<PAGE> PAGE 1
000 B000000 12/31/1999
000 C000000 0000109778
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 A
001 A000000 INDEPENDENCE SQUARE INCOME SECURITIES, INC.
001 B000000 811-2233
001 C000000 3027912919
002 A000000 ONE ALDWYN CENTER
002 B000000 VILLANOVA
002 C000000 PA
002 D010000 19085
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 PNC BANK, N.A.
008 B000001 S
008 C000001 801-000000
008 D010001 PHILADELPHIA
008 D020001 PA
008 D030001 19103
008 A000002 BLACKROCK INSTITUTIONAL MANAGEMENT CORP.
008 B000002 A
008 C000002 801-47710
008 D010002 NEW YORK
008 D020002 NY
008 D030002 10154
010 A000001 PFPC INC.
010 B000001 85-1196
010 C010001 WILMINGTON
010 C020001 DE
010 C030001 19809
012 A000001 PFPC, INC.
012 B000001 85-1196
<PAGE> PAGE 2
012 C010001 WILMINGTON
012 C020001 DE
012 C030001 19809
013 A000001 PRICEWATERHOUSECOOPERS LLP
013 B010001 PHILADELPHIA
013 B020001 PA
013 B030001 19103
015 A000001 WILMINGTON TRUST
015 B000001 C
015 C010001 WILMINGTON
015 C020001 DE
015 C030001 19809
015 E010001 X
018 000000 Y
019 A000000 N
019 B000000 0
020 C000001 0
020 C000002 0
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 0
022 A000001 AUBREY G. LANSTON & CO., INC.
022 B000001 13-5521294
022 C000001 166979
022 D000001 0
022 A000002 SALOMON SMITH BARNEY
022 B000002 13-1912900
022 C000002 132350
022 D000002 493
022 A000003 PAINE, WEBBER JACKSON & CURTIS, INC.
022 B000003 13-2638166
022 C000003 45323
022 D000003 0
022 A000004 PRUDENTIAL SECURITIES, INC.
022 B000004 22-2347336
022 C000004 36407
022 D000004 0
022 A000005 COMMERZBANK U.S. FINANCE
022 B000005 13-3439358
022 C000005 29940
022 D000005 603
022 A000006 DONALDSON LUFKIN AND JENRETTE
022 B000006 13-2741729
022 C000006 2046
022 D000006 0
<PAGE> PAGE 3
022 A000007 MERRILL LYNCH
022 B000007 13-5674085
022 C000007 1462
022 D000007 0
022 A000008 GOLDMAN SACHS
022 B000008 13-5108880
022 C000008 1046
022 D000008 0
022 A000009 NATIONSBANC SECURITIES INC.
022 B000009 94-1687665
022 C000009 0
022 D000009 469
022 A000010 CS FIRST BOSTON CORP.
022 B000010 13-5659485
022 C000010 434
022 D000010 0
023 C000000 416480
023 D000000 6227
024 000000 N
025 D000001 0
025 D000002 0
025 D000003 0
025 D000004 0
025 D000005 0
025 D000006 0
025 D000007 0
025 D000008 0
026 A000000 N
026 B000000 N
026 C000000 N
026 D000000 N
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 N
028 A010000 0
028 A020000 0
028 A030000 0
028 A040000 0
028 B010000 0
028 B020000 0
028 B030000 0
028 B040000 0
028 C010000 0
028 C020000 0
028 C030000 0
028 C040000 0
028 D010000 0
028 D020000 0
<PAGE> PAGE 4
028 D030000 0
028 D040000 0
028 E010000 0
028 E020000 0
028 E030000 0
028 E040000 0
028 F010000 0
028 F020000 0
028 F030000 0
028 F040000 0
028 G010000 0
028 G020000 0
028 G030000 0
028 G040000 0
028 H000000 0
030 A000000 0
030 B000000 0.00
030 C000000 0.00
031 A000000 0
031 B000000 0
032 000000 0
033 000000 0
035 000000 0
036 B000000 0
038 000000 0
042 A000000 0
042 B000000 0
042 C000000 0
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 0
043 000000 0
044 000000 0
045 000000 Y
046 000000 N
047 000000 N
048 000000 0.000
048 A010000 0
048 A020000 0.000
048 B010000 0
048 B020000 0.000
048 C010000 0
048 C020000 0.000
048 D010000 0
048 D020000 0.000
048 E010000 0
048 E020000 0.000
048 F010000 0
048 F020000 0.000
<PAGE> PAGE 5
048 G010000 0
048 G020000 0.000
048 H010000 0
048 H020000 0.000
048 I010000 0
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 0
048 K020000 0.000
049 000000 N
050 000000 Y
051 000000 N
052 000000 N
053 A000000 N
054 A000000 N
054 B000000 N
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 N
054 I000000 N
054 J000000 N
054 K000000 N
054 L000000 N
054 M000000 N
054 N000000 N
054 O000000 N
055 A000000 N
055 B000000 N
056 000000 Y
057 000000 N
058 A000000 N
059 000000 Y
060 A000000 Y
060 B000000 Y
061 000000 0
062 A000000 Y
062 B000000 0.0
062 C000000 6.5
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
<PAGE> PAGE 6
062 M000000 2.5
062 N000000 2.5
062 O000000 0.0
062 P000000 88.4
062 Q000000 0.0
062 R000000 0.0
063 A000000 0
063 B000000 15.1
064 A000000 N
064 B000000 N
066 A000000 N
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
070 A010000 N
070 A020000 N
