<PAGE> PAGE 1
000 A000000 03/31/2000
000 C000000 0000818972
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 U
001 A000000 DREYFUS STRATEGIC MUNICIPALS, INC.
001 B000000 811-5245
001 C000000 2129226807
002 A000000 200 PARK AVENUE
002 B000000 NEW YORK
002 C000000 NY
002 D010000 10166
002 D020000 0144
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
018 000000 Y
019 A000000 Y
019 B000000 173
019 C000000 DREYFUSFAM
022 A000001 SALOMON SMITH BARNEY
022 B000001 13-1912900
022 C000001 200449
022 D000001 159190
022 A000002 GOLDMAN, SACHS & CO.
022 B000002 13-5108880
022 C000002 69700
022 D000002 62200
022 A000003 BEAR, STEARNS & CO. INC.
022 B000003 13-3299429
022 C000003 95895
022 D000003 34000
022 A000004 MORGAN STANLEY DEAN WITTER & CO.
022 B000004 13-2655998
022 C000004 53831
022 D000004 40564
022 A000005 LEHMAN BROTHERS INC.
022 B000005 13-2518466
022 C000005 48556
022 D000005 39352
022 A000006 FIRST ALBANY CORPORATION
022 B000006 14-1391446
022 C000006 51108
022 D000006 27065
<PAGE> PAGE 2
022 A000007 MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
022 B000007 13-5674085
022 C000007 48294
022 D000007 10261
022 A000008 J.P. MORGAN SECURITIES INC.
022 B000008 13-3224016
022 C000008 25259
022 D000008 13900
022 A000009 FIRST UNION CAPITAL MARKETS
022 B000009 56-1529080
022 C000009 20850
022 D000009 15000
022 A000010 J.C. BRADFORD & CO.
022 B000010 62-0136910
022 C000010 16335
022 D000010 918
023 C000000 693103
023 D000000 411981
055 A000000 N
055 B000000 N
056 000000 N
057 000000 N
062 A000000 Y
062 B000000 0.0
062 C000000 0.0
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
062 M000000 0.0
062 N000000 0.0
062 O000000 98.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
063 A000000 0
063 B000000 25.7
064 A000000 Y
064 B000000 N
066 A000000 N
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
070 A010000 Y
070 A020000 N
<PAGE> PAGE 3
070 B010000 N
070 B020000 N
070 C010000 Y
070 C020000 N
070 D010000 N
070 D020000 N
070 E010000 Y
070 E020000 N
070 F010000 N
070 F020000 N
070 G010000 Y
070 G020000 N
070 H010000 N
070 H020000 N
070 I010000 Y
070 I020000 N
070 J010000 Y
070 J020000 Y
070 K010000 Y
070 K020000 N
070 L010000 N
070 L020000 N
070 M010000 N
070 M020000 N
070 N010000 Y
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 Y
070 P020000 N
070 Q010000 N
070 Q020000 N
070 R010000 N
070 R020000 N
071 A000000 346203
071 B000000 66667
071 C000000 614044
071 D000000 11
072 A000000 6
072 B000000 21128
072 C000000 0
072 D000000 0
072 E000000 0
072 F000000 2346
072 G000000 0
072 H000000 0
072 I000000 85
072 J000000 49
072 K000000 0
072 L000000 8
072 M000000 31
<PAGE> PAGE 4
072 N000000 22
072 O000000 0
072 P000000 0
072 Q000000 0
072 R000000 17
072 S000000 61
072 T000000 0
072 U000000 0
072 V000000 0
072 W000000 126
072 X000000 2745
072 Y000000 0
072 Z000000 18383
072AA000000 9
072BB000000 7894
072CC010000 0
072CC020000 372
072DD010000 16160
072DD020000 1749
072EE000000 896
073 A010000 0.2760
073 A020000 0.0299
073 B000000 0.0153
073 C000000 0.0000
074 A000000 0
074 B000000 0
074 C000000 0
074 D000000 811101
074 E000000 0
074 F000000 0
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 35357
074 K000000 0
074 L000000 14892
074 M000000 51
074 N000000 861401
074 O000000 36438
074 P000000 553
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 383
074 S000000 0
074 T000000 824027
074 U010000 58549
074 U020000 11
074 V010000 9.21
074 V020000 0.00
<PAGE> PAGE 5
074 W000000 0.0000
074 X000000 5608
074 Y000000 0
075 A000000 0
075 B000000 625666
076 000000 8.00
077 A000000 Y
077 C000000 Y
077 I000000 Y
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 11
086 C020000 285000
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
087 A010000 SERIES M AUCTION PREFERRED STOCK
087 A020000 261932206
087 B010000 SERIES T AUCTION PREFERRED STOCK
087 B020000 261932305
087 C010000 SERIES W AUCTION PREFERRED STOCK;(AND TH & F)
087 C020000 261932404
088 A000000 N
088 B000000 N
088 C000000 N
088 D000000 Y
SIGNATURE ROBERT R. MULLERY
TITLE ASSISTANT SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000818972
<NAME> DREYFUS STRATEGIC MUNICPALS, INC.
<SERIES>
<NUMBER> 001
<NAME> DREYFUS STRATEGIC MUNICIPALS, INC. - COMMON STOCK
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<INVESTMENTS-AT-COST> 815816
<INVESTMENTS-AT-VALUE> 811101
<RECEIVABLES> 50249
<ASSETS-OTHER> 51
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 861401
<PAYABLE-FOR-SECURITIES> 36438
<SENIOR-LONG-TERM-DEBT> 036
<OTHER-ITEMS-LIABILITIES> 936
<TOTAL-LIABILITIES> 37374
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 552304
<SHARES-COMMON-STOCK> 58549
<SHARES-COMMON-PRIOR> 58549
<ACCUMULATED-NII-CURRENT> (544)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (8019)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4714)
<NET-ASSETS> 539027
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21128
<OTHER-INCOME> 0
<EXPENSES-NET> 2745
<NET-INVESTMENT-INCOME> 18383
<REALIZED-GAINS-CURRENT> (7885)
<APPREC-INCREASE-CURRENT> (372)
<NET-CHANGE-FROM-OPS> 10126
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16160)
<DISTRIBUTIONS-OF-GAINS> (896)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 273272
<ACCUMULATED-NII-PRIOR> (1019)
<ACCUMULATED-GAINS-PRIOR> 763
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2346
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2745
<AVERAGE-NET-ASSETS> 625666
<PER-SHARE-NAV-BEGIN> 9.41
<PER-SHARE-NII> .31
<PER-SHARE-GAIN-APPREC> (.13)
<PER-SHARE-DIVIDEND> (.31)
<PER-SHARE-DISTRIBUTIONS> (.02)
<RETURNS-OF-CAPITAL> (.05)
<PER-SHARE-NAV-END> 9.21
<EXPENSE-RATIO> .009
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000818972
<NAME> DREYFUS STRATEGIC MUNICIPALS, INC.
<SERIES>
<NUMBER> 002
<NAME> DREYFUS STRATEGIC MUNICIPALS, INC. - AUCTION PREFERRED STOCK
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 285000
<SHARES-COMMON-STOCK> 11
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 285000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 281950
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
</TABLE>
EXHIBIT 77C
A Special Meeting of Shareholders was held on October 15, 1999. The only
proposal before stockholders was as follows: To approve a change to a
fundamental policy of the fund to permit the fund to issue preferred stock.
58,549,216 stockholders of record at the close of business on September 7,
1999 were entitled to receive notice of and to vote at the meeting. The
results of the vote were as follows:
31,503,930 shares of common stock of the fund were represented at the meeting
in person or by proxy. 24,412,465 shares had been voted in favor of the
proposal to change a Fundamental Policy of the fund to permit the fund to
issue preferred stock, 5,508,512 shares had been voted against such proposal,
and 1,582,953 shares had abstained from voting thereon.
EXHIBIT 77I
On January 26, 2000, the fund's Board of Directors reclassified 11,400 shares
of capital stock as Auction Preferred Stock ("APS"). On January 27, 2000, the
fund issued 2,280 shares of Series M, 2,280 shares of Series T, 2,280 shares
of Series W, 2,280 shares of Series TH and 2,280 shares of Series F APS, with
a liquidation preference of $25,000 per share (plus an amount equal to
accumulated but unpaid dividends upon liquidation). The initial dividend rate
on the APS was 3.60% per annum for each series payable on February 8, 2000
for Series M, February 9, 2000 for Series T, February 10, 2000 for Series W,
February 11, 2000 for Series TH and February 14, 2000 for Series F.
Subsequent dividend rates are determined at auction generally every 7 days.
Banker's Trust Company, as Auction Agent, receives a fee from the fund for
its services in connection with such auctions. The fund also compensates
broker-dealers generally at an annual rate of .25% of the purchase price of
the shares of APS placed by the broker-dealer at auction. The fund is subject
to certain restrictions relating to the APS. Failure to comply with these
restrictions could preclude the fund from declaring any distributions to
common shareholders or repurchasing common shares and/or could trigger the
mandatory redemption of APS at liquidation value. The holders of the APS,
voting as a separate class, have the right to elect at least two directors.
The holders of the APS will vote as a separate class on certain other
matters, as required by law. The fund has designated Robin A. Pringle and
John E. Zuccotti to represent holders of APS on the fund's Board of
Directors. For additional information on the fund's APS, please refer to the
fund's definitive Prospectus for the APS filed via EDGAR on Form 497H2 on
January 27, 2000. Articles Supplementary and Amended By-Laws filed in
connection with the fund's APS are part of Exhibit 77Q.
EXHIBIT 77Q
DREYFUS STRATEGIC MUNICIPALS, INC.
Articles Supplementary Creating Five Series of
Auction Preferred Stock
Dreyfus Strategic Municipals, Inc., a Maryland corporation having its
principal Maryland office in the City of Baltimore in the State of Maryland
(the "Corporation"), certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to authority expressly vested in the board of directors
of the Corporation by Article FIFTH of its Articles of Incorporation, the
Board of Directors has classified from the Corporation's capital stock and
authorized the issuance of five series of 2,280 shares each of authorized
preferred stock, par value $0.001 per share, liquidation preference $25,000
per share, designated respectively: Auction Preferred Stock, Series M,
Auction Preferred Stock, Series T, Auction Preferred Stock, Series W, Auction
Preferred Stock, Series TH and Auction Preferred Stock, Series F.
SECOND: Pursuant to Section 2-411 of the Maryland General Corporation
Law and authority granted by Article II of the Corporation's By-laws, the
Board of Directors of the Corporation has appointed a pricing committee (the
"Pricing Committee") and has authorized such Pricing Committee to fix,
consistent with, and subject to, the authorization referred to in Article
FIRST of these Articles Supplementary, the terms of the shares of Auction
Preferred Stock, Series M, Auction Preferred Stock, Series T, Auction
Preferred Stock, Series W, Auction Preferred Stock, Series TH and Auction
Preferred Stock, Series F.
THIRD: The preferences, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption, of the
shares of such series of preferred stock are as follows:
DESIGNATION
Series M: A series of 2,280 shares of preferred stock, par value $0.001
per share, liquidation preference $25,000 per share, hereby is designated
"Auction Preferred Stock Series M." Each share of Auction Preferred Stock,
Series M shall be issued on the Date of Original Issue (as herein defined);
and have such other preferences, limitations and relative voting rights, in
addition to those required by applicable law or set forth in the
Corporation's Articles of Incorporation applicable to preferred stock of the
Corporation, as are set forth in these Articles Supplementary. The Auction
Preferred Stock, Series M shall constitute a separate series of preferred
stock of the Corporation, and each share of Auction Preferred Stock, Series M
shall be identical.
Series T: A series of 2,280 shares of preferred stock, par value $0.001
per share, liquidation preference $25,000 per share, hereby is designated
"Auction Preferred Stock Series T." Each share of Auction Preferred Stock,
Series T shall be issued on the Date of Original Issue (as herein defined);
and have such other preferences, limitations and relative voting rights, in
addition to those required by applicable law or set forth in the
Corporation's Articles of Incorporation applicable to preferred stock of the
Corporation, as are set forth in these Articles Supplementary. The Auction
Preferred Stock, Series T shall constitute a separate series of preferred
stock of the Corporation, and each share of Auction Preferred Stock, Series T
shall be identical.
Series W: A series of 2,280 shares of preferred stock, par value $0.001
per share, liquidation preference $25,000 per share, hereby is designated
"Auction Preferred Stock Series W." Each share of Auction Preferred Stock,
Series W shall be issued on the Date of Original Issue (as herein defined);
and have such other preferences, limitations and relative voting rights, in
addition to those required by applicable law or set forth in the
Corporation's Articles of Incorporation applicable to preferred stock of the
Corporation, as are set forth in these Articles Supplementary. The Auction
Preferred Stock, Series W shall constitute a separate series of preferred
stock of the Corporation, and each share of Auction Preferred Stock, Series W
shall be identical.
Series TH: A series of 2,280 shares of preferred stock, par value
$0.001 per share, liquidation preference $25,000 per share, hereby is
designated "Auction Preferred Stock Series TH." Each share of Auction
Preferred Stock, Series TH shall be issued on the Date of Original Issue (as
herein defined); and have such other preferences, limitations and relative
voting rights, in addition to those required by applicable law or set forth
in the Corporation's Articles of Incorporation applicable to preferred stock
of the Corporation, as are set forth in these Articles Supplementary. The
Auction Preferred Stock, Series TH shall constitute a separate series of
preferred stock of the Corporation, and each share of Auction Preferred
Stock, Series TH shall be identical.
Series F: A series of 2,280 shares of preferred stock, par value $0.001
per share, liquidation preference $25,000 per share, hereby is designated
"Auction Preferred Stock Series F." Each share of Auction Preferred Stock,
Series F shall be issued on the Date of Original Issue (as herein defined);
and have such other preferences, limitations and relative voting rights, in
addition to those required by applicable law or set forth in the
Corporation's Articles of Incorporation applicable to preferred stock of the
Corporation, as are set forth in these Articles Supplementary. The Auction
Preferred Stock, Series F shall constitute a separate series of preferred
stock of the Corporation, and each share of Auction Preferred Stock, Series F
shall be identical.
1. Definitions.
(a) Capitalized terms not defined in this paragraph 1 shall have
the respective meanings specified in paragraph 10 hereof. Unless the context
or use indicates another or different meaning, the following terms shall have
the following meanings, whether used in the singular or plural:
"'AA' Composite Commercial Paper Rate," on any Valuation Date,
means (i) the Interest Equivalent of the rate on commercial paper placed on
behalf of issuers whose corporate bonds are rated "AA" by S&P or "Aa" by
Moody's or the equivalent of such rating by another nationally recognized
statistical rating organization, as such rate is made available on a discount
basis or otherwise by the Federal Reserve Bank of New York for the Business
Day immediately preceding such date, or (ii) in the event that the Federal
Reserve Bank of New York does not make available such a rate, then the
arithmetic average of the Interest Equivalent of the rate on commercial paper
placed on behalf of such issuers, as quoted on a discount basis or otherwise
by PaineWebber Incorporated or its successors that are Commercial Paper
Dealers, to the Auction Agent for the close of business on the Business Day
immediately preceding such date. If one of the Commercial Paper Dealers does
not quote a rate required to determine the "AA" Composite Commercial Paper
Rate, the "AA" Composite Commercial Paper Rate will be determined on the
basis of the quotation or quotations furnished by any Substitute Commercial
Paper Dealer or Substitute Commercial Paper Dealers selected by the Fund to
provide such rate or rates not being supplied by the Commercial Paper Dealer.
If the number of Dividend Period days shall be (i) 7 or more but fewer than
49 days, such rate shall be the Interest Equivalent of the 30-day rate on
such commercial paper; (ii) 49 or more but fewer than 70 days, such rate
shall be the Interest Equivalent of the 60-day rate on such commercial paper;
(iii) 70 or more days but fewer than 85 days, such rate shall be the
arithmetic average of the Interest Equivalent of the 60-day and 90-day rates
on such commercial paper; (iv) 85 or more days but fewer than 99 days, such
rate shall be the Interest Equivalent of the 90-day rate on such commercial
paper; (v) 99 or more days but fewer than 120 days, such rate shall be the
arithmetic average of the Interest Equivalent of the 90-day and 120-day rates
on such commercial paper; (vi) 120 or more days but fewer than 141 days, such
rate shall be the Interest Equivalent of the 120-day rate on such commercial
paper; (vii) 141 or more days but fewer than 162 days, such rate shall be the
arithmetic average of the Interest Equivalent of the 120-day and 180-day
rates on such commercial paper; and (viii) 162 or more days but fewer than
183 days, such rate shall be the Interest Equivalent of the 180-day rate on
such commercial paper.
"Accountant's Confirmation" has the meaning set forth in paragraph
7(c) of these Articles Supplementary.
"Additional Dividend" has the meaning set forth in paragraph 2(e)
of these Articles Supplementary.
"Adviser" means the Corporation's investment adviser which shall be
The Dreyfus Corporation or any other entity that may serve as the
Corporation's investment adviser.
"Affiliate" means any Person known to the Auction Agent to be
controlled by, in control of, or under common control with, the Corporation.
"Agent Member" means a member of the Securities Depository that
will act on behalf of a Beneficial Owner of one or more shares of APS or a
Potential Beneficial Owner.
