15 USC Sec. 80a-16                                          01/05/2009




    Sec. 80a-16. Board of directors


    (a) Election of directors
      No person shall serve as a director of a registered investment
    company unless elected to that office by the holders of the
    outstanding voting securities of such company, at an annual or a
    special meeting duly called for that purpose; except that vacancies
    occurring between such meetings may be filled in any otherwise
    legal manner if immediately after filling any such vacancy at least
    two-thirds of the directors then holding office shall have been
    elected to such office by the holders of the outstanding voting
    securities of the company at such an annual or special meeting. In
    the event that at any time less than a majority of the directors of
    such company holding office at that time were so elected by the
    holders of the outstanding voting securities, the board of
    directors or proper officer of such company shall forthwith cause
    to be held as promptly as possible and in any event within sixty
    days a meeting of such holders for the purpose of electing
    directors to fill any existing vacancies in the board of directors
    unless the Commission shall by order extend such period. The
    foregoing provisions of this subsection shall not apply to members
    of an advisory board.
      Nothing herein shall, however, preclude a registered investment
    company from dividing its directors into classes if its charter,
    certificate of incorporation, articles of association, by-laws,
    trust indenture, or other instrument or the law under which it is
    organized, so provides and prescribes the tenure of office of the
    several classes: Provided, That no class shall be elected for a
    shorter period than one year or for a longer period than five years
    and the term of office of at least one class shall expire each
    (b) Term vacancies
      Any vacancy on the board of directors of a registered investment
    company which occurs in connection with compliance with section 80a-
    15(f)(1)(A) of this title and which must be filled by a person who
    is not an interested person of either party to a transaction
    subject to section 80a-15(f)(1)(A) of this title shall be filled
    only by a person (1) who has been selected and proposed for
    election by a majority of the directors of such company who are not
    such interested persons, and (2) who has been elected by the
    holders of the outstanding voting securities of such company,
    except that in the case of the death, disqualification, or bona
    fide resignation of a director selected and elected pursuant to
    clauses (1) and (2) of this subsection (b), the vacancy created
    thereby may be filled as provided in subsection (a) of this
    (c) Trustees of common-law trusts
      The foregoing provisions of this section shall not apply to a
    common-law trust existing on August 22, 1940, under an indenture of
    trust which does not provide for the election of trustees by the
    shareholders. No natural person shall serve as trustee of such a
    trust, which is registered as an investment company, after the
    holders of record of not less than two-thirds of the outstanding
    shares of beneficial interests in such trust have declared that he
    be removed from that office either by declaration in writing filed
    with the custodian of the securities of the trust or by votes cast
    in person or by proxy at a meeting called for the purpose.
    Solicitation of such a declaration shall be deemed a solicitation
    of a proxy within the meaning of section 80a-20(a) of this title.
      The trustees of such a trust shall promptly call a meeting of
    shareholders for the purpose of voting upon the question of removal
    of any such trustee or trustees when requested in writing so to do
    by the record holders of not less than 10 per centum of the
    outstanding shares.
      Whenever ten or more shareholders 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 per centum of the outstanding shares,
    whichever is less, shall apply to the trustees in writing, stating
    that they wish to communicate with other shareholders with a view
    to obtaining signatures to a request for a meeting pursuant to this
    subsection and accompanied by a form of communication and request
    which they wish to transmit, the trustees shall within five
    business days after receipt of such application either -
        (1) afford to such applicants access to a list of the names and
      addresses of all shareholders as recorded on the books of the
      trust; or
        (2) inform such applicants as to the approximate number of
      shareholders of record, and the approximate cost of mailing to
      them the proposed communication and form of request.
      If the trustees elect to follow the course specified in paragraph
    (2) of this subsection the trustees, 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 shareholders of
    record at their addresses as recorded on the books, unless within
    five business days after such tender the trustees shall mail to
    such applicants and file with the Commission, together with a copy
    of the material to be mailed, a written statement signed by at
    least a majority of the trustees 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.
      After opportunity for hearing upon the objections specified in
    the written statement so filed, the Commission may, and if demanded
    by the trustees or by such applicants shall, enter an order either
    sustaining one or more of such objections or refusing to sustain
    any of them. 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 trustees shall mail copies of such material to all shareholders
    with reasonable promptness after the entry of such order and the
    renewal of such tender.


    (Aug. 22, 1940, ch. 686, title I, Sec. 16, 54 Stat. 813; Pub. L. 94-
    29, Sec. 28(3), June 4, 1975, 89 Stat. 165.)


      1975 - Subsecs. (b), (c). Pub. L. 94-29 added subsec. (b),
    redesignated former subsec. (b) as (c), and substituted "The
    foregoing provisions of this section" for "The provisions of
    subsection (a) of this section" in first sentence.
                     EFFECTIVE DATE OF 1975 AMENDMENT
      Amendment by Pub. L. 94-29 effective June 4, 1975, see section
    31(a) of Pub. L. 94-29, set out as a note under section 78b of this


      For transfer of functions of Securities and Exchange Commission,
    with certain exceptions, to Chairman of such Commission, see Reorg.
    Plan No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175,
    64 Stat. 1265, set out under section 78d of this title.
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