SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
REGISTRATION NO. 2-29858
POST-EFFECTIVE AMENDMENT NO. 49
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
REGISTRATION NO. 811-1701
AMENDMENT NO. 24
DAVIS NEW YORK VENTURE FUND, INC.
(formerly, NEW YORK VENTURE FUND, INC.)
124 East Marcy Street
Santa Fe, New Mexico 87501
(1-505-983-4335)
Agent For Service: Sheldon R. Stein
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
(1-312-580-2014)
It is proposed that this filing will become effective:
----- immediately upon filing pursuant to paragraph (b)
X on December 1, 1995, pursuant to paragraph (b)
----- ----------------
----- 60 days after filing pursuant to paragraph (a)
----- on ----------, pursuant to paragraph (a) of Rule 485
In accordance with Section 24(f) of the Investment Company Act of 1940
and Rule 24f-2 thereunder, Registrant has previously elected to register
an indefinite number of shares of its Common Stock. The 24f-2 Notice
was filed on or about September 27, 1995.
<PAGE>
FORM N-1A
DAVIS NEW YORK VENTURE FUND, INC.
POST-EFFECTIVE AMENDMENT NO. 49 TO REGISTRATION STATEMENT NO.
2-29858 UNDER THE SECURITIES ACT OF 1933 AND AMENDMENT NO. 24
UNDER THE INVESTMENT COMPANY ACT OF 1940 TO REGISTRATION
STATEMENT NO. 811-1701.
CROSS REFERENCE SHEET
---------------------
N-1A
Item No. Prospectus Caption or Placement
- ------- -------------------------------
1 Front Cover
2 Summary
3 Financial Highlights
4 Summary; Investment Objective and Policies
5 Adviser and Distributor; Distribution Plans; Purchase of
Shares; Summary; Investment Objective and Policies
5A Management's Discussion of Fund Performance (contained in
the1995 Annual Report)
6 Summary; Shareholder Inquiries; Dividends and Distributions;
Federal Income Taxes; Fund Shares
7 Purchase of Shares; Adviser and Distributor; Exchange
of Shares; Determining the Price of Shares; Dividends and
Distributions
8 Redemption of Shares; Exchange of Shares
9 (Not Applicable)
Part B Caption or Placement
---------------------------
10 Cover Page
11 Table of Contents
12 (Not Applicable)
13 Investment Restrictions; Hedging of Foreign Currency Risks;
Repurchase Agreements
Portfolio Transactions
14 Directors and Officers
15 Certain Shareholders of the Fund
16 Investment Advisory Services; Custodian; Auditors;
Determining the Price of Shares; Distribution of Fund Shares
17 Portfolio Transactions
18 *
19 Determining the Price of Shares; Reduction of Class A Sales Charge
20 *
21 *
22 Performance Data
23 Financial Statements are incorporated by reference from the 1995
Annual Report to Shareholders.
____________________
* Included in Prospectus
<PAGE>
PROSPECTUS December 1, 1995
Davis New York Venture Fund, Inc.
124 East Marcy Street
Santa Fe, New Mexico 87501
1-800-279-0279
________________________
Minimum Investment Plans Available
Initial Purchase $1,000 Individual Retirement Account (IRA)
For Retirement Plans $250 Prototype Retirement Plans
Subsequent Investment $25 Exchange Privilege
Automatic Investment Plan
Automatic Withdrawals Plan
Davis New York Venture Fund, Inc. (the "Fund") seeks to achieve
growth of capital. It invests primarily in common stocks.
The Fund offers three classes of shares, Class A, B and C, each
having different expense levels and sales charges. These alternatives
permit you to choose the method of purchasing shares that is most
beneficial to you, depending on the amount of the purchase, the length of
time you expect to hold the shares and other circumstances. See
"Summary" and "Purchase of Shares" for more information.
This Prospectus concisely sets forth information about the Fund that
prospective investors should know before investing. It should be read
carefully and retained for future reference. A Statement of Additional
Information dated December 1, 1995, has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. A copy
of this Statement and other information about the Fund may be obtained
without charge by writing to or calling the Fund at the above address or
telephone number.
________________________
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
SUMMARY
Fund Expenses. The following table is intended to assist you in
understanding the various costs and expenses that an investor in each
class of shares of the Fund will bear directly or indirectly. The
information with respect to Class A shares is based on the Fund's fiscal
year ended July 31, 1995. The information concerning "other expenses"
with respect to the Fund's Class B and Class C shares is estimated for the
fiscal year ending July 31, 1996, the first full fiscal year such shares are
offered. You can refer to the section "Adviser and Distributor" and
"Purchase of Shares" for more information on transaction and operating
expenses of the Fund.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses Class A Class B Class C
- -------------------------------- ------- ------- -------
<S> <C> <C> <C>
Maximum sales load imposed on purchases........................ 4.75% None None
Maximum sales load imposed on reinvested dividends............. None None None
Deferred sales load or redemptions (a percentage of the
lesser of the net asset value of the shares
redeemed or the total cost of such shares)
Redeemed during first year................................ None 4.00% 1.00%<F1>
Redeemed during second or third year...................... None 3.00% None
Redeemed during fourth or fifth year...................... None 2.00% None
Redeemed during sixth year................................ None 1.00% None
Redeemed after sixth year................................. None None None
Exchange Fee................................................... $5.00 $5.00 $5.00
Annual Fund operating expenses (as a percentage of average net assets)
- ---------------------------------------------------------------------
Management fees........................................... 0.63% 0.63% 0.63%
12b-1 fees<F2>.............................................. 0.12% 1.00% 1.00%
Other expenses............................................ 0.15% 0.15% 0.15%
Total Fund operating expenses........................ 0.90% 1.78% 1.78%
<FN>
<F1>On shares purchased after February 8, 1995 and redeemed during the
first year after purchase, there is a 1% fee charged upon redemption.
<F2> The effect of a Rule 12b-1 plan is that long-term shareholders may
pay more than the maximum front-end sales charge permitted under
applicable rules of the National Association of Securities Dealers, Inc.
</FN>
</TABLE>
Example:
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and (except as provided below) redemption at
the end of each time period:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A............................................ $56 $75 $95 $153
Class B............................................ $48 $76 $106 N/A
Class B (assuming no redemption at end of period).. $18 $56 $96 N/A
Class C............................................ $18 $56 $96 $209
Class C (assuming no redemption at end of period).. $18 $56 $96 $209
</TABLE>
The 5% rate used in the example is only for illustration and is
not intended to be indicative of the future performance of the Fund, which
may be more or less than the assumed rate. Future expenses may be more
or less than those shown.
<PAGE>
The Fund. Davis New York Venture Fund, Inc. is an open-end,
diversified, management investment company incorporated in Maryland in
1968 and registered under the Investment Company Act of 1940.
The Fund offers investors the choice among three classes of shares.
Class A shares may be purchased at a price equal to their net asset value
per share plus a front-end sales charge imposed at the time of purchase.
Purchases of $1 million or more of Class A shares may be purchased at net
asset value. Class B shares may be purchased at net asset value, with no
front-end sales charge, but are subject to a CDSC on most redemptions
made within six years after purchase. Class C shares may also be
purchased at net asset value but are subject to a 1% fee on redemptions
made within one year after purchase. These alternatives permit an
investor to choose the method of purchasing shares that is most
beneficial given the amount of the purchase, the length of time the
investor expects to hold the shares, and other circumstances. Each class
of shares pays a Rule 12b-1 distribution fee at an annual rate not to
exceed (i) for Class A shares, 0.25% of the Fund's aggregate average daily
net assets attributable to the Class A shares and (ii) for Class B and C
shares, 1.00% of the Fund's aggregate average daily net assets
attributable to each such class. The purpose and function of the deferred
sales charge, or redemption fee, and distribution fees with respect to the
Class B and Class C shares is the same as those of the front-end sales
charge and distribution services fee with respect to the Class A shares.
Each share of the Fund represents an identical interest in the
investment portfolio of the Fund. However, shares differ by class in
important respects. For example, Class B shares incur higher distribution
services fees and bear certain other expenses and will thus have a higher
expense ratio and pay correspondingly lower dividends than Class A
shares. Class B shares will automatically convert to Class A shares at the
end of eight years after purchase, in the circumstances and subject to the
qualifications described in this Prospectus. Class C shares, like Class B
shares, will also have a higher expense ratio and pay correspondingly
lower dividends than Class A shares, as a result of higher distribution
services fees and certain other expenses. Unlike Class B shares, Class C
shares do not have a conversion feature and therefore will always be
subject to higher distribution fees and other expenses than Class A
shares. In addition, Class C shares are subject to a redemption fee for the
first year such shares are owned. The per share net asset value of the
Class B and Class C shares generally will be lower than the per share net
asset value of the Class A shares, reflecting the daily expense accruals of
additional distribution fees and certain other expenses applicable to Class
B and C shares. It is expected, however, that the per share net asset value
of the classes, which differ by approximately the amount of the expense
accrual differential among the classes, will tend to converge immediately
on the ex date of the dividends or distributions. The Board of Directors
may offer additional classes of shares in the future and may at any time
discontinue the offering of any class of shares. See "Purchase of
Shares--Alternative Purchase Arrangements".
Investment Objective. The Fund's investment objective is growth of
capital. The Fund invests primarily in common stocks. These securities
are subject to the risk of price fluctuations reflecting both market
evaluations of the businesses involved and general changes in the equity
markets. The Fund may invest in foreign securities and attempt to reduce
currency fluctuation risks by engaging in related hedging transactions.
These transactions involve special risk factors. There is no assurance
that the investment objective of the Fund will be achieved. See
"Investment Objective and Policies".
Investment Adviser and Distributor. Davis Selected Advisers, L.P.,
(the "Adviser") is the investment adviser and distributor for the Fund. See
"Adviser and Distributor".
Purchases, Exchanges and Redemptions. The Fund offers three
classes of shares, as described above. Initial and subsequent minimum
investments may be made in amounts equal to $1,000 and $25,
respectively, except that the minimum initial investment for retirement
plans is $250. Shares may be exchanged under certain circumstances at
net asset value for the same class of shares of certain other funds
managed and distributed by the Adviser, with a $5 service fee for each
exchange payable to the Adviser. Accounts with a
<PAGE>
market value of less than $250 caused by shareholder redemptions are
redeemable by the Fund. See "Purchase of Shares," "Exchange of Shares" and
"Redemption of Shares".
Shareholder Services. Questions regarding the Fund or your account
may be directed to Davis Selected Advisers, L.P. at 1-800-279-0279 or to
your sales representative. Written inquiries may be directed to Davis
Selected Advisers, L.P., P.O. Box 1688, Santa Fe, NM 87504-1688. During
severe market conditions, the Adviser may experience difficulty in
accepting telephone redemptions or exchanges. If you are unable to contact
the Adviser at the above telephone number, you should call
1-505-820-3000 Monday through Friday between 8:00 a.m. and 4:00 p.m.
Mountain Time.
FINANCIAL HIGHLIGHTS
The following table provides you with information about the
financial history of the Fund's shares. The table expresses the
information in terms of a single Class A, Class B or Class C share for the
respective periods presented and is supplementary information to the
Fund's financial statements which are included in the 1995 Annual Report
to Shareholders. Such report may be obtained by writing or calling the
Fund. The Fund's financial statements and financial highlights for the five
years ended July 31, 1995 have been audited by the Fund's independent
certified public accountants, whose opinion thereon is contained in the
Annual Report.
<PAGE>
<TABLE>
-----------------------------CLASS A-------------------------------------------CLASS B CLASS C
Dember
20,1994
(Commence-
Eight ment of
Months operations)
ended through
Year ended July 31, July 31, July 31,
-----------------------------------------------------------------------------
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1995<F2> 1995<F2>
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.................... $12.04 $12.08 $10.70 $ 9.85 $9.39 $9.72 $8.07 $10.88 $10.41 $ 8.80 $10.88 $11.16
------ ------ ------ ------ ----- ----- ----- ------ ------ ------ ------ ------
Income From
Investment
Operations
- ----------
Net Investment
Income.................. .14 .16 .10 .14 .16 .36 .21 .19 .15 .14 (.01) (.01)
Net Gains on
Securities (both
realized and
unrealized)............. 2.95 .54 1.98 1.57 1.02 .38 2.22 (.64) 2.10 2.37 3.56 3.32
------ ------ ------ ------ ----- ----- ----- ------ ------ ------ ------ ------
Total From
Investment
Operations.............. 3.09 .70 2.08 1.71 1.18 .74 2.43 (.45) 2.25 2.51 3.55 3.31
Less Distributions
- ------------------
Dividends (from
net investment
income)................. (.12) (.16) (.10) (.21) (.18) (.37) (.22) (.22) (.10) (.18) _ _
Distributions
From Real-
ized Capital
Gains.................... (.45) (.58) (.59) (.55) (.50) (.70) (.34) (1.66) (1.68) (.72) _ _
Distributions
From Paid In
Capital................. _ _ (.01) (.10) (.04) _ (.22) (.48) _ _ _ _
------ ------ ------ ------ ----- ----- ----- ------ ------ ------ ------ ------
Total Dis-
tributions.............. (.57) (.74) (.70) (.86) (.72) (1.07) (.78) (2.36) (1.78) (.90) _ _
------ ------ ------ ------ ----- ----- ----- ------ ------ ------ ------ ------
Net Asset Value,
End of Period.......... $14.56 $12.04 $12.08 $10.70 $9.85 $9.39 $9.72 $ 8.07 $10.88 $10.41 $14.43 $14.47
====== ====== ====== ====== ===== ===== ===== ====== ====== ====== ====== ======
Total Return<1>............. 27.21% 5.99% 20.20% 18.62% 14.29% 8.12% 33.44% (3.30)% 25.22% 32.95% 26.07% 26.42%
- ------------
Ratios/Supplemental
- -------------------
Data
- ----
Net Assets, End of
Period (000,000
omitted)............... 1,595 1,077 739 494 421 345 319 168 232 147 40 12
Ratio of
Expenses
to Average
Net Assets............. 90% .87% .89% .91% .97% .97% .97% 1.01% .93% .99% 1.78%<F1> 1.78%<F1>
Ratio of Net
Income to Average
Net Assets............. 1.11% 1.19% .85% 1.36% 1.84% 3.78% 2.45% 2.42% 1.48% 1.56% .23%<F1> .23%<F1>
Portfolio Turn-
over Rate.............. 15% 13% 24% 26% 52% 47% 58% 38% 55% 98% 15% 15%
<FN>
<F1> Sales charges are not reflected in calculation.
<F2> Class B and Class C shares were initially offered on December 1, 1994.
<F3> Annualized.
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
General. The Fund's investment objective is growth of capital.
There is no assurance that such objective will be achieved. The Fund
ordinarily invests in securities which the Adviser believes have
above-average appreciation potential. Usually these securities are
common stocks. Income is not a significant factor in selecting the Fund's
investments.
Generally, the Fund invests predominantly in equity securities of
companies with market capitalizations of at least $250 million. It also
will invest in issues with smaller capitalizations. Special risks
associated with investing in small cap issuers relative to larger cap
issuers include high volatility of valuations and less liquidity.
Investments will consist of issues which the Adviser believes have
capital growth potential due to factors such as undervalued assets or
earnings potential, product development and demand, favorable operating
ratios, resources for expansion, management abilities, reasonableness of
market price, and favorable overall business prospects.
Foreign Investments. The Fund may invest in securities of foreign
issuers or securities which are principally traded in foreign markets
("foreign securities"). Investments in foreign securities may be made
through the purchase of individual securities on recognized exchanges and
developed over-the-counter markets, through American Depository
Receipts ("ADRs") covering such securities, and through U.S. registered
investment companies investing primarily in foreign securities. The Fund,
however, may not invest in the securities of other investment companies
if more than 10% of the Fund's total assets would then be invested in such
companies. Other registered investment companies usually have their own
management costs or fees and the Adviser will also earn its regular fee on
Fund assets invested in such other companies. When the Fund is invested
in foreign securities, the operating expenses of the Fund are likely to be
higher than that of an investment company investing exclusively in U.S.
securities, since the management, custodial and certain other expenses
are expected to be higher.
Investments in foreign securities may involve a higher degree of
risk than investments in domestic issuers. Foreign securities are often
denominated in foreign currencies, which means that their value will be
affected by changes in exchange rates, as well as other factors that
affect securities prices. There is generally less publicly available
information about foreign securities and securities markets, and there
may be less government regulation and supervision of foreign issuers and
securities markets. Foreign securities and markets may also be affected
by political and economic instabilities, and may be more volatile and less
liquid than domestic securities and markets. Investment risks may
include expropriation or nationalization of assets, confiscatory taxation,
exchange controls and limitations on the use or transfer of assets, and
significant withholding taxes. Foreign economies may differ from the
United States favorably or unfavorably with respect to inflation rates,
balance of payments, capital reinvestment, gross national product
expansion, and other relevant indicators.
To attempt to reduce exposure to currency fluctuations, the Fund
may trade in forward foreign currency exchange contracts (forward
contracts), currency futures contracts and options thereon and securities
indexed to foreign securities. These techniques may be used to lock in an
exchange rate in connection with transactions in securities denominated
or traded in foreign currencies, to hedge the currency risk in foreign
securities held by the Fund and to hedge a currency risk involved in an
anticipated purchase of foreign securities. Cross-hedging may also be
utilized, that is, entering into a hedge transaction in respect to a
different foreign currency than the one in which a trade is to be made or
in which a portfolio security is principally traded. There is no limitation
on the amount of assets that may be committed to currency hedging.
However, the Fund will not engage in a futures transaction if it would
cause the aggregate of initial margin deposits and premiums paid on
outstanding options on futures contracts to exceed 5% of the value of its
total assets (excluding in calculating such 5% any in-the-money amount of
any option). Currency hedging transactions
<PAGE>
may be utilized as a tool to reduce currency fluctuation risks due to a
current or anticipated position in foreign securities. The successful use
of currency hedging transactions usually depends on the Adviser's ability
to forecast interest rate and currency exchange rate movements. Should
interest or exchange rates move in an unexpected manner, the anticipated
benefits of futures contracts, options or forward contracts may not be
achieved or losses may be realized and thus the Fund could be in a worse
position than if such strategies had not been used. Unlike many
exchange-traded futures contracts, there are no daily price fluctuation
limits with respect to options on currencies and forward contracts, and
adverse market movements could therefore continue to an unlimited extent
over a period of time. In addition, the correlation between movements in
the prices of such instruments and movements in the price of the securities
and currencies hedged or used for cover will not be perfect and could
produce unanticipated losses. Unanticipated changes in currency prices may
result in poorer overall performance for the Fund than if it had not entered
into such contracts. When taking a position in an anticipatory hedge, the
Fund is required to set aside cash or high grade liquid securities to fully
secure the obligation.
Temporary Defensive Investments. For defensive purposes or to
accommodate inflows of cash awaiting more permanent investment, the
Fund may temporarily and without limitation hold high-grade short-term
money market instruments, cash and cash equivalents, including
repurchase agreements.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities, i.e., securities which, if sold, would cause the Fund to be
deemed an "underwriter" under the Securities Act of 1933 (the "1933
Act") or which are subject to contractual restrictions on resale. The
Fund's policy is to not purchase or hold illiquid securities (which may
include restricted securities) if more than 15% of the Fund's net assets
would then be illiquid. If at any time more than 15% of the Fund's net
assets are illiquid, steps will be taken as soon as practicable to reduce
the percentage of illiquid assets to 15% or less.
The restricted securities which the Fund may purchase include
securities which have not been registered under the 1933 Act but are
eligible for purchase and sale pursuant to Rule 144A ("Rule 144A
Securities"). This Rule permits certain qualified institutional buyers,
such as the Fund, to trade in privately placed securities even though such
securities are not registered under the 1933 Act. The Adviser, under
criteria established by the Fund's Board of Directors, will consider
whether Rule 144A securities being purchased or held by the Fund are
illiquid and thus subject to the Fund's policy limiting investments in
illiquid securities. In making this determination, the Adviser will
consider the frequency of trades and quotes, the number of dealers and
potential purchasers, dealer undertakings to make a market, and the
nature of the security and the market place trades (for example, the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer). The liquidity of Rule 144A Securities will also be
monitored by the Adviser and, if as a result of changed conditions, it is
determined that a Rule 144A Security is no longer liquid, the Fund's
holding of illiquid securities will be reviewed to determine what, if any,
action is required in light of the policy limiting investments in such
securities. Investing in Rule 144A Securities could have the effect of
increasing the amount of investments in illiquid securities if qualified
institutional buyers are unwilling to purchase such securities.
Repurchase Agreements. The Fund may enter into repurchase
agreements, but normally will not enter into repurchase agreements
maturing in more than seven days, and may make repurchase agreement
transactions through a joint account with other funds which have the
same investment adviser. A repurchase agreement, as referred to herein,
involves a sale of securities to the Fund, with the concurrent agreement
of the seller (a bank or securities dealer which the Adviser or
Sub-Adviser determines to be financially sound at the time of the
transaction) to repurchase the securities at the same price plus an amount
equal to accrued interest at an agreed-upon interest rate, within a
specified time, usually less than one week, but, on occasion, at a later
time. The repurchase obligation of the seller is, in effect, secured by the
underlying securities. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying securities and losses, including (a) possible
decline in the value of the collateral
<PAGE>
during the period while the Fund seeks to enforce its rights thereto;
(b) possible loss of all or a part of the income during this period; and
(c) expenses of enforcing its rights.
Borrowing. The Fund may not borrow money except from banks for
extraordinary or emergency purposes in amounts not exceeding 10% of the
value of the Fund's total assets (excluding the amount borrowed) at the
time of borrowing. The Fund may not pledge or hypothecate any of its
assets, except in connection with permitted borrowing in amounts not
exceeding 15% of the value of the Fund's total assets (excluding the
amount borrowed) at the time of such borrowing.
Portfolio Transactions. The Adviser is responsible for the
placement of portfolio transactions, subject to the supervision of the
Board of Directors. It is the Fund's policy to seek to place portfolio
transactions with brokers or dealers who will execute transactions as
efficiently as possible and at the most favorable price. Subject to this
policy, research services and placement of orders by securities firms for
Fund shares may be taken into account as a factor in placement of
portfolio transactions. In seeking the Fund's investment objective, the
Fund may trade to some degree in securities for the short term if the
Adviser believes that the growth potential of a security no longer exists,
considers that other securities have more growth potential, or otherwise
believes that such trading is advisable. Because of the Fund's investment
policies, portfolio turnover rate will vary. At times it could be high,
which could require the payment of larger amounts in brokerage
commissions. Portfolio turnover rates are set forth in "Financial
Highlights".
Fundamental Policies. The Fund has adopted certain investment
restrictions set forth in the Statement of Additional Information. These
restrictions and the Fund's investment objective are fundamental policies
and may not be changed unless authorized by a vote of the shareholders.
