Registrant Nos. 333-80099 and 811-09377
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
PRE-EFFECTIVE AMENDMENT No. 1
POST-EFFECTIVE AMENDMENT No. ____
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
AMENDMENT No. 1
_______________________
THE GABELLI BLUE CHIP VALUE FUND
(Exact Name of Registrant as Specified in Charter)
One Corporate Center, Rye, New York 10580-1434
(Address of Principal Executive Office)
Registrant's Telephone Number (800) 422-3554
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center, Rye, New York 10580-1434
(Name and Address of Agent for Service)
_______________________
Copies to:
James E. McKee, Esq. Richard T. Prins, Esq.
Gabelli Funds, LLC Skadden, Arps, Slate, Meagher & Flom LLP
One Corporate Center 919 Third Avenue
Rye, New York 10580-1434 New York, New York 10022
_______________________
Approximate Date of proposed public offering: As soon as practicable after
the effective date of this Registration Statement.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
has elected to register an indefinite number of shares of beneficial
interest.
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 Commission, acting
pursuant to Section 8(a), may determine.
THE GABELLI BLUE CHIP VALUE FUND
ONE CORPORATE CENTER
RYE, NEW YORK 10580-1434
TELEPHONE: 1-800-GABELLI (1-800-422-3554)
HTTP://WWW.GABELLI.COM
PROSPECTUS
_______________, 1999
CLASS AAA SHARES
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND.
PLEASE READ IT BEFORE INVESTING AND KEEP IT FOR FUTURE REFERENCE.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.
TABLE OF CONTENTS
PAGE
INVESTMENT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT AND RISK INFORMATION . . . . . . . . . . . . . . . . . . . . . 3
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . 5
PURCHASING, SELLING AND EXCHANGING SHARES . . . . . . . . . . . . . . . . 6
PRICING OF FUND SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 6
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . 7
TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE:
The Gabelli Blue Chip Value Fund, a Delaware business trust (the "Fund"),
seeks to provide long-term growth of capital. Capital is the amount of
money you invest in the Fund. The Fund's secondary objective is to achieve
current income by investing in dividend-paying common stocks.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund will primarily invest in common stocks of well established,
widely-held, high quality companies that have ample liquidity and a market
capitalization of greater than $5 billion. The Fund focuses on those
companies which the Fund's Investment Adviser, Gabelli Funds, LLC (the
"Adviser") believes are undervalued and have the potential to achieve
significant capital appreciation. In selecting investments, the Adviser
will consider, among other things, the market price of the issuer's
securities, earnings expectations, earnings and price histories, balance
sheet characteristics and perceived management skills. The Adviser will
also consider changes in economic and political outlooks as well as
individual corporate developments.
PRINCIPAL RISKS:
The Fund's share price will fluctuate with changes in the market value of
the Fund's portfolio securities. Stocks are subject to market, economic
and business risks that cause their prices to fluctuate. The Fund may
invest up to 25% of its total assets in securities of non-U.S. issuers
(excluding American Depository Receipts and U.S. denominated Securities of
foreign issuers). Investments in foreign securities involve risks related
to political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and
foreign issuers and markets are subject. When you sell Fund shares, they
may be worth less than what you paid for them. Consequently, you can lose
money by investing in the Fund. The Fund is also subject to the risk that
market values may never be realized in the market, or that the price of its
portfolio securities will decline, or that value stocks as a category lose
favor with investors compared to growth stocks or because the Adviser
failed to anticipate which stocks or which industries would benefit from
changing market or economic conditions.
WHO MAY WANT TO INVEST:
The Shares offered herein are offered only to investors who acquire them
directly through the Fund's distributor or through a select number of
financial intermediaries with whom the distributor has entered into selling
agreements specifically authorizing them to offer Class AAA Shares.
The Fund may appeal to you if:
o you are a long-term investor
o you seek growth of capital
o you believe that the market will favor value over growth stocks
over the long term
o you wish to include a value strategy as a portion of your overall
investments
You may not want to invest in the Fund if:
o you are seeking a high level of current income
o you are conservative in your investment approach
o you seek stability of principal more than growth of capital
PERFORMANCE INFORMATION:
Since the Fund did not exist before this offering, no performance bar chart
or table has been presented.
FEES AND EXPENSES OF THE FUND:
This table describes the fees and expenses that you may pay if you buy and
hold Class AAA shares of the Fund.
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets):
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00%
Distribution (Rule 12b-1) Expenses . . . . . . . . . . . . . . . . 0.25%
Other Expenses(1) . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%
----
Total Annual Operating Expenses . . . . . . . . . . . . . . . . . . 1.75%
====
_________________
(1) Based on an estimated asset size of $30 million for the current fiscal
year. Actual costs may be higher.
EXPENSE EXAMPLE:
This example is intended to help you compare the cost of investing in Class
AAA shares of the Fund with the cost of investing in other mutual funds.
The example assumes (1) you invest $10,000 in the Fund for the time periods
shown, (2) you redeem your shares at the end of those periods, (3) your
investment has a 5% return each year and (4) the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
1 Year 3 Years
------ -------
$178 $551
INVESTMENT AND RISK INFORMATION
The Fund's primary investment objective is to seek long-term growth of
capital, and investments will be made based on the Adviser's perception of
their potential for capital appreciation. Current income, derived from
dividend paying common stocks, is a secondary objective. The investment
objectives of the Fund may not be changed without shareholder approval.
Under normal market conditions, the Fund invests at least 65% of its assets
in common stocks of well established, widely held high quality companies
that have ample liquidity and a market capitalization of greater than $5
billion and which the Adviser believes are undervalued and have the
potential to achieve significant capital appreciation.
Undervaluation of the stock of an established company with good
intermediate and longer-term fundamentals can result from a variety of
factors, such as a lack of investor recognition of:
o the underlying value of a company's fixed assets,
o the value of a consumer or commercial franchise,
o changes in the economic or financial environment affecting the
company,
o new, improved or unique products or services,
o new or rapidly expanding markets,
o technological developments or advancements affecting the company
or its products, or
o changes in governmental regulations, political climate or
competitive conditions.
Additionally, undervaluation may result from:
o poor management decisions which result in a low return on the
company's assets,
o short-term earnings problems, or
o a difficult near-term operating or economic environment affecting
the company's business.
The actual events that may lead to a significant increase in the value of a
company's securities include:
o earnings surprises relative to analysts' expectations,
o the company's development of new, improved or unique products and
services,
o a change in the company's management or management policies,
o an investor's purchase of a large portion of the company's stock,
o a merger or reorganization or recapitalization of the company,
o a sale of a division of the company,
o a tender offer (an offer to purchase investors' shares),
o the spin-off to shareholders of a subsidiary, division or other
substantial assets, or
o the retirement or death of a senior officer or substantial
shareholder of the company.
In general, the Adviser seeks to take advantage of investors' tendency to
overemphasize near-term events by investing in companies which are
temporarily undervalued and which may return to a significantly higher
valuation. In selecting investments, the Adviser will consider factors
such as the market price of the issuer's securities, earnings expectations,
earnings and price histories, balance sheet characteristics and perceived
management skills. The Adviser will also consider changes in economic and
political outlooks as well as individual corporate developments. The
Adviser will sell any Fund investments which lose their perceived value
relative to other investments.
The Fund's assets will be invested primarily in a broad range of readily
marketable equity securities consisting primarily of common stocks. Many
of the common stocks the Fund will buy will be bought for the potential
that their prices will increase, providing capital appreciation for the
Fund. The Fund's secondary objective is to achieve current income by
investing in dividend-paying common stocks. The value of common stocks
will fluctuate due to many factors, including the past and predicted
earnings of the issuer, the quality of the issuer's management, general
market conditions, the forecasts for the issuer's industry and the value of
the issuer's assets. Holders of common stocks only have rights to value
in the company after all debts have been paid, and they could lose their
entire investment in a company that encounters financial difficulty.
The Fund may also use the following investment techniques:
o FOREIGN SECURITIES. Under normal circumstances, the Fund may
invest up to 25% of its total assets in securities of non-U.S.
issuers (excluding American Depository Receipts and U.S.
denominated securities of foreign issuers).
o DEFENSIVE INVESTMENTS. When opportunities for capital growth do
not appear attractive or when adverse market or economic
conditions occur, the Fund may temporarily invest all or a
portion of its assets in defensive investments. Such investments
include preferred stocks, high-grade debt securities, obligations
of the U.S. Government and its agencies and instrumentalities,
and short-term money market instruments such as high-quality
commercial paper (rated at least "A-1" by Standard & Poor's
Rating Service ("S&P") or "P-1" by Moody's Investors Service,
Inc.). When following a defensive strategy, the Fund may not
achieve its investment objective of long term growth of capital.
The Fund may also engage in other investment practices in order to
achieve its investment objective. These are briefly discussed in the
Statement of Additional Information which may be obtained by calling 1-800-
GABELLI (1-800-422-3554). The Fund does not currently utilize the other
practices to any significant degree and does not anticipate doing so.
Investing in the Fund involves the following risks, listed in the
order of importance.
o EQUITY RISK. The principal risk of investing in the Fund is
equity risk. Equity risk is the risk that the prices of the
securities held by the Fund will change due to general market and
economic conditions, perceptions regarding the industries in
which the companies issuing the securities participate and the
issuer company's particular circumstances.
o FUND AND MANAGEMENT RISK. The Fund invests in stocks issued by
companies that have a market capitalization of greater than $5
billion and which are believed by the Adviser to be undervalued
and have the potential to achieve significant capital
appreciation. The Fund's price may decline because the market
favors other stocks or small capitalization stocks over stocks of
mid- to large-size companies. If the Adviser is incorrect in its
assessment of the values of the securities it holds or no event
occurs which surfaces value, then the value of the Fund's shares
may decline.
o FOREIGN RISK. The Fund's investments in foreign securities may
go down because of unfavorable foreign government actions,
political instability or the absence of accurate information
about foreign issuers. Also, a decline in the value of foreign
currencies relative to the U.S. dollar will reduce the value of
securities denominated in those currencies. Foreign securities
are sometimes less liquid and harder to value than securities of
U.S. issuers.
MANAGEMENT OF THE FUND
THE ADVISER. Gabelli Funds, LLC, with principal offices located at One
Corporate Center, Rye, New York 10580-1434, serves as investment adviser to
the Fund. The Adviser makes investment decisions for the Fund and
continuously reviews and administers the Fund's investment program under
the supervision of the Fund's Board of Trustees. The Adviser also manages
several other open-end and closed-end investment companies in the Gabelli
family of funds. The Adviser is a New York limited liability company
organized in 1999 as successor to Gabelli Group Capital Partners, Inc.
(formerly named Gabelli Funds, Inc.), a New York corporation organized in
1980. The Adviser is a wholly owned subsidiary of Gabelli Asset Management
Inc. ("GAMI"), a publicly held company listed on the New York Stock
Exchange.
As compensation for its services and the related expenses borne by the
Adviser, the Fund will pay the Adviser an annual fee equal to 1.00% of the
value of the Fund's average daily net assets.
THE PORTFOLIO MANAGER. Ms. Barbara G. Marcin is responsible for the day-
to-day management of the Fund. Ms. Marcin joined the Adviser in June 1999.
Prior to joining the Adviser, Ms. Marcin was the head of value investments
at Citibank Global Asset Management, managing mid- and large-cap equity
securities in value-style mutual funds and in separate accounts. Ms.
Marcin was employed at Citibank Global Asset Management from 1993 until
joining the Adviser.
YEAR 2000. As the year 2000 approaches, an issue has emerged regarding how
the software used by the Fund's service providers can accommodate the date
"2000." Failure to adequately address this issue could result in major
systems or process failures which could disrupt the Fund's operations. The
Adviser is working with the Fund's service providers to prepare for the
year 2000. Based on information currently available, the Adviser does not
expect that the Fund will incur significant operating expenses or be
required to incur material costs to be year 2000 compliant. The Fund
cannot guarantee, however, that all year 2000 issues will be identified and
corrected by January 1, 2000 and any non-compliant computer system could
hurt key Fund operations, such as shareholder servicing, pricing and
trading. In addition, the Year 2000 problem may adversely affect the
companies in which the Fund invests, particularly companies in foreign
countries. For example, these companies may incur substantial costs to
correct the Year 2000 problem, which could lower the value of such
companies' securities and negatively affect the Fund's performance.
RULE 12B-1 PLAN. The Fund has adopted a plan under Rule 12b-1 (the "Plan")
which authorizes payments by the Fund on an annual basis of .25% of the
Fund's average daily net assets attributable to Class AAA Shares to finance
distribution of the Fund's Class AAA Shares. The Fund may make payments
under the Plan for the purpose of financing any activity primarily intended
to result in the sales of Class AAA Shares of the Fund. To the extent any
activity is one which the Fund may finance without a distribution plan, the
Fund may also make payments to compensate such activity outside of the Plan
and not be subject to its limitations. Because payments under the Plan 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 paying
other types of sales charges.
PURCHASING, SELLING AND EXCHANGING SHARES
Information about purchasing, selling and exchanging your shares is
contained in a separate document called the Owner's Manual, which has been
delivered with this Prospectus. The Owner's Manual is considered an
integral part of this Prospectus. The Owner's Manual also contains
information about the Telephone Investment Plan, Telephone Redemption Plan,
Automatic Investment Plan, Systematic Withdrawal Plan and Retirement Plans.
PRICING OF FUND SHARES
The net asset value per share of the Class AAA Shares is calculated on each
day the New York Stock Exchange ("NYSE") is open for trading. The NYSE is
open Monday through Friday, but currently is scheduled to be closed on New
Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas and
on the preceding Friday or subsequent Monday when a holiday falls on a
Saturday or Sunday, respectively.
The net asset value per share of the Class AAA Shares is determined as of
the close of regular trading on the NYSE, normally 4:00 p.m., New York
time. Net asset value is computed by dividing the value of the Fund's net
assets (i.e. the value of its securities and other assets less its
liabilities, including expenses payable or accrued but excluding capital
stock and surplus) by the total number of its shares outstanding at the
time the determination is made. The Fund uses market quotations in valuing
its portfolio securities. Short-term investments that mature in 60 days or
less are valued at amortized cost, which the Trustees of the Fund believe
represents fair value. The price of Fund shares for purposes of purchase
and redemption will be based upon the next calculation of net asset value
after the purchase or redemption order is placed.
The Fund may from time to time hold securities that are primarily listed on
foreign exchanges. Such securities may trade on days when the Fund does
not price its shares. Therefore, the value of the Class AAA Shares may
change on days when you are not able to purchase or redeem Class AAA
Shares.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to pay dividends and capital gain distributions, if any,
on an annual basis. Shareholders may have dividends or capital gains
distributions that are declared by the Fund automatically reinvested at net
asset value in additional shares of the Fund. You will make an election to
receive dividends and distributions in cash or Fund shares at the time you
purchase your shares. You may change this election by notifying the Fund
in writing at any time prior to the record date for a particular dividend
or distribution. There are no sales or other charges in connection with
the reinvestment of dividends and capital gains distributions. There is no
fixed dividend rate, and there can be no assurance that the Fund will pay
any dividends or realize any capital gains.
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net
investment income and net realized capital gains. Dividends out of net
investment income and distributions of net realized short-term capital
gains are taxable to you as ordinary income. Distributions of net long-
term capital gains are taxable to you at long-term capital gain rates. The
Fund's distributions, whether paid in cash or reinvested in Fund shares,
generally will be subject to federal, state or local taxes. An exchange of
the Fund's shares for shares of another fund will be treated for tax
purposes as a sale of the Fund's shares, and any gain you realize on such a
transaction generally will be taxable. Foreign shareholders generally will
be subject to a federal withholding tax .
This summary of tax consequences is intended for general information only.
You should consult a tax adviser concerning the tax consequences of your
investment in the Fund.
FINANCIAL HIGHLIGHTS
The Class AAA shares of the Fund have not previously been offered and
therefore do not have previous financial history.
THE GABELLI BLUE CHIP VALUE FUND
ADDITIONAL INFORMATION
A Statement of Additional Information dated ___________, 1999 (the "SAI")
includes additional information about the Fund. The SAI is incorporated by
reference into this Prospectus and, therefore, is legally a part of this
Prospectus.
Purchase and sale information is provided in a separate document called the
Owner's Manual which is accompanying this Prospectus.
SEMI-ANNUAL REPORTS
Information about the Fund's investments will be available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its
fiscal year.
INQUIRIES
You may make inquiries about the Fund, or obtain a copy of the SAI, the
Owner's Manual or the annual or semi-annual reports without charge, by
calling 1-800-GABELLI (1-800-422-3554).
You can review and copy information about the Fund (including the SAI) at
the SEC Public Reference Room in Washington, DC (for information call 1-
800-SEC-0330). Such information is also available on the SEC's Internet
site at http://www.sec.gov. You may request documents by mail from the
SEC, upon payment of a duplicating fee, by writing to the Securities and
Exchange Commission, Public Reference Section, Washington, DC 20549-6009.
Investment Company Act File No. 811-09377
THE GABELLI FAMILY
OF FUNDS
OWNER'S MANUAL
AAA CLASS -
NO-LOAD CLASS
THE INFORMATION CONTAINED IN THE OWNER'S MANUAL IS INCORPORATED BY
REFERENCE INTO, AND IS LEGALLY CONSIDERED PART OF, THE PROSPECTUSES FOR THE
GABELLI FAMILY OF FUNDS. THE OWNER'S MANUAL MUST BE PRECEDED OR ACCOMPANIED
BY A GABELLI FUNDS PROSPECTUS.
OWNER'S MANUAL
TABLE OF CONTENTS
PURCHASING SHARES
3 Instructions for Opening or Adding to an Account
4 Telephone Investment Plan
4 Automatic Investment Plan
4 Retirement Plans
4 Minimum Investments
5 Dividends and Distributions
SELLING SHARES
5 Instructions for Selling Shares
5 By Bank Wire or Check via Telephone
5 By Bank Wire or Check via Mail
6 General Policies on Selling Shares
6 Signature Guarantees
6 Verifying Telephone Redemptions
6 Redemptions Within 15 Days of Investment
6 Refusal of Redemption Request
6 Closing of Small Accounts
6 Undeliverable Distribution Checks
EXCHANGING SHARES
7 Instructions for Exchanging Shares
PRICING OF FUND SHARES
7 How NAV is Calculated
PURCHASING SHARES
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT
PURCHASES THROUGH BROKERS/DEALERS:
If purchasing through your financial advisor or brokerage account, simply
tell your advisor or broker that you wish to purchase shares of the Funds
and he or she will take care of the necessary documentation. Your should
state specifically which class of shares you are buying. For all other
purchases directly with the Fund, follow the instructions below.
PURCHASES DIRECTLY FROM THE FUND:
All investments made by regular mail or personal delivery, whether initial
or subsequent, should be sent to:
BY REGULAR MAIL BY OVERNIGHT DELIVERY
--------------- ---------------------
The Gabelli Funds The Gabelli Funds
PO Box 8308 c/o BFDS Building, 6th Floor
Boston, MA 02266-8308 Two Heritage Drive
Quincy, MA 02171
For Initial Investment:
1. Carefully read and complete the application.
2. Make check, bank draft or money order payable to "[name of Fund]."
3. Mail or deliver application and payment to the address above.
For Subsequent Investments:
1. Make check, bank draft or money order payable to "[name of Fund]."
2. Provide the exact name and number of your account.
3. Mail or deliver payment to the address above.
BY WIRE TRANSFER
For Initial Investment:
Call 1-800-GABELLI (1-800-422-3554) to obtain a new account number.
Promptly mail the completed application to the address shown above for
regular mail, and
For Initial and Subsequent Investments:
Instruct your bank to wire transfer your investment to:
STATE STREET BANK AND TRUST COMPANY
ABA #011-0000-28 REF DDA# 9904-6187
ATTN: SHAREHOLDER SERVICES
RE: [FUND NAME]
A/C#___________________________
YOUR NAME ______________________
225 FRANKLIN STREET, BOSTON, MA 02110
NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE
PURCHASING SHARES (CONTINUED)
You can add to your account by using the convenient options described
below. The Fund reserves the right to change or eliminate these privileges
at any time upon 60 days notice to shareholders.
TELEPHONE INVESTMENT PLAN
You may purchase additional shares of the Funds by telephone as long as
your bank is a member of the Automated Clearing House (ACH) system. You
must also have a completed, approved Investment Plan application on file
with the Fund's Transfer Agent.
There is a minimum of $100 for each telephone investment. To initiate an
ACH purchase, please call 1-800-GABELLI (1-800-422-3554) or 1-800-872-5365.
AUTOMATIC INVESTMENT PLAN
You can make automatic monthly investments in the Funds. Details about this
plan can be obtained from the Distributor on a separate application by
calling 1-800-GABELLI (800-422-3554).
RETIREMENT PLANS
You can invest in various types of retirement plans through the Fund.
Details about these plans can be obtained from the Distributor on a
separate application by calling 1-800-GABELLI (800-422-3554).
MINIMUM INVESTMENTS
You may purchase Funds through the Distributor or participating
organizations, which may charge additional fees and may require higher or
lower minimum investments or impose other limitations on buying and selling
shares.
MINIMUM
INITIAL MINIMUM
ACCOUNT TYPE INVESTMENT SUBSEQUENT
Regular (non-retirement) $ 1,000 $ 0
Retirement (IRA)
Traditional IRA $ 1,000 $ 0
Roth IRA $ 1,000 $ 0
Spousal IRA $ 250 $ 0
Education IRA $ 250 $ 0
Automatic Investment Plan $ 0 $ 100
Telephone Investment Plan $ 100 $ 100
All purchases must be in U.S. dollars. A fee will be charged for any checks
that do not clear. Third-party checks are not accepted. Your purchase of
shares will be effective on the same business day if the Fund's transfer
agent receives your order by 4:00 p.m. (12 noon for a money market fund),
and receives Federal funds by 4:00 p.m., eastern time. Otherwise, your
purchase will be effective on the next business day. (See "Pricing of Fund
Shares.") Shares are held on account for you unless you specify in writing
that you would like to receive a stock certificate (certificates are not
available for money market funds). We can only issue a certificate for
whole shares.
The Distributor may reject a purchase order if it considers it in the best
interest of the Fund and its shareholders. A Fund may waive its minimum
purchase requirement.
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested unless you
request otherwise.
SELLING SHARES
As a mutual fund shareholder, you are technically selling shares when you
request a withdrawal in cash. This is also known as redeeming shares.
WITHDRAWING MONEY FROM YOUR INVESTMENT
You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received by the Fund, its transfer agent, or your
investment representative. See section on "General Policies on Selling
Shares" below.
SYSTEMATIC WITHDRAWAL PLAN
You can receive automatic payments from your account on a monthly,
quarterly or annual basis. You can obtain details from the Distributor.
INSTRUCTIONS FOR SELLING SHARES
The Fund accepts telephone requests for redemptions of unissued shares.
BY BANK WIRE OR CHECK VIA TELEPHONE
1. Call 1-800-GABELLI (1-800-422-3554) with your account number, the
amount of the redemption and instructions as to how you wish to
receive your funds.
2. If you are unable to reach the Fund by telephone, you may telecopy
your redemption request to the Fund at 914-921-____.
NOTE: If you call by 4:00 p.m., eastern time, your payment will normally be
wired to your bank on the following business day. (For Money Market Funds:
If you call before 12:00 noon, eastern time, your payment will be wired to
your bank on that day.) If you call after that time, your payment will be
wired to your bank on the next business day. If you request your wire
redemption by telephone, it must be at least $1,000. Your bank may charge a
fee for incoming wires.
BY BANK WIRE OR CHECK VIA MAIL
Submit a redemption request to the Fund. Redemption requests may be made by
letter to the Transfer Agent. You must specify the name of the Fund, the
dollar amount or number of shares you wish to redeem and the account
number. You must sign the letter in exactly the same way the account is
registered, and if there is more than one owner of shares, all must sign. A
signature guarantee is required for most requests.
SELLING SHARES (CONTINUED)
GENERAL POLICIES ON SELLING SHARES
SIGNATURE GUARANTEES
Signature guarantees are required on redemption requests for the following:
o The check is not being mailed to the address on your account
o The check is not being made payable to the owner of the account
o The redemption proceeds are being transferred to another person's
Fund account.
A signature guarantee can be obtained from most banks and securities
dealers. Notarized signatures are not considered a signature guarantee.
VERIFYING TELEPHONE REDEMPTIONS
The Fund makes every effort to ensure that telephone redemptions are only
made by authorized shareholders. All telephone calls are recorded for your
protection and you will be asked for information to verify your identity.
If appropriate precautions have not been taken, the Fund may be liable for
losses due to unauthorized transactions.
REDEMPTIONS WITHIN 15 DAYS OF INVESTMENT
When you have made an investment by check or through the automatic
investment plan, your redemption proceeds will not be mailed until the
Transfer Agent is satisfied that the check has cleared (which may require
up to 15 days). You can avoid this delay by purchasing shares with a
certified check or federal funds wire.
REDEMPTION IN KIND
The Fund reserves the right to make a redemption in kind - payment in
portfolio securities rather than cash - for certain large redemption
amounts that could hurt fund operations.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.
CLOSING OF SMALL ACCOUNTS
If your account (other than an IRA) falls below $500, the Fund may ask you
to increase your balance. If it is still below $500 after 30 days, the Fund
may close your account and send you the proceeds at the current NAV.
UNDELIVERABLE DISTRIBUTION CHECKS
If distribution checks (1) are returned and marked as "undeliverable" or
(2) remain uncashed for six months, your account will be changed
automatically so that all future distributions are reinvested in your
account. Checks that remain uncashed for six months will be canceled and
the money reinvested in the Fund at the then current net asset value.
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE
EXCHANGING SHARES
You can exchange your shares in one Fund for shares of the same class of
another Fund managed by Gabelli Funds, LLC, or its affiliates, usually
without paying additional sales charges (see "Notes" below).
You must meet the minimum investment requirements for the Fund into which
you are exchanging. Exchanges from one Fund to another are taxable
transactions.
INSTRUCTIONS FOR EXCHANGING SHARES
Exchanges may be made by sending a written request to The Gabelli Funds, PO
Box 8308, Boston, MA 02266-8308 or by calling 1-800-GABELLI
(1-800-422-3554).
Please provide the following information:
o Your name and telephone number
o The exact name on your account and account number
o Taxpayer identification number (usually your Social Security
number)
o Dollar value or number of shares to be exchanged
o The names of the Funds from/into which the exchange is to be made
See "Selling Shares" for important information about telephone transactions.
NOTES ON EXCHANGES
o When exchanging from a Fund that has no sales charge or a lower
sales charge to a Fund with a higher sales charge, you will pay
the difference.
o The registration and tax identification numbers of the two
accounts must be identical.
o This exchange privilege may be changed or eliminated at any time
upon a 60-day notice to shareholders.
o Be sure to read the prospectus carefully of any Fund into which
you wish to exchange shares.
PRICING OF FUND SHARES
HOW NAV IS CALCULATED
The NAV is calculated by adding the total value of the Fund's investments
and other assets, subtracting its liabilities and then dividing that figure
by the number of outstanding shares of the Fund:
NAV =
TOTAL ASSETS - LIABILITIES
--------------------------
Number of Shares
Outstanding
You can find the Fund's NAV daily in the Wall Street Journal and other
newspapers, or by calling 1-800-GABELLI (800-422-3554).
A Fund's net asset value, or NAV, is determined and its shares are priced
at the close of regular trading on the New York Stock Exchange, normally at
4:00 p.m., eastern time, on days the New York Stock Exchange is open. Your
order for purchase, sale or exchange of shares is priced at the next NAV
calculated after your order is received by the Fund. This is what is known
as the offering price.
Fund securities are valued as of the close of trading on the primary
exchange on which they trade. Fund securities are generally valued at
current market prices. If market quotations are not available, prices will
be based on the average of the latest bid and asked quotations for such
securities prior to the valuation time, or the latest bid price if asked
prices are not available. Debt securities with remaining maturities of 60
days or less will be valued at amortized cost, which the Board of Directors
believes represents fair value.
Some Fund securities may be listed on foreign exchanges that are open on
days (such as U.S. holidays) when a Fund does not compute its NAV. This
could cause the value of a Fund's portfolio investments to be affected on
days when you cannot buy or sell shares.
THE GABELLI BLUE CHIP VALUE FUND
ONE CORPORATE CENTER
RYE, NEW YORK 10580-1434
TELEPHONE: 1-800-GABELLI (1-800-422-3554)
HTTP://WWW.GABELLI.COM
PROSPECTUS
_________, 1999
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND.
PLEASE READ IT BEFORE INVESTING AND KEEP IT FOR FUTURE REFERENCE.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.
TABLE OF CONTENTS
Page
INVESTMENT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT AND RISK INFORMATION . . . . . . . . . . . . . . . . . . . . 3
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . 6
CLASSES OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 12
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXCHANGES OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 15
PRICING OF FUND SHARES . . . . . . . . . . . . . . . . . . . . . . . . 16
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 16
TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . 17
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE:
The Gabelli Blue Chip Value Fund, a Delaware business trust (the "Fund"),
seeks to provide long-term growth of capital. Capital is the amount of
money you invest in the Fund. The Fund's secondary objective is to achieve
current income by investing in dividend-paying common stocks.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund will primarily invest in common stocks of well established,
widely-held, high quality companies that have ample liquidity and a market
capitalization of greater than $5 billion. The Fund focuses on those
companies which the Fund's Investment Adviser, Gabelli Funds, LLC (the
"Adviser") believes are undervalued and have the potential to achieve
significant capital appreciation. In selecting investments, the Adviser
will consider, among other things, the market price of the issuer's
securities, earnings expectations, earnings and price histories, balance
sheet characteristics and perceived management skills. The Adviser will
also consider changes in economic and political outlooks as well as
individual corporate developments.
PRINCIPAL RISKS:
The Fund's share price will fluctuate with changes in the market value of
the Fund's portfolio securities. Stocks are subject to market, economic
and business risks that cause their prices to fluctuate. The Fund may
invest up to 25% of its total assets in securities of non-U.S. issuers
(excluding American Depository Receipts and U.S. denominated Securities of
foreign issuers). Investments in foreign securities involve risks related
to political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and
foreign issuers and markets are subject. When you sell Fund shares, they
may be worth less than what you paid for them. Consequently, you can lose
money by investing in the Fund. The Fund is also subject to the risk that
market values may never be realized in the market, or that the price of its
portfolio securities will decline, or that value stocks as a category lose
favor with investors compared to growth stocks or because the Adviser
failed to anticipate which stocks or which industries would benefit from
changing market or economic conditions.
WHO MAY WANT TO INVEST:
The Fund may appeal to you if:
o you are a long-term investor
o you seek growth of capital
o you believe that the market will favor value over growth
stocks over the long term
o you wish to include a value strategy as a portion of your
overall investments
You may not want to invest in the Fund if:
o you are seeking a high level of current income
o you are conservative in your investment approach
o you seek stability of principal more than growth of capital
PERFORMANCE INFORMATION:
Since the Fund did not exist before this offering, no performance bar chart
or table has been presented.
FEES AND EXPENSES OF THE FUND:
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees
(fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases
(as a percentage of offering price) 5.75% (1) None N
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption price*) None 5.00% (2) 1.00% (
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):
Management Fees 1.00% 1.00% 1.00%
Distribution and Service (Rule 12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses (3) 0.50% 0.50% 0.50%
Total Annual Operating Expenses 1.75% 2.50% 2.50%
</TABLE>
______________________
(1) The sales charge declines as the amount invested increases.
(2) The Fund imposes a sales charge upon redemption of B shares if you
sell your shares within seventy-two months after purchase. A maximum
sales charge of 1% applies to redemptions of Class C shares within
twenty-four months after purchase.
(3) Based on an estimated asset size of $30 million for the current fiscal
year.
* "Redemption Price" equals the net asset value at the time of
investment or redemption, whichever is lower.
EXPENSE EXAMPLE:
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The example assumes
(1) you invest $10,000 in the Fund for the time periods shown, (2) you
redeem your shares at the end of the period, except as noted, (3) your
investment has a 5% return each year and (4) the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based
on these assumptions your costs would be:
1 Year 3 Years
------ -------
Class A shares $743 $1,094
Class B shares
- assuming redemption $753 $1,079
- assuming no redemption $253 $779
Class C shares
- assuming redemption $353 $779
- assuming no redemption $253 $779
INVESTMENT AND RISK INFORMATION
The Fund's primary investment objective is to seek long-term growth of
capital, and investments will be made based on the Adviser's perception of
their potential for capital appreciation. Current income, derived from
dividend paying common stocks, is a secondary objective. The investment
objectives of the Fund may not be changed without shareholder approval.
Under normal market conditions, the Fund invests at least 65% of its assets
in common stocks of well established, widely held high quality companies
that have ample liquidity and a market capitalization of greater than $5
billion and which the Adviser believes are undervalued and have the
potential to achieve significant capital appreciation.
Undervaluation of the stock of an established company with good
intermediate and longer-term fundamentals can result from a variety of
factors, such as a lack of investor recognition of:
o the underlying value of a company's fixed assets,
o the value of a consumer or commercial franchise,
o changes in the economic or financial environment affecting the
company,
o new, improved or unique products or services,
o new or rapidly expanding markets,
o technological developments or advancements affecting the company
or its products, or
o changes in governmental regulations, political climate or
competitive conditions.
Additionally, undervaluation may result from:
o poor management decisions which result in a low return on the
company's assets,
o short-term earnings problems, or
o a difficult near-term operating or economic environment affecting
the company's business.
The actual events that may lead to a significant increase in the value of a
company's securities include:
o earnings surprises relative to analysts' expectations,
o the company's development of new, improved or unique products and
services,
o a change in the company's management or management policies,
o an investor's purchase of a large portion of the company's stock,
o a merger or reorganization or recapitalization of the company,
o a sale of a division of the company,
o a tender offer (an offer to purchase investors' shares),
o the spin-off to shareholders of a subsidiary, division or other
substantial assets, or
o the retirement or death of a senior officer or substantial
shareholder of the company.
In general, the Adviser seeks to take advantage of investors' tendency to
overemphasize near-term events by investing in companies which are
temporarily undervalued and which may return to a significantly higher
valuation. In selecting investments, the Adviser will consider factors
such as the market price of the issuer's securities, earnings expectations,
earnings and price histories, balance sheet characteristics and perceived
management skills. The Adviser will also consider changes in economic and
political outlooks as well as individual corporate developments. The
Adviser will sell any Fund investments which lose their perceived value
relative to other investments.
The Fund's assets will be invested primarily in a broad range of readily
marketable equity securities consisting primarily of common stocks. Many
of the common stocks the Fund will buy will be bought for the potential
that their prices will increase, providing capital appreciation for the
Fund. The Fund's secondary objective is to achieve current income by
investing in dividend-paying common stocks. The value of common stocks
will fluctuate due to many factors, including the past and predicted
earnings of the issuer, the quality of the issuer's management, general
market conditions, the forecasts for the issuer's industry and the value of
the issuer's assets. Holders of common stocks only have rights to value
in the company after all debts have been paid, and they could lose their
entire investment in a company that encounters financial difficulty.
The Fund may also use the following investment techniques:
o FOREIGN SECURITIES. Under normal circumstances, the Fund may
invest up to 25% of its total assets in securities of non-U.S.
issuers (excluding American Depository Receipts and U.S.
denominated securities of foreign issuers).
o DEFENSIVE INVESTMENTS. When opportunities for capital growth do
not appear attractive or when adverse market or economic
conditions occur, the Fund may temporarily invest all or a
portion of its assets in defensive investments. Such investments
include preferred stocks, high-grade debt securities, obligations
of the U.S. Government and its agencies and instrumentalities,
and short-term money market instruments such as high-quality
commercial paper (rated at least "A-1" by Standard & Poor's
Rating Service ("S&P") or "P-1" by Moody's Investors Service,
Inc.) When following a defensive strategy, the Fund may not
achieve its investment objective of long term growth of capital.
The Fund may also engage in other investment practices in order to achieve
its investment objective. These are briefly discussed in the Statement of
Additional Information which may be obtained by calling your broker. The
Fund does not currently utilize the other practices to any significant
degree and does not anticipate doing so.
Investing in the Fund involves the following risks, listed in the order of
importance:
o EQUITY RISK. The principal risk of investing in the Fund is
equity risk. Equity risk is the risk that the prices of the
securities held by the Fund will change due to general market and
economic conditions, perceptions regarding the industries in
which the companies issuing the securities participate and the
issuer company's particular circumstances.
o FUND AND MANAGEMENT RISK. The Fund invests in stocks issued by
companies that have a market capitalization of greater than $5
billion and which are believed by the Adviser to be undervalued
and have the potential to achieve significant capital
appreciation. The Fund's price may decline because the market
favors other stocks or small capitalization stocks over stocks of
mid- to large size companies. If the Adviser is incorrect in its
assessment of the values of the securities it holds or no event
occurs which surfaces value, then the value of the Fund's shares
may decline.
o FOREIGN RISK. The Fund's investments in foreign securities may
go down because of unfavorable foreign government actions,
political instability or the absence of accurate information
about foreign issuers. Also, a decline in the value of foreign
currencies relative to the U.S. dollar will reduce the value of
securities denominated in those currencies. Foreign securities
are sometimes less liquid and harder to value than securities of
U.S. issuers.
