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SIGNATURE PAUL SCHUBERT
TITLE TREASURER
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</TABLE>
Exhibit 77Q-1
PaineWebber Tax-Free Fund, Inc.
PAINEWEBBER RMA TAX-FREE FUND, INC.
A Maryland Corporation
BY-LAWS
As Restated
May 13, 1998
TABLE OF CONTENTS
Page
ARTICLE I NAME OF
CORPORATION, LOCATION OF OFFICES
AND SEAL 4
Section 1.01. Name: 4
Section 1.02. Principal Offices: 4
Section 1.03. Seal 4
ARTICLE II STOCKHOLDERS 4
Section 2.01. Annual Meetings: 4
Section 2.02. Special Meetings: 4
Section 2.03. Place of Meetings: 4
Section 2.04. Notice of Meetings: 5
Section 2.05. Voting - In General: 5
Section 2.06. Stockholders Entitled to Vote: 5
Section 2.07. Voting - Proxies: 5
Section 2.08. Quorum: 6
Section 2.09. Absence of Quorum: 6
Section 2.10. Stock Ledger and List of Stockholders: 6
Section 2.11. Action Without Meeting: 6
ARTICLE III BOARD OF DIRECTORS 7
Section 3.01. Number and Term of Office: 7
Section 3.02. Qualification of Directors: 7
Section 3.03. Election of Directors: 7
Section 3.04. Removal of Directors: 7
Section 3.05. Vacancies and Newly Created Directorships: 7
Section 3.06. General Powers: 8
Section 3.07. Power to Issue and Sell Stock: 8
Section 3.08. Power to Declare Dividends: 8
Section 3.09. Annual and Regular Meetings: 8
Section 3.10. Special Meetings: 9
Section 3.11. Notice: 9
Section 3.12. Waiver of Notice: 9
Section 3.13. Quorum and Voting: 9
Section 3.14. Compensation: 9
Section 3.15. Action Without a Meeting: 9
Page
ARTICLE IV EXECUTIVE COMMITTEE
AND OTHER COMMITTEES 10
Section 4.01. How Constituted: 10
Section 4.02. Powers of the Executive Committee: 10
Section 4.03. Powers of Other Committees of the Board of Directors 10
Section 4.04. Proceedings, Quorum and Manner of Acting: 10
Section 4.05. Other Committees: 10
ARTICLE V OFFICERS 10
Section 5.01. Officers: 10
Section 5.02. Election, Term of Office and Qualifications: 11
Section 5.03. Resignation: 11
Section 5.04. Removal: 11
Section 5.05. Vacancies and Newly Created Offices: 11
Section 5.06. Chairman of the Board: 11
Section 5.07. President: 11
Section 5.08. Vice President: 12
Section 5.09. Treasurer and Assistant Treasurers: 12
Section 5.10. Secretary and Assistant Secretaries: 12
Section 5.11. Subordinate Officers: 12
Section 5.12. Remuneration: 13
Section 5.13. Surety Bonds: 13
ARTICLE VI CUSTODY OF
SECURITIES 13
Section 6.01. Employment of a Custodian: 13
Section 6.02. Action Upon Termination of Custodian Agreement: 13
Section 6.03. Provisions of Custodian Contract: 13
Section 6.04. Other Arrangements: 12
ARTICLE VII EXECUTION OF
INSTRUMENTS, VOTING OF SECURITIES 14
Section 7.01. General: 14
Section 7.02. Checks, Notes, Drafts, Etc.: 14
Section 7.03. Voting of Securities: 14
ARTICLE VIII CAPITAL STOCK 14
Section 8.01. Certificates of Stock: 14
Section 8.02. Transfer of Capital Stock: 15
Section 8.03. Transfer Agents and Registrars: 15
Section 8.04. Transfer Regulations: 15
Page
Section 8.05. Fixing of Record Date: 16
Section 8.06. Lost Stolen or Destroyed Certificates: 16
ARTICLE IX FISCAL YEAR,
ACCOUNTANT 16
Section 9.01. Fiscal Year: 15
Section 9.02. Accountant: 15
ARTICLE X INDEMNIFICATION AND
INSURANCE 16
Section 10.01.
Indemnification of
Officers, Directors,
Employeesand
Agents17
Section 10.02. Insurance of Officers, Directors,EmployeesandAgents17
Section 10.03. Amendment: 17
ARTICLE XI AMENDMENTS 17
Section 11.01. General: 17
Section 11.02. By Stockholders Only: 17
ARTICLE I
NAME OF CORPORATION, LOCATION OF OFFICES
AND SEAL
Section 1.01. Name:
The name of the Corporation is PaineWebber RMA
Tax-Free Fund, Inc.
Section 1.02. Principal Offices:
The principal office of the Corporation in the State
of Maryland shall be located in the City of Baltimore. The
Corporation shall also maintain a principal office in the City
of New York, New York. The Corporation may establish
and maintain such other offices and places of business as the
board of directors may, from time to time, determine.
