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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 10
SIGNATURE BRIAN SHISSEL
TITLE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 128261043
<INVESTMENTS-AT-VALUE> 194064097
<RECEIVABLES> 358244
<ASSETS-OTHER> 80924
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 194503265
<PAYABLE-FOR-SECURITIES> 55917
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 215078
<TOTAL-LIABILITIES> 270995
<SENIOR-EQUITY> 40000000
<PAID-IN-CAPITAL-COMMON> 96304134
<SHARES-COMMON-STOCK> 13129779
<SHARES-COMMON-PRIOR> 13129779
<ACCUMULATED-NII-CURRENT> 1343196
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 15286637
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 42904062
<NET-ASSETS> 194232270
<DIVIDEND-INCOME> 770016
<INTEREST-INCOME> 988790
<OTHER-INCOME> 0
<EXPENSES-NET> 596343
<NET-INVESTMENT-INCOME> 1162463
<REALIZED-GAINS-CURRENT> 11648118
<APPREC-INCREASE-CURRENT> 610044
<NET-CHANGE-FROM-OPS> 13420625
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1550000
<DISTRIBUTIONS-OTHER> 0
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<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11870625
<ACCUMULATED-NII-PRIOR> 180733
<ACCUMULATED-GAINS-PRIOR> 3638519
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 317470
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 596343
<AVERAGE-NET-ASSETS> 191228455
<PER-SHARE-NAV-BEGIN> 10.84
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> .94
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .12
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</TABLE>
ROYCE MICRO-CAP TRUST, INC.
Form N-SAR attachment for period ending 6/30/98
Item 77(C)
At the 1998 Annual Meeting of Stockholders held on April 28, 1998, the Fund's
stockholders: (i) elected of the board of directors, consisting of (a) Charles
M. Royce, (b) Richard M. Galkin, (c) Stephen L. Isaacs, (d) John D. Diederich
and (e) David L. Meister and (ii) ratified the selection of Tait, Weller & Baker
as independent accountants.
<TABLE>
<CAPTION>
Common Common Common
Stock Stock Stock
and and and Preferred Preferred Preferred
Preferred Preferred Preferred Stock Stock Stock
Stock Stock Stock Voting Voting Voting
Voting Voting Voting As A As A As A
Together Together Together Separate Separate Separate
As A As A As A Class - Class - Class -
Single Single Single Votes Votes Votes
Class - Class - Class - For Against Abstained
Votes Votes Votes
For Against Abstained
------- ------- --------- ----- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
(i)
(a) 12,829,818 N/A 83,714 N/A N/A N/A
(b) 12,824,470 N/A 89,062 N/A N/A N/A
(c) 12,824,470 N/A 89,062 N/A N/A N/A
(d) N/A N/A N/A 1,492,018 N/A 4,249
(e) N/A N/A N/A 1,492,018 N/A 4,249
(ii) 12,823,634 37,258 9,831 N/A N/A N/A
</TABLE>
Item 77(K)
At the 1998 Annual Meeting of Stockholders of the Registrant held on April
28, 1998, the stockholders ratified the selection by the Registrant's Board of
Directors, including a majority of such directors who were not "interested
persons" (as such term is defined in the Investment Company Act of 1940), of
Tait, Weller & Baker, independent public accountants, to serve as the
Registrant's auditors for the year ending December 31, 1998.
The Board's selection of Tait, Weller & Baker was based on a consideration
of its expertise and cost efficiency, and did not involve any dispute with Ernst
& Young LLP or a decision by Ernst & Young LLP not to stand for re-election as
auditors. The reports of Ernst & Young LLP on the financial statements of the
Registrant as of December 31, 1997 and 1996, and for the years then ended did
not contain an adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.
Tait, Weller & Baker has informed the Registrant that neither Tait, Weller
& Baker nor any of its partners has any direct or indirect financial interest in
the Registrant except as auditors and independent public accountants.
<PAGE>
AMENDED AND RESTATED
BYLAWS
OF
ROYCE MICRO-CAP TRUST, INC.
A Maryland Corporation
ARTICLE I
STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the stockholders
of Royce Micro-Cap Trust, Inc. (the "Corporation") shall be held on a date fixed
from time to time by the Board of Directors within the thirty-one (31) day
period ending on April 30 of each calendar year. An annual meeting may be held
at any place in the United States, in or out of the State of Maryland, as may be
determined by the Board of Directors, and shall be designated in the notice of
the meeting, and at the time specified by the Board of Directors. Unless
otherwise provided by statute, the Corporation's Articles of Incorporation or
these Bylaws, any business of the Corporation may be transacted at an annual
meeting without being specifically designated in the notice.