"Anticipation Notes" shall mean the following Municipal
Obligations: revenue anticipation notes, tax anticipation notes, tax and
revenue anticipation notes, grant anticipation notes and bond anticipation
notes.
"Applicable Percentage" has the meaning set forth in paragraph
10(a)(vii) of these Articles Supplementary.
"Applicable Rate" means the rate per annum at which cash dividends
are payable on the APS or Other APS, as the case may be, for any Dividend
Period.
"APS" means, as the case may be, the Auction Preferred Stock.
"APS Basic Maintenance Amount," as of any Valuation Date, means the
dollar amount equal to (i) the sum of (A) the product of the number of shares
of APS and Other APS Outstanding on such Valuation Date multiplied by the sum
of (a) $25,000 and (b) any applicable redemption premium attributable to the
designation of a Premium Call Period; (B) the aggregate amount of cash
dividends (whether or not earned or declared) that will have accumulated for
each share of APS and Other APS Outstanding, in each case, to (but not
including) the end of the current Dividend Period for each series of APS that
follows such Valuation Date in the event the then current Dividend Period
will end within 49 calendar days of such Valuation Date or through the 49th
day after such Valuation Date in the event the then current Dividend Period
for each series of APS will not end within 49 calendar days of such Valuation
Date; (C) in the event the then current Dividend Period will end within 49
calendar days of such Valuation Date, the aggregate amount of cash dividends
that would accumulate at the Maximum Applicable Rate applicable to a Dividend
Period of 28 or fewer days on any shares of APS and Other APS Outstanding
from the end of such Dividend Period through the 49th day after such
Valuation Date, multiplied by the S&P Volatility Factor, determined from time
to time by S&P (except that if such Valuation Date occurs during a Non-
Payment Period, the cash dividend for purposes of calculation would
accumulate at the then current Non-Payment Period Rate); (D) the amount of
anticipated expenses of the Corporation for the 90 days subsequent to such
Valuation Date (including any premiums payable with respect to a Policy); (E)
the amount of the Corporation's Maximum Potential Additional Dividend
Liability as of such Valuation Date; and (F) any current liabilities as of
such Valuation Date to the extent not reflected in any of (i)(A) through
(i)(E) (including, without limitation, and immediately upon determination,
any amounts due and payable by the Corporation pursuant to repurchase
agreements and any amounts payable for Municipal Obligations purchased as of
such Valuation Date) less (ii) either (A) the Discounted Value of any of the
Corporation's assets, or (B) the face value of any of the Corporation's
assets if such assets mature prior to or on the date of redemption of APS or
payment of a liability and are either securities issued or guaranteed by the
United States Government or Deposit Securities, in both cases irrevocably
deposited by the Corporation for the payment of the amount needed to redeem
shares of APS subject to redemption or to satisfy any of (i)(B) through
(i)(F).
"APS Basic Maintenance Cure Date," with respect to the failure by
the Corporation to satisfy the APS Basic Maintenance Amount (as required by
paragraph 7(a) of these Articles Supplementary) as of a given Valuation Date,
means the second Business Day following such Valuation Date.
"APS Basic Maintenance Report" means a report signed by any of the
President, Treasurer, any Vice President or any Assistant Treasurer of the
Corporation which sets forth, as of the related Valuation Date, the assets of
the Corporation, the Market Value and the Discounted Value thereof (seriatim
and in aggregate), and the APS Basic Maintenance Amount.
"Articles of Incorporation" means the Articles of Incorporation of
the Corporation, as amended, supplemented and restated from time to time,
including as supplemented by these Articles Supplementary.
"Auction" means a periodic operation of the Auction Procedures.
"Auction Agent" means Bankers Trust Company unless and until
another commercial bank, trust company or other financial institution
appointed by a resolution of the Board of Directors of the Corporation or a
duly authorized committee thereof enters into an agreement with the
Corporation to follow the Auction Procedures for the purpose of determining
the Applicable Rate and to act as transfer agent, registrar, dividend
disbursing agent and redemption agent for the APS and Other APS.
"Auction Procedures" means the procedures for conducting Auctions
set forth in paragraph 10 of these Articles Supplementary.
"Beneficial Owner" means a customer of a Broker-Dealer who is
listed on the records of that Broker-Dealer (or, if applicable, the Auction
Agent) as a holder of shares of APS or a Broker-Dealer that holds APS for its
own account.
"Board of Directors" or "Board" means the Corporation's Board of
Directors and, to the extent permitted by law, any committee thereof.
"Broker-Dealer" means any broker-dealer, or other entity permitted
by law to perform the functions required of a Broker-Dealer in paragraph 10
of these Articles Supplementary, that has been selected by the Corporation
and has entered into a Broker-Dealer Agreement with the Auction Agent that
remains effective.
"Broker-Dealer Agreement" means an agreement between the Auction
Agent and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in paragraph 10 of these Articles
Supplementary.
"Business Day" means a day on which the New York Stock Exchange is
open for trading and which is not a Saturday, Sunday or other day on which
banks in The City of New York are authorized or obligated by law to close.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial Paper Dealers" means PaineWebber Incorporated and such
other commercial paper dealer or dealers as the Corporation may from time to
time appoint, or, in lieu of any thereof, their respective affiliates or
successors.
"Common Stock" means the shares of common stock designated as
common stock, par value $0.001 per share, of the Corporation.
"Corporation" means Dreyfus Strategic Municipals, Inc., a Maryland
corporation.
"Date of Original Issue" means, with respect to any share of APS or
Other APS, the date on which the Corporation originally issues such share.
"Deposit Securities" means cash and Municipal Obligations rated at
least A2 (having a remaining maturity of 12 months or less), P-1, VMIG-1 or
MIG-1 by Moody's or A (having a remaining maturity of 12 months or less), A-
1+ or SP-1+ by S&P.
"Discounted Value" means the quotient of the Market Value thereof
divided by the applicable S&P Discount Factor.
"Dividend Payment Date," with respect to APS, has the meaning set
forth in paragraph 2(b)(i) of these Articles Supplementary and, with respect
to Other APS, has the equivalent meaning.
"Dividend Period" means any of the Initial Dividend Period, 7-Day
Dividend Periods or the Special Dividend Periods.
"Escrow Bonds" mean Municipal Obligations that (i) have been
determined to be legally defeased in accordance with S&P's legal defeasance
criteria, (ii) have been determined to be economically defeased in accordance
with S&P's economic defeasance criteria and assigned a rating of AAA by S&P,
(iii) are not rated by S&P but have been determined to be legally defeased by
another Rating Agency, or (iv) have been determined to be economically
defeased by another Rating Agency and assigned a rating no lower than the
rating that is such Rating Agency's equivalent of S&P's AAA rating.
"Existing Holder" means a Broker-Dealer or any such other Person as
may be permitted by the Corporation that is listed as the holder of record of
shares of APS in the Share Books.
"Forward Commitment" has the meaning set forth in paragraph 8(c) of
these Articles Supplementary.
"Holder" means a Person identified as a holder of record of shares
of APS in the Stock Register.
"Independent Accountant" means a nationally recognized accountant,
or firm of accountants, that is, with respect to the Corporation, an
independent public accountant or firm of independent public accountants under
the Securities Act of 1933, as amended.
"Initial Dividend Payment Date" means the Initial Dividend Payment
Date as determined by the Board of Directors of the Corporation with respect
to each series of APS or Other APS, as the case may be.
"Initial Dividend Period" has the meaning set forth in paragraph
2(c)(i) of these Articles Supplementary and, with respect to Other APS, has
the equivalent meaning.
"Initial Dividend Rate" means the rate per annum applicable to the
Initial Dividend Period for such series of APS and, with respect to Other
APS, has the equivalent meaning. The Initial Dividend Rate shall be 3.60%
for Series M APS, 3.60% for Series T APS, 3.60% for Series W APS, 3.60% for
Series TH APS and 3.60% for Series F APS.
"Initial Margin" means the amount of cash or securities deposited
with a broker as a margin payment at the time of purchase or sale of a
futures contract.
"Interest Equivalent" means a yield on a 360-day basis of a
discount basis security which is equal to the yield on an equivalent interest-
bearing security.
"Inverse Floaters" mean trust certificates or other instruments
evidencing interests in one or more Municipal Obligations that qualify as S&P
Eligible Assets (and satisfy the issuer and original issue size requirements
of clause (vii) of the definition of S&P Eligible Assets) the interest rates
on which are adjusted at short term intervals on a basis that is inverse to
the simultaneous readjustment of the interest rates on corresponding floating
rate trust certificates or other instruments issued by the same issuer,
provided that the ratio of the aggregate dollar amount of floating rate
instruments to inverse floating rate instruments issued by the same issuer
does not exceed one to one at their time of original issuance unless the
floating rate instruments have only one reset remaining until maturity.
"Long Term Dividend Period" means a Special Dividend Period
consisting of a specified period of one whole year or more but not greater
than five years.
"Mandatory Redemption Price" means $25,000 per share of APS plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) to the date fixed for redemption and excluding Additional
Dividends.
"Marginal Tax Rate" means the maximum marginal regular Federal
individual income tax rate applicable to ordinary income or the maximum
marginal regular Federal corporate income tax rate, whichever is greater.
"Market Value" of any asset of the Corporation shall be the market
value thereof determined by the Pricing Service. Market Value of any asset
shall include any interest accrued thereon. The Pricing Service shall value
portfolio securities at the quoted bid prices or the mean between the quoted
bid and asked price or the yield equivalent when quotations are not readily
available. Securities for which quotations are not readily available shall
be valued at fair value as determined by the Pricing Service using methods
which include consideration of: yields or prices of Municipal Obligations of
comparable quality, type of issue, coupon, maturity and rating; indications
as to value from dealers; and general market conditions. The Pricing Service
may employ electronic data processing techniques and/or a matrix system to
determine valuations. If the Pricing Service is unable to value a security,
the security shall be valued at the lower of two dealer bids obtained by the
Corporation from dealers who are members of the National Association of
Securities Dealers, Inc. and who make a market in the security, at least one
of which shall be in writing. Futures contracts and options are valued at
closing prices for such instruments established by the exchange or board of
trade on which they are traded, or if market quotations are not readily
available, are valued at fair value on a consistent basis using methods
determined in good faith by the Board of Directors.
"Maximum Applicable Rate," with respect to APS, has the meaning set
forth in paragraph 10(a)(vii) of these Articles Supplementary and, with
respect to Other APS, has the equivalent meaning.
"Maximum Potential Additional Dividend Liability," as of any
Valuation Date, means the aggregate amount of Additional Dividends that would
be due if the Corporation were to make Retroactive Taxable Allocations, with
respect to any fiscal year, estimated based upon dividends paid and the
amount of undistributed realized net capital gains and other taxable income
earned by the Corporation, as of the end of the calendar month immediately
preceding such Valuation Date and assuming such Additional Dividends are
fully taxable.
"Moody's" means Moody's Investors Service, Inc. or its successors.
"Municipal Obligations" means "Municipal Obligations" as defined in
the Corporation's Registration Statement on Form N-2 (File Nos. 333-84699 and
No. 811-05245) relating to the APS on file with the Securities and Exchange
Commission, as such Registration Statement may be amended from time to time,
as well as short term Municipal Obligations and Inverse Floaters.
"Municipal Index" has the meaning set forth in paragraph 8(a) of
these Articles Supplementary.
"1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
"1940 Act APS Asset Coverage" means asset coverage, as defined in
section 18(h) of the 1940 Act, of at least 200% with respect to all
outstanding senior securities of the Corporation which are shares of capital
stock, including all outstanding shares of APS and Other APS (or such other
asset coverage as may in the future be specified in or under the 1940 Act as
the minimum asset coverage for senior securities which are shares of capital
stock of a closed-end investment company as a condition of paying dividends
on its Common Stock).
"1940 Act Cure Date," with respect to the failure by the
Corporation to maintain the 1940 Act APS Asset Coverage (as required by
paragraph 6 of these Articles Supplementary) as of the last Business Day of
each month, means the last Business Day of the following month.
"Non-Call Period" has the meaning set forth under the definition of
"Specific Redemption Provisions."
"Non-Payment Period" means any period commencing on and including
the day on which the Corporation shall fail to (i) declare, prior to the
close of business on the second Business Day preceding any Dividend Payment
Date, for payment on or (to the extent permitted by paragraph 2(c)(i) of
these Articles Supplementary) within three Business Days after such Dividend
Payment Date to the Holders as of 12:00 noon, New York City time, on the
Business Day preceding such Dividend Payment Date, the full amount of any
dividend on shares of APS payable on such Dividend Payment Date or (ii)
deposit, irrevocably in trust, in same-day funds, with the Auction Agent by
12:00 noon, New York City time, (A) on such Dividend Payment Date the full
amount of any cash dividend on such shares payable (if declared) on such
Dividend Payment Date or (B) on any redemption date for any shares of APS
called for redemption, the Mandatory Redemption Price per share of such APS
or, in the case of an optional redemption, the Optional Redemption Price per
share, and ending on and including the Business Day on which, by 12:00 noon,
New York City time, all unpaid cash dividends and unpaid redemption prices
shall have been so deposited or shall have otherwise been made available to
Holders in same-day funds; provided that, a Non-Payment Period shall not end
unless the Corporation shall have given at least five days' but no more than
30 days' written notice of such deposit or availability to the Auction Agent,
all Existing Holders (at their addresses appearing in the Share Books) and
the Securities Depository. Notwithstanding the foregoing, the failure by the
Corporation to deposit funds as provided for by clauses (ii)(A) or (ii)(B)
above within three Business Days after any Dividend Payment Date or
redemption date, as the case may be, in each case to the extent contemplated
by paragraph 2(c)(i) of these Articles Supplementary, shall not constitute a
"Non-Payment Period."
"Non-Payment Period Rate" means, initially, 200% of the applicable
Reference Rate (or 275% of such rate if the Corporation has provided
notification to the Auction Agent prior to the Auction establishing the
Applicable Rate for any dividend pursuant to paragraph 2(f) hereof that net
capital gains or other taxable income will be included in such dividend on
shares of APS), provided that the Board of Directors of the Corporation shall
have the authority to adjust, modify, alter or change from time to time the
initial Non-Payment Period Rate if the Board of Directors of the Corporation
determines and S&P (and any Substitute Rating Agency in lieu of S&P in the
event such party shall not rate the APS) advise the Corporation in writing
that such adjustment, modification, alteration or change will not adversely
affect its then current ratings on the APS.
"Normal Dividend Payment Date" has the meaning set forth in
paragraph 2(b)(i) of these Articles Supplementary.
"Notice of Redemption" means any notice with respect to the
redemption of shares of APS pursuant to paragraph 4 of these Articles
Supplementary.
"Notice of Revocation" has the meaning set forth in paragraph
2(c)(iii) of these Articles Supplementary.
"Notice of Special Dividend Period" has the meaning set forth in
paragraph 2(c)(iii) of these Articles Supplementary.
"Optional Redemption Price" means $25,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared)
to the date fixed for redemption and excluding Additional Dividends plus any
applicable redemption premium attributable to the designation of a Premium
Call Period.
"Other APS" means the Auction Rate Preferred Stock of the
Corporation, other than the APS.
"Outstanding" means, as of any date (i) with respect to APS, shares
of APS therefor issued by the Corporation except, without duplication, (A)
any shares of APS theretofore canceled or delivered to the Auction Agent for
cancellation, or redeemed by the Corporation, or as to which a Notice of
Redemption shall have been given and Deposit Securities shall have been
deposited in trust or segregated by the Corporation pursuant to paragraph
4(c) and (B) any shares of APS as to which the Corporation or any Affiliate
thereof shall be a Beneficial Owner, provided that shares of APS held by an
Affiliate shall be deemed outstanding for purposes of calculating the APS
Basic Maintenance Amount and (ii) with respect to shares of other Preferred
Stock, has the equivalent meaning.
"Parity Shares" means the APS and each other outstanding series of
Preferred Stock the holders of which, together with the holders of the APS,
shall be entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
proportion to the full respective preferential amounts to which they are
entitled, without preference or priority one over the other.
"Person" means and includes an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
"Policy" means an insurance policy purchased by the Corporation
which guarantees the payment of principal and interest on specified Municipal
Obligations during the period in which such Municipal Obligations are owned
by the Corporation; provided, however, that, as long as the APS are rated by
S&P, the Corporation will not obtain any Policy unless S&P advises the
Corporation in writing that the purchase of such Policy will not adversely
affect its then-current rating on the APS.
"Potential Beneficial Owner" means a customer of a Broker-Dealer or
a Broker-Dealer that is not a Beneficial Owner of shares of APS but that
wishes to purchase such shares, or that is a Beneficial Owner that wishes to
purchase additional shares of APS.
"Potential Holder" means any Broker-Dealer or any such other Person
as may be permitted by the Corporation, including any Existing Holder, who
may be interested in acquiring shares of APS (or, in the case of an Existing
Holder, additional shares of APS).
"Preferred Stock" means the preferred shares of capital stock, par
value $0.001 per share, of the Corporation, and includes APS and Other APS.
"Premium Call Period" has the meaning set forth under the
definition of "Specific Redemption Provisions."
