XXXXXX DIVIDEND INCOME FUND
BYLAWS
TABLE OF CONTENTS
ARTICLE 1
Agreement and Declaration of Trust and Principal Office.......1
1.1 Agreement and Declaration of Trust . . . . . . . . . .1
1.2 Principal Office of the Trust. . . . . . . . . . . . 1
ARTICLE 2
Meetings of Trustees. . . . . . . . . . . . . . . . . . . . 1
2.1 Regular Meetings. . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings. . . . . . . . . . . . . . . . . . . 1
2.3 Notice of Special Meetings. . . . . . . . . . . . . .1
2.4 Quorum. . . . . . . . . . . . . . . . . . . . . . . .2
2.5 Notice of Certain Actions by Consent. . . . . . . . .2
ARTICLE 3
Officers. . . . . . . . . . . . . . . . . . . . . . . . . . .2
3.1 Enumeration; Qualification. . . . . . . . . . . . . . 2
3.2 Election. . . . . . . . . . . . . . . . . . . . . . . 2
3.3 Tenure. . . . . . . . . . . . . . . . . . . . . . . . 2
3.4 Powers. . . . . . . . . . . . . . . . . . . . . . . . 2
3.5 Chairman; President . . . . . . . . . . . . . . . . . 2
3.6 Treasurer . . . . . . . . . . . . . . . . . . . . . . 3
3.7 Clerk . . . . . . . . . . . . . . . . . . . . . . . . 3
3.8 Resignations and Removals . . . . . . . . . . . . . . 3
ARTICLE 4
Committees. . . . . . . . . . . . . . . . . . . . . . . . . .3
4.1 Quorum; Voting. . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . .4
5.1 General . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE 6
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . .4
6.1 General . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE 7
Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
7.1 General . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE 8
Execution of Papers . . . . . . . . . . . . . . . . . . . . .4
8.1 General . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 9
Issuance of Shares and Share Certificates . . . . . . . . . .4
9.1 Sale of Shares. . . . . . . . . . . . . . . . . . . . 4
9.2 Share Certificates. . . . . . . . . . . . . . . . . .5
9.3 Loss of Certificates. . . . . . . . . . . . . . . . . 5
9.4 Issuance of New Certificate to Pledgee. . . . . . . . 5
9.5 Discontinuance of Issuance of Certificates. . . . . . 5
ARTICLE 10
Provisions Relating to the Conduct of the Trust's Business. .6
10.1 Certain Definitions . . . . . . . . . . . . . . . . . 6
10.2 Limitations on Dealings with Officers or Trustees. . .6
10.3 Securities and Cash of the Trust to be held by
Custodian Subject to Certain Terms and Conditions . .6
10.4 Reports to Shareholders . . . . . . . . . . . . . . . 7
10.5 Valuation of Assets . . . . . . . . . . . . . . . . . 7
ARTICLE 11
Shareholders. . . . . . . . . . . . . . . . . . . . . . . . .8
11.1 Annual Meeting. . . . . . . . . . . . . . . . . . . . 8
11.2 Record Dates. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 12
Terms of Preferred Shares . . . . . . . . . . . . . . . . . .8
12.1 Designation . . . . . . . . . . . . . . . . . . . . . 8
12.2 Definitions . . . . . . . . . . . . . . . . . . . . . 8
(a) "'AA' Composite Commercial Paper Rate". . . . .9
(b) " Accountants' Certificate". . . . . . . . . . .9
(c) " Additional Dividend" . . . . . . . . . . . . .9
(d) " Additional Dividend Payment Date". . . . . . .9
(e) " Additional Dividend Right" . . . . . . . . . .9
(f) " Applicable Rate" . . . . . . . . . . . . . . 10
(g) " Auction" . . . . . . . . . . . . . . . . . . 10
(h) " Auction Agent" . . . . . . . . . . . . . . . 10
(i) " Auction Date". . . . . . . . . . . . . . . . 10
(j) " Auction Procedures". . . . . . . . . . . . . 10
(k) " Business Day". . . . . . . . . . . . . . . . 10
(l) " Certificate of Eligible Xxxxx Xxxxxxxx" . . .00
(x) " Certificate of 1940 Act Xxxxx Xxxxxxxx" . . .00
(x) " Code". . . . . . . . . . . . . . . . . . . . 10
(o) " Commercial Paper Dealers". . . . . . . . . . 10
(p) " Common Shares" . . . . . . . . . . . . . . . 10
(q) " Common Shares Paying Agent". . . . . . . . . 10
(r) " Confirmation Date" . . . . . . . . . . . . . 10
(s) " Coverage Value". . . . . . . . . . . . . . . 11
(t) " Date of Original Issue". . . . . . . . . . . 11
(u) " Discount Factor" . . . . . . . . . . . . . . 11
(v) " Dividend Payment Date" . . . . . . . . . . . 15
(w) " Dividend Period" . . . . . . . . . . . . . . 15
(x) " Dividends Received Deduction". . . . . . . . 15
(y) " Eligible Asset Coverage is met". . . . . . . 15
(z) " Eligible Asset Coverage Amount". . . . . . . 15
(aa) " Eligible Asset Cure Date". . . . . . . . . . 16
(bb) " Eligible Asset Evaluation Date". . . . . . . 16
(cc) " Eligible Assets" . . . . . . . . . . . . . . 16
(dd) " Federal Corporate Income Tax Rate" . . . . . 16
(ee) " Gross-Up Tax Rate" . . . . . . . . . . . . . 16
(ff) " Holder". . . . . . . . . . . . . . . . . . . 16
(gg) " Independent Accountants" . . . . . . . . . . 16
(hh) " Initial Dividend Payment Date" . . . . . . . 16
(ii) " Initial Rate Period" . . . . . . . . . . . . 16
(jj) " Market Value". . . . . . . . . . . . . . . . 16
(kk) " Maximum Rate". . . . . . . . . . . . . . . . 17
(ll) " Xxxxx'x" . . . . . . . . . . . . . . . . . . 17
(mm) " Minimum Holding Period". . . . . . . . . . . 17
(nn) " Minimum Rate Period" . . . . . . . . . . . . 17
(oo) " MMP[R]". . . . . . . . . . . . . . . . . . . 17
(pp) " MMP Paying Agent" . . . . . . . . . . . . . 17
(qq) " Net Coverage Value". . . . . . . . . . . . . 17
(rr) " 1940 Act". . . . . . . . . . . . . . . . . . 17
(ss) " 1940 Act Asset Coverage is met". . . . . . . 18
(tt) " 1940 Act Cure Date". . . . . . . . . . . . . 18
(uu) " 1940 Act Evaluation Date". . . . . . . . . . 18
(vv) " Non-Payment Period Rate" . . . . . . . . . . 18
(ww) " Notice of Redemption". . . . . . . . . . . . 18
(xx) " Other Securities". . . . . . . . . . . . . . 18
(yy) "Paragraph 12.3(a) Dividend". . . . . . . . . .18
(aaa)"Rate Period". . . . . . . . . . . . . . . . . 19
(bbb)"Rate Period Days" . . . . . . . . . . . . . . 19
(ccc)"Retroactive Taxable Allocation" . . . . . . . 19
(ddd)"Securities Depository". . . . . . . . . . . . 19
(eee)"Short-Term Money Market Instruments". . . . . 19
(fff)"Share Books". . . . . . . . . . . . . . . . . 20
(ggg)"Special Dividend" . . . . . . . . . . . . . . 20
(hhh)"Special Rate Period". . . . . . . . . . . . . 20
(iii)"Specific Redemption Provisions" . . . . . . . 21
(jjj)"Standard & Poor's". . . . . . . . . . . . . . 21
(kkk)"Subsequent Rate Period" . . . . . . . . . . . 21
(lll)"Substitute Commercial Paper Dealers". . . . . 21
[R][Trademark]
(mmm)"Substitute U.S. Government Securities Dealer. 21
(nnn)"Treasury Rate," . . . . . . . . . . . . . . . 21
(ooo)"Trustees" . . . . . . . . . . . . . . . . . . 22
(ppp)"U.S. Government Securities Dealer" . . . . . .22
(qqq)"U.S. Treasury Securities" . . . . . . . . . . 22
12.3 Dividends . . . . . . . . . . . . . . . . . . . . . .22
12.4 Redemption. . . . . . . . . . . . . . . . . . . . . .32
12.5 Designation of Special Rate Periods . . . . . . . . .37
12.6 Liquidation Rights. . . . . . . . . . . . . . . . . .38
12.7 Voting Rights . . . . . . . . . . . . . . . . . . . .39
12.8 Eligible Asset Coverage . . . . . . . . . . . . . . .42
12.9 Certain Other Restrictions. . . . . . . . . . . . . .49
12.10Auction Procedures . . . . . . . . . . . . . . . . . 52
Amendments to the Bylaws. . . . . . . . . . . . . . . . . . 66
13.1 General . . . . . . . . . . . . . . . . . . . . . . 66
BYLAWS
OF
XXXXXX DIVIDEND INCOME FUND
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These Bylaws shall
be subject to the Agreement and Declaration of Trust, as from
time to time in effect (the "Declaration of Trust"), of the
Massachusetts business trust established by the Declaration of
Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of
the Trust shall be located in Boston, Massachusetts.
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.
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 Clerk or an
Assistant Clerk or by the officer or the Trustees calling the
meeting.
2.3 Notice of Special Meetings. It shall be sufficient
notice to a Trustee of a special meeting to send notice by mail
at least forty-eight hours or by telegram 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 special 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.
2.5 Notice of Certain Actions by Consent. If in accordance
with the provisions of the Declaration of Trust any action is
taken by the Trustees by written consent of less than all of the
Trustees, then prompt notice of any such action shall be
furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall not
be impaired by any delay or failure to furnish such notice.
ARTICLE 3
Officers
3.1 Enumeration; Qualification. The officers of the Trust
shall be a Chairman of the Trustees, a President, a Treasurer, a
Clerk 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. The Chairman of the Trustees and the
President shall be a Trustee and may but need not be a
shareholder; and any other officer may but need not be a Trustee
or a shareholder. Any two or more offices may be held by the
same person. A Trustee may but need not be a shareholder.
3.2 Election. The Chairman of the Trustees, the President,
the Treasurer and the Clerk shall be elected by the Trustees upon
the occurrence of any vacancy in any such office. Other
officers, if any, may be elected or appointed by the Trustees at
any time. Vacancies in any such other office may be filled at
any time.
3.3 Tenure. The Chairman of the Trustees, the President,
the Treasurer and the Clerk shall hold office in each case until
he or she dies, resigns, is removed or becomes disqualified.
Each other officer shall hold office and each agent 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 organized as a Massachusetts
business corporation and such other duties and powers as the
Trustees may from time to time designate.
3.5 Chairman; President. Unless the Trustees otherwise
provide, the Chairman of the Trustees or, if there is none or in
the absence of the Chairman of the Trustees, the President shall
preside at all meetings of the shareholders and of the Trustees.
Unless the Trustees otherwise provide, the President shall be the
chief executive officer.
3.6 Treasurer. Unless the Trustees shall provide otherwise,
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 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.
The chief accounting officer of the Trust shall be elected by the
Trustees and shall have tenure as provided in Paragraph 3.3 of
these Bylaws.
3.7 Clerk. The Clerk 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 Clerk from any meeting of the
shareholders or Trustees, an Assistant Clerk, or if there be none
or if he or she is absent, a temporary Clerk chosen at such
meeting shall record the proceedings thereof in the aforesaid
books.
3.8 Resignations and Removals. Any Trustee or officer may
resign at any time by written instrument signed by him or her and
delivered to the Chairman of the Trustees, the President or the
Clerk or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some
other time. The Trustees may remove any officer elected by them
with or without cause. Except to the extent expressly provided
in a written agreement with the Trust, no Trustee or 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. 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.
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 subsequent fiscal years shall end on such
date in subsequent years.
ARTICLE 7
Seal
7.1 General. The seal of the Trust shall 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 but, 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, contracts, notes and other obligations
made by the Trustees shall be signed by the President, Vice
Chairman, a Vice President or the Treasurer and need not bear the
seal of the Trust.
ARTICLE 9
Issuance of Shares and Share Certificates
9.1 Sale of Shares. Except as otherwise determined by the
Trustees, the Trust will issue and sell for cash or securities
from time to time, full and fractional shares of its shares of
beneficial interest, such shares to be issued and sold at a price
of not less than the par value per share, if any, and not less
than the net asset value per share, if any, as from time to time
determined in accordance with the Declaration of Trust and these
Bylaws and, in the case of fractional shares, at a proportionate
reduction in such price. In the case of shares sold for
securities, such securities shall be valued in accordance with
the provisions for determining the value of the assets of the
Trust as stated in the Declaration of Trust and these Bylaws.
The officers of the Trust are severally authorized to take all
such actions as may be necessary or desirable to carry out this
Paragraph 9.1.
9.2 Share Certificates. 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.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled
to a certificate stating the number of shares owned by him or
her, in such form as shall be prescribed from time to time by the
Trustees. Such certificate shall be signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer.
Such signatures may be facsimile if the certificate is signed by
a transfer agent or by a registrar. 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
issue.
9.3 Loss of Certificates. The transfer agent of the Trust,
with the approval of any two officers of the Trust, is authorized
to issue and countersign replacement certificates for the shares
of the Trust which have been lost, stolen or destroyed upon (i)
receipt of an affidavit or affidavits of loss or non-receipt and
of an indemnity agreement executed by the registered holder or
his or her legal representative and supported by an open penalty
surety bond, said agreement and said bond in all cases to be in
form and content satisfactory to and approved by the President or
the Treasurer, or (ii) receipt of such other documents as may be
approved by the Trustees.
9.4 Issuance of New Certificate to Pledgee. A pledgee of
shares transferred as collateral security shall be entitled to a
new certificate if the instrument of transfer substantially
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 the pledgor shall
be stated thereon, who alone shall be liable as a shareholder and
entitled to vote thereon.
9.5 Discontinuance of Issuance of Certificates. 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 affect
the ownership of shares in the Trust.
ARTICLE 10
Provisions Relating to the Conduct of the Trust's
Business
10.1 Certain Definitions. When used herein the following
words shall have the following meanings: "Distributor" shall mean
any one or more corporations, firms or associations which have
distributor's or principal underwriter's contracts in effect with
the Trust. "Manager" shall mean any corporation, firm or
association which may at the time have an advisory or management
contract with the Trust.
10.2 Limitations on Dealings with Officers or Trustees. The
Trust will not lend any of its assets to the Distributor or Manager
or to any officer or director of the Distributor or Manager or any
officer or Trustee of the Trust, and shall not permit any officer
or Trustee of the Trust or any officer or director of the
Distributor or Manager to deal for or on behalf of the Trust with
himself or herself as principal or agent, or with any partnership,
association or corporation in which he or she has a financial
interest; provided that the foregoing provisions shall not prevent
(a) officers and Trustees of the Trust or officers and directors of
the Distributor or Manager from buying, holding or selling shares
in the Trust or from being partners, officers or directors or
otherwise financially interested in the Distributor or the Manager;
(b) purchases or sales of securities or other property if such
transaction is permitted by or is exempt or exempted from the
provisions of the Investment Company Act of 1940 or any Rule or
Regulation thereunder, all as amended from time to time, and if
such transaction does not involve any commission or profit to any
security dealer who is, or one or more of whose partners,
shareholders, officers or directors is, an officer or Trustee of
the Trust or an officer or director of the Distributor or
Manager; (c) employment of legal counsel, registrar, transfer
agent, shareholder servicing agent, dividend disbursing agent or
custodian who is, or has a partner, shareholder, officer or
director who is, an officer or Trustee of the Trust or an officer
or director of the Distributor or Manager; and (d) sharing
statistical, research, legal and management expenses and office
hire and expenses with any other investment company in which an
officer or Trustee of the Trust or an officer or director of the
Distributor or Manager is an officer or director or otherwise
financially interested.
10.3 Securities and Cash of the Trust to be held by Custodian
Subject to Certain Terms and Conditions.
(a) All securities and cash owned by the Trust shall
be held by or deposited with one or more banks or trust companies
having (according to its last published report) not less than
$5,000,000 aggregate capital, surplus and undivided profits (any
such bank or trust company being hereby designated as
"Custodian"), provided such a Custodian can be found ready and
willing to act; subject to such rules, regulations and orders, if
any, as the Securities and Exchange Commission may adopt, the
Trust may, or may permit any Custodian to, deposit all or any
part of the securities owned by the Trust in a system for the
central handling of securities pursuant to which all securities
of any particular class or series of any issue deposited within
the system may be transferred or pledged by bookkeeping entry,
without physical delivery. The Custodian may appoint, subject to
the approval of the Trustees, one or more subcustodians.
(b) The Trust shall enter into a written contract with
each Custodian regarding the powers, duties and compensation of
such Custodian with respect to the cash and securities of the
Trust held by such Custodian. Said contract and all amendments
thereto shall be approved by the Trustees.
(c) The Trust shall upon the resignation or inability
to serve of any Custodian or upon change of any Custodian:
(i) in case of such resignation or inability to
serve, use its best efforts to obtain a successor Custodian;
(ii) require that the cash and securities owned by
the Trust be delivered directly to the successor Custodian; and
(iii) in the event that no successor Custodian
can be found, submit to the shareholders, before permitting
delivery of the cash and securities owned by the Trust otherwise
than to a successor Custodian, the question whether the Trust
shall be liquidated or shall function without a Custodian.
10.3 Reports to Shareholders. The Trust shall send to each
shareholder of record at least semiannually a statement of the
condition of the Trust and of the results of its operations,
containing all information required by applicable laws or
regulations.
10.4 Valuation of Assets. In valuing the portfolio
investments of the Trust, securities for which market quotations
are readily available shall be valued at prices which, in the
opinion of the Trustees or the person designated by the Trustees
to make the determination, most nearly represent the market value
of such securities, and other securities and assets shall be
valued at their fair value as determined by or pursuant to the
direction of the Trustees, which in the case of debt obligations,
commercial paper and repurchase agreements may, but need not, be
on the basis of yields for securities of comparable maturity,
quality and type, or on the basis of amortized cost. Expenses
and liabilities of the Trust shall be accrued each day.
Liabilities may include such reserves for taxes, estimated
accrued expenses and contingencies as the Trustees or their
designates may in their sole discretion deem fair and reasonable
under the circumstances. No accruals shall be made in respect of
taxes on unrealized appreciation of securities owned unless the
Trustees shall otherwise determine.
ARTICLE 11
Shareholders
11.1 Annual Meeting. The annual meeting of the shareholders
of the Trust shall be held on the last Friday in April in each
year or on such other day as may be fixed by the Trustees. The
meeting shall be held at such time as the Chairman of the Trustees
or the Trustees may fix in the notice of the meeting or otherwise.
Purposes for which an annual meeting is to be held, additional to
those prescribed by law or these Bylaws, may be specified by the
Chairman of the Trustees or by the Trustees.
11.2 Record Dates. For the purpose of determining the
shareholders of any series or class of shares of the Trust 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 more than 60 days before the
date of payment of any dividend or of any other distribution, as
the record date for determining the shareholders of such series
or class 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 such 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 such
purposes close the register or transfer books for all or part of
such period.
ARTICLE 12
Terms of Preferred Shares
12.1 Designation. A class of 600 preferred shares of
beneficial interest, without par value, liquidation preference
$100,000 per share plus accumulated but unpaid dividends, if any,
thereon (whether or not earned), is hereby designated "Money
Market Cumulative Preferred Shares," provided that the Trustees
may, in their discretion, increase the number of shares of MMP
authorized under this Section 12.1 or may amend these Bylaws to
authorize the issuance of another class or classes of preferred
shares if Xxxxx'x has advised the Trust in writing that such
increase or amendment would not affect its then-current rating of
the shares of MMP.
