<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1999
REGISTRATION NOS. 811-9235, 333-75075
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 / /
PRE-EFFECTIVE AMENDMENT NO. 1 /X/
POST-EFFECTIVE AMENDMENT NO. / /
AND/OR
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 1 /X/
------------------------
GAMNA SERIES FUNDS, INC.
(Exact name of registrant as specified in charter)
------------------------
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code: 212-480-1900
MARK P. BRONZO
GROUPAMA ASSET MANAGEMENT N.A.
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
(Name and Address of agent for service)
------------------------
COPIES TO:
CYNTHIA COBDEN, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PURSUANT TO RULE 24f-2 UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
REGISTRANT HEREBY ELECTS TO REGISTER AN INDEFINITE NUMBER OF SHARES OF
REGISTRANT AND ANY SERIES THEREOF.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
GAMNA SERIES FUNDS, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM NUMBER
FORM N-1A,
PART A PROSPECTUS CAPTION
- ----------------- ----------------------------------------------------------------------------------------------------
<C> <S>
1(a) Cover Page
1(b) Back Cover Page
2 The Fund At A Glance; The Fund's Main Investment Strategy; The Main Risks of Investing in the Fund
3 Fees and Expenses
4 The Fund At A Glance; The Fund's Main Investment Strategy; The Main Risks of Investing in the Fund
5 Not Applicable
6 Management of the Fund
7 Shareholder Information: Sales Charge and Choosing a Share Class, Pricing of Fund Shares; How to
Open Your Fund Account, Minimum Investments; How to Purchase Shares, Types of Account Ownership,
Tax-Deferred Accounts, How To Redeem Shares, Payment of Redemption Proceeds, Written Instructions,
Signature Requirements Based on Account Type, Signature Guarantee, How to Obtain a Signature
Guarantee, Shareholder Services and Account Policies
8 Distributions and Taxes
9 Not Applicable
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ITEM NUMBER
FORM N-1A,
PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ----------------- ----------------------------------------------------------------------------------------------------
<C> <S>
10 Cover Page; Table of Contents
11 The Fund
12 The Fund; Investment Policies and Restrictions
13 Management of the Company and the Fund
14 Management of the Company and the Fund--GAMNA; General Information--Control Persons and Principal
Holders
15 Management of the Company and the Fund; Distribution and Sub-Administration Agreement; Transfer
Agent and Custodian; Distribution Plans
16 Investment Policies and Restrictions: Portfolio Transactions and Brokerage Allocation
17 General Information--Description of Shares, Voting Rights and Liabilities
18 Determination of Net Asset Value; Purchase, Redemptions and Exchanges
19 Distributions; Tax Matters
20 Management of the Company and the Fund; Distribution and Sub-Administration Agreement
21 Not Applicable
22 Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
ii
<PAGE>
SUBJECT TO COMPLETION, DATED , 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
, 1999
GAMNA FOCUS FUND
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of securities of this Fund or determined
if this prospectus is accurate or complete. It is a crime to state otherwise.
<PAGE>
CONTENTS
<TABLE>
<S> <C>
THE FUND AT A GLANCE...................................................... 1
THE FUND'S MAIN INVESTMENT STRATEGY....................................... 1
THE MAIN RISKS OF INVESTING IN THE FUND................................... 2
FEES AND EXPENSES......................................................... 3
PAST PERFORMANCE OF PRIVATE ACCOUNTS...................................... 4
MANAGEMENT OF THE FUND.................................................... 6
SHAREHOLDER INFORMATION................................................... 7
DISTRIBUTIONS AND TAXES................................................... 18
GLOSSARY OF INVESTMENT TERMS.............................................. A-1
</TABLE>
<PAGE>
THE FUND AT A GLANCE
The Fund's investment objective is long-term growth of capital. The Fund is
non-diversified and will seek to achieve its objective by normally concentrating
its investments in a core position of 20-30 common stocks. The investment
adviser for the Fund is Groupama Asset Management N.A. (the "Adviser" or
"GAMNA").
THE FUND'S MAIN INVESTMENT STRATEGY
INVESTMENT OBJECTIVE
The Fund's investment objective is long-term growth of capital.
TYPES OF INVESTMENTS
The GAMNA Focus Fund invests primarily in common stocks selected for their
growth potential. The Portfolio Manager utilizes both a "top down" and "bottom
up" approach in constructing the portfolio. The "top down" approach is a
screening process which narrows the available number of stock investments from
thousands of large cap stocks to several hundred potential stock ideas. The "top
down" approach takes into consideration such macro-economic factors as Federal
Reserve Policy, interest rates, inflation, and the domestic economy. This
approach helps the Portfolio Manager focus his analysis on the most attractive
business sectors within the overall market. The "bottom-up" analysis is then
performed on potential stock ideas in these targeted business sectors by
identifying individual companies with both attractive earnings potential and
sustainable growth characteristics that may not be recognized by the market at
large. Twelve month target prices are established for all individual companies
reviewed, with minimum hurdle rates of capital appreciation potential required
before a stock will be added to the portfolio. Realization of income is not a
significant investment consideration. Any income realized on the GAMNA Focus
Fund's investments will be incidental to its objective.
Under normal market conditions, the Fund will invest at least 80% of its
total assets in common stocks and American, Global or other types of Depositary
Receipts of companies with market capitalization of $1 billion or more which the
Adviser believes have growth potential.
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's Portfolio Manager, the
securities of a particular issuer will appreciate in value due to a specific
development with respect to that issuer. These are described in more detail
below.
The Fund may invest up to 20% of its total assets in high-quality money
market instruments, and repurchase agreements, U.S. Government obligations, high
quality short-term debt securities and investment grade bonds, notes and
debentures. In addition, the Fund may invest without limit in U.S. Government
obligations and high quality short-term debt securities or money market
instruments if the Adviser determines that a temporary defensive position is
advisable or to meet anticipated redemption requests. When such a defensive
strategy is in effect the Fund may not achieve its investment objective.
The Fund may change any of these investment policies (including its
investment objective) without shareholder approval.
The following questions are designed to help you better understand an
investment in the Fund.
Q: WHAT IS MEANT BY "MARKET CAPITALIZATION"?
A: Market capitalization is the most commonly used measure of the size and
value of a company. It is computed by multiplying the current market price of a
share of the company's stock by the total number of its shares outstanding.
Under normal market conditions, the Fund will invest at least 80% of its total
assets in companies with market capitalization of $1 billion or more.
Q: HOW FREQUENTLY WILL SECURITIES BE PURCHASED AND SOLD?
A: The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price
1
<PAGE>
or yield objective, changes in interest rates or the credit standing of an
issuer, or by reason of economic or other developments not foreseen at the time
of the initial investment decision. Changes are made in the Fund's portfolio
whenever the Portfolio Manager believes such changes are desirable. Portfolio
turnover rates are generally not a factor in making buy and sell decisions. To a
limited extent, the Fund may purchase securities in anticipation of relatively
short-term price gains.
Q: WHAT IS A "SPECIAL SITUATION"?
A: A special situation arises when the Adviser believes that the securities of
an issuer will appreciate in value due to a specific development with respect to
that issuer. Special situations may include significant changes in a company's
allocation of its existing capital, a restructuring of assets, or a redirection
of free cash flows. For example, issuers undergoing significant capital changes
may include companies involved in spin-offs, sales of divisions, mergers or
acquisitions, companies emerging from bankruptcy, or companies initiating large
changes in their debt to equity ratio. Companies that are redirecting cash flows
may be reducing debt, repurchasing shares or paying dividends. Special
situations may also result from (i) significant changes in industry structure
through regulatory developments or shifts in competition; (ii) a new or improved
product, service, operation or technological advance; (iii) changes in senior
management; or (iv) significant changes in cost structure.
THE MAIN RISKS OF INVESTING IN THE FUND
All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Fund.
Since the Fund usually invests heavily in common stocks, the fundamental
risk is that the value of the stocks the Fund holds might decrease. Stock values
may fluctuate in response to the activities of an individual company or in
response to general market and/or economic conditions.
The Fund can invest in depositary receipts which are securities issued by
financial institutions (like banks or trust companies) which represent ownership
in underlying securities issued by foreign companies. These securities carry
additional risks associated with investing in foreign securities, such as
changes in currency exchange rates, lack of public information about the foreign
company and political, social and economic instability in the company's country.
Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.
If the Fund trades securities actively, transaction costs will be increased
which will lower performance and could increase taxable dividends.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements, U.S. Government obligations or short-term
debt securities, it could reduce the Fund's potential returns. In addition, the
value of debt securities tends to fall when prevailing interest rates rise which
could affect the value of the Fund's shares. Short-term debt securities are
generally less sensitive to interest rate changes than longer-term securities.
The Fund is non-diversified and may invest a greater percentage of its
assets in a particular issuer than a diversified fund would. As a result, the
value of its shares will be more sensitive to economic problems affecting those
issuers. Since the Fund may invest in a relatively small number of companies, a
decrease in the value of any one of its investments can have a large impact on
the value of the entire portfolio.
2
<PAGE>
FEES AND EXPENSES
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
MAXIMUM DEFERRED SALES
CHARGE (LOAD)(1)IMPOSED
ON
PURCHASES (AS A
MAXIMUM SALES CHARGE PERCENTAGE OF
(LOAD)(1)IMPOSED ON LOWER OF ORIGINAL
PURCHASES (AS A PERCENTAGE PURCHASE PRICE
OF THE OFFERING PRICE)(2) OR REDEMPTION PROCEEDS)
----------------------------- -------------------------
<S> <C> <C>
Class A Shares.................................. 5.75% None
Class B Shares.................................. None 5.00%
Class C Shares.................................. None 1.00%
</TABLE>
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
TOTAL ANNUAL
DISTRIBUTION FUND
AND SERVICE OTHER OPERATING NET
CLASS OF SHARES MANAGEMENT FEE (12B-1) FEES EXPENSES EXPENSES FEE WAIVER EXPENSES
- ----------------------------- ------------------- -------------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A...................... 0.55% 0.50% 0.50% 1.55% 0.18% 1.37%
Class B...................... 0.55% 1.00% 0.53% 2.08% 0.18% 1.90%
Class C...................... 0.55% 1.00% 0.53% 2.08% 0.18% 1.90%
</TABLE>
- ------------------------
(1) A reduced sales charge may be available depending on the size of your
investment and other factors.
(2) The offering price is the net asset value of the shares purchased plus any
sales charge.
The Adviser has agreed not to collect a portion of its fees and to reimburse
others so that total operating expenses of the Fund for the next year will not
exceed 1.90%. The Fund may have to repay these waivers and reimbursements to
GAMNA in the following two years if the repayment can be made within the total
expense limit.
As of the date of this Prospectus, the Fund had not commenced investment
operations. The amounts set forth for "Other Expenses" are therefore based on
estimates for the current fiscal year and will include fees for shareholder
services, administrative fees, custodial fees, legal and accounting fees,
printing costs and registration fees.
The table does not reflect charges or credits which you might incur if you
invest through a financial institution.
EXAMPLE This example helps you compare the cost of investing in the Fund with
the cost of investing in other mutual funds. The example assumes that:
- you invest $10,000
- you sell all your shares at the end of the period
- your investment has a 5% return each year, and
- the Fund's net operating expenses, including the fee waiver, remain the
same as shown above.
3
<PAGE>
IF YOU SELL YOUR SHARES:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------- -----------
<S> <C> <C>
Class A Shares*.................. $ 706 $ 984
Class B Shares**................. $ 708 $ 926
Class C Shares**................. $ 296 $ 597
</TABLE>
- ------------------------
* Assumes sales charge is deducted when shares are purchased.
** Assumes applicable deferred sales charge is deducted when shares are sold.
IF YOU DON'T SELL YOUR SHARES:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------- -----------
<S> <C> <C>
Class B Shares................... $ 192 $ 597
Class C Shares................... $ 192 $ 597
</TABLE>
This example is for comparison only. Your actual costs may be higher or
lower, depending on the amount you invest and the Fund's actual rate of return.
PAST PERFORMANCE OF PRIVATE ACCOUNTS
The investment results shown below represent the net historical performance
of Mark Bronzo with respect to non-fee paying proprietary accounts while
employed at SOREMA N.A. Holding Corporation until December 31, 1995 and
thereafter for client accounts at GROUPAMA Asset Management N.A. (formerly named
Sorema Asset Management). These accounts have substantially similar investment
objectives, policies and strategies to those of the Fund. Mr. Bronzo was the
sole portfolio manager responsible for this performance. Mr. Bronzo continues to
be primarily responsible for the equity portfolios for clients of GROUPAMA Asset
Management N.A., with assistance from Daniel Portanova, and intends to utilize a
substantially similar investment approach for the Fund. The performance
information is provided to illustrate the past performance of Mr. Bronzo, in
managing substantially similar accounts and does not represent the performance
of the Fund, which has no history of operations. Investors should realize that
this past performance data is not an indication of future performance of the
Fund.
4
<PAGE>
NET ANNUALIZED RETURNS AS OF DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NET ANNUALIZED RETURNS AS OF DECEMBER 31,
1998
<S> <C>
GAM Equity
12/31/97 33.13
12/31/95 36.64
12/31/93 38.73
1/1/90 29.15
S&P 500 Index
12/31/98 28.58
12/31/98 28.27
12/31/98 24.06
12/31/98 17.89
</TABLE>
[The following table was depicted as a bar graph in the printed material.]
For the six-month period ending June 30, 1999, preliminary results for GAM
Equity show an approximate [ ]% return compared to [ ]% for the S & P 500
Index.
The data represents accounts with assets as of December 31, 1998 of $
million representing % of total assets under management. The data includes all
accounts with substantially similar investment objectives, policies and
strategies to those of the Fund. The asset-weighted composite dispersion for
1998 was 0.48% (excluding assets) managed in sub-advisory accounts through a
wrap-fee program for which dispersion data are not available. Only portfolios
that have been managed for the full year are included in the dispersion
calculation.
The performance numbers above reflect the deduction for investment advisory
fees and are net of all transaction costs and expenses. The performance results
reflect dividend reinvestment and are calculated on a settlement date basis
through December 31, 1995 and on a trade date basis thereafter.
The index used for comparison is the S&P 500 Index, an unmanaged index with
no expenses, which covers 500 industrial, utility, transportation and financial
companies of the U.S. markets. It is a capitalization-weighted index calculated
on a total return basis with dividends reinvested.
The private accounts that are included in the data above are not subject to
the same types of expenses as the Fund and are not subject to the same
diversification requirements, tax restrictions and other investment limitations
imposed on the Fund by the Investment Company Act of 1940 or Subchapter M of the
Internal Revenue Code of 1986. The performance results of the private accounts
could have been adversely affected if the accounts had been regulated as
investment companies under the federal tax and securities laws. In addition,
differences in the Securities and Exchange Commission (the "SEC") and AIMR
methodology for calculating performance could result in different performance
data for identical time periods. The expenses for the private accounts included
in the performance results above are lower than the Fund's anticipated expenses.
If such accounts had expenses similar to the Fund's, the performance of the
composite would have been lower than the results shown above.
5
<PAGE>
MANAGEMENT OF THE FUND
THE FUND'S INVESTMENT ADVISER
GAMNA is the investment adviser to the Fund and is responsible for the
day-to-day management of the investment portfolio and other business affairs of
the Fund. GAMNA is located at 180 Maiden Lane, New York, New York 10038.
GAMNA was formed as a joint venture between Groupama Asset Management and
Sorema N.A. Holding Corporation. The principals of GAMNA originally were the
in-house investment department of Sorema N.A. beginning in 1989. GAMNA became a
separate company and started to manage assets for outside clients in 1995 under
the name Sorema Asset Management Company. In August of 1998, Sorema Asset
Management's name was changed to Groupama Asset Management N.A. Mark Bronzo has
continually managed the equity assets of GAMNA and its predecessor and
affiliates since 1995. GAMNA currently serves as investment adviser to
individual, corporate, charitable and retirement accounts.
GAMNA furnishes continuous advice and recommendations concerning the Fund's
investments. GAMNA also oversees certain administrative, compliance and
accounting services for the Fund. In addition, GAMNA employees serve as officers
of the Fund and GAMNA provides office space for the Fund and pays the salaries,
fees and expenses of Fund officers and Directors who are affiliated with GAMNA.
PORTFOLIO MANAGER
Mark P. Bronzo is the portfolio manager of the Fund and is responsible for
making investment decisions and for the day-to-day management of the Fund's
portfolio. Mr. Bronzo is assisted by Daniel W. Portanova.
Mark Bronzo is Senior Vice President, Managing Director and Board Member of
GAMNA. Mr. Bronzo is primarily responsible for management of GAMNA's equity
accounts. From 1989 to 1998, Mr. Bronzo served as Vice President, Chief
Investment Officer and Treasurer (from 1989 to 1996) of the Sorema N.A. Group
and served as Vice President from 1989 to 1998 and currently serves as Senior
Vice President of its wholly-owned subsidiary, Sorema North America Reinsurance
Company and as Director, Vice President and Chief Investment Officer of its
affiliate, Fulcrum Insurance Company. He also served as Vice President and Chief
Investment Officer of another affiliate, C&C Consultants, Inc., from 1989 to
1997. His responsibilities at each company were the setting of investment policy
and guidelines and supervising broker-dealer relationships. From 1983 to 1989,
Mr. Bronzo worked at General Reinsurance Corporation where he was an Assistant
Secretary from 1987 to 1989 and Assistant Portfolio Manager from 1986 to 1989.
Mr. Bronzo is a Chartered Financial Analyst and has made numerous appearances on
CNBC and Bloomberg television. Mr. Bronzo has an MBA in Finance from New York
University and a BA in Economics from Boston College.
Daniel Portanova is currently Senior Vice President, Managing Director and
Board Member of GAMNA. Mr. Portanova is primarily responsible for the management
of GAMNA's taxable bond portfolios and for assisting Mr. Bronzo in forecasting
Federal Reserve Board policy and analyzing the economic background and relative
attractiveness of industry sectors in which GAMNA equity accounts, including the
Fund, may invest. From 1993 to 1995, Mr. Portanova was a Managing Director at
General Reinsurance Asset Management, where he was one of two portfolio managers
with investment discretion over more than $4 billion in assets. From 1989 to
1993, Mr. Portanova was a taxable fixed income portfolio manager for General
Reinsurance. Mr. Portanova also worked for Smith Barney, Harris, Upham Inc. from
1984 to 1989 as an Institutional Corporate Bond Trader, primarily in the Yankee
and Canadian sectors. Mr. Portanova earned an MBA from Duke University's Fuqua
School of Business in 1984 and a BA in Economics from Boston College in 1982.
6
<PAGE>
MANAGEMENT FEES
The Fund pays a management fee which is calculated daily and paid monthly.
The advisory agreement with the Fund spells out the management fee and other
expenses that the Fund must pay. The Fund is subject to the following management
fee schedule (expressed as an annual rate):
<TABLE>
<CAPTION>
AVERAGE DAILY NET ANNUAL RATE
ASSETS OF FUND PERCENTAGE (%)
------------------ -----------------
<S> <C>
First $1 Billion................................ 0.55
Over $1 Billion................................. 0.50
</TABLE>
GAMNA and the Fund have entered into an expense limitation agreement. The
agreement sets a limit of 1.90% on the operating expenses of the Fund for the
next year and requires GAMNA to waive or reimburse fees or expenses if operating
expenses exceed that limit. If in the following two years the operating expenses
of the Fund are less than the expense limit, the Fund is required to repay GAMNA
the amount of expenses previously waived or reimbursed but only to the extent
the Fund's total operating expenses would not exceed the 1.90% limit for that
year.
YEAR 2000
Preparing for Year 2000 is a high priority for GAMNA which has established a
policy to address this issue. The Fund, like any business, could be affected if
the computer systems on which it relies fail to properly process information
beginning on January 1, 2000. GAMNA has updated its own systems and encouraging
service providers to do the same, but there's no guarantee these systems will
work properly. Year 2000 problems could also hurt issuers whose securities the
Fund holds or securities markets generally.
SHAREHOLDER INFORMATION
This section will help you become familiar with how to establish an account
with the Fund. It also explains in detail the different share classes and the
types of services and features you can establish on your account, as well as
account policies and fees that may apply to your account. Account policies
(including fees), services and features may be modified or discontinued without
shareholder approval or prior notice.
SALES CHARGES AND CHOOSING A SHARE CLASS
There is a sales charge to buy shares in the Fund. There are also ongoing
charges that all investors pay as long as they own their shares. Investors may
choose Class A, Class B or Class C shares which have different types of charges
and are each described below. There are a number of plans and special discounts
which can decrease or even eliminate certain of these charges.
CLASS A SHARES. When you purchase Class A shares you pay a sales charge at
the time of purchase. The initial sales charge is deducted directly from the
money you invest. As the table shows, the initial sales charge is lower the more
you invest and there is no initial sales charge on purchases of $1 million or
more. Certain purchases of Class A shares qualify for reduced sales charges.
Class A shares are not subject to any sales charges when they are redeemed and
have lower combined 12b-1 and service fees than Class B and Class C shares.
<TABLE>
<CAPTION>
TOTAL SALES CHARGE
---------------------------------
AS % OF PUBLIC AS % OF NET
OFFERING PRICE AMOUNT
AMOUNT OF INVESTMENT PER SHARE INVESTED
- --------------------------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Under $100,000............................................................. 5.75% 6.10%
$100,000 but under $250,000................................................ 3.75% 3.90%
$250,000 but under $500,000................................................ 2.50% 2.56%
$500,000 but under $1,000,000.............................................. 2.00% 2.04%
$1,000,000 or more......................................................... None None
</TABLE>
7
<PAGE>
The public offering price of Class A shares is the net asset value plus the
initial sales charge. Net asset value is the value of everything the Fund owns,
minus everything it owes, divided by the number of shares held by investors.
CLASS B SHARES. Class B shares are sold without an initial sales charge,
but are subject to a deferred sales charge which is deducted directly from your
assets when you sell your shares. It is a percentage of the original purchase
price or the current value of the shares, whichever is lower. As the table
shows, the deferred sales charge gets lower the longer you hold the shares and
disappears altogether after six years. Class B shares have the benefit of
putting all of your dollars to work from the time the investment is made. Class
B shares have higher combined 12b-1 and service fees than Class A shares.
<TABLE>
<CAPTION>
DEFERRED
YEAR SALES CHARGE
- ---------------------------------------- ----------------
<S> <C>
1....................................... 5%
2....................................... 4%
3....................................... 3%
4....................................... 3%
5....................................... 2%
6....................................... 1%
7....................................... None
</TABLE>
Deferred sales charges are calculated from the month you buy your shares.
The Fund always sells the shares with the lowest deferred sales charge first.
Class B shares automatically convert into Class A shares, based on relative
net asset value, at the beginning of the ninth year after purchase.
CLASS C SHARES. Class C shares are sold without an initial sales charge,
which has the benefit of putting all of your dollars to work from the time the
investment is made. If redeemed within one year after purchase, Class C shares
are subject to a deferred sales charge of 1% which is deducted directly from
your assets when you sell your shares. The sales charge is based on the lesser
of the original cost or the net asset value at the time of the redemption. Class
C shares, like Class B shares, have higher combined 12b-1 and service fees than
Class A shares. Unlike Class B shares, Class C shares do not convert into any
other class of shares of the Fund. That means you keep paying the higher service
and distribution fees as long as you hold your shares. Over the long term, this
can add up to higher total fees than either Class A or Class B shares.
RULE 12B-1 FEES. Provident Distributors, Inc. is the distributor for the
Fund. The Fund has adopted Rule 12b-1 distribution plans under which it pays
annual distribution fees of up to 0.25% of the average daily net assets
attributed to Class A shares and up to 0.75% of the average daily net assets
attributable to Class B and Class C shares. This payment covers such things as
compensation for services provided by broker-dealers and expenses connected to
the sale of shares. Payments are not tied to actual expenses incurred. The Fund
has also entered into agreements with certain shareholder servicing agents who
have agreed to provide certain support services to their customers. For
performing these services, each shareholder servicing agent receives an annual
fee of up to 0.25% of the average daily net assets of the shares of each Class
held by investors serviced by the shareholder servicing agent. These fees are
payable for the administration and servicing of shareholder accounts and are not
costs which are primarily intended to result in the sale of Fund shares. Because
Rule 12b-1 expenses are paid out of the Fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than other types of sales charges.
Which Arrangement Is Best For You? The decision as to which class of shares
provides a more suitable investment for you depends on a number of factors,
including the amount and intended length of the investment. If you are making an
investment that qualifies for reduced sales charges, you might consider Class A
shares. If you prefer not to pay an initial sales charge and anticipate holding
your shares
8
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for a number of years, you might consider Class B shares. If you prefer not to
pay an initial sales charge and you are uncertain as to the intended length of
your investment, you might consider Class C shares. In almost all cases, if you
are a long-term investor planning to purchase $250,000 or more of the Fund's
shares you will pay lower aggregate charges and expenses by purchasing Class A
shares.
PRICING OF FUND SHARES
All purchases and redemptions will be processed at the net asset value or
NAV next calculated after your request is received and approved by the Fund (or
its designated agent). The Fund's NAV is calculated at the close of the regular
trading session of the New York Stock Exchange (the "NYSE") which is normally
4:00 p.m. New York time each day that the NYSE is open. In order to receive a
day's price, your order must be received by the close of the regular trading
session of the NYSE. Securities are valued at market value or, if a market
quotation is not readily available, at their fair value determined in good faith
under procedures established by and under the supervision of the Board of
Directors. Short-term instruments maturing within 60 days are valued at
amortized cost, which approximates market value.
HOW TO OPEN YOUR FUND ACCOUNT
Complete and sign the appropriate application. Please be sure to provide
your Social Security or taxpayer identification number on the application and
make your check payable to GAMNA Focus Fund. Send all items to one of the
following addresses:
For Overnight Carrier
GAMNA Series Funds, Inc.
c/o PFPC Inc.
410 Bellevue Parkway, Suite 108
Wilmington, DE 19809-3710
For All Other Inquiries
GAMNA Series Funds, Inc.
c/o PFPC Inc.
P.O. Box 8940
Wilmington, DE 19899-8940
MINIMUM INVESTMENTS
<TABLE>
<S> <C>
To open a new account...................................................... $ 10,000
To open a new retirement account........................................... $ 2,000
To open a new account with an Automatic Investment Program................. $ 2,000
To add to any type of an account........................................... $ 1,000
</TABLE>
The Funds reserve the right to change the amount of these minimums from time
to time or to waive them in whole or in part for certain types of accounts.
HOW TO PURCHASE SHARES
PAYING FOR SHARES. When you purchase shares, your request will be processed
at the next NAV calculated after your order is received and accepted. Please
note the following:
- Cash, credit cards, third party checks and credit card checks will not be
accepted.
- All purchases must be made in U.S. dollars.
- Checks must be drawn on U.S. banks and made payable to GAMNA Focus Fund.
9
<PAGE>
- If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
- If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
- The Fund reserves the right to reject any specific purchase request.
If your purchase is canceled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the canceled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.
PURCHASE BY MAIL. Send your check and written instructions to the address
specified above under "How to Open Your Fund Account". If you are making a
purchase into a retirement account, please indicate whether the purchase is a
rollover or a current or prior year contribution.
PURCHASE BY TELEPHONE. In order to purchase shares by telephone, you must
complete the "Telephone Purchase of Shares Option" section on the application.
If your account is already established, call 888-287-4093 to request the
appropriate form. This option will become effective ten business days after the
form is received. Thereafter, you may call the Fund at 888-287-4093 (toll free)
to execute a telephone purchase of shares, on weekdays, except holidays, between
the hours of 8:00 A.M. and 6:00 P.M., New York time. For your protection and to
prevent fraudulent purchases, your telephone call may be recorded and you will
be asked to provide your personal identification number. A written confirmation
of the purchase transaction will be sent to you. NEITHER THE FUND NOR ITS AGENTS
WILL BE LIABLE FOR ANY LOSS, LIABILITY OR COST WHICH RESULTS FROM ACTING UPON
INSTRUCTIONS REASONABLY BELIEVED TO BE GENUINE UNDER THE FOREGOING PROCEDURES.
All purchases will be made on the basis of the net asset value of the Fund next
determined after the funds are received, plus applicable sales charges.
In periods of severe market or economic conditions, the telephone purchase
of shares may be difficult to implement and you should make purchases by mail by
writing to the Transfer Agent at the address noted above.
The Fund may accept telephone orders from broker-dealers which have been
previously approved by the Fund by telephoning 888-287-4093 (toll free). It is
the responsibility of such broker-dealers to promptly forward purchase orders
and payments for such orders to the Fund. The Fund reserves the right to cancel
any purchase order for which payment has not been received by the third (3rd)
business day following the investment.
Transactions in Fund shares through your broker-dealer may be subject to
transaction or other fees, including postage and handling charges, imposed by
your broker-dealer (in addition to the sales charge imposed by the Fund) which
would otherwise not be charged if the shares were purchased directly from the
Fund.
PURCHASE BY WIRE. You may purchase Shares (other than initial purchases) by
wire transfer. To do so, you must (i) telephone the Transfer Agent at
888-287-4093 (toll free)(individual shareholders) or 888-287-4093
(toll-free)(broker-dealers) to advise the Transfer Agent that you would like to
purchase shares of the Fund by wire transfer and then (ii) give instructions to
your bank to transfer funds by wire to the following account:
<TABLE>
<S> <C>
Bank Name: PNC Bank, Philadelphia, PA
ABA Number: 031-0000-53
Account Name: GAMNA Series Funds, Inc.
Account No.: 8612822925
Further Credit: [Name of Shareholder and
Account Number]
</TABLE>
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<PAGE>
AUTOMATIC INVESTMENT PROGRAMS. The Fund, offers several automatic
investment programs to help you achieve your financial goals as simply and
conveniently as possible.
- Automatic Monthly Investment Program
You select the day each month that your money ($1000 minimum) will be
electronically transferred from your bank account to your Fund account. To
establish this option, complete the "Automatic Monthly Investment Program"
section on the application and attach a "voided" check or deposit slip from
your bank account. If your Fund account is already established, call
888-287-4093 to request the appropriate form.
- Payroll Deduction
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck ($1000 minimum) invested directly into
your Fund account. To obtain information on establishing this option, call
888-287-4093.
TYPES OF ACCOUNT OWNERSHIP
If you are investing in the Fund for the first time, you will need to
establish an account. You can establish the following types of accounts by
completing a New Account Application. To request an application, call
888-287-4093.
- INDIVIDUAL OR JOINT OWNERSHIP. Individual accounts are owned by one
person. Joint accounts have two or more owners.
- A GIFT OR TRANSFER TO MINOR (UGMA OR UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
- TRUST. An established trust can open an account. The names of each
trustee, the name of the trust and the date of the trust agreement must be
included on the application.
- BUSINESS ACCOUNTS. Corporations and partnerships may also open an
account. The application must be signed by an authorized officer of the
corporation or a general partner of the partnership.
TAX-DEFERRED ACCOUNTS
If you are eligible, you may set up one or more tax-deferred accounts. A
tax-deferred account allows you to shelter your investment income and capital
gains from current income taxes. A contribution to certain of these plans may
also be tax deductible. Tax deferred accounts include retirement plans and the
Education IRA. Distributions from these plans are generally subject to income
tax and may be subject to an additional tax if withdrawn prior to age 59 1/2 or
used for a nonqualifying purpose. Investors should consult their tax or legal
counsel before selecting a tax-deferred account.
PFPC Trust Company serves as custodian for the tax-deferred accounts offered
by the Fund. You will be charged an annual account maintenance fee of $ for
each Fund account, up to a maximum of $
for two or more Fund accounts registered under the same taxpayer identification
number. The Fund reserves the right to change the amount of this fee or to waive
it in whole or in part for certain types of accounts.
The following plans require a special application. For an application and
more details about our Retirement Plans, call 888-287-4093.
- REGULAR AND ROTH INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS"): Both types of
IRAs allow most individuals with earned income to contribute up to the
lesser of $2,000 ($4,000 for most married couples) or 100% of compensation
annually.
- EDUCATION IRA: This plan allows individuals, subject to certain income
limitations, to contribute up to $500 annually on behalf of any child
under the age of 18.
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<PAGE>
- SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
- PROFIT SHARING OR MONEY PURCHASE PENSION PLAN: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
- SECTION 403(b)(7) PLAN: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted. The Fund reserves the
right to pay redemptions in the form of readily marketable portfolio securities
rather than in cash.
Depending on how long you have held your shares, redemptions of Class B and
Class C shares may be subject to a deferred sales charge as described above
under "Sales Charges and Choosing a Share Class."
