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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a11(c) or Rule 14a12
Davis New York Venture Fund, Inc.; and
Davis Series, Inc.
(joint proxy solicitation)
(Name of Registrants as Specified in their Charter)
(Name of Person(s) Filing Proxy Statement., if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a6(i)(1) and 011.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
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Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CONTENTS
1. Shareholder Message
2. Questions and Answers
3. Notice of Special Meeting
4. Proxy Statement
5. Appendices
A: Definitions of Some Terms used in this Proxy
B: Eligible Votes of Each Davis Fund
C: Shareholders owning over 5% of any Class And Nominees owning over 1%
of any Class
D: Audit Committee Charter
E: Officers of the Davis Funds, the Adviser, and the Sub-Adviser
F: New Advisory Agreements
G: New Sub-Advisory Agreements
H: Dates that the Existing Advisory and Sub-Advisory Agreements were
most recently submitted to shareholders.
I: Other Investment Companies which Davis Selected Advisers serves as
Investment Adviser
J: Proposed Fundamental Policies
K: Current Fundamental Policies for Each Davis Fund
6. Form of Proxy Card
7. Financial Advisers Letter
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SHAREHOLDER MESSAGE
September 29, 2000
DEAR SHAREHOLDER:
A special meeting of shareholders of all Davis Funds will take place on
December 1, 2000, and we are asking for your participation.
You do not need to attend the meeting to participate. It is important that you
take a few minutes to read the enclosed material and vote your shares. You can
vote by Internet, by telephone or by mailing the enclosed proxy voting card(s)
in the postagepaid envelope.
EVERY DAVIS FUND HAS FOUR PROPOSALS UP FOR A VOTE. SHAREHOLDERS OF ALL FUNDS
ARE BEING ASKED TO:
1. Elect a board of directors;
2. Reapprove advisory agreements with Davis Selected Advisers, L.P. and its
subsidiary Davis Selected Advisers -- NY, Inc.;
3. Approve proposals that are intended to help the funds increase their
management efficiency by granting them additional investment flexibility;
and
4. Ratify the selection of KPMG LLP as independent accountants of the funds.
NONE OF THESE PROPOSALS WILL INCREASE FEES OR CHANGE THE PORTFOLIO MANAGER(S)
FOR YOUR INVESTMENT(S).
The directors and I believe these proposals are in the best interests of the
shareholders, and we recommend a vote FOR each of them.
No matter how many shares you own, your vote is important. A proxy solicitor,
D.F. King & Co., has been retained to make follow-up phone calls as may be
necessary on behalf of the funds. But your prompt response will help reduce
proxy costs and will also mean that you can avoid receiving follow-up phone
calls or mailings. Voting by Internet or phone lowers proxy costs even further.
All of us thank you for your attention to this important matter.
Sincerely,
Shelby M.C. Davis
Founder and Senior Research Adviser
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
WHAT ARE SHAREHOLDERS VOTING ON?
Davis Funds are asking shareholders to vote on four proposals:
1. TO ELECT DIRECTORS. Shareholders of each of the Davis Funds are being
asked to elect or reelect Davis Funds directors. Eight of the 11
directors are independent of the investment adviser.
2. TO RE-APPROVE ADVISORY AND SUB-ADVISORY AGREEMENTS. Shareholders of each
Davis Fund are being asked to re-approve the advisory and Sub-Advisory
agreements with Davis Selected Advisers, L.P. and its wholly owned
subsidiary, Davis Selected Advisers - NY, Inc. The agreements are not
being changed, fees are not being increased, and the same portfolio
managers will be managing your investments.
3. TO CONSIDER CHANGING OR ELIMINATING CERTAIN INVESTMENT POLICIES. The main
reason for these proposed changes is to allow the Funds a greater degree
of investment flexibility.
4. TO RATIFY DAVIS FUNDS' INDEPENDENT ACCOUNTANTS. Shareholders are being
asked to ratify the directors appointment of KPMG LLP as independent
accountants.
MORE INFORMATION ABOUT THE PROPOSALS
The following tells you more about the proposals and explains the main reasons
that the directors believe the proposals are in the best interests of
shareholders.
WHAT ROLE DO THE DIRECTORS PLAY (PROPOSAL 1)?
The Board of Directors is responsible for protecting the interests of the
Funds' shareholders. The Directors meet regularly to review the Funds'
activities, contractual arrangements and performance. Directors are fiduciaries
and have an obligation to serve the best interests of shareholders, including
approving policy changes such as those proposed in the proxy statement. In
addition, the Directors review Fund performance, oversee Fund activities, and
review contractual arrangements with companies that provide services to the
Funds.
WHY ARE SHAREHOLDERS BEING ASKED TO APPROVE ADVISORY AND SUB-ADVISORY
AGREEMENTS (PROPOSAL 2)?
Currently Venture Advisers, Inc. (an entity controlled by Shelby M.C. Davis)
controls, as general partner, Davis Selected Advisers, L.P., which provides
investment advice and administrative services to each of the Davis Funds. On
December 31, 2000, Venture Advisers, Inc., proposes to transfer control of
Davis Selected Advisers, L.P., to Davis Investments, LLC (an entity controlled
by Christopher C. Davis, son of Shelby M.C. Davis), which will become the new
general partner of Davis Selected Advisers, L.P. This will be accomplished
though the sale of 100 general partnership units from Venture Advisers, Inc.,
to Davis Investments, LLC. Venture Advisers, Inc., will continue to own
approximately 44% of Davis Selected Advisers, L.P. The 1940 Act requires that
directors and shareholders be asked to approve all advisory and Sub-Advisory
agreements after a change in control such as this.
Neither the advisory nor the sub-advisory agreements are being changed, no new
fees are being added and no fees are being increased. The same portfolio
managers will continue to manage your investments. Shelby M.C. Davis will
continue as Founder and Senior Research Adviser as described in the current
prospectuses of each Fund.
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WHAT ARE THE REASONS FOR THE PROPOSED CHANGES IN FUNDAMENTAL POLICIES
(PROPOSAL 3)?