12.2 Definitions. The following terms shall have the
following meanings, whether used in the singular or plural:
(a) "'AA' Composite Commercial Paper Rate," on any
date for any Rate Period, means (i)(A) in the case of any Rate
Period with Rate Period Days of less than 46 days, the interest
equivalent of the 30-day rate, (B) in the case of any Rate Period
with Rate Period Days of 46 days or more but less than 70 days, the
interest equivalent of the 60-day rate, (C) in the case of any Rate
Period with Rate Period Days of 70 days or more but less than 85
days, the arithmetic average of the interest equivalent of the
60-day and 90-day rates, (D) in the case of any Rate Period with
Rate Period Days of 85 days or more but less than 120 days, the
interest equivalent of the 90-day rate, (E) in the case of any Rate
Period with Rate Period Days of 120 days or more but less than 148
days, the arithmetic average of the interest equivalent of the
90-day and 180-day rates and (F) in the case of any Rate Period
with Rate Period Days of 148 days or more but 182 days or less,
the interest equivalent of the 180-day rate, on commercial paper
placed on behalf of issuers whose corporate bonds are rated "AA" by
Standard & Poor's or the equivalent of such rating by Standard &
Poor's or another rating agency, as made available on a discount
basis or otherwise by the Federal Reserve Bank of New York for the
Business Day immediately preceding such date; or (ii) in the event
that the Federal Reserve Bank of New York does not make available
any such rate, then the arithmetic average of such rates, 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 next preceding such date. If any Commercial Paper Dealer
does not quote a rate required to determine the "AA" Composite
Commercial Paper Rate, the "AA" Composite Commercial Paper Rate
shall be determined on the basis of the quotation or quotations
furnished by the remaining Commercial Paper Dealer or Commercial
Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Trust to
provide such rate or rates not being supplied by any Commercial
Paper Dealer or Commercial Paper Dealers, as the case may be, or,
if the Trust does not select any such Substitute Commercial Paper
Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers. For purposes
of this definition, the "interest equivalent" of a rate stated on
a discount basis (a "discount rate") for commercial paper of a
given days' maturity shall be equal to the quotient (rounded
upwards to the next higher one-thousandth (.001) of 1%) of (A) the
discount rate divided by (B) the difference between (x) 1.00 and
(y) a fraction the numerator of which shall be the product of
the discount rate times the number of days in which such commercial
paper matures and the denominator of which shall be 360.
(b) "Accountants' Certificate" has the meaning
specified in paragraph 12.8(e) below.
(c) "Additional Dividend" has the meaning specified in
paragraph 12.3(f) below.
(d) "Additional Dividend Payment Date" has the meaning
specified in paragraph 12.3(f) below.
(e) "Additional Dividend Right" has the meaning
specified in paragraph 12.3(f) below.
(f) "Applicable Rate" has the meaning specified in
paragraph 12.3(c)(i) below.
(g) "Auction" means each periodic operation of the
Auction Procedures.
(h) "Auction Agent" means The Bank of New York, unless
and until another bank or trust company has been appointed as
auction agent for the MMP by a resolution of the Trustees, and
thereafter such substitute bank or trust company.
(i) "Auction Date," with respect to any Rate Period,
means the Business Day next preceding the first day of such Rate
Period.
(j) "Auction Procedures" means the procedures set
forth in paragraph 12.10 below.
(k) "Business Day" means a day on which the New York
Stock Exchange, Inc. is open for trading and which is neither a
Saturday, Sunday nor any other day on which banks in The City of
New York, New York are authorized by law to close.
(l) "Certificate of Eligible Asset Coverage" has the
meaning specified in paragraph 12.8(c) below.
(m) "Certificate of 1940 Act Asset Coverage" has the
meaning specified in paragraph 12.8(c) below.
(n) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(o) "Commercial Paper Dealers" means Xxxxxx
Brothers Inc., Xxxxxxx, Sachs & Co., and Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, or, in lieu of any thereof, their
respective affiliates or successors, provided that such entity is
a commercial paper dealer.
(p) "Common Shares" means the Trust's common
shares of beneficial interest, no par value.
(q) "Common Shares Paying Agent" means Xxxxxx
Fiduciary Trust Company unless and until another bank or trust
company has been appointed as paying agent for the Common Shares
by a resolution of the Trustees, and thereafter such substitute
bank or trust company.
(r) "Confirmation Date" has the meaning specified
in paragraph 12.8(e) below.
(s) "Coverage Value," with respect to an Eligible
Asset, is equal to the Market Value of the Eligible Asset divided
by the applicable Discount Factor; provided that the Coverage Value
of an Eligible Asset may not exceed its stated principal amount, if
any. Coverage Value may be calculated on other bases, and the
Coverage Value of other assets which become includible in Eligible
Assets shall be determined according to procedures established by
the Trust, if Moody's has advised the Trust in writing that such
revised calculation of Coverage Value or such procedures for
determining the Coverage Value of other assets would not adversely
affect its then-current rating of the shares of MMP.
(t) "Date of Original Issue" means the date on
which the Trust originally issues the shares of MMP.
(u) (i) "Discount Factor" means, with respect to
an Eligible Asset specified below, the applicable number specified
below:
Type of Eligible Asset Discount Factor:
Cash, as set forth in the definition of
Eligible Assets in paragraph 12.8(a) below. . . . . . . . .1.00
Demand or time deposits, certificates of
deposit and bankers' acceptances maturing
in 90 days or less having a rating or
rating equivalent of "P-2" or better from
Moody's or a rating of "A-1" or better from
Standard & Poor's . . . . . . . . . . . . . . . . . . . . .1.00
Demand or time deposits, certificates of
deposit maturing in more than 90 days but
in one year or less and bankers'acceptances
maturing in more than 90 days but in 270 days
or less having a rating or rating equivalent
of "P-2" or better from Moody's or a rating
of "A-1" or better from Standard & Poor's . . . . . . . . 1.15
Commercial paper rated "P-1" by Moody's
(or, if unrated by Moody's, guaranteed or
supported by a person or entity the unsecured
debt obligations of which are rated at least
"Aa3"/"P-1" by Moody's or, if such commercial
paper will mature within one Business Day
from the Eligible Asset Evaluation Date,
the long-term unsecured debt obligations of
which are rated at least "A3"/"P-1" by Moody's)
maturing in 30 days or less. . . . . . . . . . . . . . . . 1.00
Commercial paper rated "P-1" by Moody's
(or, if unrated by Moody's, guaranteed or
supported by a person or entity, the unsecured
debt obligations of which are rated at least
"Aa3"/"P-1" by Moody's or, if such commercial
paper will mature within one Business Day from
the Eligible Asset Evaluation Date, the long-term
unsecured debt obligations of which are rated at
least "A3"/"P-1" by Moody's) maturing in more than
30 days but in 270 days or less . . . . . . . . . . . . . .1.15
Commercial paper not rated by Moody's but rated
"A-1" by Standard & Poor's maturing in 270 days or less. . 1.25
Commercial paper rated "P-2" by Moody's maturing in
270 days or less . . . . . . . . . . . . . . . . . . . . . 1.30
Securities which the Trust has bought and agreed
to sell in the future:
(a) If the counterparty to the transaction
has a rating of at least "A2" by Moody's
or a party approved by Moody's and the
transaction has a term of 30 days or less . . . . 1.00
(b) Otherwise . . . . . . . . . . . . . . . . . . . . . Discount
Factor of
security
subject to
purchase and
resale
Securities which the Trust has sold but
for which it has yet to receive payment
(a) If the counterparty to the transaction has
outstanding senior securities rated at
least "Baa3" by Moody's and the transaction
has a term of five days or less . . . . . . . . . 1.00
(b) Otherwise . . . . . . . . . . . . . . . . . . . . . Discount
Factor
of
security
sold
Preferred stocks:
Auction rate preferred stocks issued by issuers whose
assets are not credit enhanced. . . . . . . . . . . . 3.00
Auction rate preferred stocks issued by issuers whose
assets are credit enhanced. . . . . . . . . . . . . . 3.50
Other preferred stocks issued by issuers in the
financial and industrial industries. . . . . . . . . . . . 2.14
Other preferred stocks issued by issuers in the utilities
industry . . . . . . . . . . . . . . . . . . . . . . . . . 1.53
U.S. Treasury Securities:
U.S. Treasury Securities with remaining terms to maturity of:
1 year or less. . . . . . . . . . . . . . . . . . . . 1.07
2 years or less . . . . . . . . . . . . . . . . . . .1.13
3 years or less . . . . . . . . . . . . . . . . . . . 1.18
4 years or less . . . . . . . . . . . . . . . . . . . 1.23
5 years or less . . . . . . . . . . . . . . . . . . . 1.28
7 years or less . . . . . . . . . . . . . . . . . . . 1.35
10 years or less. . . . . . . . . . . . . . . . . . . 1.42
15 years or less. . . . . . . . . . . . . . . . . . . 1.47
20 years or less. . . . . . . . . . . . . . . . . . . 1.53
30 years or less. . . . . . . . . . . . . . . . . . . 1.54
U.S. Treasury Strips with remaining terms to maturity of:
1 year or less. . . . . . . . . . . . . . . . . . . . 1.08
2 years or less . . . . . . . . . . . . . . . . . . . 1.16
3 years or less . . . . . . . . . . . . . . . . . . .1.23
4 years or less . . . . . . . . . . . . . . . . . . . 1.30
5 years or less . . . . . . . . . . . . . . . . . . . 1.37
7 years or less . . . . . . . . . . . . . . . . . . . 1.46
10 years or less. . . . . . . . . . . . . . . . . . .1.58
15 years or less. . . . . . . . . . . . . . . . . . . 1.83
20 years or less. . . . . . . . . . . . . . . . . . . 2.07
30 years or less. . . . . . . . . . . . . . . . . . . 2.31
Corporate bonds:
Corporate and utility bonds rated "Aaa" with remaining terms
to maturity of:
1 year or less. . . . . . . . . . . . . . . . . . . . 1.12
2 years or less . . . . . . . . . . . . . . . . . . . 1.18
3 years or less . . . . . . . . . . . . . . . . . . . 1.23
4 years or less . . . . . . . . . . . . . . . . . . . 1.28
5 years or less . . . . . . . . . . . . . . . . . . . 1.33
7 years or less . . . . . . . . . . . . . . . . . . . 1.41
10 years or less. . . . . . . . . . . . . . . . . . . 1.48
15 years or less. . . . . . . . . . . . . . . . . . . 1.53
20 years or less. . . . . . . . . . . . . . . . . . . 1.59
30 years or less. . . . . . . . . . . . . . . . . . .1.60
Corporate and utility bonds rated "Aa" with remaining terms to
maturity of:
1 year or less. . . . . . . . . . . . . . . . . . . . 1.18
2 years or less . . . . . . . . . . . . . . . . . . . 1.24
3 years or less . . . . . . . . . . . . . . . . . . . 1.29
4 years or less . . . . . . . . . . . . . . . . . . . 1.34
5 years or less . . . . . . . . . . . . . . . . . . . 1.40
7 years or less . . . . . . . . . . . . . . . . . . . 1.48
10 years or less. . . . . . . . . . . . . . . . . . . 1.55
15 years or less. . . . . . . . . . . . . . . . . . . 1.60
20 years or less. . . . . . . . . . . . . . . . . . . 1.67
30 years or less. . . . . . . . . . . . . . . . . . . 1.67
Corporate and utility bonds rated "A" with remaining terms to
maturity of:
1 year or less. . . . . . . . . . . . . . . . . . . . 1.23
2 years or less . . . . . . . . . . . . . . . . . . . 1.30
3 years or less . . . . . . . . . . . . . . . . . . . 1.35
4 years or less . . . . . . . . . . . . . . . . . . . 1.41
5 years or less . . . . . . . . . . . . . . . . . . . 1.46
7 years or less . . . . . . . . . . . . . . . . . . . 1.55
10 years or less. . . . . . . . . . . . . . . . . . . 1.62
15 years or less. . . . . . . . . . . . . . . . . . . 1.67
20 years or less. . . . . . . . . . . . . . . . . . . 1.74
30 years or less. . . . . . . . . . . . . . . . . . . 1.75
Corporate and utility bonds rated "Baa" with remaining terms
to maturity of:
1 year or less. . . . . . . . . . . . . . . . . . . . 1.28
2 years or less . . . . . . . . . . . . . . . . . . . 1.35
3 years or less . . . . . . . . . . . . . . . . . . . 1.40
4 years or less . . . . . . . . . . . . . . . . . . . 1.47
5 years or less . . . . . . . . . . . . . . . . . . . 1.52
7 years or less . . . . . . . . . . . . . . . . . . . 1.61
10 years or less. . . . . . . . . . . . . . . . . . . 1.69
15 years or less. . . . . . . . . . . . . . . . . . . 1.75
20 years or less. . . . . . . . . . . . . . . . . . . 1.82
30 years or less. . . . . . . . . . . . . . . . . . . 1.83
Common stocks:
Issued by utilities . . . . . . . . . . . . . . . . . 1.65
Issued by industrial companies. . . . . . . . . . . . 2.43
Issued by financial companies . . . . . . . . . . . . 2.33
Issued by transportation companies. . . . . . . . . . 3.07
(ii) By resolution of the Trustees and without
amending these Bylaws or otherwise submitting such resolution for
shareholder approval, (A) the Discount Factors set out in (i)
above may be changed from those set forth above and (B) additional
Discount Factors may be established for Other Securities if, in
each case, Moody's has advised the Trust in writing that such
change or addition would not adversely affect its then-current
rating of the shares of MMP, provided that the Trust shall cause to
be made available a written statement setting forth the appropriate
Discount Factors, as changed and/or as supplemented, for inspection
by the Holders at the principal office of the Trust.
(v) "Dividend Payment Date" means any date on which
dividends are payable pursuant to the provisions of paragraph
12.3(a) below.
(w) "Dividend Period" with respect to the shares of
MMP, means the period from and including the Date of Original Issue
to but excluding the Initial Dividend Payment Date for such shares
and any period thereafter from and including a Dividend Payment
Date for such shares to but excluding the next succeeding Dividend
Payment Date for such shares.
(x) "Dividends Received Deduction" means the corporate
dividends received deduction generally allowed to non-affiliated
corporate holders under Section 243(a)(1) of the Code as in
effect with respect to a Paragraph 12.3(a) Dividend or an
Additional Dividend, as the case may be.
(y) "Eligible Asset Coverage is met" means, as of any
date of determination, that the aggregate Net Coverage Value of
the Eligible Assets owned by the Trust as of the date of
determination equals or exceeds the applicable Eligible Asset
Coverage Amount.
(z) "Eligible Asset Coverage Amount," as of any date
of determination, means the sum of (i) an amount equal to the
product of (A) $100,000 and (B) the number of shares of MMP then
outstanding, (ii) an amount equal to the applicable redemption
premium, if any, on the shares of MMP called for redemption
pursuant to the provisions of paragraph 12.4(a) below, and (iii)
the Projected Dividend Amount; provided that, in the event the
amount of liabilities used in the calculation of the Net Coverage
Value includes any redemption price payable with respect to the
shares of MMP called for redemption, the number of shares of MMP
outstanding, for purposes of subclause (i)(B) above, shall not
include the number of such shares called for redemption.
(aa) "Eligible Asset Cure Date" means (i) the sixth
Business Day following an Eligible Asset Evaluation Date on which
an Accountants' Certificate is not required to be delivered,
except that with respect to any Eligible Asset Evaluation Date on
which Eligible Asset Coverage is not met that is also an Auction
Date, the fifth Business Day following such Eligible Asset
Evaluation Date, or (ii) the third Business Day following a
Confirmation Date with respect to which the Trust has not
delivered to the MMP Paying Agent an Accountants' Certificate
confirming the matters specified in paragraph 12.8(e) relating to
the immediately preceding Eligible Asset Evaluation Date.
(bb) "Eligible Asset Evaluation Date" means (i) the
Date of Original Issue, (ii) each succeeding Friday following the
Date of Original Issue (or, if such day is not a Business Day,
the first Business Day following such Friday), (iii) the Business
Day preceding the day on which any notice is sent to Holders or
former Holders as to the payment of any Additional Dividend, and
(iv) the Business Day immediately preceding the date on which the
Trustees approve the redemption of any Common Shares.
(cc) "Eligible Assets" has the meaning specified in
paragraph 12.8(a) below.
(dd) "Federal Corporate Income Tax Rate" has the
meaning specified in paragraph 12.3(f) below.
(ee) "Gross-Up Tax Rate" has the meaning specified in
paragraph 12.3(f) below.
(ff) "Holder" means an individual or entity in whose
name an outstanding share of the MMP is registered on the Share
Books.
(gg) "Independent Accountants" means the Trust's
independent certified public accountants, which shall be a
nationally recognized accounting firm.
(hh) "Initial Dividend Payment Date" has the meaning
specified in paragraph 12.3(b)(i) below.
(ii) "Initial Rate Period," with respect to the MMP,
means the period from and including the Date of Original Issue
thereof to but excluding the initial Dividend Payment Date
therefor.
(jj) "Market Value" means (i) with respect to any
Eligible Asset which is listed on an exchange or traded over-the-
counter and quoted on the NASDAQ National Market, the last sale
price on the day of valuation or, if there has been no sale that
day, the last reported bid price, using prices as of the close of
trading, during the 24-hour period prior to such determination,
(ii) with respect to any Eligible Asset referred to in (i) above
as to which there has been no reported bid price during the 24--
hour period preceding such determination and with respect to any
Eligible Asset which is not listed on an exchange or quoted on
the NASDAQ National Market, the lower of the bid prices, as of
the close of business on the Business Day immediately preceding
the date of determination, for the same kind of securities, as
quoted (at least one of such quotes being in writing) to the
Trust by two or more nationally recognized securities dealers
making a market in such Eligible Asset at the time, and (iii)
with respect to a Short-Term Money Market Instrument or
commercial paper with a remaining term to maturity of 90 days or
less, the cost on the date of investment adjusted for
amortization of interest and the discount, if any, uniformly over
the number of days remaining to maturity. If there is no sale or
bid price for an investment as provided in clause (i) or (ii) of
the preceding sentence, an investment shall be deemed to have a
Market Value of zero. By resolution of the Trustees and without
amending these Bylaws, the calculation of Market Value may be
made on bases other than those set forth above if Moody's has
advised the Trust in writing that the revised method of
calculation of Market Value would not adversely affect its then-
current rating of the shares of MMP, provided that the Trust
shall cause to be made available a written statement setting
forth such revised method for inspection by Holders at the
principal office of the Trust.
(kk) "Maximum Rate" has the meaning specified in
paragraph 12.10(a)(xi) below.
(ll) "Moody's" means Xxxxx'x Investors Service, Inc. or
any successor thereto, or, if the MMP is not rated by Xxxxx'x
Investors Service, Inc. or any successor thereto, any nationally
recognized statistical rating organization designated by the
Trust pursuant to paragraph 12.10(a)(xviii).
(mm) "Minimum Holding Period" shall mean the then-
current minimum holding period (contained, as of the adoption of
this Article 12, in Section 246(c) of the Code) required for
corporate taxpayers generally to be entitled to the Dividends
Received Deduction.
(nn) "Minimum Rate Period" means any Rate Period
consisting of 49 Rate Period Days or such greater or lesser number
of Rate Period Days as shall be established as the Minimum Rate
Period by the Trustees pursuant to paragraph 12.3(b)(ii)(C) below,
provided that the Minimum Rate Period shall in all cases equal or
exceed the Minimum Holding Period.
(oo) "MMP[R] " means Money Market Cumulative Preferred
Shares.
[R][Trademark]
(pp) "MMP Paying Agent" means The Bank of New York,
unless and until another bank or trust company has been appointed
as paying agent for the MMP by a resolution of the Trustees, and
thereafter such substitute bank or trust company.
(qq) "Net Coverage Value" has the meaning specified in
paragraph 12.8(b) below.
(rr) "1940 Act" means the Investment Company Act of
1940, as amended.
(ss) "1940 Act Asset Coverage is met" means, as of any
date of determination, that the ratio of the value of the Trust's
total assets, less all liabilities and indebtedness not represented
by senior securities (as defined in the 1940 Act), to the aggregate
amount of senior securities representing indebtedness of the Trust
plus the aggregate liquidation preference of the MMP is at least
200% (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 stock of a closed-end investment
company as a condition of declaring a dividend on its common
stock).