IN WRITING. You may request redemption by writing to the Transfer Agent. If
you hold share certificates, you must sign the certificates in exactly the same
form as appears on the face of the share certificates and deliver them to the
Transfer Agent. If you hold shares in non-certificate form, you must sign the
request in the exact name in which the shares are registered. If you are a
corporation, partnership, trust or fiduciary, you must submit written evidence
of authority acceptable to the Transfer Agent. Direct all correspondence to the
Transfer Agent at GAMNA Series Funds, Inc., P.O. Box 8940, Wilmington, Delaware
19899-8940 or by overnight delivery c/o PFPC Inc., 400 Bellevue Parkway,
Wilmington, Delaware 19809.
In the following cases, you must provide signature guarantees by an
"eligible guarantor institution" of the signature on the redemption request and
the certificates, if any, or stock powers, if any:
- if the proceeds of the redemption exceed $10,000 (unless you have
submitted a Shareholder Redemption Option form authorizing the Transfer
Agent to redeem shares of the fund upon written instructions without a
signature guarantee);
- if the proceeds are to be paid to a person other than the record owner or
sent to an address other than that on the Transfer Agent's records (or
within 30 days after the Transfer Agent has been notified of the address
change); or
- if the proceeds are to be paid to a corporation, partnership, trust or
fiduciary.
An "eligible guarantor institution" includes any domestic bank or trust company,
broker, dealer, clearing agency or savings association who are participants in a
medallion program recognized by the Securities Transfer Agents Association. The
three recognized medallion programs are Securities Transfer Agents Medallion
Program (STAMP), Stock Exchanges Medallion Program (SEMP) and the New York Stock
Exchange, Inc. Medallion Signature Program (MSP). Signature guarantees that are
not a part of these programs will not be accepted. The Transfer Agent reserves
the right to request additional information from, and make reasonable inquiries
of, any eligible guarantor institution.
The Transfer Agent will pay you by check within seven (7) days after it
receives your certificate and/or written request, except that redemption of
recently purchased shares will be delayed until the Fund or the Transfer Agent
has been advised that the purchase check has been honored, up to fifteen (15)
days from the time of receipt of the purchase check by the Transfer Agent. You
can avoid such a delay by purchasing shares by wire or by certified or official
bank check except as indicated below. Such payment may also be postponed or the
right of redemption suspended at times (i) when the New York Stock Exchange is
closed for other than customary weekends and holidays, (ii) when trading on such
Exchange is restricted, (iii) when an emergency exists as a result of which
disposal by the Fund of securities owned by it is not
12
<PAGE>
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or (iv) during any other period when
the SEC, by order, so permits. The SEC's rules and regulations shall be used to
determine whether a condition described in (ii), (iii) or (iv) exists.
BY TELEPHONE. Redemptions by telephone must be in amounts of at least
$1,000 and may not be for more than $10,000. In addition, the proceeds from a
telephone redemption may be paid only to the owner(s) of record any may be sent
only to the address of record or a pre-authorized bank account, and cannot be
made within thirty (30) days after the Transfer Agent has been notified of an
address change. If there are multiple owners of record, the Transfer Agent may
rely upon the instructions of only one owner of record.
In order to redeem shares by telephone, you must authorize telephone
redemptions on your initial application form or by writing to the Transfer
Agent, and you must also hold your shares in non-certificate form. You may call
the Fund at 888-287-4093 (toll free) to execute a telephone redemption of
shares, on weekdays, except holidays, between the hours of 8:00 A.M. and 6:00
P.M., New York time. Redemption requests will be processed at the NAV next
calculated after receipt and acceptance of the request. For your protection and
to prevent fraudulent redemptions, your telephone call may be recorded and you
will be asked to provide your personal identification number. A written
confirmation of the redemption transaction will be sent to you. NEITHER THE FUND
NOR ITS AGENTS WILL BE LIABLE FOR ANY LOSS, LIABILITY OR COST WHICH RESULTS FROM
ACTING UPON INSTRUCTIONS REASONABLY BELIEVED TO BE GENUINE UNDER THE FOREGOING
PROCEDURES.
SYSTEMATIC REDEMPTION OPTION. The Systematic Redemption Option allows you
to redeem a specific dollar amount from your account on a regular basis. For
more information or to request the appropriate form, please call 888-287-4093.
PAYMENT OF REDEMPTION PROCEEDS
BY CHECK. Redemption proceeds will be sent to the shareholder(s) of record
at the address of record within seven days after receipt of a valid redemption
request.
BY ELECTRONIC TRANSFER. If you have established the electronic redemption
option, your redemption proceeds can be electronically transferred to your
predesignated bank account on the next bank business day after receipt of your
redemption request (wire transfer) or the second bank business day after receipt
of your redemption request (ACH transfer). Wire transfers will be charged a
$15.00 fee per wire and your bank may charge an additional fee to receive the
wire. ACH transfers are made free of charge. Wire redemptions are not available
for retirement accounts.
If you would like to establish the electronic redemption option on an
existing account, please call 888-287-4093 to request the appropriate form.
If the shares being redeemed were purchased by check, telephone or through
the Automatic Monthly Investment Program, the Fund may delay the payment of your
redemption proceeds for up to 15 days from the day of purchase to allow the
purchase to clear.
WRITTEN INSTRUCTIONS
To redeem all or part of your shares in writing, your request should be sent
to one of the addresses listed under "How to Open Your Fund Account" and must
include the following information:
- the name of the Fund
- the account number(s)
- the amount of money or number of shares being redeemed
- the name(s) on the account
- the signature(s) of all registered account owners
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<PAGE>
- your daytime telephone number
SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
- INDIVIDUAL, JOINT TENANTS, TENANTS IN COMMON: Written instructions must
be signed by each shareholder, exactly as the names appear in the account
registration.
- UGMA OR UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
- SOLE PROPRIETOR, GENERAL PARTNER: Written instructions must be signed by
an authorized individual in his/her capacity as it appears on the account
registration.
- CORPORATION, ASSOCIATION: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified copy
of the corporate resolution authorizing the signer to act must accompany
the request.
- TRUST: Written instructions must be signed by the trustee(s). If the name
of the current trustee(s) does not appear in the account registration, a
certificate of incumbency dated within 60 days must also be submitted.
- IRA: Written instructions must be signed by the account owner. If you do
not want federal income tax withheld from your redemption, you must state
that you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
59 1/2) or premature (before age 59 1/2) and, if premature, whether any
exceptions such as death or disability apply with regard to the 10%
additional tax on early distributions.
SIGNATURE GUARANTEE
In addition to the signature requirements, a signature guarantee is also
required if any of the following is applicable:
- You request a redemption that exceeds $10,000.
- You would like the check made payable to anyone other than the
shareholder(s) of record.
- You would like the check mailed to an address which has been changed
within 30 days of the redemption request.
- You would like the check mailed to an address other than the address of
record.
The Fund reserves the right to require a signature guarantee under other
circumstances or to reject or delay a redemption in accordance with its rights
under the Investment Company Act of 1940. For more information pertaining to
signature guarantees, please call 888-287-4093.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, clearing agencies, broker-dealers, and
member firms of a national securities exchange who are participants in a
medallion program recognized by the Securities Transfer Agents Association. Call
your financial institution to see if they have the ability to guarantee a
signature. A signature guarantee may not be provided by a notary public.
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
WEB SITE. You may access information on the Fund at a Web site located at
http://www.gamna.com. You can access information such as your account balance
and the Fund's NAVs through the Web site. In addition, you may request and/or
download a prospectus for the Fund.
14
<PAGE>
SMALL ACCOUNTS. Due to the proportionately higher costs of maintaining
small accounts, the Fund reserves the right to close your Fund account if your
account balance falls below $250.00 because you've sold shares. This policy does
not apply to accounts that fall below the minimums solely as a result of market
value fluctuations. You will receive notice before we close your account so that
you may increase your account balance to the required minimum.
SHARE CERTIFICATES. The Fund will issue share certificates upon written
request only. Share certificates will not be issued until the shares have been
held for at least 15 days.
TELEPHONE TRANSACTIONS. You may initiate many transactions by telephone.
The Fund and its agents will not be responsible for any losses resulting from
unauthorized transactions when procedures designed to verify the identity of the
caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions.
TEMPORARY SUSPENSION OF SERVICES. The Fund or its agents may, in case of
emergency, temporarily suspend telephone transactions and other shareholder
services.
ADDRESS CHANGES. To change the address on your account, call 888-287-4093
or send a written request signed by all account owners. Include the name of the
Fund, the account number(s), the name(s) on the account and both the old and new
addresses. Certain options may be suspended for 10 days following an address
change unless a signature guarantee is provided.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
The Fund will generally distribute its income annually. The Fund's income
from dividends and interest and any net realized short-term capital gain are
paid to shareholders as ordinary income dividends. Net realized long-term gain
is paid to shareholders as capital gain dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want
to receive your distributions. You may change your distribution option at any
time by writing the Fund at one of the addresses on page 9 or calling
888-287-4093. The Fund offers the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends and capital
gain dividends in additional shares of the same class. This option is
assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital gain
dividends in cash.
3. REINVEST AND CASH OPTION. You may receive either your income dividends
or capital gain dividends in cash and reinvest the other in additional
shares of the same class.
If we are unable to deliver to you any dividend or distribution check and it
remains outstanding for six months, we reserve the right to cancel the check and
reinvest the dividend or distribution in shares of the Fund for your account. If
a check representing the Fund distribution is not cashed within a specified
period, the Fund will notify the investor that he or she has the option of
requesting another check or reinvesting the distribution in the Fund. If the
Fund does not receive the investor's election, the distribution will be
reinvested in the Fund. Similarly, if the Fund sends the investor correspondence
returned as "undeliverable," distributions will automatically be reinvested in
the Fund. We will use the NAV next computed after the check is canceled.
Subsequent distributions may also be reinvested.
15
<PAGE>
TAXES
The Fund intends to qualify as a "regulated investment company" for federal
income tax purposes under Subchapter M of the Code and to meet all other
requirements that are necessary for it to be relieved of federal taxes on income
and gain it distributes to shareholders. If the Fund does not qualify as a
regulated investment company for any taxable year or does not meet certain other
requirements, the Fund will be subject to tax on all of its taxable income and
gains.
The taxation of dividends will not be affected by the form in which you
receive them (cash or additional shares). Ordinary dividends are usually taxable
as ordinary income at the federal, state and local levels. Capital gain
dividends will be taxable as long-term capital gain regardless of on how long
you have owned your shares. If you buy shares just before a distribution, you
will pay tax on the entire amount of the taxable distribution you receive, even
though the NAV will be higher on that date because it includes the distribution
amount.
A portion of the ordinary income dividends paid by the Fund may qualify for
the 70% dividends-received deduction for corporate shareholders, subject to
certain limitations.
Ordinarily, you are required to take distributions by the Fund into account
in the year in which the distributions are made. However, dividends declared in
October, November or December of any year and payable to you in such a month
will be deemed to have been received by you (and made by the Fund) on December
31 of such calendar year if such dividends are actually paid in January of the
following year.
You will recognize gain or loss on the sale or redemption of shares of the
Fund in an amount equal to the difference between the proceeds of the sale or
redemption and your adjusted tax basis in the shares. In general, any gain or
loss arising from the sale or redemption of shares of the Fund will be
considered capital gain or loss and will be long-term capital gain or loss if
the shares were held for longer than one year. However, any capital loss arising
from the sale or redemption of shares held for six months or less will be
treated as a long-term capital loss to the extent of any capital gain dividends
received on such shares.
The Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of ordinary income dividends and capital gain dividends, and the
proceeds of redemption of shares, paid to you if (1) you provide either an
incorrect taxpayer identification number or no number at all, (2) you are
subject to backup withholding by the Internal Revenue Service for failure to
report the receipt of interest or dividend income properly, or (3) you have
failed to certify to the Fund that you are not subject to backup withholding or
that you are a corporation or other "exempt recipient."
Early in each calendar year, the Fund will send you a notice showing the
amount of distributions you received in the proceeding year and the tax status
of those distributions. The above is a general summary of tax implications of
investing in the Fund. Please consult your tax adviser to see how investing in
the Fund will affect your own tax situation.
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APPENDIX A
GLOSSARY OF CERTAIN INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objectives
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the Statement of Additional Information (SAI)
for a more detailed discussion of certain instruments.
Bonds, notes and debentures are debt securities issued by a company,
municipality, government or government agency. The issuer of a bond is required
to pay the holder the amount of the loan (or par value of the bond) at a
specified maturity and to make scheduled interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging
from 1 to 270 days issued by banks, corporations and other borrowers to
investors seeking to invest idle cash.
Common stock represents a share of ownership in a company and usually
carries voting rights and earns dividends. Unlike preferred stock, dividends on
common stock are not fixed but are declared at the discretion of the issuer's
board of directors.
Depositary receipts are receipts for shares of a foreign-based corporation
that entitle the holder to dividends and capital gains on the underlying
security. Receipts include those issued by domestic banks (American Depositary
Receipts), foreign banks (Global or European Depositary Receipts) and broker-
dealers (depositary shares).
Investment grade debt securities are debt securities rated in the category
BBB- or higher by Standard & Poor's Corporation or Baa3 or higher by Moody's
Investors Services, Inc. or the equivalent by another national rating
organization or, if unrated, determined by GAMNA to be of comparable quality.
Money market instruments may include U.S. Government securities, commercial
paper and obligations of banks.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used primarily to provide cash to satisfy unusually high
redemption requests, or for other temporary or emergency purposes.
A-1
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STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information about the Fund and its policies.
It is incorporated by reference into this prospectus. That means that by law it
is considered to be a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
The Fund will issue annual and semi-annual reports. These reports will
contain more information about the Fund's investments and performance. The
annual report will also include details about the market conditions and
investment strategies that had a significant effect on the Fund's performance
during the last fiscal year. The first report the Fund will issue will be its
semi-annual report for the period ending December 31, 1999.
CONTACTING THE FUND
You can get a free copy of these documents or ask us any questions by
calling 888-287-4093 or writing:
GAMNA Focus Fund
c/o PFPC INC.
If you buy your shares through a financial institution, you should contact
that institution directly for more information. You can also find information
on-line at www.gamna.com on the internet.
SECURITIES AND EXCHANGE COMMISSION (SEC)
You can write the SEC's Public Reference Room and ask them to mail you
information about the Fund, including the SAI. They will charge you a copying
fee for this service. You can also visit the Public Reference Section and copy
the documents while you are there.
Public Reference Section of the SEC
Washington, D.C. 20549-6009
1-800-SEC-0330
Reports, a copy of the SAI and other information about the Fund is also
available on the SEC's website at http://www.sec.gov.
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THE INFORMATION CONTAINED HEREIN IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 22, 1999
GAMNA SERIES FUNDS, INC.
GAMNA FOCUS FUND
STATEMENT OF
ADDITIONAL INFORMATION
, 1999
This Statement of Additional Information sets forth information about GAMNA
Series Funds, Inc. and its portfolio, GAMNA Focus Fund, which may be of interest
to investors but which is not necessarily included in the prospectus dated
, 1999 (the "Prospectus") offering shares of GAMNA Focus Fund. This
Statement of Additional Information should be read in conjunction with the
Prospectus. Copies of the Prospectus may be obtained by an investor without
charge by contacting Provident Distributors, Inc., the Fund's distributor (the
"Distributor"), at the address or phone number listed below.
This Statement of Additional Information is not a prospectus and is
authorized for distribution to prospective investors only if preceded or
accompanied by an effective prospectus.
For more information about your account, simply call or write GAMNA Focus
Fund at:
1-888-287-4093
GAMNA Focus Fund
Four Falls Corporate Center
Sixth Floor
West Conshohocken, PA 19428-2961
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TABLE OF CONTENTS
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THE FUND.................................................................. 1
INVESTMENT POLICIES AND RESTRICTIONS...................................... 1
PERFORMANCE INFORMATION................................................... 6
DETERMINATION OF NET ASSET VALUE.......................................... 7
PURCHASES, REDEMPTIONS AND EXCHANGES...................................... 7
DISTRIBUTIONS; TAX MATTERS................................................ 10
MANAGEMENT OF THE COMPANY AND THE FUND.................................... 14
DISTRIBUTION PLANS........................................................ 16
DISTRIBUTION AGREEMENT.................................................... 18
TRANSFER AGENT AND CUSTODIAN.............................................. 18
INDEPENDENT ACCOUNTANTS................................................... 18
COUNSEL................................................................... 18
EXPENSES.................................................................. 18
GENERAL INFORMATION....................................................... 19
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THE FUND
GAMNA Series Funds, Inc. (the "Company") is an open-end investment company
which was organized as a corporation under the laws of the State of Maryland on
March 18, 1999. The Company presently consists of a single series, GAMNA Focus
Fund (the "Fund"). The Fund is non-diversified, as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The shares of the
Fund are collectively referred to in this Statement of Additional Information as
the "Shares."
The Board of Directors of the Company provides broad supervision over the
affairs of the Company including the Fund. Groupama Asset Management, N.A.
("GAMNA" or the "Adviser") is the investment adviser for the Fund. PFPC Inc.
serves as the Company's administrator (the "Administrator") and supervises the
overall administration of the Company, including the Fund.
INVESTMENT POLICIES AND RESTRICTIONS
INVESTMENT POLICIES
The Prospectus sets forth the various investment policies of the Fund. The
following information supplements and should be read in conjunction with the
related sections of the Prospectus. Except as specifically set forth below under
"Investment Restrictions", the investment policies of the Fund (including the
Fund's investment objective) are non-fundamental and may be changed without the
approval of the shareholders of the Fund. In the event of a change in the Fund's
investment objective, shareholders will be given at least 30 days' written
notice prior to such a change. For descriptions of the securities ratings of
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P") see Appendix A.
DEPOSITARY RECEIPTS. The Fund may invest in securities of multinational
companies in the form of American Depositary Receipts or other similar
securities representing securities of foreign issuers, such as European
Depositary Receipts, Global Depositary Receipts and other similar securities
representing securities of foreign issuers (collectively, "Depositary
Receipts"). These securities carry additional risks associated with investing in
foreign securities. These investment risks may involve, among other
considerations, risks relating to future political and economic developments,
more limited liquidity than comparable domestic securities, the possible
imposition of withholding taxes on income, the possible seizure or
nationalization of foreign assets and the possible establishment of exchange
controls or other restrictions. There may be less publicly available information
concerning foreign issuers, there may be difficulties in obtaining or enforcing
a judgment against a foreign issuer and accounting, auditing and financial
reporting standards and practices may differ from those applicable to U.S.
issuers. The Fund treats Depositary Receipts as interests in the underlying
securities for purposes of its investment policies.
MONEY MARKET INSTRUMENTS. The Fund may invest in cash or high-quality,
short-term money market instruments. These may include U.S. Government
securities, commercial paper of domestic issuers and obligations of domestic
banks.
U.S. GOVERNMENT SECURITIES. The Fund may invest in U.S. Government
Securities. U.S. Government Securities include (1) U.S. Treasury obligations,
which generally differ only in their interest rates, maturities and times of
issuance, including U.S. Treasury bills (maturities of one year or less), U.S.
Treasury notes (maturities of one to ten years) and U.S. Treasury bonds
(generally maturities of greater than ten years); and (2) obligations issued or
guaranteed by U.S. Government agencies and instrumentalities which are supported
by any of the following: (a) the full faith and credit of the U.S. Treasury, (b)
the right of the issuer to borrow any amount listed to a specific line of credit
from the U.S. Treasury, (c) discretionary authority of the U.S. Government to
purchase certain obligations of the U.S. Government agency or instrumentality or
(d) the credit of the agency or instrumentality. Agencies and instrumentalities
of the U.S. Government include but are not limited to: Federal Land Banks,
Federal Financing Banks, Banks for Cooperatives, Federal Intermediate Credit
Banks, Farm Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, Student Loan Marketing
Association, United States Postal Service, Chrysler Corporate Loan Guarantee
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Board, Small Business Administration, Tennessee Valley Authority and any other
enterprise established or sponsored by the U.S. Government. Certain U.S.
Government Securities, including U.S. Treasury bills, notes and bonds, are
supported by the full faith and credit of the United States. Other U.S.
Government Securities are issued or guaranteed by federal agencies or government
sponsored enterprises and are not supported by the full faith and credit of the
United States. These securities include obligations that are supported by the
right of the issuer to borrow from the U.S. Treasury and obligations that are
supported by the creditworthiness of the particular instrumentality.
COMMERCIAL PAPER. Commercial paper consists of short-term (usually from 1
to 270 days) unsecured promissory notes issued by corporations in order to
finance their current operations. A variable amount master demand note (which is
a type of commercial paper) represents a direct borrowing arrangement involving
periodically fluctuating rates of interest under a letter agreement between a
commercial paper issuer and an institutional lender pursuant to which the lender
may determine to invest varying amounts.
BANK OBLIGATIONS. Investments in bank obligations are limited to those of
U.S. banks which have total assets at the time of purchase in excess of $1
billion and the deposits of which are insured by either the Bank Insurance Fund
or the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation and such other U.S. commercial banks which are judged by GAMNA to
meet comparable credit standing criteria.
Bank obligations include negotiable certificates of deposit, bankers'
acceptances, fixed time deposits and deposit notes. A certificate of deposit is
a short-term negotiable certificate issued by a commercial bank against funds
deposited in the bank and is either interest-bearing or purchased on a discount
basis. A bankers' acceptance is a short-term draft drawn on a commercial bank by
a borrower, usually in connection with an international commercial transaction.
The borrower is liable for payment as is the bank, which unconditionally
guarantees to pay the draft at its face amount on the maturity date. Fixed time
deposits are obligations of branches of United States banks which are payable at
a stated maturity date and bear a fixed rate of interest. Although fixed time
deposits do not have a market, there are no contractual restrictions on the
right to transfer a beneficial interest in the deposit to a third party. Fixed
time deposits subject to withdrawal penalties and with respect to which a Fund
cannot realize the proceeds thereon within seven days are deemed "illiquid" for
the purposes of its restriction on investments in illiquid securities. Deposit
notes are notes issued by commercial banks which generally bear fixed rates of
interest and typically have original maturities ranging from eighteen months to
five years.
Investments in the banking industry may involve certain credit risks, such
as defaults or downgrades, if at some future date adverse economic conditions
prevail in such industry. Banks are subject to extensive governmental
regulations that may limit both the amounts and types of loans and other
financial commitments that may be made and the interest rates and fees that may
be charged. The profitability of this industry is largely dependent upon the
availability and cost of capital funds for the purpose of financing lending
operations under prevailing money market conditions. Also, general economic
conditions play an important part in the operations of this industry and
exposure to credit losses arising from possible financial difficulties of
borrowers might affect a bank's ability to meet its obligations. Bank
obligations may be general obligations of the parent bank or may be limited to
the issuing branch by the terms of the specific obligations or by government
regulation.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. The
Fund will enter into repurchase agreements only with member banks of the Federal
Reserve System and securities dealers believed creditworthy, and only if fully
collateralized by securities in which the Fund is permitted to invest. Under the
terms of a typical repurchase agreement, the Fund would acquire an underlying
instrument for a relatively short period (usually not more than one week)
subject to an obligation of the seller to repurchase the instrument and the Fund
to resell the instrument at a fixed price and time, thereby determining the
yield during the Fund's holding period. This procedure results in a fixed rate
of return insulated from market fluctuations during such period. A repurchase
agreement is subject to the risk that the seller may fail to repurchase the
security. Repurchase agreements are considered under the 1940 Act to be loans
collateralized by the underlying securities. All repurchase agreements entered
into by the Fund will be fully
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collateralized at all times during the period of the agreement in that the value
of the underlying security will be at least equal to 100% of the amount of the
loan, including the accrued interest thereon, and the Fund or its custodian will
have possession of the collateral, which the Board of Directors believes will
give it a valid, perfected security interest in the collateral. Whether a
repurchase agreement is the purchase and sale of a security or a collateralized
loan has not been conclusively established. This might become an issue in the
event of the bankruptcy of the other party to the transaction. In the event of
default by the seller under a repurchase agreement construed to be a
collateralized loan, the underlying securities would not be owned by the Fund,
but would only constitute collateral for the seller's obligation to pay the
repurchase price. Therefore, the Fund may suffer time delays and incur costs in
connection with the disposition of the collateral. The collateral underlying
repurchase agreements may be more susceptible to claims of the seller's
creditors than would be the case with securities owned by the Fund. Repurchase
agreements maturing in more than seven days are treated as illiquid for purposes
of the Fund's restrictions on purchases of illiquid securities.
BORROWINGS. The Fund may borrow money from banks for temporary or
short-term purposes. But the Fund may not borrow money to buy additional
securities, which is known as "leveraging."
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. Reverse repurchase agreements involve the sale of securities held by
the Fund with an agreement to repurchase the securities at an agreed upon price
and date. The Fund may use this practice to generate cash for shareholder
redemptions without selling securities during unfavorable market conditions.
Whenever the Fund enters into a reverse repurchase agreement, it will establish
a segregated account in which it will maintain liquid assets on a daily basis in
an amount at least equal to the repurchase price (including accrued interest).
The Fund would be required to pay interest on amounts obtained through reverse
repurchase agreements, which are considered borrowings under federal securities
laws. The repurchase price is generally equal to the original sales price plus
interest. Reverse repurchase agreements are usually for seven days or less and
cannot be repaid prior to their expiration dates. Reverse repurchase agreements
involve the risk that the market value of the portfolio securities transferred
may decline below the price at which the Fund is obliged to purchase the
securities.
OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of its total
assets in shares of other investment companies when consistent with its
investment objective and policies, subject to applicable regulatory limitations.
Additional fees may be charged by other investment companies.
SECURITIES LOANS. The Fund is permitted to lend its securities to
broker-dealers and other institutional investors in order to generate additional
income. Such loans of portfolio securities may not exceed 30% of the value of
the Fund's total assets. In connection with such loans, the Fund will receive
collateral consisting of cash, cash equivalents, U.S. Government securities or
irrevocable letters of credit issued by financial institutions. Such collateral
will be maintained at all times in an amount equal to at least 100% of the
current market value plus accrued interest of the securities loaned. The Fund
can increase its income through the investment of such collateral. The Fund
continues to be entitled to the interest payable or any dividend-equivalent
payments received on a loaned security and, in addition, to receive interest on
the amount of the loan. However, the receipt of any dividend-equivalent payments
by the Fund on a loaned security from the borrower will not qualify for the
dividends-received deduction. Such loans will be terminable at any time upon
specified notice. The Fund might experience risk of loss if the institutions
with which it has engaged in portfolio loan transactions breach their agreements
with the Fund. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delays in receiving additional
collateral or in the recovery of the securities or possible loss of rights in
the collateral should the borrower experience financial difficulty. Loans will
be made only to firms deemed by GAMNA to be of good standing and will not be
made unless, in the judgment of GAMNA, the consideration to be earned from such
loans justifies the risk.
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INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions which may not be
changed without approval by a "majority of the outstanding shares" of the Fund
which, as used in this Statement of Additional Information, means the vote of
the lesser of (i) 67% or more of the shares of the Fund present or represented
by proxy at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Fund. The Fund may not:
(1) borrow money, except that the Fund may borrow money for temporary or
emergency purposes, or by engaging in reverse repurchase transactions, in an
amount not exceeding 33 1/3% of the value of its total assets at the time
when the loan is made and may pledge, mortgage or hypothecate no more than
1/3 of its net assets to secure such borrowings;
(2) make loans, except that the Fund may: (i) purchase and hold debt
instruments (including without limitation, bonds, notes, debentures or other
obligations and certificates of deposit, bankers' acceptances and fixed time
deposits) in accordance with its investment objectives and policies; (ii)
enter into repurchase agreements with respect to portfolio securities; and
(iii) lend portfolio securities with a value not in excess of one-third of
the value of its total assets;
(3) purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or repurchase agreements secured thereby) if, as a
result, more than 25% of the Fund's total assets would be invested in the
securities of companies whose principal business activities are in the same
industry;
(4) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments but this shall not prevent the
Fund from investing in securities or other instruments backed by physical
commodities;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments. Investments by the Fund in
marketable securities of companies engaged in such activities are not hereby
precluded;
(6) issue any senior security (as defined in the 1940 Act), except that
(a) the Fund may engage in transactions that may result in the issuance of
senior securities to the extent permitted under applicable regulations and
interpretations of the 1940 Act; (b) the Fund may acquire other securities,
the acquisition of which may result in the issuance of a senior security, to
the extent permitted under applicable regulations or interpretations of the
1940 Act; and (c) subject to the restrictions set forth above, the Fund may
borrow money as authorized by the 1940 Act; or
(7) underwrite securities issued by other persons except insofar as the
Fund may technically be deemed to be an underwriter under the Securities Act
of 1933 in selling a portfolio security.
The following investment restrictions of the Fund may be changed without the
approval of the shareholders of the Fund. The Fund may not:
(1) hold more than 25% of its total assets in securities of any single
issuer and, with respect to 50% of its total assets, hold more than 10% of
the outstanding voting securities of any issuer or invest more than 5% of
its total assets in the securities of any one issuer other than obligations
of the U.S. government, its agencies and instrumentalities.
(2) make short sales of securities, including short sales "against the
box," or purchase securities on margin except for short-term credit
necessary for clearance of portfolio transactions.
(3) invest more than 15% of its net assets in illiquid securities.
(4) write, purchase or sell any put or call option or any combination
thereof.
If a percentage or rating restriction on investment or use of assets set
forth herein or in a Prospectus is adhered to at the time a transaction is
effected, later changes in percentage resulting from any cause other than
actions by the Fund will not be considered a violation; provided, however, that
the Fund will be
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required to reduce its outstanding borrowings in accordance with the
requirements of the 1940 Act if its asset coverage falls below 300%. If the
value of the Fund's holdings of illiquid securities at any time exceeds the
percentage limitation applicable at the time of acquisition due to subsequent
fluctuations in value or other reasons, the Board of Directors will consider
what actions, if any, are appropriate to maintain adequate liquidity.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
Specific decisions to purchase or sell securities for the Fund are made by
the Portfolio Manager. Changes in the Fund's investments are reviewed by the
Board of Directors of the Company. The Portfolio Manager may serve other clients
of GAMNA in a similar capacity.
The frequency of the Fund's portfolio transactions--the portfolio turnover
rate--will vary from year to year depending upon market conditions. The Fund
estimates that its portfolio turnover rate will not exceed 300%. A high turnover
rate may increase transaction costs, including brokerage commissions and dealer
mark-ups, and the possibility of taxable short-term gains. A high turn-over rate
could thus make it more difficult for the Fund to qualify as a registered
investment company under federal tax law. Therefore, GAMNA will weigh the added
costs of short-term investment against anticipated gains, and the Fund will
engage in portfolio trading if the Adviser believes a transaction, net of costs
(including custodian charges), will help it achieve its investment objective.
Under the Advisory Agreement, GAMNA shall use its best efforts to seek to
execute portfolio transactions at prices which, under the circumstances, result
in total costs or proceeds being the most favorable to the Fund. In assessing
the best overall terms available for any transaction, GAMNA considers all
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer, research services provided to GAMNA, and the
reasonableness of the commissions, if any, both for the specific transaction and
on a continuing basis. GAMNA is not required to obtain the lowest commission or
the best net price for the Fund on any particular transaction, and is not
required to execute any order in a fashion either preferential to the Fund
relative to other accounts they manage or otherwise materially adverse to such
other accounts.
Debt securities are traded principally in the over-the-counter market
through dealers acting on their own account and not as brokers. In the case of
securities traded in the over-the-counter market (where no stated commissions
are paid but the prices include a dealer's markup or markdown), GAMNA normally
seeks to deal directly with the primary market makers unless, in its opinion,
best execution is available elsewhere. In the case of securities purchased from
underwriters, the cost of such securities generally includes a fixed
underwriting commission or concession.
Under the Advisory Agreement and as permitted by Section 28(e) of the
Securities Exchange Act of 1934, GAMNA may cause the Fund to pay a broker-dealer
which provides brokerage and research services to GAMNA, the Fund and/or other
accounts for which they exercise investment discretion an amount of commission
for effecting a securities transaction for the Fund in excess of the amount
other broker-dealers would have charged for the transaction if they determine in
good faith that the greater commission is reasonable in relation to the value of
the brokerage and research services provided by the executing broker-dealer
viewed in terms of either a particular transaction or their overall
responsibilities to accounts over which they exercise investment discretion. Not
all of such services are useful or of value in advising the Fund. GAMNA reports
to the Board of Directors regarding overall commissions paid by the Fund and
their reasonableness in relation to the benefits to the Fund. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or of purchasers or sellers of securities, furnishing
analyses and reports concerning issues, industries, securities, economic factors
and trends, portfolio strategy and the performance of accounts, and effecting
securities transactions and performing functions incidental thereto such as
clearance and settlement.