Some of the Davis Funds' policies reflect government regulations that no longer
exist. In other cases, limitations are more stringent than current government
regulations require. The Board of Directors believes the proposed changes in
investment policies will benefit shareholders by allowing the portfolio
managers of the Davis Funds to adapt more quickly to future changes in
investment opportunities.
WHAT IS THE ROLE OF THE INDEPENDENT ACCOUNTANTS (PROPOSAL 4)?
The independent accountants act as the Davis Fund's auditors. They review the
Funds' annual financial statements and provide other audit and tax-related
services to the Funds.
HAVE THE DIRECTORS APPROVED EACH PROPOSAL?
Yes. The Directors have unanimously approved all of the proposals and recommend
that you vote to approve them.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net asset
value you own of a Davis Fund on the record date. The record date is September
8, 2000.
HOW TO VOTE YOUR SHARES
Voting your shares is easy and will only take a few minutes. You may use any of
the following options, and remember that VOTING BY INTERNET OR PHONE WILL HELP
LOWER PROXY EXPENSES. For Internet and touchtone telephone voting, you will
need the 12-digit number(s) on your enclosed proxy voting card(s).
o BY INTERNET: Go to the Internet address listed on your proxy card and
follow the instructions.
o BY TOUCH-TONE PHONE: Call toll-free, 1-877-779-8683, and follow the
recorded instructions.
o BY FAX: Sign and date the proxy card. Fax both sides of the proxy card to
(781) 575-3957.
o BY MAIL: Mark your votes on the enclosed proxy card, sign your name
exactly as it appears on your latest account statement. Be sure to date
and mail your vote using the postage-paid envelope provided.
REMEMBER: if you vote by Internet, fax or phone, you should not mail in your
proxy card. Please make sure you vote all the enclosed proxy card(s).
If you have questions on any part of this document, please call our proxy
solicitor, D.F. King, at 1-800-290-6424. A specially trained customer service
representative will be pleased to assist you with any questions or instructions
on how to vote your shares.
The information on these pages is only a summary. Before you vote, please read
the following proxy statement.
It's important to vote as soon as you can.
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NOTICE OF SPECIAL MEETING
TO ALL SHAREHOLDERS: Notice is hereby given that a special meeting of
shareholders of Davis New York Venture Fund, Inc., and Davis Series, Inc., will
be held at 3480 East Britannia Drive, Tucson, Arizona 85706, on December 1,
2000, beginning at 10 a.m. Pacific Time for the following purposes:
1. To elect directors to hold office until their successors are duly elected
and qualified;
2. To re-approve the advisory and sub-advisory agreements with Davis Selected
Advisers, L.P., and its wholly owned subsidiary, Davis Selected Advisers -
NY, Inc.;
3. To eliminate, reclassify or amend certain fundamental investment policies
and restrictions; and
4. To ratify the selection of KPMG LLP as independent accountants.
The close of business on September 8, 2000, was fixed as the record date for
determining which shareholders are entitled to notice of the meeting and any
adjournments thereof and are entitled to vote.
By order of the Board of Directors,
THOMAS TAYS
Secretary
September 29, 2000
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1
PROXY STATEMENT
PROXY STATEMENT FOR SPECIAL MEETINGS OF SHAREHOLDERS
OF THE FUNDS TO BE HELD ON DECEMBER 1, 2000
DAVIS FUNDS
2949 EAST ELVIRA ROAD, SUITE 101
TUCSON, ARIZONA 85706
INTRODUCTION
PURPOSE OF THIS DOCUMENT
This proxy statement is being furnished to shareholders of each of the Davis
Funds in connection with the solicitation of proxies by and on behalf of the
Board of Directors for use at each Fund's meeting. The meetings will be held at
3480 East Britannia Drive, Tucson, Arizona 85706, on December 1, 2000,
beginning at 10 a.m. Pacific Time. This proxy statement is first being mailed
to shareholders on or about September 29, 2000. Appendix A defines some of the
terms used in this proxy.
WHO MAY VOTE
The Board of Directors has fixed the record date as of the close of business on
September 8, 2000. Only holders of shares of the Funds at the close of business
on the record date are entitled to notice of, and to vote at, the meetings.
Appendix B shows the eligible votes of each Davis Fund. "Eligible votes" is
defined in Appendix A.
Shareholders as of the record date are entitled to one vote for each dollar of
net asset value, and each fractional share is entitled to a proportionate share
of one vote, upon each matter properly submitted to the meeting. Shareholders
will vote in the aggregate on each of the proposals and any element thereof;
classes of shares will not vote separately. Shareholders may vote by class or
in the aggregate, as appropriate, on such other business as may properly come
before the meeting as required by law.
HOW TO VOTE
Shareholders are requested to vote by Internet, phone or by returning the
enclosed proxy cards. Voting by Internet costs the Fund less than if you vote
by telephone or mail. Depending on the number of Funds in which you are a
shareholder and the number of accounts you have, you may receive more than one
proxy card.
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If you vote by mail, complete, date, sign and promptly return the enclosed
proxy cards in the accompanying envelope. If you properly execute and return
your proxy cards prior to the meeting, your shares will be voted in accordance
with the instructions marked on the proxy cards. If no instructions are marked
on the proxy cards, the proxies will be voted FOR the proposals described in
this proxy statement.
The Directors do not intend to present any other business at the Meeting. If,
however, any other matters are properly brought before the Meeting, the persons
named in the accompanying form of proxy will vote thereon in accordance with
their judgment. If you object to our voting other matters on your behalf,
please tell us so in writing before the meeting.
You may revoke your proxy at any time prior to its exercise by voting in person
at the meeting or by submitting, before the meeting, written notice of
revocation or a later-dated proxy.
QUORUM AND VOTING REQUIREMENTS
In order to take action on any proposal (or element of a proposal), a "quorum"
or a majority of the votes entitled to be cast on that proposal must be
represented in person or by proxy.
PROPOSAL 1:
The 11 nominees for the board of directors who receive the highest number of
votes will be elected directors. Davis New York Venture Fund and Davis Growth &
Income Fund are authorized series of a single corporation, Davis New York
Venture Fund, Inc., and together will elect a single board of directors.