SECTION 2. Special Meetings. Special meetings of the stockholders
for any purpose or purposes, unless otherwise prescribed by statute or by the
Corporation's Articles of Incorporation, may be held at any place within the
United States, and may be called at any time by the Board of Directors or by the
President, and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors or at the request in writing of
stockholders entitled to cast at least a majority of the votes entitled to be
cast at the meeting upon payment by such stockholders to the Corporation of the
reasonably estimated cost of preparing and mailing a notice of the meeting
(which estimated cost shall be provided to such stockholders by the Secretary of
the Corporation).
SECTION 3. Notice of Meetings. Written or printed notice of the
purpose or purposes, in the case of a special meeting, and of the time and place
of every meeting of the stockholders shall be given by the Secretary of the
Corporation to each stockholder of record entitled to vote at the meeting, by
placing the notice in the mail at least ten (10) days, but not more than ninety
(90) days, prior to the date designated for the meeting, addressed to each
stockholder at his address appearing on the books of the Corporation or supplied
by the stockholder to the Corporation for the purpose of notice. The notice of
any meeting of stockholders may be accompanied by a form of proxy approved by
the Board of Directors in favor of the actions or persons as the Board of
Directors may select. Notice of any meeting of stockholders shall be deemed
waived by any stockholder who attends the meeting in person or by proxy, or who
before or after the meeting submits a signed waiver of notice that is filed with
the records of the meeting.
<PAGE>
SECTION 4. Quorum. The presence in person or by proxy of
stockholders of the Corporation entitled to cast at least a majority of the
votes entitled to be cast shall constitute a quorum at each meeting of the
stockholders, and all questions shall be decided by a majority of the votes cast
on the question (except with respect to the election of directors, which shall
be by plurality of the votes cast), unless otherwise required by the laws of the
State of Maryland, the Investment Company Act of 1940, as amended, or the
Corporation's Articles of Incorporation. In the absence of a quorum, the
stockholders present in person or by proxy at the meeting, by majority vote and
without notice other than by announcement at the meeting, may adjourn the
meeting from time to time as provided in Section 5 of this Article I until a
quorum shall attend. The stockholders present at any duly organized meeting may
continue to do business until adjournment, notwithstanding the withdrawal of
enough stockholders to leave less than a quorum. The lack of presence at any
meeting in person or by proxy of holders of the number of shares of stock of the
Corporation of the proportion that may be required by the laws of the State of
Maryland, the Investment Company Act of 1940, as amended, or other applicable
statute, the Corporation's Articles of Incorporation or these Bylaws, for action
upon any given matter shall not prevent action at the meeting on any other
matter or matters that may properly come before the meeting, so long as there
are present, in person or by proxy, holders of the number of shares of stock of
the Corporation required for action upon the other matter or matters.
SECTION 5. Adjournment. Any meeting of the stockholders may be
adjourned from time to time, without notice other than by announcement at the
meeting at which the adjournment is taken. At any adjourned meeting at which a
quorum shall be present, any action may be taken that could have been taken at
the meeting originally called. A meeting of the stockholders may not be
adjourned to a date more than one hundred twenty (120) days after the original
record date, unless a new record date is set by the Board of Directors and
further notice is provided to the stockholders.
SECTION 6. Organization. At every meeting of the stockholders, the
President, or in his absence or inability to act, a Vice President, or in the
absence or inability to act of the President and all the Vice Presidents, a
chairman chosen by the stockholders, shall act as chairman of the meeting. The
Secretary, or in his absence or inability to act, a person appointed by the
chairman of the meeting, shall act as secretary of the meeting and keep the
minutes of the meeting.
SECTION 7. Order of Business. The order of business at all meetings
of the stockholders shall be as determined by the chairman of the meeting.
SECTION 8. Voting. Except as otherwise provided by statute or the
Corporation's Articles of Incorporation, each holder of record of shares of
stock of the Corporation having voting power shall be entitled at each meeting
of the stockholders to one (1) vote for every full share of stock, and
proportional voting rights for fractional shares of stock, standing in his name
on the records of the Corporation as of the record date determined pursuant to
Section 9 of this Article I.
Each stockholder entitled to vote at any meeting of stockholders may
authorize another person or persons to act for him by a proxy signed by the
stockholder or his attorney-in-fact. A stockholder may authorize another person
or persons to act as proxy by transmitting, or
<PAGE>
authorizing the transmission of,
a telegram, cablegram, datagram or other means of electronic transmission to the
person or persons authorized to act as proxy or to a proxy solicitation firm,
proxy support service organization or other person authorized by the person or
persons who will act as proxy to receive the transmission. No proxy shall be
valid after the expiration of eleven (11) months from the date thereof, unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the stockholder executing it, except in those cases in which the proxy states
that it is irrevocable and in which an irrevocable proxy is permitted by law.