The management fees that the Fund pays to GAMNA will not be reduced as a
consequence of GAMNA's receipt of brokerage and research services. To the extent
the Fund's portfolio transactions are
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used to obtain such services, the brokerage commissions paid by the Fund will
exceed those that might otherwise be paid by an amount which cannot be presently
determined. Such services generally would be useful and of value to GAMNA in
serving one or more of their other clients and, conversely, such services
obtained by the placement of brokerage business of other clients generally would
be useful to GAMNA in carrying out its obligations to the Fund. While such
services are not expected to reduce the expenses of GAMNA, GAMNA would, through
use of the services, avoid the additional expenses which would be incurred if it
should attempt to develop comparable information through its own staff.
In certain instances, there may be securities that are suitable for one or
more of the accounts advised by GAMNA. Investment decisions for the Fund and for
other clients are made with a view to achieving their respective investment
objectives. It may develop that the same investment decision is made for more
than one client or that a particular security is bought or sold for only one
client even though it might be held by, or bought or sold for, other clients.
Likewise, a particular security may be bought for one or more clients when one
or more clients are selling that same security. Some simultaneous transactions
are inevitable when several clients receive investment advice from the same
investment adviser, particularly when the same security is suitable for the
investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could have a detrimental
effect on the price or volume of the security as far as the Fund is concerned.
However, it is believed that the ability of the Fund to participate in volume
transactions will generally produce better executions for the Fund.
No portfolio transactions are executed with any affiliate of GAMNA or the
Distributor, acting either as principal or as broker.
PERFORMANCE INFORMATION
From time to time, the Fund may use hypothetical investment examples and
performance information in advertisements, shareholder reports or other
communications to shareholders. Performance is calculated separately for each
class of Shares. Because such performance information is based on past
investment results, it should not be considered as an indication or
representation of the performance of any classes of the Fund in the future. From
time to time, the performance of classes of the Fund may be quoted and compared
to those of other mutual funds with similar investment objectives, unmanaged
investment accounts, including savings accounts, or other similar products and
to stock or other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the performance of the Fund or its
classes may be compared to data prepared by Lipper Analytical Services, Inc. or
Morningstar Mutual Fund on Disc, widely recognized independent services which
monitor the performance of mutual funds. Performance data as reported in
national financial publications including, but not limited to, Money Magazine,
Forbes, Barron's, The Wall Street Journal and The New York Times, or in local or
regional publications, may also be used in comparing the performance of the Fund
or its classes. The Fund's performance may be compared with indices such as the
S&P 500 Index, the Dow Jones Industrial Average or any other commonly quoted
index of common stock prices. Additionally, the Fund may, with proper
authorization, reprint articles written about the Fund and provide them to
prospective shareholders.
The Fund may provide period and average annual "total rates of return." The
"total rate of return" refers to the change in the value of an investment in the
Fund over a period (which period shall be stated in any advertisement or
communication with a shareholder) based on any change in net asset value per
share including the value of any Shares purchased through the reinvestment of
any dividends or capital gains distributions declared during such period. For
Class A Shares, the average annual total rate of return figures will assume
payment of the maximum initial sales load at the time of purchase. For Class B
and Class C Shares, the average annual total rate of return figures will assume
deduction of the applicable contingent deferred sales charge imposed on a total
redemption of Shares held for the period. One-, five-, and ten-year periods will
be shown, unless the class has been in existence for a shorter period.
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Unlike some bank deposits or other investments which pay a fixed yield for a
stated period of time, the yields and the net asset values of the classes of
Shares will vary based on market conditions, the current market value of the
securities held by the Fund and changes in the Fund's expenses.
Advertising or communications to shareholders may contain the views of GAMNA
as to current market, economic, trade and interest rate trends, as well as
legislative, regulatory and monetary developments, and may include investment
strategies and related matters believed to be of relevance to the Fund.
The Fund's or class's total rate of return for any period will be calculated
by (a) dividing (i) the sum of the net asset value per share on the last day of
the period and the net asset value per share on the last day of the period of
Shares purchasable with dividends and capital gains declared during such period
with respect to a share held at the beginning of such period and with respect to
Shares purchased with such dividends and capital gains distributions, by (ii)
the public offering price per share on the first day of such period, and (b)
subtracting 1 from the result. The average annual rate of return quotation will
be calculated by (x) adding 1 to the period total rate of return quotation as
calculated above, (y) raising such sum to a power which is equal to 365 divided
by the number of days in such period, and (z) subtracting 1 from the result.
DETERMINATION OF NET ASSET VALUE
As of the date of this Statement of Additional Information, the New York
Stock Exchange is open for trading every weekday except for the following
holidays: New Year's Day, Martin Luther King Jr.'s Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
Equity securities in the Fund's portfolio are valued at the last sale price
on the exchange on which they are primarily traded or on the NASDAQ National
Market System, or at the last quoted bid price for securities in which there
were no sales during the day or for other unlisted (over-the-counter) securities
not reported on the NASDAQ National Market System. Bonds and other fixed income
securities (other than short-term obligations, but including listed issues) in
the Fund's portfolio are valued on the basis of valuations furnished by a
pricing service, the use of which has been approved by the Board of Directors.
In making such valuations, the pricing service utilizes both dealer-supplied
valuations and electronic data processing techniques that take into account
appropriate factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data, without exclusive reliance upon quoted
prices or exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities.
Short-term obligations which mature in 60 days or less are valued at amortized
cost, which approximates market value. Portfolio securities (other than
short-term obligations) for which there are no such quotations or valuations are
valued at fair value as determined in good faith by or at the direction of the
Board of Directors.
Interest income on long-term obligations in the Fund's portfolio is
determined on the basis of coupon interest accrued plus amortization of discount
(the difference between acquisition price and stated redemption price at
maturity) and premiums (the excess of purchase price over stated redemption
price at maturity). Interest income on short-term obligations is determined on
the basis of interest and discount accrued less amortization of premium.
PURCHASES, REDEMPTIONS AND EXCHANGES
The Fund has established certain procedures and restrictions, subject to
change from time to time, for purchase, redemption, and exchange orders,
including procedures for accepting telephone instructions and effecting
automatic investments and redemptions. The Fund's Transfer Agent may defer
acting on a shareholder's instructions until it has received them in proper
form. In addition, the privileges described in the Prospectus are not available
until a completed and signed account application has been received by the
Transfer Agent. Telephone transaction privileges are made available to
shareholders automatically upon opening an account unless the privilege is
declined on the Account Application. The Telephone Exchange Privilege is not
available if you were issued certificates for Shares that remain outstanding.
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Upon receipt of any instructions or inquiries by telephone from a
shareholder or, if held in a joint account, from either party, or from any
person claiming to be the shareholder, the Fund or its agent is authorized,
without notifying the shareholder or joint account parties, to carry out the
instructions or to respond to the inquiries, consistent with the service options
chosen by the shareholder or joint shareholders in his or their latest account
application or other written request for services, including purchasing,
exchanging, or redeeming Shares and depositing and withdrawing monies from the
bank account specified in the shareholder's latest account application or as
otherwise properly specified to the Fund in writing.
Subject to compliance with applicable regulations, the Fund has reserved the
right to pay the redemption price of its Shares, either totally or partially, by
a distribution in kind of readily marketable portfolio securities (instead of
cash). The Company has filed an election under Rule 18f-1 committing to pay in
cash all redemptions by a shareholder of record up to amounts specified by the
rule (approximately $250,000). The securities so distributed would be valued at
the same amount as that assigned to them in calculating the net asset value for
the Shares being sold. If a shareholder received a distribution in kind, the
shareholder could incur brokerage or other charges in converting the securities
to cash.
Class B Shares automatically convert to Class A Shares (and thus are then
subject to the lower expenses borne by Class A Shares) after the beginning of
the ninth year after the date of purchase (the "CDSC Period"), together with the
pro rata portion of all Class B Shares representing dividends and other
distributions paid in additional Class B Shares attributable to the Class B
Shares then converting. At the time of the conversion the net asset value per
share of the Class A Shares may be higher or lower than the net asset value per
share of the Class B Shares; as a result, depending on the relative net asset
values per share, a shareholder may receive fewer or more Class A Shares than
the number of Class B Shares converted.
The Fund may require signature guarantees for changes that shareholders
request be made in Fund records with respect to their accounts, including but
not limited to, changes in bank accounts, for any written requests for
additional account services made after a shareholder has submitted an initial
account application to the Fund, and in certain other circumstances described in
the Prospectus. The Fund may also refuse to accept or carry out any transaction
that does not satisfy any restrictions then in effect. A signature guarantee may
be obtained from a bank, trust company, broker-dealer or other member of a
national securities exchange. Please note that a notary public cannot provide a
signature guarantee.
Investors may incur a fee if they effect transactions through a broker or
agent.
REDUCED SALES CHARGES
Class A Shares may be purchased by any person at a reduced initial sales
charge which is determined by (a) aggregating the dollar amount of the new
purchase and the greater of the purchaser's total (i) net asset value or (ii)
cost of any Shares acquired and still held in the Fund and (b) applying the
initial sales charge applicable to such aggregate dollar value (the "Cumulative
Quantity Discount"). The privilege of the Cumulative Quality Discount is subject
to modification or discontinuance at any time with respect to all Class A Shares
purchased thereafter.
An individual who is a member of a qualified group (as hereinafter defined)
may also purchase Class A Shares at the reduced sales charge applicable to the
group taken as a whole. The reduced initial sales charge is based upon the
aggregate dollar value of Class A Shares previously purchased and still owned by
the group plus the securities currently being purchased and is determined as
stated in the preceding paragraph. In order to obtain such Discount, the
purchaser or investment dealer must provide the Transfer Agent with sufficient
information, including the purchaser's total cost, at the time of purchase to
permit verification that the purchaser qualifies for a Cumulative Quantity
Discount, and confirmation of the order is subject to such verification.
Information concerning the current initial sales charge applicable to a group
may be obtained by contacting the Transfer Agent.
A "qualified group" is one which (i) has been in existence for more than six
months, (ii) has a purpose other than acquiring Class A Shares at a discount and
(iii) satisfies uniform criteria which enables the Distributor to realize
economies of scale in its costs of distributing Class A Shares. A qualified
group must
8
<PAGE>
have more than 10 members, must be available to arrange for group meetings
between representatives of the Fund and the members must agree to include sales
and other materials related to the Fund in its publications and mailings to
members at reduced or no cost to the Distributor, and must seek to arrange for
payroll deduction or other bulk transmission of investments in the Fund. This
would include, but it not limited to, retirement plans under Section 401 or 408
of the Internal Revenue Code. This privilege is subject to modification or
discontinuance at any time with respect to all Class A Shares purchased
thereafter.
The Fund may sell Class A Shares without an initial sales charge to (i) the
Directors of the Company (and their immediate families), (ii) employees (and
their immediate families) of GAMNA, (iii) the Fund's Distributor and transfer
agent or any affiliates or subsidiaries thereof, registered representatives and
other employees (and their immediate families) of broker-dealers having selected
dealer agreements with the Fund's Distributor, (iv) employees (and their
immediate families) of financial institutions having selected dealer agreements
with the Fund's Distributor (or otherwise having an arrangement with a
broker-dealer or financial institution with respect to sales of GAMNA Focus Fund
Shares), (v) participants in "wrap-fee" or asset allocation programs or other
fee-based arrangements sponsored by broker-dealers and other financial
institutions that have entered into agreements with GAMNA, (vi) and financial
institution trust departments investing an aggregate of $1 million or more in
GAMNA Focus Fund.
Purchases of the Fund's Class A Shares may be made with no initial sales
charge (i) by an investment adviser, broker or financial planner, provided
arrangements are preapproved and purchases are placed through an omnibus account
with the Fund or (ii) by clients of such investment adviser or financial planner
who place trades for their own accounts, if such accounts are linked to a master
account of such investment adviser or financial planner on the books and records
of the broker or agent.
Initial sales charges on Class A Shares may be waived if the investor is
using redemption proceeds received within the prior ninety days from non-GAMNA
funds to buy his or her Shares, and on which he or she paid a front-end or
contingent deferred sales charge.
Some participant-directed employee benefit plans participate in a
"multi-fund" program which offers both GAMNA and non-GAMNA mutual funds. The
money that is invested in GAMNA Focus Fund may be combined with the other mutual
funds in the same program when determining the plan's eligibility to buy Class A
Shares for purposes of the discount privileges and programs described above.
No initial sales charge will apply to the purchase of the Fund's Class A
Shares if (i) one is investing proceeds from a qualified retirement plan where a
portion of the plan was invested in GAMNA Focus Fund, (ii) one is investing
through any qualified retirement plan with 50 or more participants or (iii) one
is a participant in certain qualified retirement plans and is investing (or
reinvesting) the proceeds from the repayment of a plan loan made to him or her.
Purchases of the Fund's Class A Shares may be made with no initial sales
charge in accounts opened by a bank, trust company or thrift institution which
is acting as a fiduciary exercising investment discretion, provided that
appropriate notification of such fiduciary relationship is reported at the time
of the investment to the Fund or the Fund's Distributor.
The contingent deferred sales charge for Class B and Class C Shares will be
waived for redemptions in connection with the Fund's systematic redemption plan.
In addition, subject to confirmation of a shareholder's status, the contingent
deferred sales charge will be waived for: (i) a total or partial redemption made
within one year of the shareholder's death or initial qualification for Social
Security disability payments; (ii) a redemption in connection with a Minimum
Required Distribution from an IRA, Keogh or custodial account under section
403(b) of the Internal Revenue Code or a mandatory distribution from a qualified
plan; (iii) redemptions made from an IRA, Keogh or custodial account under
section 403(b) of the Internal Revenue Code through an established Systematic
Redemption Plan; (iv) a redemption resulting from an over-contribution to an
IRA; (v) distributions from a qualified plan upon retirement; (vi) an
involuntary redemption of an account balance under $500; (vii) the redemption of
Shares by participants in certain wrap-fee or asset allocation programs
sponsored by broker-dealers and other financial institutions that have entered
into agreements with GAMNA.
9
<PAGE>
The Fund reserve the right to change any of these policies at any time and
may reject any request to purchase Shares at a reduced sales charge.
TAX MATTERS
The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Fund's Prospectus. No attempt is made to present a detailed explanation of the
tax treatment of the Fund or its shareholders, and the discussions here and in
the Fund's Prospectus are not intended as substitutes for careful tax planning.
QUALIFICATION AS A REGULATED INVESTMENT COMPANY
The Fund intends to qualify and elect to be taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code") and to meet all other requirements that are necessary for it to be
relieved of federal taxes on income and gains it distributes to shareholders. As
a regulated investment company, the Fund is not subject to federal income tax on
the portion of its net investment income (i.e., its investment company taxable
income, as that term is defined in the Code, without regard to the deduction for
dividends paid ) and net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) that it distributes to shareholders,
provided that it distributes at least 90% of its net investment income for the
taxable year (the "Distribution Requirement"), and satisfies certain other
requirements of the Code that are described below. Distributions by the Fund
made during the taxable year or, under specified circumstances, within twelve
months after the close of the taxable year, will be considered distributions of
income and gains of the taxable year and can therefore satisfy the Distribution
Requirement.
In addition to satisfying the Distribution Requirement for each taxable
year, a regulated investment company must derive at least 90% of its gross
income from dividends, interest, certain payments with respect to securities
loans, gains from the sale or other disposition of stock or securities or
foreign currencies (to the extent such currency gains are directly related to
the regulated investment company's principal business of investing in stock or
securities) and other income derived with respect to its business of investing
in such stock, securities or currencies (the "Income Requirement").
In addition to satisfying the requirements described above, the Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of such issuer and as to which the Fund does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the value
of its total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses.
The Fund may make investments that produce income that is not matched by a
corresponding cash distribution to the Fund, such as investments having original
issue discount (i.e., an amount equal to the excess of the stated redemption
price of the security at maturity over its issue price) or market discount
(i.e., an amount equal to the excess of the stated redemption price of the
security over the basis of such bond immediately after it was acquired), if the
Fund elects to accrue market discount on a current basis. In addition, income
may continue to accrue for federal income tax purposes with respect to a
non-performing investment. Any such income would be treated as income earned by
the Fund and therefore would be subject to the distribution requirements of the
Code. Because such income may not be matched by a corresponding cash
distribution to the Fund, the Fund may be required to borrow money or dispose of
other securities to be able to make distributions to its investors.
If for any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income (including its net capital gain) will be
subject to tax at regular corporate rates without any
10
<PAGE>
deduction for distributions to shareholders, and such distributions will be
taxable to the shareholders as ordinary dividends to the extent of the Fund's
current and accumulated earnings and profits. Such distributions generally will
be eligible for the dividends-received deduction in the case of corporate
shareholders.
EXCISE TAX ON REGULATED INVESTMENT COMPANIES
A 4% non-deductible excise tax is imposed on a regulated investment company
that fails to distribute in each calendar year an amount equal to 98% of
ordinary taxable income for the calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year (or, at the
election of a regulated investment company having a taxable year ending November
30 or December 31, for its taxable year (a "taxable year election"). The balance
of such income must be distributed during the next calendar year. For the
foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year.
The Fund intends to make sufficient distributions or deemed distributions of
its ordinary taxable income and capital gain net income prior to the end of each
calendar year to avoid liability for the excise tax. However, investors should
note that the Fund may in certain circumstances be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability.
FUND DISTRIBUTIONS
The Fund anticipates distributing substantially all of its net investment
income for each taxable year. Such distributions will be taxable to shareholders
as ordinary income and treated as dividends for federal income tax purposes, but
they will qualify for the 70% dividends-received deduction for corporations only
to the extent discussed below. Dividends paid on Class A, Class B and Class C
Shares are calculated at the same time.
The Fund may either retain or distribute to shareholders its net capital
gain for each taxable year. The Fund currently intends to distribute any such
amounts. If net capital gain is distributed and designated as a "capital gain
dividend," it will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his Shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his Shares.
The maximum rate of tax on long-term capital gains of individuals is 20%
(10% for gains otherwise taxed at 15%) with respect to capital assets held for
more than one year.
If the Fund elects to retain its net capital gain, the Fund will be taxed
thereon (except to the extent of any available capital loss carryovers) at the
35% corporate tax rate. If the Fund elects to retain its net capital gain, it is
expected that the Fund also will elect to have shareholders of record on the
last day of its taxable year treated as if each received a distribution of his
pro rata share of such gain, with the result that each shareholder will be
required to report his pro rata share of such gain on his tax return as
long-term capital gain, will receive a refundable tax credit for his pro rata
share of tax paid by the Fund on the gain, and will increase the tax basis for
his Shares by an amount equal to the deemed distribution less the tax credit.
Ordinary income dividends paid by the Fund with respect to a taxable year
will qualify for the 70% dividends-received deduction generally available to
corporations to the extent of the amount of qualifying dividends received by the
Fund from domestic corporations for the taxable year. A dividend received by the
Fund will not be treated as a qualifying dividend (1) if it has been received
with respect to any share of stock that the Fund has held for less than 46 days
(91 days in the case of certain preferred stock) during the 90 day period
beginning on the date which is 45 days before the date on which such share
becomes ex-dividend with respect to such dividend (during the 180 day period
beginning 90 days before such date in the case of certain preferred stock) under
the rules of Code Section 246(c)(3) and (4); (2) to the extent that the Fund is
under an obligation to make related payments with respect to positions in
substantially similar or related property; or (3) to the extent the stock on
which the dividend is paid is treated as debt-
11
<PAGE>
financed under the rules of Code Section 246A. Moreover, the dividends-received
deduction for a corporate shareholder may be disallowed or reduced if the
corporate shareholder fails to satisfy the foregoing requirements with respect
to its Shares.
Distributions by the Fund that do not constitute ordinary income dividends,
or capital gain dividends will be treated as a return of capital to the extent
of (and in reduction of) the shareholder's tax basis in his Shares; any excess
will be treated as gain from the sale of his Shares, as discussed below.
Distributions by the Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional Shares. Shareholders receiving a distribution in the form of
additional Shares will be treated as receiving a distribution in an amount equal
to the fair market value of the Shares received, determined as of the
reinvestment date. In addition, if the net asset value at the time a shareholder
purchases Shares reflects undistributed net investment income or net capital
gain, or unrealized appreciation in the value of the assets of the Fund,
distributions of such amounts will be taxable to the shareholder in the manner
described above, although such distributions economically constitute a return of
capital to the shareholder.
Ordinarily, shareholders are required to take distributions by the Fund into
account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
The Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of ordinary income dividends and capital gain dividends, and the
proceeds of redemption of Shares, paid to any shareholder (1) who has provided
either an incorrect taxpayer identification number or no number at all, (2) who
is subject to backup withholding by the IRS for failure to report the receipt of
interest or dividend income properly, or (3) who has failed to certify to the
Fund that it is not subject to backup withholding or that it is a corporation or
other "exempt recipient."
SALE OR REDEMPTION OF SHARES
A shareholder will recognize gain or loss on the sale or redemption of
Shares in an amount equal to the difference between the proceeds of the sale or
redemption and the shareholder's adjusted tax basis in the Shares. All or a
portion of any loss so recognized may be disallowed if the shareholder purchases
other Shares within 30 days before or after the sale or redemption. In general,
any gain or loss arising from (or treated as arising from) the sale or
redemption of Shares will be considered capital gain or loss and will be
long-term capital gain or loss if the Shares were held for longer than one year.
However, any capital loss arising from the sale or redemption of Shares held for
six months or less will be treated as a long-term capital loss to the extent of
the amount of capital gain dividends received on such Shares. For this purpose,
special holding period rules may apply in determining the holding period of
Shares. Capital losses in any year are deductible only to the extent of capital
gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.
FOREIGN SHAREHOLDERS
Taxation of a shareholder who, as to the United States, is a nonresident
alien individual, foreign trust or estate, foreign corporation, or foreign
partnership ("foreign shareholder"), depends on whether the income from the Fund
is "effectively connected" with a U.S. trade or business carried on by such
shareholder.
If the income from the Fund is not effectively connected with a U.S. trade
or business carried on by a foreign shareholder, dividends paid to a foreign
shareholder from net investment income will be subject to U.S. withholding tax
at the rate of 30% (or lower treaty rate) upon the gross amount of the dividend.
Such a foreign shareholder would generally be exempt from U.S. federal income
tax on gains realized on the
12
<PAGE>
sale of Shares and capital gain dividends and amounts retained by the Fund that
are designated as undistributed capital gains.
If the income from the Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the sale of Shares will be
subject to U.S. federal income tax at the rates applicable to U.S. citizens or
domestic corporations. In the case of foreign noncorporate shareholders, the
Fund may be required to withhold U.S. federal income tax at a rate of 31% on
distributions that are otherwise exempt from withholding tax (or taxable at a
reduced treaty rate) unless such shareholders furnish the Fund with proper
notification of their foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the Fund, including
the applicability of foreign taxes.
STATE AND LOCAL TAX MATTERS
Depending on the residence of the shareholder for tax purposes,
distributions may also be subject to state and local taxes or withholding taxes.
Shareholders are urged to consult their tax advisers as to the consequences of
these and other state and local tax rules affecting investment in the Fund.
EFFECT OF FUTURE LEGISLATION
The foregoing general discussion of U.S. federal income tax consequences is
based on the Code and the Treasury Regulations issued thereunder as in effect on
the date of this Statement of Additional Information. Future legislative or
administrative changes or court decisions may significantly change the
conclusions expressed herein, and any such changes or decisions may have a
retroactive effect with respect to the transactions contemplated herein.
13
<PAGE>
MANAGEMENT OF THE COMPANY AND THE FUND
DIRECTORS AND OFFICERS
The business and affairs of the Corporation shall be managed under the
direction of its Board of Directors.
The Directors and officers of the Company and their principal occupations
for at least the past five years are set forth below.
<TABLE>
<CAPTION>
NAME, AGE, ADDRESS POSITION HELD WITH FUND PRINCIPAL OCCUPATION(S) PAST 5 YEARS
- ------------------------------------- ---------------------------- ---------------------------------------------
<S> <C> <C>
Robert T. Adams (age 44) Director Attorney, Wilson, Elser, Moskowitz, Edelman &
150 E. 42nd Street Dicker, 1986-present.
New York, NY 10017-5639
Vincent Benefico (age 38) Director Manager, Fixed Income Product Management,
263 Tresser Boulevard, 14th Floor Reuters America Holdings, Inc. ("Reuters"),
Stamford, CT 06901 1999-present; Product Support Manager,
Reuters, 1997-1999; Technical Specialist,
Reuters, 1995-1997; Manager, Quality Control,
Reuters, 1992-1997.
Mark Bronzo (age 38)* Director, President and Senior Vice President (1998-present), Vice
180 Maiden Lane Chief Executive Officer President (1995-1998), Managing Director and
New York, NY 10038 Board Member (1998-present) of GAMNA
(formerly Sorema Asset Management
Company)--1995-present; Chief Investment
Officer of Sorema N.A. Group--1989-1998
James S. Carluccio (age 45) Director Independent consultant, 2/99-present;
70 Wearimus Road Executive Vice President, Technology
Ho-Ho-Kus, NJ 07423 Solutions Company, 1992-1999
Edward Fogarty, Jr. (age 40) Director Attorney, White & McSpedon, P.C.,
875 Avenue of the Americas 4/19/1999-present; attorney, Fogarty &
New York, NY 10001 Fogarty PC, 1984-1999
Daniel Portanova (age 38)* Director, Treasurer and Senior Vice President, Managing Director and
180 Maiden Lane Chief Operating Officer Board Member of GAMNA--1998-present; Vice
New York, NY 10038 President and Managing Director of Sorema
Asset Management Company, 1995-1998; Managing
Director-- General Reinsurance Asset
Management--1993-1995
Jonathan M. Rather (age 39) Director General Partner and Chief Financial Officer
425 Park Avenue, 28th Floor of Welsh, Carson, Anderson &
New York, NY 10022 Stowe--currently; Chief Operating Officer and
Chief Financial Officer of Goelet
Corporation, 1985-1999
Iona Watter (age 46) Secretary Second Vice President (1999), Corporate
Secretary and Compliance Officer, GAMNA
1995-present; Second Vice President and
Corporate Secretary of Sorema N.A. Group
(1994-1999); AVP and Assistant Corporate
Secretary (1989-1994).
</TABLE>
- ------------------------
* Asterisks indicate those Directors that are "interested persons" (as defined
in the 1940 Act).
14
<PAGE>
The Board of Directors of the Company presently has an Audit Committee. The
members of the Audit Committee are Messrs. Adams, Benefico, Carluccio, Fogarty
and Rather. The function of the Audit Committee is to recommend independent
auditors and monitor accounting and financial matters.
REMUNERATION OF DIRECTORS AND CERTAIN EXECUTIVE OFFICERS
Each Director who is not an affiliate of GAMNA receives a fee which consists
of an annual retainer of $3,000 and a meeting fee of $500 for each meeting
attended. Each Director is also reimbursed for expenses incurred in attending
each meeting of the Board of Directors or any committee thereof.
The Articles of Incorporation provide that the Company will indemnify its
Directors and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Company, unless, as to liability to the Company or its shareholders, it is
finally adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices or with
respect to any matter unless it is finally adjudicated that they did not act in
good faith in the reasonable belief that their actions were in the best interest
of the Company. In the case of settlement, such indemnification will not be
provided unless it has been determined by a court or other body approving the
settlement or other disposition, or by a reasonable determination based upon a
review of readily available facts, by vote of a majority of disinterested
Directors or in a written opinion of independent counsel, that such officers or
Directors have not engaged in willful misfeasance, bad faith, gross negligence
or reckless disregard of their duties.
GAMNA
GAMNA acts as investment adviser to the Fund pursuant to an Investment
Advisory Agreement, (the "Advisory Agreement"). Subject to such policies as the
Board of Directors may determine, GAMNA is responsible for investment decisions
for the Fund. Pursuant to the terms of the Advisory Agreement, GAMNA provides
the Fund with such investment advice and supervision as it deems necessary for
the proper supervision of the Fund's investments. GAMNA provides a continuous
investment program and determines from time to time what securities shall be
purchased, sold or exchanged and what portion of the Fund's assets shall be held
uninvested. GAMNA also oversees certain administrative, compliance and
accounting services for the Fund. GAMNA furnishes, at its own expense, all
services, facilities and personnel necessary in connection with managing the
investments and effecting portfolio transactions for the Fund. The Advisory
Agreement for the Fund will continue in effect for an initial two year period
and thereafter for successive annual periods provided that such continuance is
specifically approved at least annually by (i) the Board of Directors or by vote
of a majority of the Fund's outstanding voting securities and (ii) by a majority
of the Directors who are not parties to the Advisory Agreement or interested
persons of any such party, at a meeting called for the purpose of voting on such
Advisory Agreement.
Pursuant to the terms of the Advisory Agreement, GAMNA is permitted to
render services to others. The Advisory Agreement is terminable without penalty
by the Company on behalf of the Fund on not more than 60 days', nor less than 30
days', written notice when authorized either by a majority vote of the Fund's
shareholders or by a vote of a majority of the Board of Directors of the
Company, or by GAMNA on not more than 60 days', nor less than 30 days', written
notice, and will automatically terminate in the event of its "assignment" (as
defined in the 1940 Act). The Advisory Agreement provides that GAMNA shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution of portfolio
transactions for the Fund, except for wilful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties thereunder.
GAMNA (formerly Sorema Asset Management Company) was formed as a joint
venture between Groupama Asset Management and Sorema N.A. Holding Corporation.
GAMNA is 80% owned by Groupama Asset Management N.A. and 20% owned by Sorema
N.A. Holding Corporation. Groupama Asset Management N.A. is 96.1% owned by
Banque Financiere Groupama, which is in turn owned 67.7%
15
<PAGE>
by Groupama Finance and 28.7% by AMACAM. Groupama Finance is 100% owned by
Groupama S.A. AMACAM is 50% owned by Groupama S.A., 25% owned by SACAM S.A. and
25% owned by CNCA S.A. CNCA S.A. and SACAM S.A. are both controlled by Credit
Agricoles. Sorema N.A. Holding Corporation is 100% owned by Sorema (Paris) which
is in turn owned 100% by Financiere Sorema. Financiere Sorema is 93.5% owned by
Groupama Reassurance. Groupama Reassurance is 36.2% owned by Groupama S.A.,
23.45% owned by Groupama Assurances and Services and 40.35% owned by Groupama.
Groupama Assurances and Services is 96.03% owned by Groupama S.A. Groupama S.A.
is 100% owned by Groupama.
In consideration of the services provided by GAMNA pursuant to the Advisory
Agreement, GAMNA is entitled to receive from the Fund an investment advisory fee
computed daily and paid monthly based on a rate equal to a percentage of the
Fund's average daily net assets specified in the Prospectus. However, GAMNA may
voluntarily agree to waive a portion of the fees payable to it on a
month-to-month basis. The Fund may be required to reimburse GAMNA for any
advisory fees waived.
GAMNA may from time to time, at its own expense out of compensation retained
by it from the Fund or other sources available to it, make additional payments
to certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers. These services include maintaining
account records, processing orders to purchase, redeem and exchange Shares and
responding to certain customer inquiries. The amount of such compensation may be
up to an additional % annually of the average net assets of the Fund
attributable to Shares held by customers of such shareholder servicing agents.
Such compensation does not represent an additional expense to the Fund or its
shareholders, since it will be paid by GAMNA.
ADMINISTRATOR
Pursuant to an Administration Agreement (the "Administration Agreement"),
PFPC Inc. is the administrator of the Fund. The Administrator provides certain
administrative services to the Fund, including, among other responsibilities,
certain accounting, clerical and bookkeeping services, assistance in the
preparation of reports to shareholders, coordinating the negotiation of
contracts and fees with, and the monitoring of performance and billing of, the
Fund's independent contractors and agents; preparation for signature by an
officer of the Company of documents required to be filed for compliance by the
Company with applicable laws and regulations including those of the Securities
and Exchange Commission and the securities laws of various states; arranging for
the computation of performance data, including net asset value; and arranging
for the maintenance of books and records of the Fund and providing, at its own
expense, office facilities, equipment and personnel necessary to carry out its
duties. The Administrator does not have any responsibility or authority for the
management of the Fund, the determination of investment policy, or for any
matter pertaining to the distribution of Shares.
In consideration of the services provided pursuant to the Administration
Agreement, the Administrator receives from the Fund a fee computed daily and
paid monthly at an annual rate equal to 120% of the Fund's first $250 million of
average daily net assets; .095% of the next $250 million; .070% of the next $250
million; and .050% of the average daily net assets in excess of $750 million.
Certain class, base and minimum fees also apply.
