announced by the Federal Reserve Bank of New York for the
close of business on the Business Day immediately preceding such date; and (B)
for Dividend Periods greater than 91 days but fewer than 184 days, the rate
described in clause (ii) below; or (ii) if the Federal Reserve Bank of New York
does not make available such a rate, or with respect to Dividend Periods greater
than 91 days but fewer than 184 days, then the arithmetic average of the
Interest Equivalent of such rates on commercial paper placed on behalf of such
issuers, as quoted on a discount basis or otherwise by the Commercial Paper
Dealers to the Auction Agent for the close of business on the Business Day
immediately preceding such date (rounded to the next highest one-thousandth
(0.001) of 1%). If any Commercial Paper Dealer does not quote a rate required to
determine the "AA" Financial Composite Commercial Paper Rate, such rate shall be
determined on the basis of the quotations (or quotation) furnished by the
remaining Commercial Paper Dealers (or Dealer), if any, or, if there are no such
Commercial Paper Dealers, by the Auction Agent. For purposes of this definition,
(A) "Commercial Paper Dealers" shall mean (1) Xxxxxxx Xxxxx Xxxxxx Inc., Xxxxxx
Brothers Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated and Xxxxxxx
Sachs & Co.; (2) in lieu of any thereof, its respective affiliate or successor;
and (3) in the event that any of the foregoing shall cease to quote rates for
commercial paper of issuers of the sort described above, in substitution
therefor, a nationally recognized dealer in commercial paper of such issuers
then making such quotations selected by the Trust, and (B) "Interest Equivalent"
of a rate stated on a discount basis for commercial paper of a given number of
days' maturity shall mean a number equal to the quotient (rounded upward to the
next higher one-thousandth (0.001) of 1%) of (1) such rate expressed as a
decimal, divided by (2) the difference between (x) 1.00 and (y) a fraction, the
numerator of which shall be the product of such rate expressed as a decimal,
13
multiplied by the number of days in which such commercial paper shall mature and
the denominator of which shall be 360.
"Accountant's Confirmation" has the meaning set forth in Section
11.7(c) of these Bylaws.
"Additional Trustees" has the meaning set forth in Section 11.5(b) of
these Bylaws.
"Affiliate" means any Person known to the Auction Agent to be
controlled by, in control of, or under common control with, the Trust.
"Agent Member" means a member of or a participant in the Securities
Depository that will act on behalf of a Beneficial Owner of one or more AMPS or
on behalf of a Potential Beneficial Owner.
"AMPS" means the Series M AMPS, the Series T AMPS, the Series W AMPS,
the Series TH AMPS and the Series F AMPS.
"Applicable Rate" means the rate per annum at which cash dividends are
payable on the AMPS for any Dividend Period in accordance with Section 11.2.
"Applicable Percentage" has the meaning set forth in Section
11.10(a)(vi) of these Bylaws.
"Approved Price" means the "fair value" as determined by the Trust in
accordance with the valuation procedures adopted from time to time by the Board
of Trustees of the Trust and for which the Trust receives a marked-to-market
price (which, for the purpose of clarity, shall not mean Market Value) from an
independent source at least semi-annually.
"Auction" means a periodic operation of the Auction Procedures.
"Auction Agent" means Deutsche Bank Trust Company Americas unless and
until another commercial bank, trust company or other financial institution
appointed by a resolution of the Board of Trustees of the Trust or a duly
authorized committee thereof enters into an agreement with the Trust to follow
the Auction Procedures for the purpose of determining the Applicable Rate and to
act as transfer agent, registrar, dividend paying agent and redemption agent for
the AMPS.
"Auction Date" has the meaning set forth in Section 11.10(a)(i) of
these Bylaws.
"Auction Procedures" means the procedures for conducting Auctions, as
set forth in Section 11.10 of these Bylaws.
"Bank Loans" means direct purchases of, assignments of, participations
in and other interests in (a) any bank loan or (b) any loan made by an
investment bank, investment fund or other financial institution, provided that
such loan under this clause (b) is similar to those
14
typically made, syndicated, purchased or participated by a commercial bank or
institutional loan investor in the ordinary course of business.
"Beneficial Owner" means a customer of a Broker-Dealer who is listed
on the records of that Broker-Dealer (or, if applicable, the Auction Agent) as a
holder of AMPS or a Broker-Dealer that holds AMPS for its own account.
"Broker-Dealer" means any broker-dealer, commercial bank or other
entity permitted by law to perform the functions required of a Broker-Dealer
pursuant to Section 11.10 of these Bylaws, that (a) is a member of or
participant in the Securities Depository or an affiliate of such member or
participant, (b) has been selected or approved by the Trust, and (c) has entered
into a Broker-Dealer Agreement with the Auction Agent that remains effective.
"Broker-Dealer Agreement" means an agreement between the Auction Agent
and a Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the
procedures specified in Section 11.10 of these Bylaws.
"Business Day" means a day on which the New York Stock Exchange is
open for trading and which is not a Saturday, Sunday or other day on which banks
in New York City are authorized or obligated by law to close.
"Closing Transactions" has the meaning set forth in Section 11.8(a)(i)
of these Bylaws.
"Commercial Paper Dealers" has the meaning set forth in the definition
of "'AA' Financial Composite Commercial Paper Rate."
"Common Shares" means the shares of beneficial interest designated as
common shares, par value $0.00001 per share, of the Trust.
"Cure Date" has the meaning set forth in Section 11.4(a)(ii) of these
Bylaws.
"Date of Original Issue" means, with respect to any Auction Market
Preferred Share, the date on which the Trust first issues such share.
"Declaration of Trust" means the Amended and Restated Agreement and
Declaration of Trust of the Trust dated November 19, 2002, as from time to time
amended and supplemented.
"Deposit Securities" means cash and portfolio securities rated at
least A2 (having a remaining maturity of 12 months or less), X-0, XXXX-0 xx
XXX-0 by Moody's or A (having a remaining maturity of 12 months or less), A-1+
or SP-1+ by S&P.
"Discounted Value" of any asset of the Trust means the quotient of the
Market Value of an Eligible Asset divided by the Moody's Discount Factor,
provided that with respect to an Eligible Asset that is currently callable, the
Discounted Value will be equal to the quotient as calculated above or the call
price, whichever is lower, and that with respect to an Eligible Asset
15
that is prepayable, the Discounted Value will be equal to the quotient as
calculated above or the face value, whichever is lower.
"Dividend Payment Date," with respect to AMPS, has the meaning set
forth in Section 11.2(b)(i) of these Bylaws.
"Dividend Period" means the Initial Dividend Period, any 7-Day
Dividend Period and any Special Dividend Period.
"Eligible Asset" means a Moody's Eligible Asset (if Xxxxx'x is then
rating the AMPS) and/or any asset included in the calculations used by any
Rating Agency then rating the AMPS for purposes of determining such Rating
Agency's rating on the AMPS, as applicable.
"Existing Holder" means a Broker-Dealer, or any such other Person that
may be permitted by the Trust, that is listed as the holder of record of AMPS in
the Share Books.
"Extension Period" has the meaning set forth in Section 11.2(c)(iii)
of these Bylaws.
"FHLB, FNMA and FFCB Debentures" has the meaning set forth in
paragraph (viii) of the definition of "Moody's Eligible Assets."
"Fitch" means Fitch, Inc. or its successors.
"Forward Commitment" has the meaning set forth in Section 11.8(d) of
these Bylaws.
"Holder" means a Person identified as a holder of record of AMPS in
the Share Register.
"Independent Accountant" means a nationally recognized accountant, or
firm of accountants, that is, with respect to the Trust, an independent public
accountant or firm of independent public accountants under the Securities Act
and serving as such for the Trust.
"Initial Dividend Payment Date" means, with respect to a series of
AMPS, the initial dividend payment date with respect to the Initial Dividend
Period as determined by the Board of Trustees of the Trust or pursuant to their
delegated authority with respect to such series.
"Initial Dividend Period" has the meaning set forth in Section
11.2(c)(i) of these Bylaws.
"Initial Dividend Rate" means, with respect to a series of AMPS, the
rate per annum applicable to the Initial Dividend Period for such series of
AMPS.
"Interest Equivalent" has the meaning set forth in the definition of
"'AA' Financial Composite Commercial Paper Rate."
"Lien" means any material lien, mortgage, pledge, security interest or
security agreement of any kind.
16
"Long Term Dividend Period" means a Special Dividend Period consisting
of a specified period of one or more whole years but not greater than five
years.
"Mandatory Redemption Price" means $25,000 per Auction Market
Preferred Share plus an amount equal to accumulated but unpaid dividends
(whether or not earned or declared) to (but not including) the date fixed for
redemption.
"Market Value" of any asset of the Trust shall be the market value
thereof determined by a Pricing Service. The Market Value of any asset shall
include any interest accrued thereon. A Pricing Service shall value portfolio
securities at the quoted bid prices or the mean between the quoted bid and asked
prices or the yield equivalent when quotations are not readily available.
Securities for which quotations are not readily available shall be valued at
fair value as determined by a Pricing Service using methods which include
consideration of: yields or prices of securities of comparable quality, type of
issue, coupon, maturity and rating; indications as to value from dealers; and
general market conditions. A Pricing Service may employ electronic data
processing techniques and/or a matrix system to determine valuations. In the
event a Pricing Service is unable to value a security, the security shall be
valued at the lower of two bid quotations obtained by the Trust from dealers who
are members of the National Association of Securities Dealers, Inc. and who make
a market in the security, at least one of which shall be in writing. If two bid
quotations are not readily available for any securities, such securities shall
be valued in good faith at fair value pursuant to procedures approved by the
Board of Trustees of the Trust. Futures contracts and options are valued at the
closing prices for such instruments established by the exchange or board of
trade on which they are traded, or if market quotations are not readily
available, are valued at fair value in good faith pursuant to procedures
approved by the Trustees. All other assets will be valued at fair value on a
consistent basis using methods determined in good faith by the Trustees.
"Maximum Applicable Rate," with respect to AMPS, has the meaning set
forth in Section 11.10(a)(vi) of these Bylaws.
"Moody's" means Xxxxx'x Investors Service, Inc. or its successors.
"Moody's Discount Factor" means, for purposes of determining the
Discounted Value of any Moody's Eligible Asset, the percentage determined as
follows:
17
(i) Corporate debt securities: The percentage determined by
reference to the rating on such asset with reference to the remaining
term to maturity of such asset, in accordance with the table set forth
below.
TERM TO MATURITY OF XXXXX'X RATING CATEGORY
CORPORATE DEBT SECURITY AAA AA A BAA BA B UNRATED(1)
------------------------------------------- --- --- --- --- --- --- ----------
1 year or less 109% 112% 115% 118% 119% 125% 225%
2 years or less (but longer than 1 year) 115 118 122 125 127 133 225
3 years or less (but longer than 2 years) 120 123 127 131 133 140 225
4 years or less (but longer than 3 years) 126 129 133 138 140 147 225
5 years or less (but longer than 4 years) 132 135 139 144 146 154 225
7 years or less (but longer than 5 years) 139 143 147 152 156 164 225
10 years or less (but longer than 7 years) 145 150 155 160 164 173 225
15 years or less (but longer than 10 years) 150 155 160 165 170 180 225
20 years or less (but longer than 15 years) 150 155 160 165 170 190 225
30 years or less (but longer than 20 years) 150 155 160 165 170 191 225
Greater than 30 years 165 173 181 189 205 221 225
----------
(1) Unrated securities (securities rated by neither Moody's nor S&P) are
limited to 10% of discounted Moody's Eligible Assets. If a corporate debt
security is unrated by Moody's but is rated by S&P, a rating two numeric
ratings below the S&P rating will be used (e.g., where the S&P rating is
AAA, a Xxxxx'x rating of Aa1 will be used; where the S&P rating is AA+, a
Xxxxx'x rating of Aa3 will be used). If a corporate debt security is
unrated by both Moody's and S&P, the Trust will use the percentage set
forth under "Unrated" in this table.
The Moody's Discount Factors presented in the immediately
preceding table will also apply to Moody's Eligible Assets that are
FHLB, FNMA and FFCB Debentures and to rated TRACERs, whereby the
ratings in the table will be applied to the underlying securities and
the Market Value of each underlying security will be its proportionate
amount of the Market Value of the TRACER. The Moody's Discount Factors
presented in the immediately preceding table will also apply to
corporate debt securities that do not pay interest in U.S. dollars or
euros, provided that the Moody's Discount Factor determined from the
table shall be multiplied by a factor of 110% for purposes of
calculating the Discounted Value of such securities.
(ii) Preferred stock: The Moody's Discount Factor for preferred
stock shall be (A) for preferred stocks issued by a utility, 155%; (B)
for preferred stocks of industrial and financial issuers, 209%; and
(C) for auction rate preferred stocks, 350%.
(iii) Short-term instruments: The Moody's Discount Factor applied
to short-term portfolio securities, including without limitation
corporate debt securities, Short Term Money Market Instruments and
municipal debt obligations, will be (A) 100%, so long as such
portfolio securities mature or have a demand feature at par
exercisable within the Moody's Exposure Period; (B) 115%, so long as
such portfolio securities do not mature within the Moody's Exposure
Period, or have a demand feature at par not exercisable within the
Moody's Exposure Period; and (C) 125%, if such securities are not
rated by Moody's, so long as such portfolio securities are rated at
least A-1+/AA or SP-1+/AA by
18
S&P and mature or have a demand feature at par exercisable within the
Moody's Exposure Period. A Moody's Discount Factor of 100% will be
applied to cash.
(iv) U.S. Government Securities and U.S. Treasury Strips:
U.S. GOVERNMENT SECURITIES U.S. TREASURY STRIPS
REMAINING TERM TO MATURITY DISCOUNT FACTOR DISCOUNT FACTOR
------------------------------------------- -------------------------- --------------------
1 year or less 107% 107%
2 years or less (but longer than 1 year) 113 115
3 years or less (but longer than 2 years) 118 121
4 years or less (but longer than 3 years) 123 128
5 years or less (but longer than 4 years) 128 135
7 years or less (but longer than 5 years) 135 147
10 years or less (but longer than 7 years) 141 163
15 years or less (but longer than 10 years) 146 191
20 years or less (but longer than 15 years) 154 218
30 years or less (but longer than 20 years) 154 244
(v) Rule 144A Securities: The Moody's Discount Factor applied to
Rule 144A Securities whose terms include rights to registration under
the Securities Act exercisable within 1 year of the applicable date
shall be 100% of the Moody's Discount Factor that would apply were the
securities registered under the Securities Act. The Moody's Discount
Factor applied to Rule 144A Securities whose terms include rights to
registration under the Securities Act that are not exercisable within
one year of the applicable date shall be 120% of the Moody's Discount
Factor that would apply were the securities registered under the
Securities Act. The Moody's Discount Factor applied to Rule 144A
Securities whose terms do not include rights to registration under the
Securities Act shall be 130% of the Moody's Discount Factor that would
apply were the securities registered under the Securities Act.
(vi) Bank Loans: The Moody's Discount Factor applied to senior
Bank Loans ("Senior Loans") shall be the percentage specified in the
table below opposite such Moody's Loan Category:
MOODY'S LOAN CATEGORY DISCOUNT FACTOR
--------------------- ---------------
A 118%
B 137%
C 161%
D 222%
E 222%
(vii) Asset-backed and Mortgage-backed securities: The Moody's
Discount Factor applied to asset-backed securities shall be 131%. The
Moody's Discount Factor applied to collateralized mortgage
obligations, planned amortization class bonds and targeted
amortization class bonds shall be determined by reference to the
weighted average life of the security and whether cash flow is
retained (i.e., controlled by a trustee) or excluded (i.e., not
controlled by a trustee), in accordance with the table set forth
below.
19
REMAINING TERM TO MATURITY CASH FLOW RETAINED CASH FLOW EXCLUDED
------------------------------------------- ------------------ ------------------
3 years or less 133% 141%
7 years or less (but longer than 3 years) 142 151
10 years or less (but longer than 7 years) 158 168
20 years or less (but longer than 10 years) 174 185
The Moody's Discount Factor applied to residential mortgage
pass-throughs (including private-placement mortgage pass-throughs)
shall be determined by reference to the coupon paid by such security
and whether cash flow is retained (i.e., controlled by a trustee) or
excluded (i.e., not controlled by a trustee), in accordance with the
table set forth below.
COUPON CASH FLOW RETAINED CASH FLOW EXCLUDED
---------- ------------------ ------------------
5% 166% 173%
6% 162 169
7% 158 165
8% 154 161
9% 151 157
10% 148 154
11% 144 154
12% 142 151
13% 139 148
adjustable 165 172
The Xxxxx'x Discount Factor applied to fixed-rate pass-throughs that
are not rated by Xxxxx'x and are serviced by a servicer approved by
Xxxxx'x shall be determined by reference to the table in the following
paragraph (relating to whole loans).
The Xxxxx'x Discount Factor applied to whole loans shall be
determined by reference to the coupon paid by such security and
whether cash flow is retained (i.e., controlled by a trustee) or
excluded (i.e., not controlled by a trustee), in accordance with the
table set forth below.