Section 1.03. Seal
The corporate seal of the Corporation shall be
circular in form and shall bear the name of the Corporation,
the year of its incorporation, and the words "Corporate
Seal, Maryland." The form of the seal shall be subject to
alteration by the board of directors and the seal may be used
by causing it or a facsimile to be impressed or affixed or
printed or otherwise reproduced. Any officer or director of
the Corporation shall have authority to affix the corporate
seal of the Corporation to any document requiring the same.
ARTICLE II
STOCKHOLDERS
Section 2.01. Annual Meetings:
There shall be no stockholder meetings for the
election of directors and the transaction of other proper
business except as required by law or as hereinafter
provided.
Section 2.02. Special Meetings:
Special meetings of the stockholders may be called
at any time by the chairman of the board, the president or by
any vice president, or by a majority of the board of
directors. Special meetings of the stockholders shall be
called by the secretary upon the written request of the
holders of shares entitled to not less than 25% of all the
votes entitled to be cast at such meeting, provided that (a)
such request shall state the purposes of such meeting and
the matters proposed to be acted on, and (b) the
stockholders requesting such meeting shall have paid to the
Corporation the reasonably estimated cost of preparing and
mailing the notice thereof, which the secretary shall
determine and specify to such stockholders. No special
meeting shall be called upon the request of the stockholders
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,
unless requested by holders of a majority of all shares
entitled to be voted at such meeting.
Section 2.03. Place of Meetings:
All stockholders' meetings shall be held at 1285
Avenue of the Americas, New York, New York, except that
the board of directors may fix a different place of meeting,
within the United States, which shall be specified in each
notice or waiver of notice of the meeting.
Section 2.04. Notice of Meetings:
The secretary or an assistant secretary shall cause
notice of the place, date and hour, and, in the case of a
special meeting, the purpose or purposes for which the
meeting is called, to be mailed, postage prepaid, not less
than 10 nor more than 90 days before the date of the
meeting, to each stockholder entitled to vote at such
meeting, at his address as it appears on the records of the
Corporation at the time of such mailing. Notice shall be
deemed to be given when deposited in the United States
mail addressed to the stockholders as aforesaid. Notice of
any stockholders' meeting need not be given to any
stockholder who shall sign a written waiver of such notice
whether before or after the time of such meeting, which
waiver shall be filed with the record of such meeting, or to
any stockholder who shall attend such meeting in person or
by proxy. Notice of adjournment of a stockholders' meeting
to another time or place need not be given, if such time and
place are announced at the meeting. Irregularities in the
notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any
action otherwise properly taken by or at any such meeting.
Section 2.05. Voting - In General:
At each stockholders' meeting each stockholder shall
be entitled to one vote for each share and a fractional vote
for each fraction of a share of stock of the Corporation
validly issued and outstanding and standing in his name on
the books of the Corporation on the record date fixed in
accordance with Section 8.05 of Article VIII hereof, either
in person or by proxy appointed by instrument in writing
subscribed by such stockholder or his or her duly authorized
attorney, except that no shares held by the Corporation shall
be entitled to a vote. Except as otherwise specifically
provided in the Articles of Incorporation, these By-Laws or
the Investment Company Act of 1940, as amended, all
matters shall be decided by a vote of the majority of the
shares of stock of the Corporation outstanding and entitled
to vote, validly cast at a meeting at which a quorum is
present. The vote upon any question shall be by ballot
whenever requested by any person entitled to vote, but,
unless such a request is made, voting may be conducted in
any way approved by the meeting. At any meeting at which
there is an election of directors, the chairman of the meeting
may, and upon the request of the holders of ten percent 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 to an inspector.
Section 2.06. Stockholders Entitled to Vote:
If, pursuant to Section 8.05 hereof, a record date
has been fixed for the determination of stockholders entitled
to notice of or to vote at any stockholders' meeting, each
stockholder of the Corporation shall be entitled to vote, in
person or by proxy, each share of stock and fraction of a
share of stock standing in his name on the books of the
Corporation on such record date and outstanding at the time
of the meeting. If no record date has been fixed, the record
date for the determination of stockholders entitled to notice
of or to vote at a meeting of stockholders shall be the later
of the close of business on the day on which the notice of
the meeting is mailed or the thirtieth day before the meeting;
or, if notice is waived by all stockholders, at the close of
business on the tenth day next preceding the day on which
the meeting is held.
Section 2.07. Voting - Proxies:
The right to vote by proxy shall exist only if the
proxy is authorized to act by (1) a written instrument, dated
not more than eleven months prior to the meeting and
executed either by the stockholder or by his or her duly
authorized attorney in fact (who may be so authorized by a
writing or by any non-written means permitted by the laws
of the State of Maryland) or (2) such electronic, telephonic,
computerized or other alternative means as may be
approved by a resolution adopted by the Directors. Proxies
shall be delivered to the secretary of the Corporation or
person acting as secretary of the meeting before being
voted, who shall decide all questions concerning
qualification of voters, the validity of proxies, and the
acceptance or rejection of votes. If inspectors of election
have been appointed by the chairman of the meeting, such
inspectors shall decide all such questions. A proxy with
respect to stock held in the name of two or more persons
shall be valid if executed by one of them unless at or prior to
exercise of such proxy the Corporation receives from any
one of them a specific written notice to the contrary and a
copy of the instrument or order that so provides. A proxy
purporting to be executed by or on behalf of a stockholder
shall be deemed valid unless challenged at or prior to its
exercise.