MANAGEMENT OF THE FUND
THE ADVISER. Gabelli Funds, LLC, with principal offices located at One
Corporate Center, Rye, New York 10580-1434, serves as investment adviser to
the Fund. The Adviser makes investment decisions for the Fund and
continuously reviews and administers the Fund's investment program under
the supervision of the Fund's Board of Trustees. The Adviser also manages
several other open-end and closed-end investment companies in the Gabelli
family of funds. The Adviser is a New York limited liability company
organized in 1999 as successor to Gabelli Group Capital Partners, Inc.
(formerly named Gabelli Funds, Inc.), a New York corporation organized in
1980. The Adviser is a wholly-owned subsidiary of Gabelli Asset Management
Inc. ("GAMI"), a publicly held company listed on the New York Stock
Exchange.
As compensation for its services and the related expenses borne by the
Adviser, the Fund will pay the Adviser an annual fee equal to 1.00% of the
value of the Fund's average daily net assets.
THE PORTFOLIO MANAGER. Ms. Barbara G. Marcin is responsible for the day-
to-day management of the Fund. Ms. Marcin joined the Adviser in June 1999.
Prior to joining the Adviser, Ms. Marcin was the head of value investments
at Citibank Global Asset Management, managing mid- and large-cap equity
securities in value-style mutual funds and in separate accounts. Ms.
Marcin was employed at Citibank Global Asset Management from 1993 until
joining the Adviser.
YEAR 2000. As the year 2000 approaches, an issue has emerged regarding how
the software used by the Fund's service providers can accommodate the date
"2000." Failure to adequately address this issue could result in major
systems or process failures which could disrupt the Fund's operations. The
Adviser is working with the Fund's service providers to prepare for the
year 2000. Based on information currently available, the Adviser does not
expect that the Fund will incur significant operating expenses or be
required to incur material costs to be year 2000 compliant. The Fund
cannot guarantee, however, that all year 2000 issues will be identified and
corrected by January 1, 2000 and any non-compliant computer system could
hurt key Fund operations, such as shareholder servicing, pricing and
trading. In addition, the Year 2000 problem may adversely affect the
companies in which the Fund invests, particularly companies in foreign
countries. For example, these companies may incur substantial costs to
correct the Year 2000 problem, which could lower the value of such
companies' securities and negatively affect the Fund's performance.
CLASSES OF SHARES
Three classes of the Fund's shares are offered in this prospectus Class A
shares, Class B shares and Class C shares. The table below summarizes the
differences among the classes of shares.
o A "front-end sales load," or sales charge, is a one-time fee
charged at the time of purchase of shares.
o A "contingent deferred sales charge" ("CDSC") is a one-time fee
charged at the time of redemption.
o A "Rule 12b-1 fee" is a recurring annual fee for distributing
shares and servicing shareholder accounts based on the Fund's
average daily net assets attributable to the particular class of
shares.
<TABLE>
<S> <C> <C> <C>
Class A Shares Class B Shares Class C Shares
-------------- -------------- --------------
Front-End Sales Load? Yes. The percentage No. No.
declines as the amount
invested increases.
Contingent Deferred Yes, for shares redeemed Yes, for shares redeemed Yes, for shares redeemed
Sales Charge within twenty-four months within seventy-two months within twenty-four months
after purchase as part of after purchase. Declines after purchase.
an investment greater over time.
than $2 million if no
front-end sales charge
was paid at the time of
purchase.
Rule 12b-1 Fee 0.25% 1.00% 1.00%
Convertible to Another No. Yes. Automatically No.
Class? converts to Class A
shares after
approximately
ninety-six months.
Fund Expense Levels Lower annual expenses Higher annual expenses Higher annual expenses
than Class B or Class C than Class A shares. than Class A shares.
shares.
</TABLE>
In selecting a class of shares in which to invest, you should consider
o the length of time you plan to hold the shares
o the amount of sales charge and Rule 12b-1 fees, recognizing that
your share of 12b-1 fees as a percentage of your investment
increases if the Fund's assets increase in value and decreases if
the Fund's assets decrease in value
o whether you qualify for a reduction or waiver of the Class A
sales charge
o that Class B shares convert to Class A shares approximately
ninety-six months after purchase
If you... then you should consider
--------------------------------------- ------------------------
o do not qualify for a reduced or purchasing Class C shares instead
waived front-end sales load and of either Class A shares or
intend to hold your shares for Class B shares
only a few years or less
o do not qualify for a reduced or purchasing Class A or Class B
waived front-end sales load and shares instead of Class C shares
intend to hold your shares for
several years
o qualify for a significantly purchasing Class A shares no
reduced or waived front-end matter how long you intend to
sales load hold your shares
SALES CHARGE - CLASS A SHARES. The sales charge is imposed on Class A at
the time of purchase shares in accordance with the following schedule:
<TABLE>
<CAPTION>
Sales Charge Sales Charge Reallowance
as % of the as % of to
Amount of Investment Offering Price* Amount Invested Broker-Dealers
-------------------- --------------- --------------- --------------
<S> <C> <C> <C>
Under $50,000 5.75% 6.10% 5.00%
$50,000 but under $100,000 4.50% 4.71% 3.75%
$100,000 but under $250,000 3.50% 3.62% 2.75%
$250,000 but under $500,000 2.50% 2.56% 2.00%
$500,000 but under $1 million 2.00% 2.04% 1.75%
$1 million but under $2 million 1.00% 1.01% 1.00%
$2 million or more 0.00% 0.00% 1.00%
</TABLE>
* Front-end sales load
SALES CHARGE REDUCTIONS AND WAIVERS CLASS A SHARES
Reduced sales charges are available to (1) investors who are eligible to
combine their purchases of Class A shares to receive volume discounts and
(2) investors who sign a Letter of Intent agreeing to make purchases over
time. Certain types of investors are eligible for sales charge waivers.
1. Volume Discounts. Investors eligible to receive volume discounts are
individuals and their immediate families, tax-qualified employee benefit
plans and a trustee or other fiduciary purchasing shares for a single trust
estate or single fiduciary account even though more than one beneficiary is
involved. You also may combine the value of Class A shares you already
hold in the Fund and other funds advised by Gabelli Funds, LLC or its
affiliates along with the value of the Class A shares being purchased to
qualify for a reduced sales charge. For example, if you own Class A shares
of the Fund that have an aggregate value of $100,000, and make an
additional investment in Class A shares of the Fund of $4,000, the sales
charge applicable to the additional investment would be 3.50%, rather than
the 5.75% normally charged on a $4,000 purchase. If you want more
information on volume discounts, call your broker.
2. Letter of Intent. If you initially invest at least $1,000 in Class A
shares of the Fund and submit a Letter of Intent to the Distributor, you
may make purchases of Class A shares of the Fund during a 13-month period
at the reduced sales charge rates applicable to the aggregate amount of the
intended purchases stated in the Letter. The Letter may apply to purchases
made up to 90 days before the date of the Letter. You will have to pay
sales charges at the higher rate if you fail to honor your letter of
intent. For more information on the Letter of Intent, call your broker.
3. Investors Eligible for Sales Charge Waivers. Class A shares of the
Fund may be offered without a sales charge to: (1) any other investment
company in connection with the combination of such company with the Fund by
merger, acquisition of assets or otherwise; (2) shareholders who have
redeemed shares in the Fund and who wish to reinvest in the Fund, provided
the reinvestment is made within 30 days of the redemption; (3) tax-exempt
organizations enumerated in Section 501(c)(3) of the Internal Revenue Code
of 1986 (the "Code") and private, charitable foundations that in each case
make lump-sum purchases of $100,000 or more; (4) qualified employee benefit
plans established pursuant to Section 457 of the Code that have established
omnibus accounts with the Fund; (5) qualified employee benefit plans having
more than one hundred eligible employees and a minimum of $1 million in
plan assets invested in the Fund (plan sponsors are encouraged to notify
the Fund's distributor when they first satisfy these requirements); (6) any
unit investment trusts registered under the Investment Company Act of 1940
(the "1940 Act") which have shares of the Fund as a principal investment;
(7) financial institutions purchasing Class A shares of the Fund for
clients participating in a fee based asset allocation program or wrap fee
program which has been approved by the Distributor; and (8) registered
investment advisers or financial planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services; and clients of such investment
advisers or financial planners who place trades for their own accounts if
the accounts are linked to the master account of such investment adviser or
financial planner on the books and records of a broker or agent.
Investors who qualify under any of the categories described above should
contact their brokerage firm.
CONTINGENT DEFERRED SALES CHARGES. You will pay a CDSC when you redeem:
o Class A shares within approximately twenty-four months of buying
them as part of an investment greater than $2 million if no
front-end sales charge was paid at the time of purchase.
o Class B shares within approximately seventy-two months of buying
them.
o Class C shares within approximately twenty-four months of buying
them.
The CDSC payable upon redemption of Class A shares and Class C shares in
the circumstances described above is 1%. The CDSC schedule for Class B
shares is set forth below. The CDSC is based on the net asset value at the
time of your investment or the net asset value at the time of redemption,
whichever is lower.
CLASS B SHARES
Years Since Purchase CDSC
-------------------- ----
First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh and thereafter 0.00%
The Distributor pays sales commissions of up to 4.00% of the purchase price
of Class B shares of the Fund to brokers at the time of sale that initiate
and are responsible for purchases of such Class B shares of the Fund.
You will not pay a CDSC to the extent that the value of the redeemed shares
represents:
o reinvestment of dividends or capital gains distributions
o capital appreciation of shares redeemed
When you redeem shares, we will assume that you are redeeming first shares
representing reinvestment of dividends and capital gains distributions,
then any appreciation on shares redeemed, and then remaining shares held by
you for the longest period of time. We will calculate the holding period
of shares acquired through an exchange of shares of another fund from the
date you acquired the original shares of the other fund. The time you hold
shares in a money market fund, however, will not count for purposes of
calculating the applicable CDSC.
We will waive the CDSC payable upon redemptions of shares for:
o redemptions and distributions from retirement plans made after
the death or disability of a shareholder
o minimum required distributions made from an IRA or other
retirement plan account after you reach age 591/2
o involuntary redemptions made by the Fund
o a distribution from a tax-deferred retirement plan after your
retirement
o returns of excess contributions to retirement plans following the
shareholder's death or disability
CONVERSION FEATURE -- CLASS B SHARES
o Class B shares automatically convert to Class A shares of the
Fund on the first business day of the ninety-seventh month
following the month in which you acquired such shares.
o After conversion, your shares will be subject to the lower Rule
12b-1 fees charged on Class A shares, which will increase your
investment return compared to the Class B shares.
o You will not pay any sales charge or fees when your shares
convert, nor will the transaction be subject to any tax.
o If you exchange Class B shares of one fund for Class B shares of
another fund, your holding period will be calculated from the
time of your original purchase of Class B shares. If you
exchange shares into a Gabelli money market fund, however, your
holding period will be suspended.
o The dollar value of Class A shares you receive will equal the
dollar value of the B shares converted.
The Board of Trustees may suspend the automatic conversion of Class B to
Class A shares for legal reasons or due to the exercise of its fiduciary
duty. If the Board determines that such suspension is likely to continue
for a substantial period of time, it will create another class of shares
into which Class B shares are convertible.
RULE 12B-1 PLAN. The Fund has adopted a plan under Rule 12b-1 (the "Plan")
for each of its classes of shares. Under the Plan, the Fund may use its
assets to finance activities relating to the sale of its shares and the
provision of certain shareholder services.
For the classes covered by this Prospectus, the Rule 12b-1 fees vary by
class as follows:
Class A Class B Class C
------- ------- -------
Service Fees 0.25% 0.25% 0.25%
Distribution Fees None 0.75% 0.75%
These are annual rates based on the value of each of these Classes' average
daily net assets. Because the Rule 12b-1 fees are higher for Class B and
Class C shares than for Class A shares, Class B and Class C shares will
have higher annual expenses. Because Rule 12b-1 fees are paid out of the
Fund's assets on an on-going basis, over time these fees will increase the
cost of your investment and may cost you more than paying other types of
sales charges.
PURCHASE OF SHARES
You can purchase the Fund's shares on any day the New York Stock Exchange,
Inc. ("NYSE") is open for trading (a "Business Day"). You may purchase
shares through broker-dealers, banks and other intermediaries who have
selling agreements with Gabelli & Company, the Fund's distributor. The
broker-dealer, bank or other intermediary will transmit a purchase order
and payment to State Street on your behalf. Broker-dealers, banks or other
intermediaries may send you confirmations of your transactions and periodic
account statements showing your investments in the Fund.
MINIMUM INVESTMENTS. Unless your broker has a different minimum, your
minimum initial investment must be at least $1,000. See "Retirement Plans"
and "Automatic Investment Plan" regarding minimum investment amounts
applicable to such plans. There is no minimum for subsequent investments.
SHARE PRICE. The Fund sells its shares at the "net asset value" next
determined after the Fund receives your completed subscription order form
and your payment in Federal funds, subject to a sales charge in the case of
Class A shares. See "Pricing of Fund Shares" for a description of the
calculation of the net asset value and "Classes of Shares Sales Charge
Class A Shares" for a description of the sales charges.
RETIREMENT PLANS. The minimum initial investments for all retirement
plans is $250. The minimum for all subsequent investments by retirement
plans is $100. Investors with IRA plans and self-employed investors may
purchase shares of the Fund through tax-deductible contributions to their
existing IRA account or their retirement plans for self-employed persons,
known as Keogh or H.R. 10 plans. Fund shares may also be a suitable
investment for other types of qualified pension or profit-sharing plans
which are employer sponsored, including deferred compensation or salary
reduction plans known as "401(k) Plans" which give participants the right
to defer portions of their compensation for investment on a tax-deferred
basis until distributions are made from the plans.
AUTOMATIC INVESTMENT PLAN. The Fund offers an automatic monthly investment
plan. There is no minimum monthly investment for accounts establishing an
automatic investment plan. Call your broker for more details about the
plan.
GENERAL. The Fund will not issue share certificates unless requested by
you. The Fund reserves the right to (i) reject any purchase order if, in
the opinion of Fund management, it is in the Fund's best interest to do so
and (ii) suspend the offering of shares for any period of time.
REDEMPTION OF SHARES
You can redeem shares on any Business Day. The Fund may temporarily stop
redeeming its shares when the NYSE is closed or trading on the NYSE is
restricted, when an emergency exists and the Fund cannot sell its shares or
accurately determine the value of its assets, or if the Securities and
Exchange Commission ("SEC") orders the Fund to suspend redemptions.
The Fund redeems its shares at the net asset value next determined after
the Fund receives your redemption request, subject in some cases to a CDSC,
as described under "Class of Shares Contingent Deferred Sales charges"
above. See "Pricing of Fund Shares" below for a description of the
calculation of net asset value.
You may redeem shares directly from the Fund through its transfer agent or
through a broker-dealer.
o THROUGH A BROKER-DEALER. You may redeem shares through a broker-
dealer which will transmit a redemption order to State Street on
your behalf. A redemption request received from a broker-dealer
will be effected at the net asset value next determined (less any
applicable CDSC) after State Street receives the request. If you
hold share certificates, you must present the certificates to the
broker-dealer endorsed for transfer. A broker-dealer may charge
you fees for effecting redemptions for you.
o BY LETTER. You may mail a letter requesting redemption of shares
to: THE GABELLI FUNDS, P.O. BOX 8308, BOSTON, MA 02266-8308.
Your letter should state the name of the Fund and the share
class, the dollar amount or number of shares you are redeeming
and your account number. You must sign the letter in exactly the
same way the account is registered and if there is more than one
owner of shares, all must sign. A signature guarantee is
required for each signature on your redemption letter. You can
obtain a signature guarantee from financial institutions such as
commercial banks, brokers, dealers and savings associations. A
notary public cannot provide a signature guarantee.
o BY TELEPHONE. You may redeem your shares in a direct
registered account by calling 1-800-872-5365 (617-328-5000 from
outside the United States), subject to a $25,000 limitation. You
may not redeem shares held through an IRA by telephone. You may
be responsible for any fraudulent telephone order in your account
as long as State Street or the Fund follows reasonable procedures
to protect against unauthorized transactions. You may request
that redemption proceeds be mailed to you by check (if your
address has not changed in the prior 30 days), forwarded to you
by bank wire or invested in another mutual fund advised by the
Adviser (see "Exchange of Shares" below).
1. Telephone Redemption By Check. The Fund will make checks
payable to the name in which the account is registered and
normally will mail the check to the address of record within
seven days.
2. Telephone Redemption By Wire. The Fund accepts telephone
requests for wire redemption in amounts of at least $1,000.
The Fund will send a wire to either a bank designated on
your subscription order form or on a subsequent letter with
a guaranteed signature. The proceeds are normally wired on
the next Business Day.
o THROUGH THE AUTOMATIC CASH WITHDRAWAL PLAN. You may
automatically redeem shares on a monthly, quarterly or annual
basis if you have at least $10,000 in your account and if your
account is directly registered with State Street. If you redeem
Class B or Class C shares under this plan, you must pay the
applicable CDSC. Please call your broker for more information.
o THROUGH INVOLUNTARY REDEMPTION. The Fund may redeem all shares
in your account (other than an IRA account) if their value falls
below $1,000 as a result of redemptions (but not as a result of a
decline in net asset value). You will be notified in writing and
allowed 30 days to increase the value of your shares to at least
$1,000.
REDEMPTION PROCEEDS. If you request redemption proceeds by check, the Fund
will normally mail the check to you within seven days after it receives
your redemption request. If you purchased your Fund shares by check, you
may not redeem shares until the check clears, which may take up to 15 days
following purchase. While the Fund will delay the processing of the
redemption until the check clears, your shares will be valued at the next
determined net asset value after receipt of your redemption order.
The Fund may pay to you your redemption proceeds wholly or partly in
portfolio securities. Payments would be made in portfolio securities,
however, only in the rare instance that the Fund's Board of Trustees
believes that it would be in the Fund's best interest not to pay redemption
proceeds in cash.
EXCHANGES OF SHARES
You may exchange shares of the Fund you hold for shares of the same class
of another fund managed by the Adviser or its affiliates based on their
relative net asset values. To obtain a list of the funds whose shares you
may acquire through exchange call your broker. Class B and Class C shares
will continue to age from the date of the original purchase of such shares
and will assume the CDSC rate they had at the time of exchange. You may
also exchange your shares for shares of a money market fund managed by the
Adviser or its affiliates, without imposition of any CDSC at the time of
exchange. Upon subsequent redemption from such money market funds or the
Fund (after re-exchange into the Fund), such shares will be subject to the
CDSC calculated by excluding the time such shares were held in the money
market fund.
In effecting an exchange:
o you must meet the minimum purchase requirements for the fund
whose shares you purchase through exchange.
o if you are exchanging into Class A shares of a fund with a higher
sales charge, you must pay the difference at the time of
exchange.
o you may realize a taxable gain or loss.
o you should read the prospectus of the fund whose shares you are
purchasing (call your broker to obtain the prospectus).
o you should be aware that brokers may charge a fee for handling an
exchange for you.
You may exchange shares by telephone, by mail or through a broker-dealer.
o Exchanges by Telephone. You may give exchange instructions by
telephone by calling your broker. You may not exchange shares
by telephone if you hold share certificates.
o Exchanges by Mail. You may send a written request for exchanges
to: THE GABELLI FUNDS, P.O. BOX 8308, BOSTON, MA 02266-8308.
State your name, your account number, the dollar value or number
of shares you wish to exchange, the name and class of the fund
whose shares you wish to exchange, and the name of the funds
whose shares you wish to acquire.
We may modify or terminate the exchange privilege at any time. You will be
given notice 60 days prior to any material change in the exchange
privilege.
PRICING OF FUND SHARES
The Fund's net asset value per share is calculated on each Business Day.
The NYSE is currently scheduled to be closed on New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas and on the
preceding Friday or subsequent Monday when a holiday falls on a Saturday or
Sunday, respectively.
The Fund's net asset value is calculated separately for each class. It is
determined as of the close of regular trading on the NYSE, normally 4:00
p.m., New York time. Net asset value is computed by dividing the value of
the Fund's net assets (i.e. the value of its securities and other assets
less its liabilities, including expenses payable or accrued but excluding
capital stock and surplus) by the total number of its shares outstanding at
the time the determination is made. The Fund uses market quotations in
valuing its portfolio securities. Short-term investments that mature in 60
days or less are valued at amortized cost, which the Trustees of the Fund
believe represents fair value. The price of Fund shares for purposes of
purchase and redemption will be based upon the next calculation of net
asset value after the purchase or redemption order is placed.
The Fund may from time to time hold securities that are primarily listed on
foreign exchanges. Such securities may trade on days when the Fund does
not price its shares. Therefore, the Fund's value may change on days when
you are not able to purchase or redeem Fund shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions may differ for different classes of shares.
Dividends from net investment income and distributions of net realized
capital gains, if any, will be paid at least annually. Shareholders may
have dividends or capital gains distributions that are declared by the Fund
automatically reinvested at net asset value in additional shares of the
Fund. You will make an election to receive dividends and distributions in
cash or Fund shares at the time you purchase your shares. You may change
this election by notifying the Fund in writing at any time prior to the
record date for a particular dividend or distribution. There are no sales
or other charges in connection with the reinvestment of dividends and
capital gains distributions. There is no fixed dividend rate, and there
can be no assurance that the Fund will pay any dividends or realize any
capital gains.
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net
investment income and net realized capital gains. Dividends out of net
investment income and distributions of net realized short-term capital
gains are taxable to you as ordinary income. Distributions of net long-
term capital gains are taxable to you at long-term capital gain rates. The
Fund's distributions, whether paid in cash or reinvested in Fund shares,
generally will be subject to federal, state or local taxes. An exchange of
the Fund's shares for shares of another fund will be treated for tax
purposes as a sale of the Fund's shares, and any gain you realize on such a
transaction generally will be taxable. Foreign shareholders generally will
be subject to a federal withholding tax.
This summary of tax consequences is intended for general information only.
You should consult a tax adviser concerning the tax consequences of your
investment in the Fund.
FINANCIAL HIGHLIGHTS
The Class A, Class B and Class C shares of the Fund have not previously
been offered and therefore do not have previous financial history.
THE GABELLI BLUE CHIP VALUE FUND
ADDITIONAL INFORMATION.
A Statement of Additional Information dated __, 1999 (the "SAI") includes
additional information about the Fund. The SAI is incorporated by
reference into this Prospectus and, therefore, is legally a part of this
Prospectus.
SEMI-ANNUAL REPORTS.
Information about the Fund's investments will be available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its
fiscal year.
INQUIRIES.
You may make inquiries about the Fund, or obtain a copy of the SAI or of
the annual or semi-annual reports without charge, by calling your broker.
You can review and copy information about the Fund (including the SAI) at
the SEC Public Reference Room in Washington, DC (for information call 1-
800-SEC-0330). Such information is also available on the SEC's Internet
site at http://www.sec.gov. You may request documents by mail from the
SEC, upon payment of a duplicating fee, by writing to the Securities and
Exchange Commission, Public Reference Section, Washington, DC 20549-6009.
Investment Company Act File No. 811-09377
THE GABELLI BLUE CHIP VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
______________, 1999
This Statement of Additional Information (the "SAI"), which is not a
prospectus, describes the Gabelli Blue Chip Value Fund. The SAI should be
read in conjunction with the Fund's Prospectuses for Class A Shares, Class
B Shares, Class C Shares and Class AAA Shares dated __________, 1999. For
a free copy of the Prospectuses, please contact the Fund at the address,
telephone number or Internet Web site printed below.
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
http://www.gabelli.com
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . B-1
INVESTMENT STRATEGIES AND RISKS . . . . . . . . . . . . . . . . . . . B-1
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . B-10
TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . B-12
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . B-15
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . B-15
DISTRIBUTION PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . B-19
PORTFOLIO TRANSACTIONS AND BROKERAGE . . . . . . . . . . . . . . . . B-20
RETIREMENT PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . B-22
COMPUTATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . B-23
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-24
INVESTMENT PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . B-27
DESCRIPTION OF THE FUND'S SHARES . . . . . . . . . . . . . . . . . . B-28
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . B-30
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX-1
GENERAL INFORMATION
The Fund is a diversified, open-end, management investment company.
The Fund was organized as a business trust under the laws of the State of
Delaware on May 13, 1999.
INVESTMENT STRATEGIES AND RISKS
The Prospectus discusses the investment objective of the Fund and the
principal strategies to be employed to achieve that objective. This
section contains supplemental information concerning certain types of
securities and other instruments in which the Fund may invest, additional
strategies that the Fund may utilize and certain risks associated with such
investments and strategies.
CONVERTIBLE SECURITIES
The Fund may invest in convertible securities when it appears to the
Adviser that it may not be prudent to be fully invested in common stocks.
In evaluating a convertible security, the Adviser places primary emphasis
on the attractiveness of the underlying common stock and the potential for
capital appreciation through conversion. The Fund will normally purchase
only investment grade, convertible debt securities having a rating of, or
equivalent to, at least "BBB" (which securities may have speculative
characteristics) by Standard & Poor's Rating Service ("S&P") or, if
unrated, judged by the Adviser to be of comparable quality. However, the
Fund may also invest up to 25% of its assets in more speculative
convertible debt securities.
Convertible securities may include corporate notes or preferred stock
but are ordinarily a long-term debt obligation of the issuer convertible at
a stated exchange rate into common stock of the issuer. As with all debt
securities, the market value of convertible securities tends to decline as
interest rates increase and, conversely, to increase as interest rates
decline. Convertible securities generally offer lower interest or dividend
yields than non-convertible securities of similar quality. However, when
the market price of the common stock underlying a convertible security
exceeds the conversion price, the price of the convertible security tends
to reflect the value of the underlying common stock. As the market price
of the underlying common stock declines, the convertible security tends to
trade increasingly on a yield basis, and thus may not depreciate to the
same extent as the underlying common stock. Convertible securities rank
senior to common stocks on an issuer's capital structure and are
consequently of higher quality and entail less risk than the issuer's
common stock, although the extent to which such risk is reduced depends in
large measure upon the degree to which the convertible security sells above
its value as a fixed income security.
In selecting convertible securities for the Fund, the Adviser relies
primarily on its own evaluation of the issuer and the potential for capital
appreciation through conversion. It does not rely on the rating of the
security or sell because of a change in rating absent a change in its own
evaluation of the underlying common stock and the ability of the issuer to
pay principal and interest or dividends when due without disrupting its
business goals. Interest or dividend yield is a factor only to the extent
it is reasonably consistent with prevailing rates for securities of similar
quality and thereby provides a support level for the market price of the
security. The Fund will purchase the convertible securities of highly
leveraged issuers only when, in the judgment of the Adviser, the risk of
default is outweighed by the potential for capital appreciation.
The issuers of debt obligations having speculative characteristics may
experience difficulty in paying principal and interest when due in the
event of a downturn in the economy or unanticipated corporate developments.
The market prices of such securities may become increasingly volatile in
periods of economic uncertainty. Moreover, adverse publicity or the
perceptions of investors over which the Adviser has no control, whether or
not based on fundamental analysis, may decrease the market price and
liquidity of such investments. Although the Adviser will attempt to avoid
exposing the Fund to such risks, there is no assurance that it will be
successful or that a liquid secondary market will continue to be available
for the disposition of such securities.
DEBT SECURITIES
The Fund may invest up to 25% of its assets in low rated and unrated
corporate debt securities (often referred to as "junk bonds"), although the
Fund does not expect to invest more than 10% of its assets in such
securities. Corporate debt securities which are either unrated or have a
predominantly speculative rating may present opportunities for significant
long-term capital appreciation if the ability of the issuer to repay
principal and interest when due is underestimated by the market or the
rating organizations. Because of its perceived credit weakness, the issuer
is generally required to pay a higher interest rate and/or its debt
securities may be selling at a significantly lower market price than the
debt securities of issuers actually having similar strengths. When the
inherent value of such securities is recognized, the market value of such
securities may appreciate significantly. The Adviser believes that its
research on the credit and balance sheet strength of certain issuers may
enable it to select a limited number of corporate debt securities which, in
certain markets, will better serve the objective of capital appreciation
than alternative investments in common stocks. Of course, there can be no
assurance that the Adviser will be successful. In its evaluation, the
Adviser will not rely exclusively on ratings and the receipt of income is
only an incidental consideration.
The ratings of Moody's Investors Service, Inc. and Standard & Poor's
Rating Service generally represent the opinions of those organizations as
to the quality of the securities that they rate. Such ratings, however,
are relative and subjective, are not absolute standards of quality and do
not evaluate the market risk of the securities. Although the Adviser uses
these ratings as a criterion for the selection of securities for the Fund,
the Adviser also relies on its independent analysis to evaluate potential
investments for the Fund. See Appendix A "Description of Corporate Bond
Ratings."
As in the case of the convertible debt securities discussed above, low
rated and unrated corporate debt securities are generally considered to be
more subject to default and therefore significantly more speculative than
those having an investment grade rating. They also are more subject to
market price volatility based on increased sensitivity to changes in
interest rates and economic conditions or the liquidity of their secondary
trading market. The Fund does not intend to purchase debt securities for
which a liquid trading market does not exist but there can be no assurance
that such a market will exist for the sale of such securities.
INVESTMENTS IN WARRANTS AND RIGHTS
Warrants basically are options to purchase equity securities at a
specified price valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights
with respect to the assets of the issuer.
The Fund may invest in warrants and rights (other than those acquired
in units or attached to other securities) but will do so only if the
underlying equity securities are deemed appropriate by the Adviser for
inclusion in the Fund's portfolio.
Investing in rights and warrants can provide a greater potential for
profit or loss than an equivalent investment in the underlying security,
and thus can be a speculative investment. The value of a right or warrant
may decline because of a decline in the value of the underlying security,
the passage of time, changes in interest rates or in the dividend or other
policies of the Fund whose equity underlies the warrant or a change in the
perception as to the future price of the underlying security, or any
combination thereof. Rights and warrants generally pay no dividends and
confer no voting or other rights other than to purchase the underlying
security.
INVESTMENT IN ILLIQUID SECURITIES
The Fund will not invest, in the aggregate, more than 15% of its net
assets in illiquid securities. These securities include securities which
are restricted for public sale, securities for which market quotations are
not readily available, and repurchase agreements maturing or terminable in
more than seven days. Securities freely salable among qualified
institutional investors pursuant to Rule 144A under the Securities Act of
1933, as amended, and as adopted by the SEC, may be treated as liquid if
they satisfy liquidity standards established by the Board of Trustees. The
continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly, the Board of Trustees will
monitor their liquidity.
CORPORATE REORGANIZATIONS
In general, securities of companies engaged in reorganization
transactions sell at a premium to their historic market price immediately
prior to the announcement of the tender offer or reorganization proposal.
However, the increased market price of such securities may also discount
what the stated or appraised value of the security would be if the
contemplated transaction were approved or consummated. Such investments
may be advantageous when the discount significantly overstates the risk of
the contingencies involved; significantly undervalues the securities,
assets or cash to be received by shareholders of the prospective portfolio
company as a result of the contemplated transaction; or fails adequately to
recognize the possibility that the offer or proposal may be replaced or
superseded by an offer or proposal of greater value. The evaluation of
such contingencies requires unusually broad knowledge and experience on the
part of the Adviser which must appraise not only the value of the issuer
and its component businesses as well as the assets or securities to be
received as a result of the contemplated transaction, but also the
financial resources and business motivation of the offeror as well as the
dynamic of the business climate when the offer or proposal is in progress.
In making such investments, the Fund will not violate any of its
diversification requirements or investment restrictions (see below,
"Investment Restrictions") including the requirements that, except for the
investment of up to 25% of its assets in any one company or industry, not
more than 5% of its assets may be invested in the securities of any issuer.
Since such investments are ordinarily short term in nature, they will tend
to increase the Fund's portfolio turnover ratio thereby increasing its
brokerage and other transaction expenses. The Adviser intends to select
investments of the type described which, in its view, have a reasonable
prospect of capital appreciation which is significant in relation to both
the risk involved and the potential of available alternate investments.
WHEN ISSUED, DELAYED DELIVERY SECURITIES & FORWARD COMMITMENTS
The Fund is authorized to buy and sell when issued securities as an
additional investment strategy in furtherance of its investment objectives.
In utilizing this strategy, the Fund may enter into forward
commitments for the purchase or sale of securities, including on a "when
issued" or "delayed delivery" basis in excess of customary settlement
periods for the type of securities involved. In some cases, a forward
commitment may be conditioned upon the occurrence of a subsequent event,
such as approval and consummation of a merger, corporate reorganization or
debt restructuring, i.e., a when, as and if issued security. When such
transactions are negotiated, the price is fixed at the time of the
commitment, with payment and delivery taking place in the future, generally
a month or more after the date of the commitment. While the Fund will only
enter into a forward commitment with the intention of actually acquiring
the security, the Fund may sell the security before the settlement date if
it is deemed advisable.
Securities purchased under a forward commitment are subject to market
fluctuation and no interest (or dividends) accrues to the Fund prior to the
settlement date. The Fund will segregate cash or liquid securities with
its custodian in an aggregate amount at least equal to the amount of its
outstanding forward commitments.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with "primary dealers"
in U.S. Government securities and member banks of the Federal Reserve
System which furnish collateral at least equal in value or market price to
the amount of their repurchase obligation. In a repurchase agreement, an
investor (e.g., the Fund) purchases a debt security from a seller which
undertakes to repurchase the security at a specified resale price on an
agreed future date (ordinarily a week or less). The resale price generally
exceeds the purchase price by an amount which reflects an agreed-upon
market interest rate for the term of the repurchase agreement.
The Fund's risk is primarily that, if the seller defaults, the
proceeds from the disposition of underlying securities and other collateral
for the seller's obligation are less than the repurchase price. If the
seller becomes bankrupt, the Fund might be delayed in selling the
collateral. Under the Investment Company Act of 1940, as amended (the
"1940 Act"), repurchase agreements are considered loans. Repurchase
agreements usually are for short periods, such as one week or less, but
could be longer. Except for repurchase agreements for a period of a week
or less in respect to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, not more than 15% of the
Fund's total assets may be invested in repurchase agreements. In addition,
the Fund will not enter into repurchase agreements of a duration of more
than seven days if, taken together with restricted securities and other
securities for which there are no readily available quotations, more than
15% of its total assets would be so invested. These percentage limitations
are fundamental and may not be changed without shareholder approval.
BORROWING
The Fund may borrow money (1) for short-term credits from banks as may
be necessary for the clearance of portfolio transactions, and (2) from
banks for temporary or emergency purposes, including the meeting of
redemption requests. Borrowing for any purpose (including redemptions) may
not, in the aggregate, exceed 15% of the value of the Fund's total assets.
Borrowing for purposes other than meeting redemptions may not exceed 5% of
the value of the Fund's total assets at the time the borrowing is made.
The Fund will not purchase any portfolio securities at any time its
borrowings exceed 5% of its assets. Not more than 20% of the total assets
of the Fund may be used as collateral in connection with the borrowings
described above.
SHORT SALES
The Fund may, from time to time, make short sales of securities it
owns or has the right to acquire through conversion or exchange of other
securities it owns. In a short sale, the Fund does not immediately deliver
the securities sold or receive the proceeds from the sale. The Fund may
not make short sales or maintain a short position if it would cause more
than 25% of the Fund's total assets, taken at market value, to be held as
collateral for the sales. However, short sales "against the box" are not
subject to any limitation.
The Fund may make a short sale in order to hedge against market risks
when it believes that the price of a security may decline, causing a
decline in the value of a security owned by the Fund or security
convertible into, or exchangeable for, the security.
To secure its obligations to deliver the securities sold short, the
Fund will deposit in escrow in a separate account with the Fund's
custodian, State Street Bank and Trust Company ("State Street"), an amount
at least equal to the securities sold short or securities convertible into,
or exchangeable for, the securities. The Fund may close out a short
position by purchasing and delivering an equal amount of securities sold
short, rather than by delivering securities already held by the Fund,
because the Fund may want to continue to receive interest and dividend
payments on securities in its portfolio that are convertible into the
securities sold short.
OPTIONS
The Fund may, from time to time, purchase or sell listed call or put
options on securities as a means of achieving additional return or of
hedging the value of the Fund's portfolio. A call option is a contract
that, in return for a premium, gives the holder of the option the right to
buy from the writer of the call option the security underlying the option
at a specified exercise price at any time during the term of the option.
The writer of the call option has the obligation, upon exercise of the
option, to deliver the underlying security upon payment of the exercise
price during the option period. A put option is the reverse of a call
option, giving the holder the right to sell the security to the writer and
obligating the writer to purchase the underlying security from the holder.
A call option is "covered" if the Fund owns the underlying security
covered by the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon
conversion or exchange of other securities held in its portfolio. A call
option is also covered if the Fund holds a call on the same security as the
call written where the exercise price of the call held is (1) equal to or
less than the exercise price of the call written or (2) greater than the
exercise price of the call written if the difference is maintained by the
Fund in cash, U.S. Government securities or other high grade short-term
obligations in a segregated account held with its custodian. A put option
is "covered" if the Fund maintains cash or other liquid portfolio
securities with a value equal to the exercise price in a segregated account
held with its custodian, or else holds a put on the same security as the
put written where the exercise price of the put held is equal to or greater
than the exercise price of the put written.
If the Fund has written an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by
purchasing an option of the same series as the option previously written.