COUPON CASH FLOW RETAINED CASH FLOW EXCLUDED
---------- ------------------ ------------------
5% 172% 179%
6% 167 174
7% 163 170
8% 159 165
9% 155 161
10% 151 158
11% 148 157
12% 145 154
13% 142 151
adjustable 170 177
(viii)Municipal debt obligations: The Xxxxx'x Discount Factor
applied to municipal debt obligations shall be the percentage
determined by reference to the rating on such asset and the shortest
Exposure Period set forth opposite such rating that is the same length
as or is longer than the Xxxxx'x Exposure Period, in accordance with
the table set
20
forth below (provided that, except as provided in the following table,
any municipal obligation (excluding any short-term municipal
obligation) not rated by Xxxxx'x but rated by S&P shall be deemed to
have a Xxxxx'x rating which is one full rating category lower than its
S&P rating):
EXPOSURE PERIOD AAA(1) AA(1) A(1) BAA(1) OTHER(2) (V)MIG-1(3) SP-1+(4) UNRATED(5)
--------------------- ------ ----- ---- ------ -------- ----------- -------- ----------
7 weeks 151% 159% 166% 173% 187% 136% 148% 225%
8 weeks or less but
greater than seven
weeks 154 161 168 176 190 137 149 231
9 weeks or less but
greater than eight
weeks 158 163 170 177 192 138 150 240
----------
(1) Xxxxx'x rating.
(2) Municipal debt obligations not rated by Xxxxx'x but rated BBB by S&P.
(3) Municipal debt obligations rated MIG-1 or VMIG-1, which do not mature or
have a demand feature at par exercisable in 30 days and which do not have a
long-term rating.
(4) Municipal debt obligations not rated by Xxxxx'x but rated SP-1+ by S&P,
which do not mature or have a demand feature at par exercisable in 30 days
and which do not have a long-term rating.
(5) Municipal debt obligations rated less than Baa3 or not rated by Xxxxx'x and
less than BBB or not rated by S&P, not to exceed 10% of Xxxxx'x Eligible
Assets.
(ix) Structured Notes: The Xxxxx'x Discount Factor applied to
Structured Notes will be (A) in the case of a corporate issuer, the
Xxxxx'x Discount Factor determined in accordance with paragraph (i)
under this definition, whereby the rating on the issuer of the
Structured Note will be the rating on the Structured Note for purposes
of determining the Xxxxx'x Discount Factor in the table in paragraph
(i); and (B) in the case of an issuer that is the U.S. government or
an agency or instrumentality thereof, the Xxxxx'x Discount Factor
determined in accordance with paragraph (iii) under this definition.
(x) Convertible securities (including convertible preferred
stock): (1) For convertible securities having a Delta between 0.4 and
0.0, the Xxxxx'x Discount Factor shall be 100% of the Xxxxx'x Discount
Factor applied to non-convertible corporate debt securities (i.e.
using the Xxxxx'x Discount Factors found in the subsection (ii) of
this definition), (2) for convertible securities having a Delta
between 0.8 and 0.4, the Xxxxx'x Discount Factor shall be 192% for
securities rated Baa or above and 226% for securities rated Ba and
below, and (3) for convertible securities having a Delta between 1.0
and 0.8, the Xxxxx'x Discount Factor shall be 195% for securities
rated Baa or above and 229% for securities rated Ba and below;
provided, however, that for any unrated convertible security, the
Xxxxx'x Discount Factor shall be 250%.(1,2)
(1) Unless conclusions regarding liquidity risk as well as estimates of both
the probability and severity of default for applicable Trust assets can be
derived from other sources as well as combined with a number of sources as
presented by the Trust to Xxxxx'x, unrated fixed-income and convertible
securities, which are securities that are not rated by any of Xxxxx'x, S&P
or Fitch
21
Ratings, are limited to 10% of Xxxxx'x Eligible Assets for purposes of
calculations related to the Preferred Shares Basic Maintenance Amount. If a
convertible security is not rated by any of Xxxxx'x, S&P or Fitch Ratings,
the Trust will consider the security unrated for the purposes of the
discounts discussed above. Ratings assigned by S&P and/or Fitch Ratings are
generally accepted at face value. However, adjustments to face value may be
made to particular categories of credits for which the ratings by S&P
and/or Fitch Ratings do not seem to approximate a Xxxxx'x rating
equivalent. Split-rated securities assigned by S&P and Fitch Ratings (i.e.,
these Rating Agencies assign different rating categories to the security)
will be accepted at the lower of the two ratings.
(2) Discount factors are for 7-week exposure period.
For the purposes of determining such discount factors, "Delta", which
is intended to express the change in the price of the convertible
security per unit of change in the price of the common stock into
which the convertible security is convertible, shall be the number
provided by Xxxxxxx Lynch, Pierce, Xxxxxx and Xxxxx, Incorporated or
such other provider as the Trust shall determine from time to time.
The Trust shall use commercially reasonable efforts to update such
Delta figures monthly.
Upon conversion to common stock, the Discount Factors applicable to
common stock will apply:
COMMON STOCKS(1) LARGE-CAP MID-CAP SMALL CAP
---------------------- --------- ------- ---------
7 week exposure period 200% 205% 220%
(1) Market cap for Large-cap stocks are $10 billion and up, Mid-cap stocks
range between $2 billion and $10 billion, and Small-cap stocks are $2
billion and below. "
The Xxxxx'x Discount Factor for any Xxxxx'x Eligible Asset other
than the securities set forth above will be the percentage provided in
writing by Xxxxx'x.
"Xxxxx'x Eligible Assets" means
(i) cash (including interest and dividends due on assets rated
(A) Baa3 or higher by Xxxxx'x if the payment date is within five
Business Days of the Valuation Date, (B) A2 or higher if the payment
date is within thirty days of the Valuation Date, and (C) A1 or higher
if the payment date is within the Xxxxx'x Exposure Period) and
receivables for Xxxxx'x Eligible Assets sold if the receivable is due
within five Business Days of the Valuation Date, and if the trades
which generated such receivables are (A) settled through clearing
house firms or (B) (1) with counterparties having a Xxxxx'x long-term
debt rating of at least Baa3 or (2) with counterparties having a
Xxxxx'x Short Term Money Market Instrument rating of at least P-1;
(ii) Short Term Money Market Instruments so long as (A) such
securities are rated at least P-1, (B) in the case of demand deposits,
time deposits and overnight funds, the supporting entity is rated at
least A2, or (C) in all other cases, the supporting entity (1) is
rated A2 and the security matures within one month, (2) is rated A1
and the security matures within three months or (3) is rated at least
Aa3 and the security matures within six months; provided, however,
that for purposes of this definition, such instruments
22
(other than commercial paper rated by S&P and not rated by Xxxxx'x)
need not meet any otherwise applicable S&P rating criteria;
(iii) U.S. Government Securities and U.S. Treasury Strips;
(iv) Rule 144A Securities;
(v) Senior Loans and other Bank Loans approved by Xxxxx'x;
(vi) Corporate debt securities if (A) such securities are rated
B3 or higher by Xxxxx'x; (B) such securities provide for the periodic
payment of interest in cash in U.S. dollars or euros, except that such
securities that do not pay interest in U.S. dollars or euros shall be
considered Xxxxx'x Eligible Assets if they are rated by Xxxxx'x or
S & P; (C) for securities which provide for conversion or exchange
into equity capital at some time over their lives, the issuer must be
rated at least B3 by Xxxxx'x and the discount factor will be 250%; (D)
for debt securities rated Ba1 and below, no more than 10% of the
original amount of such issue may constitute Xxxxx'x Eligible Assets;
(E) such securities have been registered under the Securities Act or
are restricted as to resale under federal securities laws but are
eligible for resale pursuant to Rule 144A under the Securities Act as
determined by the Fund's investment manager or portfolio manager
acting pursuant to procedures approved by the Board of Trustees,
except that such securities that are not subject to U.S. federal
securities laws shall be considered Xxxxx'x Eligible Assets if they
are publicly traded; and (F) such securities are not subject to
extended settlement.
Notwithstanding the foregoing limitations, (x) corporate debt
securities not rated at least B3 by Xxxxx'x or not rated by Xxxxx'x
shall be considered to be Xxxxx'x Eligible Assets only to the extent
the Market Value of such corporate debt securities does not exceed 10%
of the aggregate Market Value of all Xxxxx'x Eligible Assets;
provided, however, that if the Market Value of such corporate debt
securities exceeds 10% of the aggregate Market Value of all Xxxxx'x
Eligible Assets, a portion of such corporate debt securities (selected
by the Trust) shall not be considered Xxxxx'x Eligible Assets, so that
the Market Value of such corporate debt securities (excluding such
portion) does not exceed 10% of the aggregate Market Value of all
Xxxxx'x Eligible Assets; and (y) corporate debt securities rated by
neither Xxxxx'x nor S&P shall be considered to be Xxxxx'x Eligible
Assets only to the extent such securities are issued by entities which
(i) have not filed for bankruptcy within the past three years, (ii)
are current on all principal and interest in their fixed income
obligations, (iii) are current on all preferred stock dividends, and
(iv) possess a current, unqualified auditor's report without
qualified, explanatory language.
(vii) Preferred stocks if (A) dividends on such preferred stock
are cumulative, (B) such securities provide for the periodic payment
of dividends thereon in cash in U.S. dollars or euros and do not
provide for conversion or exchange into, or have warrants attached
entitling the holder to receive, equity capital at any time over the
respective lives of such securities, (C) the issuer of such a
preferred stock has common stock listed on
23
either the New York Stock Exchange or the American Stock Exchange, (D)
the issuer of such a preferred stock has a senior debt rating from
Xxxxx'x of Baa1 or higher or a preferred stock rating from Xxxxx'x of
Baa3 or higher and (E) such preferred stock has paid consistent cash
dividends in U.S. dollars or euros over the last three years or has a
minimum rating of A1 (if the issuer of such preferred stock has other
preferred issues outstanding that have been paying dividends
consistently for the last three years, then a preferred stock without
such a dividend history would also be eligible). In addition, the
preferred stocks must have the following diversification requirements:
(X) the preferred stock issue must be greater than $50 million and (Y)
the minimum holding by the Trust of each issue of preferred stock is
$500,000 and the maximum holding of preferred stock of each issue is
$5 million. In addition, preferred stocks issued by transportation
companies will not be considered Xxxxx'x Eligible Assets;
(viii) Asset-backed and mortgage-backed securities:
(A) Asset-backed securities if (1) such securities are rated
at least Aa3 by Xxxxx'x or at least AA by S&P, (2) the securities
are part of an issue that is $250 million or greater, or the
issuer of such securities has a total of $500 million or greater
of asset-backed securities outstanding at the time of purchase of
the securities by the Trust and (3) the expected average life of
the securities is not greater than 4 years;
(B) Collateralized mortgage obligations ("CMOs"), including
CMOs with interest rates that float at a multiple of the change
in the underlying index according to a pre-set formula, provided
that any CMO held by the Trust (1) has been rated Aaa by Xxxxx'x
or AAA by S&P, (2) does not have a coupon which floats inversely,
(3) is not portioned as an interest-only or principal-only strip
and (4) is part of an issuance that had an original issue size of
at least $100 million;
(C) Planned amortization class bonds ("PACs") and targeted
amortization class bonds ("TACs") provided that such PACs or TACs
are (1) backed by certificates of either the Federal National
Mortgage Association ("FNMA"), the Government National Mortgage
Association ("GNMA") or the Federal Home Loan Mortgage
Corporation ("FHLMC") representing ownership in single-family
first lien mortgage loans with original terms of 30 years, (2)
part of an issuance that had an original issue size of at least
$10 million, (3) part of PAC or TAC classes that have payment
priority over other PAC or TAC classes, (4) if TACs, TACs that do
not support PAC classes, and (5) if TACs, not considered reverse
TACs (i.e., do not protect against extension risk);
(D) Consolidated senior debt obligations of Federal Home
Loan Banks ("FHLBs"), senior long-term debt of the FNMA, and
consolidated systemwide bonds and FCS Financial Assistance
Corporation Bonds of Federal Farm Credit Banks ("FFCBs")
(collectively, "FHLB, FNMA and FFCB Debentures"), provided that
such FHLB, FNMA and FFCB Debentures are (1) direct issuance
corporate debt rated Aaa by Xxxxx'x, (2) senior debt obligations
backed by the FHLBs, FFCBs or FNMA, (3)
24
part of an issue entirely denominated in U.S. dollars and (4) not
callable or exchangeable debt issues;
(E) Mortgage pass-throughs rated at least Aa by Xxxxx'x and
pass-throughs issued prior to 1987 (if rated AA by S&P and based
on fixed-rate mortgage loans) by Travelers Mortgage Services,
Citicorp Homeowners, Citibank, N.A., Sears Mortgage Security or
RFC - Salomon Brothers Mortgage Securities, Inc., provided that
(1) certificates must evidence a proportional, undivided interest
in specified pools of fixed or adjustable rate mortgage loans,
secured by a valid first lien, on one- to four-family residential
properties and (2) the securities are publicly registered (not
issued by FNMA, GNMA or FHLMC);
(F) Private-placement mortgage pass-throughs provided that
(1) certificates represent a proportional undivided interest in
specified pools of fixed-rate mortgage loans, secured by a valid
first lien, on one- to four-family residential properties, (2)
documentation is held by a trustee or independent custodian, (3)
pools of mortgage loans are serviced by servicers that have been
approved by FNMA or FHLMC and funds shall be advanced to meet
deficiencies to the extent provided in the pooling and servicing
agreements creating such certificates, and (4) pools have been
rated Aa or better by Xxxxx'x; and
(G) Whole loans (e.g., direct investments in mortgages)
provided that (1) at least 65% of such loans (a) have seasoning
of no less than 6 months, (b) are secured by single-family
detached residences, (c) are owner-occupied primary residences,
(d) are secured by a first-lien, fully-documented mortgage, (e)
are neither currently delinquent (30 days or more) nor delinquent
during the preceding year, (f) have loan-to-value ratios of 80%
or below, (g) carry normal hazard insurance and title insurance,
as well as special hazard insurance, if applicable, (h) have
original terms to maturity not greater than 30 years, with at
least one year remaining to maturity, (i) have a minimum of
$10,000 remaining principal balance, (j) for loans underwritten
after January 1, 1978, FNMA and/or FHLMC forms are used for
fixed-rate loans, and (k) such loans are whole loans and not
participations; (2) for loans that do not satisfy the
requirements set forth in the foregoing clause (1), (a) non-owner
occupied properties represent no greater than 15% of the
aggregate of either the adjustable-rate pool or the fixed-rate
pool, (b) multi-family properties (those with five or more units)
represent no greater than 15% of the aggregate of either the
adjustable-rate pool or the fixed-rate pool, (c) condominiums
represent no greater than 10% of the aggregate of either the
adjustable-rate pool or the fixed-rate pool, and any condominium
project must be 80% occupied at the time the loan is originated,
(d) properties with loan-to-value ratios exceeding 80% represent
no greater than 25% of the aggregate of either the
adjustable-rate pool or the fixed-rate pool and the portion of
the mortgage on any such property that exceeds a loan-to-value
ratio of 80% is insured with Primary Mortgage Insurance from an
insurer rated at least Baa3 by Xxxxx'x and (e) loan balances in
excess of the current FHLMC limit plus $75,000 represent no
greater than 25% of the aggregate of either the adjustable-rate
pool or the fixed-rate pool, loan
25
balances in excess of $350,000 represent no greater than 10% of
the aggregate of either the adjustable-rate pool or the
fixed-rate pool, and loan balances in excess of $1,000,000
represent no greater than 5% of the aggregate of either the
adjustable-rate pool or the fixed-rate pool; (3) no greater than
5% of the pool of loans is concentrated in any one zip code; (4)
the pool of loans contains at least 100 loans or $2 million in
loans per servicer; (5) for adjustable-rate mortgages ("ARMs"),
(a) any ARM is indexed to the National Cost of Funds index, the
11th District Cost of Funds index, the 1-year Treasury or the
6-month Treasury, (b) the margin over the given index is between
0.15% and 0.25% for either cost-of-funds index and between 0.175%
and 0.325% for Treasuries, (c) the maximum yearly interest rate
increase is 2%, (d) the maximum life-time interest rate increase
is 6.25% and (e) ARMs may include Federal Housing Administration
and Department of Veterans Affairs loans; (6) for "teaser" loans,
(a) the initial discount from the current ARM market rate is no
greater than 2%, (b) the loan is underwritten at the market rate
for ARMs, not the "teaser" rate, and (c) the loan is seasoned six
months beyond the "teaser" period.
(ix) Any municipal debt obligation that (A) pays interest in
cash, (B) does not have a Xxxxx'x rating, as applicable, suspended by
Xxxxx'x, and (C) is part of an issue of municipal debt obligations of
at least $5,000,000, except for municipal debt obligations rated below
A by Xxxxx'x, in which case the minimum issue size is $10,000,000;
(x) Structured Notes and rated TRACERs; and
(xi) Financial contracts, as such term is defined in Section
3(c)(2)(B)(ii) of the 1940 Act, not otherwise provided for in this
definition but only upon receipt by the Trust of a letter from Xxxxx'x
specifying any conditions on including such financial contract in
Xxxxx'x Eligible Assets and assuring the Trust that including such
financial contract in the manner so specified would not affect the
credit rating assigned by Xxxxx'x to the AMPS.
