UNITED STATES
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and
THE INVESTMENT COMPANY ACT OF 1940
Alamo Growth Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217
(Address of Principal Executive Offices)
210-829-1800
(Registrant's Telephone Number)
Jack E. Guenther, Jr. 1777 N.E. Loop 410, Suite 1512, San Antonio, TX 78217
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration.
Calculation of Registration Fee Under the Securities Act of 1933
Title of Securities Amount Being Proposed Max Proposed Max Amount of
Being Registered Registered Offering Offering Registration
Aggregate Price Fee
Price
Alamo Growth Fund, Inc. Indefinite $10.00* ** **
Common Stock $.01
par value
* Estimated. This is the actual net asset value per share as of the starting
date.
** Registrant elects to register an indefinite amount of its securities
under Rule 24f-2.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(A) of the
Securities Act of 1933 or until this Registration Statement shall become effect-
ive on such date as the Commission acting to Section 8(A) may determine.
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Cross Reference Sheet
INFORMATION REQUIRED CAPTIONS IN FILING
Part A: IN A PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Condensed Financial Information
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and Other Securities Capitalization
Item 7. Purchase of Securities Being Purchase of Shares -
Offered Reinvestments
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Objectives and Policies
Item 14. Management of the Registrant Officers and Directors of the
Fund
Item 15. Control Persons and Principal Control Person
Holders of Securities
Item 16. Investment Advisory and Other Investment Adviser
Services
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock and Other Securities Capitalization
Item 19. Purchase, Redemption and Pricing Purchase of Shares
of Securities Being Offered
Item 19. Purchase, Redemption and Pricing Redemption of Shares
of Securities Being Offered
Item 19. Purchase, Redemption and Pricing Pricing of Shares
of Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Yield Quotations Not Applicable
of Money Market Funds
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits Financial Statements and Exhibits
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business and Other Connections Activities of Investment Adviser
of Adviser
Item 29. Principal Underwriters Principal Underwriter
Item 30. Location of Accounts and Records Location of Accounts and Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Undertakings
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<PAGE>
INVESTMENT ADVISER PROSPECTUS
ALAMO ADVISERS, INC. ALAMO GROWTH FUND, INC.
1777 N.E. Loop 410, Suite 1512 1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217 San Antonio, TX 78217
210-829-1800
TABLE OF CONTENTS June 1, 1997
The Fund and Investment Objective. . . 1
Fund Share Purchase. . . . . . . . . . 1
Additional Information . . . . . . . . 1
Fund Expenses. . . . . . . . . . . . . 2
Condensed Financial Information
Total Return . . . . . . . . . . . . 2
Ratios/Supplemental Data . . . . . . 3
The Fund . . . . . . . . . . . . . . . 3
Objective and Policies
Objective. . . . . . . . . . . . . . 3
Security Selection Criteria. . . . . 4
Portfolio Turnover Policy. . . . . . 4
Non-Diversification Policy . . . . . 4
Tax Status . . . . . . . . . . . . . . 4
Investment Restrictions. . . . . . . . 5
Investment Adviser . . . . . . . . . . 6
Officers and Directors of the Fund . . 6
Capitalization
Description of Common Stock. . . . . 7
Voting Rights. . . . . . . . . . . . 7
Control Person . . . . . . . . . . . . 7
Purchase of Shares - Reinvestment
Initial Investments. . . . . . . . . 8
Retirement Plans . . . . . . . . . . 8
Reinvestments. . . . . . . . . . . . 9
Whole Shares . . . . . . . . . . . . 9
Pricing of Shares. . . . . . . . . . . 9
Redemption of Shares . . . . . . . . . 9
Brokerage. . . . . . . . . . . . . . . 10
Management of the Fund . . . . . . . . 11
Custodian and Transfer Agent . . . . . 11
Reports to Shareholders. . . . . . . . 11
Auditors . . . . . . . . . . . . . . . 11
Litigation . . . . . . . . . . . . . . 11
Additional Information . . . . . . . . 12
Share Purchase Application . . . . . . 13
Payer's Request for Taxpayer
ID Number. . . . . . . . . . . . . . 14
<PAGE>
ALAMO GROWTH FUND, INC.
SAN ANTONIO, TX 78217
210-829-1800
PROSPECTUS June 1, 1997
The Fund and Investment Objective
Alamo Growth Fund, Inc. ("the Fund") is an open-end non-diversified management
investment company that seeks capital appreciation through investment in the
common stock and/or securities convertible into the common stock of businesses
which the Adviser deems desirable to own. The criteria used by the Adviser will
be based on the Business Economics, Management Quality, Financial Condition and
Stock Price of each business. However, the Fund may invest in debt securities
(bonds) when the Adviser believes these securities offer greater total return
potential than common stocks. Bond investments when made will usually be in
debt securities with an Investment Grade rating by Standard & Poor's (BBB to
AAA).
Although the Adviser may recommend purchase of lower or non-rated bonds when it
deems that the appreciation potential warrants such investments to be made.
Current income from investments will be a subordinate consideration, whereas
long-term appreciation will be the Fund's primary objective.
Fund Share Purchase
Capital shares of the Fund may only be purchased directly from the Fund at net
asset value as next determined after receipt of order. The Board of Directors
has established $10,000 as the minimum initial purchase and $1,000 for
subsequent purchases.
Additional Information
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the Fund
has been filed with the Securities and Exchange Commission. Such Statement is
dated June 1, 1997, and has been incorporated by reference into the Prospectus.
A copy of the Statement may be obtained without charge, by writing to the Fund
or by calling the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION, NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
FUND EXPENSES
The following illustrates all expenses and fees that a shareholder of Alamo
Growth Fund, Inc. will incur. The expenses and fees set forth below are for the
1996 fiscal year.
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
IRA Trustee Fees None
Annual Fund Operating Expenses:
Management and Advisory Expenses 1.0%
12b-1 Fees None
Other Expenses after Expense Reimbursement 1.5%
Total Operating Expenses 2.5%
The following table is given to assist investors in understanding the various
costs and expenses that an investor in the Fund will bear directly and indir-
ectly. It illustrates the expenses paid on a $1,000 investment over various time
period assuming (a) 5% annual rate of return and (b) redemption at the end of
each time period. This example should not be considered a representation of
past or future expenses or performance. Actual expenses may be greater or less
than those shown.
1 Year 3 Years 5 Years 10 Years
$ 25 $ 77 $131 $280
CONDENSED FINANCIAL INFORMATION
Selected per share and ratios to average net assets data will be presented upon
the completion of first operating year.
Year Ended May 31, 1997
Net Asset Value, Beginning of Period $ 0
Income From Investment Operations
Net Investment Income
Net Gains or Losses on Securities (both
realized and unrealized)
Total From Investment Operations
Less Distributions
Dividends (from net investment income)
Distributions (from capital gains)
Returns of Capital
Total Distributions
Net Asset Value, End of Period $ 0
Total Return
.............................................
Ratios/Supplemental Data
Net Assets, End of Period $ 0
Ratio of Expenses to Average Net Assets N/A
Ratio of Net Income to Average Net Assets N/A
Portfolio Turnover Rate N/A
THE FUND
The Fund was incorporated in Maryland on December 24, 1996, and is applying to
be registered under the Investment Company Act of 1940 (the "1940 Act").
OBJECTIVES AND POLICIES
Objective: The Fund's objective is capital appreciation through investment in
the common stock and/or securities convertible into the common stock of
businesses which the Adviser deems desirable to own. The criteria used by the
Adviser will be based on the Business Economics, Management Quality, Financial
Condition and Stock Price of each business. However, the Fund may invest in
debt securities (bonds) when the Adviser believes these securities offer greater
total return potential than common stocks. Bond investments when made will
usually be in debt securities with an Investment Grade rating by Standard &
Poor's (BBB to AAA). Although the Adviser may recommend purchase of lower or
non-rated bonds when it deems that the appreciation potential warrants such
investments to be made. Current income from investments will be a subordinate
consideration, where as long-term appreciation will be the Fund's primary
objective.
Since the major portion of the Fund's portfolio will normally be invested in
common stocks, the Fund's net asset value may be subject to greater fluctuation
than a portfolio containing a substantial amount of fixed income securities.
There can be no assurance that the primary objective of the Fund will be real-
ized or that any income will be earned nor can there be any assurance that the
Fund's portfolio will not decline in value.
Except for temporary defensive purposes, the Fund intends to have at all times
at least 70% of its investments in securities which the Adviser believes offer
opportunity for growth of capital. No minimum or maximum percentage of the
Fund's assets is required to be invested in common stocks or any other type of
security. When the Adviser believes that securities other than common stocks
offer opportunity for long-term capital appreciation, the Fund may invest in
publicly distributed debt securities, preferred stocks, particularly those which
are convertible into or carry rights to acquire commons stocks, and warrants.
Investments in publicly distributed debt securities and nonconvertible preferred
stocks offer an opportunity for growth of capital during periods of declining
interest rates, when the market value of such securities in general increases.
Except for temporary defensive purposes, cash and money market instruments will
be retained by the Fund only in amounts deemed adequate for current needs and to
permit the Fund to take advantage of investment opportunities. The money market
instruments in which the Fund may invest include conservative fixed-market
securities, such as United States Treasury Bills, certificates of deposit of
U.S. banks (provided that the bank has capital, surplus and undivided profits,
with a value in excess of $100,000,000 at the date of investment), commercial
paper rated A-1 or better by Standard & Poor's Corporation, and commercial paper
master notes.
The Fund will limit to 15% of its assets investments in securities of foreign
issuers or in American Depository Receipts of such issuers. Such investments
may involve risks which are in addition to the usual risks inherent in domestic
investments. In many countries, there is less publicly available information
about issuers than is available in the reports and ratings published about
companies in the United States. In addition, foreign companies may not be
subject to uniform accounting, auditing and financial reporting standards.
Dividends and interest on foreign securities may be subject to foreign with-
holding taxes, which would reduce the Fund's income without providing a tax
credit for the Fund's stockholders. Although the Fund intends to invest in
securities of foreign issuers domiciled in nations which the Fund's investment
adviser considers as having stable and friendly governments, there is the
possibility of expropriation, confiscatory taxation, currency blockage or polit-
ical or social instability which could affect investments in those nations.
Under certain circumstances the Fund may (a) invest in warrants, (b) temporarily
borrow money from banks for emergency or extraordinary borrowings, (c) pledge
its assets to secure borrowings, (d) purchase securities of other investment
companies, and (e) sell securities short. A more complete discussion of the
circumstances in which the Fund may engage in these activities is included in
the Fund's Statement of Additional Information. Except for the investment
policies listed in this paragraph, the investment objective and the other
policies described under this caption are not fundamental policies and may be
changed without stockholder approval. Such changes may result in the Fund
having investment objectives different from the objectives which the stockholder
considered appropriate at the time of investment in the Fund. Stockholders will
receive at least 30 days' prior written notice of any changes in the policies of
the Fund which are not fundamental.
Security Selection Criteria: To the extent feasible, the Fund will endeavor to
emphasize fundamental corporate considerations related to the prospects of the
issuer and its industry, as well as technical market considerations.
Portfolio Turnover Policy: The Fund does not intend to emphasize short term
trading profits. Accordingly, it is expected that the annual turnover rate will
not exceed 200%. Turnover is computed by dividing the lesser of the Fund's
total purchases of sales of securities within the period by the average monthly
portfolio value of the Fund during such period. Portfolio turnover rates may
vary substantially from year to year, depending on market conditions and
prospects.
Non-Diversification Policy: The Fund is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issues. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any single economic,
political, or regulatory occurrence. The Fund may concentrate its investment in
a particular industry or industries when, in the opinion of the Adviser, such
industry or industries have high potential for capital appreciation. The policy
of the Fund, in the hope of achieving its objective as stated above, is one of
selective investments rather than broad diversification. The Fund seeks only
enough diversification for adequate representation among what it considers to be
the best performing securities and to maintain its federal non-taxable status
under Sub-Chapter M of the Internal Revenue Code (see next paragraph).
TAX STATUS
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1954 as
amended, the Fund, by paying out substantially all its investment income and
realized capital gains, expects to be relieved of federal income tax on the
amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income must
be derived from dividends, interest and gains from securities transactions, no
more than 30% of the Fund's profits may be derived from sales of securities held
less than three months, and no more than 50% of the Fund's assets may be in
security holdings that exceed 5% of the total assets of the Fund at the time of
purchase.
Distribution of any net long term capital gains realized by the Fund in 1997
will be taxable to the shareholder as long term capital gains, regardless of the
length of time Fund shares have been held by the investor. All income realized
by the Fund, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such
dividends or distributions and, although in effect a return of capital, are
subject to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by the
Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
the Fund may not, except by the approval of a majority of the outstanding
shares; i.e. (a) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or (b) of more than 50% of the outstanding
voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio
securities.
(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of
securities for temporary or emergency purposes in an amount not exceeding
5% of the value of its total assets.
(c) Sell securities short in an aggregate amount in excess of 10% of the
total assets of the Fund.
(d) Invest in securities of other investment companies except as part of a
merger, consolidation, or purchase of assets approved by the Fund's
shareholders or by purchases with no more than 10% of the Fund's assets
in the open market involving only customary brokers commissions.
(e) Invest more than 50% of its assets at the time of purchase in any one
industry.
(f) Make investments in commodities, commodity contracts or real estate
although the Fund may purchase and sell securities of companies which
deal in real estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will not
be considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all
debt securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) The Fund may not purchase or retain securities of any issuer if the
officers and directors of the Fund or its Investment Adviser own individ-
ually more than 1/2 of 1% of any class of security or collectively own
more than 5% of such class of securities of such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the
Securities Act of 1933 prior to sale to the public or which are not at
the time of purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market value at
the time of purchase, in securities of companies with less than three
years' continuous operation, including the operations of any predecessor.
INVESTMENT ADVISER
Alamo Advisers, Inc. is a Texas corporation that acts as an Investment Adviser
to the Fund. Alamo Advisers, Inc. has no previous experience in advising a
mutual fund. Mr. Jack E. Guenther Jr. is the majority owner, a director and
President of the Investment Adviser and President of the Fund. Mr. Michael J.
Avellar is a 25% owner, a director and an officer of Alamo Advisers, Inc. and an
officer of the Fund. On March 24, 1997, an Investment Advisory Agreement with
Alamo Advisers, Inc. was unanimously approved by the Board of Directors of the
Fund. This Agreement will continue on a year to year basis provided that
approval is voted at least annually by specific approval of the Board of
Directors of the Fund or by vote of the holders of a majority of the outstanding
voting securities of the Fund, but, in either event, it must also be approved by
a majority of the directors of the Fund who are neither parties to the Agreement
nor interested persons as defined in the Investment Company Act of 1940 at a
meeting called for the purpose of voting on such approval. Under the Agreement
Alamo Advisers, Inc. will furnish investment advice to the Directors of the
Fund on the basis of a continuous review of the portfolio and recommend to the
Fund when and to what extent securities should be purchased or disposed. The
Agreement may be terminated at any time, without the payment of any penalty, by
the Board of Directors or by vote of a majority of the outstanding voting secur-
ities of the Fund on not more than 60 days' written notice to Alamo Advisers,
Inc. A fee of 1% per year on the net assets of the Fund is payable monthly.
Alamo Advisers, Inc. has agreed to advance funds to the Fund so that the total
expenses of the Fund (other than brokerage commissions, interest and taxes)
during the first two years of operations will not exceed 2.5% of the Fund's
average net assets. Such advances shall be repaid by the Fund when its total
expenses are below 2.0 percent of average net assets.
Pursuant to its contract with the Fund, the Investment Adviser is required to
render research, statistical, and Advisory services to the Fund; to make spec-
ific recommendations based on the Fund's investment requirements; and to pay the
salaries of those of the Funds employees who are affiliated with the Investment
Adviser. The Fund bears all expenses of its operations other than those borne
by the Investment Adviser. These expenses include, but are not limited to,
legal and accounting fees and compensation for directors who are not affiliated
with the Investment Adviser, administrative services fees and the cost of
printing and sending reports and proxy materials to shareholders, custodial
fees, interest, taxes and brokerage commissions. The Investment Adviser has
paid the initial organization costs of the Fund.
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, principal
occupations during the past five years are:
Name and Address Position Principal Occupation Past 5 Yrs
Jack E. Guenther Jr. President Treasurer
1777 N.E. Loop 410, Interested Director Performance Management, Ltd.
Suite 1512 San Antonio, TX
San Antonio, TX 78217
Michael J. Avellar Vice President and Chief Operating Officer
1777 N.E. Loop 410, Secretary Performance Management, Ltd.
Suite 1512 Interested Director
San Antonio, TX 78217
Abigail G. Kampmann Interested Director Attorney
112 E. Pecan, Suite 2300 Bayern, Paterson & Aycock
San Antonio, TX 78205 San Antonio, TX
Christopher Allison Director Investment Banker
112 E. Pecan, Suite 1200 M. E. Allison & Co.
San Antonio, TX 78205 San Antonio, TX
Edmund R. McKane Jr. Director Insurance Agent
2135 N.W. Military Drive, McKane, Morgan & Associates
Suite 101 San Antonio, TX
San Antonio, TX 78213
It is estimated that a total of less than $1,000 each will be paid to Mr.
Allison and Mr. McKane for their service to the Fund in 1997. The Fund does not
compensate its officers and directors that are affiliated with the Investment
Adviser except as they may benefit through payment of the advisory fee (see
page 6).
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 10,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights. There are no conver-
sion or preemptive rights applicable to any shares of the Fund. All shares
issued are fully paid and non-assessable. At the date of this Prospectus, there
are no issued and outstanding shares of the Fund; however, Performance Plan,
Ltd. has subscribed for the purchase of 10,000 shares at the price of $10 per
share.
Voting Rights: Each holder of common stocks has one vote for each share held.
Voting rights are non-cumulative, which means that the holders of a majority of
shares of common stock can elect all directors of the Fund if they so choose,
and the holders of the remaining shares will not be able to elect any person as
a director.
The Maryland General Corporation Law permits registered investment companies,
such as the Fund, to operate without an annual meeting of stockholders under
specified circumstances if an annual meeting is not required by the Investment
Company Act of 1940. The Fund has adopted the appropriate provisions in its By-
Laws and does not anticipate holding an annual meeting in any year in which the
election of directors is not required to be acted on by stockholders under the
Investment Company Act of 1940. The Fund also has adopted provisions in its By-
Laws for the removal of directors by the stockholders.
CONTROL PERSON
At the date of this Prospectus, there are no issued and outstanding shares of
the Fund. So long as a majority of the Fund's shares are held by one person,
that person will be able to exercise voting control of the Fund. So long as
over 50 percent of the Fund's shares are owned by five or fewer persons, the
Fund will be subject to Personal Holding Company Tax on any income not dist-
ributed to shareholders.
PURCHASE OF SHARES - REINVESTMENTS
Shares of Common Stock may be purchased directly from the Fund. A share
purchase application form is included at the back of the Prospectus. The price
per share is the next determined per share net asset value after receipt of an
application by the Fund. Additional purchase applications may be obtained from
the Fund. Purchase applications should be mailed directly to:
Alamo Growth Fund, Inc.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217-5290.
All applications must be accompanied by payment in the form of a check drawn on
a U.S. bank payable to Alamo Growth Fund, Inc., or by direct wire transfer. No
cash will be accepted. The Fund will charge a $15 fee against a stockholder's
account for any payment check returned to the custodian. THE STOCKHOLDER WILL
ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY THE FUND AS A RESULT.
The establishment of a new account or any additional purchases for an existing
account by wire transfer should be preceded by a phone call to the Fund, to
provide information for the account. A property signed share purchase applica-
tion marked "Follow up" must be sent for all new accounts opened by wire
transfer. Applications are subject to acceptance by the Fund and are not
binding until so accepted. The Fund does not accept telephone orders for
purchase of shares. The Fund reserves the right to reject applications in whole
or part. Shares of the Fund may also be purchased through a registered broker-
dealer who may charge the investor a fee either at the time of purchase or
redemption. The fee, if charged, is retained by the broker-dealer and not
remitted to the Fund or Adviser.
