EXHIBIT 3(b)
SBM CERTIFICATE COMPANY
(A Maryland Corporation)
BY-LAWS
ARTICLE I. NAME OF CORPORATION,
LOCATION OF OFFICES, AND SEAL
Section 1.01. NAME: The name of the Corporation is SBM Certificate Company.
Section 1.02. PRINCIPAL OFFICE: The principal office of the Corporation in the
State of Maryland shall be located at 2 Wisconsin Circle Seventh Floor Chevy
Chase, MD 20815, c/o John J. Lawbaugh. The Corporation may, in addition,
establish and maintain such other offices and places of business, within or
outside the State of Maryland, as the Board of Directors may from time to time
determine. [MGCL, Sections 2-103(4), 2-108(a)(1)] (1)
Section 1.03. SEAL: The corporate seal of the Corporation shall be circular in
form, and shall bear the name of the Corporation, the year of its
incorporation, and the words "Corporate Seal, Maryland." The form of the seal
shall be subject to alteration by the Board of Directors and the seal may be
used by causing it or a facsimile to be impressed or affixed or printed or
otherwise reproduced. In lieu of affixing the corporate seal to any document
it shall be sufficient to meet the requirements of any law, rule, or
regulation relating to a corporate seal to affix the word "(Seal)" adjacent to
the signature of the authorized officer of the Corporation. Any officer or
Director of the Corporation shall have authority to affix the corporate seal
of the Corporation to any document requiring the same. [MGCL, Sections
1-304(b), 2-103(3)]
ARTICLE II. SHAREHOLDERS
Section 2.01. ANNUAL MEETINGS: The Corporation shall not be required to hold
an annual meeting of its shareholders in any year in which election of
Directors is not required to be acted upon under the Investment Company Act.
In the event that the Investment Company Act requires the Corporation to hold
a meeting of shareholders to elect Directors, such meeting shall for all
purposes constitute the annual meeting of shareholders for the fiscal year of
the Corporation in which the meeting is held, and shall be held at a date and
time set by the Board of Directors in accordance with the Investment Company
Act, but in no event later than one hundred and twenty (120) days after the
event requiring the meeting. At any such meeting, the shareholders shall elect
JOHN J. LAWBAUGH AS PRESIDENT.
(1) Bracketed citations are to the State of Maryland General Corporation Law
("MGCL") or to the United States Investment Company Act of 1940, as amended
(the "Investment Company Act"), or to Rules of the United States Securities
and Exchange Commission thereunder ("ICA Rules"). The citations are inserted
for reference only and do not constitute a part of the By-Laws. Directors to
hold the offices of any Directors, as required by applicable law. Except as
the Articles of Incorporation or applicable law provides otherwise, Directors
may transact any business within the powers of the Corporation as may properly
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come before the meeting. Any business of the Corporation may be transacted at
the annual meeting without being specially designated in the notice, except
such business as is specifically required by applicable law to be stated in
the notice. The use of the term "annual meeting" in these By-Laws shall not be
construed as implying a requirement that a shareholder's meeting be held
annually. [MGCL, Section 2-501]
Section 2.02. SPECIAL MEETINGS: Special meetings of the shareholders may be
called at any time by the Chairman of the Board, if there be such an officer,
the President, any Vice President, or by the Board of Directors. Special
meetings of the shareholders also shall be called by the Secretary on the
written request of shareholders entitled to cast at least ten (10) percent of
all the votes entitled to be cast at such meeting, PROVIDED that (a) such
request shall state the purpose or purposes of the meeting and the matters
proposed to be acted on, and (b) the shareholders requesting the meeting shall
have paid to the Corporation the reasonably estimated cost of preparing and
mailing the notice thereof, which the Secretary shall determine and specify to
such shareholders. Unless requested by shareholders entitled to cast a
majority of all the votes entitled to be cast at the meeting, a special
meeting need not be called to consider any matter which is substantially the
same as a matter voted upon at any annual or special meeting of the
shareholders held during the preceding twelve (12) months. [MGCL, Section
2-502]
Section 2.03. PLACE OF MEETINGS: All shareholders' meetings shall be held at
such place within the United States as may be fixed from time to time by the
Board of Directors. [MGCL, Section 2-503]
Section 2.04. NOTICE OF MEETINGS: Not less than ten (10) days, nor more than
ninety (90) days before each shareholders' meeting, the Secretary or an
Assistant Secretary of the Corporation shall give to each shareholder entitled
to vote at the meeting, and each other shareholder entitled to notice of the
meeting, written notice stating (a) the time and place of the meeting, and (b)
the purpose or purposes of the meeting if the meeting is a special meeting or
if notice of the purpose is required by applicable law to be given. Such
notice shall be personally delivered to the shareholder, or left at his (2)
residence or usual place of business, or mailed to him at his address as it
appears on the records of the Corporation. No notice of a shareholders'
meeting need be given to any shareholder who shall sign a written waiver of
such notice, whether before or after the meeting, which is filed with the
records of shareholders' meetings, or to any shareholder who is present at the
meeting in person or by proxy. Notice of adjournment of a shareholders'
meeting to another time or place need not be given if such time and place are
announced at the meeting, unless the adjournment is for more than one hundred
and twenty (120) days after the original record date. [MGCL, Sections 2-504,
2-511(d)]
Section 2.05. SHAREHOLDER CONFERENCE COMMUNICATIONS: Shareholders may
participate in a shareholders' meeting by means of a conference call or
similar communication equipment if all persons participating in the meeting
can hear each other at the same time. Participation by such means shall
constitute presence in person at such meeting, unless otherwise prohibited by
applicable law. [MGCL, Section 2-502.1]
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Section 2.06. VOTING IN GENERAL: Except as otherwise specifically provided in