070 B010000 N
070 B020000 N
070 C010000 N
070 C020000 N
070 D010000 N
070 D020000 N
070 E010000 N
070 E020000 N
070 F010000 N
070 F020000 N
070 G010000 N
070 G020000 N
070 H010000 N
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 N
070 K010000 N
070 K020000 N
070 L010000 N
070 L020000 N
070 M010000 N
070 M020000 N
070 N010000 N
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 N
070 Q020000 N
070 R010000 N
070 R020000 N
<PAGE> PAGE 7
071 A000000 8004
071 B000000 6225
071 C000000 29906
071 D000000 21
072 A000000 12
072 B000000 2628
072 C000000 0
072 D000000 0
072 E000000 0
072 F000000 117
072 G000000 0
072 H000000 0
072 I000000 22
072 J000000 21
072 K000000 0
072 L000000 18
072 M000000 33
072 N000000 0
072 O000000 3
072 P000000 0
072 Q000000 0
072 R000000 28
072 S000000 22
072 T000000 0
072 U000000 0
072 V000000 0
072 W000000 20
072 X000000 284
072 Y000000 0
072 Z000000 2344
072AA000000 34
072BB000000 0
072CC010000 0
072CC020000 2346
072DD010000 2372
072DD020000 0
072EE000000 34
073 A010000 1.3011
073 A020000 0.0000
073 B000000 0.0189
073 C000000 0.0000
074 A000000 11
074 B000000 0
074 C000000 1880
074 D000000 28424
074 E000000 0
074 F000000 0
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 0
<PAGE> PAGE 8
074 K000000 33
074 L000000 693
074 M000000 0
074 N000000 31041
074 O000000 0
074 P000000 0
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 255
074 S000000 0
074 T000000 30786
074 U010000 1822752
074 U020000 0
074 V010000 16.89
074 V020000 0.00
074 W000000 0.0000
074 X000000 0
074 Y000000 0
075 A000000 0
075 B000000 32129
076 000000 15.34
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
080 A000000 RELIANCE INS CO. & NATIONAL UNION FIRE INS CO
080 C000000 12000
081 A000000 Y
081 B000000 8
082 A000000 Y
082 B000000 25
083 A000000 N
083 B000000 0
<PAGE> PAGE 9
084 A000000 N
084 B000000 0
085 A000000 Y
085 B000000 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 850
086 E020000 962
086 F010000 1
086 F020000 1
087 A010000 INDEPENDENCE SQUARE INCOME SECURITIES, INC.
087 A020000 453779100
087 A030000 ISIS
088 A000000 N
088 B000000 N
088 C000000 N
088 D000000 N
SIGNATURE MARY JANE MALONEY
TITLE MANAGER
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000109778
<NAME> INDEPENDENCE SQUARE INCOME SECURITIES, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 30631940
<INVESTMENTS-AT-VALUE> 30303872
<RECEIVABLES> 724686
<ASSETS-OTHER> 10701
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 31039259
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 252727
<TOTAL-LIABILITIES> 252727
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31102858
<SHARES-COMMON-STOCK> 1822752
<SHARES-COMMON-PRIOR> 1822752
<ACCUMULATED-NII-CURRENT> 2344259
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34367
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (328068)
<NET-ASSETS> 30786532
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2628371
<OTHER-INCOME> 0
<EXPENSES-NET> (284112)
<NET-INVESTMENT-INCOME> 2344259
<REALIZED-GAINS-CURRENT> 34367
<APPREC-INCREASE-CURRENT> (2346344)
<NET-CHANGE-FROM-OPS> 32282
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2371538)
<DISTRIBUTIONS-OF-GAINS> (34495)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2373751)
<ACCUMULATED-NII-PRIOR> 2381702
<ACCUMULATED-GAINS-PRIOR> 167192
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 116817
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 284112
<AVERAGE-NET-ASSETS> 32129440
<PER-SHARE-NAV-BEGIN> 18.19
<PER-SHARE-NII> 1.29
<PER-SHARE-GAIN-APPREC> (1.27)
<PER-SHARE-DIVIDEND> (1.30)
<PER-SHARE-DISTRIBUTIONS> (.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.89
<EXPENSE-RATIO> .88
</TABLE>
EXHIBIT INDEX
EXHIBIT A:
Attachment to item 77B:
Accountants report on internal control
EXHIBIT B:
Attachment to item 77Q1: Amended by-laws
- ------------------------------------------------------------------
EXHIBIT A:
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Independence Square Income Securities, Inc.:
In planning and performing our audit of the financial statements
of Independence Square Income Securities, Inc. (the "Fund), for
the year ended December 31 1999, we considered its internal