Initial Investments: THE BOARD OF DIRECTORS OF THE FUND HAS ESTABLISHED $10,000
AS THE MINIMUM INITIAL PURCHASE AND $1,000 AS THE MINIMUM FOR ANY SUBSEQUENT
PURCHASE (except through dividend reinvestment), which minimum amounts are
subject to change at any time. Stockholders will receive written notification
at least 30 days in advance of any changes in such minimum amounts. Shares of
the Fund may be purchased without regard to the foregoing minimum initial
investment by employees, officers and directors of the Fund or the Adviser or
firms providing contractual services to the Fund, and by members of their
"immediate families" (i.e., spouses, siblings, parents, children, grandchildren
and grandparents) and by retirement plans and trusts for their benefit. The
officers of the Fund in their discretion may waive the minimum initial invest-
ment. Stock certificates for shares purchased are not issued unless requested
in writing, and directed to Alamo Growth Fund, Inc., 1777 N.E. Loop 410, Suite
1512, San Antonio, TX 78217-5290.
Retirement Plans: Employee benefit, profit-sharing, or retirement plans (such
as 401(k) plans) may purchase shares of Common Stock through financial institu-
tions or other service providers ("Processing Intermediaries"), which may become
stockholders of record of the shares and which may use procedures and impose
restrictions in addition to or different from those applicable to stockholders
who invest directly in the Fund. Processing Intermediaries may charge fees or
assess other charges for the services they provide to their customers. Any such
fee or charge is retained by the Processing Intermediary and is not remitted to
the Fund or its Adviser. Program materials provided by the Processing Inter-
mediary should be read in conjunction with this Prospectus before investing in
this manner. Shares of Common Stock may be purchased through Processing Inter-
mediaries without regard to the Fund's minimum purchase amounts.
Reinvestments: The Fund will automatically retain and reinvest dividends and
capital gains distributions in whole shares and use same for the purchase of
additional shares for the shareholder at net asset value as of the close of
business on the distribution date. Any surplus over whole shares will be held
in a cash account. A shareholder may at any time by letter or forms supplied by
the Fund direct the Fund to pay dividend and/or capital gains distributions, if
any, to such shareholder in cash.
Whole Shares: Only whole shares may be purchased from the Fund. No fractional
shares will be issued. The Fund will maintain an account for each shareholder
of shares for which no certificates have been issued.
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of
business of the New York Stock Exchange on each business day of which that
Exchange is open (presently 4:00 p.m.) Monday through Friday exclusive of
Washington's Birthday, Good Friday, Memorial Day, July 4th, Labor Day, Thanks-
giving, Christmas and New Year's Day. The price is determined by dividing the
value of its securities, plus any cash and other assets less all liabilities,
excluding capital surplus, by the number of shares outstanding. The market
value of securities listed on a national exchange is determined to be the last
recent sales price on such exchange. Listed securities that have not recently
traded and over-the-counter securities are valued at the last bid price in such
market.
Short term paper (debt obligations that mature in less than 60 days) are valued
at amortized cost which approximates market value. Other assets are valued at
fair market value. Other assets are valued at fair value as determined in good
faith by the Board of Directors.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who
tenders a request for redemption (if certificates have not been issued) or cert-
ificates with respect to shares for which certificates have been issued. In
either case, proper endorsements guaranteed either by a national bank or a
member firm of the New York Stock Exchange will be required if the proceeds of
redemption are to be sent to an address or to a person other than as the shares
to be redeemed are registered. The redemption price is the net asset value per
share next determined after notice is received by the Fund for redemption of
shares. The proceeds received by the shareholder may be more or less than his
cost of such shares, depending upon the next asset value per share at the time
of redemption and the difference should be treated by the shareholder as a
capital gain or loss for federal income tax purposes.
Redemption requests must be made in writing and directed to: Alamo Growth Fund,
Inc., 1777 N.E. Loop 410, Suite 1512, San Antonio, TX 78217-5290. Requests for
redemption by telegram and requests which are subject to any special conditions
or which specify an effective date other than as provided herein cannot be
honored.
A request for redemption must be signed by the stockholder or stockholders
exactly as the shares are registered, including the signature of each joint
owner, and must specify either the number of shares or the dollar amount of
shares that are to be redeemed. Additional documentation may be required for
redemptions by corporations, executors, administrators, trustees, guardians, or
others who hold shares in a fiduciary or representative capacity or who are not
natural persons. In case of any questions concerning the nature of such docu-
mentation, please contact the Fund at (210) 829-1800. Redemptions will not be
effective or complete until all of the foregoing conditions, including receipt
of all required documentation by the Fund, have been satisfied.
Payment by the Fund will ordinarily be made within seven days after tender. The
Fund may suspend the right of redemption or postpone the date of payment if:
The New York Stock Exchange is closed for other than customary weekend or
holiday closings, or when trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission or when the Securities
and Exchange Commission has determined that an emergency exists, making disposal
of Fund securities or valuation of net assets not reasonably practicable. The
Fund intends to make payments in cash, however, the Fund reserves the right to
make payments in kind.
BROKERAGE
Decisions to buy and sell securities for the Fund are made by the Adviser
subject to review by the Fund's Board of Directors. In placing purchase and
sale orders for portfolio securities for the Fund, it is the policy of the
Adviser to seek the best execution of orders at the most favorable price in
light of the overall quality of brokerage and research services provided, as
described in this and the following paragraph. In selecting brokers to effect
portfolio transactions, the determination of what is expected to result in best
execution at the most favorable price involves a number of largely judgmental
considerations. Among these are the Adviser's evaluation of the broker's
efficiency in executing and clearing transactions, block trading capability
(including the broker's willingness to position securities) and the broker's
financial strength and stability. The most favorable price to the Fund means
the best net price without regard to the mix between purchase or sale price and
commission, if any. Over-the-counter securities may be purchased and sold
directly with principal market makers who retain the difference in their cost in
the security and its selling price.
In allocating brokerage business for the Fund, the Adviser will take into
consideration the research, analytical, statistical and other information and
services provided by the broker, such as general economic reports and
information, reports or analyses of particular companies or industry groups,
market timing and technical information, and the availability of the brokerage
firm's analysts for consultation. While considered supplemental to the
Adviser's own efforts in the performance of its duties under the Agreement.
Other clients of the Adviser may indirectly benefit from the availability of
these services to the Adviser, and the Fund may indirectly benefit from services
available to the Adviser as a result of transactions for other clients. The
Agreement provides that the Adviser may cause the Fund to pay a broker which
provides brokerage and research services to the Adviser a commission for
effecting a securities transaction in excess of the amount another broker would
have charged for effecting the transaction, if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value of
brokerage and research services provided by the executing broker viewed in terms
of either the particular transaction or the Adviser's overall responsibilities
with respect to the Fund and the other accounts as to which he exercises invest-
ment discretion.
The Adviser also may take into account the sale of the Fund's shares when
allocating brokerage business for the Fund.
MANAGEMENT OF THE FUND
Shareholders meet in those years in which it is necessary to elect members of
the Board of Directors, select an independent auditor, or vote on any other
items deemed pertinent by the incumbent Board. The Directors are in turn
responsible for determining that the Fund operates in accordance with its stated
objectives, policies, and investment restrictions. The Board appoints officers
to run the Fund and selects an Investment Adviser to provide investment advice.
The Adviser supervises and manages the investment portfolio of the Fund and,
subject to such policies as the Board of Directors of the Fund may determine,
directs the purchase or sale of investment securities in the day-to-day manage-
ment of the Fund. All investment decisions for the Fund are made by an invest-
ment teams of at least two analysts, and no single person is primarily
responsible for making investment recommendations to such teams. Under the
Agreement, the Adviser, at its own expense and without reimbursement from the
Fund, will furnish office space, and all necessary office facilities, equipment,
and executive personnel for making the investment decisions necessary for
managing the Fund and maintaining its organization, and will pay the salaries
and fees of all officers and directors of the Fund (except the fees paid to
disinterested directors). For the foregoing, the Adviser will receive a monthly
fee of 1/12 of 1% (1% per annum) on the daily net assets of the Fund.
The Fund has entered into an Administrative Service Agreement and Fund
Accounting Service Agreement with American Data Services, Inc., Huntington,
NY ("ADS"), pursuant to which ADS will (a) prepare and maintain financial state-
ments, books of account and related documents; (b) determine the Fund's daily
net asset value; and (c) provide data needed to prepare certain reports to be
filed with the Securities and Exchange Commission. The Fund will pay an annual
fee measured by the average net assets of the Fund, subject to certain minimum
fees. It is expected that the Fund will pay the minimum fees in its first year
of operation, which are $27,800.
CUSTODIAN AND TRANSFER AGENT
Crestar Bank, P.O. Box 26665, Richmond, Virginia 23261 acts as custodian of the
Fund's assets. The Fund acts as its own transfer and dividend paying agent.
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing certified financial
statements and other periodic reports, at least semiannually, containing
unaudited financial statements.
AUDITORS
McCurdy & Associates CPA's, Inc., Certified Public Accountants, Westlake, Ohio,
has been selected as the independent accountant and auditor of the Fund.
McCurdy & Associates CPA's, Inc. has no direct or indirect financial interest in
the Fund or the Adviser.
LITIGATION
As of the date of this Prospectus, there was no pending or threatened litigation
involving the Fund in any capacity whatsoever.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration state-
ment on file with the Securities and Exchange Commission. The registration
statement may be inspected without charge at the principal office of the
Commission in Washington, D.C. and copies of all or part thereof may be obtained
upon payment of the fee prescribed by the Commission. Shareholders may also
direct inquiries to the Fund by phone or at the address given on page 1 of this
Prospectus.
<PAGE>
<PAGE>
SHARE PURCHASE APPLICATION
ALAMO GROWTH FUND, INC.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217-5290
(A) Please fill out one of the following four types of accounts:
1. Individual
First Name MI Last Name Social Security Number
2. Joint Owner
First Name MI Last Name Social Security Number
3. Custodial Accounts
Custodian's First Name MI Custodian's Last Name
Minor's First Name MI Minor's Last Name Minor's
Social Security Number
4. All Other Accounts
Name of account Tax Identification Number
(Use this second line if you need it)
B) Biographical and other information about the new account:
Full Address:
Number and Street
City St Zip
Citizen of Home Phone Bus Phone
Dividend Direction: Reinvest all distributions Pay in Cash
Signature of Owner, Trustee or Custodian:
Signature of Joint Owner (if joint account):
Please make check payable to: ALAMO GROWTH FUND, INC.
Amount of Investment Attached $ (Minimum initial purchase $10,000)
All applications are accepted in Texas and under Texas laws.
<PAGE>
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER
Name as shown on account (if joint account, give name corresponding to TIN):
Street Address:
City, State and Zip Code:
Part 1. - Taxpayer Identification Number
Social Security Number or Employer ID Number
Part 2. - Certification
I certify under penalty of perjury that:
(1) The Social Security or other Tax I.D. Number stated above is correct.
(2) I am not subject to backup withholding because:
a. The IRS has not informed me that I am subject to backup withholding.
b. The IRS has notified me that I am no longer subject to backup
withholding.
OR
I am subject to backup withholding.
I am a U.S. Citizen. Yes No
Certification - Under the penalty of perjury, I certify that the information
provided on this form is true, correct and complete.
Signature Date
<PAGE>
ALAMO GROWTH FUND, INC.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217
210-829-1800
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
June 1, 1997
This Statement is not a prospectus, but should be read in conjunction with the
Fund's current Prospectus dated June 1, 1997. To obtain the Prospectus, please
write the Fund or call the telephone number shown above.
TABLE OF CONTENTS
The Fund . . . . . . . . . . . . . . . 2
Objectives and Policies
Objective . . . . . . . . . . . . 2
Security Selection Criteria . . . 3
Portfolio Turnover Policy . . . . 3
Non-Diversification Policy. . . . 3
Tax Status . . . . . . . . . . . . . . 3
Investment Restrictions. . . . . . . . 4
Investment Adviser . . . . . . . . . . 6
Administrative Services. . . . . . . . 6
Officers and Directors of the Fund . . 6
Capitalization
Description of Common Stock . . . 7
Voting Rights . . . . . . . . . . 8
Control Person . . . . . . . . . . . . 8
Purchase of Shares - Reinvestment
Initial Investments . . . . . . . 8
Retirement Plans. . . . . . . . . 9
Reinvestments . . . . . . . . . . 9
Whole Shares. . . . . . . . . . . 9
Redemption of Shares . . . . . . . . . 9
Brokerage. . . . . . . . . . . . . . .10
<PAGE>
<PAGE>
THE FUND
The Fund was incorporated in Maryland on December 24, 1996, and is applying to
be registered under the Investment Company Act of 1940 (the "1940 Act"). The
Fund has no prior business history.
OBJECTIVES AND POLICIES
Objective: The Fund's investment objectives is capital appreciation through
investment in the common stock and/or securities convertible into the common
stock of businesses which the Adviser deems desirable to own. The criteria used
by the Adviser will be based on the Business Economics, Management Quality,
Financial Condition and Stock Price of each business. However, the Fund may
invest in debt securities (bonds) when the Adviser believes these securities
offer greater total return potential than common stocks. Bond investments when
made will usually be in debt securities with an Investment Grade rating by
Standard & Poor's (BBB to AAA). Although the Adviser may recommend purchase of
lower or non-rated bonds when it deems that the appreciation potential warrants
such investments to be made. Current income from investments will be a subord-
inate consideration, whereas long-term appreciation will be the Fund's primary
objective.
Since the major portion of the Fund's portfolio will normally be invested in
common stocks, the Fund's net asset value may be subject to greater fluctuation
than a portfolio containing a substantial amount of fixed income securities.
There can be no assurance that the primary amount of fixed income securities.
There can be no assurance that the primary objective of the Fund will be
realized or that any income will be earned nor can there be any assurance that
the Fund's portfolio will not decline in value.
Except for temporary defensive purposes, the Fund intends to have at all times
at least 70% of its investments in securities which the Adviser believes offer
opportunity for growth of capital. No minimum or maximum percentage of the
Fund's assets is required to be invested in common stocks or any other type of
security. When the Adviser believes that securities other than common stocks
offer opportunity for long-term capital appreciation, the Fund may invest in
publicly distributed debt securities, preferred stocks, particularly those which
are convertible into or carry rights to acquire commons stocks, and warrants.
Investments in publicly distributed debt securities and nonconvertible preferred
stocks offer an opportunity for growth of capital during periods of declining
interest rates, when the market value of such securities in general increases.
Except for temporary defensive purposes, cash and money market instruments will
be retained by the Fund only in amounts deemed adequate for current needs and to
permit the Fund to take advantage of investment opportunities. The money market
instruments in which the Fund may invest include conservative fixed-market
instruments in which the Fund may invest include conservative fixed-income
securities, such as United States Treasury Bills, certificates of deposit of
U.S. banks (provided that the bank has capital, surplus and undivided profits,
with a value in excess of $100,000,000 at the date of investment), commercial
paper rated A-1 or better by Standard & Poor's Corporation, and commercial paper
master notes.
The Fund will limit to 15% of its assets investments in securities of foreign
issuers or in American Depository Receipts of such issuers. Such investments
may involve risks which are in addition to the usual risks inherent in domestic
investments. In many countries, there is less publicly available information
about issuers than is available in the reports and ratings published about
companies in the United States. In addition, foreign companies may not be
subject to uniform accounting, auditing and financial reporting standards.
Dividends and interest on foreign securities may be subject to foreign with-
holding taxes, which would reduce the Fund's income without providing a tax
credit for the Fund's stockholders. Although the Fund intends to invest in
securities of foreign issuers domiciled in nations which the Fund's investment
adviser considers as having stable and friendly governments, there is the
possibility of expropriation, confiscatory taxation, currency blockage or
political or social instability which could affect investments in those nations.
Under certain circumstances the Fund may (a) invest in warrants, (b) temporarily
borrow money from banks for emergency or extraordinary borrowings, (c) pledge
its assets to secure borrowings, (d) purchase securities of other investment
companies, and (e) sell securities short. Except for the investment policies
listed in this paragraph, the investment objective and the other policies
described under this caption are not fundamental policies and may be changed
without stockholder approval. Such changes may result in the Fund having
investment objectives different from the objectives which the stockholder
considered appropriate at the time of investment in the Fund. Stockholders will
receive at least 30 days' prior written notice of any changes in the policies of
the Fund which are not fundamental.
Security Selection Criteria: To the extent feasible, the Fund will endeavor to
emphasize fundamental corporate considerations related to the prospects of the
issuer and its industry, as well as technical market considerations.
Portfolio Turnover Policy: The Fund does not propose to purchase securities for
short term trading in the ordinary course of operations. Accordingly, it is
expected that the annual turnover rate will not exceed 200%, wherein turnover is
computed by dividing the lesser of the Fund's total purchases or sales of
securities within the period of the average monthly portfolio value of the Fund
during such period. There may be times when management deems it advisable to
substantially alter the composition of the portfolio, in which event, the
portfolio turnover rate might substantially exceed 200%; this would only result
from special circumstances and not from the Fund's normal operations.
Non-Diversification Policy: The Fund is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issuers. The Fund, therefore, may be more
susceptible than a more widely diversified fund to any single, economic,
political, or regulatory occurrence. The policy of the Fund, in the hope of
achieving its objective as stated above, is one of selective investments rather
than broad diversification. The Fund seeks only enough diversification for
adequate representation among what it considers to be best performing securities
and to maintain its federal non-taxable status under Sub-Chapter M of the
Internal Revenue Code (see next paragraph).
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1954 as
amended, the Fund intends to pay out substantially all its investment income and
realized capital gains, and intends to be relieved of federal income tax on the
amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income must
be derived from dividends, interest, and gains from securities transactions, no
more than 30% of the Fund's profits may be derived from securities held less
than three months, and no more than 50% of the Fund assets may be held in
security holdings that exceed 5% of the total assets of the Fund at time of
purchase.
Distribution of any net long term capital gains realized by the Fund will be
taxable to the shareholder as long term capital gains, regardless of the length
of time Fund shares have been held by the investor. All income realized by the
Fund including short term capital gains, will be taxable to the shareholder as
ordinary income. Dividends from net income will be made annually or more
frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such
dividends or distributions and, although in effect a return of capital, are
subject to federal income taxes.
The Fund is required by Federal Law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by the
Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not subject to back-up withholding, or that you are
exempt from back-up withholding.
INVESTMENT RESTRICTIONS
As set forth in the Prospectus dated June 1, 1997, of the Fund, under the
caption "Investment Objective and Policies", the primary investment objective of
the Fund is to produce long-term capital appreciation principally through
investing in common stocks. Current income is a secondary consideration.
Consistent with its investment objective, the By-Laws of the Fund provide the
following investment restrictions which are matters of fundamental policy and
cannot be changed without approval of the holders of the lesser of: (i) 67% of
the Fund's shares present or represented at a stockholder's meeting at which the
holders of more than 50% of such shares are present or represented; or (ii) more
than 50% of the outstanding shares of the Fund.
1. The Fund will not act as an underwriter or distributor of securities other
than shares of the Fund and will not purchase any securities which are
restricted from sale to the public without registration under the Securities
Act of 1933, as amended.
2. The Fund will not borrow money or issue senior securities, except for
temporary bank borrowings or for emergency or extraordinary purposes (but not
for the purpose of purchase of investments) and then only in an amount not
in excess of 5% of the value of its net assets and will not pledge any of its
assets except to secure borrowings and then only to an extent not greater
than 10% of the value of the Fund's net assets. The Fund will not purchase
securities while it has any outstanding borrowings.
3. The Fund will not purchase securities on margin, participate in a joint-
trading account, or write or invest in put or call options. The Fund's
investments in warrants, valued at the lower of cost or market, will not
exceed 5% of the value of the Fund's net assets and of such 5% not more than
2% of the Fund's net assets at the time of purchase may be invested in
warrants that are not listed on the New York or American Stock Exchanges.
4. When the Fund effects a short sale, it must put in a segregated account (not
with the broker) an amount of cash or United States government securities
equal to the difference between (a) the market value of the securities sold
short at the time they were sold short and (b) any cash or United States
government securities required to be deposited as collateral with the broker
in connection with the short sale (not including the proceeds from the short
sale). In addition, until the Fund repurchases the security sold short, it
must daily maintain the segregated account at such a level that (1) the
amount deposited in it plus the amount deposited with the broker as
collateral will equal the current market value of the securities sold short,
and (2) the amount deposited in it plus the amount deposited with the broker
as collateral will not be less than the market value of the securities at the
time they were sold short. Short sales of securities by the Fund will not
result in collateral deposits plus separate account deposits exceeding, in
total, 10% of the total assets of the Fund.