the Articles of Incorporation or these By-Laws, or as required by provisions
of the Investment Company Act or other applicable law, at every shareholders'
meeting, each shareholder shall be entitled to one (1) vote for each share of
stock of the Corporation validly issued and outstanding and held by such
shareholder, except that no shares held by the Corporation shall be entitled
to a vote. Fractional shares shall be entitled to fractional votes. Except as
otherwise specifically provided in the Articles of Incorporation, or these
By-Laws, or as required by provisions of the Investment Company Act or other
applicable law, a majority of all the votes cast at a meeting at which a
quorum is present is sufficient to approve any matter which properly comes
before the meeting. The vote upon any question shall be by ballot whenever
requested by any person entitled to vote, but, unless such a request is made,
voting may be conducted in any way approved by the meeting. [MGCL, Sections
2-214(a)(1), 2-506(a)(2), 2-507(a), 2-509(b)]
Section 2.07. VOTING SHAREHOLDERS ENTITLED TO VOTE: If a record date has been
established for the determination of shareholders entitled to notice of or to
vote at any shareholders' meeting in accordance with section 8.05 hereof, each
such shareholder of the Corporation shall be entitled to vote in person or by
proxy, each share or fraction of a share of stock outstanding in his name on
the books of the Corporation on such record date. [MGCL, Section 2-507]
Section 2.08. VOTING PROXIES: The right to vote by proxy shall exist only if
the shareholder has authorized another person to act as proxy by signing a
writing authorizing the other person to act as proxy. Such signing may be
accomplished by the shareholder or the shareholder's authorized agent signing
the writing or causing the shareholder's signature to be affixed to the
writing by any reasonable means, including facsimile signature. A shareholder
may authorize another person to act as proxy by transmitting, or authorizing
the transmission of, a telegram, cablegram, datagram, or other means of
electronic transmission to the person authorized to act as proxy or to a proxy
solicitation firm, proxy support service organization, or other person
authorized by the person who will act as proxy to receive the transmission. A
copy, facsimile communication, or other reliable reproduction of the writing
or transmission herein authorized may be substituted for the original writing
or transmission for any purpose for which the original writing or transmission
could be used. A proxy is revocable by a shareholder at any time without
condition or qualification unless made irrevocable in accordance with Maryland
General Corporation Law, as amended, from time to time ("Maryland Law"). No
proxy shall be valid more than eleven (11) months after its date unless it
provides for a longer period. Unless otherwise agreed to in writing, the
holder of record of a share of stock, which actually belongs to another, shall
issue a proxy to vote the share to the actual owner on his demand. [MGCL,
Section 2-507]
Section 2.09. QUORUM: The presence at any shareholders' meeting, in person or
by proxy, of shareholders entitled to cast one-third of the votes entitled to
be cast at the meeting shall constitute a quorum, unless otherwise required by
applicable law. [MGCL, Section 2-506(a)]
Section 2.10. ABSENCE OF QUORUM: In the absence of a quorum, the holders of a
majority of shares entitled to vote at the meeting and present thereat in
person or by proxy, or, if no shareholder entitled to vote is present in
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person or by proxy, any officer present who is entitled to preside at or act
as Secretary of such meeting, may adjourn the meeting sine die or from time to
time. Any business that might have been transacted at the meeting originally
called may be transacted at any such adjourned meeting at which a quorum is
present.
Section 2.11. STOCK LEDGER AND LIST OF SHAREHOLDERS: It shall be the duty of
the Secretary or Assistant Secretary of the Corporation to cause an original
or duplicate stock ledger to be maintained at the office of the Corporation's
transfer agent, containing the names and addresses of all shareholders and the
number of shares of each series or class held by each shareholder. 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. One or more
persons, who together and for at least six (6) months have been shareholders
of record of at least five (5) percent of the outstanding capital stock of the
Corporation, may submit (unless the Corporation at the time of the request
maintains a duplicate stock ledger at its principal office) a written request
to any officer of the Corporation or its resident agent in Maryland for a list
of the shareholders of the Corporation. Within twenty (20) days after such a
request, there shall be prepared and filed at the Corporation's principal
office a list, verified under oath by an officer of the Corporation or by its
transfer agent or registrar, which sets forth the name and address of each
shareholder and the number of shares of each series or class which the
shareholder holds. [MGCL, Sections 2-209, 2-513]
Section 2.12. INFORMAL ACTION BY SHAREHOLDERS: Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting, if the following are filed with the records of shareholders'
meetings:
(a) A unanimous written consent which sets forth the action and is signed by
each shareholder entitled to vote on the matter; and
(b) A written waiver of any right to dissent signed by each shareholder
entitled to notice of the meeting, but not entitled to vote at it. [MGCL,
2-505]
ARTICLE III. BOARD OF DIRECTORS
Section 3.01. NUMBER AND TERM OF OFFICE: The Board of Directors shall consist
of three (3) Directors, which number may be increased or decreased by a
resolution of a majority of the entire Board of Directors, PROVIDED that the
number of Directors shall not be more than eleven (11) nor less than the
lesser of (i) three (3) or (ii) the number of shareholders of the Corporation.
Each Director (whenever elected) shall hold office until the next annual
meeting of shareholders and until his successor is elected and qualified or
until his earlier death, resignation, or removal. [MGCL, Sections 2-402, 2-404
2-405(b)]
Section 3.02. QUALIFICATION OF DIRECTORS: No member of the Board of Directors
need be a shareholder of the Corporation. The composition of the Board of
Directors shall at all times comply with the requirements of applicable law.