However, once the Fund has been assigned an exercise notice, the Fund will
be unable to effect a closing purchase transaction. Similarly, if the Fund
is the holder of an option it may liquidate its position by effecting a
closing sale transaction. This is accomplished by selling an option of the
same series as the option previously purchased. There can be no assurance
that either a closing purchase or sale transaction can be effected when the
Fund so desires.
The Fund will realize a profit from a closing transaction if the price
of the transaction is less than the premium received from writing the
option or is more than the premium paid to purchase the option; the Fund
will realize a loss from a closing transaction if the price of the
transaction is more than the premium received from writing the option or is
less than the premium paid to purchase the option. Since call option
prices generally reflect increases in the price of the underlying security,
any loss resulting from the repurchase of a call option may also be wholly
or partially offset by unrealized appreciation of the underlying security.
Other principal factors affecting the market value of a put or a call
option include supply and demand, interest rates, the current market price
and price volatility of the underlying security and the time remaining
until the expiration date.
An option position may be closed out only on an exchange which
provides a secondary market for an option of the same series. Although the
Fund will generally purchase or write only those options for which there
appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular
option. In such event it might not be possible to effect closing
transactions in particular options, so that the Fund would have to exercise
its options in order to realize any profit and would incur brokerage
commissions upon the exercise of call options and upon the subsequent
disposition of underlying securities for the exercise of put options. If
the Fund, as a covered call option writer, is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or otherwise covers the position.
In addition to options on securities, the Fund may also purchase and
sell call and put options on securities indexes. A stock index reflects in
a single number the market value of many different stocks. Relative values
are assigned to the stocks included in an index and the index fluctuates
with changes in the market values of the stocks. The options give the
holder the right to receive a cash settlement during the term of the option
based on the difference between the exercise price and the value of the
index. By writing a put or call option on a securities index, the Fund is
obligated, in return for the premium received, to make delivery of this
amount. The Fund may offset its position in stock index options prior to
expiration by entering into a closing transaction on an exchange or it may
let the option expire unexercised.
The Fund may write put and call options on stock indexes for the
purposes of increasing its gross income and protecting its portfolio
against declines in the value of the securities it owns or increases in the
value of securities to be acquired. In addition, the Fund may purchase put
and call options on stock indexes in order to hedge its investments against
a decline in value or to attempt to reduce the risk of missing a market or
industry segment advance. Options or stock indexes are similar to options
on specific securities. However, because options on stock indexes do not
involve the delivery of an underlying security, the option represents the
holder's right to obtain from the writer cash in an amount equal to a fixed
multiple of the amount by which the exercise price exceeds (in the case of
a put) or is less than (in the case of a call) the closing value of the
underlying stock index on the exercise date. Therefore, while one purpose
of writing such options is to generate additional income for the Fund, the
Fund recognizes that it may be required to deliver an amount of cash in
excess of the market value of a stock index at such time as an option
written by the Fund is exercised by the holder. The writing and purchasing
of options is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary
portfolio securities transactions. The successful use of protective puts
for hedging purposes depends in part on the Adviser's ability to predict
future price fluctuations and the degree of correlation between the options
and securities markets.
Use of options on securities indexes entails the risk that trading in
the options may be interrupted if trading in certain securities included in
the index is interrupted. The Fund will not purchase these options unless
the Adviser is satisfied with the development, depth and liquidity of the
market and the Adviser believes the options can be closed out.
Price movements in the Fund's portfolio may not correlate precisely
with movements in the level of an index and, therefore, the use of options
on indexes cannot serve as a complete hedge and will depend, in part, on
the ability of the Adviser to predict correctly movements in the direction
of the stock market generally or of a particular industry. Because options
on securities indexes require settlement in cash, the Adviser may be forced
to liquidate portfolio securities to meet settlement obligations.
Although the Adviser will attempt to take appropriate measures to
minimize the risks relating to the Fund's writing of put and call options,
there can be no assurance that the Fund will succeed in any option-writing
program it undertakes.
LENDING OF PORTFOLIO SECURITIES
The Fund may lend its portfolio securities to broker-dealers or
financial institutions provided that the loans are callable at any time by
the Fund. Loans by the Fund, if and when made, (1) will be collateralized
in accordance with applicable regulatory requirements and (2) will be
limited so that the value of all loaned securities does not exceed 33% of
the value of the Fund's total assets. The Fund, however, currently intends
to limit the value of all loaned securities to no more than 5% of the
Fund's total assets.
The Fund lends its portfolio securities in order to generate revenue
to defray certain operating expenses. The advantage of this practice is
that the Fund continues to receive the income on the loaned securities
while at the same time earns interest on the cash amounts deposited as
collateral, which will be invested in short-term obligations.
A loan may generally be terminated by the borrower on one business
day's notice, or by the Fund on five business days' notice. If the
borrower fails to deliver the loaned securities within five days after
receipt of notice, the Fund could use the collateral to replace the
securities while holding the borrower liable for any excess of replacement
cost over collateral. As with any extensions of credit, there are risks of
delay in recovery and in some cases even loss of rights in the collateral
should the borrower of the securities fail financially. However, loans of
portfolio securities will only be made to firms deemed by the Fund's
management to be creditworthy and when the income that can be earned from
the loans justifies the attendant risks. The Board of Trustees will
oversee the creditworthiness of the contracting parties on an ongoing
basis. Upon termination of the loan, the borrower is required to return
the securities to the Fund. Any gain or loss in the market price during
the loan period would inure to the Fund. The risks associated with loans
of portfolio securities are substantially similar to those associated with
repurchase agreements. Thus, if the party to whom the loan was made
petitions for bankruptcy or becomes subject to the U.S. Bankruptcy Code,
the law regarding the rights of the Fund is unsettled. As a result, under
extreme circumstances, there may be a restriction on the Fund's ability to
sell the collateral and the Fund could suffer a loss.
When voting or consent rights that accompany loaned securities pass to
the borrower, the Fund will follow the policy of calling the loaned
securities, to be delivered within one day after notice, to permit the
exercise of such rights if the matters involved would have a material
effect on the Fund's investment in such loaned securities. The Fund will
pay reasonable finder's, administrative and custodial fees in connection
with a loan of its securities.
FUTURES CONTRACTS AND OPTIONS ON FUTURES
The Fund has authorized the Adviser to enter into futures contracts
that are traded on a U.S. exchange or board of trade, provided, however,
that, other than to close an existing position, the Fund will not enter
into futures contacts for which the aggregate initial margins and premiums
would exceed 5% of the fair market value of the Fund's assets. Although
the Fund has no current intention of using options on futures contracts,
the Fund may at some future date authorize the Adviser to enter into
options on futures contracts, subject to the limitations stated in the
preceding sentence. These investments will be made by the Fund solely for
the purpose of hedging against changes in the value of its portfolio
securities and in the value of securities it intends to purchase. Such
investments will only be made if they are economically appropriate to the
reduction of risks involved in the management of the Fund. In this regard,
the Fund may enter into futures contracts or options on futures for the
purchase or sale of securities indices or other financial instruments
including but not limited to U.S. Government securities. Futures exchanges
and trading in the United States are regulated under the Commodity Exchange
Act by the Commodity Futures Trading Commission.
A "sale" of a futures contract (or a "short" futures position) means
the assumption of a contractual obligation to deliver the securities
underlying the contract at a specified price at a specified future time. A
"purchase" of a futures contract (or a "long" futures position) means the
assumption of a contractual obligation to acquire the securities underlying
the contract at a specified price at a specified future time. Certain
futures contracts, including stock and bond index futures, are settled on a
net cash payment basis rather than by the sale and delivery of the
securities underlying the futures contracts.
No consideration will be paid or received by the Fund upon the
purchase or sale of a futures contract. Initially, the Fund will be
required to deposit with the broker an amount of cash or cash equivalents
equal to approximately 1% to 10% of the contract amount (this amount is
subject to change by the exchange or board of trade on which the contract
is traded and brokers or members of such board of trade may charge a higher
amount). This amount is known as "initial margin" and is in the nature of
a performance bond or good faith deposit on the contract. Subsequent
payments, known as "variation margin," to and from the broker will be made
daily as the price of the index or security underlying the futures contract
fluctuates. At any time prior to the expiration of a futures contract, the
portfolio may elect to close the position by taking an opposite position,
which will operate to terminate the Fund's existing position in the
contract.
An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in a futures contract at
a specified exercise price at any time prior to the expiration of the
option. Upon exercise of an option, the delivery of the futures position
by the writer of the option to the holder of the option will be accompanied
by delivery of the accumulated balance in the writer's futures margin
account attributable to that contract, which represents the amount by which
the market price of the futures contract exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract. The potential loss related to the purchase of an option
on futures contracts is limited to the premium paid for the option (plus
transaction costs). Because the value of the option purchased is fixed at
the point of sale, there are no daily cash payments by the purchaser to
reflect changes in the value of the underlying contract; however, the value
of the option does change daily and that change would be reflected in the
net asset value of the portfolio.
As noted above, the Fund may authorize the Adviser to use such
instruments depending upon market conditions prevailing at such time and
the perceived investment needs of the Fund. However, in no event may the
Fund enter into futures contracts or options on futures contracts if,
immediately thereafter, the sum of the amount of margin deposits on the
Fund's existing futures contracts and premiums paid for options would
exceed 5% of the value of the Fund's total assets after taking into account
unrealized profits and losses on any existing contracts. In the event the
Fund enters into long futures contracts or purchases call options, an
amount of cash, obligations of the U.S. Government and its agencies and
instrumentalities or other high grade debt securities equal to the market
value of the contract will be deposited and maintained in a segregated
account with the Fund's custodian to collateralize the positions, thereby
insuring that the use of the contract is unleveraged.
The success of hedging depends on the Adviser's ability to predict
movements in the prices of the hedged securities and market fluctuations.
The Adviser may not be able to perfectly correlate changes in the market
value of securities and the prices of the corresponding options or futures.
The Adviser may have difficulty selling or buying futures contracts and
options when it chooses and there may be certain restrictions on trading
futures contracts and options. The Fund is not obligated to pursue any
hedging strategy. While hedging can reduce or eliminate losses, it can
also reduce or eliminate gains. In addition, hedging practices may not be
available, may be too costly to be used effectively or may be unable to be
used for other reasons.
INVESTMENT RESTRICTIONS
The Fund's investment objectives and the following investment
restrictions are fundamental and may not be changed without the approval of
a majority of the Fund's shareholders, defined as the lesser of (1) 67% of
the Fund's shares present at a meeting if the holders of more than 50% of
the outstanding shares are present in person or by proxy, or (2) more than
50% of the Fund's outstanding shares. All other investment policies or
practices are considered by the Fund not to be fundamental and accordingly
may be changed without shareholder approval. If a percentage restriction
on investment or the use of assets set forth below is adhered to at the
time the transaction is effected, later changes in percentage resulting
from changing market values or total assets of the Fund will not be
considered a deviation from policy. Under such restrictions, the Fund may
not:
(1) Purchase the securities of any one issuer, other than the United
States Government, or any of its agencies or instrumentalities, if
immediately after such purchase more than 5% of the value of its total
assets would be invested in such issuer or the Fund would own more than 10%
of the outstanding voting securities of such issuer, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such 5% and 10% limitations;
(2) Invest more than 25% of the value of its total assets in any
particular industry (this restriction does not apply to obligations issued
or guaranteed by the U.S. Government or its agencies or its
instrumentalities;
(3) Make loans of its assets except for: (a) purchasing private or
publicly distributed debt obligations, (b) engaging in repurchase
agreements as set forth in the Prospectus, and (c) lending its portfolio
securities consistent with applicable regulatory requirements and as set
forth in the Prospectus;
(4) Purchase securities on margin, but it may obtain such short-term
credits from banks as may be necessary for the clearance of purchase and
sales of securities;
(5) Issue senior securities, except to the extent permitted by
applicable law;
(6) Mortgage, pledge or hypothecate any of its assets except that, in
connection with permissible borrowings mentioned in restriction (5) above,
not more than 30% of the assets of the Fund (not including amounts
borrowed) may be used as collateral and except for collateral arrangements
with respect to options, futures, hedging transactions, short sales, when-
issued and forward commitment transactions and similar investment
strategies;
(7) Engage in the underwriting of securities, except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, in disposing of a portfolio security;
(8) Purchase or sell commodities or commodity contracts except for
bona fide hedging, yield enhancement and risk management purposes or invest
in any oil, gas or mineral interests;
(9) Purchase real estate or interests therein, other than mortgage-
backed securities and securities of companies that invest in real estate or
interests therein; or
(10) Invest for the purpose of exercising control over management of
any company (the Fund does not view efforts to affect management or
business decisions of portfolio companies as investing for the purpose of
exercising control).
TRUSTEES AND OFFICERS
Under Delaware law, the Fund's Board of Trustees is responsible for
establishing the Fund's policies and for overseeing the management of the
Fund. The Board also elects the Fund's officers who conduct the daily
business of the Fund. The Trustees and principal officers of the Fund,
their ages and their principal occupations for the past five years, are
listed below. Unless otherwise specified, the address of each such person
is One Corporate Center, Rye, New York 10580-1434. Trustees deemed to be
"interested persons" of the Fund for purposes of the 1940 Act are indicated
by an asterisk.
Name, Address, Age and
Position(s) with Fund Principal Occupations During Past Five Years
---------------------- --------------------------------------------
Mario J. Gabelli,* 57 Chairman of the Board, Chief Executive
Trustee Officer and Chief Investment Officer of
Gabelli Asset Management Inc., (since 1999)
and Gabelli Funds, LLC, Director or Trustee
and Officer of various other investment
companies advised by Gabelli Funds, LLC and
its affiliates; Chairman of the Board and
Chief Executive Officer of Lynch Corporation
(diversified manufacturing and
communications services company) and
Director of East/West Communications Inc.
Anthony J. Colavita, 64 President and Attorney at Law in the law
Trustee firm of Anthony J. Colavita, P.C. since
1961; Director or Trustee of various other
mutual funds advised by Gabelli Funds, LLC
and its affiliates.
Vincent D. Enright, 56 Former Senior Vice President and Chief
Trustee Financial Officer of KeySpan Energy
Corporation; Director or Trustee of various
other investment companies managed by
Gabelli Funds, LLC and its affiliates
Werner J. Roeder, M.D., 58 Director of Surgery, Lawrence Hospital, and
Trustee practicing private physician. Director or
Trustee of various other mutual funds
advised by Gabelli Funds, LLC and its
affiliates.
Karl Otto Pohl,*+ 69 Member of the Shareholder Committee of Sal
Trustee Oppenheim Jr. & Cie (private investment
bank); Director of Gabelli Asset Management
Inc., (investment management), Zurich Allied
(insurance), and TrizecHahn Corp.; Former
President of the Deutsche Bundesbank and
Chairman of its Central Bank Council from
1980 through 1991; Director or Trustee of
all other mutual funds advised by Gabelli
Funds, LLC and its affiliates.
Bruce N. Alpert, 47 Executive Vice President and Chief Operating
Vice President and Officer of the Adviser; President and
Treasurer Director of Gabelli Advisers, Inc. and an
Officer of all funds advised by Gabelli
Funds, LLC and its affiliates.
James E. McKee, 35 Vice President and General Counsel of the
Secretary Adviser; Vice President and General Counsel
of GAMCO Investors, Inc. since 1993;
Secretary of all funds advised by Gabelli
Funds, LLC and Gabelli Advisers, Inc. since
August 1995.
________________
+ Mr. Pohl is a director of the parent company of the Adviser.
No director, officer or employee of the Adviser receives any
compensation from the Fund for serving as an officer or Trustee of the
Fund. The Fund pays each of its Trustees who is not a director, officer or
employee of the Adviser or any of their affiliates, $3,000 per annum plus
$500 per meeting attended in person or by telephone and reimburses each
Trustee for related travel and out-of-pocket expenses. The Fund also pays
each Trustee serving as a member of the Audit, Proxy or Nominating
Committees a fee of $500 per committee meeting if held on a day other than
a regularly scheduled board meeting.
COMPENSATION TABLE
(1) (2) (3)
Total Compensation
Aggregate Compensation from Registrant and Fund
from Registrant for Complex Paid to Trustees
Name of Person, Position Fiscal Year* for Calendar Year**
Mario J. Gabelli $ 0 $ 0 (14)
Trustee
Anthony J. Colavita $2,000 $ 84,000 (14)
Trustee
Vincent D. Enright $2,000 $ 20,000 (4)
Trustee
Karl Otto POhl $2,000 $104,466 (16)
Trustee
Werner J. Roeder $2,000 $ 27,500 (8)
Trustee
______________
* Since the Fund has not began operations, this column represents the
estimated compensation to be paid to such persons for the year ended
December 31, 1999.
** The total compensation paid to such persons during the calendar year
ending December 31, 1998 by investment companies, from which such
person receives compensation that are part of the same Fund complex as
the Fund, because they have common or affiliated investment advisers,
and estimated compensation to be paid to such person by the Fund, as
if the Fund had been in existence. The number in parentheses
represents the number of such investment companies (including the
Fund).
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of the date of this Registration Statement, no person owned of
record or beneficially 5% or more of the Fund's outstanding shares.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
The Adviser is a New York limited liability company which also serves
as an investment adviser to 12 other open-end investment companies, and 3
closed-end investment companies with aggregate assets in excess of $7.2
billion as of December 31, 1998. The Adviser is a registered investment
adviser under the Investment Advisers Act of 1940, as amended. Mr. Mario
J. Gabelli may be deemed a "controlling person" of the Adviser on the basis
of his controlling interest of the ultimate parent company of the Adviser.
The Adviser has several affiliates that provide investment advisory
services: GAMCO Investors, Inc. ("GAMCO"), acts as investment adviser for
individuals, pension trusts, profit-sharing trusts and endowments, and had
assets under management of approximately $7.1 billion under its management
as of December 31, 1998; Gabelli Advisers, Inc. acts as investment adviser
to the Gabelli Westwood Funds with assets under management of approximately
$400 Million as of December 31, 1998; Gabelli Securities, Inc. acts as
investment adviser to certain alternative investments products, consisting
primarily of risk arbitrage and merchant banking limited partnerships and
offshore companies, with assets under management of approximately $146
Million as of December 31, 1998; and Gabelli Fixed Income LLC acts as
investment adviser for the Treasurer's Funds and separate accounts having
assets under management of approximately $1.5 Billion as of December 31,
1998.
Affiliates of the Adviser may, in the ordinary course of their
business, acquire for their own account or for the accounts of their
advisory clients, significant (and possibly controlling) positions in the
securities of companies that may also be suitable for investment by the
Fund. The securities in which the Fund might invest may thereby be limited
to some extent. For instance, many companies in the past several years
have adopted so-called "poison pill" or other defensive measures designed
to discourage or prevent the completion of non-negotiated offers for
control of the company. Such defensive measures may have the effect of
limiting the shares of the company which might otherwise be acquired by the
Fund if the affiliates of the Adviser or their advisory accounts have or
acquire a significant position in the same securities. However, the
Adviser does not believe that the investment activities of its affiliates
will have a material adverse effect upon the Fund in seeking to achieve its
investment objectives. Securities purchased or sold pursuant to
contemporaneous orders entered on behalf of the investment company accounts
of the Adviser or the advisory accounts managed by its affiliates for their
unaffiliated clients are allocated pursuant to principles believed to be
fair and not disadvantageous to any such accounts. In addition, all such
orders are accorded priority of execution over orders entered on behalf of
accounts in which the Adviser or its affiliates have a substantial
pecuniary interest. The Adviser may on occasion give advice or take action
with respect to other clients that differ from the actions taken with
respect to the Fund. The Fund may invest in the securities of companies
which are investment management clients of GAMCO. In addition, portfolio
companies or their officers or directors may be minority shareholders of
the Adviser or its affiliates.
Pursuant to an Investment Advisory Contract, which was approved by the
Trustees of the Fund at a meeting held on May 19, 1999 (the "Contract"),
the Adviser furnishes a continuous investment program for the Fund's
portfolio, makes the day-to-day investment decisions for the Fund, arranges
the portfolio transactions of the Fund and generally manages the Fund's
investments in accordance with the stated policies of the Fund, subject to
the general supervision of the Board of Trustees of the Fund.
Under the Contract, the Adviser also (i) provides the Fund with the
services of persons competent to perform such supervisory, administrative,
and clerical functions as are necessary to provide effective administration
of the Fund, including maintaining certain books and records and overseeing
the activities of the Fund's Custodian and Transfer Agent; (ii) oversees
the performance of administrative and professional services to the Fund by
others, including the Fund's Sub-Administrator, Custodian, Transfer Agent
and Dividend Disbursing Agent, as well as accounting, auditing and other
services performed for the Fund; (iii) provides the Fund with adequate
office space and facilities; (iv) prepares, but does not pay for, the
periodic updating of the Fund's registration statement, Prospectus and
Additional Statement, including the printing of such documents for the
purpose of filings with the SEC and state securities administrators, the
Fund's tax returns, and reports to the Fund's shareholders and the SEC; (v)
calculates the net asset value of shares in the Fund; (vi) prepares, but
does not pay for, all filings under the securities or "Blue Sky" laws of
such states or countries as are designated by the Distributor, which may be
required to register or qualify, or continue the registration or
qualification, of the Fund and/or its shares under such laws; and (vii)
prepares notices and agendas for meetings of the Fund's Board of Trustees
and minutes of such meetings in all matters required by the Act to be acted
upon by the Board.
The Contract provides that absent willful misfeasance, bad faith,
gross negligence or reckless disregard of its duty, the Adviser and its
employees, officers, directors and controlling persons are not liable to
the Fund or any of its investors for any act or omission by the Adviser or
for any error of judgment or for losses sustained by the Fund. However,
the Contract provides that the Fund is not waiving any rights it may have
with respect to any violation of law which cannot be waived. The Contract
also provides indemnification for the Adviser and each of these persons for
any conduct for which they are not liable to the Fund. The Contract in no
way restricts the Adviser from acting as Adviser to others. The Fund has
agreed by the terms of the Contract that the word "Gabelli" in its name is
derived from the name of the Adviser which in turn is derived from the name
of Mario J. Gabelli; that such name is the property of the Adviser for
copyright and/or other purposes; and that, therefore, such name may freely
be used by the Adviser for other investment companies, entities or
products. The Fund has further agreed that in the event that for any
reason, the Adviser ceases to be its investment adviser, the Fund will,
unless the Adviser otherwise consents in writing, promptly take all steps
necessary to change its name to one which does not include "Gabelli."
By its terms, the Contract will remain in effect for a period of two
years and thereafter from year to year, provided each such annual
continuance is specifically approved by the Fund's Board of Trustees or by
a "majority" (as defined in the 1940 Act) vote of its shareholders and, in
either case, by a majority vote of the Trustees who are not parties to the
Contract or interested persons of any such party, cast in person at a
meeting called specifically for the purpose of voting on the Contract. The
Contract is terminable without penalty by the Fund on sixty days' written
notice when authorized either by majority vote of its outstanding voting
shares or by a vote of a majority of its Board of Trustees, or by the
Adviser on sixty days' written notice, and will automatically terminate in
the event of its "assignment" as defined by the 1940 Act.
SUB-ADMINISTRATOR
First Data Investor Services Group, Inc. (the "Sub-Administrator"), a
subsidiary of First Data Corporation which is located at Exchange Place,
Boston, Massachusetts 02109, serves as Sub-Administrator to the Fund
pursuant to a Sub-Administration Agreement with the Adviser (the "Sub-
Administration Agreement"). Under the Sub-Administration Agreement, the
Sub-Administrator (a) assists in supervising all aspects of the Fund's
operations except those performed by the Adviser under its advisory
agreement with the Fund; (b) supplies the Fund with office facilities
(which may be in the Sub-Administrator's own offices), statistical and
research data, data processing services, clerical, accounting and
bookkeeping services, including, but not limited to, the calculation of the
net asset value of shares in the Fund, internal auditing and legal
services, internal executive and administrative services, and stationery
and office supplies; (c) prepares and distributes materials for all Fund
Board of Trustees' Meetings including the mailing of all Board materials
and collates the same materials into the Board books and assists in the
drafting of minutes of the Board Meetings; (d) prepares reports to Fund
shareholders, tax returns and reports to and filings with the SEC and state
"Blue Sky" authorities; (e) calculates the Fund's net asset value per
share, provides any equipment or services necessary for the purpose of
pricing shares or valuing the Fund's investment portfolio and, when
requested, calculates the amounts permitted for the payment of distribution
expenses under any distribution plan adopted by the Fund; (f) provides
compliance testing of all Fund activities against applicable requirements
of the 1940 Act and the rules thereunder, the Code, and the Fund's
investment restrictions; (g) furnishes to the Adviser such statistical and
other factual information and information regarding economic factors and
trends as the Adviser from time to time may require; and (h) generally
provides all administrative services that may be required for the ongoing
operation of the Fund in a manner consistent with the requirements of the
1940 Act.
For the services it provides, the Adviser pays the Sub-Administrator
an annual fee based on the value of the aggregate average daily net assets
of all funds under its administration managed by the Adviser as follows:
up to $10 billion - .0275%; $10 billion to $15 billion - .0125%; over $15
billion - .001%. The Sub-Administrator's fee is paid by the Adviser and
will result in no additional expenses to the Fund.
COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York,
New York 10022, serves as the Fund's legal counsel.
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP, independent auditors, have been selected to audit
the Fund's annual financial statements.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company ("State Street"), 225 Franklin
Street, Boston, MA 02110 is the Custodian for the Fund's cash and
securities. Boston Financial Data Services, Inc. ("BFDS"), an affiliate of
State Street located at the BFDS Building, Two Heritage Drive, Quincy,
Massachusetts 02171, performs the services of transfer agent and dividend
disbursing agent for the Fund. Neither BFDS nor State Street assists in or
is responsible for investment decisions involving assets of the Fund.
DISTRIBUTOR
To implement the Fund's 12b-1 Plans, the Fund has entered into a
Distribution Agreement with the Gabelli & Company, Inc., a New York
corporation which is an indirect majority owned subsidiary of GAMI, having
principal offices located at One Corporate Center, Rye, New York 10580.
The Distributor continuously solicits offers for the purchase of shares of
the Fund on a best efforts basis.
DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution (a "Plan") pursuant to
Rule 12b-1 under the 1940 Act on behalf of each of the Class AAA Shares,
Class A Shares, the Class B Shares and the Class C Shares. Payments may be
made by the Fund under each Plan for the purpose of financing any activity
primarily intended to result in the sales of shares of the class to which
such Plan relates as determined by the Board of Trustees. Such activities
typically include advertising, compensation for sales and marketing
activities of the Distributor and other banks, broker-dealers and service
providers; shareholder account servicing; production and dissemination of
prospectus and sales and marketing materials; and capital or other expenses
of associated equipment, rent, salaries, bonuses, interest and other
overhead. To the extent any activity is one which the Fund may finance
without a distribution plan, the Fund may also make payments to finance
such activity outside of the Plans and not be subject to its limitations.
Payments under the Plans are not solely dependent on distribution expenses
actually incurred by the Distributor.
Under its terms, each Plan remains in effect so long as its
continuance is specifically approved at least annually by vote of the
Fund's Board of Trustees, including a majority of the Trustees who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Fund ("Independent Trustees"). No Plan
may be amended to increase materially the amount to be spent for services
provided by the Distributor thereunder without shareholder approval, and
all material amendments of any Plan must also be approved by the Trustees
in the manner described above. Each Plan may be terminated at any time,
without penalty, by vote of a majority of the Independent Trustees, or by a
vote of a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act). Under each Plan, the Distributor will provide
the Trustees periodic reports of amounts expanded under such Plan and the
purpose for which expenditures were made. The Plans compensate the
Distributor regardless of expenses.
No interested person of the Fund or any Independent Trustee of the
Fund had a direct or indirect financial interest in the operation of any
Plan or related agreements.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Under the Contract, the Adviser is authorized on behalf of the Fund to
employ brokers to effect the purchase or sale of portfolio securities with
the objective of obtaining prompt, efficient and reliable execution and
clearance of such transactions at the most favorable price obtainable
("best execution") at reasonable expense. The Adviser is permitted to (1)
direct Fund portfolio brokerage to Gabelli & Company, a broker-dealer
affiliate of the Adviser; (2) pay commissions to brokers other than Gabelli
& Company which are higher than might be charged by another qualified
broker to obtain brokerage and/or research services considered by the
Adviser to be useful or desirable for its investment management of the Fund
and/or other advisory accounts under the management of the Adviser and any
investment adviser affiliated with it; and (3) consider the sales of shares
of the Fund by brokers other than Gabelli & Company as a factor in its
selection of brokers for Fund portfolio transactions. Transactions in
securities other than those for which a securities exchange is the
principal market are generally executed through a brokerage firm and a
commission is paid whenever it appears that the broker can obtain a more
favorable overall price. In general, there may be no stated commission on
principal transactions in over-the-counter securities, but the prices of
such securities may usually include undisclosed commissions or markups.
When consistent with the objective of obtaining best execution, Fund
brokerage may be directed to brokers or dealers which furnish brokerage or
research services to the Fund or the Adviser of the type described in
Section 28(e) of the Securities Exchange Act of 1934, as amended. The
commissions charged by a broker furnishing such brokerage or research
services may be greater than that which another qualified broker might
charge if the Adviser determines, in good faith, that the amount of such
greater commission is reasonable in relation to the value of the additional
brokerage or research services provided by the executing broker, viewed in
terms of either the particular transaction or the overall responsibilities
of the Adviser or its advisory affiliates to the accounts over which they
exercise investment discretion. Since it is not feasible to do so, the
Adviser need not attempt to place a specific dollar value on such services
or the portion of the commission which reflects the amount paid for such
services but must be prepared to demonstrate a good faith basis for its
determinations.
Investment research obtained by allocations of Fund brokerage is used
to augment the scope and supplement the internal research and investment
strategy capabilities of the Adviser but does not reduce the overall
expenses of the Adviser to any material extent. Such investment research
may be in written form or through direct contact with individuals and
includes information on particular companies and industries as well as
market, economic or institutional activity areas. Research services
furnished by brokers through which the Fund effects securities transactions
are used by the Adviser and its advisory affiliates in carrying out their
responsibilities with respect to all of their accounts over which they
exercise investment discretion. Such investment information may be useful
only to one or more of the other accounts of the Adviser and its advisory
affiliates, and research information received for the commissions of those
particular accounts may be useful both to the Fund and one or more of such
other accounts.
Neither the Fund nor the Adviser has any agreement or legally binding
understanding with any broker regarding any specific amount of brokerage
commissions which will be paid in recognition of such services. However,
in determining the amount of portfolio commissions directed to such
brokers, the Adviser does consider the level of services provided.
The Adviser may also place orders for the purchase or sale of
portfolio securities with Gabelli & Company when it appears that, as an
introducing broker or otherwise, Gabelli & Company can obtain a price and
execution which is at least as favorable as that obtainable by other
qualified brokers. As required by Rule 17e-1 under the 1940 Act, the Board
of Trustees has adopted "Procedures" which provide that commissions paid to
Gabelli & Company on stock exchange transactions may not exceed that which
would have been charged by another qualified broker or member firm able to
effect the same or a comparable transaction at an equally favorable price
and contains a schedule setting forth maximum commission charges for such
transactions designed to reflect that standard. Rule 17e-1 and the
Procedures contain requirements that the Board, including its "independent"
Trustees, conduct periodic compliance reviews of such brokerage allocations
and review such schedule at least annually for its continuing compliance
with the foregoing standard. The Adviser and Gabelli & Company are also
required to furnish reports and maintain records in connection with such
reviews.
To obtain the best execution of portfolio transactions on the New York
Stock Exchange ("NYSE"), Gabelli & Company controls and monitors the
execution of such transactions on the floor of the NYSE through independent
"floor brokers" or through the Designated Order Turnaround System of the
NYSE. Such transactions are then cleared, confirmed to the Fund for the
account of Gabelli & Company, and settled directly with the Custodian of
the Fund by a clearing house member firm which remits the commission less
its clearance charges to Gabelli & Company. Pursuant to an agreement with
the Fund, Gabelli & Company pays all charges incurred for such services and
reports at least quarterly to the Board the amount of such expenses and
commissions. The compensation realized by Gabelli & Company for its
brokerage services is subject to the approval of the Board, including its
"independent" Trustees, who must approve the continuance of the arrangement
at least annually. Commissions paid by the Fund pursuant to the
arrangement may not exceed the commission level specified by the Procedures
described above. Gabelli may also effect Fund portfolio transactions in
the same manner and pursuant to the same arrangements on other national
securities exchanges which adopt direct order access rules similar to those
of the NYSE.
RETIREMENT PLANS
Under the Internal Revenue Code of 1986, as amended (the "Code"),
individuals may make wholly or partly tax deductible IRA contributions of
up to $2,000 annually, depending on whether they are active participants in
an employer-sponsored retirement plan and on their income level. However,
dividends and distributions held in the account are not taxed until
withdrawn in accordance with the provisions of the Code. An individual
with a non-working spouse may establish a separate IRA for the spouse under
the same conditions and contribute a combined maximum of $4,000 annually to
both IRAs provided that no more than $2,000 may be contributed to the IRA
of either spouse. Other provisions permit additional IRA contributions
which are not tax deductible but the tax on reinvested dividends and
distributions is deferred while held in the account. There are also rules
on the amount of tax deductible contributions which may be made to other
retirement plans.
Investors may be eligible to make contributions to another type of
individual retirement account (a "Roth IRA"). An investor can open a Roth
IRA if he or she meets certain income limits specified in the Code. Any
contributions made by an investor to a Roth IRA are nondeductible for U.S.
Federal income tax purposes. Distributions from a Roth IRA are not
included in the investor's gross income and are not subject to a 10%
penalty for early withdrawal if the distributions are made after the end of
the five-year period beginning with the first tax year in which the
investor made a contribution to the Roth IRA and the distributions meet
other criteria set forth in the Code. The maximum annual aggregate
contribution that can be made to IRAs and Roth IRAs is $2,000. In
addition, certain low and middle-income investors may open an education
individual retirement account (an "Education IRA"). Eligible individuals
are permitted to contribute up to $500 per year per beneficiary under 18
years old to an Education IRA. The minimum initial investment for an
Education IRA through the Fund is $250. A distribution from an Education
IRA is generally excludable from gross income to the extent that such
distribution does not exceed qualified higher education expenses incurred
by the beneficiary during the year in which the distribution is made.
Investors should be aware that they may be subject to penalties or
additional tax on contributions to or withdrawals from IRAs or other
retirement plans which are not permitted by the applicable provisions of
the Code and prior to a withdrawal, shareholders may be required to certify
their age and awareness of such restrictions in writing. Persons desiring
information concerning investments through IRAs or other retirement plans
should write or telephone the Distributor.
REDEMPTION OF SHARES
Payment of the redemption price for shares redeemed may be made either
in cash or in portfolio securities (selected in the discretion of the Board
of Trustees of the Fund and taken at their value used in determining the
Fund's net asset value per share as described under "Computation of Net
Asset Value"), or partly in cash and partly in portfolio securities.
However, payments will be made wholly in cash unless the Board of Trustees
believes that economic conditions exist which would make such a practice
detrimental to the best interests of the Fund. If payment for shares
redeemed is made wholly or partly in portfolio securities, brokerage costs
may be incurred by the investor in converting the securities to cash. The
Fund will not distribute in-kind portfolio securities that are not readily
marketable. The Fund has filed a formal election with the SEC pursuant to
which the Fund will only effect a redemption in portfolio securities where
the particular shareholder of record is redeeming more than $250,000 or 1%
of the Fund's total net assets, whichever is less, during any 90 day
period. In the opinion of the Fund's management, however, the amount of a
redemption request would have to be significantly greater than $250,000
before a redemption wholly or partly in portfolio securities would be made.
Cancellation of purchase orders for Fund shares (as, for example, when
checks submitted to purchase shares are returned unpaid) causes a loss to
be incurred when the net asset value of the Fund shares on the date of
cancellation is less than on the original date of purchase. The investor
is responsible for such loss, and the Fund may reimburse itself or the
Distributor for such loss by automatically redeeming shares from any
account registered at any time in that shareholder's name, or by seeking
other redress. In the event shares held in the account of such shareholder
are not sufficient to cover such loss, the Distributor will promptly
reimburse the Fund for the amount of such unrecovered loss.
COMPUTATION OF NET ASSET VALUE
Net asset value is calculated separately for each class of the Fund.
The net asset value of Class B Shares and Class C Shares of the Fund will
generally be lower than the net asset value of Class A Shares or Class AAA
Shares as a result of the larger distribution-related fee to which Class B
Shares and Class C Shares are subject. It is expected, however, that the
net asset value per share of each class will tend to converge immediately
after the recording of dividends, if any, which will differ by
approximately the amount of the distribution and/or service fee expense
accrual differential among the classes.
For purposes of determining the Fund's net asset value per share,
readily marketable portfolio securities listed on a market subject to
governmental regulation on which trades are reported contemporaneously are
valued, except as indicated below, at the last sale price reflected at the
close of the regular trading session of the principal market for such
security on the business day as of which such value is being determined.
If there has been no sale on such day, the securities are valued at the
average of the closing bid and asked prices on the principal market for
such security on such day. If no asked prices are quoted on such day, then
the security is valued at the closing bid price on the principal market for
such security on such day. If no bid or asked prices are quoted on such
day, then the security is valued by such method as the Board of Trustees
shall determine in good faith to reflect its fair market value.