"Pricing Service" means S&P J.J. Kenny or any pricing service
designated by the Board of Directors of the Corporation provided the
Corporation obtains written assurance from S&P that such designation will not
impair the rating then assigned by S&P to the APS.
"Quarterly Valuation Date" means the last Business Day of the last
month of each fiscal quarter of the Corporation in each fiscal year of the
Corporation, commencing March 31, 2000.
"Rating Agency" means a nationally recognized statistical rating
organization.
"Receivables for Municipal Obligations Sold" has the meaning set
forth under the definition of S&P Discount Factor.
"Reference Rate" means: (i) with respect to a Dividend Period or a
Short Term Dividend Period having 28 or fewer days, the higher of the
applicable "AA" Composite Commercial Paper Rate and the Taxable Equivalent of
the Short Term Municipal Bond Rate, (ii) with respect to any Short Term
Dividend Period having more than 28 but fewer than 183 days, the applicable
"AA" Composite Commercial Paper Rate, (iii) with respect to any Short Term
Dividend Period having 183 or more but fewer than 364 days, the applicable
U.S. Treasury Bill Rate and (iv) with respect to any Long Term Dividend
Period, the applicable U.S. Treasury Note Rate.
"Request for Special Dividend Period" has the meaning set forth in
paragraph 2(c)(iii) of these Articles Supplementary.
"Response" has the meaning set forth in paragraph 2(c)(iii) of
these Articles Supplementary.
"Retroactive Taxable Allocation" has the meaning set forth in
paragraph 2(e) of these Articles Supplementary.
"Right," with respect to the APS, has the meaning set forth in
paragraph 2(e) of these Articles Supplementary and, with respect to Other
APS, has the equivalent meaning.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or its successors.
"S&P Discount Factor" means, for purposes of determining the
Discounted Value of any Municipal Obligation which constitutes an S&P
Eligible Asset, the percentage determined by reference to (a) the rating by
S&P or another Rating Agency on such Municipal Obligation and (b) the S&P
Exposure Period, in accordance with the table set forth below:
S&P Discount Factors Rating
Category
Exposure Period AAA AA A BBB Unrated
*
45 Business Days 190% 195% 210% 250% 220%
25 Business Days 170 175 190 230 220
10 Business Days 155 160 175 215 220
7 Business Days 150 155 170 210 220
3 Business Days 130 135 150 190 220
___________________________________
* Eligible Assets not rated by S&P or rated less
than BBB by S&P and not rated at least the equivalent
of S&P's A rating by another Rating Agency.
Notwithstanding the foregoing, (i) the S&P Discount Factor for
short term Municipal Obligations will be 115%, so long as such Municipal
Obligations are rated A-1+ or SP-1+ by S&P and mature or have a demand
feature exercisable in 30 days or less, 120% if such Municipal Obligations
are rated A-1 or SP-1- by S&P and mature or have a demand feature exercisable
within 30 days or less, or 125% if such Municipal Obligations are not rated
by S&P but are rated VMIG-1, P-1 or MIG-1 by Moody's; provided, however, such
short term Municipal Obligations rated by Moody's but not rated by S&P having
a demand feature exercisable in 30 days or less must be backed by a letter of
credit, liquidity facility or guarantee from a bank or other financial
institution having a short term rating of at least A-1+ from S&P; and further
provided that such short term Municipal Obligations rated by Moody's but not
rated by S&P may comprise no more than 50% of short term Municipal
Obligations that qualify as S&P Eligible Assets; (ii) no S&P Discount Factor
will be applied to cash, options or to Receivables for Municipal Obligations
Sold; and (iii) except as set forth in clause (i) above, in the case of any
Municipal Obligation that is not rated by S&P but qualifies as an S&P
Eligible Asset pursuant to clause (iv) of the following paragraph, such
Municipal Obligation will be deemed to have an S&P rating one full rating
category lower than the S&P rating category that is the equivalent of the
rating category in which such Municipal Obligation is placed by another
Rating Agency. "Receivables for Municipal Obligations Sold," for purposes of
calculating S&P Eligible Assets as of any Valuation Date, means the book
value of Receivables for Municipal Obligations Sold as of or prior to such
Valuation Date if such receivables are due within five Business Days of the
Valuation Date. For purposes of the foregoing, Anticipation Notes rated SP-
1+ or, if not rated by S&P, rated VMIG-1 by Moody's, which do not mature or
have a demand feature exercisable in 30 days and which do not have a long
term rating, shall be considered to be short term Municipal Obligations. In
calculating the Discounted Value of the Corporation's portfolio (1) the S&P
Discount Factor will be applied to futures and Inverse Floaters and (2) an
S&P Discount Factor of 388% will be applied to Municipal Obligations rated
AAA by S&P which are not interest bearing or do not pay interest at least
semi-annually.
"S&P Eligible Asset" means cash, Receivables for Municipal
Obligations Sold or a Municipal Obligation that (i) is issued by any of the
50 states, the territories and their subdivisions, counties, cities, towns,
villages, and school districts, agencies, such as authorities and special
districts created by the states, and certain federally sponsored agencies
such as local housing authorities (payments made on these bonds are exempt
from regular federal income taxes and are generally exempt from state and
local taxes in the state of issuance), (ii) is interest bearing and pays
interest at least semi-annually; (iii) is payable with respect to principal
and interest in United States Dollars; (iv) is publicly rated BBB or higher
by S&P or, except in the case of Anticipation Notes that are grant
anticipation notes or bond anticipation notes, which must be rated by S&P to
be included in S&P Eligible Assets, if not rated by S&P but rated by another
Rating Agency, is rated at least A by such agency; (v) is not part of a
private placement (except in the case of Inverse Floaters); (vi) is not
subject to a covered call or covered put option written by the Corporation;
and (vii) is part of an issue of Municipal Obligations with an original issue
size of at least $20 million or, if of an issue with an original issue size
below $20 million (but in no event below $10 million), is issued by an issuer
with a total of at least $50 million of securities outstanding.
Notwithstanding the foregoing:
(1) Municipal Obligations (excluding Escrow Bonds) of any one
issuer or guarantor (excluding bond insurers) will be considered S&P Eligible
Assets only to the extent the fair market value of such obligations does not
exceed 10% of the aggregate fair market value of the S&P Eligible Assets,
provided that 2% is added to the applicable S&P Discount Factor for every 1%
by which the fair market value of such Municipal Obligations exceeds 5% of
the aggregate fair market value of the S&P Eligible Assets, and provided that
Municipal Obligations (excluding Escrow Bonds) not rated or rated less than
BBB by S&P or not rated at least A by another Rating Agency with respect to
any one issuer or guarantor (excluding bond insurers) will be considered S&P
Eligible Assets only to the extent the fair market value of such Municipal
Obligations does not exceed 5% of the aggregate fair market value of S&P
Eligible Assets;
(2) Municipal Obligations not rated at least BBB by S&P or not
rated by S&P, or not rated at least A by another Rating Agency, will be
considered S&P Eligible Assets only to the extent the fair market value of
such Municipal Obligations does not exceed 20% of the aggregate fair market
value of S&P Eligible Assets; provided however, that if the fair market value
of such Municipal Obligations exceeds 20% of the aggregate fair market value
of S&P Eligible Assets, a portion of such Municipal Obligations (selected by
the Corporation) will not be considered S&P Eligible Assets, so that the fair
market value of such Municipal Obligations (excluding such portion) does not
exceed 20% of the aggregate fair market value of S&P Eligible Assets;
(3) Municipal Obligations not rated at least BBB by S&P or not
rated by S&P, but rated at least A by another Rating Agency, will be
considered S&P Eligible Assets only to the extent the fair market value of
such Municipal Obligations does not exceed 50% of the aggregate fair market
value of S&P Eligible Assets; provided however, that if the fair market value
of such Municipal Obligations exceeds 50% of the aggregate fair market value
of S&P Eligible Assets, a portion of such Municipal Obligations (selected by
the Corporation) will not be considered S&P Eligible Assets, so that the fair
market value of such Municipal Obligations (excluding such portion) does not
exceed 50% of the aggregate fair market value of S&P Eligible Assets;
(4) Long term Municipal Obligations (excluding Escrow Bonds)
issued by issuers in any one state or territory will be considered S&P
Eligible Assets only to the extent the fair market value of such Municipal
Obligations does not exceed 25% of the aggregate fair market value of S&P
Eligible Assets; and
(5) Municipal Obligations which are not interest bearing or do not
pay interest at least semi-annually will be considered S&P Eligible Assets if
rated AAA by S&P.
"S&P Exposure Period" means the maximum period of time following a
Valuation Date, including the Valuation Date and the APS Basic Maintenance
Cure Date, that the Corporation has under these Articles Supplementary to
cure any failure to maintain, as of such Valuation Date, the Discounted Value
for its portfolio at least equal to the APS Basic Maintenance Amount (as
described in paragraph 7(a) of these Articles Supplementary).
"S&P Hedging Transactions" has the meaning set forth in paragraph
8(a) of these Articles Supplementary.
"S&P Volatility Factor" means 277% or such other potential dividend
rate increase factor as S&P advises the Corporation in writing is applicable.
"Securities Depository" means Depository Trust and Clearing
Corporation or any successor company or other entity selected by the
Corporation as securities depository for the shares of APS that agrees to
follow the procedures required to be followed by such securities depository
in connection with the shares of APS.
"Service" means the United States Internal Revenue Service.
"Series M APS" means the Auction Preferred Stock, Series M.
"Series T APS" means the Auction Preferred Stock, Series T.
"Series W APS" means the Auction Preferred Stock, Series W.
"Series TH APS" means the Auction Preferred Stock, Series TH.
"Series F APS" means the Auction Preferred Stock, Series F.
"7-Day Dividend Period" means a Dividend Period consisting of 7
days.
"Short Term Dividend Period" means a Special Dividend Period
consisting of a specified number of days (other than seven), evenly divisible
by seven and not fewer than seven nor more than 364.
"Special Dividend Period" means a Dividend Period consisting of (i)
a specified number of days (other than seven), evenly divisible by seven and
not fewer than seven nor more than 364 or (ii) a specified period of one
whole year or more but not greater than five years (in each case subject to
adjustment as provided in paragraph 2(b)(i)).
"Specific Redemption Provisions" means, with respect to a Special
Dividend Period either, or any combination of, (i) a period (a "Non-Call
Period") determined by the Board of Directors of the Corporation, after
consultation with the Auction Agent and the Broker-Dealers, during which the
shares of APS subject to such Dividend Period shall not be subject to
redemption at the option of the Corporation and (ii) a period (a "Premium
Call Period"), consisting of a number of whole years and determined by the
Board of Directors of the Corporation, after consultation with the Auction
Agent and the Broker-Dealers, during each year of which the shares of APS
subject to such Dividend Period shall be redeemable at the Corporation's
option at a price per share equal to $25,000 plus accumulated but unpaid
dividends plus a premium expressed as a percentage of $25,000, as determined
by the Board of Directors of the Corporation after consultation with the
Auction Agent and the Broker-Dealers.
"Stock Books" means the books maintained by the Auction Agent
setting forth at all times a current list, as determined by the Auction
Agent, of Existing Holders of the APS.
"Stock Register" means the register of Holders maintained on behalf
of the Corporation by the Auction Agent in its capacity as transfer agent and
registrar for the APS.
"Subsequent Dividend Period," with respect to APS, has the meaning
set forth in paragraph 2(c)(i) of these Articles Supplementary and, with
respect to Other APS, has the equivalent meaning.
"Substitute Commercial Paper Dealers" means such Substitute
Commercial Paper Dealer or Dealers as the Corporation may from time to time
appoint or, in lieu of any thereof, their respective affiliates or
successors.
"Substitute Rating Agency" and "Substitute Rating Agencies" mean a
Rating Agency or two statistical Rating Agencies, respectively, selected by
PaineWebber Incorporated or its affiliates and successors, after consultation
with the Corporation, to act as the substitute Rating Agency or substitute
Rating Agencies, as the case may be, to determine the credit ratings of the
shares of APS.
"Taxable Equivalent of the Short Term Municipal Bond Rate" on any
date means 90% of the quotient of (A) the per annum rate expressed on an
interest equivalent basis equal to the Kenny S&P 30 Day High Grade Index (the
"Kenny Index") or any successor index, made available for the Business Day
immediately preceding such date but in any event not later than 8:30 A.M.,
New York City time, on such date by Kenny Information Systems Inc. or any
successor thereto, based upon 30-day yield evaluations at par of bonds the
interest on which is excludable for regular Federal income tax purposes under
the Code of "high grade" component issuers selected by Kenny Information
Systems Inc. or any such successor from time to time in its discretion, which
component issuers shall include, without limitation, issuers of general
obligation bonds but shall exclude any bonds the interest on which
constitutes an item of tax preference under Section 57(a)(5) of the Code, or
successor provisions, for purposes of the "alternative minimum tax," divided
by (B) 1.00 minus the Marginal Tax Rate (expressed as a decimal); provided,
however, that if the Kenny Index is not made so available by 8:30 A.M., New
York City time, on such date by Kenny Information Systems Inc. or any
successor, the Taxable Equivalent of the Short Term Municipal Bond Rate shall
mean the quotient of (A) the per annum rate expressed on an interest
equivalent basis equal to the most recent Kenny Index so made available for
any preceding Business Day, divided by (B) 1.00 minus the Marginal Tax Rate
(expressed as a decimal). The Corporation may not utilize a successor index
to the Kenny Index unless S&P provides the Corporation with written
confirmation that the use of such successor index will not adversely affect
the then-current S&P rating of the APS.
"Treasury Bonds" has the meaning set forth in paragraph 8(a) of
these Articles Supplementary.
"U.S. Treasury Bill Rate" on any date means (i) the Interest
Equivalent of the rate on the actively traded Treasury Bill with a maturity
most nearly comparable to the length of the related Dividend Period, as such
rate is made available on a discount basis or otherwise by the Federal
Reserve Bank of New York in its Composite 3:30 P.M. Quotations for U.S.
Government Securities report for such Business Day, or (ii) if such yield as
so calculated is not available, the Alternate Treasury Bill Rate on such
date. "Alternate Treasury Bill Rate" on any date means the Interest
Equivalent of the yield as calculated by reference to the arithmetic average
of the bid price quotations of the actively traded Treasury Bill with a
maturity most nearly comparable to the length of the related Dividend Period,
as determined by bid price quotations as of any time on the Business Day
immediately preceding such date, obtained from at least three recognized
primary U.S. Government securities dealers selected by the Auction Agent.
"U.S. Treasury Note Rate" on any date means (i) the yield as calculated by
reference to the bid price quotation of the actively traded, current coupon
Treasury Note with a maturity most nearly comparable to the length of the
related Dividend Period, as such bid price quotation is published on the
Business Day immediately preceding such date by the Federal Reserve Bank of
New York in its Composite 3:30 P.M. Quotations for U.S. Government
Securities report for such Business Day, or (ii) if such yield as so
calculated is not available, the Alternate Treasury Note Rate on such date.
"Alternate Treasury Note Rate" on any date means the yield as calculated by
reference to the arithmetic average of the bid price quotations of the
actively traded, current coupon Treasury Note with a maturity most nearly
comparable to the length of the related Dividend Period, as determined by the
bid price quotations as of any time on the Business Day immediately preceding
such date, obtained from at least three recognized primary U.S. Government
securities dealers selected by the Auction Agent.
"Valuation Date" means, for purposes of determining whether the
Corporation is maintaining the APS Basic Maintenance Amount, each Business
Day commencing with the Date of Original Issue.
"Variation Margin" means, in connection with an outstanding futures
contract owned or sold by the Corporation, the amount of cash or securities
paid to or received from a broker (subsequent to the Initial Margin payment)
from time to time as the price of such futures contract fluctuates.
(b) The foregoing definitions of Accountant's Confirmation, APS
Basic Maintenance Amount, APS Basic Maintenance Cure Date, APS Basic
Maintenance Report, Deposit Securities, Discounted Value, Independent
Accountant, Initial Margin, Inverse Floaters, Market Value, Maximum Potential
Additional Dividend Liability, S&P Discount Factor, S&P Eligible Asset, S&P
Exposure Period, S&P Hedging Transactions, S&P Volatility Factor, Valuation
Date and Variation Margin have been determined by the Board of Directors of
the Corporation in order to obtain a AAA rating from S&P on the APS on their
Date of Original Issue; and the Board of Directors of the Corporation shall
have the authority, without shareholder approval, to amend, alter or repeal
from time to time the foregoing definitions and the restrictions and
guidelines set forth thereunder if S&P or any Substitute Rating Agency
advises the Corporation in writing that such amendment, alteration or repeal
will not adversely affect its then-current rating on the APS.
2. Dividends. (a) The Holders of a particular series of APS
shall be entitled to receive, when, as and if declared by the Board of
Directors of the Corporation, out of funds legally available therefor,
cumulative dividends each consisting of (i) cash at the Applicable Rate, (ii)
a Right to receive cash as set forth in paragraph 2(e) below, and (iii) any
additional amounts as set forth in paragraph 2(f) below, and no more, payable
on the respective dates set forth below. Dividends on the shares of each
series of APS so declared and payable shall be paid (i) in preference to and
in priority over any dividends declared and payable on the Common Stock, and
(ii) to the extent permitted under the Code and to the extent available, out
of net tax-exempt income earned on the Corporation's investments. To the
extent permitted under the Code, dividends on shares of APS will be
designated as exempt-interest dividends. For the purposes of this section,
the term "net tax-exempt income" shall exclude capital gains of the
Corporation.