5. The Fund will not purchase securities of other investment companies except
(a) as part of a plan of merger, consolidation or reorganization approved by
the stockholders of the Fund or (b) securities of registered closed-end
investment companies on the open market where no commission or profit
results, other than the usual and customary broker's commission and where as
a result of such purchase the Fund would hold less than 3% of any class of
securities, including voting securities, of any registered closed-end
investment company and less than 10% of the Fund's assets, taken at current
value, would be invested in securities of registered closed-end investment
companies.
6. The Fund will not concentrate 50% or more of the value of its total assets,
determined at the time an investment is made, exclusive of government
securities, in securities issued by companies engaged in the same industry.
7. The Fund will not purchase or sell commodities or commodities contracts.
8. The Fund will not purchase or sell real estate (including limited partnership
interests of limited partnerships investing in real estate, but not including
readily marketable investments in real estate investment trusts or readily
marketable securities of companies investing in real estate) or real estate
mortgage loans.
9. The Fund will not lend money (except by purchasing publicly distributed debt
securities or entering into repurchase agreements provided that repurchase
agreements maturing in more than seven days plus all other illiquid
securities will not exceed 10% of the Fund's total assets) and will not lend
its portfolio securities.
10. The Fund will not make investments for the purpose of exercising control
or management of any company.
11. The Fund will not acquire or retain any security issued by a company if
any of the directors or officers of the Fund, or directors, officers or
other affiliated persons of its investment adviser beneficially own more
than 1/2% of such company's securities and all of the above persons
owning more than 1/2% own together more than 5% of its securities.
12. The Fund will limit its purchases of securities of any issuer (other than
the United States or an instrumentality of the United States) in such a
manner that it will satisfy at all times the requirements of Section
5(b)(1) of the Investment Company Act of 1940 (i.e., that at least 75% of
the value of its total assets is represented by cash and cash items
(including receivables), U.S. Government Securities, securities of other
investment companies, and other securities for the purpose of the fore-
going limited in respect of any one issuer to an amount not greater than
5% of the value of the total assets of the Fund and to not more than 10%
of the outstanding voting securities of such issuer).
13. The Fund will not acquire or retain any security issued by a company, an
officer or director of which is an officer or director of the Fund or an
officer director or other affiliated person of its investment adviser.
INVESTMENT ADVISER
Alamo Advisers, Inc. is a Texas corporation that acts as an Investment Adviser
to the Fund. Alamo Advisers, Inc. has no previous experience in advising a
mutual fund. Mr. Jack E. Guenther Jr. is the majority owner, director and
President of the Investment Adviser and is also a director and President of the
Fund. Mr. Michael J. Avellar is a 25% owner, a director and an officer of Alamo
Advisers, Inc. and a director and an officer of the Fund.
On March 24, 1997, an Investment Advisory Agreement with Alamo Advisers, Inc.
was approved by the Board of Directors of the Fund. This Agreement will
continue on a year-to-year basis provided that approval is voted at least
annually by specific approval of the Board of Directors of the Fund or by vote
of the holders of a majority of the outstanding voting securities of the Fund,
but in either event, it must also be approved by a majority of the Directors of
the Fund who are neither parties to the Agreement nor interested persons as
defined in the Investment Company Act of 1940 at a meeting called for the
purpose of voting on such approval.
Under the Agreement, Alamo Advisers, Inc. will furnish investment advice to the
Fund's Directors on the basis of a continuous review of the portfolio and
recommend to the Fund when and to what extent securities should be purchased or
disposed. The Agreement may be terminated at any time, without payment of
penalty, by the Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund on not more than 60 days' written notice to Alamo
Advisers, Inc. In the event of its assignment, the agreement will terminate
automatically. Ultimate decisions as to the investment policy and as to
individual purchases and sales of securities will be made by the Fund's officers
and directors. For these services the Fund has agreed to pay Alamo Advisers,
Inc. a fee of 1% per year of the Fund's net assets. All fees are computed on
the average daily closing net asset value of the Fund and are payable monthly.
Alamo Advisers, Inc. has agreed to advance funds to the Fund so that the total
expenses of the Fund (other than brokerage commissions, interest and taxes)
during the first two years of operations will not exceed 2.5% of the Fund's
average net assets. Such advances shall be repaid by the Fund when its total
expenses are below 2.0 percent of average net assets.
Pursuant to this contract with the Fund, the Investment Adviser is required to
render research, statistical, and advisory services to the Fund; to make
specific recommendations based on the Fund's investment requirements; and to pay
the salaries of the Fund's employees who are affiliated with the Investment
Adviser. The Fund bears all expenses of its operations other than those borne by
the Investment Adviser. These expenses include, but are not limited to, legal
and accounting fees and compensation for directors who are not affiliated with
the Investment Adviser, transfer agent fees and the cost of printing and sending
reports and proxy materials to shareholders, custodial fees, interest, taxes and
brokerage commissions. The Investment Adviser will pay the initial organiza-
tional costs of the Fund.
ADMINISTRATIVE SERVICES
The Fund has entered into an Administrative Service Agreement and Fund
Accounting Service Agreement with American Data Services, Inc., Huntington, NY
("ADS"), pursuant to which ADS will (a) prepare and maintain financial state-
ments, books of account and related documents; (b) determine the Fund's daily
net asset value; and (c) provide data needed to prepare certain reports to be
filed with the Securities and Exchange Commission. The Fund will pay an annual
fee measured by the average net assets of the Fund, subject to certain minimum
fees. It is expected that the Fund will pay the minimum fees in its first year
of operation, which are $27,800. The agreements may be cancelled by either
party upon 90 days' written notice. ADS provides similar services for other
companies.
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, principal
occupations during the past five years are:
Name and Address Position Principal Occupation
Past Five Years
Jack E. Guenther Jr.1,2 President Treasurer
1777 N.E. Loop 410, Director Performance Management, Ltd.3
Suite 1512 Interested Person San Antonio, TX 78217
San Antonio, TX
Michael J. Avellar4 Vice President and Chief Operating Officer
1777 N.E. Loop 410, Secretary Performance Management, Ltd.3
Suite 1512 Director San Antonio, TX
San Antonio, TX 78217 Interested Person
Abigail G. Kampmann1,5 Director Attorney
112 E. Pecan, Suite 2300 Interested Person Bayern, Paterson & Aycock
San Antonio, TX 78205 San Antonio, TX
Christopher Allison Director Investment Banker
112 E. Pecan, Suite 1200 M. E. Allison & Co.
San Antonio, TX 78205 San Antonio, TX
Edmund R. McKane, Jr. Director Insurance Agent
2135 N.W. Military Drive, McKane, Morgan & Associates
Suite 101 San Antonio, TX
San Antonio, TX 78213
1 Mr. Guenther and Ms. Kampmann are siblings.
2 Mr. Guenther is President, Treasurer, Director and Majority Owner of Alamo
Advisers, Inc, the Fund's investment adviser.
3 Performance Management, Ltd. provides services to franchised automobile
dealerships.
4 Mr. Avellar is Vice President, Secretary, Director and minority owner of Alamo
Advisers, Inc.
5 Ms. Kampmann is a Director and a minority owner of Alamo Advisers, Inc.
It is estimated that a total of less than $1,000 each will be paid to Mr.
Allison and Mr. McKane for their service to the Fund in 1997. The Fund does not
compensate its officers and directors that are affiliated with the Investment
Adviser except as they may benefit through payment of the advisory fee.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 10,000,000 shares of common stock of $.01 par value per share. Each share
has equal dividend, distribution and liquidation rights. There are no conver-
sion or preemptive rights applicable to any shares of the Fund. All shares
issued are fully paid and non-assessable.
Voting Rights: Each holder of common stocks has one vote for each share held.
Voting rights are non-cumulative, which means that the holders of a majority of
shares can elect all the directors of the Fund if they so choose, and the
holders of the remaining shares will not be able to elect any person as a
director.
CONTROL PERSON
At the date of the Prospectus, there are no issued and outstanding shares of the
Fund. So long as a majority of the Fund's shares are held by one person, that
person will be able to exercise voting control of the Fund. So long as over 50
percent of the Fund's shares are owned by five or fewer persons, the Fund will
be subject to Personal Holding Company Tax on any income not distributed to
shareholders.
PURCHASE OF SHARES - REINVESTMENTS
Shares of Common Stock may be purchased directly from the Fund. A share
purchase application form is included at the back of the Prospectus. The price
per share is the next determined per share net asset value after receipt of an
application by the Fund. Additional purchase applications may be obtained from
the Fund. Purchase applications should be mailed directly to:
Alamo Growth Fund, Inc.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217-5290.
All applications must be accompanied by payment in the form of a check drawn on
a U.S. bank payable to Alamo Growth Fund, Inc., or by direct wire transfer. No
cash will be accepted. The Fund will charge a $15 fee against a stockholder's
account for any payment check returned to the custodian. THE STOCKHOLDER WILL
ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY THE FUND AS A RESULT.
The establishment of a new account or any additional purchases for an existing
account by wire transfer should be preceded by a phone call to the Fund, to
provide information for the account. A property signed share purchase applica-
tion marked "Follow up" must be sent for all new accounts opened by wire
transfer. Applications are subject to acceptance by the Fund and are not binding
until so accepted. The Fund does not accept telephone orders for purchase of
shares. The Fund reserves the right to reject applications in whole or part.
Shares of the Fund may also be purchased through a registered broker-dealer who
may charge the investor a fee either at the time of purchase or redemption. The
fee, if charged, is retained by the broker-dealer and not remitted to the Fund
or Adviser.
Initial Investments: THE BOARD OF DIRECTORS OF THE FUND HAS ESTABLISHED $10,000
AS THE MINIMUM INITIAL PURCHASE AND $1,000 AS THE MINIMUM FOR ANY SUBSEQUENT
PURCHASE (except through dividend reinvestment), which minimum amounts are
subject to change at any time. Stockholders will receive written notification
at least 30 days in advance of any changes in such minimum amounts. Shares of
the Fund may be purchased without regard to the foregoing minimum initial
investment by employees, officers and directors of the Fund or the Adviser or
firms providing contractual services to the Fund, and by members of their
"immediate families" (i.e., spouses, siblings, parents, children, grandchildren
and grandparents) and by retirement plans and trusts for their benefit. The
officers of the Fund in their discretion may waive the minimum initial invest-
ment. Stock certificates for shares purchased are not issued unless requested
in writing, and directed to Alamo Growth Fund, Inc., 1777 N.E. Loop 410,
Suite 1512, San Antonio, TX 78217-5290.
Retirement Plans: Employee benefit, profit-sharing, or retirement plans (such
as 401(k) plans) may purchase shares of Common Stock through financial institu-
tions or other service providers ("Processing Intermediaries"), which may become
stockholders of record of the shares and which may use procedures and impose
restrictions in addition to or different from those applicable to stockholders
who invest directly in the Fund. Processing Intermediaries may charge fees or
assess other charges for the services they provide to their customers. Any such
fee or charge is retained by the Processing Intermediary and is not remitted to
the Fund or its Adviser. Program materials provided by the Processing Inter-
mediary should be read in conjunction with this Prospectus before investing in
this manner. Shares of Common Stock may be purchased through Processing Inter-
mediaries without regard to the Fund's minimum purchase amounts.
Reinvestments: The Fund will automatically retain and reinvest dividends and
capital gains distributions in whole shares and use same for the purchase of
additional shares for the shareholder at net asset value as of the close of
business on the distribution date. Any surplus over whole shares will be held
in a cash account. A shareholder may at any time by letter or forms supplied by
the Fund direct the Fund to pay dividends and/or capital gains distributions, if
any, to such shareholder in cash.
Whole Shares: Whole shares may be purchased from the Fund. No fractional
shares will be issued. The Fund will maintain an account for each shareholder
of shares for which no certificates have been issued.
REDEMPTION OF SHARES
The Fund will redeem all or any part of the shares of any shareholder who
tenders a request for redemption when certificates have not been issued. When
certificates have been issued then certificates need to accompany a request for
redemption. In either case, proper endorsements guaranteed either by a national
bank or member firm of the New York Stock Exchange will be required if the
proceeds of redemption are to be sent to an address or to a person other than as
the shares to be redeemed are registered.
The redemption price is the net asset value per share next determined after
notice is received by the Fund for redemption of shares. The proceeds received
by the shareholder may be more or less than his cost of such shares, depending
upon the net asset value per share at the time of redemption and the difference
should be treated by the shareholder as a capital gain or loss for income tax
purposes.
Redemption requests must be made in writing and directed to: Alamo Growth Fund,
Inc., 1777 N.E. Loop 410, Suite 1512, San Antonio, TX 78217-5290. Requests for
redemption by telegram and requests which are subject to any special conditions
or which specify an effective date other than as provided herein cannot be
honored.
A request for redemption must be signed by the stockholder or stockholders
exactly as the shares are registered, including the signature of each joint
owner, and must specify either the number of shares or the dollar amount of
shares that are to be redeemed. Additional documentation may be required for
redemptions by corporations, executors, administrators, trustees, guardians, or
others who hold shares in a fiduciary or representative capacity or who are not
natural persons. In case of any questions concerning the nature of such docu-
mentation, please contact the Fund at (210) 829-1800. Redemptions will not be
effective or complete until all of the foregoing conditions, including receipt
of all required documentation by the Fund, have been satisfied.
Payment by the Fund will ordinarily be made within seven days after tender. The
Fund may suspend the right of redemption or postpone the date of payment if: The
New York Stock Exchange is closed for other than customary weekend or holiday
closings, or when trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or when the Securities and
Exchange Commission has determined that an emergency exists, making disposal of
Fund securities or valuation of net assets not practicable. The Fund intends to
make payments in cash, to the extent possible; however, the Fund reserves the
right to make payments in kind.
BROKERAGE
Decisions to buy and sell securities for the Fund are made by the Adviser
subject to review by the Fund's Board of Directors. In placing purchase and
sale orders for portfolio securities for the Fund, it is the policy of the
Adviser to seek the best execution of orders at the most favorable price in
light of the overall quality of brokerage and research services provided, as
described in this and the following paragraph. In selecting brokers to effect
portfolio transactions, the determination of what is expected to result in best
execution at the most favorable price involves a number of largely judgmental
considerations. Among these are the Adviser's evaluation of the broker's
efficiency in executing and clearing transactions, block trading capability
(including the broker's willingness to position securities) and the broker's
financial strength and stability. The most favorable price to the Fund means
the best net price without regard to the mix between purchase or sale price and
commission, if any. Over-the-counter securities may be purchased and sold
directly with principal market makers who retain the difference in their cost in
the security and its selling price.
In allocating brokerage business for the Fund, the Adviser will take into
consideration the research, analytical, statistical and other information and
services provided by the broker, such as general economic reports and informa-
tion, reports or analyses of particular companies or industry groups, market
timing and technical information, and the availability of the brokerage firm's
analysts for consultation. While considered supplemental to the Adviser's own
efforts in the performance of its duties under the Agreement. Other clients of
the Adviser may indirectly benefit from the availability of these services to
the Adviser, and the Fund may indirectly benefit from services available to the
Adviser as a result of transactions for other clients. The Agreement provides
that the Adviser may cause the Fund to pay a broker which provides brokerage and
research services to the Adviser a commission for effecting a securities trans-
action in excess of the amount another broker would have charged for effecting
the transaction, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of brokerage and research
services provided by the executing broker viewed in terms of either the
particular transaction or the Adviser's overall responsibilities with respect to
the Fund and the other accounts as to which he exercises investment discretion.
The Adviser also may take into account the sale of the Fund's shares when
allocating brokerage business for the Fund.
<PAGE>
<PAGE>
ALAMO GROWTH FUND, INC.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217
210-829-1800
FORM N-1A
PART C - OTHER INFORMATION
Contents Page #
1. Financial Statements and Exhibits 1
2. Control Persons 1
3. Number of Shareholders 1
4. Indemnification 1
5. Activities of Investment Adviser 3
6. Principal Underwriters 3
7. Location of Accounts and Records 3
8. Management Services 4
9. Distribution Expenses 4
10. Undertakings 4
11. Signatures 5
Exhibits
<PAGE>
<PAGE>
1. a. Financial Statements - Condensed financial information on a per share
basis is presented in Part A for 1997. The Fund will file an amended
Registration Statement with certified financial statements in accordance
with the undertaking set forth below.
b. Exhibits
(1) Articles of Incorporation
(2) By-Laws
(3) Investment Advisory Agreement
Expense Limitation Agreement
(8) Custody Service Agreement
(9) Fund Accounting Service Agreement
Administrative Service Agreement
(10) Opinion of Counsel Concerning Fund Securities
(13) Subscription Agreement
All exhibits believed to be applicable to the Fund have been included.
2. Control Persons - not applicable
3. Number of Shareholders - Alamo Growth Fund, Inc. has no shareholders as
of filing.
4. Indemnification - Registrant's Board of Directors has adopted the
following By-Laws which is in full force and effect and has not been
modified:
Section 7. Indemnification.
A. The Corporation shall indemnify all of its corporate
representatives against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
them in connection with the defense of any action, suit or proceeding,
or threat or claim of such action, suit or proceeding, whether civil,
criminal, administrative, or legislative, no matter by whom brought, or
in any appeal in which they or any of them are made parties or a party
by reason of being or having been a corporate representative, if the
corporate representative acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Corporation
and with respect to any criminal proceeding, if he had no reasonable
cause to believe his conduct was unlawful, provided that the Corporation
shall not indemnify corporate representatives in relation to matters as
to which any such corporate representative shall be adjudged in such
action, suit or proceeding to be liable for gross negligence, willful
misfeasance, bad faith, reckless disregard of the duties and obligations
involved in the conduct of his office or when indemnification is
otherwise not permitted by the Maryland General Corporation Law.
B. In the absence of any adjudication which expressly absolves the
corporate representative or in the event of a settlement, each corporate
representative shall be indemnified hereunder only if there has been a
reasonable determination based on a review of the facts that
indemnification of the corporate representative is proper because he has
met the applicable standard of conduct set forth in paragraph A. Such
determination shall be made: (i) by the Board of Directors, by a
majority vote of a quorum which consists of directors who were not
parties to the action, suit or proceeding, or if such a quorum cannot be
obtained, then by a majority vote of a committee of the Board consisting
solely of two or more directors, not, at the time, parties to the action,
suit or proceeding and who were duly designated to act in the matter by
the full Board in which the designated directors who are parties to the
action, suit or proceeding may participate; or (ii) by special legal
counsel selected by the Board of Directors or a committee of the Board
by vote as set forth in (i) of this paragraph, or, if the requisite
quorum of the bull Board cannot be obtained therefor and the committee
cannot be established, by a majority vote of the full Board in which
directors who are parties to the action, suit or proceeding may
participate.
C. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall create a rebuttable presumption that the person was
guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard to the duties and obligations involved in the conduct of his
or her office, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his or her conduct was unlawful.
D. Expenses, including attorneys' fees, incurred in the preparation
of and/or presentation of the defense of a civil or criminal action, suit
or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized in the
manner provided in Section 2-418(F) of the Maryland General Corporation
Law upon receipt of: (i) an undertaking by or on behalf of the corporate
representative to repay such amount unless it shall ultimately be
determined that he or she is entitled to be indemnified by the
Corporation as authorized in this By-Law; and (ii) a written affirmation
by the corporate representative of the corporate representative's good
faith belief that the standard of conduct necessary for indemnification
by the Corporation has been met.
E. The indemnification provided by this By-Law shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under these By-Laws, any agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person subject to the limitations imposed
form time to time by the Investment Company Act of 1940, as amended.
F. This Corporation shall have power to purchase and maintain
insurance on behalf of any corporate representative against any liability
asserted against him or her and incurred by him or her in such capacity
or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such
liability under this By-Law provided that no insurance may be purchased
or maintained to protect any corporate representative against liability
for gross negligence, willful misfeasance, bad faith or reckless
disregard of the duties and obligations involved in the conduct of his
or her office.