(xii) Convertible securities (including convertible preferred
stock), provided that (A) the issuer of common stock must have a
Xxxxx'x senior unsecured debt of Caa or better, or an S&P or Fitch
rating of CCC or better, (B) the common stocks must be traded on the
New York Stock Exchange, the American Stock Exchange, or the NASDAQ,
(C) dividends must be paid in U.S. dollars, (D) the portfolio of
convertible bonds must be diversified as set forth in the table set
forth below, (E) the company shall not hold shares exceeding the
average weekly trading volume during the preceding month, and (F)
synthetic convertibles are excluded from asset eligibility.
CONVERTIBLE BONDS DIVERSIFICATION GUIDELINES
----------------------------------------------------------
TYPE MAXIMUM SINGLE ISSUER (%)(1) MAXIMUM SINGLE INDUSTRY (%) MAXIMUM SINGLE STATE (%)(1)
------- ---------------------------- --------------------------- ---------------------------
Utility 4 50 7(2)
Other 6 20 n/a
----------
(1) Percentage represent a portion of the aggregate market value and number of
outstanding shares of the convertible stock portfolio.
(2) Utility companies operating in more than one state should be diversified
according to the state in which they generate the largest part of their
revenues. Publicly available information on utility company revenues by
state is available from the Uniform Statistical Report (USR) or the Federal
Energy Regulation Commission (FERC)."
26
In addition, portfolio holdings as described below must be within the
following diversification and issue size requirements in order to be included in
Xxxxx'x Eligible Assets:
MAXIMUM SINGLE MAXIMUM SINGLE MINIMUM ISSUE SIZE
RATINGS (1) ISSUER (2,3) INDUSTRY (3,4) ($ IN MILLION) (5)
----------- -------------- -------------- ------------------
Aaa 100% 100% $100
Aa 20 60 100
A 10 40 100
Baa 6 20 100
Ba 4 12 50(6)
B1-B2 3 8 50(6)
B3 2 5 50(6)
----------
(1) Refers to the preferred stock and senior debt rating of the portfolio
holding.
(2) Companies subject to common ownership of 25% or more are considered as one
issuer.
(3) Percentages represent a portion of the aggregate Market Value of the
portfolio holdings.
(4) Industries are determined according to Xxxxx'x Industry Classifications, as
defined herein.
(5) Except for preferred stock, which has a minimum issue size of $50 million.
(6) Portfolio holdings from issues ranging from $50 million to $100 million are
limited to 20% of the Fund's total assets.
Where the Trust sells an asset and agrees to repurchase such asset in
the future, the Discounted Value of such asset will constitute a Xxxxx'x
Eligible Asset and the amount the Trust is required to pay upon repurchase of
such asset will count as a liability for the purposes of the Preferred Shares
Basic Maintenance Amount. Where the Trust purchases an asset and agrees to sell
it to a third party in the future, cash receivable by the Trust thereby will
constitute a Xxxxx'x Eligible Asset if the long-term debt of such other party is
rated at least A2 by Xxxxx'x and such agreement has a term of 30 days or less;
otherwise the Discounted Value of such purchased asset will constitute a Xxxxx'x
Eligible Asset. For the purposes of calculation of Xxxxx'x Eligible Assets,
portfolio securities which have been called for redemption by the issuer thereof
shall be valued at the lower of Market Value or the call price of such portfolio
securities.
Notwithstanding the foregoing, an asset will not be considered a
Xxxxx'x Eligible Asset to the extent that it (i) has been irrevocably deposited
for the payment of (i)(A) through (i)(E) under the definition of Preferred
Shares Basic Maintenance Amount or to the extent it is subject to any Liens,
except for (A) Liens which are being contested in good faith by appropriate
proceedings and which Xxxxx'x has indicated to the Trust will not affect the
status of such asset as a Xxxxx'x Eligible Asset, (B) Liens for taxes that are
not then due and payable or that can be paid thereafter without penalty, (C)
Liens to secure payment for services rendered or cash advanced to the Trust by
its investment manager or portfolio manager, the Trust's custodian, transfer
agent or registrar or the Auction Agent and (D) Liens arising by virtue of any
repurchase
27
agreement, or (ii) has been segregated against obligations of the Fund in
connection with an outstanding derivative transaction.
"Xxxxx'x Exposure Period" means the period commencing on a given
Valuation Date and ending 49 days thereafter.
"Xxxxx'x Hedging Transactions" has the meaning set forth in Section
11.8(a) of these Bylaws.
"Xxxxx'x Industry Classification" means, for the purposes of
determining Xxxxx'x Eligible Assets, each of the following industry
classifications (or such other classifications as Xxxxx'x may from time to time
approve for application to the AMPS):
1. Aerospace and Defense: Major Contractor, Subsystems, Research,
Aircraft Manufacturing, Arms, Ammunition
2. Automobile: Automobile Equipment, Auto-Manufacturing, Auto Parts
Manufacturing, Personal Use Trailers, Motor Homes, Dealers
3. Banking: Bank Holding, Savings and Loans, Consumer Credit, Small
Loan, Agency, Factoring, Receivables
4. Beverage, Food and Tobacco: Beer and Ale, Distillers, Wines and
Liquors, Distributors, Soft Drink Syrup, Bottlers, Bakery, Mill
Sugar, Canned Foods, Corn Refiners, Dairy Products, Meat
Products, Poultry Products, Snacks, Packaged Foods, Candy, Gum,
Seafood, Frozen Food, Cigarettes, Cigars, Leaf/Snuff, Vegetable
Oil
5. Buildings and Real Estate: Brick, Cement, Climate Controls,
Contracting, Engineering, Construction, Hardware, Forest Products
(building-related only), Plumbing, Roofing, Wallboard, Real
Estate, Real Estate Development, REITs, Land Development
6. Chemicals, Plastics and Rubber: Chemicals (non-agricultural),
Industrial Gases, Sulfur, Plastics, Plastic Products, Abrasives,
Coatings, Paints, Varnish, Fabricating
7. Containers, Packaging and Glass: Glass, Fiberglass, Containers
made of: Glass, Metal, Paper, Plastic, Wood or Fiberglass
8. Personal and Non-Durable Consumer Products (Manufacturing Only):
Soaps, Perfumes, Cosmetics, Toiletries, Cleaning Supplies, School
Supplies
9. Diversified/Conglomerate Manufacturing
10. Diversified/Conglomerate Service
28
11. Diversified Natural Resources, Precious Metals and Minerals:
Fabricating, Distribution
12. Ecological: Pollution Control, Waste Removal, Waste Treatment and
Waste Disposal
13. Electronics: Computer Hardware, Electric Equipment, Components,
Controllers, Motors, Household Appliances, Information Service
Communicating Systems, Radios, TVs, Tape Machines, Speakers,
Printers, Drivers, Technology
14. Finance: Investment Brokerage, Leasing, Syndication, Securities
15. Farming and Agriculture: Livestock, Grains, Produce, Agriculture
Chemicals, Agricultural Equipment, Fertilizers
16. Grocery: Grocery Stores, Convenience Food Stores
17. Healthcare, Education and Childcare: Ethical Drugs, Proprietary
Drugs, Research, Health Care Centers, Nursing Homes, HMOs,
Hospitals, Hospital Supplies, Medical Equipment
18. Home and Office Furnishings, Housewares, and Durable Consumer
Products: Carpets, Floor Coverings, Furniture, Cooking, Ranges
19. Hotels, Motels, Inns and Gaming
20. Insurance: Life, Property and Casualty, Broker, Agent, Surety
21. Leisure, Amusement, Motion Pictures, Entertainment: Boating,
Bowling, Billiards, Musical Instruments, Fishing, Photo
Equipment, Records, Tapes, Sports, Outdoor Equipment (Camping),
Tourism, Resorts, Games, Toy Manufacturing, Motion Picture
Production Theaters, Motion Picture Distribution
22. Machinery (Non-Agricultural, Non-Construction, Non-Electronic):
Industrial, Machine Tools, Steam Generators
23. Mining, Steel, Iron and Non-Precious Metals: Coal, Copper, Lead,
Uranium, Zinc, Aluminum, Stainless Steel, Integrated Steel, Ore
Production, Refractories, Steel Mill Machinery, Mini-Xxxxx,
Fabricating, Distribution and Sales of the foregoing
24. Oil and Gas: Crude Producer, Retailer, Well Supply, Service and
Drilling
25. Printing, Publishing, and Broadcasting: Graphic Arts, Paper,
Paper Products, Business Forms, Magazines, Books, Periodicals,
Newspapers, Textbooks, Radio, T.V., Cable Broadcasting Equipment
29
26. Cargo Transport: Rail, Shipping, Railroads, Rail-car Builders,
Ship Builders, Containers, Container Builders, Parts, Overnight
Mail, Trucking, Truck Manufacturing, Trailer Manufacturing, Air
Cargo, Transport
27. Retail Stores: Apparel, Toy, Variety, Drugs, Department, Mail
Order Catalog, Showroom
28. Telecommunications: Local, Long Distance, Independent, Telephone,
Telegraph, Satellite, Equipment, Research, Cellular
29. Textiles and Leather: Producer, Synthetic Fiber, Apparel
Manufacturer, Leather Shoes
30. Personal Transportation: Air, Bus, Rail, Car Rental
31. Utilities: Electric, Water, Hydro Power, Gas
32. Diversified Sovereigns: Semi-sovereigns, Canadian Provinces,
Supra-national Agencies
The Trust will use its discretion in determining which industry
classification is applicable to a particular investment in consultation with the
Independent Accountant and Xxxxx'x, to the extent the Trust considers necessary.
"Xxxxx'x Loan Category" means the following five categories (and, for
purposes of this categorization, the Market Value of a Xxxxx'x Eligible Asset
trading at par is equal to $1.00):
(i) "Xxxxx'x Loan Category A" means Performing Senior Loans which
have a Market Value or an Approved Price greater than or equal to
$0.90.
(ii) "Xxxxx'x Loan Category B" means: (A) Performing Senior Loans
which have a Market Value or an Approved Price of greater than or
equal to $0.80 but less than $0.90; and (B) non-Performing Senior
Loans which have a Market Value or an Approved Price greater than or
equal to $0.85.
(iii) "Xxxxx'x Loan Category C" means: (A) Performing Senior
Loans which have a Market Value or an Approved Price of greater than
or equal to $0.70 but less than $0.80; and (B) non-Performing Senior
Loans which have a Market Value or an Approved Price of greater than
or equal to $0.75 but less than $0.85.
(iv) "Xxxxx'x Loan Category D" means Senior Loans which have a
Market Value or an Approved Price less than $0.75.
(v) "Xxxxx'x Loan Category E" means non-Senior Loans which have a
Market Value or an Approved Price.
30
Notwithstanding any other provision contained above, for purposes of
determining whether a Xxxxx'x Eligible Asset falls within a specific Xxxxx'x
Loan Category, to the extent that any Xxxxx'x Eligible Asset would fall in more
than one of the Xxxxx'x Loan Categories, such Xxxxx'x Eligible Asset shall be
deemed to fall into the Xxxxx'x Loan Category with the lowest applicable Xxxxx'x
Discount Factor.
"1940 Act" means the Investment Company Act of 1940, as amended from
time to time.
"1940 Act Cure Date," with respect to the failure by the Trust to
maintain the 1940 Act Preferred Shares Asset Coverage (as required by these
Bylaws) as of the last Business Day of each month, means the last Business Day
of the following month.
"1940 Act Preferred Shares Asset Coverage" means asset coverage, as
defined in Section 18(h) of the 1940 Act, of at least 200% with respect to all
outstanding senior securities of the Trust which are shares of beneficial
interest, including AMPS (or such other asset coverage as may in the future be
specified in or under the 1940 Act as the minimum asset coverage for senior
securities which are shares of beneficial interest of a closed-end investment
company as a condition of paying dividends on its common shares).
"Non-Call Period" has the meaning set forth under the definition of
"Specific Redemption Provisions."
"Non-Payment Period" means a period commencing on and including a
Dividend Payment Date or redemption date for which the Trust shall fail to (i)
declare, prior to the close of business on the second Business Day preceding
such Dividend Payment Date, for payment (to the extent permitted by Section
11.2(c)(i) of these Bylaws) within three Business Days after such Dividend
Payment Date to the Holders as of 12:00 noon, New York City time, on the
Business Day preceding such Dividend Payment Date, the full amount of any
dividend on AMPS payable on such Dividend Payment Date, provided, however, that
if the Trust is not able to make such declaration in compliance with the
foregoing because an unforeseen event or unforeseen events causes or cause a day
that otherwise would have been a Business Day not to be a Business Day, then the
Trust may make such declaration on the Business Day immediately preceding the
Dividend Payment Date, if possible, or, if not possible, on the Dividend Payment
Date, and in such case the Trust shall not be deemed to have failed to declare a
dividend otherwise required to be declared, or (ii) deposit, irrevocably in
trust, in same-day funds, with the Auction Agent by 12:00 noon, New York City
time, (A) on such Dividend Payment Date the full amount of any cash dividend on
such shares payable (if declared) on such Dividend Payment Date or (B) on any
such redemption date for any AMPS called for redemption, the Mandatory
Redemption Price per share of such AMPS or, in the case of an optional
redemption, the Optional Redemption Price per share, and ending on and including
the Business Day on which, by 12:00 noon, New York City time, all unpaid cash
dividends and unpaid redemption prices shall have been so deposited or shall
have otherwise been made available to Holders in same-day funds; provided that a
Non-Payment Period shall not end unless the Trust shall have given at least five
days' but no more than 30 days' written notice of such deposit or availability
to the Auction Agent, all Existing Holders (at their addresses appearing in the
Share Books) and the Securities Depository.
31
Notwithstanding the foregoing, the failure by the Trust to deposit funds as
provided for by clauses (ii)(A) or (ii)(B) above within three Business Days
after any Dividend Payment Date or redemption date, as the case may be, in each
case to the extent contemplated by Section 11.2(c)(i) of these Bylaws, shall not
constitute a "Non-Payment Period."
"Non-Payment Period Rate" means, initially, 300% of the applicable
Reference Rate, provided that the Board of Trustees of the Trust shall have the
authority to adjust, modify, alter or change from time to time the initial
Non-Payment Period Rate if the Board of Trustees of the Trust determines and
Xxxxx'x (and any Substitute Rating Agency in lieu of Xxxxx'x in the event
Xxxxx'x shall not rate the AMPS) advises the Trust in writing that such
adjustment, modification, alteration or change will not adversely affect its
then current ratings on the AMPS.
"Normal Dividend Payment Date" has the meaning set forth in Section
11.2(b)(i) of these Bylaws.
"Notice of Redemption" means any notice with respect to the redemption
of AMPS pursuant to Section 11.4 of these Bylaws.
"Notice of Revocation" has the meaning set forth in Section
11.2(c)(iii) of these Bylaws.
"Notice of Special Dividend Period" has the meaning set forth in
Section 11.2(c)(iii) of these Bylaws.
"Optional Redemption Price" means $25,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared) to
the date fixed for redemption plus any applicable redemption premium
attributable to the designation of a Premium Call Period.
"Outstanding" means, as of any date (i) with respect to AMPS, AMPS
theretofore issued by the Trust except, without duplication, (A) any AMPS
theretofore canceled or delivered to the Auction Agent for cancellation, or
redeemed by the Trust, or as to which a Notice of Redemption shall have been
given and Deposit Securities shall have been deposited in trust or segregated by
the Trust pursuant to Section 11.4(c) hereto and (B) any AMPS as to which the
Trust or any Affiliate (other than an Affiliate that is a Broker-Dealer) thereof
shall be a Beneficial Owner, provided that AMPS held by an Affiliate shall be
deemed outstanding for purposes of calculating the Preferred Shares Basic
Maintenance Amount and (ii) with respect to other preferred shares of beneficial
interest of the Trust, the meaning equivalent to that for AMPS as set forth in
clause (i).
"Parity Shares" means the AMPS and each other outstanding series of
preferred shares of beneficial interest of the Trust the holders of which,
together with the holders of the AMPS, shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in proportion to the full respective preferential
amounts to which they are entitled, without preference or priority one over the
other.
"Performing" means with respect to any asset that is a Bank Loan or
other debt, the issuer of such investment is not in default of any payment
obligations in respect thereof.
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"Person" means and includes an individual, a corporation, a
partnership, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
"Potential Beneficial Owner" means a customer of a Broker-Dealer or a
Broker-Dealer that is not a Beneficial Owner of AMPS but that wishes to purchase
such shares, or that is a Beneficial Owner that wishes to purchase additional
AMPS.
"Potential Holder" means any Broker-Dealer or any such other Person as
may be permitted by the Trust, including any Existing Holder, who may be
interested in acquiring AMPS (or, in the case of an Existing Holder, additional
AMPS).