All other policies are non-fundamental and may be changed without
shareholder approval. Except for the restriction with respect to illiquid
securities, any percentage restrictions set forth in the prospectus or in
the Statement of Additional Information apply as of the time of
investment without regard to later increases or decreases in the values of
securities or total net assets.
ADVISER AND DISTRIBUTOR
Subject to the direction and supervision of the Fund's Board of
Directors, the Fund's affairs are managed by Davis Selected Advisers, L.P.,
124 East Marcy Street, Santa Fe, New Mexico 87501. Venture Advisers,
Inc. is the Adviser's sole general partner. Shelby M.C. Davis is the
controlling shareholder of the general partner. The Adviser manages the
Fund's investment and business operations and acts as the distributor of
the Fund's shares. The Adviser also acts as investment adviser and
distributor for Davis High Income Fund, Inc., Davis Tax-Free High Income
Fund, Inc., Davis Series, Inc. and Davis International Series, Inc.
(collectively with the Fund, the "Davis Funds"), Selected American Shares,
Inc., Selected Special Shares, Inc. and Selected Capital
Preservation Trust.
The Fund pays the Adviser a fee at the annual rate of 0.75% on the
first $250 million of average net assets, 0.65% on the next $250 million
of average net assets and 0.55% on average net assets over $500 million.
This fee is higher than that of most other mutual funds but is not
necessarily higher than that paid by funds with a similar objective. The
Fund also reimburses the Adviser for its costs of providing certain
accounting and financial reporting, shareholder services and compliance
with state securities laws.
Shelby M.C. Davis has been the Fund's primary portfolio manager
since its inception in 1969. Since 1969, he has been a director of the
Adviser's general partner. He is a director and officer of all investment
companies managed by the Adviser and has been the portfolio manager of
Selected American Shares, Inc. since May 1, 1993.
<PAGE>
Christopher C. Davis is the portfolio co-manager for the Fund and
Selected American Shares, Inc., and the portfolio manager of the Davis
Series, Inc., Davis Financial Fund. He was co-portfolio manager of the
Davis Financial Fund, with Shelby M.C. Davis, from its inception on May 1,
1991 until December 1, 1994. He has been employed by the Adviser since
September, 1989 as an assistant portfolio manager and research analyst.
Davis Selected Advisers, L.P., in its capacity as distributor, is also
reimbursed by the Fund for some of its distribution expenses through
Distribution Plans which have been adopted with respect to each class of
shares and approved by the Fund's Board of Directors and the shareholders
of each class in accordance with Rule 12b-1 under the Investment
Company Act of 1940. See "Distribution Plans" below for more details.
DISTRIBUTION PLANS
The Fund bears some of the costs of selling its shares under
Distribution Plans adopted with respect to each class of shares pursuant
to Rule 12b-1 under the Investment Company Act of 1940. This rule
regulates the manner in which a mutual fund may assume costs of
distributing and promoting the sale of its shares.
Payments under the Class A Distribution Plan are limited to an
annual rate of 0.25% of the average daily net asset value of the Class A
shares. Such payments are made to reimburse the Adviser for the fees it
pays to its salespersons and other firms for selling Fund shares, servicing
shareholders and maintaining shareholder accounts. Normally, such fees
are at the annual rate of 0.25% of the average net asset value of the
accounts serviced and maintained on the books of the Fund. Payments
under the Class A Distribution Plan may also be used to reimburse the
Adviser for other distribution costs (excluding overhead) not covered in
any year by any portion of the sales charges the Adviser retains. See
"Purchase of Shares."
Payments under the Class B Distribution Plan are limited to an
annual rate of 1% of the average daily net asset value of the Class B
shares. In accordance with current applicable rules, such payments are
also limited to 6.25% of gross sales of Class B shares plus interest at 1%
over the prime rate on any unpaid amounts. Up to 0.75% of the average
daily net assets is used to pay the Adviser a 4% commission on new sales
of Class B Shares. Most or all of such commissions are reallowed to
salespersons and to firms responsible for such sales. No commissions are
paid by the Fund with respect to sales by the Adviser to officers,
directors and full-time employees of the Fund, the Adviser or the
Adviser's general partner. Up to 0.25% of average net assets is used to
reimburse the Adviser for the payment of service and maintenance fees to
its salespersons and other firms for shareholder servicing and
maintenance of shareholder accounts.
If, due to the foregoing payment limitations, the Fund is unable to
pay the Adviser the 4% commission on new sales of Class B shares, the
Adviser intends, but is not obligated, to accept new orders for shares and
pay commissions in excess of the payments it receives from the Fund. The
Adviser intends to seek full payment from the Fund of any excess amounts
with interest at 1% over the prime rate at such future date when and to
the extent such payments on new sales would not be in excess of the
limitations. The Fund is not obligated to make such payments; the amount
(if any), timing and condition of any such payments are solely within the
discretion of the directors of the Fund who are not interested persons of
the Adviser or the Fund and have no direct or indirect financial interest in
the Class B Distribution Plan (the "Independent Directors"). If the Class B
Distribution Plan is terminated, the Adviser will ask the Independent
Directors to take whatever action they deem appropriate with regard to
the payment of any excess amounts.
Payments under the Class C Distribution Plan are limited to an
annual rate of 1% of the average daily net asset value of the Class C
shares, and are subject to the same 6.25% and 1% limitations applicable to
the Class B Distribution Plan. The entire amount of payments may be used
to reimburse the Adviser for the payments of an initial commission and
service and maintenance fees to its salespersons and other firms for
selling new Class C shares, shareholder servicing and maintenance of
shareholder accounts.
<PAGE>
In addition, the Plans provide that the Adviser, in its sole
discretion, may utilize its own resources for distributing and promoting
sales of Fund shares, including any profits from its advisory fees.
Each of the Distribution Plans may be terminated at any time by vote
of the Independent Directors or by vote of the respective class. Payments
pursuant to a Distribution Plan are included in the operating expenses of
the class.
As described herein, dealers or others will receive different levels
of compensation depending on which class of shares they sell. The Adviser
may make expense reimbursements for special training of a dealer's
registered representatives, advertising or equipment, or to defray the
expenses of dealer meetings.
Shares of the Fund may also be sold through banks or bank-affiliated
dealers. Any determination that such banks or bank-affiliated dealers are
prohibited from selling shares of the Fund under the Glass-Steagall Act
would have no material adverse effects on the Fund. State securities laws
may require such firms to be licensed as securities dealers in order to
sell shares of the Fund.
PURCHASE OF SHARES
General. You can purchase Class A, Class B or Class C shares of the
Fund from any dealer or other person having a sales agreement with the
Adviser.
There are three ways to make an initial investment in the Fund. One
way is to fill out the Application Form included in this Prospectus and
mail it to State Street Bank and Trust Company ("State Street") at the
address on the Form. The dealer must also sign the Form. Your dealer or
sales representative will help you fill out the Form. You should enclose a
check (minimum $1,000, except $250 for retirement plans) payable as
indicated on the Form.
Another way to make an initial investment is to have your dealer
order and pay for the shares. In this case, you must pay your dealer. The
dealer can order the shares from the Adviser by telephone or wire. You
can also use this method for additional investments of at least $1,000.
The third way to purchase shares is by wire. Shares may be
purchased at any time by wiring federal funds directly to State Street.
Prior to an initial investment by wire, the shareholder should telephone
Davis Selected Advisers, L.P. at 1-800-279-0279 to advise them of the
investment and class of shares and to obtain an account number and
instructions. A completed Plan Adoption Agreement or Application Form
should be mailed to State Street after the initial wire purchase. To
assure proper credit, the wire instructions should be made as follows:
State Street Bank and Trust Company,
Boston, MA 02210
Attn.: Mutual Fund Services
DAVIS NEW YORK VENTURE FUND, INC.
Shareholder Name,
Shareholder Account Number,
Federal Routing Number 011000028,
DDA Number 9904-947-0
After your initial investment, you can make additional investments
of at least $25. Simply mail a check payable to "State Street Bank and
Trust Company," c/o The Davis Funds, P.O. Box 8406, Boston, MA
02266-8406. The check should be accompanied by a form which State
Street will provide after each purchase. If you
<PAGE>
do not have a form, you should tell State Street that you want to invest
the check in shares of the Fund. If you know your account number, you
should also give it to State Street.
The Fund does not issue certificates for Class A shares unless you
request a certificate each time you make a purchase. Certificates are not
issued for Class B or Class C shares. Instead, shares purchased are
automatically credited to an account maintained for you on the books of
the Fund by State Street. You receive a statement showing the details of
the transaction and any other transactions you had during the current year
each time you add to or withdraw from your account.
Alternative Purchase Arrangements. The Fund offers three classes
of shares. With certain exceptions described below, Class A shares are
sold with a front-end sales charge at the time of purchase and are not
subject to a sales charge when they are redeemed. Class B shares are sold
without a sales charge at the time of purchase, but are subject to a
deferred sales charge if they are redeemed within six years after
purchase. Class B shares will automatically convert to Class A shares
eight years after the end of the calendar month in which the shareholder's
order to purchase was accepted. Class C shares are purchased at their net
asset value per share without the imposition of a front-end sales charge
but are subject to a 1% fee if redeemed within one year after purchase and
do not have a conversion feature.
Depending on the amount of the purchase and the anticipated length
of time of investment, investors may choose to purchase one class of
shares rather than the other. Investors who would rather pay the entire
cost of distribution at the time of investment, rather than spreading such
cost over time, might consider Class A shares. Other investors might
consider Class B or Class C shares, in which case 100% of the purchase
price is invested immediately. The Fund will not accept any purchase of
Class B shares in the amount of $250,000 or more per investor. Such
purchase must be made in Class A shares. Class C shares may be more
appropriate for the short-term investor. The Fund will not accept any
purchase of Class C shares when Class A shares may be purchased at net
asset value. See also "Distribution Plans" for more information.
Class A Shares. Class A shares are sold at their net asset value plus
a sales charge. The amounts of the sales charges are shown in the
following table.
<TABLE>
<CAPTION>
Customary
Sales Charge Charge as Concession to Your
as Percentage Approximate Percentage Dealer as Percentage
Amount of Purchase of Offering Price of Amount Invested of Offering Price
- ------------------ ----------------- ------------------ -----------------
<S> <C> <C> <C>
$99,999 or less................ 4-3/4% 5.0% 4%
$100,000 to $249,999........... 3-1/2% 3.6% 3%
$250,000 to $499,999........... 2-1/2% 2.6% 2%
$500,000 to $749,999........... 2% 2.0% 1-3/4%
$750,000 to $999,999........... 1% 1.0% 3/4 of 1%
$1,000,000 or more............. 0% 0.0% 0%<F1>
<FN>
<F1> On purchases of $1 million or more, the investor pays no front-end
sales charge or contingent deferred sales charge. However, the Adviser
may pay the financial service firm a commission during the first year
after such purchase at an annual rate as follows:
<FN>
</TABLE>
<TABLE>
<CAPTION>
Purchase Amount Commission
--------------- ----------
<S> <C>
First $3,000,000................................... .75%
Next $2,000,000................................... .50%
Over $5,000,000................................... .25%
</TABLE>
Such commission will be paid quarterly at the end of each fiscal quarter
for the first year after purchase. Where a commission is paid because of
purchases of $1 million or more, such payment will be made from 12b-1
<PAGE>
distribution fees received from the Fund and, in cases where the limits of
the distribution plan in any year have been reached, from the distributor's
own resources.
There are a number of ways to reduce the sales charge on the
purchase of Class A shares, as set forth below.
(i) Family Purchases: Purchases made by an individual, such
individual's spouse and children under 21 are combined and treated as a
purchase of a single person.
(ii) Group Purchases: The purchases of an organized group, whether
or not incorporated, are combined and treated as the purchase of a single
person. The organization must have been organized for a purpose other
than to purchase shares of mutual funds.
(iii) Purchases for Employee Benefit Plans: Trusteed or other
fiduciary accounts and Individual Retirement Accounts ("IRA") of a single
employer are treated as purchases of a single person. Purchases of and
ownership by an individual and such individual's spouse under an IRA are
combined with their other purchases and ownership.
(iv) Purchases under a Statement of Intention: By executing the
"Statement of Intention" included in the Application Form at the back of
the Prospectus, purchases of Class A shares of $100,000 or more made
over a 13-month period may be made at the applicable price for the
aggregate shares actually purchased during the period. Please see "Terms
and Conditions" at the back of this prospectus.
(v) Rights of Accumulation: If you notify your dealer or the Adviser,
you may include the Class A shares you already own (valued at maximum
offering price) in calculating the price applicable to your current
purchase.
(vi) Combined Purchases with other Davis Funds: Purchases of Class
A shares of the Fund may be combined with your purchases of Class A
shares of other Davis Funds, including Davis High Income Fund, Inc., Davis
Tax-Free High Income Fund, Inc., Davis International Series, Inc. and all
funds offered by Davis Series, Inc. (other than Davis Government Money
Market Fund), separately or under combined Statements of Intention or
rights of accumulation to determine the price applicable to your purchases
of Class A shares of the Fund.
(vii) Sales at Net Asset Value: The sales charge will not apply to:
(1) Class A shares purchased through the automatic reinvestment of
dividends and distributions (see "Dividends and Distributions"); (2) Class A
shares purchased by directors, officers and employees of any Fund,
supervised and distributed by the Adviser or Adviser's general partner,
including former directors and officers and any spouse, child, parent,
grandparent, brother or sister of all of the foregoing, and any employee
benefit or payroll deduction plan established by or for such persons; (3)
Class A shares purchased by any registered representatives, principals
and employees (and any spouse, child, parent, grandparent, brother or
sister) of securities dealers having a sales agreement with the Adviser;
(4) initial purchases of Class A shares totaling $250,000 or more, made at
any one time by banks, trust companies and other financial institutions
(collectively "Institutions") on behalf of one or more clients for which
such Institution acts in a fiduciary capacity; (5) initial purchases of Class
A shares totaling $250,000 or more by a registered investment adviser on
behalf of a client for which the adviser is authorized to make investment
decisions or otherwise acts in a fiduciary capacity; (6) Class A shares
purchased by any single account covering a minimum of 250 participants
and representing a defined benefit plan, defined contribution plan, cash or
deferred plan qualified under 401(a) or 401(k) of the Internal Revenue
Code or a plan established under section 403(b), 457 or 501(c)(9) of such
Code; (7) Class A shares purchased by persons participating in a "wrap
account" or similar fee-based program sponsored and maintained by a
registered broker-dealer approved by the
<PAGE>
Fund's Adviser; and (8) Class A shares purchased by any state, county, city,
department, authority or similar agency prohibited by law from paying a sales
charge. The Fund may also issue Class A shares at net asset value incident to
a merger with or acquisition of assets of an investment company.
Class B Shares. Class B shares are offered at net asset value,
without a front-end sales charge. With certain exceptions described
below, the Fund imposes a deferred sales charge of 4% on shares redeemed
during the first year after purchase, 3% on shares redeemed during the
second or third year after purchase, 2% on shares redeemed during the
fourth or fifth year after purchase and 1% on shares redeemed during the
sixth year after purchase. However, on Class B shares of the Fund which
are acquired upon exchange from Class B shares of other Davis Funds
which were purchased prior to December 1, 1994, the Fund will impose a
deferred sales charge of 4% on shares redeemed during the first calendar
year after purchase; 3% on shares redeemed during the second calendar
year after purchase; 2% on shares redeemed during the third calendar year
after purchase; and 1% on shares redeemed during the fourth calendar
year after purchase, and no deferred sales charge is imposed on amounts
redeemed after four calendar years from purchase. Class B shares will be
subject to a maximum Rule 12b-1 fee at the annual rate of 1% of the
class' average daily net asset value.
Class B shares that have been outstanding for eight years will
automatically convert to Class A shares without imposition of a front-end
sales charge or exchange fee. The Class B shares so converted will no
longer be subject to the higher expenses borne by Class B shares. Because
the net asset value per share of the Class A shares may be higher or lower
than that of the Class B shares at the time of conversion, although the
dollar value will be the same, a shareholder may receive more or less
Class A shares than the number of Class B shares converted. Under the
Funds' private Internal Revenue Service Ruling, such a conversion will not
constitute a taxable event under the federal income tax law. In the event
that this ceases to be the case, the Board of Directors will consider what
action, if any, is appropriate and in the best interests of the Class B
shareholders.
Any contingent deferred sales charge imposed upon the redemption
of Class B shares is a percentage of the lesser of (i) the net asset value of
the shares redeemed or (ii) the original cost of such shares. No contingent
deferred sales charge is imposed when you redeem amounts derived from
(a) increases in the value of shares above the original cost of such shares
or (b) certain shares with respect to which the Fund did not pay a
commission on issuance, including shares acquired through reinvestment
of dividend income and capital gains distributions. Upon request for
redemption, shares not subject to the contingent deferred sales charge
will be redeemed first. Thereafter, shares held the longest will be the
first to be redeemed.
The contingent deferred sales charge will be waived as follows: (1)
on redemptions following a shareholder's death or disability, as defined in
Section 72(m)(7) of the Internal Revenue Code of 1986, as amended (the
"Code"); (2) on taxable periodic distributions from a qualified retirement
plan or IRA upon retirement or attainment of age 59 1/2 (e.g. the
applicable contingent deferred sales charge, if any, is imposed upon a
lump sum redemption at any age whether or not it is taxable) or
distributions to make a tax-free return of contributions to avoid tax
penalty; (3) on redemptions of shares sold to directors, officers and
employees of the Fund, its Adviser or the Adviser's general partner,
including former directors and officers and immediate family members of
all of the foregoing, and any employee benefit or payroll deduction plan
established by or for such persons; (4) on redemptions made as tax-free
returns of contributions to avoid tax penalty; and (5) on redemptions
pursuant to the right of the Fund to liquidate a shareholder's account if
the aggregate net asset value of the shares held in such account falls
below an established minimum amount.
Class C Shares. Class C shares are offered at net asset value
without a sales charge at the time of purchase. Class C shares purchased
after February 8, 1995 and redeemed within one year thereafter will be
subject to a 1% charge upon redemption. Class C shares do not have a
conversion feature. The Fund will not accept any purchases of Class C
shares when Class A shares may be purchased at net asset value.
<PAGE>
The Adviser will pay a 1% commission to the firm responsible for
the sale of Class C shares. No other fees will be paid by the Adviser
during the one-year period following purchase. The Adviser will be
reimbursed for the commissions paid from 12b-1 fees paid by the Fund
during the one-year period. If Class C shares are redeemed within the
one-year period after purchase, the difference between the 1%
commission paid to the dealer and the 12b-1 fees paid to the Adviser
during that period will reimbursed to the Adviser out of the 1%
redemption charge. The remainder of the charge will be paid to the Fund.
After Class C shares have been outstanding form more than one year, the
Adviser will pay service and maintenance fees quarterly to the firm
responsible for the sale of the shares at an annual rate of 1% of the
average daily net asset value of such shares.
Prototype Retirement Plans. The Adviser and certain qualified
dealers have available prototype retirement plans sponsored by the Fund
for corporations and self-employed individuals and prototype Individual
Retirement Account ("IRA") plans for both individuals and employers.
These plans utilize the shares of the Fund and other Funds managed and
distributed by the Adviser as their investment vehicle. State Street acts
as custodian or trustee for the plans and charges the participant $10 to
establish each account and an annual maintenance fee of $10 per account.
Such fees will be redeemed automatically at year end from your account,
unless you elect to pay the fee directly.
Automatic Investment Plan. Shareholders may arrange for automatic
monthly investing whereby State Street will be authorized to initiate a
debit to the shareholder's bank account of a specific amount (minimum
$25) each month which will be used to purchase Fund shares. For
institutions that are members of the Automated Clearing House system
(ACH), such purchases can be processed electronically on any day of the
month between the 3rd and 28th day of each month. After each automatic
investment, the shareholder will receive a transaction confirmation and
the debit should be reflected on the shareholder's next bank statement.
The plan may be terminated at any time by the shareholder. If you desire
to utilize this plan, you may use the appropriate designation on the
Application Form.
Dividend Diversification Program. You may also establish a dividend
diversification program which allows you to have all dividends and any
other distributions automatically invested in shares of one or more of the
Davis Funds, subject to state securities law requirements and the
minimum investment requirements set forth below. You must receive a
current prospectus for the other fund or funds prior to investment. Shares
will be purchased at the chosen fund's net asset value on the dividend
payment date. A dividend diversification account must be in the same
registration as the distributing fund account and must be of the same
class of shares. All accounts established or utilized under this program
must have a minimum initial value of at least $250 and all subsequent
investments must be at least $25. This program can be amended or
terminated at any time, upon at least 60 days' notice. If you would like to
participate in this program, you may use the appropriate designation on
the Application Form.
TELEPHONE PRIVILEGE
Unless you have provided in your application that the telephone
privilege is not to be available, the telephone privilege is automatically
available under certain circumstances for exchanging shares and for
redeeming shares. By exercising the telephone privilege to sell or
exchange shares, you agree that the Fund shall not be liable for following
telephone instructions reasonably believed to be genuine. Reasonable
procedures will be employed to confirm that such instructions are genuine
and if not employed, the Fund may be liable for unauthorized instructions.
Such procedures will include a request for personal identification
(account or social security number) and tape recording of the instructions.
You should be aware that during unusual market conditions we may have
difficulty in accepting telephone requests, in which case you should
contact us by mail. See "Exchange of Shares - By Telephone", "Redemption
of Shares - By Telephone" and "Redemption of Shares - Expedited
Redemption Privilege".
<PAGE>
EXCHANGE OF SHARES
General. You may exchange shares of the Fund for shares of the same
class of the other Davis Funds. This exchange privilege is a convenient
way to buy shares in other Davis Funds in order to respond to changes in
your goals or in market conditions. If such goals or market conditions
change, the Davis Funds offer a variety of investment objectives that
includes common stock funds, tax-exempt and corporate bond funds, and a
money market fund. However, the Fund is intended as a long-term
investment and is not intended for short-term trades. Shares of a
particular class of the Fund may be exchanged only for shares of the same
class of another Davis Fund. All of the Davis Funds offer Class A and
Class B shares. Only the Fund and Davis Series, Inc., Davis Government
Money Market Fund offer Class C shares. The shares to be received upon
exchange must be legally available for sale in your state. The net asset
value of the initial shares being acquired must be at least $1,000 unless
such exchange is under the Automatic Exchange Program described below.
There is a $5 service charge payable to the Adviser for each exchange
other than an exchange under the Automatic Exchange Program.
Shares may be exchanged at relative net asset value without any
additional charge. However, if any shares being exchanged are subject to
an escrow or segregated account pursuant to the terms of a Statement of
Intention or a CDSC, such shares will be exchanged at relative net asset
value, but the escrow or segregated account will continue with respect to
the shares acquired in the exchange. In addition, the terms of any CDSC, or
redemption fee, to which any Class B or Class C, shares are subject at the
time of exchange will continue to apply to any Class B shares acquired
upon exchange.