G. "Corporate Representative" means an individual who is or was a
director, officer agent or employee of the Corporation or who serves or
served another corporation, partnership, joint venture, trust or other
enterprise in one of these capacities at the request of the Corporation
and who, by reason of his or her position, is, was, or is threatened to
be made, a party to a proceeding described herein.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, the registrant has been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
5. Activities of Investment Adviser - Alamo Advisers, Inc.'s activity at the
present time is performance of its Investment Advisory Agreement
currently effective with the Alamo Growth Fund, Inc. Alamo Advisers,
Inc. has no previous experience in advising a mutual fund.
Mr. Jack E. Guenther Jr., President of the Fund and of the Adviser is
employed as Treasurer of Performance Management, Ltd., 1777 N.E. Loop
410, Suite 1512, San Antonio, TX 78217, which provides management
services to businesses, including automobile dealerships. Mr. Guenther
also is an officer or director of 10 other privately held businesses.
Mr. Michael J. Avellar, Vice President of the Fund and of the Adviser is
employed as the Chief Operating Officer of Performance Management, Ltd.
Mr. Avellar also is an officer or director of 20 other privately held
businesses.
Ms. Abigail G. Kampmann is a Director of the Fund and of the Adviser.
Ms. Kampmann is employed as a lawyer by the firm of Bayern, Paterson &
Aycock, P.C., 112 E. Pecan, Suite 2300, San Antonio, TX 78205. Ms.
Kampmann is an officer or director of one other privately held business.
6. Principal Underwriter - The Fund acts as its own underwriter.
7. Location of Accounts and Records - Fund records concerning and generated
by the accounting and administrative activities performed by American
Data Services, Inc. are held at the offices of American Data Services,
Inc. at 24 West Carver Street, Huntington, NY 11743. Securities and
records related to custodial services provided to the Fund by Crestar
Bank are held by Crestar Bank at 919 E. Main Street, Richmond, VA 23261.
All other Fund records are held in the Fund's corporate headquarters at
1777 N.E. Loop 410, Suite 1512, San Antonio, TX 78217.
8. Management Services - Not applicable.
9. Distribution Expenses - The Fund currently bears no distribution
expenses.
10. Undertakings - The Fund undertakes to file an amendment to the
Registration Statement with certified financial statements showing the
initial capital record before accepting subscriptions from any persons
in excess of 25. The Fund also undertakes to file a post-effective
amendment using financial statements, which need not be certified, within
four to six months from the effective date of the Fund's Registration
Statement.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Alamo Growth Fund, Inc. certifies that it meets all of
the requirements for effectiveness of this Registration Statement and has duly
caused this amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of San Antonio and
State of Texas, on the 27th day of March 1997.
ALAMO GROWTH FUND, INC.
By: /s/ Jack E. Guenther Jr.
Jack E. Guenther Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signatures Title Date
Jack E. Guenther Jr. President, Treasurer and Director March 27, 1997
Michael J. Avellar Vice President, Secretary and Director March 27, 1997
Abigail G. Kampmann Director March 27, 1997
/s/ Jack E. Guenther Jr.
JACK E. GUENTHER JR.
/s/ Michael J. Avellar
MICHAEL J. AVELLAR
/s/ Abigail G. Kampmann
ABIGAIL G. KAMPMANN
ALAMO GROWTH FUND, INC.
FORM N-1A
EXHIBIT INDEX
1. Articles of Incorporation of Alamo Growth Fund, Inc.
2. By-Laws of Alamo Growth Fund, Inc.
3. Investment Advisory Agreement
4. Expense Limitation Agreement
5. Custody Service Agreement
6. Fund Accounting Service Agreement
7. Administrative Service Agreement
8. Opinion of Legal Counsel
9. Subscription Agreement
Exhibit 1
ARTICLES OF INCORPORATION
OF
ALAMO GROWTH FUND, INC.
The undersigned, a natural person of the age of eighteen years or
more, acting as incorporator of a corporation under the Maryland General
Corporation Law, adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
The name of the corporation (which is hereinafter called the
"Corporation") is ALAMO GROWTH FUND, INC.
ARTICLE II
The period of existence is perpetual.
ARTICLE III
The purpose or purposes for which the Corporation is organized are:
A. To engage in the business of a non-diversified open-end
management investment company.
B. To purchase or otherwise acquire, hold for investment or
otherwise, and to sell, exchange or otherwise dispose of the following
types of securities: common stocks, debt securities and preferred stocks
(including those convertible into common stock), warrants, United States
treasury bills and notes, certificates of deposit, prime-rated commercial
paper, repurchase agreements and commercial paper master notes.
C. To deposit its funds from time to time in such checking account
or accounts as may be reasonably required, and to deposit its funds in
interest-bearing accounts in a bank, savings bank or trust company in good
standing organized under the laws of the United States of America or any
state thereof, or of the District of Columbia.
D. To conduct research and investigations with respect to
securities, organizations and business conditions in the United States and
elsewhere; to secure information and advice pertaining to the investment
and employment of the assets and funds of the Corporation and to pay
compensation to others for the furnishing of any or all of the foregoing.
E. Subject to any restrictions contained in the Investment Company
Act of 1940, the applicable state securities or "Blue Sky" laws, or any
rules or regulations issued pursuant to any of the foregoing, to exercise
in respect of all securities, property and assets owned by it, all rights,
powers and privileges which could be exercised by any natural person owning
the same securities, property or assets.
F. To acquire all or any part of the good will, property or
business of any firm, person, association or corporation heretofore or
hereafter engaged in any business similar to any business which this
Corporation has the power to conduct, and to hold, utilize, enjoy, and in
any manner dispose of the whole or part of the rights, property and
business so acquired and to assume in connection therewith any liabilities
of any such person, firm, association, or corporation.
G. To purchase, acquire, hold, dispose of, transfer and reissue or
cancel shares of its own capital stock in any manner or to any extent now
or hereafter permitted by the laws of Maryland and by these Articles of
Incorporation.
H. To carry out all or any part of the aforesaid objects and
purposes and to conduct its business in all or any of its branches in any
or all states, territories, districts and possessions of the United States
of America and in foreign countries; to maintain offices and agencies in
any and all states, territories, districts and possessions of the United
States of America and in foreign countries.
The foregoing objects and purposes shall, except when otherwise
expressed, be in no way limited or restricted by reference to or inference form
the terms of any clause of this or any other Article of these Articles of
Incorporation, or any amendment thereto, and shall each be regarded as
independent and construed as powers as well as objects and purposes.
The Corporation shall be authorized to exercise and enjoy all the
powers, rights, and privileges granted to or conferred upon corporations of a
similar character by the laws of the State of Maryland now or hereafter enacted,
and the enumeration of the foregoing powers shall not be deemed to exclude any
powers, rights or privileges so granted or conferred.
ARTICLE IV
The aggregate number of shares which the Corporation shall have
authority to issue is ten million (10,000,000), consisting of one class only,
designated as "Common Stock", of the par value of $.01 per share and of the
aggregate par value of One Hundred Thousand Dollars ($100,000).
ARTICLE V
The number of directors constituting the Board of Directors shall
initially be five (5), and the names of the initial directors are:
Christopher Allison
Michael J. Avellar
Jack E. Guenther Jr.
Abigail G. Kampmann
Edmund R. McKane Jr.
Thereafter, the number of directors shall be such number (not less than three)
as is fixed from time to time by the By-Laws.
ARTICLE VI
The post office address of the place at which the principal office of
the Corporation in the State of Maryland will be located is c/o The Corporation
Trust Incorporated, 32 South Street, Baltimore, Maryland 21202. The resident
agent of the Corporation in the State of Maryland is The Corporation Trust
Incorporated, a Maryland corporation, and the post office address of the
resident agent is 32 South Street, Baltimore, Maryland 21202.
ARTICLE VI
The name and address of the sole incorporator is:
Name Address
Michael J. Avellar 1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217
ARTICLE VIII
The following provisions define, limit and regulate the powers of the
Corporation, the Board of Directors and the Stockholders:
A. The Board of Directors of the Corporation shall authorize an
initial issuance of shares of Common Stock for such consideration, not less
than the aggregate par value of the shares included in the issuance, as the
Board of Directors shall determine. After such initial issuance, the Board
of Directors may authorize the issuance from time to time of shares of
Common Stock and the reissuance from time to time of retired shares of
Common Stock, whether now or hereafter authorized, for such consideration,
not less than the aggregate par value of the shares so issued, as said
Board of Directors may deem advisable, provided that, except with respect
to shares issued as a share dividend or distribution, such consideration
shall be in the form of cash or its equivalent and shall not be less than
the net asset value of such shares computed in accordance with this Article
VIII. That portion of the consideration received by the Corporation for
shares issued (or reissued) which is equal to the aggregate par value of
such shares shall be stated capital and any consideration received in
excess of said aggregate par value may, in its sole and absolute discre-
tion, reject in whole or in part orders for the purchase of shares of
Common Stock, and may, in addition, require such orders to be in such
minimum amounts as it shall determine.
B. The holders of any fractional shares of Common Stock shall be
entitled to the payment of dividends on such fractional shares, to receive
the net asset value thereof upon redemption, to share in the assets of the
Corporation upon liquidation and to exercise voting rights with respect
thereto.
C. The Board of Directors shall have full power in accordance with
good accounting practices (a) to determine what receipts of the Corporation
shall constitute income available for payment of dividends and what
receipts shall constitute principal to make such allocation of any partic-
ular receipt between principal and income as it may deem proper; and (b)
from time to time, in its discretion (i) to determine whether any and all
expenses and other outlays paid or incurred (including any and all taxes,
assessments or governmental charges which the Corporation may be required
to pay or hold under any present or future law of the United States of
America or of any other taxing authority therein) shall be charged to or
paid from principal or income or both, and (ii) to apportion any and all of
said expenses and outlays, including taxes, between principal and income.
D. Each holder of record of stock of this Corporation shall be
entitled to one (1) vote for each share thereof standing registered in his
name on the books of the Corporation. At all elections of directors of the
Corporation, each stockholder shall be entitled to vote the shares owned of
record by him for as many persons as there are directors to be elected, but
shall not be entitled to exercise any right of cumulative voting.
E. The Board of Directors shall have power to determine from time
to time whether and to what extent and at what time and places and under
what conditions and regulations the books, accounts and documents of the
Corporation or any of them, shall be open to the inspection of stock-
holders, except as otherwise provided by statute or by law; and except as
so provided, no stockholder shall have any right to inspect any book,
account or document of the Corporation unless authorized to do so by
resolution of the Board of Directors.
F. When the net worth of the Corporation shall for the first time
have amounted to $100,000, or more, a fact which shall be conclusively
evidenced by a resolution of the Board of Directors of the Corporation
specifying the date and time when the Corporation's net worth first
amounted to $100,000 or more, each holder of shares of Common Stock shall
be entitled at any time thereafter to require the Corporation to redeem all
or any part of the shares standing in the name of such holder on the books
of the Corporation at the net asset value of such shares as determined in
accordance with the provisions of this Article VIII, subject to the
provisions of Section K of this Article.
G. The net asset value to which a holder of shares of Common Stock
shall be entitled upon redemption of shares held by such holder is the net
asset value, as such value is determined under Section J of this Article
VIII, applicable at the time when any of the following events effecting
redemption occur:
(1) The Corporation receives, at such place as the Board
of Directors designates from time to time, irrevocable
instructions in writing in form acceptable to the Board of
Directors to redeem stock held by such holder and, if such
stock to be redeemed is represented by certificates, the
certificates, duly endorsed or accompanied by proper
instructions of assignment, with proper stock transfer stamps
affixed, if required:
(2) The Corporation receives documents, drafts,
telegrams, telephonic communications, in such manner, form and
place and under such circumstances as the Board of Directors
may determine from time to time in its discretion, transmitted
or made by such holder for the purpose of redeeming stock held
by such holder.
H. The time for payment for shares redeemed shall be within seven
(7) days after receipt by the Corporation of documents properly prepared,
executed and submitted pursuant to the provisions of Section G of this
Article VIII for the purpose of redeeming shares.
I. The net asset value of each share of Common Stock shall be
determined as of the close of trading on the New York Stock Exchange each
day that said Exchange is open for trading and any such net asset value
shall be applicable to all transactions in Common Stock occurring at or
before the close of business on that day and after the close of business on
the last preceding day on which said Exchange was open for trading, subject
to adjustments for declared dividends or distributions, or in accordance
with any controlling provisions of the Investment Company Act of 1940 or
any rules or regulations thereunder.
J. The net asset value of each share of Common Stock shall be
determined in accordance with generally accepted accounting principles by
dividing the total value of the Corporation's net assets (meaning its
assets less its liabilities excluding capital and surplus) by the total
number of its shares outstanding at that time. The net asset value is
determined as of the close of trading on the New York Stock Exchange on
each day the Exchange is open for trading. This determination is applic-
able to all transactions in shares of the Corporation prior to that time
and after the previous time as of which net asset value was determined.
Accordingly, purchase orders accepted or shares tendered for redemption
prior to the close of trading on a day the Exchange is open for trading
will be valued as of the close of trading, and purchase orders accepted or
shares tendered for redemption after that time will be valued as of the
close of the next trading day.
(1) Securities traded on any national stock exchange or
quoted on the NASDAQ National Market System will ordinarily be
valued on the basis of the last sale price on the date of
valuation, or, in the absence of any sale on that date, the
most recent bid price.
(2) The liabilities of the Corporation shall be deemed
to include all bills and accounts payable; all administrative
expenses payable or accrued, including the estimated amount of
any fees payable under an investment advisory agreement; all
contractual obligations for the payment of money or property;
all reserves authorized or approved by the Board of Directors
for taxes or contingencies, including such reserves if any, for
taxes based on any unrealized appreciation in the value of the
assets of the Corporation; and all other liabilities of the
Corporation of whatsoever kind and nature, except liabilities
represented by outstanding shares and surplus of the
Corporation.
(3) Securities purchased shall be included among the
assets of the Corporation, and the cost thereof shall
simultaneously be regarded as a liability, not later than the
first business day following the date of purchase; and
securities sold shall be excluded from such assets, and the
amount receivable therefor shall simultaneously be included as
an asset, not later than the first business day following the
date of sale.
(4) Shares of Common Stock shall be considered as no
longer outstanding on the first business day subsequent to
receipt of the properly endorsed certificate representing such
shares or receipt of the properly prepared request for
redemption for those shares not represented by certificates,
and the amount payable on such redemption or repurchase shall
simultaneously become a liability of the Corporation. The
endorsed certificates or redemption requests shall be in the
form established by the Board of Directors pursuant to Section
G hereof.
(5) Shares of Common Stock for which purchase orders
have been accepted shall be considered as issued and
outstanding not later than the first business day after the
receipt of payment therefor in the form of a check made payable
to ALAMO GROWTH FUND, INC., and the amount receivable therefor
shall simultaneously become an asset of the Corporation.
(6) Notwithstanding the provisions of paragraphs (1) and
(3) of this Section J, interest declared or accrued and not yet
received, and accrued expenses, may be omitted from any calculation
of net asset value, in the discretion of the Board of Directors, if
the net amount of all such interest and expenses is less than one
percent of the net asset value per share.
K. In the event that the New York Stock Exchange shall be closed
at any time because of then existing financial conditions or for any other
unusual or extraordinary reason, the right of a holder of shares of Common
Stock to have his shares redeemed by the Corporation shall be suspended for
a period from and including the day on which the action is taken for the
closing of said Exchange to and including the day on which said Exchange is
reopened. In accordance with the provisions of the Investment Company Act
of 1940 and the rules and regulations promulgated thereunder by the
Securities and Exchange Commission, the Corporation may also suspend such
right of redemption (a) for any period during which trading on the New York
Stock Exchange is restricted; (b) for any period during when an emergency
exists as a result of which (i) disposal by the Corporation of securities
owned by it is not reasonably practicable or (ii) it is not reasonably
practicable for the Corporation to determine fairly the value of its net
assets; or (c) for such other periods as the Securities and Exchange
Commission may by order permit for the protection of shareholders of the
Corporation.
L. The Corporation may purchase in the open market or otherwise
acquire from any owner or holder thereof any shares of Common Stock, in
which case the consideration paid therefor (in cash or in securities in
which the funds of the Corporation shall then be invested) shall not exceed
the net asset value thereof determined or estimated in accordance with any
method deemed proper by the Board of Directors and producing any amount
approximately equal to the net asset value of said shares (determined in
accordance with the provisions of this Article VIII) at the time of the
purchase or acquisition by the Corporation thereof. In respect of all
powers, duties and authorities conferred by the preceding Sections J and K,
and this Section L, the Corporation may act by and through agents from time
to time designated and appointed by the Board of Directors and the Board of
Directors may delegate to any such agent any and all powers, duties and
authorities conferred upon the Corporation or upon the Board of Directors
by said Sections.
ARTICLE IX
The Corporation reserves the right to enter into, from time to time,
investment advisory agreements providing for the management and supervision of
the investments of the Corporation, the furnishing of advice to the Corporation
with respect to the desirability of investing in, purchasing or selling
securities or other property and the furnishing of clerical and administrative
services to the Corporation. Such agreement shall contain such other terms,
provisions and conditions as the Board of Directors of the Corporation may deem
advisable and as are permitted by the Investment Company Act of 1940.
The Corporation may designate custodians, transfer agents, registrars
or disbursing agents for the stock and assets of the Corporation and employ and
fix the powers, rights, duties, responsibilities and compensation of each such
custodian, transfer agent, registrar or disbursing agent.
IN WITNESS WHEREOF, the undersigned incorporator of ALAMO GROWTH FUND,
INC. who executed the foregoing Articles of Incorporation hereby acknowledges
the same to be his act and further acknowledges that, to the best of his know-
ledge, the matters and facts set forth therein are true in all material respects
under the penalties of perjury.
Dated the 23d day of December 1996.
Michael J. Avellar
Sole Incorporator
Exhibit 2
BY-LAWS
OF
ALAMO GROWTH FUND, INC.
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. Place of Meetings. All meetings of stockholders shall be held
at 1777 N.E. Loop 410, Suite 1512, San Antonio, Texas, or at such other location
as the Board of Directors shall direct.
Section 2. Annual Meeting.
A. The annual meeting of stockholders for the election of directors
and the transaction of such other business as may properly come before it,
if the annual meeting shall be held, shall be held during the month of July
of each year (or during such other month as the Board of Directors shall
determine), commencing in 1998, at such date and time as shall be fixed by
the Board of Directors and stated in the notice of such meeting. Any
business of the Corporation may be transacted at the annual meeting without
being specifically designated in the notice, except such business as is
specifically required by statute to be stated in the notice.
B, The Corporation shall not be required to hold an annual meeting
in any year in which none of the following is required to be acted on by
stockholders under the Investment Company Act of 1940:
(i) Election of directors;
(ii) Approval of the Corporation's investment advisory
contracts;
(iii) Ratification of the selection of the Corporation's
independent public accountants; and
(iv) Approval, if any, of the Corporation's distribution
agreement with respect to any particular class or series.
Section 3. Special Meeting. Special meetings of the stockholders may be
called by the Board of Directors, the president, vice president, or the
secretary, and shall be called by the secretary upon the written request of the
holders of shares entitled to not less than 25% of all the votes entitled to be
cast at such meeting; provided that such holders prepay the costs to the Corp-
oration of preparing and mailing the notice of the meeting. The business
transacted at any special meeting of stockholders shall be limited to the
purposes stated in the notice.
Section 4. Notice of Meeting. Not less than ten days nor more than ninety
days before the date of every stockholders meeting, the secretary shall give to
each stockholder entitled to vote at such meeting, written or printed notice
stating the time and place of the meeting, and in the case of a special meeting
the purpose or purposes for which the meeting is called, either by mail, by
presenting it to him personally or by leaving it at his residence or usual place
of business. If mailed, such notice shall be deemed to be given when deposited
in the United States mail addressed to the stockholder at his post office
address as it appears on the records of the Corporation, with postage thereon
prepaid.
Section 5. Quorum. At any meeting of stockholders, the presence in person
or by proxy of stockholders entitled to cast a majority of the votes thereat
shall constitute a quorum; but this Section shall not affect any requirement
under statute or under the charter for the vote necessary for the adoption of
any measure. If at any meeting a quorum is not present or represented, the
chairman of the meeting or the holders of a majority of the stock present or
represented may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present or represented. At such
adjourned meeting at which a quorum is present or represented, any business may
be transacted which might have been transacted at the meeting as originally
called.