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[MGCL, Section 2-403; Investment Company Act, Section 10]
Section 3.03. ELECTION OF DIRECTORS: Until the first annual meeting of
shareholders and until successors are duly elected and qualified, the Board of
Directors shall consist of the person(s) named as such in the Articles of
Incorporation. Thereafter, except as otherwise provided in Sections 3.04 and
3.05 hereof, at each annual meeting, the shareholders shall elect Directors to
hold office until the next annual meeting and until their successors are
elected and qualified. In the event that Directors are not elected at an
annual shareholders' meeting, then Directors may be elected at a special
shareholders' meeting. Directors shall be elected by vote of the holders of a
plurality of the shares present in person or by proxy and entitled to vote.
[MGCL, Section 2-404]
Section 3.04. REMOVAL OF DIRECTORS: At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any Director or Directors from office, for cause, and may
elect a successor or successors to fill any resulting vacancies for the
unexpired terms of any removed Directors. [MGCL, Sections 2-406, 2-407]
Section 3.05. VACANCIES AND NEWLY CREATED DIRECTORSHIPS: In the event that at
any time, other than the time preceding the first meeting of shareholders, any
vacancies occur in the Board of Directors by reason of resignation, removal,
or otherwise, or if the authorized number of Directors is increased, the
Directors then in office shall continue to act, and such vacancies (if not
previously filled by the shareholders) may be filled by a majority of the
Directors then in office, whether or not sufficient to constitute a quorum,
PROVIDED that, immediately after filling such vacancy, at least two-thirds of
the Directors then holding office shall have been elected to such office by
the shareholders of the Corporation. In the event that at any time, other than
the time preceding the first meeting of shareholders, less than a majority of
the Directors of the Corporation holding office at that time were so elected
by the shareholders, a meeting of the shareholders shall be held promptly and
in any event within sixty (60) days for the purpose of electing Directors to
fill any existing vacancies in the Board of Directors unless the Securities
and Exchange Commission shall by order extend such period. Except as provided
in Section 3.04 hereof, a Director elected by the Board of Directors to fill a
vacancy shall be elected to hold office until the next annual meeting of
shareholders and until his successor is elected and qualified. A Director
elected by the shareholders to fill a vacancy, which results from the removal
of Director serves for the balance of the term of the removed Director.
[MGCL,Section 2-407; Investment Company Act, Section 16(a)]
Section 3.06. GENERAL POWERS:
(a) The property, business, and affairs of the Corporation shall be managed
under the direction of the Board of Directors, which may exercise all the
powers of the Corporation except as conferred upon or reserved to the
shareholders of the Corporation by applicable law, by the Articles of
Incorporation, or by these By-Laws. [MGCL, Section 2-401]
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(b) All acts done by any meeting of the Board of Directors or by any person
acting as a Director, so long as his successor shall not have been duly
elected or appointed, shall be treated as valid as if the Directors or such
person, as the case may be, were or was duly elected and qualified to be
Directors or a Director of the Corporation, notwithstanding that it may be
afterwards discovered that there was some defect in the election of the
Directors or such person acting as a Director, or that they or any of them
were disqualified.
Section 3.07. POWER TO ISSUE AND SELL STOCK: The Board of Directors may from
time to time authorize by resolution the issuance and sale of any of the
Corporation's authorized shares to such persons as the Board of Directors
shall deem advisable. Such resolution shall set the minimum price or value of
consideration for the stock or a formula for its determination, and shall
include a fair description of any consideration, other than money, and a
statement of the actual value of such consideration as determined by the Board
of Directors or a statement that the Board of Directors has determined that
the actual value is or will be not less than a certain sum. [MGCL, Section
2-203]
Section 3.08. POWER TO DECLARE DIVIDENDS:
(a) The Board of Directors, from time to time as it may deem advisable, may
declare that the Corporation pay dividends, in cash, property, or shares of
the Corporation available for dividends, out of any source available for
dividends, to the shareholders according to their respective rights and
interests.
(b) The Board of Directors shall cause a written statement to accompany any
dividend payment wholly or partly from any source other than the Corporation's
accumulated undistributed net income not including profits or losses realized
upon the sale of securities or other properties (as determined in accordance
with good accounting practice and the rules and regulations of the Securities
and Exchange Commission then in effect). Such statement shall adequately
disclose the source or sources of such payment and the basis of calculation
and shall be otherwise in such form as the Securities and Exchange Commission
may prescribe. [Investment Company Act, Section 19 and ICA Rule 19a-l]
Notwithstanding the above provisions of this Section 3.08, the Board of
Directors may at any time declare and distribute pro rata among the
shareholders a stock dividend out of the Corporation's authorized but unissued
shares of stock, including any shares previously redeemed by the Corporation.
The shares so distributed may be declared and paid to the holders of shares of
another series or class. The shares so distributed shall be issued in
accordance with these By-Laws and applicable law. [MGCL, Section 2-309]
Section 3.09. BORROWING: The Board of Directors, from time to time as it may
deem advisable, may establish limitations upon the borrowing of money and
pledging of assets by the Corporation.
Section 3.10. ANNUAL AND REGULAR MEETINGS: The annual meeting of the Board of
Directors held for the purpose of choosing officers and transacting other
proper business shall be held after the annual shareholders' meeting at such
time and place as may be specified in the notice of such meeting of the Board
of Directors or, in the absence of such annual shareholders' meeting, at such
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time and place as the Board of Directors may provide. The Board of Directors
from time to time may provide by resolution for the holding of regular
meetings and fix their time and place (within or outside the State of
Maryland). [MGCL, Section 2-409(a)]
Section 3.11. SPECIAL MEETINGS: Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, if there be such
an officer, the President (or, in the absence or disability of the President,
by any Vice President), the Treasurer, or two (2) or more Directors, at the
time and place (within or outside the State of Maryland) specified in the
respective notices or waivers of notice of such meetings. [MGCL, Section
2-409(a)]
Section 3.12. NOTICE: Notice of annual, regular, and special meetings of the
Board of Directors shall be in writing, stating the time and place, and shall
be mailed to each Director at his residence or regular place of business or
caused to be delivered to him personally or to be transmitted to him by
telegraph, telecopy, cable, or wireless at least two (2) days before the day
on which the meeting is to be held. Except as otherwise required by these
By-Laws or the Investment Company Act, such notice need not include a
statement of the business to be transacted at, or the purpose of, the meeting.