control, including control activities for safeguarding
securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and
financial highlights and to comply with the requirements of Form
N-SAR, not to provide assurance on internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgements by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding
of assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal controls, errors or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to
the risk that it may become inadequate because of changes in
conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a
condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low
level the risk that misstatements caused by errors or fraud in
amounts that would be material in relation to the financial
statements and financial highlights being audited may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted
no matters involving internal control and its operation,
including controls over safeguarding securities, that we consider
to be material weaknesses as defined above as of December 31,
1999.
This report is intended solely for the information and use of the
Board of Directors of Independence Square Income Securities,
Inc., management and the Securities and Exchange Commission and
is not intended to be and should not be used by anyone other than
these specified parties.
PricewaterhouseCoopers LLP
January 21, 2000
EXHIBIT B:
AS AMENDED through
2/25/72
and on 7/10/72
and 4/27/73
and 4/27/90
and 4/19/93
and 10/12/99
By Laws of
INDEPENDENCE SQUARE INCOME SECURITIES, INC.
____________________
ARTICLE I
OFFICES
Section 1. The registered office of the Corporation
shall be in the City of Baltimore, State of Maryland.
Section 2. The Corporation may also have offices at
such other places both within and without the State of Maryland
as the board of directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders shall be
held at such time and place within the United States as the board
of directors may from time to time determine.
Section 2. No Annual Meeting of Stockholders of the
Corporation shall be held unless required by applicable law or
otherwise determined by the Board of Directors. At an annual
meeting, the stockholders shall elect a Board of Directors and
transact any other business which may properly be brought before
the meeting.
Section 3. At any time, a special meeting of the
stockholders may be called by the Chairman of the Board, a
majority of the Board of Directors, or by the Secretary at the
request of two or more the members of the Board, and shall be
called by the Chairman of the Board upon the written request of
the holders of shares entitled to not less than twenty-five
percent of all votes entitled to be cast at such meeting. Such
request shall state the purpose or purposes of such meeting. If
the stated purpose of such shareholders' request is to consider
any matter which is substantially the same as a matter voted upon
at any special meeting of the stockholders held during the
preceding twelve months, the meeting need not be called unless
the request is made by the holders of shares entitled to cast a
majority of the votes entitled to be cast at the meeting.
Section 4. Business transacted at any special meeting
of stockholders shall be limited to the purposes stated in the
notice.
Section 5. Not less than ten nor more than ninety days
before the date of every stockholders' meeting, the Secretary
shall give to each stockholder entitled to vote at such meeting,
written notice stating the time and place of the meeting and, in
the case of a special meeting, the purpose or purposes for which
the meeting is called.
Section 6. At any meeting of stockholders the presence
in person or by proxy of stockholders entitled to cast a majority
of the votes thereat shall constitute a quorum. If, however,
such quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 7. A majority of the votes cast at a meeting
of stockholders, duly called and at which a quorum is present,
shall be sufficient to take or authorize action upon any matter
which may properly come before the meeting, unless otherwise
required by the Investment Company Act of 1940.