Section 6. Stock Entitled to Vote. Each issued share of stock shall be
entitled to vote at any meeting of stockholders except shares owned, other than
in a fiduciary capacity, by the Corporation or by another corporation in which
the Corporation owns shares entitled to cast a majority of all the votes
entitled to be cast by all shares outstanding and entitled to vote of such
corporation.
Section 7. Voting. Each outstanding share of stock entitled to vote at a
meeting of stockholders shall be entitled to one vote on each matter submitted
to a vote. In all elections for directors, every stockholder shall have the
right to vote the shares owned of record by him for as many persons as there are
directors to be elected, but shall not be entitled to exercise any right of
cumulative voting. A stockholder may vote the shares owned of record by him
either in person or by proxy executed in writing by the stockholder or by his
authorized attorney-in-fact. No proxy shall be valid after eleven months from
its date unless otherwise provided in the proxy. At all meetings of stock-
holders, unless the voting is conducted by inspectors, all questions relating to
the qualification of voters, the validity of proxies and the acceptance or
rejection of votes shall be decided by the chairman of the meeting. A majority
of the votes cast at a meeting of stockholders, duly called and at which a
quorum is present, shall be sufficient to take or authorize any action which may
properly come before the meeting, unless a greater number is required by statute
or by the charter.
Section 8. Informal Action. Any action required or permitted to be taken
at any meeting of stockholders may be taken without a meeting, if a consent in
writing, setting forth such action, is signed by all the stockholders entitled
to vote on the subject matter thereof and such consent is filed with the records
of the Corporation.
ARTICLE II
DIRECTORS
Section 1. Number. The number of directors of the Corporation shall be
five (5). By vote of a majority of the entire Board of Directors, the number of
directors fixed by the charter or by these By-Laws may be increased or decreased
from time to time to not more than fifteen nor less than three, but the tenure
of office of a director shall not be affected by any decrease in the number of
directors so made by the Board.
Section 2. Election and Qualification. Until the first annual meeting of
stockholders and until successors are duly elected and qualify, the Board of
Directors shall consist of the persons named as such in the Charter. At the
first annual meeting of stockholders and at each annual meeting thereafter, the
stockholders shall elect directors to hold office until the next annual meeting
or until their successors are elected and qualified. A Director need not be a
stockholder of the Corporation, but must be eligible to serve as a director of a
registered investment company under the Investment Company Act of 1940. All but
one of the directors may be interested persons of the investment adviser of the
Corporation, as defined in the Investment Company Act of 1940 or officers or
employees of the Corporation.
Section 3. Vacancies. Any vacancy on the Board of Directors occurring
between stockholders' meetings called for the purpose of electing directors may
be filled, if immediately after filling any such vacancy at lest two-thirds of
the directors then holding office shall have been elected to such office at an
annual or special meeting of stockholders, in the following manner: (i) for a
vacancy occurring other than by reason of an increase in directors, by a
majority of the remaining members of the Board, although such majority is less
than a quorum; and (ii) for a vacancy occurring by reason of an increase in the
number of directors, by action of a majority of the entire Board. A Director
elected by the Board to fill a vacancy shall be elected to hold office until the
next annual meeting of stockholders or until his successor is elected and
qualified. If by reason of the death, disqualification or bona fide resignation
of any director or directors, there is no member of the Board of Directors who
is not an interested person of the investment adviser of the Corporation, as
defined in the Investment Company Act of 1940, such vacancy shall be filled
within thirty days if it may be filled by the Board, or within sixty days if a
vote of stockholders is required to fill such vacancy; provided that such
vacancy may be filled within such longer period as the Securities and Exchange
Commission may prescribe by rules and regulations, upon its own motion or by
order upon application. In the event that at any time less than a majority of
the directors were elected by the stockholders, the Board or proper officer
shall forthwith cause to be held as promptly as possible, and in any event
within sixty days, a meeting of the stockholders for the purpose of electing
directors to fill any existing vacancies in the Board, unless the Securities
and Exchange Commission shall by order extend such period.
Section 4. Powers. The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors, which may exercise all of
the powers of the Corporation, except such as are by law or by the Charter or by
these By-Laws conferred upon or reserved to the stockholders.
Section 5. Removal. At any meeting of stockholders, duly called and at
which a quorum is present, the stockholders may, by the affirmative vote of the
holders of a majority of the votes entitled to be cast thereon, remove any
director or directors from office and may elect a successor or successors to
fill any resulting vacancies for the unexpired terms of removed directors.
Section 6. Place of Meetings. Meetings of the Board of Directors, regular
or special, may be held at any place in or out of the State of Maryland as the
Board may from time to time determine or as may be specified in the notice of
meeting.
Section 7. First Meeting of Newly Elected Board. The first meeting of
each newly elected Board of Directors shall be held without notice immediately
after and at the same general place as the annual meeting of the stockholders,
for the purpose of organizing the Board, electing officers and transacting any
other business that may properly come before the meeting.
Section 8. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at such time and place as shall from time to time be
determined by the Board.
Section 9. Special Meetings. Special meetings of the Board of Directors
may be called at any time either by the Board, the president, a vice president
or a majority of the directors in writing with or without a meeting. Notice of
special meetings shall either be mailed by the secretary to each Director at
least three days before the meeting or shall be given personally or telegraphed
to each director at least one day before the meeting. Such notice shall set
forth the time and place of such meeting but need not, unless otherwise required
by law, state the purposes of the meeting.
Section 10. Quorum and Vote Required for Action. At all meetings of the
Board of Directors, a majority of the entire Board shall constitute a quorum for
the transaction of business, and the action of a majority of the directors
present at any meetings at which a quorum is present shall be the action of the
Board of Directors unless the concurrence of a greater proportion is required
for such action by statute, the Articles of Incorporation or these By-Laws. If
at any meeting a quorum is not present, a majority of the directors present may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present. Members of the Board of Directors or a
committee of the Board 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 the meeting.
Section 11. Executive and Other Committees. The Board of Directors may
appoint from among its members an executive and other committees composed of two
or more directors. The Board may delegate to such committees in the intervals
between meetings of the Board any of the powers of the Board to manage the
business and affairs of the Corporation, except the power to: (i) declare
dividends or distributions upon the stock of the Corporation; (ii) issue stock
of the Corporation; (iii) recommend to the stockholders any action which
requires stockholder approval; (iv) amend the By-Laws; (v) approve any merger or
share exchange which does not require stockholder approval; or (vi) take any
action required by the Investment Company Act of 1940 to be taken by the
independent directors of the Corporation or by the full Board of Directors.
Section 12. Informal Action. Any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting, if a
written consent to such action is signed by all members of the Board and such
written consent is filed with the minutes of proceedings of the Board.
ARTICLE III
OFFICERS AND EMPLOYEES
Section 1. Election and Qualification. At the first meeting of each newly
elected Board of Directors there shall be elected a president, one or more vice
presidents, a secretary and a treasurer. The Board also may elect one or more
assistant secretaries and assistant treasurers. No officer need be a director.
Any two or more offices, except the offices of president and vice president, may
be held by the same person but no officer shall execute, acknowledge or verify
any instrument in more than one capacity, if such instrument is required by law,
charter or these By-Laws to be executed, acknowledged or verified by two or more
officers. Each officer must be eligible to serve as an officer of a registered
investment company under the Investment Company Act of 1940. Nothing herein
shall preclude the employment of other employees or agents by the Corporation
from time to time without action by the Board.
Section 2. Term, Removal and Vacancies. The officers shall be elected to
serve until the next first meeting of a newly elected Board of Directors and
until their successors are elected and qualified. Any officer may be removed by
the Board, with or without cause, whenever in its judgment the best interests of
the Corporation will be served thereby, but such removal shall be without
prejudice to the contractual rights, if any, of the person so removed. A
vacancy in any office shall be filled by the Board for the unexpired term.
Section 3. Bonding. Each officer and employee of the Corporation who
singly or jointly with others has access to securities or funds of the
Corporation, either directly or through authority to draw upon such funds or to
direct generally the disposition of such securities shall be bonded against
larceny and embezzlement by a reputable fidelity insurance company authorized to
do business in Texas. Each such bond, which may be in the form of an individual
bond, a schedule or blanket bond covering the Corporation's officers and
employees and the officers and employees of the investment adviser to the Corp-
oration and other corporations to which said investment adviser also acts as
investment adviser, shall be in such form and for such amount (determined at
least annually) as the Board of Directors shall determine in compliance with
the requirements of Section 17(g) of the Investment Company Act of 1940, as
amended from time to time, and the rules, regulations or orders of the
Securities and Exchange Commission thereunder.
Section 4. President. The president shall be the principal executive
officer of the Corporation. He shall preside at all meetings of the stock-
holders and directors, have general and active management of the business of the
Corporation, see that all orders and resolutions of the Board of Directors are
carried into effect, and execute in the name of the Corporation all authorized
instruments of the Corporation except where the signing shall be expressly
delegated by the Board to some other officer or agent of the Corporation.
Section 5. Vice Presidents. The vice president, or if there be more than
one, the vice presidents in the order determined by the Board of Directors,
shall, in the absence or disability of the president, perform the duties and
exercise the powers of the president, and shall have such other duties and
powers as the Board from time to time prescribe or the president delegate.
Section 6. Secretary and Assistant Secretaries. The secretary shall give
notice of, attend and record the minutes of meetings of stockholders and
directors, keep the minutes of meetings of stockholders and directors, keep the
corporate seal and, when authorized by the Board, affix the same to any
instrument requiring it, attesting to the same by his signature, and shall have
such further duties and powers as are incident to his office or as the Board may
from time to time prescribe. The assistant secretary, if any, or, if there be
more than one, the assistant secretaries in the order determined by the Board,
shall in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary, and shall have such other duties and
powers as the Board may from time to time prescribe or the secretary delegate.
Section 7. Treasurer and Assistant Treasurers. The treasurer shall be the
principal financial and accounting officer of the Corporation. He shall be
responsible for the custody and supervision of the Corporation's books of
account and subsidiary accounting records, and shall have such further duties
and powers as are incident to his office or as the Board of Directors may from
time to time prescribe. The assistant treasurer, if any, or, if there be more
than one, the assistant treasurers in the order determined by the Board, shall
in the absence or disability of the treasurer, perform all duties and exercise
the powers of the treasurer, and shall have such other duties and powers as the
Board may from time to time prescribe or the treasurer delegate.
ARTICLE IV
RESTRICTIONS ON COMPENSATION
TRANSACTIONS AND INVESTMENTS
Section 1. Salary and Expenses. Directors and executive officers as such
shall not receive any salary for their services or reimbursement for expenses
from the Corporation; provided that the Corporation may pay fees in such amounts
and at such times as the Board of Directors shall determine to directors who are
not interested persons of the Corporation for attendance at meetings of the
Board of Directors. Clerical employees shall receive compensation for their
services from the Corporation in such amounts as are determined by the Board of
Directors.
Section 2. Compensation and Profit from Purchase and Sales. No affiliated
person of the Corporation, as defined in the Investment Company Act of 1940, or
affiliated person of such person, shall, except as permitted by Section 17(e) of
the Act, or the rules, regulations or orders of the Securities and Exchange
Commission thereunder, (i) acting as agent, accept from any source any
compensation for the purchase or sale of any property or securities to or for
the Corporation or any controlled company of the Corporation, as defined in such
Act, or (ii) acting as a broker, in connection with the sale of securities to or
by the Corporation or any controlled company of the Corporation, receive from
any source a commission, fee or other remuneration for effecting such trans-
action. The investment adviser to the Corporation shall not profit directly or
indirectly from sales of securities to or from the Corporation.
Section 3. Transactions with Affiliate Person. No affiliated person of
the Corporation, as defined in the Investment Company Act of 1940, or affiliated
person of such person shall knowingly (i) sell any security or other property to
the Corporation or to any company controlled by the Corporation, as defined in
the Act, except shares of stock of the Corporation or securities of which such
person is the issuer and which are part of a general offering to the holders of
a class of its securities, (ii) purchase from the Corporation or any such
controlled company any security or property except shares of stock of the
Corporation or securities of which such person is the issuer, (iii) borrow money
or other property from the Corporation or any such controlled company, or (iv)
acting as a principal effect any transaction in which the Corporation or
controlled company is a joint or joint and several participant with such person;
provided, however, that this Section shall not apply to any transaction
permitted by Section 17(a), (b), (c), (d) or 21(b) of the Investment Company Act
of 1940 or the rules, regulations or orders of the Securities and Exchange
Commission thereunder.
Section 4. Investment Adviser. The Corporation shall employ only one
investment adviser, the employment of which shall be pursuant to a written
agreement in accordance with Section 15 of the Investment Company Act of 1940,
as amended from time to time.
Section 5. Ownership of Stock by Officers and Directors. No officer or
director shall take a long or short position in the stock of the Corporation,
provided, however, that officers or directors may purchase stock of the
Corporation for investment purposes at the same price as that available to the
public at the time of purchase, or in connection with the original capital-
ization of the Corporation.
Section 6. Portfolio Transactions. The Corporation shall not purchase,
acquire or retain:
(a) any security of an issuer, any of whose officers or directors is
an officer, director or investment adviser of the Corporation or an
affiliated person, as defined in the Investment Company Act of 1940, of
such investment adviser;
(b) any security issued by or any interest in the business of an
investment company, insurance company, broker, dealer, underwriter or
investment adviser, except as permitted under Section 12(d), (e) and (g) of
the Investment Company Act of 1940, as amended from time to time, or the
rules, regulations or orders of the Securities and Exchange Commission
thereunder;
(c) voting securities of another issuer, the acquisition or retention
of which would result in circular or cross ownership, as defined in Section
20(c) of the Act; or
(d) during the existence of any underwriting or selling syndicate,
any security, except stock of the Corporation, a principal underwriter of
which is an officer, director, distributor, investment adviser or employee
of the Corporation, or is a person (other than a company of the character
described in Section 12(d)(3) (A) and (B) of the Investment Company Act of
1940, as amended from time to time) of which any such officer, director,
distributor, investment adviser or employee is an affiliated person, as
defined in the Investment Company Act of 1940, unless in acquiring such
security the Corporation is itself acting as a principal underwriter for
the issue, except as the Securities and Exchange Commission, by rules,
regulations, or order shall permit.
Section 7. General Business and Investment Activities. The Corporation
shall not:
(a) purchase any security on margin, except such short-term credits
as are necessary for the clearance of transactions;
(b) participate on a joint or joint and several basis in any trading
account in securities;
(c) act as an underwriter in the distribution of any security other
than stock of the Corporation;
(d) make loans to other persons except through the purchase of debt
obligations permissible under Article III of the Articles of Incorporation
of this Corporation and through repurchase agreements provided that
repurchase agreements maturing in more than seven days will not exceed 10%
of the total net assets of this Corporation.
(e) borrow money or issue senior securities except to the extent
permitted under Sections 18(f), (g) and (h) of the Investment Company Act
of 1940, as amended from time to time, provided that the amount of money
that may be borrowed shall not exceed that which would be permitted under
the margin requirements of the Board of Governors of the Federal Reserve
System, in force at the time of borrowing, as specified in Regulation T, or
any amendment thereto;
(f) purchase or sell real estate or interests in real estate or
commodities;
(g) issue any warrant or right to subscribe to or purchase stock of
the Corporation, except in the form of warrants or rights to subscribe
expiring not later than one hundred twenty days after their issuance and
issued exclusively and ratably to its stockholders, or any voting trust
certificates relating to stock of the Corporation;
(h) deviate from its policy in respect to concentration of
investments in any particular industry or group of industries as reported
in its registration statement under the Investment Company Act of 1940, or
deviate from any fundamental policy receipted in such registration state-
ment pursuant to Section 8(b)(2) of the Investment Company Act of 1940;
(i) change the nature of its business so as to cease to be an
investment company;
(j) charge any sales loan or commission in connection with the sale
or redemption of any stock of the Corporation; provided that the Board of
Directors may impose a redemption charge in such amount, with such
limitations and at such times as the Board of Directors in its discretion
shall determine.
ARTICLE V
STOCK CERTIFICATES AND TRANSFER BOOKS
Section 1. Certificates. Each stockholder shall be entitled to a
certificate or certificates, in such form as the Board of Directors shall from
time to time approve, representing and certifying the number of shares of stock
owned by him in the Corporation. Each certificate shall be signed, manually or
by facsimile signature by the president or a vice president, countersigned,
manually or by facsimile signature by the secretary, an assistant secretary, the
treasurer or an assistant treasurer and sealed with the corporate seal or
facsimile thereof. In case any officer who has signed any certificate, or whose
facsimile signature appears thereon, ceases to be an officer of the Corporation
before the certificate is issued, the certificate may nevertheless be issued
with the same effect as if the officer had not ceased to be such officer as of
the date of its issue. Any certificate representing stock which is restricted
or limited as to transferability shall have a full statement of such restriction
or limitation plainly stated thereon or shall state that the Corporation will
furnish information to the stockholder on request and without charge.
Section 2. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen, destroyed or mutilated (or may delegate such authority to one or more
officers of the Corporation) upon the making of an affidavit of that fact by the
person claiming the certificate to be lost, stolen, destroyed or mutilated. The
Board or such officer may, in its or his discretion, require the owner of such
certificate or his legal representative to give bond with sufficient surety to
the Corporation to indemnify it against any loss or claim which may arise or
expense which may be incurred by reason of the issuance of a new certificate.
Section 3. Stock Ledger. The Corporation shall maintain at its office in
San Antonio, Texas, or at the office of its principal transfer agent, if any, an
original or duplicate stock ledger containing the names and addresses of all
stockholders and the number of shares held by each stockholder.
Section 4. Registered Stockholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as such, as
the owner of shares for all purposes, and shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
Section 5. Transfer Agent and Registrar. The Corporation may maintain one
or more transfer offices or agencies, each in charge of a transfer agent
designated by the Board of Directors, where the shares of stock of the Corp-
oration shall be transferable. The Corporation may also maintain one or more
registry offices, each in charge of a registrar designated by the Board, where
such shares of stock shall be registered.
Section 6. Transfers of Stock. Upon surrender to the Corporation or a
transfer agent of a certificate of shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer it shall be the duty
of the Corporation to issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.
Section 7. Fixing of Record Dates and Closing of Transfer Books. The
Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of stockholders, or stockholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a determination of
stockholders for any other proper purpose. Such date in any case, shall be not
more than ninety days, and in case of a meeting of stockholders is to be taken.
In lieu of fixing a record date, the Board may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, twenty
days. If the stock transfer books are closed or a record date is fixed for the
purpose of determining stockholders entitled to vote at a meeting of stock-
holders, such books shall be closed for at least ten days immediately preceding
such action.
ARTICLE VI
ACCOUNTS, REPORTS AND CUSTODIAN
Section 1. Inspection of Books. The Board of Directors shall determine
from time to time whether, and, if allowed, when and under what conditions and
regulations the accounts and books of the Corporation (except such as may by
statute be specifically open to inspection) or any of them, shall be open to the
inspection of the stockholders and the stockholders' rights in this respect are
and shall be limited accordingly.
Section 2. Reliance on Records. Each director and officer shall, in the
performance of his duties, be fully protected in relying in good faith on the
books of account or reports made to the Corporation by any of its officials or
by an independent public accountant.
Section 3. Preparation and Maintenance of Accounts, Records and State-
ments. The president, a vice president or the treasurer shall prepare or cause
to be prepared annually, a full and correct statement of the affairs of the
Corporation, including a balance sheet or statement of financial condition and a
financial statement of operations for the preceding fiscal year, which shall be
submitted at the annual meeting of the stockholders and filed within twenty days
thereafter at the principal office of the Corporation in the state of Delaware.
The proper officers of the Corporation shall also prepare, maintain and preserve
or cause to be prepared, maintained and preserved the accounts, books and other
documents required by Section 2-111 of the Maryland General Corporation Law and
Section 31 of the Investment Company Act of 1940 and shall prepare and file or
cause to be prepared and filed the reports required by Section 30 of such Act.
No financial statement shall be filed with the Securities and Exchange
Commission unless the officers or employees who prepared or participated in the
preparation of such financial statement have been specifically designated for
such purpose by the Board of Directors.