(b) (i) Cash dividends on shares of each series of APS shall
accumulate from the Date of Original Issue and shall be payable, when, as and
if declared by the Board of Directors, out of funds legally available
therefor, commencing on the Initial Dividend Payment Date. Following the
Initial Dividend Payment Date for a series of APS, dividends on that series
of APS will be payable, at the option of the Corporation, either (i) with
respect to any 7-Day Dividend Period and any Short Term Dividend Period of 35
or fewer days, on the day next succeeding the last day thereof, or (ii) with
respect to any Short Term Dividend Period of more than 35 days and with
respect to any Long Term Dividend Period, monthly on the first Business Day
of each calendar month during such Short Term Dividend Period or Long Term
Dividend Period and on the day next succeeding the last day thereof (each
such date referred to in clause (i) or (ii) being herein referred to as a
"Normal Dividend Payment Date"), except that if such Normal Dividend Payment
Date is not a Business Day, then the Dividend Payment Date shall be the first
Business Day next succeeding such Normal Dividend Payment Date. Although any
particular Dividend Payment Date may not occur on the originally scheduled
date because of the exception discussed above, the next succeeding Dividend
Payment Date, subject to such exception, will occur on the next following
originally scheduled date. If for any reason a Dividend Payment Date cannot
be fixed as described above, then the Board of Directors shall fix the
Dividend Payment Date. The Board of Directors by resolution prior to
authorization of a dividend by the Board of Directors may change a Dividend
Payment Date if such change does not adversely affect the contract rights of
the Holders of shares of APS set forth in the Articles of Incorporation. The
Initial Dividend Period, 7-Day Dividend Periods and Special Dividend Periods
with respect to a series of APS are hereinafter sometimes referred to as
Dividend Periods. Each dividend payment date determined as provided above is
hereinafter referred to as a "Dividend Payment Date."
(ii) Each dividend shall be paid to the Holders as they appear in
the Stock Register as of 12:00 noon, New York City time, on the Business Day
preceding the Dividend Payment Date. Dividends in arrears for any past
Dividend Period may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to the Holders as they appear on the Stock
Register on a date, not exceeding 15 days prior to the payment date therefor,
as may be fixed by the Board of Directors of the Corporation.
(c) (i) During the period from and including the Date of Original
Issue to but excluding the Initial Dividend Payment Date for each series of
APS (the "Initial Dividend Period"), the Applicable Rate shall be the Initial
Dividend Rate. Commencing on the Initial Dividend Payment Date for each
series of APS, the Applicable Rate for each subsequent dividend period
(hereinafter referred to as a "Subsequent Dividend Period"), which Subsequent
Dividend Period shall commence on and include a Dividend Payment Date and
shall end on and include the calendar day prior to the next Dividend Payment
Date (or last Dividend Payment Date in a Dividend Period if there is more
than one Dividend Payment Date), shall be equal to the rate per annum that
results from implementation of the Auction Procedures. The Applicable Rate
for each Dividend Period commencing during a Non-Payment Period shall be
equal to the Non-Payment Period Rate; and each Dividend Period, commencing
after the first day of, and during, a Non-Payment Period shall be a 7-Day
Dividend Period in the case of each series of APS. Except in the case of the
willful failure of the Corporation to pay a dividend on a Dividend Payment
Date or to redeem any shares of APS on the date set for such redemption, any
amount of any dividend due on any Dividend Payment Date (if, prior to the
close of business on the second Business Day preceding such Dividend Payment
Date, the Corporation has declared such dividend payable on such Dividend
Payment Date to the Holders of such shares of APS as of 12:00 noon, New York
City time, on the Business Day preceding such Dividend Payment Date) or
redemption price with respect to any shares of APS not paid to such Holders
when due may be paid to such Holders in the same form of funds by 12:00 noon,
New York City time, on any of the first three Business Days after such
Dividend Payment Date or due date, as the case may be, provided that, such
amount is accompanied by a late charge calculated for such period of non-
payment at the Non-Payment Period Rate applied to the amount of such non-
payment based on the actual number of days comprising such period divided by
365. In the case of a willful failure of the Corporation to pay a dividend
on a Dividend Payment Date or to redeem any shares of APS on the date set for
such redemption, the preceding sentence shall not apply and the Applicable
Rate for the Dividend Period commencing during the Non-Payment Period
resulting from such failure shall be the Non-Payment Period Rate. For the
purposes of the foregoing, payment to a person in same-day funds on any
Business Day at any time shall be considered equivalent to payment to such
person in New York Clearing House (next-day) funds at the same time on the
preceding Business Day, and any payment made after 12:00 noon, New York City
time, on any Business Day shall be considered to have been made instead in
the same form of funds and to the same person before 12:00 noon, New York
City time, on the next Business Day.
(ii) The amount of cash dividends per share of any series of APS
payable (if declared) on the Initial Dividend Payment Date, each 7-Day
Dividend Period and each Dividend Payment Date of each Short Term Dividend
Period shall be computed by multiplying the Applicable Rate for such Dividend
Period by a fraction, the numerator of which will be the number of days in
such Dividend Period or part thereof that such share was outstanding and the
denominator of which will be 365, multiplying the amount so obtained by
$25,000, and rounding the amount so obtained to the nearest cent. During any
Long Term Dividend Period, the amount of cash dividends per share of a series
of APS payable (if declared) on any Dividend Payment Date shall be computed
by multiplying the Applicable Rate for such Dividend Period by a fraction,
the numerator of which will be such number of days in such part of such
Dividend Period that such share was outstanding and for which dividends are
payable on such Dividend Payment Date and the denominator of which will be
360, multiplying the amount so obtained by $25,000, and rounding the amount
so obtained to the nearest cent.
(iii) With respect to each Dividend Period that is a Special
Dividend Period, the Corporation may, at its sole option and to the extent
permitted by law, by telephonic and written notice (a "Request for Special
Dividend Period") to the Auction Agent and to each Broker-Dealer, request
that the next succeeding Dividend Period for a series of APS be a number of
days (other than seven), evenly divisible by seven and not fewer than seven
nor more than 364 in the case of a Short Term Dividend Period or one whole
year or more but not greater than five years in the case of a Long Term
Dividend Period, specified in such notice, provided that the Corporation may
not give a Request for Special Dividend Period of greater than 28 days (and
any such request shall be null and void) unless, for any Auction occurring
after the initial Auction, Sufficient Clearing Bids were made in the last
occurring Auction and unless full cumulative dividends, any amounts due with
respect to redemptions, and any Additional Dividends payable prior to such
date have been paid in full. Such Request for Special Dividend Period, in
the case of a Short Term Dividend Period, shall be given on or prior to the
second Business Day but not more than seven Business Days prior to an Auction
Date for a series of APS and, in the case of a Long Term Dividend Period,
shall be given on or prior to the second Business Day but not more than 28
days prior to an Auction Date for a series of APS. Upon receiving such
Request for Special Dividend Period, the Broker-Dealer(s) shall jointly
determine whether, given the factors set forth below, it is advisable that
the Corporation issue a Notice of Special Dividend Period for the series of
APS as contemplated by such Request for Special Dividend Period and the
Optional Redemption Price of the APS during such Special Dividend Period and
the Specific Redemption Provisions and shall give the Corporation and the
Auction Agent written notice (a "Response") of such determination by no later
than the second Business Day prior to such Auction Date. In making such
determination the Broker-Dealer(s) will consider (1) existing short term and
long term market rates and indices of such short term and long term rates,
(2) existing market supply and demand for short term and long term
securities, (3) existing yield curves for short term and long term securities
comparable to the APS, (4) industry and financial conditions which may affect
the APS, (5) the investment objective of the Corporation, and (6) the
Dividend Periods and dividend rates at which current and potential beneficial
holders of the APS would remain or become beneficial holders. If the Broker-
Dealer(s) shall not give the Corporation and the Auction Agent a Response by
such second Business Day or if the Response states that given the factors set
forth above it is not advisable that the Corporation give a Notice of Special
Dividend Period for the series of APS, the Corporation may not give a Notice
of Special Dividend Period in respect of such Request for Special Dividend
Period. In the event the Response indicates that it is advisable that the
Corporation give a Notice of Special Dividend Period for the series of APS,
the Corporation may by no later than the second Business Day prior to such
Auction Date give a notice (a "Notice of Special Dividend Period") to the
Auction Agent, the Securities Depository and each Broker-Dealer which notice
will specify (i) the duration of the Special Dividend Period, (ii) the
Optional Redemption Price as specified in the related Response and (iii) the
Specific Redemption Provisions, if any, as specified in the related Response.
The Corporation also shall provide a copy of such Notice of Special Dividend
Period to S&P. The Corporation shall not give a Notice of Special Dividend
Period and, if the Corporation has given a Notice of Special Dividend Period,
the Corporation is required to give telephonic and written notice of its
revocation (a "Notice of Revocation") to the Auction Agent, each Broker-
Dealer, and the Securities Depository on or prior to the Business Day prior
to the relevant Auction Date if (x) either the 1940 Act APS Asset Coverage is
not satisfied or the Corporation shall fail to maintain S&P Eligible Assets
with an aggregate Discounted Value at least equal to the APS Basic
Maintenance Amount, on each of the two Valuation Dates immediately preceding
the Business Day prior to the relevant Auction Date on an actual basis and on
a pro forma basis giving effect to the proposed Special Dividend Period
(using as a pro forma dividend rate with respect to such Special Dividend
Period the dividend rate which the Broker-Dealers shall advise the
Corporation is an approximately equal rate for securities similar to the APS
with an equal dividend period), (y) sufficient funds for the payment of
dividends payable on the immediately succeeding Dividend Payment Date have
not been irrevocably deposited with the Auction Agent by the close of
business on the third Business Day preceding the related Auction Date or (z)
the Broker-Dealer(s) jointly advise the Corporation that after consideration
of the factors listed above they have concluded that it is advisable to give
a Notice of Revocation. The Corporation also shall provide a copy of such
Notice of Revocation to S&P. If the Corporation is prohibited from giving a
Notice of Special Dividend Period as a result of any of the factors
enumerated in clause (x), (y) or (z) above or if the Corporation gives a
Notice of Revocation with respect to a Notice of Special Dividend Period for
any series of APS, the next succeeding Dividend Period will be a 7-Day
Dividend Period. In addition, in the event Sufficient Clearing Bids are not
made in the applicable Auction or such Auction is not held for any reason,
such next succeeding Dividend Period will be a 7-Day Dividend Period and the
Corporation may not again give a Notice of Special Dividend Period for the
APS (and any such attempted notice shall be null and void) until Sufficient
Clearing Bids have been made in an Auction with respect to a 7-Day Dividend
Period.
(d) (i) Holders shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of full cumulative dividends
and applicable late charges, as herein provided, on the shares of APS (except
for Additional Dividends as provided in paragraph 2(e) hereof and additional
payments as provided in paragraph 2(f) hereof). Except for the late charge
payable pursuant to paragraph 2(c)(i) hereof, no interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment on the
shares of APS that may be in arrears.
(ii) For so long as any share of APS is Outstanding, the
Corporation shall not declare, pay or set apart for payment any dividend or
other distribution (other than a dividend or distribution paid in shares of,
or options, warrants or rights to subscribe for or purchase, Common Stock or
other shares of capital stock, if any, ranking junior to the shares of APS as
to dividends or upon liquidation) in respect of the Common Stock or any other
shares of capital stock of the Corporation ranking junior to or on a parity
with the shares of APS as to dividends or upon liquidation, or call for
redemption, redeem, purchase or otherwise acquire for consideration any
shares of the Common Stock or any other such junior shares (except by
conversion into or exchange for shares of the Corporation ranking junior to
the shares of APS as to dividends and upon liquidation) or any other such
Parity Shares (except by conversion into or exchange for stock of the
Corporation ranking junior to or on a parity with the shares of APS as to
dividends and upon liquidation), unless (A) immediately after such
transaction, the Corporation shall have S&P Eligible Assets with an aggregate
Discounted Value equal to or greater than the APS Basic Maintenance Amount
and the Corporation shall maintain the 1940 Act APS Asset Coverage, (B) full
cumulative dividends on shares of APS and shares of Other APS due on or prior
to the date of the transaction have been declared and paid or shall have been
declared and sufficient funds for the payment thereof deposited with the
Auction Agent, (C) any Additional Dividend required to be paid under
paragraph 2(e) below on or before the date of such declaration or payment has
been paid and (D) the Corporation has redeemed the full number of shares of
APS required to be redeemed by any provision for mandatory redemption
contained herein.
(e) Each dividend shall consist of (i) cash at the Applicable
Rate, (ii) an uncertificated right (a "Right") to receive an Additional
Dividend (as defined below), and (iii) any additional amounts as set forth in
paragraph 2(f) below. Each Right shall thereafter be independent of the
share or shares of APS on which the dividend was paid. The Corporation shall
cause to be maintained a record of each Right received by the respective
Holders. A Right may not be transferred other than by operation of law. If
the Corporation retroactively allocates any net capital gains or other income
subject to regular Federal income taxes to shares of APS without having given
advance notice thereof to the Auction Agent as described in paragraph 2(f)
hereof solely by reason of the fact that such allocation is made as a result
of the redemption of all or a portion of the outstanding shares of APS or the
liquidation of the Corporation (the amount of such allocation referred to
herein as a "Retroactive Taxable Allocation"), the Corporation will, within
90 days (and generally within 60 days) after the end of the Corporation's
fiscal year for which a Retroactive Taxable Allocation is made, provide
notice thereof to the Auction Agent and to each holder of a Right applicable
to such shares of APS (initially as nominee of Depository Trust and Clearing
Corporation) during such fiscal year at such holder's address as the same
appears or last appeared on the Stock Books of the Corporation. The
Corporation will, within 30 days after such notice is given to the Auction
Agent, pay to the Auction Agent (who will then distribute to such holders of
Rights), out of funds legally available therefor, an amount equal to the
aggregate Additional Dividend with respect to all Retroactive Taxable
Allocations made to such holders during the fiscal year in question.
An "Additional Dividend" means payment to a present or former
holder of shares of APS of an amount which, when taken together with the
aggregate amount of Retroactive Taxable Allocations made to such holder with
respect to the fiscal year in question, would cause such holder's dividends
in dollars (after Federal income tax consequences) from the aggregate of both
the Retroactive Taxable Allocations and the Additional Dividend to be equal
to the dollar amount of the dividends which would have been received by such
holder if the amount of the aggregate Retroactive Taxable Allocations would
have been excludable from the gross income of such holder. Such Additional
Dividend shall be calculated (i) without consideration being given to the
time value of money; (ii) assuming that no holder of shares of APS is subject
to the Federal alternative minimum tax with respect to dividends received
from the Corporation; and (iii) assuming that each Retroactive Taxable
Allocation would be taxable in the hands of each holder of shares of APS at
the greater of: (x) the maximum marginal regular Federal individual income
tax rate applicable to ordinary income or capital gains depending on the
taxable character of the distribution (including any surtax); or (y) the
maximum marginal regular Federal corporate income tax rate applicable to
ordinary income or capital gains depending on the taxable character of the
distribution (disregarding in both (x) and (y) the effect of any state or
local taxes and the phase out of, or provision limiting, personal exemptions,
itemized deductions, or the benefit of lower tax brackets).
(f) Except as provided below, whenever the Corporation intends to
include any net capital gains or other income subject to regular Federal
income taxes in any dividend on shares of APS, the Corporation will notify
the Auction Agent of the amount to be so included at least five Business Days
prior to the Auction Date on which the Applicable Rate for such dividend is
to be established. The Corporation may also include such income in a
dividend on shares of a series of APS without giving advance notice thereof
if it increases the dividend by an additional amount calculated as if such
income was a Retroactive Taxable Allocation and the additional amount was an
Additional Dividend, provided that the Corporation will notify the Auction
Agent of the additional amounts to be included in such dividend at least five
Business Days prior to the applicable Dividend Payment Date.
(g) No fractional shares of APS shall be issued.
3. Liquidation Rights. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the Holders
shall be entitled to receive, out of the assets of the Corporation available
for distribution to shareholders, before any distribution or payment is made
upon any Common Stock or any other shares of ranking junior in right of
payment upon liquidation to the APS, the sum of $25,000 per share plus
accumulated but unpaid dividends (whether or not earned or declared) thereon
to the date of distribution, and after such payment the Holders will be
entitled to no other payments other than Additional Dividends as provided in
paragraph 2(e) hereof. If upon any liquidation, dissolution or winding up of
the Corporation, the amounts payable with respect to the APS and any other
Outstanding class or series of Preferred Stock of the Corporation ranking on
a parity with the APS as to payment upon liquidation are not paid in full,
the Holders and the holders of such other class or series will share ratably
in any such distribution of assets in proportion to the respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the
Holders will not be entitled to any further participation in any distribution
of assets by the Corporation except for any Additional Dividends. A
consolidation, merger or statutory share exchange of the Corporation with or
into any other corporation or entity or a sale, whether for cash, shares of
stock, securities or properties, of all or substantially all or any part of
the assets of the Corporation shall not be deemed or construed to be a
liquidation, dissolution or winding up of the Corporation.