Likewise, Davis Growth Opportunity Fund, Davis Financial Fund, Davis Real
Estate Fund, Davis Convertible Securities Fund, Davis Government Bond Fund and
Davis Government Money Market Fund are each an authorized series of a single
corporation, Davis Series, Inc., and together will elect a single board of
directors.
PROPOSAL 2:
The new advisory and sub-advisory agreements with Davis Selected Advisers,
L.P., and its wholly owned subsidiary, Davis Selected Advisers - NY, Inc.,
require approval of a majority of the eligible votes of each Fund as defined by
the 1940 Act. A majority of eligible votes of a Fund is the affirmative vote of
the lesser of (i) 67% of such votes if the holders of more than 50% of the
total eligible votes of the Fund are represented at the meeting, or (ii) more
than 50% of the total eligible votes of the Fund.
FUNDS VOTING ON EACH PROPOSAL
PROPOSAL 1:
Elect directors All Funds
PROPOSAL 2: All Funds
Reapprove agreements
PROPOSALS 3A THROUGH 3G: All Funds
Adopt standardized fundamental investment
policies
PROPOSALS 3H THROUGH 3M: All Funds except Davis Growth
Eliminate a variety of obsolete fundamental & Income Fund
investment policies
PROPOSAL 3N AND O: Davis New York
Eliminate fundamental policies dealing with Venture Fund only
illiquid securities and investment objective
PROPOSAL 3P: Davis Government
Eliminate fundamental policies dealing with Money Market
maturities, restricted securities, and minerals Fund only
PROPOSAL 4: All Funds
Affirming selection of KPMG LLC
as independent accountants
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PROPOSAL 3:
The amendment or elimination of certain fundamental investment policies for
each Fund requires the favorable vote of a majority of the eligible vote of a
Fund as defined by the 1940 Act (see description of vote under Proposal 2
above).
PROPOSAL 4:
To ratify the selection of KPMG LLP as independent accountants, the proposal
must receive the affirmative vote of the holders of a majority of the votes
represented at the meeting.
OTHER VOTINGRELATED ISSUES
If a quorum is not present at a meeting, or if sufficient votes to approve a
proposal are not received, the persons named as proxies may propose one or more
adjournments of such meeting to permit further solicitation of proxies. Any
adjournment(s) of a meeting will require the approval of a majority of the
votes of the Davis Funds represented at the meeting.
A shareholder vote may be taken on any other matter to come properly before the
meeting prior to such adjournment(s) if sufficient votes to approve such
matters have been received and such vote is otherwise appropriate. The Board of
Directors does not presently know of any matter to be considered at the meeting
other than the matters described in the Notice of Special Meeting accompanying
this proxy statement.
Abstentions and broker "non-votes" (i.e., proxies received from brokers or
nominees indicating that they have not received instructions from the
beneficial owner or other person entitled to vote) will be counted as present
for purposes of determining the presence of a quorum, but will have no effect
on the election of directors (Proposal 1) and will not be counted as votes FOR
Proposals 2 through 4. Accordingly, abstentions and broker nonvotes will have
the effect of a vote AGAINST Proposals 2 through 4.
SOLICITATION OF PROXIES
Each Fund has retained D.F. King & Co., Inc., a proxy solicitation firm, to
assist in the solicitation of proxies. The cost of these services will depend
upon the amount and types of services rendered. The Adviser has agreed to pay
75% of the expenses of holding the special meeting of shareholders, including
solicitation of proxies and the Davis Funds will pay 25% of the expenses. Each
Fund will bear its pro rata share of costs of solicitation and expenses
incurred in connection with preparing this proxy statement, including the cost
of retaining a proxy solicitation firm. The Adviser and the Davis Funds also
will reimburse certain parties for their expenses in forwarding proxy materials
to beneficial owners of Fund shares.
In addition to the solicitation of proxies by mail, officers of the Funds and
of the Adviser may also solicit proxies electronically, by telephone, by fax,
in person or by other means.
Additional information about the Davis Funds and their operations may be found
throughout the proxy statement.
IMPORTANT SERVICE PROVIDERS
ADVISER. Davis Selected Advisers, L.P.
SUB-ADVISER. Davis Selected Advisers NY, Inc.
PRINCIPAL UNDERWRITER. Davis Distributors, LLC
INDEPENDENT ACCOUNTANTS. KPMG LLC
COUNSEL. D'Ancona & Pflaum
CUSTODIAN. State Street Bank
TRANSFER AGENT. Boston Financial Data Services
The address for Davis Selected Advisers, L.P., and Davis Distributors, LLC, is:
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706. The address for Davis
Selected Advisers - NY, Inc., is: 609 Fifth Avenue, New York, New York 10017.
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SHAREHOLDER REPORTS
Each Fund will furnish, without charge, a copy of its most recent Annual Report
and, if available, Semiannual Report, to any shareholder upon request.
Shareholders desiring a copy of such reports should direct all written requests
to the Davis Funds, P.O. Box 8406, Boston, Massachusetts 02266-8406, or should
call Davis Funds at 1-800-279-0279.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Davis Funds are not required to hold annual shareholders' meetings, and
none of the Funds intends to do so.
A Fund may hold special meetings as required or as deemed desirable by its
Board of Directors for other purposes, such as changing fundamental policies,
electing or removing directors, or approving or amending an investment advisory
agreement. In addition, special shareholder meetings may be called for by any
Davis Fund upon the written request of shareholders having at least 25% of the
eligible votes that could be cast at the meeting.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a future shareholder meeting should send their written submissions to the
particular Davis Fund in which they own shares. The address for each Fund is
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.
Proposals must be received a reasonable time in advance of a proxy solicitation
to be included. Submission of a proposal does not guarantee inclusion in a
proxy statement because the proposal must comply with certain federal
securities regulations.
NOTICE TO BANKS, BROKERS-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Davis Funds in writing whether other persons are the
beneficial owners of the shares for which proxies are being solicited and, if
so, the number of copies of the proxy statements, other soliciting material and
Annual Reports (or Semiannual Reports) you wish to receive in order to supply
copies to the beneficial owners of shares. Write in care of the particular
Davis Fund, P.O. Box 8406, Boston, Massachusetts 02266-8406.