"Preferred Shares Basic Maintenance Amount," as of any Valuation Date,
means the dollar amount equal to the sum of (i)(A) the product of the number of
AMPS Outstanding on such date multiplied by $25,000, plus any redemption premium
applicable to AMPS then subject to redemption; (B) the aggregate amount of
dividends that will have accumulated at the respective Applicable Rates (whether
or not earned or declared) to (but not including) the first respective Dividend
Payment Dates for each series of AMPS Outstanding that follow such Valuation
Date (plus the aggregate amount of dividends, whether or not earned or declared,
that will have accumulated in respect of other outstanding preferred shares to,
but not including, the first respective dividend payment dates for such other
shares that follow such Valuation Date); (C) the aggregate amount of dividends
that would accumulate on shares of each series of AMPS Outstanding from such
first respective Dividend Payment Date therefor through the 49th day after such
Valuation Date, at the Maximum Applicable Rate (calculated as if such Valuation
Date were the Auction Date for the Dividend Period commencing on such Dividend
Payment Date) for a 7-Day Dividend Period of shares of such series to commence
on such Dividend Payment Date, multiplied by the Volatility Factor (except that
(1) if such Valuation Date occurs during a Non-Payment Period, the dividend for
purposes of calculation would accumulate at the then current Non-Payment Period
Rate and (2) for those days during the period described in this clause (C) in
respect of which the Applicable Rate in effect immediately prior to such
Dividend Payment Date will remain in effect, the dividend for purposes of
calculation would accumulate at such Applicable Rate in respect of those days);
(D) the amount of anticipated expenses of the Trust for the 90 days subsequent
to such Valuation Date; and (E) any current liabilities as of such Valuation
Date to the extent not reflected in any of (i)(A) through (i)(D) (including,
without limitation, any payables for portfolio securities of the Trust purchased
as of such Valuation Date and any liabilities incurred for the purpose of
clearing securities transactions) less (ii) the value (i.e., the face value of
cash, short-term securities rated XXX-0, XXXX-0 xx X-0, and short-term
securities that are the direct obligation of the U.S. government, provided in
each case that such securities mature on or prior to the date upon which any of
(i)(A) through (i)(E) become payable, otherwise the Discounted Value) of any of
the Trust's assets irrevocably deposited by the Trust for the payment of any of
(i)(A) through (i)(E).
"Preferred Shares Basic Maintenance Cure Date," with respect to the
failure by the Trust to satisfy the Preferred Shares Basic Maintenance Amount
(as required by Section 11.7(a) of
33
these Bylaws) as of a given Valuation Date, means the tenth Business Day
following such Valuation Date.
"Preferred Shares Basic Maintenance Report" means a report signed by
any of the President, Treasurer, any Senior Vice President or any Vice President
of the Trust which sets forth, as of the related Valuation Date, the assets of
the Trust, the Market Value and the Discounted Value thereof (seriatim and in
aggregate), and the Preferred Shares Basic Maintenance Amount.
"Premium Call Period" has the meaning set forth under the definition
of "Specific Redemption Provisions."
"Pricing Service" means any pricing service designated by the Board of
Trustees of the Trust and approved by Xxxxx'x for purposes of determining
whether the Trust has Eligible Assets with an aggregate Discounted Value that
equals or exceeds the Preferred Shares Basic Maintenance Amount.
"Quarterly Valuation Date" means the last Business Day of the last
month of each fiscal quarter of the Trust in each fiscal year of the Trust,
commencing May 31, 2003.
"Rating Agency" means a nationally recognized statistical rating
organization.
"Reference Rate" means the applicable "AA" Financial Composite
Commercial Paper Rate (for a Dividend Period of fewer than 184 days) or the
applicable Treasury Index Rate (for a Dividend Period of 184 days or more).
"Request for Special Dividend Period" has the meaning set forth in
Section 11.2(c)(iii) of these Bylaws.
"Response" has the meaning set forth in Section 11.2(c)(iii) of these
Bylaws.
"Rule 144A Securities" means securities which are restricted as to
resale under federal securities laws but are eligible for resale pursuant to
Rule 144A under the Securities Act as determined by the Trust's investment
manager or portfolio manager acting pursuant to procedures approved by the Board
of Trustees of the Trust.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., or its successors.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Securities Depository" means The Depository Trust Company and its
successors and assigns or any successor securities depository selected by the
Trust as securities depository for the AMPS that agrees to follow the procedures
required to be followed by such securities depository in connection with the
AMPS.
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"Senior Loans" has the meaning set forth under the definition of
"Xxxxx'x Discount Factor."
"Series F AMPS" means the Auction Market Preferred Shares, Series F.
"Series M AMPS" means the Auction Market Preferred Shares, Series M.
"Series T AMPS" means the Auction Market Preferred Shares, Series T.
"Series TH AMPS" means the Auction Market Preferred Shares, Series TH.
"Series W AMPS" means the Auction Market Preferred Shares, Series W.
"7-Day Dividend Period" means a Subsequent Dividend Period that (a)
consists of seven days or (b) would consist of seven days but for the fact that
the Dividend Payment Date which immediately follows, or the Dividend Payment
Date which falls within, such Subsequent Dividend Period is not a Business Day.
"Share Books" means the books maintained by the Auction Agent setting
forth at all times a current list, as determined by the Auction Agent, of
Existing Holders of the AMPS.
"Share Register" means the register of Holders maintained on behalf of
the Trust by the Auction Agent in its capacity as transfer agent and registrar
for the AMPS.
"Short Term Dividend Period" means a Special Dividend Period
consisting of a specified number of days, evenly divisible by seven and not
fewer than fourteen nor more than 364.
"Short Term Money Market Instruments" means the following types of
instruments if, on the date of purchase or other acquisition thereof by the
Trust, the remaining term to maturity thereof is not in excess of 180 days (or
270 days for instruments rated at least Aaa for purposes of determining Xxxxx'x
Eligible Assets):
(i) commercial paper rated either F-1 by Fitch or A-1 by S&P if
such commercial paper matures in 30 days or P-1 by Xxxxx'x and either
F-1+ by Fitch or A-1+ by S&P if such commercial paper matures in over
30 days;
(ii) demand or time deposits in, and banker's acceptances and
certificates of deposit of (A) a depository institution or trust
company incorporated under the laws of the United States of America or
any state thereof or the District of Columbia or (B) a United States
branch office or agency of a foreign depository institution (provided
that such branch office or agency is subject to banking regulation
under the laws of the United States, any state thereof or the District
of Columbia);
(iii) overnight funds;
(iv) U.S. Government Securities; and
35
(v) Eurodollar demand or time deposits in, or certificates of
deposit of, the head office or the London branch office of a
depository institution or trust company if the certificates of
deposit, if any, and the long-term unsecured debt obligations (other
than such obligations the ratings of which are based on the credit of
a person or entity other than such depository institution or trust
company) of such depository institution or trust company that have (1)
credit ratings on each Valuation Date of at least P-1 from Xxxxx'x and
either F-1+ from Fitch or A-1+ from S&P, in the case of commercial
paper or certificates of deposit, and (2) credit ratings on each
Valuation Date of at least Aa3 from Xxxxx'x and either AA from Fitch
or AA- from S&P, in the case of long-term unsecured debt obligations;
provided, however, that in the case of any such investment that
matures in no more than one Business Day from the date of purchase or
other acquisition by the Trust, all of the foregoing requirements
shall be applicable except that the required long-term unsecured debt
credit rating of such depository institution or trust company from
Xxxxx'x, Fitch and S&P shall be at least A2, A-2 and A, respectively;
and provided further, however, that the foregoing credit rating
requirements shall be deemed to be met with respect to a depository
institution or trust company if (1) such depository institution or
trust company is the principal depository institution in a holding
company system, (2) the certificates of deposit, if any, of such
depository institution or trust company are not rated on any Valuation
Date below P-1 by Xxxxx'x, F-1+ by Fitch or A-1+ by S&P and there is
no long-term rating, and (3) the holding company shall meet all of the
foregoing credit rating requirements (including the preceding proviso
in the case of investments that mature in no more than one Business
Day from the date of purchase or other acquisition by the Trust); and
provided further, that the interest receivable by the Trust shall not
be subject to any withholding or similar taxes.
"Special Dividend Period" (sometimes referred to as a "Special Rate
Period") means a Short Term Dividend Period or a Long Term Dividend Period.
"Specific Redemption Provisions" means, with respect to a Special
Dividend Period either, or both, of (i) a period (a "Non-Call Period")
determined by the Board of Trustees of the Trust, after consultation with the
Auction Agent and the Broker-Dealers, during which the AMPS subject to such
Special Dividend Period shall not be subject to redemption at the option of the
Trust and (ii) a period (a "Premium Call Period"), consisting of a number of
whole years and determined by the Board of Trustees of the Trust, after
consultation with the Auction Agent and the Broker-Dealers, during each year of
which the AMPS subject to such Special Dividend Period shall be redeemable at
the Trust's option at a price per share equal to $25,000, plus accumulated but
unpaid dividends (whether or not earned or declared) to (but not including) the
date fixed for redemption, plus a premium expressed as a percentage or
percentages of $25,000, as determined by the Board of Trustees of the Trust
after consultation with the Auction Agent and the Broker-Dealers.
"Structured Notes" means privately negotiated debt obligations where
the principal and/or interest is determined by reference to the performance of a
benchmark asset or market (an "embedded index"), such as selected securities or
an index of securities, or the differential performance of two assets or
markets, such as indices reflecting bonds.
36
"Subsequent Dividend Period" has the meaning set forth in Section
11.2(c)(i) of these Bylaws.
"Substitute Rating Agency" means a Rating Agency selected by Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated or its affiliates and successors,
after consultation with the Trust, to act as the substitute Rating Agency to
determine the credit ratings of the AMPS.
"Sufficient Clearing Bids" has the meaning set forth in Section
11.10(d)(i) of these Bylaws.
"TRACERs" means traded custody receipts representing direct ownership
in a portfolio of underlying securities.
"Treasury Xxxx" means a direct obligation of the U.S. government
having a maturity at the time of issuance of 364 days or less.
"Treasury Bonds" means United States Treasury Bonds or Notes.
"Treasury Index Rate" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities having the same
number of 30-day periods to maturity as the length of the applicable Dividend
Period, determined, to the extent necessary, by linear interpolation based upon
the yield for such securities having the next shorter and next longer number of
30-day periods to maturity treating all Dividend Periods with a length greater
than the longest maturity for such securities as having a length equal to such
longest maturity, in all cases based upon data set forth in the most recent
weekly statistical release published by the Board of Governors of the Federal
Reserve System (currently in H.15 (519)); provided, however, if the most recent
such statistical release shall not have been published during the 15 days
preceding the date of computation, the foregoing computations shall be based
upon the average of comparable data as quoted to the Trust by at least three
recognized dealers in U.S. government securities selected by the Trust.
"U.S. Government Securities" means direct obligations of the United
States or of its agencies or instrumentalities that are entitled to the full
faith and credit of the United States and that, other than Treasury Bills,
provide for the periodic payment of interest and the full payment of principal
at maturity or call for redemption.
"U.S. Treasury Securities" means direct obligations of the United
States Treasury that are entitled to the full faith and credit of the United
States.
"U.S. Treasury Strips" means securities based on U.S. Treasury
Securities created through the Separate Trading of Registered Interest and
Principal of Securities program.
"Valuation Date" means, for purposes of determining whether the Trust
is maintaining the Preferred Shares Basic Maintenance Amount, the last Business
Day of each week commencing with the Date of Original Issue.
37
"Volatility Factor" means 1.89.
"Voting Period" has the meaning set forth in Section 11.5(b) of these
Bylaws.
(b) The foregoing definitions of Accountant's Confirmation, Closing
Transactions, Deposit Securities, Discounted Value, Forward Commitment,
Independent Accountant, Market Value, Maximum Applicable Rate, Xxxxx'x Advance
Rate, Xxxxx'x Discount Factor, Xxxxx'x Eligible Assets, Xxxxx'x Exposure Period,
Xxxxx'x Hedging Transactions, Xxxxx'x Industry Classification, Xxxxx'x Loan
Category, 1940 Act Cure Date, 1940 Act Preferred Shares Asset Coverage,
Preferred Shares Basic Maintenance Amount, Preferred Shares Basic Maintenance
Cure Date, Preferred Shares Basic Maintenance Report, Short Term Money Market
Instruments, Treasury Bonds, Valuation Date and Volatility Factor (and any terms
defined within such definitions) have been determined by the Board of Trustees
of the Trust in order to obtain a rating of "Aaa" from Xxxxx'x on the AMPS on
their Date of Original Issue; and the Board of Trustees of the Trust shall have
the authority, without shareholder approval, to amend, alter or repeal from time
to time the foregoing definitions (and any terms defined within such
definitions) and the restrictions and guidelines set forth thereunder if Xxxxx'x
or any Substitute Rating Agency advises the Trust in writing that such
amendment, alteration or repeal will not adversely affect its then current
rating on the AMPS.
11.2 DIVIDENDS.
(a) The Holders of a particular series of AMPS shall be entitled
to receive, when, as and if declared by the Board of Trustees of the Trust,
out of funds legally available therefor, cumulative dividends each
consisting of cash at the Applicable Rate and no more, payable on the
respective dates set forth below. Dividends on the shares of each series of
AMPS so declared and payable shall be paid in preference to and in priority
over any dividends declared and payable on the Common Shares.
(b) (i) Cash dividends on shares of each series of AMPS shall
accumulate at the relevant Applicable Rate(s) from the Date of Original
Issue and shall be payable, when, as and if declared by the Board of
Trustees of the Trust, out of funds legally available therefor, commencing
on the Initial Dividend Payment Date. Following the Initial Dividend
Payment Date for a series of AMPS, dividends on that series of AMPS will be
payable, at the option of the Trust, either (i) with respect to any 7-Day
Dividend Period and any Short Term Dividend Period of 35 or fewer days, on
the day next succeeding the last day thereof, or (ii) with respect to any
Short Term Dividend Period of more than 35 days and with respect to any
Long Term Dividend Period, monthly on the first Business Day of each
calendar month during such Short Term Dividend Period or Long Term Dividend
Period and on the day next succeeding the last day thereof (each such date
referred to in clause (i) or (ii) being herein referred to as a "Normal
Dividend Payment Date"), except that if such Normal Dividend Payment Date
is not a Business Day, then the Dividend Payment Date shall be the first
Business Day next succeeding such Normal Dividend Payment Date. Although
any particular Dividend Payment Date may not occur on the originally
scheduled date because of the exceptions discussed above, the next
succeeding Dividend Payment Date, subject to such exceptions, will occur on
38
the next following originally scheduled date. If for any reason a Dividend
Period for a series of AMPS is scheduled to begin on the same day and end
on the same day as a Dividend Period for another series of AMPS, then the
last day of such Dividend Period for such other series of AMPS shall be the
second Business Day next succeeding such scheduled day unless the Trust
obtains the opinion of tax counsel referred to in this paragraph. Subject
to the limitation in the next sentence, if for any reason a Dividend
Payment Date cannot be fixed as described above, then the Board of Trustees
of the Trust shall fix the Dividend Payment Date. However, no Dividend
Period of any series of AMPS shall be co-extensive with any Dividend Period
of any other series of AMPS unless the Trust has received an opinion of tax
counsel that having such co-extensive periods will not affect the
deductibility, for federal income tax purposes, of dividends paid on the
different series of AMPS. The Board of Trustees of the Trust before
authorizing a dividend may change a Dividend Payment Date if such change
does not adversely affect the contract rights of the Holders of AMPS set
forth in the Declaration of Trust or the Bylaws. The Initial Dividend
Period, 7-Day Dividend Periods and Special Dividend Periods with respect to
a series of AMPS are hereinafter sometimes referred to as "Dividend
Periods." Each dividend payment date determined as provided above is
hereinafter referred to as a "Dividend Payment Date."
(ii) Each dividend shall be paid to the Holders as they
appear in the Stock Register as of 12:00 noon, New York City time, on
the Business Day preceding the Dividend Payment Date. Dividends in
arrears for any past Dividend Period may be declared and paid at any
time, without reference to any regular Dividend Payment Date, to the
Holders as they appear on the Stock Register on a date, not exceeding
15 days prior to the payment date therefor, as may be fixed by the
Board of Trustees of the Trust.
(c) (i) During the period from and including the Date of Original
Issue to but excluding the Initial Dividend Payment Date for a series of
AMPS (the "Initial Dividend Period"), the Applicable Rate for such series
of AMPS shall be the Initial Dividend Rate. Commencing on the Initial
Dividend Payment Date for a series of AMPS, the Applicable Rate on that
series for each subsequent dividend period (hereinafter referred to as a
"Subsequent Dividend Period"), which Subsequent Dividend Period shall
commence on and include a Dividend Payment Date and shall end on and
include the calendar day prior to the next Dividend Payment Date (or last
Dividend Payment Date in a Dividend Period if there is more than one
Dividend Payment Date), shall be equal to the rate per annum that results
from implementation of the Auction Procedures.