Section 8. Each shareholder shall have one vote in
person or by proxy for each share of stock having voting power
held by such stockholder on each matter submitted to a vote at a
meeting of stockholders, but no proxy shall be valid after eleven
months from its date, unless otherwise provided in the proxy. At
all meetings of stockholders, unless the voting is conducted by
inspectors, all questions relating to the qualification of voters
and the validity of proxies and the acceptance or rejection of
votes shall be decided by the chairman of the meeting. At any
election of directors, the board of directors prior thereto may,
or, if they have not so acted, the chairman of the meeting may,
and upon the request of the holders of ten percent (10%) of the
stock entitled to vote at such election shall, appoint two
inspectors of election who shall first subscribe an oath or
affirmation to execute faithfully the duties of inspectors at
such election with strict impartiality and according to the best
of their ability, and shall after the election make a certificate
of the result of the vote taken. No candidate for the office of
director shall be appointed such inspector. The chairman of the
meeting may cause a vote by ballot to be taken upon any election
or matter, and such vote shall be taken upon the request of the
holders of ten percent (10%) of the stock entitled to vote on
such election or matter.
ARTICLE III
DIRECTORS
Section 1. The number of directors of the Corporation
who shall constitute the whole board shall be five, provided,
however, that by vote of a majority of the entire board of
directors, the number of directors may be increased or decreased
from time to time to a number not more than fifteen nor less than
three, but the tenure of office of a director shall not be
affected by any decrease in the number of directors so made by
the board. Until the first annual meeting of stockholders or
until successors are duly elected and qualify, the board shall
consist of the persons named as such in the Articles of
Incorporation.
Section 2. Subject to the provisions of Article II,
Section 2, the members of the Board of Directors shall be elected
at an annual meeting of the stockholders, except that any vacancy
in the board of directors resulting from death, resignation,
increase in authorized number of directors or otherwise, may be
filled for the unexpired term by a majority vote of the remaining
directors in office, though less than a quorum; provided, that
after the filling of any such vacancy at least two-thirds of the
Board of Directors then holding office shall have been elected by
the stockholders; and provided further, that if at any time less
than a majority of the directors then holding office were elected
by the stockholders, a stockholders' meeting shall forthwith be
called, to be held as promptly as possible, and in any event
within sixty days, for the purpose of electing an entire new
Board of Directors. Each director elected shall hold office
until his successor is elected and qualified, until he shall have
resigned, or until he shall have been removed by a vote of the
stockholders. Directors need not be stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 3. Meetings of the board of directors, regular
or special, may be held at any place in or out of the State of
Maryland as the board may from time to time determine.
Section 4. The first meeting of each newly elected
board of directors shall be held immediately following and at the
same place as the annual meeting of stockholders and no notice of
such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall
be present. In the event such meeting is not held at the said
time and place, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be
specified in a written waiver signed by all of the directors.
Section 5. Regular meetings of the board of directors
may be held without notice at such time and place as shall from
time to time be determined by the board of directors.
Section 6. Special meetings of the board of directors
may be called by the Chairman of the Board on one day's notice to
each director; special meetings shall be called by the Chairman
of the Board or Secretary in like manner and on like notice on
the written request of two directors.
Section 7. At all meetings of the board of directors,
a majority of the entire board of directors shall constitute a
quorum for the transaction of business and the action of a
majority of the directors present at any meeting at which a
quorum is present shall be the action of the board of directors
unless the concurrence of a greater proportion is required for
such action by the laws of Maryland, or the Articles of
Incorporation. If a quorum shall not be present at any meeting
of directors, the directors present thereat may by a majority
vote adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be
present.
Section 8. Any action required or permitted to be
taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting, if a written
consent to such action is signed in one or more counterparts by
all members of the board or of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the board or committee.
COMMITTEES OF DIRECTORS
Section 9. The board of directors may by resolution
passed by a majority of the whole board appoint from among its
members an executive committee and other committees composed of
two or more directors, and may delegate to such committees, in
the intervals between meetings of the board of directors, any or
all of the powers of the board of directors in the management of
the business and affairs of the Corporation, except the power to
declare dividends, to issue stock or to recommend to stockholders
any action requiring stockholders' approval. In the absence of
any member of such committee, the members thereof present at any
meeting, whether or not they constitute a quorum, may appoint a
member of the board of directors to act in the place of such
absent member.