DISTRIBUTION PLANS
The Company has adopted separate plans of distribution pursuant to Rule
12b-1 under the 1940 Act (a "Distribution Plan") on behalf of each class of
Shares as described in the Prospectus. The Distribution Plans provide that each
class of Shares shall pay for distribution services a distribution fee (the
"Distribution Fee"), including payments to the Distributor, at annual rates not
to exceed the amounts set forth in the Prospectus. The Distributor may use all
or any portion of such Distribution Fee to pay for Fund expenses of printing
prospectuses and reports used for sales purposes, expenses of the preparation
and
16
<PAGE>
printing of sales literature and other distribution-related expenses, including
payments to selected securities dealers. Promotional activities for the sale of
each class of Shares may be conducted generally, and activities intended to
promote one class of Shares may also benefit the Fund's other Shares.
Class B and Class C Shares pay a Distribution Fee of up to 0.75% of average
daily net assets. The Distributor currently expects to pay sales commissions to
a dealer at the time of sale of Class B and Class C Shares of up to 4.00% and
1.00%, respectively, of the purchase price of the Shares sold by such dealer.
The Distributor will use its own funds (which may be borrowed or otherwise
financed) to pay such amounts. Because the Distributor will receive a maximum
Distribution Fee of 0.75% of average daily net assets with respect to Class B
Shares, it will take the Distributor several years to recoup the sales
commissions paid to dealers and other sales expenses.
Some payments under the Distribution Plans may be used to compensate
broker-dealers with trail or maintenance commissions in an amount not to exceed
0.25% annualized of the average net asset value of Class A Shares, or 0.25%
annualized of the average net asset value of the Class B Shares, or 0.75%
annualized of the average net asset value of the Class C Shares, maintained in
the Fund by such broker-dealers' customers. Trail or maintenance commissions on
Class B and Class C Shares will be paid to broker-dealers beginning the 13th
month following the purchase of such Class B or Class C Shares. Since the
distribution fees are not directly tied to expenses, the amount of distribution
fees paid by the Fund during any year may be more or less than actual expenses
incurred pursuant to the Distribution Plans. For this reason, this type of
distribution fee arrangement is characterized by the staff of the Securities and
Exchange Commission as being of the "compensation variety" (in contrast to
"reimbursement" arrangements by which a distributor's payments are directly
linked to its expenses). With respect to Class B and Class C Shares, because of
the 0.75% annual limitation on the compensation paid to the Distributor during a
fiscal year, compensation relating to a large portion of the commissions
attributable to sales of Class B or Class C Shares in any one year will be
accrued and paid by the Fund to the Distributor in fiscal years subsequent
thereto. In determining whether to purchase Class B or Class C Shares, investors
should consider that compensation payments could continue until the Distributor
has been fully reimbursed for the commissions paid on sales of Class B and Class
C Shares. However, the Shares are not liable for any distribution expenses
incurred in excess of the Distribution Fee paid.
Each class of Shares is entitled to exclusive voting rights with respect to
matters concerning its Distribution Plan.
Each Distribution Plan provides that it will continue in effect indefinitely
if such continuance is specifically approved at least annually by a vote of both
a majority of the Directors and a majority of the Directors who are not
"interested persons" (as defined in the 1940 Act) of the Company and who have no
direct or indirect financial interest in the operation of the Distribution Plans
or in any agreement related to such Plan ("Qualified Directors"). Each
Distribution Plan was approved on . Each Distribution Plan requires that
the Company shall provide to the Board of Directors, and the Board of Directors
shall review, at least quarterly, a written report of the amounts expended (and
the purposes therefor) under the Distribution Plan. Each Distribution Plan
further provides that the selection and nomination of Qualified Directors shall
be committed to the discretion of the disinterested Directors (as defined in the
1940 Act) then in office. Each Distribution Plan may be terminated at any time
by a vote of a majority of the Qualified Directors or by vote of a majority of
the outstanding voting shares of the class of the Fund. Each Distribution Plan
may not be amended to increase materially the amount of permitted expenses
thereunder without the approval of shareholders and may not be materially
amended in any case without a vote of the majority of both the Directors and the
Qualified Directors. The benefit the Fund anticipates from the Distribution
Plans is that the Fund will obtain the Distributor's services as underwriter and
its best efforts at selling Shares of the Fund.
17
<PAGE>
DISTRIBUTION AGREEMENT
The Company has entered into a Distribution Agreement (the "Distribution
Agreement") with the "Distributor", pursuant to which the Distributor serves as
the Fund's exclusive underwriter and has agreed to use its best efforts to
promote and arrange for the sale of each class of Shares and enters into dealer
agreements with broker-dealers to sell shares. The shares will be offered
continuously. The Company pays for all of the expenses for qualification of the
Shares for sale in connection with the public offering of such Shares, and all
legal expenses in connection therewith.
The Distribution Agreement will continue in effect for an initial two year
period and thereafter for successive annual periods only if such continuance is
specifically approved at least annually by (i) the Board of Directors or by vote
of a majority of the Fund's outstanding voting securities and (ii) by a majority
of the Directors who are not parties to the Distribution Agreement or
"interested persons" (as defined in the 1940 Act) of any such party. The
Distribution Agreement is terminable without penalty by the Company on behalf of
the Fund on 60 days' written notice when authorized either by a majority vote of
the Fund's shareholders or by vote of a majority of the Board of Directors of
the Company, including a majority of the Directors who are not "interested
persons" (as defined in the 1940 Act) of the Company, or by the Distributor on
60 days' written notice, and will automatically terminate in the event of its
"assignment" (as defined in the 1940 Act). The Distribution Agreement also
provides that neither the Distributor nor its personnel shall be liable for any
act or omission in the course of, or connected with, rendering services under
the Distribution Agreement, except for willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.
TRANSFER AGENT AND CUSTODIAN
The Company has also entered into a Transfer Agency Agreement pursuant to
which PFPC Inc. serves as transfer agent and dividend-paying agent for the
Company. The Transfer Agent's address is 400 Bellevue Parkway, Wilmington, DE
19809.
Pursuant to a Custodian Agreement, PFPC Trust Company serves as the
Custodian of the assets of the Fund and receives such compensation as is agreed
upon from time to time. As Custodian provides oversight and record keeping for
the assets held in the portfolios of the Fund. The Custodian is located at 200
Stevens Drive, Lester, Pennsylvania 19113.
INDEPENDENT ACCOUNTANTS
KPMG LLP provides the Fund with audit services, tax return preparation and
assistance and consultation with respect to the preparation of filings with the
Securities and Exchange Commission. The financial statement included in this
Statement of Additional Information has been included in reliance upon the
report of KPMG LLP, 345 Park Avenue, New York, New York 10154, independent
accountants of the Fund, given on the authority of that firm as experts in
accounting and auditing.
LEGAL COUNSEL
Simpson Thacher & Bartlett serves as counsel to the Company and the Fund.
Piper & Marbury L.L.P., Baltimore, Maryland has issued an opinion regarding the
valid issuance of Shares being offered pursuant to the Fund's Prospectus.
EXPENSES
The Fund pays the expenses incurred in its operations, including its pro
rata share of expenses of the Company. These expenses include investment
advisory and administrative fees; the compensation of the Directors;
registration fees; interest charges; taxes; expenses connected with the
execution, recording and settlement of security transactions; fees and expenses
of the Fund's custodian for all services to the Fund, including safekeeping of
funds and securities and maintaining required books and accounts; expenses of
18
<PAGE>
preparing and mailing reports to investors and to government offices and
commissions; expenses of meetings of investors; fees and expenses of independent
accountants, of legal counsel and of any transfer agent, registrar or dividend
disbursing agent of the Company; insurance premiums; and expenses of calculating
the net asset value of, and the net income on, Shares. Distribution fees are
allocated to specific classes of the Fund. In addition, the Fund may allocate
transfer agency and certain other expenses by class. Service providers to the
Fund may, from time to time, voluntarily waive all or a portion of any fees to
which they are entitled.
GENERAL INFORMATION
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
GAMNA Series Funds, Inc. is an open-end management investment company
organized as corporation under the laws of the State of Maryland on March 18,
1999. The Company currently consists of one series of Shares of common stock,
par value $.01 per share, relating to the GAMNA Focus Fund. The Company has
reserved the right to create and issue additional series or classes. Each share
of a series or class represents an equal proportionate interest in that series
or class with each other share of that series or class. The Shares of each
series or class participate equally in the earnings, dividends and assets of the
particular series or class. Expenses of the Company which are not attributable
to a specific series or class are allocated among all the series in a manner
believed by management of the Company, under the supervision of the Board of
Directors, to be fair and equitable. Shares have no pre-emptive or conversion
rights. Shareholders are entitled to one vote for each whole share held, and
each fractional share shall be entitled to a proportionate fractional vote,
except that Shares held by the Company shall not be voted. Shares of each series
or class generally vote together, except when required under the 1940 Act to
vote separately on matters that only affect a particular class, such as the
approval of distribution plans for a particular class.
The Fund offers Class A, Class B and Class C Shares. The classes of Shares
have several different attributes relating to sales charges and expenses, as
described herein and in the Prospectus. In addition to such differences,
expenses borne by each class of the Fund may differ slightly because of the
allocation of other class-specific expenses. For example, a higher transfer
agency fee may be imposed on certain classes. The relative impact of initial
sales charges, contingent deferred sales charges, and ongoing annual expenses
will depend on the length of time a share is held.
Selected dealers and financial consultants may receive different levels of
compensation for selling one particular class of Shares rather than another.
The business and affairs of the Company are managed under the general
direction and supervision of the Company's Board of Directors. The Company is
not required to and does not currently intend to hold annual meetings of
shareholders but will hold special meetings of shareholders of a series or class
when required by the 1940 Act and when, in the judgment of the Directors, it is
necessary or desirable to submit matters for a shareholder vote. Shareholders
have, under certain circumstances, the right to communicate with other
shareholders in connection with requesting a meeting of shareholders. No
material amendment may be made to the Company's Articles of Incorporation
without the affirmative vote of the holders of a majority of the outstanding
shares of each portfolio affected by the amendment. Shares have no preemptive or
conversion rights.
Stock certificates are issued only upon the written request of a
shareholder. No certificates are issued for Class B Shares due to their
conversion feature.
The Board of Directors has adopted a code of ethics addressing personal
securities transactions by investment personnel and access persons and other
related matters. The code has been designated to address potential conflicts of
interest that can arise in connection with personal trading activities of such
persons. Persons subject to the code are generally permitted to engage in
personal securities transactions, subject to certain prohibitions, pre-clearance
requirements and blackout periods.
19
<PAGE>
CONTROL PERSONS, PRINCIPAL HOLDERS AND MANAGEMENT OWNERSHIP
As of the date of this Statement of Additional Information, 100% of the
issued and outstanding common stock of the Company is owned by GAMNA.
As of the date hereof, the Directors and officers as a group own less than
1% of the Fund's outstanding Shares, all of which were acquired for investment
purposes.
20
<PAGE>
[Audit Report]
INDEPENDENT AUDITORS REPORT
The Board of Directors
GAMNA Series Funds, Inc.
We have audited the accompanying Statement of Assets and Liabilities of
GAMNA Focus Fund (the "Fund") as of , 1999. This financial statement is
the responsibility of the Fund's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of GAMNA Focus Fund as of
, 1999, in conformity with generally accepted accounting principles.
New York, New York
[date]
21
<PAGE>
FINANCIAL STATEMENTS
GAMNA SERIES FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
, 1999
<TABLE>
<S> <C>
Assets:
Cash..............................................................................
---------
Total Assets:.......................................................................
---------
---------
Liabilities:
Organization expenses payable.....................................................
Net Assets........................................................................
Net Assets consist of:
Paid-in capital...................................................................
Net Assets........................................................................
Shares outstanding..................................................................
---------
Net asset value, offering and redemption price per share............................
---------
---------
</TABLE>
See accompanying notes to financial statement.
22
<PAGE>
GAMNA SERIES FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
GAMNA Series Funds, Inc (the "Company"), an open-end management investment
company, has one portfolio, GAMNA Focus Fund (the "Fund"). The Series was
incorporated in Maryland on March , 1999. The Fund is classified as a
non-diversified fund under the Investment Company Act of 1940, as amended (the
"1940 Act").
As of March , 1999, the Series had no other activity except for matters
relating to its organization and the purchase by Groupama Asset Management N.A.
("GAMNA"), the Fund's investment adviser, of Shares of the Fund.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
NOTE 2. MANAGEMENT AND ADVISORY FEES AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement with GAMNA.
Pursuant to the agreement, GAMNA manages the investment and reinvestment of the
Fund's assets. GAMNA also furnishes office space, personnel and certain
facilities required for the performance by GAMNA of the services provided by it
to the Fund under the management contract.
As compensation for its services, the Fund will pay GAMNA a monthly fee at
an annual rate, based on its average daily net assets, of between 0.50% and
0.55%.
GAMNA has voluntarily agreed to impose an expense cap on the total operating
expenses (exclusive of taxes, interest and extraordinary expenses such as
litigation and indemnification expenses) for the Fund at 1.9% for the fiscal
year ending June 30, 2000.
NOTE 3. ORGANIZATION EXPENSES
Organization expenses estimated at $ have been charged to expense.
23
<PAGE>
SPECIMEN COMPUTATIONS OF OFFERING PRICES PER SHARE
<TABLE>
<S> <C>
A Shares:
Net Asset Value and Redemption Price per Share at an assumed net asset value of
$10.00 per share.................................................................. $ 10.00
Maximum Offering Price per Share (an assumed net value of $10.00 per share divided
by .9425) (reduced on purchases of $100,000 or more).............................. $ 10.61
B Shares:
Net Asset Value and Redemption Price per Share at an assumed net asset value of
$10.00 per share.................................................................. $ 10.00
C Shares:
Net Asset Value and Redemption Price per Share at an assumed net asset value of
$10.00 per share.................................................................. $ 10.00
</TABLE>
24
<PAGE>
APPENDIX A
DESCRIPTION OF RATINGS
A description of the rating policies of Moody's and S&P with respect to
bonds and commercial paper appears below.
MOODY'S INVESTORS SERVICE'S CORPORATE BOND RATINGS
Aaa--Bonds which are rated "Aaa" are judged to be of the best quality and
carry the smallest degree of investment risk. Interest payments are protected by
a large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa--Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated "A" possess many favorable investment qualities and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are rated "Ba" are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B--Bonds which are rated "B" generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated "Caa" are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated "Ca" represent obligations which are speculative
in high degree. Such issues are often in default or have other marked
shortcomings.
C--Bonds which are rated "C" are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's applies numerical modifiers "1", "2", and "3" to certain of its
rating classifications. The modifier "1" indicates that the security ranks in
the higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category.
STANDARD & POOR'S RATINGS GROUP CORPORATE BOND RATINGS
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to repay principal and pay
interest.
A-1
<PAGE>
AA--Bonds rated "AA" also qualify as high quality debt obligations. Capacity
to pay principal and interest is very strong, and differs from "AAA" issues only
in small degree.
A--Bonds rated "A" have a strong capacity to repay principal and pay
interest, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB--Bonds rated "BBB" are regarded as having an adequate capacity to repay
principal and pay interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to repay principal and pay interest for
bonds in this category than for higher rated categories.
BB-B-CCC-CC-C--Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and C the highest
degree of speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
CI--Bonds rated "CI" are income bonds on which no interest is being paid.
D--Bonds rated "D" are in default. The "D" category is used when interest
payments or principal payments are not made on the date due even if the
applicable grace period has not expired unless S&P believes that such payments
will be made during such grace period. The "D" rating is also used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
The ratings set forth above may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
MOODY'S INVESTORS SERVICE'S COMMERCIAL PAPER RATINGS
Prime-1--Issuers (or related supporting institutions) rated "Prime-1" have a
superior ability for repayment of senior short-term debt obligations. "Prime-1"
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries, high
rates of return on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers (or related supporting institutions) rated "Prime-2" have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is maintained.
Prime-3--Issuers (or related supporting institutions) rated "Prime-3" have
an acceptable ability for repayment of senior short-term obligations. The effect
of industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.
Not Prime--Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.
STANDARD & POOR'S RATINGS GROUP COMMERCIAL PAPER RATINGS
S&P commercial paper rating is current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded in several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. The four categories are as follows:
A-2
<PAGE>
A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-13"
A-3--Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
B--Issues rated "B" are regarded as having only speculative capacity for
timely payment.
C--This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.
D--Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date due, even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
After purchase by the Fund, a security may cease to be rated or its rating
may be reduced below the minimum required for purchase by the Fund. Neither
event will require a sale of such security by the Fund. However, the Fund's
Adviser will consider such event in its determination of whether the Fund should
continue to hold the security. To the extent the ratings given by Moody's or S&P
may change as a result of changes in such organizations or their rating systems,
the Fund will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in the Prospectus and in the
Statement of Additional Information.
A-3
<PAGE>
GAMNA SERIES FUNDS, INC.
PART C.
OTHER INFORMATION
ITEM 23. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ --------------------------------------------------------------------------------------------------
<C> <C> <S>
(a) -- Articles of Incorporation of Registrant.
(b) -- By-Laws of Registrant.
(c) -- None.
(d) -- Form of Management Contract between Registrant and Groupama Asset Management N.A. relating to the
GAMNA Focus Fund.
(e) -- Form of Distribution Agreement between Registrant and Provident Distributors, Inc.
(f) -- None.
(g) -- Form of Custodian Agreement between Registrant and PFPC Trust Company.
(h)(i) -- Form of Transfer Agency Agreement between Registrant and PFPC Inc.
(h)(ii) -- Form of Administration Agreement between Registrant and PFPC Inc.
(h)(iii) -- Form of Share Purchase Agreement.
(h)(iv) -- Form of Expense Limitation Agreement between Registrant and Groupama Asset Management N.A.
relating to the GAMNA Focus Fund.
(i) -- Opinion and Consent of Counsel of Piper & Marbury L.L.P. as to the Legality of Securities Being
Registered.
(j) -- Consent of Independent Accountants.*
</TABLE>
- ------------------------
* To be filed by amendment.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 25. INDEMNIFICATION.
Reference is made to Article XII of Registrant's Articles of Incorporation,
Article V of Registrant's By-Laws and Section 11(b) of the Distribution
Agreement between the Registrant and Provident Distributors, Inc.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant understands that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities 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,
II-1
<PAGE>
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The list required by this Item 26 of officers and directors of Groupama
Asset Management, together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated by reference
to Schedules A and D of the FORM ADV filed by Groupama Asset Management,
pursuant to the Advisers Act (SEC File No. 801-50836).
ITEM 27. PRINCIPAL UNDERWRITER.
(a) Provident Distributors, Inc. currently acts as distributor for, in
addition to the Registrant:
Time Horizon Funds
Pacific Innovations Trust
International Dollar Reserve Fund I, Ltd.
Provident Institutional Funds Trust
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Fund, Inc.
Columbia High Yield Fund, Inc.
Columbia National Municipal Bond Fund, Inc.
Kalmar Pooled Investment Trust
The RBB Fund, Inc.
Robertson Stephens Investment Trust
HT Insight Funds, Inc.
Harris Insight Funds, Inc.
Hilliard-Lyons Government Fund, Inc.
Hilliard-Lyons Growth Fund, Inc.
The Rodney Square Fund
The Rodney Square Tax-Exempt Fund
The Rodney Square Strategic Equity Fund
The Rodney Square Strategic Fixed-Income Fund
The BlackRock Funds, Inc. (Distributed by BlackRock Distributors, Inc., a wholly
owned subsidiary of Provident Distributors, Inc.)
The OFFITBANK Investment Fund, Inc. (Distributed by OFFIT Funds Distributor,
Inc., a wholly owned subsidiary of Provident Distributors, Inc.)
The OFFITBANK Variable Insurance Fund, Inc. (Distributed by OFFIT Funds
Distributor, Inc., a wholly owned subsidiary of Provident Distributors, Inc.)
CVO Greater China Fund, Inc. (Distributed by OFFIT Funds Distributor, Inc., a
wholly owned subsidiary of Provident Distributors, Inc.)
(b) The information required by this Item 27 with respect to each director,
officer or partner of Provident Distributors, Inc. is incorporated by reference
to Schedule A of Form BD filed by Provident Distributors, Inc. pursuant to the
Securities Exchange Act of 1934 (SEC File No. 8-46564).
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
(1) Administrator:
PFPC Inc.
400 Bellevue Parkway
Willmington, DE 19809
(2) Custodian:
PFPC Trust Company
200 Stevens Drive
Lester, PA 19113
II-2
<PAGE>
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
The Registrant undertakes to file a post-effective amendment containing
certified financial statements showing the initial capital received before
accepting subscriptions from more than 25 persons if the Fund intends to raise
its capital under section 14(a)(3) of the Investment Company Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, as amended, and the
Investment Company Act, as amended, the Registrant has duly caused this
Pre-Effective Amendment No. 1 to be signed on its behalf by the undersigned,
duly authorized, in the City of New York, and State of New York, on the 24th day
of June, 1999.
<TABLE>
<S> <C> <C>
GAMNA SERIES FUNDS, INC.
-----------------------------------
(Registrant)
By: /s/ Mark P. Bronzo
-----------------------------------
Mark P. Bronzo
PRESIDENT
</TABLE>
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------------- ---------------------------------------------- -----------------
<C> <S> <C>
/s/ Mark P. Bronzo Director and President (principal executive
------------------------------------ officer) June 24, 1999
Mark P. Bronzo
/s/ Daniel W. Portanova Director and Treasurer (principal financial
------------------------------------ and accounting officer) June 24, 1999
Daniel W. Portanova
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------ --------------------------------------------------------------------------------------------------
<C> <C> <S>
(a) -- Articles of Incorporation of Registrant.
(b) -- By-Laws of Registrant.
(c) -- None.
(d) -- Form of Management Contract between Registrant and Groupama Asset Management N.A. relating to the
GAMNA Focus Fund.
(e) -- Form of Distribution Agreement between Registrant and Provident Distributors, Inc.
(f) -- None.
(g) -- Form of Custodian Agreement between Registrant and PFPC Trust Company.
(h)(i) -- Form of Transfer Agency Agreement between Registrant and PFPC Inc.
(h)(ii) -- Form of Administration Agreement between Registrant and PFPC Inc.
(h)(iii) -- Form of Share Purchase Agreement.
(h)(iv) -- Form of Expense Limitation Agreement between Registrant and Groupama Asset Management N.A.
relating to the GAMNA Focus Fund.
(i) -- Opinion and Consent of Counsel of Piper & Marbury L.L.P. as to the Legality of Securities Being
Registered.
(j) -- Consent of Independent Accountants.*
</TABLE>
- ------------------------
* To be filed by amendment.
II-5
<PAGE>
EXHIBIT (a)
GAMNA SERIES FUNDS, INC.
ARTICLES OF INCORPORATION
FIRST: The undersigned, Robert L. Monkmeyer, whose address is 425 Lexington
Avenue, New York, New York 10017-3954, being at least eighteen years of age,
acting as incorporator, does hereby form a corporation under the General Laws of
the State of Maryland.
SECOND: The name of the corporation (which is hereinafter called the
"Corporation") is:
GAMNA Series Funds, Inc.
THIRD: (a) The purposes for which the Corporation is formed and the
business and objects to be carried on and promoted by it are:
(1) To engage primarily in the business of investing, reinvesting or
trading in securities as an investment company classified under the
Investment Company Act of 1940 as an open-end, management company.
(2) To engage in any one or more businesses or transactions, or to
acquire all or any portion of any entity engaged in any one or more
businesses or transactions, which the Board of Directors may from time to
time authorize or approve, whether or not related to the business described
elsewhere in this article or to any other business at the time or
theretofore engaged in by the Corporation.
(b) The foregoing enumerated purposes and objects shall be in no way limited
or restricted by reference to, or inference from, the terms of any other clause
of this or any other Article of these Articles of Incorporation, and each shall
be regarded as independent; and they are intended to be and shall be construed
as powers as well as purposes and objects of the Corporation and shall be in
addition to and not in limitation of the general powers of corporations under
the General Laws of the State of Maryland.
FOURTH: The present address of the principal office of the Corporation in
this State is c/o The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202.
FIFTH: The name and address of the resident agent of the Corporation in this
State are The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202. Said resident agent is a Maryland corporation.
SIXTH: (a) The total number of shares of stock of all classes and series
which the Corporation initially has authority to issue is five hundred million
(500,000,000) shares of capital stock (par value $.001 per share), amounting in
aggregate par value to Five Hundred Thousand Dollars ($500,000). All of the
authorized shares of capital stock of the Corporation are initially classified
as "Common Stock," of which three hundred million (300,000,000) shares are
further initially classified as a series of Common Stock designated "GAMNA Focus
Fund". The remaining two hundred million (200,000,000) shares of authorized but
unissued Common Stock remain undesignated as to series or class. The Board of
Directors may classify and reclassify any unissued shares of capital stock by
setting or changing in any one or more respects the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of such shares of stock.
(b) Unless otherwise prohibited by law, so long as the Corporation is
registered as an open-end company under the Investment Company Act of 1940, the
Board of Directors shall have the power and authority, without the approval of
the holders of any outstanding shares, to increase or decrease the number of
shares of capital stock, or the number of shares of capital stock of any class
or series, that the Corporation has authority to issue.
(c) The following is a description of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the
<PAGE>
GAMNA Focus Fund and any additional series of Common Stock of the Corporation
(unless otherwise provided in the articles supplementary or other charter
document classifying or reclassifying such series):
(1) All consideration received by the Corporation from the issue or sale
of shares of a particular series of Common Stock, together with all assets
in which such consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived
from any investment or reinvestment of such proceeds in whatever form the
same may be, shall irrevocably belong to that series for all purposes and
shall be so recorded upon the books of account of the Corporation. Such
consideration, assets, income, earnings, profits and proceeds, together with
any items allocated as provided in the following sentence, are hereinafter
referred to collectively as the "assets belonging to" that series. In the
event that there are any assets, income, earnings, profits or proceeds which
are not identifiable as belonging to a particular series of Common Stock,
such items shall be allocated by or under the supervision of the Board of
Directors to and among one or more of the series of Common Stock from time
to time classified or reclassified, in such manner and on such basis as the
Board of Directors, in its sole discretion, deems fair and equitable. Each
such allocation shall be conclusive and binding for all purposes. No holder
of a particular series of Common Stock shall have any right or claim against
the assets belonging to any other series, except as a holder of the shares
of such other series.
(2) The assets belonging to each series of Common Stock shall be charged
with the liabilities of the Corporation in respect of that series and all
expenses, costs, charges and reserves attributable to that series. Any
liabilities, expenses, costs, charges or reserves of the Corporation which
are attributable to more than one series of Common Stock, or are not
identifiable as pertaining to any series, shall be allocated and charged by
or under the supervision of the Board of Directors to and among one or more
of the series of Common Stock from time to time classified or reclassified,
in such manner and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. Each such allocation shall be
conclusive and binding for all purposes. The liabilities, expenses, costs,
charges and reserves charged to a series of Common Stock are hereinafter
referred to collectively as the "liabilities of" that series. All persons
who have extended credit with respect to, or who have a claim or contract in
respect of, a particular series of Common Stock shall look only to the
assets belonging to that series for payment or satisfaction of such credit,
claim or contract.
(3) The net asset value per share of a particular series of Common Stock
shall be the quotient obtained by dividing the value of the net assets of
that series (being the value of the assets belonging to that series less the
liabilities of that series) by the total number of shares of that series
outstanding, all as determined by or under the direction of the Board of
Directors in accordance with generally accepted accounting principles and
the Investment Company Act of 1940. Subject to the applicable provisions of
the Investment Company Act of 1940, the Board of Directors, in its sole
discretion, may prescribe and shall set forth in the by-laws of the
Corporation, or in a duly adopted resolution of the Board of Directors, such
bases and times for determining the current net asset value per share of
each series of Common Stock, and the net income attributable to such series,
as the Board of Directors deems necessary or desirable. The Board of
Directors shall have full discretion, to the extent not inconsistent with
the Maryland General Corporation Law and the Investment Company Act of 1940,
to determine whether any moneys or other assets received by the Corporation
shall be treated as income or capital and whether any item of expense shall
be charged to income or capital, and each such determination shall be
conclusive and binding for all purposes.
(4) Subject to the provisions of law and any preferences of any class or
series of stock from time to time classified or reclassified, dividends,
including dividends payable in shares of another class or series of the
Corporation's stock, may be paid on a particular class or series of Common
Stock of the Corporation at such time and in such amounts as the Board of
Directors may deem advisable.
2
<PAGE>
Dividends and other distributions on the shares of a particular series of
Common Stock shall be paid only out of the assets belonging to that series
after providing for the liabilities of that series.
(5) Each share of Common Stock shall have one vote, irrespective of the
class or series thereof, and the exclusive voting power for all purposes
shall be vested in the holders of the Common Stock. All classes and series
of Common Stock shall vote together as a single class; provided, however,
that as to any matter with respect to which a separate vote of a particular
class or series is required by the Investment Company Act of 1940 or the
Maryland General Corporation Law, such requirement shall apply and, in that
event, the other classes and series entitled to vote on the matter shall
vote together as a single class; and provided, further, that the holders of
a particular class or series of Common Stock shall not be entitled to vote
on any matter which does not affect any interest of that class or series,
including liquidation of another class or series, except as otherwise
required by the Investment Company Act of 1940 or the Maryland General
Corporation Law.
(6) Each holder of Common Stock shall have the right to require the
Corporation to redeem all or any part of his shares of any class or series
at a redemption price equal to the current net asset value per share of that
class or series which is next computed after receipt of a tender of such
shares for redemption, less such redemption fee or deferred sales charge, if
any, as the Board of Directors may from time to time establish in accordance
with the Investment Company Act of 1940 and the Rules of Fair Practice
adopted by the National Association of Securities Dealers, Inc. Payment of
the redemption price shall be made by the Corporation only from the assets
belonging to the series whose shares are being redeemed. The redemption
price shall be paid in cash; provided, however, that if the Board of
Directors determines, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable,
the Corporation may, to the extent and in the manner permitted by law, make
payment wholly or partly in securities or other assets, at the value of such
securities or other assets used in such determination of current net asset
value. Notwithstanding the foregoing, the Corporation may suspend the right
of holders of any series of Common Stock to require the Corporation to
redeem their shares, or postpone the date of payment or satisfaction upon
such redemption for more than seven days after tender of such shares for
redemption, during any period or at any time when and to the extent
permitted under the Investment Company Act of 1940.
(7) To the extent and in the manner permitted by the Investment Company
Act of 1940 and the Maryland General Corporation Law, the Board of Directors
may cause the Corporation to redeem, at their current net asset value, the
shares of any series of Common Stock held in the account of any stockholder
having, because of redemptions or exchanges, an aggregate net asset value
which is less than the minimum initial investment in that series specified
by the Board of Directors from time to time in its sole discretion.
(8) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, or of the liquidation of a
particular series of Common Stock, the holders of each series that is being
liquidated shall be entitled, after payment or provision for payment of the
liabilities of that series, as a class, to share ratably in the remaining
assets belonging to the series. The holders of shares of any particular
series shall not be entitled thereby to any distribution upon the
liquidation of any other series. The liquidation of any series of Common
Stock of which there are shares then outstanding shall be approved by the
vote of a majority (as defined in the Investment Company Act of 1940) of the
outstanding shares of that series, and without the vote of the holders of
shares of any other series of Common Stock.
(9) Subject to compliance with the Investment Company Act of 1940, the
Board of Directors shall have authority to provide that holders of any
series of Common Stock shall have the right to exchange their shares for
shares of one or more other series in accordance with such requirements and
procedures as may be established by the Board of Directors.
3
<PAGE>
(d) Subject to the foregoing and to the Investment Company Act of 1940, the
power of the Board of Directors to classify and reclassify any of the shares of
capital stock shall include, without limitation, subject to the provisions of
the charter of the Corporation, authority to classify or reclassify any unissued
shares of such stock into one or more classes or series of preferred stock,
preference stock, special stock or other stock, and to divide and classify
shares of any class or series into one or more classes or series of such class
or series by determining, fixing or altering one or more of the following:
(1) The distinctive designation of such class or series and the number
of shares to constitute such class or series; provided that, unless
otherwise prohibited by the terms of such or any other class or series, the
number of shares of any class or series may be decreased by the Board of
Directors in connection with any classification or reclassification of
unissued shares and the number of shares of such class or series may be
increased by the Board of Directors in connection with any such
classification or reclassification, and any shares of any class or series
which have been redeemed, purchased, otherwise acquired or converted into
shares of any other class or series shall become part of the authorized
capital stock and be subject to classification and reclassification as
herein provided.