[MGCL, Section 2-409(b)]
Section 3.13. WAIVER OF NOTICE: No notice of any meeting of the Board of
Directors need be given to any Director who is present at the meeting or to
any Director who signs a waiver of the notice of the meeting (which waiver
shall be filed with the records of the meeting) whether before or after the
meeting. [MGCL, Section 2-409(c)]
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Section 3.14. QUORUM AND VOTING: At all meetings of the Board of Directors the
presence of one-third of the total number of Directors, but not less than two
(2) Directors if there are at least (2) two Directors, shall constitute a
quorum. In the absence of a quorum, a majority of the Directors present may
adjourn the meeting, from time to time, until a quorum shall be present. The
action of a majority of the Directors present at a meeting at which a quorum
is present shall be the action of the Board of Directors unless the
concurrence of a greater proportion is required for such action by applicable
law, by the Articles of Incorporation, or by these By-Laws. [MGCL, Section
2-408]
Section 3.15. DIRECTOR CONFERENCE COMMUNICATIONS: Members of the Board of
Directors or of any committee designated by the Board of Directors may
participate in a meeting of the Board of Directors or of such committee by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at such
meeting, unless otherwise prohibited by applicable law. [MGCL, Section
2-409(d); Investment Company Act, Sections 15 and 32]
Section 3.16. COMPENSATION: Each Director may receive such remuneration for
his services as shall be fixed from time to time by resolution of the Board of
Directors.
Section 3.17. ACTION WITHOUT A MEETING: Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee thereof may be
taken without a meeting if a unanimous written consent which sets forth the
action is signed by each member of the Board of Directors or of such committee
and such written consent is filed with the minutes of proceedings of the Board
of Directors or committee, unless otherwise prohibited by applicable law.
[MGCL, Section 2-408(c); Investment Company Act, Sections 15 and 32]
ARTICLE IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 4.01. HOW CONSTITUTED: By resolution adopted by the Board of
Directors, the Board of Directors may appoint from among its members one or
more committees, including an Executive Committee and an Audit Committee, each
consisting of at least one (1) or more Directors. Each member of a committee
shall hold such position at the pleasure of the Board of Directors. [MGCL,
Section 2-411(a)]
Section 4.02. POWERS OF THE EXECUTIVE Committee: Unless otherwise provided by
resolution of the Board of Directors, the Executive Committee, in the
intervals between meetings of the Board of Directors, shall have and may
exercise all of the powers of the Board of Directors to manage the business
and affairs of the Corporation except the power to:
(a) Authorize dividends on stock;
(b) Issue stocks other than as provided in Section 2-411(b) of the Maryland
Law;
(c) Recommend to the shareholders any action, which requires shareholder
approval;
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(d) Amend these By-Laws; or
(e) Approve any merger or share exchange, which does not require shareholder
approval. [MGCL, Section 2-411(a)]
Section 4.03. OTHER COMMITTEES OF THE BOARD OF DIRECTORS: To the extent
provided by resolution of the Board of Directors, other committees shall have
and may exercise any of the powers that may lawfully be granted to the
Executive Committee. [MGCL, Section 2-411 (a)]
Section 4.04. PROCEEDINGS, QUORUM, AND MANNER OF ACTING: In the absence of an
appropriate resolution of the Board of Directors, each committee may adopt
such rules and regulations governing its proceedings, quorum, and manner of
acting as it shall deem proper and desirable. 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. [MGCL, Section 2-411(a)]
Section 4.05. OTHER COMMITTEES: The Board of Directors may appoint other
committees, each consisting of one or more persons who need not be Directors.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the Board of Directors, but shall not
exercise any power which may lawfully be exercised only by the Board of
Directors or a committee thereof.
ARTICLE V.
OFFICERS
Section 5.01. GENERAL: The officers of the Corporation shall be a President,
one or more Vice-Presidents (one or more of whom may be designated Executive
Vice President), a Secretary, and a Treasurer, and may include one or more
Assistant Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 5.11 hereof. The Board of Directors
may elect, but shall not be required to elect, a Chairman of the Board of
Directors. [MGCL, Section 2-412]
Section 5.02. ELECTION, TERM OF OFFICE, AND QUALIFICATIONS: The officers of
the Corporation (except those appointed pursuant to Section 5.11 hereof) shall
be elected by the Board of Directors at its first meeting and thereafter at
each annual meeting of the Board of Directors. If any officer or officers are
not elected at any such meeting, such officer or officers may be elected at
any subsequent regular or special meeting of the Board of Directors. Except as
provided in Sections 5.03, 5.04, and 5.05 hereof, each officer elected by the
Board of Directors shall hold office until the next annual meeting of the
Board of Directors and until his successor shall have been chosen and
qualified. Any person may hold two (2) or more offices of the Corporation,
except that neither the Chairman of the Board, if there be such an officer,
nor the President, may hold the office of Vice-President. A person who holds
more than one office may not act in more than one (1) capacity to execute,
acknowledge, or verify any instrument required by applicable law, the Articles
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of Incorporation, or these By-Laws to be executed, acknowledged, or verified
by two (2) or more officers of the Corporation, except as otherwise permitted
or required by law. The Chairman of the Board of Directors, if there be such
an officer, shall be selected from among the Directors of the Corporation and
may hold such office only so long as he continues to be a Director. No other
officer need be a Director. [MGCL, Sections 2-412, 2-413, 2-415]
Section 5.03. RESIGNATION: Any officer may resign his office at any time by
delivering a written resignation to the Board of Directors, the Chairman of
the Board if there be such an officer, the President, the Secretary, or any
Assistant Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 5.04. REMOVAL: Any officer may be removed from office by the Board of
Directors whenever in the judgment of the Board of Directors the best
interests of the Corporation will be served thereby. [MGCL, Section 2-413(c)]
Section 5.05. VACANCIES AND NEWLY CREATED OFFICES: If any vacancy shall occur
in any office by reason of death, resignation, removal, disqualification, or
other cause, or if any new office shall be created, such vacancies or newly
created offices may be filled by the Board of Directors at any meeting or, in
the case of any office created pursuant to Section 5.11 hereof, by any officer
upon whom such power shall have been conferred by the Board of Directors.