SECTION 9. Fixing of Record Date for Determining Stockholders
Entitled to Notice and to Vote at Meeting. The Board of Directors may set a
record date for the purpose of determining stockholders entitled to notice of,
and to vote at, any meeting of the stockholders. The record date for a
particular meeting shall be not more than ninety (90) nor fewer than ten (10)
days before the date of the meeting. All persons who were holders of record of
shares as of the record date of a meeting, and no others, shall be entitled to
vote at such meeting and any adjournment thereof.
SECTION 10. Inspectors. The Board of Directors may, in advance of
any meeting of stockholders, appoint one (1) or more inspectors to act at the
meeting or at any adjournment of the meeting. If the inspectors shall not be so
appointed or if any of them shall fail to appear or act, the chairman of the
meeting may appoint inspectors. Each inspector, before entering upon the
discharge of his duties, shall, if required by the chairman of the meeting, take
and sign an oath to execute faithfully the duties of inspector of the meeting
with strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the voting power
of each share, the number of shares represented at the meeting, the existence of
a quorum and the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result and do those acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the chairman
of the meeting or any stockholder entitled to vote at the meeting, the
inspectors shall make a report in writing of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them.
No director or candidate for the office of director shall act as inspector of an
election of directors. Inspectors need not be stockholders of the Corporation.
SECTION 11. Consent of Stockholders in Lieu of Meeting. Except as
otherwise provided by statute or the Corporation's Articles of Incorporation,
any action required to be taken at any annual or special meeting of
stockholders, or any action that may be taken at any annual or special meeting
of the stockholders, may be taken without a meeting, without prior notice and
without a vote, if the following are filed with the records of stockholders'
meetings: (a) a unanimous written consent that sets forth the action and is
signed by each stockholder entitled to vote on the matter and (b) a written
waiver of any right to dissent signed by each stockholder entitled to notice of
the meeting but not entitled to vote at the meeting.
SECTION 12. Nominations of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors. Nominations of persons for election to the Board of
Directors may be made at a meeting of stockholders by or at the direction of the
Board of Directors, by any nominating committee or person appointed by
<PAGE>
the Board
of Directors or by any stockholder entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 12. Such nominations, other than those made by or at the direction
of the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the Corporation's principal executive office not less
than fifteen (15) days nor more than sixty (60) days prior to the meeting;
provided, however, that in the event that less than thirty (30) days' notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received no
later than the close of business on the tenth (10th) day following the day on
which such notice of the date of the meeting was mailed or such public
disclosure was made. Such stockholder's notice shall set forth: (a) as to each
person who the stockholder proposes to nominate for election or re-election as a
director, (i) the name, age, business address and residence address of the
person, (ii) the person's principal occupation or employment, (iii) the class,
series (if any) and number of shares of stock of the Corporation which are
beneficially owned by the person and (iv) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934 or any successor rule or regulation thereto; and (b) as to the
stockholder giving the notice, (i) the stockholder's name and record address and
(ii) the class, series (if any) and number of shares of stock of the Corporation
which are beneficially owned by the stockholder. The Corporation may require
any proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine such proposed nominee's eligibility to
serve as a director. No person shall be eligible for election as a director
unless nominated in accordance with the procedures set forth herein.
The presiding officer at the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedures, and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded.
SECTION 13. Business at Annual Meeting. At an annual meeting of the
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be specified in the notice of the meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, otherwise be
properly brought before the meeting by or at the direction of the Board of
Directors or otherwise be properly brought before the meeting by a stockholder.
In addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
Corporation's principal executive office not less than fifteen (15) days nor
more than sixty (60) days prior to the meeting (or, with respect to a proposal
required to be included in the Corporation's proxy statement pursuant to Rule
14a-8 of Regulation 14A under the Securities Exchange Act of 1934 or its
successor provision, the earlier date such proposal was received); provided,
however, that in the event that less than thirty (30) days' notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received no later than the
close of business on the tenth (10th) day following the day on which such notice
of the date of the annual meeting was mailed or such
<PAGE>
public disclosure was made.
A stockholder's notice to the Secretary shall set forth, as to each matter the
stockholder proposes to bring before the annual meeting, (a) a brief description
of the business desired to be brought before the annual meeting and the
reason(s) for conducting such business at the annual meeting, (b) the name and
record address of the stockholder proposing such business, (c) the class, series
(if any) and number of shares of the Corporation which are beneficially owned by
the stockholder and (d) any material interest of the stockholder in such
business.