4. Redemption. (a) Shares of APS shall be redeemable by the
Corporation as provided below:
(i) To the extent permitted under the 1940 Act and Maryland law,
upon giving a Notice of Redemption, the Corporation at its option may redeem
shares of any series of APS, in whole or in part, out of funds legally
available therefor, at the Optional Redemption Price per share, on any
Dividend Payment Date; provided that no share of APS may be redeemed at the
option of the Corporation during (A) the Initial Dividend Period with respect
to a series of shares or (B) a Non-Call Period to which such share is
subject. In addition, holders of APS which are redeemed shall be entitled to
receive Additional Dividends to the extent provided herein. The Corporation
may not give a Notice of Redemption relating to an optional redemption as
described in this paragraph 4(a)(i) unless, at the time of giving such Notice
of Redemption, the Corporation has available Deposit Securities with maturity
or tender dates not later than the day preceding the applicable redemption
date and having a value not less than the amount due to Holders by reason of
the redemption of their shares of APS on such redemption date.
(ii) The Corporation shall redeem, out of funds legally available
therefor, at the Mandatory Redemption Price per share, shares of APS to the
extent permitted under the 1940 Act and Maryland law, on a date fixed by the
Board of Directors, if the Corporation fails to maintain S&P Eligible Assets
with an aggregate Discounted Value equal to or greater than the APS Basic
Maintenance Amount as provided in paragraph 7(a) or to satisfy the 1940 Act
APS Asset Coverage as provided in paragraph 6 and such failure is not cured
on or before the APS Basic Maintenance Cure Date or the 1940 Act Cure Date
(herein collectively referred to as a "Cure Date"), as the case may be. In
addition, holders of APS so redeemed shall be entitled to receive Additional
Dividends to the extent provided herein. The number of shares of APS to be
redeemed shall be equal to the lesser of (i) the minimum number of shares of
APS the redemption of which, if deemed to have occurred immediately prior to
the opening of business on the Cure Date, together with all shares of other
Preferred Stock subject to redemption or retirement, would result in the
Corporation having S&P Eligible Assets with an aggregate Discounted Value
equal to or greater than the APS Basic Maintenance Amount or satisfaction of
the 1940 Act APS Asset Coverage, as the case may be, on such Cure Date
(provided that, if there is no such minimum number of shares of APS and
shares of other Preferred Stock the redemption of which would have such
result, all shares of APS and shares of other Preferred Stock then
Outstanding shall be redeemed), and (ii) the maximum number of shares of APS,
together with all shares of other Preferred Stock subject to redemption or
retirement, that can be redeemed out of funds expected to be legally
available therefor on such redemption date. In determining the number of
shares of APS required to be redeemed in accordance with the foregoing, the
Corporation shall allocate the number required to be redeemed which would
result in the Corporation having S&P Eligible Assets with an aggregate
Discounted Value equal to or greater than the APS Basic Maintenance Amount or
satisfaction of the 1940 Act APS Asset Coverage, as the case may be, pro rata
among shares of APS of all series, Other APS and other Preferred Stock
subject to redemption pursuant to provisions similar to those contained in
this paragraph 4(a)(ii); provided that, shares of APS which may not be
redeemed at the option of the Corporation due to the designation of a Non-
Call Period applicable to such shares (A) will be subject to mandatory
redemption only to the extent that other shares are not available to satisfy
the number of shares required to be redeemed and (B) will be selected for
redemption in an ascending order of outstanding number of days in the Non-
Call Period (with shares with the lowest number of days to be redeemed first)
and by lot in the event of shares having an equal number of days in such Non-
Call Period. The Corporation shall effect such redemption on a Business Day
which is not later than 35 days after such Cure Date, except that if the
Corporation does not have funds legally available for the redemption of all
of the required number of shares of APS and shares of other Preferred Stock
which are subject to mandatory redemption or the Corporation otherwise is
unable to effect such redemption on or prior to 35 days after such Cure Date,
the Corporation shall redeem those shares of APS which it is unable to redeem
on the earliest practicable date on which it is able to effect such
redemption out of funds legally available therefor.
(b) Notwithstanding any other provision of this paragraph 4, no
shares of APS may be redeemed pursuant to paragraph 4(a)(i) of these Articles
Supplementary (i) unless all dividends in arrears on all remaining
outstanding shares of Parity Shares shall have been or are being
contemporaneously paid or declared and set apart for payment and (ii) if
redemption thereof would result in the Corporation's failure to maintain S&P
Eligible Assets with an aggregate Discounted Value equal to or greater than
the APS Basic Maintenance Amount. In the event that less than all the
outstanding shares of a series of APS are to be redeemed and there is more
than one Holder, the shares of that series of APS to be redeemed shall be
selected by lot or such other method as the Corporation shall deem fair and
equitable.
(c) Whenever shares of APS are to be redeemed, the Corporation,
not less than 17 nor more than 30 days prior to the date fixed for
redemption, shall mail a notice ("Notice of Redemption") by first-class mail,
postage prepaid, to each Holder of shares of APS to be redeemed and to the
Auction Agent. The Corporation shall cause the Notice of Redemption to also
be published in the eastern and national editions of The Wall Street Journal.
The Notice of Redemption shall set forth (i) the redemption date, (ii) the
amount of the redemption price, (iii) the aggregate number of shares of APS
of such series to be redeemed, (iv) the place or places where shares of APS
of such series are to be surrendered for payment of the redemption price, (v)
a statement that dividends on the shares to be redeemed shall cease to
accumulate on such redemption date (except that holders may be entitled to
Additional Dividends) and (vi) the provision of these Articles Supplementary
pursuant to which such shares are being redeemed. No defect in the Notice of
Redemption or in the mailing or publication thereof shall affect the validity
of the redemption proceedings, except as required by applicable law.
If the Notice of Redemption shall have been given as aforesaid and,
concurrently or thereafter, the Corporation shall have deposited in trust
with the Auction Agent, or segregated in an account at the Corporation's
custodian bank for the benefit of the Auction Agent, Deposit Securities (with
a right of substitution) having an aggregate Discounted Value (utilizing in
the case of S&P an S&P Exposure Period of 3 Business Days) equal to the
redemption payment for the shares of APS as to which such Notice of
Redemption has been given with irrevocable instructions and authority to pay
the redemption price to the Holders of such shares, then upon the date of
such deposit or, if no such deposit is made, then upon such date fixed for
redemption (unless the Corporation shall default in making the redemption
payment), all rights of the Holders of such shares as shareholders of the
Corporation by reason of the ownership of such shares will cease and
terminate (except their right to receive the redemption price in respect
thereof and any Additional Dividends, but without interest), and such shares
shall no longer be deemed outstanding. The Corporation shall be entitled to
receive, from time to time, from the Auction Agent the interest, if any, on
such Deposit Securities deposited with it and the Holders of any shares so
redeemed shall have no claim to any of such interest. In case the Holder of
any shares so called for redemption shall not claim the redemption payment
for his shares within one year after the date of redemption, the Auction
Agent shall, upon demand, pay over to the Corporation such amount remaining
on deposit and the Auction Agent shall thereupon be relieved of all
responsibility to the Holder of such shares called for redemption and such
Holder thereafter shall look only to the Corporation for the redemption
payment.
5. Voting Rights. (a) General. Except as otherwise provided in
the Articles of Incorporation, each Holder of shares of APS shall be entitled
to one vote for each share held on each matter submitted to a vote of
stockholders of the Corporation, and the holders of outstanding shares of
Preferred Stock, including APS, and of shares of Common Stock shall vote
together as a single class; provided that, at any meeting of the stockholders
of the Corporation held for the election of directors, the holders of
outstanding shares of Preferred Stock, including APS, shall be entitled, as a
class, to the exclusion of the holders of all other securities and classes of
capital stock of the Corporation, to elect two directors of the Corporation.
Subject to paragraph 5(b) hereof, the holders of outstanding shares of
capital stock of the Corporation, including the holders of outstanding shares
of Preferred Stock, including APS, voting as a single class, shall elect the
balance of the directors.
(b) Right to Elect Majority of Board of Directors. During any
period in which any one or more of the conditions described below shall exist
(such period being referred to herein as a "Voting Period"), the number of
directors constituting the Board of Directors shall be automatically
increased by the smallest number that, when added to the two directors
elected exclusively by the holders of shares of Preferred Stock, would
constitute a majority of the Board of Directors as so increased by such
smallest number; and the holders of shares of Preferred Stock shall be
entitled, voting separately as one class (to the exclusion of the holders of
all other securities and classes of shares of capital stock of the
Corporation), to elect such smallest number of additional directors, together
with the two directors that such holders are in any event entitled to elect.
A Voting Period shall commence:
(i) if at any time accumulated dividends (whether or not earned or
declared, and whether or not funds are then legally available in an amount
sufficient therefor) on the outstanding shares of APS equal to at least two
full years' dividends shall be due and unpaid and sufficient cash or
specified securities shall not have been deposited with the Auction Agent for
the payment of such accumulated dividends; or
(ii) if at any time holders of any other shares of Preferred Stock
are entitled to elect a majority of the directors of the Corporation under
the 1940 Act. Upon the termination of a Voting Period, the voting rights
described in this paragraph 5(b) shall cease, subject always, however, to the
reverting of such voting rights in the Holders upon the further occurrence of
any of the events described in this paragraph 5(b).
(c) Right to Vote with Respect to Certain Other Matters. So long
as any shares of APS are outstanding, the Corporation shall not, without the
affirmative vote of the holders of a majority of the shares of Preferred
Stock Outstanding at the time, voting separately as one class: (i) authorize,
create or issue any class or series of shares of capital stock ranking prior
to the APS or any other series of Preferred Stock with respect to payment of
dividends or the distribution of assets on liquidation, provided, however,
that no vote is required to authorize the issuance of another class or series
of Preferred Stock which is substantially identical in all respects to the
shares of APS, if the Corporation obtains written confirmation from S&P that
the issuance of any additional shares would not impair the rating then
assigned by S&P to the APS; or (ii) amend, alter or repeal the provisions of
the Articles of Incorporation, whether by merger, consolidation or otherwise,
so as to adversely affect any of the contract rights expressly set forth in
the Articles of Incorporation of holders of shares of APS or any other
Preferred Stock. So long as any shares of APS are outstanding, the
Corporation may not, without the affirmative vote of the holders of at least
66-2/3% of the shares of APS outstanding at the time, voting as a separate
class, file a voluntary application for relief under federal bankruptcy law
or any similar application under state law for so long as the Corporation is
solvent and does not foresee becoming insolvent. To the extent permitted
under the 1940 Act, in the event shares of more than one series of APS are
outstanding, the Corporation shall not approve any of the actions set forth
in clause (i) or (ii) which adversely affects the contract rights expressly
set forth in the Articles of Incorporation of a Holder of shares of a series
of APS differently than those of a Holder of shares of any other series of
APS without the affirmative vote of the holders of at least a majority of the
shares of APS of each series adversely affected and outstanding at such time
(each such adversely affected series voting separately as a class). The
Corporation shall notify S&P ten Business Days prior to any such vote
described in clause (i) or (ii). Unless a higher percentage is provided for
under the Articles of Incorporation, the affirmative vote of the holders of a
majority of the outstanding shares of Preferred Stock, including APS, voting
together as a single class, will be required to approve any plan of
reorganization (including bankruptcy proceedings) adversely affecting such
shares or any action requiring a vote of security holders under Section 13(a)
of the 1940 Act. The class vote of holders of shares of Preferred Stock,
including APS, described above will in each case be in addition to a separate
vote of the requisite percentage of shares of Common Stock and shares of
Preferred Stock, including APS, voting together as a single class necessary
to authorize the action in question.
(d) Voting Procedures.
(i) As soon as practicable after the accrual of any right of the
holders of shares of Preferred Stock to elect additional directors as
described in paragraph 5(b) above, the Corporation shall call a special
meeting of such holders and instruct the Auction Agent to mail a notice of
such special meeting to such holders, such meeting to be held not less than
10 nor more than 20 days after the date of mailing of such notice. If the
Corporation fails to send such notice to the Auction Agent or if the
Corporation does not call such a special meeting, it may be called by any
such holder on like notice. The record date for determining the holders
entitled to notice of and to vote at such special meeting shall be the close
of business on the fifth Business Day preceding the day on which such notice
is mailed. At any such special meeting and at each meeting held during a
Voting Period, such Holders, voting together as a class (to the exclusion of
the holders of all other securities and classes of shares of capital stock of
the Corporation), shall be entitled to elect the number of directors
prescribed in paragraph 5(b) above. At any such meeting or adjournment
thereof in the absence of a quorum, a majority of such holders present in
person or by proxy shall have the power to adjourn the meeting without
notice, other than by an announcement at the meeting, to a date not more than
120 days after the original record date.
(ii) For purposes of determining any rights of the Holders to vote
on any matter or the number of shares required to constitute a quorum,
whether such right is created by these Articles Supplementary, by the other
provisions of the Articles of Incorporation, by statute or otherwise, a share
of APS which is not Outstanding shall not be counted.
(iii) Subject to the provisions of paragraph 5(b) hereof, the
terms of office of all persons who are directors of the Corporation at the
time of a special meeting of Holders and holders of other Preferred Stock to
elect directors shall continue, notwithstanding the election at such meeting
by the Holders and such other holders of the number of directors that they
are entitled to elect, and the persons so elected by the Holders and such
other holders, together with the two incumbent directors elected by the
Holders and such other holders of Preferred Stock and the remaining incumbent
directors elected by the holders of the Common Stock and Preferred Stock,
shall constitute the duly elected directors of the Corporation.
(iv) Simultaneously with the expiration of a Voting Period, the
terms of office of the additional directors elected by the Holders and
holders of other Preferred Stock pursuant to paragraph 5(b) above shall
terminate, the remaining directors shall constitute the directors of the
Corporation and the voting rights of the Holders and such other holders to
elect additional directors pursuant to paragraph 5(b) above shall cease,
subject to the provisions of the last sentence of paragraph 5(b).
(v) Solely for purposes of the provisions of paragraphs 5 (b) and
(d) hereof, and subject to the terms thereof in accordance with the 1940 Act
and Section 3-803(f) of the Maryland General Corporation Law (the "MGCL"), by
resolution of its Board of Directors on August 20, 1999, the Corporation
elected to be subject to Section 3-804(b) of the MGCL, which vests in the
Board the power to fix the number of directors of the Corporation, to be
effective upon the occurrence of the conditions giving rise to a Voting
Period, notwithstanding any contrary provisions in the Corporation's Charter
or Bylaws. Except as set forth above, the Corporation has not elected to be
subject to the provisions of Title 3 Subtitle 8 of the MGCL.
(e) Exclusive Remedy. Unless otherwise required by law, the
Holders of shares of APS shall not have any rights or preferences other than
those specifically set forth herein. The Holders of shares of APS shall have
no preemptive rights or rights to cumulative voting. In the event that the
Corporation fails to pay any dividends on the shares of APS, the exclusive
remedy of the Holders shall be the right to vote for directors pursuant to
the provisions of this paragraph 5.
(f) Notification to S&P. In the event a vote of Holders of APS is
required pursuant to the provisions of Section 13(a) of the 1940 Act, the
Corporation shall, not later than ten Business Days prior to the date on
which such vote is to be taken, notify S&P that such vote is to be taken and
the nature of the action with respect to which such vote is to be taken and,
not later than ten Business Days after the date on which such vote is taken,
notify S&P of the result of such vote.
6. 1940 Act APS Asset Coverage. The Corporation shall maintain,
as of the last Business Day of each month in which any share of APS is
outstanding, the 1940 Act APS Asset Coverage.
7. APS Basic Maintenance Amount. (a) The Corporation shall
maintain, on each Valuation Date, and shall verify to its satisfaction that
it is maintaining on such Valuation Date S&P Eligible Assets having an
aggregate Discounted Value equal to or greater than the APS Basic Maintenance
Amount. Upon any failure to maintain the required Discounted Value, the
Corporation will use its best efforts to alter the composition of its
portfolio to retain a Discounted Value at least equal to the APS Basic
Maintenance Amount on or prior to the APS Basic Maintenance Cure Date.
(b) On or before 5:00 p.m., New York City time, on the third
Business Day after a Valuation Date on which the Corporation fails to satisfy
the APS Basic Maintenance Amount, the Corporation shall complete and deliver
to the Auction Agent, and S&P, a complete APS Basic Maintenance Report as of
the date of such failure, which will be deemed to have been delivered to the
Auction Agent if the Auction Agent receives a copy or telecopy, telex or
other electronic transcription thereof and on the same day the Corporation
mails to the Auction Agent for delivery on the next Business Day the complete
APS Basic Maintenance Report. The Corporation will deliver an APS Basic
Maintenance Report to the Auction Agent and S&P, on or before 5:00 p.m., New
York City time, on the third Business Day after a Valuation Date on which the
Corporation cures its failure to maintain S&P Eligible Assets, with an
aggregate Discounted Value equal to or greater than the APS Basic Maintenance
Amount or on which the Corporation fails to maintain S&P Eligible Assets,
with an aggregate Discounted Value which exceeds the APS Basic Maintenance
Amount by 5% or more. The Corporation will also deliver an APS Basic
Maintenance Report to the Auction Agent and S&P as of each Quarterly
Valuation Date on or before the third Business Day after such date.
