<PAGE> PAGE 1
000 A000000 03/31/95
000 C000000 0000880854
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES
001 B000000 811-6464
001 C000000 7139930500
002 A000000 2800 POST OAK BLVD.
002 B000000 HOUSTON
002 C000000 TX
002 D010000 77056
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000001 A
008 C000001 801-8286
008 D010001 HOUSTON
008 D020001 TX
008 D030001 77056
011 A000001 VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC
011 B000001 8-19903
011 C010001 HOUSTON
011 C020001 TX
011 C030001 77056
012 A000001 ACCESS INVESTOR SERVICES, INC.
012 B000001 84-01621
012 C010001 KANSAS CITY
012 C020001 MO
012 C030001 64141
012 C040001 9256
013 A000001 PRICE WATERHOUSE, LLP
013 B010001 HOUSTON
<PAGE> PAGE 2
013 B020001 TX
013 B030001 77002
015 A000001 STATE STREET BANK & TRUST CO.
015 B000001 C
015 C010001 BOSTON
015 C020001 MA
015 C030001 02110
015 E010001 X
018 000000 Y
019 A000000 Y
019 B000000 34
019 C000000 ACFHOUSTON
020 C000001 0
020 C000002 0
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 0
022 A000001 SALOMON BROTHERS, INC.
022 B000001 13-3082694
022 C000001 4745
022 D000001 0
022 A000002 PRUDENTIAL SECURITIES, INC.
022 B000002 22-2347336
022 C000002 900
022 D000002 900
022 A000003 LEHMAN BROTHERS, INC.
022 B000003 13-2518466
022 C000003 1470
022 D000003 0
022 A000004 STATE STREET BANK & TRUST CO.
022 B000004 04-1867445
022 C000004 1220
022 D000004 0
022 A000005 ALLISON (M.E.) & CO., INC.
022 B000005 74-1037681
022 C000005 0
022 D000005 1148
022 A000006 PAINE WEBBER GROUP, INC.
022 B000006 13-2638166
022 C000006 400
022 D000006 400
022 A000007 RAUSCHER PIERCE REFSNES, INC.
022 B000007 75-1828470
022 C000007 0
022 D000007 509
<PAGE> PAGE 3
022 A000008 SWISS BANK CORP. GOVERNMENT SECURITIES, INC.
022 B000008 13-2639550
022 C000008 405
022 D000008 0
022 A000009 LEGG MASON WOOD WALKER, INC.
022 C000009 0
022 D000009 249
022 C000010 0
022 D000010 0
023 C000000 9140
023 D000000 3206
024 000000 Y
025 A000001 SALOMON BROTHERS, INC.
025 B000001 13-3082694
025 C000001 D
025 D000001 225
025 D000002 0
025 D000003 0
025 D000004 0
025 D000005 0
025 D000006 0
025 D000007 0
025 D000008 0
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A010000 162
028 A020000 44
028 A030000 0
028 A040000 1033
028 B010000 91
028 B020000 43
028 B030000 0
028 B040000 416
028 C010000 58
028 C020000 42
028 C030000 0
028 C040000 632
028 D010000 57
028 D020000 42
028 D030000 0
028 D040000 89
028 E010000 111
028 E020000 42
<PAGE> PAGE 4
028 E030000 0
028 E040000 432
028 F010000 148
028 F020000 41
028 F030000 0
028 F040000 642
028 G010000 627
028 G020000 254
028 G030000 0
028 G040000 3244
028 H000000 218
029 000000 Y
030 A000000 9
030 B000000 4.75
030 C000000 0.00
031 A000000 1
031 B000000 0
032 000000 8
033 000000 0
034 000000 Y
035 000000 60
036 A000000 N
036 B000000 0
037 000000 N
038 000000 0
039 000000 N
040 000000 Y
041 000000 Y
042 A000000 0
042 B000000 0
042 C000000 100
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 0
043 000000 58
044 000000 0
045 000000 Y
046 000000 N
047 000000 Y
048 000000 0.000
048 A010000 300000
048 A020000 0.600
048 B010000 300000
048 B020000 0.550
048 C010000 0
048 C020000 0.000
048 D010000 0
048 D020000 0.000
048 E010000 0
<PAGE> PAGE 5
048 E020000 0.000
048 F010000 0
048 F020000 0.000
048 G010000 0
048 G020000 0.000
048 H010000 0
048 H020000 0.000
048 I010000 0
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 600000
048 K020000 0.500
049 000000 N
050 000000 N
051 000000 N
052 000000 N
053 A000000 Y
053 B000000 Y
053 C000000 N
054 A000000 Y
054 B000000 N
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 Y
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 N
054 M000000 Y
054 N000000 N
054 O000000 Y
055 A000000 N
055 B000000 N
056 000000 N
057 000000 N
058 A000000 N
058 B000000 N
058 C000000 N
058 D000000 N
058 E000000 N
059 000000 Y
060 A000000 Y
060 B000000 Y
061 000000 500
062 A000000 Y
062 B000000 0.0
062 C000000 0.0
<PAGE> PAGE 6
062 D000000 1.1
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 97.6
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
063 A000000 0
063 B000000 19.8
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 Y
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 N
070 I020000 N
070 J010000 Y
070 J020000 N
070 K010000 N
070 K020000 N
070 L010000 N
070 L020000 N
070 M010000 N
070 M020000 N
070 N010000 N
<PAGE> PAGE 7
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 Y
070 P020000 Y
070 Q010000 N
070 Q020000 N
070 R010000 Y
070 R020000 N
071 A000000 30
071 B000000 2566
071 C000000 20628
071 D000000 0
072 A000000 6
072 B000000 734
072 C000000 0
072 D000000 0
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072 J000000 2
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072 L000000 13
072 M000000 5
072 N000000 16
072 O000000 0
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072 Q000000 33
072 R000000 14
072 S000000 2
072 T000000 58
072 U000000 2
072 V000000 0
072 W000000 1
072 X000000 218
072 Y000000 21
072 Z000000 537
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072CC010000 552
072CC020000 0
072DD010000 339
072DD020000 220
072EE000000 0
073 A010000 0.0000