Notwithstanding anything in the Bylaws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 13; provided, however, that nothing in this Section 13
shall be deemed to preclude discussion by any stockholder of any business
properly brought before the annual meeting in accordance with such procedures.
The presiding officer at the meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 13, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers. Except as otherwise provided in the
Corporation's Articles of Incorporation, the business and affairs of the
Corporation shall be managed under the direction of the 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 law, by the
Corporation's Articles of Incorporation or by these Bylaws.
SECTION 2. Number, Election and Term of Directors. The number of
directors shall be fixed from time to time by resolution of the Board of
Directors adopted by a majority of the directors then in office; provided,
however, that the number of directors shall in no event be fewer than three (3)
nor, subject to the charter of the Corporation, more than eleven (11).
Directors shall hold office for one year or until the first annual election
following their election and until their successors are duly elected and
qualify. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 5 of this Article, and each director
elected shall hold office until his successor shall have been elected and shall
have qualified, until his death or until he shall have resigned or have been
removed as provided in these Bylaws, or as otherwise provided by statute or the
Corporation's Articles of Incorporation. Any vacancy created by an increase in
directors may be filled in accordance with Section 5 of this Article II. No
reduction in the number of directors shall have the effect of removing any
director from office prior to the expiration of his term unless the director is
specifically removed pursuant to Section 4 of this Article II at the time of the
decrease. A director need not be a stockholder of the Corporation, a citizen of
the United States or a resident of the State of Maryland.
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SECTION 3. Resignation. A director of the Corporation may resign at
any time by giving written notice of his resignation to the Board of Directors
or to the President or the Secretary of the Corporation. Any resignation shall
take effect at the time specified in it or, should the time when it is to become
effective not be specified in it, immediately upon its receipt. Unless the
resignation states otherwise, acceptance of a resignation shall not be necessary
to make it effective.
SECTION 4. Removal of Directors. Any director of the Corporation may
be removed by the stockholders, with or without cause, by a vote of a majority
of the votes entitled to be cast for the election of directors.
SECTION 5. Vacancies. Subject to the provisions of the Investment
Company Act of 1940, as amended, any vacancies in the Board of Directors,
whether arising from death, resignation, removal or any other cause except an
increase in the number of directors, shall be filled by a vote of the majority
of the directors then in office even though that majority is less than a quorum,
provided that no vacancy or vacancies shall be filled by action of the remaining
directors if, after the filling of the vacancy or vacancies, fewer than two-
thirds of the directors then holding office shall have been elected by the
stockholders of the Corporation. A majority of the entire Board in office at
the time of the increase may fill a vacancy that results from an increase in the
number of directors. In the event that at any time a vacancy exists in any
office of a director that may not be filled by the remaining directors, a
special meeting of the stockholders shall be held as promptly as possible and in
any event within sixty (60) days, for the purpose of filling the vacancy or
vacancies. Any director appointed by the Board of Directors to fill a vacancy
shall hold office only until the next annual meeting of stockholders of the
Corporation and until a successor has been elected and qualifies or until his
earlier death, resignation or removal.
SECTION 6. Place of Meetings. Meetings of the Board of Directors may
be held at any place that the Board of Directors may from time to time determine
or that is specified in the notice of the meeting.
SECTION 7. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at the time and place determined by the
Board of Directors.
SECTION 8. Special Meetings. Special meetings of the Board of
Directors may be called by a majority of the directors of the Corporation or by
the President.
SECTION 9. Annual Meeting. The annual meeting of the Board of
Directors shall be held as soon as practicable after the meeting of stockholders
at which the directors were elected. No notice of such annual meeting shall be
necessary if held immediately after the adjournment, and at the site, of the
meeting of stockholders. If not so held, notice shall be given as hereinafter
provided for special meetings of the Board of Directors.
SECTION 10. Notice of Special Meetings. Notice of each special
meeting of the Board of Directors shall be given by the Secretary or the
President as hereinafter provided. Each notice shall state the time and place
of the meeting and shall be delivered to each director, either personally or by
telephone or other standard form of telecommunication, at least twenty-four (24)
hours before the time at which the meeting is to be held, or by first-class
mail, postage prepaid,
<PAGE>
addressed to the director at his residence or usual place
of business, and mailed at least three (3) days before the day on which the
meeting is to be held.
SECTION 11. Waiver of Notice of Meetings. Notice of any special
meeting need not be given to any director who shall, either before or after the
meeting, sign a written waiver of notice that is filed with the records of the
meeting or who shall attend the meeting.