Section 2.08. Quorum:
The presence at any stockholders' meeting, in person
or by proxy, of stockholders entitled to cast a majority of
the votes thereat shall be necessary and sufficient to
constitute a quorum for the transaction of business.
Section 2.09. Absence of Quorum:
In the absence of a quorum, the holders of a
majority of the shares entitled to vote at the meeting and
present in person or by proxy, or, if no stockholder entitled
to vote is present in person or by proxy, any officer present
entitled to preside or act as secretary of such meeting, may
adjourn the meeting without determining the date of the
new meeting or, from time to time, without further notice to
a date not more than 120 days after the original record date.
Any business that might have been transacted at the meeting
originally called may be transacted at any such adjourned
meeting at which a quorum is present.
Section 2.10. Stock Ledger and List of
Stockholders:
It shall be the duty of the secretary or assistant
secretary of the Corporation to cause an original or
duplicate stock ledger to be maintained at the office of the
Corporation's transfer agent. 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. Any one or more persons, each of whom has
been a stockholder of record of the Corporation for more
than six months next preceding such request, who owns in
the aggregate 5% or more of the outstanding capital stock
of the Corporation, may submit (unless the Corporation at
the time of the request maintains a duplicate stock ledger at
its principal office in Maryland) a written request to any
officer of the Corporation or its resident agent in Maryland
for a list of the stockholders of the Corporation. Within 20
days after such a request, there shall be prepared and filed at
the Corporation's principal office in Maryland a list
containing the names and addresses of all stockholders of
the Corporation and the number of shares of each class held
by each stockholder, certified as correct by an officer of the
Corporation, by its stock transfer agent, or by its registrar.
Section 2.11. Action Without Meeting:
Any action to be taken by stockholders may be taken
without a meeting if all stockholders entitled to vote on the
matter consent to the action in writing and the written
consents are filed with the records of the meetings of
stockholders. Such consent shall be treated for all purposes
as a vote at a meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01. Number and Term of Office:
The board of directors shall consist of nine directors,
which number may be increased or decreased by a
resolution of a majority of the entire board of directors,
provided that the number of directors shall not be less than
three or more than fifteen. Each director (whenever re-
elected) shall hold office until his successor is elected and
qualified or until his earlier death, resignation or removal.
Section 3.02. Qualification of Directors:
Except for the initial board of directors, at least one
of the members of the board of directors shall be a person
who is not an interested person of the Corporation, as
defined in the Investment Company Act of 1940, as
amended. All other directors may be interested persons of
the Corporation if the requirements of Section 10(d) of the
Investment Company Act of 1940, as amended, are met by
the Corporation and its investment adviser. Directors need
not be stockholders of the Corporation. All acts done by
any meeting of the directors or by any person acting as a
director, so long as his successor shall not have been duly
elected or appointed, shall, notwithstanding that it be
afterwards discovered that there was some defect in the
election of the directors or of such person acting as
aforesaid or that they or any of them were disqualified, be as
valid as if the directors or such other person, as the case
may be, had been duly elected and were or was qualified to
be directors or a director of the Corporation.
Section 3.03. Election of Directors:
Initially the directors of the Corporation shall be
those persons named as such in the Articles of
Incorporation. Thereafter, except as otherwise provided in
Section 3.04 and 3.05 hereof, the directors shall be elected
at the an annual stockholders? meeting. In the event that the
directors are not elected at the annual stockholders?
meeting, then directors may be elected at a special
stockholders? meeting. A plurality of all the votes cast at a
meeting at which a quorum is present in person or by proxy
is sufficient to elect a director.
Section 3.04. Removal of Directors:
At any stockholders' meeting duly called, provided a
quorum is present, any director may be removed (either
with or without cause) by the vote of the holders of a
majority of the shares represented at the meeting, and at the
same meeting a duly qualified person may be elected in his
stead by a majority of the votes validly cast.
Section 3.05. Vacancies and Newly Created
Directorships:
If any vacancies shall occur in the board of directors
by reason of death, resignation, removal or otherwise, or if
the authorized number of directors shall be increased, the
directors then in office shall continue to act, and such
vacancies (if not previously filled by the stockholders) may
be filled by a majority of the directors then in office,
although less than a quorum, except that a newly created
directorship may be filled only by a majority vote of the
entire board of directors, provided that in either case
immediately after filling such vacancy, at least two-thirds of
the directors then holding office shall have been elected to
such office by the stockholders of the Corporation. In the
event that at any time, other than the time preceding the first
stockholders' meeting, less than a majority of the directors
of the Corporation holding office at that time were so
elected by the stockholders, a meeting of the stockholders
shall be held promptly and in any event within 60 days for
the purpose of electing directors to fill any existing
vacancies in the board of directors unless the Securities and
Exchange Commission shall by order extend such period.