(tt) "1940 Act Cure Date" means the 1940 Act Evaluation
Date next following a 1940 Act Evaluation Date with respect to
which the 1940 Act Asset Coverage is not met.
(uu) "1940 Act Evaluation Date" means (i) the Business
Day immediately preceding each dividend declaration date for the
Common Shares, and (ii) the last Business Day of each calendar
month.
(vv) "Non-Payment Period Rate" has the meaning
specified in paragraph 12.3(c)(ii) below.
(ww) "Notice of Redemption" has the meaning specified
in paragraph 12.4(b) below.
(xx) "Other Securities" has the meaning specified in
paragraph 12.8(a)(iii) below.
(yy) "Paragraph 12.3(a) Dividend" has the meaning
specified in paragraph 12.3(a)(f)(i) below.
(zz) "Projected Dividend Amount," as of any Eligible
Asset Evaluation Date, means the amount of cash dividends, which
(whether or not earned) are accumulated and unpaid on the shares
of MMP outstanding on such Eligible Asset Evaluation Date, up to
but not including such Eligible Asset Evaluation Date, and which
are projected to accumulate on such shares from and including
such Eligible Asset Evaluation Date up to but not including the
56th day, as specified below, after such Eligible Asset
Evaluation Date, at the following rates: (i) for the period from
and including the Eligible Asset Evaluation Date and up to but
not including the first following Dividend Payment Date or the
56th day after such Eligible Asset Evaluation Date, whichever is
sooner, the Applicable Rate in effect as of such Eligible Asset
Evaluation Date; and (ii) for the period, if any, from and
including such first following Dividend Payment Date and up to
but not including the 56th day following such Eligible Asset
Evaluation Date, the product of the Maximum Rate on the last
occurring Auction Date (but with the prevailing rating of such
shares, for purposes of determining such Maximum Rate, being
deemed "Below 'baa3'" if any failure to pay funds required
pursuant to paragraphs 12.3(b)(iii) or 12.4(e) below shall not
have been cured in accordance with the provisions of paragraph
12.3(c)(ii) below on or before such Eligible Asset Evaluation
Date) (or, if prior to the first Auction Date, 150% of the 60-
day "AA" Composite Commercial Paper Rate on the Date of Original
Issue) and 2.26. For any date of determination that is not an
Eligible Asset Evaluation Date, the Projected Dividend Amount for
the MMP as of such date of determination shall equal the
Projected Dividend Amount on the immediately preceding Eligible
Asset Evaluation Date, adjusted to reflect any decrease in the
number of shares of MMP outstanding. The calculation of the
Projected Dividend Amount may be made on bases other than those
set forth above if Moody's has advised the Trust in writing that
the revised calculation of the Projected Dividend Amount would
not adversely affect its then-current rating of the MMP. If the
Trustees adjust the Minimum Rate Period pursuant to paragraph
12.3(b)(ii)(C) below, the Projected Dividend Amount shall be
determined in accordance with procedures approved by Moody's,
provided that the Trust shall cause to be made available a
written statement setting forth the revised method of
determination of the Projected Dividend Amount for inspection by
the Holders at the principal office of the Trust.
(aaa) "Rate Period" means the Initial Rate Period
thereof and any Subsequent Rate Period, including any Special Rate
Period, for the MMP.
(bbb) "Rate Period Days" for any Rate Period
consisting of less than four Dividend Periods, means the number of
days (without giving effect to paragraphs 12.3(b)(ii)(A) and (C)
below (but giving effect to the provisos of paragraph
12.3(b)(ii)(C))) in such Rate Period.
(ccc) "Retroactive Taxable Allocation" shall have
the meaning specified in paragraph 12.3(f) below.
(ddd) "Securities Depository" has the meaning
specified in paragraph 12.10(a)(xix) below.
(eee) "Short-Term Money Market Instruments" shall
mean the following types of instruments if, on the date of
purchase or other acquisition thereof (or, in the case of an
instrument specified by clauses (i) and (ii) below, on the
Eligible Asset Evaluation Date), the remaining terms of maturity
thereof are not in excess of 90 days:
(i) U.S. Treasury Securities;
(ii) commercial paper that is rated at the time of
purchase or acquisition and on the Eligible Asset Evaluation Date
at least "P-1" by Moody's (or, if unrated by Xxxxx'x, is
guaranteed or supported by a person or entity the unsecured debt
obligations of which are rated at least "Aa3"/"P-1" by Moody's
or, if such commercial paper will mature within one Business Day
from the Eligible Asset Evaluation Date, the long-term unsecured
debt obligations of which are rated at least "A3"/"P-1" by
Moody's);
(iii) demand or time deposits in, certificates
of deposit of, or bankers' acceptances issued by (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) if,
in each case, the short-term certificates of deposit or
commercial paper (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 at the time of purchase or
acquisition and on the Eligible Asset Evaluation Date, have
credit ratings from Moody's of at least "P-1";
(iv) Repurchase obligations with respect to any
U.S. Treasury Security entered into with a depository institution,
trust company, or securities dealer (acting as principal) which
meets the credit rating requirements for commercial paper and
long-term unsecured debt obligations specified in clause (ii)
above; and
(v) Eurodollar demand or time deposits in, or
certificates of deposit of, the head office or the London or Tokyo
branch office of a depository institution or trust company meeting
the credit rating requirements of commercial paper and short-term
unsecured debt obligations specified in clause (iii) above,
provided that the interest receivable by the Trust shall be in U.S.
dollars and shall not be subject to any withholding or similar
taxes.
(fff) "Share Books" means the share transfer books
of the Trust maintained by the MMP Paying Agent with respect to
the shares of MMP.
(ggg) "Special Dividend" has the meaning specified
in paragraph 12.3(g) below.
(hhh) "Special Rate Period," with respect to the
MMP, means any Subsequent Rate Period commencing on the date
designated by the Trust in accordance with Section 12.5 below and
ending on the last day of the last Dividend Period thereof, which
Subsequent Rate Period consists of that number of consecutive
Dividend Periods for such period set forth below:
Special Rate Period Number of Dividend Periods
91 Rate Period Days 1
182 Rate Period Days 2
1 Year* 4
2 Years* 8
3 Years* 12
4 Years* 16
5 Years* 20
*As adjusted pursuant to paragraph 12.3(b)(i)(C) below.
(iii) "Specific Redemption Provisions" means, with
respect to a Special Rate Period consisting of four or more
Dividend Periods, either or both of (i) a period determined
by the Trustees in consultation with the Broker-Dealer or
Broker-Dealers (as defined in paragraph 12.10(a)(vii) below) during
which shares of MMP shall not be subject to redemption at the
option of the Trust pursuant to paragraph 12.4(a)(i) below, and
(ii) a period determined by the Trustees in consultation with the
Broker-Dealer or Broker-Dealers (as so defined) during which shares
of MMP shall be redeemable at the Trust's option pursuant to
paragraph 12.4(a)(i) below at a price per share equal to $100,000
plus accumulated but unpaid dividends plus an applicable premium.
(jjj) "Standard & Poor's" means Standard & Poor's
Rating Services, or any successor thereto.
(kkk) "Subsequent Rate Period" means any period
from and including any Dividend Payment Date following the Initial
Rate Period to but excluding the next succeeding Dividend Payment
Date; provided that if any Subsequent Rate Period is also a Special
Rate Period, such term means the period commencing on the first day
of such Special Rate Period and ending on the last day of the last
Dividend Period thereof.
(lll) "Substitute Commercial Paper Dealers" means
CS First Boston Corporation or Xxxxxx Xxxxxxx & Co. Incorporated or
their respective affiliates or successors, if such entity is a
commercial paper dealer; provided that such entity at the
time of selection thereof is not a Commercial Paper Dealer.
(mmm) "Substitute U.S. Government Securities
Dealer" means CS First Boston Corporation and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated or their respective affiliates
or successors if such entity is a U.S. Government securities
dealer; provided that such entity at the time of selection thereof
is not a U.S. Government Securities Dealer.
(nnn) "Treasury Rate," on any date for any Rate
Period, means (i) the lower of the yield to stated maturity or, if
shorter, the next date on which the obligation reasonably
may be expected to be called on the most recently auctioned
direct obligations of the U.S. Government (excluding "flower"
bonds) with a remaining maturity closest to the duration of
such Rate Period, as quoted in The Wall Street Journal on such
date for the Business Day next preceding such date or (ii) in the
event that any such rate is not published by The Wall Street
Journal, then the arithmetic average of the lower of the yields to
stated maturity or, if shorter, the next date on which the
obligation reasonably may be expected to be called (expressed as an
interest equivalent in the case of a Rate Period consisting of four
Dividend Periods and expressed as a bond equivalent in the case of
any longer Rate Period) on the most recently auctioned direct
obligations of the U.S. Government (excluding "flower" bonds) with
a remaining maturity closest to the duration of such Rate Period as
quoted on a discount basis or otherwise by the U.S. Government
Securities Dealers to the Auction Agent for the close of business
on the Business Day immediately preceding such date. If any U.S.
Government Securities Dealer does not quote a rate required to
determine the Treasury Rate, the Treasury Rate shall be determined
on the basis of the quotation or quotations furnished by the
remaining U.S. Government Securities Dealer or U.S. Government
Securities Dealers and any Substitute U.S. Government Securities
Dealer selected by the Trust to provide such rate or rates being
supplied by any U.S. Government Securities Dealer or U.S.
Government Securities Dealers as the case may be, or, if the Trust
does not select any such Substitute U.S. Government Securities
Dealer or Substitute U.S. Government Securities Dealers, by the
remaining U.S. Government Securities Dealer or U.S. Government
Securities Dealers.
(ooo) "Trustees" means the Trustees of the Trust.
(ppp) "U.S. Government Securities Dealer" means
Xxxxxx Brothers Inc., Xxxxxxx Sachs & Co., Salomon Brothers Inc,
and Xxxxxx Guaranty Trust Company of New York or their respective
affiliates or successors if such entity is a U.S. Government
securities dealer.
(qqq) "U.S. Treasury Securities" means obligations
issued by, and backed by the full faith and credit of, the United
States of America which, other than Treasury bills, are
not zero coupon securities.
12.3 Dividends.
(a) Holders shall be entitled to receive, when, as and
if declared by the Trustees, out of funds legally available
therefor, cumulative cash dividends at the Applicable Rate and no
more (except to the extent set forth in paragraphs 12.3(c)(ii),
(f) and (g)), payable on the respective dates determined as set
forth in paragraph 12.3(b) below (each a "Dividend Payment
Date"). Dividends on shares of MMP shall accumulate at the
Applicable Rate from the Date of Original Issue thereof.
(b) (i) Dividends shall be payable, subject to
paragraph 12.3(b)(ii) below, on shares of MMP in same-day funds
in The City of New York, New York, on Thursday, May 9, 1996 (the
"Initial Dividend Payment Date"), and on each succeeding seventh
Thursday following such date, provided that if the Trust, subject
to the conditions set forth in Section 12.5, designates any
Subsequent Rate Period as a Special Rate Period that consists of:
(A) 91 Rate Period Days, dividends shall be
payable, subject to paragraphs 12.3(b)(ii)(A) and (C) below, on
shares of MMP in same-day funds in The City of New York, New York
on the thirteenth Thursday after the first day of such Special
Rate Period;
(B) 182 Rate Period Days, dividends shall be
payable, subject to paragraphs 12.3(b)(ii)(A) and (C) below, on
shares of MMP in same-day funds in The City of New York, New York
on each of the thirteenth and twenty-sixth Thursdays after the
first day of such Special Rate Period;
(C) four or more Dividend Periods, dividends
shall be payable, subject to paragraphs 12.3(b)(ii)(B) and (C)
below, on shares of MMP in same-day funds in The City of New
York, New York on the first day of the fourth month beginning
after the first day of such Special Rate Period and on the first
day of each succeeding third month thereafter; provided that if
dividends for the last Dividend Period in any Special Rate Period
would be payable as determined in this paragraph 12.3(b)(i)(C) on
a day that is not a Thursday, then dividends for such last
Dividend Period shall be payable instead on the first Thursday
preceding such day.
After any Special Rate Period, dividends on such shares of MMP
shall be payable, subject to paragraphs 12.3(b)(ii)(A) and
12.3(b)(ii)(C) below, on shares of MMP in same-day funds in The
City of New York, New York on each succeeding seventh Thursday,
subject in each case to the option of the Trust to further
designate from time to time any Subsequent Rate Period thereof as
a Special Rate Period.
(ii) (A) In the case of dividends that would be
payable on a Thursday, as determined by paragraph 12.3(b)(i)
above, including clause (A) or (B) of the proviso thereto, if
such Thursday is not a Business Day, then dividends shall be
payable in same-day funds in The City of New York, New York on
the first Business Day that immediately follows such Thursday.
(B) In the case of dividends that would be
payable on the first day of a month, as determined by clause (C)
of the proviso to paragraph 12.3(b)(i) above, if such first day
of the month is not a Business Day, then dividends shall be
payable in same-day funds in The City of New York, New York on
the first Business Day that immediately follows such first day of
the month.
(C) If any date on which dividends would be
payable on any shares of MMP as determined pursuant to paragraphs
12.3(b)(ii)(A) or (B) above is a day that would result in the
number of days between the second Auction Date preceding such
date and the date that would have been the Auction Date preceding
such date (determined by including such second preceding Auction
Date and excluding the date that would have been such preceding
Auction Date) being less than the number of days in the Minimum
Holding Period, then dividends on shares of MMP shall be payable
in same-day funds in The City of New York, New York on the first
Business Day that immediately follows such date that would result
in the number of days between Auction Dates as determined above
being at least equal to the number of days in the Minimum Holding
Period; provided that the Trustees, in the event of any change in
law changing the Minimum Holding Period, shall adjust the
provisions for determining Dividend Payment Dates for shares of
MMP, subject to paragraphs 12.3(b)(ii)(A) and 12.3(b)(ii)(B)
above and this paragraph 12.3(b)(ii)(C), so as to adjust
uniformly the number of Rate Period Days in Minimum Rate Periods
commencing after the date of such change in law to equal or
exceed the Minimum Holding Period, provided that after such
adjustment:
(1) the credit rating of the shares of
MMP is not adversely affected as a result of such adjustment;
(2) such number of Rate Period Days does
not exceed the length of the then-current Minimum Rate Period by
more than nine days and is not less than seven or more than 182
days; and
(3) dividends continue to be payable for
Minimum Rate Periods, subject to such paragraphs 12.3(b)(ii)(A)
and (B) above and this paragraph 12.3(b)(ii)(C), on the
successive Thursdays designated by the Trustees,
in which event dividends shall be payable on shares of MMP, in lieu
of the Thursdays specified in paragraph 12.3(b)(i) above, on the
successive Thursdays so designated by the Trustees and, if
there are more than 90 Rate Period Days in any such Subsequent
Rate Period, on the Thursday that is the 91st day thereof (with
respect to the Dividend Period ending on such 90th day), subject
to such paragraphs 12.3(b)(ii)(A) and (B) above and this paragraph
12.3(b)(ii)(C). The Trust shall notify Moody's at the earliest
possible date of any proposed change in law known to the Trust that
would alter the Minimum Holding Period, in order that Moody's may
analyze the Eligible Asset Coverage Amount in light of the altered
number of Rate Period Days with a view toward maintaining its
then-current rating of the shares of MMP in the event such proposed
change in law is enacted, and shall use reasonable efforts to
maintain the then-current rating of the shares of MMP
notwithstanding the enactment of the change in law. In the event
the Securities Depository shall change its customary procedures for
the payment of dividends, the Trustees may, in their discretion,
modify the provisions of this paragraph 12.3(b), provided that
Xxxxx'x shall have advised the Trust in writing that such
modification will not affect its then-current rating of the MMP.
Upon any change in the number of Rate Period Days as a result of a
change in law or upon any modification of the provisions of this
paragraph 12.3(b) as a result of a change in the customary
practices of the Securities Depository, the Trust shall mail or
cause to be mailed notice of such change by first class mail,
postage prepaid, to the Auction Agent, the MMP Paying Agent, each
Broker-Dealer, Moody's, and each Holder at such Holder's address as
the same appears on the Share Books of the Trust.
(iii) The Trust shall pay or cause to be
paid to the MMP Paying Agent not later than noon on the Business
Day next preceding each such Dividend Payment Date or Additional
Dividend Payment Date in next-day funds in The City of New York,
New York, an aggregate amount equal to the dividends or Additional
Dividends to be paid to all Holders on such Dividend Payment Date.
The Trust may direct the MMP Paying Agent to invest any such funds
in Short-Term Money Market Instruments, provided that the proceeds
of any such investment shall be available in The City of New York,
New York at the opening of business on such Dividend Payment Date.
(iv) All moneys paid to the MMP Paying Agent
for the payment of dividends (or for the payment of any late
charges pursuant to paragraph 12.3(c)(i) below, Additional
Dividends pursuant to paragraph 12.3(f) below, Special Dividends
pursuant to paragraph 12.3(g) below or redemption price pursuant to
paragraph 12.4(e) below) and any income or proceeds therefrom
shall be held in trust for the payment of such dividends (or for
the payment of such late charges, Special Dividends or redemption
price) by the MMP Paying Agent for the benefit of the Holders
specified in paragraph 12.3(b)(v) below. Any income or proceeds
from any moneys paid to the MMP Paying Agent in accordance with
the foregoing but not applied by the MMP Paying Agent to the
payment of dividends (or for the payment of any late charges,
Additional Dividends, Special Dividends or redemption price)
shall, to the extent permitted by law, be repaid to the Trust no
later than the date on which such moneys, income or proceeds were
so to have been applied. Any moneys paid to the MMP Paying Agent
in accordance with the foregoing (and any income or proceeds
therefrom not paid to the Trust pursuant to the preceding
sentence) but not applied by the MMP Paying Agent to the payment
of dividends (or to the payment of any late charges, Additional
Dividends, Special Dividends or redemption price) will, to the
extent permitted by law, be repaid to the Trust no later than the
end of 12 months from the date on which such moneys, income or
proceeds were so to have been applied.
(v) Each dividend on shares of MMP shall be
paid on the Dividend Payment Date therefor to the Holders as their
names appear on the Share Books of the Trust on the Business Day
next preceding such Dividend Payment Date. Subject to paragraph
12.3(e), dividends in arrears for any past Dividend Period may be
declared and paid at any time, without reference to any Dividend
Payment Date, to the Holders as their names appear on the Share
Books of the Trust on such date, not exceeding 15 days preceding
the payment date thereof, as may be fixed by the Trustees.
(c) (i) (A) The dividend rate on the MMP for the
Rate Period commencing on the Date of Original Issue and ending
on but excluding the initial Dividend Payment Date shall be the
rate determined by the Trustees of the Trust (or the person(s)
designated by them to make such determination), and (B) the
dividend rate on the MMP for each Subsequent Rate Period shall be
the rate per annum equal to the rate determined pursuant to the
Auction Procedures set forth in Section 12.10 below.
Notwithstanding the foregoing, if (x) the Trust has not paid to
the MMP Paying Agent the amounts required pursuant to paragraphs
12.3(b)(iii) above or 12.4(e) below during the immediately
preceding Rate Period, (y) the Trust has not paid any amounts the
Trust had previously failed to pay as required pursuant to
paragraphs 12.3(b)(iii) above or 12.4(e) below, together with any
applicable late charge, as set forth in paragraph 12.3(c)(ii)
below, at least four Business Days prior to the next succeeding
Auction Date, or (z) if the shares of MMP are no longer held in
the form of a single global certificate by the Securities
Depository (in which cases an Auction shall not be held) or if an
Auction is not held for any other reason, the dividend rate on
the shares of MMP for such Rate Period shall be the Maximum Rate
on the Auction Date with respect to such Rate Period. The
dividend rate on the MMP for any Rate Period or part thereof
determined as set forth in this clause (i), or set forth in
clause (ii) below, is referred to herein as the "Applicable Rate"
for such Rate Period or part thereof.