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PROPOSAL 1:
ELECTION OF DIRECTORS
It is proposed that shareholders of each Davis Fund elect 11 nominees to serve
as directors, each to hold office until a successor is elected and qualified.
All 11 of the nominees currently serve as directors and it is proposed that
they be reelected. The persons named in the accompanying proxies intend to vote
for the election of the persons listed below unless shareholders indicate on
their proxy cards their desire to withhold authority to vote for elections to
office.
Each nominee has consented to being named in this proxy statement and has
agreed to serve as a director if elected. The Board of Directors does not know
of any reason why any nominee would be unable or unwilling to serve as a
director, but if any nominee should become unable to serve prior to the
meeting, the proxy holders reserve the right to vote for another person of
their choice as nominee or nominees. Appendix C lists all shareholders who
owned 5% or more of any class of a Fund and any nominees who owned more than 1%
in any class of a Fund. The Davis Funds have no knowledge as to whether any
nominee has the right to acquire beneficial ownership of shares of any class of
a Fund.
INFORMATION ABOUT THE NOMINEES
This table shows basic information about each nominee. Each nominee currently
serves as a Director of each Davis Fund. For purposes of their duties as
directors, the address of each individual listed below is 2949 East Elvira
Road, Suite 101, Tucson, Arizona 85706. Eight of the 11 nominees are
Independent Directors (that is, they are not "interested persons" as defined in
the 1940 Act). The interested directors are indicated by footnote below.
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NAME/BIRTHDATE DIRECTOR SINCE PRINCIPAL OCCUPATION
<S> <C> <C>
WESLEY E. BASS, JR. 1990 for DNYVF and Director of each of the Davis Funds; Director of Davis Variable
August 21, 1931 1990 for DNYVF and Account Fund, Inc.; President, Bass & Associates (a financial
Davis Series consulting firm); former First Deputy City Treasurer, City of
Chicago; former Executive Vice President, Chicago Title and Trust
Company
JEREMY H. BIGGS(1) July 31, 1995 for DNYVF Director and Chairman of each of the Davis Funds, Director and
August 16, 1935 DNYVF and Davis Series Chairman of Davis International Series, Inc.; Director and
Chairman of Davis Variable Account Fund, Inc., Consultant to the
Adviser; Director of the Van Eck Chubb 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 1986 for DNYVF and Director of each of Davis Funds; Director of Davis Variable
September 9, 1942 Davis Series Account Fund, Inc.; Chief Executive Officer, World Total Return
Fund, LLP; Counsel to Gordon, Feinblatt, Rothman, Hoffberger and
Hollander, LLC (attorneys); Director, Mid-Atlantic Realty Trust
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ANDREW A. DAVIS(2) October 6, 1997, for Director and President or Vice President of each of the Davis
June 25, 1963 Davis Series; October Funds; Director and Vice President of Davis Variable Account
16, 1997, for DNYVF Fund, Inc., Director and Vice President of each of the Selected
Funds; Director and President, Venture Advisers, Inc.; President,
Davis Investments, LLC; Director and Vice President, Davis
Selected Advisers - NY, Inc.
CHRISTOPHER C. DAVIS(2) October 6, 1997, for Director and Chief Executive Officer, President or Vice President
July 13, 1965 Davis Series; October of each of the Davis Funds; Director and Chief Executive Officer
16, 1997, for DNYVF of Davis Variable Account Fund, Inc., Director and President of
Davis International Series, Inc.; Director and President of each
of the Selected Funds; Director, Vice Chairman, Venture Advisers,
Inc.; Sole Member and Chief Executive Officer of Davis
Investments, LLC; Director, Chairman and Chief Executive Officer,
Davis Selected Advisers - NY, Inc.; Chairman and Director, Shelby
Cullom Davis Financial Consultants, Inc.; Employee of Shelby
Cullom Davis & Co., a registered broker/dealer; Director, Kings
Bay Ltd., an offshore investment management company
JERRY D. GEIST 1986 for DNYVF and Director of each of the Davis Funds; Director of Davis Variable
May 23, 1934 Davis Series Account Fund, Inc., Chairman, Santa Fe Center; Chairman, Energy &
Technology Company, Ltd., Director, CH2M-Hill, Inc.; Member,
Investment Committee for Microgeneration Technology Fund, UTECH
Funds; Retired Chairman and President, Public Service Company of
New Mexico
D. JAMES GUZY 1982 for DNYVF and Director of each of the Davis Funds; Director of Davis Variable
March 7, 1936 Davis Series Account Fund, Inc., Chairman, PLX Technology, Inc. (a
manufacturer of semi-conductor circuits); Director, Intel Corp. (a
manufacturer of semi-conductor circuits), Cirrus Logic Corp. (a
manufacturer of semi-conductor circuits) and Alliance Technology
Fund (a mutual fund); Micro Component Technology, Inc.; and
Novellus Systems, Inc. (a manufacturer of semi-conductor
equipment)
G. BERNARD HAMILTON 1978 for DNYVF and Director of each of the Davis Funds; Director of Davis
March 18, 1937 Davis Series International Series, Inc.; Director of Davis Variable Account
Fund, Inc., Managing General Partner, Avanti Partners, L.P.
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LAURENCE W. LEVINE 1969 to 1983, and 1984 Director of each of the Davis Funds; Director of Davis Variable
April 9, 1931 to present; for DNYVF Account Fund, Inc., Partner, Bigham, Englar, Jones and Houston
and Davis Series (attorneys); United States Counsel to Aerolineas Argentia; United
States Counsel to Banco de la Ciudad de Buenos Aires; Director,
various private companies
CHRISTIAN R. SONNE 1990 for DNYVF and Director of each of the Davis Funds; Director of Davis Variable
May 6, 1936 Davis Series Account Fund, Inc., General Partner of Tuxedo Park Associates (a
land holding and development firm); President and Chief Executive
Officer of Mulford Securities Corporation (a private investment
fund) until 1990; formerly Vice President of Goldman Sachs & Co.