Section 10. The committees shall keep minutes of their
proceedings and when required shall report the same to the board
of directors at the meeting next succeeding, and any action by
the committees shall be subject to revision and alteration by the
board of directors, provided that no rights of third persons
shall be affected by any such revision or alteration.
COMPENSATION OF DIRECTORS
Section 11. Any director, whether or not he is a
salaried officer or employee, may be compensated for his services
as director or as a member of a committee of directors, or as
Chairman of the Board or chairman of a committee by fixed
periodic payments or by fees for attendance at meetings or by
both, and in addition may be reimbursed for transportation and
other expenses, all in such manner and amounts as the board of
directors may from time to time determine.
ARTICLE IV
NOTICES
Section 1. Notices to stockholders shall be in writing
and delivered personally or mailed to the stockholders at their
addresses appearing on the books of the Corporation. Notices to
directors shall be oral or by telephone or telegram or in writing
delivered personally or mailed to the directors at their
addresses appearing on the books of the Corporation. Notice by
mail shall deemed to be given at the time when the same shall be
mailed. Notice to directors need not state the purpose of a
regular or special meeting.
Section 2. Whenever any notice of the time, place or
purpose of any meeting of stockholders, directors or committee is
required to be given under the provisions of the Maryland law or
under the provisions of the Articles of Incorporation or these
by-laws, a waiver thereof in writing, signed by the person or
persons entitled to such notice and filed with the records of the
meeting, whether before or after the holding thereof, or actual
attendance at the meeting of stockholders in person or by proxy,
or at the meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such persons.
ARTICLE V
OFFICERS
Section 1. The officers of the Corporation shall be
chosen by the board of directors and shall include a Chairman of
the Board, a President, a Secretary and a Treasurer. The board
of directors may also choose one or more vice-presidents, and one
or more assistant secretaries and assistant treasurers. Two or
more offices, may be held by the same person but no officer shall
execute, acknowledge or verify any instrument in more than one
capacity, if such instrument is required by law, the Articles of
Incorporation or these by-laws to be executed, acknowledged or
verified by two or more officers.
Section 2. The board of directors at its first meeting
after each annual meeting of stockholders shall choose a Chairman
of the Board, a President, a Secretary and a Treasurer, none of
whom, except the President, need be a member of the board.
Section 3. The board of directors from time to time
may appoint such other officers and agents as it shall deem
advisable, who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be
determined from time to time by the board. The board of
directors from time to time may delegate to one or more officers
or agents the power to appoint any such subordinate officers or
agents and to prescribe the respective rights, terms of office,
authorities and duties.
Section 4. The salaries or other compensation of all
officers and agents of the Corporation shall be fixed by the
board of directors, except that the board of directors may
delegate to any person or group of persons the power to fix the
salary or other compensation of any subordinate officers or
agents appointed pursuant to Section 3 hereof.
Section 5. The officers of the Corporation shall serve
for one year and until their successors are chosen and qualify.
Any officer or agent may be removed by the affirmative vote of a
majority of the board of directors whenever, in its judgment, the
best interests of the Corporation will be served thereby.
THE CHAIRMAN OF THE BOARD
Section 6. The Chairman of the Board shall be the
chief executive officer of the Corporation and shall preside at
all meetings of the stockholders and directors.
PRESIDENT
Section 7. The President shall be the chief
administrative officer of the Corporation. In addition, he
shall, at the request or in the absence or disability of the
Chairman of the Board perform the duties and exercise the powers
of the Chairman of the Board, and shall perform such other duties
and have such other powers as the board of directors may from
time to time prescribe.
THE SECRETARY
Section 8. The Secretary shall attend all meetings of
the board of directors and all meetings of the stockholders and
record all the proceedings thereof and shall perform like duties
for any committee when required. He shall give, or cause to be
given, as required notice of meetings of the stockholders and of
the board of directors, and shall perform such other duties as
may be prescribed by the board of directors or President, under
whose supervision he shall be. He shall keep in safe custody the
seal of the Corporation and, when authorized by the board of
directors, affix and attest the same to any instrument requiring
it. The board of directors may give general authority to any
other officer to affix the seal of the Corporation and to attest
the affixing by his signature.