073 A020000 0.0000
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074 A000000 3
<PAGE> PAGE 8
074 B000000 225
074 C000000 0
074 D000000 20290
074 E000000 0
074 F000000 0
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 15
074 K000000 0
074 L000000 413
074 M000000 6
074 N000000 20952
074 O000000 0
074 P000000 23
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074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 135
074 S000000 0
074 T000000 20794
074 U010000 1194
074 U020000 905
074 V010000 0.00
074 V020000 0.00
074 W000000 0.0000
074 X000000 531
074 Y000000 0
075 A000000 0
075 B000000 21032
076 000000 0.00
077 A000000 Y
077 B000000 N
077 C000000 Y
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
<PAGE> PAGE 9
078 000000 N
SIGNATURE TANYA LODEN
TITLE CONTROLLER
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000880854
<NAME> AC TEXAS MUNI - A
<SERIES>
<NUMBER> 1
<NAME> CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-1-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 20,037,112
<INVESTMENTS-AT-VALUE> 20,515,259
<RECEIVABLES> 427,941
<ASSETS-OTHER> 8,840
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20,952,040
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 158,431
<TOTAL-LIABILITIES> 158,431
<SENIOR-EQUITY> 20,993
<PAID-IN-CAPITAL-COMMON> 20,346,447
<SHARES-COMMON-STOCK> 1,193,994
<SHARES-COMMON-PRIOR> 1,331,569
<ACCUMULATED-NII-CURRENT> (16,280)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (35,698)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 478,147
<NET-ASSETS> 20,793,609
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 733,813
<OTHER-INCOME> 0
<EXPENSES-NET> 196,650
<NET-INVESTMENT-INCOME> 537,163
<REALIZED-GAINS-CURRENT> 10,174
<APPREC-INCREASE-CURRENT> 552,465
<NET-CHANGE-FROM-OPS> 1,099,802
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 338,950
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,316
<NUMBER-OF-SHARES-REDEEMED> 178,125
<SHARES-REINVESTED> 16,234
<NET-CHANGE-IN-ASSETS> (1,822,985)
<ACCUMULATED-NII-PRIOR> 5,628
<ACCUMULATED-GAINS-PRIOR> (45,872)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 63,095
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 217,682
<AVERAGE-NET-ASSETS> 11,978,313
<PER-SHARE-NAV-BEGIN> 9.64
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .27
<PER-SHARE-DIVIDEND> .27
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.90
<EXPENSE-RATIO> 1.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Expense ratio is annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000880854
<NAME> AC TEXAS MUNI - B
<SERIES>
<NUMBER> 2
<NAME> CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-1-1994
<PERIOD-END> MAR-31-1995
<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> 0
<SHARES-COMMON-STOCK> 771,709
<SHARES-COMMON-PRIOR> 888,816
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<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> 191,546
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,896
<NUMBER-OF-SHARES-REDEEMED> 153,746
<SHARES-REINVESTED> 9,743
<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> 7,872,501
<PER-SHARE-NAV-BEGIN> 9.64
<PER-SHARE-NII> .22
<PER-SHARE-GAIN-APPREC> .272
<PER-SHARE-DIVIDEND> .232
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.90
<EXPENSE-RATIO> 2.33
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Expense ratio is annualized.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000880854
<NAME> AC TEXAS MUNI - C
<SERIES>
<NUMBER> 3
<NAME> CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-1-1994
<PERIOD-END> MAR-31-1995
<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> 0
<SHARES-COMMON-STOCK> 133,643
<SHARES-COMMON-PRIOR> 126,223
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<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> 28,575
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,099
<NUMBER-OF-SHARES-REDEEMED> 7,224
<SHARES-REINVESTED> 545
<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> 1,180,892
<PER-SHARE-NAV-BEGIN> 9.65
<PER-SHARE-NII> .22
<PER-SHARE-GAIN-APPREC> .272
<PER-SHARE-DIVIDEND> .232
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> 2.31
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Expense ratio is annualized.
</FN>
</TABLE>
<PAGE> 1
N-SAR ITEM 77C
Sub-item 77c is incorporated herein by reference to the proxy statement
of the Registrant filed with the SEC on October 24, 1994.
a) A Special Meeting of Shareholders was held on December 16, 1994.
b) Inapplicable
c) The following was voted on at the meeting:
1) Approval of a new investment advisory agreement between the Registrant and
American Capital Asset Management, Inc. to take effect upon the closing of
the proposed acquisition of American Capital Management & Research, Inc. by
The Van Kampen Merritt Companies, Inc.
For 1,465,210.978 Against 2,090.454
--------------- ---------------
d) Inapplicable
<PAGE> 1
Sub-item 77q(1e) is incorporated herein by reference (Exhibit 5 to Form
N-1A of registrant, registration No. 33-43800, post-effective Amendment
No. 6, filed January 25, 1995).
AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES, INC.