(2) Whether or not and, if so, the rates, amounts and times at which,
and the conditions under which, dividends shall be payable on shares of such
class or series, whether any such dividends shall rank senior or junior to
or on a parity with the dividends payable on any other class or series of
stock, and the status of any such dividends as cumulative, cumulative to a
limited extent or noncumulative and as participating or non-participating.
(3) Whether or not shares of such class or series shall have voting
rights, in addition to any voting rights provided by law and, if so, the
terms of such voting rights.
(4) Whether or not shares of such class or series shall have conversion
or exchange privileges and, if so, the terms and conditions thereof,
including provision for adjustment of the conversion or exchange rate in
such events or at such times as the Board of Directors shall determine.
(5) Whether or not shares of such class or series shall be subject to
redemption and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be redeemable and
the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates; and whether or
not there shall be any sinking fund or purchase account in respect thereof
and, if so, the terms thereof.
(6) The rights of the holders of shares of such class or series upon the
liquidation, dissolution or winding up of the affairs of, or upon any
distribution of the assets of, the Corporation, which rights may vary
depending upon whether such liquidation, dissolution or winding up is
voluntary or involuntary and, if voluntary, may vary at different dates, and
whether such rights shall rank senior or junior to or on a parity with such
rights of any other class or series of stock.
(7) Whether or not there shall be any limitations applicable, while
shares of such class or series are outstanding, upon the payment of
dividends or making of distributions on, or the acquisition of, or the use
of monies for purchase or redemption of, any stock of the Corporation, or
upon any other action of the Corporation, including action under this
paragraph and, if so, the terms and conditions thereof.
(8) Any other preferences, rights, restrictions, including restrictions
on transferability, and qualifications of shares of such class or series,
not inconsistent with law and the charter of the Corporation.
(e) For the purposes hereof and of any articles supplementary to the charter
providing for the classification or reclassification of any shares of capital
stock or of any other charter document of the
4
<PAGE>
Corporation (unless otherwise provided in any such articles or document), any
class or series of stock of the Corporation shall be deemed to rank:
(1) prior to another class or series either as to dividends or upon
liquidation, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable on liquidation, dissolution
or winding up, as the case may be, in preference or priority to holders of
such other class or series;
(2) on a parity with another class or series either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation price per share thereof be different from those
of such others, if the holders of such class or series of stock shall be
entitled to receipt of dividends or amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion to their
respective dividend rates or redemption or liquidation prices, without
preference or priority over the holders of such other class or series; and
(3) junior to another class or series either as to dividends or upon
liquidation, if the rights of the holders of such class or series shall be
subject or subordinate to the rights of the holders of such other class or
series in respect of the receipt of dividends or the amounts distributable
upon liquidation, dissolution or winding up, as the case may be.
(f) The Corporation may issue and sell fractions of shares of capital stock
having pro rata all the rights of full shares, including, without limitation,
the right to vote and to receive dividends, and wherever the words "share" or
"shares" are used in the charter or By-laws of the Corporation, they shall be
deemed to include fractions of shares where the context does not clearly
indicate that only full shares are intended.
(g) The Corporation shall not be obligated to issue certificates
representing shares of capital stock of any class or series. At the time of
issue or transfer of shares without certificates, the Corporation shall provide
the stockholder with such information as may be required under the Maryland
General Corporation Law.
SEVENTH: Pursuant to the authority of the Board of Directors contained in
these Articles of Incorporation to classify and reclassify unissued shares of
capital stock of the Corporation, the Board of Directors has duly classified:
(a) 100,000,000 shares of the authorized and unissued shares of GAMNA Focus
Fund Common Stock as Class A Common Stock of GAMNA Focus Fund, par value $.001
per share,
(b) 100,000,000 shares of the authorized and unissued shares of GAMNA Focus
Fund Common Stock as Class B Common Stock of GAMNA Focus Fund, par value $.001
per share, and
(c) 100,000,000 shares of the authorized and unissued shares of GAMNA Focus
Fund Common Stock as Class C Common Stock of GAMNA Focus Fund, par value $.001
per share.
Any class of capital stock shall be referred to herein individually as a
"Class" and collectively, together with any further classes from time to time
established, as "Classes."
EIGHTH: The shares of Class A Common Stock, Class B Common Stock and Class C
Common Stock of GAMNA Focus Fund, as so divided and classified by the
Corporation's Board of Directors, shall have and be subject to all of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of rights
to require redemption set forth in the charter.
NINTH: Notwithstanding any provision to the contrary contained herein, with
respect to determining dividends payable to shareholders of Class A Common
Stock, Class B Common Stock or Class C Common Stock of GAMNA Focus Fund, the
Board of Directors may determine not to permit certain dividends to accrue on
shares until the proceeds from the sale thereof are included in assets belonging
to such Classes
5
<PAGE>
of capital stock and/or to permit certain dividends to continue to accrue on
shares redeemed through the day before redemption proceeds are removed from the
assets belonging to such Classes of Common Stock.
TENTH: The shares of any Class of Common Stock of GAMNA Focus Fund shall
represent the same interest in the Corporation and have identical voting,
dividend, liquidation, and other rights, terms and conditions with any other
shares of GAMNA Focus Fund Common Stock, provided however:
(a) The shares of Class A, Class B and Class C Common Stock shall be subject
to such front-end sales charges and/or contingent deferred sales charges as may
be established by the Board of Directors from time to time in accordance with
the Investment Company Act of 1940, as amended and applicable rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD").
(b) Expenses related solely to a particular Class of Common Stock including,
without limitation, distribution expenses under a Rule 12b-1 plan and
administrative expenses under an administration or service agreement, plan or
other arrangement, however designated) shall be borne by that Class and shall be
appropriately reflected (in the manner determined by the Board of Directors) in
the net asset value, dividends, distribution and liquidation rights of the
shares of that Class.
(c) Except as may be otherwise required by law pursuant to any applicable
order, rule or regulation issued by the Securities and Exchange Commission (the
"SEC") or under Maryland law or otherwise, the holders of stock of any Class of
Common Stock created by these Articles of Incorporation shall have respectively
(i) exclusive voting rights with respect to any matter submitted to a vote of
stockholders which affects such Class (provided that it if it affects one or
more of such Classes, but less than all of such Classes, the affected Classes
shall together have the exclusive vote), including without limitation, the
provisions of any distribution plan adopted by the Corporation pursuant to Rule
12b-1 under the Investment Company Act applicable to such Class and (ii) no
voting rights with respect to the provisions of any Rule 12b-1 plan not
applicable to such Class or with regard to any other matter submitted to a vote
of stockholders that does not affect the holders of such Class.
(d) On the ninth anniversary of the first business day of the month
following the month in which shares of Class B Common Stock were purchased by a
stockholder, such Class B shares (as well as a pro rata portion of any Class B
shares purchased through the reinvestment of dividends and other distributions
paid in respect of all Class B shares held by such stockholder) shall
automatically convert to Class A shares. The Board of Directors, in its sole
discretion, may suspend the conversion of Class B shares if such ruling and
opinion are no longer available.
(e) The number of Class A shares into which the Class B shares are converted
pursuant to paragraph (d) above shall equal the number (including for these
purposes fractional shares) obtained by dividing the net asset value per share
of the Class B Common Stock, for purposes of sales and redemptions on the
conversion date, by the net asset value per share of the Class A Common Stock
for purposes of sales and redemptions thereof on the conversion date.
(f) The holders of each Class of Common Stock classified or designated by
these Articles of Incorporation shall have such rights to exchange their shares
for shares of any other Class or Series of GAMNA Series Funds, Inc. or shares of
another investment company upon such terms as may be approved by the Board of
Directors from time to time and set forth in appropriate disclosure documents
under the applicable law, rules and regulations of the SEC and the rules of the
NASD, including but not limited to such rights to credit holding periods of the
stock exchanged with respect to the stock received in the exchange.
ELEVENTH: The number of directors of the Corporation shall be two, which
number may be increased or decreased pursuant to the by-laws of the Corporation,
but shall never be less than the minimum number permitted by the General Laws of
the State of Maryland now or hereafter in force. The
6
<PAGE>
names of the directors who will serve until the first annual meeting and until
their successors are elected and qualified are as follows:
Mark P. Bronzo
Daniel W. Portanova
TWELFTH: (a) The following provisions are hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
(1) The Board of Directors is hereby empowered to authorize the issuance
from time to time of shares of its stock of any class or series, whether now
or hereafter authorized, or securities convertible into shares of its stock
of any class or series, whether now or hereafter authorized, for such
consideration as may be deemed advisable by the Board of Directors and
without any action by the stockholders.
(2) No holder of any stock or any other securities of the Corporation,
whether now or hereafter authorized, shall have any preemptive right to
subscribe for or purchase any stock or any other securities of the
Corporation other than such, if any, as the Board of Directors, in its sole
discretion, may determine and at such price or prices and upon such other
terms as the Board of Directors, in its sole discretion, may fix; and any
stock or other securities which the Board of Directors may determine to
offer for subscription may, as the Board of Directors in its sole discretion
shall determine, be offered to the holders of any class, series or type of
stock or other securities at the time outstanding to the exclusion of the
holders of any or all other classes, series or types of stock or other
securities at the time outstanding.
(3) The Board of Directors of the Corporation shall, consistent with
applicable law, have power in its sole discretion to determine from time to
time in accordance with sound accounting practice or other reasonable
valuation methods what constitutes annual or other net profits, earnings,
surplus or net assets in excess of capital; to determine that retained
earnings or surplus shall remain in the hands of the Corporation; to set
apart out of any funds of the Corporation such reserve or reserves in such
amount or amounts and for such proper purpose or purposes as it shall
determine and to abolish any such reserve or any part thereof; to distribute
and pay distributions or dividends in stock, cash or other securities or
property, out of surplus or any other funds or amounts legally available
therefor, at such times and to the stockholders of record on such dates as
it may, from time to time, determine; and to determine whether and to what
extent and at what times 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 stockholders, except as otherwise
provided by statute or the by-laws of the Corporation, 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.
(4) Notwithstanding any provision of law requiring the authorization of
any action by a greater proportion than a majority of the total number of
shares of capital stock or of any class or series of capital stock, such
action shall be valid and effective if authorized by the affirmative vote of
the holders of a majority of the total number of shares of capital stock or
of such class or series, as the case may be, outstanding and entitled to
vote thereon; provided, however, that the election of the Directors of the
Corporation shall be by plurality vote. At a meeting of stockholders the
presence in person or by proxy of stockholders entitled to cast a majority
of all the votes entitled to be cast on any matter with respect to which one
or more classes or series of capital stock are entitled to vote as a
separate class shall constitute a quorum of such separate class for action
on that matter. Whether or not a quorum of such a separate class for action
on any such matter is present, a meeting of stockholders convened on the
date for which it was called may be adjourned as to that matter from time to
time without further notice by a majority vote of the stockholders of the
separate class present in person or by proxy to a date not more than 120
days after the original record date.
7
<PAGE>
(5) The Corporation shall indemnify (i) its directors and officers,
whether serving the Corporation or at its request any other entity, to the
full extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of expenses under
the procedures and to the full extent permitted by law, and (ii) other
employees and agents to such extent as shall be authorized by the Board of
Directors or the by-laws of the Corporation and as permitted by law. The
foregoing rights of indemnification shall not be exclusive of any other
rights to which those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt, approve and
amend from time to time such by-laws, resolutions or contracts implementing
such provisions or such further indemnification arrangements as may be
permitted by law. The right of indemnification provided hereunder shall not
be construed to protect any director or officer of the Corporation against
any liability to the Corporation or its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office. No amendment, modification or repeal of this provision shall
adversely affect any right or protection provided hereunder that exists at
the time of such amendment, modification or repeal.
(6) To the fullest extent permitted by Maryland statutory or decisional
law, as amended or interpreted, no director or officer of the Corporation
shall be personally liable to the Corporation or its stockholders for money
damages; provided, however, that this provision shall not be construed to
protect any director or officer against any liability to the Corporation or
its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office. No amendment, modification
or repeal of this provision shall adversely affect any right or protection
provided hereunder that exists at the time of such amendment, modification
or repeal.
(7) The Corporation reserves the right from time to time to make any
amendments of its charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as expressly
set forth in its charter, of any of its outstanding stock by classification,
reclassification or otherwise.
(b) The enumeration and definition of particular powers of the Board of
Directors included in the foregoing shall in no way be limited or restricted by
reference to or inference from the terms of any other clause of this or any
other article of the Articles of Incorporation of the Corporation, or construed
as or deemed by inference or otherwise in any manner to exclude or limit any
powers conferred upon the Board of Directors under the General Laws of the State
of Maryland now or hereafter in force.
THIRTEENTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act, on this 12th day of March, 1999.
<TABLE>
<S> <C>
Witness: /s/ NAOMI WIESEN
--------------------------------------
Naomi Wiesen
/s/ ROBERT L. MONKMEYER
--------------------------------------
Name: Robert L. Monkmeyer
Title: Sole Incorporator
</TABLE>
8
<PAGE>
EXHIBIT (b)
GAMNA SERIES FUNDS, INC.
BY-LAWS
ARTICLE I.
STOCKHOLDERS
1.01 ANNUAL MEETINGS. The Corporation is not required to hold an annual
meeting of its stockholders in any year in which the election of directors is
not required to be acted upon under the Investment Company Act of 1940. If the
Corporation is required by the Investment Company Act of 1940 to hold a meeting
of stockholders to elect directors, such meeting shall be held at a date and
time set by the Board of Directors in accordance with the Investment Company Act
of 1940 and no later than 120 days after the occurrence of the event requiring
the meeting. Any stockholders' meeting held in accordance with the preceding
sentence shall for all purposes constitute the annual meeting of stockholders
for the fiscal year of the Corporation in which the meeting is held. Except as
the charter or statute provides otherwise, any business may be considered at an
annual meeting without the purpose of the meeting having been specified in the
notice. Failure to hold an annual meeting does not invalidate the Corporation's
existence or affect any otherwise valid corporate acts.
1.02 SPECIAL MEETINGS. At any time in the interval between annual
meetings, a special meeting of stockholders may be called by the Chairman of the
Board or the President or by a majority of the Board of Directors by vote at a
meeting or in writing (addressed to the Secretary of the Corporation) with or
without a meeting. Special meetings of the stockholders shall be called as may
be required by law. The Secretary of the Corporation shall call a special
meeting of stockholders on the written request of stockholders entitled to cast
at least a majority of all the votes entitled to be cast at the meeting. A
request for a special meeting shall state the purpose of the meeting and the
matters proposed to be acted on at it. The Secretary shall inform the
stockholders who make the request of the reasonably estimated costs of preparing
and mailing a notice of the meeting and, on payment of these costs to the
Corporation, notify each stockholder entitled to notice of the meeting. Unless
requested by stockholders entitled to cast a majority of all the votes entitled
to be cast at the meeting, a special meeting need not be called to consider any
matter which is substantially the same as a matter voted on at any special
meeting of stockholders held in the preceding twelve months.
1.03 PLACE OF MEETINGS. Meetings of stockholders shall be held at such
place in the United States as is set from time to time by the Board of
Directors.
1.04 NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than ten nor more than
90 days before each stockholders' meeting, the Secretary shall give written
notice of the meeting to each stockholder entitled to vote at the meeting and
each other stockholder entitled to notice of the meeting. The notice shall state
the time and place of the meeting and, if the meeting is a special meeting or
notice of the purpose is required by statute, the purpose of the meeting. Notice
is given to a stockholder when it is personally delivered to him, left at his
residence or usual place of business, or mailed to him at his address as it
appears on the records of the Corporation. Notwithstanding the foregoing
provisions, each person who is entitled to notice waives notice if he before or
after the meeting signs a waiver of the notice which is filed with the records
of stockholders' meetings, or is present at the meeting in person or by proxy.
1.05 QUORUM; VOTING. Unless statute or the charter provides otherwise, at
a meeting of stockholders the presence in person or by proxy of stockholders
entitled to cast a majority of all the votes entitled to be cast at the meeting
constitutes a quorum, except that where the holders of any series of shares are
entitled to vote as a separate class (such series being referred to as a
"Separate Class") or where the holders of two or more (but not all) series of
shares are required to vote as a single class (such series being referred to as
a "Combined Class"), the presence in person or by proxy of the holders of a
majority of the shares of that Separate Class or Combined Class, as the case may
be, issued and outstanding and entitled to vote thereat shall constitute a
quorum for such vote. A majority of all the votes cast at a meeting at which a
quorum is present is sufficient to approve any matter which properly comes
before the meeting, except that a plurality of all the votes cast at a meeting
at which a quorum is present is sufficient to elect a director.
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1.06 ADJOURNMENTS. Whether or not a quorum is present, a meeting of
stockholders convened on the date for which it was called may be adjourned from
time to time without further notice by a majority vote of the stockholders
present in person or by proxy to a date not more than 120 days after the
original record date. If a quorum with respect to a Separate Class or a Combined
Class, as the case may be, shall not be present or represented at any meeting of
stockholders, the holders of a majority of the shares of such Separate Class or
such Combined Class, as the case may be, present in person or by proxy and
entitled to vote shall have power to adjourn the meeting from time to time as to
such Separate Class or such Combined Class, as the case may be, without notice
other then announcement at the meeting, until the requisite number of shares
entitled to vote at such meeting shall be present. Any business which might have
been transacted at the meeting as originally notified may be deferred and
transacted at any such adjourned meeting at which a quorum shall be present.
1.07 GENERAL RIGHT TO VOTE; PROXIES. Unless the charter provides for a
greater or lesser number of votes per share or limits or denies voting rights,
each outstanding share of stock, regardless of class or series, is entitled to
one vote on each matter submitted to a vote at a meeting of stockholders[;
however, a share is not entitled to be voted if any installment payable on it is
overdue and unpaid]. In all elections for directors, each share of stock may be
voted for as many individuals as there are directors to be elected and for whose
election the share is entitled to be voted. A stockholder may vote the stock he
owns of record either in person or by proxy as provided by statute. A
stockholder may sign a writing authorizing another person to act as proxy.
Signing may be accomplished by the stockholder or the stockholder's authorized
agent signing the writing or causing the stockholder's signature to be affixed
to the writing by any reasonable means, including facsimile signature. A
stockholder may authorize another person to act as proxy by transmitting, or
authorizing the transmission of, a telegram, cablegram, datagram, or other means
of electronic transmission to the person authorized to act as proxy or to a
proxy solicitation firm, proxy support service organization, or other person
authorized by the person who will act as proxy to receive the transmission.
Unless a proxy provides otherwise, it shall not be valid for more than eleven
months after its date. A proxy is revocable by a stockholder at any time without
condition or qualification unless the proxy states that it is irrevocable and
the proxy is coupled with an interest. A proxy may be made irrevocable for so
long as it is coupled with an interest. The interest with which a proxy may be
coupled includes an interest in the stock to be voted under the proxy or another
general interest in the Corporation or its assets and liabilities.
1.08 LIST OF STOCKHOLDERS. At each meeting of stockholders, a full, true
and complete list of all stockholders entitled to vote at such meeting, showing
the number and class or series of shares held by each and certified by the
transfer agent for such class or series or by the Secretary, shall be furnished
by the Secretary.
1.09 CONDUCT OF BUSINESS AND VOTING. At all meetings of stockholders,
unless the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies, the acceptance or rejection of votes and procedures for the
conduct of business not otherwise specified by these By-Laws, the charter or
law, shall be decided or determined by the chairman of the meeting. If demanded
by stockholders, present in person or by proxy, entitled to cast ten percent in
number of votes entitled to be cast, or if ordered by the chairman, the vote
upon any election or question shall be taken by ballot and, upon like demand or
order, the voting shall be conducted by one or more inspectors, in which event
the proxies and ballots shall be received, and all questions touching the
qualification of voters and the validity of proxies and the acceptance or
rejection of votes shall be decided, by such inspectors. Unless so demanded or
ordered, no vote need be by ballot and voting need not be conducted by
inspectors. The stockholders at any meeting may choose an inspector or
inspectors to act at such meeting, and in default of such election the chairman
of the meeting may appoint an inspector or inspectors. No candidate for election
as a director at a meeting shall serve as an inspector thereat.
1.10 ACTION BY WRITTEN CONSENT. Any action required or permitted to be
taken at a meeting of stockholders may be taken without a meeting if there is
filed with the records of stockholders' meetings an unanimous written consent
which sets forth the action and is signed by each stockholder entitled to vote
on
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the matter and a written waiver of any right to dissent signed by each
stockholder entitled to notice of the meeting but not entitled to vote at it.
ARTICLE II.
BOARD OF DIRECTORS
2.01 FUNCTION OF DIRECTORS. The business and affairs of the Corporation
shall be managed under the direction of its Board of Directors. All powers of
the Corporation may be exercised by or under authority of the Board of
Directors, except as conferred on or reserved to the stockholders by statute or
by the charter or By-Laws. The Board may delegate the duty of management of the
assets and the administration of the day-to-day operations of the Corporation to
one or more entities or individuals pursuant to a written contract or contracts
which have obtained the approvals, including the approval of renewals thereof,
required by the Investment Company Act of 1940.
2.02 NUMBER OF DIRECTORS. The Corporation shall have at least three
directors; provided that, if there is no stock outstanding, the number of
directors may be less than three but not less than one, and, if there is stock
outstanding and so long as there are fewer than three stockholders the number of
directors may be less than three but not less than the number of stockholders.
The Corporation shall have the number of directors provided in its charter until
changed as herein provided. Unless statute or the charter provides otherwise, a
majority of the entire Board of Directors may alter the number of directors set
by the charter to a number not exceeding 25 nor less than the minimum number
then permitted herein, but the action may not affect the tenure of office of any
director.
2.03 ELECTION AND TENURE OF DIRECTORS. At each annual meeting, the
stockholders shall elect directors to hold office until the next annual meeting
and until their successors are elected and qualify.
2.04 REMOVAL OF DIRECTORS. Unless the charter of the Corporation provides
otherwise, the stockholders of the Corporation may remove any director, with or
without cause, by the affirmative vote of a majority of all the votes entitled
to be cast for the election of directors. The Board of Directors shall promptly
call a meeting of stockholders for the purpose of voting upon the question of
removal of any director or directors when requested in writing to do so by the
record holders of not less than ten percent of the outstanding shares. Whenever
ten or more stockholders of record who have been such for at least six months
preceding the date of application, and who hold in the aggregate either shares
having a net asset value of at least $25,000 or at least one percent of the
outstanding shares, whichever is less, shall apply to the Board of Directors in
writing, stating that they wish to communicate with other stockholders with a
view to obtaining signatures to a request for a meeting to vote on the removal
of any director and accompanied by a form of communication and request which
they wish to transmit, the Board shall within five business days after receipt
of such application either (i) afford to such applicants access to a list of the
names and addresses of all stockholders as recorded on the books of the
Corporation; or (ii) inform such applicants as to the approximate number of
stockholders of record, and the approximate cost of mailing to them the proposed
communication and form of request. If the Board elects to follow the course
specified in clause (ii) above, the Board, upon the written request of such
applicants accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, shall, with reasonable promptness, mail such
material to all stockholders of record at their addresses as recorded on the
books, unless within five business days after such tender the Board shall mail
to such applicants and file with the Securities and Exchange Commission,
together with a copy of the material to be mailed, a written statement signed by
a least a majority of the directors to the effect that in their opinion either
such material contains untrue statements of fact or omits to state facts
necessary to make the statements contained therein not misleading, or would be
in violation of applicable law, and specifying the basis of such opinion. If the
Securities and Exchange Commission shall enter an order refusing to sustain any
of such objections, or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all objections so sustained have been met end shall enter an order
so declaring, the Board shall mail copies of such material to all stockholders
with reasonable promptness after the entry of such order and the renewal of such
tender.
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2.05 VACANCY ON BOARD. The stockholders may elect a successor to fill a
vacancy on the Board of Directors which results from the removal of a director
by the stockholders. A director elected by the stockholders to fill a vacancy
which results from the removal of a director serves for the balance of the term
of the removed director. Unless otherwise provided by statute or the charter, a
majority of the remaining directors, whether or not sufficient to constitute a
quorum, may fill a vacancy on the Board of Directors which results from any
cause except an increase in the number of directors and a majority of the entire
Board of Directors may fill a vacancy which results from an increase in the
number of directors. A director elected by the Board of Directors to fill a
vacancy serves until the next annual meeting of stockholders and until his
successor is elected and qualifies.
2.06 REGULAR MEETINGS. After each meeting of stockholders at which
directors shall have been elected, the Board of Directors shall meet as soon as
practicable for the purpose of organization and the transaction of other
business. In the event that no other time and place are specified by resolution
of the Board, the President or Chairman with notice in accordance with Section
2.08, the Board of Directors shall meet immediately following the close of, and
at the place of, such stockholders meeting. Any other regular meeting of the
Board of Directors shell be held on such date and at any place as may be
designated from tine to time by the Board of Directors. No notice of meeting
following a stockholders meeting or any other regular meeting shall be necessary
if held as hereinabove provided.
2.07 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board or the President or by a
majority of the Board of Directors by vote at a meeting, or in writing with or
without a meeting. A special meeting of the Board of Directors shall be held on
such date and at any place as may be designated from time to time by the Board
of Directors. In the absence of designation such meeting shall be held at such
place as may be designated in the call.
2.08 NOTICE OF MEETINGS; WAIVER OF NOTICE. Except as provided in Section
2.06, the Secretary shall give notice to each director of each regular and
special meeting of the Board of Directors. The notice shall state the time and
place of the meeting. Notice is given to a director when it is delivered
personally to him, left at his residence or usual place of business, or sent by
telegraph, facsimile transmission or telephone, at least 24 hours before the
time of the meeting or, in the alternative, by mail to his address as it shall
appear on the records of the Corporation at least 72 hours before the time of
the meeting. Unless statute, the By-Laws or a resolution of the Board of
Directors provides otherwise, the notice need not state the business to be
transacted at or the purposes of any regular or special meeting of the Board of
Directors. No notice of any meeting of the Board of Directors need be given to
any director who attends except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened, or to any director who, in a writing
executed and filed with the records of the meeting either before or after the
holding thereof, waives such notice. Any meeting of the Board of Directors,
regular or special, may adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any such adjourned meeting
other than by announcement.
2.09 ACTION BY DIRECTORS. Unless statute or the charter or the By-Laws
requires a greater proportion, the action of a majority of the directors present
at a meeting at which a quorum is present is action of the Board of Directors. A
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business. In the absence of a quorum, the directors present by
majority vote and without notice other than by announcement may adjourn the
meeting from time to time until a quorum shall attend. At any such adjourned
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified. Unless
otherwise provided by statute or regulation, any action required or permitted to
be taken at a meeting of the Board of Directors may be taken without a meeting,
if an unanimous written consent which sets forth the action is signed by each
member of the Board and filed with the minutes of proceedings of the Board.
2.10 PARTICIPATION BY TELEPHONE. Members of the Board of Directors may
participate in a meeting by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Unless provided otherwise by statute or
regulation,
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participation in a meeting by these means constitutes presence in person at the
meeting, but shall not constitute attendance for the purpose of compensation
pursuant to Section 2.11.
2.11 COMPENSATION. By resolution of the Board of Directors a fixed sum and
expenses, if any, for attendance at each regular or special meeting of the Board
of Directors or of committees thereof, and other compensation for their services
as such or on committees of the Board of Directors, may be paid to directors. A
director who serves the Corporation in any other capacity also may receive
compensation for such other services, pursuant to a resolution of the Board of
Directors.
ARTICLE III.
COMMITTEES
3.01 COMMITTEES. The Board of Directors may appoint from among its members
an Executive Committee and other committees comprised of one or more directors
and delegate to these committees any of the powers of the Board of Directors,
except the power to declare dividends or other distributions on stock, elect
directors, issue stock other than as provided in the next sentence, recommend to
the stockholders any action which requires stockholder approval, amend the
By-Laws, or approve any merger or share exchange which does not require
stockholder approval. If the Board of Directors has given general authorization
for the issuance of stock, a committee of the Board, in accordance with a
general formula or method for determining the maximum number of shares to be
issued specified by the Board by resolution or by adoption of e stock option or
other plan, may fix the terms of stock subject to classification or
reclassification and the terms on which any stock may be issued, including all
terms and conditions required or permitted to be established or authorized by
the Board of Directors.
3.02 COMMITTEE PROCEDURE. Each committee may fix rules of procedure for
its business. A majority of the members of a committee shall constitute a quorum
for the transaction of business and the action of a majority of those present at
a meeting at which a quorum is present shall be action of the committee. The
members of a committee present at any meeting, whether or not they constitute a
quorum, may appoint a director to act in the place of an absent member. Any
action required or permitted to be taken at a meeting of a committee may be
taken without a meeting, if an unanimous written consent which sets forth the
action is signed by each member of the committee and filed with the minutes of
the committee. The members of a committee may conduct any meeting thereof by
telephone in accordance with the provisions of Section 2.10.
3.03 EMERGENCY. In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the
Corporation by its directors and officers as contemplated by the charter and
these By-Laws. Any two or more available members of the then incumbent Executive
Committee shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Corporation in accordance with the
provisions of Section 3.01. In the event of the unavailability, at such time, of
a minimum of two members of the then incumbent Executive Committee, the
available directors shall elect an Executive Committee comprised of any two
members of the Board of Directors, whether or not they be officers of the
Corporation, which two members shall constitute the Executive Committee for the
full conduct and management of the affairs of the Corporation in accordance with
the foregoing provisions of this Section 3.03. This Section 3.03 shall be
subject to implementation by resolution of the Board of Directors passed from
time to time for that purpose and any provisions of the By-Laws (other then this
Section) and any resolutions which are contrary to the provisions of this
Section or to the provisions of any such implementing resolutions shall be
suspended until it shall be determined by any interim Executive Committee acting
under this Section that it shall be to the advantage of the Corporation to
resume the conduct and management of its affairs and business under all the
other provisions of these By-Laws.
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ARTICLE IV.
OFFICERS
4.01 EXECUTIVE AND OTHER OFFICERS. The Corporation shall have a President,
a Secretary and a Treasurer. It may also have a Chairman of the Board. The Board
of Directors shall designate who shall serve as chief executive officer, who
shall have general supervision of the business and affairs of the Corporation,
and may designate a chief operating officer, who shall have supervision of the
operations of the Corporation. In the absence of any designation the Chairman of
the Board, if there be one, shall serve as chief executive officer and the
President shall serve as chief operating officer. In the absence of the Chairman
of the Board, or if there be none, the President shall be the chief executive
officer. The same person may hold both offices. The Corporation may also have
one or more Vice-Presidents, assistant officers and subordinate officers as may
be established by the Board of Directors. A person may hold more than one office
in the Corporation except that no person may serve concurrently as both
President and Vice-President of the Corporation. The Chairman of the Board shall
be a director. The other officers may be directors.
4.02 CHAIRMAN OF THE BOARD. The Chairman of the Board, if one be elected,
shall preside at all meetings of the Board of Directors and of the stockholders
at which he shall be present. Unless otherwise specified by the Board of
Directors, he shall be the chief executive officer of the Corporation and
perform the duties customarily performed by chief executive officers, and may
perform any duties of the President. In general, he shall perform all such
duties as are from time to time assigned to him by the Board of Directors.
4.03 PRESIDENT. Unless otherwise provided by resolution of the Board of
Directors, the President, in the absence of the Chairman of the Board, shall
preside at all meetings of the Board of Directors and of the stockholders at
which he shall be present. Unless otherwise specified by the Board of Directors,
the President shall be the chief operating officer of the Corporation and
perform the duties customarily performed by chief operating officers. He may
sign and execute, in the name of the Corporation, all authorized deeds,
mortgages, bonds, contracts or other instruments, except in cases in which the
signing and execution thereof shall have been expressly delegated to some other
officer or agent of the Corporation. In general, he shall perform all duties
usually performed by a president of a corporation and such other duties as are
from time to time assigned to him by the Board of Directors or the chief
executive officer of the Corporation.
4.04 VICE-PRESIDENTS. The Vice-President or Vice-Presidents, at the
request of the chief executive officer or the President, or in the President's
absence or during his inability to act, shall perform the duties and exercise
the functions of the President, and when so acting shall have the powers of the
President. If there be more than one Vice-President, the Board of Directors may
determine which one or more of the Vice-Presidents shall perform any of such
duties or exercise any of such functions, or if such determination is not made
by the Board of Directors, the chief executive officer or the President may make
such determination; otherwise any of the Vice-Presidents may perform any of such
duties or exercise any of such functions. The Vice-President or Vice-Presidents
shall have such other powers and perform such other duties, and have such
additional descriptive designations in their titles (if any), as are from time
to time assigned to them by the Board of Directors, the chief executive officer,
or the President.