MARSHA WILLIAMS January 1, 1999, for Director of each of the Davis Funds; Director of Davis Variable
March 28, 1951 DNYVF and Davis Account Fund, Inc., Director of each of the Selected Funds; Chief
Series Administrative Officer of Crate & Barrel; Director, Modine
Manufacturing, Inc.; Director, Chicago Bridge & Iron Company,
M.V.; former Vice President and Treasurer, Amoco Corporation
</TABLE>
(1) Jeremy H. Biggs, Jr., is an indirect owner of the Adviser and
Principal Underwriter and an "interested person" of the Funds as
defined in the 1940 Act.
(2) Andrew A. Davis and Christopher C. Davis are both owners and
officers of the Adviser and indirect owners of the Principal
Underwriter and "interested persons" of the Funds as defined in
the 1940 Act.
DIRECTOR ACTIVITIES AND COMPENSATION
MEETINGS AND COMMITTEES. Each Davis Fund's Board of Directors met four times in
person and once by telephone during calendar year 1999 and has met in person
three times through September 2000 with a total of four inperson meetings
scheduled in the year 2000. In each year, each Director attended at least 75%
of those meetings.
Each Davis Fund has an Audit Committee, which is comprised entirely of
Independent Directors (Marc P. Blum, Chair; Marsha Williams, Vice Chair; Wesley
E. Bass, Jr., D. James Guzy, Laurence W. Levine and Christian R. Sonne). The
Audit Committee reviews financial statements and other auditrelated matters
for the Davis Funds. The Audit Committee also holds discussions with management
and with the Independent Accountants concerning the scope of the audit and the
Auditor's independence. The Audit Committee meets at least quarterly and, if
necessary, more frequently. The Audit Committee met four times during each
Davis Fund's most recent full fiscal year. In each such year, each member
attended at least 75% of those meetings The Audit Committee has a written
charter, attached as Appendix D.
Each Davis Fund also has a Nominating Committee, which is comprised entirely of
Independent Directors (Jerry D. Geist, Chair; Marc P. Blum, D. James Guzy, G.
Bernard Hamilton and Christian R. Sonne), which meets as often as deemed
appropriate by the Nominating Committee. The Nominating Committee met once
during each Fund's most recent fiscal year. The Nominating Committee reviews
and nominates persons to serve as members of the Board of Directors, reviews
and makes recommendations concerning the compensation of the Independent
Directors and the chair of the Nominating Committee also serves as the Lead
Independent Director. The Nominating Committee does not ordinarily consider
nominees
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recommended by shareholders. However, shareholders may propose
nominees by writing to the Nominating Committee, in care of the secretary of
the Davis Funds, at 2949 East Elvira, Suite 101, Tucson, Arizona 85706.
COMPENSATION OF DIRECTORS, OFFICERS AND OTHERS. Directors and officers of the
Davis Funds who are also "interested persons" of the Funds receive no
compensation from the Davis Funds. Officers of the Davis Funds receive no
compensation from the Davis Funds. However, each Independent Director currently
receives an aggregate quarterly fee of $9,450 from Davis Funds and an
additional aggregate of $4,050 from the Davis Funds for each regular meeting of
the Board of Directors and is reimbursed for all reasonable out-of-pocket
expenses. The Chairman of the Audit Committee also receives an additional $900
per meeting. The Vice Chairman of the Audit Committee also receives an
additional $450 per meeting. The compensation paid to each Director is shown in
the table below.
The Davis Funds have no bonus, pension, profit sharing or retirement plans.
AGGREGATE COMPENSATION FROM THE DAVIS FUNDS
<TABLE>
<CAPTION>
NAME/POSITION DAVIS NEW YORK VENTURE DAVIS SERIES, TOTAL COMPENSATION FROM THE
FUND, INC.(1) INC.(2) FUND COMPLEX(3)
<S> <C> <C> <C>
WESLEY E. BASS, JR. $26,650 $21,760 $61,600
Director
JEREMY H. BIGGS $0.00 $0.00 $0.00
Director
MARC P. BLUM $25,300 $21,240 $59,800
Director
ANDREW A. DAVIS $0.00 $0.00 $0.00
Director
CHRISTOPHER C. DAVIS $0.00 $0.00 $0.00
Director
JERRY D. GEIST $23,800 $20,700 $58,000
Director
D. JAMES GUZY $24,850 $19,155 $53,650
Director
G. BERNARD HAMILTON $24,850 $20,700 $63,000
Director
LAURENCE W. LEVINE $24,850 $20,700 $58,000
Director
CHRISTIAN R. SONNE $24,850 $20,700 $58,000
Director
MARSHA WILLIAMS $14,000(4) $19,155 $77,150
Director
</TABLE>
8
<PAGE>
AGGREGATE COMPENSATION FROM THE DAVIS FUNDS
(1) Davis New York Venture Fund, Inc., includes Davis New York
Venture Fund and Davis Growth & Income Fund. Amounts are for the
fiscal year ended July 31, 1999.
(2) Davis Series, Inc., includes Davis Growth Opportunity Fund, Davis
Financial Fund, Davis Real Estate Fund, Davis Convertible
Securities Fund, Davis Government Bond Fund and Davis Government
Money Market Fund. Amounts are for the fiscal year ended December
31, 1999.
(3) Amounts are for the calendar year ended December 31, 1999.
(4) Ms. Williams was elected to the Board on January 1, 1999.
The Board of Directors recommends that you vote FOR each nominee.
9
<PAGE>
Proposal 2:
------------------------------------------------------------------------------
TO APPROVE OF THE NEW ADVISORY AND SUB-ADVISORY AGREEMENTS WITH DAVIS SELECTED
ADVISERS, L.P., AND ITS WHOLLY OWNED SUBSIDIARY, DAVIS SELECTED ADVISERS - NY,
INC.