BY-LAWS
(As amended March 3, 1995)
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. Annual Meeting. So long as the Corporation is registered
as an investment company under the Investment Company Act of 1940, the
Corporation shall not be required to hold an annual meeting in any year in
which the election of directors is not required to be acted upon under the
Investment Company Act of 1940. In the event that the Corporation is required
to hold an annual meeting of its stockholders by the Investment Company Act of
1940, such meeting shall be held: (a) at a date and time set by the Board of
Directors in accordance with the Investment Company Act of 1940 ("40 Act") if
the purpose of the meeting is to elect Directors or to approve an investment
advisory agreement or distribution agreement; and (b) on a date fixed by the
Board of Directors (i) in the fiscal year immediately following the fiscal
year in which independent accountants were appointed if the purpose of the
meeting is to ratify the selection of such independent accountants or (ii) in
any fiscal year if an annual meeting is to be held for any reason other than
as specified in the foregoing. Any stockholders' meeting held in accordance
with the preceding sentence shall for all purposes constitute the annual
meeting of stockholders for the fiscal year of the Corporation in which the
meeting is held. At any such meeting, the stockholders shall elect Directors
to hold the offices of any Directors who have held office for more than one
year or who have been elected by the Board of Directors to fill vacancies
which result from any cause. Except as the Charter or statute provides
otherwise, any business may be considered at an annual meeting without the
purpose of the meeting having been specified in the notice. Failure to hold
an annual meeting does not invalidate the Corporation's existence or affect
any otherwise valid corporate acts.
SECTION 1.02 Special Meeting. At any time in the interval between
stockholders' meetings, a special meeting of the stockholders may be called by
the Chairman of the Board or the President or by a majority of the Board of
Directors by vote at a meeting or in writing (addressed to the Secretary of
the Corporation) with or without a meeting. Special meetings of stockholders
shall also be called by the Secretary upon the written request of the holders
of not less than ten percent (10%) of all the shares entitled to vote at such
meeting. Such request shall state the purpose or purposes of such meeting and
the matters proposed to be acted on thereat. No special meeting need be
called upon the request of the holders of less than a majority of all the
shares entitled to vote at such meeting to consider any matter which is
substantially the same as a matter voted upon at any special meeting of
stockholders held during the preceding twelve months.
SECTION 1.03 Place of Meetings. Meetings of stockholders shall be held
at such place in the United States as is set from time to time by the Board of
Directors.
SECTION 1.04. Notice of Meetings; Waiver of Notice. Not less than ten
nor more than 90 days before each stockholders' meeting, the Secretary shall
give written notice of the meeting to each
<PAGE> 2
stockholder entitled to vote at the meeting and each other stockholder
entitled to notice of the meeting. The notice shall state the time and place
of the meeting and, if the meeting is a special meeting or notice of the
purpose is required by statute, the purpose of the meeting. Notice is given
to a stockholder when it is personally delivered to him, left at his residence
or usual place of business, or mailed to him at his address as it appears on
the records of the Corporation. Notwithstanding the foregoing provisions,
each person who is entitled to notice waives notice if he before or after the
meeting signs a waiver of the notice which is filed with the records of
stockholders' meetings, or is present at the meeting in person or by proxy.
SECTION 1.05. Quorum; Voting. Unless statute or the Charter provides
otherwise, at a meeting of stockholders the presence in person or by proxy of
stockholders entitled to cast a majority of all the votes entitled to be cast
at the meeting constitutes a quorum, and 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, except that a plurality of all the votes
cast at a meeting at which a quorum is present is sufficient to elect a
director.
SECTION 1.06. Adjournments. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time by the stockholders present in person or by proxy
by a majority vote. Any business which might have been transacted at the
meeting as originally notified may be deferred and transacted at any such
adjourned meeting at which a quorum shall be present. No further notice of an
adjourned meeting other than by announcement shall be necessary if held on a
date not more than 120 days after the original record date.
SECTION 1.07. General Right to Vote; Proxies. Unless the Charter
provides for a greater or lesser number of votes per share or limits or denies
voting rights, each outstanding share of stock, regardless of class, is
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. In all elections for directors, each share of stock may be
voted for as many individuals as there are directors to be elected and for
whose election the share is entitled to be voted. A stockholder may vote the
stock the stockholder owns of record either in person or by proxy. A
stockholder may sign a writing authorizing another person to act as proxy.
Signing may be accomplished by the stockholder or the stockholder's authorized
agent signing the writing or causing the stockholder's signature to be affixed
to the writing by any reasonable means, including facsimile signature. A
stockholder 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. Unless a proxy provides otherwise, it is not valid more than 11
months after its date. A proxy is revocable by a stockholder at any time
without condition or qualification unless the proxy states that it is
irrevocable and the proxy is coupled with an interest. A proxy may be made
irrevocable for so long as it is coupled with an interest. The interest with
which a proxy may be coupled includes an interest in the stock to be voted
under the proxy or another general interest in the Corporation or its assets
or liabilities.
SECTION 1.08. List of Stockholders. At each meeting of stockholders, a
full, true and complete list of all stockholders entitled to vote at such
meeting, showing the number and class of shares held by each and certified by
the transfer agent for such class or by the Secretary, shall be furnished by
the Secretary.
2
<PAGE> 3
SECTION 1.09. Conduct of Voting. At all meetings of stockholders,
unless the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies and the acceptance or rejection of votes shall be decided,
by the chairman of the meeting. If demanded by stockholders, present in
person or by proxy, entitled to cast 10% in number of votes entitled to be
cast, or if ordered by the chairman, the vote upon any election or question
shall be taken by ballot, and upon like demand or order, the voting shall be
conducted by two inspectors, in which event the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies and the acceptance or rejection of votes shall be decided,
by such inspectors. Unless so demanded or ordered, no vote need be by ballot
and voting need not be conducted by inspectors. The stockholders at any
meeting may choose an inspector or inspectors to act at such meeting, and in
default of such election the chairman of the meeting may appoint an inspector
or inspectors. No candidate for election as a director at a meeting shall
serve as an inspector thereat.