Before you decide to make an exchange, you must obtain the current
prospectus of the desired fund. Call your broker or the Adviser for
information and a prospectus for any of the other Davis Funds registered
in your state. Read the prospectus carefully. If you decide to exchange
your shares, send State Street a written unconditional request for the
exchange and follow the instructions regarding delivery of share
certificates contained in the section on "Redemption of Shares". A
signature guarantee is not required for such an exchange. However, if
shares are also redeemed for cash in connection with the exchange
transaction, a signature guarantee may be required. See "Redemption of
Shares". Your dealer may charge an additional fee for handling an exercise
of the exchange privilege.
By Telephone. You may exchange shares by telephone into accounts
with identical registrations. Please see the discussion of procedures in
respect to telephone instructions in the section entitled "Telephone
Privilege," as such procedures are also applicable to exchanges.
Automatic Exchange Program. The Fund also offers an automatic
monthly exchange program. All accounts established or utilized under this
program must have the same registration and a minimum initial value of
at least $250. All subsequent exchanges must have a value of at least
$25. Each month, shares will be simultaneously redeemed and purchased
at the chosen Davis Fund's applicable offering price. If you would like to
participate in this program, you may use the appropriate designation on
the Application Form.
An exchange involves both a redemption and a purchase, and normally
both are done on the same day. However, in certain instances such as
where a large redemption is involved, the investment of redemption
proceeds into shares of other Davis Funds may take up to seven days. For
federal income tax purposes, exchanges are treated as a sale and purchase.
Therefore, there will usually be a recognizable capital gain or loss due to
an exchange.
The number of times a shareholder may exchange shares among the
Davis Funds within a specified period of time may be limited at the
discretion of the Adviser. Currently, more than three exchanges out of a
<PAGE>
fund during a twelve month period are not permitted without the prior
written approval of the Adviser. The Fund reserves the right to terminate
or amend the exchange privilege at any time upon at least 60 days' notice.
REDEMPTION OF SHARES
General. You can redeem, or sell back to the Fund, all or part of your
shares at any time at net asset value less any applicable sales charges or
redemption fees. You can do this by sending a written request to State
Street Bank and Trust Company, c/o The Davis Funds, P.O. Box 8406,
Boston, MA 02266-8406, indicating how many of your shares or what
dollar amount you want to redeem. If more than one person owns the
shares to be redeemed, all owners must sign the request. The signatures
on the request must be the same as the way in which the shares are
registered.
Sometimes State Street needs more documents to verify authority
to make a redemption. This usually happens when the owner is a
corporation, partnership or fiduciary (such as a trustee or the executor of
an estate) or if the person making the request is not the registered owner
of the shares.
If shares to be redeemed are represented by a certificate, the
certificate, signed by the owner or owners, must be sent to State Street
with the request.
For the protection of all shareholders, the Fund also requires that
signatures appearing on a share certificate, stock power or redemption
request where the proceeds would be more than $25,000, must be
guaranteed by a bank, credit union, savings association, securities
exchange, broker, dealer or other guarantor institution. The transfer agent
may reject a request from any of the foregoing eligible guarantors, if such
guarantor does not satisfy the transfer agent's written standards or
procedures or if such guarantor is not a member or participant of a
signature guarantee program. This provision also applies to exchanges
when there is also a redemption for cash. A signature guarantee on
redemption requests where the proceeds would be $25,000 or less is not
required, provided that such proceeds are being sent to the address of
record and, in order to ensure authenticity of an address change, such
address of record has not been changed within the last 30 days.
Redemption proceeds are normally paid to you within seven days
after State Street receives your proper redemption request. Payment for
redemptions can be suspended under certain emergency conditions
determined by the Securities and Exchange Commission or if the New York
Stock Exchange is closed for other than customary or holiday closings. If
any of the shares redeemed were just bought by you, payment to you may
be delayed until your purchase check has cleared (which usually takes up
to 15 days from the purchase date). You can avoid any such redemption
delay by paying for your shares with a certified or cashier's check or by
bank wire or federal funds.
Redemptions are ordinarily paid to you in cash. However, the Fund's
Board of Directors is authorized to decide that conditions exist making
cash payments undesirable, although the Board has never reached such a
decision. If the Board should decide to make payment in other than cash,
redemptions could be paid in securities, valued at the value used in
computing our net asset value. There would be brokerage costs incurred by
the shareholder in selling such redemption proceeds. We must, however,
redeem shares solely in cash up to the lesser of $250,000 or 1% of the
Fund's net asset value, whichever is smaller, during any 90-day period for
any one shareholder.
Your shares may also be redeemed through participating dealers.
Under this method, the Adviser repurchases the shares from your dealer, if
your dealer is a member of the Adviser's selling group. Your dealer may,
but is not required to, use this method in selling back your shares and may
place any repurchase request by
<PAGE>
telephone or wire. Your dealer may charge you a service fee or commission.
No charge is payable if you redeem your own shares through State Street rather
than having a dealer arrange for a repurchase.
Expedited Redemption Privilege. Accounts other than prototype
retirement plans and IRAs may designate on the Expedited Redemption
Privilege Form, an account with any commercial bank and have the cash
proceeds from the redemption sent, by either wire or electronically
through the Automated Clearing House system ("ACH"), to a pre-designated
bank account. State Street will accept instructions to redeem shares and
make payment to a pre-designated commercial bank account by (a) written
request signed by the registered shareholder, (b) telephone request by any
Qualified Dealer to Davis Selected Advisers, L.P. (1-800-279-0279), and
(c) by telegraphic request by the shareholder to State Street. At the time
of redemption, the shareholder must request that federal funds be wired
or transferred by ACH to the bank account designated on the application.
The redemption proceeds under this procedure may not be directed to a
savings bank, savings and loan or credit union account except by
arrangement with its correspondent bank or unless such institution is a
member of the Federal Reserve System. The Adviser, in its discretion,
may limit the amount that may be redeemed by a shareholder in any day
under the Expedited Redemption Privilege to $25,000. There is a $5 charge
by State Street for wire service, and receiving banks may also charge for
this service. Payment by ACH will arrive usually at your bank two banking
days after your call. Payment by wire is usually credited to your bank
account on the next business day after your call. The Expedited
Redemption Privilege may be terminated, modified or suspended by the
Fund at any time. See "Telephone Privilege".
The name of the registered shareholder and corresponding Fund
account number must be supplied. The Expedited Redemption Privilege
Form provides for the appropriate information concerning the commercial
bank and account number. Changes in ownership, account number
(including the identity of your bank) or authorized signatories of the
pre-designated account may be made by written notice to State Street
with your signature, and those of new owners or signers on the account,
guaranteed by a commercial bank or trust company. Additional
documentation may be required to change the designated account when
shares are held by a corporation, partnership, executor, administrator,
trustee or guardian.
By Telephone. You can redeem shares by telephone and receive a
check by mail, but please keep in mind:
The check can only be issued for up to $25,000;
The check can only be issued to the registered owner (who must be an
individual);
The check can only be sent to the address of record; and
Your current address of record must have been on file for 30 days.
Automatic Withdrawals Plan. Under the Automatic Withdrawals
Plan, you can indicate to State Street how many dollars you would like to
receive each month or each quarter. Your account must have a value of at
least $10,000 to start a plan. Shares are redeemed so that you will
receive the payment you have requested approximately in the middle of the
month. Withdrawals involve redemption of shares and may produce gain or
loss for income tax purposes. Shares of the Fund initially acquired by
exchange from any of the other Davis Funds, will remain subject to an
escrow or segregated account to which any of the exchanged shares were
subject. If you utilize this program using Class B shares, any applicable
contingent deferred sales charges will be imposed on Class B shares
redeemed. Purchase of additional shares concurrent with withdrawals may
be disadvantageous to you because of tax consequences. If the amount you
withdraw exceeds the dividends on your shares, your account will suffer
depletion. Your Automatic Withdrawals Plan may be terminated by you at
any time without charge or penalty. The Fund reserves the right to
terminate or modify the Automatic Withdrawals Plan at any time. Call or
write the Fund if you want further information on the Automatic
Withdrawals Plan.
<PAGE>
Involuntary Redemptions. To relieve the Fund of the cost of
maintaining uneconomical accounts, the Fund may effect the redemption of
shares at net asset value in any account if the account, due to shareholder
redemptions, has a value of less than $250. At least 60 days prior to such
involuntary redemption, the Fund will mail a notice to the shareholder so
that an additional purchase may be effected to avoid such redemption.
Subsequent Repurchases. After some of or all your shares are
redeemed or repurchased, you may decide to put back all or part of your
proceeds into the same Class of the Fund's shares. Any such shares will
be issued without sales charge at the net asset value next determined
after you have returned the amount of your proceeds. In addition, any
CDSC assessed on Class B shares, or any redemption fee assessed on Class
C shares, will be returned to the account. Class B shares will be deemed
to have been purchased on the original purchase date for purposes of
calculating the CDSC and conversion period. This can be done by sending
the Fund or the Adviser a letter, together with a check for the
reinstatement amount. The letter must be received, together with the
payment, within 30 days after the redemption or repurchase. You can only
use this privilege once.
DETERMINING THE PRICE OF SHARES
The net asset value of the Fund's shares is the value of the Fund's
assets, minus its liabilities, divided by the total number of shares
outstanding. Valuation of the Fund's portfolio securities is based upon
their market value. Securities traded on a national securities exchange
are valued at the last published sales prices on the exchange, or, in the
absence of recorded sales, at the average of closing bid and asked prices
on such exchange. Over-the-counter securities are valued at the average
of closing bid and asked prices. If no quotations are available, the fair
value of the investment is determined by or at the direction of the Board
of Directors. Investments in short-term securities (maturing in sixty
days or less) are valued at amortized cost unless the Board of Directors
determines that such cost is not a fair value.
The net asset value per share is determined as of the earlier of the
close of the exchange or 4:00 p.m. Eastern Time on each day the New York
Stock Exchange is open. The price per share for purchases or redemptions
made directly through State Street normally is such value next computed
after State Street receives the purchase order or redemption request. If
the purchase order or redemption request is placed with your dealer, then
the applicable price is normally computed as of 4:00 p.m. Eastern Time on
the day the dealer receives the order, provided that the dealer receives
the order before 4:00 p.m. Eastern Time. Otherwise, the applicable price is
the next determined net asset value. It is the responsibility of your
dealer to promptly forward purchase and redemptions orders to the
Adviser. Note that in the case of redemptions and repurchases of shares
owned by corporations, trusts or estates, State Street may require
additional documents to effect the redemption and the applicable price
will be determined as of the close of the next computation following the
receipt of the required documentation. See "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
Shareholders have the option to receive all dividends and
distributions in cash, to have all dividends and distributions reinvested,
or to have income dividends paid in cash and short-term and long-term
capital gain distributions reinvested. The reinvestment of dividends and
distributions is made at net asset value (without any sales charge) on the
payment date.
Because Class B and Class C shares incur higher distribution
services fees and bear certain other expenses, such classes will have a
higher expense ratio and will pay correspondingly lower dividends than
Class A shares. Information concerning distributions will be mailed
annually to shareholders.
For the protection of the shareholder, upon receipt of the second
dividend check which has been returned to the Transfer Agent as
undeliverable, undelivered dividends will be invested in additional shares
at the current net asset value and the account designated as a dividend
reinvestment account.
<PAGE>
FEDERAL INCOME TAXES
This section is not intended to be a full discussion of all the aspects
of the federal income tax law and its effects on the Fund and its
shareholders. Shareholders may be subject to state and local taxes on
distributions. Each investor should consult his or her own tax adviser
regarding the effect of federal, state and local taxes on an investment in
the Fund.
The Fund intends to continue to qualify as a regulated investment
company under the Internal Revenue Code (the "Code") and, if so qualified,
will not be liable for federal income tax to the extent its earnings are
distributed, except in respect to realization of the "built-in gains" as
described below. If for any calendar year the distribution of earnings
required under the Code exceeds the amount distributed, an excise tax,
equal to 4% of the excess, will be imposed on the Fund. The Fund intends to
make distributions during each calendar year sufficient to prevent
imposition of the excise tax.
Distributions of net investment income and net realized short-term
capital gains will be taxable to shareholders as ordinary income.
Distributions of net long-term capital gains (other than the built-in gains
as discussed below) will be taxable to shareholders as long-term capital
gain regardless of how long the shares have been held. Distributions will
be treated the same for tax purposes whether received in cash or in
additional shares.
On October 12, 1990, the Fund acquired by merger the investment
portfolio of Mulford Securities Corp., a private investment company which,
on the date of the merger, owned securities with a fair market value in
excess of their cost ("Mulford built-in gains"). For a period of ten years
after the merger, to the extent that the Fund realizes any net Mulford
built-in gains in any year, the Fund will incur a capital gains tax and will
distribute to shareholders only the excess of the amount of the net gains
realized over the amount of the tax. Such distributions will be taxable as
ordinary income. (The Fund will be reimbursed for the tax it pays through
an escrow established for this purpose under the terms of the merger.)
A gain or loss for tax purposes may be realized on the redemption of
shares. If the shareholder realizes a loss on the sale or exchange of any
shares held for six months or less and if the shareholder received a
capital gain distribution during such period, then such loss is treated as a
long-term capital loss to the extent of such capital gain distribution.
FUND SHARES
Shares issued by the Fund are currently divided into three classes,
Class A, Class B and Class C shares. The Board of Directors may offer
additional classes in the future and may at any time discontinue the
offering of any class of shares. Each share, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive or subscription rights and are
freely transferable. Each share of the Fund represents an interest in the
assets of the Fund and has identical voting, dividend, liquidation and other
rights and the same terms and conditions as any other shares except that
(i) each dollar of net asset value per share is entitled to one vote, (ii)
the expenses related to a particular class, such as those related to the
distribution of each class and the transfer agency expenses of each class
are borne solely by each such class and (iii) each class of shares votes
separately with respect to provisions of the Rule 12b-1 Distribution Plan
which pertains to a particular class and other matters for which separate
class voting is appropriate under applicable law. Each fractional share
has the same rights, in proportion, as a full share. Shares do not have
cumulative voting rights; therefore, the holders of more than 50% of the
voting power of the Fund can elect all of the directors of the Fund.
<PAGE>
PERFORMANCE DATA
When the Fund's performance is advertised, performance will consist
of total return, which is the average annual compounded rate of return of
an initial investment for periods of one, five and ten years and may
include such return for shorter or longer periods up to and including the
life of the Fund. Total return is calculated separately for each class.
This calculation assumes reinvestment of all dividends and distributions
and deduction of all charges and expenses, including the maximum
front-end or applicable contingent deferred sales charge. In addition, a
table showing the performance of an assumed investment of $10,000 may
be used from time to time. The Fund may also quote total return and
aggregate total return performance data for various other specified time
periods. Such data will be calculated substantially as described above,
except that (1) the rates of return calculated will not be average annual
rates, but rather, actual annual, annualized or aggregate rates of return
and (2) sales charges will not be included with respect to annual or
annualized rates of return calculations. Aside from the impact on the
performance data calculations of including or excluding the sales charges,
actual annual or annualized total return data generally will be lower than
average annual total return data since the average annual rates of return
reflect compounding; aggregate total return data generally will be higher
than average annual total return data since the aggregate rates of return
reflect compounding over a longer period of time.
In reports or other communications to shareholders and in
advertising material, the performance of the Fund may be compared to
recognized unmanaged indices or averages of the performance of similar
securities. Also, the performance of the Fund may be compared to that of
other funds of comparable size and objectives as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar independent mutual
fund rating services, and the Fund may use evaluations published by
nationally recognized independent ranking services and publications.
The Fund's 1995 Annual Report contains additional performance
information and will be made available upon request and without charge.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to Davis Selected Advisers,
L. P., by writing to P. O. Box 1688, Santa Fe, NM 87504-1688 or calling
(800) 279-0279.
<PAGE>
TERMS AND CONDITIONS FOR A STATEMENT OF INTENTION (CLASS A SHARES ONLY)
TERMS OF ESCROW:
1.Out of my initial purchase (or subsequent purchases if necessary) 5%
of the dollar amount specified in this Statement will be held in escrow by
State Street in the form of shares (computed to the nearest full share at
the public offering price applicable to the initial purchase hereunder)
registered in my name. For example, if the minimum amount specified
under this statement is $100,000 and the public offering price applicable
to transactions of $100,000 is $10 a share, 500 shares (with a value of
$5,000) would be held in escrow.
2.In the event I should exchange some or all of my shares to those of
another mutual fund for which Davis Selected Advisers, L.P. acts as
adviser, according to the terms of this prospectus, I hereby authorize
State Street to escrow the applicable number of shares of the new fund,
until such time as this Statement is complete.
3.If my total purchases are at least equal to the intended purchases,
the shares in escrow will be delivered to me or to my order.
4.If my total purchases are less than the intended purchases, I will
remit to Davis Selected Advisers, L.P. the difference in the dollar amount
of sales charge actually paid by me and the sales charge which I would
have paid if the total purchase had been made at a single time. If
remittance is not made within 20 days after written request by Davis
Selected Advisers, L.P. or my dealer, State Street will redeem an
appropriate number of the escrowed shares in order to realize such
difference.
5.I hereby irrevocably constitute and appoint State Street
my attorney to surrender for redemption any or all escrowed shares with
full power of substitution in the premises.
6.Shares remaining after the redemption referred to in Paragraph
No. 4 will be credited to my account.
7.The duties of State Street are only such as are herein provided being
purely ministerial in nature, and it shall incur no liability whatever
except for willful misconduct or gross negligence so long as it has acted
in good faith. It shall be under no responsibility other than faithfully to
follow the instructions herein. It may consult with legal counsel and
shall be fully protected in any action taken in good faith in accordance
with advice from such counsel. It shall not be required to defend any legal
proceedings which may be instituted against it in respect of the subject
matter of this Agreement unless requested to do so and indemnified to its
satisfaction against the cost and expense of such defense.
8.If my total purchases are more than the intended purchases and such
total is sufficient to qualify for an additional quantity discount, a
retroactive price adjustment shall be made for all purchases made under
such Statement to reflect the quantity discount applicable to the
aggregate amount of such purchases during the thirteen-month period.
EXPEDITED REDEMPTION PRIVILEGE
/-/ If you wish the Expedited Redemption Privilege please check the box
to the left and complete the following information.
I (we) hereby authorize State Street Bank and Trust Company, Davis
Selected Advisers, L. P., and/or the Davis Funds to act upon instructions
received by telephone or telegraph, believed by them to be genuine, and to
redeem shares in my (our) account in any of the Davis Funds and to wire
the proceeds of such redemption to the predesignated bank listed below. I
(we) hereby agree that neither State Street Bank and Trust Company, nor
Davis Selected Advisers, L. P. nor the Davis Funds nor any of their
officers or employees, will be liable for any loss, liability, cost or
expense for acting upon such instructions.
- ----------------------------------- ----------------------------------
Signature of Shareholder Signature of Co-Shareholder
----------------------------------- ----------------------------------
Name of Commercial Bank (Title of Account at Bank)
----------------------------------- ----------------------------------
(Street) (Account Number at Bank)
----------------------------------- ---------------------------------
(City) (State) (Zip) (ABA/Transit Routing Number)
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Summary................................................................ 2
Financial Highlights................................................... 4
Investment Objective and Policies...................................... 6
Adviser and Distributor................................................ 8
Distribution Plans..................................................... 9
Purchase of Shares..................................................... 10
Telephone Privilege.................................................... 14
Exchange of Shares..................................................... 15
Redemption of Shares................................................... 16
Determining the Price of Shares........................................ 18
Dividends and Distributions............................................ 18
Federal Income Taxes................................................... 19
Fund Shares............................................................ 19
Performance Data....................................................... 20
Shareholder Inquiries.................................................. 20
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
December 1, 1995
Davis New York Venture Fund, Inc.
124 East Marcy Street
Santa Fe, New Mexico 87501
1-800-279-0279
TABLE OF CONTENTS
TOPIC PAGE
Investment Restrictions............................................... 2
Hedging of Foreign Currency Risks..................................... 3
Repurchase Agreements................................................. 4
Portfolio Transactions................................................ 5
Directors and Officers................................................ 5
Directors Compensation Schedule....................................... 8
Certain Shareholders of the Fund...................................... 8
Investment Advisory Services.......................................... 9
Custodian............................................................. 10
Auditors.............................................................. 10
Determining the Price of Shares....................................... 10
Reduction of Class A Sales Charge..................................... 10
Distribution of Fund Shares........................................... 12
Performance Data...................................................... 12
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED DECEMBER 1, 1995. THE
PROSPECTUS MAY BE OBTAINED FROM THE FUND.
THE FUND'S JULY 31, 1995 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS
STATEMENT OF ADDITIONAL INFORMATION. THE FINANCIAL STATEMENTS APPEARING THEREI
ARE INCORPORATED HEREIN BY REFERENCE.
<PAGE>
INVESTMENT INSTRUCTIONS
The investment restrictions set forth below and the Fund's
investment objective set forth in the Prospectus may not be changed
without the approval of the holders of the lesser of (i) 67% of the eligible
votes, if the holders of more than 50% of the eligible votes are
represented or (ii) more than 50% of the eligible votes. All percentage
limitations set forth in these restrictions apply as of the time of an
investment without regard to later increases or decreases in the value of
securities or total or net assets.
1. The Fund may not buy or sell commodities or commodity contracts,
except contracts in respect to foreign currencies for hedging (risk
reduction) purposes.
2. The Fund may not purchase real estate or real estate mortgages as
such, but may purchase the liquid securities of companies, including real
estate investment trusts, holding real estate or interests (including
mortgage interests) therein.
3. The Fund may not buy the securities of any company if after such
purchase the Fund would then own more than 10% of such company's voting
securities or any class of such company's securities. For this purpose all
debt securities are deemed to comprise a single class.
4. The Fund may not buy the securities of any company if more than 5%
of the value of the Fund's total assets would then be invested in that
company. (U.S. Government Securities, i.e. securities issued by the U.S.
Government or its agencies or instrumentalities and repurchase
agreements involving such securities, are not included in this limitation.)
5. The Fund does not concentrate its investments in any one industry
and may not buy the securities of companies in any one industry if more
than 25% of the value of the Fund's total assets would then be invested in
companies in that industry. (U.S. Government Securities are not included
in this limitation.)
6. The Fund may not purchase or write puts, calls, or a combination
thereof ("option transactions"), except that the Fund may (i) write listed
covered call options ("calls") on portfolio securities and purchase call
options to close such transactions (provided that no such call is written if
it would cause more than 25% of the value of the Fund's total assets to be
subject to calls), (ii) purchase warrants issued by a company relating to
its own securities or those of a company it is controlled by or controls or
with which it is under common control and (iii) engage in option
transactions in respect to foreign currencies for hedging purposes.
7. The Fund may not buy the securities of companies in continuous
operation for less than three years (including predecessors) if more than
5% of the value of the Fund's total assets would then be invested in such
securities.