[MGCL, Section 2-413(d)]
Section 5.06. CHAIRMAN OF THE BOARD: Unless otherwise provided by resolution
of the Board of Directors, the Chairman of the Board of Directors, if there is
such an officer, shall be the chief executive and operating officer of the
Corporation. He shall preside at all shareholders' meetings and at all
meetings of the Board of Directors, and he shall be an ex officio member of
all standing committees of the Board of Directors. Subject to the supervision
of the Board of Directors, he shall have general charge of the business
affairs, property, and operation of the Corporation and its officers,
employees, and agents. He may sign (unless the President or a Vice-President
shall have signed) certificates, if any, representing stock of the Corporation
authorized for issuance by the Board of Directors and shall have such other
powers and perform such other duties as may be assigned to him from time to
time by the Board of Directors. Section 5.07. PRESIDENT: Unless otherwise
provided by resolution of the Board of Directors, the President shall, at the
request of or in the absence or disability of the Chairman of the Board, or if
no Chairman of the Board has been chosen, preside at all shareholders'
meetings and at all meetings of the Board of Directors and shall in general
exercise the powers and perform the duties of the Chairman of the Board. He
may sign (unless the Chairman of the Board or a Vice-President shall have
signed) certificates, if any, representing stock of the Corporation authorized
for issuance by the Board of Directors. Except as the Board of Directors may
otherwise order, he may sign in the name and on behalf of the Corporation all
deeds, bonds, contracts, or agreements. He shall exercise such other powers
and perform such other duties as from time to time may be assigned to him by
the Board of Directors.
Section 5.08. VICE-PRESIDENT: The Board of Directors shall, from time to time,
designate and elect one or more Vice-Presidents (one or more of whom may be
designated Executive Vice-President) who shall have such powers and perform
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such duties as from time to time may be assigned to them by the Board of
Directors or the President. At the request or in the absence or disability of
the President, the Vice-President (or, if there are two (2) or more Vice-
Presidents, the Vice-President in order of seniority of tenure in such office
or in such other order as the Board of Directors may determine) may perform
all the duties of the President and, when so acting, shall have all the powers
of and be subject to all the restrictions placed upon the President. Any
Vice-President may sign (unless the Chairman of the Board, the President, or
another Vice President shall have signed) certificates, if any, representing
stock of the Corporation authorized for issuance by the Board of Directors.
Section 5.09. TREASURER AND ASSISTANT TREASURERS: The Treasurer shall be the
principal financial and accounting officer of the Corporation and shall have
general charge of the finances and books of account of the Corporation. Except
as otherwise provided by the Board of Directors, he shall have general
supervision of the funds and property of the Corporation and of the
performance by the custodian of its duties with respect thereto. He may
countersign (unless an Assistant Treasurer or Secretary or Assistant Secretary
shall have countersigned) certificates, if any, representing stock of the
Corporation authorized for issuance by the Board of Directors. He shall render
to the Board of Directors, whenever directed by the Board of Directors, an
account of the financial condition of the Corporation and of all his
transactions as Treasurer; and as soon as possible after the close of each
fiscal year he shall make and submit to the Board of Directors a like report
for such fiscal year. He shall cause to be prepared annually a full and
correct statement of the affairs of the Corporation, including a balance sheet
and a financial statement of operations for the preceding fiscal year, which
shall be submitted at the annual meeting of shareholders and filed within
twenty (20) days thereafter at the principal office of the Corporation or, if
no annual meeting is held, then within sixty (60) days of the end of the
fiscal year. He shall perform the entire acts incidental to the office of the
Treasurer, subject to the control of the Board of Directors. Any Assistant
Treasurer may perform such duties of the Treasurer as the Treasurer or the
Board of Directors may assign, and, in the absence of the Treasurer, he may
perform all the duties of the Treasurer and, when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer.
[MGCL, Section 2313; Investment Company Act, Section 30 and ICA Rule 30d-1]
Section 5.10. SECRETARY AND ASSISTANT SECRETARIES: The Secretary shall attend
to the giving and serving of all notices of the Corporation and shall record
all proceedings of the meetings of the shareholders and Directors in one or
more books to be kept for that purpose. He shall keep in safe custody the seal
of the Corporation and shall have charge of the records of the Corporation,
including the stock books and such other books and papers as the Board of
Directors may direct, and such books, reports, certificates, and other
documents required by law to be kept, all of which shall, at all reasonable
times, be open to inspection by any Director. He shall countersign (unless the
Treasurer, an Assistant Treasurer, or an Assistant Secretary shall have
countersigned) certificates, if any, representing stock of the Corporation
authorized for issuance by the Board of Directors. He shall perform such other
duties as appertain to his office or as may be required by the Board of
Directors. Any Assistant Secretary may perform such duties of the Secretary as
the Secretary or the Board of Directors may assign, and, in the absence of the
Secretary, he may perform all the duties of the Secretary and, when so acting,
shall have all the powers of and be subject to all the restrictions upon the
Secretary.