(ii) If the Trust fails to deposit with the
MMP Paying Agent by noon on (A) the Business Day next preceding any
Dividend Payment Date pursuant to paragraph 12.3(b)(iii) above
the full amount of any cash dividend payable on such Dividend
Payment Date or (B) any redemption date for shares of MMP called
for redemption pursuant to paragraph 12.4(e) below the full cash
redemption price of $100,000 per share plus accrued dividends,
plus any applicable redemption premium, the Trust shall pay to
the MMP Paying Agent, in addition to such amount, a late charge
calculated for the period during which the Trust has failed to
make such deposit (any such period shall exclude such Dividend
Payment Date or such redemption date but shall include the date
on which the payments provided in (A) and (B) above, together
with such late charge, are made) at a rate equal to the
Non-Payment Period Rate applied to (A) if the Trust has not
deposited funds pursuant to paragraph 12.3(b)(iii) above, the
product of the number of outstanding shares of MMP and $100,000
or (B) if the Trust has not deposited or otherwise made available
to Holders funds pursuant to paragraph 12.4(e) below, the
aggregate cash redemption price of the shares of MMP called for
redemption, based on the actual number of days comprising such
period divided by 360. The "Non-Payment Period Rate" will be
225% of the "AA" Composite Commercial Paper Rate on such Dividend
Payment Date or such redemption date for the Rate Period
containing such Business Day next preceding a Dividend Payment
Date or such redemption date (except that, with respect to a Rate
Period consisting of four or more Dividend Periods, the "AA"
Composite Commercial Paper Rate will, for this purpose, be the
"AA" Composite Commercial Paper Rate for a Rate Period (x)
consisting of 148 or more Rate Period Days but fewer than 182
Rate Period Days and (y) commencing on such Dividend Payment Date
or redemption date), provided that the Trustees may adjust,
modify, alter, or change from time to time the Non-Payment Period
Rate if Moody's advises the Trust in writing that such adjustment,
modification, alteration, or change will not adversely affect its
then-current rating of the shares of MMP and provided that the
Non-Payment Period Rate shall not be less than 225% of the
applicable "AA" Composite Commercial Paper Rate.
(iii) The amount of dividends per share
payable on shares of MMP on any date on which dividends shall be
payable on such shares shall be computed by multiplying the
respective Applicable Rate in effect for such Dividend Period or
Dividend Periods or part thereof for which dividends have not been
paid by a fraction, the numerator of which shall be the number of
days in such Dividend Period or Dividend Periods or part
thereof and the denominator of which shall be 360, and applying
the rate obtained against $100,000. Any dividend payment made on
shares of MMP shall be credited against the earliest accumulated
but unpaid dividends due with respect to such shares of MMP.
(d) [Reserved].
(e) (i) Except as set forth in the next sentence,
no dividends shall be declared or paid or set apart for payment on
the shares of any class or series of shares of beneficial interest
in the Trust ranking, as to the payment of dividends, on a parity
with shares of MMP for any period unless full cumulative dividends
have been or contemporaneously are declared and paid on the shares
of MMP and any other parity shares through the most recent
respective Dividend Payment Date with respect thereto. When
dividends are not paid in full as aforesaid, upon the shares of
MMP or any other class or series of shares ranking on a parity as
to the payment of dividends with shares of MMP, all
dividends declared upon shares of MMP and any other such class or
series of shares of beneficial interest in the Trust ranking on a
parity as to the payment of dividends with shares of MMP shall be
declared pro rata so that the amount of dividends declared per
share on shares of MMP and such other class or series of shares
shall in all cases bear to each other the same ratio that
accumulated dividends per share on the shares of MMP and such other
class or series of shares bear to each other (for purposes of
this sentence, the amount of dividends declared per share shall be
based on the Applicable Rate for such shares for the dividend
periods during which dividends were not paid in full). Holders
shall not be entitled to any dividend, whether payable in cash,
property or shares of beneficial interest, in excess of full
cumulative dividends, Additional Dividends and Special Dividends,
if any, as herein provided, on shares of MMP. No interest, or sum
of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on shares of MMP which may be in
arrears, and, except to the extent set forth in paragraph
12.3(c)(ii) above, no additional sum of money shall be payable in
respect of any such arrearage.
(ii) For so long as any shares of MMP are
outstanding, the Trust shall not declare, pay or set apart for
payment any dividend or other distribution in respect of
the Common Shares or any other shares of beneficial interest in
the Trust ranking junior to the MMP as to dividends or upon
liquidation (except a dividend payable in Common Shares
or shares of beneficial interest in the Trust ranking junior to
the MMP), or call for redemption, redeem, purchase or otherwise
acquire for consideration any Common Shares or any other shares of
beneficial interest in the Trust ranking junior to the MMP as to
dividends or upon liquidation, unless:
(A) immediately thereafter, the 1940 Act
Asset Coverage and the Eligible Asset Coverage are met;
(B) full cumulative dividends on all
shares of MMP for all past Rate Periods and any Additional
Dividends then due have been paid or declared and a sum sufficient
for the payment of such dividends and Additional Dividends set
apart for payment; and
(C) the Trust has redeemed the full
number of shares of MMP required to be redeemed by any provision
for mandatory redemption contained in this Article 12 (the number
of shares subject to mandatory redemption to be determined without
regard to the requirement that redemptions be made out of legally
available funds).
The Certificate of 1940 Act Asset
Coverage and the Certificate of Eligible Asset Coverage, dated as
of the applicable 1940 Act Asset Coverage Evaluation
Date and Eligible Asset Coverage Evaluation Date, respectively,
shall reflect any such dividend, redemption, repurchase or other
acquisition for consideration.
(iii) No dividend shall be declared, paid
or set apart for payment on any class of shares of beneficial
interest in the Trust (except dividends payable in Common
Shares of the Trust), and no shares of any class shall be called
for redemption, redeemed, repurchased or otherwise acquired for
consideration by the Trust, unless the Trust has paid, or set apart
for payment all Additional Dividends then due pursuant to
Additional Dividend Rights issued by the Trust in connection with
declaration of dividends. If the Trust does not pay all Additional
Dividends then due, the amount paid shall be payable to each holder
of Additional Dividend Rights to which Additional Dividends are
then due (regardless of the scheduled payment date) in the
proportion that the Additional Dividends then due to such
holder bear to the aggregate Additional Dividends due to all such
holders.
(f) Simultaneously with the declaration of each
dividend at the Applicable Rate to a Holder determined as set
forth in paragraph 12.3(a) above (each, a "Paragraph 12.3(a)
Dividend"), the Trustees shall also declare a dividend to such
Holder consisting of one right (an "Additional Dividend Right")
to receive an Additional Dividend in respect of such Paragraph
12.3(a) Dividend. If, after the close of its fiscal year, the
Trust characterizes a portion of such Paragraph 12.3(a) Dividend
declared during such fiscal year ineligible for the Dividends
Received Deduction solely because: (A) the Trust has redeemed
all or a portion of the MMP or has liquidated, (B) the Trust, in
its judgment, believes it is required, in order to comply with
the published position of the Internal Revenue Service concerning
the allocation of different types of income between different
classes and series of shares, Rev. Rul. 89-81, 1989-1 C.B. 226,
to allocate such portion of income ineligible for the Dividends
Received Deduction to the MMP, or (C) such Paragraph 12.3(a)
Dividend includes a return of capital for Federal income tax
purposes, and the Trust failed to give advance notice with
respect to the ineligibility of such portion for the Dividends
Received Deduction in accordance with the provisions of paragraph
12.10(f) (such portion referred to herein as a "Retroactive
Taxable Allocation"), the Trust will, within 90 days after the
end of the fiscal year in or with respect to which the Paragraph
12.3(a) Dividend was declared, provide notice of the Retroactive
Taxable Allocation made with respect to the Paragraph 12.3(a)
Dividend to the MMP Paying Agent and to each Holder or former
Holder who received such Paragraph 12.3(a) Dividend and the
corresponding Additional Dividend Right, at such Holder's or
former Holder's address as the same appears or last appeared on
the Share Books. The Trust will, within 30 days after such
notice is given to the MMP Paying Agent, pay to the MMP Paying
Agent, out of funds legally available therefor and supported by
income and gains arising in the fiscal year in or with respect to
which the Paragraph 12.3(a) Dividend was declared but not yet
declared as dividends, an amount equal to the aggregate of the
Additional Dividends payable in respect of such Retroactive
Taxable Allocation. The MMP Paying Agent will distribute such
funds, in same-day or next-day funds in accordance with its then-
current policy in The City of New York, New York to such Holders
or former Holders on the day that is 120 days after the end of
such fiscal year or on such earlier date as the Trust may
designate, or, if such day is not a Business Day, on the Business
Day immediately following such day (the "Additional Dividend
Payment Date"). The Trust may direct the MMP Paying Agent to
invest any funds paid to the MMP Paying Agent pursuant to the
preceding sentence in Short-Term Money Market Instruments,
provided that the proceeds of any such investment will be
available in The City of New York, New York at the opening of
business on the Additional Dividend Payment Date. All such funds
(to the extent necessary to pay the full amount of such
Additional Dividends) shall be held in trust for the benefit of
the holders of Additional Dividend Rights. Except as provided in
paragraph 12.6(a) below, Additional Dividends declared in respect
of an Additional Dividend Right shall be due and payable on the
Additional Dividend Payment Date to the Holder that received such
Additional Dividend Right, whether or not such Holder continues
to own the MMP in respect of which such Additional Dividend Right
was issued. Additional Dividend Rights shall be nontransferable
except by operation of law, and no purported transfer of an
Additional Dividend Right will be recognized by the Trust. No
certificates will be issued evidencing Additional Dividend
Rights.
An "Additional Dividend" in respect of any
Paragraph 12.3(a) Dividend means payment to a Holder or former
Holder of an amount which, when taken together with the Retroactive
Taxable Allocation made with respect to such Paragraph 12.3(a)
Dividend, would cause such Holder's net return (after Federal
income tax consequences) from the aggregate of both such
Retroactive Taxable Allocation and the Additional Dividend to be
equal to the net return that would have been realized by such
Holder or former Holder (after Federal income tax consequences)
from such Retroactive Taxable Allocation if such amount had been
eligible for the Dividends Received Deduction and the Additional
Dividend had not been paid. Such Additional Dividend shall be
calculated (A) without consideration being given to the time value
of money; (B) assuming that no federal alternative minimum tax or
similar tax is imposed with respect to dividends received from the
Trust; (C) assuming that the Holder or former Holder is taxable at
all times at the Gross-Up Tax Rate (as defined below) applicable to
the Retroactive Taxable Allocation and the Additional Dividend
(to the extent that the Trust does not designate all or a portion
of the Additional Dividend as qualifying for the Dividends
Received Deduction); (D) assuming that the Holder or former
Holder is fully eligible for the Dividends Received Deduction
with respect to dividends (including the Additional Dividend or
portion thereof designated as qualifying for the Dividends
Received Reduction) received from the Trust; (E) assuming that
the Holder or former Holder disposed of the shares with respect
to which the Paragraph 12.3(a) Dividend to which such Additional
Dividend relates was declared in a taxable transaction
immediately after the distribution with respect to which the
Retroactive Taxable Allocation was made; and (F) assuming that
the Holder or former Holder sold such shares for $100,000 per
share and had an adjusted tax basis in such shares equal to
$100,000 less any amount distributed as a return of capital (as
calculated for Federal income tax purposes) per share for the
distribution with respect to which the Retroactive Taxable
Allocation was made. An Additional Dividend will not include an
amount to compensate for the fact that the Additional Dividend or
the Retroactive Taxable Allocation may be subject to state and
local taxes. The "Gross-Up Tax Rate" shall be equal to the sum
of (i) the percentage of the income included in the Paragraph
12.3(a) Dividend that the Trust is not able to designate as
eligible for the Dividends Received Deduction that derives from
ordinary income or short-term gains, multiplied by the Federal
Corporate Income Tax Rate applicable to ordinary income, and (ii)
the percentage of the income included in the Paragraph 12.3(a)
Dividend that the Trust is not able to designate as eligible for
the Dividends Received Deduction that derives from net capital
gain, multiplied by the Federal Corporate Income Tax Rate
applicable to long-term capital gain. The "Federal Corporate
Income Tax Rate" shall be equal to the highest marginal Federal
income tax rate applicable to corporations (without regard to the
phase-out of graduated rates) in effect on (x) in the case of a
Retroactive Taxable Allocation, the Auction Date related to a
distribution on the shares of MMP for which a Retroactive Taxable
Allocation has been made, and (y) in the case of an Additional
Dividend, the date the Trust notifies holders of Additional
Dividend Rights of the amount of any Retroactive Taxable
Allocation with respect to which such an Additional Dividend
shall be paid.
The determination whether, and in what amount,
Additional Dividends shall become payable in respect of any
Paragraph 12.3(a) Dividend paid in any fiscal year shall be made
by the Trustees, in their sole discretion, within 90 days after
the close of such fiscal year based on the facts and
circumstances then prevailing and any such determination shall be
final and binding. Except as provided above, no Additional
Dividend shall for any reason be payable in respect of any
Paragraph 12.3(a) Dividend previously paid to a Holder. In
particular, and without limiting the generality of the foregoing,
no Additional Dividend shall be payable as a result of any
Internal Revenue Service challenge to, among other things, the
characterization of the MMP as equity, the Trust's method of
allocating various types of income between dividends paid on
different classes or series of shares or between dividends paid
on the same class or series of shares, or the designations made
by the Trust relating to distributions made with respect to an
earlier taxable year. In addition, no Additional Dividend shall
be payable as a result of any change in the law concerning the
eligibility of dividends paid on the MMP for the Dividends
Received Deduction or the reduction or elimination of the
Dividends Received Deduction.
(g) The Trustees may in their sole discretion from
time to time declare a special dividend (each, a "Special
Dividend") in an amount determined in the sole judgment of the
Trustees to be necessary or desirable to cause the Trust to
comply with any distribution requirements of the Code and thereby
to avoid the incurrence by the Trust of any income or excise tax
under the Code, provided that the Trustees shall not declare a
Special Dividend if the declaration thereof causes the Trust to
fail to maintain the Eligible Asset Coverage Amount or the 1940
Act Coverage Amount. Any Special Dividend shall be payable on a
date specified by the Trustees to Holders. The Trust shall
deposit with the MMP Paying Agent sufficient funds for the
payment of any such Special Dividend not later than noon on the
Business Day immediately preceding the date on which such Special
Dividend becomes payable and shall give the MMP Paying Agent
irrevocable instructions to apply such funds and, if applicable,
the income and proceeds therefrom, to the payment of such Special
Dividends. The Trust may direct the MMP Paying Agent to invest
any such available funds in Short-Term Money Market Instruments,
provided that the proceeds of any such investment shall be
available in The City of New York, New York at the opening of
business on the payment date for such Special Dividend.
(h) The Trust will notify Xxxxx'x promptly of any
failure by the Trust to declare any dividend on the date
contemplated by these Bylaws or to pay any dividend on the
payment date therefor.
(i) For so long as any shares of MMP are
outstanding, the MMP Paying Agent (which shall act as transfer
agent, registrar, dividend disbursing agent and redemption agent on
behalf of the Trust with respect to the shares of MMP), shall
receive and inspect Certificates of Eligible Asset Coverage and
related Accountants' Certificates, and shall have certain related
responsibilities, and the MMP Paying Agent and the Auction Agent
(which shall act as agent of the Trust in connection with the
implementation of the Auction Procedures) shall each be a
commercial bank, trust company, or other financial institution
unaffiliated with the Trust or any affiliate of the Trust (which,
however, may engage or have engaged in business transactions with
the Trust), and at no time shall the Trust or any affiliate of
the Trust act as the Auction Agent or the MMP Paying Agent. If
the Auction Agent or the MMP Paying Agent resigns or for any
reason either of their appointments is terminated during any
period that any shares of MMP are outstanding, the Trustees shall
promptly thereafter use their best efforts to appoint another
qualified commercial bank, trust company, or financial
institution to act as the Auction Agent or the MMP Paying Agent,
as the case may be, upon commercially reasonable terms. A single
qualified commercial bank, trust company, or financial
institution may act as both the Auction Agent and the MMP Paying
Agent. The MMP Paying Agent shall maintain an office or agency
in The City of New York, New York for purposes of making payments
on the shares of MMP.
12.4 Redemption.
(a) (i) The shares of MMP may be redeemed, at the
option of the Trust, as a whole or from time to time in part, on
the second Business Day next preceding any Dividend Payment Date
therefor, at a redemption price per share equal to the sum of:
(A) $100,000;
(B) an amount equal to all dividends
(whether or not earned) accumulated thereon up to but not
including the date fixed for redemption and unpaid; and
(C) if redeemed during any Special Rate
Period, the applicable redemption premium, if any, specified in
the Specific Redemption Provisions applicable to such Special
Rate Period;
provided that the Trust shall not redeem shares of MMP pursuant
to this paragraph 12.4(a)(i) during any period specified in the
Specific Redemption Provisions applicable to such Special Rate
Period as a period during which shares of MMP shall not be
subject to redemption pursuant to this paragraph 12.4(a)(i), and
provided, further, that the Trust shall not redeem shares of MMP
in part pursuant to this paragraph 12.4(a)(i) if after such
redemption fewer than 100 shares of MMP would remain outstanding.
(ii) The shares of MMP may be redeemed, at the
option of the Trust, as a whole but not in part, on the first day
following any Dividend Period thereof included in a Rate Period
consisting of four or more Dividend Periods if, on the date of
determination of the Applicable Rate for such Rate Period, such
Applicable Rate equaled or exceeded on such date of determination
the Treasury Rate for such Rate Period, at a redemption price per
share equal to the sum of $100,000 plus an amount equal to all
dividends (whether or not earned) accumulated thereon up to but
not including the date fixed for redemption and unpaid.
(iii) (A) If the 1940 Act Asset Coverage
is not met as of the 1940 Act Cure Date as shown in a Certificate
of 1940 Act Asset Coverage and the related Accountants' Certificate
delivered by the Trust to the Common Shares Paying Agent by the
close of business on such 1940 Act Cure Date, then the Trust
shall, by the close of business on such 1940 Act Cure Date, (1)
notify the MMP Paying Agent and Xxxxx'x of its intention to
redeem on the earliest practicable date following such 1940 Act
Cure Date the number of shares of MMP set forth below and (2)
give a Notice of Redemption (which shall specify a mandatory
redemption date that is not fewer than 30 days nor more than 45
days after the date of such notice) with respect to the
redemption of MMP on such mandatory redemption date. On such
mandatory redemption date, the Trust shall redeem, out of funds
legally available therefor, the number of shares of MMP equal to
the minimum number of shares the redemption of which, if such
redemption had occurred immediately prior to the opening of
business on such 1940 Act Cure Date, would have resulted in the
1940 Act Asset Coverage having been met on such 1940 Act Cure
Date or, if the 1940 Act Asset Coverage cannot be so restored,
all of the shares of MMP, at a redemption price equal to $100,000
per share (without payment of any premium) plus an amount equal
to all dividends (whether or not earned) accumulated thereon up
to but not including such mandatory redemption date and unpaid.
(B) If the Eligible Asset Coverage is
not met as of any Eligible Asset Cure Date as shown in a
Certificate of Eligible Asset Coverage and any related Accountants'
Certificate delivered by the Trust to the MMP Paying Agent by the
close of business on the second Business Day following such
Eligible Asset Cure Date, then the Trust shall, by the close of
business no later than the second Business Day following such
Eligible Asset Cure Date, (1) notify the MMP Paying Agent of its
intention to redeem on the earliest practicable date following
such Eligible Asset Cure Date the number of shares of MMP
determined as provided below and (2) give a Notice of Redemption
(which shall specify a mandatory redemption date that is not
fewer than 30 days nor more than 45 days after the date of such
notice) with respect to the redemption of shares of MMP on such
mandatory redemption date. The Trust shall redeem, out of funds
legally available therefor, the number of shares of MMP equal to
the minimum number of shares the redemption of which, if such
redemption had occurred immediately prior to the opening of
business on such Eligible Asset Cure Date, would have resulted in
the Eligible Asset Coverage having been met on such Eligible
Asset Cure Date or, if the Eligible Asset Coverage cannot be
restored, all of the shares of MMP, at a redemption price equal
to $100,000 per share (without payment of any premium) plus an
amount equal to all dividends (whether or not earned) accumulated
thereon up to but not including such mandatory redemption date
and unpaid.