Section 3.06. General Powers:
The property, affairs and business of the
Corporation shall be managed by or under the direction of
the board of directors, which may exercise all the powers of
the Corporation except those powers vested solely in the
stockholders of the Corporation by statute, by the Articles
of Incorporation or by these By-Laws.
Section 3.07. Power to Issue and Sell Stock:
The board of directors may from time to time issue
and sell or cause to be issued and sold any of the
Corporation's authorized shares to such persons and for
such consideration as the board of directors shall deem
advisable, subject to the provisions of Article SEVENTH of
the Articles of Incorporation.
Section 3.08. Power to Declare Dividends:
(a) The board of directors, from time to time as
it may deem advisable, may declare and pay dividends in
stock, cash or other property of the Corporation, out of any
source available for dividends, to the stockholders
according to their respective rights and interests in
accordance with the applicable provisions of the Article
FIFTH of the Articles of Incorporation.
(b) The board of directors may prescribe from
time to time that dividends declared may be payable at the
election of any of the stockholders (exercisable before of
after the declaration of the dividend), either in cash or in
shares of the Corporation, provided that the sum of the cash
dividend actually paid to any stockholder and the asset value
of the shares received (determined as of such time as the
board of directors shall have prescribed, pursuant to Section
1.02 or Article SEVENTH of the Articles of Incorporation,
with respect to shares sold on the date of such election)
shall not exceed the full amount of cash to which the
stockholder would be entitled if he elected to receive only
cash.
(c) The board of directors shall cause to be
accompanied by a written statement any dividend payment
wholly or partly from any source other than:
(i) the Corporation's accumulated undistributed
net income (determined in accordance with
good accounting practice and the rules and
regulations of the Securities and Exchange
Commission then in effect) and not including
profits or losses realized upon the sale of
securities or other properties; or
(ii) the Corporation's net income so determined
for the current or preceding fiscal year. Such
statement shall adequately disclose the
source or sources of such payment and the
basis of calculation, and shall be in such form
as the Securities and Exchange Commission
may prescribe.
Section 3.09. Annual and Regular Meetings:
The annual meeting of the board of directors for
choosing officers and transacting other proper business shall
be held at such time and place as the board may determine.
The board of directors from time to time may provide by
resolution for the holding of regular meetings and fix their
time and place within or outside the State of Maryland.
Except as otherwise provided under the Investment
Company Act of 1940, as amended, notice of such annual
and regular meetings need not be given, provided that
notice of any change in the time or place of such meetings
shall be sent promptly to each director not present at the
meeting at which such change was made in the manner
provided for notice of special meetings. Except as
otherwise provided under the Investment Company Act of
1940, as amended, members of the board of directors or any
committee designated thereby may participate in a meeting
of such board or committee by means of a conference
telephone or similar 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.
Section 3.10. Special Meetings:
Special meetings of the board of directors shall be
held whenever called by the chairman of the board, the
president (or, in the absence or disability of the president, by
any vice president), the treasurer, or two or more directors,
at the time and place within or outside the State of
Maryland specified in the respective notices or waivers of
notice of such meetings.
Section 3.11. Notice:
Notice of any special meetings, stating the time and
place, shall be mailed to each director at his residence or
regular place of business at least three days before the day
on which the special meeting is to be held or caused to be
delivered to him personally or to be transmitted to him by
telegraph, cable or wireless at least one day before the
meeting.
Section 3.12. Waiver of Notice:
No notice of any meeting need be given to any
director who attends such meeting in person or to any
director who waives notice of such meeting in writing
(which waiver shall be filed with the records of such
meeting), whether before or after the time of the meeting.
Section 3.13. Quorum and Voting:
At all meetings of the board of directors the
presence of one-half or more of the number of directors
then in office shall constitute a quorum for the transaction
of business, provided that there shall be present no fewer
than two directors. In the absence of a quorum, a majority
of the directors present may adjourn the meeting, from time
to time, until a quorum shall be present. The action of a
majority of the directors present at a 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 law, by the Articles of
Incorporation or by these By-Laws.
Section 3.14. Compensation:
Each director may receive such remuneration for his
services as shall be fixed from time to time by resolution of
the board of directors.
Section 3.15. Action Without a Meeting:
Except as otherwise provided under the Investment
Company Act of 1940, as amended, any action required or
permitted to be taken at any meeting of the board of
directors or any committee thereof may be taken without a
meeting if a written consent to such action is signed by all
members of the board or of such committee, as the case
may be, and such written consents are filed with the minutes
of proceedings of the board or committee.
ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER
COMMITTEES
Section 4.01. How Constituted:
By resolution adopted by the board of directors, the
board may designate one or more committees, including an
executive committee, each consisting of at least two
directors. Each member of a committee shall be a director
and shall hold office during the pleasure of the board. The
board of directors shall have the power at any time to
change the members of such committees and to fill
vacancies in the committees. The chairman of the board, if
any, shall be a member of the executive committee.