4.05 SECRETARY. The Secretary shall keep the minutes of the meetings of
the stockholders, of the Board of Directors and of any committees, in books
provided for that purpose; he shall see that all notices are duly given in
accordance with the provisions of the By-Laws or as required by law; he shall be
custodian of the records of the Corporation; he may witness any document on
behalf of the Corporation, the execution of which is duly authorized, see that
the corporate seal is affixed where such document is required or desired to be
under its seal, and, when so affixed, may attest the same; and, in general, he
shall perform all duties incident to the office of a secretary of a corporation,
and such other duties as are from time to time assigned to him by the Board of
Directors, the chief executive officer, or the President.
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4.06 TREASURER. The Treasurer shall have charge of and be responsible for
all funds, securities, receipts and disbursements of the Corporation, and shall
deposit, or cause to be deposited, in the name of the Corporation, all moneys or
other valuable effects in such banks, trust companies or other depositories as
shall, from time to time, be selected by the Board of Directors; he shall render
to the President and to the Board of Directors, whenever requested, an account
of the financial condition of the Corporation; and, in general, he shall perform
all the duties incident to the office of a treasurer of a corporation, and such
other duties as are from time to time assigned to him by the Board of Directors,
the chief executive officer, or the President.
4.07 ASSISTANT AND SUBORDINATE OFFICERS. The assistant and subordinate
officers of the Corporation are all officers below the office of Vice-President,
Secretary or Treasurer. The assistant or subordinate officers shall have such
duties as are from time to time assigned to them by the Board of Directors, the
chief executive officer, or the President.
4.08 ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board of Directors
shall elect the officers of the Corporation. The Board of Directors may from
time to time authorize any committee or officer to appoint assistant and
subordinate officers. Election or appointment of an officer, employee or agent
shall not of itself create contract rights. All officers shall be elected or
appointed to hold their respective offices, respectively, during the pleasure of
the Board. The Board of Directors (or, as to any assistant or subordinate
officer, any committee or officer authorized by the Board) may remove an officer
at any time. The removal of an officer does not prejudice any of his contract
rights. The Board of Directors (or, as to any assistant or subordinate officer,
any committee or officer authorized by the Board) may fill a vacancy which
occurs in any office.
4.09 COMPENSATION. The Board of Directors shall have power to fix the
salaries and other compensation and remuneration, of whatever kind, of all
officers of the Corporation. It may authorize any committee or officer, upon
whom the power of appointing assistant and subordinate officers may have been
conferred, to fix the salaries, compensation and remuneration of such assistant
and subordinate officers. No officer shall be prevented from receiving such
salary by reason of the fact that he is also a director of the Corporation.
ARTICLE V.
INDEMNIFICATION
5.01 INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than a proceeding by or
in the right of the Corporation in which such person shall have been adjudged to
be liable to the Corporation), by reason of being or having been a director or
officer of the Corporation, or serving or having served at the request of the
Corporation as a director, officer, partner, trustee, employee or agent of
another entity in which the Corporation has an interest as a shareholder,
creditor or otherwise (a 'Covered Person'), against all liabilities, including
but not limited to amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and reasonable expenses (including attorney's fees)
actually incurred by the Covered Person in connection with such action, suit or
proceeding, except (i) liability in connection with any proceeding in which it
is determined that (A) the act or omission of the Covered Person was material to
the matter giving rise to the proceeding, and was committed in bad faith or was
the result of active and deliberate dishonesty, or (B) the Covered Person
actually received an improper personal benefit in money, property or services,
or (C) in the case of any criminal proceeding, the Covered Person had reasonable
cause to believe that the act or omission was unlawful, and (ii) liability to
the Corporation or its security holders to which the Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office (any or all of the conduct referred to in clauses (i) and (ii) being
hereinafter referred to as "Disabling" Conduct).
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5.02 PROCEDURE FOR INDEMNIFICATION. Any indemnification under Section 5.01
shall (unless ordered by a court) be made by the Corporation only as authorized
for a specific proceeding by (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of the
proceeding against the Covered Person for insufficiency of evidence of any
Disabling Conduct, or (iii) a reasonable determination, based upon a review of
the facts, by a majority of a quorum of the directors who are neither
"interested persons" of the Corporation as defined in the Investment Company Act
of 1940 nor parties to the proceeding ('Disinterested, Non-Party Directors'), or
an independent legal counsel in a written opinion, that the Covered Person was
not liable by reason of Disabling Conduct. The termination of any proceeding by
judgment, order or settlement shall not create a presumption that the Covered
Person did not meet the required standard of conduct; the termination of any
proceeding by conviction, or a plea of nolo contendere or its equivalent, or an
entry of an order of probation prior to judgment, shall create a rebuttable
presumption that the Covered Person did not meet the required standard of
conduct. Any determination pursuant to this Section 5.02 shall not prevent
recovery from any Covered Person of any amount paid to be in accordance with
this By-Law as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction to be liable by reason of
Disabling Conduct.
5.03 ADVANCE PAYMENT OF EXPENSES. Reasonable expenses (including
attorney's fees) incurred by a Covered Person may be paid or reimbursed by the
Corporation in advance of the final disposition of an action, suit or proceeding
upon receipt by the Corporation of (i) a written affirmation by the Covered
Person of his good faith belief that the standard of conduct necessary for
indemnification under this By-Law has been met and (ii) a written undertaking by
or on behalf of the Covered Person to repay the amount if it is ultimately
determined that such standard of conduct has not been met, so long as either (A)
the Covered Person has provided a security for his undertaking, (B) the
Corporation is insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of the Disinterested, Non-Party Directors, or an
independent legal counsel in a written opinion, has determined, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Covered Person ultimately will be found
entitled to indemnification.
5.04 EXCLUSIVITY, ETC. The indemnification and advance of expenses
provided by this By-Law shall not be deemed exclusive of any other rights to
which a Covered Person seeking indemnification or advance of expenses may be
entitled under any law (common or statutory), or any agreement, vote of
stockholders or disinterested directors, or other provision that is consistent
with law, both as to action in an official capacity and as to action in another
capacity while holding office or while employed by or acting as agent for the
Corporation, shall continue in respect of all events occurring while the Covered
Person was a director or officer after such Covered Person has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of such Covered Person. The Corporation shall not
be liable for any payment under this By-Law in connection with a claim made by a
director or officer to the extent such director or officer has otherwise
actually received payment under an insurance policy, agreement, vote or
otherwise. All rights to indemnification and advance of expenses under the
charter and hereunder shall be deemed to be a contract between the Corporation
and each director or officer of the Corporation who serves or served in such
capacity at any time while this By-Law is in effect. Nothing herein shall
prevent the amendment of this By-Law, provided that no such amendment shall
diminish the rights of any Covered Person hereunder with respect to events
occurring or claims made before its adoption or as to claims made after its
adoption in respect of events occurring before its adoption. Any repeal or
modification of this By-Law shall not in any way diminish any rights to
indemnification or advance of expenses of a Covered Person or the obligations of
the Corporation arising hereunder with respect to events occurring, or claims
made, while this By-Law or any provision hereof is in force.
5.05 INSURANCE. The Corporation may purchase and maintain insurance on
behalf of any Covered Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such;
provided, however, that the Corporation shall not purchase insurance to
indemnify any Covered Person against liability for Disabling Conduct.
8
<PAGE>
5.06 SEVERABILITY; DEFINITIONS. The invalidity or unenforceability of any
provision of this Article V shall not affect the validity or enforceability of
any other provision hereof. The phrase "this By-Law" in this Article V means
this Article V in its entirety.
ARTICLE VI.
STOCK
6.01 CERTIFICATES FOR STOCK. The Board of Directors may determine to issue
certificated or uncertificated shares of capital stock and other securities of
the Corporation. For certificated stock, each stockholder is entitled to
certificates which represent and certify the shares of stock he holds in the
Corporation. Each stock certificate shall include on its face the name of the
Corporation, the name of the stockholder or other person to whom it is issued,
and the class or series of stock and number of shares it represents. It shall
also include (a) a statement of any restrictions on transferability and (b) a
statement which provides in substance that the Corporation will furnish to any
stockholder on request and without charge a full statement of the designations
and any preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the stock of each class which the Corporation is authorized to
issue, of the differences in the relative rights and preferences between the
shares of each series of a preferred or special class in series which the
Corporation is authorized to issue, to the extent they have been set, and of the
authority of the Board of Directors to set the relative rights and preferences
of subsequent series of a preferred or special class of stock and any
restrictions on transferability. Such request may be made to the Secretary or to
its transfer agent. Upon the issuance of uncertificated shares of capital stock,
the Corporation shall send the stockholder a written statement of the same
information required on the certificate and by the Maryland Uniform Commercial
Code--Investment Securities. It shall be in such form, not inconsistent with law
or with the charter, as shall be approved by the Board of Directors or any
officer or officers designated for such purpose by resolution of the Board of
Directors. Each stock certificate shall be signed by the Chairman of the Board,
the President, or a Vice-President, and countersigned by the Secretary, an
Assistant Secretary, the Treasurer, or an Assistant Treasurer. Each certificate
may be sealed with the actual corporate seal or a facsimile of it or in any
other form and the signatures may be either manual or facsimile signatures. A
certificate is valid and may be issued whether or not an officer who signed it
is still an officer when it is issued. A certificate may not be issued until the
stock represented by it is fully paid.
6.02 TRANSFERS. The Board of Directors shall have power and authority to
make such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of shares of stock; and may appoint transfer agents
and registrars thereof. The duties of transfer agent and registrar may be
combined.
6.03 RECORD DATE AND CLOSING OF TRANSFER BOOKS. The Board of Directors may
set a record date or direct that the stock transfer books be closed for a stated
period for the purpose of making any proper determination with respect to
stockholders, including which stockholders are entitled to notice of a meeting,
vote at a meeting, receive a dividend, or be allotted other rights. The record
date may not be prior to the close of business on the day the record date is
fixed nor, subject to Section 1.06, more than 90 days before the date on which
the action requiring the determination will be taken the transfer books may not
be closed for a period longer than twenty days; and, in the case of a meeting of
stockholders, the record date or the closing of the transfer books shall be at
least ten days before the date of the meeting.
6.04 STOCK LEDGER. The Corporation shall maintain a stock ledger which
contains the name and address of each stockholder and the number of shares of
stock of each class or series which the stockholder holds. The stock ledger may
be in written form or in any other form which can be converted within a
reasonable time into written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the offices of the transfer agent
for a particular class or series of stock, or, if none, at the principal office
in the State of Maryland or the principal executive office of the Corporation.
9
<PAGE>
6.05 CERTIFICATION OF BENEFICIAL OWNERS. The Board of Directors may adopt
by resolution a procedure by which a stockholder of the Corporation may certify
in writing to the Corporation that any shares of stock registered in the name of
the stockholder are held for the account of a specified person other than the
stockholder. The resolution shall set forth the class of stockholders who may
certify; the purpose for which the certification may be made; the form of
certification and the information to be contained in it; if the certification is
with respect to a record date or closing of the stock transfer books, the ties
after the record date or closing of the stock transfer books within which the
certification must be received by the Corporation; and any other provisions with
respect to the procedure which the Board considers necessary or desirable. On
receipt of a certification which complies with the procedure adopted by the
Board in accordance with this Section, the person specified in the certification
is, for the purpose set forth in the certification, the holder of record of the
specified stock in place of the stockholder who makes the certification.
6.06 LOST STOCK CERTIFICATES. The Board of Directors of the Corporation
may determine the conditions for issuing a new stock certificate in place of one
which is alleged to have been lost, stolen or destroyed, including the
requirement that the owner furnish a bond as indemnity against any claim that
may be made against the Corporation in respect of the lost, stolen or destroyed
certificate, or the Board of Directors may delegate such power to any officer or
officers of the Corporation. In their discretion, the Board of Directors or such
officer or officers may refuse to issue such new certificate save upon the order
of some court having jurisdiction in the premises.
ARTICLE VII.
FINANCE
7.01 CHECKS, DRAFTS, ETC. All checks, drafts and orders for the payment of
money, notes and other evidences of indebtedness, issued in the name of the
Corporation, shall, unless otherwise provided by resolution of the Board of
Directors, be signed by the Chairman of the Board, President, a Vice-President
or an Assistant Vice-President and countersigned by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.
7.02 ANNUAL STATEMENT OF AFFAIRS. The President or chief accounting
officer shall prepare annually a full and correct statement of the affairs of
the Corporation, to include a statement of net assets and a financial statement
of operations for the preceding fiscal year. The statement of affairs shall be
placed on file at the Corporation's principal office within 120 days after the
end of the fiscal year.
7.03 FISCAL YEAR. The fiscal year of the Corporation shall be the
twelve-calendar-month period ending December 31 in each year, unless otherwise
provided by the Board of Directors.
7.04 DIVIDENDS. If declared by the Board of Directors at any meeting
thereof, the Corporation may pay dividends on its shares in cash, property, or
in shares of the capital stock of the Corporation, unless such dividend is
contrary to law or to a restriction contained in the charter of the Corporation.
7.05 NET ASSET VALUE. Except in the event of emergency conditions or as
otherwise permitted by the Investment Company Act of 1940, the net asset value
per share of each class or series of stock shall be determined no less
frequently than once daily, Monday through Friday, at such time or times as the
Board of Directors sets. In valuing portfolio investments for the determination
of the current net asset value per share of any class or series, securities for
which market quotations are readily available shall be valued at prices which,
in the opinion of the Board of Directors or the person designated by the Board
of Directors to make the determination, most nearly represent the current market
value of such securities, and other securities and assets shall be valued on the
basis of their fair value as determined by or under the direction of the Board
of Directors.
7.06 EMPLOYMENT OF CUSTODIAN. The Corporation shall place and maintain its
securities and similar investments in the custody of one or more custodians
meeting the requirements of the Investment Company Act of 1940, or may serve as
its own custodian in accordance with such rules and regulations or
10
<PAGE>
orders as the Securities and Exchange Commission may from time to time prescribe
for the protection of investors. Securities held by a custodian may be
registered in the name of the Corporation, including the designation of the
particular class or series to which such assets belong, or any such custodian,
or the nominee of either of them. Subject to such rules, regulations, and orders
as the Commission may adopt as necessary or appropriate for the protection of
investors, the Corporation or any custodian, with the consent of the
Corporation, may deposit all or any part of the securities owned by the
Corporation in a system for the central handling of securities, pursuant to
which system all securities of a particular class or series of any issuer
deposited within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such securities.
ARTICLE VIII.
SUNDRY PROVISIONS
8.01 BOOKS AND RECORDS. The Corporation shall keep correct and complete
books and records of its accounts and transactions and minutes of the
proceedings of its stockholders and Board of Directors and of any executive or
other committee when exercising any of the powers of the Board of Directors. The
books and records of the Corporation may be in written form or in any other form
which can be converted within a reasonable time into written form for visual
inspection. Minutes shall be recorded in written form but may be maintained in
the form of a reproduction. The original or a certified copy of these By-Laws
shall be kept at the principal office of the Corporation.
8.02 CORPORATE SEAL. The Board of Directors shall provide a suitable seal,
bearing the name of the Corporation, which shall be in the charge of the
Secretary. The Board of Directors may authorize one or more duplicate seals and
provide for the custody thereof. If the Corporation is required to place its
corporate seal to a document, it is sufficient to meet the requirement of any
law, rule or regulation relating to a corporate seal to place the word "Seal"
adjacent to the signature of the person authorized to sign the document on
behalf of the Corporation.
8.03 BONDS. The Board of Directors may require any officer, agent or
employee of the Corporation to give a bond to the Corporation, conditioned upon
the faithful discharge of his duties, with one or more sureties and in such
amount as may be satisfactory to the Board of Directors.
8.04 VOTING SHARES IN OTHER CORPORATIONS. Shares of other corporations or
associations, registered in the name of the Corporation, may be voted by the
President, a Vice-President, or a proxy appointed by either of them. The Board
of Directors, however, may by resolution appoint some other person to vote such
shares, in which case such person shall be entitled to vote such shares upon the
production of a certified copy of such resolution.
8.05 MAIL. Any notice or other document which is required by these By-Laws
to be mailed shall be deposited in the United States mails, postage prepaid.
8.06 EXECUTION OF DOCUMENTS. A person who holds more than one office in
the Corporation may not act in more than one capacity to execute, acknowledge or
verify an instrument required by law to be executed, acknowledged or verified by
more than one officer.
8.07 AMENDMENTS. Subject to the special provisions of Section 2.02, (i)
any and all provisions of these By-Laws may be altered or repealed and new
by-laws may be adopted at any annual meeting of the stockholders, or at any
special meeting called for that purpose, and (ii) the Board of Directors shall
have the power, at any regular or special meeting thereof, to make and adopt new
by-laws, or to amend, alter or repeal any of the By-Laws of the Corporation.
11
<PAGE>
EXHIBIT (d)
FORM OF ADVISORY AGREEMENT
GAMNA SERIES FUNDS, INC.
180 Maiden Lane
New York, New York 10038
________________, 1999
Groupama Asset Management N.A.
180 Maiden Lane
New York, New York 10038
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") and you (the "Adviser") as follows:
1. The Company is an open-end investment company which
currently has one investment portfolio -- GAMNA Focus Fund (the "Fund"). The
Company proposes to engage in the business of investing and reinvesting the
assets of the Fund in the manner and in accordance with the investment
objectives and limitations specified in the Company's Articles of
Incorporation (the "Articles") and the currently effective prospectus,
including the documents incorporated by reference therein (the "Prospectus"),
relating to the Company and the Fund, included in the Company's Registration
Statement, as amended from time to time (the "Registration Statement"), filed
by the Company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the Securities Act of 1933, as amended. Copies of the
documents referred to in the preceding sentence have been furnished to the
Adviser. Any amendments to these documents shall be furnished to the Adviser
promptly.
2. The Company employs the Adviser to (a) make investment
strategy decisions for the Fund, (b) manage the investing and reinvesting of
the Fund's assets as specified in paragraph 1, (c) place purchase and sale
orders on behalf of the Fund, and (d) provide continuous supervision of the
Fund's investment portfolio.
3. (a) The Adviser shall, at its expense, employ or
associate with itself such persons as it believes appropriate to assist it in
performing its obligations under this agreement.
(b) Except as provided in subparagraph 3(a), the Company
shall be responsible for all of the Fund's expenses and liabilities,
including organizational expenses; taxes; interest; fees (including fees paid
to its directors); fees payable to the Securities and Exchange Commission;
state securities qualification fees; costs of preparing and printing
prospectuses for regulatory purposes and for distribution to existing
shareholders; advisory and
<PAGE>
2
administration fees; charges of the custodian and transfer agent; charges of
any shareholder servicing agents; certain insurance premiums; auditing and
legal expenses; costs of shareholders' reports and shareholder meetings; any
extraordinary expenses and brokerage fees and commissions, if any, in
connection with the purchase of portfolio securities.
4. As manager of the Fund's assets, the Adviser shall make
investments for the Fund's account in accordance with the investment
objectives and limitations set forth in the Articles, the Prospectus, the
1940 Act, the provisions of the Internal Revenue Code relating to regulated
investment companies and policy decisions adopted by the Company's Board of
Directors from time to time. The Adviser shall advise the Company's officers
and Board of Directors, at such times as the Company's Board of Directors may
specify, of investments made for the Fund's account and shall, when requested
by the Company's officers or Board of Directors, supply the reasons for
making such investments.
5. In executing portfolio transactions on behalf of the
Fund, the Adviser will use its best judgment to choose the dealer or broker
it believes most capable of providing the services necessary to obtain the
most favorable execution. The full range and quality of services available
will be considered in making these determinations. In those instances where it
is reasonably determined that more than one dealer or broker can offer the
services needed to obtain favorable execution, consideration may be given to
those dealers or brokers that supply research advice or other services.
Research advice and other services furnished by brokers through whom the Fund
effects securities transactions may be used by the Adviser in servicing
clients other than the Fund, and not all such services will necessarily
benefit the Fund. The Adviser may from time to time cause an amount to be paid
from the Fund to a broker that furnishes brokerage and research services at a
higher net price than that which might be charged by another broker for
effecting the same transaction, provided that the Adviser determines in good
faith that the amount charged by the broker is reasonable in relation to the
value of the research and brokerage services provided by the broker.
6. In consideration of the Adviser's undertaking to render
the services described in this agreement, the Company agrees that the Adviser
shall not be liable under this agreement for any error of judgment or mistake
of law or for any loss suffered by the Company in connection with the
performance of this agreement, provided that nothing in this agreement shall be
deemed to protect or purport to protect the Adviser against any liability to
the Company or its stockholders to which the Adviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Adviser's duties under this agreement or by reason of the
Adviser's reckless disregard of its obligations and duties hereunder.
7. In consideration of the services to be rendered by the
Adviser under this agreement, the Company shall pay the Adviser a monthly fee
on the last Business Day (as defined in the Prospectus) of each month at an
annual rate of 0.55% of the average daily value (as determined on the days and
at the time set forth in the Prospectus for determining net asset value per
share) of the Fund's net assets during such month with respect to the first
billion dollars of such average daily value and 0.50% for amounts over one
billion dollars. If the fee payable to the Adviser pursuant to this paragraph
7 begins to accrue before the end of any month or if this
<PAGE>
3
agreement terminates before the end of any month the fee for the period from
such date to the end of such month or from the beginning of such month to the
date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such
effectiveness or termination occurs. For purposes of calculating each such
monthly fee, the value of the Fund's net assets shall be computed in the
manner specified in the Prospectus and the Articles for the computation of the
value of the Fund's net assets in connection with the determination of the net
asset value of shares of the Fund's capital stock.
8. This agreement shall continue in effect until two years
from the date hereof and thereafter for successive annual periods, provided
that such continuance is specifically approved at least annually (a) by the
vote of a majority of the Fund's outstanding voting securities (as defined in
the 1940 Act) or by the Company's Board of Directors and (b) by the vote, cast
in person at a meeting called for the purpose, of a majority of the Company's
directors who are not parties to this agreement or "interested persons" (as
defined in the 1940 Act) of any such party. This agreement may be terminated
at any time, without the payment of any penalty, by a vote of a majority of
the Fund's outstanding voting securities (as defined in the 1940 Act) or by a
vote of a majority of the Company's entire Board of Directors on 60 days'
written notice to the Adviser or by the Adviser on 60 days' written notice to
the Company. This agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
9. Upon expiration or earlier termination of this agreement,
the Company shall, if reference to "Groupama" or "GAMNA" is made in the
corporate name of the Company or in the name of the Fund and if the Adviser
requests in writing, as promptly as practicable change its corporate name and
the name of the Fund so as to eliminate all reference to "Groupama" or
"GAMNA", thereafter the Company and the Fund shall cease transacting business
in any corporate name using the words "Groupama" or "GAMNA" or any other
reference to the Adviser, "Groupama" or "GAMNA". The foregoing rights of the
Adviser and obligations of the Company shall not deprive the Adviser, or any
affiliate thereof which has "Groupama" or "GAMNA" in its name, of, but shall
be in addition to, any other rights or remedies to which the Adviser and any
such affiliate may be entitled in law or equity by reason of any breach of
this agreement by the Company, and the failure or omission of the Adviser to
request a change of the Company's or the Fund's names or a cessation of the
use of the name of "Groupama" or "GAMNA" as described in this paragraph 9
shall not under any circumstances be deemed a waiver of the right require such
change or cessation at any time thereafter for the same or any subsequent
breach.
10. Except to the extent necessary to perform the Adviser's
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of the Adviser, or any affiliate of the Adviser, or any
employee of the Adviser, to engage in any other business or to devote time
and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind
to any other corporation, firm, individual or association.
<PAGE>
4
11. This Agreement shall be governed by the laws of the State
of New York.
If the foregoing correctly sets forth the agreement between the Company
and the Adviser, please so indicate by signing and returning to the Company
the enclosed copy hereof.
Very truly yours,
GAMNA SERIES FUNDS, INC.
By:
------------------------------
Title:
ACCEPTED:
GROUPAMA ASSET MANAGEMENT N.A.
By:
------------------------------
Title:
<PAGE>
Exhibit (e)
GAMNA SERIES FUNDS, INC.
FORM OF
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made as of the ____ day of ________,
1999, between GAMNA Series Funds, Inc., a Maryland corporation (the "Fund"),
having its principal place of business in Wilmington, Delaware, and Provident
Distributors, Inc., a corporation organized under the laws of the state of
Delaware (the " Distributor"), having its principal place of business in West
Conshohocken, Pennsylvania.
WHEREAS, the Fund wishes to employ the services of the Distributor,
with such assistance from its affiliates as the latter may provide; and
WHEREAS, the Distributor wishes to provide distribution services to the
Fund as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. SALE OF SHARES. The Fund grants to the Distributor the right to sell
shares (the "shares") of all series, and of all classes now or
hereafter created, on its behalf during the term of this Agreement and
subject to the registration requirements of the Securities Act of
1933, as amended (the "1933 Act"), and of the laws governing the sale
of securities in various states (the "Blue Sky Laws") under the
following terms and conditions: the Distributor (a) shall have the
right to sell, as agent on behalf of the Fund, shares authorized for
issue and registered under the 1933 Act; (b) may sell shares under
offers of exchange, if available, between and among the funds
distributed by Distributor and advised by Groupama Asset Management,
N.A.; and (c) shall sell such shares only in compliance with the terms
set forth in the Fund's currently effective registration statement.
The Distributor may enter into selling agreements with selected
dealers and others for the sale of Fund shares and will act only on
its own behalf as principal in entering into such selling agreements.
2. SALE OF SHARES BY THE FUND. The rights granted to the Distributor shall
be non-exclusive in that the Fund reserves the right to sell its shares
to investors on applications received and accepted by the Fund.
Further, the Fund reserves the right to issue shares in connection with
(a) the merger or consolidation, or acquisition by the Fund through
purchase or otherwise, with any other investment company, trust or
personal holding company; and (b) a pro rata distribution directly to
the holders of shares in the nature of a stock dividend or split-up.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
shares of all series of the Fund, shares of all series of the Fund held
in its treasury in the event that, in
<PAGE>
the discretion of the Fund, treasury shares shall be sold, and shares
of all series of the Fund repurchased for resale.
4. PUBLIC OFFERING PRICE. All shares sold to investors by the Distributor
or the Fund will be sold at the public offering price. The public
offering price for all accepted subscriptions will be the net asset
value per share, determined in the manner described in the Fund's
current Prospectus or Statement of Additional Information ("SAI") with
respect to the applicable series. The Fund shall in all cases receive
the net asset value per share on all sales.
5. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders placed with the Distributor before it had
knowledge of the suspension. In addition, the Fund reserves the right
to suspend sales and the Distributor's authority to process orders for
shares on behalf of the Fund if, in the judgment of the Fund, it is in
the best interests of the Fund to do so. Suspension will continue for
such period as may be determined by the Fund. In addition, the
Distributor reserves the right to reject any purchase order.
6. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the Fund. This shall not prevent the Distributor from entering into
like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. The Distributor agrees to
use all reasonable efforts to ensure that taxpayer identification
numbers provided for shareholders of the Fund are correct.
7. AUTHORIZED REPRESENTATIVE. The Distributor is not authorized by the
Fund to give any information or to make any representations other than
those contained in the appropriate registration statements,
Prospectuses or SAIs filed with the Securities and Exchange Commission
under the 1933 Act (as those registration statements, Prospectuses and
SAIs may be amended from time to time), or contained in shareholder
reports or other material that may be prepared by or on behalf of the
Fund for the Distributor's use. This shall not be construed to prevent
the Distributor from preparing and distributing, in compliance with
applicable laws and regulations, sales literature or other material as
it may deem appropriate. The Distributor shall be responsible for
filing all sales literature relating to the Fund with the National
Association of Securities Dealers, Inc. ("NASD") and any other
applicable regulatory authority. The Distributor will furnish or cause
to be furnished copies of such sales literature or other material to
the President of the Fund or his designee. The Distributor agrees to
take appropriate action to cease using such sales literature or other
material to which the Fund reasonably objects as promptly as
practicable after receipt of the objection.
8. REGISTRATION OF SHARES. The Fund agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the
necessary approval, if any, of its shareholders)
2
<PAGE>
so that there will be available for sale the number of shares the
Distributor may reasonably be expected to sell. The Fund shall furnish
to the Distributor copies of all information, financial statements and
other papers which the Distributor may reasonably request for use in
connection with the distribution of shares of each series of the Fund.
9. REPORTING. The Distributor shall provide the Fund's Board of Directors
such information as is reasonably requested. The Distributor shall also
attend any meeting of the Fund's Board of Directors at which the
Distributor's presence is requested.
10. FEES, EXPENSES AND ADDITIONAL SERVICES
(a) The Fund shall pay all fees and expenses:
(i) in connection with the preparation, setting in type
and filing of any registration statement, Prospectus
and SAI under the 1933 Act, and any amendments
thereto, for the issue of its shares;
(ii) in connection with the registration and qualification
of shares for sale in the various states in which the
Board of Directors (the "Directors") of the Fund
shall determine it advisable to qualify such shares
for sale (including registering the Fund or any
series as a broker or dealer, or any officer of the
Fund as an agent or salesperson in any state);
(iii) of preparing, setting in type, printing and mailing
any report or other communication to shareholders of
the Fund in their capacity as such; and
(iv) of printing and mailing Prospectuses, SAIs, and any
supplements thereto, sent to existing shareholders.
(b) The Distributor may, in its sole discretion, pay such expenses
as it deems reasonable for:
(i) printing and distributing Prospectuses, SAIs and
reports prepared for its use in connection with the
offering of the shares for sale to the public;
(ii) any other literature used in connection with such
offering; and
(iii) advertising in connection with such offering.
(c) In addition to the services described above, the Distributor
will provide services including assistance in the production
of marketing and advertising materials for the sale of shares
of the Fund and their review for compliance with applicable
regulatory requirements, entering into dealer agreements with
broker-dealers to sell shares of the Fund and monitoring their
financial strength and contractual compliance, providing,
directly or through its affiliates, certain investor support
services, personal service, and the maintenance of shareholder
accounts.
3
<PAGE>
(d) In connection with the services provided by the Distributor
under this Agreement, the Distributor shall receive
reimbursement from the Fund, to the extent and under the terms
and conditions set forth in any Plan of Distribution of the
Fund or its series, as such Plan may be in effect from time to
time, and subject to any further limitation on such
reimbursement as the Directors of the Fund may impose.
11. INDEMNIFICATION.
(a) The Fund agrees to indemnify and hold harmless the Distributor
and each of its directors and officers and each person, if
any, who controls the Distributor within the meaning of
Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim,
damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person
acquiring any shares, based upon the 1933 Act or any other
statute or common law, alleging any wrongful act of the Fund
or any of its employees or representatives, or based upon the
grounds that the registration statements, Prospectuses, SAIs,
shareholder reports or other information filed or made public
by the Fund (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material
fact required to be stated or necessary in order to make the
statements not misleading. However, the Fund does not agree to
indemnify the Distributor or hold it harmless to the extent
that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Fund in
writing by or on behalf of the Distributor. In no case (i) is
the indemnity of the Fund in favor of the Distributor or any
person indemnified to be deemed to protect the Distributor or
any person against any liability to the Fund or its security
holders to which the Distributor or such person would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Fund to be liable
under its indemnity agreement contained in this Section 10(a)
with respect to any claim made against the Distributor or any
person indemnified unless the Distributor or person, as the
case may be, shall have notified the Fund in writing of the
claim within a reasonable time after the summons or other
first written notification giving information of the nature of
the claim shall have been served upon the Distributor or any
such person or after the Distributor or such person shall have
received notice of service on any designated agent. However,
failure to notify the Fund of any claim shall not relieve the
Fund from any liability which it may have to the Distributor
or any person against whom such action is brought other than
on account of its indemnity agreement contained in this
Section 10(a). The Fund shall be entitled to participate at
its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any claims, but if
the Fund elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the
Distributor, or person or persons, defendant or defendants in
the suit. In the event the Fund elects to assume the defense
of any suit and retain counsel, the
4
<PAGE>
Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Fund does not
elect to assume the defense of any suit, it will reimburse the
Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, for the reasonable fees and expenses
of any counsel retained by them. The Fund agrees to notify the
Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or Directors in
connection with the issuance or sale of any of the shares.