SECTION 12. Quorum and Voting. One-third (1/3) of the members of the
entire Board of Directors shall be present in person at any meeting of the Board
so as to constitute a quorum for the transaction of business at the meeting,
and, except as otherwise expressly required by statute, the Corporation's
Articles of Incorporation, these Bylaws, the Investment Company Act of 1940, as
amended, or any other applicable statute, the act of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board. In the absence of a quorum at any meeting of the Board, a majority of
the directors present may adjourn the meeting to another time and place, and
notice of any adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place were
announced at the meeting at which the adjournment was taken, to the other
directors. At any adjourned meeting at which a quorum is present, any business
may be transacted that might have been transacted at the meeting as originally
called.
SECTION 13. Organization. The President or, in his absence or
inability to act, another director chosen by a majority of the directors present
shall act as chairman of the meeting and preside at the meeting. The Secretary
(or, in his absence or inability to act, any person appointed by the chairman)
shall act as secretary of the meeting and keep the minutes of the meeting.
SECTION 14. Committees. The Board of Directors may designate one (1)
or more committees of the Board of Directors, each consisting of one (1) or more
directors. To the extent provided in the resolution and permitted by law, the
committee or committees shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation. Any
committee or committees shall have the name or names determined from time to
time by resolution adopted by the Board of Directors. Each committee shall keep
regular minutes of its meetings and provide those minutes to the Board of
Directors when required. 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.
SECTION 15. Written Consent of Directors in Lieu of a Meeting.
Subject to the provisions of the Investment Company Act of 1940, as amended, any
action required or permitted to be taken at any meeting of the Board of
Directors or of any committee of the Board may be taken without a meeting if all
members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of the
proceedings of the Board or committee.
SECTION 16. Telephone Conference. Members of the Board of Directors
or any committee of the Board may participate in any Board or committee meeting
by means of a conference telephone or similar communications equipment by means
of which all persons
<PAGE>
participating in the meeting can hear each other at the
same time. Participation by such means shall constitute presence in person at
the meeting.
SECTION 17. Compensation. Each director shall be entitled to receive
such compensation, if any, as may from time to time be fixed by the Board of
Directors, including a fee for each meeting of the Board or any committee
thereof, regular or special, he attends. Directors may also be reimbursed by
the Corporation for all reasonable expenses incurred in traveling to and from
the place of a Board or committee meeting.
ARTICLE III
OFFICERS, AGENTS AND EMPLOYEES
SECTION 1. Number and Qualifications. The officers of the
Corporation shall be a President, a Secretary and a Treasurer, each of whom
shall be elected by the Board of Directors. The Board of Directors may elect or
appoint one (1) or more Vice Presidents and may also appoint any other officers,
agents and employees it deems necessary or proper. Any two (2) or more offices
may be held by the same person, except the office of President and Vice
President, but no officer shall execute, acknowledge or verify in more than one
capacity any instrument required by law to be executed, acknowledged or verified
in more than one capacity. Officers shall be elected by the Board of Directors
each year at its first meeting held after the annual meeting of stockholders,
each to hold office until the meeting of the Board following the next annual
meeting of the stockholders and until his successor shall have been duly elected
and shall have qualified, until his death or until he shall have resigned or
have been removed, as provided by these Bylaws. The Board of Directors may from
time to time elect such officers (including one or more Assistant Vice
Presidents, one or more Assistant Treasurers and one or more Assistant
Secretaries) and may appoint, or delegate to the President the power to appoint,
such agents as may be necessary or desirable for the business of the
Corporation. Such other officers and agents shall have such duties and shall
hold their offices for such terms as may be prescribed by the Board or by the
appointing authority.
SECTION 2. Resignations. Any officer of the Corporation may resign
at any time by giving written notice of his resignation to the Board of
Directors, the President or the Secretary. Any resignation shall take effect at
the time specified therein or, if the time when it shall become effective is not
specified therein, immediately upon its receipt. Unless otherwise stated in the
resignation, the acceptance of a resignation shall not be necessary to make it
effective.
SECTION 3. Removal of Officer, Agent or Employee. Any officer, agent
or employee of the Corporation may be removed by the Board of Directors, with or
without cause, at any time if the Board of Directors in its judgment finds that
the best interests of the Corporation will be served thereby, and the Board may
delegate the power of removal as to agents and employees not elected or
appointed by the Board of Directors. Removal shall be without prejudice to the
person's contract rights, if any, but the appointment of any person as an
officer, agent or employee of the Corporation shall not of itself create
contract rights.
<PAGE>
SECTION 4. Vacancies. A vacancy in any office, whether arising from
death, resignation, removal or any other cause, may be filled for the unexpired
portion of the term of the office that shall be vacant, in the manner prescribed
in these Bylaws for the regular election or appointment to the office.