Additionally, on or before 5:00 p.m., New York City time, on the third
Business Day after the first day of a Special Dividend Period, the
Corporation will deliver an APS Basic Maintenance Report to S&P and the
Auction Agent. The Corporation shall also provide S&P with an APS Basic
Maintenance Report when specifically requested by S&P. A failure by the
Corporation to deliver an APS Basic Maintenance Report under this paragraph
7(b) shall be deemed to be delivery of an APS Basic Maintenance Report
indicating the Discounted Value for S&P Eligible Assets of the Corporation is
less than the APS Basic Maintenance Amount, as of the relevant Valuation
Date.
(c) Within ten Business Days after the date of delivery of an APS
Basic Maintenance Report in accordance with paragraph 7(b) above relating to
a Quarterly Valuation Date, the Independent Accountant will confirm in
writing to the Auction Agent and S&P (i) the mathematical accuracy of the
calculations reflected in such Report (and in any other APS Basic Maintenance
Report, randomly selected by the Independent Accountant, that was delivered
by the Corporation during the quarter ending on such Quarterly Valuation
Date), (ii) that, in such Report (and in such randomly selected Report), the
Corporation correctly determined the assets of the Corporation which
constitute S&P Eligible Assets at such Quarterly Valuation Date in accordance
with these Articles Supplementary, (iii) that, in such Report (and in such
randomly selected Report), the Corporation determined whether the Corporation
had, at such Quarterly Valuation Date (and at the Valuation Date addressed in
such randomly selected Report) in accordance with these Articles
Supplementary, S&P Eligible Assets of an aggregate Discounted Value at least
equal to the APS Basic Maintenance Amount, (iv) with respect to the S&P
ratings on Municipal Obligations, the issuer name, issue size and coupon rate
listed in such Report, that the Independent Accountant has requested that S&P
verify such information and the Independent Accountant shall provide a
listing in its letter of any differences, (v) with respect to the ratings on
Municipal Obligations given by a Rating Agency other than by S&P, the issuer
name, issue size and coupon rate listed in such Report, that such information
has been verified by such Rating Agency (in the event such information is not
verified by such Rating Agency, the Independent Accountant will inquire of
such Rating Agency what such information is, and provide a listing in its
letter of any differences), (vi) with respect to the bid or mean price (or
such alternative permissible factor used in calculating the Market Value)
provided by the custodian of the Corporation's assets to the Corporation for
purposes of valuing securities in the Corporation's portfolio, the
Independent Accountant has traced the price used in such Report to the bid or
mean price listed in such Report as provided to the Corporation and verified
that such information agrees (in the event such information does not agree,
the Independent Accountant will provide a listing in its letter of such
differences) and (vii) with respect to such confirmation to such Rating
Agency, that the Corporation has satisfied the requirements of paragraph 8(b)
of these Articles Supplementary (such confirmation is herein called the
"Accountant's Confirmation").
(d) Within ten Business Days after the date of delivery to the
Auction Agent and S&P of an APS Basic Maintenance Report in accordance with
paragraph 7(b) above relating to any Valuation Date on which the Corporation
failed to maintain S&P Eligible Assets with an aggregate Discounted Value
equal to or greater than the APS Basic Maintenance Amount, and relating to
the APS Basic Maintenance Cure Date with respect to such failure, the
Independent Accountant will provide to the Auction Agent and S&P an
Accountant's Confirmation as to such APS Basic Maintenance Report.
(e) If any Accountant's Confirmation delivered pursuant to
subparagraph (c) or (d) of this paragraph 7 shows that an error was made in
the APS Basic Maintenance Report for a particular Valuation Date for which
such Accountant's Confirmation as required to be delivered, or shows that a
lower aggregate Discounted Value for the aggregate of all S&P Eligible Assets
of the Corporation was determined by the Independent Accountant, the
calculation or determination made by such Independent Accountant shall be
final and conclusive and shall be binding on the Corporation, and the
Corporation shall accordingly amend and deliver the APS Basic Maintenance
Report to the Auction Agent and S&P promptly following receipt by the
Corporation of such Accountant's Confirmation.
(f) On or before 5:00 p.m., New York City time, on the first
Business Day after the Date of Original Issue of the shares of APS, the
Corporation will complete and deliver to S&P an APS Basic Maintenance Report
as of the close of business on such Date of Original Issue. Within five
Business Days of such Date of Original Issue, the Independent Accountant will
confirm in writing to S&P (i) the mathematical accuracy of the calculations
reflected in such Report and (ii) that the aggregate Discounted Value of S&P
Eligible Assets reflected thereon equals or exceeds the APS Basic Maintenance
Amount reflected thereon. Also, on or before 5:00 p.m., New York City time,
on the first Business Day after shares of Common Stock are repurchased by the
Corporation, the Corporation will complete and deliver to S&P an APS Basic
Maintenance Report as of the close of business on such date that Common Stock
is repurchased.
8. Certain Other Restrictions And Requirements.
(a) For so long as any shares of APS are rated by S&P, the
Corporation will not purchase or sell futures contracts, write, purchase or
sell options on futures contracts or write put options (except covered put
options) or call options (except covered call options) on portfolio
securities unless it receives written confirmation from S&P that engaging in
such transactions will not impair the ratings then assigned to the shares of
APS by S&P, except that the Corporation may purchase or sell futures
contracts based on the Bond Buyer Municipal Bond Index (the "Municipal
Index") or United States Treasury Bonds or Notes ("Treasury Bonds") and
write, purchase or sell put and call options on such contracts (collectively,
"S&P Hedging Transactions"), subject to the following limitations:
(i) the Corporation will not engage in any S&P Hedging Transaction
based on the Municipal Index (other than transactions which terminate a
futures contract or option held by the Corporation by the Corporation's
taking an opposite position thereto ("Closing Transactions")), which would
cause the Corporation at the time of such transaction to own or have sold the
least of (A) more than 1,000 outstanding futures contracts based on the
Municipal Index, (B) outstanding futures contracts based on the Municipal
Index exceeding in number 25% of the quotient of the Market Value of the
Corporation's total assets divided by $1,000 or (C) outstanding futures
contracts based on the Municipal Index exceeding in number 10% of the average
number of daily traded futures contracts based on the Municipal Index in the
30 days preceding the time of effecting such transaction as reported by The
Wall Street Journal;
(ii) the Corporation will not engage in any S&P Hedging Transaction
based on Treasury Bonds (other than Closing Transactions) which would cause
the Corporation at the time of such transaction to own or have sold the
lesser of (A) outstanding futures contracts based on Treasury Bonds and on
the Municipal Index exceeding in number 25% of the quotient of the Market
Value of the Corporation's total assets divided by $100,000 ($200,000 in the
case of the two-year United States Treasury Note) or (B) outstanding futures
contracts based on Treasury Bonds exceeding in number 10% of the average
number of daily traded futures contracts based on Treasury Bonds in the 30
days preceding the time of effecting such transaction as reported by The Wall
Street Journal;
(iii) the Corporation will engage in Closing Transactions to
close out any outstanding futures contract which the Corporation owns or has
sold or any outstanding option thereon owned by the Corporation in the event
(A) the Corporation does not have S&P Eligible Assets with an aggregate
Discounted Value equal to or greater than the APS Basic Maintenance Amount on
two consecutive Valuation Dates and (B) the Corporation is required to pay
Variation Margin on the second such Valuation Date;
(iv) the Corporation will engage in a Closing Transaction to close
out any outstanding futures contract or option thereon in the month prior to
the delivery month under the terms of such futures contract or option thereon
unless the Corporation holds the securities deliverable under such terms; and
(v) when the Corporation writes a futures contract or option
thereon, it will either maintain an amount of cash, cash equivalents or high
grade (rated A or better by S&P), fixed-income securities in a segregated
account with the Corporation's custodian, so that the amount so segregated
plus the amount of Initial Margin and Variation Margin held in the account of
or on behalf of the Corporation's broker with respect to such futures
contract or option equals the Market Value of the futures contract or option,
or, in the event the Corporation writes a futures contract or option thereon
which requires delivery of an underlying security, it shall hold such
underlying security in its portfolio.
For purposes of determining whether the Corporation has S&P
Eligible Assets with a Discounted Value that equals or exceeds the APS Basic
Maintenance Amount, the Discounted Value of cash or securities held for the
payment of Initial Margin or Variation Margin shall be zero and the aggregate
Discounted Value of S&P Eligible Assets shall be reduced by an amount equal
to (i) 30% of the aggregate settlement value, as marked to market, of any
outstanding futures contracts based on the Municipal Index which are owned by
the Corporation plus (ii) 25% of the aggregate settlement value, as marked to
market, of any outstanding futures contracts based on Treasury Bonds which
contracts are owned by the Corporation.
(b) For so long as shares of APS are rated by S&P, the Corporation
will not, unless it has received written confirmation from S&P that such
action would not impair the rating then assigned to shares of APS by S&P (i)
borrow money except for the purpose of clearing transactions in portfolio
securities (which borrowings shall under any circumstances be limited to the
lesser of $10 million and an amount equal to 5% of the Market Value of the
Corporation's assets at the time of such borrowings and which borrowings
shall be repaid within 60 days and not be extended or renewed and shall not
cause the aggregate Discounted Value of S&P Eligible Assets to be less than
the APS Basic Maintenance Amount), (ii) engage in short sales of securities,
(iii) lend any securities, (iv) issue any class or series of stock ranking
prior to or on a parity with the APS with respect to the payment of dividends
or the distribution of assets upon dissolution, liquidation or winding up of
the Corporation, (v) reissue any APS previously purchased or redeemed by the
Corporation, (vi) merge or consolidate into or with any other Corporation or
entity, (vii) change the Pricing Service or (viii) engage in reverse
repurchase agreements.
9. Notice. All notices or communications, unless otherwise
specified in these Articles Supplementary, shall be sufficiently given if in
writing and delivered in person or mailed by first-class mail, postage
prepaid. Notice shall be deemed given on the earlier of the date received or
the date seven days after which such notice is mailed.
10. Auction Procedures.
(a) Certain definitions. As used in this paragraph 10, the
following terms shall have the following meanings, unless the context
otherwise requires:
(i) "APS" means the shares of auction preferred stock being
auctioned pursuant to this paragraph 10.
(ii) "Auction Date" means the first Business Day preceding the
first day of a Dividend Period.
(iii) "Available APS" has the meaning specified in paragraph
10(d)(i) below.
(iv) "Bid" has the meaning specified in paragraph 10(b)(i) below.
(v) "Bidder" has the meaning specified in paragraph 10(b)(i)
below.
(vi) "Hold Order" has the meaning specified in paragraph 10(b)(i)
below.
(vii) "Maximum Applicable Rate" for any Dividend Period will be
the Applicable Percentage of the Reference Rate. The Applicable Percentage
will be determined based on (i) the credit rating assigned on such date to
such shares by S&P (or if S&P shall not make such rating available, the
equivalent of such rating by a Substitute Rating Agency) and (ii) whether the
Corporation has provided notification to the Auction Agent prior to the
Auction establishing the Applicable Rate for any dividend pursuant to
paragraph 2(f) hereof that net capital gains or other taxable income will be
included in such dividend on shares of APS as follows:
Applicable Applicable
Percentage Of Percentage Of
Reference Rate Reference
S&P Credit - Rate -
Ratings No Notification Notification
AA- or higher 110% 150%
A- to A+ 125 160
BBB- to BBB+ 150 250
Below BBB- 200 275
The Corporation shall take all reasonable action necessary to
enable S&P to provide a rating for each series of APS. If S&P shall not make
such a rating available, PaineWebber or its affiliates and successors, after
consultation with the Corporation, shall select a Rating Agency to act as a
Substitute Rating Agency.
(viii) "Order" has the meaning specified in paragraph 10(b)(i)
below.
(ix) "Sell Order" has the meaning specified in paragraph 10(b)(i)
below.
(x) "Submission Deadline" means 1:00 P.M., New York City time, on
any Auction Date or such other time on any Auction Date as may be specified
by the Auction Agent from time to time as the time by which each Broker-
Dealer must submit to the Auction Agent in writing all Orders obtained by it
for the Auction to be conducted on such Auction Date.
(xi) "Submitted Bid" has the meaning specified in paragraph
10(d)(i) below.
(xii) "Submitted Hold Order" has the meaning specified in
paragraph 10(d)(i) below.
(xiii) "Submitted Order" has the meaning specified in paragraph
10(d)(i) below.
(xiv) "Submitted Sell Order" has the meaning specified in
paragraph 10(d)(i) below.
(xv) "Sufficient Clearing Bids" has the meaning specified in
paragraph 10(d)(i) below.
(xvi) "Winning Bid Rate" has the meaning specified in paragraph
10(d)(i) below.
(b) Orders by Beneficial Owners, Potential Beneficial Owners,
Existing Holders and Potential Holders.
(i) Unless otherwise permitted by the Corporation, Beneficial
Owners and Potential Beneficial Owners may only participate in Auctions
through their Broker-Dealers. Broker-Dealers will submit the Orders of their
respective customers who are Beneficial Owners and Potential Beneficial
Owners to the Auction Agent, designating themselves as Existing Holders in
respect of shares subject to Orders submitted or deemed submitted to them by
Beneficial Owners and as Potential Holders in respect of shares subject to
Orders submitted to them by Potential Beneficial Owners. A Broker-Dealer may
also hold shares of APS in its own account as a Beneficial Owner. A Broker-
Dealer may thus submit Orders to the Auction Agent as a Beneficial Owner or a
Potential Beneficial Owner and therefore participate in an Auction as an
Existing Holder or Potential Holder on behalf of both itself and its
customers. On or prior to the Submission Deadline on each Auction Date:
(A) each Beneficial Owner may submit to its Broker-Dealer
information as to:
(1) the number of Outstanding shares, if any, of APS held by
such Beneficial Owner which such Beneficial Owner desires to continue to
hold without regard to the Applicable Rate for the next succeeding
Dividend Period;
(2) the number of Outstanding shares, if any, of APS held by
such Beneficial Owner which such Beneficial Owner desires to continue to
hold, provided that the Applicable Rate for the next succeeding Dividend
Period shall not be less than the rate per annum specified by such
Beneficial Owner; and/or
(3) the number of Outstanding shares, if any, of APS held by
such Beneficial Owner which such Beneficial Owner offers to sell without
regard to the Applicable Rate for the next succeeding Dividend Period;
and
(B) each Broker-Dealer, using a list of Potential Beneficial
Owners that shall be maintained in good faith for the purpose of conducting a
competitive Auction, shall contact Potential Beneficial Owners, including
Persons that are not Beneficial Owners, on such list to determine the number
of Outstanding shares, if any, of APS which each such Potential Beneficial
Owner offers to purchase, provided that the Applicable Rate for the next
succeeding Dividend Period shall not be less than the rate per annum
specified by such Potential Beneficial Owner.
For the purposes hereof, the communication by a Beneficial Owner or
Potential Beneficial Owner to a Broker-Dealer, or the communication by a
Broker-Dealer acting for its own account to the Auction Agent, of information
referred to in clause (A) or (B) of this paragraph 10(b)(i) is hereinafter
referred to as an "Order" and each Beneficial Owner and each Potential
Beneficial Owner placing an Order, including a Broker-Dealer acting in such
capacity for its own account, is hereinafter referred to as a "Bidder"; an
Order containing the information referred to in clause (A)(1) of this
paragraph 10(b)(i) is hereinafter referred to as a "Hold Order"; an Order
containing the information referred to in clause (A)(2) or (B) of this
paragraph 10(b)(i) is hereinafter referred to as a "Bid"; and an Order
containing the information referred to in clause (A)(3) of this paragraph
10(b)(i) is hereinafter referred to as a "Sell Order." Inasmuch as a Broker-
Dealer participates in an Auction as an Existing Holder or a Potential Holder
only to represent the interests of a Beneficial Owner or Potential Beneficial
Owner, whether it be its customers or itself, all discussion herein relating
to the consequences of an Auction for Existing Holders and Potential Holders
also applies to the underlying beneficial ownership interests represented.
(ii) (A) A Bid by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding shares of APS specified in such
Bid if the Applicable Rate determined on such Auction Date shall be less
than the rate per annum specified in such Bid; or (1) such number or a
lesser number of Outstanding shares of APS to be determined as set forth
in paragraph 10(e)(i)(D) if the Applicable Rate determined on such
Auction Date shall be equal to the rate per annum specified therein; or
(2) a lesser number of Outstanding shares of APS to be
determined as set forth in paragraph 10(e)(ii)(C) if such specified rate
per annum shall be higher than the Maximum Applicable Rate and
Sufficient Clearing Bids do not exist.