The Board of Directors, including the Independent Directors, has approved and
recommends that shareholders of the Davis Funds approve the New Advisory and
Sub-Advisory Agreements with Davis Selected Advisers, L.P. ("Adviser"), and its
wholly owned subsidiary, Davis Selected Advisers - NY, Inc. ("Sub-Adviser");
The agreements are not being materially changed, fees are not being increased
and the same portfolio managers will continue managing your investments.
PROPOSED CHANGE IN CONTROL. Currently Venture Advisers, Inc. (an entity
controlled by Shelby M.C. Davis), as general partner, controls the Adviser that
provides investment advice and administrative services to each of the Davis
Funds. Venture Advisers, Inc., proposes to transfer control of the Adviser to
Davis Investments, LLC, on December 31, 2000. Davis Investments, LLC, is
controlled by Christopher C. Davis, son of Shelby M.C. Davis. Davis Investments,
LLC, will become the new general partner of the Adviser. Venture Advisers, Inc.,
and Davis Investments, LLC, both have the same business address as the Adviser.
Shelby M.C. Davis will continue as Senior Research Adviser and Founder as
described in the current prospectuses of each Davis Fund. The change in control
may be deemed an assignment of the Existing Advisory and Sub-Advisory Agreements
currently in effect for purposes of Section 15(a) of the 1940 Act, which
automatically terminates such agreements.
Venture Advisers, Inc., currently controls the Adviser by owning all of the
general partnership units issued by the Adviser. Venture Advisers, Inc.,
proposes to transfer one hundred general partnership units to Davis Investments,
LLC. Immediately thereafter Venture Advisers, Inc., would convert its remaining
general partnership units into limited partnership units. Venture Advisers,
Inc., would continue to own approximately 44% of the economic value of the
Adviser as a limited partner. Davis Investments, LLC, would then own all of the
general partnership units issued by the Adviser, be the general partner and
thereby control the Adviser. Davis Investments, LLC, will pay approximately
$11,000 to Venture Advisers, Inc., as consideration for purchasing general
partnership units.
Christopher Davis is the vice chairman and a director of Venture Advisers, Inc.
Christopher Davis is also sole member and chief executive officer of Davis
Investments, LLC. Christopher Davis serves as a portfolio manager of Davis New
York Venture Fund, Davis Growth & Income Fund, and Davis Financial Fund and is a
senior member of the team managing Davis Growth Opportunity Fund. Christopher
Davis would continue to serve as portfolio manager after the change in control.
The officers of the Davis Funds, the Adviser, and the Sub-Adviser will not
change as a result of the change in control. Officers are listed in Appendix E.
The change in control may be deemed an assignment of the Existing Advisory and
Sub-Advisory Agreements currently in effect for purposes of Section 15(a) of the
1940 Act, which automatically terminates such agreements. Therefore the New
Advisory and Sub-Advisory Agreements are being submitted to the shareholders of
each Davis Fund for their approval at this time. If such approvals are not
obtained, the change in control will be delayed and the Existing Advisory and
Sub-Advisory Agreements will remain in full force and effect.
TERMS OF THE NEW ADVISORY AGREEMENTS. Shareholders are being asked to approve
the New Advisory Agreements without material change from the Existing Advisory
Agreements. The following discussion of the New Advisory Agreements is qualified
in its entirety by reference to the form of the New Advisory Agreements set
forth in Appendix F.
As under the Existing Advisory Agreements, the New Advisory Agreements provide
that the Adviser, subject to the general supervision of the Board of Directors,
will provide management and investment
11
<PAGE>
advice and will furnish 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. The Davis Funds pay for all expenses of their operations not
specifically assumed by the Adviser. The Board of Directors may arrange for the
Adviser to perform any of the corporate management services necessary or
advisable for the operations of the Davis Funds or contract with another person
to perform them. In the absence of willful misfeasance, bad faith or gross
negligence or reckless disregard of its obligations and duties, the Adviser will
not be subject to liability to the Davis Funds or any shareholder of the Davis
Funds for any act or omission in the course of, or in connection with, rendering
services thereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
TERMS OF THE NEW SUB-ADVISORY AGREEMENTS. Shareholders are being asked to
approve the New Sub-Advisory Agreements without material change from the
Existing Sub-Advisory Agreements. The following discussion of the New
Sub-Advisory Agreements is qualified in its entirety by reference to the form of
the New Sub-Advisory Agreements set forth in Appendix G. The Adviser, not the
Davis Funds, pays for the Sub-Adviser's services.
As under the Existing Sub-Advisory Agreements, Davis Selected Advisers - NY,
Inc. ("Sub-Adviser"), a wholly owned subsidiary of the Adviser, located at 609
Fifth Avenue, New York, New York 10017, agrees to perform research and portfolio
management functions for the Funds on behalf of the Adviser.
The Sub-Adviser performs research and portfolio management services as requested
by the Adviser. The Sub-Adviser is responsible for complying with stated
policies and applicable laws, including compliance with the Adviser's Code of
Ethics. As payment for its services, the Adviser pays the Sub-Adviser's
reasonable direct and indirect costs associated with the maintenance of an
office and the performance of the terms of the Agreement and, in addition, an
agreed profit margin. The Adviser and not the Davis Funds pay all the fees paid
to the Sub-Adviser. The New Sub-Advisory Agreements will not affect the fees
paid by the Davis Funds.
The Adviser and the Board of Directors believe the New Sub-Advisory Agreements
are advantageous to the Davis Funds because they enable the Adviser, through the
Sub-Adviser, to continue to attract additional, experienced personnel to perform
services on behalf of the Davis Funds but who desire to remain in the vicinity
of New York City.
Appendix H lists the date when the Existing Advisory and Sub-Advisory Agreements
were last presented to shareholders for approval and the purpose of the vote.
ADVISORY FEES. No new fees are being added and no fees are being increased. The
advisory fee is calculated and paid monthly and is expressed as an annual
percentage of each Fund's average net assets. Advisory fees are allocated among
each Class of shares in proportion to each Class's relative total net assets.
Davis New York Venture Fund pays the Adviser a 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; 0.55% on the next $2.5 billion; 0.54% on the next $1 billion;
0.53% on the next $1 billion; 0.52% on the next $1 billion; 0.51% on the next $1
billion; and 0.50% of average net assets in excess of $7 billion.