Section 4.02. Powers of the Executive Committee:
Unless otherwise provided by resolution of the
board of directors, when the board of directors is not in
session the executive committee shall have and may exercise
all powers of the board of directors in the management of
the business and affairs of the Corporation that may lawfully
be exercised by an executive committee, except the power
to declare a dividend, to authorize the issuance of stock, to
recommend to stockholders any matter requiring
stockholders' approval, to amend the By-Laws, approve any
merger or share exchange which does not require
shareholder approval or approve or terminate any contract
with the investment adviser or principal underwriter, as
those terms are defined in the Investment Company Act of
1940, as amended, or to take any other action required by
the Investment Company Act of 1940, as amended, to be
taken by the board of directors.
Section 4.03. Powers of Other Committees of the
Board of Directors:
To the extent provided by resolution of the board,
other committees of the board of directors shall have an
may exercise any of the powers that may lawfully be granted
to the executive committee.
Section 4.04. Proceedings, Quorum and Manner of
Acting:
In the absence of an appropriate resolution of the
board of directors, each committee may adopt such rules
and regulations governing its proceedings, quorum and
manner of acting as it shall deem proper and desirable,
provided that the quorum shall not be less than two
directors. In the absence of any member of any 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 4.05. Other Committees:
The board of directors may appoint other
committees, each consisting of one or more persons, who
need not be directors. Each such committee shall have such
powers and perform such duties as may be assigned to it
from time to time by the board of directors, but shall not
exercise any power which may lawfully be exercised only by
the board of directors or a committee thereof.
ARTICLE V
OFFICERS
Section 5.01. Officers:
The officers of the Corporation shall be a president,
a secretary and a treasurer, and may include one or more
vice presidents, assistant secretaries or assistant treasurers,
and such other officers as may be appointed in accordance
with the provisions of Section 5.11 hereof. The board of
directors may elect, but shall not be required to elect, a
chairman of the board.
Section 5.02. Election, Term of Office and
Qualifications:
The officers of the Corporation (except those
appointed pursuant to Section 5.11 hereof) shall be chosen
by the board of directors at its first meeting or such
subsequent meetings as shall be held prior to its first annual
meeting, and thereafter annually at its annual meeting. If
any officers are not chosen at any annual meeting, such
officers may be chosen at any subsequent regular or special
meeting of the board. Except as provided in Sections 5.03,
5.04 and 5.05 hereof, each officer elected by the board of
directors shall hold office until the next annual meeting of
the board of directors and until his successor shall have been
chosen and qualified. Any person may hold one or more
offices of the Corporation except that the president may not
hold the office of vice president and provided further that a
person who holds more than one office may not act in more
than one capacity to execute, acknowledge or verify an
instrument required by law to be executed, acknowledged
or verified by more than one officer. The chairman of the
board shall be chosen from among the directors of the
Corporation and may hold such office only so long as he
continues to be a director. No other officer need be a
director.
Section 5.03. Resignation:
Any officer may resign his or her office at any time
by delivering a written resignation to the board of directors,
the president, the secretary, or any assistant secretary.
Unless otherwise specified therein, such resignation shall
take effect upon delivery.
Section 5.04. Removal:
Any officer may be removed from office whenever in
the board's judgment the best interest of the Corporation
will be served thereby, by the vote of a majority of the
board of directors given at the regular meeting or any
special meeting called for such purpose. In addition, any
officer or agent appointed in accordance with the provisions
of Section 5.11 hereof may be removed, either with or
without cause, by any officer upon whom such power of
removal shall have been conferred by the board of directors.
Section 5.05. Vacancies and Newly Created
Offices:
If any vacancy shall occur in any office by reason of
death, resignation, removal, disqualification or other cause,
or if any new office shall be created, such vacancies or
newly created offices may be filled by the board of directors
at any regular or special meeting or, in the case of any office
created pursuant to Section 5.11 hereof, by any officer upon
whom such power shall have been conferred by the board of
directors.
Section 5.06. Chairman of the Board:
The chairman of the board, if there be such an
officer, shall be the senior officer of the Corporation, shall
preside at all stockholders? meetings and at all meetings of
the board of directors and shall be ex officio a member of all
committees of the board of directors. He shall have such
other powers and perform such other duties as may be
assigned to him from time to time by the board of directors.
Section 5.07. President:
The president shall be the chief executive officer of
the Corporation and, in the absence of the chairman of the
board or if no chairman of the board has been chosen, he
shall preside at all stockholders' meetings and at all meetings
of the board of directors and shall in general exercise the
powers and perform the duties of the chairman of the board.
Subject to the supervision of the board of directors, he shall
have general charge of the business, affairs and property of
the Corporation and general supervision over its officers,
employees and agents. Except as the board of directors
may otherwise order, he may sign in the name and on behalf
of the Corporation all deeds, bonds, contracts or
agreements. He shall exercise such other powers and
perform such duties as from time to time may be assigned to
him by the board of directors.
Section 5.08. Vice President:
The board of directors may from time to time
designate and elect one or more vice presidents who shall
have such powers and perform such duties as from time to
time may be assigned to them by the board of directors or
the president. At the request or in the absence or disability
of the president, the vice president (or, if there are two or
more vice presidents, the then senior of the vice presidents
present and able to act) may perform all the duties of the
president and, when so acting, shall have all the powers of
and be subject to all the restrictions upon the president.