8. The Fund may not buy securities of other registered investment
companies, except: (i) shares of investment companies investing primarily
in foreign securities so long as such purchase does not cause the Fund to
(a) have more than 5% of the value of its total assets invested in any one
such company, (b) have more than 10% of the value of its total assets
invested in the aggregate of all such companies, or (c) own more than 3%
of the total outstanding voting stock of any such company; or (ii) as a part
of a merger, consolidation, reorganization or acquisition of assets. An
investor of the Fund may incur duplicate fees if shares of investment
companies are purchased.
9. The Fund may not sell short, buy on margin or engage in arbitrage
transactions. This restriction does not apply to transactions in respect to
foreign currencies for hedging purposes.
10. The Fund may not purchase illiquid securities if more than 15% of
the value of the Fund's net assets would be invested in such securities.
11. The Fund does not invest for the purpose of exercising control or
management of other companies.
12. The Fund may not borrow money except from banks for extraordinary
or emergency purposes in amounts not exceeding 10% of the value of the
Fund's total assets (excluding the amount borrowed) at the time of
borrowing. The Fund may not pledge or hypothecate any of its assets,
except in connection with permitted borrowing in amounts not exceeding
15% of the value of the Fund's total assets (excluding the amount
<PAGE>
borrowed) at the time of such borrowing. (These restrictions do not apply
to the use of margin deposits in connection with transactions in foreign
currencies for hedging purposes.)
13. The Fund may not buy or continue to hold securities if any officers
or directors of the Fund, the Adviser or the Adviser's General Partner own
too many of the same securities. This would happen if any of these
individuals own 1/2 of 1% or more of the securities and all such
individuals who own that much or more own 5% of such securities.
14. The Fund does not engage in the underwriting of securities; however,
the Fund may technically be considered an "underwriter" if it sells
restricted securities.
15. The Fund may not lend money, except that it may buy debt securities
customarily acquired by institutional investors. These debt securities
may comprise all or a portion of an issue of "restricted" debt securities.
The Fund may also buy debt securities which have been sold to the public
and may enter into repurchase agreements. The Fund may lend its
portfolio securities subject to having 100% collateral in cash or U.S.
Government Securities. The Fund will not lend securities if such a loan
would cause more than 20% of the total value of its assets to then be
subject to such loans.
State Undertakings and Non-Fundamental Policies. In addition to the
foregoing restrictions, the Fund has voluntarily undertaken with various
states, for so long as the Fund's shares are sold in such states, (1) not to
invest in oil, gas or other mineral exploration or development programs
and (2) to limit its investments in restricted securities to 10% of its
total assets, excluding restricted securities eligible for resale pursuant
to Rule 144A of the Securities Act of 1933. These undertakings and all
other non-fundamental policies may be changed without shareholder
approval.
HEDGING OF FOREIGN CURRENCY RISKS
The Fund may purchase or sell forward foreign currency exchange
contracts ("forward contracts") to attempt to minimize the risk to the
Fund from adverse changes in the relationship between the U.S. dollar and
foreign currencies. A forward contract is an obligation to purchase or sell
a specific currency for an agreed price at a future date which is
individually negotiated and privately traded by currency traders and their
customers. Such a contract gives the Fund a position in a negotiated,
currently non-regulated market. The Fund may enter into a forward
contract, for example, when it enters into a contract for the purchase or
sale of a security denominated in a foreign currency in order to "lock in"
the U.S. dollar price of the security ("transaction hedge"). Additionally,
for example, when the Adviser believes that a foreign currency may suffer
a substantial decline against the U.S. dollar, it may enter into a forward
sale contract to sell an amount of that foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency, or when the Fund believes that the U.S. dollar may suffer
a substantial decline against a foreign currency, it may enter into a
forward purchase contract to buy that foreign currency for a fixed dollar
amount in anticipation of purchasing foreign traded securities ("position
hedge"). In this situation the Fund may, in the alternative, enter into a
forward contract in respect to a different foreign currency for a fixed U.S.
dollar amount ("cross hedge"). This may be done, for example, where the
Adviser believes that the U.S. dollar value of the currency to be sold
pursuant to the forward contract will fall whenever there is a decline in
the U.S. dollar value of the currency in which portfolio securities of the
Fund are denominated.
The Fund may purchase and write put and call options on foreign
currencies for the purpose of protecting against declines in the U.S. dollar
value of foreign currency-denominated portfolio securities and against
increases in the U.S. dollar cost of such securities to be acquired. As in
the case of other kinds of options, however, the writing of an option on a
foreign currency constitutes only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on a foreign currency may constitute an
effective hedge against fluctuations in exchange rates although, in the
event of rate movements adverse to the Fund's position, it may forfeit the
entire amount of the premium plus related transaction costs. Options on
foreign currencies to be written or purchased by the Fund are traded on
U.S. and foreign exchanges or over-the-counter. Currently, a significant
portion or all of the value of an over-the-counter option may be treated as
an illiquid investment and subject to the restriction on such investments
as long as the SEC requires that over-the-counter options be treated as
illiquid. Generally, the Fund would utilize options traded on exchanges
where the options are standardized.
<PAGE>
The Fund may enter into contracts for the purchase or sale for future
delivery of foreign currencies ("currency futures contracts") and may
purchase and write put and call options to buy or sell currency futures
contracts. A "sale" of a currency futures contract means the acquisition
of a contractual obligation to deliver the foreign currencies called for by
the contract at a specified price on a specified date. A "purchase" of a
currency futures contract means the incurring of a contractual obligation
to acquire the foreign currencies called for by the contract at a specified
price on a specified date. Options on currency futures contracts to be
purchased by the Fund will be traded on U.S. or foreign exchanges or
over-the-counter. The Fund will not enter into any futures contracts or
options on currency futures contracts if immediately thereafter the
aggregate of initial margin deposits on all the outstanding currency
futures contracts of the Fund and premiums paid on outstanding options on
currency futures contracts would exceed 5% of the market value of the
total assets of the Fund (excluding in such market value any in-the-money
amount of any option).
The Fund may also purchase securities (debt securities or deposits)
which have their coupon rate or value at maturity determined by reference
to the value of one or more foreign currencies. The Fund will not use
leverage. These strategies will be used for hedging purposes only. The
Fund will hold securities or other options or futures positions whose
values are expected to offset its obligations under the hedge strategies.
The Fund will not enter into a currency hedging position that exposes the
Fund to an obligation to another party unless it owns either (i) an
offsetting position in securities, options or futures positions or (ii) cash,
receivables and short-term debt securities with a value sufficient to
cover its potential obligations. The Fund will comply with requirements
established by the SEC with respect to coverage of options and futures
strategies by mutual funds, and, if so required, will set aside cash and
high grade liquid debt securities in a segregated account with its
custodian bank in the amount prescribed. The Fund's custodian will
maintain the value of such segregated account equal to the prescribed
amount by adding or removing additional cash or liquid securities to
account for fluctuations in the value of securities held in such account.
Securities held in a segregated account cannot be sold while the futures
or option strategy is outstanding, unless they are replaced with similar
securities.
The Fund's ability to dispose of its positions in futures contracts,
options and forward contracts will depend on the availability of liquid
markets in such instruments. Markets in options and futures with respect
to currencies are still developing. It is impossible to predict the amount
of trading interest that may exist in various types of futures contracts,
options and forward contracts. If a secondary market does not exist with
respect to an option purchased or written by the Fund over-the-counter, it
might not be possible to effect a closing transaction in the option ( i.e.,
dispose of the option) with the result that (i) an option purchased by the
Fund would have to be exercised in order for the Fund to realize any profit
and (ii) the Fund may not be able to sell currencies covering an option
written by the Fund until the option expires or it delivers the underlying
futures currency upon exercise. Therefore, no assurance can be given that
the Fund will be able to utilize these instruments effectively for the
purposes set forth above. The Fund's ability to engage in currency hedging
transactions may be limited by tax considerations.
The Fund's transactions in forward contracts, options on foreign
currencies and currency futures contracts will be subject to special tax
rules under the Internal Revenue Code that, among other things, may affect
the character of any gains or losses of the Fund as ordinary or capital and
the timing and amount of any income or loss to the Fund. This, in turn,
could affect the character, timing and amount of distributions by the Fund
to shareholders. The Fund may be limited in its foreign currency
transactions by tax considerations.
REPURCHASE AGREEMENTS
A repurchase agreement involves a sale of securities to the Fund,
with the concurrent agreement of the seller (a member bank of the Federal
Reserve System or securities dealer which the Adviser believes to be
financially sound) to repurchase the securities at the same price plus an
amount equal to accrued interest at an agreed-upon interest rate, within a
specified time, usually less than one week, but, on occasion, at a later
time. The repurchase obligation of the seller is, in effect, secured by the
underlying securities, which are securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the
Fund could experience both delays in liquidating the underlying securities
and losses, including (a) possible decline in the value of the collateral
during the period while the Fund seeks to enforce its rights thereto, (b)
possible loss of all or a part of the income during this period and (c)
expenses of enforcing its rights.
<PAGE>
The Fund will enter into repurchase agreements only when the seller
agrees that the value of the underlying securities, including accrued
interest (if any), will at all times be equal to or exceed the value of the
repurchase agreement. The Fund will not enter into a repurchase
agreement maturing in more than seven days if it would cause more than
10% of the value of its total assets to be invested in such transactions.
Repurchase agreements maturing in less than seven days are not deemed
illiquid securities for the purpose of the Fund's 15% limitation on illiquid
securities.
PORTFOLIO TRANSACTIONS
Davis Selected Advisers, L.P., (the "Adviser") makes investment
decisions and arranges for the placement of buy and sell orders and the
execution of portfolio transactions for the Fund, subject to review by the
Board of Directors. In this regard, the Adviser will seek to obtain the
most favorable price and execution for the transaction given the size and
risk involved. In placing executions and paying brokerage commissions,
the Adviser considers the financial responsibility and reputation of the
broker or dealer, the range and quality of the services made available to
the Fund and the professional services rendered, including execution,
clearance procedures, wire service quotations and ability to provide
supplemental performance, statistical and other research information for
consideration, analysis and evaluation by the Adviser's staff. In
accordance with this policy, brokerage transactions may not be executed
solely on the basis of the lowest commission rate available for a
particular transaction. Research services provided to the Adviser by or
through brokers who effect portfolio transactions for the Fund may be
used in servicing other accounts managed by the Adviser and likewise
research services provided by brokers used for transactions of other
accounts may be utilized by the Adviser in performing services for the
Fund. Subject to the requirements of best execution, the placement of
orders by securities firms for shares of the Fund may be taken into
account as a factor in the placement of portfolio transactions.
On occasions when the Adviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other fiduciary
accounts, the Adviser may aggregate the securities to be sold or
purchased for the Fund with those to be sold or purchased for other
accounts in order to obtain the best net price and most favorable
execution. In such event, the allocation will be made by the Adviser in the
manner considered to be most equitable and consistent with its fiduciary
obligations to all such fiduciary accounts, including the Fund. In some
instances, this procedure could adversely affect the Fund but the Fund
deems that any disadvantage in the procedure would be outweighed by the
increased selection available and the increased opportunity to engage in
volume transactions.
The Adviser believes that research from brokers and dealers is
desirable, although not essential, in carrying out its functions, in that
such outside research supplements the efforts of the Adviser by
corroborating data and enabling the Adviser to consider the views,
information and analyses of other research staffs. Such views,
information and analyses include such matters as communicating with
persons having special expertise on certain companies, industries, areas
of the economy and/or securities prices, obtaining written materials on
these or other areas which might affect the economy and/or securities
prices, obtaining quotations on securities prices and obtaining
information on the activities of other institutional investors. The Adviser
researches, at its own expense, each security included in, or being
considered for inclusion in, the Fund's portfolio. As any particular
research obtained by the Adviser may be useful to the Fund, the Board of
Directors or its Committee on brokerage, in considering the
reasonableness of the commissions paid by the Fund, will not attempt to
allocate, or require the Adviser to allocate, the relative costs or benefits
of research.
During the last three fiscal years ended July 31, 1995, 1994 and
1993, the Fund paid brokerage commissions of $929,980, $750,697 and
$468,909, respectively.
DIRECTORS AND OFFICERS
The names and addresses of the directors and officers of the Fund
are set forth below, together with their principal business affiliations
and occupations for the last five years. The Fund's directors are divided
into five classes, three of which are each comprised of three directors
and two of which are comprised of two directors. Directors in each class
generally serve five-year terms. As these terms are staggered, our
shareholders generally elect two or three directors at each annual
meeting. The asterisk following the names of Martin H. Proyect, Shelby
M.C. Davis and Jeremy H. Biggs indicates that they are considered to be
"interested persons" of the Fund, as defined in the Investment Company
Act. As indicated below, certain directors and officers of the Fund hold
similar positions with the following funds that are managed by the
Adviser: Davis High Income Fund, Davis Tax-Free High Income Fund, Davis
Series, Inc. and Davis International Series, Inc. (collectively the
"Davis Funds").
<PAGE>
Wesley E. Bass, Jr. (8/21/31), 710 Walden Road, Winnetka, IL 60093.
Director of the Fund and each of the Davis Funds except Davis
International Series, Inc.; President, Bass & Associates (Financial
Consulting Firm); First Deputy City Treasurer, City of Chicago, and
Executive Vice President, Chicago Title and Trust Company.
Jeremy H. Biggs, (8/16/35)* Two World Trade Center, 94th Floor, New
York, NY 10048. Director and Chairman of the Fund and each of the Davis
Funds; Consultant to the Adviser; Director Van Eck Funds; Vice Chairman,
Head of Equity Research Department, Chairman of the U.S. Investment
Policy Committee and member of the International Investment Committee
of Fiduciary Trust Company International.
Marc P. Blum (9/9/42), 233 East Redwood Street, Baltimore, MD 21202.
Director of the Fund and each of the Davis Funds except Davis
International Series, Inc.; Chief Executive Officer, World Total Return
Fund, L.P.; Member, Gordon, Feinblatt, Rothman, Hoffberger and Hollander,
LLC (attorneys); Director, Mid-Atlantic Realty Trust.
Shelby M.C. Davis (3/20/37),* P.O. Box 205, Hobe Sound, FL 33455.
Director and President of the Fund and each of the Davis Funds;
Director/Trustee and Executive Vice President of Selected American
Shares, Inc., Selected Special Shares, Inc. and Selected Capital
Preservation Trust; Director, Chairman and Chief Executive Officer,
Venture Advisers, Inc. effective August 15, 1995; Employee of Capital
Ideas, Inc. (financing consulting firm); Consultant to Fiduciary Trust
Company International; Director, Shelby Cullom Davis Financial
Consultants, Inc.; formerly, Chairman, Venture Pension Advisers, Inc.
Eugene M. Feinblatt (10/28/19), 233 East Redwood Street, Baltimore, MD
21202. Director of the Fund and each of the Davis Funds except Davis
International Series, Inc.; of Counsel, Gordon Feinblatt, Rothman,
Hoffberger and Hollander, LLC (attorneys).
Jerry D. Geist (5/23/34), 6201 Uptown Blvd., N.E. Suite 207, Albuquerque,
NM 87110. Director of the Fund and each of the Davis Funds except Davis
International Series, Inc.; Chairman Santa Fe Center Enterprises;
Consultant NYSE Energy Co.; Consultant NYSE Energy Co., Major Venture
Capital Co.; Chairman Biotechnology Company; Director, Environmental Mfg.
Co.; Director, CH2M-Hill, Inc.; Retired Chairman and President, Public
Service Company of New Mexico.
D. James Guzy (3/7/36), 508 Tasman Drive, Sunnyvale, CA 94089. Director
of the Fund and each of the Davis Funds except Davis International Series,
Inc.; Chairman, PLX Technology, Inc. (manufacturer of semi-conductor
circuits); Director, Intel Corp. (manufacturer semi-conductor circuits),
Cirrus Logic Corp. (a manufacturer of semi-conductor circuits) and
Alliance Technology Fund (a mutual fund).
G. Bernard Hamilton (3/18/37), P.O. Box 544, Richmond, VA 23204-0544.
Director of the Fund and each of the Davis Funds except Davis
International Series, Inc.; Managing General Partner,
Avanti Partners, L.P.
LeRoy E. Hoffberger (6/8/25), The Exchange-Suite 215, 1112 Kenilworth
Drive, Towson, MD 21204. Director of the Fund and each of the Davis Funds
except Davis International Series, Inc.; of Counsel to Gordon, Feinblatt,
Rothman, Hoffberger and Hollander, LLC (attorneys); Chairman,
Mid-Atlantic Realty Trust; Director and President, CPC, Inc. (a real estate
company); Director and Vice President, Merchant Terminal Corporation;
formerly, Director of Equitable Bancorporation, Equitable Bank and
Maryland National Bank, and formerly, Director and President, O-W Fund,
Inc. (a private investment fund).
Laurence W. Levine (4/9/31), c/o Bigham, Englar, Jones & Houston, 14 Wall
Street, 21st Floor, New York, NY 10005-2140. Director of the Fund and
each of the Davis Funds except Davis International Series, Inc.; Partner,
Bigham, Englar, Jones and Houston (attorneys); United States Counsel to
Aerolineas Argentina; Director, various private companies.
Martin H. Proyect, (10/24/32)* P.O. Box 80176, Las Vegas, NV
89180-0176. Director of the Fund and each of the Davis Funds;
Director/Trustee and President of Selected American Shares, Inc.,
Selected Special Shares, Inc. and Selected Capital Preservation Trust;
Chairman of the Fund until July 31, 1995 and Chairman and Treasurer,
Venture Advisers, Inc. until August 15, 1995.
Christian R. Sonne (5/6/36), P.O. Box 777, Tuxedo Park, NY 10987. Director
of the Fund and each of the Davis Funds except Davis International Series,
Inc.; General Partner of Tuxedo Park Associates (a land holding and
<PAGE>
development firm); President and Chief Executive Officer of Mulford
Securities Corporation (private investment fund) until 1990; formerly
Vice President of Goldman Sachs & Company (investment bankers).
Edwin R. Werner (4/1/22), 622 3rd Avenue, Suite 1200 New York, NY
10017. Director of the Fund and each of the Davis Funds except Davis
International Series, Inc.; Director, New York Blood Center.
Carl R. Luff (4/30/54), 124 East Marcy Street, Santa Fe, New Mexico
87501. Vice President, Treasurer and Assistant Secretary of the Fund and
each of the Davis Funds, Selected American Shares, Inc., Selected Special
Shares, Inc. and Selected Capital Preservation Trust; Director,
Co-President and Treasurer, Venture Advisers, Inc. effective August 15,
1995.
Raymond O. Padilla (2/22/51), 124 East Marcy Street, Santa Fe, NM 87501.
Vice President, Secretary and Assistant Treasurer of the Fund and each of
the Davis Funds; Vice President and Assistant Secretary of Selected
American Shares, Inc., Selected Special Shares, Inc. and Selected Capital
Preservation Trust; Senior Vice President, Venture Advisers, Inc.
Carolyn H. Spolidoro (11/19/52), 124 East Marcy Street, Santa Fe, NM
87501. Vice President of the Fund and each of the Davis Funds; Vice
President, Venture Advisers, Inc.
Louis R. Proyect (3/7/45), 124 East Marcy Street, Santa Fe, NM 87501.
Vice President of the Fund and each of the Davis Funds; Vice President and
Secretary of Selected American Shares, Inc., Selected Special Shares, Inc.
and Selected Capital Preservation Trust; Director, Executive Vice
President and Secretary, Venture Advisers, Inc. effective August 15,
1995; Secretary, Shelby Cullom Davis Financial Consultants, Inc. Counsel,
Shelby Cullom Davis & Co.
Andrew A. Davis (6/25/63), 124 East Marcy Street, Santa Fe, NM 87501.
Vice President of the Fund and each of the Davis Funds; Director and
Co-President, Venture Advisers, Inc. effective August 15, 1995; formerly,
Vice President and head of convertible security research, PaineWebber,
Incorporated.
Christopher C. Davis (7/13/65), 70 Pine Street, 43rd Floor, New York, NY
10270-0108. Vice President of the Fund and each of the Davis Funds
except Davis International Series, Inc.; Director, Venture Advisers, Inc.
Eileen R. Street (3/11/62), 124 East Marcy Street, Santa Fe, NM 87501.
Assistant Treasurer and Assistant Secretary of the Fund and each of the
Davis Funds, Selected American Shares, Inc., Selected Special Shares, Inc.
and Selected Capital Preservation Trust; Senior Vice President, Venture
Advisers, Inc.
Sheldon R. Stein (11/29/28), 30 North LaSalle Street, Suite 2900,
Chicago, IL 60602. Assistant Secretary of the Fund and each of the Davis
Funds, Selected American Shares, Inc., Selected Special Shares, Inc. and
Selected Capital Preservation Trust; Partner, D'Ancona & Pflaum, the
Fund's legal counsel.
Arthur Don (9/24/53), 30 North LaSalle Street, Suite 2900, Chicago, IL
60602. Assistant Secretary of the Fund and each of the Davis Funds,
Selected American Shares, Inc., Selected Special Shares, Inc. and Selected
Capital Preservation Trust; Partner, D'Ancona & Pflaum, the Fund's legal
counsel.
The Fund does not pay salaries to any of its officers. Davis Selected
Advisers, L.P. performs certain services on behalf of the Fund. The
Adviser is reimbursed by the Fund for the costs of providing these
services. See "Investment Advisory Services."
DIRECTORS' COMPENSATION SCHEDULE
During the fiscal year ended July 31, 1995, the compensation paid to
the directors who are not considered to be interested persons of the Fund
was as follows:
<TABLE>
<CAPTION>
Aggregate Fund Total
Name Compensation Complex Compensation<F1>
- ---- ------------ --------------------
<S> <C> <C>
Wesley E. Bass 7,375 24,375
Marc P. Blum 7,200 23,600
Eugene M. Feinblatt 7,200 23,700
Jerry D. Geist 7,050 23,050
D. James Guzy 7,200 23,600
G. Bernard Hamilton 7,100 23,200
LeRoy E. Hoffberger 7,150 23,550
Laurence W. Levine 7,150 23,550
Christian R. Sonne 7,200 7,200<F2>
Edwin R. Werner 6,350 20,700
<FN>
<F1> Complex compensation is the aggregate compensation paid, for services
as a Director, by all mutual funds with the same investment adviser.
<F2> Mr. Sonne was elected to the Board of Directors of Davis High Income
Fund, Davis Tax-Free High Income Fund and Davis Series on July 31, 1995.
Prior thereto, he was a Director only of the Fund.
</FN>
</TABLE>
CERTAIN SHAREHOLDERS OF THE FUND
The following table sets forth, as of October 27, 1995, the name and
holdings of each person known by the Fund to be a record owner of more
than 5% of its outstanding Class A shares. As of such date, there were
112,566,170.628 Class A shares outstanding and the directors and
officers of the Fund, as a group, owned 4,163,253.667 Class A shares, or
approximately 3.67% of the Fund's outstanding Class A shares. As of such
date, there were 5,044,423.885 Class B and 1,587,239.246 Class C shares
outstanding. The directors and officers of the Fund do not presently own
or intend to own any Class B or C shares of the Fund.