(C) In the event of a redemption in part
of the shares of MMP pursuant to this paragraph 12.4(a)(iii), such
redemption shall not be effected on the Business Day immediately
preceding a Dividend Payment Date.
(b) If the Trust shall determine or be required to
redeem shares of MMP pursuant to paragraph 12.4(a) above, it
shall mail a notice of redemption (a "Notice of Redemption") with
respect to such redemption by first class mail, postage prepaid,
to each Holder of the shares to be redeemed, at such Holder's
address as the same appears on the Share Books of the Trust on
the record date established by the Trustee. Such Notice of
Redemption shall be so mailed no less than 30 nor more than 45
days prior to the date fixed for redemption. Each such Notice of
Redemption shall state: (i) the redemption date; (ii) the number
of shares of MMP to be redeemed; (iii) the CUSIP number of such
shares; (iv) the redemption price; (v) the place or places where
the certificates for such shares (properly endorsed or assigned
for transfer, if the Trustees shall so require and the Notice of
Redemption shall so state) are to be surrendered for payment of
the redemption price; (vi) that dividends on the shares to be
redeemed will cease to accumulate on such redemption date; and
(vii) the provision or provisions of paragraph 12.4(a) above
under which such redemption is made. If fewer than all shares of
MMP held by any Holder are to be redeemed, the Notice of
Redemption mailed to such Holder shall also specify the number of
shares to be redeemed from such Holder.
(c) Notwithstanding the other provisions of this
Section 12.4, the Trust shall not redeem, purchase or otherwise
acquire for consideration shares of MMP unless:
(i) all Additional Dividends due on or before
the date of such redemption shall have been or are
contemporaneously paid or a sum sufficient to pay such Additional
Dividends paid to the MMP Paying Agent;
(ii) all accumulated and unpaid dividends on
all outstanding shares of MMP for all past Rate Periods shall have
been or are contemporaneously paid or declared and a sum
sufficient for the payment of such dividends set apart for
payment; and
(iii) other than in the case of mandatory
redemptions pursuant to paragraph 12.4(a)(iii) only, the 1940 Act
Asset Coverage and the Eligible Asset Coverage would be met on
the date of such redemption, purchase or other acquisition after
giving effect thereto and, on or prior to such date, the Trust
provides to the Common Shares Paying Agent a Certificate of 1940
Act Asset Coverage and to the MMP Paying Agent a Certificate of
Eligible Asset Coverage, each together with a confirming
Accountants' Certificate, showing compliance with this clause
(iii) of this paragraph 12.4(c);
provided that the Trust may, without regard to the limitation
contained in clause (ii) of this paragraph 12.4(c), but subject
to the requirements of the 1940 Act, redeem, purchase or
otherwise acquire shares of MMP (A) as a whole, pursuant to a
mandatory redemption, or (B) pursuant to a purchase or exchange
offer made on an equal basis for all of the outstanding shares of
MMP pursuant to the 1940 Act. In the event that shares of MMP
are acquired pursuant to an exchange offer, the securities
exchanged for the MMP must have a rating from Xxxxx'x equivalent
to the then-current rating of the MMP. In the event that fewer
than all of the outstanding shares of MMP are to be redeemed
pursuant to either an optional redemption or a mandatory
redemption, the shares to be redeemed shall otherwise be selected
by lot, or such other method as the Trustees shall deem fair and
equitable. An officer's certificate shall be filed with the
records of the Trust maintained at its principal office
evidencing that (ii) has been satisfied.
(d) On or after the redemption date, each Holder
of shares of MMP that were called for redemption shall surrender
the certificate evidencing such shares to the Trust at the place
designated in the Notice of Redemption and shall then be entitled
to receive the cash redemption price, without interest, and the
related Additional Dividend Right; provided that if and so long
as all shares of MMP are held of record by the Securities
Depository or its nominee, the Securities Depository or its
nominee shall not be required to surrender the certificate
representing such shares in connection with a partial redemption
of shares of MMP. If less than all of the shares represented by
a share certificate are to be redeemed and the share certificate
has been surrendered, the Trust shall issue a new share
certificate for the shares not redeemed.
(e) Not later than noon on the Business Day
immediately preceding the redemption date, in next-day funds in
The City of New York, New York, the Trust shall irrevocably
deposit with or cause to be deposited with the MMP Paying Agent
sufficient funds to pay the cash redemption price of the shares
of MMP to be redeemed and shall give the MMP Paying Agent
irrevocable instructions to apply such funds and, if applicable,
the income and proceeds therefrom, to the payment of the cash
redemption price for such shares upon surrender of the
certificate therefor. The Trust may direct the MMP Paying Agent
to invest any such available funds in Short-Term Money Market
Instruments, provided that the proceeds of any such investment
shall be available in The City of New York, New York, at the
opening of business on such redemption date. All such funds (to
the extent necessary to pay the full amount of the redemption
price) shall be held in trust for the benefit of the Holders.
(f) If the Trust shall have (i) given or caused to
be given a Notice of Redemption as aforesaid, (ii)(A) irrevocably
deposited with the MMP Paying Agent a sum sufficient to pay the
cash redemption price for the shares of MMP as to which such
Notice of Redemption was given or (B) made payment of such a sum
to the MMP Paying Agent on the date fixed for redemption, and
(iii) given the MMP Paying Agent irrevocable instructions and
authority to pay the cash redemption price to the Holders of such
shares, then on the date of such deposit (or, if no such deposit
shall have been made, then on the date fixed for redemption,
unless the Trust shall have defaulted in making payment of the
redemption price), all rights of the Holders of such shares by
reason of their ownership of such shares, except their right to
receive the redemption price thereof (but without interest) and
any amount distributed pursuant to the Additional Dividend Right
distributed upon redemption or otherwise to the Holders, shall
terminate, and such shares shall no longer be deemed outstanding
for any purpose, including, without limitation, calculation of
the Eligible Asset Coverage and the right of the Holders of such
shares to vote on any matter or to participate in any subsequent
Auction. The Trust shall be entitled to receive, from time to
time, from the MMP Paying Agent the income, if any, derived from
the investment of moneys and/or other assets deposited with it
(to the extent that such income is not required to pay the cash
redemption price of the shares to be redeemed), and the Holders
of shares to be redeemed shall have no claim to any such income.
In case the Holder of any shares called for redemption shall not
claim the redemption price for his shares within one year after
the redemption date, the MMP Paying Agent shall, upon demand, pay
over to the Trust such amounts remaining on deposit, together
with any interest earned on such amounts, and the MMP Paying
Agent shall thereupon be relieved of all responsibility to the
Holder with respect to such shares, and such Holder shall
thereafter look only to the Trust for payment of the redemption
price of such shares.
(g) Except as set forth in this Section 12.4 with
respect to redemptions and subject to the provisions of
paragraphs 12.3(e) and 12.4(c) above, and the 1940 Act, nothing
contained herein shall limit any legal right of the Trust to
purchase or otherwise acquire any shares of MMP outside of an
Auction at any price, whether higher or lower than the redemption
price, in privately negotiated transactions or in the over-the-
counter market or otherwise.
(h) Solely for the purpose of determining the
number of shares of MMP to be stated in a Notice of Redemption as
subject to a mandatory or optional redemption, the amount of
funds legally available for such redemption shall be determined
as of the date of such Notice of Redemption. To the extent that
any redemption of which Notice of Redemption has been given is
not made by reason of the absence of legally available funds
therefor, such redemption shall be made as soon as practicable to
the extent such funds become available. Failure to redeem shares
of MMP shall be deemed to exist at any time after the date
specified for redemption in the Notice of Redemption when the
Trust shall have failed, for any reason whatsoever, to deposit,
in trust, funds with the MMP Paying Agent with respect to any
shares for which such Notice of Redemption has been given.
Notwithstanding the fact that the Trust may not have redeemed
shares of MMP for which Notice of Redemption has been given,
dividends may be declared and paid on shares of MMP and shall
include those shares of MMP for which a Notice of Redemption has
been given, subject to paragraph 12.4(f) above. The redemption
price stated in the Notice of Redemption for shares of MMP with
respect to which Notice of Redemption has been given shall be
deemed (i) reduced to the extent that any dividends declared and
paid on such shares pursuant to the preceding sentence represent
dividends accumulated thereon up to the date of redemption
specified in such Notice of Redemption but unpaid, and (ii)
increased by the amount of all dividends (whether or not earned)
accumulated thereon to but not including the date of redemption
and unpaid.
(i) In the event that the Trust shall have given a
Notice of Redemption with respect to any of the shares of MMP and
the sale of any Eligible Asset with a Discount Factor of greater
than 1.00 shall be necessary to provide sufficient moneys to
redeem all such shares on the redemption date, the Trust shall
sell or otherwise liquidate such Eligible Asset so as to ensure
that sufficient moneys are available to redeem all such shares on
the redemption date.
(j) In effecting any redemption pursuant to this
Section 12.4, the Trust shall use its best efforts to comply with
all applicable procedural conditions precedent to effecting such
redemption under the 1940 Act and Massachusetts law, but shall
effect no redemption except in accordance with the 1940 Act and
Massachusetts law.
(k) In the case of any redemption pursuant to this
Section 12.4, only whole shares of MMP shall be redeemed.
12.5 Designation of Special Rate Periods.
(a) The Trust, at its option, may designate any
succeeding Subsequent Rate Period as a Special Rate Period;
provided that such designation shall be effective only if:
(i) notice thereof shall have been given in
accordance with paragraphs 12.5(b) and (c)(i) below.
(ii) any failure to pay moneys required to be
paid to the MMP Paying Agent pursuant to paragraphs 12.3(b)(iii) or
12.4(e) above shall have been cured in accordance with the
provisions of paragraph 12.3(c)(ii) above;
(iii) Sufficient Clearing Bids (as defined
in paragraph 12.10(a)(xxvi) below) shall have existed in the
Auction held on the Auction Date immediately preceding the first
day of such proposed Special Rate Period;
(iv) if any Notice of Redemption shall have
been mailed by the Trust pursuant to paragraph 12.4(b) above with
respect to any shares of MMP, the redemption price with respect
to any such shares of MMP shall have been paid to the Holders of
such shares or set apart for payment; and
(v) the length of such proposed Special Rate
Period shall exceed the Minimum Rate Period.
(b) If the Trust proposes to designate any
succeeding Subsequent Rate Period as a Special Rate Period pursuant
to paragraph 12.5(a) above, not less than 20 nor more than 30 days
prior to the date the Trust proposes to designate as the first
day of such Special Rate Period (which shall be such day that
would otherwise be the first day of a Minimum Rate Period), the
Trust shall deliver to the Auction Agent and mail by first-class
mail, postage prepaid, to the Holders a notice. Each such notice
shall state (A) that the Trust may designate a succeeding
Subsequent Rate Period as a Special Rate Period, specifying the
first day thereof and (B) that the Trust will by 11:00 A.M. on
the second Business Day next preceding such date (or by such
later time or date, or both, as may be agreed to by the Auction
Agent) notify the Auction Agent of either (1) its determination,
subject to certain conditions, to designate a Special Rate
Period, in which case the Trust shall specify the Special Rate
Period designated, or (2) its determination not to designate a
Special Rate Period.
(c) Not later than 11:00 A.M. on the second
Business Day next preceding the first day of any proposed Special
Rate Period as to which notice has been given as set forth in
paragraph 12.5(b) above (or by such later time or date, or both,
as may be agreed to by the Auction Agent), the Trust shall
deliver to the Auction Agent either:
(i) a notice stating (A) that the Trust has
determined to designate the next succeeding Rate Period as a
Special Rate Period, specifying the same and the first day
thereof, (B) the Auction Date immediately prior to the first day
of such Special Rate Period, (C) that such Special Rate Period
shall not commence if (1) on such Auction Date Sufficient
Clearing Bids (as defined in paragraph 12.10(a)(xxvi) below)
shall not exist, unless all shares of MMP are subject to Hold
Orders (as defined in paragraph 12.10(a)(x) below) or (2) the
Trust shall have failed to pay moneys required to be paid to the
MMP Paying Agent pursuant to paragraphs 12.3(b)(iii) or 12.4(e)
above prior to the first day of such Special Rate Period with
respect to shares of MMP, (D) the scheduled Dividend Payment
Dates during such Special Rate Period and (E) the Specific
Redemption Provisions, if any, applicable to such Special Rate
Period; such notice to be accompanied by a Certificate of
Eligible Asset Coverage showing that, as of the third Business
Day next preceding such proposed Special Rate Period, Eligible
Assets were at least equal to Eligible Asset Coverage as of such
Business Day (assuming for purposes of the foregoing calculation
that the Maximum Rate is the Maximum Rate on such Business Day as
if such Business Day were the Auction Date for the proposed
Special Rate Period); or
(ii) a notice stating that the Trust has
determined not to designate a Special Rate Period and that the
next succeeding Rate Period shall be a Minimum Rate Period.
If the Trust fails to deliver either such notice (and, in the
case of the notice described in clause (i) above, a Certificate
of Eligible Asset Coverage) with respect to any designation of
any proposed Special Rate Period to the Auction Agent by 11:00
A.M. on the second Business Day next preceding the first day of
such proposed Special Rate Period, the Trust shall be deemed to
have delivered a notice to the Auction Agent with respect to such
Special Rate Period to the effect set forth in clause (ii) of the
preceding sentence.
12.6 Liquidation Rights.
(a) Upon the liquidation, dissolution, or winding
up of the affairs of the Trust, whether voluntary or involuntary,
Holders (and former Holders in respect only of Additional
Dividend Rights as described in clause (ii) below) shall be
entitled to receive, out of the assets of the Trust available for
distribution to shareholders after satisfying claims of creditors
but before any payment or distribution on the Common Shares or on
any other class of shares of beneficial interest ranking junior
to the MMP upon dissolution, liquidation or winding up, a
liquidation distribution in the amount of $100,000 per share plus
an amount equal to (i) accumulated and unpaid dividends on each
such share (whether or not earned) to the date of such
distribution and (ii) Additional Dividends that are unpaid, if
any, in respect of Additional Dividend Rights declared prior to
the liquidation. After the payment to Holders of the full amount
of the liquidation distributions to which they are entitled
pursuant to the first sentence of this paragraph 12.6(a), Holders
(in their capacity as such Holders) shall have no right or claim
to any of the remaining assets of the Trust.
(b) None of (i) the sale, lease, or exchange (for
cash, stock, securities, or other consideration) of all or
substantially all of the property and assets of the Trust, (ii)
the merger or consolidation of the Trust into or with any other
entity, and (iii) the merger or consolidation of any other entity
into or with the Trust shall be deemed to be a dissolution,
liquidation, or winding up, voluntary or involuntary, for the
purposes of this paragraph 12.6.
(c) If the assets of the Trust available for
distribution to the Holders (and, only to the extent described in
paragraph 12.6(a) above, former Holders), upon the dissolution,
liquidation, or winding up of the Trust, whether voluntary or
involuntary, shall be insufficient to pay the full amount of the
liquidation distributions to which the Holders (and, only to the
extent described in paragraph 12.6(a) above, former Holders) are
entitled pursuant to paragraph 12.6(a) above, no such
distribution shall be made on account of any shares of MMP or any
shares of beneficial interest ranking on a parity with the shares
of MMP with respect to the distribution of assets upon such
dissolution, liquidation or winding up, unless amounts shall be
distributed among the Holders (and, only to the extent described
in paragraph 12.6(a) above, former Holders), ratably in
proportion to the full amount of the distribution to which each
Holder (and, only to the extent described in paragraph 12.6(a)
above, each former Holder), and the holders of all such parity
shares would have been entitled upon such dissolution,
liquidation or winding up.
12.7 Voting Rights.
(a) General. Except as otherwise provided by law
and as specified by this Section 12.7, the Holders shall have equal
voting rights with the holders of Common Shares and shall be
entitled to one vote for each share on each matter submitted to a
vote of the shareholders of the Trust. For purposes of
determining any right of the Holders to vote on any matter,
whether such right is created by the Declaration of Trust, these
Bylaws, by statute, or otherwise, no Holder shall be entitled to
vote and no share of MMP shall be deemed to be "outstanding" for
the purpose of voting or determining the number of shares
required to constitute a quorum, if prior to or concurrently with
the time of determination of shares entitled to vote or shares
deemed outstanding for quorum purposes, as the case may be,
sufficient funds for the redemption of such shares have been
deposited in trust with the MMP Paying Agent for that purpose and
the requisite Notice of Redemption with respect to such shares
shall have been given as provided in paragraph 12.4(b) above.
(b) Class Voting. The holders of the Common
Shares and the Holders shall vote together a single class except as
hereinafter provided or to the extent otherwise required by the
1940 Act or the laws of The Commonwealth of Massachusetts, as in
effect from time to time.
(i) So long as any of the shares of MMP are
outstanding, without the affirmative vote of (x) the Holders of
at least a majority of the number of shares of MMP then
outstanding and (y) the holders of at least a majority of the
number of the Common Shares then outstanding, each voting as a
separate class, the Trust shall not approve any action requiring
a vote of security holders as provided in Section 13(a) of the
1940 Act including, among others, changes in the Trust's sub-
classification as a closed-end investment company, changes in the
Trust's investment objective, and changes in any fundamental
investment policy of the Trust.
(ii) So long as any of the shares of MMP are
outstanding, the Trust shall not take any action requiring the
approval of shareholders of the Trust and adversely affecting
either the MMP or the Common Shares in a manner different from
the other class without the affirmative vote of the Holders of at
least a majority of the shares of MMP outstanding, voting
separately as a class, or the holders of at least a majority of
the number of Common Shares then outstanding, voting separately
as a class, as the case may be.
(iii) (A) So long as any of the shares of
MMP are outstanding, without the affirmative vote of the Holders of
a least a majority of the shares of MMP then outstanding, voting
separately as a class, the Trust shall not amend, alter, or
repeal any of the preferences, voting powers, or special or
relative rights or privileges of the Holders of the MMP so as to
affect materially and adversely such preferences, voting powers,
or special or relative rights or privileges, or issue any
additional series of preferred shares of beneficial interest.
(B) The Trustees, without the vote or consent
of the Holders, may from time to time amend, alter or repeal any or
all of the definitions of the terms listed below, and any such
amendment, alteration or repeal will not be deemed to affect the
preferences, voting powers, or special or relative rights or
privileges of shares of MMP or the Holders, provided the Trustees
receive written confirmation from Xxxxx'x that any such
amendment, alteration or repeal would not impair the ratings then
assigned by Xxxxx'x to the shares of MMP:
Accountants' Certificate
Certificate of Eligible Asset Coverage
Certificate of 1940 Act Asset Coverage
Confirmation Date
Coverage Value
Discount Factor
Eligible Asset Coverage Amount
Eligible Asset Coverage is met
Eligible Asset Cure Date
Eligible Asset Evaluation Date
Eligible Assets
Independent Accountants
Market Value
MMP Paying Agent
Net Coverage Value
1940 Act Asset Coverage is met
1940 Act Cure Date
1940 Act Evaluation Date
Other Securities
Projected Dividend Amount
Short-Term Money Market Instruments
U.S. Treasury Securities
(c) Election of Trustees; Right to Elect Majority of
Trustees.