All other readily marketable securities are valued at the latest
average of the bid and asked price obtained from a dealer maintaining an
active market in such security.
Debt instruments having 60 days or less remaining until maturity are
stated at amortized cost. Debt instruments having a greater remaining
maturity will be valued at the latest bid price obtainable from a dealer
which maintains an active market in the security until the maturity of the
instrument is 60 days or less when it will be valued as if purchased at the
valuation established as of the 61st day of its maturity. Listed debt
securities which are actively traded on a securities exchange may also be
valued at the last sale price in lieu of the quoted bid price of a dealer.
All other investment assets, including restricted and not readily
marketable securities, are valued under procedures established by and under
the general supervision and responsibility of the Fund's Board of Trustees
designed to reflect in good faith the fair value of such securities.
TAXATION
GENERAL
Set forth below is a discussion of certain U.S. federal income tax
issues concerning the Fund and the purchase, ownership and disposition of
Fund shares. This discussion is based upon present provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the regulations
promulgated thereunder, and judicial and administrative ruling authorities,
all of which are subject to change, which change may be retroactive. This
discussion does not purport to be complete or to deal with all aspects of
federal income taxation that may be relevant to investors in light of their
particular circumstances. Prospective investors should consult their own
tax advisors with regard to the federal tax consequences of the purchase,
ownership, or disposition of Fund shares, as well as the tax consequences
arising under the laws of any state, foreign country, or other taxing
jurisdiction.
TAX STATUS OF THE FUND
The Fund intends to qualify and to elect to be taxed as a regulated
investment company under Subchapter M of the Code. Accordingly, the Fund
must, among other things, (a) derive in each taxable year at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, and gains from the sale or other disposition of stock,
securities or foreign currencies, or other income derived with respect to
its business of investing in such stock, securities or currencies; and (b)
diversify its holdings so that, at the end of each fiscal quarter (i) at
least 50% of the value of the Fund's total assets is represented by cash
and cash items, U.S. Government securities, the securities of other
regulated investment companies and other securities, with such other
securities limited, in respect of any one issuer, to an amount not greater
than 5% of the value of the Fund's total assets and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value
of its total assets is invested in the securities of any one issuer (other
than U.S. Government securities and the securities of other regulated
investment companies).
As a regulated investment company, the Fund generally is not subject
to U.S. federal income tax on income and gains that it distributes to
shareholders, if at least 90% of the Fund's investment company taxable
income (which includes, among other items, dividends, interest and the
excess of any net short-term capital gains over net long-term capital
losses) for the taxable year is distributed. The Fund intends to
distribute substantially all of such income.
Amounts not distributed on a timely basis in accordance with a
calendar year distribution requirement are subject to a nondeductible 4%
excise tax at the Fund level. To avoid the tax, the Fund must distribute
during each calendar year an amount equal to the sum of (1) at least 98% of
its ordinary income (not taking into account any capital gains or losses)
for the calendar year, (2) at least 98% of its capital gains in excess of
its capital losses (adjusted for certain ordinary losses) for a one-year
period generally ending on October 31 of the calendar year, and (3) all
ordinary income and capital gains for previous years that were not
distributed during such years. To avoid application of the excise tax, the
Fund intends to make distributions in accordance with the calendar year
distribution requirement.
A distribution will be treated as paid on December 31 of a calendar
year if it is declared by the Fund in October, November or December of that
year with a record date in such a month and paid by the Fund during January
of the following year. Such a distribution will be taxable to shareholders
in the calendar year in which the distribution is declared, rather than the
calendar year in which it is received.
DISTRIBUTIONS
Distributions of investment company taxable income are taxable to a
U.S. shareholder as ordinary income, whether paid in cash or shares.
Dividends paid by the Fund to a corporate shareholder, to the extent such
dividends are attributable to dividends received by the Fund from U.S.
corporations, may, subject to limitations, be eligible for the dividends
received deduction. However, the alternative minimum tax applicable to
corporations may reduce the value of the dividends received deduction.
Capital gains may be taxed at different rates depending on how long
the Fund held the asset giving rise to such gains. Distributions of the
excess of net long-term capital gains over net short-term capital losses
realized, if any, properly designated by the Fund, whether paid in cash or
reinvested in Fund shares, will generally be taxable to shareholders at the
rates applicable to long-term capital gains, regardless of how long a
shareholder has held Fund shares. Distributions of net capital gains from
assets held for one year or less will be taxable to shareholders at rates
applicable to ordinary income.
Shareholders will be notified annually as to the U.S. federal tax
status of distributions, and shareholders receiving distributions in the
form of newly issued shares will receive a report as to the net asset value
of the shares received.
Investors should be careful to consider the tax implications of
buying shares of the Fund just prior to the record date of a distribution
(including a capital gain dividend). The price of shares purchased at such
a time will reflect the amount of the forthcoming distribution, but the
distribution will generally be taxable to the shareholder.
To the extent that the Fund retains any net long-term capital gains,
it may designate them as "deemed distributions" and pay a tax thereon for
the benefit of its shareholders. In that event, the shareholders report
their share of the Fund's retained realized capital gains on their
individual tax returns as if it had been received, and report a credit for
the tax paid thereon by the Fund. The amount of the deemed distribution
net of such tax is then added to the shareholder's cost basis for his
shares. Shareholders who are not subject to federal income tax or tax on
capital gains should be able to file a return on the appropriate form or a
claim for refund that allows them to recover the tax paid on their behalf.
FOREIGN TAXES
The Fund may be subject to certain taxes imposed by the countries in
which it invests or operates. The Fund will not have more than 50% of its
total assets invested in securities of foreign governments or corporations
and consequently will not qualify to elect to treat any foreign taxes paid
by the Fund as having been paid by the Fund's shareholders.
DISPOSITIONS
Upon a redemption, sale or exchange of shares of the Fund, a
shareholder will realize a taxable gain or loss depending upon his basis in
the shares. A gain or loss will be treated as capital gain or loss if the
shares are capital assets in the shareholder's hands, and the rate of tax
will depend upon the shareholder's holding period for the shares. Any loss
realized on a redemption, sale or exchange will be disallowed to the extent
the shares disposed of are replaced (including through reinvestment of
dividends) within a period of 61 days, beginning 30 days before and ending
30 days after the shares are disposed of. In such a case, the basis of the
shares acquired will be adjusted to reflect the disallowed loss. If a
shareholder holds Fund shares for six months or less and during that period
receives a distribution taxable to the shareholder as long-term capital
gain, any loss realized on the sale of such shares during such six month
period would be a long-term capital loss to the extent of such
distribution.
BACKUP WITHHOLDING
The Fund generally will be required to withhold federal income tax at
a rate of 31% ("backup withholding") from dividends paid, capital gain
distributions, and redemption proceeds to shareholders if (1) the
shareholder fails to furnish the Fund with the shareholder's correct
taxpayer identification number or social security number, (2) the IRS
notifies the shareholder or the Fund that the shareholder has failed to
report properly certain interest and dividend income to the IRS and to
respond to notices to that effect, or (3) when required to do so, the
shareholder fails to certify that he or she is not subject to backup
withholding. Any amounts withheld may be credited against the
shareholder's federal income tax liability.
OTHER TAXATION
Distributions may be subject to additional state, local and foreign
taxes, depending on each shareholder's particular situation. Non-U.S.
shareholders may be subject to U.S. tax rules that differ significantly
from those summarized above, including the likelihood that ordinary income
dividends distributed to them will be subject to withholding of U.S. tax at
a rate of 30% (or a lower treaty rate, if applicable). Non-U.S. investors
should consult their own tax advisors regarding federal, state, local and
foreign tax considerations.
FUND INVESTMENTS
Options, Futures and Forward Contracts. Any regulated futures
contracts and certain options in which the Fund may invest may be "section
1256 contracts." Gains (or losses) on these contracts generally are
considered to be 60% long-term and 40% short-term capital gains or losses.
Also, section 1256 contracts held by the Fund at the end of each taxable
year (and on certain other dates prescribed in the Code) are "marked to
market" with the result that unrealized gains or losses are treated as
though they were realized.
Code section 1092, which applies to certain straddles, may affect the
taxation of the Fund's sales of securities and transactions in financial
futures contracts and related options. Under section 1092, the Fund may be
required to postpone recognition of losses incurred in certain sales of
securities and certain closing transactions in financial futures contracts
or related options.
Passive Foreign Investment Companies. The Fund may invest in shares of
foreign corporations that may be classified under the Code as passive
foreign investment companies ("PFICs"). In general, a foreign corporation
is classified as a PFIC if at least one-half of its assets constitute
investment-type assets, or 75% or more of its gross income is investment-
type income. If the Fund receives a so-called "excess distribution" with
respect to PFIC stock, the Fund itself may be subject to a tax on a portion
of the excess distribution, whether or not the corresponding income is
distributed by the Fund to shareholders. In general, under the PFIC rules,
any excess distribution is treated as having been realized ratably over the
period during which the Fund held the PFIC shares. The Fund will itself be
subject to tax on the portion, if any, of an excess distribution that is so
allocated to prior Fund taxable years and an interest factor will be added
to the tax, as if the tax had been payable in such prior taxable years.
Certain distributions from a PFIC as well as gain from the sale of PFIC
shares are treated as excess distributions. Excess distributions are
characterized as ordinary income even though, absent application of the
PFIC rules, certain excess distributions might have been classified as
capital gain.
The Fund may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under one election currently available in some
circumstances, the Fund would be required to include in its gross income
its share of the earnings of a PFIC, on a current basis, whether or not
distributions were received from the PFIC in a given year. Under another
election, the Fund would be required to mark to market the Fund's PFIC
shares at the end of each taxable year, with the result that unrealized
gains would be treated as realized and such gains would be required to be
reported as ordinary income. Any mark-to-market losses and any loss from
an actual disposition of PFIC shares would be deductible as ordinary losses
to the extent of any net mark-to-market gains included in income in prior
years. If either one of these elections were made the special rules,
discussed above, relating to the taxation of excess distributions would not
apply.
Special Code provisions applicable to Fund investments, discussed
above, may affect characterization of gains and losses realized by the
Fund, and may accelerate recognition of income or defer recognition of
losses. The Fund will monitor these investments and when possible will
make appropriate elections in order to mitigate unfavorable tax treatment.
INVESTMENT PERFORMANCE INFORMATION
The investment performance of the Fund quoted in advertising or sales
literature for the sale of its shares will be calculated on a total return
basis which assumes the reinvestment of all dividends and distributions.
Total return is computed by comparing the value of an assumed investment in
Fund shares at the offering price in effect at the beginning of the period
shown with the redemption price of the same investment at the end of the
period (including share(s) accrued thereon by the reinvestment of dividends
and distributions). Performance quotations given as a percentage will be
derived by dividing the amount of such total return by the amount of the
assumed investment. When the period shown is greater than one year, the
result is referred to as cumulative performance or cumulative total return.
Performance quotations will ordinarily be accompanied by the average
annual total return of the Fund for the past ten years as well as its total
return for the past five years and for the twelve months as of the end of
the most recent calendar quarter. Quotations of average annual total
return for periods greater than one year will be the compounded annual rate
of return which equates to the result of the previously described
calculation of cumulative total return.
The formula for computing the annual rate of total return is:
n
P (1 + T) = ERV
P = Investment at the beginning of the period.
T = Compounded annual rate of total return.
n = Number of years.
ERV = Redemption value of the same investment at the end of the period
assuming the reinvestment of all dividends and distributions.
Investors are cautioned that past results are not necessarily
representative of future results; that investment returns and principal
value will fluctuate; that investment performance is primarily a function
of portfolio management (which is affected by the economic and market
environment as well as the volatility of portfolio investments) and
operating expenses; and that performance information, such as that
described above, may not provide a valid basis of comparison with other
investments and investment companies using a different method of computing
performance data.
DESCRIPTION OF THE FUND'S SHARES
The Fund may issue an unlimited number of full and fractional shares
of beneficial interest (par value $.001 per share). The Fund's shares have
no preemptive or conversion rights.
VOTING RIGHTS
Shareholders are entitled to one vote for each share held (and
fractional votes for fractional shares) and may vote on the election of
Trustees and on other matters submitted to meetings of shareholders. As a
Delaware Business Trust, the Fund is not required, and does not intend, to
hold regular annual shareholder meetings but may hold special meetings for
the consideration of proposals requiring shareholder approval such as
changing fundamental policies. In addition, if the Trustees have not
called an annual meeting of shareholders for any year by May 31 of that
year, the Trustees will call a meeting of shareholders upon the written
request of shareholders holding in excess of 50% of the affected shares for
the purpose of removing one or more Trustees or the termination of any
investment advisory agreement. The Declaration of Trust provides that the
Fund's shareholders have the right, upon the vote of more than 662/3 of its
outstanding shares, to remove a Trustee. Except as may be required by the
1940 Act or any other applicable law, the Trustees may amend the
Declaration of Trust in any respect without any vote of shareholders to
make any change that does not (i) impair the exemption from personal
liability as provided therein or (ii) permit assessments on shareholders.
Shareholders have no preemptive or conversion rights except with respect to
shares that may be denominated as being convertible or as otherwise
provided by the Trustees or applicable law. The Fund may be (i) terminated
upon the affirmative vote of a majority of the Trustees or (ii) merged or
consolidated with, or sell all or substantially all of its assets to
another issuer, if such transaction is approved by the vote of two-thirds
of the Trustees without any vote of the shareholders, in each case except
as may be required by the 1940 Act or any other applicable law. If not so
terminated, the Fund intends to continue indefinitely.
LIABILITIES; SEPARATE SERIES OF SHARES
The Fund's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in
the Declaration of Trust protects a Trustee against any liability 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. Under Massachusetts law, shareholders of such a
trust may, under certain circumstances, be held personally liable as
partners for a trust's obligations. However, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself is unable to meet its obligations
since the Declaration of Trust provides for indemnification and
reimbursement of expenses out of the property of the Fund to any
shareholder held personally liable for any obligation of the Fund and also
provides that the Fund shall, if requested, assume the defense of any claim
made against any shareholder for any act or obligation of the Trust and
satisfy any judgment recovered thereon.
The Fund reserves the right to create and issue any number of series
and classes of shares, in which case the shares of each series would
participate equally in the earnings, dividends and assets of the particular
series and would vote separately to approve management agreements , changes
in investment policies and other matters affecting only that series and
requiring shareholder approval under the 1940 Act or other applicable law,
but shares of all series would vote together in the election or selection
of Trustees and accountants and other matters affecting all series and
classes in the same manner. Upon liquidation of the Fund, shareholders of
each series would be entitled to share pro rata (in accordance with net
asset value per share) in the net assets of their respective series
available for distribution to shareholders.
FINANCIAL STATEMENTS
THE GABELLI BLUE CHIP VALUE FUND
BALANCE SHEET
AUGUST 3, 1999
ASSET
Cash $100,000
========
NET ASSETS (applicable to 10,000 shares of
beneficial interest issued and outstanding, $.001
par value, unlimited shares authorized) $100,000
========
Net asset value, offering price and redemption
price per share $10.00
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.
____________________
NOTES TO THE BALANCE SHEET
(1) The Gabelli Blue Chip Value Fund (the "Fund") was organized on May 13,
1999 under the laws of the State of Delaware and will be registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end investment company. The Fund has had no
operations other than organizational matters and the issuance, sale
and offering of 10,000 shares of Beneficial Interest on August 3,
1999, to Gabelli Asset Management Inc., parent company to Gabelli
Funds, LLC (the "Adviser"). Estimated organizational expenses of
$100,000 will be borne by the Adviser.
(2) The preparation of the balance sheet may require management to make
estimates and assumptions that affect the reported amounts of assets
and related disclosures. Actual results may differ from those
estimates.
(3) The Fund intends to enter into an Investment Advisory Agreement with
the Adviser pursuant to which the Adviser will be responsible for
providing investment management and advisory services to the Fund.
For its services, the Adviser will receive a fee computed daily and
payable monthly at an annual rate of 1.00% of the Fund's average daily
net assets.
The Fund also has entered into a Distribution Agreement under which
the Fund's shares will be continuously offered by Gabelli & Company,
Inc., an affiliate of the Adviser. The Fund has adopted a plan under
Rule 12b-1 of the Act which authorizes the Fund to pay, based on the
class of share involved, a 12b-1 fee to finance distribution of the
Fund's shares.
(4) The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code and, as such, will not be
subject to federal income taxes to the extent that it distributes
substantially all taxable income each year.
APPENDIX A
DESCRIPTION OF CORPORATE DEBT RATINGS
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." 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 large than in Aaa securities.
A: Bonds which are rated A possess many favorable investment
attributes 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 of 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.
Unrated: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to
the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities that are not
rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's Investors Services, Inc.'s publications.
Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if
a bond is called for redemption; or for other reasons.
Note: Those bonds in the Aa A, Baa Ba and B groups which Moody's believes
possess the strongest investment attributes are designated by the
symbols Aa-1, A-1, Baa-1 and B-1.
STANDARD & POOR'S RATINGS SERVICE
AAA: Bonds rated AAA have the highest rating assigned by Standard
& Poor's Ratings Service, a division of McGraw Hill
Companies, Inc. Capacity to pay interest and repay principal
is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the higher rated issues
only in small degree.
A: Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible
to the adverse effects of changes in circumstances and
economic conditions than bonds in the highest rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal
for bonds in this category than in higher rated categories.
BB, B Bonds rated BB, B, CCC, CC and C are regarded, on balance,
CCC, as predominantly speculative with respect to capacity to pay
CC, C: interest and repay principal in accordance with the terms of
this obligation. 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, they are outweighed by large uncertainties
of major risk exposures to adverse conditions.
C1: The rating C1 is reserved for income bonds on which no
interest is being paid.
D: Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
Plus (+) The ratings from AA to CCC may be modified by the addition
Or of a plus or minus sign to show relative standing within the
Minus (-) major rating categories.
NR: Indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that
S&P does not rate a particular type of obligation as a
matter of policy.
PART C: OTHER INFORMATION
Item 23.
Exhibits
(a) Declaration of Trust of Registrant*
(b) By-laws of Registrant*
(c) (1) Form of Registrant's Common Stock Certificate - Class AAA
Shares*
(2) Form of Registrant's Common Stock Certificate - Class A
Shares*
(3) Form of Registrant's Common Stock Certificate - Class B
Shares*
(4) Form of Registrant's Common Stock Certificate - Class C
Shares*
(d) Form of Investment Advisory Agreement between Registrant and
Gabelli Funds, LLC*
(e) Form of Distribution Agreement between Registrant and Gabelli &
Company, Inc*
(f) Not applicable
(g) Form of Custodian Contract between Registrant and State
Street Bank and Trust Company*
(h) Form of Transfer Agent and Registrar Services Fee Agreement
between Registrant and State Street Bank and Trust Company*
(i) Opinion of Counsel and Consent of Skadden, Arps, Slate, Meagher &
Flom LLP with respect to legality*
(j) (1) Consent of Independent Auditors*
(2) Report of Independent Auditors*
(k) Not applicable
(l) Purchase Agreement with initial shareholder*
(m) (1) Plan of Distribution pursuant to Rule 12b-1 - Class AAA
Shares*
(2) Plan of Distribution pursuant to Rule 12b-1 - Class A Shares*
(3) Plan of Distribution pursuant to Rule 12b-1 - Class B Shares*
(4) Plan of Distribution pursuant to Rule 12b-1 - Class C Shares*
(n) Financial Data Schedule*
(o) Rule 18f-3 Multi-Class Plan*
--------------
* Filed herewith.
Item 24. Persons Controlled by or Under Common Control with Registrant
None
Item 25. Indemnification
Reference is made to Subdivision (a) of Section 4.2 of Article IV
of Registrant's Declaration of Trust.
Insofar as indemnification of liabilities arising under the 1933
Act may be permitted to trustees, officers and controlling
persons of Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in that Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of
expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in
the 1933 Act and will be governed by the final adjudication of
such issue.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Declaration of Trust, its By-
laws, the Investment Advisory Agreement, the Administration
Agreement and the Distribution Agreement in a manner consistent
with Release No. 11330 of the Securities and Exchange Commission
under the 1940 Act.
Item 26. Business and Other Connections of Investment Adviser
Gabelli Funds, LLC (the "Adviser") is a registered investment
adviser providing investment management and administrative
services to the Registrant. The Adviser also provides similar
services to other mutual funds.
The information required by this Item 26 of directors, officers
or partners of the Adviser, together with information as to any
other business, profession, vocation or employment of a
substantial nature engaged in by the Adviser or such directors,
officers or partners during the past two years, is incorporated
by reference to Form ADV filed by the Adviser under 1940 Act (SEC
File No. 801-37706).
Item 27. Principal Underwriter
(a) Gabelli & Company, Inc. ("Gabelli & Company") currently acts as
distributor for The Gabelli ABC Fund, The Gabelli Asset Fund, The
Gabelli Utilities Fund, The Gabelli Capital Asset Fund, The
Gabelli Equity Income Fund, The Gabelli Global Convertible
Securities Fund, The Gabelli Global Interactive Couch
Potatoregistered trademark Fund, The Gabelli Global
Telecommunications Fund, Gabelli Gold Fund, The Gabelli Growth
Fund, The Gabelli International Growth Fund, Inc., The Gabelli
Global Opportunity Fund, The Gabelli Small Cap Growth Fund, The
Gabelli U.S. Treasury Money Market Fund, The Gabelli Value Fund
Inc. and the Gabelli Westwood Funds.
(b) The information required by this Item 27 with respect to each
director, officer or partner of Gabelli & Company is incorporated
by reference to Schedule A of Form BD filed by Gabelli & Company
under the Securities Exchange Act of 1934, as amended (SEC File
No. 8-21373).
(c) Not applicable.
Item 28. Location of Accounts and Records
All such accounts, books and other documents required by Section
31(a) of the 1940 Act and Rules 31a-1 through 31a-3 thereunder
are maintained at the offices of the Adviser, Gabelli Funds, LLC,
One Corporate Center, Rye, New York 10580-1434, First Data
Investor Services Group, Inc., 101 Federal Street, Boston,
Massachusetts 02110, State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts, 02110 and Boston
Financial Data Services, Inc., Two Heritage Drive, North Quincy,
Massachusetts, 02171.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant, THE GABELLI
BLUE CHIP VALUE FUND, has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized, in the
City of Rye and State of New York, on the 9th day of August, 1999.
THE GABELLI BLUE CHIP VALUE FUND
By: /s/ Bruce N. Alpert
-----------------------------
Bruce N. Alpert
Vice President and Treasurer
___________________________________________________________________________
As required by the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ *
---------------------- Chairman of the Board, August 9, 1999
Mario J. Gabelli President and Trustee
/s/ *
---------------------- Vice President and August 9, 1999
Bruce N. Alpert Treasurer
/s/ * Trustee August 9, 1999
----------------------
Anthony J. Colavita
/s/ * Trustee August 9, 1999
----------------------
Vincent D. Enright
/s/ * Trustee August 9, 1999
----------------------
Karl Otto Pohl
/s/ * Trustee August 9, 1999
----------------------
Werner Roeder, M.D.
*By: /s/ Bruce N. Alpert, attorney in fact
Exhibit 23(a)
THE GABELLI BLUE CHIP VALUE FUND
AGREEMENT
AND DECLARATION OF TRUST
MAY 19, 1999
TABLE OF CONTENTS
ARTICLE I
The Trust
Section 1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Purpose and Powers of Trust . . . . . . . . . . . . . . . 4
ARTICLE II
Trustees
Section 2.1 Number and Qualification . . . . . . . . . . . . . . . . 4
Section 2.2 Term and Election . . . . . . . . . . . . . . . . . . . . 4
Section 2.3 Resignation and Removal . . . . . . . . . . . . . . . . . 5
Section 2.4 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.5 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.6 Officers . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
Powers and Duties of Trustees
Section 3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.2 Investments . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.3 Legal Title . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.4 Issuance and Repurchase of Shares . . . . . . . . . . . . 8
Section 3.5 Borrow Money or Utilize Leverage . . . . . . . . . . . . . 9
Section 3.6 Delegation; Committees. . . . . . . . . . . . . . . . . 9
Section 3.7 Collection and Payment. . . . . . . . . . . . . . . . . 9
Section 3.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.9 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.10 Miscellaneous Powers . . . . . . . . . . . . . . . . . . 10
Section 3.11 Further Powers . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
Limitations of Liability
and Indemnification
Section 4.1 No Personal Liability of Shareholders, Trustees, etc. . 12
Section 4.2 Mandatory Indemnification . . . . . . . . . . . . . . . 12
Section 4.3 No Duty of Investigation; Notice in Trust
Instruments, etc. . . . . . . . . . . . . . . . . . . 14
Section 4.4 Reliance on Experts, etc . . . . . . . . . . . . . . . . 14
ARTICLE V
Shares of Beneficial Interest
Section 5.1 Beneficial Interest . . . . . . . . . . . . . . . . . . 15
Section 5.2 Series Designation. . . . . . . . . . . . . . . . . . 15
Section 5.3 Class Designation. . . . . . . . . . . . . . . . . . . 15
Section 5.4 Description of Shares . . . . . . . . . . . . . . . . . 16
Section 5.5 Rights of Shareholders. . . . . . . . . . . . . . . . 18
Section 5.6 Trust Only . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.7 Issuance of Shares . . . . . . . . . . . . . . . . . . . 19
Section 5.8 Register of Shares. . . . . . . . . . . . . . . . . . 19
Section 5.9 Transfer of Shares . . . . . . . . . . . . . . . . . . . 20
Section 5.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.11 Net Asset Value . . . . . . . . . . . . . . . . . . . . 20
Section 5.12 Distributions to Shareholders. . . . . . . . . . . . . . 21
ARTICLE VI
Shareholders
Section 6.1 Meetings of Shareholders . . . . . . . . . . . . . . . . 21
Section 6.2 Voting . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.3 Notice of Meeting, Shareholder Proposals and Record
Date . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.4 Quorum and Required Vote . . . . . . . . . . . . . . . . 23
Section 6.5 Proxies, etc. . . . . . . . . . . . . . . . . . . . . . 23
Section 6.6 Reports . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.7 Inspection of Records . . . . . . . . . . . . . . . . . 24
Section 6.8 Shareholder Action by Written Consent . . . . . . . . . 24
ARTICLE VII
Redemption
Section 7.1 Redemptions . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.2 Disclosure of Holding . . . . . . . . . . . . . . . . . 25
Section 7.3 Redemptions of Small Accounts . . . . . . . . . . . . . 25
ARTICLE VIII
Duration: Termination of Trust;
Amendment; Mergers, Etc.
Section 8.1 Duration . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.2 Termination. . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.3 Amendment Procedure. . . . . . . . . . . . . . . . . . . 27
Section 8.4 Merger, Consolidation and Sale of Assets . . . . . . . . 28
ARTICLE IX
Miscellaneous
Section 9.1 Filing . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.2 Resident Agent . . . . . . . . . . . . . . . . . . . . . 29
Section 9.3 Governing Law . . . . . . . . . . . . . . . . . . . . . 29
Section 9.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.5 Reliance by Third Parties . . . . . . . . . . . . . . . 30
Section 9.6 Provisions in Conflict with Law or Regulation . . . . . 30
THE GABELLI BLUE CHIP VALUE FUND
AGREEMENT
AND
DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made as of the 19th day of
May, 1999, by the Trustees hereunder, and by the holders of shares of
beneficial interest issued hereunder as hereinafter provided.
WHEREAS, this Trust has been formed to carry on business as set
forth more particularly hereinafter;
WHEREAS, this Trust is authorized to issue an unlimited number of
its shares of beneficial interest in separate series and classes of each
such series, each separate series to be a sub-trust hereunder, all in
accordance with the provisions hereinafter set forth;
WHEREAS, the Trustees have agreed to manage all property coming
into their hands as Trustees of a Delaware business trust in accordance
with the provisions hereinafter set forth; and
WHEREAS, the parties hereto intend that the Trust created by this
Declaration and the Certificate of Trust filed with the Secretary of State
of the State of Delaware on May 13, 1999 shall constitute a business trust
under the Delaware Business Trust Statute and that this Declaration shall
constitute the governing instrument of such business trust.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities, and other assets which they may from time to time acquire
in any manner as Trustees hereunder IN TRUST to manage and dispose of the
same upon the following terms and conditions for the benefit of the holders
from time to time of shares of beneficial interest in this Trust or sub-
trusts created hereunder as hereinafter set forth.
ARTICLE I
The Trust
Section 1.1 Name. This Trust shall be known as "The Gabelli
Blue-Chip Value Fund" and the Trustees shall conduct the business of the
Trust under that name or any other name or names as they may from time to
time determine.
Section 1.2 Definitions. As used in this Declaration, the
following terms shall have the following meanings:
"By-Laws" shall mean the By-Laws of the Trust as amended from time
to time by the Trustees.
"Class" shall mean a portion of Shares of a Series of the Trust
established in accordance with Section 5.3 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
"Commission" shall mean the Securities and Exchange Commission.
"Declaration" shall mean this Agreement and Declaration of Trust,
as amended or amended and restated from time to time, including by way of
any classifying or reclassifying Shares of any Series or any Class of any
such Series or determining any designations, powers, preferences, voting,
conversion and other rights, limitations, qualifications and terms and
conditions thereof.
"Delaware Business Trust Statute" shall mean the provisions of the
Delaware Business Trust Act, 12 Del. C. section3801, et. seq., as such Act
may be amended from time to time.
"Fundamental Policies" shall mean the investment policies and
restrictions set forth from time to time in any Prospectus of the Trust or
any Series that are expressly designated therein as fundamental policies of
such Series.
"Interested Person" shall have the meaning ascribed thereto in the
1940 Act.
"Majority Shareholder Vote" shall mean a vote of a "majority of the
outstanding voting securities" (as such term is defined in the 1940 Act) of
the Trust, any Series of the Trust or any Class thereof, as applicable.
The "1940 Act" refers to the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder and applicable exemptions
therefrom, as amended from time to time.
The "1933 Act" refers to the Securities Act of 1933, and the rules
and regulations promulgated thereunder and applicable exemptions therefrom,
as amended from time to time.
"Person" shall mean and include natural persons, corporations,
partnerships, trusts, limited liability companies, associations, joint
ventures and other entities, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"Prospectus" shall mean the current Prospectus of the Trust or of
any Series thereof or of any Class of any such Series, as applicable.
"Series" shall mean the separate sub-trusts that may be established
and designated as series pursuant to Section 5.2 hereof or any one of such
sub-trusts, as applicable.
"Shareholders" shall mean as of any particular time the holders of
record of outstanding Shares of the Trust, any Series of the Trust or any
Class of any Series, as applicable, at such time.
"Shares" shall mean the transferable units of beneficial interest
into which the beneficial interest in the Trust or in a Series of the Trust
shall be divided from time to time and includes fractions of Shares as well
as whole Shares, which Shares may be divided into Series and Classes. All
references to Shares shall be deemed to be Shares of any or all Series or
Classes as the context may require.
"Trust" shall mean the trust established by this Declaration, as
amended from time to time, inclusive of each such amendment and every sub-
trust established as a Series hereunder.
"Trustees" shall mean the signatory to this Declaration, so long as
such signatory shall continue in office in accordance with the terms
hereof, and all other persons who at the time in question have been duly
elected or appointed and have qualified as trustees in accordance with the
provisions hereof and are then in office.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is
owned or held by or for the account of the Trust or the Trustees in such
capacity.
Section 1.3 Purpose and Powers of Trust. The Trust is
established for the purpose of engaging in any activity not prohibited by
Delaware law and shall have the power to engage in any such activity and in
any activity incidental or related to any such activity.
ARTICLE II
Trustees
Section 2.1 Number and Qualification. Prior to any offering of
Shares, there may be a sole Trustee and thereafter the number of Trustees
shall be such number, not less than three or more than fifteen, as shall be
set forth in a written instrument signed or adopted by a majority of the
Trustees then in office. No reduction in the number of Trustees shall have
the effect of removing any Trustee from office prior to the expiration of
his or her term. An individual nominated as a Trustee shall be at least 21
years of age and not older than such age as may be set forth in a written
instrument signed or adopted by not less than a majority of the Trustees
then in office and shall not be under legal disability. Trustees need not
own Shares and may succeed themselves in office.
Section 2.2 Term and Election. Except for the Trustees
appointed to fill vacancies pursuant to Section 2.4 hereof, each Trustee
shall be elected to serve until death, resignation, removal, reelection by
written ballot at the annual meeting, if one is held, or at any special
meeting. Subject to Section 2.4 hereof, each Trustee named herein or
elected or appointed pursuant to the terms hereof shall hold office until
such Trustee's successor has been elected at such meetings and has
qualified to serve as Trustee. Election of Trustees at a meeting shall be
by the affirmative vote of the holders of a plurality of the Shares present
in person or by proxy. Each individual elected or appointed as a Trustee
of the Trust shall, unless otherwise provided by such election or
appointment, by such election or appointment also thereby be elected or
appointed, as the case may be, as a Trustee of each Series of the Trust
then in existence. The election or appointment of any Trustee (other than
an individual who was serving as a Trustee immediately prior thereto) shall
not become effective unless and until such person shall have in writing
accepted his election and agreed to be bound by the terms of this
Declaration.
Section 2.3 Resignation and Removal. Any Trustee may resign his
trust (without need for prior or subsequent accounting) by an instrument in
writing signed by him and delivered or mailed to the Chairman, if any, the
President or the Secretary and such resignation shall be effective upon
such delivery, or at a later date according to the terms of the instrument.
Any Trustee may be removed (provided the aggregate number of Trustees after
such removal shall not be less than the number required by Section 2.1
hereof) for cause at any time by written instrument, signed by two-thirds
of the remaining Trustees, specifying the date when such removal shall
become effective. Any Trustee may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the minimum
number required by Section 2.1 hereof) without cause at any time by a
written instrument, signed or adopted by two-thirds of the remaining
Trustees or by vote of Shares having not less than two-thirds of the
aggregate number of Shares entitled to vote in the election of such
Trustee, specifying the date when such removal shall become effective.
Upon the resignation or removal of a Trustee, or such persons otherwise
ceasing to be a Trustee, such persons shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of
conveying to the Trust or the remaining Trustees any Trust Property held in
the name of the resigning or removed Trustee. Upon the incapacity or death
of any Trustee, such Trustee's legal representative shall execute and
deliver on such Trustee's behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
Section 2.4 Vacancies. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of the death, resignation,
bankruptcy, adjudicated incompetence or other incapacity to perform the
duties of the office, or removal, of a Trustee. Whenever a vacancy in the
Board of Trustees shall occur, the remaining Trustees may fill such vacancy
by appointing an individual having the qualifications described in this
Article by a written instrument signed or adopted by a majority of the
Trustees then in office or by election by the Shareholders, or may leave
such vacancy unfilled or may reduce the number of Trustees (provided the
aggregate number of Trustees after such reduction shall not be less than
the minimum number required by Section 2.1 hereof). Any vacancy created by
an increase in Trustees may be filled by the appointment of an individual
having the qualifications described in this Article made by a written
instrument signed by a majority of the Trustees then in office or by
election by the Shareholders. No vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms
of this Declaration. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided herein, the Trustees in
office, regardless of their number, shall have all the powers granted to
the Trustees and shall discharge all the duties imposed upon the Trustees
by this Declaration.
Section 2.5 Meetings. Meetings of the Trustees shall be held
from time to time upon the call of the Chairman, if any, the President, the
Secretary or any two Trustees. Regular meetings of the Trustees may be
held without call or notice at a time and place fixed by the By-Laws or by
the Trustees. Notice of any other meeting shall be mailed not less than 48
hours before the meeting or otherwise actually delivered orally or in
writing not less than 24 hours before the meeting, but may be waived in
writing by any Trustee either before or after such meeting. The attendance
of a Trustee at a meeting shall constitute a waiver of notice of such
meeting except where a Trustee attends a meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting
has not been lawfully called or convened. The Trustees may act with or
without a meeting. A quorum for all meetings of the Trustees shall be one-
third of the Trustees. Unless provided otherwise in this Declaration of
Trust, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a
meeting by written consent of a majority of the Trustees or such other
proportion as shall be specified herein for action at a meeting at which
all Trustees then in office are present.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any
such committee shall be a majority of the members thereof. Unless provided
otherwise in this Declaration, any action of any such committee may be
taken at a meeting by vote of a majority of the members present (a quorum
being present) or without a meeting by written consent of a majority of the
members or such other proportion as shall be specified herein for action at
a meeting at which all committee members are present.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons in any action to be taken may
be counted for quorum purposes under this Section and shall be entitled to
vote to the extent not prohibited by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone,
internet connection or similar communications equipment by means of which
all persons participating in the meeting can hear or otherwise communicate
with each other; participation in a meeting pursuant to any such
communications system shall constitute presence in person at such meeting
except as otherwise provided by the 1940 Act.
Section 2.6 Officers. The Trustees shall elect a President, a
Secretary and a Treasurer and may elect a Chairman who shall serve at the
pleasure of the Trustees or until their successors are elected. The
Trustees may elect or appoint or may authorize the Chairman, if any, or
President to appoint such other officers or agents with such other titles
and powers as the Trustees may deem to be advisable. A Chairman shall, and
the President, Secretary and Treasurer may, but need not, be a Trustee.