<TABLE>
<CAPTION>
Number of Percent of Class
Name and Address Shares Owned Outstanding
- ---------------- ------------ -----------
<S> <C> <C>
Class A shares
Shelby Cullom Davis & Co. 11,479,055.912 10.20%
70 Pine Street, 43rd Floor
New York, New York 10270-0108
Merrill Lynch Pierce Fenner & Smith 7,644,941.685 6.79%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484
Class B shares
Merrill Lynch Pierce Fenner & Smith 1,237,288.994 24.53%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484
Class C shares
Merrill Lynch Pierce Fenner & Smith 409,412.0002 5.79%
4800 Deerlake Drive East, 3rd Floor
Jacksonville, FL 32246-6484
</TABLE>
INVESTMENT ADVISORY SERVICES
Davis Selected Advisers, L.P. serves as investment adviser for the
Fund pursuant to an investment advisory agreement (the "Advisory
Agreement") adopted in accordance with the requirements of the
Investment Company Act of 1940. Pursuant to the Advisory Agreement,
the Adviser, subject to the general supervision of the Fund's Board of
Directors, provides management and investment advice, and furnishes
statistical, executive and clerical personnel, bookkeeping, office space,
and equipment necessary to carry out its investment advisory functions
and such corporate managerial duties as are requested by the Board of
Directors of the Fund. The Fund bears all expenses other than those
specifically assumed by the Adviser under the Advisory Agreement,
including preparation of its tax returns, financial reports to regulatory
authorities, dividend determinations and transaction and accounting
matters related to its custodian bank, transfer agency, custodial and
shareholder services, and qualification of its shares under federal and
state securities laws.
For the Adviser's services, the Fund pays the Adviser a monthly fee
at the annual rate based on average net assets, as follows: 0.75% on the
first $250 million; 0.65% on the next $250 million; and 0.55% on average
net assets
<PAGE>
in excess of $500 million. The aggregate advisory fees paid by
the Fund to the Adviser during the fiscal years ended July 31, 1995, 1994
and 1993 were $7,587,812, $6,021,981 and $3,969,389, respectively.
Under the Advisory Agreement, if expenses borne by the Fund in any
fiscal year (including the advisory fee, but excluding interest, taxes,
brokerage fees and payments made under a Rule 12b-1 Distribution Plan
and, where permitted, extraordinary expenses) exceed limitations imposed
by applicable state securities laws or regulations, the Adviser must
reimburse the Fund for any such excess at least annually, up to the amount
of its advisory fee. These expense limitations may be raised or lowered
from time to time. The present maximum operating expense limitations
are 2-1/2% of the first $30 million of average net assets, 2% of the next
$70 million of average net assets and 1-1/2% of average net assets over
$100 million.
The reimbursable costs for certain accounting and administrative
services for the fiscal years ended July 31, 1995, 1994 and 1993 were
$51,668, $45,000 and $42,000, respectively. The reimbursable costs for
qualifying the Fund's shares for sale with state agencies for such periods
were $9,336, $8,004 and $8,004, respectively, and the reimbursable costs
for providing shareholder services for such periods were $77,178,
$77,856 and $55,264, respectively.
The Advisory Agreement also makes provisions for portfolio
transactions and brokerage policies of the Fund which are discussed above
under "Portfolio Transactions."
In accordance with the provisions of the Investment Company Act,
the Advisory Agreement will terminate automatically upon assignment
and is subject to cancellation upon 60 days' written notice by the Fund's
Board of Directors, the vote of the holders of a majority of the Fund's
outstanding shares or the Adviser. The continuance of the Agreement
must be approved at least annually by the Fund's Board of Directors or by
the vote of holders of a majority of the outstanding shares of the Fund. In
addition, any new agreement or the continuation of the existing
agreement must be approved by a majority of directors who are not
parties to the agreement or interested persons of any such party.
The Adviser has adopted a Code of Ethics which regulates the
personal securities transactions of the Adviser's investment personnel
and other employees and affiliates with access to information regarding
securities transactions of the Fund. The Code of Ethics requires
investment personnel to disclose personal securities holdings upon
commencement of employment and all subsequent trading activity to the
Adviser's Compliance Officer. Investment personnel are prohibited from
engaging in any securities transactions, including the purchase of
securities in a private offering, without the prior consent of the
Compliance Officer. Additionally, such personnel are prohibited from
purchasing securities in an initial public offering and are prohibited from
trading in any securities (i) for which the Fund has a pending buy or sell
order, (ii) which the Fund is considering buying or selling, or (iii) which
the Fund purchased or sold within seven calendar days.
CUSTODIAN
The Custodian of the Fund's assets is State Street Bank and Trust
Company ("State Street"), Atlantic Division, 470 Atlantic Avenue, Boston,
Massachusetts 02210. The Custodian maintains all of the instruments
representing the investments of the Fund and all cash. The Custodian
delivers securities against payment upon sale and pays for securities
against delivery upon purchase. The Custodian also remits Fund assets in
payment of Fund expenses, pursuant to instructions of officers or
resolutions of the Board of Directors.
AUDITORS
The Fund's auditors are Tait, Weller & Baker, Two Penn Center, Suite
700, Philadelphia, Pennsylvania 19102-1707. The audit includes
examination of annual financial statements furnished to shareholders and
filed with the Securities and Exchange Commission, consultation on
financial accounting and reporting matters, and meeting with the Audit
Committee of the Board of Directors. In addition, the auditors review
federal and state income tax returns and related forms.
DETERMINING THE PRICE OF SHARES
The Fund does not price its shares or accept orders for purchases or
redemptions on days when the New York Stock Exchange is closed. Such
days currently include New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
<PAGE>
REDUCTION OF CLASS A SALES CHARGE
There are a number of ways to reduce the sales charge imposed on
the purchase of the Fund's Class A shares, as described below. These
reductions are based upon the fact that there is less sales effort and
expense involved in respect to purchases by affiliated persons and
purchases made in large quantities.
Family or Group Purchases. Certain purchases made by or for more
than one person may be considered to constitute a single purchase,
including (i) purchases for family members, including spouses and children
under 21, (ii) purchases by trust or other fiduciary accounts and purchases
by Individual Retirement Accounts for employees of a single employer and
(iii) purchases made by an organized group of persons, whether
incorporated or not, if the group has a purpose other than buying shares of
mutual funds. For further information on group purchase reductions,
contact the Adviser or your dealer.
Statements of Intention. Another way to reduce the sales charge is
by signing a Statement of Intention. A Statement is included in the
Application Form included in the Prospectus. Please read it carefully
before completing it.
If you enter into a Statement of Intention you (or any "single
purchaser") may state that you intend to invest at least $100,000 in the
Fund's Class A shares over a 13-month period. The amount you say you
intend to invest may include Class A shares which you already own, valued
at the offering price, at the end of the period covered by the Statement. A
Statement may be backdated up to 90 days to include purchases made
during that period, but the total period covered by the Statement may not
exceed 13 months.
Shares having a value of 5% of the amount you state you intend to
invest will be held "in escrow" to make sure that any additional sales
charges are paid. If any of the Fund's shares are in escrow pursuant to a
Statement and such shares are exchanged for shares of another Davis Fund,
the escrow will continue with respect to the acquired shares.
No additional sales charge will be payable if you invest the amount
you have indicated. Each purchase under a Statement will be made as if
you were buying at one time the total amount indicated. For example, if
you indicate that you intend to invest $100,000, you will pay a sales
charge of 3-1/2% on each purchase.
If you buy additional amounts during the period to qualify for an even
lower sales charge, you will be charged such lower charge. For example,
if you indicate that you intend to invest $100,000 and actually invest
$250,000, you will, by retroactive adjustment, pay a sales charge of
2-1/2%.
If during the 13-month period you invest less than the amount you
have indicated, you will pay an additional sales charge. For example, if
you state that you intend to invest $250,000 and actually invest only
$100,000, you will, by retroactive adjustment, pay a sales charge of
3-1/2%. The sales charge you actually pay will be the same as if you had
purchased the shares in a single purchase.
A Statement does not bind you to buy, nor does it bind the Adviser to
sell, the shares covered by the Statement.
Rights of Accumulation. Another way to reduce the sales charge is
under a right of accumulation. This means that the larger purchase
entitled to a lower sales charge need not be in dollars invested at one
time. The larger purchases that you (or any "single purchaser") make at
any one time can be determined by adding to the amount of a current
purchase the value of Fund shares (at offering price) already owned by you.
For example, if you owned $100,000 worth (at offering price) of the
Fund's Class A shares and invest $5,000 in additional shares, the sales
charge on that $5,000 investment would be 3-1/2%, not 4-3/4%.
If you claim this right of accumulation, you or your dealer must so
notify the Adviser (or State Street, if the investment is mailed to State
Street) when the purchase is made. Enough information must be given to
verify that you are entitled to such right.
Combined Purchases with other Davis Funds. Your ownership or
purchase of Class A shares of Davis High Income Fund, Inc., Davis Tax-Free
High Income Fund, Inc., Davis Series, Inc. and Davis International Series,
<PAGE>
Inc. (collectively with the Fund, the "Davis Funds") may also reduce your
sales charges in connection with the purchase of the Fund's Class A
shares. This applies to all three situations for reduction of sales charges
discussed above.
If a "single purchaser" decides to buy the Fund's Class A shares as
well as Class A shares of any of the other Davis Funds (other than shares
of Davis Government Money Market Fund) at the same time, these
purchases will be considered a single purchase for the purpose of
calculating the sales charge. For example, a single purchaser can invest
at the same time $100,000 in the Fund's Class A shares and $150,000 in
the Class A shares of VIP and pay a sales charge of 2-1/2%, not 3-1/2%.
Similarly, a Statement of Intention for the Fund's Class A shares and
for the Class A shares of the other Davis Funds (other than Davis
Government Money Market Fund) may be aggregated. In this connection, the
Fund's Class A shares and the Class A shares of the other Davis Funds
which you already own, valued at the current offering price at the end of
the period covered by your Statement of Intention, may be included in the
amount you have stated you intend to invest pursuant to your Statement.
Lastly, the right of accumulation applies also to the Class A shares
of the other Davis Funds (other than Davis Government Money Market Fund)
which you own. Thus, the amount of current purchases of the Fund's Class
A shares which you make may be added to the value of the Class A shares
of the other Davis Funds (valued at their current offering price) already
owned by you in determining the applicable sales charge. For example, if
you owned $100,000 worth of shares of Davis High Income Fund, Inc. and
Davis Financial Fund and Davis Convertible Securities Fund, (valued at the
applicable current offering price) and invest $5,000 in the Fund's shares,
the sales charge on your investment would be 3-1/2%, not 4-3/4%.
In all the above instances where you wish to claim this right of
combining the shares you own of the other Davis Funds, you or your dealer
must notify the Adviser (or State Street, if the investment is mailed to
State Street) of the pertinent facts. Enough information must be given to
permit verification as to whether you are entitled to a reduction in sales
charges.
Issuance of Shares at Net Asset Value. There are many situations
where the sales charge will not apply to the purchase of Class A shares,
as discussed in the Prospectus. In addition, the Fund occasionally may be
provided with an opportunity to purchase substantially all the assets of a
public or private investment company or to merge another such company
into the Fund. This offers the Fund the opportunity to obtain significant
assets. No dealer concession is involved. It is industry practice to effect
such transactions at net asset value as it would adversely affect the
Fund's ability to do such transactions if the Fund had to impose a sales
charge.
DISTRIBUTION OF FUND SHARES
The Adviser acts as principal underwriter of the Fund's shares on a
continuing basis pursuant to a Distributing Agreement. Pursuant to
Distributing Agreement, the Adviser, in its capacity as distributor, pays
for all expenses in connection with the preparation, printing and
distribution of advertising and sales literature for use in offering the
Fund's shares to the public, including reports to shareholders to the extent
they are used as sales literature. The Adviser also pays for the
preparation and printing of prospectuses other than those forwarded to
existing shareholders. The continuance and assignment provisions of the
Distributing Agreement are the same as those of the Advisory Agreement.
During the Fund's fiscal years ended July 31, 1995, 1994 and 1993,
the Adviser, in its capacity as distributor, received total sales charges
(which the Fund does not pay) on the sale of Fund shares of $5,230,889,
$7,256,343 and $4,379,027, respectively. Of this amount, the Adviser
paid concessions to dealers of $4,404,100, $6,104,072 and $3,670,280,
respectively.
In addition, the Fund has adopted distribution plans with respect to
each class of its shares pursuant to Rule 12b-1 under the Investment
Company Act (the "Distribution Plans"). Payments under the Class A
Distribution Plan are limited to an annual rate of 0.25% of the average
daily net asset value of the Class A shares. Payments under the Class B
and Class C Distribution Plans are limited to an annual rate of 1.00% of
the average daily net asset value of each such class of shares.
<PAGE>
To the extent that any investment advisory fees paid by the Fund
may be deemed to be indirectly financing any activity which is primarily
intended to result in the sale of shares of the Fund within the meaning of
Rule 12b-1, the payments of such fees are authorized under the Plans.
The Distribution Plans continue annually so long as they are
approved in the manner provided by Rule 12b-1 or unless earlier
terminated by vote of the majority of the Fund's Independent Directors or
a majority of the Fund's outstanding shares. The Adviser is required to
furnish quarterly written reports to the Board of Directors detailing the
amounts expended under the Distribution Plans. The Distribution Plans
may be amended provided that all such amendments comply with the
applicable requirements then in effect under Rule 12b-1. Presently, Rule
12b-1 requires, among other procedures, that it be continued only if a
majority of the Independent Directors approve continuation at least
annually and that amendments materially increasing the amount to be
spent for distribution be approved by the Independent Directors and the
shareholders. As long as the Distribution Plans are in effect, the Fund
must commit the selection and nomination of candidates for new
Independent Directors to the sole discretion of the existing Independent
Directors.
During the fiscal year ended July 31, 1995, the Adviser received
$1,514,686 and $94,221, under the Class A and Class B Distribution Plans
respectively, all of which was paid to dealers and sales personnel. During
the fiscal year ended July 31, 1995, the Adviser received $20,342 under
the Class C Distribution Plan.
PERFORMANCE DATA
The average annual total return (as defined below) with respect to
the Fund's Class A shares for each of the periods indicated below is as
follows:
One year ended July 31, 1995................. 21.17%
Five years ended July 31, 1995............... 15.91%
Ten years ended July 31, 1995................ 17.13%
The average annual total return with respect to the Fund's Class B
shares (eight months beginning December 1, 1994 and ended July 31,
1995) was 26.07%. The average annual total return with respect to the
Fund's Class C shares (period beginning December 20, 1994 and ended July
31, 1995) was 26.42%.
Average annual total return measures both the net investment
income generated by, and the effect of any realized or unrealized
appreciation or depreciation of, the underlying investments in the Fund's
portfolio. Average annual total return is calculated separately for each
class in accordance with the standardized method prescribed by the
Securities and Exchange Commission by determining the average annual
compounded rates of return over the periods indicated, that would equate
the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)n = ERV
Where: P = hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period
This calculation (i) assumes all dividends and distributions are reinvested
at net asset value on the appropriate reinvestment dates and (ii) deducts
(a) the maximum front-end or applicable contingent deferred sales charge
from the hypothetical initial $1,000 investment, and (b) all recurring
fees, such as advisory fees, charged as expenses to all shareholder
accounts.
Total return is the cumulative rate of investment growth which
assumes that income dividends and capital gains are reinvested. It is
determined by assuming a hypothetical investment at the net asset value
at the beginning of the period, adding in the reinvestment of all income
dividends and capital gains, calculating the ending value of the investment
at the net asset value as of the end of the specified time period,
subtracting he amount of the original investment. This calculated amount
is then expressed as a percentage by multiplying by 100.
The total return (as defined above) for the Fund's Class A shares for
each of the periods indicated below is as follows:
One year ended July 31, 1995................... 21.17%
Five years ended July 31, 1995................. 109.34%
Ten years ended July 31, 1995.................. 386.47%
The total return with respect to the Fund's Class B shares (eight
months beginning December 1, 1994 and ended July 31, 1995) was 26.07%.
The total return with respect to the Fund's Class C shares (period
beginning December 20, 1994 and ended July 31, 1995) was 26.42%.
In reports or other communications to shareholders and in
advertising material, the Fund may compare its performance to recognized
averages and indices of performance such as the Consumer Price Index, the
Dow Jones Industrial Average, the Standard & Poor's 500 Stock Index and
to the performance of mutual fund indexes as reported by Lipper
Analytical Services, Inc. ("Lipper") or CDA Investment Technologies, Inc.
("CDA"), two widely recognized independent mutual fund reporting
services. Lipper and CDA performance calculations include reinvestment
of all capital gain and income dividends for the periods covered by the
calculations. The Consumer Price Index is generally considered to be a
measure of inflation. The Dow Jones Industrial Average and the Standard &
Poor's 500 Stock Index are unmanaged indices of common stocks which are
considered to be generally representative of the United States stock
market. The market prices and yields of these stocks will fluctuate.
The Fund may also use evaluations of the Fund published by
nationally recognized ranking services and by financial publications. Any
given performance comparison should not be considered representative of
the Fund's performance for any future period.
<PAGE>
FORM N-1A
DAVIS NEW YORK VENTURE FUND, INC.
(formerly, NEW YORK VENTURE FUND, INC.)
POST-EFFECTIVE AMENDMENT NO. 49 UNDER THE SECURITIES ACT OF
1933
REGISTRATION STATEMENT No. 2-29858
AND
AMENDMENT NO. 24 UNDER THE INVESTMENT COMPANY ACT OF 1940
REGISTRATION NO. 811-1701
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Included in Part A:
(i) Financial Highlights.
Included in Part B by incorporation from the 1995 Annual Report:
(i) Schedule of Investments at July 31, 1995.
(ii) Statement of Assets & Liabilities at July 31, 1995.
(iii) Statement of Operations for the year ended July 31, 1995.
(iv) Statement of Changes in Net Asset Value for the years ende
July 31, 1995 and 1994.
(v) Notes to Financial Statements.
(vi) Financial Highlights.
(vii) Report of Independent Certified Public Accountants.
(b) Exhibits:
(1) Articles of Incorporation, incorporated by reference to
Exhibit (1) to Registrant's Post-Effective Amendment
No. 47, File No. 2-29858.
(2) Amended and Restated Bylaws, incorporated by reference to
Exhibit (2) to Registrant's Post-Effective Amendment
No. 47, File No. 2-29858.
(3) Not applicable.
<PAGE>
(4) Specimen Common Stock Certificate, incorporated by
reference to Exhibit 1(4)a to Registrant's Form S-5 filed
on December 17, 1968.
(5) Investment Advisory Agreement, incorporated by reference to
Exhibit (5)(b) to Registrant's Post-Effective Amendment No.
45, File No. 2-29858.
(6) Distributor's Agreement, incorporated by reference to
Exhibit (6)(b) to Registrant's Post-Effective Amendment No.
45, File No. 2-29858.
(7) Not applicable.
(8)(a) Custodian Contract, incorporated by reference to Exhibit
(8) (a) to Registrant's Post-Effective Amendment No. 44,
File No. 2-29858.
(8)(b) Transfer Agency and Service Agreement, incorporated by
reference to Exhibit (8) (b) to Registrant's Post-Effective
Amendment No. 44, File No. 2-29858..
(9) Not applicable.
(10) Opinion and Consent of Counsel (Reavis & McGrath),
incorporated by reference to Exhibit 10 to Registrant's
Post-Effective Amendment No. 35, File No. 2-29858.
(11) Consent of Auditors.
(12) Not applicable.
(13) Not applicable.
(14)(a) Prototype Retirement Plan, incorporated by reference to
Exhibit (1) to Registrant's Post-Effective Amendment
No. 38, File No. 2-29858.
(14)(b) Individual Retirement Account, incorporated by reference to
Exhibit (ii) Registrant's Post-Effective Amendment No. 38,
File No. 2-29858.
(15)(a) Distribution Plan for Class A shares, incorporated by
reference to Exhibit (15) (a) to Registrant's
Post-Effective Amendment No. 47, File No. 2-29858.
(15)(b) Distribution Plan for Class B shares, incorporated by
reference to Exhibit (15) (b) to Registrant's
Post-Effective Amendment No. 47, File No. 2-29858.
(15)(c) Distribution Plan for Class C shares, incorporated by
reference to Exhibit (15) (c) to Registrant's
Post-Effective Amendment No. 47, File No. 2-29858.
<PAGE>
(16) Sample computation of average annual total return,
incorporated by reference to Exhibit (16) of Registrant's
Post-Effective Amendment No. 40, File No. 2-29858.
(18)(a) Powers of Attorney, incorporated by reference to Exhibit
(18)(a) to Registrant's Post-Effective Amendment No. 48,
File No. 2-29858.
(18)(b) Plan pursuant to Rule 18f-3, incorporated by reference to
Exhibit (18)(b) to Registrant's Post-Effective Amendment
No. 48, File No. 2-29858.
Item 25. Persons Controlled by or Under Common Control With Registrant
-------------------------------------------------------------
Not applicable
Item 26. Number of Holders of Securities
-------------------------------
Number of Record Holders
Title of Class as of October 27, 1995
-------------- ----------------------
Common Stock
Class A shares 37,479
Class B shares 4,772
Class C shares 1,296
Item 27. Indemnification
---------------
Registrant's Articles of Incorporation indemnifies its directors,
officers and employees to the full extent permitted by Section 2-418 of
the Maryland General Corporation Law, subject only to the provisions of
the Investment Company Act of 1940. The indemnification provisions of
the Maryland General Corporation Law (the "Law") permit, among other
things, corporations to indemnify directors and officers unless it is
proved that the individual (1) acted in bad faith or with active and
deliberate dishonesty, (2) actually received an improper personal benefit
in money, property or services, or (3) in the case of a criminal proceeding,
had reasonable cause to believe that his act or omission was unlawful. The
Law was also amended to permit corporations to indemnify directors and
officers for amounts paid in settlement of stockholders' derivative suits.
In addition, the Registrant's directors and officers are covered under
a policy to indemnify them for loss (subject to certain deductibles)
including costs of defense incurred by reason of alleged errors or
omissions, neglect or breach of duty. The policy has a number of
exclusions including alleged acts, errors, or omissions which are finally
adjudicated or established to be deliberate, dishonest, malicious or
fraudulent or to constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties in respect to any
registered investment company. This coverage is incidental to a general
policy carried by the Registrant's adviser.
In addition to the foregoing indemnification, Registrant's Articles of
Incorporation exculpate directors and officers with respect to monetary
damages except to the extent that an individual actually received an
improper benefit in money property or services or to the extent that a
final adjudication finds that the individual acted with active and
deliberate dishonesty.