(B) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding shares of APS specified in such
Sell Order; or
(2) such number or a lesser number of Outstanding shares of
APS to be determined as set forth in paragraph 10(e)(ii)(C) if
Sufficient Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(1) the number of Outstanding shares of APS specified in such
Bid if the Applicable Rate determined on such Auction Date shall be
higher than the rate per annum specified in such Bid; or
(2) such number or a lesser number of Outstanding shares of
APS to be determined as set forth in paragraph 10(e)(i)(E) if the
Applicable Rate determined on such Auction Date shall be equal to the
rate per annum specified therein.
(c) Submission of Orders by Broker-Dealers to Auction Agent.
(i) Each Broker-Dealer shall submit in writing or through the
Auction Agent's Auction Processing System to the Auction Agent prior to the
Submission Deadline on each Auction Date all Orders obtained by such Broker-
Dealer, designating itself (unless otherwise permitted by the Corporation) as
an Existing Holder in respect of shares subject to Orders submitted or deemed
submitted to it by Beneficial Owners and as a Potential Holder in respect of
shares subject to Orders submitted to it by Potential Beneficial Owners, and
specifying with respect to each Order:
(A) the name of the Bidder placing such Order (which shall be the
Broker-Dealer unless otherwise permitted by the Corporation);
(B) the aggregate number of Outstanding shares of APS that are the
subject of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of Outstanding shares, if any, of APS subject to
any Hold Order placed by such Existing Holder;
(2) the number of Outstanding shares, if any, of APS subject to
any Bid placed by such Existing Holder and the rate per annum specified in
such Bid; and
(3) the number of Outstanding shares, if any, of APS subject to
any Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate per
annum specified in such Potential Holder's Bid.
(ii) If any rate per annum specified in any Bid contains more than
three figures to the right of the decimal point, the Auction Agent shall
round such rate up to the next highest one-thousandth (0.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding
shares of APS held by an Existing Holder are not submitted to the Auction
Agent prior to the Submission Deadline, the Auction Agent shall deem a Hold
Order (in the case of an Auction relating to a Dividend Period which is not a
Special Dividend Period) and a Sell Order (in the case of an Auction relating
to a Special Dividend Period) to have been submitted on behalf of such
Existing Holder covering the number of Outstanding shares of APS held by such
Existing Holder and not subject to Orders submitted to the Auction Agent.
(iv) If one or more Orders on behalf of an Existing Holder covering
in the aggregate more than the number of Outstanding shares of APS held by
such Existing Holder are submitted to the Auction Agent, such Order shall be
considered valid as follows and in the following order of priority:
(A) any Hold Order submitted on behalf of such Existing Holder
shall be considered valid up to and including the number of Outstanding
shares of APS held by such Existing Holder; provided that if more than one
Hold Order is submitted on behalf of such Existing Holder and the number of
shares of APS subject to such Hold Orders exceeds the number of Outstanding
shares of APS held by such Existing Holder, the number of shares of APS
subject to each of such Hold Orders shall be reduced pro rata so that such
Hold Orders, in the aggregate, will cover exactly the number of Outstanding
shares of APS held by such Existing Holder;
(B) any Bids submitted on behalf of such Existing Holder shall be
considered valid, in the ascending order of their respective rates per annum
if more than one Bid is submitted on behalf of such Existing Holder, up to
and including the excess of the number of Outstanding shares of APS held by
such Existing Holder over the number of shares of APS subject to any Hold
Order referred to in paragraph 10(c)(iv)(A) above (and if more than one Bid
submitted on behalf of such Existing Holder specifies the same rate per annum
and together they cover more than the remaining number of shares that can be
the subject of valid Bids after application of paragraph 10(c)(iv)(A) above
and of the foregoing portion of this paragraph 10(c)(iv)(B) to any Bid or
Bids specifying a lower rate or rates per annum, the number of shares subject
to each of such Bids shall be reduced pro rata so that such Bids, in the
aggregate, cover exactly such remaining number of shares); and the number of
shares, if any, subject to Bids not valid under this paragraph 10(c)(iv)(B)
shall be treated as the subject of a Bid by a Potential Holder; and
(C) any Sell Order shall be considered valid up to and including
the excess of the number of Outstanding shares of APS held by such Existing
Holder over the number of shares of APS subject to Hold Orders referred to in
paragraph 10(c)(iv)(A) and Bids referred to in paragraph 10(c)(iv)(B);
provided that if more than one Sell Order is submitted on behalf of any
Existing Holder and the number of shares of APS subject to such Sell Orders
is greater than such excess, the number of shares of APS subject to each of
such Sell Orders shall be reduced pro rata so that such Sell Orders, in the
aggregate, cover exactly the number of shares of APS equal to such excess.
(v) If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate per annum
and number of shares of APS therein specified.
(vi) Any Order submitted by a Beneficial Owner as a Potential
Beneficial Owner to its Broker-Dealer, or by a Broker-Dealer to the Auction
Agent, prior to the Submission Deadline on any Auction Date shall be
irrevocable.
(d) Determination of Sufficient Clearing Bids, Winning Bid Rate
and Applicable Rate.
(i) Not earlier than the Submission Deadline on each Auction Date,
the Auction Agent shall assemble all Orders submitted or deemed submitted to
it by the Broker-Dealers (each such Order as submitted or deemed submitted by
a Broker-Dealer being hereinafter referred to individually as a "Submitted
Hold Order", a "Submitted Bid" or a "Submitted Sell Order", as the case may
be, or as a "Submitted Order") and shall determine:
(A) the excess of the total number of Outstanding shares of APS
over the number of Outstanding shares of APS that are the subject of
Submitted Hold Orders (such excess being hereinafter referred to as the
"Available APS");
(B) from the Submitted Orders whether the number of Outstanding
shares of APS that are the subject of Submitted Bids by Potential Holders
specifying one or more rates per annum equal to or lower than the Maximum
Applicable Rate exceeds or is equal to the sum of:
(1) the number of Outstanding shares of APS that are the
subject of Submitted Bids by Existing Holders specifying one or more
rates per annum higher than the Maximum Applicable Rate, and
(2) the number of Outstanding shares of APS that are subject
to Submitted Sell Orders (if such excess or such equality exists (other
than because the number of Outstanding shares of APS in clause (1) above
and this clause (2) are each zero because all of the Outstanding shares
of APS are the subject of Submitted Hold Orders), such Submitted Bids by
Potential Holders being hereinafter referred to collectively as
"Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest rate per annum
specified in the Submitted Bids (the "Winning Bid Rate") that if:
(1) each Submitted Bid from Existing Holders specifying the
Winning Bid Rate and all other Submitted Bids from Existing Holders
specifying lower rates per annum were rejected, thus entitling such
Existing Holders to continue to hold the shares of APS that are the
subject of such Submitted Bids, and
(2) each Submitted Bid from Potential Holders specifying the
Winning Bid Rate and all other Submitted Bids from Potential Holders
specifying lower rates per annum were accepted, thus entitling the
Potential Holders to purchase the shares of APS that are the subject of
such Submitted Bids, would result in the number of shares subject to all
Submitted Bids specifying the Winning Bid Rate or a lower rate per annum
being at least equal to the Available APS.
(ii) Promptly after the Auction Agent has made the determinations
pursuant to paragraph 10(d)(i), the Auction Agent shall advise the
Corporation of the Maximum Applicable Rate and, based on such determinations,
the Applicable Rate for the next succeeding Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable Rate
for the next succeeding Dividend Period shall be equal to the Winning Bid
Rate;
(B) if Sufficient Clearing Bids do not exist (other than because
all of the Outstanding shares of APS are the subject of Submitted Hold
Orders), that the Applicable Rate for the next succeeding Dividend Period
shall be equal to the Maximum Applicable Rate; or
(C) if all of the Outstanding shares of APS are the subject of
Submitted Hold Orders, that the Dividend Period next succeeding the Auction
shall automatically be the same length as the immediately preceding Dividend
Period and the Applicable Rate for the next succeeding Dividend Period shall
be equal to 40% of the Reference Rate (or 60% of such rate if the Corporation
has provided notification to the Auction Agent prior to the Auction
establishing the Applicable Rate for any dividend pursuant to paragraph 2(f)
hereof that net capital gains or other taxable income will be included in
such dividend on shares of APS) on the date of the Auction.
(e) Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Shares. Based on the determinations made pursuant
to paragraph 10(d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Auction Agent shall take such other action as
set forth below:
(i) If Sufficient Clearing Bids have been made, subject to the
provisions of paragraph 10(e)(iii) and paragraph 10(e)(iv), Submitted Bids
and Submitted Sell Orders shall be accepted or rejected in the following
order of priority and all other Submitted Bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders specifying any
rate per annum that is higher than the Winning Bid Rate shall be accepted,
thus requiring each such Existing Holder to sell the Outstanding shares of
APS that are the subject of such Submitted Sell Order or Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders specifying
any rate per annum that is lower than the Winning Bid Rate shall be rejected,
thus entitling each such Existing Holder to continue to hold the Outstanding
shares of APS that are the subject of such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders specifying
any rate per annum that is lower than the Winning Bid Rate shall be accepted;
(D) the Submitted Bid of each of the Existing Holders specifying a
rate per annum that is equal to the Winning Bid Rate shall be rejected, thus
entitling each such Existing Holder to continue to hold the Outstanding
shares of APS that are the subject of such Submitted Bid, unless the number
of Outstanding shares of APS subject to all such Submitted Bids shall be
greater than the number of Outstanding shares of APS ("Remaining Shares")
equal to the excess of the Available APS over the number of Outstanding
shares of APS subject to Submitted Bids described in paragraph 10(e)(i)(B)
and paragraph 10(e)(i)(C), in which event the Submitted Bids of each such
Existing Holder shall be accepted, and each such Existing Holder shall be
required to sell Outstanding shares of APS, but only in an amount equal to
the difference between (1) the number of Outstanding shares of APS then held
by such Existing Holder subject to such Submitted Bid and (2) the number of
shares of APS obtained by multiplying (x) the number of Remaining Shares by
(y) a fraction the numerator of which shall be the number of Outstanding
shares of APS held by such Existing Holder subject to such Submitted Bid and
the denominator of which shall be the sum of the number of Outstanding shares
of APS subject to such Submitted Bids made by all such Existing Holders that
specified a rate per annum equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential Holders specifying
a rate per annum that is equal to the Winning Bid Rate shall be accepted but
only in an amount equal to the number of Outstanding shares of APS obtained
by multiplying (x) the difference between the Available APS and the number of
Outstanding shares of APS subject to Submitted Bids described in paragraph
10(e)(i)(B), paragraph 10(e)(i)(C) and paragraph 10(e)(i)(D) by (y) a
fraction the numerator of which shall be the number of Outstanding shares of
APS subject to such Submitted Bid and the denominator of which shall be the
sum of the number of Outstanding shares of APS subject to such Submitted Bids
made by all such Potential Holders that specified rates per annum equal to
the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding shares of APS are subject to Submitted Hold
Orders), subject to the provisions of paragraph 10(e)(iii), Submitted Orders
shall be accepted or rejected as follows in the following order of priority
and all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any rate
per annum that is equal to or lower than the Maximum Applicable Rate shall be
rejected, thus entitling such Existing Holder to continue to hold the
Outstanding shares of APS that are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder specifying any rate
per annum that is equal to or lower than the Maximum Applicable Rate shall be
accepted, thus requiring such Potential Holder to purchase the Outstanding
shares of APS that are the subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder specifying any rate
per annum that is higher than the Maximum Applicable Rate shall be accepted
and the Submitted Sell Orders of each Existing Holder shall be accepted, in
both cases only in an amount equal to the difference between (1) the number
of Outstanding shares of APS then held by such Existing Holder subject to
such Submitted Bid or Submitted Sell Order and (2) the number of shares of
APS obtained by multiplying (x) the difference between the Available APS and
the aggregate number of Outstanding shares of APS subject to Submitted Bids
described in paragraph 10(e)(ii)(A) and paragraph 10(e)(ii)(B) by (y) a
fraction the numerator of which shall be the number of Outstanding shares of
APS held by such Existing Holder subject to such Submitted Bid or Submitted
Sell Order and the denominator of which shall be the number of Outstanding
shares of APS subject to all such Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in paragraph
10(e)(i) or paragraph 10(e)(ii), any Existing Holder would be entitled or
required to sell, or any Potential Holder would be entitled or required to
purchase, a fraction of a share of APS on any Auction Date, the Auction Agent
shall, in such manner as in its sole discretion it shall determine, round up
or down the number of shares of APS to be purchased or sold by any Existing
Holder or Potential Holder on such Auction Date so that each Outstanding
share of APS purchased or sold by each Existing Holder or Potential Holder on
such Auction Date shall be a whole share of APS.
(iv) If, as a result of the procedures described in paragraph
10(e)(i), any Potential Holder would be entitled or required to purchase less
than a whole share of APS on any Auction Date, the Auction Agent shall, in
such manner as in its sole discretion it shall determine, allocate shares of
APS for purchase among Potential Holders so that only whole shares of APS are
purchased on such Auction Date by any Potential Holder, even if such
allocation results in one or more of such Potential Holders not purchasing
any shares of APS on such Auction Date.
(v) Based on the results of each Auction, the Auction Agent shall
determine, with respect to each Broker-Dealer that submitted Bids or Sell
Orders on behalf of Existing Holders or Potential Holders, the aggregate
number of Outstanding shares of APS to be purchased and the aggregate number
of the Outstanding shares of APS to be sold by such Potential Holders and
Existing Holders and, to the extent that such aggregate number of Outstanding
shares to be purchased and such aggregate number of Outstanding shares to be
sold differ, the Auction Agent shall determine to which other Broker-Dealer
or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one
or more sellers such Broker-Dealer shall receive, as the case may be,
Outstanding shares of APS
(f) Miscellaneous. The Corporation may interpret the provisions
of this paragraph 10 to resolve any inconsistency or ambiguity, remedy any
formal defect or make any other change or modification that does not
substantially adversely affect the rights of Beneficial Owners of APS. A
Beneficial Owner or an Existing Holder (A) may sell, transfer or otherwise
dispose of shares of APS only pursuant to a Bid or Sell Order in accordance
with the procedures described in this paragraph 10 or to or through a Broker-
Dealer, provided that in the case of all transfers other than pursuant to
Auctions such Beneficial Owner or Existing Holder, its Broker-Dealer, if
applicable, or its Agent Member advises the Auction Agent of such transfer
and (B) except as otherwise required by law, shall have the ownership of the
shares of APS held by it maintained in book entry form by the Securities
Depository in the account of its Agent Member, which in turn will maintain
records of such Beneficial Owner's beneficial ownership. Neither the
Corporation nor any Affiliate shall submit an Order in any Auction. Any
Beneficial Owner that is an Affiliate shall not sell, transfer or otherwise
dispose of shares of APS to any Person other than the Corporation. All of
the Outstanding shares of APS of a series shall be represented by a single
certificate registered in the name of the nominee of the Securities
Depository unless otherwise required by law or unless there is no Securities
Depository. If there is no Securities Depository, at the Corporation's
option and upon its receipt of such documents as it deems appropriate, any
shares of APS may be registered in the Stock Register in the name of the
Beneficial Owner thereof and such Beneficial Owner thereupon will be entitled
to receive certificates therefor and required to deliver certificates
therefor upon transfer or exchange thereof.
11. Securities Depository; Stock Certificates. (a) If there is a
Securities Depository, one certificate for all of the shares of APS of each
series shall be issued to the Securities Depository and registered in the
name of the Securities Depository or its nominee. Additional certificates
may be issued as necessary to represent shares of APS. All such certificates
shall bear a legend to the effect that such certificates are issued subject
to the provisions restricting the transfer of shares of APS contained in
these Article Supplementary. Unless the Corporation shall have elected,
during a Non-Payment Period, to waive this requirement, the Corporation will
also issue stop-transfer instructions to the Auction Agent for the shares of
APS. Except as provided in paragraph (b) below, the Securities Depository or
its nominee will be the Holder, and no Beneficial Owner shall receive
certificates representing its ownership interest in such shares.
(b) If the Applicable Rate applicable to all shares of APS of a
series shall be the Non-Payment Period Rate or there is no Securities
Depository, the Corporation may at its option issue one or more new
certificates with respect to such shares (without the legend referred to in
paragraph 11(a)) registered in the names of the Beneficial Owners or their
nominees and rescind the stop-transfer instructions referred to in paragraph
11(a) with respect to such shares.
[Remainder of page left blank]
IN WITNESS WHEREOF, DREYFUS STRATEGIC MUNICIPALS, INC., has caused
these presents to be signed in its name and on its behalf by its Vice
President and witnessed by its Assistant Secretary on this 26th day of
January, 2000, and its Vice President acknowledges that these Articles
Supplementary are the act and deed of Dreyfus Strategic Municipals, Inc.,
and, under the penalties of perjury, that the matters and facts set forth
herein with respect to authorization and approval are true in all material
respects to the best of her knowledge, information and belief.
DREYFUS STRATEGIC MUNICIPALS, INC.
By:___________________________________
Stephanie D. Pierce
Vice President
ATTEST:
_______________________
Name: (seal)
Title: Assistant Secretary
BY-LAWS
OF
DREYFUS STRATEGIC MUNICIPALS, INC.