THE TREASURER
Section 9. The Treasurer shall be the chief financial
officer of the Corporation. He shall be responsible for the
maintenance of its accounting records and shall render to the
board of directors, at its regular meetings, or when the board of
directors so requires an account of all the Corporation's
financial transactions and a report of the financial condition of
the Corporation.
ARTICLE VI
NET ASSET VALUE OF SHARES
Section 1. The net asset value per share of the
outstanding shares of Capital Stock of the Corporation shall be
determined at such times as the board of directors shall
prescribe, provided that such net asset value shall be determined
at least weekly as of the close of business on the New York Stock
Exchange on the last day of the week on which the Exchange is
open.
Section 2. The board of directors shall determine the
net asset value, provided, however, that the board of directors
may delegate to the Treasurer or the investment manager the
actual calculation thereof pursuant to the board of directors'
direction.
COMPUTATION OF NET ASSET VALUE
Section 3. The net asset value of each share of stock
as of any particular time shall be determined by dividing the
value of the Corporation's investments and other assets, less any
liabilities, by the total outstanding shares of stock of the
Corporation.
CORPORATION'S ASSETS
Section 4. The Corporation's assets shall be deemed to
include: (A) all cash on hand or on deposit, including any
interest accrued thereon, (B) all bills and demand notes and
accounts receivable, (C) all securities owned or contracted for
by the Corporation, (D) all stock and cash dividends and cash
distributions payable to but not yet received by the Corporation
(when the valuation of the underlying security is being
determined ex-dividend), (E) all interest accrued (whether or not
yet subject to collection) on any interest-bearing securities
owned by the Corporation (except accrued interest included in the
valuation of the underlying security) and (F) all other property
of every kind and nature, including prepaid expenses.
VALUATION OF CORPORATION'S ASSETS
Section 5. The value of such assets is to be
determined as follows:
(a) The value of any cash on hand and of any
prepaid expenses shall be deemed to be their
full amount.
(b) The value of any cash on deposit, bills,
demand notes, accounts receivable, and cash
dividends and interest declared or accrued as
aforesaid and not yet received shall be
deemed to be the full amount thereof, unless
the board of directors shall determine that
it is not worth its full amount. In such
case the value of the item shall be deemed to
be its reasonable value, as determined by the
board of directors.
(c) The valuation of a security in the
Corporation's portfolio listed or traded on
an exchange will be valued at its latest
quoted sales price on the day the valuation
is made, or, if there is no such reported
sale, at the most recent quoted bid price.
Price information on these listed securities
shall be taken from the exchange where the
securities are primarily traded.
(d) Unlisted securities for which market
quotations are readily available will be
valued at the most recent quoted bid price.
(e) Other assets and securities, including
restricted securities and other debt
obligations purchased in private
transactions for which no quotations are
readily available will be valued in good
faith at fair value using methods determined
by the Board of Directors.
CORPORATION'S LIABILITIES
Section 6. The Corporation's liabilities shall not be
deemed to include outstanding shares and surplus. They shall be
deemed to include: (A) all bills and accounts payable, (B) all
investment management fees and administrative expenses accrued,
(C) all contractual obligations for the payment of money or
property, including the amount of any declared but unpaid
dividends upon the Corporation's shares and all amounts held for
distribution to stockholders of record as of a prior date, (D)
all reserves authorized or approved by the board of directors for
taxes or contingencies and (E) all other liabilities not
represented by the Corporation's outstanding shares and surplus.
ARTICLE VII
INVESTMENT LIMITATIONS
Section 1. The Corporation shall not:
(a) Purchase any securities which would cause, at
the time of purchase, less than 25% of the
value of the total assets of the Corporation
to be invested in securities of utility
companies (including without limitation
companies that provide electricity, natural
gas, water and other sanitary services,
telephone and telegraph companies and other
public communication services companies), or
which would cause, at the time of purchase,
25% or greater of the value of the
Corporation's total assets to be invested in
the securities of issuers, other than utility
companies, that conduct their principal
business activities in the same industry.
(b) Purchase securities of any issuer (except
obligations of the United States Government
and its instrumentalities) if as a result
more than 5% of the value of the
Corporation's total assets would be invested
in the securities of such issuer; or purchase
more than 10% of the outstanding voting
securities, preferred stock or debt
obligations of any issuer.