SECTION 5. Compensation. The compensation of the officers of the
Corporation shall be fixed by the Board of Directors, but this power may be
delegated to any officer with respect to other officers under his control.
SECTION 6. Bonds or Other Security. If required by the Board, any
officer, agent or employee of the Corporation shall give a bond or other
security for the faithful performance of his duties, in an amount and with any
surety or sureties as the Board may require.
SECTION 7. President. The President shall be the chief executive
officer of the Corporation and shall preside at all meetings of the stockholders
and of the Board of Directors. The President shall, subject to the control of
the Board of Directors, have general charge of the business and affairs of the
Corporation and may employ and discharge employees and agents of the
Corporation, except those elected or appointed by the Board, and he may delegate
these powers.
SECTION 8. Vice President. Each Vice President shall have the powers
and perform the duties that the Board of Directors or the President may from
time to time prescribe.
SECTION 9. Treasurer. Subject to the provisions of any contract that
may be entered into with any custodian pursuant to authority granted by the
Board of Directors, the Treasurer shall have charge of all receipts and
disbursements of the Corporation and shall have or provide for the custody of
the Corporation's funds and securities; he shall have full authority to receive
and give receipts for all money due and payable to the Corporation, and to
endorse checks, drafts and warrants, in its name and on its behalf, and to give
full discharge for the same; he shall deposit all funds of the Corporation,
except those that may be required for current use, in such banks or other places
of deposit as the Board of Directors may from time to time designate; and he
shall, in general, perform all duties incident to the office of Treasurer and
such other duties as may from time to time be assigned to him by the Board of
Directors or the President.
SECTION 10. Secretary. The Secretary shall:
(a) Keep or cause to be kept, in one or more books provided for
the purpose, the minutes of all meetings of the Board of Directors, the
committees of the Board and the stockholders;
(b) See that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law;
(c) Be custodian of the records and the seal of the Corporation
and affix and attest the seal to all stock certificates of the Corporation
(unless the seal of the Corporation on such certificates shall be a facsimile,
as hereinafter provided) and affix and attest the seal to all other documents to
be executed on behalf of the Corporation under its seal;
<PAGE>
(d) See that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are properly
kept and filed; and
(e) In general, perform all the duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the Board of Directors or the President.
SECTION 11. Delegation of Duties. In case of the absence of any
officer of the Corporation, or for any other reason that the Board of Directors
may deem sufficient, the Board may confer for the time being the powers or
duties, or any of them, of such officer upon any other officer or upon any
director.
ARTICLE IV
STOCK
SECTION 1. Stock Certificates. To the extent provided by the Board
of Directors, each holder of stock of the Corporation shall be entitled to have
a certificate or certificates representing shares of stock of the Corporation
owned by him. Such certificates shall be in a form approved by the Board,
signed by or in the name of the Corporation by the President or a Vice President
and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer and sealed with the seal of the Corporation. Any or all of the
signatures or the seal on the certificate may be facsimiles. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before the certificate is issued, it may
nevertheless be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar was still in office at the date of issue.
SECTION 2. Stock Ledger. There shall be maintained a stock ledger
containing the name and address of each stockholder and the number of shares of
stock of each class the stockholder holds. The stock ledger may be in written
form or 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 principal office of the Corporation, at the office
of the transfer agent for such shares or at any other office or agency specified
by the Board of Directors.
SECTION 3. Transfers of Shares. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only by the
registered holder of the shares, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary or with a transfer
agent or transfer clerk, and on surrender of the certificate or certificates, if
issued, for the shares properly endorsed or accompanied by a duly executed stock
transfer power and the payment of all taxes thereon. Except as otherwise
provided by law, the Corporation shall be entitled to recognize the exclusive
right of a person in whose name any share or shares stand on the record of
stockholders as the owner of the share or shares for all purposes, including,
without
<PAGE>
limitation, the rights to receive dividends or other distributions and
to vote as the owner, and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or shares on the part
of any other person.
SECTION 4. Regulations. The Board of Directors may authorize the
issuance of uncertificated securities if permitted by law. If stock
certificates are issued, the Board of Directors may make any additional rules
and regulations, not inconsistent with these Bylaws, as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
stock of the Corporation. The Board may appoint, or authorize any officer or
officers to appoint, one or more transfer agents or one or more transfer clerks
and one or more registrars and may require all certificates for shares of stock
to bear the signature or signatures of any of them.