Section 5.09. Treasurer and Assistant Treasurers:
The treasurer shall be the principal financial and
accounting officer of the Corporation and shall have general
charge of the finances and books of account of the
Corporation. Except as otherwise provided by the board of
directors, he shall have general supervision of the funds and
property of the Corporation and of the performance by the
custodian of its duties with respect thereto. He shall render
to the board of directors, whenever directed by the board,
an account of the financial condition of the Corporation and
of all his transactions as treasurer; and as soon as possible
after the close of each financial year he shall make and
submit to the board of directors a like report for such
financial year. He shall cause to be prepared annually a full
and correct statement of the affairs of the Corporation,
including a balance sheet and a financial statement of
operations for the preceding fiscal year, which shall be
submitted at the annual meeting of stockholders and filed
within 20 days thereafter at the principal office of the
Corporation in the State of Maryland. He shall perform all
the acts incidental to the office of treasurer, subject to the
control of the board of directors.
Any assistant treasurer may perform such duties of
the treasurer as the treasurer or the board of directors may
assign, and, in the absence of the treasurer, may perform all
the duties of the treasurer.
Section 5.10. Secretary and Assistant Secretaries:
The secretary shall attend to the giving and serving
of all notices of the Corporation and shall record all
proceedings of the meetings of the stockholders and
directors in the books to be kept for that purpose. He shall
keep in safe custody the seal of the Corporation, and shall
have charge of the records of the Corporation, including the
stock books and such other books and papers as the board
of directors may direct and such books, reports, certificates
and other documents required by law to be kept, all of
which shall at all reasonable times be open to inspection by
any director. He shall perform such other duties as
appertain to his office or as may be required by the board of
directors.
Any assistant secretary may perform such duties of
the secretary as the secretary or the board of directors may
assign, and, in the absence of the secretary, may perform all
the duties of the secretary.
Section 5.11. Subordinate Officers:
The board of directors from time to time may
appoint such other officers or agents as it may deem
advisable, each of whom shall have such title, hold office for
such period, have such authority and perform such duties as
the board of directors may determine. 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 their
respective rights, terms of office, authorities and duties.
Section 5.12. Remuneration:
The salaries or other compensation of the officers of
the Corporation shall be fixed from time to time by
resolution of the board of directors, except that the board of
directors may by resolution delegate to any person or group
of persons the power to fix the salaries or other
compensation of any subordinate officers or agents
appointed in accordance with the provisions of Section 5.11
hereof.
Section 5.13. Surety Bonds:
The board of directors may require any officer or
agent of the Corporation to execute a bond (including,
without limitation, any bond required by the Investment
Company Act of 1940, as amended, and the rules and
regulations of the Securities and Exchange Commission
promulgated thereunder) to the Corporation in such sum
and with such surety or sureties as the board of directors
may determine, conditioned upon the faithful performance
of his duties to the Corporation, including responsibility for
negligence and for the accounting of any of the
Corporation's property, funds or securities that may come
into his or her hands.
ARTICLE VI
CUSTODY OF SECURITIES
Section 6.01. Employment of a Custodian:
The Corporation shall place and at all times maintain
in the custody of a custodian (including any sub-custodian
for the custodian) all funds, securities and similar
investments owned by the Corporation. The custodian (and
any sub-custodian) shall be a bank having not less than
$2,000,000 aggregate capital, surplus and undivided profits
and shall be appointed from time to time by the board of
directors, which shall fix its remuneration.
Section 6.02. Action Upon Termination of
Custodian Agreement:
Upon termination of a custodian agreement or
inability of the custodian to continue to serve, the board of
directors shall promptly appoint a successor custodian, but
in the event that no successor custodian can be found who
has the required qualifications and is willing to serve, the
board of directors shall call as promptly as possible a special
meeting of the stockholders to determine whether the
Corporation shall function without a custodian or shall be
liquidated. If so directed by vote of the holders of a
majority of the outstanding shares of stock of the
Corporation, the custodian shall deliver and pay over all
property of the Corporation held by it as specified in such
vote.
Section 6.03. Provisions of Custodian Contract:
The following provisions shall apply to the
employment of a custodian and to any contract entered into
with the custodian so employed:
The board of directors shall cause to be delivered to
the custodian all securities owned by the Corporation or to
which it may become entitled, and shall order the same to be
delivered by the custodian only in completion of a
sale, exchange, transfer, pledge, or other disposition
thereof, all as the board of directors may generally or from
time to time require or approve or to a successor
custodian; and the board of directors shall cause all funds
owned by the Corporation or to which it may become
entitled to be paid to the custodian, and shall order the
same disbursed only for investment against delivery of the
securities acquired, or in payment of expenses,
including management compensation, and liabilities of
the Corporation, including distributions to shareholders, or
to a successor custodian.
Section 6.04. Other Arrangements:
The Corporation may make such other arrangements
for the custody of its assets (including deposit
arrangements) as may be required by any applicable law,
rule or regulation.