Section 4. Auditors. No independent public accountant shall be retained
or employed by the Corporation to examine, certify or report on its financial
statements for any fiscal year unless such selection: (i) shall have been
approved by a majority of the entire Board of Directors within thirty days
before or after the beginning of such fiscal year or before the annual meeting
of stockholders for such fiscal year; (ii) shall have been ratified at the next
succeeding annual meeting of stockholders, provided that any vacancy occurring
between annual meetings due to the death or resignation of such accountant may
be filled by the Board of Directors; and (iii) shall otherwise meet the require-
ments of Section 32 of the Investment Company Act of 1940.
Section 5. Custodian. All securities, evidences of indebtedness and funds
of the Corporation shall be entrusted to the custody of one or more custodians
or depositaries, each of which shall be either an eligible foreign custodian as
defined in Rule 17(f)5 under the Investment Company Act of 1940 or a bank or
trust company which is a member of the Federal Reserve System having capital,
surplus and undivided profits of not less than Two Million Dollars ($2,000,000),
as set forth in its most recently published report of condition, and the qualif-
ications prescribed by and pursuant to Section 17(f) and 26 of the Investment
Company Act of 1940 and which shall be employed as agent or agents of the Corp-
oration by the Board of Directors.
Section 6. Agreement with Custodian. Each such custodian shall be
employed pursuant to a written agreement which shall conform to the requirements
prescribed by any applicable rules and regulations of the Securities and
Exchange Commission under the Investment Company Act of 1940, and, except as
otherwise provided by such rules and regulations, shall provide substantially as
follows:
(a) The custodian shall keep (i) all cash on deposit with such other
banks in the name of the custodian as the Corporation shall direct, and
(ii) all securities in a separate account, not commingled with other
assets, in the name of the custodian, its nominee or the Corporation in
care of the custodian, or in the custody of the custodian or agents in
street certificate or bearer form. The custodian may utilize a central
securities clearing agency or securities depository in accordance with the
provisions at the Investment Company Act of 1940 and the rules and
regulations of the Securities and Exchange Commission promulgated there-
under. The custodian shall receive and collect the income or funds due
with respect to such securities.
(b) Securities and cash held by the custodian may be withdrawn only
upon written order signed on behalf of the Corporation by two authorized
signatories at least one of whom shall be an officer. The authority of
such signatories shall be granted by an appropriate resolution of this
Board of Directors; provided, however, that no more than five such
signatories shall be granted such authority.
(c) Securities held by the custodian may be withdrawn only for the
following purposes:
(i) The sale of such securities for the account of the
Corporation with delivery and payment therefore in accord with
procedures and customs used by the custodian in the sale of
securities for the trust estates for which it is trustee;
(ii) The delivery of securities in exchange for or
conversion into other securities alone, cash or cash and other
securities pursuant to the provisions of such securities or a
plan of merger, consolidation, reorganization, recapitalization
or readjustment of the securities of the issuer thereof;
(iii) The surrender of warrants, rights or similar
securities in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities;
(iv) The delivery of securities to a lender as
collateral on borrowing effected by the Corporation or to a
broker selling any such securities in accordance with "street
delivery" customs;
(v) The delivery of securities as a redemption in kind
of or distribution of stock of the Corporation or in
connection with a retirement of such securities;
(vi) The delivery of securities for other proper
corporate purposes; provided that in each case specified in
clauses (i), (iii) and (iv) the payment, collateral or
securities to be received are delivered to the custodian
simultaneously or as promptly thereafter as possible.
(d) Cash held by the custodian may be withdrawn only for the
following purposes:
(i) The purchase of securities to be retained by the
custodian with delivery and payment therefor in accord with
procedures and customs used by the custodian in the purchase of
securities for the trust estates for which it is trustee;
(ii) The redemption or purchase of stock in the
Corporation;
(iii) The payment of interest, the investment adviser's
fees incurred in connection with the operation of the
Corporation and operating expenses (including, without
limitation thereto, fees for legal, accounting and auditing
services);
(iv) The payment of taxes, interest, the investment
adviser's fees incurred in connection with the operation of the
Corporation and operating expenses (including without
limitation thereto, fees for legal, accounting and auditing
services);
(v) The payment in connection with the conversion,
exchange or surrender of securities owned by the Corporation;
(vi) The deposit of funds in the name of the custodian
in or with any other bank or trust company designated by the
Corporation;
(vii) Other proper corporate purposes as certified by
resolution of the Board of Directors.
Section 7. Termination of Custodian Agreement. Any employment agreement
with a custodian shall be terminable on not more than sixty days' notice in
writing by the Board of Directors or the custodian and upon any such termina-
tion the custodian shall turn over only to the succeeding custodian designated
by the Board of Directors all funds, securities and property and documents of
the Corporation in its possession.
Section 8. Checks and Requisitions. Except as otherwise authorized by the
Board of Directors, all checks and drafts for the payment of money shall be
signed in the name of the Corporation by a custodian, and all requisitions
orders for the payment of money by a custodian or for the issue of checks and
drafts therefore, all promissory notes, all assignments of stock or securities
standing in the name of the Corporation, and all requisitions or orders for the
assignment of stock or securities standing in the name of a custodian or its
nominee, or for the execution of powers to transfer the same, shall be signed in
the name of the Corporation by not less than two persons (who shall be among
those persons, not in excess of five, designated for this purpose by the Board
of Directors) at least one of whom shall be an officer. Promissory notes,
checks or drafts payable to the Corporation may be endorsed only to the order of
a custodian or its nominee by the treasurer or president or by such other person
or persons as shall be thereto authorized by the Board of Directors.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Offices. The principal office of the Corporation in the State
of Maryland shall be in the City of Baltimore. The Corporation also shall have
an office in San Antonio, Texas. The Corporation may also have offices at such
other places within and without the State of Maryland as the Board of Directors
may from time to time determine. Except as otherwise required by statute, the
books and records of the Corporation may be kept outside the State of Maryland.
Section 2. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, and the words "Corporate Seal" and "Maryland". The seal may
be used by causing it or a facsimile thereof to be impressed, affixed,
reproduced or otherwise.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed
by the Board of Directors.
Section 4. Notice of Waiver of Notice. Whenever any notice of the time,
place or purpose of any meeting of stockholders or directors is required to be
given under the statute, the Charter or these By-Laws, a waiver thereof in
writing, signed by the person or persons entitled to such notice and filed with
the records of the meeting, either before or after the holding thereof, or
actual attendance at the meeting of stockholders in person or by proxy or at the
meeting of directors in person, shall be deemed equivalent to the giving of such
notice to such person. No notice need be given to any person with whom
communication is made unlawful by any law of the United States or any rule,
regulation, proclamation or executive order issued by any such law.
Section 5. Voting of Stock. Unless otherwise ordered by the Board of
Directors, the president shall have full power and authority, in the name and on
behalf of the Corporation, (i) to attend, act and vote at any meeting of
stockholders of any company in which the Corporation may own shares of stock of
record, beneficially (as the proxy or attorney-in-fact of the record holder) or
of record and beneficially, and (ii) to give voting directions to the record
stockholder of any such stock beneficially owned. At any such meeting, he shall
possess and may exercise any and all rights and powers incident to the ownership
of such shares which, as the holder or beneficial owner and proxy of the holder
thereof, the Corporation might possess and exercise if personally present, and
may delegate such power and authority to any officer agent or employee of the
Corporation.
Section 6. Dividends. Dividends upon the stock of the Corporation,
subject to the provisions of the Charter, if any, may be declared by the Board
of Directors at any regular or special meeting, pursuant to law. The source of
each dividend payment shall be disclosed to the stockholders receiving such
dividend, to the extent required by the laws of the State of Maryland and by
Section 19 of the Investment Company Act of 1940 and the rules and regulations
of the Securities and Exchange Commission thereunder. The total of each
dividend payment made to stockholders in respect of any one fiscal year shall be
approximately equal to the sum of (a) the net income for such fiscal year
exclusive of profits or losses realized upon the sale of securities or other
property, and (b) the excess of profits over losses on sales of securities or
other property for such fiscal year; provided the above provision shall be
interpreted to give the Board of Directors the power in its discretion to
distribute for any fiscal year as ordinary dividends and as capital gains
distributions, respectively, amounts sufficient to enable the Corporation to
avoid or reduce its tax liability.
Section 7. Indemnification.
A. The Corporation shall indemnify all of its corporate
representatives against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
them in connection with the defense of any action, suit or proceeding, or
threat or claim of such action, suit or proceeding, whether civil,
criminal, administrative, or legislative, no matter by whom brought, or in
any appeal in which they or any of them are made parties or a party by
reason of being or having been a corporate representative, if the corporate
representative acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the Corporation and with
respect to any criminal proceeding, if he had no reasonable cause to
believe his conduct was unlawful, provided that the Corporation shall not
indemnify corporate representatives in relation to matters as to which any
such corporate representative shall be adjudged in such action, suit or
proceeding to be liable for gross negligence, willful misfeasance, bad
faith, reckless disregard of the duties and obligations involved in the
conduct of his office or when indemnification is otherwise not permitted by
the Maryland General Corporation Law.
B. In the absence of any adjudication which expressly absolves the
corporate representative or in the event of a settlement, each corporate
representative shall be indemnified hereunder only if there has been a
reasonable determination based on a review of the facts that indemnifica-
tion of the corporate representative is proper because he has met the
applicable standard of conduct set forth in paragraph A. Such determina-
tion shall be made: (i) by the Board of Directors, by a majority vote of a
quorum which consists of directors who were not parties to the action, suit
or proceeding, or if such a quorum cannot be obtained, then by a majority
vote of a committee of the Board consisting solely of two or more
directors, not, at the time, parties to the action, suit or proceeding and
who were duly designated to act in the matter by the full Board in which
the designated directors who are parties to the action, suit or proceeding
may participate;
or (ii) by special legal counsel selected by the Board of directors or a
committee of the Board by vote as set forth in (i) of this paragraph, or,
if the requisite quorum of the full Board cannot be obtained therefor and
the committee cannot be established, by a majority vote of the full Board
in which directors who are parties to the action, suit or proceeding may
participate.
C. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall create a rebuttable presumption that the person was
guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard to the duties and obligations involved in the conduct of his or
her office, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
D. Expenses, including attorneys' fees, incurred in the preparation
of and/or presentation of the defense of a civil or criminal action, suit
or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized in the manner
provided in Section 2-418(F) of the Maryland General Corporation Law upon
receipt of: (i) an undertaking by or on behalf of the corporate
representative to repay such amount unless it shall ultimately be deter-
mined that he or she is entitled to be indemnified by the Corporation as
authorized in this By-Law; and (ii) a written affirmation by the corporate
representative of the corporate representative's good faith belief that the
standard of conduct necessary for indemnification by the Corporation has
been met.
E. The indemnification provided by this By-Law shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under these By-Laws, any agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person subject to the limitations imposed form
time to time by the Investment Company Act of 1940, as amended.
F. This Corporation shall have power to purchase and maintain
insurance on behalf of any corporate representative against any liability
asserted against him or her and incurred by him or her in such capacity or
arising out of his or her status as such, whether or not the Corporation
would have the power to indemnify him or her against such liability under
this By-Law provided that no insurance may be purchased or maintained to
protect any corporate representative against liability for gross
negligence, willful misfeasance, bad faith or reckless disregard of the
duties and obligations involved in the conduct of his or her office.
G. "Corporate Representative" means an individual who is or was a
director, officer agent or employee of the Corporation or who serves or
served another corporation, partnership, joint venture, trust or other
enterprise in one of these capacities at the request of the Corporation and
who, by reason of his or her position, is, was, or is threatened to be
made, a party to a proceeding described herein.
Section 8. Amendments. The Board of Directors shall have the power to
alter or repeal any By-Laws of the Corporation and to make new By-Laws, except
that the Board shall not alter or repeal any By-Law made by the stockholders
and, after capital stock of the Corporation is issued, shall not alter or repeal
Section 3 of Article III, Sections 2, 3, 6 and 7 of Article IV, Sections 3
through 8 of Article VI and Sections 6 through 8 of Article VII. The stock-
holders shall have the power at any meeting, if notice thereof be included in
the notice of such meeting, to alter or repeal any By-Laws of the Corporation
and to make new By-Laws by vote of a majority of the shares entitled to vote at
such meeting, as the term "majority" is defined in the Investment Company Act of
1940, as amended from time to time.
Exhibit 3
INVESTMENT ADVISORY AGREEMENT
Agreement made this ______ day of 1997 between
Alamo Growth Fund, Inc., a Maryland corporation (the "Fund"), and Alamo
Advisers, Inc., a Texas corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS the Fund is in the process of registering with the Securities
and Exchange Commission as an open-end management investment company under the
Investment Company Act of 1940 (the "Act");
WHEREAS upon so registering with the Securities and Exchange
Commission, the Fund will be a registered investment company satisfying the
conditions of Section 10(d) of the Act; and
WHEREAS the Fund desires to retain the Adviser, which is an investment
adviser registered under the Investment Advisers Act of 1940 and which is
engaged principally in the business of rendering investment supervisory services
within the meaning of Section 202(a)(13) of the Investment Advisers Act of 1940,
as its investment adviser.
NOW, THEREFORE, the Fund and the Adviser agree as follows:
1. Employment. The Fund hereby employs the Adviser to manage the
investment and reinvestment of the assets of the Fund for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
for the compensation herein provided and agrees during such period to render the
services and to assume the obligations herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and
manage the investment portfolio of the Fund, and, subject to such policies as
the board of directors of the Fund may determine, direct the purchase and sale
of investment securities in the day to day management of the Fund. The Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund. However, one or more stockholders, officers, directors or employees of the
Adviser may serve as directors and/or officers of the Fund, but without compen-
sation or reimbursement of expenses for such services from the Fund. Nothing
herein contained shall be deemed to require the Fund to take any action contrary
to its Articles of Incorporation or any applicable statute or regulation, or to
relieve or deprive the board of directors of the Fund of its responsibility for,
and control of, the affairs of the Fund.
3. Expenses. The Adviser, at its own expense and without
reimbursement from the Fund, shall furnish office space, and all necessary
office facilities, equipment and executive personnel for managing the invest-
ments of the Fund. The Adviser shall pay the salaries and fees of all officers
and directors of the Fund (except the fees paid to those directors who are not
interested persons of the Adviser, as defined in the Act, and who are not
officers or employees of the Fund). The Adviser also shall bear all sales and
promotional expenses of the Fund, except for expenses incurred in complying with
laws regulating the issue or sale of securities. Fees paid for attendance at
meetings of the Fund's board of directors to directors of the Fund who are not
interested persons of the Adviser, as defined in the Act, as amended, shall be
borne by the Fund. The Fund shall bear all other expenses initially incurred by
it, provided that the total expenses borne by the Fund, including the Adviser's
fee but excluding all federal, state and local taxes, interest, brokerage
commissions and extraordinary items, shall not in any year exceed that
percentage of the average net asset value of the Fund for such year, as
determined by valuations made as of the close of each business day, which is the
most restrictive percentage provided by the state laws of the various states in
which the Fund's common stock is qualified for sale. The expenses of the Fund's
operations borne by the Fund include by way of illustration and not limitation,
the costs of preparing and printing its registration statements required under
the Securities Act of 1933 and the Act (and amendments thereto), the expense of
registering its shares with the Securities and Exchange Commission and in the
various states, the printing and distribution cost of prospectuses mailed to
existing stockholders, the cost of stock certificates, director and officer
liability insurance, reports to stockholders, reports to government authorities
and proxy statements, interest charges, taxes, legal expenses, salaries of
administrative and clerical personnel, association membership dues, auditing and
accounting services, insurance premiums, brokerage and other expenses connected
with the execution of portfolio securities transactions, fees and expenses of
the custodian of the Fund's assets, expenses of calculating the net asset value
and repurchasing and redeeming shares, charges and expenses of dividend
disbursing agents, registrars and stock transfer agents and the cost of keeping
all necessary stockholder records and accounts.
4. Compensation of the Adviser. For the services and facilities
to be rendered and the charges and expenses to be assumed by the Adviser
hereunder, the Fund shall pay the Adviser an advisory fee, paid monthly in
arrears, based on the average net asset value of the Fund, as determined by
valuations made as of the close of each business day of the month. The advisory
fee shall be 1/12 of 1% of such net asset value. For any month in which this
Agreement is not in effect for the entire month, such fee shall be reduced
proportionately on the basis of the number of calendar days during which it
is in effect and the fee computed upon the average net asset value of the
business days during which it is so in effect.
5. Ownership of Shares of the Fund. Except in connection with the
initial capitalization of the Fund, the Adviser shall not take, and shall not
permit any of its stockholders, officers, directors or employees to take, a long
or short position in the shares of the Fund, except for the purchase of shares
of the Fund for investment purposes at the same price as that available to the
public at the time of purchase.
6. Exclusivity. The services of the Adviser to the Fund hereunder
are not to be deemed exclusive and the Adviser shall be free to furnish similar
services to others as long as the services hereunder are not impaired thereby.
Although the Adviser has permitted and is permitting the Fund to use the name
"Alamo", it is understood and agreed that the Adviser reserves the right to use
and to permit other persons, firms or corporations, including investment
companies, to use such name, and that the Fund will not use such name if the
Adviser ceases to be the Fund's sole investment adviser. During the period that
this Agreement is in effect, the Adviser shall be the Fund's sole investment
adviser.
7. Liability. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Adviser, the Adviser shall not be subject to liability to the Fund
or to any stockholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder, or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions. The Adviser may cause the Fund to pay
a broker-dealer which provides brokerage and research services, as such services
are defined in Section 28(e) of the Securities Exchange Act of 1934 (the
"Exchange Act"), to the Adviser a commission for effecting a securities trans-
action in excess of the amount another broker-dealer would have charged for
effecting such transaction, if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of brokerage and
research services provided by the executing broker-dealer viewed in terms of
either that particular transaction or his overall responsibilities with respect
to the accounts as to which he exercises investment discretion (as defined in
Section 3(a)(35) of the Exchange Act).
9. Amendments. This Agreement may be amended by the mutual consent
of the parties; provided, however, that in no event may it be amended without
the approval of the board of directors of the Fund in the manner required by the
Act, and by the vote of the majority of the outstanding voting securities of the
Fund, as defined in the Act.
10. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the board of directors of the Fund or by
a vote of the majority of the outstanding voting securities of the Fund, as
defined in the Act, upon giving sixty (60) days' written notice to the Adviser.
This Agreement may be terminated by the Adviser at any time upon the giving of
sixty (60) days' written notice to the Fund. This Agreement shall terminate
automatically in the event of its assignment (as defined in Section 2(a)(4) of
the Act). Subject to prior termination as hereinbefore provided, this Agreement
shall continue in effect for two (2) years from the date hereof and indefinitely
thereafter, but only so long as the continuance after such two (2) year period
is specifically approved annually by (i) of the board of directors of the Fund
or by the vote of the majority of the outstanding voting securities of the Fund,
as defined in the Act, and (ii) the board of directors of the Fund in the manner
required by the Act, provided that any such approval may be made effective not
more than sixty (60) days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day first above written.
ALAMO ADVISERS, INC.
By: By:
Secretary President
ALAMO GROWTH FUND, INC.
By: By:
Secretary President
Exhibit 4
EXPENSE REIMBURSEMENT AGREEMENT
Agreement made this ______ day of 1997 between
Alamo Growth Fund, Inc., a Maryland corporation (the "Fund"), and Alamo
Advisers, Inc., a Texas corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS the Fund proposes to enter into an Investment Advisory
Agreement (the "Advisory Agreement") with the Adviser simultaneously with the
execution of this Agreement;
WHEREAS it would be mutually advantageous to the Fund and the Adviser
to limit the expenses borne by the Fund during its start-up; and
WHEREAS the Fund desires to reimburse the Adviser for any expenses of
the Fund borne by the Adviser.
NOW, THEREFORE, the Fund and the Adviser agree as follows:
1. Definitions.
a. "Average Net Assets" of the Fund for any year shall mean
the average of the net asset values of the Fund determined as of the close
of each business day of such year.
b. "Expense Ratio" shall mean, for any year, the ratio of the
Fund's Operating Expenses to the Average Net Assets of the Fund for that
year.
c. "Operating Expenses" shall mean the total expenses of the
Fund, including operating expenses, such as office expenses, accounting
fees, legal fees, custodial fees and employment expenses; advisory fee, as
provided in the Investment Advisory Agreement; registration expenses, such
as the cost of registration of the Fund with the Securities and Exchange
Commission and with the various state agencies; and miscellaneous expenses,
such as printing costs, insurance premiums and all other expenses of
operation of the Fund, excluding only brokerage commissions, interest and
taxes.