(i) At any meeting of shareholders of the
Trust at which Trustees are to be elected, the Holders, voting
separately as a single class, shall be entitled to elect two
Trustees, and the holders of the Common Shares and the Holders
voting together, shall be entitled to elect the remaining
Trustees. If at any time, however, dividends on any outstanding
shares of MMP shall be unpaid in an amount equal to two full
years' dividends, then the number of Trustees shall automatically
be increased by the smallest number such that, when added to the
existing number of Trustees, the incumbent Trustees then elected
solely by the Holders plus such additional Trustees shall
constitute a majority of such increased number of Trustees; and
at a special meeting of shareholders which shall be called and
held as provided in paragraph 12.7(d) below, and at all
subsequent meetings at which Trustees are to be elected, the
Holders, by majority vote, voting separately as a single 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 such smallest number of additional Trustees of
the Trust who, together with the incumbent Trustees then elected
solely by the Holders, will constitute a majority of the total
number of Trustees of the Trust as so increased. The Trust shall
notify Xxxxx'x promptly following any such election of additional
Trustees. Notwithstanding such election of additional Trustees,
the terms of office of the persons who are Trustees at the time
of that election shall continue. If the Trust thereafter shall
pay, or declare and set apart for payment, in full all dividends
payable and all Additional Dividends then due on all outstanding
shares of MMP for all past Dividend Periods, the voting rights
stated in the preceding sentence shall cease, and the terms of
office of all of the additional Trustees elected by the Holders
(but not the terms of the two incumbent Trustees elected by the
Holders and the remaining incumbent Trustees elected by the
holders of shares of the Common Shares and the Holders voting
together) shall terminate automatically, subject to the revesting
of the rights of the Holders as provided in the second sentence
of this paragraph in the event of any subsequent arrearage in the
payment of two full years' dividends on the shares of MMP. In
the event that the Trust fails to pay any dividends on the MMP,
the exclusive remedies of the Holders shall be (A) the right to
vote for Trustees pursuant to this paragraph 12.7(c)(i) and (B)
to receive a late charge pursuant to paragraph 12.3(c)(ii) above.
(ii) Any vacancy in the office of any Trustee
elected solely by the Holders may be filled by the remaining
Trustees (or Trustee) so elected or, if not so filled, by the
Holders, voting separately as a single class, at any meeting of
shareholders for the election of Trustees held thereafter. A
Trustee elected by the Holders, or by the holders of the Common
Shares and the Holders voting together, may be removed with or
without cause, but only by action taken by the Holders of at
least a majority of the shares of MMP or by the holders of at
least a majority of the Common Shares and MMP voting together,
respectively, then entitled to vote in an election to fill the
vacancy created by such removal.
(d) Voting Procedures. As soon as practicable
after the accrual of any right of the Holders to elect Trustees at
a special meeting of shareholders as described in paragraph 12.7(c)
above, the Trust shall call or cause to be called such special
meeting by mailing or causing to be mailed a notice of such
special meeting to the Holders entitled to vote at such special
meeting, not less than 10 nor more than 45 days prior to the date
fixed for the meeting. If the Trust does not call or cause to be
called such special meeting, such special meeting may be called
by any Holder on like notice. The record date for determining
the Holders entitled to notice of and to vote at such meeting
shall be the close of business on the fifth Business Day
preceding the day on which such notice is mailed. The Holders of
a majority of the shares of MMP then outstanding, present in
person or by proxy, will constitute a quorum for the election of
additional Trustees. At any such meeting or adjournment thereof
in the absence of a quorum, a majority of the Holders present in
person or by proxy shall have the power to adjourn the meeting
for the election of additional Trustees without notice, other
than an announcement at the meeting, until a quorum is present,
and, subject to paragraph 12.7(b) above, to take any other action
as shall properly come before such meeting. If the right to
elect additional Trustees shall have terminated as provided in
paragraph 12.7(c) above after the notice of special meeting
provided for in this paragraph 12.7(d) has been given but before
the special meeting shall have been held, the Trust shall, as
soon as practicable after such termination, mail or cause to be
mailed to the Holders a notice of cancellation of such special
meeting.
12.8 Eligible Asset Coverage.
(a) (i) The term "Eligible Assets" shall mean one
or more of the following:
(A) cash (including, for this purpose, receivables for
securities sold, payable within five Business Days from a
counterparty whose senior debt is rated at least "Baa3" by
Moody's or a party approved by Moody's, and dividends and
interest receivable on Eligible Assets issued by (1) a party
whose senior debt securities are rated at least "A1" by Moody's,
or a party approved by Moody's, and payable within 56 days, (2) a
party whose senior debt securities are rated at least "A2" by
Moody's, or a party approved by Moody's, and payable within 30
days and (3) a party whose senior debt securities are rated at
least "Baa3" by Moody's, or a party approved by Moody's, and
payable within five days);
(B) Short-Term Money Market Instruments (provided that
for purposes of this definition commercial paper must mature within
56 days);
(C) commercial paper, bankers acceptances, demand
deposits, time deposits and certificates of deposit which are not
includable as Short-Term Money Market Instruments and which have
a rating from Moody's of "P-2" or better or a rating from
Standard & Poor's of "A-1" or better and maturing within 270
days, provided that such investments must meet the diversification
requirements set forth below in clause (ii) and if such investments
have a rating of "P-2" only, such investments shall be considered
for purposes of clause (ii) below to have a rating of "Baa3";
(D) cumulative preferred stocks without warrants
attached, other than preferred stocks of issuers in a
transportation industry, (1) which are rated at least "baa3" by
Moody's or issued by issuers with outstanding senior securities
rated at least "baa1" by Moody's (or, if unrated by Moody's, rated
at least "A" by Standard & Poor's) and which have (or, in the case
of issuers which are special purpose corporations, the parent
companies of which have) outstanding securities listed on the New
York or American Stock Exchange or the NASDAQ National Market,
(2) which are part of an issue having a minimum issue size (when
taken together with other of the issuer's issues of similar
tenor) of $50 million, (3) that have paid, or the predecessors of
which have paid, cash dividends consistently in U.S. dollars
during the preceding three-year period (or, in the case of new
issues without such a dividend history, which are issued by
issuers with outstanding preferred stock that has paid cash
dividends consistently during the preceding three-year period or
which are rated at least "a1" by Moody's, or if not rated by
Moody's, are rated at least "AA" by Standard & Poor's) and (4) in
the case of auction rate preferred stocks, which are rated at
least "aa" by Moody's, or if not rated by Moody's, rated "AAA" by
Standard & Poor's or are otherwise approved in writing by Moody's
and which have dividend periods of not more than 6 days greater
than the Minimum Rate Period (or, in the case of a new issue of
auction rate preferred stock, 64 days for the initial dividend
period) and have never had a failed auction; provided that for
this purpose, the aggregate Market Value of the Trust s holdings
of (1) any issue of preferred stock which is not an auction rate
preferred stock shall not be less than $300,000 nor more than
$5,000,000 and (2) any issue of auction rate preferred stock
shall not be more than $5,000,000;
(E) common stocks (1) which are issued by companies
whose senior debt securities are rated at least "Baa3" by Moody's
or, if unrated by Xxxxx s, rated at least "A" by Standard & Poor's,
(2) which are traded on the New York or American Stock Exchange
or the NASDAQ National Market, (3) which are of an issue having a
market capitalization greater than $500 million, (4) (A) which
have paid cash dividends consistently during the preceding three-
year period or (B) in the case of new issues without such a
dividend history, which are issued by companies whose senior debt
securities are rated at xxxxx "X0" by Moody's, and (5) which pay
dividends in U.S. dollars; provided that the number of shares of
common stock of any issuer held by the Trust and constituting an
Eligible Asset shall not exceed the average weekly trading volume
of such common stock during the preceding 26 weeks;
(F) U.S. Treasury Securities which are not includable
in clause (B) above;
(G) corporate and utility bonds (1) which are not
privately placed, are rated at least "Baa" by Moody's or, if
unrated by Moody's, rated at least "A" by Standard & Poor's; (2)
which have a minimum issue size of at least $100 million; (3) which
are U.S. dollar-denominated and pay interest in U.S. dollars; (4)
which are not convertible or exchangeable into equity of the issuer
and have a maturity of not more than 30 years; and (5) for which
the aggregate Market Value of the Trust's holdings do not exceed
10% of the aggregate Market Value of any individual issue
calculated at the time of purchase; and
(H) securities which the Trust has bought and agreed to
sell in the future.
(ii) The Trust will not include in Eligible Assets
securities of the various types listed below to the extent such
securities would, in the aggregate, exceed the percentages of the
Trust's Eligible Assets specified below:
Maximum
Maximum Maximum Investment in
Investment Investment Issuers located
in a in a in a
Type of Eligible Asset Single Industry Single Industry Single State
Common stocks of issuers
in a utilities industry 50% 4% 7%(1)
Other common stocks 20% 6% N/A
Preferred stocks and bonds
of issuers in a utilities
industry
rated "aaa" 100% 100% 100%
rated "aa" 60% 20% 20%
rated "a" 50% 10% 10%
rated "baa" 50% 4% 7%(1)
Other preferred stocks and
bonds
rated "aaa" 100% 100% N/A
rated "aa" 60% 20% N/A
rated "a" 40% 10% N/A
rated "baa" 20% 6% N/A
For purposes of this subsection (ii), if a preferred
stock held by the Trust is not rated by Moody's or Standard &
Poor's, but its issuer has senior debt outstanding rated at least
"Baa1" by Moody's or "A" by Standard & Poor's, then the maxima set
out above for preferred stocks rated "Baa" shall apply. For
purposes of this Article 12, (I) in determining whether an issuer
is engaged in a particular industry, the Trust will comply with
industry categories fixed from time to time by Moody's and (II) in
determining whether an issuer is located in a particular state, the
Trust will comply with such procedures as may be fixed from time
totime by Moody's.
(1) 15% in the case of California and New York
The Trust's Eligible Assets
invested in auction rate preferred stocks are limited to (1) 10% of the
aggregate Market Value of all of the Trust's Eligible Assets and (2) auction
rate preferred stocks approved by Moody's or underwritten in their
initial public offering by a firm approved by Moody's.
(iii) Other securities may be included in the
Trust's Eligible Assets, as the case may be, if (A) the inclusion
of such securities is deemed by the Trustees to be in the interests
of the Trust, and (B) Moody's has advised the Trust in writing that
the inclusion of such securities in such Eligible Assets would not
adversely affect its then-current rating of the shares of MMP. Any
such securities so qualifying for inclusion in any such Eligible
Assets are referred to herein as "Other Securities." The Trust
shall promptly notify Moody's of its desire to include Other
Securities in the Trust's Eligible Assets.
(iv) Whenever in these Bylaws there is specified a
securities rating for purposes of determining whether an asset
constitutes an Eligible Asset or whether the Trust otherwise
complies with the requirements of Moody's for the continued
rating of shares of MMP, any reference to a securities rating
issued by Moody's shall be deemed to include a reference to the
rating by Standard & Poor's one letter grade above the Standard &
Poor's rating corresponding to such Xxxxx'x rating.
(b) The "Net Coverage Value" of the Eligible
Assets shall be the difference between (i)(A) the aggregate
Coverage Value of the Eligible Assets plus (B) the lesser of (w)
the aggregate market value of the assets underlying purchased
futures contracts assumed to be owned by the Trust in connection
with paragraph 12.9(b)(iii)(E) below divided by the applicable
Discount Factors and (x) the aggregate settlement value of the
assets underlying such futures contracts, plus (C) the lesser of
(y) the aggregate market value of the assets underlying written put
options assumed to be owned by the Trust in connection with
paragraph 12.9(b)(iii)(E) below divided by the applicable
Discount Factors and (z) the aggregate exercise price of the
written put options, minus (D) the discounted value of securities
sold with respect to which receivables are included as
Eligible Assets pursuant to paragraph 12.8(a)(i)(A) above to the
extent that the discounted value of such securities has been
included in the calculation of the aggregate Coverage Value
of Eligible Assets, minus (E) the amount the Trust had agreed to
pay for securities it sold and agreed to buy back in the future,
and (ii) the amount of all liabilities (including, without
limitation, declared and unpaid dividends and Additional
Dividends, the redemption price payable with respect to the
shares of MMP, if any, that are covered by a Notice of Redemption
sent prior to, or being sent on, the date of such determination,
and all liabilities of the Trust in respect of futures contracts
and options as required by paragraph 12.9(b) below) that would
appear on the date of determination on the face of the Trust's
statement of assets and liabilities and the greater of all
operating expenses expected to accrue during the following three-
month period and $200,000.
(c) As of each 1940 Act Evaluation Date, the Trust
(A) shall calculate the asset coverage for the MMP on that date in
accordance with the 1940 Act and (B) shall determine whether the
1940 Act Asset Coverage is met as of such date. The calculation
of the asset coverage for the MMP on that date in accordance with
the 1940 Act and whether the 1940 Act Asset Coverage is met shall
be set forth in a certificate of the Trust (a "Certificate of
1940 Act Asset Coverage") dated as of such 1940 Act Evaluation
Date. In addition, as of each Eligible Asset Evaluation Date,
the Trust shall determine (A) the Coverage Value of each Eligible
Asset owned by the Trust on that date, (B) the Net Coverage Value
of all such Eligible Assets, (C) the Eligible Asset Coverage
Amount on that date, and (D) whether the Eligible Asset Coverage
is met as of such date. The calculations of the Coverage Value
of each Eligible Asset, the Net Coverage Value of all such
Eligible Assets, the Eligible Asset Coverage Amount, and whether
such Eligible Asset Coverage is met shall be set forth in a
certificate of the Trust (a "Certificate of Eligible Asset
Coverage") dated as of such Eligible Asset Evaluation Date. The
Trust shall cause the Certificate of 1940 Act Asset Coverage to
be delivered to the Common Shares Paying Agent not later than the
close of business on the third Business Day after the related
1940 Act Evaluation Date. The Trust shall cause the Certificate
of Eligible Asset Coverage to be delivered to the MMP Paying
Agent not later than the close of business on the third Business
Day after the related Eligible Asset Evaluation Date.
(d) In the event that a Certificate of 1940 Act
Asset Coverage or a Certificate of Eligible Asset Coverage is not
delivered to the Common Shares Paying Agent or the MMP Paying
Agent, as the case may be, when required, the 1940 Act Asset
Coverage or the Eligible Asset Coverage, as the case may be, will
be deemed not to have been met as of the applicable date.
(e) With respect to (i) the Certificate of 1940
Act Asset Coverage relating to any 1940 Act Cure Date and (ii) the
Certificate of Eligible Asset Coverage relating to the Date of
Original Issue, every succeeding thirteenth Eligible Asset
Evaluation Date, and to any Eligible Asset Cure Date, the Trust
shall obtain from the Independent Accountants a written
communication confirming that (A) with respect to the 1940 Act
Asset Coverage, (1) the calculations set forth in the related
Certificate of 1940 Act Asset Coverage are mathematically
accurate and (2) the Independent Accountants have traced the
prices used by the Trust in valuing the Trust's portfolio
investments to the prices provided to the Trust by the Trust's
custodian bank or other source providing such prices to the Trust
for such purposes and verified that such information agrees, and
(B) with respect to the Eligible Asset Coverage, (1) the
calculations set forth in the related Certificate of Eligible
Asset Coverage are mathematically accurate, (2) the method used
by the Trust in determining whether the Eligible Asset Coverage
is met is in accordance with the applicable requirements of these
Bylaws, (3) the Independent Accountants have traced the prices
used by the Trust in the determination of Market Values of the
Eligible Assets to the prices provided to the Trust by the
Trust's custodian bank or other source providing such prices to
the Trust for purposes of such determination and verified that
such information agrees, (4) the Independent Accountants have
calculated the liabilities and related assumed assets arising in
connection with paragraph 12.9(b) below, (5) the Trust's
positions in futures and options at such Eligible Asset
Evaluation Date were in accordance with the provisions of
paragraph 12.9(b) below, and (6) the assets listed as Eligible
Assets in the related Certificate of Eligible Asset Coverage
conform to the description of Eligible Assets set forth in
paragraph 12.8(a) above (such a written communication being
referred to herein as an "Accountants' Certificate"). The Trust
shall cause each Accountants' Certificate relating to any 1940
Act Cure Date to be delivered, together with the related
Certificate of 1940 Act Asset Coverage, to the Common Shares
Paying Agent by the close of business on such 1940 Act Cure Date.
The Trust shall cause each Accountants' Certificate relating to
every thirteenth Eligible Asset Evaluation Date to be delivered
to the MMP Paying Agent not later than the close of business on
the seventh Business Day following the related Eligible Asset
Evaluation Date (each such seventh Business Day being referred to
herein as a "Confirmation Date") and shall cause each
Accountants' Certificate relating to any Eligible Asset Cure Date
to be delivered to the MMP Paying Agent by the close of business
on the second Business Day following such Eligible Asset Cure
Date. In the event of any difference between the Trust's
calculations as shown on a Certificate of 1940 Act Asset Coverage
or a Certificate of Eligible Asset Coverage and the Independent
Accountants' calculations as shown on an Accountants'
Certificate, such calculations of the Independent Accountants
shall control. If the Minimum Rate Period is altered as provided
in paragraph 12.3(b)(ii)(C) above or the Trust shall designate a
Special Rate Period pursuant to paragraph 12.5(a) above, the
Trust shall provide for an Accountants' Certificate relating to a
Certificate of Eligible Asset Coverage to be furnished to the MMP
Paying Agent at such additional times as may be necessary to
provide for such confirmations to be furnished at least as
frequently as provided prior to such alteration and as may be
necessary to maintain then-current rating by Moody's of the
shares of MMP.
(f) If the 1940 Act Asset Coverage is not met as
of any 1940 Act Evaluation Date as shown in a Certificate of 1940
Act Asset Coverage delivered to the Common Shares Paying Agent by
the close of business on such 1940 Act Evaluation Date, then the
Trust shall (if necessary to enable it to meet the requirements
of paragraph 12.8(g) below):
(i) by the close of business on the 1940 Act
Cure Date relating to such 1940 Act Evaluation Date, if the Trust
shall have funds legally available for the purchase of shares of
MMP, purchase such shares outside of an Auction in order that the
1940 Act Asset Coverage is met as of such 1940 Act Cure Date;
and/or
(ii) by the close of business on the
applicable 1940 Act Cure Date, notify the MMP Paying Agent of its
intention to redeem, and give a Notice of Redemption with respect
to the redemption of, shares of MMP, all in accordance with the
provisions of paragraph 12.4(a)(iii)(A) above.
(g) If the 1940 Act Asset Coverage is not met as
shown in a Certificate of 1940 Act Asset Coverage, then the Trust
shall, by the close of business on the applicable 1940 Act Cure
Date, deliver to the Common Stock Paying Agent a Certificate of
1940 Act Asset Coverage together with an Accountants' Certificate
showing that the 1940 Act Asset Coverage is met (or, if subclause
(ii) of paragraph 12.8(f) above is applicable, would have been
met) as of such 1940 Act Cure Date after giving effect to (A) any
purchase of shares of MMP outside of an Auction pursuant to
subclause (i) of such paragraph 12.8(f) and/or (B) any redemption
of shares of MMP pursuant to the Notice of Redemption
contemplated by subclause (ii) of such paragraph 12.8(f) (as if
such redemption had occurred immediately prior to the opening of
business on such 1940 Act Cure Date).
(h) If (x) the Eligible Asset Coverage is not met
as of any Eligible Asset Evaluation Date as shown in a Certificate
of Eligible Asset Coverage delivered to the MMP Paying Agent by
the close of business on the third Business Day after such
Eligible Asset Evaluation Date or (y) the Trust is required to
deliver to the MMP Paying Agent by the close of business on a
Confirmation Date an Accountants' Certificate confirming the
Certificate of Eligible Asset Coverage with respect to such
Eligible Asset Evaluation Date, and the Trust fails timely to
deliver such Accountants' Certificate, then the Trust shall (if
and to the extent necessary to enable it to meet the requirements
of paragraph 12.8(i) below):
(i) by the close of business on the Eligible
Asset Cure Date relating to such Eligible Asset Evaluation Date
or Confirmation Date, as the case may be, purchase or otherwise
acquire additional Eligible Assets or, if the Trust shall have
funds legally available for the purchase of shares of MMP,
purchase such shares outside of an Auction, or both, in order
that Eligible Asset Coverage is met as of such Eligible Asset
Cure Date; and/or
(ii) by the close of business on the second
Business Day after the applicable Eligible Asset Cure Date,
notify the MMP Paying Agent and Moody's of its intention to
redeem, and give a Notice of Redemption with respect to the
redemption of, shares of MMP, all in accordance with the
provisions of paragraph 12.4(a)(iii)(B) above.