Item 28. Business and Other Connections of Investment Adviser
The Investment Adviser of the Registrant, Davis Selected Advisers,
L.P. (formerly, Selected/Venture Advisers, L.P.), is also the investment
adviser for Davis High Income
<PAGE>
Fund, Inc. (formerly, Venture Income (+) Plus, Inc.), Davis Tax-Free High Income
Fund, Inc. (formerly, Venture Muni (+) Plus, Inc.), Davis Series, Inc.
(formerly, Retirement Planning Funds of America, Inc.), Davis International
Series, Inc. (formerly, Venture Series, Inc.), Selected American Shares, Inc.,
Selected Special Shares Inc. and Selected Capital Preservation Trust. It also
may engage as an investment adviser for accounts other than mutual funds,
although this is not presently business of a substantial nature.
Shelby M.C. Davis is a Director, Chairman, Chief Executive Officer
and principal owner of Venture Advisers, Inc. (the "General Partner") and
is a Director of Shelby Cullom Davis Financial Consultants, Inc., 70 Pine
Street, New York, New York 10270 ("SCDFC"). Louis R. Proyect is a Director
and Executive Vice President of the General Partner and is a Secretary of
SCDFC. Carl R. Luff is a Director, Executive Vice President and Secretary
of the General Partner.
Item 29. Principal Underwriters
(a) Davis Selected Advisers, L.P., located at 124 East Marcy Street,
Santa Fe, NM 87501, is the principal underwriter for the Registrant also
acts as principal underwriter for Davis High Income Fund, Inc., Davis
Tax-Free High Income Fund, Inc., Davis Series, Inc. and Davis International
Series, Inc., Selected American Shares, Inc., Selected Special Shares, Inc.
and Selected Capital Preservation Trust.
(b) Management of the General Partner of the Principal Underwriters
Positions and
Name and Principal Positions and Offices with the Offices with
Business Address general partner of the Underwriter Registrant
- ---------------- ---------------------------------- ----------
Shelby M.C. Davis Director, Chairman and Director and President
P.O. Box 205 Chief Executive Officer
Hobe Sound, FL 33455
Carl R. Luff Director, Co-President Vice President,
124 East Marcy Street and Treasurer Treasurer and Assistant
Santa Fe, NM 87501 Secretary
Louis R. Proyect Director, Executive Vice President
124 East Marcy Vice President and
Santa Fe, NM 87501 Secretary
Raymond O. Padilla Senior Vice President Vice President,
124 East Marcy Street Secretary & Assistant
Santa Fe, NM 87501 Treasurer
Carolyn H. Spolidoro Vice President Vice President
124 East Marcy Street
Santa Fe, NM 87501
Andrew A. Davis Co-President Vice President
124 East Marcy Street
Santa Fe, NM 87501
Christopher C. Davis Director Vice President
70 Pine Street, 43rd Floor
New York, NY 10270-0108
<PAGE>
Eileen R. Street Senior Vice President Assistant Treasurer and
124 East Marcy Street Assistant Secretary
Santa Fe, NM 87501
Item 30. Location of Accounts and Records
--------------------------------
Accounts and records are maintained at the offices of Davis
Selected Advisers, L.P., 124 East Marcy Street, Santa Fe, New Mexico
87501, and at the offices of the Registrant's custodian, State Street Bank
and Trust Company, 470 Atlantic Avenue, Boston, Massachusetts 02210.
Item 31. Management Services
-------------------
Not applicable
Item 32. Undertakings
------------
Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of Registrant's latest annual report to shareholders
upon request and without charge.
<PAGE>
NEW YORK VENTURE FUND, INC.
SIGNATURES
----------
Registrant certifies that this Amendment meets all of the
requirements for effectiveness pursuant to Rule 485(b).
Pursuant to the requirements of the Securities Act of 1933 and/or
the Investment Company Act of 1940, the Registrant has caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago and State of Illinois on
the 3rd day of April, 1996.
NEW YORK VENTURE FUND, INC.
*By: /s/ Sheldon R. Stein
--------------------
Sheldon R. Stein,
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Shelby M.C. Davis* President April 3, 1996
- -----------------
Shelby M.C. Davis (Chief Executive
Officer) and
Director
Carl R. Luff* Vice President, April 3, 1996
- ------------
Carl R. Luff Treasurer and
Assistant Secretary
*By: /s/ Sheldon R. Stein
--------------------
Sheldon R. Stein,
Attorney-in-Fact
*Sheldon R. Stein signs this document on behalf of the Registrant
and the foregoing officers pursuant to the powers of attorney filed as
Exhibit (18)(a) to this Registrant's Post-Effective Amendment No. 48.
<PAGE>
NEW YORK VENTURE FUND, INC.
Pursuant to the requirements of the Securities Act of 1933, this
PostEffective Amendment has been signed on April 3, 1996 by the
following persons in the capacities indicated.
Signature Title
--------- -----
Wesley E. Bass. Jr.* Director
- ------------------------------
Wesley E. Bass, Jr.
Jeremy H. Biggs* Director
- ------------------------------
Jeremy H. Biggs
Marc P. Blum* Director
- ------------------------------
Marc P. Blum
Eugene M. Feinblatt* Director
- ------------------------------
Eugene M. Feinblatt
Jerry D. Geist* Director
- ------------------------------
Jerry D. Geist
D. James Guzy* Director
- ------------------------------
D. James Guzy
G. Bernard Hamilton* Director
- ------------------------------
G. Bernard Hamilton
LeRoy E. Hoffberger* Director
- ------------------------------
LeRoy E. Hoffberger
Laurence W. Levine* Director
- ------------------------------
Laurence W. Levine
Christian R. Sonne* Director
- ------------------------------
Christian R. Sonne
Edwin R. Werner* Director
- ------------------------------
Edwin R. Werner
*Sheldon R. Stein signs this document on behalf of each of the
foregoing persons pursuant to the powers of attorney filed as Exhibit
18(a) to this Registrant's Post-Effective Amendment No. 48.
/s/Sheldon R. Stein
------------------------
Sheldon R. Stein,
Attorney-in-Fact
Exhibit (1)
UNOFFICIAL FORM
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
DAVIS NEW YORK VENTURE FUND, INC.
(EFFECTIVE AS OF OCTOBER 1, 1994)
FIRST: Incorporators: The original incorporators were Michael J.
Valicenti, Robert A. J. Barry and Donald F. French.
SECOND: Name. The name of the Corporation (hereinafter called the
"Corporation") is Davis New York Venture Fund, Inc.
THIRD: Purpose. The purpose for which the Corporation is formed is
to engage in, conduct, operate and carry on the business of an open-end
management investment company under the Investment Company Act of
1940 (including any amendment thereof or other applicable Act of
Congress hereafter enacted) (hereinafter called the "1940 Act"), and to do
any and all acts or things as are necessary, convenient, appropriate,
incidental or customary in connection therewith.
FOURTH: Principal Office and Resident Agent. The post office
address of the place at which the principal office of the Corporation in the
State of Maryland will be located at 32 South Street, Baltimore, Maryland
21202.
The Corporation's registered agent is The Corporation Trust
Incorporated whose post office address is 32 South Street, Baltimore,
Maryland 21202. Said registered agent is a corporation of the State of
Maryland.
FIFTH: Capitalization. (a) The total number of shares of capital
stock which the Corporation shall have authority to issue is
1,000,000,000 shares of capital stock of the par value of $.05 per share,
having an aggregate par value of $50,000,000. Without limiting the power
of the Board of Directors as set forth in paragraph (b) of this Article
FIFTH, 350,000,000 shares are classified as Class A Common Stock,
350,000,000 shares are classified as Class B Common Stock, and
200,000,000 shares are classified as Class C Common Stock.
The Class A Common Stock, Class B Common Stock and Class C
Common Stock shall represent investment in the same pool of assets and
shall have the same preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption except as set forth in the Articles of
Incorporation of the Corporation and as set forth below:
(i) Expenses related to the distribution of each class of stock and
such other expenses as may be permitted by rule or order of the Securities
and Exchange Commission and as the Board of Directors shall deem
appropriate shall be borne solely by each class, and the bearing of such
expenses shall be appropriately reflected (in the manner determined by
the Board of Directors) in the net asset value, dividends, distribution and
liquidation rights of the stock of such Class;
<PAGE>
(ii) The Class A Common Stock may be subject to a front-end load
and a Rule 12b-1 service and distribution fee as determined by the Board
of Directors from time to time prior to issuance of such stock;
(iii) The Class B Common Stock may be subject to a contingent
deferred sales charge and a Rule 12b-1 service and distribution fee as
determined by the Board of Directors from time to time prior to issuance
of such stock and shall be converted to Class A Common Stock at the end
of eight (8) years after purchase or such earlier period as determined by
the Board of Directors giving effect to reciprocal exchange privileges;
(iv) The Class C Common Stock may be sold without a front-end
sales load or contingent sales charge and may be subject to a Rule 12b-1
service and distribution fee as determined by the Board of Directors from
time to time prior to issuance of such stock.
(v) Each class shall vote separately on matters pertaining only to
that class, as the Board of Directors shall from time to time determine.
(vi) Nothing herein shall prohibit the imposition of a redemption fee
or exchange fee upon any Class.
(b) For purposes of establishing classes or subclasses of stock with
different investment objectives, types of investments or distribution
methods, costs or charges, the Board of Directors may classify or
reclassify any unissued stock from time to time by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of the stock. Without limiting the generality of the foregoing,
the Board of Directors may, from time to time, (i) classify or reclassify
any unissued shares of stock into classes having "assets belonging to"
such class, as described in Paragraph (c)(i) of this Article, (ii) divide any
class having "assets belonging to" such class into subclasses with
different distribution methods, costs or charges and classify or reclassify
any unissued shares of such subclass, and (iii) name and change the name
of any class or subclass of outstanding or unissued stock.
(c) Subject to the authority granted to the Board of Directors of the
Corporation in subparagraph (b) of this Article FIFTH, each class of stock
of the Corporation now outstanding and each class of stock hereafter
designated by the Directors as a class which shall have assets belonging
to such class shall have the following described powers, preferences and
rights and the qualifications, limitations and restrictions thereof shall be
as follows:
(i) All consideration received by the Corporation for the issue or
sale of shares of a particular class, together with all income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds, in whatever form the same may be, are
herein referred to as "assets belonging to" such class.
(ii) The assets belonging to a particular class of stock shall be
charged with the liabilities (including, in the discretion of the Board of
Directors or its delegate, accrued expenses and reserves) incurred in
respect of such class, and such class shall also be charged with its share of
any
<PAGE>
general liabilities of the Corporation not incurred in respect of any
particular class, such general liabilities to be allocated in proportion to
the net asset value of the respective classes. The allocation of such
liabilities to any subclass shall be determined by the Board of Directors
or its delegate. The determination of the Board of Directors or its
delegate shall be final and conclusive as to the amount of assets and
liabilities, including accrued expenses and reserves, which are to be
allocated to one or more particular classes or subclasses. The power to
make such determinations may be delegated by the Board of Directors
from time to time to one or more of the directors and officers of the
Corporation, or to an agent of the corporation appointed for such purpose.
(iii) In the event of the liquidation or dissolution of the
Corporation (for whatever reason), shareholders of each class shall be entitled
to receive as a class, out of the assets of the Corporation available for
distribution to shareholders the assets belonging to such class; and the
assets so distributable to the shareholders of any class shall be
distributed among such shareholders in proportion to the relative
aggregate net asset values of the shares held by such shareholders. In the
event that there are any general assets available for distribution not
belonging to any particular class, any distribution thereof shall be made
to the holders of all such classes in proportion to the net asset value of
the respective classes.
(iv) The voting rights of the shares of each class shall be as set
forth in subparagraph (d) of this Article FIFTH.
(v) The relative rights of the shares of each class to be redeemed or
repurchased shall be as set forth in Article SEVENTH.
(vi) The relative rights of the shares of each class to receive
dividends shall be as set forth in Article NINTH.
(d) Subject to the requirements of the Investment Company Act of
1940, at any meeting of the shareholders, each shareholder shall have one
vote for each dollar of net asset value per share for each share held
irrespective of the class or subclass thereof. On any matter submitted to
a vote of shareholders, all shares of the Corporation then issued and
outstanding and entitled to vote shall be voted in the aggregate and not by
class or subclass except to the extent class or subclass voting is required
as to any matter by the laws of the State of Maryland, the Investment
Company Act of 1940 or any Regulation thereunder or by the Board of
Directors.
(e) Fractional shares shall carry proportionately all the rights of a
whole share.
SIXTH: Preemptive Rights. No holder of any of the stock of the
Corporation shall as such holder have any preemptive or other right to
purchase or subscribe for any stock which the Corporation may issue or
sell, whether or not exchangeable for any other stock of the Corporation,
and whether out of the number of shares authorized by the Articles of
Incorporation as originally filed or by any amendment thereof or out of
shares of the stock of the Corporation acquired by it after the issue
thereof, other than such, if any, as the Board of Directors in its discretion
may from time to time determine to offer, or authorize to be offered, for
subscription to stockholders of the Corporation, and then only at such price
<PAGE>
or prices and upon such terms as the Board of Directors from time to
time, in its discretion, may determine.
SEVENTH: Redemption. (a) Each holder of the stock of the
Corporation shall be entitled at any time to require the Corporation, to the
extent that the Corporation shall have any surplus available for such
purpose and out of such surplus, to purchase all or any part of the shares
of the stock standing in the name of such holder on the books of the
Corporation at the net asset value of such shares; provided, however, that
the Corporation may suspend such right of redemption or postpone
payment for such shares pursuant to the 1940 Act or any rule, regulation
or order thereunder. The procedures and requirements for redemption
shall be determined by the Corporation or its duly authorized agent.
(b) Any redemptions or purchases of shares by the Corporation of
any class of the Corporation's stock shall be made solely from assets
belonging to such class.
(c) The Corporation, without the vote or consent of the stockholders
of the Corporation, may redeem all shares of stock in any stockholder's
account in which the value of such shares is less than $250, or such other
minimum amount as the Board of Directors may from time to time
establish, in its discretion; provided, that any such redemption is at a
price determined in accordance with the Corporation's then current
prospectus.
EIGHTH: Number of Directors. The number of directors of the
corporation shall be fourteen. However, the By-Laws of the Corporation
may from time to time fix the number of directors at a number other than
fourteen and may authorize the Board of Directors, by vote of a majority
of the entire Board of Directors, to increase or decrease the number of
directors fixed by these Articles or by the By-Laws. The By-Laws of the
corporation may divide the Directors of the Corporation into classes and
prescribe the tenure of office of the several classes, but no class shall be
elected for a period shorter than that from the time of the election
following the division into classes until the next annual meeting and
thereafter for a period shorter than the interval between annual meetings
or for a period longer than five years, and the term of office of at least
one class shall expire each year.
NINTH: Board of Directors. The following powers are expressly and
exclusively vested in the Board of Directors of the Corporation and may be
exercised without the approval of the stockholders of the Corporation.
(a)To make, alter, amend and repeal the By-Laws of the
Corporation.
(b)To declare and provide for the distribution of dividends and to
determine the amount, source, method and time thereof, except that
distributions from assets belonging to a particular class of stock shall be
distributed only to the holders of shares of such class.
(c)To authorize and provide for the issuance and sale of shares of
the stock of the Corporation;
(d)To authorize the purchase by the Corporation, either directly
or through an agent, of shares of its stock, in the open market or
otherwise, at prices not in excess of the net asset value of such shares.
TENTH: Net Asset Value, Other Determinations. The net asset value
of shares of capital stock of the Corporation shall be determined by or
pursuant to the direction of the Board of Directors of the Corporation. Any
determination made in good faith by or on behalf of the Board of Directors
or pursuant to its delegation or direction, as to the amount
<PAGE>
of the assets, debts, obligations or liabilities of the Corporation, as to the
net asset value, bid price or asked price of the shares of the Corporation, as
to the value of any asset or assets of the Corporation, or as to any other
matter relating to the issue, sale, redemption, purchase, acquisition or
disposition of the shares of the Corporation, shall be final and conclusive
and shall be binding upon the Corporation and all holders of shares issued
by it, and the shares of the Corporation shall be issued and sold on the
condition and understanding that any and all such determinations shall be
binding as aforesaid.
ELEVENTH: Indemnification. Subject to the provisions of the
Investment Company Act of 1940, as amended, the Corporation shall
indemnify and advance expenses to a director or officer of the Corporation
in connection with any proceeding to the fullest extent permitted by and
in accordance with Section 2-418 of the Maryland General Corporation
Law, as amended from time to time (the "Indemnification Section").
Subject to the provisions of the Investment Company Act of 1940, as
amended, with respect to an employee or agent, other than a director or
officer of the Corporation, the Corporation may, as determined by and in
the discretion of the Board of Directors of the Corporation, indemnify and
advance expenses to such employee or agent in connection with a
proceeding to the extent permitted by and in accordance with the
Indemnification Section. As used in this Article Eleventh, any word or
words that are defined in the Indemnification Section shall have the same
meaning as provided in the Indemnification Section. The indemnification
and advancement of expenses provided or authorized by these Articles
shall not be deemed exclusive of any other rights to which a director,
officer, employee or agent of the Corporation may be entitled.
TWELFTH. Exculpation. Subject to the provisions of the Investment
Company Act of 1940, as amended, no director or officer of the
Corporation shall be liable to the Corporation or its stockholders for
money damages, except (i) to the extent that it is proved that such
director or officer actually received an improper benefit or profit in
money, property or services, for the amount of the benefit or profit in
money, property or services actually received, or (ii) to the extent that a
judgment or other final adjudication adverse to such director or officer is
entered in a proceeding based on a finding in the proceeding that such
director's or officer's action, or failure to act, was the result of active
and deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding.
THIRTEENTH. Majority Vote. Notwithstanding any provision of the
General Corporation Law of the State of Maryland requiring that any action
be taken or authorized by the affirmative vote of the holders of a
designated proportion greater than a majority of votes entitled to be cast,
such action shall be effective and valid if taken or authorized by the
affirmative vote of the holders of a majority of the total number of votes
entitled to vote thereon. When shares are voted by individual class or
subclass, any such action shall be effective and valid if taken or
authorized by the affirmative vote of the holders of a majority of the
total number of votes entitled to vote thereon.
FOURTEENTH: Amendments The Corporation reserves the right from
time to time to amend, alter, change, add to, or repeal any provision
contained in these Restated and Amended Articles of Incorporation in the
manner now or hereafter prescribed or permitted by statute, including any
amendment which alters the contract rights, as expressly set forth in
these Restated and Amended Articles of Incorporation, of any outstanding
stock, and all rights conferred on stockholders and others herein are
granted subject to this reservation.
FIFTEENTH: Titles. The titles contained in these Restated and
Amended Articles of Incorporation are for convenience only and shall not
affect the interpretation of any of the provisions hereof.
<PAGE>
IN WITNESS WHEREOF, DAVIS NEW YORK VENTURE FUND, INC., has
caused these presents to be signed in its name and on its behalf by its
Chairman of the Board of Directors and attested by its Secretary this 19th
day of October, 1992.
Attest: DAVIS NEW YORK VENTURE FUND, INC.
/S/ Raymond O. Padilla /S/ Martin H. Proyect
Raymond O. Padilla, Martin H. Proyect, Chairman of the Board
Secretary
Exhibit (2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED BYLAWS
October 17, 1994
NEW YORK VENTURE FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
IN EFFECT AS OF
October 17, 1994
AMENDED AND RESTATED BYLAWS OF
NEW YORK VENTURE FUND, INC.
ARTICLE I
---------
STOCKHOLDERS
------------
SECTION 1. Place of Meeting. All meetings of the stockholders shall
----------------
be held at the principal office of the Corporation in the State of Maryland
or at such other place within or without the State of Maryland as may
from time to time be designated by the Board of Directors and stated in
the notice of meeting.
SECTION 2. Annual Meetings. The annual meeting of the stockholders
---------------
of the Corporation shall be held at such hour as may be determined by the
Board of Directors and as shall be designated in the notice of the meeting
on such date within the month of October of each year as may be fixed by
the Board of Directors for the purpose of electing directors for the
ensuing year and for the transaction of such other business as may
properly be brought before the meeting.
SECTION 3. Special or Extraordinary Meetings. Special or
---------------------------------
extraordinary meetings of the stockholders for any purpose or purposes
may be called by the Chief Executive Officer or by a majority of the Board
of Directors and shall be called by the Secretary upon receipt of the
request in writing signed by stockholders holding not less than one
quarter in amount of the entire capital stock issued and outstanding and
entitled to vote thereat. Such request shall state the purpose or purposes
of the proposed meeting.
SECTION 4. Notice of Meetings of Stockholders. Not less than ten
----------------------------------
days' and not more than ninety days' written or printed notice of every
meeting of stockholders, stating the time and place thereof (and the
general nature of the business proposed to be transacted at any special or
extraordinary meeting), shall be given to each stockholder entitled to vote
thereat by leaving the same with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to him at his
address as it appears upon the books of the Corporation.
<PAGE>
No notice of the time, place or purpose of any meeting of
stockholders need be given to any stockholder who attends in person or by
proxy or to any stockholder who, in writing executed and filed with
records of the meeting, either before or after the holding thereof, waives
such notice.
SECTION 5. Closing of Transfer Books: Record Dates. The Board of
---------------------------------------
Directors may fix the time, not exceeding twenty days preceding the date
of any meeting of stockholders, any dividend payment date or any date for
the allotment of rights, during which the books of the Corporation shall be
closed against transfers of stock. If such books are closed for the purpose
of determining stockholders entitled to notice of or to vote at a meeting
of stockholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of providing for the closing of
the books against transfers of stock as aforesaid, the Board of Directors
may fix, in advance, a date, not exceeding sixty days and not less than ten
days preceding the date of any meeting of stockholders, and not exceeding
sixty days preceding any dividend payment date or any date for the
allotment of rights, as a record date for the determination of the
stockholders entitled to notice of and to vote at such meeting, or entitled
to receive such dividends or rights, as the case may be; and only
stockholders of record on such date shall be entitled to notice of and to
vote at such meeting or to receive such dividends or rights, as the case
may be.
SECTION 6. Quorum, Adjournment of Meetings. The presence in person or by
-------------------------------
proxy of the holders of record of a majority of the votes entitled to be
cast shall constitute a quorum at all meetings of the stockholders. If at
any meeting of the stockholders there shall be less than a quorum present,
the stockholders present at such meeting may, without further notice,
adjourn the same from time to time until a quorum shall attend, but no
business shall be transacted at any such adjourned meeting except such as
might have been lawfully transacted had the meeting not been adjourned.
SECTION 7. Voting and Inspectors. At all meetings of stockholders
---------------------
every stockholder of record entitled to vote shall be entitled to one vote
for each dollar of net asset value per share standing in the stockholder's
name on the books of the Corporation (and such stockholders of record
holding fractional shares, if any, shall have proportionate voting rights).
<PAGE>
All elections shall be had and all questions decided by a majority of
the votes cast at a duly constituted meeting, except as otherwise provided
in the Articles of Incorporation or in these Bylaws or by specific
statutory provision superseding the restrictions and limitations contained
in the Articles of Incorporation or in these Bylaws.