ARTICLE III
Powers and Duties of Trustees
Section 3.1 General. The Trustees shall owe to the Trust and
its Shareholders the same fiduciary duties as owed by directors of
corporations to such corporations and their stockholders under the general
corporation law of the State of Delaware. The Trustees shall have
exclusive and absolute control over the Trust Property and over the
business of the Trust or any Series thereof to the same extent as if the
Trustees were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees shall have power to engage in any activity not
prohibited by Delaware law. The enumeration of any specific power herein
shall not be construed as limiting the aforesaid power. The Trustees may
perform such acts as in their sole discretion are proper for conducting the
business of the Trust. The powers of the Trustees may be exercised without
order of or resort to any court. No Trustee shall be obligated to give any
bond or other security for the performance of any of his duties or powers
hereunder.
Section 3.2 Investments. The Trustees shall have power to:
(a) manage, conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of any and all sorts of
property, tangible or intangible, including but not limited to securities
of any type whatsoever, whether equity or non-equity, of any issuer,
evidences of indebtedness of any person and any other rights, interests,
instruments or property of any sort and to exercise any and all rights,
powers and privileges of ownership or interest in respect of any and all
such investments of every kind and description, including, without
limitation, the right to consent and otherwise act with respect thereto,
with power to designate one or more Persons to exercise any of said rights,
powers and privileges in respect of any of said investments. The Trustees
shall not be limited by any law limiting the investments which may be made
by fiduciaries.
Section 3.3 Legal Title. Legal title to all the Trust Property
shall be vested in the Trustees as joint tenants except that the Trustees
shall have power to cause legal title to any Trust Property to be held by
or in the name of one or more of the Trustees, or in the name of the Trust,
or any Series thereof, or in the name of any other Person as nominee,
custodian or pledgee, on such terms as the Trustees may determine, provided
that the interest of the Trust or any Series thereof therein is
appropriately protected.
The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each person who may hereafter become a Trustee
upon his due election and qualification. Upon the ceasing of any person to
be a Trustee for any reason, such person shall automatically cease to have
any right, title or interest in any of the Trust Property, and the right,
title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered.
Section 3.4 Issuance and Repurchase of Shares. Subject to the
provisions of this Declaration and applicable law, the Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in, Shares,
including Shares in fractional denominations, shall have the power to
establish from time to time in accordance with the provisions of Section
5.2 and 5.3 hereof Series and Classes representing interests in the Trust
or a Series thereof and, subject to the more detailed provisions set forth
in Article VII, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds or property of the
applicable Series of the Trust whether capital or surplus or otherwise, to
the full extent now or hereafter permitted by the laws of the State of
Delaware governing business corporations.
Section 3.5 Borrow Money or Utilize Leverage. The Trustees
shall have the power to borrow money or otherwise obtain credit or utilize
leverage in connection with the activities of the Trust to the maximum
extent permitted by law, regulation or order and the Fundamental Policies
of any Series and to secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the Trust or any Series thereof,
including the lending of portfolio securities, and to endorse, guarantee,
or undertake the performance of any obligation, contract or engagement of
any other person, firm, association or corporation; provided, however, that
the assets of any particular Series shall not be used as security for any
credit extended solely to one or more other Series.
Section 3.6 Delegation; Committees. The Trustees shall have
power, consistent with their continuing exclusive authority over the
management of the Trust and the Trust Property, to delegate from time to
time to such of their number or to officers, employees or agents of the
Trust the doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Trustees or otherwise as the
Trustees may deem expedient, to at least the same extent as such delegation
is permitted to directors of a Delaware business corporation and is
permitted by the 1940 Act, as well as any further delegations the Trustees
may determine to be desirable, expedient or necessary in order to effect
the purpose hereof. The Trustees may designate one or more committees
which shall have all or such lesser portion of the authority of the entire
Board of Trustees as the Trustees shall determine from time to time except
to the extent action by the entire Board of Trustees or particular Trustees
is required by the 1940 Act.
Section 3.7 Collection and Payment. The Trustees shall have
power to collect all property due to the Trust or any Series of the Trust
or any Class thereof; to pay all claims, including taxes, against the Trust
Property, the Trust or any Series of the Trust or any Class thereof, the
Trustees or any officer, employee or agent of the Trust; to prosecute,
defend, compromise or abandon any claims relating to the Trust Property,
the Trust or any Series of the Trust or any Class thereof, or the Trustees
or any officer, employee or agent of the Trust; to foreclose any security
interest securing any obligations, by virtue of which any property is owed
to the Trust or any Series of the Trust or any Class thereof; and to enter
into releases, agreements and other instruments. Except to the extent
required for a Delaware business corporation, the Shareholders shall have
no power to vote as to whether or not a court action, legal proceeding or
claim should or should not be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders.
Section 3.8 Expenses. The Trustees shall have power to incur
and pay out of the assets or income of the Trust or any Series of the Trust
or any Class thereof, any expenses which in the opinion of the Trustees are
necessary or appropriate to carry out any of the purposes of this
Declaration, and the business of the Trust or any Series of the Trust or
any Class thereof, and to pay reasonable compensation from the funds of the
Trust to themselves as Trustees. The Trustees shall fix the compensation
of all officers, employees and Trustees. The Trustees may pay themselves
such compensation for special services, including legal, underwriting,
syndicating and brokerage services, as they in good faith may deem
reasonable and reimbursement for expenses reasonably incurred by themselves
on behalf of the Trust. The Trustees shall have the power, as frequently
as they may determine, to cause each Shareholder, or each Shareholder of
any particular Series or Class thereof, to pay directly, in advance or
arrears, for charges of distribution, of the custodian or transfer,
shareholder servicing or similar agent of such Series or Class, a pro rata
amount as defined from time to time by the Trustees, by setting off such
charges due from such Shareholder from declared but unpaid dividends or
distributions owed such Shareholder and/or by reducing the number of shares
in the account of such Shareholder by that number of full and/or fractional
Shares which represents the outstanding amount of such charges due from
such Shareholder.
Section 3.9 By-Laws. The Trustees may adopt and from time to
time amend or repeal By-Laws for the conduct of the business of the Trust.
Such By-Laws shall be binding on the Trust and the Shareholders unless
inconsistent with the provisions of this Declaration. The Shareholders
shall not have authority to adopt or amend By-Laws.
Section 3.10 Miscellaneous Powers. The Trustees shall have the
power to: (a) employ or contract with such Persons as the Trustees may
deem desirable for the transaction of the business of the Trust or any
Series thereof, including investment advisors, administrators, custodians,
transfer agents, shareholder services providers, accountants, counsel,
brokers, dealers and others; (b) enter into joint ventures, partnerships
and any other combinations or associations; (c) purchase, and pay for out
of Trust Property, insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisors, distributors, selected
dealers or independent contractors of the Trust or any Series thereof
against all claims arising by reason of holding any such position or by
reason of any action taken or omitted by any such Person in such capacity,
whether or not constituting negligence, or whether or not the Trust would
have the power to indemnify such Person against such liability; (d)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and
agents of the Trust; (e) make donations, irrespective of benefit to the
Trust, for charitable, religious, educational, scientific, civic or similar
purposes; (f) to the extent permitted by applicable law, indemnify any
Person with whom the Trust or any Series thereof has dealings, including
without limitation any investment advisor, administrator, manager, transfer
agent, custodian, distributor or selected dealer, or any other person as
the Trustees may see fit to such extent as the Trustees shall determine;
(g) guarantee indebtedness or contractual obligations of others; (h)
determine and change the fiscal year of the Trust and the method in which
its accounts shall be kept; and (i) adopt a seal for the Trust but the
absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust.
Section 3.11 Further Powers. The Trustees shall have the power
to conduct the business of the Trust or any Series of the Trust or any
Class thereof and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any
and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies,
colonies, possessions, agencies or instrumentalities of the United States
of America and of foreign governments, and to do all such other things and
execute all such instruments as they deem necessary, proper or desirable in
order to promote the interests of the Trust or any Series of the Trust or
any Class thereof although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust
or any Series of the Trust or any Class thereof made by the Trustees in
good faith shall be conclusive. In construing the provisions of this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
ARTICLE IV
Limitations of Liability
and Indemnification
Section 4.1 No Personal Liability of Shareholders, Trustees,
etc. No Shareholder of the Trust shall be subject in such capacity to any
personal liability whatsoever to any Person in connection with Trust
Property or the acts, obligations or affairs of the Trust. Shareholders
shall have the same limitation of personal liability as is extended to
stockholders of a private corporation for profit incorporated under the
general corporation law of the State of Delaware. No Trustee, officer,
employee or agent of the Trust or any Series of the Trust shall be subject
in such capacity to any personal liability whatsoever to any Person, other
than the Trust or the respective Series or the Shareholders, in connection
with Trust Property or the affairs of the Trust or the respective Series,
save only liability to the Trust or its Shareholders arising from bad
faith, willful misfeasance, gross negligence or reckless disregard for his
duty to such Person; and, subject to the foregoing exception, all such
Persons shall look solely to the Trust Property for satisfaction of claims
of any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee or officer, as such, of the Trust, is made a party to
any suit or proceeding to enforce any such liability, subject to the
foregoing exception, he shall not, on account thereof, be held to any
personal liability.
Section 4.2 Mandatory Indemnification. (a) The Trust shall
indemnify the Trustees and officers of the Trust (each such person being an
"indemnitee") against any liabilities and expenses, including amounts paid
in satisfaction of judgments, in compromise or as fines and penalties, and
reasonable counsel fees reasonably incurred by such indemnitee in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative
or investigative body in which he may be or may have been involved as a
party or otherwise (other than, except as authorized by the Trustees, as
the plaintiff or complainant) or with which he may be or may have been
threatened, while acting in any capacity set forth above in this Section
4.2 by reason of his having acted in any such capacity, except with respect
to any matter as to which he shall not have acted in good faith in the
reasonable belief that his action was in the best interest of the Trust or
the respective Series of the Trust or Class thereof and furthermore, in the
case of any criminal proceeding, as to which he shall have had reasonable
cause to believe that the conduct was unlawful, provided, however, that no
indemnitee shall be indemnified hereunder against any liability to any
person or any expense of such indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence (negligence in the case
of indemnitees that are affiliates of the Trust), or (iv) reckless
disregard of the duties involved in the conduct of his position.
Notwithstanding the foregoing, with respect to any action, suit or other
proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action,
suit or other proceeding by such indemnitee was authorized by a majority of
the Trustees.
(b) Notwithstanding the foregoing, no indemnification shall
be made hereunder unless there has been a determination (1) by a final
decision on the merits by a court or other body of competent jurisdiction
before whom the issue of entitlement to indemnification hereunder was
brought that such indemnitee is entitled to indemnification hereunder or,
(2) in the absence of such a decision, by (i) a majority vote of a quorum
of those Trustees who are neither Interested Persons of the Trust nor
parties to the proceeding ("Disinterested Non-Party Trustees"), that the
indemnitee is entitled to indemnification hereunder, or (ii) if such quorum
is not obtainable or even if obtainable, if such majority so directs,
independent legal counsel in a written opinion conclude that the indemnitee
should be entitled to indemnification hereunder. All determinations to
make advance payments in connection with the expense of defending any
proceeding shall be authorized and made in accordance with the immediately
succeeding paragraph (c) below.
(c) The Trust shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification
might be sought hereunder if the Trust receives a written affirmation by
the indemnitee of the indemnitee's good faith belief that the standards of
conduct necessary for indemnification have been met and a written
undertaking to reimburse the Trust unless it is subsequently determined
that he is entitled to such indemnification and if a majority of the
Trustees determine that the applicable standards of conduct necessary for
indemnification appear to have been met. In addition, at least one of the
following conditions must be met: (1) the indemnitee shall provide
adequate security for his undertaking, (2) the Trust shall be insured
against losses arising by reason of any lawful advances, or (3) a majority
of a quorum of the Disinterested Non-Party Trustees, or if a majority vote
of such quorum so direct, independent legal counsel in a written opinion,
shall conclude, based on a review of readily available facts (as opposed to
a full trial-type inquiry), that there is substantial reason to believe
that the indemnitee ultimately will be found entitled to indemnification.
(d) The rights accruing to any indemnitee under these
provisions shall not exclude any other right to which he may be lawfully
entitled.
(e) Notwithstanding the foregoing, subject to any limitations
provided by the 1940 Act and this Declaration, the Trust shall have the
power and authority to indemnify Persons providing services to the Trust to
the full extent provided by law as if the Trust were a corporation
organized under the Delaware General Corporation Law provided that such
indemnification has been approved by a majority of the Trustees.
Section 4.3 No Duty of Investigation; Notice in Trust
Instruments, etc. No purchaser, lender, transfer agent or other person
dealing with the Trustees or with any officer, employee or agent of the
Trust or any Series of the Trust or Class thereof shall be bound to make
any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by said officer, employee or agent or be liable for
the application of money or property paid, loaned, or delivered to or on
the order of the Trustees or of said officer, employee or agent. Every
obligation, contract, undertaking, instrument, certificate, Share, other
security of the Trust or any Series of the Trust or any Class thereof, and
every other act or thing whatsoever executed in connection with the Trust
or any Series of the Trust or Class thereof shall be conclusively taken to
have been executed or done by the executors thereof only in their capacity
as Trustees under this Declaration or in their capacity as officers,
employees or agents of the Trust. The Trustees may maintain insurance for
the protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to
cover possible liability, and such other insurance as the Trustees in their
sole judgment shall deem advisable or is required by the 1940 Act.
Section 4.4 Reliance on Experts, etc. Each Trustee and officer
or employee of the Trust or any Series of the Trust shall, in the
performance of its duties, be fully and completely justified and protected
with regard to any act or any failure to act resulting from reliance in
good faith upon the books of account or other records of the Trust or any
Series of the Trust or Class thereof, upon an opinion of counsel, or upon
reports made to the Trust or any Series thereof by any of the Trust's
officers or employees or by any advisor, administrator, manager,
distributor, selected dealer, accountant, appraiser or other expert or
consultant selected with reasonable care by the Trustees, officers or
employees of the Trust, regardless of whether such counsel or other person
may also be a Trustee.
ARTICLE V
Shares of Beneficial Interest
Section 5.1 Beneficial Interest. The interest of the
beneficiaries hereunder shall be divided into an unlimited number of shares
of beneficial interest, par value $.001 per share. All Shares issued in
accordance with the terms hereof, including, without limitation, Shares
issued in connection with a dividend in Shares or a split of Shares, shall
be fully paid and nonassessable when the consideration determined by the
Trustees (if any) therefor shall have been received by the Trust.
Section 5.2 Series Designation. The Trustees, in their
discretion from time to time, may authorize the division of Shares into two
or more Series, each Series relating to a separate portfolio of investments
and each of which Series shall be a separate and distinct subtrust of the
Trust. Each Series so established hereunder shall be deemed to be a
separate trust under the provisions of Delaware law. The Trustees shall
have exclusive power without the requirement of Shareholder approval to
establish and designate such separate and distinct Series and to fix and
determine the relative rights and preferences as between the different
Series. The establishment and designation of any Series shall be effective
upon the execution by a majority of the Trustees of an instrument setting
forth the establishment and designation of such Series. Such instrument
shall also set forth any rights and preferences of such Series which are in
addition to the rights and preferences of Shares set forth in this
Declaration. At any time that there are no Shares outstanding of any
particular Series previously established and designated, the Trustees may
by an instrument executed by a majority of their number abolish or alter
that Series and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration.
Section 5.3 Class Designation. The Trustees, in their
discretion from time to time, may authorize the division of Shares of the
Trust or any Series into two or more Classes of Shares all the assets of
which shall be commingled with the other Classes of such Series. The
Trustees shall have exclusive power without the requirement of Shareholder
approval to establish and designate such separate and distinct Classes and
to fix and determine the relative rights, terms, conditions and expenses
applicable to each Class of Shares to the maximum extent permitted by the
1940 Act. The establishment and designation of any Class of Shares shall
be effective upon the affirmative vote of a majority of the Trustees of the
Trust, including the Trustees who are not interested persons of the Trust.
At any time that there are no Shares outstanding of any particular Class
previously established and designated, the Trustees may, by the affirmative
vote of a majority of the Trustees, including a majority of the Trustees
who are not interested persons of the Trust, abolish or alter that Class
and the establishment and designation thereof.
Section 5.4 Description of Shares. If the Trustees shall
create sub-trusts and divide the Shares into one or more Series or create
Classes of Shares, the following provisions shall be applicable:
(a) Number of Shares. The number of Shares of each Series or
Class that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more Series or Classes that
may be established and designated from time to time. The Trustees may hold
as treasury Shares (of the same or some other Series or Class), reissue for
such consideration and on such terms as they may determine, or cancel any
Shares of any Series or Class reacquired by the Trust at their discretion
from time to time.
(b) Investment of Property. The power of the Trustees to
invest and reinvest the Trust Property of each Series that may be
established shall be governed by Section 3.2 of this Declaration.
(c) Allocation of Assets. All consideration received by the
Trust for the issue or sale of Shares of a particular Series or Class,
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 payment derived from any reinvestment of such proceeds in
whatever form the same may be, together with such Series' or Class' share
of any assets of the Trust not otherwise allocated to any particular Series
or Class, shall be held by the Trustees and Trust for the benefit of the
Shareholders of such Series and, subject to the rights of creditors of such
Series only, shall irrevocably belong to that Series for all purposes, and
shall be so recorded upon the books of account of the Trust. In the event
that there are any assets, income, earnings, profits, and proceeds thereof,
funds or payments which are not readily identifiable as belonging to any
particular Series, the Trustees shall allocate them among any one or more
of the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable, and anything so allocated to a Series shall belong to such
Series. Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(d) Allocation of Expenses. The assets belonging to each
particular Series or attributable to each particular Class shall be charged
with the liabilities of the Trust in respect of that Series or Class and
all expenses, costs, charges and reserves attributable to that Series or
Class, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series or attributable to any particular Class shall be allocated and
charged by the Trustees to and among any one or more of the Series or
Classes established and designated from time to time in such manner and on
such basis as the Trustees in their sole discretion deem fair and
equitable; provided that any incremental expenses allocated to one or more
Classes of Shares on a basis other than the relative net asset values of
the respective Classes shall be allocated in a manner consistent with the
1940 Act. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Series and Classes for all purposes. The Trustees
shall have full discretion, to the extent not inconsistent with the 1940
Act, to determine which items shall be treated as income and which items as
capital, and each such determination and allocation shall be conclusive and
binding upon the Shareholders. Under no circumstances shall the assets
allocated or belonging to a particular Series or attributable to a
particular Class be charged with any liabilities attributable to another
Series or Class. Any creditor may look only to the assets of the
particular Series with respect to which such person is a creditor for
satisfaction of such creditor's debt.
(e) Dividends. The power of the Trustees to pay dividends
and make distributions with respect to any one or more Series shall be
governed by Section 5.12 of this Trust. Dividends and distributions on
Shares of a particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with such frequency
as the Trustees may determine, to the holders of Shares of that Series,
from such of the income and capital gains, accrued or realized, from the
assets belonging to that Series, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Series. All
dividends and distributions on each Class of a Series shall be distributed
pro rata to the holders of Shares of that Class in proportion to the number
of Shares of that Class held by such holders at the date and time of record
established for the payment of such dividends or distributions, and such
dividends and distributions need not be pro rata with respect to dividends
and distributions paid to Shares of any other Class of such Series.
Dividends and distributions shall be paid with respect to Shares of a given
Class only out of lawfully available assets attributable to such Class.
Section 5.5 Rights of Shareholders. The Shares shall be
personal property giving only the rights in this Declaration specifically
set forth. The ownership of the Trust Property of every description and
the right to conduct any business herein before described are vested
exclusively in the Trustees, and the Shareholders shall have no interest
therein other than the beneficial interest conferred by their Shares, with
respect to a particular Series of Class and they shall have no right to
call for any partition or division of any property, profits, rights or
interests of the Trust nor can they be called upon to share or assume any
losses of the Trust or, subject to the right of the Trustees to charge
certain expenses directly to Shareholders, as provided in the last sentence
of Section 3.8, suffer an assessment of any kind by virtue of their
ownership of Shares. The Shares shall not entitle the holder to
preference, preemptive, appraisal, conversion or exchange rights (except as
specified in this Section 5.5 or in Section 8.4 or as specified by the
Trustees in the designation or redesignation of any Series or Class
thereof). Notwithstanding anything to the contrary contained herein:
(i) Any Class of shares denominated as being convertible
automatically, and without any action or choice on the part of the
holder thereof, or shares denominated as being convertible based on an
election of the holder thereof, into any other Class of Shares (or
fractions thereof) pursuant to such terms, conditions and restrictions
as may be established by the Board of Trustees and set forth from time
to time in the applicable Prospectus with respect to such Shares shall
be convertible on such terms as are described in such Prospectus.
(ii) The number of Shares into which each such
convertible Share shall convert pursuant to the foregoing paragraph
shall equal the number (including for this purpose fractions of a Share)
obtained by dividing the net asset value per share of the convertible
Shares for purposes of sales and redemptions thereof on the date of such
conversion (the "Conversion Date") by the net asset value per share of
the Class of Shares being converted into for purposes of sales and
redemptions thereof on the Conversion Date.
(iii) On the Conversion Date, those Shares which are
converted into another Class of Shares shall cease to accrue dividends
and will no longer be deemed outstanding and the rights of the holders
thereof (except the right to receive dividends declared prior to the
Conversion Date but unpaid as of the Conversion Date) will cease.
Certificates representing Shares resulting from conversion may be issued
pursuant to such terms and conditions as may be established from time to
time by the Board of Trustees.
Section 5.6 Trust Only. It is the intention of the Trustees to
create only the relationship of Trustee and beneficiary between the
Trustees and each Shareholder from time to time. It is not the intention
of the Trustees to create a general partnership, limited partnership, joint
stock association, corporation, bailment or any form of legal relationship
other than a trust. Nothing in this Declaration shall be construed to make
the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
Section 5.7 Issuance of Shares. The Trustees, in their
discretion, may from time to time without vote of the Shareholders issue
Shares with respect to any Series that may have been established pursuant
to Section 5.2, in addition to the then issued and outstanding Shares and
Shares held in the treasury, to such party or parties and for such amount
and type of consideration, including cash or property, at such time or
times, and on such terms as the Trustees may determine, and may in such
manner acquire other assets (including the acquisition of assets subject
to, and in connection with the assumption of, liabilities) and businesses.
The Trustees may from time to time divide or combine the Shares of any
Series into a greater or lesser number without thereby changing the
proportionate beneficial interest in such Series of the Trust. Issuances
and redemptions of Shares may be made in whole Shares and/or l/l,000ths of
a Share or multiples thereof as the Trustees may determine in such
fractions thereof.
Section 5.8 Register of Shares. A register shall be kept at the
Trust or any transfer agent duly appointed by the Trustees under the
direction of the Trustees which shall contain the names and addresses of
the Shareholders and the number of Shares held by them respectively and a
record of all transfers thereof. Separate registers shall be established
and maintained for each Series of the Trust and each Class thereof. Each
such register shall be conclusive as to who are the holders of the Shares
of the applicable Series and Classes thereof and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the
rights of Shareholders. No Shareholder shall be entitled to receive
payment of any dividend or distribution, nor to have notice given to him as
herein provided, until he or she has given his or her address to a transfer
agent or such other officer or agent of the Trustees as shall keep the
register for entry thereon. It is not contemplated that certificates will
be issued for the Shares; however, the Trustees, in their discretion, may
authorize the issuance of share certificates and promulgate appropriate
fees therefore and rules and regulations as to their use.
Section 5.9 Transfer of Shares. Shares shall be transferable on
the records of the Trust only by the record holder thereof or by its agent
thereto duly authorized in writing, upon delivery to the Trustees or a
transfer agent of the Trust of a duly executed instrument of transfer,
together with such evidence of the genuineness of each such execution and
authorization and of other matters as may reasonably be required. Upon
such delivery the transfer shall be recorded on the applicable register of
the Trust. Until such record is made, the Shareholder of record shall be
deemed to be the holder of such Shares for all purposes hereof and neither
the Trustees nor any transfer agent or registrar nor any officer, employee
or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the
death, bankruptcy, or incompetence of any Shareholder, or otherwise by
operation of law, shall be recorded on the applicable register of Shares as
the holder of such Shares upon production of the proper evidence thereof to
the Trustees or a transfer agent of the Trust, but until such record is
made, the Shareholder of record shall be deemed to be the holder of such
for all purposes hereof, and neither the Trustees nor any transfer agent or
registrar nor any officer or agent of the Trust shall be affected by any
notice of such death, bankruptcy or incompetence, or other operation of
law.
Section 5.10 Notices. Any and all notices to which any
Shareholder hereunder may be entitled and any and all communications to any
Shareholder shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his or her last known
address as recorded on the applicable register of the Trust and may be sent
together with any such notice or other communication to another Shareholder
at the same address.
Section 5.11 Net Asset Value. The value of the assets of the
Trust or any Series thereof, the amount of liabilities of the Trust or any
Series thereof and the net asset value of each outstanding Share of the
Trust or any Series or Class shall be determined at such time or times and
on such days as the Trustees may determine in accordance with the 1940 Act.
The method of determination of net asset value shall be determined by the
Trustees. The power and duty to value the assets and liabilities of the
Trust and make net asset value determinations and calculations may be
delegated by the Trustees.
Section 5.12 Distributions to Shareholders.
(a) The Trustees shall from time to time distribute among the
Shares such proportion of the net profits, surplus (including paid-in
surplus), capital, or assets held by the Trustees as they may deem proper
or as may otherwise be determined in the instrument setting forth the terms
of such Shares such Class or Series of Shares, which need not be ratable
with respect to distributions in respect of Shares of any other class or
series thereof of the Trust. Such distributions may be made in cash or
property (including without limitation any type of obligations of the Trust
or any assets thereof) or any combination thereof.
(b) Distributions may be made to the Shareholders of record
entitled to such distribution at the time such distribution is declared or
at such later date as shall be determined by the Trust prior to the date of
payment.
(c) The Trustees may always retain from any source such
amount as they may deem necessary to pay the debts or expenses of the Trust
or to meet obligations of the Trust, or as they otherwise may deem
desirable to use in the conduct of its affairs or to retain for future
requirements or extensions of the business of the Trust.
ARTICLE VI
Shareholders
Section 6.1 Meetings of Shareholders. The Trust may, but shall
not be required to, hold annual meetings of the holders of any class or
series of Shares. An annual or special meeting of Shareholders may be
called at any time only by the Trustees; provided, however, that if May 31
of any year shall have passed and the Trustees shall not have called an
annual meeting of Shareholders for such year, the Trustees shall call a
meeting for the purpose of voting on the removal of one or more Trustees or
the termination of any investment advisory agreement, upon written request
of holders of Shares of the Trust or a Series having in the aggregate not
less than a majority of the votes of the outstanding Shares of the Trust
entitled to vote on the matter or matters in question, such request
specifying the purpose or purposes for which such meeting is to be called.
Any meeting of Shareholders shall be held within or without the State of
Delaware on such day and at such time as the Trustees shall designate.
Section 6.2 Voting. Shareholders shall have no power to vote on
any matter except matters on which a vote of Shares is required by
applicable law, this Declaration or resolution of the Trustees. Any matter
required to be submitted for approval of any of the Shares and affecting
one or more Series or Classes shall require approval by the required vote
of Shares of the affected Series or Class voting together as a single
Series or Class and, if such matter affects one or more Series or Class
thereof differently from one or more other Series or Class, approval by the
required vote of Shares of such other Series or Class voting as a separate
Series or Class shall be required in order to be approved with respect to
such other Series or Class; provided, however, that except to the extent
required by the 1940 Act, there shall be no separate class votes on the
election or removal of Trustees or the selection of auditors for the Trust.
Shareholders of a particular Series shall not be entitled to vote on any
matter that affects the rights or interests of only one or more other
Series. There shall be no cumulative voting in the election or removal of
Trustees.
Section 6.3 Notice of Meeting, Shareholder Proposals and Record
Date. Notice of all meetings of Shareholders, stating the time, place and
purposes of the meeting, shall be given by the Trustees by mail to each
Shareholder of record entitled to vote thereat at its registered address,
mailed at least 10 days before the meeting or otherwise in compliance with
applicable law. Except with respect to an annual meeting, at which any
business required by the 1940 Act may be conducted, only the business
stated in the notice of the meeting shall be considered at such meeting.
Subject to the provisions of applicable law, any Shareholder wishing to
include a proposal to be considered at an annual meeting must submit such
proposal to the Trust at least 30 days in advance of such meeting. Any
adjourned meeting may be held as adjourned one or more times without
further notice not later than 130 days after the record date. For the
purposes of determining the Shareholders who are entitled to notice of and
to vote at any meeting the Trustees may, without closing the transfer
books, fix a date not more than 100 days prior to the date of such meeting
of Shareholders as a record date for the determination of the Persons to be
treated as Shareholders of record for such purposes.
Section 6.4 Quorum and Required Vote.
(a) The holders of one-third of the outstanding Shares of the
Trust on the record date present in person or by proxy shall constitute a
quorum at any meeting of the Shareholders for purposes of conducting
business on which a vote of all Shareholders of the Trust is being taken.
The holders of one-third of the outstanding Shares of one or more Series or
one or more Classes on the record date present in person or by proxy shall
constitute a quorum at any meeting of the Shareholders for purposes of
conducting business on which a vote of Shareholders of such Series or
Series or Class or Classes is being taken. Shares underlying a proxy as to
which a broker or other intermediary states its absence of authority to
vote with respect to one or more matters shall be treated as present for
purposes of establishing a quorum for taking action on any such matter only
to the extent so determined by the Trustees at or prior to the meeting of
Shareholders at which such matter is to be considered.
(b) Subject to any provision of applicable law, this
Declaration or a resolution of the Trustees specifying or requiring a
greater or lesser vote requirement for the transaction of any matter of
business at any meeting of Shareholders, (i) the affirmative vote of a
plurality of the Shares entitled to vote for the election of any Trustee or
Trustees shall be the act of such Shareholders with respect to the election
of such Trustee or Trustees, (ii) the affirmative vote of a majority of the
Shares present in person or represented by proxy and entitled to vote on
any other matter shall be the act of the Shareholders with respect to such
matter, and (iii) where a separate vote of any Series is required on any
matter, the affirmative vote of a majority of the Shares of such Series
present in person or represented by proxy and entitled to vote on such
matter shall be the act of the Shareholders of such Series with respect to
such matter.
Section 6.5 Proxies, etc. At any meeting of Shareholders, any
holder of Shares entitled to vote thereat may vote by proxy, provided that
no proxy shall be voted at any meeting unless it shall have been placed on
file with the Secretary, or with such other officer or agent of the Trust
as the Secretary may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of a majority of the
Trustees, proxies may be solicited in the name of one or more Trustees or
one or more of the officers or employees of the Trust. Only Shareholders
of record shall be entitled to vote. Each full Share shall be entitled to
one vote and each fractional Share shall be entitled to a vote equal to its
fraction of a full Share. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, but if more than one of them shall be present at
such meeting in person or by proxy, and such joint owners or their proxies
so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Share. A proxy purporting to be given by or on
behalf of a Shareholder of record on the record date for a meeting shall be
deemed valid unless challenged at or prior to its exercise, and the burden
of proving invalidity shall rest on the challenger. If the holder of any
such Share is a minor or a person of unsound mind, and subject to
guardianship or to the legal control of any other person as regards the
charge or management of such Share, he or she may vote by his or her
guardian or such other person appointed or having such control, and such
vote may be given in person or by proxy. The Trustees shall have the
authority to make and modify from time to time regulations regarding the
validity of proxies. In addition to signed proxies, such regulations may
authorize facsimile, telephonic, internet and other methods of appointing a
proxy that are subject to such supervision by or under the direction of the
Trustees as the Trustees shall determine.
Section 6.6 Reports. The Trustees shall cause to be prepared
and sent to Shareholders at least annually and more frequently to the
extent and in the form required by law, regulation or any exchange on which
Shares are listed a report of operations containing financial statements
of the Trust prepared in conformity with generally accepted accounting
principles and applicable law. It is contemplated that separate reports
may be prepared for the various Series. Copies of such reports shall be
mailed to all Shareholders of record of the applicable Series within the
time required by the 1940 Act, and in any event within a reasonable period
preceding the meeting of Shareholders.
Section 6.7 Inspection of Records. The records of the Trust
shall be open to inspection by Persons who have been holders of record of
at least $25,000 in net asset value or liquidation preference of Shares for
a continuous period of not less than six months to the same extent and for
the same purposes as is permitted under the Delaware General Business
Corporation Law to shareholders of a Delaware business corporation.
Section 6.8 Shareholder Action by Written Consent. Any action
which may be taken by Shareholders by vote may be taken without a meeting
if the holders of all of the Shares entitled to vote thereon consent to the
action in writing and the written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
ARTICLE VII
Redemption
Section 7.1 Redemptions. All outstanding Shares of any Series
of the Trust may be redeemed at the option of the holders thereof, upon and
subject to the terms and conditions provided in this Article VII. The
Trust shall, upon application by any Shareholder or pursuant to
authorization from any Shareholder of a particular Series or Class, redeem
or repurchase from such Shareholder outstanding Shares of such Series or
Class for an amount per share determined by the application of a formula
adopted for such purpose by the Trustees with respect to such Series (which
formula shall be consistent with the 1940 Act); provided that (a) such
amount per share shall not exceed any limitations imposed under applicable
law and (b) if so authorized by the Trustees, the Trust may, at any time
and from time to time, charge fees for effecting such redemption, at such
rates as the Trustees may establish, as and to the extent permitted under
the 1940 Act, and may, at any time and from time to time, pursuant to such
Act, suspend such right of redemption. The procedures for effecting
redemption shall be as set forth in the Prospectus with respect to the
applicable Series or Class from time to time. The proceeds of the
redemption of Shares shall be paid in cash or property (tangible of
intangible) or any combination thereof in the sole discretion of the
Trust's investment advisor. The proceeds of the redemption of Shares
subject to a contingent deferred sales charge (including fractional shares)
shall be reduced by the amount of any applicable contingent deferred sales
charge payable on such redemption with respect to the respective Class of
such Shares as set forth in the applicable Prospectus (to the extent
consistent with the 1940 Act) or such other charges, fees or expenses as
may be applicable thereto.
Section 7.2 Disclosure of Holding. The holders of Shares or
other securities of the Trust shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of
Shares or other securities of the Trust as the Trustees deem necessary to
comply with the provisions of the Code or any other applicable laws.
Section 7.3 Redemptions of Small Accounts. The Trustees shall
have the power to redeem shares of any Series at a redemption price
determined in accordance with Section 7.1 above, (a) if at any time the
total investment in such account does not have a value of at least such
minimum amount as may be specified in the Prospectus for such Series from
time to time, (b) as provided by Section 3.8, or (c) to the extent a
Shareholder or other person beneficially owns Shares equal to or in excess
of a percentage of Shares of the Trust or any Series or Class determined
from time to time by the Trustees and specified in the applicable
Prospectus. In the event the Trustees determine to exercise their power to
redeem Shares provided in subsection (a) of this Section 7.3, the
Shareholder shall be notified that the value of his account is less than
the applicable minimum amount and shall be allowed 30 days to make an
appropriate investment before redemption is processed.
ARTICLE VIII
Duration: Termination of Trust;
Amendment; Mergers, Etc.
Section 8.1 Duration. Subject to termination in accordance with
the provisions of Section 8.2 hereof, the Trust created hereby shall have
perpetual existence.
Section 8.2 Termination.
(a) The Trust or any Series may be dissolved by the
affirmative vote of a majority of the Trustees, and without any vote of the
Shareholders thereof, except as may be required by the 1940 Act. Upon the
dissolution of the Trust or any Series:
(1) The Trust or such Series shall carry on
no business except for the purpose of winding up its affairs.
(2) The Trustees shall proceed to wind up
the affairs of the Trust or such Series and all of the powers of the
Trustees under this Declaration shall continue until the affairs of
the Trust or such Series shall have been wound up, including the power
to fulfill or discharge the contracts of the Trust or such Series,
collect its assets, sell, convey, assign, exchange, merger where the
Trust is not the survivor, transfer or otherwise dispose of all or any
part of the remaining Trust Property to one or more Persons at public
or private sale for consideration which may consist in whole or in
part in cash, securities or other property of any kind, discharge or
pay its liabilities, and do all other acts appropriate to liquidate
its business; provided that any sale, conveyance, assignment,
exchange, merger in which the Trust is not the survivor, transfer or
other disposition of all or substantially all the Trust Property of
the Trust or any Series shall require approval of the principal terms
of the transaction and the nature and amount of the consideration with
the same vote as required for dissolution pursuant to paragraph (a)
above.
(3) After paying or adequately providing for
the payment of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements, as they deem necessary for their
protection, the Trustees may distribute the remaining Trust Property
of the Trust or any Series, in cash or in kind or partly each, among
the Shareholders of such Series according to their respective rights.
(b) After the winding up and termination of the Trust or any
Series and distribution to the Shareholders as herein provided, a majority
of the Trustees shall execute and lodge among the records of the Trust an
instrument in writing setting forth the fact of such termination and shall
execute and file a certificate of cancellation with the Secretary of State
of the State of Delaware. Upon termination of the Trust, the Trustees
shall thereupon be discharged from all further liabilities and duties
hereunder, and the rights and interests of all Shareholders shall thereupon
cease.