SECTION 1.10. Informal Action by Stockholders. Any action required or
permitted to be taken at a meeting of stockholders may be taken without a
meeting if there is filed with the records of stockholders' meetings a
unanimous written consent which sets forth the action and is signed by each
stockholder entitled to vote on the matter and a written waiver of any right
to dissent signed by each stockholder entitled to notice of the meeting but
not entitled to vote at it.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. Function of Directors. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors.
All powers of the Corporation may be exercised by or under authority of the
Board of Directors, except as conferred on or reserved to the stockholders by
statute or by the Charter or By-Laws.
SECTION 2.02. Number of Directors. The business and property of the
Corporation shall be conducted and managed by a Board of Directors consisting
of not less than five (5) nor more than seventeen (17) Directors, which number
may be increased or decreased as herein provided. By vote of a majority of
the entire Board of Directors, the number of Directors fixed by these By-Laws
may be increased or decreased from time to time, but the tenure of office of a
Director shall not be affected by any decrease in the number of Directors to
hold office until the next annual meeting and until their successors are
elected and qualify. Directors need not be stockholders.
SECTION 2.03. Election and Tenure of Directors. At each annual meeting,
the stockholders shall elect directors to hold office until the next annual
meeting and until their successors are elected and qualify; provided, however,
that through June 30, 1996 the term of office of each director shall end at
the time such director reaches the age of 76 1/2 or 74 1/2 for persons first
elected on or after January 1, 1986 as a director of any open end investment
company managed by Van Kampen American Capital Asset Management, Inc. and that
on and after July 1, 1996 the term of office of each director shall end at the
time such director reaches the age of 76 1/2 or 72 1/2 for persons first
elected on or after January 1, 1986 as a director of any open end investment
company managed by Van Kampen American Capital Asset Management, Inc.
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SECTION 2.04. Removal of Director. Unless statute or the Charter
provides otherwise, the stockholders may remove any director, with or without
cause, by the affirmative vote of a majority of the outstanding voting
securities as defined in Section 2(a)(42) of the 40 Act. Such action may be
taken at a special meeting of stockholders called for such purpose upon the
request of the holders of not less than 10% of the shares entitled to vote
pursuant to Section 1.02 hereof.
Whenever ten or more stockholders of record who have been such for at
least six months preceding the date of application, and who hold in the
aggregate either shares having a net asset value of at least $25,000 or at
least 1 percent of the outstanding shares, whichever is less, shall apply to
the Board of Directors in writing, stating that they wish to communicate with
other stockholders with a view to obtaining signatures to a request for a
special meeting to remove any director and accompanied by a form of
communication and request which they wish to transmit, the Board shall within
five business days after receipt of such application either:
(a) afford to such applicants access to a list of the names and
addresses of all stockholders as recorded on the books of the Corporation; or
(b) inform such applicants as to the approximate number of stockholders
of record, and the approximate cost of mailing to them the proposed
communication and form of request.
If the Board elects to follow the course specified in paragraph (b), the
Board, upon the written request of such applicants, accompanied by a tender of
the material to be mailed and of the reasonable expenses of mailing, shall,
with reasonable promptness, mail such material to all stockholders of record
at their addresses as recorded on the books, unless within five business days
after such tender the Board shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission") together with a copy of
the material to be mailed, a written statement signed by at least a majority
of the directors to the effect that in their opinion either such material
contains untrue statements of fact or omits to state facts necessary to make
the statements contained therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.
If the Commission shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all objections so sustained have been met, and shall enter an
order so declaring, the Board shall mail copies of such material to all
stockholders with reasonable promptness after the entry of such order and the
renewal of such tender.
SECTION 2.05. Vacancy on Board. The stockholders may elect a successor
to fill a vacancy on the Board of Directors which results from the removal of
a director. A director elected by the stockholders to fill a vacancy which
results from the removal of a director serves for the balance of the term of
the removed director. A majority of the remaining directors, whether or not
sufficient to constitute a quorum, may fill a vacancy on the Board of
Directors which results from any cause except an increase in the number of
directors and a majority of the entire Board of Directors may fill a vacancy
which results from an increase in the number of directors. A director elected
by the Board of Directors to fill a vacancy serves until the next annual
meeting of stockholders and until his successor is elected and qualifies. The
Board of Directors may not fill more than two directorships resulting from an
increase in the number of directors during the period between any two
successive annual meetings of stockholders.
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SECTION 2.06. Regular Meetings. Any regular meeting of the Board of
Directors shall be held on such date and at any place as may be designated
from time to time by the Board of Directors.
SECTION 2.07. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or the
President or by a majority of the Board of Directors by vote at a meeting, or
in writing with or without a meeting. A special meeting of the Board of
Directors shall be held on such date and at any place as may be designated
from time to time by the Board of Directors. In the absence of designation
such meeting shall be held at such place as may be designated in the call.