For a series of AMPS, the Applicable Rate for such series for
each Dividend Period commencing during a Non-Payment Period shall be equal
to the Non-Payment Period Rate; and each Dividend Period, commencing after
the first day of and during, but not after the end of, a Non-Payment Period
shall be a 7-Day Dividend Period. Except in the case of the willful failure
of the Trust to pay a dividend on a Dividend Payment Date or to redeem any
AMPS on the date set for such redemption, any amount of any dividend due on
any Dividend Payment Date (if, prior to the close of business on the second
Business Day preceding such Dividend Payment Date, the Trust has declared
such dividend payable on such Dividend Payment Date to the Holders of such
AMPS as of 12:00 noon, New York City time, on the
39
Business Day preceding such Dividend Payment Date) or redemption price with
respect to any AMPS not paid to such Holders when due may be paid to such
Holders in the same form of funds by 12:00 noon, New York City time, on any
of the first three Business Days after such Dividend Payment Date or due
date, as the case may be, provided that such amount is accompanied by a
late charge calculated for such period of non-payment at the Non-Payment
Period Rate applied to the amount of such non-payment based on the actual
number of days comprising such period (excluding any days that would have
been Business Days but for the occurrence of any unforeseen event or
unforeseen events that caused such days not to be Business Days) divided by
365, and in such case such period shall not constitute a Non-Payment
Period; provided, however, that the Trust shall not be required to pay any
late charge if it declares a dividend on the Dividend Payment Date or the
Business Day immediately preceding such Dividend Payment Date in accordance
with clause (i) of the definition of "Non-Payment Period" and deposits
payment for such dividend as contemplated by clause (ii)(A) of the
definition of "Non-Payment Period" on or before the second Business Day
succeeding the day on which the dividend was declared. In the case of a
willful failure of the Trust to pay a dividend on a Dividend Payment Date
or to redeem any AMPS on the date set for such redemption, the preceding
sentence shall not apply and the Applicable Rate for the Dividend Period
commencing during the Non-Payment Period resulting from such failure shall
be the Non-Payment Period Rate. For purposes of the foregoing, payment to a
person in same-day funds on any Business Day at any time shall be
considered equivalent to payment to such person in New York Clearing House
(next-day) funds at the same time on the preceding Business Day, and any
payment made after 12:00 noon, New York City time, on any Business Day
shall be considered to have been made instead in the same form of funds and
to the same person before 12:00 noon, New York City time, on the next
Business Day.
(ii) The amount of cash dividends per share of any series of
AMPS payable (if declared) on the Initial Dividend Payment Date, each
7-Day Dividend Period and each Dividend Payment Date of each Short
Term Dividend Period shall be computed by multiplying the Applicable
Rate for such Dividend Period by a fraction, the numerator of which
will be the number of days in such Dividend Period or part thereof
that such share was outstanding and the denominator of which will be
365, multiplying the amount so obtained by $25,000, and rounding the
amount so obtained to the nearest cent. During any Long Term Dividend
Period, the amount of cash dividends per share of a series of AMPS
payable (if declared) on any Dividend Payment Date shall be computed
by multiplying the Applicable Rate for such Dividend Period by a
fraction, the numerator of which will be such number of days in such
part of such Dividend Period that such share was outstanding and for
which dividends are payable on such Dividend Payment Date and the
denominator of which will be 360, multiplying the amount so obtained
by $25,000, and rounding the amount so obtained to the nearest cent.
(iii) The Trust may, at its sole option and to the extent
permitted by law, by telephonic and written notice (a "Request for
Special Dividend Period") to the Auction Agent and to each
Broker-Dealer, request that the next succeeding Dividend Period for a
series of AMPS be a number of days (other than seven), evenly
divisible by seven and
40
not fewer than fourteen nor more than 364 in the case of a Short Term
Dividend Period or one whole year or more but not greater than five
years in the case of a Long Term Dividend Period, specified in such
notice, provided that the Trust may not give a Request for Special
Dividend Period for a Dividend Period of greater than 28 days (and any
such request shall be null and void) unless, for any Auction occurring
after the initial Auction, Sufficient Clearing Bids were made in the
last occurring Auction and unless full cumulative dividends and any
amounts due with respect to redemptions have been paid in full. Such
Request for Special Dividend Period, in the case of a Short Term
Dividend Period, shall be given on or prior to the second Business Day
but not more than seven Business Days prior to an Auction Date for a
series of AMPS and, in the case of a Long Term Dividend Period, shall
be given on or prior to the second Business Day but not more than 28
days prior to an Auction Date for a series of AMPS. Upon receiving
such Request for Special Dividend Period, the Broker-Dealer(s) shall
jointly determine the Optional Redemption Price of the AMPS during
such Special Dividend Period and the Specific Redemption Provisions
and shall give the Trust and the Auction Agent written notice (a
"Response") of such determination by no later than the second Business
Day prior to such Auction Date. In making such determination the
Broker-Dealer(s) will consider (1) existing short-term and long-term
market rates and indices of such short-term and long-term rates, (2)
existing market supply and demand for short-term and long-term
securities, (3) existing yield curves for short-term and long-term
securities comparable to the AMPS, (4) industry and financial
conditions which may affect the AMPS, (5) the investment objectives of
the Trust, and (6) the Dividend Periods and dividend rates at which
current and potential beneficial holders of the AMPS would remain or
become beneficial holders. After providing the Request for Special
Dividend Period to the Auction Agent and each Broker-Dealer as set
forth above, the Trust may by no later than the second Business Day
prior to such Auction Date give a notice (a "Notice of Special
Dividend Period") to the Auction Agent, the Securities Depository and
each Broker-Dealer which notice will specify (i) the duration of the
Special Dividend Period, (ii) the Optional Redemption Price as
specified in the related Response and (iii) the Specific Redemption
Provisions, if any, as specified in the related Response. The Trust
also shall provide a copy of such Notice of Special Dividend Period to
Xxxxx'x and any Substitute Rating Agency. The Trust shall not give a
Notice of Special Dividend Period and, if the Trust has given a Notice
of Special Dividend Period, the Trust is required to give telephonic
and written notice of its revocation (a "Notice of Revocation") to the
Auction Agent, each Broker-Dealer, and the Securities Depository on or
prior to the Business Day prior to the relevant Auction Date if (x)
either the 1940 Act Preferred Shares Asset Coverage is not satisfied
or the Trust shall fail to maintain Xxxxx'x Eligible Assets with an
aggregate Discounted Value at least equal to the Preferred Shares
Basic Maintenance Amount, on each of the two Valuation Dates
immediately preceding the Business Day prior to the relevant Auction
Date on an actual basis and on a pro forma basis giving effect to the
proposed Special Dividend Period (using as a pro forma dividend rate
with respect to such Special Dividend Period the dividend rate which
the Broker-Dealers shall advise the Trust is an approximately equal
rate for securities similar to the AMPS with an equal dividend period)
or (y) sufficient funds for the payment of dividends payable on the
immediately succeeding Dividend Payment Date have not been
41
irrevocably deposited with the Auction Agent by the close of business
on the third Business Day preceding the Auction Date immediately
preceding such Dividend Payment Date. The Trust also shall provide a
copy of such Notice of Revocation to Xxxxx'x and any Substitute Rating
Agency. If the Trust is prohibited from giving a Notice of Special
Dividend Period as a result of any of the factors enumerated in clause
(x) or (y) above or if the Trust gives a Notice of Revocation with
respect to a Notice of Special Dividend Period for any series of AMPS,
the next succeeding Dividend Period will be a 7-Day Dividend Period.
In addition, in the event Sufficient Clearing Bids are not made in an
Auction, or if an Auction is not held for any reason, such next
succeeding Dividend Period will be a 7-Day Dividend Period and the
Trust may not again give a Notice of Special Dividend Period for the
AMPS (and any such attempted notice shall be null and void) until
Sufficient Clearing Bids have been made in an Auction with respect to
a 7-Day Dividend Period. If an Auction is not held because an
unforeseen event or unforeseen events cause a day that otherwise would
have been a Dividend Payment Date or an Auction Date not to be a
Business Day, then the length of the Dividend Period relating to such
Dividend Payment Date shall be extended by seven days (or a multiple
thereof if necessary because of such unforeseen event or events) (an
"Extension Period"), the Applicable Rate for such Extension Period
shall be the Applicable Rate for the Dividend Period so extended and
the Dividend Payment Date for such Dividend Period shall be the first
Business Day next succeeding the end of such Extension Period.
(d) (i) Holders shall not be entitled to any dividends, whether
payable in cash, property or AMPS, in excess of full cumulative dividends
as herein provided. Except for the late charge payable pursuant to Section
11.2(c)(i) hereof, no interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend payment on the AMPS that may be in
arrears.
(ii) For so long as any AMPS are Outstanding, the Trust
shall not declare, pay or set apart for payment any dividend or other
distribution (other than a dividend or distribution paid in shares of,
or options, warrants or rights to subscribe for or purchase, Common
Shares or other shares of beneficial interest, if any, ranking junior
to the AMPS as to dividends or upon liquidation) in respect of the
Common Shares or any other shares of beneficial interest of the Trust
ranking junior to or on a parity with the AMPS as to dividends or upon
liquidation, or call for redemption, redeem, purchase or otherwise
acquire for consideration any Common Shares or any other such junior
shares (except by conversion into or exchange for shares of the Trust
ranking junior to the AMPS as to dividends and upon liquidation) or
any other such Parity Shares (except by conversion into or exchange
for stock of the Trust ranking junior to or on a parity with the AMPS
as to dividends and upon liquidation), unless (A) immediately after
such transaction, the Trust shall have Xxxxx'x Eligible Assets each
with an aggregate Discounted Value equal to or greater than the
Preferred Shares Basic Maintenance Amount and the Trust shall maintain
the 1940 Act Preferred Shares Asset Coverage, (B) full cumulative
dividends on AMPS due on or prior to the date of the transaction have
been declared and paid or shall have been declared and sufficient
funds for the payment thereof deposited with the Auction Agent and (C)
the Trust has redeemed the full number of AMPS required to be
42
redeemed by any provision for mandatory redemption contained herein.
Further, for so long as any AMPS are Outstanding, the Trust shall not
declare, pay or set apart for payment any dividend or other
distribution on any Parity Shares other than the AMPS unless
contemporaneously therewith it declares, pays or sets apart for
payment, as the case may be, the same proportionate share of dividends
on the AMPS.
(e) Each dividend shall consist of cash at the Applicable Rate.
(f) No fractional AMPS shall be issued.
(g) Solely for purposes of the proviso in clause (i) under the
definition of "Non-Payment Period," the second parenthetical in the second
sentence of the second paragraph of Section 11.2(c)(i) of these Bylaws and
the last sentence of Section 11.2(c)(iii) of these Bylaws, any day on which
banks in New York City generally are closed, for any reason, while the New
York Stock Exchange remains open for trading and any day which otherwise
would be a Business Day as defined in these Bylaws on which the Auction
Agent is closed for business, for any reason, shall be considered a day
which is not a Business Day.
11.3 LIQUIDATION RIGHTS. Upon any liquidation, dissolution or winding
up of the Trust, whether voluntary or involuntary, the Holders shall be entitled
to receive, out of the assets of the Trust available for distribution to
shareholders, before any distribution or payment is made upon any Common Shares
or any other shares of beneficial interest ranking junior in right of payment
upon liquidation to the AMPS, the sum of $25,000 per share plus accumulated but
unpaid dividends (whether or not earned or declared) thereon to the date of
distribution, and after such payment the Holders will be entitled to no other
payments. If upon any liquidation, dissolution or winding up of the Trust, the
amounts payable with respect to the AMPS and any other Outstanding class or
series of preferred shares of beneficial interest of the Trust ranking on a
parity with the AMPS as to payment upon liquidation are not paid in full, the
Holders and the holders of such other class or series will share ratably in any
such distribution of assets in proportion to the respective preferential amounts
to which they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the Holders will not be entitled to any
further participation in any distribution of assets by the Trust. A
consolidation, merger or statutory share exchange of the Trust with or into any
other Trust or entity or a sale, whether for cash, shares of stock, securities
or properties, of all or substantially all or any part of the assets of the
Trust shall not be deemed or construed to be a liquidation, dissolution or
winding up of the Trust.
11.4 REDEMPTION.
(a) AMPS shall be redeemable by the Trust as provided below:
(i) To the extent permitted under the 1940 Act and
Massachusetts law, upon giving a Notice of Redemption, the Trust
at its option may redeem shares of any series of AMPS, in whole
or in part, out of funds legally available therefor, at the
Optional Redemption Price per share, on any Dividend Payment
Date; provided that no AMPS may be redeemed at the option of the
Trust during (A) the Initial Dividend
43
Period with respect to a series of shares or (B) a Non-Call
Period to which such share is subject.
(ii) The Trust shall redeem, out of funds legally
available therefor, at the Mandatory Redemption Price per share,
AMPS to the extent permitted under the 1940 Act and Massachusetts
law, on a date fixed by the Board of Trustees of the Trust, if
the Trust fails to maintain Xxxxx'x Eligible Assets with an
aggregate Discounted Value equal to or greater than the Preferred
Shares Basic Maintenance Amount as provided in Section 11.7(a) or
to satisfy the 1940 Act Preferred Shares Asset Coverage as
provided in Section 11.6 and such failure is not cured on or
before the Preferred Shares Basic Maintenance Cure Date or the
1940 Act Cure Date (herein collectively referred to as a "Cure
Date"), as the case may be. The number of AMPS to be redeemed
shall be equal to the lesser of (i) the minimum number of AMPS
the redemption of which, if deemed to have occurred immediately
prior to the opening of business on the Cure Date, together with
other preferred shares of beneficial interest of the Trust
subject to redemption or retirement, would result in the Trust
having Xxxxx'x Eligible Assets with an aggregate Discounted Value
equal to or greater than the Preferred Shares Basic Maintenance
Amount or satisfaction of the 1940 Act Preferred Shares Asset
Coverage, as the case may be, on such Cure Date (provided that,
if there is no such minimum number of AMPS and other preferred
shares of beneficial interest of the Trust the redemption of
which would have such result, all AMPS and other preferred shares
of beneficial interest of the Trust then Outstanding shall be
redeemed), and (ii) the maximum number of AMPS, together with all
other preferred shares of beneficial interest of the Trust
subject to redemption or retirement, that can be redeemed out of
funds expected to be legally available therefor on such
redemption date. In determining the number of AMPS required to be
redeemed in accordance with the foregoing, the Trust shall
allocate the number required to be redeemed which would result in
the Trust having Xxxxx'x Eligible Assets with an aggregate
Discounted Value equal to or greater than the Preferred Shares
Basic Maintenance Amount or satisfaction of the 1940 Act
Preferred Shares Asset Coverage, as the case may be, pro rata
among AMPS of all series and other preferred shares of beneficial
interest of the Trust subject to redemption pursuant to
provisions similar to those contained in this Section
11.4(a)(ii); provided that AMPS which may not be redeemed at the
option of the Trust due to the designation of a Non-Call Period
applicable to such shares (A) will be subject to mandatory
redemption only to the extent that other shares are not available
to satisfy the number of shares required to be redeemed and (B)
will be selected for redemption in an ascending order of
outstanding number of days remaining in the Non-Call Period (with
shares with the lowest number of days to be redeemed first) and
by lot in the event of shares having an equal number of days in
such Non-Call Period. The Trust shall effect such redemption on a
Business Day which is not later than 35 days after such Cure
Date, except that if the Trust does not have funds legally
available for the redemption of all of the required number of
AMPS and other preferred shares of beneficial interest of the
Trust which are subject to mandatory redemption or the Trust
otherwise is unable to effect such redemption on or prior to 35
days after such Cure Date, the Trust shall
44
redeem those AMPS which it is unable to redeem on the earliest
practicable date on which it is able to effect such redemption
out of funds legally available therefor.
(b) Notwithstanding any other provision of this Section 11.4, no
AMPS may be redeemed pursuant to Section 11.4(a)(i) of these Bylaws unless
(i) all dividends in arrears on all remaining outstanding Parity Shares
shall have been or are being contemporaneously paid or declared and set
apart for payment, and (ii) redemption thereof would not result in the
Trust's failure to maintain Xxxxx'x Eligible Assets with an aggregate
Discounted Value equal to or greater than the Preferred Shares Basic
Maintenance Amount. In the event that less than all the outstanding shares
of a series of AMPS are to be redeemed and there is more than one Holder,
the shares of that series of AMPS to be redeemed shall be selected by lot
or such other method as the Trust shall deem fair and equitable.
(c) Whenever AMPS are to be redeemed, the Trust, not less than 17
nor more than 30 days prior to the date fixed for redemption, shall mail a
notice ("Notice of Redemption") by first-class mail, postage prepaid, to
each Holder of AMPS to be redeemed and to the Auction Agent. The Notice of
Redemption shall set forth (i) the redemption date, (ii) the amount of the
redemption price, (iii) the aggregate number of AMPS of such series to be
redeemed, (iv) the place or places where AMPS of such series are to be
surrendered for payment of the redemption price, (v) a statement that
dividends on the shares to be redeemed shall cease to accumulate on such
redemption date, and (vi) the provision of these Bylaws pursuant to which
such shares are being redeemed. No defect in the Notice of Redemption or in
the mailing or publication thereof shall affect the validity of the
redemption proceedings, except as required by applicable law.