(c) Engage in the business of underwriting
securities issued by others or participate
with others in any trading accounts. The
Corporation may, however, purchase securities
which are not readily marketable, including
securities subject to restrictions on
disposition (in which event registration
under the Securities Act of 1933 may be
required prior to resale), and securities for
which quotations are not readily available,
but no such purchase will be made which will
result in more than 25% of the value of its
assets being invested in such securities.
(d) Invest in companies for the purpose of
exercising control or management.
(e) Issue any class of senior securities,
provided, however, that the Corporation may
borrow money from banks or others to purchase
securities, provided that at the time of such
purchase the anticipated income from the
securities to be purchased exceeds the amount
of interest on the borrowed money. Such
borrowings may not be in excess of 25% of the
market value of the Corporation's assets
(including aggregate borrowings), less
liabilities (excluding such borrowings) at
the time of the borrowing. The Corporation
may also borrow for temporary or emergency
purposes, provided that such borrowings are
not in excess of 5% of its assets taken at
the lower of their market value or cost.
(f) mortgage, pledge, or hypothecate its assets
to an extent greater than 15% of the value of
its assets.
(g) Purchase or sell real estate. However, the
Corporation may invest in securities secured
by real estate or interests therein or issued
by companies, including real estate
investment trusts, which invest in real
estate or interests therein.
(h) Purchase or sell commodities or commodity
contracts.
(i) Make loans, except through the purchase of
debt securities in accordance with the
Corporation's investment objective and
policies. In addition the board of directors
may on the request of broker/dealers or other
institutional investors, which it deems
qualified, authorize the Corporation to lend
securities for the purposes of covering short
positions of the borrower, but only when the
borrower pledges 100% cash collateral to the
Corporation and agrees to maintain such
collateral so that it amounts at all times to
at least 100% of the value of the securities.
Such security loans will not be made if as a
result the aggregate of such loans will
exceed 20% of the value of the Corporation's
assets.
(j) Purchase securities of other investment
companies except by purchase of securities of
closed-end companies in the open market
involving only customary broker's commissions
or acquisition of such securities as part of
a merger, consolidation, reorganization or
purchase of assets approved by the
Shareholders, if required by law.
(k) Purchase securities on margin, make short
sales of securities or maintain a short
position.
(l) Purchase or retain securities of an issuer,
if those directors and officers of the
Corporation or those directors and officers
above the level of vice-president of
Provident National Bank owning more than 1/2
of 1% of such securities together own more
than 5% of such securities.
ARTICLE VIII
CERTIFICATES OF STOCK
Section 1. Each stockholder shall be entitled to a
certificate or certificates which shall certify the number and
kind and class of shares owned by him in the Corporation. Each
certificate shall be signed by the president or a vice-president
and countersigned by the secretary or an assistant secretary or
the treasurer or an assistant treasurer and shall be sealed with
the corporate seal.
Section 2. Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent or (2) by a
transfer clerk acting on behalf of the Corporation and a
registrar, the signature of any such president, vice-president,
treasurer, assistant treasurer, secretary or assistant secretary
may be facsimile. In case any officer who has signed any
certificate ceases to be an officer of the Corporation before the
certificate is issued, the certificate may nevertheless be issued
by the Corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
Section 3. Notwithstanding the foregoing provisions of
this Article, the Corporation shall have full power to
participate in any program approved by the board of directors
providing for the recording and transfer of ownership of shares
of the Corporation's stock by electronic or other means without
the issuance of certificates.
LOST CERTIFICATES
Section 4. The board of directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation
alleged to have been stolen, lost or destroyed, upon the making
of an affidavit of that fact by the person claiming the
certificate of stock to be stolen, lost or destroyed, or upon
other satisfactory evidence of such loss or destruction. When
authorizing such issue of a new certificate or certificates, the
board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such
stolen, lost or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it
shall require and to give the Corporation a bond, with sufficient
surety, to the Corporation to indemnify it against any loss or
claim that may be made by reason of the issuance of a new
certificate.