SECTION 2.08. Notice of Meeting. Except as provided in Section 2.06,
the Secretary shall give notice to each director of each regular and special
meeting of the Board of Directors. The notice shall state the time and place
of the meeting. Notice is given to a director when it is delivered personally
to him, left at his residence or usual place of business, or sent by telegraph
or telephone, at least 24 hours before the time of the meeting or, in the
alternative, by mail to his address as it shall appear on the records of the
Corporation, at least 72 hours before the time of the meeting. Unless the
By-Laws or a resolution of the Board of Directors provides otherwise, the
notice need not state the business to be transacted at or the purposes of any
regular or special meeting of the Board of Directors. No notice of any
meeting of the Board of Directors need be given to any director who attends
(except where a director attends a meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully convened), or to any director who, in writing executed and filed
with the records of the meeting either before or after the holding thereof,
waives such notice. Any meeting of the Board of Directors, regular or
special, may adjourn from time to time to reconvene at the same or some other
place, and no notice need be given of any such adjourned meeting other than by
announcement.
SECTION 2.09. Action by Directors. Unless statute or the Charter or
By-Laws requires a greater proportion, the action of a majority of the
directors present at a meeting at which a quorum is present is action of the
Board of Directors. A majority of the entire Board of Directors shall
constitute a quorum for the transaction of business. In the absence of a
quorum, the directors present by majority vote and without notice other than
by announcement may adjourn the meeting from time to time until a quorum shall
attend. At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally notified. Any action required or permitted to be taken at a
meeting of the Board of Directors may be taken without a meeting, if a
unanimous written consent which sets forth the action is signed by each member
of the Board and filed with the minutes of proceedings of the Board.
SECTION 2.10. Meeting by Conference Telephone. Members of the Board of
Directors may participate in a meeting 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 in a meeting by these
means constitutes presence in person at a meeting.
SECTION 2.11. Compensation. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at each regular or special
meeting of the Board of Directors or of committees thereof, and other
compensation for their services as such or on committees of the Board of
Directors, may be paid to directors. A director who serves the Corporation in
any other capacity also may receive compensation for such other services,
pursuant to a resolution of the directors.
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ARTICLE III.
COMMITTEES
SECTION 3.01. Committees. The Board of Directors may appoint from among
its members an Executive Committee and other committees composed of two or
more directors and delegate to these committees any of the powers of the Board
of Directors, except the power to declare dividends or other distributions on
stock, elect directors, issue stock other than as provided in the next
sentence, recommend to the stockholders any action which requires stockholder
approval, amend the Articles of Incorporation or By-Laws, approve any merger
or share exchange which does not require stockholder approval, elect or remove
officers or members of any such committee, fix the compensation or any member
of such committee, or any other power prohibited by law. If the Board of
Directors has given general authorization for the issuance of stock, a
committee of the Board, in accordance with a general formula or method
specified by the Board by resolution or by adoption of a stock option or other
plan, may fix the terms of stock subject to classification or reclassification
and the terms on which any stock may be issued, including all terms and
conditions required or permitted to be established or authorized by the Board
of Directors.
SECTION 3.02. Committee Procedure. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the transaction of business and the act of a majority
of those present at a meeting at which a quorum is present shall be the act of
the committee. The members of a committee present at any meeting, whether or
not they constitute a quorum, may appoint a director to act in the place of an
absent member. Any action required or permitted to be taken at a meeting of a
committee may be taken without a meeting, if a unanimous written consent which
sets forth the action is signed by each member of the committee and filed with
minutes of the committee. The members of a committee may conduct any meeting
thereof by conference telephone in accordance with the provisions of Section
2.10.
SECTION 3.03. Emergency. In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs and
business of the Corporation by its directors and officers as contemplated by
the Charter and the By-Laws, any two or more available members of the then
incumbent Executive Committee shall constitute a quorum of that Committee for
the full conduct and management of the affairs and business of the Corporation
in accordance with the provisions of Section 3.01. In the event of the
unavailability, at such time, of a minimum of two members of the then
incumbent Executive Committee, the available directors shall elect an
Executive Committee consisting of any two members of the Board of Directors,
whether or not they be officers of the Corporation, which two members shall
constitute the Executive Committee for the full conduct and management of the
affairs of the Corporation in accordance with the aforegoing provisions of
this Section. This Section shall be subject to implementation by resolution
of the Board of Directors passed from time to time for that purpose, and any
provisions of the By-Laws (other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the provisions of any
such implementary resolutions shall be suspended until it shall be determined
by any interim Executive Committee acting under this Section that it shall be
to the advantage of the Corporation to resume the conduct and management of
its affairs and business under all the other provisions of the By-Laws.
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ARTICLE IV.
OFFICERS
SECTION 4.01. Executive and Other Officers. The Corporation shall have
a President, a Secretary, and a Treasurer who shall be the executive officers
of the Corporation. The Board of Directors may designate an officer to serve
as Chief Executive Officer, having general supervision of the business and
affairs of the Corporation, or as Chief Operating Officer, having supervision
of the operations of the Corporation; in the absence of designation the
President shall serve as Chief Executive Officer and Chief Operating Officer.
The Corporation may also have one or more Vice Presidents, assistant officers,
and subordinate officers as may be established by the Board of Directors. A
person may hold more than one office in the Corporation but may not serve
concurrently as both President and Vice President or as President and
Secretary of the Corporation. Officers may also be directors.
SECTION 4.02. Chairman of the Board. The Chairman of the Board, if one
be elected, shall preside at all meetings of the Board of Directors and of the
stockholders at which he shall be present; and, in general, he shall perform
all such duties as are from time to time assigned to him by the Board of
Directors. The Chairman of the Board shall be a director. The Chairman of
the Board, if one be elected, shall not be an officer of the corporation
unless expressly designated as an officer by the Board of Directors; the
Chairman shall be an executive officer if also expressly designated as the
Chief Executive Officer of the Corporation.
