AMENDMENT
TO THE BY-LAWS OF
PILGRIM PRIME RATE TRUST
On July 26, 2000 the Board of Trustees adopted the following amendments
to the By-laws of Pilgrim Prime Rate Trust. The amendments contemplate the Trust
issuing a class of preferred shares, with one or more series, of the Trust.
Accordingly, the By-laws of Pilgrim Prime Rate Trust are hereby amended to
revise Sections 11.1 and 11.3 of ARTICLE 11, to read as follows:
11.1 VOTING POWERS. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Article IV, Section 1 of the
Declaration of Trust and Section 11.3 of these By-laws, PROVIDED, HOWEVER, that
no meeting of Shareholders is required to be called for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees have
been elected by the shareholders, or as otherwise required by the terms of the
Investment Company Act of 1940 and the rules and regulations thereunder,
including in this regard, in the event any preferred class of shares is
outstanding, as required by Section 18(a)(2) of the Investment Company Act of
1940, as amended, (ii) with respect to any Manager or Sub-Manager as provided in
Article IV, Section 6 of the Declaration of Trust to the extent required by the
Investment Company Act of 1940 and the rules and regulations thereunder (iii)
with respect to a termination of this Trust to the extent and as provided in
Article IX, Section 4 of the Declaration of Trust, (iv) with respect to any
amendment of the Declaration of Trust to the extent and as provided in Article
IX, Section 7 of the Declaration of Trust, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
and (vi) with respect to such additional matters relating to the Trust as may be
required by laws the Declaration of Trusts these By-laws or any registration of
the Trust with the Commission (or any successor agency) or any State, or as the
Trustee may consider necessary or desirable. Each whole share shall be entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote. On any matter
submitted to a vote of Shareholders all Shares of the Trust then entitled to
vote shall be voted as one class, except (i) when required by the Investment
Company Act of 1940 and (ii) when the Trustees have determined that the matter
either affects only the interest of one class or one or more series within a
class or affects such class or shares adversely, then either Shareholders of
such class or series shall be the only class or series entitled to vote thereon
or they should be entitled to vote separately as a class or series. Consistent
with the forgoing, holders of any preferred class of shares shall vote
separately as a class (i) on the adoption of any plan of reorganization that
would adversely affect the preferred shares, (ii) with respect to any action
requiring a vote of security holders pursuant to Section 13(a) of the Investment
Company Act of 1940, as amended, and (iii) on any other matter as required by
law or as provided by the Trustees. There shall be no cumulative voting in the
election of Trustees. Shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the proxy
the Trust receives a specific written notice to the contrary from any one of
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them. A proxy purporting to be executed by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, the Declaration of Trust or those By-laws to be taken by
Shareholders.
11.2 QUORUM AND REQUIRED VOTE. A majority of Shares entitled to vote
shall be a quorum for the transaction of business at a Shareholders meeting,
except that where any provision of law or of the Declaration of Trust or these
By-laws permits or requires that holders of any class or series shall vote as a
class or series, then a majority of the aggregate number of Shares of that
respective class or series entitled to vote shall be necessary to constitute a
quorum for the transaction of business by that class or series. Any lesser
number shall be sufficient for adjournments. Any adjourned session or sessions
may be held, within a reasonable time after the date set for the original
meeting, without the necessity of further notice. Except when a larger vote is
required by any provision of law or the Declaration of Trust or these By-laws, a
majority of the Shares voted shall decide any questions and a plurality shall
elect a Trustee, provided that where any provision of law or of the Declaration
of Trust or these By-laws permits or requires that the holders of any class or
series shall vote as a class or series, then, except as otherwise required by
the terms of the Investment Company Act of 1940 and the rules and regulations
thereunder, a majority of the Shares of that respective class or series voted on
the matter (or a plurality with respect to the election of a Trustee) shall
decide that matter insofar as that class or series is concerned. Consistent with
the foregoing, holders of a preferred class of shares, if any, shall be entitled
to elect (i) at least two Trustees at all times and (ii) a majority of the
Trustees at any time two years' dividends on such preferred class of shares are
unpaid.