(i) If the Eligible Asset Coverage is not met as
shown in a Certificate of Eligible Asset Coverage or if an
Accountants' Certificate confirming a Certificate of Eligible Asset
Coverage is not timely delivered, as each is contemplated by
subclause (x) or subclause (y) of paragraph 12.8(h) above, as the
case may be, then the Trust shall, by the close of business on the
second Business Day following the applicable Eligible Asset Cure
Date, deliver to the MMP Paying Agent a Certificate of Eligible
Asset Coverage together with an Accountants' Certificate showing
that such Eligible Asset Coverage is met (or, if subclause (ii) of
such paragraph 12.8(h) is applicable, would have been met) as of
such Eligible Asset Cure Date after giving effect to (A) any
purchase or other acquisition of Eligible Assets or any purchase
of shares of MMP outside of an Auction pursuant to subclause (i)
of such paragraph 12.8(h) and/or (B) any redemption of shares of
MMP pursuant to the Notice of Redemption contemplated by
subclause (ii) of such paragraph 12.8(h) (as if such redemption
had occurred immediately prior to the opening of business on such
Eligible Asset Cure Date).
(j) For purposes of determining whether the 1940
Act Asset Coverage is met and whether the Eligible Asset Coverage
is met, no share of the MMP shall be deemed to be "outstanding" for
purposes of any computation if, prior to or concurrently with
such determination, (i) the requisite funds for the redemption of
such share shall have been deposited in trust with the MMP Paying
Agent for that purpose and the requisite Notice of Redemption
shall have been given or (ii) such share shall have been
redeemed, purchased, or otherwise acquired by the Trust. In the
case of subclause (i), the funds deposited with the MMP Paying
Agent (to the extent necessary to pay the full redemption price
for such shares) shall not be included in determining whether the
1940 Act Asset Coverage, and the Eligible Asset Coverage are met.
(k) A copy of each certificate delivered to the
MMP Paying Agent or the Common Shares Paying Agent as required by
this Section 12.8 shall be included in the records of the Trust
and shall be made available for inspection by the Holders at the
principal office of the Trust. In addition, a copy of each such
Certificate of Eligible Asset Coverage shall be delivered to
Moody's by the close of business on the third Business Day after
(i) the Date of Original Issue, (ii) any Eligible Asset
Evaluation Date immediately preceding any approval by the
Trustees of the redemption of any Common Shares and (iii) any
Eligible Asset Evaluation Date on which the Net Coverage Value of
the Trust's Eligible Assets is less than 25% greater than the
Eligible Asset Coverage Amount. In the event the Eligible Asset
Coverage is not met, or is not met and is subsequently cured, the
Trust shall cause the Certificate of Eligible Asset Coverage to
be delivered to Moody's not later than the third Business Day
following such date of failure and/or the second Business Day
following the Eligible Asset Cure Date.
12.9 Certain Other Restrictions.
(a) For so long as any shares of MMP are
outstanding and Xxxxx'x is rating such shares, the Trust will not,
unless it has received written confirmation from Moody's that any
such action would not impair its then-current rating of shares of
MMP:
(i) enter into options and futures
transactions except as set forth in paragraph 12.9(b) below;
(ii) make short sales of securities unless at
all times when a short position is open, the Trust owns an equal or
greater amount of such securities or owns preferred stock, debt
or warrants convertible or exchangeable into an equal or greater
number of the shares of common stocks sold short;
(iii) overdraw any bank account (except as
may be necessary for the clearance of security transactions); or
(iv) borrow money or issue senior securities
(as defined in the 0000 Xxx) other than shares of MMP.
(b) (i) For so long as the shares of MMP are
rated by Moody's, the Trust (A) may buy call or put option
contracts on securities, (B) may write only covered call options on
securities, (C) may write put options on securities, (D) may only
sell futures contracts as a bona fide hedge of assets held by the
Trust, (E) may only engage in futures transactions on an exchange
where the exchange takes the opposite side of the transaction,
(F) may buy call or put options on futures contracts, (G) may
write put options on futures contracts and may only write call
options on futures contracts if such call options are covered by:
(1) purchased futures contracts underlying the options, (2) call
positions owned on the futures contracts underlying the call
options written, or (3) holdings of securities for which the
written call options are a bona fide hedge, (H) may purchase
futures contracts as a hedge, (I) to the extent an asset is used
to cover a particular option, futures contract or option on a
futures contract, will not be able to use such asset to cover any
additional option, futures contract or option on a futures
contract, and (J) will only engage in index-based futures or
options transactions if Moody's advises the Trust in writing that
such transaction will not adversely affect its then-current
rating of the MMP.
(ii) For so long as the shares of MMP are rated by
Moody's, unless, in each case, Moody's advised the Trust in
writing that such action or actions will not adversely affect its
then-current rating of the MMP, in determining the Net Coverage
Value of the Trust's Eligible Assets, the Trust shall include as
a liability (A) 10% of the exercise price of a written call
option on securities, (B) 100% of the exercise price of any
written put option on securities, (C) 10% of the settlement value
of the assets underlying futures contracts sold or call options
written on futures contracts, (D) 100% of the settlement value of
the assets underlying futures contracts purchased and (E) 100% of
the settlement value of the assets underlying the futures
contracts based on exercise price if the Trust writes put options
on futures contracts.
(iii) For so long as the shares of MMP are rated
by Moody's, unless, in each case, Moody's advises the Trust in
writing that such action or actions will not adversely affect its
then-current rating of the MMP, the Trust (A) will limit its
transactions in futures contracts and written options thereon to
those relating to U.S. Treasury bonds, (B) will not engage in
options and futures transactions for leveraging or speculative
purposes, (C) will not enter into an options or futures
transaction unless after giving effect to such transaction the
Eligible Asset Coverage is met, (D) shall not include in Eligible
Assets any assets pledged in margin accounts in connection with
futures transactions, (E) will assume for purposes of determining
the Coverage Value, when the Trust has purchased futures
contracts or has written put options, ownership by the Trust of
the underlying asset, which will be the security resulting in the
lowest Coverage Value when delivery may be made to the Trust with
any of a class of securities, (F) will engage only in exchange-
traded futures contracts and written options thereon on exchanges
approved by Moody's in writing, which, as of the Date of Original
Issue, consist of the Chicago Board of Trade and the Financial
Exchange, (G) will limit the transactions in futures contracts
sold and call options written on futures contracts so that the
settlement value of the underlying futures contracts does not in
total exceed 65% of the value of the Eligible Assets of the Trust
rated the equivalent of "baa3" or better by Moody's and not
otherwise hedged by a written call and (H) will only take
positions in futures which are deliverable in the nearby and next
following contract months and will close out such futures
positions by the fifth business day of the delivery month.
(c) For so long as the shares of MMP are rated by
Moody's, unless, in each case, Moody's advises the Trust in
writing that such action or actions will not adversely affect its
then-current rating of the MMP:
(i) the composition of the Trust's portfolio
will not be altered if the effect of any such alteration would be
to cause the Trust, immediately after giving effect to the
transaction, to have an Eligible Asset Coverage Amount equal to
or in excess of the Net Coverage Value of Eligible Assets as of
the previous Eligible Asset Evaluation Date;
(ii) if the Eligible Asset Coverage Amount
exceeds the Net Coverage Value of Eligible Assets, the Trust will
invest the proceeds of the sale or other disposition of an Eligible
Asset in an investment having a greater Discount Factor or in an
issuer in a different industry from the investment sold or
otherwise disposed of only if the effect of such transaction
immediately after giving effect thereto would be to reduce the
excess of the Eligible Asset Coverage Amount over the Net
Coverage Value; and
(iii) at such time as the Net Coverage
Value of Eligible Assets is less than 25% greater than the Eligible
Asset Coverage Amount, the composition of the Trust's portfolio
will not be altered if, in the Trust's reasonable judgment, the
effect of such alteration would be to cause the Eligible Asset
Coverage not to be met.
(d) By resolution of the Trustees and without
amending the Bylaws or otherwise submitting such resolution for
shareholder approval, the restrictions and procedures set forth
in this Section 12.9 may be adjusted, modified, altered or
changed and any such adjustment, modification, alteration or
change will not be deemed to affect the preferences, voting
powers, or special or relative rights or privileges of shares of
MMP or the Holders thereof if Moody's has advised the Trust in
writing that such adjustment, modification, alteration or change
will not adversely affect its then-current rating of the MMP and
that any such action will be in accordance with guidelines
established by Moody's.
12.10 Auction Procedures.
(a) Certain Definitions. Capitalized terms not
defined in this paragraph 12.10 shall have the respective
meanings specified in paragraphs 12.1 through 12.9 above. As
used in this paragraph 12.10, the following terms shall have the
following meanings, unless the context otherwise requires.
(i) "Affiliate" means any Person known to the
Auction Agent to be controlled by, in control of or under common
control with the Trust; provided that no Broker-Dealer controlled
by, in control of or under common control with the Trust shall be
an Affiliate nor shall any corporation or any Person controlled
by, in control of or under common control with such corporation one
of the directors or executive officers of which is also a Trustee
be an Affiliate solely because such director or executive officer
is also a Trustee.
(ii) "Agent Member" means a member of or
participant in the Securities Depository that will act on behalf of
a Bidder.
(iii) "Available shares of MMP" shall have
the meaning specified in paragraph 12.10(d)(i) below.
(iv) "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 MMP and who
has delivered to such Broker-Dealer an executed Purchaser's
Letter.
(v) "Bid" and "Bids" shall have the
respective meanings specified in paragraph 12.10(b)(i) below.
(vi) "Bidder" and "Bidders" shall have the
respective meanings specified in paragraph 12.10(b)(i) below.
(vii) "Broker-Dealer" means any
broker-dealer, commercial bank or other entity permitted by law to
perform the functions required of a Broker-Dealer in this
Section 12.10 that is a member of, or a participant in, the
Securities Depository or is an affiliate of such member or
participant, has been selected by the Trust, and has entered into
a Broker-Dealer Agreement that remains effective.
(viii) "Broker-Dealer Agreement" means an
agreement among the Trust, the Auction Agent and a Broker-Dealer
pursuant to which such Broker-Dealer agrees to follow the
procedures specified in this Section 12.10.
(ix) "Existing Holder" means a Broker-Dealer
(or any such other person as may be permitted by the Trust) that
has delivered and executed Purchaser's Letter to the Auction Agent
and that is listed on the records of the Auction Agent as a holder
of shares of MMP.
(x) "Hold Order" and "Orders" have the
respective meanings specified in paragraph 12.10(b)(i) below.
(xi) "Maximum Rate," for shares of MMP on any
Auction Date, means:
(A) in the case of any Auction Date which does not
immediately precede the first day of any proposed Special Rate
Period designated by the trust pursuant to Section 12.5 above, the
product of (1) the "AA" Composite Commercial Paper Rate on such
Auction Date for the next Rate Period and (2) the Rate Multiple on
such Auction Date, unless there is or has been a Special Rate
Period and an Auction at which Sufficient Clearing Bids existed
has not yet occurred for a Minimum Rate Period after such Special
Rate Period, in which case the higher of:
(1) the dividend rate on such shares for the
then-ending Rate Period, and
(2) the product of (x) the higher of (I) the
"AA" Composite Commercial Paper Rate on such Auction Date for the
then-ending Rate Period, and (II) the "AA" Composite Commercial
Paper Rate on such Auction Date for such Special Rate Period if
such Special Rate Period consists or consisted of less than four
Dividend Periods, or the Treasury Rate on such Auction Date
for such Special Rate Period if such Special Rate Period consists
or consisted of four or more Dividend Periods, and (y) the Rate
Multiple on such Auction Date; or
(B) in the case of any Auction Date which is the
Auction Date immediately prior to the first day of any proposed
Special Rate Period designated by the Trust pursuant to
Section 12.5 above, the product of (1) the highest of (x) the
"AA" Composite Commercial Paper Rate on such Auction Date for the
then-ending Rate Period if such Rate Period consists of less than
four Dividend Periods, or the Treasury Rate on such Auction Date
for such Rate Period if such Rate Period consists of four or more
Dividends Periods, (y) the "AA" Composite Commercial Paper Rate on
such Auction Date for the Special Rate Period for which the Auction
is being held if such Special Rate Period consists of less than
four Dividend Periods, or the Treasury Rate on such Auction Date
for the Special Rate Period for which the Auction is being held if
such Special Rate Period consists of four or more Dividend Periods
and (z) the "AA" Composite Commercial Paper Rate on such Auction
Date for Minimum Rate Periods and (2) the Rate Multiple on such
Auction Date.
(xii) "Order" and "Orders" shall have the
respective meanings specified in paragraph 12.10(b)(i).
(xiii) "Outstanding" means, as of any Auction
Date with respect to shares of MMP, the number of such shares
theretofore issued by the Trust except, without duplication, (A)
any shares of MMP theretofore canceled or delivered to the Auction
Agent for cancellation or purchased or redeemed by the Trust or as
to which a notice of redemption shall have been given by the Trust
and funds shall have been deposited to pay the cash redemption
price as provided herein, (B) any shares of MMP as to
which the Trust or any Affiliate thereof shall be an Existing
Holder and (C) any shares of MMP represented by any
certificate in lieu of which a new certificate has been executed
and delivered by the Trust.
(xiv) "Person" means and includes an
individual, a partnership, a corporation, a trust, an
unincorporated association, a joint venture or other entity or a
government or any agency or political subdivision thereof.
(xv) "Potential Beneficial Owner" means a
customer of a Broker-Dealer that is not a Beneficial Owner of
shares of MMP but that has delivered an executed Purchaser's Letter
and wishes to purchase shares of MMP, or that is a Beneficial
Owner that wishes to purchase additional shares of MMP.
(xvi) "Potential Holder" means a
Broker-Dealer (or any such other person as may be permitted by the
Trust) that is not an Existing Holder of shares of MMP and that has
delivered an executed Purchaser s Letter or that is an Existing
Holder of shares of MMP and wishes to become the Existing Holder of
additional shares of MMP.
(xvii) "Purchaser's Letter" means a
purchaser's letter addressed to the Corporation, the Auction Agent,
a Broker-Dealer and an Agent Member in which a Person agrees, among
other things, to offer to purchase, purchase, offer to sell and/or
sell the shares of MMP as set forth in this Section 12.10.
(xviii) "Rate Multiple," for shares of MMP
on any Auction Date, means the percentage, determined as set forth
below, based on the prevailing rating of such shares in effect at
the close of business on the Business Day next preceding such
Auction Date:
Prevailing Rating Percentage
"aa3" or higher. . . . . . . . . . . . . . . . . . . . . . 150%
"a3" . . . . . . . . . . . . . . . . . . . . . . . . . . . 175%
"baa3" . . . . . . . . . . . . . . . . . . . . . . . . . . 200%
Below "baa3" . . . . . . . . . . . . . . . . . . . . . . . 225%
provided that if the Trust (x) shall have failed to pay the
amounts required to the MMP Paying Agent pursuant to paragraphs
12.3(b)(iii) or 12.4(e) above within three Business Days next
succeeding the date on which such amounts were to be paid, or (y)
shall not have paid any amounts the Trust had previously failed
to pay as required pursuant to paragraphs 12.3(b)(iii) or 12.4(e)
above, together with any applicable late charge, to the MMP
Paying Agent in next-day funds in The City of New York, New York,
at least four Business Days prior to such Auction Date, the
prevailing rating of shares of MMP on such Auction Date shall be
deemed to be "Below 'baa3'"; and provided, further, that if the
Trust has notified the Auction Agent that it expects that any
portion of the dividend to be paid on the shares of MMP will be
ineligible for the Dividends Received Deduction in such Rate
Period, prior to the Auction establishing the Applicable Rate for
such shares, the applicable percentage in the foregoing table
shall be (A) multiplied by one minus the product of (1) one minus
the Dividends Received Deduction rate and (2) the maximum
marginal regular Federal income tax rate generally applicable to
corporations (at the time of the adoption of this Article 12,
generally 35%) and (B) divided by the quantity one minus the
maximum marginal regular Federal income tax rate generally
applicable to corporations.
For purposes of this definition, the "prevailing rating"
of shares of MMP shall be (A) "aa3" or higher if such shares have
a rating of "aa3" or better by Moody's or the equivalent of such
rating by Moody's or a substitute rating agency selected as
provided below, (B) if not "aa3" or higher, then "a3" if such
shares have a rating of "a3" or better by Moody's or the
equivalent of such rating by Moody's or a substitute rating
agency selected as provided below, (C) if not "aa3" or higher or
"a3," then "baa3" if such shares have a rating of "baa3" or
better by Moody's or the equivalent of such rating by Moody's or
a substitute rating agency selected as provided below, and (D) if
not "aa3" or higher, "a3" or "baa3," then "Below 'baa3'." The
Trust shall take all reasonable action necessary to enable
Moody's to provide a rating for shares of MMP. If Moody's shall
not make such a rating available, the Trust shall select one or
more nationally recognized statistical rating organizations (as
that term is used in the rules and regulations of the Securities
and Exchange Commission under the Securities Exchange Act of
1934, as amended from time to time) to act as a substitute rating
agency in respect of the shares of MMP and the Trust shall take
all reasonable action to enable such rating agency to provide a
rating for the shares of MMP.
(xix) "Securities Depository" means The
Depository Trust Company and its successors and assigns or any
other securities depository selected by the Trust which agrees to
follow the procedures required to be followed by such securities
depository in connection with the shares of MMP.
(xx) "Sell Order" and "Sell Orders" have the
respective meanings specified in paragraph 12.10(b)(i).
(xxi) "Submission Deadline" means 1:00 P.M.
on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Auction Agent
as specified by the Auction Agent from time to time.
(xxii) "Submitted Bid" and "Submitted Bids"
have the respective meanings specified in paragraph 12.10(d)(i).
(xxiii) "Submitted Hold Order" and "Submitted
Hold Orders" have the respective meanings specified in paragraph
12.10(d)(i).
(xxiv) "Submitted Order" and "Submitted
Orders" have the respective meanings specified in paragraph
12.10(d)(i).
(xxv) "Submitted Sell Order" and "Submitted
Sell Orders" have the respective meanings specified in paragraph
12.10(d)(i).
(xxvi) "Sufficient Clearing Bids" has the
meaning specified in paragraph 12.10(d)(i).
(xxvii) "Winning Bid Rate" has the meaning
specified in paragraph 12.10(d)(i).
(b) Orders by Beneficial Owners and Potential
Beneficial Owners. (i) Prior to the Submission Deadline on each
Auction Date:
(A) each Beneficial Owner of shares of
MMP subject to an Auction on such Auction Date may submit to its
Broker-Dealer by telephone or otherwise information as to:
(1) the number of Outstanding shares, if
any, of MMP held by such Beneficial Owner which such Beneficial
Owner desires to continue to hold without regard to the
Applicable Rate for the next succeeding Rate Period;
(2) the number of Outstanding shares, if
any, of MMP which such Beneficial Owner offers to sell if the
Applicable Rate for the next succeeding Rate Period shall be less
than the rate per annum specified by such Beneficial Owner;
and/or
(3) the number of Outstanding shares, if
any, of MMP held by such Beneficial Owner which such Beneficial
Owner offers to sell without regard to the Applicable Rate for
the next succeeding Rate Period; and
(B) one or more Broker-Dealers, using
lists of Potential Beneficial Owners, shall in good faith for the
purpose of conducting a competitive Auction in a commercially
reasonable manner, contact Potential Beneficial Owners (by
telephone or otherwise), including Persons that are not
Beneficial Owners, on such lists to determine the number of
Outstanding shares, if any, of shares of MMP which each such
Potential Beneficial Owner offers to purchase if the Applicable
Rate for such shares for the next succeeding Rate 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 by a Broker-Dealer to the Auction Agent, of
information referred to in clause (A)(1), (A)(2), (A)(3) or B of
this subparagraph (i) is hereinafter referred to as an "Order"
and collectively as "Orders" and each Beneficial Owner and each
Potential Beneficial Owner placing an Order with a Broker-Dealer,
and such Broker-Dealer placing an Order with the Auction Agent,
is hereinafter referred to as a "Bidder" and collectively as
"Bidders"; an Order containing the information referred to in
clause (A)(1) of this subparagraph (i) is hereinafter referred to
as a "Hold Order" and collectively as "Hold Orders"; an Order
containing the information referred to in clause (A)(2) or (B) of
this subparagraph (i) is hereinafter referred to as a "Bid" and
collectively as "Bids"; and an Order containing the information
referred to in clause (A)(3) of this subparagraph (i) is
hereinafter referred to as a "Sell Order" and collectively as
"Sell Orders."