(b) The Distributor also covenants and agrees that it will
indemnify and hold harmless the Fund and each of its Directors
and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act, against any
loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable
counsel fees incurred in connection therewith) arising by
reason of any person acquiring any shares, based upon the 1933
Act or any other statute or common law, alleging any wrongful
act of the Distributor or any of its employees or
representatives, or alleging that the registration statements,
Prospectuses, SAIs, shareholder reports or other information
filed or made public by the Fund (as from time to time
amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated or
necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance
upon, and in conformity with, information furnished in writing
to the Fund by or on behalf of the Distributor. In no case (i)
is the indemnity of the Distributor in favor of the Fund or
any person indemnified to be deemed to protect the Fund or any
person against any liability to which the Fund or such person
would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Distributor to be
liable under its indemnity agreement contained in this Section
10(b) with respect to any claim made against the Fund or any
person indemnified unless the Fund or person, as the case may
be, shall have notified the Distributor in writing of the
claim within a reasonable time after the summons or other
first written notification giving information of the nature of
the claim shall have been served upon the Fund or any such
person or after the Fund or such person shall have received
notice of service on any designated agent. However, failure to
notify the Distributor of any claim shall not relieve the
Distributor from any liability which it may have to the Fund
or any person against whom the action is brought other than on
account of its indemnity agreement contained in this Section
10(b). In the case of any notice to the Distributor, it shall
be entitled to participate, at its own expense, in the
defense, or, if it so elects, to assume the defense of any
suit brought to enforce any claims, but if the Distributor
elects to
5
<PAGE>
assume the defense, the defense shall be conducted by counsel
chosen by it and satisfactory to the Fund, to its officers and
Directors and to any controlling person(s) or any
defendants(s) in the suit. In the event the Distributor elects
to assume the defense of any suit and retain counsel, the Fund
or controlling person(s) or defendant(s) in the suit, shall
bear the fees and expenses of any additional counsel retained
by them. If the Distributor does not elect to assume the
defense of any suit, it will reimburse the Fund, its officers
or Directors, controlling person(s) or defendant(s) in the
suit, for the reasonable fees and expenses of any counsel
retained by them. The Distributor agrees to notify the Fund
promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the
shares.
12. STATUS OF THE DISTRIBUTOR. The Distributor is a member in good standing
of the NASD and a properly registered broker-dealer under the
Securities Exchange Act of 1934, as amended. In carrying out this
Agreement, the Distributor agrees to abide by the rules and regulations
of the NASD and all applicable federal and state laws.
13. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective
on the date first written above, and unless terminated as provided,
shall continue in force for two (2) years from the date of its
execution and thereafter from year to year, provided continuance after
the two (2) year period is approved at least annually by either (a) the
vote of a majority of the Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund, and (b) the
vote of a majority of those Directors of the Fund who are not
interested persons of the Fund, cast in person at a meeting called for
the purpose of voting on the approval. This Agreement shall
automatically terminate in the event of its assignment. As used in this
Section 11, the terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested person" shall have the
respective meanings specified in the 1940 Act and the rules enacted
thereunder as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated without the payment of any
penalty by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on not more
than sixty (60) days' written notice to the Fund. This Agreement may be
terminated by the Distributor upon not less than sixty (60) days' prior
written notice to the Fund.
14. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail,
postage prepaid, to the other party to this Agreement at its principal
place of business.
15. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. GOVERNING LAW. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the state of Delaware.
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<PAGE>
17. SHAREHOLDER LIABILITY. The Distributor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Articles of Incorporation of the Fund and agrees that obligations
assumed by the Fund pursuant to this Agreement shall be limited in all
cases to the Fund and its assets. The Distributor agrees that it shall
not seek satisfaction of any such obligation from the shareholders or
any individual shareholder of the Fund, nor from the Directors or any
individual Director of the Fund.
18. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in two counterparts, each of which,
taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
GAMNA SERIES FUNDS, INC.
By:
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Name:
------------------------------------------------
Title:
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PROVIDENT DISTRIBUTORS, INC.
By:
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Name:
------------------------------------------------
Title:
-----------------------------------------------
<PAGE>
Exhibit (g)
FORM OF
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of ___________, 1999 by and between PFPC
TRUST COMPANY, a limited purpose trust company incorporated under the laws of
Delaware ("PFPC Trust"), and GAMNA SERIES FUNDS, INC., a Maryland corporation
(the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services to its investment portfolios listed on Exhibit A attached hereto and
made a part hereof, as such Exhibit A may be amended from time to time (each a
"Portfolio"), and PFPC Trust wishes to furnish custodian services, either
directly or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as
amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any
other person authorized by the Fund to give Oral or Written
Instructions on behalf of the Fund and listed on the
Authorized Persons Appendix attached hereto or any amendment
thereto as may be received by PFPC Trust. An Authorized
Person's scope of
<PAGE>
authority may be limited by the Fund by setting forth such
limitation in the Authorized Persons Appendix.
(d) "BOOK-ENTRY SYSTEM" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any
book-entry system maintained by an exchange registered with
the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "CHANGE OF CONTROL" means a change in ownership or control
(not including transactions between wholly-owned direct or
indirect subsidiaries of a common parent) of 25% or more of
the beneficial ownership of the shares of common stock or
shares of beneficial interest of an entity or its parent(s).
(g) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC
Trust from an Authorized Person or from a person reasonably
believed by PFPC Trust to be an Authorized Person.
(h) "PFPC TRUST" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act,
the 1940 Act and the CEA.
(k) "SHARES" mean the shares of beneficial interest of
any series or class of the Fund.
(l) "PROPERTY" means:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PFPC Trust or which PFPC
Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or
other investment items;
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<PAGE>
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
(m) "WRITTEN INSTRUCTIONS" mean written instructions signed by two
Authorized Persons and received by PFPC Trust. The
instructions may be delivered by hand, mail, tested telegram,
cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment Portfolios,
and PFPC Trust accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC Trust with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's Board of Directors, approving the appointment of PFPC
Trust or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution agreement with respect to each
class of Shares;
(e) a copy of each Portfolio's administration agreement;
(f) copies of any shareholder servicing agreements made in respect
of the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements
of the Securities Laws and material laws, rules and regulations of
governmental authorities having
3
<PAGE>
jurisdiction with respect to the duties to be performed by PFPC Trust
hereunder. Except as specifically set forth herein, PFPC Trust assumes
no responsibility for such compliance by the Fund or any Portfolio.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall
act only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral
Instructions or Written Instructions it receives from an
Authorized Person (or from a person reasonably believed by
PFPC Trust to be an Authorized Person) pursuant to this
Agreement. PFPC Trust may assume that any Oral Instructions or
Written Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents
of the Fund or of any vote, resolution or proceeding of the
Fund's Board of Directors or of the Fund's shareholders,
unless and until PFPC Trust receives Written Instructions to
the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral
Instructions are given by PFPC Trust or its affiliates) so
that PFPC Trust receives the Written Instructions by the close
of business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions
are not received by PFPC Trust shall in no way invalidate the
transactions or enforceability of the transactions authorized
by the Oral Instructions. Where Oral Instructions or Written
Instructions reasonably appear to have been received from an
Authorized Person, PFPC Trust shall incur no liability to the
Fund in acting upon such Oral Instructions or Written
4
<PAGE>
Instructions provided that PFPC Trust's actions comply with
the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC Trust is in doubt as to any action
it should or should not take, PFPC Trust may request
directions or advice, including Oral Instructions or Written
Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC Trust may request advice at its own cost from
such counsel of its own choosing (who may be counsel for the
Fund, the Fund's investment adviser or PFPC Trust, at the
option of PFPC Trust).
(c) CONFLICTING ADVICE. In the event of a conflict between
directions, advice or Oral Instructions or Written
Instructions PFPC Trust receives from the Fund, and the advice
it receives from counsel, PFPC Trust shall be entitled to rely
upon and follow the advice of counsel. In the event PFPC Trust
so relies on the advice of counsel, PFPC Trust remains liable
for any action or omission on the part of PFPC Trust which
constitutes willful misfeasance, bad faith, gross negligence
or reckless disregard by PFPC Trust of any duties, obligations
or responsibilities set forth in this Agreement.
(d) PROTECTION OF PFPC TRUST. PFPC Trust shall be protected in any
action it takes or does not take in reliance upon directions,
advice or Oral Instructions or Written Instructions it
receives from the Fund or from counsel and which PFPC Trust
believes, in good faith, to be consistent with those
directions, advice or Oral
5
<PAGE>
Instructions or Written Instructions. Nothing in this
section shall be construed so as to impose an obligation
upon PFPC Trust (i) to seek such directions, advice or Oral
Instructions or Written Instructions, or (ii) to act in
accordance with such directions, advice or Oral
Instructions or Written Instructions unless, under the
terms of other provisions of this Agreement, the same is a
condition of PFPC Trust's properly taking or not taking
such action. Nothing in this subsection shall excuse PFPC
Trust when an action or omission on the part of PFPC Trust
constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC Trust of any
duties, obligations or responsibilities set forth in this
Agreement.
7. RECORDS; VISITS. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all
times during PFPC Trust's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be
provided by PFPC Trust to the Fund or to an authorized representative
of the Fund, at the Fund's expense.
8. CONFIDENTIALITY. PFPC Trust agrees to keep confidential the records of
the Fund and information relating to the Fund and its shareholders,
unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund agrees that such
consent shall not be unreasonably withheld and may not be withheld
where PFPC Trust may be exposed to civil or criminal contempt
proceedings or when PFPC Trust is
6
<PAGE>
required to divulge such information or records to duly constituted
authorities.
9. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants
as reasonably requested by the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the
event of equipment failures, PFPC Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
11. YEAR 2000 READINESS DISCLOSURE. PFPC Trust (a) has reviewed its
business and operations as they relate to the services provided
hereunder, (b) has developed or is developing a program to remediate or
replace computer applications and systems, and (c) has developed a
testing plan to test the remediation or replacement of computer
applications/systems, in each case, to address on a timely basis the
risk that certain computer applications/systems used by PFPC Trust may
be unable to recognize and perform date sensitive functions involving
dates prior to, including and after December 31, 1999, including dates
such as February 29, 2000 (the "Year 2000 Challenge"). To the best of
PFPC Trust's knowledge and belief, the reasonably foreseeable
consequences of the Year 2000 Challenge will not adversely effect PFPC
Trust's ability to perform its
7
<PAGE>
duties and obligations under this Agreement.
12. COMPENSATION. As compensation for custody services rendered by PFPC
Trust during the term of this Agreement, the Fund, on behalf of each of
the Portfolios, will pay to PFPC Trust a fee or fees as may be agreed
to in writing from time to time by the Fund and PFPC Trust.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PFPC Trust from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any state
or foreign securities or blue sky laws, and amendments thereto, and
expenses, including (without limitation) attorneys' fees and
disbursements), arising directly or indirectly from any action or
omission to act which PFPC Trust takes (i) in connection with providing
its service hereunder, (ii) at the request or on the direction of or in
reliance on the advice of the Fund or (iii) upon Oral Instructions or
Written Instructions. PFPC Trust shall not be indemnified against any
liability (or any expenses incident to such liability) arising out of
PFPC Trust's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties under this Agreement.
14. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action on behalf
of the Fund or any Portfolio except as specifically set forth
herein or as may be specifically agreed to by PFPC Trust in
writing. PFPC Trust shall be obligated to exercise care and
diligence in the performance of its duties hereunder and to
act in good faith in performing services provided for under
this Agreement. PFPC Trust shall be liable for any damages
arising out of PFPC Trust's failure to perform its duties
8
<PAGE>
under this Agreement to the extent such damages arise out of
PFPC Trust's willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties under this Agreement.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, PFPC Trust shall not be
under any duty or obligation to inquire into and shall not be
liable for (i) the validity or invalidity or authority or lack
thereof of any Oral Instruction or Written Instruction, notice
or other instrument which PFPC Trust reasonably believes to be
genuine; or (ii) subject to section 10, delays, errors, loss
of data or other losses occurring by reason of circumstances
beyond PFPC Trust's control, including acts of civil or
military authority, national emergencies, fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure
of the mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC Trust nor its affiliates shall be liable to the
Fund or to any Portfolio for any consequential, special or
indirect losses or damages which the Fund may incur or suffer,
whether or not the likelihood of such losses or damages was
known by PFPC Trust or its affiliates.
15. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the
Portfolios, including cash received as a result of the
distribution of Shares, during the term of this Agreement.
PFPC Trust will not be responsible for such property until
actual receipt.
(b) RECEIPT AND DISBURSEMENT OF MONEY. PFPC Trust, acting upon
Written
9
<PAGE>
Instructions, shall open and maintain separate accounts in the
Fund's name using all cash received from or for the account of
the Fund, subject to the terms of this Agreement. In addition,
upon Written Instructions, PFPC Trust shall open separate
custodial accounts for each separate Portfolio of the Fund
(collectively, the "Accounts") and shall hold in the Accounts
all cash received from or for the Accounts of the Fund
specifically designated to each separate Portfolio. PFPC Trust
shall make cash payments from or for the Accounts of a
Portfolio only for:
(i) purchases of securities in the name of a Portfolio,
PFPC Trust, PFPC Trust's nominee or a sub-custodian
or nominee thereof as provided in sub-section (j) and
for which PFPC Trust has received a copy of the
broker's or dealer's confirmation or payee's invoice,
as appropriate;
(ii) purchase or redemption of Shares of the Fund
delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions,
interest, taxes, administration, accounting,
distribution, advisory, management fees or similar
expenses which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be distributed in cash by the
transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for
the direct payment of cash dividends and
distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by
and among the Fund, PFPC Trust and the Fund's
transfer agent.
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Fund and
held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments made to a sub-custodian pursuant to
provisions in sub-section (c) of this Section; and
10
<PAGE>
(viii) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Accounts.
(c) RECEIPT OF SECURITIES; SUBCUSTODIANS.
(i) PFPC Trust shall hold all securities received by it
for the Accounts in a separate account that
physically segregates such securities from those of
any other persons, firms or corporations, except for
securities held in a Book-Entry System. All such
securities shall be held or disposed of only upon
Written Instructions of the Fund pursuant to the
terms of this Agreement. PFPC Trust shall have no
power or authority to assign, hypothecate, pledge or
otherwise dispose of any such securities or
investment, except upon the express terms of this
Agreement or upon Written Instructions authorizing
the transaction. In no case may any member of the
Fund's Board of Directors, or any officer, employee
or agent of the Fund withdraw any securities.
At PFPC Trust's own expense and for its own
convenience, PFPC Trust may enter into sub-custodian
agreements with other banks or trust companies to
perform duties described in this sub-section (c) with
respect to domestic assets. Such bank or trust
company shall have an aggregate capital, surplus and
undivided profits, according to its last published
report, of at least one million dollars ($1,000,000),
if it is a subsidiary or affiliate of PFPC Trust, or
at least twenty million dollars ($20,000,000) if such
bank or trust company is not a subsidiary or
affiliate of PFPC Trust. In addition, such bank or
trust company must be qualified to act as custodian
and agree to comply with the relevant provisions of
applicable rules and regulations. Any such
arrangement will not be entered into without prior
written notice to the Fund (or as otherwise provided
in the 1940 Act).
In addition, PFPC Trust may enter into arrangements
with sub-custodians with respect to services
regarding foreign assets. Any such arrangement will
be entered into with prior written notice to the Fund
(or as otherwise provided in the 1940 Act).
PFPC Trust shall remain responsible for the
performance of all of its duties as described in this
Agreement and shall hold the Fund and each Portfolio
harmless from its own acts or omissions, under the
standards of care provided for herein, or the acts
and omissions of any sub-custodian chosen by PFPC
Trust under the terms of this sub-section (c).
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<PAGE>
(d) TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:
(i) deliver any securities held for a Portfolio against
the receipt of payment for the sale of such
securities;
(ii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of a
Portfolio as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for a Portfolio against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(v) deliver any securities held for a Portfolio to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be
stated in said Oral Instructions or Written
Instructions to be for the purpose of effectuating a
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the
Fund;
(vii) release securities belonging to a Portfolio to any
bank or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the Fund
on behalf of that Portfolio; provided, however, that
securities shall be released only upon payment to
PFPC Trust of the monies borrowed, except that in
cases where additional collateral is required to
secure a borrowing already made subject to proper
prior authorization, further securities may be
released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and
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upon surrender of the note or notes evidencing the
loan;
(viii) release and deliver securities owned by a Portfolio
in connection with any repurchase agreement entered
into on behalf of the Fund, but only on receipt of
payment therefor; and pay out moneys of the Fund in
connection with such repurchase agreements, but only
upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver securities owned by the Fund for
the purpose of redeeming in kind shares of the Fund
upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and
the name and address of the person(s) to whom
delivery shall be made when such action is pursuant
to sub-paragraph d(xii).
(e) USE OF BOOK-ENTRY SYSTEM. PFPC Trust is authorized and
instructed, on a continuous basis, to deposit in the
Book-Entry System all securities belonging to the Portfolios
eligible for deposit therein and to utilize the Book-Entry
System to the extent possible in connection with settlements
of purchases and sales of securities by the Portfolios, and
deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with
borrowings. PFPC Trust shall continue to perform such duties
until it receives Written Instructions or Oral Instructions
authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
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(i) With respect to securities of each Portfolio which
are maintained in the Book-Entry System, the records
of PFPC Trust shall identify by Book-Entry or
otherwise those securities belonging to each
Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry
System will at all times be segregated from any
assets and cash controlled by PFPC Trust in other
than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request
from time to time.
(f) REGISTRATION OF SECURITIES. All Securities held for a
Portfolio which are issued or issuable only in bearer form,
except such securities held in the Book-Entry System, shall be
held by PFPC Trust in bearer form; all other securities held
for a Portfolio may be registered in the name of the Fund on
behalf of that Portfolio, PFPC Trust, the Book-Entry System, a
sub-custodian, or any duly appointed nominee of the Fund, PFPC
Trust, Book-Entry System or sub-custodian. The Fund reserves
the right to instruct PFPC Trust as to the method of
registration and safekeeping of the securities of the Fund.
The Fund agrees to furnish to PFPC Trust appropriate
instruments to enable PFPC Trust to hold or deliver in proper
form for transfer, or to register in the name of its nominee
or in the name of the Book-Entry System or in the name of
another appropriate entity, any securities which it may hold
for the Accounts and which may from time to time be registered
in the name of the Fund on behalf of a Portfolio.
(g) VOTING AND OTHER ACTION. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of a Portfolio, except in
accordance with Written Instructions. PFPC Trust, directly or
through
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<PAGE>
the use of the Book-Entry System, shall execute in blank and
promptly deliver all notices, proxies and proxy soliciting
materials received by PFPC Trust as custodian of the Property
to the registered holder of such securities. If the registered
holder is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person
who owns such securities.
(h) TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of
contrary Written Instructions, PFPC Trust is authorized to
take the following actions:
(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
(A) collect and receive for the account of each
Portfolio, all income, dividends,
distributions, coupons, option premiums,
other payments and similar items, included
or to be included in the Property, and, in
addition, promptly advise each Portfolio of
such receipt and credit such income, as
collected, to each Portfolio's custodian
account;
(B) endorse and deposit for collection, in the
name of the Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of each
Portfolio all securities received as a
distribution on the Portfolio's securities
as a result of a stock dividend, share
split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or
similar securities issued with respect to
any securities belonging to a Portfolio and
held by PFPC Trust hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature
or be, on a mandatory basis, called,
redeemed, or retired, or otherwise become
payable on the date such securities become
payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments
and the endorsement for collection of
checks, drafts, and other negotiable
instruments.
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(ii) MISCELLANEOUS TRANSACTIONS.
(A) PFPC Trust is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or
dealer selling for the account of a
Portfolio in accordance with street
delivery custom;
(2) for the exchange of interim receipts
or temporary securities for
definitive securities; and
(3) for transfer of securities into the
name of the Fund on behalf of a
Portfolio or PFPC Trust or a
sub-custodian or a nominee of one of
the foregoing, or for exchange of
securities for a different number of
bonds, certificates, or other
evidence, representing the same
aggregate face amount or number of
units bearing the same interest
rate, maturity date and call
provisions, if any; provided that,
in any such case, the new securities
are to be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral
Instructions or Written Instructions to the
contrary, PFPC Trust shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the cash
received by it upon such payment for
the account of each Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund,
to the account of each Portfolio;
(3) hold for the account of each
Portfolio all stock dividends,
rights and similar securities issued
with respect to any securities held
by PFPC Trust; and
(4) execute as agent on behalf of the
Fund all necessary ownership
certificates required by the
Internal Revenue Code or the Income
Tax Regulations of the United States
Treasury Department or under the
laws of any state now or hereafter
in effect, inserting the Fund's
name, on behalf of a Portfolio, on
such certificate as the owner of the
securities covered thereby, to the
extent it may lawfully do so.
16
<PAGE>
(i) SEGREGATED ACCOUNTS.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain
segregated accounts on its records for and on behalf
of each Portfolio. Such accounts may be used to
transfer cash and securities, including securities in
the Book-Entry System:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such
procedures comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
(B) upon receipt of Written Instructions, for
other corporate purposes.
(ii) PFPC Trust shall arrange for the establishment of IRA
custodian accounts for such shareholders holding
Shares through IRA accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
(j) PURCHASES OF SECURITIES. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker
through whom the purchase was made. PFPC Trust shall
upon receipt of securities purchased by or for a
Portfolio pay out of the moneys held for the account
of the Portfolio the total amount payable to the
person from whom or the broker through whom the
purchase was made, provided that the same conforms to
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<PAGE>
the total amount payable as set forth in such Oral
Instructions or Written Instructions.
(k) SALES OF SECURITIES. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if
applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made;
(vii) the location to which the security must be delivered
and delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Portfolio upon such sale, provided that the total
amount payable is the same as was set forth in the Oral Instructions or
Written Instructions. Notwithstanding the other provisions thereof,
PFPC Trust may accept payment in such form as shall be satisfactory to
it, and may deliver securities and arrange for payment in accordance
with the customs prevailing among dealers in securities.
(l) REPORTS; PROXY MATERIALS.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for
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<PAGE>
the account of each portfolio, listing each
portfolio security belonging to each
Portfolio with the adjusted average cost of
each issue and the market value at the end
of such month and stating the cash account
of each Portfolio including disbursements;
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 of the 1940 Act;
and
(D) such other information as may be agreed upon
from time to time between the Fund and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any
proxy statement, proxy material, notice of a call or
conversion or similar communication received by it as
custodian of the Property. PFPC Trust shall be under
no other obligation to inform the Fund as to such
actions or events.
(m) COLLECTIONS. All collections of monies or other property
in respect, or which are to become part, of the Property (but
not the safekeeping thereof upon receipt by PFPC Trust) shall
be at the sole risk of the Fund. If payment is not received by
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify the Fund in writing,
including copies of all demand letters, any written responses
and memoranda of all oral responses and shall await
instructions from the Fund. PFPC Trust shall not be obliged to
take legal action for collection unless and until reasonably
indemnified to its satisfaction. PFPC Trust shall also notify
the Fund as soon as reasonably practicable whenever income due
on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected
after a reasonable time.
16. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Fund or PFPC Trust on sixty (60) days' prior written
notice to the other party. In the
19
<PAGE>
event this Agreement is terminated (pending appointment of a successor
to PFPC Trust or vote of the shareholders of the Fund to dissolve or to
function without a custodian of its cash, securities or other
property), PFPC Trust shall not deliver cash, securities or other
property of the Portfolios to the Fund. It may deliver them to a bank
or trust company of PFPC Trust's choice, having an aggregate capital,
surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000), as a custodian
for the Fund to be held under terms similar to those of this Agreement.
PFPC Trust shall not be required to make any delivery or payment of
assets upon termination until full payment shall have been made to PFPC
Trust of all of its fees, compensation, costs and expenses. PFPC Trust
shall have a security interest in and shall have a right of setoff
against the Property as security for the payment of such fees,
compensation, costs and expenses.
17. CHANGE OF CONTROL. Notwithstanding any other provision of this
Agreement, in the event of an agreement to enter into a transaction
that would result in a Change of Control of the Fund's adviser or
sponsor, the Fund's ability to terminate the Agreement will be
suspended from the time of such agreement until two years after the
Change of Control.
18. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notice shall be addressed (a) if to
PFPC Trust at 200 Stevens Drive, Lester, Pennsylvania 19113, Attention:
Sam Sparhawk; (b) if to the Fund, at __________, Attn: _________; or
(c) if to neither of the foregoing, at such other address as shall have
been given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed
to have been given immediately. If notice is sent by first-class mail,
it shall be deemed to
20
<PAGE>
have been given five days after it has been mailed. If notice is sent
by messenger, it shall be deemed to have been given on the day it is
delivered.
19. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
20. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate
its duties hereunder to any affiliate of PFPC Trust or of PNC Bank
Corp., provided that (i) PFPC Trust gives the Fund 30 days' prior
written notice of such assignment or delegation; (ii) the assignee or
delegate agrees to comply with the relevant provision of the 1940 Act;
and (iii) PFPC Trust and such assignee or delegate promptly provide
such information as the Fund may reasonably request, and respond to
such questions as the Fund may reasonably ask, relative to the
assignment or delegation (including, without limitation, the
capabilities of the assignee or delegate).
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
23. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may
21
<PAGE>
embody in one or more separate documents their agreement, if
any, with respect to delegated duties or Oral Instructions.
(b) CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(c) GOVERNING LAW. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
(d) PARTIAL INVALIDITY. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(f) FACSIMILE SIGNATURES. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By:
----------------------
Title:
---------------------
GAMNA SERIES FUNDS, INC.
By:
----------------------
Title:
---------------------
23
<PAGE>
EXHIBIT A
THIS EXHIBIT A, dated as of ___________, 1999, is Exhibit A to that
certain Custodian Services Agreement dated as of __________, 1999 between PFPC
Inc. and GAMNA Series Funds, Inc.
PORTFOLIOS
GAMNA Focus Fund
24
<PAGE>
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
- --------------------------- ------------------------------
- --------------------------- ------------------------------
- --------------------------- ------------------------------
- --------------------------- ------------------------------
- --------------------------- ------------------------------
- --------------------------- ------------------------------
25
<PAGE>
Exhibit (h)(i)
FORM OF
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of ________, 1999 by and between PFPC INC., a
Delaware corporation ("PFPC"), and GAMNA SERIES FUND, INC., a Maryland
corporation (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to its
investment portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each a "Portfolio"),
and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as
amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any
other person duly authorized by the Fund's Board of Directors
to give Oral Instructions and Written Instructions on behalf
of the Fund and listed on the Authorized Persons Appendix
attached hereto and made a part hereof or any amendment
thereto as may be
1
<PAGE>
received by PFPC. An Authorized Person's scope of authority
may be limited by the Fund by setting forth such limitation in
the Authorized Persons Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "CHANGE OF CONTROL" means a change in ownership or control
(not including transactions between wholly-owned direct or
indirect subsidiaries of a common parent) of 25% or more of
the beneficial ownership of the shares of common stock or
shares of beneficial interest of an entity or its parents(s).
(f) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC
from an Authorized Person or from a person reasonably believed
by PFPC to be an Authorized Person.
(g) "SEC" means the Securities and Exchange Commission.
(h) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(i) "SHARES" mean the shares of beneficial interest of any series
or class of the Fund.
(j) "WRITTEN INSTRUCTIONS" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions
may be delivered by hand, mail, tested telegram, cable, telex
or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to
the Fund in accordance with the terms set forth in this Agreement. PFPC
accepts such appointment and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide
2
<PAGE>
PFPC with the following:
(a) Certified or authenticated copies of the resolutions of the
Fund's Board of Directors, approving the appointment of PFPC
or its affiliates to provide services to the Fund and
approving this Agreement;
(b) A copy of the Fund's most recent effective registration
statement;
(c) A copy of the advisory agreement with respect to each
investment Portfolio of the Fund (each, a Portfolio);
(d) A copy of the distribution agreement with respect to each
class of Shares of the Fund;
(e) A copy of each Portfolio's administration agreements if PFPC
is not providing the Portfolio with such services;
(f) Copies of any shareholder servicing agreements made in respect
of the Fund or a Portfolio; and
(g) Copies (certified or authenticated where applicable) of any
and all amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS. PFPC undertakes to comply with
all applicable requirements of the Securities Laws and any laws, rules
and regulations of governmental authorities having jurisdiction with
respect to the duties to be performed by PFPC hereunder. Except as
specifically set forth herein, PFPC assumes no responsibility for such
compliance by the Fund or any of its investment portfolios.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral Instructions and Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions and
Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by
3
<PAGE>
PFPC to be an Authorized Person) pursuant to this Agreement.
PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent
with the provisions of organizational documents or this
Agreement or of any vote, resolution or proceeding of the
Fund's Board of Directors or of the Fund's shareholders,
unless and until PFPC receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions so that PFPC receives the Written
Instructions by the close of business on the same day that
such Oral Instructions are received. The fact that such
confirming Written Instructions are not received by PFPC shall
in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. Where Oral
Instructions or Written Instructions reasonably appear to have
been received from an Authorized Person, PFPC shall incur no
liability to the Fund in acting upon such Oral Instructions or
Written Instructions provided that PFPC's actions comply with
the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or
advice, including Oral Instructions or Written Instructions,
from the Fund.
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC may request advice at its own
4
<PAGE>
cost from such counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment adviser or PFPC, at the
option of PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict between
directions, advice or Oral Instructions or Written
Instructions PFPC receives from the Fund, and the advice it
receives from counsel, PFPC may rely upon and follow the
advice of counsel. In the event PFPC so relies on the advice
of counsel, PFPC remains liable for any action or omission on
the part of PFPC which constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by PFPC of any
duties, obligations or responsibilities set forth in this
Agreement.
(d) PROTECTION OF PFPC. PFPC shall be protected in any action it
takes or does not take in reliance upon directions, advice or
Oral Instructions or Written Instructions it receives from the
Fund or from counsel and which PFPC believes, in good faith,
to be consistent with those directions, advice or Oral
Instructions or Written Instructions. Nothing in this section
shall be construed so as to impose an obligation upon PFPC (i)
to seek such directions, advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions, advice or Oral Instructions or Written
Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC's properly
taking or not taking such action. Nothing in this subsection
shall excuse PFPC when an action or omission on the part of
PFPC constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC of any duties,
obligations or
5
<PAGE>
responsibilities set forth in this Agreement.
7. RECORDS; VISITS. The books and records pertaining to the Fund, which
are in the possession or under the control of PFPC, shall be the
property of the Fund. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall have
access to such books and records at all times during PFPC's normal
business hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by PFPC to the Fund or to an
Authorized Person, at the Fund's expense.
8. CONFIDENTIALITY. PFPC agrees to keep confidential the records of the
Fund and information relating to the Fund and its shareholders, unless
the release of such records or information is otherwise consented to,
in writing, by the Fund. The Fund agrees that such consent shall not be
unreasonably withheld and may not be withheld where PFPC may be exposed
to civil or criminal contempt proceedings or when required to divulge
such information or records to duly constituted authorities.
9. COOPERATION WITH ACCOUNTANTS. PFPC shall cooperate with the Fund's
independent public accountants and shall take all reasonable actions in
the performance of its obligations under this Agreement to ensure that
the necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.
10. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In
6
<PAGE>
the event of equipment failures, PFPC shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure, provided such loss
or interruption is not caused by PFPC's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
11. YEAR 2000 READINESS DISCLOSURE. PFPC (a) has reviewed its business and
operations as they relate to the services provided hereunder, (b) has
developed or is developing a program to remediate or replace computer
applications and systems, and (c) has developed a testing plan to test
the remediation or replacement of computer applications/systems, in
each case, to address on a timely basis the risk that certain computer
applications/systems used by PFPC may be unable to recognize and
perform properly date sensitive functions involving dates prior to,
including and after December 31, 1999, including dates such as February
29, 2000 (the "Year 2000 Challenge"). To the best of PFPC's knowledge
and belief, the reasonably foreseeable consequences of the Year 2000
Challenge will not adversely effect PFPC's ability to perform its
duties and obligations under this Agreement.
12. COMPENSATION. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund will pay to PFPC a fee or fees as may
be agreed to from time to time in writing by the Fund and PFPC.