Davis Growth & Income Fund pays the Adviser a 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; 0.55% on total net assets over $500 million.
Davis Growth Opportunity Fund, Davis Financial Fund, Davis Real Estate Fund and
Davis Convertible Securities Fund each pay the Adviser a monthly fee at an
annual rate based on average net assets, as follows: 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 in excess of $500 million.
11
<PAGE>
Davis Government Bond Fund pays the Adviser a fee at the annual rate of 0.50%
of total net assets. Davis Government Money Market Fund pays the Adviser 0.50%
on the first $250 million of average net assets; 0.45% on the next $250 million
of average net assets; and 0.40% on average net assets in excess of $500
million.
These fees may be higher than those of most other mutual funds, but are not
necessarily higher than those paid by funds with similar objectives. Under the
Sub-Advisory Agreements, the Adviser pays all of the Sub-Adviser's direct and
indirect costs of operations. The Adviser and not the Funds pays all of the
fees paid to the Sub-Adviser.
Appendix I lists other investment companies with investment objectives similar
to the Davis Funds for which the Adviser serves as investment adviser. The
Adviser also serves as sub-adviser to other investment companies with similar
investment objectives. As sub-adviser, the Adviser is not responsible for
managing the investment companies or supervising other service providers and
the negotiated fees reflect this fact.
ADMINISTRATIVE FEES, REGISTRATION FEES AND SHAREHOLDER SERVICES FEES.
Pursuant to the Advisory Agreement, the Adviser, subject to the general
supervision of the Funds' Board of Directors, provides advisory services, which
are described above. The Davis Funds bear 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, 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.
Each Davis Fund reimburses the Adviser for providing certain services including
accounting and administrative services, qualifying shares for sale with state
agencies and shareholder services. During the fiscal year ended July 31, 1999,
Davis New York Venture Fund and Davis Growth & Income Fund reimbursed the
Adviser a total of $405,996, $27,000 and $1,335,214 for accounting and
administrative services, qualifying shares for sale with state agencies, and
shareholder services, respectively. During the fiscal year ended December 31,
1999, Davis Growth Opportunity Fund, Davis Financial Fund, Davis Real Estate
Fund, Davis Convertible Securities Fund, Davis Government Bond Fund and Davis
Government Money Market Fund reimbursed the Adviser a total of $78,000, $59,976
and $298,034 for accounting and administrative services, qualifying shares for
sale with state agencies and shareholder services, respectively. These services
will not be affected by the approval or disapproval of Proposal 2.
PORTFOLIO TRANSACTIONS. Shelby Cullom Davis & Co. ("SCD") is a broker-dealer who
may be considered an affiliated person of the Adviser because Davis family
members also control it. SCD executes certain brokerage transactions for the
Davis Funds. The Adviser follows procedures designed to ensure that the
commissions paid to SCD are equal to or less than those paid to other brokers in
connection with
ADVISORY FEE
FOR THE MOST RECENT FISCAL YEAR
FOR EACH FUND
ANNUAL MOST RECENT
% OF NET FISCAL YEAR
FUND ASSETS ENDED
Davis New York Venture Fund 0.53% July 31, 1999
Davis Growth & Income Fund 0.75% July 31, 1999
Davis Growth Opportunity Fund 0.75% December 31, 1999
Davis Financial Fund 0.63% December 31, 1999
Davis Real Estate Fund 0.72% December 31, 1999
Davis Convertible Securities Fund 0.74% December 31, 1999
Davis Government Bond Fund 0.50% December 31, 1999
Money Market Fund 0.47% December 31, 1999
The Adviser and not the Funds pays the Sub-Adviser's fees.
12
<PAGE>
comparable transactions involving similar securities and that
the commissions charged the Davis Funds by SCD do not exceed commissions charged
to other clients in connection with comparable transactions involving similar
securities. Davis Funds paid the following commissions to SCD during their most
recently completed fiscal year:
<TABLE>
<CAPTION>
DOLLAR % OF TOTAL
FUND NAME AMOUNT COMMISSIONS FISCAL YEAR
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Davis New York Venture Fund $546,972 5.74% July 31, 1999
Davis Growth & Income Fund $6,300 6.23% July 31, 1999
Davis Growth Opportunity Fund $19,527 7.52% December 31, 1999
Davis Financial Fund $16,260 2.90% December 31, 1999
Davis Real Estate Fund N/A N/A December 31, 1999
Davis Convertible Securities Fund N/A N/A December 31, 1999
</TABLE>
EFFECTIVE DATE AND TERMINATION OF THE NEW ADVISORY AND SUB-ADVISORY AGREEMENTS.
If approved by shareholders, the New Advisory and Sub-Advisory Agreements will
take effect immediately upon the change in control and will remain in effect
through January 1, 2003, and thereafter, but only as long as their continuance
is approved at least annually by (i) the vote, cast in person at a meeting
called for the purpose, of a majority of the Independent Directors, and (ii) the
vote of either a majority of the Directors or a majority of the outstanding
shares of the Fund. If the New Advisory and Sub-Advisory Agreements are not
approved, the change in control described above will be delayed while other
options are considered. If Proposal 2 is not approved, the Existing Advisory and
Sub-Advisory Agreements will continue in effect through March 31, 2001, and
thereafter only as long as their continuance is approved at least annually as
described above.
MATTERS CONSIDERED BY THE BOARD
On March 20, 2000, the Board of Directors, including all of the Independent
Directors approved of the Existing Advisory and Sub-Advisory Agreements without
any material changes. At that meeting the Independent Directors were notified of
the proposed change in control.
On June 13, 2000, the Board of Directors, including all of the Independent
Directors approved the New Advisory and Sub-Advisory Agreements following the
change in control and called for a meeting of shareholders to approve the New
Advisory and Sub-Advisory Agreements following the change in control.
In their March 20, 2000, meeting, the Independent Directors reviewed materials
specifically relating to the Existing Advisory and Sub-Advisory Agreements.