At any election of Directors, the Board of Directors prior thereto
may, or if they have not so acted, the Chairman of the meeting may, and
upon the request of the holders of ten percent (10%) of the votes entitled
to be cast at such election shall, appoint at least one inspector of election
who shall first subscribe an oath or affirmation to execute faithfully the
duties of inspector at such election with strict impartiality and according
to the best of their ability, and shall after the election make a certificate
of the result of the vote taken. No candidate for the office of Director
shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken
upon any election or matter, and such vote shall be taken upon the request
of the holders of ten percent (10%) of the votes entitled to be cast on such
election or such matter.
SECTION 8. Conduct of Stockholders' Meetings. The meetings of the
---------------------------------
stockholders shall be presided over by the Chairman or President or, if he
shall not be present, by a Vice-President or, if neither the President nor
any Vice-President is present, by a chairman to be elected at the meeting.
The Secretary of the Corporation, if present, shall act as Secretary of
such meetings or, if he is not present, an Assistant Secretary shall so act;
if neither the Secretary nor an Assistant Secretary is present, then the
meeting shall elect its secretary.
SECTION 9. Concerning Validity of Proxies, Ballots, Etc. At every
--------------------------------------------
meeting of the stockholders, all proxies shall be received and taken in
charge of and all ballots shall be received and canvassed by the secretary
of the meeting, who shall decide all questions touching the qualification
of voters, the validity of the proxies, and the acceptance or rejection of
votes, unless inspectors of election shall have been appointed as provided
in Section 7, in which event such inspectors of election shall decide all
such questions.
<PAGE>
ARTICLE II
----------
BOARD OF DIRECTORS
------------------
SECTION 1. Number and Tenure of Office. The business and property
---------------------------
of the Corporation shall be conducted and managed by a Board of Directors
of five Directors, which number may be increased or decreased as provided
in Section 3 of this Article. Directors need not be stockholders. The Board
of Directors at its first meeting shall classify the Directors with respect
to the period of time for which they shall serve into five classes, each
consisting as nearly as possible of one-fifth of the total number of
Directors. The Directors in the first class shall serve until the first
annual meeting next ensuing after the organization of the Corporation; and
the Directors in the second, third, fourth and fifth classes shall serve
until the second, third, fourth and fifth annual meetings, respectively; and
at each annual election held after the organization of the Corporation the
successors to the class of Directors whose terms shall expire in that year
shall be elected to hold office for a full term of five years, so that the
term of office of one class of Directors shall expire in each year.
Whenever, under the provisions hereof, the number of Directors is
increased and vacancies caused by such increase are filled by the Board of
Directors, the Board of Directors in filling such vacancies shall classify
such Directors so elected in accordance with the provisions hereof so that
each of the five classes shall contain as nearly equal numbers as possible.
Whenever, under the provisions hereof, the number of Directors is
decreased by vote of a majority of the entire Board to take effect while
the number of Directors whose terms of office have not then expired
exceeds the number of Directors to which the Board is decreased, the
Board shall determine when the term of office of the Directors in excess
of such decreased number shall expire and shall, if necessary, reclassify
the remaining Directors so that each of the classes shall contain as nearly
equal numbers as possible, provided that the term of office of no Director
shall be extended to a period which shall be more than five years from the
date of his last election and qualification. In the event that the number of
Directors should be decreased below five, the number of classes of
Directors shall be reduced so as to be equal to the number of Directors.
SECTION 2. Mandatory Retirement of Directors. A Director shall
---------------------------------
retire from the Board of Directors and cease being a Director at the close
of business on the last day of the calendar year in which the Director
attains age seventy-two (72), except that any person who was a Director
on July 1, 1994, and on that date was at least sixty-nine (69) years of
<PAGE>
age shall continue to serve as a director at the discretion of the Nominating
Committee of the Board of Directors.
SECTION 3. Vacancies. A majority of the remaining Directors,
---------
whether or not sufficient to constitute a quorum, may fill a vacancy on
the Board of Directors which results from any cause except an increase in
the number of Directors; and a Director elected by the Board of Directors
to fill such vacancy shall serve until the next annual meeting of
stockholders and until his successor is duly elected and qualifies. A
Director elected by the stockholders to fill a position which directly or
indirectly resulted from a vacancy, except a vacancy caused by an increase
in the number of Directors in the Board of Directors, shall serve the
balance of the term of the Director whose vacancy required the election.
SECTION 4. Increase or Decrease in Number of Directors. The Board of
-------------------------------------------
Directors, by the vote of a majority of the entire Board, may increase the
number of Directors to a number not exceeding fifteen, and may elect
Directors to fill the vacancies created by any such increase in the number
of Directors until the next annual meeting or until their suc-cessors are
duly elected and qualify; the Board of Directors, by the vote of a majority
of the entire Board, may likewise decrease the number of Directors to a
number not less than five.
SECTION 5. Place of Meeting. The Directors may hold their meetings,
----------------
have one or more offices, and keep the books of the Corporation outside
the State of Maryland, at any office or offices of the Corporation or at any
other place as they may from time to time by resolution determine, or in
the case of meetings, as they may from time to time by resolution
determine or as shall be specified or fixed in the respective notices or
waivers of notice thereof.
SECTION 6. Regular Meetings. Regular meetings of the Board of
----------------
Directors shall be held at such time and on such notice, if any, as the
Directors may from time to time determine.
The annual meeting of the Board of Directors shall be held as soon as
practicable after the annual meeting of the stockholders for the election
of Directors.
SECTION 7. Special Meetings. Special meetings of the Board of
----------------
Directors may be held from time to time upon call of the Chairman or two
or more of the Directors, by oral or
<PAGE>
telegraphic or written notice duly
served on or sent or mailed to each Director not less than one day before
such meeting. No notice need be given to any Director who attends in
person or to any Director who, in writing executed and filed with the
records of the meeting either before or after the holding thereof, waives
such notice. Such notice or waiver of notice need not state the purpose or
purposes of such meeting.
SECTION 8. Quorum. One-third of the Directors then in office shall
------
constitute a quorum for the transaction of business, provided that a
quorum shall in no case be less than two Directors. If at any meeting of
the Board there shall be less than a quorum present, a majority of those
present may adjourn the meeting from time to time until a quorum shall
have been obtained. The act of the majority of the Directors present at any
meeting at which there is a quorum shall be the act of the Directors,
except as may be otherwise specifically provided by statute, by the
Articles of Incorporation or by these Bylaws.
SECTION 9. Executive Committee. The Board of Directors may, by the
-------------------
affirmative vote of a majority of the entire Board, elect from the
Directors an Executive Committee to consist of such number of Directors
as the Board may from time to time determine. The Board of Directors by
such affirmative vote shall have power at any time to change the members
of such Committee and may fill vacancies in the Committee by election
from the Directors. When the Board of Directors is not in session, the
Executive Committee shall have and may exercise any or all of the powers
of the Board of Directors in the management of the business and affairs of
the Corporation (including the power to authorize the seal of the
Corporation to be affixed to all papers which may require it) except as
provided by law and except the power to increase or decrease the size of,
or fill vacancies on, the Board, to remove or appoint executive officers or
to dissolve or change the permanent membership of the Executive
Committee, and the power to make or amend the Bylaws of the
Corporation. The Executive Committee may fix its own rules of procedure,
and may meet, when and as provided by such rules or by resolution of the
Board of Directors, but in every case the presence of a majority shall be
necessary to constitute a quorum. In the absence of any member of the
Executive Committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a member of the
Board of Directors to act in the place of such absent member.
SECTION 10. Other Committees. The Board of Directors, by the
----------------
affirmative vote of a majority of the entire Board, may appoint other
committees which shall in each case
<PAGE>
consist of such number of members (not less than two) and shall have and may
exercise such powers as the Board may determine in the resolution appointing
them. A majority of all members of any such committee may determine its action,
and fix the time and place of its meetings, unless the Board of Directors shall
otherwise provide. The Board of Directors shall have power at any time to
change the members and powers of any such committee, to fill vacancies,
and to discharge any such committee.
SECTION 11. Informal Action by Directors and Committees. Any
-------------------------------------------
action required or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting, if a
written consent to such action is signed by all members of the Board, or
of such committee, as the case may be.
SECTION 12. Compensation of Directors. No Director shall receive
-------------------------
any stated salary or fees from the Corporation for his services as such
Director if such Director is, otherwise than by reason of being such
Director, affiliated (as such term is defined by the Investment Company
Act of 1940) with the Corporation or with any investment adviser or
principal underwriter. Except as provided in the preceding sentence,
Directors shall be entitled to receive such compensation from the
Corporation for their services as may from time to time be voted by the
Board of Directors.
ARTICLE III
-----------
OFFICERS
--------
SECTION 1. Executive Officers. The executive officers of the
------------------
Corporation shall be chosen by the Board of Directors as soon as may be
practicable after the annual meeting of the stockholders. These shall
include a President, one or more other Vice Presidents (the number
thereof to be determined by the Board of Directors), a Secretary and a
Treasurer. The Board of Directors or the Executive Committee may also in
its discretion appoint a Chairman of the Board of Directors, Assistant
Secretaries, Assistant Treasurers, and other officers, agents and
employees, who shall have such authority and perform such duties as the
Board or the Executive Committee may determine. The Board of Directors
may fill any vacancy which may occur in any office. Any two or more
offices, except those of President and Vice President, may be held by the
same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is
<PAGE>
required by law or these Bylaws to be executed, acknowledged or verified by two
or more officers.
SECTION 2. Term of Office. The term of office of all officers shall be
--------------
one year and until their respective successors are chosen and qualify,
subject, however, to the provision for removal contained in the Articles of
Incorporation. Any officer may be removed from office at any time with or
without cause by the vote of a majority of the entire Board of Directors.
SECTION 3. Powers and Duties. The officers of the Corporation shall
-----------------
have such powers and duties as generally pertain to their respective
offices, as well as such powers and duties as may from time to time be
conferred by the Board of Directors or the Executive Committee.
ARTICLE IV
----------
CAPITAL STOCK
-------------
SECTION 1. Certificates of Shares. A stockholder of Class A Shares
----------------------
of any series shall upon request be entitled to a certificate for full shares
of stock in such form not inconsistent with law as the Board of Directors
shall determine. No certificates will be issued to evidence ownership of
any other Class of shares.
SECTION 2. Transfer of Shares. Shares of the Corporation shall be
------------------
transferable on the books of the Corporation by the holder thereof in
person or by his duly authorized attorney or legal representative, upon
surrender and cancellation of certificates for the same number of shares,
duly endorsed or accompanied by proper instruments of assignment and
transfer, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require.
SECTION 3. Stock Ledgers. The stock ledgers of the Corporation,
-------------
containing the names and addresses of the stockholders and the number of
shares held by them respectively, shall be kept at the principal offices of
the Corporation or, if the Corporation employs a transfer agent, at the
offices of the Transfer Agent of the Corporation.
<PAGE>
SECTION 4. Lost, Stolen or Destroyed Certificates. The Board of
--------------------------------------
Directors or the Executive Committee may determine the conditions upon
which a new certificate of stock of the Corporation of any class may be
issued in place of a certificate which is alleged to have been lost, stolen
or destroyed; and may, in their discretion, require the owner of such
certificate or his legal representative to give bond, with sufficient surety
to the Corporation and each Transfer Agent, if any, to indemnify it and
each Transfer Agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one so lost,
stolen or destroyed.
ARTICLE V
---------
CORPORATE SEAL
--------------
The Board of Directors shall provide a suitable corporate seal, in
such form and bearing such inscriptions as it may determine.
ARTICLE VI
----------
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be fixed by the Board of
Directors.
ARTICLE VII
-----------
INDEMNIFICATION
---------------
Each director and officer (and his heirs, executors and
administrators) shall be indemnified by the Corporation to the extent set
forth in the Articles of Incorporation.
ARTICLE VIII
------------
AMENDMENT OF BYLAWS
The Bylaws of the Corporation may be altered, amended, added to or
repealed by the stockholders or by majority vote of the entire Board of
Directors; but any such alteration, amendment, addition or repeal of the
Bylaws by action of the Board of Directors may be altered or repealed by
the stockholders.
Exhibit (5)
NEW YORK VENTURE FUND, INC.
INVESTMENT ADVISORY AGREEMENT
April 15,1993
Venture Advisers, L.P.
124 East Marcy Street
Santa Fe, NM 87501
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. We desire to employ the capital of New York Venture Fund, Inc.
(the "Company") by investing and reinvesting the same in securit-ies of
the type and in accordance with the limitations specified in the
registration statement under the Securities Act of 1933 and the
Investment Company Act of 1940, of which we enclose a copy, and in such
manner and to such extent as may from time to time be approved by our
Board of Directors. We desire to employ you to supervise and assist in the
management of this business for us. You shall for all purposes herein be
deemed an independent contractor, and shall, unless otherwise expressly
provided for or authorized, have no authority to act or represent us.
2. In this connection it is understood that you will from time to time
employ or associate with yourselves such person or persons as you may
believe to be particularly fitted to assist you in the execution of this
Agreement, it being understood that the compensation of such person or
persons shall be paid by you and that no obligation may be incurred on our
behalf in any such respect. This does not apply to such individuals as we
may in due course elect as officers of our corporation, except that no
officer, director, stockholder or employee of your firm shall receive
compensation from us for acting as director, officer or employee of our
corporation, and you agree to pay the compensa-tion of all such persons.
We understand that, during the con-tinuance of this agreement, officers of
your firm will, if elected, serve as directors of our corporation and as its
prin-cipal officers.
3. You are to have complete and exclusive authority to develop and
handle for us any business of the type above men-tioned which you may
consider advantageous for us, subject to the direction and control of our
officers and directors. You will furnish us with such statistical
information with respect to the securities which we may hold or
contemplate purchasing as we may request. We wish to be kept in touch
with important developments affecting our Company and shall expect you
on your own initiative to furnish us from time to time with such
information as you may believe appropriate for this purpose, whether
concerning the individual companies whose securities are included in our
portfo-lio or the industries in which they are engaged. We shall also
expect you of your own motion to advise us whenever in your opinion
conditions are such as to make it desirable that a specific security be
eliminated from our portfolio.
4. We shall expect of you your best judgment in rendering these
services to us, and we agree as an inducement to your undertaking the
same that you shall not be liable hereunder for any mistake of judgment or
in any other event whatsoever, except for lack of good faith, provided that
nothing herein shall be deemed to protect or purport to protect you against
any liability to us or to our security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of your duties hereunder, or by reason of your reckless
disregard of your obligations and duties hereunder.
5. Except as otherwise provided below in this paragraph, you will
attend to, or arrange for the performance, at your expense, of such
clerical and accounting work related to the investment and reinvestment
of our capital for us as we may specify. We shall, however, bear all costs
and expenses of or attendant upon: (i) preparation of our federal, state and
local tax returns; (ii) preparation of certain documents we must file with
the Securities and Exchange Commission; (iii) determination of the status
and payment of dividends; (iv) reconciling and reviewing output of our
custodian bank, determining the adequacy of various accruals, approving
our expenses, authorizing our bank to receive and disburse money and
securities and verifica-tions related thereto, and interfacing with our
auditors; (v) verifica-tion of our security ledger and preparation and
main-tenance of other corporate books and records; (vi) brokerage fees
and commissions; (vii) stockholders' and Directors' meetings; (viii)
corporate reports and proxy materials, including their prepara-tion,
printing and distribution; (ix) fees of disinter-ested Directors; (x)
<PAGE>
taxes and interest expenses; (xi) reports to government authorities including
all expenses and costs relating to such reports and to state securities law
compliance; (xii) custodian and transfer agent fees; (xiii) association
membership dues; (xiv) premiums on all insurance and bonds maintained
for us or on our behalf; (xv) retention of the transfer agent and registrar
for our shares and the disbursing agent for our stock-holders, including
costs and expenses attendant upon repurchase and redemption of our
shares; (xvi) our counsel; and (xvii) our independent auditors. We may
arrange for you to provide some or all of the services relating to items (i)
to (xvii) above, and any other services not directly relating to investment
and reinvest-ment of our capital, upon such terms and conditions as we
may agree and subject to the approval and review of our Board of
Directors.
6. In consideration of such services, we shall pay you a monthly fee
as of the last day of each month in each year based upon the average daily
value of net assets during a month for which the monthly fee is
calculated, as follows:
VALUE OF AVERAGE DAILY NET ASSETS
MONTHLY RATE OF THE FUND DURING THE MONTH
- ------------ ----------------------------
1/12 of .75% of.............................. First $250 Million
1/12 of .65% of.............................. Next $250 Million
1/12 of .55% of.............................. Amounts in excess of $500 Million
provided, however, that such fee for any period which shall not be a full
monthly period shall be prorated according to the proportion which such
period bears to the full month. For this purpose, the value of our net
assets shall be computed in the same manner as the value of such net
assets are computed in connection with the determination of the net asset
value of our shares.
7.(a) You are authorized to place purchase and sale orders for our
portfolio transactions with brokers and/or dealers which, in your best
judgment are able to achieve "best execution" of such orders. "Best
execution" shall mean prompt and reliable execution at the most favorable
security price obtainable, taking into account research and other services
available and the reasonableness of commission charges. Purchases and
sales of securities not listed or traded on a securities exchange shall
ordinarily be executed with primary market makers, acting as principal,
except where, in your judgment, better prices and execution may
otherwise be obtained.
(b) You are authorized to allocate brokerage and principal business
to members of securities exchanges, brokers and dealers (such members,
brokers and dealers being hereinafter referred to as "brokers") who have
provided brokerage and re-search services, as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934 (the "1934 Act") for
us and/or other accounts, if any, for which you exercise investment
discre-tion (as defined in Section 3(a) (35) of the 1934 Act) and to cause
us to pay a commission for effecting a securities transaction in excess of
the amount another broker would have charged for effecting that
transaction if you determine in good faith that such amount of commission
is reasonable in relation to the value of the brokerage and research
services provided by such broker, viewed in terms of either that
particular transaction or your overall responsibilities with respect to us
and the other accounts, if any, as to which you exercise investment
discretion.
In reaching such determination, you will not be re-quired to place or
attempt to place a specific dollar value on the research or execution
services of a broker or on the portion of any commission reflecting either
of said services. In demon-strat-ing that such determinations were made
in good faith, you shall be prepared to show that all commissions were
allocated and paid in accordance with this agreement, that commissions
were not allocated or paid for products or services which were readily and
customarily available and offered to the public on a commercial basis and
that the commissions were within a reasonable range shall be based on
any available information as to the level of commissions known to be
charged by qualified brokers on com-parable transactions, but taking into
account (i) the provisions of this agreement relating to obtaining the most
favorable securities price, since it is recognized by our Board of
Direc-tors and shareholders that it usually is more beneficial to us to
obtain a favorable price than to pay the lowest commission; and (ii) that
research from brokers is useful to you in performing your advisory
activities under this Agreement.
(c) Portfolio transactions may be allocated to any broker or dealer
taking into account the sale by such broker or dealer of our shares. Any
such allocation shall be made in accordance with the provisions of this
agreement relating to obtaining "best execution".
(d) In selecting brokers for our portfolio transac-tions, you shall
make use of a list of a number of brokers which you and we believe, based
on past and current experience, are qualified to execute our portfolio
transactions. The brokers on the list will ordinarily be used for our
portfolio transactions, but other brokers may be used in accordance with
the principles of this agreement. The brokers on the list may be changed
from time to time and will include members of the major and regional
securities exchanges and certain non-member brokers.
<PAGE>
8. You may act as investment adviser for any other person, firm or
corporation. We recognize that you have given us the right to use the name
"Venture" in our corporate title. If for any reason you no longer act as our
investment adviser, we shall remove the name "Venture" from our
corporate title upon demand made by you.
9. All of our expenses shall be paid by us except for those you
specifically agree to assume under this Agreement. If the total expense
payable by us for any fiscal year (inclusive of all fees payable under this
agreement but exclusive of interest, taxes, brokerage fees and payments
under any Rule 12b-1 distribu-tion plan) shall exceed the most restrictive
applicable expense limitation prescribed by any statute or regulatory
authority of any jurisdiction in which our shares are qualified for offer
and sale, you will pay or refund to us the amount by which such expenses
exceed the amount so computed.
10. This Agreement shall become effective for an initial period of
not more than two years from its effective date, and shall continue in full
force and effect continuously there-after, if its continuance is approved
at least annually as required by the Investment Company Act of 1940. The
effective date of this Agreement shall be the later of (i) April 15, 1993,
or (ii) the date this Agreement has been approved as required by the
Invest-ment Company Act of 1940. As of such effective date, this
Agreement shall supersede all prior investment advisory agree-ments
between the parties. This Agree-ment may be terminated at any time,
without the payment of any penal-ty, by our Board of Directors or by vote
of a majority of our out-standing voting securities (as defined in the 1940
Act) on 60 days' written notice to you, or by you on 60 days' written
notice to us, and it shall be automatically terminated in the event of its
assignment (as defined in said Act).
11. As of the date of this Agreement, the Company has only one
series of shares ("Fund"). In the event that the Company shall create
additional Funds, this Agreement shall apply to and be effective as to each
such Fund, provided that the Agreement is approved as required by the
Investment Company Act of 1940. The effective date of the Agreement as
to each such Fund shall be the date that it is so approved or any later date
as shall be agreed to by the parties.
If the foregoing is in accordance with your understanding, will you
so kindly indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
NEW YORK VENTURE FUND, INC.
By:____________________________
Its:___________Chairman_________
Accepted as of the day and year first above written.
VENTURE ADVISERS, L.P.
By: VENTURE ADVISERS, INC., General Partner
By:_______________________________________
Its: ___________Senior Vice President______
Exhibit (6)
NEW YORK VENTURE FUND, INC.
DISTRIBUTING AGREEMENT
AGREEMENT dated as of April 15, 1993 between New York Venture
Fund, Inc., a Maryland corporation, hereinafter called the "Company", and
VENTURE ADVISERS, L.P., a Colorado limited partnership, hereinafter
called the "Distributor".
W I T N E S S E T H:
-------------------
1. Appointment of Fund Distributor. The Company hereby appoints the
-------------------------------
Distributor as the exclusive distributor to sell as principal and not as
agent shares of capital stock of the Company during the term of this
Agreement.
2. Sales of Capital Stock. The Company agrees to sell and deliver to
----------------------
the Distributor, upon the terms set forth herein, such fully-paid and
non-assessable shares of capital stock of the Company ("Shares") then
effectively registered for continuous offering under the Securities Act of
1933 (the "Act") as Distributor shall order from the Company, but only to
the extent that the Distributor shall have received purchase orders
therefor. All orders from the Distributor shall be subject to confirmation
by the Company, and the Company authorizes the Distributor to reject any
purchase order.