(ii) (A) A Bid by a Beneficial Owner or an
Existing Holder of shares of MMP subject to an Auction on any
Auction Date shall constitute an irrevocable offer to sell:
(1) the number of Outstanding shares of
MMP specified in such Bid if the Applicable Rate for such shares of
MMP determined on such Auction Date shall be less than the rate
specified therein;
(2) such number or a lesser number of
Outstanding shares of MMP to be determined as set forth in clause
(D) of paragraph 12.10(e)(i) if the Applicable Rate for such
shares of MMP determined on such Auction Date shall be equal to
the rate specified therein; or
(3) the number of Outstanding shares of
MMP specified in such Bid if the rate specified therein shall be
higher than the Maximum Rate for shares of MMP, or such number or
a lesser number of Outstanding shares of MMP to be determined as
set forth in clause (C) of paragraph 12.10(e)(ii) if the rate
specified therein shall be higher than the Maximum Rate for
shares of MMP and Sufficient Clearing Bids do not exist.
(B) A Sell Order by a Beneficial Owner
or an Existing Holder of shares of MMP subject to an Auction on any
Auction Date shall constitute an irrevocable offer to sell:
(1) the number of Outstanding shares of
MMP specified in such Sell Order; or
(2) such number or a lesser number of
Outstanding shares of MMP as set forth in clause (C) of paragraph
12.10(e)(ii) if Sufficient Clearing Bids do not exist.
(C) A Bid by a Potential Beneficial
Owner or a Potential Holder of shares of MMP subject to an Auction
on any Auction Date shall constitute an irrevocable offer to
purchase:
(1) the number of Outstanding shares of
MMP specified in such Bid if the Applicable Rate for shares of MMP
determined on such Auction Date shall be higher than the rate
specified therein; or
(2) such number or a lesser number of
Outstanding shares of MMP as set forth in clause (E) of paragraph
12.10(e)(i) if the Applicable Rate for shares of MMP determined
on such Auction Date shall be equal to the rate specified
therein.
(3) No Order for any number of shares of
MMP other than whole shares shall be valid.
(c) Submission of Orders by Broker-Dealers to
Auction Agent.
(i) Each Broker-Dealer shall submit in
writing to the Auction Agent prior to the Submission Deadline on
each Auction Date all Orders for shares of MMP subject to an
Auction on such Auction Date obtained by such Broker-Dealer,
designating itself (unless otherwise permitted by the Trust) as an
Existing Holder in respect of shares of MMP subject to Orders
submitted or deemed submitted to it by Beneficial Owners and as a
Potential Holder in respect of shares of MMP subject to Orders
submitted to it by Potential Beneficial Owners, and shall specify
with respect to each Order for shares of MMP:
(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 shares of
MMP that are the subject of such Order;
(C) to the extent that such Bidder is an
Existing Holder of shares of MMP;
(1) the number of shares, if any, of
shares of MMP subject to any Hold Order of such Existing Holder;
(2) the number of shares, if any, of
shares of MMP subject to any Bid of such Existing Holder and the
rate specified in such Bid; and
(3) the number of shares, if any, of
shares of MMP subject to any Sell Order of such Existing Holder;
and
(D) to the extent such Bidder is a
Potential Holder of shares of MMP, the rate and number of shares of
MMP specified in such Potential Holder's Bid.
(ii) If any rate 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 shares of MMP held by any Existing Holder is not
submitted to the Auction Agent prior to the Submission Deadline,
the Auction Agent shall deem a Hold Order to have been submitted
by or on behalf of such Existing Holder covering the number of
Outstanding shares of MMP held by such Existing Holder and not
subject to Orders submitted to the Auction Agent; provided that
if an Order or Orders covering all of the Outstanding shares of
MMP held by any Existing Holder is not submitted to the Auction
Agent prior to the Submission Deadline for an Auction relating to
a Rate Period consisting of more than the Minimum Rate Period,
the Auction Agent shall deem a Sell Order to have been submitted
by or on behalf of such Existing Holder covering the number of
Outstanding shares of MMP held by such Existing Holder and not
subject to Orders submitted to the Auction Agent.
(iv) If one or more Orders of an Existing
Holder is submitted to the Auction Agent covering in the aggregate
more than the number of Outstanding shares of MMP subject to an
Auction held by such Existing Holder, such Orders shall be
considered valid in the following order of priority:
(A) all Hold Orders for shares of MMP
shall be considered valid, but only up to and including in the
aggregate the number of Outstanding shares of MMP held by such
Existing Holder, and if the number of shares of MMP subject to
such Hold Orders exceeds the number of Outstanding shares of MMP
held by such Existing Holder, the number of shares of MMP subject
to each such Hold Order shall be reduced pro rata to cover the
number of Outstanding shares of MMP held by such Existing Holder;
(B) (1) any Bid for shares of MMP shall
be considered valid up to and including the excess of the number of
Outstanding shares of MMP held by such Existing Holder over the
number of shares of MMP subject to any Hold Orders referred to in
clause (A) above;
(2) subject to subclause (1), if more
than one Bid of an Existing Holder is submitted to the Auction
Agent with the same rate and the number of Outstanding shares of
MMP subject to such Bids is greater than such excess, such Bids
shall be considered valid up to and including the amount of such
excess, and the number of shares of MMP subject to each Bid with
the same rate shall be reduced pro rata to cover the number of
shares of MMP equal to such excess;
(3) subject to subclauses (1) and (2),
if more than one Bid of an Existing Holder for shares of MMP is
submitted to the Auction Agent with different rates, such Bids
shall be considered valid in the ascending order of their
respective rates up to and including the amount of such excess;
and
(4) in any such event, the number, if
any, of such Outstanding shares of MMP subject to any portion of
Bids considered not valid in whole or in part under this clause (B)
shall be treated as the subject of a Bid for shares of MMP by or
on behalf of a Potential Holder at the rate therein specified;
and
(C) all Sell Orders for shares of MMP
shall be considered valid up to and including the excess of the
number of Outstanding shares of MMP held by such Existing Holder
over the sum of shares of MMP subject to valid Hold Orders referred
to in clause (A) above and valid Bids referred to in clause (B)
above.
(v) If more than one Bid for one or more
shares of MMP is submitted to the Auction Agent by or on behalf of
any Potential Holder, each such Bid submitted shall be a separate
Bid with the rate and number of shares of MMP therein specified.
(vi) Any Order submitted by a Beneficial Owner
or 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.
(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 valid
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 as a "Submitted Order" and
collectively as "Submitted Hold Orders," "Submitted Bids" or
"Submitted Sell Orders," as the case may be, or as "Submitted
Orders") and shall determine:
(A) the excess of the number of
Outstanding shares of MMP over the number of Outstanding shares of
MMP subject to Submitted Hold Orders (such excess being hereinafter
referred to as the "Available shares of MMP");
(B) from the Submitted Orders whether:
(1) the number of Outstanding shares of
MMP subject to Submitted Bids of Potential Holders specifying one
or more rates equal to or lower than the Maximum Rate exceeds or is
equal to the sum of:
(x) the number of Outstanding shares of
MMP subject to Submitted Bids of Existing Holders specifying one or
more rates higher than the Maximum Rate; and
(y) the number of Outstanding shares of
MMP subject to Submitted Sell Orders.
(in the event such excess or such equality exists (other than
because the number of shares of MMP in subclauses (x) and (y)
above is each zero because all of the Outstanding shares of MMP
are subject to Submitted Hold Orders), such Submitted Bids in
subclause (1) above being hereinafter referred to collectively as
"Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist,
the lowest rate specified in such Submitted Bids (the "Winning Bid
Rate") which if:
(1) (x) each such Submitted Bid of
Existing Holders specifying such lowest rate and (y) all other such
Submitted Bids of Existing Holders specifying lower rates were
rejected, thus entitling such Existing Holders to continue to
hold the shares of MMP that are subject to such Submitted Bids;
and
(2) (x) each such Submitted Bid of
Potential Holders specifying such lowest rate and (y) all other
such Submitted Bids of Potential Holders specifying lower rates
were accepted, thus requiring such Potential Holders to purchase
the shares of MMP that are the subject of such Submitted Bids;
would result in such Existing Holders described in subclause (1)
above continuing to hold an aggregate number of Outstanding
shares of MMP which, when added to the number of Outstanding
shares of MMP to be purchased by such Potential Holders described
in subclause (2) above, would equal not less than the Available
shares of MMP.
(ii) Promptly after the Auction Agent has made
the determinations pursuant to paragraph 12.10(d)(i), the Auction
Agent shall advise the Trust of the Maximum Rate for the shares
of MMP for which an Auction is being held on the Auction Date
and, based on such determination, the Applicable Rate for the
next succeeding Rate Period thereof as follows:
(A) if Sufficient Clearing Bids exist,
that the Applicable Rate for the next succeeding Rate Period
thereof shall be equal to the Winning Bid Rate so determined;
(B) if Sufficient Clearing Bids do not
exist (other than because all of the Outstanding shares of MMP are
subject to Submitted Hold Orders), that the Applicable Rate for
the next succeeding Rate Period thereof shall be equal to the
Maximum Rate for such shares; or
(C) if all of the Outstanding shares of
MMP are subject to Submitted Hold Orders, that the Applicable Rate
for the next succeeding Rate Period thereof shall be equal to (1)
the product of (x) either (I) the "AA" Composite Commercial Paper
Rate on the Auction Date for such Rate Period, if such Rate
Period consists of less than four Dividend Periods, or (II) the
Treasury Rate on such Auction Date for such Rate Period, if such
Rate Period consists of four or more Dividend Periods, and (y)
one minus the maximum marginal regular Federal income tax rate
generally applicable to corporations, divided by (2) one minus
the product of (x) one minus the Dividends Received Deduction
rate and (y) the maximum marginal regular Federal income tax rate
generally applicable to corporations.
(e) Acceptance and Rejection of Submitted Bids and
Submitted Sell Orders and Allocation of Shares. Existing Holders
shall continue to hold the shares of MMP that are subject to
Submitted Hold Orders, and, based on the determinations made
pursuant to paragraph 12.10(d)(i), the Submitted Bids and
Submitted Sell Orders shall be accepted or rejected by the
Auction Agent and the Auction Agent shall take such other action
as set forth below:
(i) If Sufficient Clearing Bids for shares of MMP
have been made, all Submitted Sell Orders shall be accepted and,
subject to the provisions of paragraphs 12.10(e)(iv) and (v),
Submitted Bids shall be accepted or rejected as follows in the
following order of priority and all other Submitted Bids shall be
rejected:
(A) Existing Holders' Submitted Bids for
shares of MMP specifying any rate that is higher than the Winning
Bid Rate shall be accepted, thus requiring each such Existing
Holder to sell the shares of MMP subject to such Submitted Bids;
(B) Existing Holders' Submitted Bids for
shares of MMP specifying any rate that is lower than the Winning
Bid Rate shall be rejected, thus entitling each such Existing
Holder to continue to hold the shares of MMP subject to such
Submitted Bids;
(C) Potential Holders' Submitted Bids for
shares of MMP specifying any rate that is lower than the Winning
Bid Rate shall be accepted;
(D) each Existing Holder's Submitted Bid for
shares of MMP specifying a rate that is equal to the Winning Bid
Rate shall be rejected, thus entitling such Existing Holder to
continue to hold the shares of MMP subject to such Submitted Bid,
unless the number of Outstanding shares of MMP subject to all
such Submitted Bids shall be greater than the number of MMP
("remaining shares") in the excess of the Available shares of MMP
over the number of shares of MMP subject to Submitted Bids
described in clauses (B) and (C) of this paragraph 12.10(e)(i),
in which event such Submitted Bid of such Existing Holder shall
be rejected in part, and such Existing Holder shall be entitled
to continue to hold shares of MMP subject to such Submitted Bid,
but only in an amount equal to the number of shares of MMP
obtained by multiplying the number of remaining shares by a
fraction, the numerator of which shall be the number of
Outstanding shares of MMP held by such Existing Holder subject to
such Submitted Bid and the denominator of which shall be the
aggregate number of Outstanding shares of MMP subject to such
Submitted Bids made by all such Existing Holders that specified a
rate equal to the Winning Bid Rate; and
(E) each Potential Holder's Submitted Bid
for shares of MMP specifying a rate that is equal to the Winning
Bid Rate shall be accepted but only in an amount equal to the
number of shares of MMP obtained by multiplying the number of
shares of MMP in the excess of the Available MMP over the number
of shares of MMP subject to Submitted Bids described in clauses
(B) through (D) of this paragraph 12.10(e)(i), by a fraction, the
numerator of which shall be the number of Outstanding shares of
MMP subject to such Submitted Bid and the denominator of which
shall be the aggregate number of Outstanding shares of MMP
subject to such Submitted Bids made by all such Potential Holders
that specified a rate equal to the Winning Bid Rate for such
shares; and
(ii) If Sufficient Clearing Bids for shares of MMP
have not been made (other than because all of the Outstanding
shares of MMP are subject to Submitted Hold Orders), subject to
the provisions of paragraph 12.10(e)(iv), Submitted Orders shall
be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(A) Existing Holders' Submitted Bids for
shares of MMP specifying any rate that is equal to or lower than
the Maximum Rate shall be rejected, thus entitling such Existing
Holder to continue to hold the shares of MMP subject to such
Submitted Bids;
(B) Potential Holders' Submitted Bids for
shares of MMP specifying any rate that is equal to or lower than
the Maximum Rate shall be accepted, thus requiring the Potential
Holder to purchase shares of MMP that are the subject of such
Submitted Bids; and
(C) Each Existing Holder's Submitted Bid for
shares of shares of MMP specifying any rate that is higher than
the Maximum Rate for such shares and the Submitted Sell Orders
for shares of MMP of each Existing Holder shall be accepted, thus
entitling each Existing Holder that submitted or on whose behalf
was submitted any such Submitted Bid or Submitted Sell Order to
sell the shares of MMP subject to such Submitted Bid or Submitted
Sell Order, but in both cases only in an amount equal to the
number of shares of MMP obtained by multiplying the number of
shares of MMP subject to Submitted Bids described in clause (B)
of this paragraph 12.10(e)(ii)) by a fraction, the numerator of
which shall be the number of Outstanding shares MMP held by such
Existing Holder subject to such Submitted Bid or Submitted Sell
Order and the denominator of which shall be the aggregate number
of Outstanding shares of MMP subject to all such Submitted Bids
and Submitted Sell Orders.
(iii) If all of the Outstanding shares of MMP
are subject to Submitted Hold Orders, all Submitted Bids for such
shares shall be rejected.
(iv) If, as a result of the procedures
described in clause (D) or (E) of paragraph 12.10(e)(i) or clause
(C) of paragraph 12.10(e)(ii), any Existing Holder would be
entitled or required to sell, or any Potential Holder would be
entitled or required to purchase, a fraction of a share of MMP on
any Auction Date, the Auction Agent shall, in such manner as it
shall determine in its sole discretion, round up or down the
number of shares of MMP to be purchased or sold by any Existing
Holder or Potential Holder on such Auction Date as a result of
such procedures so that the number of shares of MMP so purchased
or sold by each Existing Holder or Potential Holder on such
Auction Date shall be whole shares of MMP.
(v) If, as a result of the procedures described
in clause (E) of paragraph 12.10(e)(i), any Potential Holder
would be entitled or required to purchase less than a whole share
of MMP on any Auction Date, the Auction Agent shall, in such
manner as it shall determine in its sole discretion, allocate
shares of MMP for purchase among Potential Holders so that only
whole shares of MMP are purchased on such Auction Date as a
result of such procedures by any Potential Holder, even if such
allocation results in one or more Potential Holders not
purchasing shares of MMP on such Auction Date.
(vi) Based on the results of each Auction for
shares of MMP, the Auction Agent shall determine the aggregate
number of shares of MMP to be purchased and the aggregate number
of shares of MMP to be sold by Potential Holders and Existing
Holders and, with respect to each Potential Holder or Existing
Holder, to the extent that such aggregate number of shares of MMP
to be purchased and such aggregate number of shares of MMP to be
sold differ, determine to which other Potential Holder(s) or
Existing Holder(s) they shall deliver, or from which other
Potential Holder(s) or Existing Holder(s) they shall receive, as
the case may be, shares of MMP.
(f) Notification of Allocations. Whenever the Trust
expects to allocate any net capital gains or other income
ineligible for the Dividends Received Deduction to any dividend
on shares of MMP, the Trust may, but shall not be required to,
notify the Auction Agent of the amount estimated to be so
allocated at least five Business Days preceding the Auction Date
on which the Applicable Rate for such dividend is to established.
Whenever the Auction Agent receives such notice from the Trust,
it shall be required in turn to notify each Broker-Dealer, who,
on or prior to such Auction Date, in accordance with its
Broker-Dealer Agreement, shall be required to notify its
Beneficial Owners and Potential Beneficial Owners of shares of
MMP believed by it to be interested in submitting an Order in the
Auction to be held on such Auction Date.
(g) Miscellaneous.
(i) The Trustees may interpret the provisions of
this Article 12 to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification that
does not adversely affect the rights of beneficial owners or
Existing Holders, and if such inconsistency, ambiguity, or formal
defect reflects an inaccurate provision hereof, the Trustees may,
in appropriate circumstances, amend this Article 12 as may be
appropriate.
(ii) Unless otherwise permitted by the Trust,
a Beneficial Owner or an Existing Holder may sell, transfer or
otherwise dispose of shares of MMP only pursuant to a Bid or Sell
Order placed with the Auction Agent in accordance with the
auction procedures described in this paragraph 12.10 or to a
Broker-Dealer, provided that in the case of all transfers other
than pursuant to Auctions, the Broker-Dealer for such Beneficial
Owner or Existing Holder shall advise the Auction Agent of such
transfer if such transfer results in a change in the Existing
Holder with respect to such shares of MMP.
(iii) Except as otherwise required by law,
Beneficial Owners shall not be entitled to receive any
certificate representing shares of MMP and their ownership of
shares of MMP shall be maintained in book entry form by the
Securities Depository or its nominee for the accounts of their
respective Agent Members. All of the Outstanding shares of MMP
shall be represented by a single certificate registered in the
name of the nominee of the Securities Depository unless otherwise
required by law or unless there is no Securities Depository.
Such certificate shall bear a legend substantially to the effect
that transfer of the shares of MMP represented by such
certificate is subject to the restrictions specified in this
paragraph 12.10(g) and in the Purchaser's Letter. If there is no
Securities Depository, at the Trust's option and upon its receipt
of such documents as it deems appropriate, any shares of MMP may
be registered in the stock books in the name of the beneficial
owners thereof and such beneficial owners thereupon shall be
entitled to receive certificates therefor and required to deliver
certificates therefor upon transfer or exchange thereof.
(iv) Neither the Trust nor any affiliate of
the Trust (as defined under the 0000 Xxx) shall submit any Order
in any Auction. Neither the Trust nor any of its agents,
including, without limitation, the Auction Agent, shall have any
liability with respect to the failure of a Potential Holder,
Existing Holder, or Agent Member to deliver, or to pay for, any
shares of MMP sold or purchased in an Auction or otherwise.
(h) Headings of Subdivisions. The headings of the
various subdivisions of this paragraph 12.10 are for convenience
of reference only and shall not affect the interpretation of any
of the provisions hereof.
ARTICLE 13
Amendments to the Bylaws
13.1 General. Except as otherwise expressly stated herein,
these Bylaws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
The Trust will notify Moody's of any amendment or repeal of these
Bylaws materially affecting the shares of MMP.