Upon termination of any Series, the Trustees shall thereunder be
discharged from all further liabilities and duties with respect to such
Series, and the rights and interests of all Shareholders of such Series
shall thereupon cease.
Section 8.3 Amendment Procedure.
(a) Subject to Section 8.3(b), this Declaration may be
amended in any respect by the affirmative vote of two-thirds of the
Trustees and without any vote of the Shareholders of the Trust or any
Series or Class except as may be required by the 1940 Act.
(b) Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of
the Trust or to permit assessments upon Shareholders. Expenses of the
Trust charged directly to Shareholders pursuant to Section 3.8 hereof or
fees or sales charges payable upon or in connection with redemptions of
Shares pursuant to Section 7.1 hereof shall not constitute "assessments"
for purposes of this Section 8.3(b).
(c) An amendment duly adopted by the requisite vote of the
Board of Trustees and, if required, Shareholders as aforesaid, shall become
effective at the time of such adoption or at such other time as may be
designated by the Board of Trustees or Shareholders, as the case may be. A
certification signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Trustees and, if
required, Shareholders as aforesaid, or a copy of the Declaration, as
amended, and executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust or at
such other time designated by the Board.
Notwithstanding any other provision hereof, until such time as
Shares are issued and outstanding, this Declaration may be terminated or
amended in any respect by the affirmative vote of a majority of the
Trustees or by an instrument signed by a majority of the Trustees.
Section 8.4 Merger, Consolidation and Sale of Assets. The Trust
or any Series may merge or consolidate with any other corporation,
association, trust or other organization or any Series, sub-trust or other
designated portion thereof or may sell, lease or exchange all or
substantially all of the Trust Property or the property of any Series
including its good will or may acquire all or substantially all of the
property of any other corporation, association, trust or other organization
or any series, sub-trust or other designated portion thereof, upon such
terms and conditions and for such consideration when and as authorized by
two-thirds of the Trustees and without any vote by the Shareholders of the
Trust or any Series or Class except as may be required by the 1940 Act, and
any such merger, consolidation, sale, lease, exchange or purchase shall be
determined for all purposes to have been accomplished under and pursuant to
the statutes of the State of Delaware.
ARTICLE IX
Miscellaneous
Section 9.1 Filing. This Declaration and any amendment
(including any supplement) hereto shall be filed in such places as may be
required or as the Trustees deem appropriate. Each amendment shall be
accompanied by a certificate signed and acknowledged by a Trustee stating
that such action was duly taken in a manner provided herein, and shall,
upon insertion in the Trust's minute book, be conclusive evidence of all
amendments contained therein. A restated Declaration, containing the
original Declaration and all amendments theretofore made, may be executed
from time to time by a majority of the Trustees and shall, upon insertion
in the Trust's minute book, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
Section 9.2 Resident Agent. The Trust shall maintain a resident
agent in the State of Delaware, which agent shall initially be The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
The Trustees may designate a successor resident agent, provided, however,
that such appointment shall not become effective until written notice
thereof is delivered to the office of the Secretary of the State.
Section 9.3 Governing Law. This Declaration is executed and
delivered in the State of Delaware and with reference to the laws thereof,
and the rights of all parties and the validity and construction of every
provision hereof shall be subject to and construed according to the laws of
said State and reference shall be specifically made to the business
corporation law of the State of Delaware as to the construction of matters
not specifically covered herein or as to which an ambiguity exists,
although such law shall not be viewed as limiting the powers otherwise
granted to the Trustees hereunder and any ambiguity shall be viewed in
favor of such powers.
Section 9.4 Counterparts. This Declaration may be
simultaneously executed in several counterparts, each of which shall be
deemed to be an original, and such counterparts, together, shall constitute
one and the same instrument, which shall be sufficiently evidenced by any
such original counterpart.
Section 9.5 Reliance by Third Parties. Any certificate executed
by an individual who, according to the records of the Trust, or of any
recording office in which this Declaration may be recorded, appears to be a
Trustee hereunder, certifying to the existence of any fact or facts which
in any manner relate to the affairs of the Trust shall be conclusive
evidence as to the matters so certified in favor of any person dealing with
the Trust.
Section 9.6 Provisions in Conflict with Law or Regulation.
(a) The provisions of this Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of this Declaration to the extent of such conflict;
provided, however, that such determination shall not affect any of the
remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction
and shall not in any manner affect such provision in any other jurisdiction
or any other provision of this Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
By: /s/ Bruce Alpert
___________________________________
Name: Bruce Alpert
Title: Vice President and Treasurer
EXHIBIT 23(b)
BY-LAWS
OF
THE GABELLI BLUE-CHIP VALUE FUND
TABLE OF CONTENTS
Page
ARTICLE I
Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Chairman . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Proxies; Voting . . . . . . . . . . . . . . . . . . . 1
1.3 Fixing Record Dates . . . . . . . . . . . . . . . . . 1
1.4 Inspectors of Election . . . . . . . . . . . . . . . 1
1.5 Records at Shareholder Meetings . . . . . . . . . . . 2
ARTICLE II
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Annual and Regular Meetings . . . . . . . . . . . . . 2
2.2 Chairman; Records . . . . . . . . . . . . . . . . . . 3
ARTICLE III
Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Officers of the Trust . . . . . . . . . . . . . . . . 3
3.2 Election and Tenure . . . . . . . . . . . . . . . . . 3
3.3 Removal of Officers . . . . . . . . . . . . . . . . . 3
3.4 Bonds and Surety . . . . . . . . . . . . . . . . . . 4
3.5 Chairman, President, and other Officers . . . . . . . 4
3.6 Secretary . . . . . . . . . . . . . . . . . . . . . . 4
3.7 Treasurer . . . . . . . . . . . . . . . . . . . . . . 5
3.8 Other Officers and Duties . . . . . . . . . . . . . . 5
ARTICLE IV
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Signatures . . . . . . . . . . . . . . . . . . . . . 5
4.2 Seal . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V
Amendment of By-Laws . . . . . . . . . . . . . . . . . . . . . . . . 6
5.1 Amendment and Repeal of By-Laws . . . . . . . . . . . 6
THE GABELLI BLUE-CHIP VALUE FUND
BY-LAWS
These By-Laws are made and adopted pursuant to Section 3.9 of the
Declaration of Trust establishing The Gabelli Blue-Chip Value Fund dated as
of May 19, 1999, as from time to time amended (hereinafter called the
"Declaration"). All words and terms capitalized in these By-Laws shall
have the meaning or meanings set forth for such words or terms in the
Declaration.
ARTICLE I
Shareholder Meetings
1.1 Chairman. The Chairman, if any, shall act as chairman at
all meetings of the Shareholders; in the Chairman's absence, the Trustee or
Trustees present at each meeting may elect a temporary chairman for the
meeting, who may be one of themselves.
1.2 Proxies; Voting. Shareholders may vote either in person or
by duly executed proxy and each full share or fraction thereof represented
at the meeting shall have one vote (or such fraction, as the case may be),
all as provided in Article VII of the Declaration.
1.3 Fixing Record Dates. For the purpose of determining the
Shareholders who are entitled to notice of or to vote or act at any
meeting, including any adjournment thereof, or who are entitled to
participate in any dividends, or for any other proper purpose, the Trustees
may from time to time, without closing the transfer books, fix a record
date in the manner provided in Section 6.3 of the Declaration. If the
Trustees do not prior to any meeting of Shareholders so fix a record date
or close the transfer books, then the date of mailing notice of the meeting
or the date upon which the dividend resolution is adopted, as the case may
be, shall be the record date.
1.4 Inspectors of Election. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the Chairman, if any, of any meeting of Shareholders may, and on
the request of any Shareholder or Shareholder proxy shall, appoint
Inspectors of Election of the meeting. The number of Inspectors shall be
either one or three. If appointed at the meeting on the request of one or
more Shareholders or proxies, a majority of Shares present shall determine
whether one or three Inspectors are to be appointed, but failure to allow
such determination by the Shareholders shall not affect the validity of the
appointment of Inspectors of Election. In case any person appointed as
Inspector fails to appear or fails or refuses to act, the vacancy may be
filled by appointment made by the Trustees in advance of the convening of
the meeting or at the meeting by the person acting as chairman. The
Inspectors of Election shall determine the number of Shares outstanding,
the Shares represented at the meeting, the existence of a quorum, the
authenticity, validity and effect of proxies, shall receive votes, ballots
or consents, shall hear and determine all challenges and questions in any
way arising in connection with the right to vote, shall count and tabulate
all votes or consents, determine the results, and do such other acts as may
be proper to conduct the election or vote with fairness to all
Shareholders. If there are three Inspectors of Election, the decision, act
or certificate of a majority is effective in all respects as the decision,
act or certificate of all. On request of the Chairman, if any, of the
meeting, or of any Shareholder or Shareholder proxy, the Inspectors of
Election shall make a report in writing of any challenge or question or
matter determined by them and shall execute a certificate of any facts
found by them.
1.5 Records at Shareholder Meetings. At each meeting of the
Shareholders, there shall be made available for inspection at a convenient
time and place during normal business hours, if requested by Shareholders,
the minutes of the last previous Annual or Special Meeting of Shareholders
of the Trust and a list of the Shareholders of the Trust, as of the record
date of the meeting or the date of closing of transfer books, as the case
may be. Such list of Shareholders shall contain the name and the address
of each Shareholder in alphabetical order and the number of Shares owned by
such Shareholder. Shareholders shall have such other rights and procedures
of inspection of the books and records of the Trust as are granted to
shareholders of a Delaware business corporation.
ARTICLE II
Trustees
2.1 Annual and Regular Meetings. Meetings of the Trustees shall
be held from time to time upon the call of the Chairman, if any, the
President, the Secretary or any two Trustees. Regular meetings of the
Trustees may be held without call or notice and shall generally be held
quarterly on dates established by the Trustees. Notice of any other
meeting shall be mailed not less than 48 hours before the meeting or
otherwise actually delivered orally or in writing not less than 24 hours
before the meeting, but may be waived in writing by any Trustee either
before or after such meeting. The attendance of a Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee
attends a meeting for the express purpose of objecting to the transaction
of any business on the ground that the meeting has not been lawfully called
or convened. Neither the business to be transacted at, nor the purpose of,
any meeting of the Board of Trustees need be stated in the notice or waiver
of notice of such meeting.
2.2 Chairman; Records. The Chairman, if any, shall be elected
by the Trustees from one of their number to serve at the pleasure of the
Trustees. Such Chairman, if any, shall act as chairman at all meetings of
the Trustees; in absence of a chairman, the Trustees present shall elect
one of their number to act as temporary chairman. The results of all
actions taken at a meeting of the Trustees, or by unanimous written consent
of the Trustees, shall be recorded by the person appointed by the Board of
Trustees as the meeting secretary.
ARTICLE III
Officers
3.1 Officers of the Trust. The officers of the Trust shall
consist of a President, a Secretary, a Treasurer and such other officers or
assistant officers as may be elected or authorized by the Trustees. Any
two or more of the offices may be held by the same Person, except that the
same person may not be both President and Secretary.
3.2 Election and Tenure. At the initial organization meeting,
the Trustees shall elect the President, Secretary, Treasurer and such other
officers as the Trustees shall deem necessary or appropriate in order to
carry out the business of the Trust. Such officers shall serve at the
pleasure of the Trustees or until their successors have been duly elected
and qualified. The Trustees may fill any vacancy in office or add any
additional officers at any time.
3.3 Removal of Officers. Any officer may be removed at any
time, with or without cause, by action of a majority of the Trustees. This
provision shall not prevent the making of a contract of employment for a
definite term with any officer and shall have no effect upon any cause of
action which any officer may have as a result of removal in breach of a
contract of employment. Any officer may resign at any time by notice in
writing signed by such officer and delivered or mailed to the Chairman, if
any, President, or Secretary, and such resignation shall take effect
immediately upon receipt by the Chairman, if any, President, or Secretary,
or at a later date according to the terms of such notice in writing.
3.4 Bonds and Surety. Any officer may be required by the
Trustees to be bonded for the faithful performance of such officer's duties
in such amount and with such sureties as the Trustees may determine.
3.5 Chairman, President, and other Officers. The Chairman, if
any, shall, if present, preside at all meetings of the Shareholders and of
the Trustees and shall exercise and perform such other powers and duties as
may be from time to time assigned to such person by the Trustees. Subject
to such supervisory powers, if any, as may be given by the Trustees to the
Chairman, if any, the President shall be the chief executive officer of the
Trust and, subject to the control of the Trustees and any agreements
entered into by the Trust with others, shall have general supervision,
direction and control of the business of the Trust and of its employees and
shall exercise such general powers of management as are usually vested in
the office of President of a corporation. Each officer shall have power in
the name and on behalf of the Trust for the benefit of the Trust or any of
its Series to execute any and all loans, documents, contracts, agreements,
deeds, mortgages, registration statements, applications, requests, filings
and other instruments in writing, and to employ and discharge employees and
agents of the Trust. Unless otherwise directed by the Trustees, each
officer shall have full authority and power, on behalf of all of the
Trustees, to attend and to act and to vote, on behalf of the Trust at any
meetings of business organizations in which the Trust holds an interest, or
to confer such powers upon any other persons, by executing any proxies duly
authorizing such persons. The President shall have such further
authorities and duties as the Trustees shall from time to time determine.
In the absence or disability of the President, the Vice-Presidents in order
of their rank as fixed by the Trustees or, if more than one and not ranked,
the Vice-President designated by the Trustees, shall perform all of the
duties of the President, and when so acting shall have all the powers of
and be subject to all of the restrictions upon the President.
3.6 Secretary. The Secretary shall maintain the minutes of all
meetings of, and record all votes of, Shareholders, Trustees and the
Executive Committee, if any. The Secretary shall be custodian of the seal
of the Trust, if any, and the Secretary (and any other person so authorized
by the Trustees) shall affix the seal, or if permitted, facsimile thereof,
to any instrument executed by the Trust which would be sealed by a Delaware
business corporation executing the same or a similar instrument and shall
attest the seal and the signature or signatures of the officer or officers
executing such instrument on behalf of the Trust. The Secretary shall also
perform any other duties commonly incident to such office in a Delaware
business corporation, and shall have such other authorities and duties as
the Trustees shall from time to time determine.
3.7 Treasurer. Except as otherwise directed by the Trustees,
the Treasurer shall have the general supervision of the monies, funds,
securities, notes receivable and other valuable papers and documents of the
Trust, and shall have and exercise under the supervision of the Trustees
and of the President all powers and duties normally incident to the office.
The Treasurer may endorse for deposit or collection all notes, checks and
other instruments payable to the Trust or to its order. The Treasurer
shall deposit all funds of the Trust in such depositories as the Trustees
shall designate. The Treasurer shall be responsible for such disbursement
of the funds of the Trust as may be ordered by the Trustees or the
President. The Treasurer shall keep accurate account of the books of the
Trust's transactions which shall be the property of the Trust, and which
together with all other property of the Trust in the Treasurer's
possession, shall be subject at all times to the inspection and control of
the Trustees. Unless the Trustees shall otherwise determine, the Treasurer
shall be the principal accounting officer of the Trust and shall also be
the principal financial officer of the Trust. The Treasurer shall have
such other duties and authorities as the Trustees shall from time to time
determine. Notwithstanding anything to the contrary herein contained, the
Trustees may authorize any adviser, administrator, manager or transfer
agent to maintain bank accounts and deposit and disburse funds of any
Series of the Trust on behalf of such Series.
3.8 Other Officers and Duties. The Trustees may elect such
other officers and assistant officers as they shall from time to time
determine to be necessary or desirable in order to conduct the business of
the Trust. Assistant officers shall act generally in the absence of the
officer whom they assist and shall assist that officer in the duties of the
office. Each officer, employee and agent of the Trust shall have such
other duties and authority as may be conferred upon such person by the
Trustees or delegated to such person by the President.
ARTICLE IV
Miscellaneous
4.1 Signatures. All contracts and other instruments shall be
executed on behalf of the Trust by its properly authorized officers, agent
or agents, as provided in the Declaration or By-laws or as the Trustees may
from time to time by resolution provide.
4.2 Seal. The Trust is not required to have any seal, and the
adoption or use of a seal shall be purely ornamental and be of no legal
effect. The seal, if any, of the Trust, or any Series of the Trust, if
any, may be affixed to any instrument, and the seal and its attestation may
be lithographed, engraved or otherwise printed on any document with the
same force and effect as if it had been imprinted and affixed manually in
the same manner and with the same force and effect as if done by a Delaware
business corporation. The presence or absence of a seal shall have no
effect on the validity, enforceability or binding nature of any document or
instrument that is otherwise duly authorized, executed and delivered.
ARTICLE V
Amendment of By-Laws
5.1 Amendment and Repeal of By-Laws. In accordance with Section
3.9 of the Declaration, only the Trustees shall have the power to amend or
repeal the By-Laws or adopt new By-Laws at any time. Action by the
Trustees with respect to the By-Laws shall be taken by an affirmative vote
of a majority of the Trustees. The Trustees shall in no event adopt
By-Laws which are in conflict with the Declaration, and any apparent
inconsistency shall be construed in favor of the related provisions in the
Declaration.
EXHIBIT 23(c)(1)
TEMPORARY CERTIFICATE: EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY
CLASS AAA COMMON SHARES OF BENEFICIAL INTEREST
THE GABELLI BLUE CHIP VALUE FUND
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MASSACHUSETTS
AND NEW YORK, NEW YORK
CUSIP [ ]
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE CLASS AAA COMMON SHARES OF BENEFICIAL INTEREST OF
THE GABELLI BLUE CHIP VALUE FUND
transferable on the books of the Trust by the holder hereto in person or by
duly authorized Attorney upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be subject to all the provisions of the Agreement and Declaration of
the Trust and the By-Laws of the Trust, and all amendments thereof, copies
of which are on file at the principal office of the Trust and with the
Transfer Agent.
This Certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of its
duly authorized officers.
DATED:
Countersigned and Registered:
STATE STREET BANK AND TRUST COMPANY
(BOSTON, MASSACHUSETTS.) Chairman of the Board
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED SIGNATURE Secretary
AUTHORIZED SIGNATURE President
THE GABELLI BLUE CHIP VALUE FUND.
A full statement of the designations and any preferences,
conversions and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of the
common shares of beneficial interest which the Trust is authorized to
issues, and the differences in the relative rights and preferences between
the shares of each series to the extent that they have been set and the
authority of the Board of Trustees to set the relative nights and
preferences of subsequent series will be furnished by the Trust and any
shareholder, without charge, upon request to the Secretary of the Trust at
its principal office.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations.
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT___________ Custodian___________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right Act______________________________________________
of survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the above
list.
For value Received, _________________ hereby sells, assigns and transfers unto
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________Shares
of the Common Shares of beneficial interest represented by the within
Certificate, and do hereby irrevocably constitute and appoint_________________
______________________________________________________________________Attorney
to transfer the said Shares on the books of the within-named Trust, with
full power of substitution in the premises.
Dated ___________________
__________________________________
EXHIBIT 23(c)(2)
TEMPORARY CERTIFICATE: EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY
CLASS A COMMON SHARES OF BENEFICIAL INTEREST
THE GABELLI BLUE CHIP VALUE FUND
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MASSACHUSETTS
AND NEW YORK, NEW YORK
CUSIP [ ]
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE CLASS A COMMON SHARES OF BENEFICIAL INTEREST OF
THE GABELLI BLUE CHIP VALUE FUND
transferable on the books of the Trust by the holder hereto in person or by
duly authorized Attorney upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be subject to all the provisions of the Agreement and Declaration of
the Trust and the By-Laws of the Trust, and all amendments thereof, copies
of which are on file at the principal office of the Trust and with the
Transfer Agent.
This Certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of its
duly authorized officers.
DATED:
Countersigned and Registered:
STATE STREET BANK AND TRUST COMPANY
(BOSTON, MASSACHUSETTS.) Chairman of the Board
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED SIGNATURE Secretary
AUTHORIZED SIGNATURE President
THE GABELLI BLUE CHIP VALUE FUND.
A full statement of the designations and any preferences,
conversions and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of the
common shares of beneficial interest which the Trust is authorized to
issues, and the differences in the relative rights and preferences between
the shares of each series to the extent that they have been set and the
authority of the Board of Trustees to set the relative nights and
preferences of subsequent series will be furnished by the Trust and any
shareholder, without charge, upon request to the Secretary of the Trust at
its principal office.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations.
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT___________ Custodian___________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right Act______________________________________________
of survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the above
list.
For value Received, _________________ hereby sells, assigns and transfers unto
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________Shares
of the Common Shares of beneficial interest represented by the within
Certificate, and do hereby irrevocably constitute and appoint_________________
______________________________________________________________________Attorney
to transfer the said Shares on the books of the within-named Trust, with
full power of substitution in the premises.
Dated ___________________
__________________________________
EXHIBIT 23(c)(3)
TEMPORARY CERTIFICATE: EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY
CLASS B COMMON SHARES OF BENEFICIAL INTEREST
THE GABELLI BLUE CHIP VALUE FUND
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MASSACHUSETTS AND
NEW YORK, NEW YORK
CUSIP [ ]
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE CLASS B COMMON SHARES OF BENEFICIAL
INTEREST OF
THE GABELLI BLUE CHIP VALUE FUND
transferable on the books of the Trust by the holder hereto in person or by
duly authorized Attorney upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued
and shall be subject to all the provisions of the Agreement and Declaration
of the Trust and the By-Laws of the Trust, and all amendments thereof,
copies of which are on file at the principal office of the Trust and with
the Transfer Agent.
This Certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of its
duly authorized officers.
DATED:
Countersigned and Registered:
STATE STREET BANK AND TRUST COMPANY
(BOSTON, MASSACHUSETTS.) Chairman of the Board
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED SIGNATURE Secretary
AUTHORIZED SIGNATURE President
THE GABELLI BLUE CHIP VALUE FUND.
A full statement of the designations and any preferences,
conversions and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of the
common shares of beneficial interest which the Trust is authorized to
issues, and the differences in the relative rights and preferences between
the shares of each series to the extent that they have been set and the
authority of the Board of Trustees to set the relative nights and
preferences of subsequent series will be furnished by the Trust and any
shareholder, without charge, upon request to the Secretary of the Trust at
its principal office.
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were written
out in full according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT________ Custodian________
(Cust) (Minor)
TEN ENT - as tenants by the under Uniform Gifts to Minors
entireties
Act _______________________________________
(State)
JT TEN - as joint tenants with
right of survivorship
and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
For value Received, ______________________ hereby sells, assigns and
transfers unto
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
_____________________________________________________________________Shares
of the Common Shares of beneficial interest represented by the within
Certificate, and do hereby irrevocably constitute and appoint _____________
_________________________________________________________________ Attorney
to transfer the said Shares on the books of the within-named Trust, with
full power of substitution in the premises.
Dated ___________________
______________________________
EXHIBIT 23(c)(4)
TEMPORARY CERTIFICATE: EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY
CLASS C COMMON SHARES OF BENEFICIAL INTEREST
THE GABELLI BLUE CHIP VALUE FUND
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MASSACHUSETTS
AND NEW YORK, NEW YORK
CUSIP [ ]
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE CLASS C COMMON SHARES OF BENEFICIAL INTEREST OF
THE GABELLI BLUE CHIP VALUE FUND
transferable on the books of the Trust by the holder hereto in person or by
duly authorized Attorney upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be subject to all the provisions of the Agreement and Declaration of
the Trust and the By-Laws of the Trust, and all amendments thereof, copies
of which are on file at the principal office of the Trust and with the
Transfer Agent.
This Certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of its
duly authorized officers.
DATED:
Countersigned and Registered:
STATE STREET BANK AND TRUST COMPANY
(BOSTON, MASSACHUSETTS.) Chairman of the Board
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED SIGNATURE Secretary
AUTHORIZED SIGNATURE President
THE GABELLI BLUE CHIP VALUE FUND.
A full statement of the designations and any preferences,
conversions and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of the
common shares of beneficial interest which the Trust is authorized to
issues, and the differences in the relative rights and preferences between
the shares of each series to the extent that they have been set and the
authority of the Board of Trustees to set the relative nights and
preferences of subsequent series will be furnished by the Trust and any
shareholder, without charge, upon request to the Secretary of the Trust at
its principal office.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations.
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT___________ Custodian___________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right Act______________________________________________
of survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the above
list.
For value Received, _________________ hereby sells, assigns and transfers unto
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________Shares
of the Common Shares of beneficial interest represented by the within
Certificate, and do hereby irrevocably constitute and appoint_________________
______________________________________________________________________Attorney
to transfer the said Shares on the books of the within-named Trust, with
full power of substitution in the premises.
Dated ___________________
__________________________________
EXHIBIT 23(d)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of __, 1999, between
The Gabelli Blue Chip Value Fund (the "Fund"), a Delaware business trust,
and Gabelli Funds, LLC (the "Adviser"), a New York limited liability
company.
In consideration of the mutual promises and agreements herein
contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act
as investment adviser to the Fund with respect to the investment of the
assets of the Fund and to supervise and arrange the purchase and sale of
assets held in the investment portfolio of the Fund. The Adviser may
delegate any or all of its responsibilities to one or more sub-advisers or
administrators, subject to the approval of the Board of Trustees of the
Fund. Such delegation shall not relieve the Adviser of its duties and
responsibilities hereunder.
2. Duties and obligations of the Adviser with respect to
investments of assets of the Fund
(a) Subject to the succeeding provisions of this
paragraph and subject to the direction and control of the Fund's Board of
Trustees, the Adviser shall (i) act as investment adviser for and supervise
and manage the investment and reinvestment of the Fund's assets and in
connection therewith have complete discretion in purchasing and selling
securities and other assets for the Fund and in voting, exercising consents
and exercising all other rights appertaining to such securities and other
assets on behalf of the Fund; (ii) arrange for the purchase and sale of
securities and other assets held in the investment portfolio of the Fund
and (iii) oversee the administration of all aspects of the Fund's business
and affairs and provide, or arrange for others whom it believes to be
competent to provide, certain services as specified in subparagraph (b)
below. Nothing contained herein shall be construed to restrict the Fund's
right to hire its own employees or to contract for administrative services
to be performed by third parties, including but not limited to, the
calculation of the net asset value of the Fund's shares.
(b) The specific services to be provided or arranged for by the
Adviser for the Fund are (i) maintaining the Fund's books and records, such
as journals, ledger accounts and other records in accordance with
applicable laws and regulations to the extent not maintained by the Fund's
custodian, transfer agent and dividend disbursing agent; (ii) transmitting
purchase and redemption orders for the Fund's shares to the extent not
transmitted by the Fund's distributor or others who purchase and redeem
shares; (iii) initiating all money transfers to the Fund's custodian and
from the Fund's custodian for the payment of the Fund's expenses,
investments, dividends and share redemptions; (iv) reconciling account
information and balances among the Fund's custodian, transfer agent,
distributor, dividend disbursing agent and the Adviser; (v) providing the
Fund, upon request, with such office space and facilities, utilities and
office equipment as are adequate for the Fund's needs; (vi) preparing, but
not paying for, all reports by the Fund to its shareholders and all reports
and filings required to maintain the registration and qualification of the
Fund's shares under federal and state law including periodic updating of
the Fund's registration statement and the Fund's Prospectus (including its
Statement of Additional Information); (vii) supervising the calculation of
the net asset value of the Fund's shares; and (viii) preparing notices and
agendas for meetings of the Fund's shareholders and the Fund's Board of
Trustees as well as minutes of such meetings in all matters required by
applicable law to be acted upon by the Board of Trustees.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform to, and
act in accordance with, any requirements imposed by (i) the provisions of
the Investment Company Act of 1940, as amended (the "Act"), and of any
rules or regulations in force thereunder; (ii) any other applicable
provision of law; (iii) the provisions of the Declaration of Trust, as
amended, and By-Laws of the Fund, as such documents are amended from time
to time; (iv) the investment objectives, policies and restrictions
applicable to the Fund as set forth in the Fund's Registration Statement on
Form N-1A and (v) any policies and determinations of the Board of Trustees
of the Fund.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses
(including any overhead and personnel costs) incurred in connection with
its duties hereunder and shall bear the costs of any salaries or trustees
fees of any officers or trustees of the Fund who are affiliated persons (as
defined in the Act) of the Adviser. Subject to the foregoing, the Fund
shall be responsible for the payment of all the Fund's other expenses,
including (i) payment of the fees payable to the Adviser under paragraph 4
hereof; (ii) organizational expenses; (iii) brokerage fees and commissions;
(iv) taxes; (v) interest charges on borrowings; (vi) the cost of liability
insurance or fidelity bond coverage for the Fund officers and employees,
and trustees' and officers' errors and omissions insurance coverage; (vii)
legal, auditing and accounting fees and expenses; (viii) charges of the
Fund's custodian, transfer agent and dividend disbursing agent; (ix) the
Fund's pro rata portion of dues, fees and charges of any trade association
of which the Fund is a member; (x) the expenses of printing, preparing and
mailing proxies, stock certificates and reports, including the Fund's
prospectus and statement of additional information, and notices to
shareholders; (xi) filing fees for the registration or qualification of the
Fund and its shares under federal or state securities laws; (xii) the fees
and expenses involved in registering and maintaining registration of the
Fund's shares with the Securities and Exchange Commission; (xiii) the
expenses of holding shareholder meetings; (xiv) the compensation, including
fees, of any of the Fund's trustees, officers or employees who are not
affiliated persons of the Adviser; (xv) all expenses of computing the
Fund's net asset value per share, including any equipment or services
obtained solely for the purpose of pricing shares or valuing the Fund's
investment portfolio; (xvi) expenses of personnel performing shareholder
servicing functions and all other distribution expenses payable by the
Fund; and (xvii) litigation and other extraordinary or non-recurring
expenses and other expenses properly payable by the Fund.
(e) The Adviser shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but neither the
Adviser nor any of its officers, directors, employees, agents or
controlling persons shall be liable for any act or omission or for any loss
sustained by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from 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;
provided, however, that the foregoing shall not constitute a waiver of any
rights which the Fund may have which may not be waived under applicable
law.
(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as
investment adviser for any other person, firm or corporation, or from
engaging in any other lawful activity, and shall not in any way limit or
restrict the Adviser or any of its directors, officers, employees or agents
from buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may be acting.
3. Portfolio Transactions
In the course of the Adviser's execution of portfolio
transactions for the Fund, it is agreed that the Adviser shall employ
securities brokers and dealers which, in its judgment, will be able to
satisfy the policy of the Fund to seek the best execution of its portfolio
transactions at reasonable expenses. For purposes of this agreement, "best
execution" shall mean prompt, efficient and reliable execution at the most
favorable price obtainable. Under such conditions as may be specified by
the Fund's Board of Trustees in the interest of its shareholders and to
ensure compliance with applicable law and regulations, the Adviser may (a)
place orders for the purchase or sale of the Fund's portfolio securities
with its affiliate, Gabelli & Company, Inc.; (b) pay commissions to brokers
other than its affiliate which are higher than might be charged by another
qualified broker to obtain brokerage and/or research services considered by
the Adviser to be useful or desirable in the performance of its duties
hereunder and for the investment management of other advisory accounts over
which it or its affiliates exercise investment discretion; and (c) consider
sales by brokers (other than its affiliate distributor) of shares of the
Fund and any other mutual fund for which it or its affiliates act as
investment adviser, as a factor in its selection of brokers and dealers for
the Fund's portfolio transactions.
4. Compensation of the Adviser
(a) Subject to paragraph 2(b), the Fund agrees to pay to
the Adviser out of the Fund's assets and the Adviser agrees to accept as
full compensation for all services rendered by or through the Adviser
(other than any amounts payable to the Adviser pursuant to paragraph 4(b))
a fee computed daily and payable monthly in an amount equal on an
annualized basis to 1.0% of the Fund's daily average net asset value. For
any period less than a month during which this Agreement is in effect, the
fee shall be prorated according to the proportion which such period bears
to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) The Fund will pay the Adviser separately for any costs and
expenses incurred by the Adviser in connection with distribution of the
Fund's shares in accordance with the terms (including proration or
nonpayment as a result of allocations of payments) of Plans of Distribution
(collectively, the "Plan") adopted by the Fund pursuant to Rule 12b-1 under
the Act as such Plan may be in effect from time to time; provided, however,
that no payments shall be due or paid to the Adviser hereunder unless and
until this Agreement shall have been approved by Board Approval and
Disinterested Board Approval (as such terms are defined in such Plan). The
Fund reserves the right to modify or terminate such Plan at any time as
specified in the Plan and Rule 12b-1, and this subparagraph shall thereupon
be modified or terminated to the same extent without further action of the
parties. The persons authorized to direct the payment of the funds pursuant
to this Agreement and the Plan shall provide to the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly a written
report of the amount so paid and the purposes for which such expenditures
were made.
(c) For purposes of this Agreement, the net assets of the
Fund shall be calculated pursuant to the procedures adopted by resolutions
of the Trustees of the Fund for calculating the net asset value of the
Fund's shares.
5. Indemnity.
(a) The Fund hereby agrees to indemnify the Adviser and
each of the Adviser's directors, officers, employees, and agents (including
any individual who serves at the Adviser's request as director, officer,
partner, trustee or the like of another corporation) and controlling
persons (each such person being an "indemnitee) against any liabilities and
expenses, including amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees (all as provided in
accordance with applicable corporate law) reasonably incurred by such
indemnitee in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which he may be or may have been
involved as a party or otherwise or with which he may be or may have been
threatened, while acting in any capacity set forth above in this paragraph
or thereafter by reason of his having acted in any such capacity, except
with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in
the best interest of the Fund and furthermore, in the case of any criminal
proceeding, so long as he had no reasonable cause to believe that the
conduct was unlawful, provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Fund or its shareholders
or any expense of such indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence iv) reckless disregard
of the duties involved in the conduct of his position (the conduct referred
to in such clauses (i) through (v) being sometimes referred to herein as
"disabling conduct"), (2) as to any matter disposed of by settlement or a
compromise payment by such indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless there has been a determination that such
settlement or compromise is in the best interests of the Fund and that such
indemnitee appears to have acted in good faith in the reasonable belief
that his action was in the best interest of the Fund and did not involve
disabling conduct by such indemnitee and (3) with respect to any action,
suit or other proceeding voluntarily prosecuted by any indemnitee as
plaintiff, indemnification shall be mandatory only if the prosecution of
such action, suit or other proceeding by such indemnitee was authorized by
a majority of the full Board of the Fund. Notwithstanding the foregoing the
Fund shall not be obligated to provide any such indemnification to the
extent such provision would waive any right which the Fund cannot lawfully
waive.
(b) The Fund shall make advance payments in connection
with the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Fund receives a written
affirmation of the indemnitee's good faith belief that the standard of
conduct necessary for indemnification has been met and a written
undertaking to reimburse the Fund unless it is subsequently determined that
he is entitled to such indemnification and if the trustees of the Fund
determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must
be met: (A) the indemnitee shall provide a security for his undertaking,
(B) the Fund shall be insured against losses arising by reason of any
lawful advances, or (C) a majority of a quorum of trustees of the Fund who
are neither "interested persons" of the Fund (as defined in Section
2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Trustees") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the
indemnitee ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by a court or
other body before whom the proceeding was brought that such indemnitee is
not liable by reason of disabling conduct or, (2) in the absence of such a
decision, by (i) a majority vote of a quorum of the Disinterested Non-Party
Trustees of the Fund, or (ii) if such a quorum is not obtainable or even,
if obtainable, if a majority vote of such quorum so directs, independent
legal counsel in a written opinion.
The rights accruing to any indemnitee under these provisions
shall not exclude any other right to which he may be lawfully entitled.
6. Duration and Termination
This Agreement shall become effective upon on the date hereof
and shall continue in effect for a period of two years and thereafter from
year to year, but only so long as such continuation is specifically
approved at least annually in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time
without penalty upon giving the Fund sixty days written notice (which
notice may be waived by the Fund) and may be terminated by the Fund at any
time without penalty upon giving the Adviser sixty days notice (which
notice may be waived by the Adviser), provided that such termination by the
Fund shall be directed or approved by the vote of a majority of the
Trustees of the Fund in office at the time or by the vote of the
holders of a "majority of the voting securities" (as defined in the Act) of
the Fund at the time outstanding and entitled to vote or, with respect to
paragraph 4(b), by a majority of the Trustees of the Fund who are not
"interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or any agreements related
to the Plan. This Agreement shall terminate automatically in the event of
its assignment (as "assignment" is defined in the Act and the rules
thereunder.)
It is understood and hereby agreed that the word "Gabelli" is
the property of the Adviser for copyright and other purposes. The Fund
further agrees that the word "Gabelli" in its name is derived from the name
of Mario J. Gabelli and such name may freely be used by the Adviser for
other investment companies, entities or products. The Fund further agrees
that, in the event that the Adviser shall cease to act as investment
adviser to the Fund and the Fund shall promptly take all necessary and
appropriate action to change its name to names which do not include the
word "Gabelli"; provided, however, that the Fund may continue to use the
word "Gabelli" if the Adviser consents in writing to such use.