13. INDEMNIFICATION. The Fund agrees to indemnify and hold harmless PFPC
and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including,
7
<PAGE>
without limitation, liabilities arising under the Securities Laws and
any state and foreign securities and blue sky laws, and amendments
thereto), and expenses, including (without limitation) attorneys' fees
and disbursements, arising directly or indirectly from (i) any action
or omission to act which PFPC takes (a) at the request or on the
direction of or in reliance on the advice of the Fund or (b) upon Oral
Instructions or Written Instructions or (ii) the acceptance, processing
and/or negotiation of checks or other methods utilized for the purchase
of Shares. Neither PFPC, nor any of its affiliates, shall be
indemnified against any liability (or any expenses incident to such
liability) arising out of PFPC's or its affiliates' own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement, provided that in the
absence of a finding to the contrary the acceptance, processing and/or
negotiation of a fraudulent payment for the purchase of Shares shall be
presumed not to have been the result of PFPC=s or its affiliates own
willful misfeasance, bad faith, gross negligence or reckless disregard
of such duties and obligations.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of
the Fund except as specifically set forth herein or as may be
specifically agreed to by PFPC in writing. PFPC shall be
obligated to exercise care and diligence in the performance of
its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, in performing services
provided for under this Agreement. PFPC shall be liable for
any damages arising out of PFPC's failure to
8
<PAGE>
perform its duties under this Agreement to the extent such
damages arise out of PFPC's willful misfeasance, bad faith,
gross negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC, shall not be
liable for losses beyond its control, provided that PFPC has
acted in accordance with the standard of care set forth above;
and (ii) PFPC shall not be under any duty or obligation to
inquire into and shall not be liable for (A) the validity or
invalidity or authority or lack thereof of any Oral
Instruction or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this
Agreement, and which PFPC reasonably believes to be genuine;
or (B) subject to Section 10, delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control,
including acts of civil or military authority, national
emergencies, labor difficulties, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC nor its affiliates shall be liable to the Fund
for any consequential, special or indirect losses or damages
which the Fund may incur or suffer by or as a consequence of
PFPC's or its affiliates' performance of the services provided
hereunder, whether or not the likelihood of such losses or
damages was known by PFPC or its affiliates.
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15. DESCRIPTION OF SERVICES.
(a) SERVICES PROVIDED ON AN ONGOING BASIS, IF APPLICABLE.
(i) Calculate 12b-1 payments;
(ii) Maintain proper shareholder registrations;
(iii) Review new applications and correspond with
shareholders to complete or correct information;
(iv) Direct payment processing of checks or wires;
(v) Prepare and certify stockholder lists in conjunction
with proxy solicitations;
(vi) Countersign share certificates;
(vii) Prepare and mail to shareholders confirmation of
activity;
(viii) Provide toll-free lines for direct shareholder use,
plus customer liaison staff for on-line inquiry
response;
(ix) Mail duplicate confirmations to broker-dealers of
their clients' activity, whether executed through the
broker-dealer or directly with PFPC;
(x) Provide periodic shareholder lists and statistics to
the clients;
(xi) Provide detailed data for underwriter/broker
confirmations;
(xii) Prepare periodic mailing of year-end tax and
statement information;
(xiii) Notify on a timely basis the investment adviser,
accounting agent, and custodian of fund activity; and
(xiv) Perform other participating broker-dealer shareholder
services as may be agreed upon from time to time.
(b) SERVICES PROVIDED BY PFPC UNDER ORAL INSTRUCTIONS OR WRITTEN
INSTRUCTIONS.
(i) Accept and post daily Fund purchases and redemptions;
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(ii) Accept, post and perform shareholder transfers and
exchanges;
(iii) Pay dividends and other distributions;
(iv) Solicit and tabulate proxies; and
(v) Issue and cancel certificates (when requested in
writing by the shareholder).
(c) Purchase of Shares. PFPC shall issue and credit an account of
an investor, in the manner described in the Fund's prospectus,
once it receives:
(i) A purchase order;
(ii) Proper information to establish a shareholder
account; and
(iii) Confirmation of receipt or crediting of funds for
such order to the Fund's custodian.
(d) REDEMPTION OF SHARES. PFPC shall redeem Shares only if
that function is properly authorized by the certificate of
incorporation or resolution of the Fund's Board of Directors.
Shares shall be redeemed and payment therefor shall be made in
accordance with the Fund's prospectus, when the recordholder
tenders Shares in proper form and directs the method of
redemption. If Shares are received in proper form, Shares
shall be redeemed before the funds are provided to PFPC from
the Fund's custodian (the "Custodian"). If the recordholder
has not directed that redemption proceeds be wired, when the
Custodian provides PFPC with funds, the redemption check shall
be sent to and made payable to the recordholder, unless:
(i) the surrendered certificate is drawn to the order of
an assignee or holder and transfer authorization is
signed by the recordholder; or
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<PAGE>
(ii) Transfer authorizations are signed by the
recordholder when Shares are held in book-entry form.
When a broker-dealer notifies PFPC of a redemption desired by
a customer, and the Custodian provides PFPC with funds, PFPC
shall prepare and send the redemption check to the
broker-dealer and made payable to the broker-dealer on behalf
of its customer.
(e) DIVIDENDS AND DISTRIBUTIONS. Upon receipt of a resolution of
the Fund's Board of Directors authorizing the declaration and
payment of dividends and distributions, PFPC shall issue
dividends and distributions declared by the Fund in Shares,
or, upon shareholder election, pay such dividends and
distributions in cash, if provided for in the Fund's
prospectus. Such issuance or payment, as well as payments upon
redemption as described above, shall be made after deduction
and payment of the required amount of funds to be withheld in
accordance with any applicable tax laws or other laws, rules
or regulations. PFPC shall mail to the Fund's shareholders
such tax forms and other information, or permissible
substitute notice, relating to dividends and distributions
paid by the Fund as are required to be filed and mailed by
applicable law, rule or regulation. PFPC shall prepare,
maintain and file with the IRS and other appropriate taxing
authorities reports relating to all dividends above a
stipulated amount paid by the Fund to its shareholders as
required by tax or other law, rule or regulation.
(f) SHAREHOLDER ACCOUNT SERVICES.
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<PAGE>
(i) PFPC may arrange, in accordance with the prospectus,
for issuance of Shares obtained through:
- Any pre-authorized check plan; and
- Direct purchases through broker wire orders,
checks and applications.
(ii) PFPC may arrange, in accordance with the prospectus,
for a shareholder's:
- Exchange of Shares for shares of another
fund with which the Fund has exchange
privileges;
- Automatic redemption from an account where
that shareholder participates in a automatic
redemption plan; and/or
- Redemption of Shares from an account with a
checkwriting privilege.
(g) Communications to Shareholders. Upon timely Written
Instructions, PFPC shall mail all communications by the Fund
to its shareholders, including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Fund shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices;
(v) Proxy material; and
(vi) Tax form information.
In addition, PFPC will receive and tabulate the proxy cards
for the meetings of the Fund's shareholders.
(h) Records. PFPC shall maintain records of the accounts for each
shareholder showing the following information:
(i) Name, address and United States Tax Identification or
Social Security number;
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<PAGE>
(ii) Number and class of Shares held and number and class
of Shares for which certificates, if any, have been
issued, including certificate numbers and
denominations;
(iii) Historical information regarding the account of each
shareholder, including dividends and distributions
paid and the date and price for all transactions on a
shareholder's account;
(iv) Any stop or restraining order placed against a
shareholder's account;
(v) Any correspondence relating to the current
maintenance of a shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Any information required in order for the transfer
agent to perform any calculations contemplated or
required by this Agreement.
(i) LOST OR STOLEN CERTIFICATES. PFPC shall place a stop notice
against any certificate reported to be lost or stolen and
comply with all applicable federal regulatory requirements for
reporting such loss or alleged misappropriation. A new
certificate shall be registered and issued only upon:
(i) The shareholder's pledge of a lost instrument bond or
such other appropriate indemnity bond issued by a
surety company approved by PFPC; and
(ii) Completion of a release and indemnification agreement
signed by the shareholder to protect PFPC and its
affiliates.
(j) SHAREHOLDER INSPECTION OF STOCK RECORDS. Upon a request from
any Fund shareholder to inspect stock records, PFPC will
notify the Fund and the Fund will issue instructions granting
or denying each such request. Unless PFPC has acted contrary
to the Fund's instructions, the Fund agrees and does hereby,
release PFPC from any liability for refusal of permission for
a particular shareholder to inspect the Fund's stock records.
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<PAGE>
(k) WITHDRAWAL OF SHARES AND CANCELLATION OF CERTIFICATES.
Upon receipt of Written Instructions, PFPC shall cancel
outstanding certificates surrendered by the Fund to reduce the
total amount of outstanding shares by the number of shares
surrendered by the Fund.
16. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Fund or by PFPC on sixty (60) days' prior written
notice to the other party.
17. CHANGE OF CONTROL. Notwithstanding any other provision of this
Agreement, in the event of an agreement to enter into a transaction
that would result in a Change of Control of the Fund's adviser or
sponsor, the Fund's ability to terminate the Agreement will be
suspended from the time of such agreement until two years after the
Change of Control.
18. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to
PFPC, at 400 Bellevue Parkway, Wilmington, Delaware 19809, Attention:
President; (b) if to the Fund, at , Attn: or (c) if to neither of the
foregoing, at such other address as shall have been given by like
notice to the sender of any such notice or other communication by the
other party. If notice is sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given
immediately. If notice is sent by first-class mail, it shall be deemed
to have been given three days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it
is delivered.
19. AMENDMENTS. This Agreement, or any term thereof, may be changed or
waived only by
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<PAGE>
a written amendment, signed by the party against whom enforcement of
such change or waiver is sought.
20. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its
duties hereunder to any majority-owned direct or indirect subsidiary of
PFPC or PNC Bank Corp., provided that (i) PFPC gives the Fund 30 days
prior written notice of such assignment or delegation, (ii) the
assignee or delegate agrees to comply with the relevant provision of
the 1940 Act, and (iii) PFPC and such assignee or delegate promptly
provide such information as the Fund may reasonably request, and
respond to such questions as the Fund may reasonably ask, relative to
the assignment or delegation (including, without limitation, the
capabilities of the assignee or delegate).
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
23. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties and Oral Instructions.
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<PAGE>
(b) CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(c) GOVERNING LAW. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
(d) PARTIAL INVALIDITY. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(f) FACSIMILE SIGNATURES. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:
----------------------------
Title:
-------------------------
GAMNA SERIES FUNDS, INC.
By:
----------------------------
Title:
-------------------------
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<PAGE>
EXHIBIT A
THIS EXHIBIT A, dated as of _____________, 1999, is Exhibit A to that
certain Transfer Agency Services Agreement dated as of _____________, 1999
between PFPC Inc. and GAMNA Series Funds, Inc.
PORTFOLIOS
GAMNA Focus Fund
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<PAGE>
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
- ------------------------------- -------------------------------
20
<PAGE>
Exhibit (h)(ii)
FORM OF
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of ________, 1999 by and between GAMNA SERIES
FUNDS, INC., a Maryland corporation (the "Fund"), and PFPC INC., a Delaware
corporation ("PFPC"), which is an indirect wholly owned subsidiary of PFPC
Worldwide, Inc.
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide administration and
accounting services to its investment portfolios listed on Exhibit A attached
hereto and made a part hereof, as such Exhibit A may be amended from time to
time (each a "Portfolio"), and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund's Board of Directors to give
Oral Instructions and Written Instructions on behalf of the Fund and
listed on the Authorized Persons Appendix attached hereto and made a
part hereof or any amendment thereto as may be received by PFPC. An
Authorized Person's scope of authority may be limited by the Fund by
setting forth such limitation in the Authorized Persons Appendix.
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<PAGE>
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Change of Control" means a change in ownership or control
(not including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(f) "Oral Instructions" mean oral instructions received by PFPC
from an Authorized Person or from a person reasonably believed by
PFPC to be an Authorized Person.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(i) "Shares" means the shares of beneficial interest of any series or
class of the Fund.
(j) "Written Instructions" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide administration and
accounting services to the each of the Portfolios, in accordance with the
terms set forth in this Agreement. PFPC accepts such appointment and agrees
to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
Board of Directors, approving the appointment of PFPC or its
affiliates to provide services to each Portfolio and approving this
Agreement;
(b) a copy of Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement or agreements;
2
<PAGE>
(d) a copy of the distribution agreement with respect to each class of
Shares representing an interest in a Portfolio;
(e) a copy of any additional administration agreement with respect to a
Portfolio;
(f) a copy of any shareholder servicing agreement made in respect of the
Fund or a Portfolio; and
(g) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed
by PFPC hereunder. Except as specifically set forth herein, PFPC assumes no
responsibility for such compliance by the Fund or any Portfolio.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions and Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions and Written
Instructions it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any
vote, resolution or proceeding of the Fund's Board of Directors or of
the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
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<PAGE>
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) so that PFPC receives the Written Instructions
by the close of business on the same day that such Oral Instructions
are received. The fact that such confirming Written Instructions are
not received by PFPC shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized Person,
PFPC shall incur no liability to the Fund in acting upon such Oral
Instructions or Written Instructions provided that PFPC's actions
comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it should
or should not take, PFPC may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC, at the option of PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions PFPC receives from
the Fund and the advice PFPC receives from counsel, PFPC may rely upon
and follow the advice of counsel. In the event PFPC so relies on the
advice of counsel, PFPC remains liable for any action or omission on
the part of PFPC which constitutes willful
4
<PAGE>
misfeasance, bad faith, gross negligence or reckless disregard by
PFPC of any duties, obligations or responsibilities set forth in this
Agreement.
(d) PROTECTION OF PFPC. PFPC shall be protected in any action it takes
or does not take in reliance upon directions, advice or Oral
Instructions or Written Instructions it receives from the Fund or from
counsel and which PFPC believes, in good faith, to be consistent with
those directions, advice and Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as to
impose an obligation upon PFPC (i) to seek such directions, advice or
Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions, advice or Oral Instructions or
Written Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC's properly taking or
not taking such action. Nothing in this subsection shall excuse PFPC
when an action or omission on the part of PFPC constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by PFPC
of any duties, obligations or responsibilities set forth in this
Agreement.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund and the Portfolios which
are in the possession or under the control of PFPC shall be the
property of the Fund. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall
have access to such books and records at all times during PFPC's
normal business hours. Upon the reasonable request of the Fund, copies
of any such books and records shall be provided by PFPC to the Fund or
to
5
<PAGE>
an Authorized Person, at the Fund's expense.
(b) PFPC shall keep the following records:
(i) all books and records with respect to each Portfolio's books of
account;
(ii) records of each Portfolio's securities transactions; and
(iii) all other books and records as PFPC is required to maintain
pursuant to Rule 31a-1 of the 1940 Act in connection with the
services provided hereunder.
8. CONFIDENTIALITY. PFPC agrees to keep confidential the records of the Fund
and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in
writing, by the Fund. The Fund agrees that such consent shall not be
unreasonably withheld and may not be withheld where PFPC may be exposed to
civil or criminal contempt proceedings or when required to divulge such
information or records to duly constituted authorities.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal
year summaries, and other audit-related schedules with respect to each
Portfolio. PFPC shall take all reasonable action in the performance of its
duties under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion, as
required by the Fund.
10. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PFPC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with
6
<PAGE>
respect to the loss of data or service interruptions caused by equipment
failure, provided such loss or interruption is not caused by PFPC's own
willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties or obligations under this Agreement.
11. YEAR 2000 READINESS DISCLOSURE. PFPC (a) has reviewed its business and
operations as they relate to the services provided hereunder, (b) has
developed or is developing a program to remediate or replace computer
applications and systems, and (c) has developed a testing plan to test the
remediation or replacement of computer applications/systems, in each case,
to address on a timely basis the risk that certain computer
applications/systems used by PFPC may be unable to recognize and perform
properly date sensitive functions involving dates prior to, including and
after December 31, 1999, including dates such as February 29, 2000 (the
"Year 2000 Challenge"). To the best of PFPC's knowledge and belief, the
reasonably foreseeable consequences of the Year 2000 Challenge will not
adversely effect PFPC's ability to perform its duties and obligations under
this Agreement.
12. COMPENSATION. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund, on behalf of each Portfolio, will pay to
PFPC a fee or fees as may be agreed to in writing by the Fund and PFPC.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PFPC and its affiliates from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any state or
foreign securities and blue sky laws, and amendments thereto), and
expenses, including (without limitation) attorneys' fees and disbursements
arising directly or indirectly from any action or omission to act which
PFPC takes (i) at the request or on
7
<PAGE>
the direction of or in reliance on the advice of the Fund or (ii) upon Oral
Instructions or Written Instructions. Neither PFPC, nor any of its
affiliates', shall be indemnified against any liability (or any expenses
incident to such liability) arising out of PFPC's or its affiliates' own
willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties and obligations under this Agreement. Any amounts payable by the
Fund hereunder shall be satisfied only against the relevant Portfolio's
assets and not against the assets of any other investment portfolio of the
Fund.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the Fund
or any Portfolio except as specifically set forth herein or as may be
specifically agreed to by PFPC in writing. PFPC shall be obligated to
exercise care and diligence in the performance of its duties
hereunder, to act in good faith and to use its best efforts, within
reasonable limits, in performing services provided for under this
Agreement. PFPC shall be liable for any damages arising out of PFPC's
failure to perform its duties under this Agreement to the extent such
damages arise out of PFPC's willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with
the standard of care set forth above; and (ii) PFPC shall not be
liable for (A) the validity or invalidity or authority or lack thereof
of any Oral Instruction or Written Instruction, notice or other
instrument which conforms to the applicable requirements of this
Agreement, and which
8
<PAGE>
PFPC reasonably believes to be genuine; or (B) subject to Section
10, delays or errors or loss of data occurring by reason of
circumstances beyond PFPC's control, including acts of civil or
military authority, national emergencies, labor difficulties, fire,
flood, catastrophe, acts of God, insurrection, war, riots or failure
of the mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or
damages which the Fund or any Portfolio may incur or suffer by or as
a consequence of PFPC's or any affiliates' performance of the
services provided hereunder, whether or not the likelihood of such
losses or damages was known by PFPC or its affiliates.
15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services with respect to each
Portfolio:
(i) Journalize investment, capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from the
investment adviser for a Portfolio (the "Adviser") and transmit
trades to the Fund's custodian (the "Custodian") for proper
settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with the
Custodian, and provide the Adviser with the beginning cash balance
available for investment purposes;
(vi) Update the cash availability throughout the day as required by the
Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities and
the Statement of Operations;
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<PAGE>
(viii) Calculate various contractual expenses (E.G., advisory and
custody fees);
(ix) Monitor the expense accruals and notify an officer of the Fund of
any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon
Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing services
approved by the Adviser, or if such quotes are unavailable, then
obtain such prices from the Adviser, and in either case calculate
the market value of each Portfolio's Investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Adviser;
(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which will include the
following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
16. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following administration services with respect to
each Portfolio:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund statistical
data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and state tax
returns;
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<PAGE>
(v) Monitor each Portfolio's status as a regulated investment
company under Sub-chapter M of the Internal Revenue Code of 1986,
as amended;
(vi) Prepare and file with the SEC the Fund's annual, semi-annual,
and quarterly shareholder reports;
(vii) Prepare, coordinate with the Fund's counsel and file with the
SEC Post-Effective Amendments to the Fund's Registration
Statement, prepare reports to the SEC including, the preparation
and filing of (i) semi-annual reports on Form N-SAR and (ii)
Notices pursuant to Rule 24f-2;
(viii) Assist in the preparation of notices of Annual or Special Meetings
of Shareholders and Proxy materials relating to such meetings;
(ix) Assist in obtaining the fidelity bond and directors' and officers'/
errors and omissions insurance policies for the Fund in accordance
with the requirements of Rule 17g-1 and 17d-1(d)(7) under the 1940
Act as such bond and policies are approved by the Fund's Board of
Directors;
(x) Monitor the Fund's assets to assure adequate fidelity bond coverage
is maintained;
(xi) Draft agendas, resolutions and materials for quarterly and special
Board meetings;
(xii) Coordinate the preparation, assembly and mailing of Board
materials;
(xiii) Maintain the Fund's corporate calendar to assure compliance with
various filing deadlines;
(xiv) Coordinate contractual relationships and communications between the
Fund and its contractual service providers; and
(xv) Monitor the Fund's compliance with the amounts and conditions of
each state qualification.
17. DURATION AND TERMINATION. This Agreement shall continue until terminated
by the Fund or by PFPC on sixty (60) days' prior written notice to the
other party.
18. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's ability
to terminate the Agreement will be
11
<PAGE>
suspended from the time of such agreement until two years after the Change
of Control.
19. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex
or facsimile sending device. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been
given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given three days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it is
delivered. Notices shall be addressed (a) if to PFPC, at 400 Bellevue
Parkway, Wilmington, Delaware 19809, Attn: President; (b) if to the Fund,
at , Attn: ; or (c) if to neither of the foregoing, at such other address
as shall have been provided by like notice to the sender of any such notice
or other communication by the other party.
20. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of
such change or waiver is sought.
21. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PFPC or
PNC Bank Corp., provided that (i) PFPC gives the Fund 30 days prior written
notice of such assignment or delegation, (ii) the assignee or delegate
agrees to comply with the relevant provision of the 1940 Act, and (iii)
PFPC and such assignee or delegate promptly provide such information as the
Fund may reasonably request, and respond to such questions as the Fund may
reasonably ask, relative to the assignment or delegation (including,
without limitation, the capabilities of the assignee or delegate).
22. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of
12
<PAGE>
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
24. MISCELLANEOUS.
(a) This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that
the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties and Oral
Instructions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. Notwithstanding any provision hereof, the services of PFPC are
not, nor shall they be, construed as constituting legal advice or the
provision of legal services for or on behalf of the Fund or any other
person.
(b) This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law, without regard to principles of conflicts of
law.
(c) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(d) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:
------------------------
Title:
---------------------
GAMNA SERIES FUNDS, INC.
By:
------------------------
Title:
---------------------
14
<PAGE>
EXHIBIT A
THIS EXHIBIT A, dated as of _________, 1999 is Exhibit A to that certain
Administration and Accounting Services Agreement dated as of ________, 1999
between PFPC Inc. and GAMNA Series Fund, Inc.
PORTFOLIOS
GAMNA Focus Fund
15
<PAGE>
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
- ---------------------------------- ----------------------------------
16
<PAGE>
Exhibit (h)(iii)
FORM OF PURCHASE AGREEMENT
GAMNA Series Funds, Inc. (the "Company"), a Maryland corporation,
and Groupama Asset Management N.A. (the "Purchaser") hereby agree as follows:
1. The Company hereby offers the Purchaser and the Purchaser
hereby purchases 9,998 shares of Class A and 1 share each of Class B and
Class C of the Company's GAMNA Focus Fund capital stock (par value $.001 per
share) for consideration of $10.00 per share (collectively, the "Shares").
The Purchaser hereby acknowledges receipt of a purchase confirmation
reflecting the purchase of the Shares, and the Company hereby acknowledges
receipt from the Purchaser of funds in the amount of $100,000 in full payment
for the Shares.
2. The Purchaser represents and warrants to the Company that the
Shares are being acquired for investment purposes and not with a view to the
distribution thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the ____ day of ____________, 1999.
GAMNA SERIES FUNDS, INC.
Attest:
By:
- ------------------------------ ------------------------------
Mark Bronzo
President
(SEAL)
GROUPAMA ASSET MANAGEMENT N.A.
Attest:
By:
- ------------------------------ ------------------------------
<PAGE>
Exhibit (h)(iv)
GAMNA SERIES FUNDS, INC.
FORM OF EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, dated as of ___________, 1999, by and between
Groupama Asset Management N.A. ("Groupama") and GAMNA Series Funds, Inc. (the
"Company"), on behalf of each portfolio of the Company set forth in Schedule A
(each a "Portfolio", and collectively, the "Portfolios").
WHEREAS, the Company is a Maryland corporation and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company; and
WHEREAS, the Company and Groupama have entered into an Investment Advisory
Agreement (the "Advisory Agreement"), pursuant to which Groupama will render
investment advisory services to each Portfolio for compensation based on the
value of the average daily net assets of each such Portfolio; and
WHEREAS, the Company and Groupama have determined that it is appropriate
and in the best interests of each Portfolio and its shareholders to maintain
certain expenses of each Portfolio at a level below the level to which each
such Portfolio would normally be subject.
NOW, THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1 APPLICABLE EXPENSE LIMIT. To the extent that the aggregate
expenses incurred by a Portfolio in any one year period beginning on ________
(each, an "Applicable Year") which are not specifically allocated to a class
of shares of a Portfolio under the Company's Rule 18f-3 Plan, including but
not limited to investment advisory fees of Groupama (but excluding: (i)
interest, taxes, brokerage commissions, and other expenditures which are
capitalized in accordance with generally accepted accounting principles; (ii)
expenses specifically allocated to a class of shares of a Portfolio under the
Company's Rule 18f-3 Plan such as Rule 12b-1 expenses and transfer agency
fees; and (iii) other extraordinary expenses not incurred in the ordinary
course of such Portfolio's business) ("Portfolio Operating Expenses"), exceed
the Operating Expense Limit, as defined in Section 1.2 below, such excess
amount (the "Excess Amount") shall be the liability of Groupama.
1.2 OPERATING EXPENSE LIMIT. The Operating Expense Limit in any
Applicable Year shall be as set forth in Schedule A as to each Portfolio, or
such other rate as may be agreed to in writing by the parties.
<PAGE>
2
1.3 METHOD OF COMPUTATION. To determine Groupama's liability with
respect to the Excess Amount, each month the Portfolio Operating Expenses for
each Portfolio shall be annualized for the Applicable Year as of the last day of
the month. If such annualized Portfolio Operating Expenses for any month of a
Portfolio exceed the Operating Expense Limit of such Portfolio, Groupama shall
first waive or reduce its investment advisory management fee for such month by
an amount sufficient to reduce the annualized Portfolio Operating Expenses for
the Applicable Year to an amount no higher than the Operating Expense Limit. If
the amount of the waived or reduced investment advisory fee for any such month
is insufficient to pay the Excess Amount, Groupama may also remit to the
appropriate Portfolio or Portfolios an amount that, together with the waived or
reduced advisory fee, is sufficient to pay such Excess Amount.
1.4 YEAR-END ADJUSTMENT. If necessary, on or before the last day of
the first month of each Applicable Year, an adjustment payment shall be made by
the appropriate party in order that the amount of the advisory fees waived or
reduced and other payments remitted by Groupama to the Portfolio or Portfolios
with respect to the previous Applicable Year shall equal the Excess Amount.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1. REIMBURSEMENT. If in any Applicable Year during which the
Advisory Agreement is still in effect, the estimated aggregate Portfolio
Operating Expenses of such Portfolio for the Applicable Year are less than
the Operating Expense Limit for that Applicable Year, subject to quarterly
approval by the Company's Board of Directors as provided in Section 2.2
below, Groupama shall be entitled to reimbursement by such Portfolio, in
whole or in part as provided below, of the advisory fees waived or reduced
and other payments remitted by Groupama to such Portfolio pursuant to Section
1 hereof. The total amount of reimbursement to which Groupama may be entitled
(the "Reimbursement Amount") shall equal, at any time, the sum of all
investment advisory fees previously waived or reduced by Groupama and all
other payments remitted by Groupama to the Portfolio, pursuant to Section 1
hereof, during any of the previous two (2) Applicable Years, less any
reimbursement previously paid by such Portfolio to Groupama, pursuant to
Sections 2.2 or 2.3 hereof, with respect to such waivers, reductions, and
payments. The Reimbursement Amount shall not include any additional charges
or fees whatsoever, including, e.g., interest accruable on the Reimbursement
Amount.
2.2 BOARD APPROVAL. No reimbursement shall be paid to Groupama
pursuant to this provision unless the Company's Board of Directors has
determined that the payment of such reimbursement is in the best interests of
the Portfolio or Portfolios and their shareholders. The Company's Board of
Directors shall determine quarterly in advance whether any reimbursement may be
paid to Groupama for the relevant succeeding quarterly period.
2.3 METHOD OF COMPUTATION. To determine each Portfolio's payments,
if any, to reimburse Groupama for the Reimbursement Amount, each month the
Portfolio Operating Expenses of each Portfolio shall be annualized for the
Applicable Year as of the last day of the month. If such annualized Portfolio
Operating Expenses of a Portfolio for any month are less than the Operating
Expense Limit of such Portfolio, such Portfolio, only with the prior
<PAGE>
3
approval of the Board, shall pay to Groupama an amount sufficient to increase
the annualized Portfolio Operating Expenses of that Portfolio to an amount no
greater than the Operating Expense Limit of that Portfolio, provided that such
amount paid to Groupama will in no event exceed the total Reimbursement Amount.
In the event the Operating Expense Limit for a Portfolio is increased subsequent
to an Applicable Year in which Groupama becomes entitled to reimbursement
hereunder for fees waived or reduced or amounts otherwise remitted to that
Portfolio, the amount available to reimburse Groupama in accordance with this
Section 2.3 shall be calculated by reference to the Operating Expense Limit for
that Portfolio in effect at the time Groupama became entitled to receive such
reimbursement, rather than the subsequently increased Operating Expense Limit
for that Portfolio.
2.4 YEAR-END ADJUSTMENT. If necessary, on or before the last day of
the first month of each Applicable Year, an adjustment payment shall be made
by the appropriate party in order that the actual Portfolio Operating
Expenses of a Portfolio for the prior Applicable Year (including any
reimbursement payments hereunder with respect to such Applicable Year) do not
exceed the Operating Expense Limit.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect until ___________, 2000 and
from year to year thereafter provided such continuance is specifically
approved by a majority of the Directors of the Company who (i) are not
"interested persons" of the Company or any other party to this Agreement, as
defined in the 1940 Act, and (ii) have no direct or indirect financial
interest in the operation of this Agreement ("Non-Interested Directors").
Nevertheless, this Agreement may be terminated by either party hereto,
without payment of any penalty, upon 90 days' prior written notice to the
other party at its principal place of business; provided that, in the case of
termination by the Company, such action shall be authorized by resolution of
a majority of the Non-Interested Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Company.
4. MISCELLANEOUS.
4.1 CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
4.2 INTERPRETATION. This Agreement shall be construed in accordance
with the laws of the State of New York. Nothing herein contained shall be
deemed to require the Company or any Portfolio to take any action contrary to
the Company's Declaration or By-Laws, or any applicable statutory or
regulatory requirement to which it is subject or by which it is bound, or to
relieve or deprive the Company's Board of Directors of its responsibility for
and control of the conduct of the affairs of the Company or the Portfolios.
4.3 DEFINITIONS. Any questions of interpretation of any term or
provision of this Agreement, including but not limited to the investment
advisory fee, the computations of net
<PAGE>
4
asset values, and the allocation of expenses, having a counterpart in or
otherwise derived from the terms and provisions of the Advisory Agreement or the
1940 Act, shall have the same meaning as and be resolved by reference to such
Advisory Agreement or the 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year first
above written.
ATTEST: GAMNA SERIES FUNDS, INC.
ON BEHALF OF ITS PORTFOLIOS
By:
- -------------------------------- ---------------------------
Secretary
ATTEST: GROUPAMA ASSET MANAGEMENT N.A.
By:
- -------------------------------- ---------------------------
Secretary
<PAGE>
SCHEDULE A
This Agreement relates to the following Operating Expense
Portfolios of the Company: Limit
- --------------------------------------- ------------------
GAMNA FOCUS FUND [ ]
<PAGE>
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201-3018
410-539-2530 WASHINGTON
FAX: 410-539-0489 NEW YORK
PHILADELPHIA
RESTON
EASTON
June 21, 1999
GAMNA Series Funds, Inc.
180 Maiden Lane
New York, New York 10014
Re: Registration Statement on Form N-1A
(Registration Nos. 333-75075 and 811-9235
-----------------------------------------
Dear Ladies and Gentlemen:
We have acted as special Maryland counsel to GAMNA Series Funds, Inc.,
a Maryland corporation (the "Corporation"), in connection with the registration
under the Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended, pursuant to a Registration Statement on Form N-1A of the
Corporation (Registration Nos. 333-75075 and 811-9235) (as amended, the
"Registration Statement") filed with the Securities and Exchange Commission (the
"Commission"), of an indefinite number of shares of capital stock, par value
$.001 per share, of which 300,000,000 shares are designated as the "GAMNA Focus
Fund" Common Stock, of the Corporation (the "Shares").
In this capacity, we have examined the Charter and By-Laws of the
Corporation, the resolutions of the Corporation's Board of Directors authorizing
the issuance of the Shares, a Certificate of Secretary dated the date hereof
(the "Certificate") and such other statutes, certificates, instruments and
documents relating to the Corporation and matters of law as we have deemed
necessary to the issuance of this opinion. In such examination, we have assumed,
without independent investigation, the genuineness of all signatures, the legal
capacity of all individuals who have executed any of the aforesaid documents,
the authenticity of all documents submitted to us as originals, the conformity
with originals of all documents submitted to us as originals, the conformity
with originals of all documents submitted to us as copies (and the authenticity
of the originals of such copies), and that all public records reviewed are
accurate and complete. As to factual
<PAGE>
Piper & Marbury
L.L.P.
GAMNA Series Funds, Inc.
June 21, 1999
Page 2
matters, we have relied on the Certificate and have not independently verified
the matters stated therein.
We are of the opinion and so advise you that the issuance of the Shares
has been duly authorized, and such Shares, when issued and delivered as
contemplated by the Registration Statement, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Counsel" in the Statement of Additional Information supplementing the Prospectus
included in the Registration Statement. In giving our consent, we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
Piper & Marbury L.L.P.