If the Notice of Redemption shall have been given as aforesaid
and, concurrently or thereafter, the Trust shall have deposited in trust
with the Auction Agent, or segregated in an account at the Trust's
custodian bank for the benefit of the Auction Agent, Deposit Securities
(with a right of substitution) having an aggregate Discounted Value equal
to the redemption payment (including any applicable premiums) for the AMPS
as to which such Notice of Redemption has been given with irrevocable
instructions and authority to pay the redemption price to the Holders of
such shares, then upon the date of such deposit or, if no such deposit is
made, then upon such date fixed for redemption (unless the Trust shall
default in making the redemption payment), all rights (including without
limitation voting rights) of the Holders of such shares as shareholders of
the Trust by reason of the ownership of such shares will cease and
terminate (except their right to receive the redemption price in respect
thereof, but without interest), and such shares shall no longer be deemed
Outstanding. The Trust shall be entitled to receive, from time to time,
from the Auction Agent the interest, if any, on such Deposit Securities
deposited with it and the Holders of any shares so redeemed shall have no
claim to any of such interest. In case the Holder of any shares so called
for redemption shall not claim the redemption payment for his shares within
one year after the date of redemption, the Auction Agent shall, upon
demand, pay over to the Trust such amount remaining on deposit and the
Auction Agent shall thereupon be relieved of all responsibility to the
Holder of such shares called for redemption and such Holder thereafter
shall look only to the Trust for the redemption payment.
45
11.5 Voting Rights.
(a) GENERAL. Except as otherwise provided in the Declaration of
Trust or Bylaws or as otherwise required by applicable law, each Holder of
AMPS shall be entitled to one vote for each share held on each matter
submitted to a vote of shareholders of the Trust, and the holders of
Outstanding preferred shares of beneficial interest of the Trust, including
AMPS, and of Common Shares shall vote together as a single class; provided
that the holders of Outstanding preferred shares of beneficial interest of
the Trust, including AMPS, shall be entitled, as a class, to the exclusion
of the holders of all other securities and classes of shares of beneficial
interest of the Trust, to elect two Trustees of the Trust. Subject to
Section 11.5(b) hereof, the holders of shares of beneficial interest of the
Trust, including the holders of preferred shares of beneficial interest of
the Trust, including AMPS, voting as a single class, shall elect the
balance of the trustees.
(b) RIGHT TO ELECT MAJORITY OF BOARD OF TRUSTEES. Except as
otherwise required by law, during any period in which any one or more of
the conditions described below shall exist (such period being referred to
herein as a "Voting Period"), the number of trustees constituting the Board
of Trustees of the Trust shall be automatically increased by the smallest
number that, when added to the two trustees elected exclusively by the
holders of preferred shares of beneficial interest of the Trust, including
the AMPS, would constitute a majority of the Board of Trustees of the Trust
as so increased by such smallest number; and the holders of preferred
shares of beneficial interest of the Trust shall be entitled, voting
separately as one class (to the exclusion of the holders of all other
securities and classes of shares of beneficial interest of the Trust), to
elect such smallest number of additional trustees (as so elected, the
"Additional Trustees"), in addition to the two trustees that such holders
are in any event entitled to elect.
A Voting Period shall commence:
(i) if at any time accumulated dividends (whether or
not earned or declared, and whether or not funds are then legally
available in an amount sufficient therefor) on any outstanding
preferred shares, including the AMPS, equal to at least two full
years' dividends shall be due and unpaid and sufficient cash or
specified securities shall not have been deposited with the
Auction Agent for the payment of such accumulated dividends; or
(ii) if at any time holders of any preferred shares of
beneficial interest of the Trust, including the holders of AMPS,
are entitled to elect a majority of the trustees of the Trust
under the 1940 Act.
Upon the termination of a Voting Period, the voting
rights described in this Section 11.5(b) shall cease, subject
always, however, to the revesting of such voting rights in the
Holders upon the further occurrence of any of the events
described in Section 11.5(b), the terms of the Additional
Trustees shall terminate automatically, and the remaining
Trustees shall constitute the Trustees of the Trust.
46
(c) RIGHT TO VOTE WITH RESPECT TO CERTAIN OTHER MATTERS. So long
as any AMPS are Outstanding, the Trust shall not, without the affirmative
vote or consent of the holders of a majority of the preferred shares of the
Trust, including all AMPS, Outstanding at the time, voting separately as
one class: (i) authorize, create or issue any class or series of shares of
beneficial interest ranking prior to the AMPS or any other series of
preferred shares of beneficial interest of the Trust with respect to
payment of dividends or the distribution of assets upon dissolution,
liquidation, or winding up of the affairs of the Trust; provided, however,
that no vote is required to authorize the issuance of another series of
AMPS or another class of preferred shares of beneficial interest of the
Trust that is substantially identical in all respects to the AMPS, or (ii)
amend, alter or repeal the provisions of the Declaration of Trust or
Bylaws, whether by merger, consolidation or otherwise, so as to adversely
affect any of the contract rights expressly set forth in the Declaration of
Trust or Bylaws of holders of AMPS or any other preferred shares of
beneficial interest of the Trust. To the extent permitted under the 1940
Act, in the event shares of more than one series of preferred shares of the
Trust, including AMPS, are outstanding, the Trust shall not approve any of
the actions set forth in clause (i) or (ii) which adversely affects the
contract rights expressly set forth in the Declaration of Trust or Bylaws
of a Holder of a series of AMPS differently than those of a Holder of any
other series of preferred shares of the Trust, including AMPS, without the
affirmative vote of the holders of at least a majority of the AMPS of each
series adversely affected and Outstanding at such time (each such adversely
affected series voting separately as a class). Unless a higher percentage
is provided for under the Declaration of Trust or these Bylaws, the
affirmative vote of the holders of a majority of the outstanding preferred
shares of beneficial interest of the Trust, including AMPS, voting together
as a single class, will be required to approve any plan of reorganization
(including bankruptcy proceedings) adversely affecting such shares or any
action requiring a vote of security holders under Section 13(a) of the 1940
Act. To the extent permitted under the 1940 Act, in the event shares of
more than one series of AMPS are outstanding, with respect to any action
requiring Shareholder approval pursuant to the operation of Section 2 or
Section 3 of Article V of the Declaration of Trust, the affirmative vote of
at least seventy-five percent of the AMPS of each series Outstanding at
such time (each such series voting separately as a class) shall also be
required. The class (and, where applicable, the series) vote of holders of
preferred shares of beneficial interest of the Trust, including AMPS,
described above will in each case be in addition to a separate vote of the
requisite percentage of Common Shares and preferred shares of beneficial
interest of the Trust, including AMPS, voting together as a single class
necessary to authorize the action in question.
(d) VOTING PROCEDURES.
(i) As soon as practicable after the accrual of any
right of the holders of preferred shares of beneficial interest
of the Trust to elect additional trustees as described in Section
11.5(b) above, the Trust shall call a special meeting of such
holders and instruct the Auction Agent and any other registrar
for preferred shares of beneficial interest of the Trust other
than AMPS to mail a notice of such special meeting to such
holders, such meeting to be held not less than 10 nor more than
20 days after the date of mailing of such notice. If the Trust
fails to send such notice to
47
the Auction Agent and any other applicable registrar, or if the
Trust does not call such a special meeting, it may be called by
any such holder on like notice. The record date for determining
the holders entitled to notice of and to vote at such special
meeting shall be the close of business on the fifth Business Day
preceding the day on which such notice is mailed. At any such
special meeting and at each meeting held during a Voting Period
at which trustees are to be elected, such holders, voting
together as a class (to the exclusion of the holders of all other
securities and classes of shares of beneficial interest of the
Trust), shall be entitled to elect the number of Trustees
prescribed in Section 11.5(b) above. At any such meeting or
adjournment thereof in the absence of a quorum, a majority of
such holders present in person or by proxy shall have the power
to adjourn the meeting without notice, other than by an
announcement at the meeting, to a date not more than 120 days
after the original record date.
(ii) Except as otherwise required by applicable law,
for purposes of determining any rights of the Holders to vote on
any matter or the number of shares required to constitute a
quorum, whether such right is created by these Bylaws, by the
other provisions of the Declaration of Trust, by statute or
otherwise, an Auction Market Preferred Share which is not
Outstanding shall not be counted.
(iii) The terms of office of all persons who are
trustees of the Trust at the time of a special meeting of Holders
and holders of other preferred shares of beneficial interest of
the Trust to elect trustees shall continue, notwithstanding the
election at such meeting by the Holders and such other holders of
the number of trustees that they are entitled to elect, and the
persons so elected by the Holders and such other holders,
together with the two incumbent trustees elected by the Holders
and such other holders of preferred shares of beneficial interest
of the Trust and the remaining incumbent trustees elected by the
holders of the Common Shares and preferred shares of beneficial
interest of the Trust, shall constitute the duly elected trustees
of the Trust.
(iv) Simultaneously with the termination of a Voting
Period, the terms of office of the Additional Trustees shall
automatically terminate, the remaining trustees shall constitute
the trustees of the Trust and the voting rights of the Holders
and such other holders to elect additional trustees pursuant to
Section 11.5(b) above shall cease, subject to the provisions of
the last sentence of Section 11.5(b).
(e) EXCLUSIVE REMEDY. Unless otherwise required by law, the
Holders shall not have any rights or preferences other than those
specifically set forth herein. The Holders shall have no preemptive rights
or rights to cumulative voting. In the event that the Trust fails to pay
any dividends on the AMPS, the exclusive remedy of the Holders shall be the
right to vote for trustees pursuant to the provisions of this Section 11.5.
48
11.6 1940 ACT PREFERRED SHARES ASSET COVERAGE. The Trust shall
maintain, as of the last Business Day of each month in which any AMPS are
outstanding, the 1940 Act Preferred Shares Asset Coverage.
11.7 PREFERRED SHARES BASIC MAINTENANCE AMOUNT.
(a) So long as any AMPS are outstanding and any Rating Agency so
requires, the Trust shall maintain, on each Valuation Date, and shall
verify to its satisfaction that it is maintaining on such Valuation Date,
Moody's Eligible Assets having an aggregate Discounted Value equal to or
greater than the Preferred Shares Basic Maintenance Amount. Upon any
failure to maintain the required Discounted Value, the Trust will use its
best efforts to alter the composition of its portfolio to retain a
Discounted Value of Moody's Eligible Assets at least equal to the Preferred
Shares Basic Maintenance Amount on or prior to the Preferred Shares Basic
Maintenance Cure Date.
(b) On or before 5:00 p.m., New York City time, on the third
Business Day after a Valuation Date on which the Trust fails to satisfy the
Preferred Shares Basic Maintenance Amount, the Trust shall complete and
deliver to (i) the Auction Agent and (ii) Moody's and any other Rating
Agency then rating the AMPS the Discounted Value of whose Eligible Assets
held by the Trust fails to satisfy the Preferred Shares Basic Maintenance
Amount, as applicable, a complete Preferred Shares Basic Maintenance Report
as of the date of such failure, which will be deemed to have been delivered
to such recipient if the recipient receives a copy or telecopy, telex or
other electronic transcription thereof and on the same day the Trust mails
to the recipient for delivery on the next Business Day the complete
Preferred Shares Basic Maintenance Report. The Trust will deliver a
Preferred Shares Basic Maintenance Report to each applicable Rating Agency
on or before 5:00 p.m., New York City time, on the third Business Day after
a Valuation Date on which the Trust cures its failure to maintain Eligible
Assets of each applicable Rating Agency with an aggregate Discounted Value
equal to or greater than the Preferred Shares Basic Maintenance Amount or
on which the Trust fails to maintain Eligible Assets of each applicable
Rating Agency with an aggregate Discounted Value which exceeds the
Preferred Shares Basic Maintenance Amount by 5% or more. The Trust will
notify each applicable Rating Agency on or before 5:00 p.m., New York City
time, on the third Business Day after a Valuation Date on which the Trust
fails to maintain Eligible Assets of each applicable Rating Agency with an
aggregate Discounted Value which exceeds the Preferred Shares Basic
Maintenance Amount by 30% or more. The Trust will also deliver a Preferred
Shares Basic Maintenance Report to the Auction Agent and Moody's as of each
Quarterly Valuation Date on or before the third Business Day after such
date. Additionally, on or before 5:00 p.m., New York City time, on the
third Business Day after the first day of a Special Dividend Period, the
Trust will deliver a Preferred Shares Basic Maintenance Report to the
Auction Agent and Moody's. The Trust shall also provide Moody's with a
Preferred Shares Basic Maintenance Report when specifically requested by
Moody's.
(c) Within ten Business Days after the date of delivery of a
Preferred Shares Basic Maintenance Report in accordance with Section
11.7(b) above relating to a Quarterly
49
Valuation Date (except as described in the following sentence), the
Independent Accountant will confirm in writing to the Auction Agent and
Moody's, (i) the mathematical accuracy of the calculations reflected in
such Report, (ii) that, in such Report, the Trust correctly determined the
assets of the Trust which constitute Moody's Eligible Assets at such
Quarterly Valuation Date in accordance with these Bylaws, (iii) that, in
such Report, the Trust determined whether the Trust had, at such Quarterly
Valuation Date in accordance with these Bylaws, Moody's Eligible Assets
with an aggregate Discounted Value at least equal to the Preferred Shares
Basic Maintenance Amount, (iv) with respect to the S&P ratings on portfolio
securities of the Trust, the issuer name, issue size and coupon rate, if
any, listed in such Report, that the Independent Accountant has verified
such information in reference to third-party information sources (such as
Reuters or Bloomberg) and the Independent Accountant shall provide a
listing in its letter of any differences, (v) with respect to the Moody's
ratings on portfolio securities of the Trust, the issuer name, issue size
and coupon rate, if any, listed in such Report, that the Independent
Accountant has verified such information in reference to third-party
information sources (such as Reuters or Bloomberg) and the Independent
Accountant shall provide a listing in its letter of any differences, and
(vi) that the Independent Accountant has compared the prices in such Report
to the prices in the applicable pricing appraisal report provided by the
custodian of the Trust's assets to the Trust for purposes of valuing
securities in the Trust's portfolio and verified that such information
agrees (in the event such information does not agree, the Independent
Accountant will provide a listing in its letter of such differences) (such
confirmation is herein called the "Accountant's Confirmation").
Notwithstanding the foregoing sentence, the Independent Accountant will
provide the confirmation described in the foregoing sentence with respect
to the Preferred Shares Basic Maintenance Reports delivered pursuant to the
third sentence of Section 11.7(b) above only for such Preferred Shares
Basic Maintenance Reports relating to the last fiscal quarter of each
fiscal year.
(d) Within ten Business Days after the date of delivery to the
Auction Agent and Moody's of a Preferred Shares Basic Maintenance Report in
accordance with Section 11.7(b) above relating to the Preferred Shares
Basic Maintenance Cure Date with respect to such failure, the Trust shall
cause the Independent Accountant to provide to the Auction Agent and
Moody's an Accountant's Confirmation as to such Preferred Shares Basic
Maintenance Report.
(e) If any Accountant's Confirmation delivered pursuant to
subparagraph (c) or (d) of this Section 11.7 shows that an error was made
in the Preferred Shares Basic Maintenance Report for a particular Valuation
Date for which such Accountant's Confirmation was required to be delivered,
or shows that a lower aggregate Discounted Value for the aggregate of all
Moody's Eligible Assets of the Trust was determined by the Independent
Accountant, the calculation or determination made by such Independent
Accountant shall be final and conclusive and shall be binding on the Trust,
and the Trust shall accordingly amend and deliver the Preferred Shares
Basic Maintenance Report to the Auction Agent and each applicable Rating
Agency promptly following receipt by the Trust of such Accountant's
Confirmation.
50
(f) On or before 5:00 p.m., New York City time, on the first
Business Day after the Date of Original Issue of the AMPS, the Trust will
complete and deliver to Moody's a Preferred Shares Basic Maintenance Report
as of the close of business on such Date of Original Issue. Within five
Business Days of such Date of Original Issue, the Independent Accountant
will confirm in writing to Moody's (i) the mathematical accuracy of the
calculations reflected in such Preferred Shares Basic Maintenance Report
and (ii) that the aggregate Discounted Value of Moody's Eligible Assets
reflected thereon equals or exceeds the Preferred Shares Basic Maintenance
Amount reflected thereon. Also, on or before 5:00 p.m., New York City time,
on the first Business Day after any Common Shares are repurchased by the
Trust, the Trust will complete and deliver to Xxxxx'x a Preferred Shares
Basic Maintenance Report as of the close of business on such date that
Common Shares are repurchased.