SECTION 5. Lost, Destroyed or Mutilated Certificates. The holder of
any certificate representing shares of stock of the Corporation shall
immediately notify the Corporation of its loss, destruction or mutilation, and
the Corporation may issue a new certificate of stock in the place of any
certificate issued by it that has been alleged to have been lost or destroyed or
that shall have been mutilated. The Board may, in its absolute discretion,
require the owner (or his legal representative) of a lost, destroyed or
mutilated certificate to give to the Corporation a bond in a sum, limited or
unlimited, and form and with any surety or sureties, as the Board in its
absolute discretion shall determine, to indemnify the Corporation against any
claim that may be made against it on account of the alleged loss or destruction
of any such certificate or issuance of a new certificate. Anything herein to
the contrary notwithstanding, the Board of Directors may, in its absolute
discretion, refuse to issue any such new certificate, except pursuant to legal
proceedings under the laws of the State of Maryland.
SECTION 6. Fixing of Record Date for Dividends, Distributions, etc.
The Board may fix, in advance, a date not more than ninety (90) days preceding
the date fixed for the payment of any dividend or the making of any distribution
or the allotment of rights to subscribe for securities of the Corporation, or
for the delivery of evidences of rights or evidences of interests arising out of
any change, conversion or exchange of common stock or other securities, as the
record date for the determination of the stockholders entitled to receive any
such dividend, distribution, allotment, rights or interests, and in such case
only the stockholders of record at the time so fixed shall be entitled to
receive such dividend, distribution, allotment, rights or interests.
SECTION 7. Information to Stockholders and Others. Any stockholder
of the Corporation or his agent may, during the Corporation's usual business
hours, inspect and copy the Corporation's Bylaws, minutes of the proceedings of
its stockholders, annual statements of its affairs and voting trust agreements
on file at its principal office.
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification of Directors and Officers. Any person who
was or is a party or is threatened to be made a party in any threatened, pending
or completed action, suit
<PAGE>
or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is a current or former
director or officer of the Corporation, or is or was serving while a director or
officer of the Corporation at the request of the Corporation as a director,
officer, partner, trustee, employee, agent or fiduciary of another domestic or
foreign corporation, partnership, joint venture, trust, enterprise or employee
benefit plan shall be indemnified by the Corporation against judgments,
penalties, fines, excise taxes, settlements and reasonable expenses (including
attorneys' fees) actually incurred by such person in connection with such
action, suit or proceeding to the fullest extent permissible under the Maryland
General Corporation Law and the Investment Company Act of 1940, as amended, as
those statutes are now or hereafter in force, except that such indemnity shall
not protect any such person against any liability to the Corporation or any
stockholder thereof to which such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office ("disabling conduct").
SECTION 2. Advances. Any current or former director or officer of
the Corporation claiming indemnification within the scope of this Article V
shall be entitled to advances from the Corporation for payment of the reasonable
expenses incurred by him in connection with proceedings to which he is a party
in the manner and to the fullest extent permissible under the Maryland General
Corporation Law and the Investment Company Act of 1940, as amended, as those
statutes are now or hereafter in force; provided, however, that the person
seeking indemnification shall provide to the Corporation a written affirmation
of his good faith belief that the standard of conduct necessary for
indemnification by the Corporation has been met and a written undertaking to
repay any such advance, if it should ultimately be determined that the standard
of conduct has not been met, and provided further that at least one (1) of the
following additional conditions is met: (a) the person seeking indemnification
shall provide a security in form and amount acceptable to the Corporation for
his undertaking; (b) the Corporation is insured against losses arising by reason
of the advance; or (c) a majority of a quorum of directors of the Corporation
who are neither "interested persons" as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended, nor parties to the proceeding
("disinterested non-party directors"), or independent legal counsel, in a
written opinion, shall determine, based on a review of facts readily-available
to the Corporation at the time the advance is proposed to be made, that there is
reason to believe that the person seeking indemnification will ultimately be
found to be entitled to indemnification.
SECTION 3. Procedure. At the request of any current or former
director or officer, or any employee or agent whom the Corporation proposes to
indemnify, the Board of Directors shall determine, or cause to be determined, in
a manner consistent with the Maryland General Corporation Law and the Investment
Company Act of 1940, as amended, as those statutes are now or hereafter in
force, whether the standards required by this Article V and Section 2-418 of the
Maryland General Corporation Law have been met; provided, however, that
indemnification shall be made only following: (a) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of disabling conduct or (b) in
the absence of such a decision, a reasonable determination, based upon a review
of the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (i) the vote of a majority of a quorum of disinterested
non-party directors or (ii) an independent legal counsel in a written opinion.