SECTION 4.03. President. The President, in the absence of the Chairman
of the Board, shall preside at all meetings of the Board of Directors and of
the stockholders at which he shall be present; he may sign and execute, in the
name of the Corporation, all authorized deeds, mortgages, bonds, contracts or
other instruments, except in cases in which the signing and execution thereof
shall have been expressly delegated to some other officer or agent of the
Corporation; and, in general, he shall perform all duties usually performed by
a president of a corporation and such other duties as are from time to time
assigned to him by the Board of Directors or the Chief Executive Officer of
the Corporation.
SECTION 4.04. Vice Presidents. The Vice President or Vice Presidents,
at the request of the Chief Executive Officer or the President, or in the
President's absence or during his inability to act, shall perform the duties
and exercise the functions of the President, and when so acting shall have the
powers of the President. If there be more than one Vice President, the Board
of Directors may determine which one or more of the Vice Presidents shall
perform any of such duties or exercise any of such functions, of if such
determination is not made by the Board of Directors, the Chief Executive
Officer, or the President may make such determination; otherwise any of the
Vice Presidents may perform any of such duties or exercise any of such
functions. The Vice President or Vice Presidents shall have such other powers
and perform such other duties, and have such additional descriptive
designations in their titles (if any), as are from time to time assigned to
them by the Board of Directors, the Chief Executive Officer, or the President.
SECTION 4.05. Secretary. The Secretary shall keep the minutes of the
meetings of the stockholders, of the Board of Directors and of any committees
(unless a committee has elected a different person as Secretary), in books
provided for the purpose; he shall see that all notices are duly given in
accordance with the provisions of the By-Laws or as required by law; he shall
be custodian of the records of the Corporation; he may witness any document on
behalf of the Corporation, the execution of which is duly authorized, see that
the corporate seal is affixed where such document is required or desired to be
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under its seal, and when so affixed, may attest the same; and, in general, he
shall perform all duties incident to the office of a secretary of a
corporation, and such other duties as are from time to time assigned to him by
the Board of Directors, the Chief Executive Officer, or the President.
SECTION 4.06. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust
companies or other depositories as shall, from time to time, be selected by
the Board of Directors; he shall render to the President and to the Board of
Directors, whenever requested an account of the financial condition of the
Corporation; and, in general, he shall perform all the duties incident to the
office of a treasurer of a corporation, and such other duties as are from time
to time assigned to him by the Board of Directors, the Chief Executive
Officer, or the President.
SECTION 4.07. Assistant and Subordinate Officers. The assistant and
subordinate officers of the Corporation are all officers below the office of
Vice President, Secretary, or Treasurer. The assistant or subordinate
officers shall have such duties as are from time to time assigned to them by
the Board of Directors, the Chief Executive Officer, or the President.
SECTION 4.08. Election, Tenure and Removal of Officers. The Board of
Directors shall elect the officers. The Board of Directors may from time to
time authorize any committee or officer to appoint assistant and subordinate
officers. The President serves for one year. All other officers shall be
appointed to hold their offices, respectively, during the pleasure of the
Board. The Board of Directors (or, as to any assistant or subordinate
officer, any committee or officer authorized by the Board) may remove an
officer at any time. The removal of an officer does not prejudice any of his
contract rights. The Board of Directors (or, as to any assistant or
subordinate officer, any committee or officer authorized by the Board) may
fill a vacancy which occurs in any office for the unexpired portion of the
term.
SECTION 4.09. Compensation. The Board of Directors shall have power to
fix the salaries and other compensation and remuneration, of whatever kind, of
all officers of the Corporation. It may authorize any committee or officer,
upon whom the power of appointing assistant and subordinate officers may have
been conferred, to fix the salaries, compensation and remuneration of such
assistant and subordinate officers.
ARTICLE V.
STOCK
SECTION 5.01. Certificates for Stock. Upon written request therefor in
accordance with such procedures as may be established by the Board of
Directors from time to time, each stockholder is entitled to certificates
which represent and certify the shares of stock he holds in the Corporation.
Each stock certificate shall include on its face the name of the corporation
that issues it, the name of the stockholder or other person to whom it is
issued, and the class of stock and number of shares it represents. It shall
be in such form, not inconsistent with law or with the Charter, as shall be
approved by the Board of Directors or any officer or officers designated for
such purpose by resolution of the Board of Directors. Each stock certificate
shall be signed by the Chairman of the Board, the President, or a Vice
President, and countersigned by the Secretary, an Assistant Secretary, the
Treasurer, or an Assistant Treasurer. Each certificate may be sealed with the
actual corporate seal or a facsimile of it or in any other form and the
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signatures may be either manual or facsimile signatures. A certificate is
valid and may be issued whether or not an officer who signed it is still an
officer when it is issued.
SECTION 5.02. Transfers. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of certificates of stock; and
may appoint transfer agents and registrars thereof. The duties of transfer
agent and registrar may be combined.
SECTION 5.03. Record Date and Closing of Transfer Books. The Board of
Directors may set a record date or direct that the stock transfer books be
closed for a stated period for the purpose of making any proper determination
with respect to stockholders, including which stockholders are entitled to
notice of a meeting, vote at a meeting, receive a dividend, or be allotted
other rights. The record date may not be more than 90 days before the date on
which the action requiring the determination will be taken; the transfer books
may not be closed for a period longer than 20 days; and, in the case of a
meeting of stockholders, the record date or the closing of the transfer books
shall be at least ten days before the date of the meeting.