7. Notices
Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from time to
time for the receipt of such notice and shall be deemed to be received on
the earlier of the date actually received or on the fourth day after the
postmark if such notice is mailed first class postage prepaid.
8. Governing Law
This Agreement shall be construed in accordance with the laws
of the State of New York for contracts to be performed entirely therein and
in accordance with the applicable provisions of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized officers, all
as of the day and the year first above written.
THE GABELLI BLUE CHIP VALUE FUND
By________________________________
Name: Bruce N. Alpert
Title: Vice President and Treasurer
GABELLI FUNDS, LLC.
By________________________________
Name: Stephen G. Bondi
Title: Vice President of Finance
EXHIBIT 23(e)
FORM OF
DISTRIBUTION AGREEMENT
FOR
THE GABELLI BLUE CHIP VALUE FUND
DISTRIBUTION AGREEMENT, dated July __, 1999, between The Gabelli
Blue Chip Value Fund, a Delaware business trust (the "Fund"), and Gabelli &
Company, Inc., a New York corporation (the "Distributor"). The Fund is
registered as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and an indefinite number of shares (the
"Shares") of the Fund, par value $.001 per share (the "Shares"), have been
registered under the Securities Act of 1933, as amended (the "1933 Act") to
be offered for sale to the public in a continuous public offering in
accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Fund included
in the Fund's Registration Statement on Form N-1A as such documents may be
amended from time to time.
In this connection, the Fund desires that the Distributor act as
its exclusive sales agent and distributor for the sale and distribution of
Shares. The Distributor has advised the Fund that it is willing to act in
such capacities, and it is accordingly agreed between them as follows:
1. The Fund hereby appoints the Distributor as exclusive sales
agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Fund further
agrees from and after the commencement of such continuous public offering
that it will not, without the Distributor's consent, sell or agree to sell
any Shares otherwise than through the Distributor, except the Fund may
issue Shares in connection with a merger, consolidation or acquisition of
assets on such basis as may be authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such Shares; provided, however, that when
requested by the Fund at any time for any reason the Distributor will
suspend such efforts. The Fund may also withdraw the offering of Shares at
any time when required by the provisions of any statute, order, rule or
regulation of any governmental body having jurisdiction. It is understood
that the Distributor does not undertake to sell all or any specific portion
of the Shares of the Fund. The Fund acknowledges that the Distributor will
enter into sales or servicing agreements with registered securities brokers
and banks and into servicing agreements with financial institutions and
other industry professionals, such as investment advisers, accountants and
estate planning firms. In entering into such agreements, the Distributor
shall act only on its own behalf as principal underwriter and distributor.
The Distributor shall not be responsible for making any distribution plan
or service fee payments pursuant to any plans the Fund may adopt or
agreements it may enter into.
3. The Distributor represents that it is a member in good
standing of the National Association of Dealers, Inc. and agrees that it
will use all reasonable efforts to maintain such status and to abide by the
Rules of Fair Practice, the Constitution and the Bylaws of the National
Association of Securities Dealers, Inc., and all other rules and
regulations that are now or may become applicable to its performance
hereunder. The Distributor will undertake and discharge its obligations
hereunder as an independent contractor and it shall have no authority or
power to obligate or bind the Fund by its actions, conduct or contracts
except that it is authorized to accept orders for the purchase or
repurchase of Shares as the Fund's agent and subject to its approval. The
Fund reserves the right to reject any order in whole or in part. The
Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements
approved by the Fund, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale or
repurchase of Shares on behalf of the Fund or otherwise act as the Fund's
agent for any purpose. The Distributor shall not utilize any materials in
connection with the sale or offering of Shares except the then current
Prospectus and such other materials as the Fund shall provide or approve in
writing.
4. Shares may be sold by the Distributor only at prices and
terms described in the then current Prospectus relating to the Shares and
may be sold either through persons with whom it has selling agreements in a
form approved by the Fund's Board of Trustees or directly to prospective
purchasers. To facilitate sales, the Fund will furnish the Distributor
with the net asset value of its Shares promptly after each calculation
thereof.
5. The Fund has delivered to the Distributor a copy of the
current Prospectus for the Fund. It agrees that it will use its best
efforts to continue the effectiveness of its Registration Statement filed
under the 1933 Act and the 1940 Act. The Fund further agrees to prepare
and file any amendments to its Registration Statement as may be necessary
and any supplemental data in order to comply with such Acts. The Fund will
furnish the Distributor at the Distributor's expense with a reasonable
number of copies of the Prospectus and any amended Prospectus for use in
connection with the sale of Shares.
6. At the Distributor's request, the Fund will take such steps
at its own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of America
and in the District of Columbia in accordance with the laws thereof, and to
renew or extend any such qualification; provided, however, that the Fund
shall not be required to qualify Shares or to maintain the qualification of
Shares in any state, territory, dependency or district where it shall deem
such qualification disadvantageous to the Fund.
7. The Distributor agrees that:
(a) It will furnish to the Fund any pertinent information
required to be inserted with respect to the Distributor as exclusive
sales agent and distributor within the purview of Federal and state
securities laws in any reports or registrations required to be filed
with any government authority;
(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus
filed under the Securities Act of 1933, as in effect from time to
time;
(c) It will not use or distribute or authorize the use or
distribution of any statements other than those contained in the
Fund's then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Fund; and
(d) Subject to Paragraph 9 below, the Distributor will bear the
costs and expenses of printing and distributing any copies of any
prospectuses and annual and interim reports of the Fund (after such
items have been prepared and set in type) which are used in connection
with the offering of Shares, and the costs and expenses of preparing,
printing and distributing any other literature used by the Distributor
or furnished by the Distributor for use in connection with the
offering of the Shares and the costs and expenses incurred by the
Distributor in advertising, promoting and selling Shares of the Fund
to the public. The Fund has adopted a separate plan of distribution
(collectively, the "Plan") pursuant to the provisions of rule 12b-1 of
the 1940 Act on behalf of its Class A, Class B, Class C and Class AAA
shares, respectively, each of which provides for the payment of
administrative and sales related expenses in connection with the
distribution of Fund shares and the Distributor agrees to take no
action inconsistent with said Plan.
8. The Fund will pay its legal and auditing expenses and the
cost of composition of any prospectuses of annual or interim reports of the
Fund.
9. The Fund will pay the Distributor for costs and expenses
incurred by the Distributor in connection with distribution of Shares by
the Distributor in accordance with the terms of a Plan of Distribution (the
"Plan") adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as
such Plan may be in effect from time to time; provided, however, that no
payments shall be due or paid to the Distributor hereunder unless and until
this Agreement shall have been approved by Board Approval and Disinterested
Board Approval (as such terms are defined in such Plan). The Fund reserves
the right to modify or terminate such Plan at any time as specified in the
Plan and Rule 12b-1, and this Section 9 shall thereupon be modified or
terminated to the same extent without further action of the parties. The
persons authorized to direct the payment of funds pursuant to this
Agreement and the Plan shall provide to the Fund's Board of Trustees, and
the Trustees shall review, at least quarterly a written report of the
amounts so paid and the purposes for which such expenditures were made.
10. The Fund agrees to indemnify, defend and hold the
Distributor, its officers, directors, employees and agents and any person
who controls the Distributor within the meaning of Section 15 of the 1933
Act (each, an "indemnitee"), free and harmless from any and all liabilities
and expenses, including costs of investigation or defense (including
reasonable counsel fees) incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether
civil or criminal, in which such indemnitee may be or may have been
involved as a party or otherwise or with which he may be or may have been
threatened, while the Distributor was active in such capacity or by reason
of the Distributor having acted in any such capacity or arising out of or
based upon any untrue statement of a material fact contained in the then-
current Prospectus relating to the Shares or arising out of or based upon
any alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar
as such claims, demands, liabilities or expenses arise out of or are based
upon any such untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information furnished
in writing by the Distributor to the Fund expressly for use in any such
Prospectus; provided, however, that (1) no indemnitee shall be indemnified
hereunder against any liability to the Fund or the shareholders of the Fund
or any expense of such indemnitee with respect to any matter as to which
such indemnitee shall have been adjudicated not to have acted in good faith
in the reasonable belief that its action was in the best interest of the
Fund or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason
of its reckless disregard of its obligations under this Agreement
("disabling conduct"), or (2) as to any matter disposed of by settlement or
a compromise payment by such indemnitee, no indemnification shall be
provided unless there has been a determination that such settlement or
compromise is in the best interests of the Fund and that such indemnitee
appears to have acted in good faith in the reasonable belief that its
action was in the best interest of the Fund and did not involve disabling
conduct by such indemnitee. Notwithstanding the foregoing the Fund shall
not be obligated to provide any such indemnification to the extent such
provision would waive any right which the Fund cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the Fund,
its Trustees, officers, employees and agents and any person who controls
the Fund within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities
and expenses, including costs of investigation or defense (including
reasonable counsel fees) incurred by such indemnitee, but only to the
extent that such liability or expense shall arise out of or be based upon
any untrue or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor of the Fund expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary
to make such information not misleading or arising by reason of disabling
conduct by such indemnitee or any person selling Shares pursuant to an
agreement with the Distributor.
The Fund shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification
might be sought hereunder if the Fund receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the
Fund unless it is subsequently determined that he is entitled to such
indemnification and if the trustees of the Fund determine that the facts
then known to them would not preclude indemnification. In addition, at
least one of the following conditions must be met: (A) the indemnitee
shall provide a security for his undertaking, (B) the Fund shall be insured
against losses arising by reason of any lawful advances, or (C) a majority
of a quorum of trustees of the Fund who are neither "interested persons" of
the Fund (as defined in Section 2(a)(19) of the Act) nor parties to the
proceeding ("Disinterested Non-Party Trustees") or an independent legal
counsel in a written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the indemnitee ultimately will be found entitled to
indemnification.
All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other
body before whom the proceeding was brought that such indemnitee is not
liable by reason of disabling conduct or, (2) in the absence of such a
decision, by (i) a majority vote of a quorum of the Disinterested Non-Party
Trustees of the Fund, or (ii) if such a quorum is not obtainable or even,
if obtainable, if a majority vote of such quorum so directs, independent
legal counsel in a written opinion.
11. This Agreement shall become effective on the date first set
forth above and shall remain in effect for up to two years from such date
(one year in the case of Section 9 and thereafter from year to year
provided such continuance is specifically approved at least annually prior
to each anniversary of such date by (a) Board Approval or by vote at a
meeting of shareholders of the Fund of the lesser of (i) 67 per cent of the
Shares present or represented by proxy and (ii) 50 per cent of the
outstanding Shares and (b) by Disinterested Board Approval.
12. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty (60) days' written notice to the
Fund which notice may be waived by the Fund; or (b) by the Fund at any time
without penalty upon sixty (60) days' written notice to the Distributor
(which notice may be waived by the Distributor); provided, however, that
any such termination by the Fund shall be directed or approved in the same
manner as required for continuance of this Agreement by Section 11(a) (or,
in the case of termination of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in
writing signed by each of the parties hereto and approved in the same
manner as provided for continuance of this Agreement in Section 11(a) (or,
in the case of amendment of Section 9, by Section 11(b)). Any such
amendment or change shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, but this Agreement
shall not be assigned by either party and shall automatically terminate
upon assignment (as such term is defined in the 1940 Act and the rules
thereunder).
14. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be performed
entirely therein and in accordance with applicable provisions of the 1940
Act.
15. If any provision of this Agreement shall be held or made
invalid or unenforceable by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized officers as of the date first
written above.
THE GABELLI BLUE CHIP VALUE FUND
By: ____________________________
Name: Bruce N. Alpert
Title: Vice President
GABELLI & COMPANY, INC.
By: _____________________________
Name: Bruce N. Alpert
Title:
EXHIBIT 23(g)
FORM OF
CUSTODIAN CONTRACT
Between
THE GABELLI BLUE CHIP VALUE FUND
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It . . . . . 1
2. Duties of the Custodian with Respect to Property of the
Fund Held By the Custodian . . . . . . . . . . . . . . . . . . 1
2.1 Holding Securities . . . . . . . . . . . . . . . . . 1
2.2 Delivery of Securities . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . 5
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . 5
2.5 Payments for Shares . . . . . . . . . . . . . . . . . 5
2.6 Availability of Federal Funds . . . . . . . . . . . . 6
2.7 Collection of Income . . . . . . . . . . . . . . . . 6
2.8 Payment of Fund Monies . . . . . . . . . . . . . . . 6
2.9 Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . 8
2.10 Payments for Repurchases or Redemptions of Shares of
the Fund . . . . . . . . . . . . . . . . . . . . . . 8
2.11 Appointment of Agents . . . . . . . . . . . . . . . . 8
2.12 Deposit of Fund Assets in Securities Systems . . . . 9
2.13 Fund Assets Held in the Custodian's Direct Paper
System . . . . . . . . . . . . . . . . . . . . . . 10
2.14 Segregated Account . . . . . . . . . . . . . . . . 11
2.15 Ownership Certificates for Tax Purposes . . . . . . 12
2.16 Proxies . . . . . . . . . . . . . . . . . . . . . . 12
2.17 Communications Relating to
Fund Portfolio Securities . . . . . . . . . . . . . 12
2.18 Proper Instructions . . . . . . . . . . . . . . . . 12
2.19 Actions Permitted without Express Authority . . . . 13
2.20 Evidence of Authority . . . . . . . . . . . . . . . 14
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income . . . . . . . . 14
4. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. Opinion of Fund's Independent Accountant . . . . . . . . . . 15
6. Reports to Fund by Independent Public Accountants . . . . . . 15
7. Compensation of Custodian . . . . . . . . . . . . . . . . . . 15
8. Responsibility of Custodian . . . . . . . . . . . . . . . . . 15
9. Effective Period, Termination and Amendment . . . . . . . . . 16
10. Successor Custodian . . . . . . . . . . . . . . . . . . . . . 17
11. Interpretive and Additional Provisions . . . . . . . . . . . 18
12. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . 18
13. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . 18
CUSTODIAN CONTRACT
This Contract between The Gabelli Blue Chip Value Fund, a business
trust organized and existing under the laws of having its principal place
of business at One Corporate Center, Rye, NY 10580 hereinafter called the
"Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street,
Boston, Massachusetts, 02110, hereinafter called the ("Custodian").
WITNESSETH, that in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Declaration of Trust. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all
payments of income, payments of principal or capital distributions received
by it with respect to all securities owned by the Fund from time to time,
and the cash consideration received by it for such new or treasury shares
of beneficial interest ("Shares") of the Fund as may be issued or sold from
time to time. The Custodian shall not be responsible for any property of
the Fund held or received by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.17), the Custodian shall from time to time employ one or more sub-
custodians, but only in accordance with an applicable vote by the Board of
Trustees of the Fund, and provided that the Custodian shall have no more or
less responsibility or liability to the Fund on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has
to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held
By the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property, including all
securities owned by the Fund, other than (a) securities which are
maintained pursuant to Section 2.12 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein as a
Securities System' and (b) commercial paper of an issuer for which State
Street Bank and Trust Company acts as issuing and paying agent ("Direct
Paper) which is deposited and/or maintained in the Direct Paper System of
the Custodian pursuant to Section 2.12A.
2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by the Fund held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper Account") only upon receipt
of Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into
by the Fund;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any
agent appointed pursuant to Section 2.11 or into the name or
nominee name of any sub-custodian appointed pursuant to
Article l; or for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Fund, but only against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Fund, which may be in the form of cash or obligations issued
by the United States government, its agencies or
instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned
by the Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings
by the Fund requiring a pledge of assets by the Fund, but
only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or
any similar organization or organizations, regarding account
deposits in connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time to
time in the Fund's currently effective prospectus and
statement of additional information ("prospectus"), in
satisfaction of requests by holders of Shares for repurchase
or redemption; and
For any other proper corporate purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary, specifying
the securities to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such
securities shall be made.
2.3 Registration of Securities. Securities held by the
Custodian (other than bearer securities) shall be registered in the name of
the Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund, unless
the Fund has authorized in writing the appointment of a nominee to be used
in common with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name of any agent
appointed pursuant to Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted by
the Custodian on behalf of the Fund under the terms of this Contract shall
be in "street name or other good delivery form. If, however, the Fund
directs the Custodian to maintain securities in street name , the
Custodian shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best efforts basis
only of relevant corporate actions including, without limitation, pendency
of calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of the Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of the
Fund, other than cash maintained by the Fund in a bank account established
and used in accordance with Rule 17f-3 under the Investment Company Act of
1940. Funds held by the Custodian for the Fund may be deposited by it to
its credit as Custodian in the Banking Department of the Custodian or in
such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds
to be deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees of the Fund. Such funds shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the
distributor for the Fund's Shares or from the Transfer Agent of the Fund
and deposit into the Fund's account such payments as are received for
Shares of the Fund issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Fund and the Transfer
Agent of any receipt by it of payments for Shares of the Fund.
2.6 Availability of Federal Funds. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall, upon the receipt
of Proper Instructions, make federal funds available to the Fund as of
specified times agreed upon from time to time by the Fund and the Custodian
in the amount of checks received in payment for Shares of the Fund which
are deposited into the Fund's account.
2.7 Collection of Income. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other
payments with respect to registered securities held hereunder to which the
Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and
other payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to the Fund's custodian
account. Without limiting the generality of the foregoing, the Custodian
shall detach and present for payment all coupons and other income items
requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due the Fund on
securities loaned pursuant to the provisions of Section 2.2 (10) shall be
the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund with
such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which
the Fund is properly entitled.
2.8 Payment of Fund Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out monies of the Fund in the
following cases only:
1) Upon the purchase of securities, options, futures contracts
or options on futures contracts for the account of the Fund
but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or
options on futures contracts, to the Custodian (or any bank,
banking firm or trust company doing business in the United
States or abroad which is qualified under the Investment
Company Act of 1940, as amended, to act as a custodian and
has been designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in the name
of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in accordance
with the conditions set forth in Section 2.12 hereof; (c) in
the case of a purchase involving the Direct Paper System, in
accordance with the conditions set forth in Section 2.12A;
(d) n the case of repurchase agreements entered into
between the Fund and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Fund or (e) for transfer to a time
deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined in
Section 2.17;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Fund as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments
for the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be
in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect
of securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees or of the Executive
Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this Contract, in
any and every case where payment for purchase of securities for the account
of the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from
the Fund to so pay in advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if the securities had
been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of the
Fund. From such funds as may be available for the purpose but subject to
the limitations of the Declaration of Trust and any applicable votes of the
Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire
funds to or through a commercial bank designated by the redeeming
shareholders. In connection with the redemption or repurchase of Shares of
the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
2.11 Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the Investment Company Act
of 1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to time
direct; provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities Systems. The Custodian
may deposit and/or maintain securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S. department
of the Treasury and certain federal agencies, collectively referred to
herein as "Securities System" in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and regulations, if any,
and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of
the Fund which are maintained in a Securities System shall
identify by book-entry those securities belonging to the
Fund;
3) The Custodian shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon
(i) receipt of advice from the Securities System that
payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of
the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the
Securities System of transfers of securities for the account
of the Fund shall identify the Fund, be maintained for the
Fund by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice and shall
furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System
for the account of the Fund.
4) The Custodian shall provide the Fund with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9
hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for any loss or
damage to the Fund resulting from use of the Securities
System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any
of its or their employees or from failure of the Custodian
or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of
the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against
the Securities System or any other person which the
Custodian may have as a consequence of any such loss or
damage if and to the extent that the Fund has not been made
whole for any such loss or damage.
2.13 Fund Assets Held in the Custodian's Direct Paper System.
The Custodian may deposit and/or maintain securities owned by the
Fund in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to securities of
the Fund which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to
the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account of
the Fund upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment
for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of
a written advice or notice, of Direct Paper on the next
business day following such transfer and shall furnish to
the Fund copies of dally transaction sheets reflecting each
day's transaction in the Securities System for the account
of the Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may
reasonably request from time to time;
2.14 Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an
account by the Custodian pursuant to Section 2.12 hereof, (i) in accordance
with the provisions of any agreement among the Fund, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD
(or any futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for purposes
of segregating cash or government securities in connection with options
purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purpose of
compliance by the Fund with the procedures required by Investment Company
Act Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee signed by
an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account
and declaring such purposes to be proper corporate purposes.
2.15 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of income or
other payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
2.16 Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be Promptly executed by the registered
holder of such securities, if the securities are registered otherwise than
in the name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Fund such proxies, all proxy soliciting materials
and all notices relating to such securities.
2.17 Communications Relating to Fund Portfolio Securities.
Subject to the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund all written information (including, without
limitation, pendency of calls and maturities of securities and expirations
of rights in connection therewith and notices of exercise of call and put
options written by the Fund and the maturity of futures contracts purchased
or sold by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the
Fund shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
2.18 Proper Instructions. Proper Instructions as used throughout
this Article 2 means a writing signed or initialed by one or more person or
persons as the Board of Trustees shall have from time to time authorized.
Each such writing shall set forth the specific transaction or type of
transaction involved, including a specific statement of the purpose for
which such action is requested. Oral instructions will be considered
Proper Instructions if the Custodian reasonably believes them to have been
given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Trustees of the
Fund accompanied by a detailed description of procedures approved by the
Board of Trustees, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Board of Trustees and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Section 2.13.
2.19 Actions Permitted without Express Authority. The Custodian
may in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Board of
Trustees of the Fund.
2.20 Evidence of Authority. The Custodian shall be protected in
acting upon any instructions, notice, request, consent, certificate or
other instrument or paper believed by it to be genuine and to have been
properly executed by or on behalf of the Fund. The Custodian may receive
and accept a certified copy of a vote of the Board of Trustees of the Fund
as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by
the Board of Trustees pursuant to the Declaration of Trust as described in
such vote, and such vote may be considered as in full force and effect
until receipt by the Custodian of written notice to the contrary.
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to
keep the books of account of the Fund and/or compute the net asset value
per share of the outstanding shares of the Fund or, if directed in writing
to do so by the Fund, shall itself keep such books of account and/or
compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of the Fund as described in the
Fund's currently effective prospectus and shall advise the Fund and the
Transfer Agent daily of the total amounts of such net income and, if
instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per share and
the daily income of the Fund shall be made at the time or times described
from time to time in the Fund's currently effective prospectus.
4. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder. All such records shall be the property of the Fund and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation
of securities owned by the Fund and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed
upon between the Fund and the custodian, include certificate numbers in
such tabulations.
5. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from
the Fund's independent accountants With respect to its activities hereunder
in connection with the preparation of the Fund's Form N-lA, and Form N-SAR
or other annual reports to the Securities and Exchange Commission and with
respect to any other requirements of such Commission.
6. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this
Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so
state.
7. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between the Fund and the Custodian.
8. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in
acting upon any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be signed by the proper
party or parties, including any futures commission merchant acting pursuant
to the terms of a three-party futures or options agreement. The Custodian
shall be held to the exercise of reasonable care in carrying out the
provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it in good
faith without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted
pursuant to such advice. Notwithstanding the foregoing, the responsibility
of the Custodian with respect to redemptions effected by check shall be in
accordance with a separate Agreement entered into between the Custodian and
the Fund.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may,
in the opinion of the Custodian, result in the Custodian or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in
an amount and form satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall incur
or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except
such as may arise from its or its nominee's own negligent action, negligent
failure to act or willful misconduct, any property at any time held for the
account of the Fund shall be security therefor and should the Fund fail to
repay the Custodian promptly, the Custodian shall be entitled to utilize
available cash and to dispose of Fund assets to the extent necessary to
obtain reimbursement.
9. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties hereto and
may be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect
not sooner than thirty (30) days after the date of such delivery or
mailing; provided, however that the Custodian shall not act under Section
.12 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund
has approved the initial use of a particular Securities System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not
act under Section 2.12A hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved the initial use of the Direct Paper System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has reviewed the use by the Fund of the Direct
Paper System; provided further, however, that the Fund shall not amend or
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust, and further
provided, that the Fund may at any time by action of its Board of Trustees
(i) substitute another bank or trust company for the Custodian by giving
notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver
for the Custodian by the Comptroller of the Currency or upon the happening
of a like event at the direction of an appropriate regulatory agency or
court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements.
10. Successor Custodian
If a successor custodian shall be appointed by the Board of Trustees
of the Fund, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities then held by it hereunder and shall
transfer to an account of the successor custodian all of the Fund's
securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of Trustees of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of Trustees shall have been
delivered to the Custodian on or before the date when such termination
shall become effective, then the Custodian shall have the right to deliver
to a bank or trust company, which is a bank as defined in the Investment
Company Act of 1940, doing business in Boston, Massachusetts, of its own
selection, having an aggregate capital, surplus, and undivided profits, as
shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian and all
instruments held by the Custodian relative thereto and all other property
held by it under this Contract and to transfer to an account of such
successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of
the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to
or of the Board of Trustees to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period
as the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or
in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
12. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
13. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody
of the Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed as of the day of 1999.
ATTEST THE GABELLI BLUE CHIP VALUE FUND
_________________________ By:__________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
__________________________ By: _________________________________
Assistant Secretary Vice President
EXHIBIT 23(h)
FORM OF
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE GABELLI BLUE CHIP VALUE FUND
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE BANK . . . . . . . . . . 3
ARTICLE 2 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE BANK . . . . . . . . . 6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . 7
ARTICLE 5 DATA ACCESS AND PROPRIETARY INFORMATION . . . . . . . . . . 8
ARTICLE 6 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 7 STANDARD OF CARE . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 8 COVENANTS OF THE FUND AND THE BANK . . . . . . . . . . . . 13
ARTICLE 9 TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . 14
ARTICLE 10 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 11 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 12 MASSACHUSETTS LAW TO APPLY . . . . . . . . . . . . . . . . 16
ARTICLE 13 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 14 CONSEQUENTIAL DAMAGES . . . . . . . . . . . . . . . . . . 16
ARTICLE 15 MERGER OF AGREEMENT . . . . . . . . . . . . . . . . . . . 16
ARTICLE 16 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 17 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 18 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . 17
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the day of
, 1999, by and between The Gabelli Blue Chip Value Fund
a Delaware business trust, having its principal office and place of
business at (the "Fund"), and STATE STREET
BANK AND TRUST, Gabelli, a Massachusetts trust company having its principal
office and place of business at 225 Franklin Street, Boston, Massachusetts
02110 (the "Bank").
WHEREAS, the Fund desires to appoint the Bank as its registrar,
transfer agent, dividend disbursing agent and agent in connection with
certain other activities and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF THE BANK
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Bank to act as, and the
Bank agrees to act as registrar, transfer agent for the Fund's authorized
and issued shares of its common stock ("Shares"), dividend disbursing agent
and agent in connection with any dividend reinvestment plan as set out in
the prospectus of the Fund, corresponding to the date of this Agreement.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and the Bank, the Bank shall:
(i) Issue and record the appropriate number of Shares as
authorized and hold such shares in the appropriate
Shareholder account
(ii) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate documentation;
(iii) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(iv) Act as agent for Shareholders pursuant to the dividend
reinvestment and cash purchase plan as amended from time to
time in accordance with the terms of the agreement to be
entered into between the Shareholders and the Bank in
substantially the form attached as Exhibit hereto;
(v) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt
by the Bank of indemnification satisfactory to the Bank and
protecting the Bank and the Fund, and the Bank at its
option, may issue replacement certificates in place of
mutilated stock certificates upon presentation thereof and
without such indemnity.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall: (i) perform
all of the customary services of a registrar, transfer agent, dividend
disbursing agent and agent of the dividend reinvestment anc cash purchase
plan as described in Article 1 consistent with those requirements in effect
as of the date of this agreement. The detailed definition, frequency,
limitations and associated costs (if any) set out in the attached fee
schedule, include but are not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, and mailing
Shareholder reports to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts where applicable, preparing and
filing U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities
for all registered Shareholders.
(c) The Bank shall provide additional services on behalf of the
Fund (i.e., escheatment services) which may be agreed upon in writing
between the Fund and the Bank.
ARTICLE 2 FEES AND EXPENSES
2.01 For the performance by the Bank pursuant to this Agreement,
the Fund agrees to pay the Bank an annual maintenance fee as set out in the
initial fee schedule attached hereto. Such fees and out-of-pocket expenses
and advances identified under Section 2.02 below may be changed from time
to time subject to mutual written agreement between the Fund and the Bank.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Bank for out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by
the Bank for the items set out in the fee schedule attached hereto. In
addition, any other expenses incurred by the Bank at the request or with
the consent of the Fund, will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses
within five days following the receipt of the respective billing notice.
Postage and the cost of materials for mailing of dividends, proxies, Fund
reports and other mailings to all Shareholder accounts shall be advanced to
the Bank by the Fund at least seven (7) days prior to the mailing date of
such materials.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the
Commonwealth of Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Bank that:
4.01 It is a corporation duly organized and existing and in good
standing under the laws of Maryland.
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement
4.03 All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4.04 It is a closed-end, diversified investment company registered
under the Investment Company Act of 1940, as amended.
4.05 To the extent required by federal securities laws a
registration statement under the Securities Act of 1933, as amended is
currently effective and appropriate state securities law filings have been
made with respect to all Shares of the Fund being offered for sale;
information to the contrary will result in immediate notification to the
Bank.
4.06 It shall make all required filings under federal and state
securities laws.
ARTICLE 5 DATA ACCESS AND PROPRIETARY INFORMATION
5.01 The Fund acknowledges that the data bases, computer programs,
screen formats, interactive design techniques, and other information
furnished to the Fund by the Bank are provided solely in connection with
the services rendered under this Agreement and constitute copyrighted trade
secrets or proprietary information of substantial value to the Bank. Such
databases, programs, formats, designs, techniques and other information are
collectively referred to below as "Proprietary Information." The Fund
agrees that it shall treat all Proprietary Information to any person or
organization except as expressly permitted hereunder. The Fund agrees for
itself and its employees and agents:
(a) to use such programs and databases (i) solely on the Fund
computers, or (ii) solely from equipment at the locations agreed to between
the Fund and the Bank and (iii) in accordance with the Bank's applicable
user documentation;
(b) to refrain from copying or duplicating in any way (other than
in the normal course of performing processing on the Fund's computers) any
part of any Proprietary Information;
(c) to refrain from obtaining unauthorized access to any programs,
data or other information not owned by the Fund, and if such access is
accidentally obtained, to respect and safeguard the same Proprietary
Information;
(d) to refrain from causing or allowing information transmitted
from the Bank's computer to the Funds' terminal to be retransmitted to any
other computer terminal or other device except as expressly permitted by
the Bank, (such permission not to be unreasonably withheld);
(e) that the Fund shall have access only to those authorized
transactions as agreed to between the Fund and the Bank; and
(f) to honor reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in Proprietary
Information at common law and under applicable statues.
5.02 If the transactions available to the Fund include the ability
to originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information, then in such event the Bank shall be
entitled to rely on the validity and authenticity of such instruction
without undertaking any further inquiry as long as such instruction is
undertaken in conformity with security procedures established by the Bank
from time to time.
ARTICLE 6 INDEMNIFICATION
6.01 The Bank shall not be responsible for, and the Fund shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement; provided that such actions
are taken in good faith and without negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or warranty
of the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services which (i) are
received by the Bank or its agents or subcontractors, and (ii) have been
prepared, maintained or performed by the Fund or any other person or firm
on behalf of the Fund including but not limited to any previous transfer
agent registrar.
(d) The reliance on, or the carrying out by the Bank or its agents
or subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in
such State.
6.02 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under
this Agreement, and the Bank and its agents or subcontractors shall not be
liable and shall be indemnified by the Fund for any action taken or omitted
by it in reliance upon such instructions or upon the opinion of such
counsel. The Bank, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf
of the Fund, reasonably believed to be genuine and to have been signed by
the proper person or persons, or upon any instruction, information, data,
records or documents provided the Bank or its agents or subcontractors by
telephone, in person, machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have
notice thereof from the Fund. The Bank, its agents and subcontractors
shall also be protected and indemnified in recognizing stock certificates
which are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper countersignature of
any former transfer agent or former registrar, or of a co-transfer agent or
co-registrar.
6.03 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Fund may
be required to indemnify the Bank, the Bank shall promptly notify the Fund
in writing of such assertion, and shall keep the Fund advised with respect
to all developments concerning such claim. The Fund shall have the option
to participate with the Bank in the defense of such claim or to defend
against said claim in its own name or in the name of the Bank. The Bank
shall in no case confess any claim or make any compromise in any case in
which the Fund may be required to indemnify the Bank except with the Fund's
prior written consent.
ARTICLE 7 STANDARD OF CARE
7.01 The Bank shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility and
shall not be liable for loss or damage due to errors unless said errors are
caused by its negligence, bad faith, or willful misconduct of that of its
employees.
ARTICLE 8 COVENANTS OF THE FUND AND THE BANK
8.01 The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Board of Directors
of the Fund authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the
Fund and all amendments thereto.
8.02 The Bank hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
8.03 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Bank agrees that all such records
prepared or maintained by the Bank relating to the services to be performed
by the Bank hereunder are the property of the Fund and will be preserved,
maintained and made available in accordance with such Section and Rules,
and will be surrendered promptly to the Fund on and in accordance with its
request.
8.04 The Bank and the Fund agree that all books, records,
information and data pertaining to the business of the other party which
are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be requested by a governmental
entity or as may be required by law.
8.05 In cases of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund
and to secure instructions from an authorized officer of the Fund as to
such inspection. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder
records to such person.
ARTICLE 9 TERMINATION OF AGREEMENT
9.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other.
9.02 Should the Fund exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and material will
be borne by the Fund. Additionally, the Bank reserves the right to charge
for any other reasonable expenses associated with such termination and/or a
charge equivalent to the average of three (3) month's fees.
ARTICLE 10 ASSIGNMENT
10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.
10.03 The Bank may, without further consent on the part of the
Fund, subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS"), which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934 ("Section 17A(c)(2)"), or (ii) a BFDS
affiliate duly registered as a transfer agent pursuant to Section
17A(c)(2), provided, however, that the Bank shall be as fully responsible
to the Fund for the acts and omissions of any subcontractor as it is for
its own acts and omissions.
ARTICLE 11 AMENDMENT
11.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a
resolution of the Board of Directors of the Fund.
ARTICLE 12 MASSACHUSETTS LAW TO APPLY
12.01 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts.
ARTICLE 13 FORCE MAJEURE
13.01 In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably beyond its
control, or other causes reasonably beyond its control, such party shall
not be liable for damages to the other for any damages resulting from such
failure to perform or otherwise from such causes.
ARTICLE 14 CONSEQUENTIAL DAMAGES
14.01 Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of this Agreement
or for any consequential damages arising out of any act or failure to act
hereunder.
ARTICLE 15 MERGER OF AGREEMENT
15.01 This Agreement constitutes the entire agreement between
the parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
ARTICLE 16 SURVIVAL
16.01 All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.
ARTICLE 17 SEVERABILITY
17.01 If any provision or provisions of this Agreement shall be
held to be invalid, unlawful, or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired.
ARTICLE 18 COUNTERPARTS
18.01 This Agreement may be executed by the parties hereto on
any number of counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
The Gabelli Blue Chip Value Fund
BY:_______________________________
State Street Bank and Trust Company
BY:______________________________
EXHIBIT 23(i)
August 9, 1999
The Gabelli Blue Chip Value Fund
One Corporate Center
Rye, NY 10580
Re: The Gabelli Blue Chip Value Fund
Registration on Form N-1A
Ladies and Gentlemen:
We have acted as special counsel to The Gabelli Blue Chip Value
Fund, a business trust formed under the Delaware Business Trust Act (the
"Fund"), in connection with the issuance and sale by the Fund of an
indefinite number of shares of the Fund's Class A common shares of
beneficial interest, par value $.001 per share (the "Class A Shares"),
Class B common shares of beneficial interest, par value $.001 per share
(the "Class B Shares"), Class C common shares of beneficial interest, par
value $.001 per share (the "Class C Shares"), and Class AAA common shares
of beneficial interest, par value $.001 per share (the "Class AAA Shares"
and, together with the Class A Shares, the Class B Shares and the Class C
Shares, the "Shares").
This opinion is being furnished in accordance with the
requirements of Item 23(i) of Form N-1A.
In connection with this opinion, we have examined originals or
copies (including facsimile transmission), certified or otherwise
identified to our satisfaction, of (i) the Registration Statement on Form
N-1A (File Nos. 333-80099 and 811-09377), as filed with the Securities and
Exchange Commission (the "Commission") on June 7, 1999 under the Securities
Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of
1940, as amended, and Pre- Effective Amendment No. 1 thereto, as filed with
the Commission on August 9, 1999 (such Registration Statement, as so
amended, being hereinafter referred to as the "Registration Statement");
(ii) specimen certificates representing each of the Class A Shares, the
Class B Shares, the Class C Shares and the Class AAA Shares; (iii) the
Agreement and Declaration of Trust of the Fund, as currently in effect;
(iv) the ByLaws of the Fund, as currently in effect; (v) the Distribution
Agreement between the Fund and Gabelli & Company, Inc., as currently in
effect (the "Distribution Agreement") and (vi) certain resolutions of the
Board of Trustees of the Fund relating to the issuance and sale of the
Shares and related matters. We have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of
the Fund and such agreements, certificates of public officials,
certificates of officers or other representatives of the Fund and others,
and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed,
facsimile or photostatic copies and the authenticity of the originals of
such latter documents. In making our examination of documents executed or
to be executed by parties other than the Fund, we have assumed that such
parties had or will have the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution
and delivery by such parties of such documents and the validity and binding
effect thereof. As to any facts material to the opinions expressed herein
which we have not independently established or verified, we have relied
upon statements and representations of officers and other representatives
of the Fund and others.