<PAGE>
SECTION 4. Indemnification of Employees and Agents. Employees and
agents who are not officers or directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such employees or agents, in
accordance with the procedures set forth in this Article V to the extent
permissible under the Maryland General Corporation Law and the Investment
Company Act of 1940, as amended, as those statutes are now or hereafter in
force, and to such further extent, consistent with the foregoing, as may be
provided by action of the Board of Directors or by contract.
SECTION 5. Other Rights. The indemnification provided by this
Article V shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking such indemnification may be
entitled under any insurance or other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action by a director or officer
of the Corporation in his capacity as such and as to action by such person in
another capacity while holding such office or position, and shall continue as to
a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person.
SECTION 6. Insurance. The Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or who, while a
director, officer, employee or agent of the Corporation, is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another domestic or foreign corporation,
partnership, joint venture, trust, enterprise or employee benefit plan, against
any liability asserted against and incurred by him in any such capacity or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability.
ARTICLE VI
SEAL
The seal of the Corporation shall be circular in form and shall bear the
name of the Corporation, the year of its incorporation, the words "Corporate
Seal" and "Maryland" and any emblem or device approved by the Board of
Directors. The seal may be used by causing it or a facsimile to be impressed or
affixed or in any other manner reproduced, or by placing the word "(Seal)"
adjacent to the signature of the authorized officer of the Corporation.
ARTICLE VII
FISCAL YEAR
SECTION 1. Fiscal Year. The Corporation's fiscal year shall be fixed
by the Board of Directors.
<PAGE>
SECTION 2. Accountant.
(a) The Corporation shall employ an independent public
accountant or a nationally-recognized firm of independent public accountants as
its Accountant to examine the accounts of the Corporation and to certify
financial statements of the Corporation. The Accountant's certificates and
reports shall be addressed both to the Board of Directors and to the
stockholders. The employment of the Accountant shall be conditioned upon the
right of the Corporation to terminate the employment forthwith without any
penalty by vote of a majority of the outstanding voting securities at any
stockholders' meeting called for that purpose.
(b) A majority of the members of the Board of Directors who are
not "interested persons" (as such term is defined in the Investment Company Act
of 1940, as amended) of the Corporation shall select the Accountant at any
meeting held within thirty (30) days before or after the beginning of the fiscal
year of the Corporation or before the annual stockholders' meeting in that year.
Such selection shall be submitted for ratification or rejection at the next
succeeding annual stockholders' meeting. If such meeting shall reject such
selection, the Accountant shall be selected by majority vote of the
Corporation's outstanding voting securities, either at the meeting at which the
rejection occurred or at a subsequent meeting of stockholders called for that
purpose.
(c) Any vacancy occurring between annual meetings, due to the
resignation of the Accountant, may be filled by the vote of a majority of the
members of the Board of Directors who are not "interested persons" of the
Corporation, as that term is defined in the Investment Company Act of 1940, at a
meeting called for the purpose of voting on such action.
ARTICLE VIII
CUSTODY OF SECURITIES
SECTION 1. Employment of a Custodian. The Corporation shall place
and at all times maintain in the Custodian (including any sub-custodian for the
Custodian) all funds, securities and similar investments owned by the Corpo
ration. The Custodian (and any sub-custodian) shall be an institution
conforming to the requirements of Section 17(f) of the Investment Company Act of
1940, as amended, and the rules of the Securities and Exchange Commission
thereunder. The Custodian shall be appointed from time to time by the Board of
Directors, which shall fix its remuneration.
Subject to such rules, regulations and orders as the Securities and
Exchange Commission may adopt, the Corporation may direct the 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 a national securities
exchange or a national securities association registered with the Securities and
Exchange Commission, or otherwise in accordance with the Investment Company Act
of 1940, as amended, pursuant to which system all securities of any particular
class of any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Corporation or the Custodian.
<PAGE>
SECTION 2. Termination of Custodian Agreement. Upon termination of
the Custodian Agreement or inability of the Custodian to continue to serve, the
Board of Directors shall promptly appoint a successor Custodian, but in the
event that no successor Custodian can be found who has the required
qualifications and is willing to serve, the Board of Directors shall call as
promptly as possible a special meeting of the stockholders to determine whether
the Corporation shall function without a Custodian or shall be liquidated. If
so directed by vote of the holders of a majority of the outstanding shares of
stock entitled to vote of the Corporation, the Custodian shall deliver and pay
over all property of the Corporation held by it as specified in such vote.
ARTICLE IX
AMENDMENTS
These Bylaws may be amended or repealed by the affirmative vote of a
majority of the Board of Directors at any regular or special meeting of the
Board of Directors, subject to the requirements of the Investment Company Act of
1940, as amended.
Dated: June 18, 1998