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Section 5.11. SUBORDINATE OFFICERS: The Board of Directors from time to time
may appoint such other officers or agents as it may deem advisable, each of
whom shall have such title, hold office for such period, have such authority
and perform such duties as the Board of Directors may determine. The Board of
Directors from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe
their respective rights, terms of office, authorities, and duties. [MGCL,
Section 2-412 (b)]
Section 5.12. REMUNERATION: The salaries or other compensation of the officers
of the Corporation shall be fixed from time to time by resolution of the Board
of Directors, except that the Board of Directors may by resolution delegate to
any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in accordance
with the provisions of Section 5.11 thereof.
ARTICLE VI.
CUSTODY OF SECURITIES AND CASH
Section 6.01. EMPLOYMENT OF A CUSTODIAN: The Corporation shall place and at
all times maintain in the custody of a Custodian (including any subcustodian
for the Custodian) all funds, securities, and similar investments owned by the
Corporation. The Custodian shall be a bank or other institution meeting the
requirements set out in Section 26(a)(1) of the Investment Company Act.
Subject to such rules, regulations, and orders as the Securities and Exchange
Commission may adopt as necessary or appropriate for the protection of
investors, the Corporation's Custodian may deposit all or a part of the
securities owned by the Corporation in the custody of a subcustodian or
sub-custodians situated within or without the United States. The Custodian
shall be appointed and its remuneration fixed by the Board of Directors.
[Investment Company Act, Section 28(c)]
ARTICLE VII.
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES
Section 7.01. EXECUTION OF INSTRUMENTS: All deeds, documents, transfers,
contracts, agreements, requisitions or orders, promissory notes, assignments,
endorsements, checks and drafts for the payment of money by the Corporation,
and other instruments requiring execution by the Corporation shall be signed
by the Chairman of the Board, if there be such an officer, the President, a
Vice-President, or the Treasurer, or as the Board of Directors may otherwise
authorize, from time to time. Any such authorization may be general or
confined to specific instances.
Section 7.02. VOTING OF SECURITIES: Unless otherwise ordered by the Board of
Directors, the Chairman of the Board, if there be such an officer, the
President, or any Vice President shall have full power and authority on behalf
of the Corporation to attend and to act and to vote, or in the name of the
Corporation to execute proxies to vote, at any meeting of shareholders of any
company in which the Corporation may hold stock. At any such meeting such
officer shall possess and may exercise (in person or by proxy) any and all
rights, powers, and privileges incident to the ownership of such stock. The
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Board of Directors may by resolution from time to time confer like powers upon
any other person or persons. [MGCL, Section 2-509(a)]
ARTICLE VIII.
CAPITAL STOCK
Section 8.01. CERTIFICATE OF STOCK:
(a) The Board of Directors may authorize the issuance of some or all shares of
stock of the Corporation stock without certificates. At the time of the
issuance of shares without certificates, the Corporation shall send to the
shareholder a written statement of the information required being on
certificates by Section 2-211 of the Maryland Law. [MGCL, Section 2-210]
(b) In the event certificates of stock of the Corporation are to be issued,
then such certificates shall be in the form approved by the Board of
Directors. Certificates of stock, if any, shall be signed in the name of the
Corporation by the Chairman of the Board, if there be such an officer, or the
President, or any Vice President and countersigned by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, and shall
certify the number and kind of shares owned by the holder thereof in the
Corporation. Such certificate may be sealed with the corporate seal of the
Corporation. Such signatures may be either manual or facsimile signatures and
the seal may be either facsimile or any other form of seal. [MGCL, Sections
2-210(a), 2-212]
(c) In case any officer, transfer agent, or registrar who shall have signed
any such certificate, or whose facsimile signature has been placed thereon,
shall cease to be such an officer, transfer agent or registrar (because of
death, resignation or otherwise) before such certificate is issued, such
certificate may be issued and delivered by the Corporation with the same
effect as if he were such officer, transfer agent, or registrar at the date of
issue. [MGCL, Section 2-212(c)]
(d) The number of any certificate issued, the name of the person owning the
shares represented thereby, the number of such shares, and the date of
issuance shall be entered upon the stock books of the Corporation at the time
of issuance.
(e) Every certificate exchanged, surrendered for redemption, or otherwise
returned to the Corporation shall be marked "Canceled" with the date of
cancellation.
Section 8.02. TRANSFER OF CAPITAL STOCK:
(a) Shares of stock of the Corporation shall be transferable only upon the
books of the Corporation kept for such purpose and, if one or more
certificates representing such shares have been issued, upon surrender to the
Corporation or its transfer agent or agents of such certificate or
certificates duly endorsed, or accompanied by appropriate evidence of
assignment, transfer, succession, or authority to transfer.
(b) The Corporation shall be entitled to treat the holder of record of any
share of stock as the absolute owner thereof for all purposes, and accordingly
shall not be bound to recognize any legal, equitable, or other claim or
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interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 8.03. TRANSFER AGENTS AND REGISTRARS: The Board of Directors may, from
time to time, appoint or remove transfer agents and registrars of transfers of
shares of stock of the Corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment being made all
certificates, if any, representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers and shall not be valid unless so countersigned.