(A Maryland Corporation)
___________
ARTICLE II
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing
shares of stock shall set forth thereon the statements prescribed by
Section 2-211 of the Maryland General Corporation Law ("General Corporation
Law") and by any other applicable provision of law and shall be signed by the
Chairman of the Board or the President or a Vice President and countersigned
by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer and may be sealed with the corporate seal. The signatures of any
such officers may be either manual or facsimile signatures and the corporate
seal may be either facsimile or any other form of seal. In case any such
officer who has signed manually or by facsimile any such certificate ceases
to be such officer before the certificate is issued, it nevertheless may 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.
No certificate representing shares of stock shall be issued for any
share of stock until such share is fully paid, except as otherwise authorized
in Section 2-206 of the General Corporation Law.
The corporation may issue a new certificate of stock in place of
any certificate theretofore issued by it, alleged to have been lost, stolen
or destroyed, and the Board of Directors may require, in its discretion, the
owner of any such certificate or the owner's legal representative to give
bond, with sufficient surety, to the corporation to indemnify it against any
loss or claim that may arise by reason of the issuance of a new certificate.
2. SHARE TRANSFERS. Upon compliance with provisions restricting
the transferability of shares of stock, if any, transfers of shares of stock
of the corporation shall be made only on the stock transfer books of the
corporation by the record holder thereof or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the corporation or with a transfer agent or a registrar, if any, and on
surrender of the certificate or certificates for such shares of stock
properly endorsed and the payment of all taxes due thereon.
3. RECORD DATE FOR STOCKHOLDERS. 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 90 days, and in case of a meeting of stockholders not less than
10 days, prior to the date on which the meeting or particular action
requiring such determination of stockholders is to be held or 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 20 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 10 days immediately preceding such
meeting. If no record date is fixed and the stock transfer books are not
closed for the determination of stockholders: (1) The record date for the
determination of stockholders entitled to notice of, or to vote at, a meeting
of stockholders shall be at the close of business on the day on which the
notice of meeting is mailed or the day 30 days before the meeting, whichever
is the closer date to the meeting; and (2) The record date for the
determination of stockholders entitled to receive payment of a dividend or an
allotment of any rights shall be at the close of business on the day on which
the resolution of the Board of Directors declaring the dividend or allotment
of rights is adopted, provided that the payment or allotment date shall not
be more than 60 days after the date on which the resolution is adopted.
4. MEANING OF CERTAIN TERMS. As used herein in respect of the
right to notice of a meeting of stockholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu of a
meeting, as the case may be, the term "share of stock" or "shares of stock"
or "stockholder" or "stockholders" refers to an outstanding share or shares
of stock and to a holder or holders of record of outstanding shares of stock
when the corporation is authorized to issue only one class of shares of stock
and said reference also is intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class or series upon which or upon whom the Charter confers such
rights where there are two or more classes or series of shares or upon which
or upon whom the General Corporation Law confers such rights notwithstanding
that the Charter may provide for more than one class or series of shares of
stock, one or more of which are limited or denied such rights thereunder.
5. STOCKHOLDER MEETINGS.
TIME. The annual meeting of stockholders shall be held on the
date fixed, from time to time, by the directors, within the thirty-one day
period commencing with the first day of June (or if said day be a legal
holiday, then on the next succeeding day not a legal holiday), for the
election of directors and the transaction of any business within the powers
of the corporation. Special meetings shall be held on the date or dates
fixed by the directors.
PLACE. Annual meetings and special meetings shall be held at
such place, either within the State of Maryland or at such other place within
the United States, and at such date or dates as the directors from time to
time may fix.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written or
printed notice of all meetings shall be given by the Secretary and shall
state the time and place of the meeting. The notice of a special meeting
shall state in all instances the purpose or purposes for which the meeting is
called. Written or printed notice of any meeting shall be given to each
stockholder either by mail or by presenting it to the stockholder personally
or by leaving it at his or her residence or usual place of business not less
than ten days and not more than 90 days before the date of the meeting,
unless any provisions of the General Corporation Law shall prescribe a
different elapsed period of time, to each stockholder at his or her address
appearing on the books of the corporation or the address supplied by the
stockholder for the purpose of notice. If mailed, notice shall be deemed to
be given when deposited in the United States mail addressed to the
stockholder at his or her post office address as it appears on the records of
the corporation with postage thereon prepaid. Whenever any notice of the
time, place or purpose of any meeting of stockholders is required to be given
under the provisions of these by-laws or of the General Corporation Law, a
waiver thereof in writing, signed by the stockholder and filed with the
records of the meeting, whether before or after the holding thereof, or
actual attendance or representation at the meeting shall be deemed equivalent
to the giving of such notice to such stockholder. The foregoing requirements
of notice also shall apply, whenever the corporation shall have any class of
stock which is not entitled to vote, to holders of stock who are not entitled
to vote at the meeting, but who are entitled to notice thereof and to dissent
from any action taken thereat.
STATEMENT OF AFFAIRS. The President of the corporation or, if
the Board of Directors shall determine otherwise, some other executive
officer thereof, shall prepare or 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 and filed within 20 days
thereafter at the principal office of the corporation in the State of
Maryland.
QUORUM. At any meeting of stockholders, the presence in
person or by proxy of stockholders entitled to cast one-third of the votes
thereat shall constitute a quorum. In the absence of a quorum, the
stockholders present in person or by proxy, by majority vote and without
notice other than by announcement, may adjourn the meeting from time to time,
but not for a period exceeding 120 days after the original record date until
a quorum shall attend.
ADJOURNED MEETINGS. A meeting of stockholders convened on the
date for which it was called (including one adjourned to achieve a quorum as
provided in the paragraph above) may be adjourned from time to time without
further notice to a date not more than 120 days after the original record
date, and any business may be transacted at any adjourned meeting which could
have been transacted at the meeting as originally called.
CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and
if present and acting: the President, the Chairman of the Board, a Vice
President or, if none of the foregoing is in office and present and acting,
by a chairman to be chosen by the stockholders. The Secretary of the
corporation or, in his or her absence, an Assistant Secretary, shall act as
secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present the chairman of the meeting shall appoint a secretary of
the meeting.
PROXY REPRESENTATION. Every stockholder may authorize another
person or persons to act for him by proxy in all matters in which a
stockholder is entitled to participate, whether for the purposes of
determining the stockholder's presence at a meeting, or whether by waiving
notice of any meeting, voting or participating at a meeting, expressing
consent or dissent without a meeting or otherwise. Every proxy shall be
executed in writing by the stockholder or by his or her duly authorized
attorney-in-fact or be in such other form as may be permitted by the Maryland
General Corporation Law, including documents conveyed by electronic
transmission and filed with the Secretary of the corporation. A copy,
facsimile transmission or other reproduction of the writing or transmission
may be substituted for the original writing or transmission for any purpose
for which the original transmission could be used. No unrevoked proxy shall
be valid after 11 months from the date of its execution, unless a longer time
is expressly provided therein. The placing of a stockholder's name on a
proxy pursuant to telephonic or electronically transmitted instructions
obtained pursuant to procedures reasonably designed to verify that such
instructions have been authorized by such stockholder shall constitute
execution of such proxy by or on behalf of such stockholder.
INSPECTORS OF ELECTION. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the
meeting or any adjournment thereof. If an inspector or inspectors are not
appointed, the person presiding at the meeting may, but need not, appoint one
or more inspectors. In case any person who may be appointed as an inspector
fails to appear or act, the vacancy may be filled by appointment made by the
directors in advance of the meeting or at the meeting by the person presiding
thereat. Each inspector, if any, before entering upon the discharge of his
duties, shall take and sign an oath to execute faithfully the duties of
inspector at such meeting with strict impartiality and according to the best
of his ability. The inspectors, if any, shall determine the number of shares
outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum and the validity and effect of proxies,
and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count
and tabulate all votes, ballots or consents, determine the result and do such
acts as are proper to conduct the election or vote with fairness to all
stockholders. On request of the person presiding at the meeting or any
stockholder, the inspector or inspectors, if any, shall make a report in
writing of any challenge, question or matter determined by him or them and
execute a certificate of any fact found by him or them.
VOTING. Each share of stock shall entitle the holder thereof
to one vote, except in the election of directors, at which each said vote may
be cast for as many persons as there are directors to be elected. Except for
election of directors, 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 come before
a meeting, unless more than a majority of votes cast is required by the
corporation's Articles of Incorporation. A plurality of all the votes cast
at a meeting at which a quorum is present shall be sufficient to elect a
director.
6. INFORMAL ACTION. Any action required or permitted to be taken
at a meeting of stockholders may be taken without a meeting if a consent in
writing, setting forth such action, is signed by all the stockholders
entitled to vote on the subject matter thereof and any other stockholders
entitled to notice of a meeting of stockholders (but not to vote thereat)
have waived in writing any rights which they may have to dissent from such
action and such consent and waiver are filed with the records of the
corporation.
ARTICLE III
BOARD OF DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the
corporation shall be managed under the direction of a Board of Directors.
The use of the phrase "entire board" herein refers to the total number of
directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be a natural
person of full age. A director need not be a stockholder, a citizen of the
United States or a resident of the State of Maryland. The initial Board of
Directors shall consist of two persons. Thereafter, the number of directors
constituting the entire board shall never be less than three or the number of
stockholders, whichever is less. At any regular meeting or at any special
meeting called for that purpose, a majority of the entire Board of Directors
may increase or decrease the number of directors, provided that the number
thereof shall never be less than three or the number of stockholders,
whichever is less, nor more than twelve and further provided that the tenure
of office of a director shall not be affected by any decrease in the number
of directors.
3. ELECTION AND TERM. The first Board of Directors shall consist
of the directors named in the Articles of Incorporation and shall hold office
until the first annual meeting of stockholders or until their successors have
been elected and qualified. Beginning with the first annual meeting of
stockholders held after the initial public offering of the shares of the
corporation (the "initial annual meeting"), the Board of Directors shall be
divided into three classes, as nearly equal in number as the then total
number of directors constituting the entire Board permits, with the term of
office of one class expiring each year. At the initial annual meeting,
directors of the first class shall be deemed to have been elected to hold
office for a term expiring at the next succeeding annual meeting, directors
of the second class shall be deemed to have been elected to hold office for a
term expiring at the second succeeding annual meeting and directors of the
third class shall be deemed to have been elected to hold office for a term
expiring at the third succeeding annual meeting. In the interim between
annual meetings of stockholders or special meetings of stockholders called
for the election of directors, newly created directorships and any vacancies
in the Board of Directors, other than vacancies resulting from the removal of
directors by the stockholders, may be filled by the Board of Directors.
Newly created directorships filled by the Board of Directors shall be by
action of a majority of the entire Board of Directors. All other vacancies
to be filled by the Board of Directors may be filled by a majority of the
remaining members of the Board of Directors, although such majority is less
than a quorum thereof. Any director elected by the stockholders of the
corporation to fill a vacancy shall be in the same class and have the same
remaining term as that of the predecessor. Any director elected by the Board
of Directors to fill a vacancy shall serve until the next annual meeting of
stockholders and until his successor is elected and qualifies. No decrease
in the number of directors shall shorten the term of any incumbent director.
4. MEETINGS.
TIME. Meetings shall be held at such time as the Board shall
fix, except that the first meeting of a newly elected Board shall be held as
soon after its election as the directors conveniently may assemble.
PLACE. Meetings shall be held at such place within or without
the State of Maryland as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be called by
or at the direction of the President or of a majority of the directors in
office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Whenever any notice
of the time, place or purpose of any meeting of directors or any committee
thereof is required to be given under the provisions of the General
Corporation Law or of these by-laws, a waiver thereof in writing, signed by
the director or committee member 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 shall be deemed equivalent to the giving of
such notice to such director or such committee member.
QUORUM AND ACTION. A majority of the entire Board of
Directors shall constitute a quorum except when a vacancy or vacancies
prevents such majority, whereupon a majority of the directors in office shall
constitute a quorum, provided such majority shall constitute at least one-
third of the entire Board and, in no event, less than two directors. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting to another time and place. Except as otherwise
specifically provided by the Articles of Incorporation, the General
Corporation Law or these by-laws, 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.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if any
and if present and acting, or the President or any other director chosen by
the Board, shall preside at all meetings.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be
removed for cause or without cause by the stockholders, who may elect a
successor or successors to fill any resulting vacancy or vacancies for the
unexpired term of the removed director or directors.
6. COMMITTEES. The Board of Directors may appoint from among its
members an Executive Committee and other committees composed of one or more
directors and may delegate to such committee or 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 to the extent permitted by law. 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.
7. INFORMAL ACTION. 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 by all
members of the Board of Directors or any such committee, as the case may be,
and such written consent is filed with the minutes of the proceedings of the
Board or any such committee.
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. Participation by such means shall constitute presence in person at a
meeting.
ARTICLE IV
OFFICERS
The corporation may have a Chairman of the Board and shall have a
President, a Secretary and a Treasurer, who shall be elected by the Board of
Directors, and may have such other officers, assistant officers and agents as
the Board of Directors shall authorize from time to time. Any two or more
offices, except those of President and Vice President, may be held by the
same person, but no person shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by law
to be executed, acknowledged or verified by two or more officers.
Any officer or agent may be removed by the Board of Directors
whenever, in its judgment, the best interests of the corporation will be
served thereby.
ARTICLE V
PRINCIPAL OFFICE - RESIDENT AGENT - STOCK LEDGER
The address of the principal office of the corporation in the State
of Maryland prescribed by the General Corporation Law is 300 East Lombard
Street, c/o The Corporation Trust Incorporated, Baltimore, Maryland 21202.
The name and address of the resident agent in the State of Maryland
prescribed by the General Corporation Law are: The Corporation Trust
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202.
The corporation shall maintain, at its principal office in the
State of Maryland prescribed by the General Corporation Law or at the
business office or an agency of the corporation, an original or duplicate
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.
The corporation shall keep at said principal office in the State of
Maryland the original or a certified copy of the by-laws, including all
amendments thereto, and shall duly file thereat the annual statement of
affairs of the corporation prescribed by Section 2-313 of the General
Corporation Law.
ARTICLE VI
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words and/or
figures as the Board of Directors shall determine or the law require.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be
subject to change, by the Board of Directors.
ARTICLE VIII
CONTROL OVER BY-LAWS
The power to make, alter, amend and repeal the by-laws is vested
exclusively in the Board of Directors of the corporation.
ARTICLE IX
INDEMNIFICATION
1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation
shall indemnify its directors to the fullest extent that indemnification of
directors is permitted by the General Corporation Law. The corporation shall
indemnify its officers to the same extent as its directors and to such
further extent as is consistent with law. The corporation shall indemnify
its directors and officers who while serving as directors or officers also
serve at the request of the corporation as a director, officer, partner,
trustee, employee, agent or fiduciary of another corporation, partnership,
joint venture, trust, other enterprise or employee benefit plan to the
fullest extent consistent with law. The indemnification and other rights
provided by this Article shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. This Article shall not protect any such
person against any liability to the corporation or any stockholder thereof to
which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct").
2. ADVANCES. Any current or former director or officer of the
corporation seeking indemnification within the scope of this Article shall be
entitled to advances from the corporation for payment of the reasonable
expenses incurred by him in connection with the matter as to which he is
seeking indemnification in the manner and to the fullest extent permissible
under the General Corporation Law. The person seeking indemnification shall
provide to the corporation a written affirmation of his good faith belief
that the standard of conduct necessary for indemnification by the corporation
has been met and a written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not been met. In
addition, at least one of the following additional conditions shall be met:
(a) the person seeking indemnification shall provide a security in form and
amount acceptable to the corporation for his or her undertaking; (b) the
corporation is insured against losses arising by reason of the advance; or
(c) a majority of a quorum of directors of the corporation who are neither
"interested persons" as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended, nor parties to the proceeding ("disinterested non-
party directors"), or independent legal counsel, in a written opinion, shall
have determined, based on a review of facts readily available to the
corporation at the time the advance is proposed to be made, that there is
reason to believe that the person seeking indemnification will ultimately be
found to be entitled to indemnification.
3. PROCEDURE. At the request of any person claiming
indemnification under this Article, the Board of Directors shall determine,
or cause to be determined, in a manner consistent with the General
Corporation Law, whether the standards required by this Article have been
met. Indemnification shall be made only following: (a) a final decision on
the merits by a court or other body before whom the proceeding was brought
that the person to be indemnified was not liable by reason of disabling
conduct or (b) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the person to be indemnified was not
liable by reason of disabling conduct by (i) the vote of a majority of a
quorum of disinterested non-party directors or (ii) an independent legal
counsel in a written opinion.
4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees and agents
who are not officers or directors of the corporation may be indemnified, and
reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940, as amended.
5. OTHER RIGHTS. The Board of Directors may make further
provision consistent with law for indemnification and advance of expenses to
directors, officers, employees and agents by resolution, agreement or
otherwise. The indemnification provided by this Article shall not be deemed
exclusive of any other right, with respect to indemnification or otherwise,
to which those seeking indemnification may be entitled under any insurance or
other agreement or resolution of stockholders or disinterested non-party
directors or otherwise.
6. AMENDMENTS. References in this Article are to the General
Corporation Law and to the Investment Company Act of 1940 as from time to
time amended. No amendment of the by-laws shall affect any right of any
person under this Article based on any event, omission or proceeding prior to
the amendment.
Dated: July 20, 1987
Amended: August 20, 1999