SECTION 5.04. Stock Ledger. The Corporation shall maintain a stock
ledger which contains the name and address of each stockholder and the number
of shares of stock of each class which the stockholder holds. The stock
ledger may be in written form or in any other form which can be converted
within a reasonable time into written form for visual inspection. The
original or a duplicate of the stock ledger shall be kept at the offices of a
transfer agent for the particular class of stock, or, if none, at the
principal office in the State of Texas or the principal executive offices of
the Corporation.
SECTION 5.05. Certification of Beneficial Owners. The Board of
Directors may adopt by resolution a procedure by which a stockholder of the
Corporation may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth
the class of stockholders who may certify; the purpose for which the
certification may be made; the form of certification and the information to be
contained in it; if the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or closing
of the stock transfer books, within which the certification must be received
by the Corporation; and any other provisions with respect to the procedure
which the Board considers necessary or desirable. On receipt of a
certification which complies with the procedure adopted by the Board in
accordance with this Section, the person specified in the certification is,
for the purpose set forth in the certification, the holder of record of the
specified stock in place of the stockholder who makes the certification.
SECTION 5.06. Lost Stock Certificates. The Board of Directors of the
Corporation may determine the conditions for issuing a new stock certificate
in place of one which is alleged to have been lost, stolen, or destroyed, or
the Board of Directors may delegate such power to any officer or officers of
the Corporation. In their discretion, the Board of Directors or such officer
or officers may refuse to issue such new certificate save upon the order of
some court having jurisdiction in the premises.
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ARTICLE VI.
FINANCE
SECTION 6.01. Checks, Drafts, Etc. All checks, drafts and orders for
the payment of money, notes and other evidences of indebtedness, issued in the
name of the Corporation, shall, unless otherwise provided by resolution of the
Board of Directors, be signed by the President, a Vice President or an
Assistant Vice President and countersigned by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.
SECTION 6.02. Annual Statement of Affairs. The President shall prepare
annually a full and correct statement of the affairs of the Corporation, to
include a balance sheet and a financial statement of operations for the
preceding fiscal year. The statement of affairs shall be submitted at the
annual meeting of the stockholders and, within 20 days after the meeting,
placed on file at the Corporation's principal office.
SECTION 6.03. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
SECTION 6.04. Dividends. If declared by the Board of Directors at any
meeting thereof, the Corporation may pay dividends on its shares in cash,
property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the Charter.
ARTICLE VII.
SUNDRY PROVISIONS
SECTION 7.01. Books and Records. The Corporation shall keep correct and
complete books and records of its accounts and transactions and minutes of the
proceedings of its stockholders and Board of Directors and of any executive or
other committee when exercising any of the powers of the Board of Directors.
The books and records of a Corporation may be in written form or in any other
form which can be converted within a reasonable time into written form for
visual inspection. Minutes shall be recorded in written form but may be
maintained in the form of a reproduction. The original or a certified copy of
the By-Laws shall be kept at the principal office of the Corporation.
SECTION 7.02. Corporate Seal. The Board of Directors shall provide a
suitable seal, bearing the name of the Corporation, which shall be in the
charge of the Secretary. The Board of Directors may authorize one or more
duplicate seals and provide for the custody thereof. If the Corporation is
required to place its corporate seal to a document, it is sufficient to meet
the requirement of any law, rule, or regulation relating to a corporate seal
to place the word "Seal" adjacent to the signature of the person authorized to
sign the document on behalf of the Corporation.
SECTION 7.03. Bonds. The Board of Directors may require any officer,
agent or employee of the Corporation to give a bond to the Corporation,
conditioned upon the faithful discharge of his duties, with one or more
sureties and in such amount as may be satisfactory to the Board of Directors.
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SECTION 7.04. Voting Upon Shares in Other Corporations. Stock of other
corporations or associations, registered in the name of the Corporation, may
be voted by the President, a Vice President, or a proxy appointed by either of
them. The Board of Directors, however, may by resolution appoint some other
person to vote such shares, in which case such person shall be entitled to
vote such shares upon the production of a certified copy of such resolution.
SECTION 7.05. Mail. Any notice or other document which is required by
these By-Laws to be mailed shall be deposited in the United States mails,
postage prepaid.
SECTION 7.06. Execution of Documents. A person who holds more than one
office in the Corporation may not act in more than one capacity to execute,
acknowledge, or verify an instrument required by law to be executed,
acknowledged, or verified by more than one officer.
SECTION 7.07. Amendments. Subject to the special provisions of Section
2.02, (a) any and all provisions of these By-Laws may be altered or repealed
and new by-laws may be adopted at any annual meeting of the stockholders, or
at any special meeting called for that purpose, and (b) the Board of Directors
shall have the power, at any regular or special meeting thereof, to make and
adopt new by-laws, or to amend, alter or repeal any of the By-Laws of the
Corporation.
ARTICLE VIII.
CUSTODIAN
SECTION 8.01. Employment of Custodian. All assets of the Corporation
shall be held by one or more custodian banks or trust companies meeting the
requirements of the Investment Company Act of 1940, as amended (the "1940
Act"), and having capital, surplus and undivided profits of at least
$2,000,000 and may be registered in the name of the Corporation, including the
designation of the particular class or series to which such assets belong, or
any such custodian, or the nominee of either of them. The terms of any such
custodian agreement shall be determined by the Board of Directors, which terms
shall be in accordance with the provisions of the 1940 Act. If so directed by
vote of the holders of a majority of the outstanding shares of a particular
class or series or by vote of the Board of Directors, the custodian of the
assets belonging to such class or series shall deliver and pay over such
assets as specified in such vote.