The Distributor as principal may sell and distribute any Shares so
purchased, through dealers or otherwise, in such manner not inconsistent
with law and all applicable rules and regulations, including those of any
applicable self-regulatory organizations, and the provisions of this
Agreement, as the Distributor may from time to time determine. The
Distributor agrees to use its best efforts to effect sales of Shares, but
does not undertake to sell any specific number of Shares thereof.
The Distributor may in its discretion sell the Shares to such
registered and qualified retail dealers as it may select. In making
agreements with its dealers or others for sale of the Shares, the
Distributor shall act only as principal and in no sense as agent for the
Company.
3. Sales by Distributor - Offering Price. All Shares, whether
purchased from the Company or otherwise, shall be offered for sale and
sold by the Distributor at a price per share (hereinafter called the
"Offering Price") in accordance with the provisions of the current
prospectus applicable to such offer and sale. Any sales charge and any
reduction or elimination thereof shall be determined by the Distributor in
a manner not inconsistent with law and all applicable rules and
regulations and the provisions of this Agreement, and the Company agrees
to amend its current prospectus to the extent necessary from time to time
to reflect any such determination. The Company will cause such net asset
value to be determined with such frequency and as of such times and will
cause the Offering Price to be effective for such periods as are set forth
in the current prospectus of the Company. The Company will cause such
determinations to be furnished to the Distributor as often as they are
made and shall make available to the Distributor upon request the
computations underlying any such determination.
Anything to the contrary herein notwithstanding, the Company may
suspend the Offering Price currently in effect and may decline to accept
or confirm any orders for, or to make any sales of, any Shares to the
Distributor under this Agreement until such time as it shall deem it
advisable to accept and confirm such orders and to make such sales.
During any period during which the Offering Price currently in effect shall
be suspended or during which the Company shall decline to
<PAGE>
accept or confirm any such orders or make any such sales, the Company shall be
under no obligation to confirm or accept any such orders or make any such
sales at any price.
4. Payment. At or prior to the time of delivery by the Company to, or
-------
on the order of the Distributor of any Shares, the Distributor will pay or
cause to be paid to the Company or to its order an amount equal to the
Offering Price of such shares at which such order had been confirmed, less
the sales charge, if any, included thereon as aforesaid. The Distributor
agrees to cause to be remitted to the Company for the benefit of the
Company or to its order all such funds promptly after receipt thereof.
5. Delivery of Share Certificates. Delivery of certificates for Shares
------------------------------
shall be made as promptly as practicable after receipt by the Company of
the purchase price therefor and written request by the Distributor for
such certificates. Such certificates shall be registered in such names and
amounts as the Distributor may specify to the Company in writing.
6. Compensation of Distributor. Any sales charges and any
--------------------------
compensation to be paid the Distributor out of any Distribution Plan
described in 7(e) below shall constitute the entire compensation of the
Distributor. Out of such sales charge the Distributor may allow
concessions to dealers as the Distributor shall from time to time
determine.
7. Allocation of Expenses. The Company shall pay all expenses
----------------------
connected with (i) the organization of the Company or any Fund thereof and
(ii) the offering of Shares, including without limitation all expenses of:
(a) Registering Shares for offer or sale under the federal
securities laws, except for prospectus printing costs as set forth below;
and
(b) Reports required by and under the federal securities laws; and
(c) Issuance of Shares, including cost of stock certificates,
issue taxes (if any) and fees of legal counsel and of the transfer agent; and
(d) Registering or qualifying Shares for offer or sale under the
securities laws of any state or other jurisdiction in which the Distributor
may arrange for the sale of the Shares; and
(e) Any Distribution Plan adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act")
providing for any payments by the Company or any Fund thereof.
The Distributor will pay, or promptly reimburse the Company for, all
expenses in connection with:
(a) Preparing, printing and distributing advertising and sales
literature for use in offering the Shares to the public, including the cost
of printing copies of the prospectus and the additional cost of printing
reports to stockholders other than copies thereof required for distribution
to stockholders or for filing with any securities authorities; and
(b) The registration or qualification of the Distributor as a
dealer or broker under state or federal laws.
Transfer taxes, if any, which may be payable in connection with the
issue and delivery of certificates in a name or names other than the name
of the Distributor will not be borne by the Company and the Distributor
agrees to indemnify and hold the Company harmless against any
<PAGE>
such transfer taxes. Any other taxes in connection with the sale of Shares
pursuant to this Agreement will be borne by the Company.
8. Company to Furnish Information. The Company shall furnish the
------------------------------
Distributor for use in connection with the sale of the Shares such
information with respect to the Company and the Shares as the Distributor
may reasonably request, including copies of documents filed with or
furnished to any federal or state securities authorities or sent to its
stockholders.
9. Representations and Agreements with Respect to Registration
-----------------------------------------------------------
Statement and Prospectus.
- ------------------------
(a) As used in this Agreement, the term "registration
statement" shall include any registration statement with respect to the
Shares which is effective under the Act including any amendment thereto,
and the term "prospectus" shall include any prospectus and statement of
additional information filed as part of such registration statement.
(b) The Company represents that the registration statement
and prospectus will conform in all material respects to the Act and the
rules and regulations thereunder and will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided that this representation will not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Distributor
expressly for use in the registration statement or prospectus.
(c) The Company agrees to advise the Distributor promptly:
(i) of any request of the Securities and Exchange
Commission for amendments to the registration statement or prospectus
or for additional information;
(ii) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the effectiveness of
the registration statement or prospectus or the initiation of any
proceedings for that purpose;
(iii) of the happening of any event which makes untrue
any statement, or which requires the making of any change, in the
registration statement or prospectus in order to make the statements
therein not misleading; and
(iv) of all actions of the Securities and Exchange
Commission with respect to any amendments to the registration
statement or prospectus which may from time to time be filed with the
Securities and Exchange Commission under the Act.
10. Indemnification. The Company agrees to indemnify, defend and
---------------
hold the Distributor, its officers and directors and any person who
controls the Distributor within the meaning of Section 15 of the Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers, directors or any such
controlling person may incur under the Act, or under common law or
otherwise, arising out of or based upon any untrue statement of a material
fact contained in the registration statement or prospectus relating to the
Company or arising out of or based upon any alleged omission to state a
material fact required to be stated in either thereof or necessary to make
the statements in either thereof 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 Company for use in the
registration statement or prospectus relating to the Company; provided,
however, that this indemnity agreement, to the extent that it
<PAGE>
might require indemnity for liability arising under the Act of any person who is
also an officer or director of the Company or who controls the Company
within the meaning of Section 15 of the Act, shall not inure to the benefit
of such officer, director or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined by
controlling precedent, that such result would not be against public policy
as expressed in the Act; and further provided, that in no event shall
anything contained herein be so construed as to protect the Distributor
against any liability to the Company or to its security holders to which
the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the performance of its
duties, or by reason of its reckless disregard of its obligations under this
Agreement. The Company's agreement to indemnify the Distributor, its
officers and directors and any such controlling person as aforesaid is
expressly conditioned upon the Company being promptly notified of any
action brought against the Distributor, its officers or directors, or any
such controlling person, such notification to be given by letter or
telegram addressed to the Company at its principal business office. The
Company agrees to promptly notify the Distributor of the commencement
of any litigation or proceedings against it or any of its officers or
directors in connection with the issue and sale of any Shares.
The Distributor agrees to indemnify, defend and hold the Company,
its officers and directors and any person who controls the Company, if
any, within the meaning of Section 15 of the Act free and harmless from
and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
the Company, its directors or officers or any such controlling person may
incur under the Act or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Company, its
directors or officers or such controlling person resulting from such
claims or demands shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished in writing
by the Distributor to the Company for use in the Company's registration
statement or prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information not
misleading or shall arise out of or be based on any false or misleading or
allegedly false or misleading sales literature relating to the Company and
prepared by the Distributor. The Distributor's agreement to indemnify the
Company, its directors and officers, and any such controlling person as
aforesaid is expressly conditioned upon the Distributor being promptly
notified of any action brought against the Company, its officers or
directors or any such controlling person, such notification being given to
the Distributor at its principal business office.
11. Compliance with Securities Laws. The Company represents that
-------------------------------
it is registered as an open-end diversified management investment
company under the Investment Company Act of 1940, and agrees that it
will comply with all of the provisions of such Act and of the rules and
regulations thereunder. The Company and the Distributor each agree to
comply with all of the applicable terms and provisions of the Investment
Company Act of 1940, the Securities Act of 1933 and, subject to the
following provisions of this paragraph 11, all applicable state securities
("Blue Sky") laws. The Distributor agrees to comply with all of the
applicable terms and provisions of the Securities Exchange Act of 1934.
The Company will cooperate with the Distributor (to the extent of
supplying all necessary documents, exhibits and information), and will
execute and permit to be filed with the proper public bodies, such
applications (including amendments and renewals thereof), instruments,
papers and exhibits as may be appropriate to enable the Shares to be
offered for sale under the laws of such states as the Distributor shall
reasonably determine, and will cooperate with the Distributor in the
presentation of said applications (including amendments and renewals
thereof), to the end that Shares may be qualified in such states under the
respective Blue Sky laws thereof; provided that the Company shall not be
required to amend its Articles of Incorporation or By-Laws to comply with
the laws of any state, to maintain an office in any state, to change the
terms of the offering of Shares in any state from the terms set forth in
its registration statement and prospectus, to qualify as a foreign
corporation in any state or to consent to service of process in any state
other than with respect to claims arising
<PAGE>
out of Shares. The Distributor will furnish to the Company any information
known to the Distributor which is necessary or desirable in the preparation
of the Company's registration statement and prospectus and any amendments or
supplements thereto.
12. Effect on Distribution Plan or Distribution Plan and Agreement.
--------------------------------------------------------------
Any Distribution Plan or Distribution Plan and Agreement in effect on the
effective date of this Agreement which has been adopted in accordance
with Rule 12b-1 under the 1940 Act shall remain in effect and any
reference therein to a Distributing Agreement or other underwriting
agreement between the parties as of any date prior thereto shall be
deemed to be a reference to this Agreement.
13. Effective Period; Termination. This Agreement shall become
-----------------------------
effective for an initial period of not more than two years from the date of
its execution, and shall continue in full force and effect continuously
thereafter provided that such continuance is approved at least annually as
required by the 1940 Act. This Agreement shall automatically terminate
in the event of its assignment (as defined by the 1940 Act). In addition,
this Agreement may be terminated at any time, without penalty, by either
party on not more than sixty days' nor less than thirty days' written notice
delivered or mailed by registered mail, postage prepaid, to the other party.
IN WITNESS WHEREOF, New York Venture Fund, Inc. and Venture
Advisers, L.P. have caused this instrument to be signed in several
counterparts, each of which shall be an original and which together shall
constitute one and the same Agreement, by an officer or officers
thereunto duly authorized, as of the day and year first above written.
NEW YORK VENTURE FUND, INC.
By:___________________________
Its: Chairman
___________________________
VENTURE ADVISERS, L.P.
By:___________________________
Its: Senior Vice President
___________________________
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm in the Registration
Statement, (Form N-1A), and related Statement of Additional Information
of Davis New York Venture Fund, Inc. (formerly New York Venture Fund,
Inc.) and to the inclusion of our report dated August 31, 1995 to the
Shareholders and Board of Directors of New York Venture Fund, Inc.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
April 2, 1996
Exhibit (15) (a)
VENTURE FUNDS
MASTER RULE 12b-1 DISTRIBUTION PLAN
FOR CLASS A SHARES
The Plan:
- --------
1. Purpose. The Company shall finance the distribution of its Class
A shares pursuant to Rule 12b-1 under the Investment Company Act of
1940 ("Act") according to the terms of this Distribution Plan (the "Plan").
2. Fees. Amounts, not exceeding in the aggregate a maximum annual
amount equal to 0.25% of the averages of the daily net asset values of the
Class A shares of the Company during each fiscal year of the Company,
may be paid quarterly by the Company to the Distributor out of the assets
attributable to such shares at any time after the effective date of the
Plan to: (i) reimburse the Distributor for fees paid to its salespersons and
to other firms which offer and sell the Company's shares at such intervals
as the Distributor may determine, for the sale of the Company's shares and
the continuing servicing of shareholders of the Company towards
augmentation of Company shares in accounts of shareholders of the
Company and (ii) reimburse the Distributor its other distribution
expenses, after application of the Distributor's portion of sales charges
incurred in connection with the distribution of Company shares, excluding
overhead expense and including expenses of promotion, sales seminars,
wholesaling, advertising, and sales literature. For this purpose sales
literature shall not include reports sent to shareholders regulatory bodies
which are paid for by the Company.
To the extent that any investment advisory fees paid by the
Company may be deemed to be indirectly financing any activity which is
primarily intended to result in the sale of shares of the Company within
the meaning of Rule 12b-1, the payments of such fees are authorized under
this Plan.
3. Required Approvals and Term. Subject to paragraph 8, the Plan
shall not take effect until it has been approved by the vote of at least a
majority (as defined in the Act) of the outstanding Class A shares of the
Company. In addition, the Plan shall not take effect until it has been
approved, together with any related agreements, by votes of the majority
of both (i) the Board of Directors of the Company and (ii) those directors
of the Company who are not "interested persons" of the Company 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 it ("Independent
Directors"), cast in person at a meeting called or the purpose of voting on
the Plan or such Agreements. Unless sooner terminated pursuant to the
terms hereof, the Plan shall continue in effect for a period of one year
from its effective date, and thereafter shall continue in effect so long as
such continuance is specifically approved at least annually in the manner
provided for by Rule 12b-1 under the Act.
4. Periodic Reports. Any person authorized to direct the disposition
of monies paid or payable by the Company pursuant to the Plan or any
related agreement shall provide to the Company's Board of Directors, and
the Board of Directors shall review at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures
were made.
5. Termination. Subject to paragraph 8, the Plan may be terminated
at any time by a vote of a majority of the Independent Directors, or by
vote of a majority vote of the outstanding Class A shares.
6. Related Agreements. Any agreement related to the Plan shall be
in writing, and shall provide:
(i) That such agreement may be terminated at any time, without
payment of penalty, by vote of a majority of the Independent Directors or
by a majority vote of the Class A shares on not more than 60 days written
notice to any other party to the agreement; and
<PAGE>
(ii) That such agreement shall terminate automatically in the event
of its assignment.
7. Amendments. The Plan may not be amended to increase
materially the amount of distribution expenses provided for in paragraph 2
unless such amendment is approved in the manner provided in paragraph 3,
and no material amendment to the Plan shall be made unless approved by
the Board of Directors and the Independent Directors.
8. Special Procedures For Series Company. If the Company is or
becomes a series company (as defined in Rule 18f-2 under the Act), then
the Plan shall not take effect as to the Class A shares of any series and no
amendment may be effected to increase materially the amount of
distribution expenses as to the Class A shares of any series until it has
been approved as to the Class A shares of such series by the Board of
Directors, the Independent Directors and the Class A shareholders of such
series in the manner provided in paragraph 3; and no material amendment
to the Plan in respect to such shares shall be made unless approved as to
such shares by the Board of Directors and Independent Directors. The Plan
may be terminated as to any series at any time by vote of a majority of
the Independent Directors by majority vote of the Class A shareholders of
the series.
Exhibit (15) (b)
VENTURE FUNDS
MASTER RULE 12b-1 DISTRIBUTION PLAN
FOR CLASS B SHARES
The Plan:
- --------
1. Purpose. The Company shall finance the distribution of its Class
B shares pursuant to Rule 12b-1 under the Investment Company Act of
1940 ("Act") according to the terms of this Distribution Plan (the "Plan").
2. Fees. Amounts, not exceeding in the aggregate a maximum
amount equal to the lesser of (a) .3125% of the averages of the daily net
asset values of the Company or (b) the maximum amount provided by an
applicable rule or regulation of the National Association of Securities
Dealers, Inc. during each fiscal quarter of the Company elapsed after the
inception of the Plan may be paid by the Company to the Distributor at any
time after the inception of the Plan in order: (i) to pay the Distributor
commissions in respect of shares of the Company previously sold at any
time after the inception of the Plan, all or any part of which may be or
may have been reallowed or otherwise paid to others by the Distributor in
respect of or in furtherance of sales of shares of the Company after the
inception of the Plan; and (ii) to enable the Distributor to pay or to have
paid to others who sell the Company's shares a maintenance or service
fees, at such intervals as the Distributor may determine, in respect of
that Company's shares previously sold by any such others at any time after
the inception of the Plan and remaining outstanding during the period in
respect of which such fee is or has been paid.
To the extent that any investment advisory fees paid by the Company
may be deemed to be indirectly financing any activity which is primarily
intended to result in the sale of shares of the Company within the meaning
of rule 12b-1, the payments of such fees are authorized under this Plan.
3. Required Approvals and Term. Subject to paragraph 8, the Plan
shall not take effect as to the Company until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding Class
B shares of the Company. In addition, the Plan shall not take effect until
it has been approved, together with any related agreements, by votes of
the majority of both (i) the Board of Directors of the Company and (ii)
those directors of the Company who are not "interested persons" of the
Company 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 it (the
"Independent Directors"), cast in person at a meeting called for the
purpose of voting on the Plan or such agreements. Unless sooner
terminated pursuant to the terms hereof, the Plan shall continue in effect
for a period of one year from its effective date, and thereafter shall
continue in effect so long as such continuance is specifically approved at
least annually in the manner provided for by Rule 12b-1 under the Act.
4. Periodic Reports. Any person authorized to direct the disposition
of monies paid or payable by the Company pursuant to the Plan or any
related agreement shall provide to the Company's Board of Directors, and
the Board of Directors shall review at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures
were made.
5. Termination. Subject to paragraph 8, the Plan may be terminated
at any time by a vote of a majority of the Independent Directors, or by a
majority vote of the Company's outstanding Class B shares.
6. Related Agreements. Any agreement related to the Plan shall be
in writing, and shall provide:
(i) That such agreement may be terminated at any time, without
payment of penalty, by vote of a majority of the Independent Directors or
by a majority vote of the Company's outstanding Class B shares on not
more than 60 days written notice to any other party to the agreement; and
<PAGE>
(ii) That such agreement shall terminate automatically in the event
of its assignment.
7. Amendments. The Plan may not be amended to increase
materially the amount of distribution expenses provided for in paragraph 2
unless such amendment is approved in the manner proved in paragraph 3,
and no material amendment to the Plan shall be made unless approved by
the Board of Directors and the Independent Directors.
8. Special Procedures For Series Company. If the Company is or
becomes a series company (as defined in Rule 18f-2 under the Act), then
the Plan shall not take effect as to the Class B shares of any series and no
amendment may be effected to increase materially the amount of
distribution expenses as to the Class B shares of any series until it has
been approved as to the Class B shares of such series by the Board of
Directors, the Independent Directors and the Class B shareholders of such
series in the manner provided in paragraph 3; and no material amendment
to the Plan in respect to such shares shall be made unless approved as to
such shares by the Board of Directors and Independent Directors. The Plan
may be terminated as to any series at any time by vote of a majority of
the Independent Directors or by majority vote of the Class B shareholders
of the series.
Exhibit (15) (c)
VENTURE FUNDS
MASTER RULE 12b-1 DISTRIBUTION PLAN
FOR CLASS C SHARES
The Plan:
- --------
1. Purpose. The Company shall finance the distribution of its Class
C shares pursuant to Rule 12b-1 under the Investment Company Act of
1940 ("Act") according to the terms of this Distribution Plan (the "Plan").
2. Fees. Amounts, not exceeding in the aggregate a maximum
amount equal to the lesser of (a) .3125% of the averages of the daily net
asset values of the Company or (b) the maximum amount provided by an
applicable rule or regulation of the National Association of Securities
Dealer, Inc. during each fiscal quarter of the Company elapsed after the
inception of the Plan may be paid by the Company to the Distributor at any
time after the inception of the Plan in order: (i) to pay the Distributor
commissions in respect of shares of the Company previously sold at any
time after the inception of the Plan, all or any part of which may be or
may have been reallowed or otherwise paid to others by the Distributor in
respect of or in furtherance of sales of shares of the Company after the
inception of the Plan; and (ii) to enable the Distributor to pay or to have
paid to others who sell the Company's shares a maintenance or service
fees, at such intervals as the distributor may determine, in respect of
that Company's shares previously sold by any such others at any time after
the inception of the Plan and remaining outstanding during the period in
respect of which such fee is or has been paid.
To the extent that any investment advisory fees paid by the Company
may be deemed to be indirectly financing any activity which is primarily
intended to result in the sale of shares of the Company within the meaning
of Rule 12b-1, the payments of such fees are authorized under this Plan.
3. Required Approvals and Terms. Subject to paragraph 8, the Plan
shall not take effect as to the Company until it has been approved by a
vote of at least a majority (as defined in the Act) of the outstanding Class
C shares of the Company. In addition, the Plan shall not take effect until
it has been approved, together with any related agreements, by votes of
the majority of both (i) the Board of Directors of the Company and (ii)
those directors of the Company who are not "interest persons" of the
Company 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 it ( the
"Independent Directors"), cast in person at a meeting called for the
purpose of voting on the Plan or such agreements. Unless sooner
terminated pursuant to the terms hereof, the Plan shall continue in effect
for a period of one year from its effective date, and thereafter shall
continue in effect so long as such continuance is specifically approved at
least annually in the manner provided for by Rule 12b-1 under the Act.
4. Periodic Reports. Any person authorized to direct the
disposition of monies paid or payable by the Company pursuant to the Plan
or any related agreement shall provide to the Company's Board of
Directors, and the Board of Directors shall review at least quarterly, a
written report of the amounts so expended and the purposes for which
such expenditures were made.
5. Termination. Subject to paragraph 8, the Plan may be terminated
at any time by a vote of a majority of the Independent Directors, or by a
majority vote of the Company's outstanding Class C shares.
6. Related Agreements. Any agreement related to the Plan shall be
in writing, and shall provide:
(i) That such agreement may be terminated at any time, without
payment of penalty, by vote of a majority of the Independent Directors or
by a majority vote of the Company's outstanding Class C shares on not
more than 60 days written notice to any other party to the agreement; and
<PAGE>
(ii) That such agreement shall terminate automatically in the event
of its assignment.
7. Amendments. The Plan may not be amended to increase
materially the amount of distribution expenses provided in paragraph 2
unless such amendment is approved in the manner provided in paragraph 3,
and no material amendment to the Plan shall be made unless approved by
the Board of Directors and the Independent Directors.
8. Special Procedures For Series Company. If the Company is or
becomes a series company (as defined in Rule 18f-2 under the Act), then
the Plan shall not take effect as to the Class C shares of any series and no
amendment may be effected to increase materially the amount of
distribution expenses as to the Class C shares of any series until it has
been approved as to the Class C shares of such series by the Board of
Directors, the Independent Directors and the Class C shareholders of such
series in the manner provided in paragraph 3; and no material amendment
to the Plan in respect to such shares shall be made unless approved as to
such shares by the Board of Directors and Independent Directors. The Plan
may be terminated as to any series at any time by vote of a majority of
the Independent Directors or by majority vote of the Class C shareholders
of the series.