Section 8.04. TRANSFER RESTRICTIONS: The shares of stock of the Corporation
may be freely transferred; provided, however, that the Board of Directors may,
from time to time, adopt lawful rules and regulations with reference to the
method of transfer of the shares of stock of the Corporation. [SEE Investment
Company Act, Section 22(f)]
Section 8.05. FIXING OF RECORD DATE: The Board of Directors may fix in advance
a date as a record date for the determination of the shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express consent to corporate action in writing without a
meeting, or to receive payment of any dividend or other distribution or
allotment of any rights, or to exercise any rights in respect of any change,
conversion, or exchange of stock, or for any other proper purpose, PROVIDED
that such record date shall be a date not more than ninety (90) days nor, in
the case of a meeting of shareholders, less than ten (10) days prior to the
date on which the particular action, requiring such determination of
shareholders, is to be taken. In such case, only such shareholders of record
on the record date so fixed shall be entitled to such notice of, and to vote
at, such meeting or adjournment, or to give such consent, or to receive
payment of such dividend or other distribution, or to receive such allotment
of rights, or to exercise such rights, or to take other action, as the case
may be, notwithstanding any transfer of any shares on the books of the
Corporation after any such record date. If a record date, as referred to in
this section 8.05, is not set: (a) the record date for determining the
shareholders entitled to notice of or to vote at any meeting of shareholders,
or to notice of any adjournment of such meeting, or to express consent to
corporate action in writing without a meeting, shall be the later of (i) the
close of business on the day on which notice of the meeting is mailed or (ii)
the thirtieth (30th) day before such meeting (unless notice has been waived by
all shareholders, in which case the record date shall be at the close of
business on the tenth (10th) day preceding the date of the meeting); and (b)
the record date for determining shareholders entitled to receive payment of
any dividend or other distribution or allotment of any rights, or to exercise
any rights in respect of any change, conversion, or exchange of stock, shall
be the close of business on the day on which the resolution of the Board of
Directors declaring such dividend, distribution, allotment or exercise of
rights is adopted, but the payment of dividend or distribution, or allotment
or exercise of rights, as the case may be, may not be made more than sixty
(60) days after the date on which the resolution is adopted. [MGCL, Section
2-511]
Section 8.06. LOST, STOLEN, OR DESTROYED CERTIFICATES: Before issuing a new
certificate for stock of the Corporation alleged to have been lost, stolen, or
destroyed, the Board of Directors, or any officer authorized by the Board of
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Directors, may, in its discretion, require the owner of the lost, stolen, or
destroyed certificate (or his legal representative) to give the Corporation a
bond or other indemnity, in such form and in such amount as the Board of
Directors or any such officer may direct and with such surety or sureties as
may be satisfactory to the Board of Directors or any such officer, sufficient
to indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft, or destruction of any such certificate or
the issuance of such new certificate. The issuance of a new certificate under
such circumstances shall not constitute an over-issue of the shares
represented thereby. [MGCL, Section 2-213]
ARTICLE IX.
FISCAL YEAR, ACCOUNTANT
Section 9.01. FISCAL YEAR: The fiscal year of the Corporation shall be the
twelve (12) calendar months beginning on the first day of January in each year
and ending on the last day of the following December, or such other period of
twelve (12) calendar months as the Board of Directors may by resolution
prescribe.
Section 9.02. ACCOUNTANT:
(a) The Corporation shall employ an independent public accountant or firm of
independent public accountants as its accountant to examine the accounts of
the Corporation and to sign and certify the Corporation's financial
statements, which may be filed with various regulatory agencies. The
accountant's certificates and reports shall be addressed both to the Board of
Directors and to the shareholders.
(b) A majority of the members of the Board of Directors who are not
"interested persons" (as such term is defined in Section 2(a)(19) of the
Investment Company Act) of the Corporation shall select the accountant, by
vote cast in person, at any meeting held before the first annual shareholders'
meeting, and thereafter shall select the accountant annually, by vote cast in
person, at a meeting held within thirty (30) days before or after the
beginning of the fiscal year of the Corporation or within thirty (30) days
before the annual shareholders' meeting, if any, held in that year. Such
selection shall be submitted for ratification or rejection at the next
succeeding annual shareholders' meeting. If the holders of a majority vote of
the outstanding voting securities at such meeting reject such selection, the
accountant shall be selected by majority vote of the Corporation's outstanding
voting securities, either at the meeting at which the rejection occurred or at
a subsequent meeting of shareholders called for that purpose. [Investment
Company Act, Section 32(a)]
(c) Any vacancy occurring between annual meetings, due to the death or
resignation of the accountant, may be filled by the vote of a majority of
those members of the Board of Directors who are not "interested persons" (as
such term is defined in Section 2(a)(19) of the Investment Company Act) of the
Corporation, cast in person at a meeting called for the purpose of voting on
such action. [Investment Company Act, Section 32(a)]
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(d) The employment of the accountant shall be conditioned upon the right of
the Corporation by vote of a majority of the outstanding voting securities at
any meeting called for the purpose to terminate such employment forthwith
without any penalty. [Investment Company Act, Section 32(a)]
ARTICLE X.