Subject to such rules, regulations and orders as the Securities and
Exchange Commission (the "Commission") may adopt, the Corporation may direct a
custodian to deposit all or any part of the securities owned by the
Corporation in a system for the central handling of securities established by
the Federal Reserve system or by a national securities exchange or a national
securities association registered with the Commission, or otherwise in
accordance with the 1940 Act, pursuant to which system, all securities of a
particular class or issuer deposited within the system are treated as fungible
and may be transferred or pledged by bookkeeping entry without the physical
delivery of such securities, provided that all such deposits shall be subject
to withdrawal only upon the order of the Corporation or a custodian.
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ARTICLE IX.
INDEMNIFICATION
SECTION 9.01. Indemnification of Directors and Officers. The
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than a proceeding by or in the right of the Corporation in which such person
shall have been adjudged to be liable to the Corporation), by reason of being
or having been a director or officer of the Corporation, or serving or having
served at the request of the Corporation as a director, officer, partner,
trustee, employee or agent of another entity in which the Corporation has an
interest as a shareholder, creditor or otherwise (a "Covered Person"), against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and reasonable expenses
(including attorney's fees) actually incurred by the Covered Person in
connection with such action, suit or proceeding, except (a) liability in
connection with any proceeding in which it is determined that (i) the act or
omission of the Covered Person was material to the matter giving rise to the
proceeding, and was committed in bad faith or was the result of active and
deliberate dishonesty, or (ii) the Covered Person actually received an
improper personal benefit in money, property or services, or (iii) in the case
of any criminal proceeding, the Covered Person had reasonable cause to believe
that the act or omission was unlawful and (b) liability to the Corporation or
its security holders to which the Covered 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 (any or all of
the conduct referred to in clauses (a) and (b) being hereinafter referred to
as "Disabling Conduct").
SECTION 9.02. Procedure For Indemnification. Any indemnification
under this By-law shall (unless ordered by a court) be made by the Corporation
only as authorized for a specific proceeding by (a) a final decision on the
merits by a court or other body before whom the proceeding was brought that
the Covered Person to be indemnified was not liable by reason of Disabling
Conduct, (b) dismissal of the proceeding against the Covered Person for
insufficiency of evidence of any Disabling Conduct, or (c) a reasonable
determination, based upon a review of the facts, by a majority of a quorum of
the directors who are neither "interested persons" of the Corporation as
defined in the 40 Act nor parties to the proceeding ("disinterested, non-party
directors"), or an independent legal counsel in a written opinion, that the
Covered Person was not liable by reason of Disabling Conduct. The termination
of any proceeding by judgment, order or settlement shall not create a
presumption that the Covered Person did not meet the required standard of
conduct; the termination of any proceeding by conviction, or a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, shall create a rebuttable presumption that the Covered Person did
not meet the required standard of conduct. Any determination pursuant to this
Section IX shall not prevent recovery from any Covered Person of any amount
paid to him in accordance with this By-Law as indemnification if such Covered
Person is subsequently adjudicated by a court of competent jurisdiction to be
liable by reason of Disabling Conduct.
SECTION 9.03. Advance Payment of Expenses. Reasonable expenses
(including attorney's fees) incurred by a Covered Person may be paid or
reimbursed by the Corporation in advance of the final disposition of an
action, suit or proceeding upon receipt by the Corporation of (a) a written
affirmation by the Covered Person of his good faith belief that the standard
of conduct necessary for indemnification under this By-Law has been met and
(b) a written undertaking by or on behalf of the Covered Person to repay the
amount if it is ultimately determined that such standard of conduct has not
been met, so long as either (i) the Covered Person has provided a security for
his undertaking, (ii) the
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Corporation is insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested, non-party
directors, or an independent legal counsel in a written opinion, has
determined, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Covered Person
ultimately will be found entitled to indemnification.
SECTION 9.04. Exclusivity, Etc. The indemnification and advance of
expenses provided by this By-Law shall not be deemed exclusive of any other
rights to which a Covered Person seeking indemnification or advance of
expenses may be entitled under any law (common or statutory), or any
agreement, vote of stockholders or disinterested directors, or other provision
that is consistent with law, both as to action in an official capacity and as
to action in another capacity while holding office or while employed by or
acting as agent for the Corporation, shall continue in respect of all events
occurring while the Covered Person was a director or officer after such
Covered Person has ceased to be a director or officer, and shall inure to the
benefit of the estate, heirs, executors and administrators of such Covered
person. All rights to indemnification and advance of expenses under the
Charter and hereunder shall be deemed to be a contract between the Corporation
and each director or officer of the Corporation who serves or served in such
capacity at any time while this By-Law is in effect. Nothing herein shall
prevent the amendment of this By-Law, provided that no such amendment shall
diminish the rights of any Covered Person hereunder with respect to events
occurring or claims made before its adoption or as to claims made after its
adoption in respect of events occurring before its adoption. Any repeal or
modification of this By-Law shall not in any way diminish any rights to
indemnification or advance of expenses of a Covered Person or the obligations
of the Corporation arising hereunder with respect to events occurring, or
claims made, while this By-Law or any provision hereof is in force.
SECTION 9.05. Insurance. The Corporation may purchase and maintain
insurance on behalf of any Covered Person against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such; provided, however, that the Corporation shall not purchase
insurance to indemnify any Covered Person against liability for Disabling
Conduct.
SECTION 9.06. Severability: Definitions. The invalidity or
unenforceability of any provision of this Article IX shall not affect the
validity or enforceability of any other provision hereof. The phrase "this
By-Law" in this Article IX means this Article IX in its entirety.
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