ARTICLE VII
EXECUTION OF INSTRUMENTS, VOTING OF
SECURITIES
Section 7.01. General:
Subject to the provisions of Sections 5.07, 7.02 and
8.03 hereof, all deeds, documents, transfers, contracts,
agreements and other instruments requiring execution by the
Corporation shall be signed by the president or a vice
president and by the treasurer or secretary or an assistant
treasurer or an assistant secretary, or as the board of
directors may otherwise, from time to time, authorize. Any
such authorization may be general or confined to specific
instances.
Section 7.02. Checks, Notes, Drafts, Etc.:
So long as the Corporation shall employ a custodian
to keep custody of the cash and securities of the
Corporation, all checks and drafts for the payment of money
by the Corporation may be signed in the name of the
Corporation by the custodian. Except as otherwise
authorized by the board of directors, all requisitions or
orders for the assignment of securities standing in the name
of the custodian or its nominee, or for the execution of
powers to transfer the same, shall be signed in the name of
the Corporation by the president or a vice president and by
the treasurer or an assistant treasurer. Promissory notes,
checks or drafts payable to the Corporation may be
endorsed only to the order of the custodian or its nominee
and only by the treasurer or president or a vice president or
by such other person or persons as shall be authorized by
the board of directors.
Section 7.03. Voting of Securities:
Unless otherwise ordered by the board of directors,
the president or any vice president shall have full power and
authority on behalf of the Corporation to attend and to act
and to vote, or in the name of the Corporation to execute
proxies to vote, at any meeting of stockholders of any
company in which the Corporation may hold stock. At any
such meeting such officer shall possess and may exercise (in
person or by proxy) any and all rights, powers and
privileges incident to the ownership of such stock. The
board of directors may by resolution from time to time
confer like powers upon any other person or persons.
ARTICLE VIII
CAPITAL STOCK
Section 8.01. Certificate of Stock:
(a) No certificates certifying the ownership of
shares shall be issued except as the directors may otherwise
authorize. In the event that the directors authorize the
issuance of share certificates, certificates of stock shall be in
the form approved by the board of directors, signed in the
name of the Corporation by the president of any vice
president and by the treasurer or any assistant treasurer or
the secretary or any assistant secretary, sealed with the seal
of the Corporation and certifying the number and kind of
shares owned by the stockholder in the Corporation. Such
signatures and seal may be a facsimile and may be
mechanically reproduced thereon. The certificates
containing such facsimiles shall be valid for all intents and
purposes.
(b) In case any officer who shall have signed any
such certificate, or whose facsimile signature has been
placed thereon, shall cease to be such officer (because of
death, resignation or otherwise) before such certificate is
issued, such certificates may be issued an delivered by the
Corporation with the same effect as if he were such officer
at the date of issue.
(c) The number of each certificate issued, the
name of the person owning the shares represented thereby,
the number of such shares and the date of issuance shall be
entered upon the stock ledger of the Corporation at the time
of issuance.
(d) Every certificate exchanged, surrendered for
redemption or otherwise returned to the Corporation shall
be marked ?Canceled? with the date of cancellation.
(e) The directors may at any time discontinue
the issuance of share certificates and may, by written notice
to each stockholder, require the surrender of share
certificates to the Corporation for cancellation. Such
surrender and cancellation shall not affect the ownership of
shares the Corporation.
Section 8.02. Transfer of Capital Stock:
(a) Transfers of shares of the stock of the
Corporation shall be made on the books of the Corporation
by the holder of record thereof (in person or by his attorney
thereunto duly authorized by a power of attorney duly
executed in writing and filed with the secretary of the
Corporation) (i) if a certificate or certificates have been
issued, upon the surrender of the certificate or certificates,
properly endorsed or accompanied by proper instruments of
transfer, representing such shares, or (ii) as otherwise
prescribed by the board of directors.
(b) The Corporation shall be entitled to treat the
holder of record of any share of stock as the absolute owner
thereof for all purposes, and accordingly shall not be bound
to recognize any legal, equitable or other claim or interest in
such share on the part of any other person, whether or not it
shall have express or other notice thereof, except as
otherwise expressly provided by the statutes of the State of
Maryland.
Section 8.03. Transfer Agents and Registrars:
The board of directors may, from time to time,
appoint or remove transfer agents or registrars 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
transfer 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.
Section 8.04. Transfer Regulations:
Except as provided in Section II of Article
SEVENTH of the Articles of Incorporation, the shares of
stock of the Corporation may be freely transferred, subject
to the charging of customary transfer fees, 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.
Section 8.05. Fixing of Record Date:
The board of directors may fix in advance a date as a
record date for the determination of the stockholders
entitled to notice of or to vote at any stockholders' meeting
or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or to receive
payment of any dividend or other distribution or allotment
of any rights, or to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose
of any other lawful action; provided that such record date
shall be a date not more than 90 days prior to the date on
which the particular action requiring such determination of
stockholders of record will be taken, except that a meeting
of stockholders convened on the date for which it was
called may be adjourned from time to time without further
notice to a date not more than 120 days after the original
record date. In the case of a meeting of stockholders, the
record date shall be at least ten days before the date of the
meeting.