INDEMNIFICATION, ADVANCE PAYMENT OF EXPENSES, AND INSURANCE
Section 10.01. INDEMNIFICATION GENERALLY: The Corporation shall indemnify any
individual ("Indemnitee") who is a present or former Director, officer,
employee, or agent of the Corporation, or who is or was serving at the request
of the Corporation as a director, officer, partner, trustee, employee, or
agent of another corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan, who, by reason of his service in that
capacity, was, is, or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (hereinafter collectively referred to as a
"Proceeding") against any judgments, penalties, fines, settlements, and
reasonable expenses (including attorneys' fees) incurred by such Indemnitee in
connection with any Proceeding, to the fullest extent under Maryland Law and
the Investment Company Act. [MGCL, Section 2-418(b); Investment Company Act,
Section 17(h)]
Section 10.02. LIMITATIONS ON INDEMNIFICATION: Notwithstanding the foregoing,
nothing herein shall protect or purport to protect any Indemnitee against any
liability to which he would otherwise be subject by reason of:
(a) willful misfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of his office;
(b) any act or omission that was material to the matter giving rise to the
Proceeding and was the result of active and deliberate dishonesty;
(c) the receipt of an improper personal benefit in money, property, or
services, whether or not involving action in an official capacity as that term
is defined in Section 2-418 of the Maryland Law ("Official Capacity");
(d) in the case of any criminal Proceeding, the Indemnitee's reasonable cause
to believe that the act or omission giving rise to such Proceeding was
unlawful; or
(e) an adjudication in a Proceeding by or in the right of the Corporation
that the Indemnitee is liable to the Corporation. [MGCL, Section 2-418(b);
Investment Company Act, Section 17(h)]
Section 10.03. AUTHORIZATION OF INDEMNIFICATION: Indemnification shall be made
by the Corporation to an Indemnitee only if authorized for a specific
Proceeding after a determination has been made that indemnification is
permissible under the circumstances because the Indemnitee has met the
requisite standard of conduct necessary for indemnification under Maryland Law
and the Investment Company Act. Such determination as to permissibility shall
be made:
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(a) by a court or other body before whom the Proceeding was brought, based on
a final decision on the merits, or in the absence of such a decision, then:
(b) by the vote of a majority of a quorum of Directors who are neither
"interested persons" of the Corporation as defined in Section 2(a)(19) of the
Investment Company Act nor parties to the Proceeding ("disinterested non-party
Directors");
(c) by independent legal counsel, selected in accordance with Maryland Law,
in a written opinion; or
(d) by the Corporation's shareholders, except that shares held by Directors
who are parties to the Proceeding may not be voted on the subject matter
pertaining to the Proceeding.
Authorization of indemnification and determination as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination that
indemnification is permissible is made by independent legal counsel,
authorization of indemnification and determination as to reasonableness of
expenses shall be made by such counsel in the manner specified by Maryland
Law. [MGCL, Section 2-418(e)]
Section 10.04. ADVANCE PAYMENT OF EXPENSES: The Corporation shall pay any
reasonable expenses so incurred by any Indemnitee in defending a Proceeding in
advance of the final disposition thereof to the fullest extent permitted by
applicable law, but only upon receipt of: (a) a written affirmation by the
Indemnitee of his good faith belief that the requisite standard of conduct
necessary for indemnification under Maryland Law and the Investment Company
Act has been met and (b) a written undertaking by such Indemnitee to repay the
advance if it is ultimately determined that such standard of conduct has not
been met, and if one of the following conditions is met: (i) the Indemnitee
provides a security for his undertaking; (ii) the Corporation is insured
against losses arising by reason of any lawful advances; or (iii) a majority
of disinterested non-party Directors or independent legal counsel in a written
opinion determines, based on a review of readily available facts, that there
is reason to believe that the Indemnitee will ultimately be found entitled to
indemnification. [MGCL, Section 2-418(f); Investment Company Act Section
17(h)]
Section 10.05. NON-EXCLUSIVITY OF INDEMNIFICATION. The indemnification and
advancement of expenses herein authorized are not deemed to be exclusive of
any other rights, by indemnification or otherwise, to which an Indemnitee may
be entitled under the Articles of Incorporation, these By-Laws, a resolution
of the shareholders or Directors, an agreement or otherwise, both as to action
in an Official Capacity and as to action in another capacity while holding
such office. [MGCL, Section 2-418(g)]
Section 10.06. REPORT OF INDEMNIFICATION TO SHAREHOLDERS. If arising out of a
Proceeding by or in the right of the Corporation, any indemnification of, or
advance of expenses to, any Indemnitee, shall be reported promptly in writing
to the Corporation's shareholders. [MGCL, Section 2-418(1)]
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Section 10.07. INSURANCE OF OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS: To the
fullest extent permitted by applicable law, the Corporation may purchase and
maintain insurance on behalf of any person who is or was a Director, officer,
employee, or agent of the Corporation, or who is or was serving at the request
of the Corporation as a director, officer, partner, trustee, employee, or
agent of another corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted against or
incurred by him in any such capacity or arising out of his position, whether
or not the Corporation would have the power to indemnify against such
liability. [MGCL, Section 2-418(k); Investment Company Act, Section 17(h)]
ARTICLE XI.
AMENDMENTS
Section 11.01. GENERAL: Except as provided in Section 11.02 hereof, all
By-Laws of the Corporation, whether adopted by the Board of Directors or the
Shareholders, shall be subject to amendment, alteration, or repeal, and new
By-Laws may be made, by the affirmative vote of a majority of either:
(a) the holders of record of the outstanding shares of stock of the
Corporation entitled to vote, at any annual or special meeting the notice or
waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal, or new by-law; or
(b) the Directors present at any regular or special meeting at which a quorum
is present if the notice or waiver of notice thereof or material sent to the
Directors in connection therewith on or prior to the last date for the giving
of such notice under these By-Laws shall have specified or summarized the
proposed amendment, alteration, repeal, or new by-law. [MGCL, Section 2-109]
Section 11.02. BY SHAREHOLDERS ONLY:
(a) No amendment of any section of these By-Laws shall be made except by the
shareholders of the Corporation if the shareholders shall have provided in the
By-Laws that such section may not be amended, altered, or repealed except by
the shareholders.
(b) From and after the issuance of any shares of the Corporation, no amendment
of this Article XI shall be made except by the shareholders of the
Corporation.
-END-
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