11.8 CERTAIN OTHER RESTRICTIONS.
(a) For so long as any AMPS are rated by Moody's, the Trust will
not buy or sell financial futures contracts, write, purchase or sell call
options on financial futures contracts or purchase put options on financial
futures contracts or write call options (except covered call options) on
portfolio securities unless it receives written confirmation from Moody's
that engaging in such transactions would not impair the ratings then
assigned to the AMPS by Moody's, except that the Trust may purchase or sell
exchange-traded financial futures contracts based on any index approved by
Moody's or Treasury Bonds, and purchase, write or sell exchange-traded put
options on such financial futures contracts, any index approved by Moody's
or Treasury Bonds, and purchase, write or sell exchange-traded call options
on such financial futures contracts, any index approved by Moody's or
Treasury Bonds (collectively "Moody's Hedging Transactions"), subject to
the following limitations:
(i) the Trust will not engage in any Moody's Hedging
Transaction based on any index approved by Moody's (other than
transactions that terminate a futures contract or option held by
the Trust by the Trust's taking the opposite position thereto
("Closing Transactions")) that would cause the Trust at the time
of such transaction to own or have sold:
(A) outstanding financial futures contracts based
on such index exceeding in number 10% (or such higher
percentage as Moody's may approve) of the average number of
daily traded financial futures contracts based on such index
in the 30 days preceding the time of effecting such
transaction as reported by The Wall Street Journal; or
(B) outstanding financial futures contracts based
on any index approved by Moody's having a Market Value
exceeding 50% (or such higher percentage as Moody's may
approve) of the Market Value of all portfolio securities of
the Trust constituting Moody's Eligible Assets owned by the
Trust (other than Moody's Eligible Assets already subject to
a Moody's Hedging Transaction);
51
(ii) the Trust will not engage in any Moody's Hedging
Transaction based on Treasury Bonds (other than Closing
Transactions) that would cause the Trust at the time of such
transaction to own or have sold:
(A) outstanding financial futures contracts based
on Treasury Bonds with such contracts having an aggregate
Market Value exceeding 20% (or such higher percentage as
Moody's may approve) of the aggregate Market Value of
Moody's Eligible Assets owned by the Trust and rated Aa or
higher by Moody's (or, if not rated by Moody's but rated by
S&P, rated AAA by S&P); or
(B) outstanding financial futures contracts based
on Treasury Bonds with such contracts having an aggregate
Market Value exceeding 80% of the aggregate Market Value of
all portfolio securities of the Trust constituting Moody's
Eligible Assets owned by the Trust (other than Moody's
Eligible Assets already subject to a Moody's Hedging
Transaction) and rated Baa or A by Moody's (or, if not rated
by Moody's but rated by S&P, rated A or AA by S&P)
(for purposes of the foregoing clauses (i) and (ii), the Trust
shall be deemed to own the number of financial futures contracts
that underlie any outstanding options written by the Trust);
(iii) the Trust will engage in Closing Transactions to
close out any outstanding financial futures contract based on any
index approved by Moody's if the amount of open interest in such
index as reported by The Wall Street Journal is less than an
amount to be mutually determined by Moody's and the Trust;
(iv) the Trust will engage in a Closing Transaction to
close out any outstanding financial futures contract by no later
than the fifth Business Day of the month in which such contract
expires and will engage in a Closing Transaction to close out any
outstanding option on a financial futures contract by no later
than the first Business Day of the month in which such option
expires;
(v) the Trust will engage in Moody's Hedging
Transactions only with respect to financial futures contracts or
options thereon having the next settlement date or the settlement
date immediately thereafter;
(vi) the Trust (A) will not engage in options and
futures transactions for leveraging or speculative purposes,
except that an option or futures transaction shall not for these
purposes be considered a leveraged position or speculative so
long as the combination of the Fund's non-derivative positions,
together with the relevant option or futures transaction,
produces a synthetic investment position, or the same economic
result, that could be achieved by an investment, consistent with
the Fund's investment objectives and policies, in a security that
is not an option or futures transaction, and (B) will not write
any call options or sell any financial futures contracts for the
purpose of hedging the anticipated purchase of an asset prior to
completion of such purchase; and
52
(vii) while the Trust may use options and futures
transactions for hedging and risk management purposes, it will
not enter into an option or futures transaction unless, after
giving effect thereto, the Trust would continue to have Moody's
Eligible Assets with an aggregate Discounted Value equal to or
greater than the Preferred Shares Basic Maintenance Amount.
(b) For purposes of determining whether the Trust has Moody's
Eligible Assets with an aggregate Discounted Value that equals or exceeds
the Preferred Shares Basic Maintenance Amount, the Discounted Value of
Moody's Eligible Assets that the Trust is obligated to deliver or receive
pursuant to an outstanding futures contract or option shall be as follows:
(i) assets subject to call options written by the Trust
that are either exchange-traded and "readily reversible" or that
expire within 49 days after the date as of which such valuation
is made shall be valued at the lesser of (A) Discounted Value and
(B) the exercise price of the call option written by the Trust;
(ii) assets subject to call options written by the
Trust not meeting the requirements of clause (i) of this sentence
shall have no value;
(iii) assets subject to put options written by the
Trust shall be valued at the lesser of (A) the exercise price and
(B) the Discounted Value of the assets subject to the option;
(iv) futures contracts shall be valued at the lesser of
(A) settlement price and (B) the Discounted Value of the assets
subject to the futures contract, provided that, if a contract
matures within 49 days after the date as of which such valuation
is made, where the Trust is the seller the contract may be valued
at the settlement price and where the Trust is the buyer the
contract may be valued at the Discounted Value of the assets
subject to the futures contract; and
(v) where delivery may be made to the Trust with any
security of a class of securities, the Trust shall assume that it
will take delivery of the security with the lowest Discounted
Value.
(c) For purposes of determining whether the Trust has Moody's
Eligible Assets with an aggregate Discounted Value that equals or exceeds
the Preferred Shares Basic Maintenance Amount, the following amounts shall
be subtracted from the aggregate Discounted Value of the Moody's Eligible
Assets held by the Trust to the extent the relevant asset is a Moody's
Eligible Asset:
(i) 10% of the exercise price of a written call option;
(ii) the exercise price of any written put option;
53
(iii) where the Trust is the seller under a financial
futures contract, 10% of the settlement price of the financial
futures contract;
(iv) where the Trust is the purchaser under a financial
futures contract, any amounts payable by the Trust under such
financial futures contract;
(v) the settlement price of the underlying financial
futures contract if the Trust writes put options on a financial
futures contract; and
(vi) 105% of the Market Value of the underlying
financial futures contract if the Trust writes call options on a
financial futures contract and does not own the underlying
contract.
(d) For so long as any AMPS are rated by Moody's, the Trust will
not enter into any "Forward Commitment," herein defined as any contract to
purchase securities for a fixed price at a future date beyond customary
settlement time (other than such contracts that constitute Moody's Hedging
Transactions, as applicable), except that the Trust may enter into Forward
Commitments subject to the following limitations:
(i) for each Forward Commitment, the Trust will
maintain with its custodian (A) cash, cash equivalents or
short-term, fixed-income securities rated X-0, XXX-0 xx XXXX-0 by
Moody's or A-1 by S&P and maturing in one year or less with a
fair market value that equals or exceeds the amount by which the
Trust's obligations under any Forward Commitments to which it is
from time to time a party exceed obligations to the Trust arising
from securities sales by the Trust that are scheduled to settle
at a future date, or (B) long-term, fixed-income securities with
a then current market value that equals or exceeds the amount by
which the Trust's obligations under any Forward Commitments to
which it is from time to time a party exceed obligations to the
Trust arising from securities sales by the Trust that are
scheduled to settle on a future date, or (C) a combination of
assets described in (A) and (B) above that in the aggregate
equals or exceeds the amount by which the Trust's obligations
under any Forward Commitments to which it is from time to time a
party exceed obligations to the Trust arising from securities
sales by the Trust that are scheduled to settle on a future date;
and
(ii) the Trust will not enter into a Forward Commitment
unless, after giving effect thereto, the Trust would continue to
have Moody's Eligible Assets with an aggregate Discounted Value
equal to or greater than the Preferred Shares Basic Maintenance
Amount.
For purposes of determining whether the Trust has Moody's Eligible
Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the Discounted Value of all
Forward Commitments to which the Trust is a party and of all
securities deliverable to the Trust pursuant to such Forward
Commitments shall be zero.
54
(e) For so long as any AMPS are Outstanding and Xxxxx'x is rating
such shares, the Trust, unless it has received written confirmation from
Moody's that such action would not impair the rating then assigned to the
AMPS by Moody's, will not:
(i) borrow money except for the purpose of clearing
transactions in portfolio securities (which borrowings under any
circumstances shall be limited to an amount equal to 5% of the
Market Value of the Trust's assets at the time of such borrowings
and which borrowings shall be repaid within 60 days and not be
extended or renewed and shall not cause the aggregate Discounted
Value of Moody's Eligible Assets to be less than the Preferred
Shares Basic Maintenance Amount);
(ii) engage in short sales of securities;
(iii) lend any securities;
(iv) issue any class or series of shares of beneficial
interest ranking prior to or on a parity with the AMPS with
respect to the payment of dividends or the distribution of assets
upon dissolution, liquidation or winding up of the Trust;
(v) merge or consolidate into or with any other
corporation or entity; and
(vi) change any Pricing Service of the Trust.
11.9 NOTICE. All notices or communications, unless otherwise specified
in these Bylaws, shall be sufficiently given if in writing and delivered in
person or mailed by first-class mail, postage prepaid. Notice shall be deemed
given on the earlier of the date received or the date seven days after which
such notice is mailed.
11.10 AUCTION PROCEDURES.
(a) CERTAIN DEFINITIONS. As used in this Section 11.10, the
following terms shall have the following meanings, unless the context
otherwise requires:
(i) "Auction Date" means the first Business Day preceding the
first day of a Dividend Period.
(ii) "Available AMPS" has the meaning specified in Section
11.10(d)(i)(A) below.
(iii) "Bid" has the meaning specified in Section 11.10(b)(i)(B)
below.
(iv) "Bidder" has the meaning specified in Section 11.10(b)(i)(B)
below.
(v) "Hold Order" has the meaning specified in Section
11.10(b)(i)(B) below.
(vi) "Maximum Applicable Rate" for any Dividend Period will be
the Applicable Percentage of the Reference Rate. The Auction Agent
will round each applicable Maximum Applicable Rate to the nearest
one-thousandth (0.001) of one percent per
55
annum, with any such number ending in five ten-thousandths of one
percent being rounded upwards to the nearest one-thousandth (0.001) of
one percent. The Auction Agent will not round the applicable Reference
Rate as part of its calculation of the Maximum Applicable Rate. The
"Applicable Percentage" shall be the percentage determined based on
the lower of the credit ratings assigned on such date by Moody's as
follows:
MOODY'S APPLICABLE
CREDIT RATING PERCENTAGE
------------- ----------
Aa3 or above 150%
A3 to A1 200%
Baa3 to Baa1 225%
Below Baa3 275%
The Applicable Percentage as so determined shall be further
subject to upward but not downward adjustment in the discretion of the
Board of Trustees of the Trust after consultation with the
Broker-Dealers, provided that the Board of Trustees has received
assurance from Moody's and from any other Rating Agency then rating
the AMPS that such increase will not impair such Rating Agency's
rating thereof, and further provided that immediately following any
such increase the Trust would be in compliance with the Preferred
Shares Basic Maintenance Amount. The Trust shall take all reasonable
action necessary to enable Moody's to provide a rating for each series
of AMPS. If Moody's shall not make such a rating available, Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated or its affiliates and
successors, after consultation with the Trust, shall select another
Rating Agency to act as a Substitute Rating Agency.
(vii) "Order" has the meaning specified in Section 11.10(b)(i)(B)
below.
(viii) "AMPS" means the AMPS being auctioned pursuant to this
Section 11.10.
(ix) "Sell Order" has the meaning specified in Section
11.10(b)(i)(B) below.
(x) "Submission Deadline" means 1:00 p.m., New York City time, on
any Auction Date or such other time on any Auction Date as may be
specified by the Auction Agent from time to time as the time by which
each Broker-Dealer must submit to the Auction Agent in writing all
Orders obtained by it for the Auction to be conducted on such Auction
Date.
(xi) "Submitted Bid" has the meaning specified in Section
11.10(d)(i) below.
(xii) "Submitted Hold Order" has the meaning specified in Section
11.10(d)(i) below.
(xiii) "Submitted Order" has the meaning specified in Section
11.10(d)(i) below.
(xiv) "Submitted Sell Order" has the meaning specified in Section
11.10(d)(i) below.
56
(xv) "Sufficient Clearing Bids" has the meaning specified in
Section 11.10(d)(i) below.
(xvi) "Winning Bid Rate" has the meaning specified in Section
11.10(d)(i)(c) below.
(b) ORDERS BY BENEFICIAL OWNERS, POTENTIAL BENEFICIAL OWNERS,
EXISTING HOLDERS AND POTENTIAL HOLDERS.
(i) Unless otherwise permitted by the Trust, Beneficial
Owners and Potential Beneficial Owners may only participate in
Auctions through their Broker-Dealers. Broker-Dealers will submit
the Orders of their respective customers who are Beneficial
Owners and Potential Beneficial Owners to the Auction Agent,
designating themselves as Existing Holders in respect of shares
subject to Orders submitted or deemed submitted to them by
Beneficial Owners and as Potential Holders in respect of shares
subject to Orders submitted to them by Potential Beneficial
Owners. A Broker-Dealer may also hold AMPS in its own account as
a Beneficial Owner. A Broker-Dealer may thus submit Orders to the
Auction Agent as a Beneficial Owner or a Potential Beneficial
Owner and therefore participate in an Auction as an Existing
Holder or Potential Holder on behalf of both itself and its
customers. On or prior to the Submission Deadline on each Auction
Date:
(A) each Beneficial Owner may submit to its
Broker-Dealer information as to:
(1) the number of Outstanding AMPS, if any,
held by such Beneficial Owner which such
Beneficial Owner desires to continue to hold
without regard to the Applicable Rate for the next
succeeding Dividend Period for such shares;
(2) the number of Outstanding AMPS, if any,
held by such Beneficial Owner which such
Beneficial Owner desires to continue to hold,
provided that the Applicable Rate for the next
succeeding Dividend Period for such shares shall
not be less than the rate per annum specified by
such Beneficial Owner; and/or
(3) the number of Outstanding AMPS, if any,
held by such Beneficial Owner which such
Beneficial Owner offers to sell without regard to
the Applicable Rate for the next succeeding
Dividend Period; and
(B) each Broker-Dealer, using a list of Potential
Beneficial Owners that shall be maintained in good faith in
a commercially reasonable manner for the purpose of
conducting a competitive Auction, shall contact Potential
Beneficial Owners, including Persons that are not Beneficial
Owners, on such list to determine the number of Outstanding
AMPS, if any, which each such Potential Beneficial Owner
offers to purchase, provided that the Applicable Rate
57
for the next succeeding Dividend Period shall not be less
than the rate per annum specified by such Potential
Beneficial Owner.
For the purposes hereof, the communication by
a Beneficial Owner or Potential Beneficial Owner
to a Broker-Dealer, or the communication by a
Broker-Dealer acting for its own account to the
Auction Agent, of information referred to in
clause (A) or (B) of this Section 11.10(b)(i) is
hereinafter referred to as an "Order" and each
Beneficial Owner and each Potential Beneficial
Owner placing an Order, including a Broker-Dealer
acting in such capacity for its own account, is
hereinafter referred to as a "Bidder"; an Order
containing the information referred to in clause
(A)(1) of this Section 11.10(b)(i) is hereinafter
referred to as a "Hold Order"; an Order containing
the information referred to in clause (A)(2) or
(B) of this Section 11.10(b)(i) is hereinafter
referred to as a "Bid"; and an Order containing
the information referred to in clause (A)(3) of
this Section 11.10(b)(i) is hereinafter referred
to as a "Sell Order." Inasmuch as a Broker-Dealer
participates in an Auction as an Existing Holder
or a Potential Holder only to represent the
interests of a Beneficial Owner or Potential
Beneficial Owner, whether it be its customers or
itself, all discussion herein relating to the
consequences of an Auction for Existing Holders
and Potential Holders also applies to the
underlying beneficial ownership interests
represented.
(ii) (A) A Bid by a Beneficial Owner or an Existing
Holder shall constitute an irrevocable offer to sell:
(1) the number of Outstanding AMPS specified
in such Bid if the Applicable Rate determined on
such Auction Date shall be less than the rate per
annum specified in such Bid; or
(2) such number or a lesser number of
Outstanding AMPS to be determined as set forth in
Section 11.10(e)(i)(D) if the Applicable Rate
determined on such Auction Date shall be equal to
the rate per annum specified therein; or
(3) a lesser number of Outstanding AMPS to be
determined as set forth in Section 11.10(e)(ii)(C)
if such specified rate per annum shall be higher
than the Maximum Applicable Rate and Sufficient
Clearing Bids do not exist.
(B) A Sell Order by a Beneficial Owner or an Existing
Holder shall constitute an irrevocable offer to sell:
(1) the number of Outstanding AMPS specified
in such Sell Order; or
58
(2) such number or a lesser number of
Outstanding AMPS to be determined as set forth in
Section 11.10(e)(ii)(C) if Sufficient Clearing
Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an
irrevocable offer to purchase:
(1) the number of Outstanding AMPS specified
in such Bid if the Applicable Rate determined on
such Auction Date shall be higher than the rate
per annum specified in such Bid; or
(2) such number or a lesser number of
Outstanding AMPS to be determined as set forth in
Section 11.10(e)(i)(E) if the Applicable Rate
determined on such Auction Date shall be equal to
the rate per annum specified therein.
(c) SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT.