2. Expense Limitation. If for any fiscal year of the Fund ending
before December 31, 1999, the Expense Ratio of the Fund exceeds 2.5 percent,
then the Adviser will reimburse the Fund an amount which will cause the Expense
Ratio for such fiscal year not to exceed 2.5 percent. Reimbursement may be made
by waiving the Adviser's advisory fee, payment to the Fund or both, at the
option of the Adviser. All such reimbursements, regardless of form, shall be
treated as non-interest bearing advances from the Adviser to the Fund, to be
repaid by the Fund as provided below. The obligation to make such repayment
shall survive the termination of this Agreement.
3. Repayment of Expense Reimbursement. When the Expense Ratio of
the Fund is less than 2.0 percent, the Fund shall repay the Adviser for any
amounts advanced by the Adviser to reduce the Fund's Expense Ratio; provided,
however, that such repayments shall be limited in any year to an amount that
will not cause the Fund's Expense Ratio to exceed 2.0 percent.
4. Termination. This Agreement may be terminated at any time,
without payment of any penalty, by the board of directors of the Fund or by a
vote of the majority of the outstanding voting securities of the Fund upon
giving sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of 60 days' written notice
to the Fund. This Agreement shall automatically terminate upon the termination
of the Advisory Agreement.
5. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day first above written.
ALAMO ADVISERS, INC.
By: By:
Secretary President
ALAMO GROWTH FUND, INC.
By: By:
Secretary President
Exhibit 5
Custody Service Agreement CRESTAR
THIS AGREEMENT, dated this ______________ between Alamo Growth Fund, Inc. (the
"Owner") and CRESTAR BANK, a Virginia banking institution (the "Bank").
In consideration of the mutual promises and agreements contained herein, the
parties agree as follows:
A BANK'S OBLIGATIONS:
1. Safekeeping of Securities
a. The Bank shall accept the Owner's securities from time to time upon instruc
tions described in Paragraph C-3 below;
b. The Bank shall hold, register or dispose of the Owner's securities from
time to time upon instructions described in Paragraph C-3 below;
c. The Bank shall provide to the Owner a report of holdings and transaction
notices periodically;
d. For the purpose of audits by agents of the Owner or the Bank or as required
by regulatory authorities, the Bank shall verify the Owner's holdings as of
a specified date.
2. Collection of Principal and Income
a. The Bank shall collect and credit principal, interest and other income
to the Owner's custody account with the Bank on payable date unless
specified otherwise on Attachment A attached hereto;
b. Notwithstanding the foregoing, all payments of principal or income are
credited to the Owner's account subject to final collection and charge
back, if subsequently dishonored;
c. The Bank shall use its best efforts to collect securities and other
property at maturity and at dates of call for payment, but assumes no
responsibility for its failure to do so, except for losses resulting
from its willful misconduct. The Bank shall not be obligated to insti-
tute or participate in any legal proceedings related to collection of
securities or property.
3. Corporate Actions
a. The Bank shall notify the Owner of all corporate actions of which the Bank
has actual knowledge and act upon instructions described in Paragraph
C-3 below for redemption, tender offer, warrant, subscription right,
merger, consolidation, reorganization or recapitalization, or any
similar corporate action affecting the securities;
b. For purposes of this Agreement, the Bank shall be deemed to have actual
knowledge only of actions of which it receives notice from the Owner or
its agent, the issuer or its agent, or as published in the sources the
Bank, in its sole discretion, deems advisable to review from time to
time. Notwithstanding the foregoing, the Bank shall be deemed to have
actual knowledge of a put only if it receives written notice of the put
from the Owner or its agent no earlier than 30 days and no later than 5
days prior to the expiration of the window period;
c. The Bank, when providing notice of such corporate actions to the Owner,
shall state the Bank's action deadline required to meet any deadlines
established by the issuer of the securities, and the Bank shall have no
duty to act with respect to such corporate actions unless it has full
and timely actual knowledge and receives written instruction from the
Owner, both in time to act before the action deadline set by the Bank;
Funds or assets resulting from any corporate action will be credited on a
timely basis upon receipt by the Bank.
4. Proxy Materials
a. The Bank shall forward, or have its agent forward, to the Owner all
properly executed proxies, proxy soliciting materials and annual reports
with respect to securities in the Owner's safekeeping account;
b. Notwithstanding the foregoing, the Bank shall have no duty to forward such
materials if the Owner permits the company issuing such securities to
forward such materials to the Owner;
c. The Bank shall have no responsibility to vote any proxies with respect to
any securities in the Owner's Custody Service Account.
5. Delivery/Receipt of Securities
a. The Bank shall receive or deliver securities, either with or without
payment, upon the Owner's instructions as described in Paragraph C-3
below;
b. The Bank shall notify the Bank's agent to accept the receipt or delivery if
the transaction so requires;
c. Upon theoretical settlement date, the Bank shall record the credit or debit
in the Owner's Custody Service Account. If there are insufficient funds
in the Owner's Custody Service Account to settle purchases, thereby
creating an overdraft, the Account will be subject to additional charges
by the Bank;
The Bank shall exchange temporary certificates for definitive certificates
when appropriate.
6. Signing Authority
a. The Bank shall execute on behalf of the Owner any declaration, affidavit,
certificate of ownership or other document required with respect to
coupons, registered interest, dividends or other income, and any
endorsement, assignment or other instrument of transfer of securities or
other document that disposes of property in the Owner's Custody Service
Account, in accordance with the Owner's instructions as described in
Paragraph C-3 below;
b. Such execution shall include, but not be limited to, signing such documents
as attorney in fact for the Owner or signing the Owner's name and
guaranteeing the signature in the Bank's name;
c. The Bank shall supply the Owner's taxpayer identification number upon
request.
7. Cash Reinvestment
a. The Bank shall provide automatic reinvestment of daily cash balances above
$1.00;
b. Such investments shall be in money market funds or short-term investments
from the list of such investments maintained by the Bank and selected by
the Owner;
c. After paying all commissions or expenses chargeable to such investments,
including but not limited to the Bank's sweep fee, if applicable, the
Bank shall collect and remit the net income therefrom as provided in
Paragraph A-2 above.
B. OWNER'S OBLIGATIONS:
1. Purchases and Sales
The Owner shall initiate, or have its agent initiate, all purchases, sales or
transfer of securities held hereunder;
2. Instructions to Bank
a. The Owner shall issue, or have its agent issue, to the Bank instructinos in
accordance with the Bank's delivery instructions as described in Para-
graph C-3 below for delivery, registration or transfer of securities, or
for action upon any redemption, tender offer, call, warrant, subscrip-
tion right, merger, consolidation, reorganization, recapitalization or
any similar corporate action affecting the securities;
b. The Owner agrees to instruct the Bank regarding corporate actions,
including but not limited to puts, of which the Bank does not have
actual knowledge as defined in Paragraph A-3 above and of which Owner
or its agent has or reasonably should have knowledge;
c. Any instructions requiring the Bank to act shall be delivered to the Bank
no later than 11:00 a.m. on the date action is to be taken as requested
by the Owner;
d. The Owner shall indemnify and hold the Bank harmless for all losses,
claims, actions and expenses resulting from failure to so inform the
Bank, regardless of whether the Bank attempts to honor instructions
given by the Owner after the deadline stated above.
3. Bank Compensation
a. The Owner shall compensate the Bank for its custody services in accordance
with the Custody Services Compensation Schedule attached to this Agree-
ment. After this Agreement has been in effect for two years, the Bank
may change the Custody Services Compensation Schedule by delivering a
copy of the new schedule to Owner 60 days' prior to its effective date.
b. If any security transaction for the Owner's Custody Service Account is
negotiated through the Bank's investment or brokerage department or
separate subsidiary, such department or subsidiary shall be entitled to
charge the Owner an amount equal to the usual commission for such trans-
action, in addition to the Bank's fee for custody services hereunder.
4. Indemnity
The Owner shall reimburse, indemnify and hold the Bank harmless for and from
any liability, loss, claim, damage or expense that may arise or to which the
Bank may be subjected by reason of
(i) execution of documents referred to in Paragraph A-6 above,
(ii) following any instructions given by the Owner as described in Paragraph
C-3 below
(iii)complying with any state or federal law or regulation or
(iv) failure of the Owner to assume its or its agents' obligations hereunder.
5. Delivery/Receipt of Securities
a. If desired, the Owner shall designate an investment advisor by completing
Attachment B hereto;
b. The Owner shall inform any investment advisor or investment manager acting
for the Owner of the duties of the parties hereto.
6. Securities' Confirmation and Communications
a. The Owner understands and acknowledges that federal regulations require the
Bank to (i) provide the Owner with confirmations of security trans-
actions at no additional cost within five business days after receipt by
the Bank unless the Bank is released from this obligation by the Owner
and (ii) disclose the Owner's name, address and share position to
companies issuing securities held in the account unless the Owner
objects in writing to such disclosure;
b. Until further written notice to the Bank, the Owner does not (i) request
security confirmations more frequently than provided by the Bank in the
Owner's periodic account statement, and (ii)authorize release of the
Owner's account information to companies issuing securities in its
account.
C. GENERAL PROVISIONS
1. Liability
a. The Bank assumes no obligation to review the securities and other property
at any time held in the Owner's Custody Service Account, or to advise or
recommend to the Owner the purchase, retention, sale, exchange or
deposit, in reorganization or otherwise, of any securities or other
property held pursuant to this Agreement;
b. The Bank shall not be liable or responsible for or on account of any act or
omission of any broker or other agent designated by the Owner;
c. Notwithstanding anything herein to the contrary, the Bank shall have no
liability to the Owner or any third party for special, indirect or
consequential damages, including lost profits or loss of business,
incurred as a result of the Bank's action or failure to act under this
Agreement.
2. Registration and Location of Securities
a. All securities held by the Bank under this Agreement may be registered and
held in the name of the Bank or its agent, or the nominee name of either;
b. The Bank, in its discretion, is hereby authorized to maintain portions of
the securities in a correspondent bank or banks;
c. The Bank will be responsible for the safekeeping of all securities
registered in nominee or bearer form and held by other banking
institutions at the Bank's request;
d. The Bank is further authorized to use the Federal Reserve book-entry system
and the facilities of a qualified central depository for all or any
portion of the Owner's securities;
e. Notwithstanding anything herein to the contrary, at all times the Owner
shall remain beneficial owner of the securities, and the securities
shall be held separate and apart from the Bank's own assets.
3. Authorized Representatives
a. The Bank may act under this Agreement, without liability, upon written
instructions given by an authorized representative designated on
Attachment C or any amendment thereto, or upon oral instructions
received by the Bank from an individual purporting to be an authorized
representative of the Owner, without further confirmation of the
sender's identity or authority;
b. The Owner assumes all risk and responsibility for any action taken by the
Bank in good faith reliance on such instructions, including the obliga-
tion to institute and participate in any related legal proceeding.
4. Amendment and Termination
a. This Agreement may be amended in writing at any time as mutually agreed
upon by the parties and may be terminated upon thirty days' prior
written notice by either party;
b. Upon termination, all assets held under this Agreement shall be delivered
as the Owner designates in writing; provided all fees and expenses due
the Bank shall have been paid to it, and the Owner or the Owner's agent
shall hve executed a receipt for delivery of the Owner's assets.
5. Situs and Enforceability
a. This Agreement and its attachments constitutes the entire Agreement between
the parties, shall be binding on and inure to the benefit of the
successors of each party, shall be governed by Virginia law and may be
executed in more than one counterpart, each of which shall be deemed to
be an original;
b. The parties acknowledge that all corporate action necessary to enter into
this Agreement has been duly taken;
c. No failure or delay by either party hereunder shall operate as a waiver of
a right, power or privilege, nor shall any single or partial exercise of
such right, power or privilege;
The finding that any provision of this Agreement is void or unenforceable shall
not affect the validity or enforceability of the remaining provisions hereof.
6. Notices
All notices shall be given by personal delivery or by first class mail, to the
Owner's address of record last on file with the Bank or to the Bank's last
known address, as the case may be.
7. Additional Services
a. If, at any time during the term of this Agreement, a separate agreement
related to the Owner's Custody Service Account is executed by the Bank
and the Owner, including but not limited to a Securities Lending Agree-
ment and an On-Line Access Agreement, such agreement shall become an
attachment hereto and shall thereafter be deemed to be incorporated
herein by reference;
b. To the extent this Agreement may contain provisions that conflict with the
provisions of the incorporated agreement, the incorporated agreement
shall be controlling.
8. Telephonic Recordings
The parties agree that communications between them or their agents by telephone
may be electronically recorded from time to time as the Bank deems appro-
priate and without further notice to the Owner or its agents.
9. Assignability
This Agreement shall not be assigned or transferred by either party without the
prior written consent of the other party, except that either party may
assign its rights, duties and obligations hereunder without such consent to
any parent, subsidiary or affiliate corporation.
WITNESS the following signatures:
CRESTAR BANK
By:____________________________
Barbara B. Crossman
Title: Vice President
Date:
Alamo Growth Fund, Inc.
By:____________________________
Title____________________
Date:_____________________
<PAGE>
<PAGE>
CRESTAR
ATTACHMENT A
SCHEDULE OF INCOME COLLECTION
The following sets forth the responsibilities of the Bank to the Owner with
respect to the collection and crediting of income accrued and paid on the
Securities.
All income accrued and paid on Securities of Owner will be credited, except as
noted below, to the Custody Service Account on payable date and available
based on a determination of receipt of funds by the Custodian in Fed Funds
(same day) or Clearinghouse Funds (next day). The following exceptions are
agreed:
a. All mortgage-backed securities credited on payable date plus one (1) day.
b. All floating rate obligations credited on receipt date plus one (1) day.
c. All income on private placements credited on receipt date plus one (1) day.
d. All income on receivable backed issues credited on receipt plus one (1) day.
SCHEDULE OF PRINCIPAL COLLECTION
The following sets forth the responsibilities of the Bank to the Owner with
respect to the collection and crediting of principal of called, tendered, or
matured securities:
a. Proceeds of matured and called securities will be credited on payable date.
b. Proceeds of tendered (put) securities will be credited on receipt date plus
two (2) days.
c. Proceeds of periodic payments of mortgage-backed securities will be credited
on payable date plus one (1) day.
<PAGE>
<PAGE>
CRESTAR
ATTACHMENT B
INVESTMENT ADVISOR DESIGNATION
In accordance with Paragraph B-5 of the Custody Service Agreement dated _______
19____, the Owner hereby appoints ________________________________, as the
authorized Investment Advisor for the Owner's Custody Service Account. This
appointment will allow representatives of the advisor to act as designated
agents for the Owner until their authority is rescinded in writing.
Alamo Growth Fund, Inc.
By:__________________________
Title________________________
Date:________________
<PAGE>
<PAGE>
CRESTAR
ATTACHMENT C
AUTHORIZED REPRESENTATIVES
In accordance with Paragraph C-3 of the attached Custody Service Agreement
dated _______________________, 19__, we, as individual owners, or as
authorized officers of the corporate owner of securities hereby appoint the
following individuals as our designated representatives and authorize each
of them to give directions to Crestar Bank regarding the Owner's assets, and
to receive information on our behalf:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Crestar Bank is authorized to accept directions from and provide information to
any of these persons with respect to our account until we notify the Bank in
writing to the contrary.
ALAMO GROWTH FUND, INC.
By:________________________
Title:______________________
Date:________________
<PAGE>
<PAGE>
CRESTAR
ATTACHMENT D
CERTIFICATE OF RESOLUTION
I, ____________________, Secretary of Alamo Growth Fund, Inc. (the Corporation),
hereby certify that the following is a true copy of action taken by the Board of
Directors of the Corporation [at a meeting, duly called and convened on______
______________ or by unanimous consent in writing effective __________________]
RESOLVED, that the Corporation enter into a Custodian Agreement with Crestar
Bank for the deposit and custordy of such funds and securities, in one or
more accounts, as may be determined from time to time.
RESOLVED, FURTHER, that the President, Vice President, or any officer designated
by the President is hereby authorized and directed to execute such documents
and to take such additional action as may be appropriate to carry out the
purposes of these resolutions.
And the undersigned further certifies that the foregoing resolutions remain in
effect and do not contravene the charter of the by-laws of the Corporation.
WITNESS the following signature and seal this ______ day of __________________
19_____.
_____________________________
Secretary
Exhibit 6
FUND ACCOUNTING SERVICE AGREEMENT
between
ALAMO GROWTH FUND, INC.
and
AMERICAN DATA SERVICES, INC.
<PAGE>
<PAGE>
INDEX
1. DUTIES OF ADS.......................................................... 3
2. COMPENSATION OF ADS.................................................... 4
3. LIMITATION OF LIABILITY OF ADS......................................... 4
4. REPORTS................................................................ 5
5. ACTIVITIES OF ADS...................................................... 5
6. ACCOUNTS AND RECORDS................................................... 5
7. CONFIDENTIALITY........................................................ 5
8. DURATION AND TERMINATION OF THIS AGREEMENT............................. 5
9. ASSIGNMENT............................................................. 6
10. NEW YORK LAWS TO APPLY................................................ 6
11. AMENDMENTS TO THIS AGREEMENT.......................................... 6
12. MERGER OF AGREEMENT................................................... 6
13. NOTICES............................................................... 6
SCHEDULE A................................................................ 7
(A) FUND ACCOUNTING SERVICE FEE........................................... 7
(B) EXPENSES.............................................................. 7
(C) SPECIAL REPORTS....................................................... 7
(D) SECURITY DEPOSIT...................................................... 8
(E) CONVERSION CHARGE..................................................... 8
SCHEDULE B................................................................ 9
<PAGE>
<PAGE>
FUND ACCOUNTING SERVICE AGREEMENT
AGREEMENT made the _______ day of ____________, 1997, by and between the Alamo
Growth Fund, Inc., a _______________ Corporation having its principal office
and place of business at 1777 N.E. Loop 410, Suite 1512, San Antonio, Texas
78217 (the "Fund"), and American Data Services, Inc., a New York corporation
having its principal office and place of business at 24 West Carver Street,
Huntington, New York 11743 ("ADS").
BACKGROUND
WHEREAS, the Fund is a non-diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, ADS is a corporation experienced in providing accounting services to
mutual funds and possesses facilities sufficient to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience, assistance and
facilities of ADS and to have ADS perform for the Fund certain services
appropriate to the operations of the Fund, and ADS is willing to furnish such
services in accordance with the terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual covenants herein-
after contained, the Fund and ADS hereby agree as follows:
1. DUTIES OF ADS.
ADS will provide the Fund with the necessary office space, communication
facilities and personnel to perform the following services for the Fund:
(a) Timely calculate and transmit to NASDAQ the Fund's daily net asset value
and communicate such value to the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the Fund as required by
Rule 31a-1 under the 1940 Act, as such rule or any successor rule may be
amended from time to time ("Rule 31a-1"), that are applicable to the
fulfillment of ADS's duties hereunder, as well as any other documents
necessary or advisable for compliance with applicable regulations as may
be mutually agreed to between the Fund and ADS. Without limiting the
generality of the foregoing, ADS will prepare and maintain the following
records upon receipt of information in proper form from the Fund or its
authorized agents:
. Cash receipts journal
. Cash disbursements journal
. Dividend record
. Purchase and sales-portfolio securities journals
. Subscription and redemption journals
. Security ledgers
. Broker ledger
. General ledger
. Daily expense accruals
. Daily income accruals
. Securities and monies borrowed or loaned and collateral therefore
. Foreign currency journals
. Trial balances
(c) Provide the Fund and its investment adviser with daily portfolio valuation,
net asset value calculation and other standard operational reports as
requested from time to time.
(d) Provide all raw data available from our fund accounting system (PAIRS) for
management's or the administrators preparation of the following:
1. Semi-annual financial statements;
2. Semi-annual form N-SAR;
3. Annual tax returns;
4. Financial data necessary to update form N-1a;
5. Annual proxy statement.
(e) Provide facilities to accommodate annual audit and any audits or examina-
tions conducted by the Securities and Exchange Commission or any other govern-
mental or quasi-governmental entities with jurisdiction.