Section 8.06. Lost Stolen or Destroyed Certificates:
Before issuing a new certificate for stock of the
Corporation alleged to have been lost, stolen or destroyed,
the board of directors or any officer authorized by the board
may, in its discretion, require the owner of the lost, stolen
or destroyed certificate (or his legal representative) to give
the Corporation a bond or other indemnity, in such form
and in such amount as the board or any such officer may
direct and with such surety or sureties as may be
satisfactory to the board or any such officer, sufficient to
indemnify the Corporation against any claim that may be
made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such
new certificate.
ARTICLE IX
FISCAL YEAR, ACCOUNTANT
Section 9.01. Fiscal Year:
The fiscal year of the Corporation shall,
unless otherwise ordered by the board of directors, be
twelve calendar months beginning on the 1st day of July
each year and ending on the 31st day of the following June.
Section 9.02. Accountant:
(a) The Corporation shall employ and
independent public accountant or firm of independent public
accountants as its accountant to examine the accounts of the
Corporation and to sign and certify financial statements filed
by the Corporation. The accountant?s certificates and
reports shall be addressed both to the board of directors and
to the stockholders. The employment of the accountant
shall be conditioned upon the right of the Corporation to
terminate the employment forthwith without any penalty by
vote of a majority of the outstanding voting securities at any
stockholders? meeting called for that purpose.
(b) A majority of the members of the board of
directors who are not interested persons (as such term is
defined in the Investment Company Act of 1940, as
amended) of the Corporation shall select the accountant at
any meeting held within 90 days before or after the
beginning of the fiscal year of the Corporation or before the
annual stockholders? meeting in that year. Such selection
shall be submitted for ratification or rejection at the next
succeeding annual stockholders? meeting. If such meeting
shall reject such selection, the accountant shall be selected
by majority vote of the Corporation?s outstanding voting
securities, either at the meeting at which the rejection
occurred or at a subsequent meeting of stockholders called
for the purpose of selecting an accountant.
(c) Any vacancy occurring between annual
meetings, due to the death or resignation of the accountant,
may be filled by a majority vote of the members of the board
of directors who are not interested persons.
ARTICLE X
INDEMNIFICATION AND INSURANCE
Section 10.01. Indemnification of Officers,
Directors, Employees and Agents:
The Corporation shall indemnify its present and past
directors, officers, employees and agents, and any persons
who are serving or have served at the request of the
Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, or
enterprise, to the full extent provided and allowed by
Section 2-418 of the Annotated Corporations and
Associations Code of Maryland concerning corporations, as
amended from time to time or any other applicable
provisions of law. Notwithstanding anything herein to the
contrary, no director, officer, investment adviser or principal
underwriter of the Corporation shall be indemnified in
violation of Section 17(h) and (i) of the Investment
Company Act of 1940, as amended.
Section 10.02. Insurance of Officers, Directors,
Employees and Agents:
The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any
such capacity or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him
against such liability.
Section10.03. Amendment:
No amendment, alteration or repeal of this Article or
the adoption, alteration or amendment of any other
provision of the Articles of Incorporation or By-Laws
inconsistent with this Article, shall adversely affect any right
or protection of any person under this Article with respect
to any act or failure to act which occurred prior to such
amendment, alteration, repeal or adoption.
ARTICLE XI
AMENDMENTS
Section 11.01. General:
Except as provided in Section 11.02 hereof, all By-
Laws of the Corporation, whether adopted by the board of
directors or the stockholders, shall be subject to
amendment, alteration or repeal, and new By-Laws may be
made, by the affirmative vote of a majority of either:
(a) the holders of record of the outstanding
shares of stock of the Corporation entitled to vote, at any
annual or special meeting, the notice or waiver of notice of
which shall have specified or summarized the proposed
amendment, alteration, repeal or new By-Law; or
(b) the directors, at any regular or special
meeting the notice or waiver of notice of which shall have
specified or summarized the proposed amendment,
alteration, repeal or new By-Law.
Section 11.02. By Stockholders Only:
(a) No amendment of any section of these By-Laws
shall be made except by the stockholders of the Corporation
if the By-Laws provide that such section may not be
amended, altered or repealed except by the stockholders.
(b) From and after the issue of any shares of the
Capital Stock of the Corporation, no amendment of this
Article XI shall be made except by the stockholders of the
Corporation.
END OF BY-LAWS
Report of Independent Auditors
To the Shareholders and Board of Directors of
PaineWebber RMA Tax-Free Fund, Inc.
In planning and performing our audit of the financial
statements of PaineWebber RMA Tax-Free Fund, Inc.
for the year ended June 30, 1998, 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 to comply with the
requirements of Form N-SAR, not to provide assurance
on the internal control.
The management of PaineWebber RMA Tax-Free Fund,
Inc. is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates
and judgments 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 entitys 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 control, errors
or irregularities 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 the internal control would not
necessarily disclose all matters in the 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 errors or irregularities in
amounts that would be material in relation to the financial
statements 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 the internal control and its
operation, including controls for safeguarding securities,
that we consider to be material weaknesses as defined
above at June 30, 1998.
This report is intended solely for the information and use
of the board of directors and management of
PaineWebber RMA Tax-Free Fund, Inc. and the
Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
August 21, 1998