(i) Each Broker-Dealer shall submit in writing or
through the Auction Agent's auction processing system to the
Auction Agent prior to the Submission Deadline on each Auction
Date all Orders obtained by such Broker-Dealer, designating
itself (unless otherwise permitted by the Trust) as an Existing
Holder in respect of shares subject to Orders submitted or deemed
submitted to it by Beneficial Owners and as a Potential Holder in
respect of shares subject to Orders submitted to it by Potential
Beneficial Owners, and specifying with respect to each Order:
(A) the name of the Bidder placing such Order
(which shall be the Broker-Dealer unless otherwise permitted
by the Trust);
(B) the aggregate number of Outstanding AMPS that
are the subject of such Order;
(C) to the extent that such Bidder is a Beneficial
Owner or an Existing Holder:
(1) the number of Outstanding AMPS, if any,
subject to any Hold Order placed by such
Beneficial Owner or Existing Holder;
(2) the number of Outstanding AMPS, if any,
subject to any Bid placed by such Beneficial Owner
or Existing Holder and the rate per annum
specified in such Bid; and
(3) the number of Outstanding AMPS, if any,
subject to any Sell Order placed by such
Beneficial Owner or Existing Holder; and
59
(D) to the extent such Bidder is a Potential
Holder, the rate per annum specified in such Potential
Holder's Bid.
(ii) If any rate per annum specified in any Bid
contains more than three figures to the right of the decimal
point, the Auction Agent shall round such rate up to the next
highest one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the
Outstanding AMPS held by an Existing Holder are not submitted to
the Auction Agent prior to the Submission Deadline, the Auction
Agent shall deem a Hold Order (in the case of an Auction relating
to a Special Dividend Period of 28 days or less) or a Sell Order
(in the case of an Auction relating to a Special Dividend Period
of longer than 28 days) to have been submitted on behalf of such
Existing Holder covering the number of Outstanding AMPS held by
such Existing Holder and not subject to Orders submitted to the
Auction Agent.
(iv) If one or more Orders on behalf of an Existing
Holder covering in the aggregate more than the number of
Outstanding AMPS held by such Existing Holder are submitted to
the Auction Agent, such Order shall be considered valid as
follows and in the following order of priority:
(A) any Hold Order submitted on behalf of such
Existing Holder shall be considered valid up to and
including the number of Outstanding AMPS held by such
Existing Holder; provided that if more than one Hold Order
is submitted on behalf of such Existing Holder and the
number of AMPS subject to such Hold Orders exceeds the
number of Outstanding AMPS held by such Existing Holder, the
number of AMPS subject to each of such Hold Orders shall be
reduced pro rata so that such Hold Orders, in the aggregate,
will cover exactly the number of Outstanding AMPS held by
such Existing Holder;
(B) any Bids submitted on behalf of such Existing
Holder shall be considered valid, in the ascending order of
their respective rates per annum if more than one Bid is
submitted on behalf of such Existing Holder, up to and
including the excess of the number of Outstanding AMPS held
by such Existing Holder over the number of AMPS subject to
any Hold Order referred to in Section 11.10(c)(iv)(A) above
(and if more than one Bid submitted on behalf of such
Existing Holder specifies the same rate per annum and
together they cover more than the remaining number of shares
that can be the subject of valid Bids after application of
Section 11.10(c)(iv)(A) above and of the foregoing portion
of this Section 11.10(c)(iv)(B) to any Bid or Bids
specifying a lower rate or rates per annum, the number of
shares subject to each of such Bids shall be reduced pro
rata so that such Bids, in the aggregate, cover exactly such
remaining number of shares); and the number of shares, if
any, subject to Bids not valid under this Section
11.10(c)(iv)(B) shall be treated as the subject of a Bid by
a Potential Holder; and
60
(C) any Sell Order shall be considered valid up to
and including the excess of the number of Outstanding AMPS
held by such Existing Holder over the number of AMPS subject
to Hold Orders referred to in Section 11.10(c)(iv)(A) and
Bids referred to in Section 11.10(c)(iv)(B); provided that
if more than one Sell Order is submitted on behalf of any
Existing Holder and the number of AMPS subject to such Sell
Orders is greater than such excess, the number of AMPS
subject to each of such Sell Orders shall be reduced pro
rata so that such Sell Orders, in the aggregate, cover
exactly the number of AMPS equal to such excess.
(v) If more than one Bid is submitted on behalf of any
Potential Holder, each Bid submitted shall be a separate Bid with
the rate per annum and number of AMPS therein specified.
(vi) Any Order submitted by a Beneficial Owner as a
Potential Beneficial Owner to its Broker-Dealer, or by a
Broker-Dealer to the Auction Agent, prior to the Submission
Deadline on any Auction Date shall be irrevocable.
(vii) The Trust shall not be responsible for a
Broker-Dealer's failure to act in accordance with the
instructions of Beneficial Owners or Potential Beneficial Owners
or failure to comply with the provisions of this Section 11.10.
(d) DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE
AND APPLICABLE RATE.
(i) Not earlier than the Submission Deadline on each
Auction Date, the Auction Agent shall assemble all Orders
submitted or deemed submitted to it by the Broker-Dealers (each
such Order as submitted or deemed submitted by a Broker-Dealer
being hereinafter referred to individually as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the
case may be, or, more generally, as a "Submitted Order") and
shall determine:
(A) the excess of the total number of Outstanding
AMPS over the number of Outstanding AMPS that are the
subject of Submitted Hold Orders (such excess being
hereinafter referred to as the "Available AMPS");
(B) from the Submitted Orders whether the number
of Outstanding AMPS that are the subject of Submitted Bids
by Potential Holders specifying one or more rates per annum
equal to or lower than the Maximum Applicable Rate exceeds
or is equal to the sum of:
(1) the number of Outstanding AMPS that are
the subject of Submitted Bids by Existing Holders
specifying one or more rates per annum higher than
the Maximum Applicable Rate, and
61
(2) the number of Outstanding AMPS that are
subject to Submitted Sell Orders (if such excess
or such equality exists (other than because the
number of Outstanding AMPS in clause (1) above and
this clause (2) are each zero because all of the
Outstanding AMPS are the subject of Submitted Hold
Orders), such Submitted Bids by Potential Holders
being hereinafter referred to collectively as
"Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest
rate per annum specified in the Submitted Bids (the "Winning
Bid Rate") that if:
(1) each Submitted Bid from Existing Holders
specifying the Winning Bid Rate and all other
Submitted Bids from Existing Holders specifying
lower rates per annum were rejected, thus
entitling such Existing Holders to continue to
hold the AMPS that are the subject of such
Submitted Bids, and
(2) each Submitted Bid from Potential Holders
specifying the Winning Bid Rate and all other
Submitted Bids from Potential Holders specifying
lower rates per annum were accepted, thus
entitling the Potential Holders to purchase the
AMPS that are the subject of such Submitted Bids,
would result in the number of shares subject to
all Submitted Bids specifying the Winning Bid Rate
or a lower rate per annum being at least equal to
the Available AMPS.
(ii) Promptly after the Auction Agent has made the
determinations pursuant to Section 11.10(d)(i), the Auction Agent
shall advise the Trust of the Maximum Applicable Rate and, based
on such determinations, the Applicable Rate for the next
succeeding Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the
Applicable Rate for the next succeeding Dividend Period
shall be equal to the Winning Bid Rate;
(B) if Sufficient Clearing Bids do not exist
(other than because all of the Outstanding AMPS are the
subject of Submitted Hold Orders), that the Applicable Rate
for the next succeeding Dividend Period shall be equal to
the Maximum Applicable Rate; or
(C) if all of the Outstanding AMPS are the subject
of Submitted Hold Orders, that the Dividend Period next
succeeding the Auction shall automatically be the same
length as the immediately preceding Dividend Period and the
Applicable Rate for the next succeeding Dividend Period
shall be equal to 80% of the Reference Rate on the date of
the Auction.
(e) ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL
ORDERS AND ALLOCATION OF SHARES. Existing Holders shall continue to hold
the AMPS that are subject to
62
Submitted Hold Orders, and, based on the determinations made pursuant to
Section 11.10(d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Auction Agent shall take such other action as
set forth below:
(i) If Sufficient Clearing Bids have been made, subject
to the provisions of Section 11.10(e)(iii) and Section
11.10(e)(iv), Submitted Bids and Submitted Sell Orders shall be
accepted or rejected in the following order of priority and all
other Submitted Bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders
shall be accepted and the Submitted Bid of each of the
Existing Holders specifying any rate per annum that is
higher than the Winning Bid Rate shall be accepted, thus
requiring each such Existing Holder to sell the Outstanding
AMPS that are the subject of such Submitted Sell Order or
Submitted Bid;
(B) the Submitted Bid of each of the Existing
Holders specifying any rate per annum that is lower than the
Winning Bid Rate shall be rejected, thus entitling each such
Existing Holder to continue to hold the Outstanding AMPS
that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential
Holders specifying any rate per annum that is lower than the
Winning Bid Rate shall be accepted;
(D) the Submitted Bid of each of the Existing
Holders specifying a rate per annum that is equal to the
Winning Bid Rate shall be rejected, thus entitling each such
Existing Holder to continue to hold the Outstanding AMPS
that are the subject of such Submitted Bid, unless the
number of Outstanding AMPS subject to all such Submitted
Bids shall be greater than the number of Outstanding AMPS
("Remaining Shares") equal to the excess of the Available
AMPS over the number of Outstanding AMPS subject to
Submitted Bids described in Section 11.10(e)(i)(B) and
Section 11.10(e)(i)(C), in which event the Submitted Bids of
each such Existing Holder shall be accepted, and each such
Existing Holder shall be required to sell Outstanding AMPS,
but only in an amount equal to the difference between (1)
the number of Outstanding AMPS then held by such Existing
Holder subject to such Submitted Bid and (2) the number of
AMPS obtained by multiplying (x) the number of Remaining
Shares by (y) a fraction the numerator of which shall be the
number of Outstanding AMPS held by such Existing Holder
subject to such Submitted Bid and the denominator of which
shall be the sum of the number of Outstanding AMPS subject
to such Submitted Bids made by all such Existing Holders
that specified a rate per annum equal to the Winning Bid
Rate; and
(E) the Submitted Bid of each of the Potential
Holders specifying a rate per annum that is equal to the
Winning Bid Rate shall be accepted but only in an amount
equal to the number of Outstanding AMPS obtained by
multiplying (x) the difference between the Available AMPS
and the number of
63
Outstanding AMPS subject to Submitted Bids described in
Section 11.10(e)(i)(B), Section 11.10(e)(i)(C) and Section
11.10(e)(i)(D) by (y) a fraction the numerator of which
shall be the number of Outstanding AMPS subject to such
Submitted Bid and the denominator of which shall be the
number of Outstanding AMPS subject to such Submitted Bids
made by all such Potential Holders that specified rates per
annum equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made
(other than because all of the Outstanding AMPS are subject to
Submitted Hold Orders), subject to the provisions of Section
11.10(e)(iii), Submitted Orders shall be accepted or rejected as
follows in the following order of priority and all other
Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder
specifying any rate per annum that is equal to or lower than
the Maximum Applicable Rate shall be rejected, thus
entitling such Existing Holder to continue to hold the
Outstanding AMPS that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder
specifying any rate per annum that is equal to or lower than
the Maximum Applicable Rate shall be accepted, thus
requiring such Potential Holder to purchase the Outstanding
AMPS that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder
specifying any rate per annum that is higher than the
Maximum Applicable Rate shall be accepted and the Submitted
Sell Orders of each Existing Holder shall be accepted, in
both cases only in an amount equal to the difference between
(1) the number of Outstanding AMPS then held by such
Existing Holder subject to such Submitted Bid or Submitted
Sell Order and (2) the number of AMPS obtained by
multiplying (x) the difference between the Available AMPS
and the aggregate number of Outstanding AMPS subject to
Submitted Bids described in Section 11.10(e)(ii)(A) and
Section 11.10(e)(ii)(B) by (y) a fraction the numerator of
which shall be the number of Outstanding AMPS held by such
Existing Holder subject to such Submitted Bid or Submitted
Sell Order and the denominator of which shall be the number
of Outstanding AMPS subject to all such Submitted Bids and
Submitted Sell Orders.
If all of the Outstanding shares of a series of AMPS are subject to Submitted
Hold Orders, all Submitted Bids for shares of such series shall be rejected.
(iii) If, as a result of the procedures described in
Section 11.10(e), any Existing Holder would be entitled or
required to sell, or any Potential Holder would be entitled or
required to purchase, a fraction of an Auction Market Preferred
Share on any Auction Date, the Auction Agent shall, in such
manner as in its sole discretion it shall determine, round up or
down the number of AMPS to be purchased or sold by
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any Existing Holder or Potential Holder on such Auction Date so
that each Outstanding Auction Market Preferred Share purchased or
sold by each Existing Holder or Potential Holder on such Auction
Date shall be a whole Auction Market Preferred Share.
(iv) If, as a result of the procedures described in
Section 11.10(e), any Potential Holder would be entitled or
required to purchase less than a whole Auction Market Preferred
Share on any Auction Date, the Auction Agent shall, in such
manner as in its sole discretion it shall determine, allocate
AMPS for purchase among Potential Holders so that only whole AMPS
are purchased on such Auction Date by any Potential Holder, even
if such allocation results in one or more of such Potential
Holders not purchasing any AMPS on such Auction Date.
(v) Based on the results of each Auction, the Auction
Agent shall determine, with respect to each Broker-Dealer that
submitted Bids or Sell Orders on behalf of Existing Holders or
Potential Holders, the aggregate number of Outstanding AMPS to be
purchased and the aggregate number of the Outstanding AMPS to be
sold by such Potential Holders and Existing Holders and, to the
extent that such aggregate number of Outstanding shares to be
purchased and such aggregate number of Outstanding shares to be
sold differ, the Auction Agent shall determine to which other
Broker-Dealer or Broker-Dealers acting for one or more purchasers
such Broker-Dealer shall deliver, or from which other
Broker-Dealer or Broker-Dealers acting for one or more sellers
such Broker-Dealer shall receive, as the case may be, Outstanding
AMPS.
(f) MISCELLANEOUS.
(i) To the extent permitted by applicable law, the
Trust may in its sole discretion interpret the provisions of this
Section 11.10 to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification that
does not substantially adversely affect the rights of Beneficial
Owners of AMPS.
(ii) Unless otherwise permitted by the Trust, a
Beneficial Owner or an Existing Holder (A) may sell, transfer or
otherwise dispose of AMPS only pursuant to a Bid or Sell Order in
accordance with the procedures described in this Section 11.10 or
to or through a Broker-Dealer or to such other persons as may be
permitted by the Trust, provided that in the case of all
transfers other than pursuant to Auctions such Beneficial Owner
or Existing Holder, its Broker-Dealer, if applicable, or its
Agent Member advises the Auction Agent of such transfer and (B)
except as otherwise required by law, shall have the ownership of
the AMPS held by it maintained in book entry form by the
Securities Depository in the account of its Agent Member, which
in turn will maintain records of such Beneficial Owner's
beneficial ownership. The Trust may not submit an Order in any
Auction.
(iii) All of the Outstanding AMPS of a series shall be
registered in the name of the nominee of the Securities
Depository unless otherwise required by law or
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unless there is no Securities Depository. If there is no
Securities Depository, at the Trust's option and upon its receipt
of such documents as it deems appropriate, any AMPS may be
registered in the Stock Register in the name of the Beneficial
Owner thereof and such Beneficial Owner thereupon will be
entitled to receive certificates therefor and required to deliver
certificates therefor upon transfer or exchange thereof.
11.11 SECURITIES DEPOSITORY; STOCK CERTIFICATES.
(a) If there is a Securities Depository, all of the AMPS of each
series shall be issued to the Securities Depository and registered in the
name of the Securities Depository or its nominee. Certificates may be
issued as necessary to represent AMPS. All such certificates shall bear a
legend to the effect that such certificates are issued subject to the
provisions restricting the transfer of AMPS contained in these Bylaws.
Unless the Trust shall have elected, during a Non-Payment Period, to waive
this requirement, the Trust will also issue stop-transfer instructions to
the Auction Agent for the AMPS. Except as provided in paragraph (b) below,
the Securities Depository or its nominee will be the Holder, and no
Beneficial Owner shall receive certificates representing its ownership
interest in such shares.
(b) If the Applicable Rate applicable to all AMPS of a series
shall be the Non-Payment Period Rate or there is no Securities Depository,
the Trust may at its option issue one or more new certificates with respect
to such shares (without the legend referred to in Section 11.11(a))
registered in the names of the Beneficial Owners or their nominees and
rescind the stop-transfer instructions referred to in Section 11.11(a) with
respect to such shares.
ARTICLE 12
AMENDMENT TO THE BYLAWS
12.1 GENERAL. Except to the extent that the Declaration of Trust or
applicable law requires a vote or consent of Shareholders, these Bylaws may be
amended, changed, altered or repealed, in whole or part, only by resolution of a
majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such Trustees.
12.2 ARTICLE 11. Without limiting the provisions of Section 12.1, the
Board of Trustees of the Trust may, by resolution duly adopted, without
shareholder approval (except as otherwise required by Article 11 or required by
applicable law), amend Article 11 to (a) reflect any amendments thereto which
the Board of Trustees of the Trust is entitled to adopt pursuant to the terms of
Article 11 without shareholder approval or (b) add additional series of AMPS or
additional shares of a series of AMPS (and terms relating thereto) to the series
and AMPS described herein, provided that the Board of Trustees shall not
authorize, create or issue an additional series of AMPS unless it has received
assurance from Moody's and from any other Rating Agency then rating the AMPS
that such authorization, creation or issuance will not impair such Rating
Agency's then current rating thereof. Each such additional series and all such
additional AMPS shall be governed by the terms of Article 11.
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