ADS shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Fund in any way or otherwise be deemed an agent
of the Fund.
2. COMPENSATION OF ADS.
In consideration of the services to be performed by ADS as set forth herein for
each portfolio listed in Sechedule B, ADS shall be entitled to receive
compensation and reimbursement for all reasonable out-of-pocket expenses.
The Fund agrees to pay ADS the fees and reimbursement of out-of-pocket
expenses as set forth in the fee schedule attached hereto as Schedule A.
3. LIMITATION OF LIABILITY OF ADS.
(a) ADS shall be held to the exercise of reasonable care in carrying out the
provisions of the Agreement, but shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence, bad faith,
willful misconduct or reckless disregard of its duties hereunder. It shall be
entitled to rely upon and may act upon the accounting records and reports gener-
ated by the Fund, advice of the Fund, or of counsel for the Fund and upon
statements of the Fund's independent accountants, and shall be without
liability for any action reasonably taken or omitted pursuant to such records
and reports or advice, provided that such action is not, to the knowledge of
ADS, in violation of applicable federal or state laws or regulations, and
provided further that such action is taken without negligence, bad faith,
willful misconduct or reckless disregard of its duties.
(b) Except as may otherwise be provided by applicable law, neither ADS nor its
stockholders, officers, directors, employees or agents shall be subject to,
and the Fund shall indemnify and hold such persons harmless from and against,
any liability for and any damages, expenses or losses incurred by reason of
the inaccuracy of information furnished to ADS by the Fund or its authorized
agents.
4. REPORTS.
(a) The Fund shall provide to ADS on a quarterly basis a report of a duly
authorized officer of the Fund representing that all information furnished to
ADS during the preceding quarter was true, complete and correct in all
material respects. ADS shall not be responsible for the accurancy of any infor-
mation furnished to it by the Fund or its authorized agents, and the Fund shall
hold ADS harmless in regard to any liability incurred by reason of the
inaccuracy of such information.
(b) Whenever, in the course of performing its duties under this Agreement, ADS
determines, on the basis of information supplied to ADS by the Fund or its
authorized agents, that a violation of applicable law has occurred or that,
to its knowledge, a possible violation of applicable law may have occurred
or, with the passage of time, would occur, ADS shall promptly notify the Fund
and its counsel of such violation.
5. ACTIVITIES OF ADS.
The services of ADS under this Agreement are not to be deemed exclusive, and
ADS shall be free to render similar services to others so long as its
services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by ADS shall be the property of the Fund,
and shall be surrendered to the Fund promptly upon request by the Fund in the
form in which such accounts and records have been maintained or preserved.
ADS agrees to maintain a back-up set of accounts and records of the Fund
(which back-up set shall be updated on at least a weekly basis) at a location
other than that where the original accounts and records are stored. ADS shall
assist the Fund's independent auditors, or, upon approval of the Fund, any
regulatory body, in any requested review of the Fund's accounts and records.
ADS shall preserve the accounts and records as they are required to be main-
tained and preserved by Rule 31a-1.
7. CONFIDENTIALITY.
ADS agrees that it will, on behalf of itself and its officers and employees,
treat all transactions contemplated by this Agreement, and all other information
germane thereto, as confidential and not to be disclosed to any person except
as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective and charges shall begin to accrue as of
the date the Fund's registration statement becomes effective with the Securities
and Exchange Commission (the "SEC"). This Agreement shall remain in force for
a period of three (3) years, provided however, that both parties to this Agree-
ment have the option to terminate the Agreement, upon ninety (90) days prior
written notice.
Should the Fund exercise its right to terminate, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Fund.
Additionally, ADS reserves the right to charge for reasonable expenses incurred
to generate any report, schedule, or explanation requested by the successor
service agent associated with such termination. The cost incurred to generate
any such reports, schedules, or requested explanation shall be calculated util-
izing the fees set forth in Schedule A paragraph c.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Fund without the prior written consent of ADS,
or by ADS without the prior written consent of the Fund.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in accord-
ance with the laws of the State of New York as at the time in effect and the
applicable provisions of the 1940 Act. To the extent that the applicable law of
the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such amendment is
in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto and
supersedes any prior agreement with respect to the subject matter hereof whether
oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing, shall be
deemed to have been given when received or when sent by telex or facsimile,
and shall be given to the following addresses (or such other addresses as to
which notice is given):
To the Fund: To ADS:
Michael Miola
President
American Data Services, Inc.
24 West Carver Street
Huntington, New York 11743
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
AMERICAN DATA SERVICES, INC.
By:_________________________________ By:_____________________________
Michael Miola, President
<PAGE>
<PAGE>
SCHEDULE A
(a) FUND ACCOUNTING SERVICE FEE:
For the services rendered by ADS in its capacity as fund accounting agent, as
specified in Paragraph 1. DUTIES OF ADS, the Fund shall pay ADS, within ten
(10) days after receipt of an invoice from ADS at the beginning of each month,
a fee equal to:
Calculated Fee Will Be Based Upon Prior Month Average Net Assets:
(No prorating partial months)
MONTHLY FEE PER PORTFOLIO:
Portfolio Type
Net Assets (in millions) Global Domestic Money Mkt
Under $2................... $1,200 $1,000 $ 850
From $2 to $ 5............. 1,475 1,200 950
From $5 to $10............. 1,750 1,400 1,250
From $10 to $20............ 2,125 1,700 1,475
Over $20................... 2,500 2,000 1,700
Excess of $30 million:
The fee for assets over $20 million,
plus 1/12 of............. 3.50BP* 2.00BP 2.00BP
* Basis Points
MULTI-CLASS PROCESSING CHARGE
$300 per month will be charged for each additional class of stock per portfolio.
(b) EXPENSES.
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive of
salaries, advanced by ADS in connection with but not limited to the printing
or filing of documents for the Fund, travel, quotation services, prorata
portion of annual SAS 70 review, postage incurred to mail documents to all
Fund shareholders, and courier charges (incurred at the request of the Fund),
incurred in connection with the performance of its duties hereunder. ADS shall
provide the Fund with a monthly invoice of such expenses and the Fund shall
reimburse ADS within fifteen (15) days after receipt thereof.
(c) SPECIAL REPORTS.
All reports and/or analyses requested by the Fund, its auditors, legal counsel,
portfolio manager, or any regulatory agency having jurisdiction over the Fund,
that are not in the normal course of fund accounting activities as specified
in Section 1 of this Agreement shall be subject to an additional charge,
agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
(d) SECURITY DEPOSIT.
The Fund will remit to ADS upon execution of this Agreement a security deposit
equal to one (1) month's minimum fee under this Agreement, computed in accord-
ance with the number of portfolios listed in Schedule B of this Agreement.
The Fund will have the option to have the security deposit applied to the last
month's service fee, or applied to any new contract between the Fund and ADS.
However, if the Fund elects or is forced to terminate this Agreement for any
reason what-so-ever other than a material breach by ADS (including, but not
limited to, the voluntary or involuntary termination of the Fund, liquidation
of the Fund's assets, the sale or merger of the Fund or it's assets to any
successor entity) prior to the termination date of this Agreement as spec-
ified in Paragraph 8 of this Agreement, the Fund will forfeit the Security
Deposit paid to ADS upon execution of this Agreement.
(e) CONVERSION CHARGE.
NOTE: FOR EXISTING FUNDS ONLY (new funds please ignore):
There will be a charge to convert the Fund's portfolio accounting records on to
the ADS fund accounting system (PAIRS). In addition, ADS will be reimbursed for
all out-of-pocket expenses, enumerated in paragraph (b) above, incurred during
the conversion process.
The conversion charge will be estimated and agreed upon in advance by the Fund
and ADS. The charge will be based upon the quantity of records to be converted
and the condition of the previous service agents records.
<PAGE>
<PAGE>
SCHEDULE B:
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
Exhibit 7
ADMINISTRATIVE SERVICE AGREEMENT
between
ALAMO GROWTH FUND, INC.
and
AMERICAN DATA SERVICES, INC.
<PAGE>
<PAGE>
INDEX
1. DUTIES OF THE ADMINISTRATOR.................................... 3
2. COMPENSATION OF THE ADMINISTRATOR.............................. 4
3. RESPONSIBILITY AND INDEMNIFICATION............................. 4
4. REPORTS........................................................ 5
5. ACTIVITIES OF THE ADMINISTRATOR................................ 5
6. RECORDS........................................................ 5
7. CONFIDENTIALITY................................................ 5
8. DURATION AND TERMINATION OF THE AGREEMENT...................... 5
9. ASSIGNMENT..................................................... 6
10. NEW YORK LAWS TO APPLY........................................ 6
11. AMENDMENTS TO THIS AGREEMENT.................................. 6
12. MERGER OF AGREEMENT........................................... 6
13. NOTICES....................................................... 6
SCHEDULE A........................................................ 8
(A) ADMINISTRATIVE SERVICE FEE:................................... 8
(B) EXPENSES...................................................... 8
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:...................... 8
(D) SPECIAL REPORTS............................................... 9
(E) SECURITY DEPOSIT.............................................. 9
SCHEDULE B....................................................... 10
<PAGE>
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the _______ day of ______________ 1997, by and between the Alamo
Growth Fund, Inc., a ____________________ Corporation, having its principal
office and place of business at 1777 N.E. Loop 410, Suite 1512, San Antonio,
Texas 78217 (the "Fund"), and American Data Services, Inc., a New York corp-
oration having its principal office and place of business at 24 West Carver
Street, Hunnington, New York 11743 (the "Administrator").
BACKGROUND
WHEREAS, the Fund is a non-diversified open-end management investment company
registered with the United States Securities and Exchange Commission under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in providing admin-
istrative services to mutual funds and possesses facilities sufficient
to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience, assistance and
facilities of the Administrator and to have the Administrator perform for the
Fund certain services appropriate to the operations of the Fund and the Admin-
istrator is willing to furnish such services in accordance with the terms
hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual covenants herein-
after contained, the Fund and the Administrator hereby agree to the following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus restrictions for
compliance;
(b) Prepare and coordinate the printing of semi-annual and annual financial
statements;
(c) Prepare selected management reports for performance and compliance
analyses as agreed upon by the Fund and Administrator from time to time;
(d) Prepare selected financial data required for directors' meetings as
agreed upon by the Fund and the Administrator from time to time and
coordinate directors meeting agendas with outside legal counsel to the Fund;
(e) Determine income and capital gains available for distribution and cal-
culate distributions required to meet regulatory, income, and excise tax
requirements, to be reviewed by the Fund's independent public accountants;
(f) Prepare the Fund's federal, state, and local tax returns to be reviewed
by the Fund's independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget to determine
proper expense accruals to be charged to the Fund in order to calculate it's
daily net asset value;
(h) 1940 ACT filings-
In conjunction with the Fund's outside legal counsel the Administrator
will:
. Prepare the Fund's Form N-SAR reports;
. Update all financial sections of the Fund's Statement of Additional
Information and coordinate its completion;
. Update all financial sections of the Fund's prospectus and
coordinate its completion;
. Update all financial sections of the Fund's proxy statement and
coordinate its completion;
. Prepare an annual update to Fund's 24f-2 filing (if applicable);
(i) Monitor services provided by the Fund's custodian bank as well as any
other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by the Fund's
independent public accountants or SEC examiners), coordinate the Fund's annual
or SEC audit, and provide office facilities as may be required;
(k) Attend management and board of directors meetings as requested;
(l) The preparation and filing (filing fee to be paid by the Fund) of applic-
ations and reports as necessary to register or maintain the Funds registration
under the securities or "Blue Sky" laws of the various states selected by the
Fund or its Distributor.
The Administrator shall, for all purposes herein, be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have
no authority to act for or represent the Fund in any way or otherwise be deemed
an agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In considertion of the services to be performed by ADS as set forth herein for
each portfolio listed in Schedule B, ADS shall be entitled to receive compen-
sation and reimbursement for all reasonable out-of-pocket expenses. The Fund
agrees to pay ADS the fees and reimbursement of out-of-pocket expenses as set
forth in the fee schedule attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall be without liability
to the Fund for any action taken or omitted by it in good faith without
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel
for the Fund and upon statements of the Fund's independent accountants, and
shall be without liability for any action reasonably taken or omitted pursuant
to such records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) Except as may otherwise be provided by applicable law, neither the Admin-
istrator not its stockholders, officers, directors, employees or agents shall
be subject to, and the Fund shall indemnify and hold such persons harmless from
and against, any liability for and any damages, expenses or losses incurred by
reason of the inaccuracy of information furnished to the Administrator by the
Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to the Administrator on a quarterly basis a report
of a duly authorized officer of the Fund representing that all information
furnished to the Administrator during the preceding quarter was true, complete
and correct to the best of its knowledge. The Administrator shall not be resp-
onsible for the accuracy of any information furnished to it by the Fund, and the
Fund shall hold the Administrator harmless in regard to any liability incurred
by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the Fund, on a
quarterly basis, a report, in such a form as the Administrator and the Fund
shall from time to time agree, representing that, to its knowledge, the Fund
was in compliance with all requirements of applicable federal and state law,
including without limitation, the rules and regulations of the Securities and
Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course
of performing its duties under this Agreement, the Administrator determines, on
the basis of information supplied to the Administrator by the Fund, that a
violation of applicable law has occurred, or that, to its knowledge, a possible
violation of applicable law may have occurred or, with the passage of time,
could occur, the Administrator shall promptly notify the Fund and its counsel of
such violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so long as
its services hereinunder are not impaired thereby.
6. RECORDS.
The records maintained by the Administrator shall be the property of the Fund,
and shall be made available to the Fund promptly upon request by the Fund in the
form in which such records have been maintained or preserved. The Admin-
istrator shall upon approval of the Fund assist the Fund's independent auditors,
or, any regulatory body, in any requested review of the Fund's accounts and
records. The Administrator shall preserve the records in its possession (at the
expense of the Fund) as required by Rule 31a-1 of the 1940 Act.
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and such information shall not be
disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective and charges shall begin to accrue as of
the date the Fund's registration statement becomes effective with the Securities
and Exchange Commission (the "SEC"). This Agreement shall remain in force for a
period of three (3) years, provided, however, that both parties to this Agree-
ment have the option to terminate the Agreement, upon ninety (90) days prior
written notice.
Should the Fund exercise its right to terminate, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Fund.
Additionally, ADS reserves the right to charge for reasonable expenses incurred
to generate any report, schedule, or explanation requested by the successor
service agent associated with such termination. The cost incurred to generate
any such reports, schedules, or requested explanation shall be calculated
utilizing the fees set forth in Schedule A paragraph d.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Fund without the prior written consent of the
Administrator, or by the Administrator without the prior written consent of the
Fund.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in accord-
ance with the laws of the State of New York as at the time in effect and the
applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicble provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such amendment is
in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto and
supersedes any prior agreement with respect to the subject matter hererof
whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing, shall be
deemed to have been given when delivered in person or by certified mail,
return receipt requested, and shall be given to the following addresses (or
such other addresses as to which notice is given):
To the Fund: To the Administrator:
Michael Miola
President
American Data Services, Inc.
24 West Carver Street
Huntington, New York 11743
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AMERICAN DATA SERVICES, INC.
By:__________________________ By:_______________________________
Michael Miola, President
<PAGE>
<PAGE>
SCHEDULE A
(a) ADMINISTRATIVE SERVICE FEE:
For the services rendered by ADS in its capacity as administrator, as specfied
in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the Fund shall pay ADS within
ten (10) days after receipt of an invoice from ADS at the beginning of each
month, a fee equal to the greater of:
NOTE: The following fees are per portfolio serviced.
MINIMUM FEE:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
Each Portfolio
Under $10 million................... $1,300
From $10 million to $20 million...... 1,600
From $20 million on.................. 2,000
OR
NET ASSET CHARGE:
1/12th of 0.085% (8.5 basis points) of average net assets of portfolio
for month.
(b) EXPENSES.
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive of
salaries, advanced by ADS in connection with but not limited to the printing
or filing of documents for the Fund, travel requested by the Fund, quotation
services, and courier charges (incurred at the request of the Fund), incurred
in connection with the performance of its duties hereunder, ADS shall provide
the Fund with a monthly invoice of such expenses and the Fund shall reimburse
ADS within fifteen (15) days after receipt thereof.
(c) STATE REGISTRATION (BLUE SKY) SURCHARGE:
The fees enumerated in paragraph (a) above include the initial state regis-
tration, renewal and maintenance of registrations (as detailed in Paragraph 1(1)
DUTIES OF THE ADMINISTRATOR) for five (5) states. Each additional state regis-
tration requested will be subject to the following fees:
<PAGE>
<PAGE>
Initial registration.......... $295.00
Registration renewal.......... $150.00
Sales reports (if required)... $ 25.00
(d) SPECIAL REPORTS.
All reports and/or analyses requested by the Fund, its auditors, legal counsel,
portfolio manager, or any regulatory agency having jurisdiction over the Fund,
that are not in the normal course of fund administrative activities as specified
in Section 1 of this Agreement shall be subject to an additional charge, agreed
upon in advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
(e) SECURITY DEPOSIT.
The Fund will remit to ADS upon execution of this Agreement a security deposit
equal to one (1) month's minimum fee under this Agreement, computed in accord-
ance with the number of portfolios listed in Schedule B of this Agreement. The
Fund will have the option to have the security deposit applied to the last
month's service fee, or applied to any new contract between the Fund and ADS.
However, if the Fund elects or is forced to terminate this Agreement for any
reason what-so-ever (including, but not limited to, the voluntary or involuntary
termination of the Fund, liquidation of the Fund's assets, the sale or merger of
the Fund or it's assets to any successor entity) prior to the termination date
of this Agreement as specified in Paragraph 8 of this Agreement, the Fund will
forfeit the Security Deposit paid to ADS upon execution of this Agreement.
<PAGE>
<PAGE>
SCHEDULE B
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
ALAMO GROWTH FUND, INC.
Exhibit 8
Cox & Smith
Incorporated
2000 NBC Bank Plaza
112 East Pecan Street
San Antonio, Texas 78205
March 26, 1997
Alamo Growth Fund, Inc.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217
Gentlemen:
I have acted as counsel for you in connection with the preparation of
aRegistration Statement on Form N-1A relating to the sale by you of an indefin-
ite amount of Alamo Growth Fund, Inc., Common Stock, $.01 par value (such Common
Stock being hereinafter referred to as the "Stock") in the manner set forth in
the Registration Statement to which reference is made. In this connection, I
have examined: (a) the Registration Statement on Form N-1A; (b) your Art-
icles of Incorporation and By-Laws, as amended to date; (c) corporate proceed-
ings relative to the authorization for issuance of the Stock; and (d) such other
proceedings, documents and records as I have deemed necessary to enable me to
render this opinion.
Based upon the foregoing, I am of the opinion that the shares of Stock
when sold as contemplated in the Registration Statement will be legally issued,
fully paid and nonassessable.
I hereby consent to the use of this opinion as an exhibit to the Form
N-1A Registration Statement. In giving this consent, I do not admit that I am
an expert within the meaning of Section 11 of the Securities Act of 1933, as
amended, or within the category of persons whose consent is required by Section
7 of said Act.
Very truly yours,
Jack Guenther
/jah/AGF97106L
Exhibit 9
SUBSCRIPTION AGREEMENT
Alamo Growth Fund, Inc.
1777 N.E. Loop 410, Suite 1512
San Antonio, TX 78217-5290
Gentlemen:
The undersigned hereby subscribes to 10,000 shares of the Common
Stock, $.01 par value of Alamo Growth Fund, Inc., and agrees to pay to said
corporation the sum of $100,000 in cash for such stock.
It is understood that upon acceptance by Alamo Growth Fund, Inc. and
payment of the above-described consideration, the shares subscribed for shall be
issued to the undersigned and that said shares shall be deemed to be fully paid
and non-assessable.
The undersigned agrees that the shares are being purchased for invest-
ment with no present intention of reselling or redeeming said shares.
Dated and effective as of this 26 day of December 1996.
PERFORMANCE PLAN, LTD.
Performance Automotive Group, Inc.,
General Partner
By:
Michael J. Avellar, Vice President
The foregoing subscription is hereby accepted. Dated and effective as
of this 26 day of December 1996.
ALAMO GROWTH FUND, INC.
By:
Jack E. Guenther, Jr., President