Members of our firm are admitted to the bar in the States of
New York and Delaware, and we do not express any opinion as to any laws
other than the Delaware Business Trust Act.
Based upon and subject to the foregoing, we are of the opinion
that when Pre-Effective Amendment No. 1 to the Registration Statement
becomes effective, the issuance and sale of the Shares by the Fund
thereunder will have been validly authorized and when issued and delivered
against payment therefor as provided in the Distribution Agreement, such
Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to
the reference to our firm under the caption "Counsel" in the
Registration Statement. In giving this consent, we do not thereby admit
that we are included in the category of persons whose consent is required
under Section 7 of the 1933 Act or the rules and regulations of the
Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher &
Flom LLP
Exhibit 23(j)(1)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated August 5, 1999, in this
Registration Statement (File number 333-80099 and 811-09377) of The
Gabelli Blue Chip Value Fund.
ERNST & YOUNG LLP
New York, New York
August 5, 1999
Exhibit 23(j)(2)
REPORT OF INDEPENDENT AUDITORS
To the Shareholder and Board of Trustees of
The Gabelli Blue Chip Value Fund
We have audited the accompanying balance sheet of The Gabelli Blue Chip
Value Fund (the "Fund") as of August 3, 1999. This balance sheet is the
responsibility of the Fund's management. Our responsibility is to express
an opinion on this balance sheet 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 balance sheet is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of The Gabelli Blue Chip Value
Fund at August 3, 1999, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
August 5, 1999
EXHIBIT 23(l)
PURCHASE AGREEMENT
The Gabelli Blue Chip Value Fund (the "Fund"), a Delaware business
trust, and Gabelli Asset Management Inc. (the "Buyer") hereby agree
as follows:
1. The Fund hereby offers the Buyer and the Buyer hereby purchases
10,000 shares of the Fund's Class AAA Shares (the "Shares") at a price of
$10.00 per Share. The Shares are the "initial Class AAA Shares" of the
Fund. The Buyer hereby acknowledges receipt of a purchase confirmation
reflecting the purchase of the Shares, and the Fund hereby acknowledges
receipt from the Buyer of funds in the amount of $100,000 in full payment
for the Shares.
2. The Buyer represents and warrants to the Fund that the Shares
purchased by the Buyer are being acquired for investment purposes and not
for the purpose of distribution.
3. This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his or her capacity as an officer of the
Fund.
4. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the 3rd day of August, 1999.
Attest: THE GABELLI BLUE CHIP VALUE
FUND
James E. McKee By:/s/ Bruce Alpert
- ----------------------- ------------------------------
Attest: GABELLI ASSET MANAGEMENT
INC.
James E. McKee By:/s/ Bruce Alpert
- ----------------------- ------------------------------
EXHIBIT 23(m)(1)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI BLUE CHIP VALUE FUND
WHEREAS, THE GABELLI BLUE CHIP VALUE FUND, a Delaware Business
Trust (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares of
common stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the
distribution agreement between the Fund and the Distributor, which
distribution agreement, as amended, has been duly approved by the Board of
Trustees of the Fund (the "Board"), in accordance with the requirements of
the Act (the "Distribution Agreement");
WHEREAS, the Fund has established and plans to offer Shares of
its common stock denominated as Class AAA Shares (the "Class AAA Shares"),
pursuant to Rule 18f-3 under the Act that permits the Fund to implement a
multiple distribution system providing investors with the option of
purchasing Shares of various classes;
WHEREAS, the Board as a whole, and the trustees who are not
interested persons of the Fund (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to the Plan (the "Disinterested Trustees"), have
determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination, that it
would be desirable to adopt a plan of distribution for the Class AAA Shares
and that, in the exercise of reasonable business judgment and in light of
their fiduciary duties, that there is a reasonable likelihood that a plan
of distribution containing the terms set forth herein (the "Plan") will
benefit the Fund and the shareholders of the Class AAA Shares, and have
accordingly approved the Plan by votes cast in person at a meeting called
for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class AAA Shares and does not
relate to any class of Shares which may be offered and sold by the Fund
other than the Class AAA Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the
expenses to be incurred, by the Distributor pursuant to the Distribution
Agreement, the Fund will pay to the Distributor as distribution payments
(the "Payments") in connection with the distribution of Class AAA Shares an
aggregate amount at a rate of .25% per year of the average daily net assets
of the Class AAA Shares. Such Payments shall be accrued daily and paid
monthly in arrears or shall be accrued and paid at such other intervals as
the Board shall determine. The Fund's obligation hereunder shall be
limited to the assets of the Class AAA Shares and shall not constitute an
obligation of the Fund except out of such assets and shall not constitute
an obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under
this Plan will be used by the Distributor for the purpose of financing or
assisting in the financing of any activity which is primarily intended to
result in the sale of Class AAA Shares. The scope of the foregoing shall
be interpreted by the Board, whose decision shall be conclusive except to
the extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of Class AAA
Shares: advertising the Class AAA Shares or the Fund's investment
adviser's mutual fund activities; compensating underwriters, dealers,
brokers, banks and other selling entities (including the Distributor and
its affiliates) and sales and marketing personnel of any of them for sales
of Class AAA Shares, whether in a lump sum or on a continuous, periodic,
contingent, deferred or other basis; compensating underwriters, dealers,
brokers, banks and other servicing entities and servicing personnel
(including the Fund's investment adviser and its personnel) or any of them
for providing services to shareholders of the Fund relating to their
investment in the Class AAA Shares, including assistance in connection with
inquiries relating to shareholder accounts; the production and
dissemination of prospectuses (including statements of additional
information) of the Fund and the preparation, production and dissemination
of sales, marketing and shareholder servicing materials; and the ordinary
or capital expenses, such as equipment, rent, fixtures, salaries, bonuses,
reporting and recordkeeping and third party consultancy or similar expenses
relating to any activity for which Payment is authorized by the Board; and
the financing of any activity for which Payment is authorized by the Board;
and profit to the Distributor and its affiliates arising out of their
provision of shareholder services. Notwithstanding the foregoing, this
Plan does not require the Distributor or any of its affiliates to perform
any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered
by this Section 2. In addition, Payments made in a particular year shall
not be refundable whether or not such Payments exceed the expenses incurred
for that year pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into
appropriate written agreements with the Distributor and each other person
to whom the Fund intends to make any Payment, and the Distributor is hereby
authorized and directed to enter into appropriate written agreements with
each person to whom the Distributor intends to make any payments in the
nature of a Payment. The foregoing requirement is not intended to apply to
any agreement or arrangement with respect to which the party to whom
Payment is to be made does not have the purpose set forth in Section 2
above (such as the printer in the case of the printing of a prospectus or a
newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement
for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must
contain the provisions required by Rule 12b-1 under the Act and must be
approved by a majority of the Board ("Board Approval") and by a majority of
the Disinterested Trustees ("Disinterested Trustee Approval"), by vote cast
in person at a meeting called for the purposes of voting on such agreement.
All determinations or authorizations of the Board hereunder shall be made
by Board Approval and Disinterested Trustee Approval.
5. The officers, investment adviser or Distributor of the Fund,
as appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is
also an activity which the Fund may pay for on behalf of the Class AAA
Shares without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed
to prevent or restrict the Fund from paying such amounts outside of this
Plan and without limitation hereby and without such payments being included
in calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved
by a vote of at least a majority of the Class AAA Shares. This Plan may
not be amended in any material respect without Board Approval and
Disinterested Trustee Approval and may not be amended to increase the
maximum level of Payments permitted hereunder without such approvals and
further approval by a vote of at least a majority of the Class AAA Shares.
This Plan may continue in effect for longer than one year after its
approval by a majority of the Class AAA Shares only as long as such
continuance is specifically approved at least annually by Board Approval
and by Disinterested Trustee Approval.
8. This Plan may be terminated at any time by a vote of the
Disinterested Trustees, cast in person at a meeting called for the purpose
of voting on such termination, or by a vote of at least a majority of the
Class AAA Shares.
9. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and
the term "vote of a majority of the Class AAA Shares" shall mean the vote,
at the annual or a special meeting of the holders of the Class AAA Shares
duly called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the Class AAA Shares
outstanding on the record date for such meeting are present or represented
by proxy or, if less, (b) more than 50% of the Class AAA Shares outstanding
on the record date for such meeting.
Dated: May 19, 1999
EXHIBIT 23(m)(2)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI BLUE CHIP VALUE FUND
WHEREAS, THE GABELLI BLUE CHIP VALUE FUND, a Delaware Business
Trust (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares of
common stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the
distribution agreement between the Fund and the Distributor, which
distribution agreement, as amended, has been duly approved by the Board of
Trustees of the Fund (the "Board"), in accordance with the requirements of
the Act (the "Distribution Agreement");
WHEREAS, the Fund has established and plans to offer Shares of
its common stock denominated as Class A Shares (the "Class A Shares"),
pursuant to Rule 18f-3 under the Act that permits the Fund to implement a
multiple distribution system providing investors with the option of
purchasing Shares of various classes;
WHEREAS, the Board as a whole, and the trustees who are not
interested persons of the Fund (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to the Plan (the "Disinterested Trustees"), have
determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination, that it
would be desirable to adopt a plan of distribution for the Class A Shares
and that, in the exercise of reasonable business judgment and in light of
their fiduciary duties, that there is a reasonable likelihood that a plan
of distribution containing the terms set forth herein (the "Plan") will
benefit the Fund and the shareholders of the Class A Shares, and have
accordingly approved the Plan by votes cast in person at a meeting called
for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class A Shares and does not relate
to any class of Shares which may be offered and sold by the Fund other than
the Class A Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the
expenses to be incurred, by the Distributor pursuant to the Distribution
Agreement, the Fund will pay to the Distributor as distribution payments
(the "Payments") in connection with the distribution of Class A Shares an
aggregate amount at a rate of 0.25% per year of the average daily net
assets of the Class A Shares. Such Payments shall be accrued daily and
paid monthly in arrears or shall be accrued and paid at such other
intervals as the Board shall determine. The Fund's obligation hereunder
shall be limited to the assets of the Class A Shares and shall not
constitute an obligation of the Fund except out of such assets and shall
not constitute an obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under
this Plan will be used by the Distributor for the purpose of financing or
assisting in the financing of any activity which is primarily intended to
result in the sale of Class A Shares. The scope of the foregoing shall be
interpreted by the Board, whose decision shall be conclusive except to the
extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of Class A Shares:
advertising the Class A Shares or the Fund's investment adviser's mutual
fund activities; compensating underwriters, dealers, brokers, banks and
other selling entities (including the Distributor and its affiliates) and
sales and marketing personnel of any of them for sales of Class A Shares,
whether in a lump sum or on a continuous, periodic, contingent, deferred or
other basis; compensating underwriters, dealers, brokers, banks and other
servicing entities and servicing personnel (including the Fund's investment
adviser and its personnel) or any of them for providing services to
shareholders of the Fund relating to their investment in the Class A
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and
shareholder servicing materials; and the ordinary or capital expenses, such
as equipment, rent, fixtures, salaries, bonuses, reporting and
recordkeeping and third party consultancy or similar expenses relating to
any activity for which Payment is authorized by the Board; and the
financing of any activity for which Payment is authorized by the Board; and
profit to the Distributor and its affiliates arising out of their provision
of shareholder services. Notwithstanding the foregoing, this Plan does not
require the Distributor or any of its affiliates to perform any specific
type or level of distribution activities or shareholder services or to
incur any specific level of expenses for activities covered by this Section
2. In addition, Payments made in a particular year shall not be refundable
whether or not such Payments exceed the expenses incurred for that year
pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into
appropriate written agreements with the Distributor and each other person
to whom the Fund intends to make any Payment, and the Distributor is hereby
authorized and directed to enter into appropriate written agreements with
each person to whom the Distributor intends to make any payments in the
nature of a Payment. The foregoing requirement is not intended to apply to
any agreement or arrangement with respect to which the party to whom
Payment is to be made does not have the purpose set forth in Section 2
above (such as the printer in the case of the printing of a prospectus or a
newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement
for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must
contain the provisions required by Rule 12b-1 under the Act and must be
approved by a majority of the Board ("Board Approval") and by a majority of
the Disinterested Trustees ("Disinterested Trustee Approval"), by vote cast
in person at a meeting called for the purposes of voting on such agreement.
All determinations or authorizations of the Board hereunder shall be made
by Board Approval and Disinterested Trustee Approval.
5. The officers, investment adviser or Distributor of the Fund,
as appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is
also an activity which the Fund may pay for on behalf of the Class A Shares
without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed
to prevent or restrict the Fund from paying such amounts outside of this
Plan and without limitation hereby and without such payments being included
in calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved
by a vote of at least a majority of the Class A Shares. This Plan may not
be amended in any material respect without Board Approval and Disinterested
Trustee Approval and may not be amended to increase the maximum level of
Payments permitted hereunder without such approvals and further approval by
a vote of at least a majority of the Class A Shares. This Plan may
continue in effect for longer than one year after its approval by a
majority of the Class A Shares only as long as such continuance is
specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.
8. This Plan may be terminated at any time by a vote of the
Disinterested Trustees, cast in person at a meeting called for the purposes
of voting on such termination, or by a vote of at least a majority of the
Class A Shares.
9. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and
the term "vote of a majority of the Class A Shares" shall mean the vote, at
the annual or a special meeting of the holders of the Class A Shares duly
called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the Class A Shares outstanding
on the record date for such meeting are present or represented by proxy or,
if less, (b) more than 50% of the Class A Shares outstanding on the record
date for such meeting.
Dated: May 19, 1999
EXHIBIT 23(m)(3)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI BLUE CHIP VALUE FUND
WHEREAS, THE GABELLI BLUE CHIP VALUE FUND, a Delaware Business
Trust (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares of
common stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the
distribution agreement between the Fund and the Distributor, which
distribution agreement, as amended, has been duly approved by the Board of
Trustees of the Fund (the "Board"), in accordance with the requirements of
the Act (the "Distribution Agreement");
WHEREAS, the Fund has established and plans to offer Shares of
its common stock denominated as Class B Shares (the "Class B Shares"),
pursuant to Rule 18f-3 under the Act that permits the Fund to implement a
multiple distribution system providing investors with the option of
purchasing Shares of various classes;
WHEREAS, the Board as a whole, and the trustees who are not
interested persons of the Fund (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to the Plan (the "Disinterested Trustees"), have
determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination, that it
would be desirable to adopt a plan of distribution for the Class B Shares
and that, in the exercise of reasonable business judgment and in light of
their fiduciary duties, that there is a reasonable likelihood that a plan
of distribution containing the terms set forth herein (the "Plan") will
benefit the Fund and the shareholders of the Class B Shares, and have
accordingly approved the Plan by votes cast in person at a meeting called
for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class B Shares and does not relate
to any class of Shares which may be offered and sold by the Fund other than
the Class B Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the
expenses to be incurred, by the Distributor pursuant to the Distribution
Agreement, the Fund will pay to the Distributor a distribution fee at the
aggregate amount rate of .75% per year of the average daily net asset value
of the Class B Shares and a service fee at the aggregate amount rate of
.25% per year of the average daily net asset value of the Class B Shares
(the "Payments"). Such Payments shall be accrued daily and paid monthly in
arrears or shall be accrued and paid at such other intervals as the Board
shall determine. The Fund's obligation hereunder shall be limited to the
assets of the Class B Shares and shall not constitute an obligation of the
Fund except out of such assets and shall not constitute an obligation of
any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under
this Plan will be used by the Distributor for the purpose of financing or
assisting in the financing of any activity which is primarily intended to
result in the sale of Class B Shares. The scope of the foregoing shall be
interpreted by the Board, whose decision shall be conclusive except to the
extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of Class B Shares:
advertising the Class B Shares or the Fund's investment adviser's mutual
fund activities; compensating underwriters, dealers, brokers, banks and
other selling entities (including the Distributor and its affiliates) and
sales and marketing personnel of any of them for sales of Class B Shares,
whether in a lump sum or on a continuous, periodic, contingent, deferred or
other basis; compensating underwriters, dealers, brokers, banks and other
servicing entities and servicing personnel (including the Fund's investment
adviser and its personnel) or any of them for providing services to
shareholders of the Fund relating to their investment in the Class B
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and
shareholder servicing materials; and the ordinary or capital expenses, such
as equipment, rent, fixtures, salaries, bonuses, reporting and
recordkeeping and third party consultancy or similar expenses relating to
any activity for which Payment is authorized by the Board; and the
financing of any activity for which Payment is authorized by the Board; and
profit to the Distributor and its affiliates arising out of their provision
of shareholder services. Notwithstanding the foregoing, this Plan does not
require the Distributor or any of its affiliates to perform any specific
type or level of distribution activities or shareholder services or to
incur any specific level of expenses for activities covered by this Section
2. In addition, Payments made in a particular year shall not be refundable
whether or not such Payments exceed the expenses incurred for that year
pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into
appropriate written agreements with the Distributor and each other person
to whom the Fund intends to make any Payment, and the Distributor is hereby
authorized and directed to enter into appropriate written agreements with
each person to whom the Distributor intends to make any payments in the
nature of a Payment. The foregoing requirement is not intended to apply to
any agreement or arrangement with respect to which the party to whom
Payment is to be made does not have the purpose set forth in Section 2
above (such as the printer in the case of the printing of a prospectus or a
newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement
for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must
contain the provisions required by Rule 12b-1 under the Act and must be
approved by a majority of the Board ("Board Approval") and by a majority of
the Disinterested Trustees ("Disinterested Trustee Approval"), by vote cast
in person at a meeting called for the purposes of voting on such agreement.
All determinations or authorizations of the Board hereunder shall be made
by Board Approval and Disinterested Trustee Approval.
5. The officers, investment adviser or Distributor of the Fund,
as appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is
also an activity which the Fund may pay for on behalf of the Class B Shares
without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed
to prevent or restrict the Fund from paying such amounts outside of this
Plan and without limitation hereby and without such payments being included
in calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved
by a vote of at least a majority of the Class B Shares. This Plan may not
be amended in any material respect without Board Approval and Disinterested
Trustee Approval and may not be amended to increase the maximum level of
Payments permitted hereunder without such approvals and further approval by
a vote of at least a majority of the Class B Shares. This Plan may
continue in effect for longer than one year after its approval by a
majority of the Class B Shares only as long as such continuance is
specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.
8. This Plan may be terminated at any time by a vote of the
Disinterested Trustees, cast in person at a meeting called for the purposes
of voting on such termination, or by a vote of at least a majority of the
Class B Shares.
9. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and
the term "vote of a majority of the Class B Shares" shall mean the vote, at
the annual or a special meeting of the holders of the Class B Shares duly
called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the Class B Shares outstanding
on the record date for such meeting are present or represented by proxy or,
if less, (b) more than 50% of the Class B Shares outstanding on the record
date for such meeting.
Dated: May 19, 1999
EXHIBIT 23(m)(4)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI BLUE CHIP VALUE FUND
WHEREAS, THE GABELLI BLUE CHIP VALUE FUND, a Delaware Business
Trust (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares of
common stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the
distribution agreement between the Fund and the Distributor, which
distribution agreement, as amended, has been duly approved by the Board of
Trustees of the Fund (the "Board"), in accordance with the requirements of
the Act (the "Distribution Agreement");
WHEREAS, the Fund has established and plans to offer Shares of
its common stock denominated as Class C Shares (the "Class C Shares"),
pursuant to Rule 18f-3 under the Act that permits the Fund to implement a
multiple distribution system providing investors with the option of
purchasing Shares of various classes;
WHEREAS, the Board as a whole, and the trustees who are not
interested persons of the Fund (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related to the Plan (the "Disinterested Trustees"), have
determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination, that it
would be desirable to adopt a plan of distribution for the Class C Shares
and that, in the exercise of reasonable business judgment and in light of
their fiduciary duties, that there is a reasonable likelihood that a plan
of distribution containing the terms set forth herein (the "Plan") will
benefit the Fund and the shareholders of the Class C Shares, and have
accordingly approved the Plan by votes cast in person at a meeting called
for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class C Shares and does not relate
to any class of Shares which may be offered and sold by the Fund other than
the Class C Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the
expenses to be incurred, by the Distributor pursuant to the Distribution
Agreement, the Fund will pay to the Distributor a distribution fee at the
aggregate amount rate of .75% per year of the average daily net asset value
of the Class C Shares and a service fee at the aggregate amount rate of
.25% per year of the average daily net asset value of the Class C Shares
(the "Payments"). Such Payments shall be accrued daily and paid monthly in
arrears or shall be accrued and paid at such other intervals as the Board
shall determine. The Fund's obligation hereunder shall be limited to the
assets of the Class C Shares and shall not constitute an obligation of the
Fund except out of such assets and shall not constitute an obligation of
any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under
this Plan will be used by the Distributor for the purpose of financing or
assisting in the financing of any activity which is primarily intended to
result in the sale of Class C Shares. The scope of the foregoing shall be
interpreted by the Board, whose decision shall be conclusive except to the
extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of Class C Shares:
advertising the Class C Shares or the Fund's investment adviser's mutual
fund activities; compensating underwriters, dealers, brokers, banks and
other selling entities (including the Distributor and its affiliates) and
sales and marketing personnel of any of them for sales of Class C Shares,
whether in a lump sum or on a continuous, periodic, contingent, deferred or
other basis; compensating underwriters, dealers, brokers, banks and other
servicing entities and servicing personnel (including the Fund's investment
adviser and its personnel) or any of them for providing services to
shareholders of the Fund relating to their investment in the Class C
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and
shareholder servicing materials; and the ordinary or capital expenses, such
as equipment, rent, fixtures, salaries, bonuses, reporting and
recordkeeping and third party consultancy or similar expenses relating to
any activity for which Payment is authorized by the Board; and the
financing of any activity for which Payment is authorized by the Board; and
profit to the Distributor and its affiliates arising out of their provision
of shareholder services. Notwithstanding the foregoing, this Plan does not
require the Distributor or any of its affiliates to perform any specific
type or level of distribution activities or shareholder services or to
incur any specific level of expenses for activities covered by this Section
2. In addition, Payments made in a particular year shall not be refundable
whether or not such Payments exceed the expenses incurred for that year
pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into
appropriate written agreements with the Distributor and each other person
to whom the Fund intends to make any Payment, and the Distributor is hereby
authorized and directed to enter into appropriate written agreements with
each person to whom the Distributor intends to make any payments in the
nature of a Payment. The foregoing requirement is not intended to apply to
any agreement or arrangement with respect to which the party to whom
Payment is to be made does not have the purpose set forth in Section 2
above (such as the printer in the case of the printing of a prospectus or a
newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement
for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must
contain the provisions required by Rule 12b-1 under the Act and must be
approved by a majority of the Board ("Board Approval") and by a majority of
the Disinterested Trustees ("Disinterested Trustee Approval"), by vote cast
in person at a meeting called for the purposes of voting on such agreement.
All determinations or authorizations of the Board hereunder shall be made
by Board Approval and Disinterested Trustee Approval.
5. The officers, investment adviser or Distributor of the Fund,
as appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is
also an activity which the Fund may pay for on behalf of the Class C Shares
without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed
to prevent or restrict the Fund from paying such amounts outside of this
Plan and without limitation hereby and without such payments being included
in calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved
by a vote of at least a majority of the Class C Shares. This Plan may not
be amended in any material respect without Board Approval and Disinterested
Trustee Approval and may not be amended to increase the maximum level of
Payments permitted hereunder without such approvals and further approval by
a vote of at least a majority of the Class C Shares. This Plan may
continue in effect for longer than one year after its approval by a
majority of the Class C Shares only as long as such continuance is
specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.
8. This Plan may be terminated at any time by a vote of the
Disinterested Trustees, cast in person at a meeting called for the purposes
of voting on such termination, or by a vote of at least a majority of the
Class C Shares.
9. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and
the term "vote of a majority of the Class C Shares" shall mean the vote, at
the annual or a special meeting of the holders of the Class C Shares duly
called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the Class C Shares outstanding
on the record date for such meeting are present or represented by proxy or,
if less, (b) more than 50% of the Class C Shares outstanding on the record
date for such meeting.
Dated: May 19, 1999
EXHIBIT 23(o)
RULE 18f-3
MULTI-CLASS PLAN
FOR
THE GABELLI BLUE CHIP VALUE FUND
This Multi-Class Plan (the "Multi-Class Plan") is adopted
pursuant to Rule 18f-3 under the Act to provide for the issuance and
distribution of multiple classes of shares by the Fund in accordance with
the terms, procedures and conditions set forth below. A majority of the
Trustees of the Fund, including a majority of the Trustees who are not
interested persons of the Fund within the meaning of the Act, have found
this Multi-Class Plan, including the expense allocations, to be in the best
interest of the Fund and each Class of Shares constituting the Fund.
A. Definitions. As used herein, the terms set forth below shall
have the meanings ascribed to them below.
1. The Act -- the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder.
2. CDSC -- contingent deferred sales charge.
3. CDSC Period -- the period of time following acquisition during
which Shares are assessed a CDSC upon redemption.
4. Class - a class of Shares of the Fund.
5. Class A Shares -- shall have the meaning ascribed in Section
B.1.
6. Class B Shares -- shall have the meaning ascribed in Section
B.1.
7. Class C Shares -- shall have the meaning ascribed in Section
B.1.
8. Class AAA Shares -- shall have the meaning ascribed in Section
B.1.
9. Distribution Expenses -- expenses, including allocable overhead
costs, imputed interest any other expenses and any element of
profit referred to in a Plan of Distribution and/or board
resolutions, incurred in activities which are primarily
intended to result in the distribution and sale of Shares.
10. Distribution Fee -- a fee paid by the Fund in respect
of the asset of a Class of the Fund to the Distributor
pursuant to the Plan of Distribution relating to the
Class.
11. Distributor -- Gabelli & Company, Inc.
12. Fund - The Gabelli Blue Chip Value Fund.
13. IRS - Internal Revenue Service
14. NASD - National Association of Securities Dealers, Inc.
15. Plan of Distribution -- any plan adopted under
Rule 12b-1 under the Act with respect to payment of a
Distribution Fee.
16. Prospectus - the prospectus, including the statement of
additional information incorporated by reference
therein, covering the Shares of the referenced Class or
Classes of the Fund.
17. SEC - Securities and Exchange Commission
18. Service Fee -- a fee paid to financial intermediaries,
including the Distributor and its affiliates, for the
ongoing provision of personal services to shareholders
of a Class and/or the maintenance of shareholder
accounts relating to a Class.
19. Share - a share of beneficial interest in the Fund.
20. Trustees -- the trustees of the Fund.
B. Classes. The Fund may offer four Classes as follows:
1. Class A Shares. Class A Shares means The Gabelli Blue Chip
Value Fund Class A Shares designated by the Declaration of
Trust and adopted by the Trustees. Class A Shares shall be
offered at net asset value plus a front-end sales charge set
forth in the Prospectus from time to time, which may be reduced
or eliminated in any manner not prohibited by the Act or the
NASD as set forth in the Prospectus. Class A Shares that are
not subject to a front-end sales charge as a result of the
foregoing may be subject to a CDSC for the CDSC Period set
forth in Section D.1. The offering price of Class A Shares
subject to a front-end sales charge shall be computed in
accordance with the Act. Class A Shares shall be subject to
ongoing Distribution Fees or Service Fees approved from time to
time by the Trustees and set forth in the Prospectus.
2. Class B Shares. Class B Shares means The Gabelli Blue Chip
Value Fund Class B Shares designated by the Declaration of
Trust and adopted by the Trustees. Class B Shares shall be (1)
offered at net asset value, (2) subject to a CDSC for the CDSC
Period set forth in Section D.1, (3) subject to ongoing
Distribution Fees and Service Fees approved from time to time
by the Trustees and set forth in the Prospectus and (4)
converted to Class A Shares on the first business day of the
ninety-seventh calendar month following the calendar month in
which such Shares were issued. For Class B Shares previously
exchanged for shares of a money market fund the investment
adviser of which is the same as or an affiliate of the
investment adviser of the Fund, the time period during which
such Shares were held in the money market fund will be
excluded.
3. Class C Shares. Class C Shares means The Gabelli Blue Chip
Value Fund Class C Shares designated by the Declaration of
Trust and adopted by the Trustees. Class C Shares shall be (1)
offered at net asset value, (2) subject to a CDSC for the CDSC
Period set forth in Section D.1. and (3) subject to ongoing
Distribution Fees and Service Fees approved from time to time
by the Trustees and set forth in the Prospectus.
4. Class AAA Shares. Class AAA Shares means The Gabelli Blue Chip
Value Fund Class AAA Shares designated by the Declaration of
Trust and adopted by the Trustees. Class AAA Shares shall be
(1) offered at net asset value, (2) sold without a front end
sales charge or CDSC, (3) offered to investors acquiring Shares
directly from the Distributor or from a financial intermediary
with whom the Distributor has entered into an agreement
expressly authorizing the sale by such intermediary of Class
AAA Shares and (4) subject to ongoing Distribution Fees or
Service Fees approved from time to time by the Trustees and set
forth in the Prospectus.
C. Rights and Privileges of Classes. Each of the Class A Shares,
Class B Shares, Class C Shares and Class AAA Shares will
represent an interest in the same portfolio of assets and will
have identical voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations, qualifications,
designations and terms and conditions except as described
otherwise in the Declaration of Trust with respect to each of
such Classes.
D. CDSC. A CDSC may be imposed upon redemption of Class A Shares.
Class B Shares and Class C Shares that do not incur a front end
sales charge subject to the following conditions:
1. CDSC Period. The CDSC Period for Class A Shares and Class C
Shares shall be twenty-four months plus any portion of the
month during which payment for such Shares was received. The
CDSC Period for Class B Shares shall be ninety-six months plus
any portion of the month during which payment for such Shares
was received.
2. CDSC Rate. The CDSC rate shall be recommended by the
Distributor and approved by the Trustees. If a CDSC is imposed
for a period greater than thirteen months in each succeeding
twelve months of the CDSC Period after the first twelve months
(plus any initial partial month) the CDSC rate must be less
than or equal to the CDSC rate in the preceding twelve months
(plus any initial partial month).
3. Disclosure and changes. The CDSC rates and CDSC Period shall
be disclosed in the Prospectus and may be decreased at the
discretion of the Distributor but may not be increased unless
approved as set forth in Section L.
4. Method of calculation. The CDSC shall be assessed on an amount
equal to the lesser of the then current net asset value or the
cost of the Shares being redeemed. No CDSC shall be imposed on
increases in the net asset value of the Shares being redeemed
above the initial purchase price. No CDSC shall be assessed on
Shares derived from reinvestment of dividends or capital gains
distributions. The order in which Class B Shares and Class C
Shares are to be redeemed when not all of such Shares would be
subject to a CDSC shall be as determined by the Distributor in
accordance with the provisions of Rule 6c-10 under the Act.
5. Waiver. The Distributor may in its discretion waive a CDSC
otherwise due upon the redemption of Shares of any Class under
circumstances previously approved by the Trustees and disclosed
in the Prospectus and as allowed under Rule 6c-10 under the
Act.
6. Calculation of offering price. The offering price of Shares of
any Class subject to a CDSC shall be computed in accordance
with Rule 22c-1 under the Act and Section 22(d) of the Act and
the rules and regulations thereunder.
7. Retention by Distributor. The CDSC paid with respect to Shares
of any Class may be retained by the Distributor to reimburse
the Distributor for commissions paid by it in connection with
the sale of Shares subject to a CDSC and for Distribution
Expenses.
E. Service and Distribution Fees. Class A Shares and Class AAA
Shares shall be subject to ongoing Distribution Fees or Service
Fees not in excess of 0.25% per annum of the average daily net
assets of the Class. Class B Shares and Class C Shares shall
be subject to a Distribution Fee not in excess of 0.75% per
annum of the average daily net assets of the Class and a
Service Fee not in excess of 0.25% of the average daily net
assets of the Class. All other terms and conditions with
respect to Service Fees and Distribution Fees shall be governed
by the plans adopted by the Fund with respect to such fees and
Rule 12b-1 of the Act.
F. Conversion. Shares acquired through the reinvestment of
dividends and capital gain distributions paid on Shares of a
Class subject to conversion shall be treated as if held in a
separate sub-account. Each time any Shares of a Class in a
shareholder's account (other than Shares held in the sub-
account) convert to Class A Shares, a proportionate number of
Shares held in the sub-account shall also convert to Class A
Shares. All conversions shall be effected on the basis of the
relative net asset values of the two Classes without the
imposition of any sales load or other charge. So long as any
Class of Shares converts into Class A Shares, the Distributor
shall waive or reimburse the Fund, or take such other actions
with the approval of the Trustees as may be reasonably
necessary to ensure that, the expenses, including payments
authorized under a Plan of Distribution, applicable to the
Class A Shares are not higher than the expenses, including
payments authorized under a Plan of Distribution, applicable to
the Class of Shares that converts into Class A Shares. Shares
acquired through an exchange privilege will convert to Class A
Shares after expiration of the conversion period applicable to
such Shares. The continuation of the conversion feature is
subject to continued compliance with the rules and regulations
of the SEC, the NASD and the IRS.
G. Allocation of Liabilities, Expenses, Income and Gains Among
Classes.
1. Liabilities and Expenses applicable to a particular Class.
Each Class of the Fund shall pay any Distribution Fee and
Service Fee applicable to that Class. Other expenses
applicable to any of the foregoing such as incremental transfer
agency fees, but not including advisory or custodial fees or
other expenses related to the management of the Fund's assets,
shall be allocated among such Classes in different amounts in
accordance with the terms of each such Class if they are
actually incurred in different amounts by such Classes or if
such Classes receive services of a different kind or to a
different degree than other Classes.
2. Income, losses, capital gains and losses, and liabilities and
other expenses applicable to all Classes. Income, losses,
realized and unrealized capital gains and losses, and any
liabilities and expenses not applicable to any particular Class
shall be allocated to each Class on the basis of the net asset
value of that Class in relation to the net asset value of the
Fund.
3. Determination of nature of items. The Trustees shall determine
in their sole discretion whether any liability, expense,
income, gains or loss other than those listed herein is
properly treated as attributed in whole or in part to a
particular Class or all Classes.
H. Exchange Privilege. Holders of Class A Shares, Class B Shares,
Class C Shares and Class AAA Shares shall have such exchange
privileges as set forth in the Prospectus for such Class.
Exchange privileges may vary among Classes and among holders of
a Class.
I. Voting Rights of Classes.
1. Shareholders of each Class shall have exclusive voting rights
on any matter submitted to them that relates solely to that
Class, provided that:
a. If any amendment is proposed to the Plan of
Distribution under which Distribution Fees or Service
Fees are paid with respect to Class A Shares of the
Fund that would increase materially the amount to be
borne by Class A Shares under such Plan of
Distribution, then no Class B Shares shall convert into
Class A Shares of the Fund until the holders of Class B
Shares of the Fund have also approved the proposed
amendment.
b. If the holders of either the Class B Shares referred to
in subparagraph a. do not approve the proposed
amendment, the Trustees and the Distributor shall take
such action as is necessary to ensure that the Class
voting against the amendment shall convert into another
Class identical in all material respects to Class A
Shares of the Fund as constituted prior to the
amendment.
2. Shareholders shall have separate voting rights on any matter
submitted to shareholders in which the interest of one Class
differs from the interests of any other Class, provided that:
a. If the holders of Class A Shares approve any increase
in expenses allocated to the Class A Shares, then no
Class B Shares shall convert into Class A Shares of the
Fund until the holders of Class B Shares of the Fund
have also approved such expense increase.
b. If the holders of Class B Shares referred to in
subparagraph a. do not approve such increase, the
Trustees and the Distributor shall take such action as
is necessary to ensure that the Class B Shares shall
convert into another Class identical in all material
respects to Class A Shares of the Fund as constituted
prior to the expense increase.
J. Dividends and Distributions. Dividends and capital gain
distributions paid by the Fund with respect to each Class, to
the extent any such dividends and distributions are paid, will
be calculated in the same manner and at the same time on the
same day and will be, after taking into account any
differentiation in expenses allocable to a particular Class, in
substantially the same proportion on a relative net asset value
basis.
K. Reports to Trustees. The Distributor shall provide the
Trustees such information as the Trustees may from time to time
deem to be reasonably necessary to evaluate this Plan.
L. Amendment. Any material amendment to this Multi-Class Plan
shall be approved by the affirmative vote of a majority (as
defined in the Act) of the Trustees of the Fund, including the
affirmative vote of the Trustees of the Fund who are not
interested persons of the Fund, except that any amendment that
increases the CDSC rate schedule or CDSC Period must also be
approved by the affirmative vote of a majority of the Shares of
the affected Class. Except as so provided, no amendment to
this Multi-Class Plan shall be required to be approved by the
shareholders of any Class of the Shares constituting the Fund.
The Distributor shall provide the Trustees such information as
may be reasonably necessary to evaluate any amendment to this
Multi-Class Plan.
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
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