CLOSING OF TRANSFER BOOKS
Section 5. The board of directors may fix, in advance,
a date as the record date for the purpose of determining
stockholders entitled to notice of, or to vote at, any meeting of
stockholders, or stockholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a
determination of stockholders for any other proper purpose. Such
date, in any case, shall be not more than ninety days, and in
case of a meeting of stockholders not less than ten days, prior
to the date on which the particular action requiring such
determination of stockholders is to be taken. In lieu of fixing
a record date, the board of directors may provide that the stock
transfer books shall be closed for a stated period but not to
exceed, in any case, twenty days. If the stock transfer books
are closed for the purpose of determining stockholders entitled
to notice of or to vote at a meeting of stockholders, such books
shall be closed for at least ten days immediately preceding such
meeting.
REGISTERED STOCKHOLDERS
Section 6. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
TRANSFER AGENTS AND REGISTRARS
Section 7. The board of directors may, from time to
time, appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the Corporation, and it may
appoint the same person as both transfer agent and registrar.
Upon any such appointment being made all certificates
representing shares of capital stock thereafter issued shall be
countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless
so countersigned. If the same person shall be both transfer
agent and registrar, only one countersignature by such person
shall be required.
TRANSFER REGULATIONS
Section 8. The shares of stock of the Corporation may
be freely transferred, and the board of directors may, from time
to time, adopt rules and regulations with reference to the method
of transfer of the shares of stock of the Corporation.
ARTICLE IX
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Articles of
Incorporation, if any, may be declared by the board of directors
at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property, or in its own shares, subject
to the provisions of the Maryland law and of the Articles of
Incorporation, and further subject to the provisions if any of an
automatic dividend investment plan or other similar plan which
the board of directors may adopt, which may give shareholders the
right to receive dividends and distributions in cash and/or
shares at their option, and may provide that such shares shall be
issued at net asset value notwithstanding that the same is below
market value.
STOCK LEDGER
Section 2. The Corporation shall maintain an original
stock ledger containing the names and addresses of all
stockholders and the number of shares of each class held by each
stockholder. Such stock ledger may be in written form or any
other form capable of being converted into written form within a
reasonable time for visual inspection.
GIVING OF PROXIES
Section 3. Unless otherwise ordered by the board of
directors, any officer of the Corporation or the investment
manager may appoint an agent or agents (who may be or include
such officer himself), in the name and on behalf of the
Corporation, to cast the votes which the Corporation may be
entitled to cast as a stockholder or otherwise in any other
corporation any of whose shares or other securities are held by
or for the Corporation, at meetings of the holders of the shares
or other securities of such other corporation, or, in connection
with the ownership of such shares or other securities, to consent
in writing to any action by such other corporation, and may
instruct the person or persons so appointed as to the matter of
casting such votes or giving such consent, and may execute or
cause to be executed in the name and on behalf of the Corporation
and under its seal such written proxies or other instruments as
he may deem necessary or proper in the premises.
CUSTODIANSHIP
Section 4. All securities owned by the Corporation and
all similar investments shall be held by a custodian which shall
be a bank having the qualifications prescribed in the Investment
Company Act of 1940. All securities held by said custodian shall
be so held pursuant to a written contract which shall have been
approved or ratified by a majority of the board of directors of
the Corporation. Said contract shall meet the requirements of
the General Rules and Regulations promulgated under the
Investment Company Act of 1940.
REPORTS
Section 5. The Corporation shall transmit to its
shareholders semi-annual unaudited or audited reports of its
financial condition and annual reports audited by independent
certified public accountants. All such reports shall be
furnished to the securities commissions of every state in which
the Corporation's securities are registered for sale.
PROHIBITION AGAINST RETENTION OF CERTAIN SECURITIES
Section 6. The Corporation may not retain in its
portfolio securities issued by an issuer any of whose security
holders is an officer or director of the Corporation or of its
investment advisor or manager if after the purchase of the
securities of such an issuer by the Corporation one or more of
such officers or directors owns beneficially more than one-half
of one percent (1/2%) of the shares or securities, or both, of
such issuer and such officers and directors owning more than one-
half of one percent (1/2%) of such shares or securities together
own beneficially more than 5% of such shares or securities.
ARTICLE X
AMENDMENTS
Section 1. These by-laws may be altered or repealed at
any regular or special meeting of the board of directors,
provided that the provisions of Article VII may not be amended
without the consent of the lessor of (a) 67% of the Fund's shares
present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy or (b) more
than 50% of the Fund's outstanding shares, a majority vote of the
holders of the Corporation's outstanding Common Stock and
provided further than amendment procedure meet the requirements
of the Investment Company Act of 1940, if any.
DBR Cleanup macro run.