These materials included: (i) information on the investment performance of each
Davis Fund compared against a peer group of funds, (ii) sales and redemption
data in respect of each Davis Fund, (iii) information concerning the expenses of
each Davis Fund compared against a peer group of funds, and (iv) The Adviser's
and Sub-Adviser's operations and financial condition. The Directors, including
the Independent Directors, regularly review, among other issues: (i)
arrangements in respect of the distribution of Davis Fund's shares, (ii) the
allocation of each Fund's brokerage, if any, including allocations to brokers
affiliated with the Adviser and the use of "soft" commission dollars to pay Fund
expenses and to pay for research and other similar services, (iii) the Adviser's
management of the relationships with the Davis Funds' third party providers,
including custodian and transfer agents, (iv) the resources devoted to and the
record of compliance with the Davis Funds' investment policies and restrictions
and with policies on personal securities transactions, and (v) the nature, cost
and character of noninvestment management services provided by the Adviser and
its affiliates.
In their June 13, 2000, meeting, the Independent Directors considered the New
Advisory and Sub-Advisory Agreements including: (i) the Adviser and Sub-Adviser
do not anticipate any material changes in their operations as a result of the
proposed change in control, (ii) each of the Davis Funds would continue to be
managed by the same portfolio manager, (iii) Shelby M.C. Davis will continue as
Senior Research Adviser
13
<PAGE>
and Founder as described in the current prospectuses of each Fund, (iv) the
Adviser's and Sub-Adviser's senior management will not change as a result of the
change in control, and (v) the Advisory and Sub-Advisory Agreements will be
materially unchanged, including no new fees and no increase in fees.
Conclusion. In considering the Existing Advisory and Sub-Advisory Agreements in
the March meetings and the New Advisory and Sub-Advisory Agreements in June, the
Board of Directors and the Independent Directors did not identify any single
factor as allimportant or controlling. Based on their evaluation of all
material factors and assisted by the advice of independent counsel, the
Directors and Independent Directors concluded that the New Advisory and
Sub-Advisory Agreements are fair and reasonable and that they should be approved
without material change following the change in control.
The Board of Directors, including the Independent Directors, voted to approve
the submission of the New Advisory and Sub-Advisory Agreements to shareholders
of the Davis Funds and recommends that shareholders vote FOR Proposal 2.
14
<PAGE>
PROPOSAL 3:
-------------------------------------------------------------------------------
ELIMINATING OR AMENDING FUNDAMENTAL
INVESTMENT POLICIES AND RESTRICTIONS
BACKGROUND
Each Davis Fund operates in accordance with the investment objectives, policies
and restrictions described in its prospectus and Statement of Additional
Information.
The Davis Funds generally classify their investment policies as either
"fundamental" or "non-fundamental." A fundamental policy may be changed only by
shareholder vote, while non-fundamental policies may be changed by vote of a
Fund's Board of Directors. The 1940 Act requires mutual funds to classify only
certain policies as fundamental. With this proposal, the Davis Funds seek to
modernize their fundamental policies and gain greater investment flexibility by
adopting a set of uniform fundamental investment policies. A copy of the
proposed uniform fundamental investment policies is included in Appendix J.
Adopting the proposed uniform fundamental investment policies involves restating
certain fundamental policies and eliminating other, unnecessary, fundamental
policies.
Since the time each Fund was created, there have been a number of changes in the
laws and regulations that govern the Funds. For example, significant federal
legislation in 1996 preempted state regulation of all mutual funds. As a result,
many investment policies previously imposed on the Davis Funds by various states
are no longer required.
Recently, the Adviser performed a comprehensive review of the Davis Funds'
fundamental and nonfundamental policies. Based on the recommendations of the
Adviser, the Board of Directors has approved policy revisions that are designed
to simplify and modernize those policies that are required to be fundamental and
eliminate those policies that are not required under the law.
If each element of Proposal 3 is approved, each of the Davis Funds will have a
uniform set of fundamental policies (Davis Real Estate Fund and Davis Financial
Fund would have different concentration policies and Davis Real Estate Fund
would also have a different diversification policy, as described below). Each of
the Davis Funds also has a number of non-fundamental policies that the Board of
Directors can change or eliminate without the expense and delay of holding a
shareholder meeting. After the results of the shareholders meetings are known,
the Board of Directors will consider which non-fundamental policies should be
added, changed or eliminated.
Approval of these changes by shareholders would allow the Adviser greater
flexibility to respond to a changing investment environment, subject to the
supervision of the Board of Directors and consistent with legal requirements,
including published SEC staff positions. The Adviser believes that the proposed
changes will enhance its ability to manage the Davis Funds' investment
portfolios.
Each proposed change to a Fund's fundamental policies recommended by the Board
of Directors is discussed in detail below. The exact language of each
fundamental policy is presented, often followed by further discussion of the
policy. If approved, the fundamental policy could not be changed again without a
shareholder vote. The discussion following the fundamental policy could be
changed by the Board of Directors without a shareholder vote to reflect changes
in the governing law. In order to help you understand the proposed changes, we
have attached Appendices J and K to this proxy statement. Appendix J shows the
proposed uniform fundamental polices that each of the Davis Funds would adopt.
Appendix K shows each Davis Fund's current fundamental policies proposed to be
replaced by new fundamental policies or eliminated.
15
<PAGE>
VOTING REQUIREMENTS
Approval of each element of Proposal 3 requires the favorable vote of a majority
of the eligible votes of a Fund as defined by the 1940 Act. Proposal 3 is
separated into elements specific to each type of fundamental policy involved,
e.g., diversification, borrowing and concentration. You may vote separately for
or against each element of Proposal 3.
If shareholders of a Fund approve some, but not all, elements of Proposal 3, the
Fund will have a combination of certain current fundamental policies and certain
new fundamental policies. The Funds intend to implement new policies after the
meeting, as soon as practicable.
The Board of Directors recommends that you vote FOR Proposal 3 and all its
elements.
PROPOSAL 3A:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING DIVERSIFICATION
Each of the Davis Funds is currently diversified. If this element of Proposal 3
is adopted, Davis New York Venture Fund and Davis Growth Opportunity Fund would
each have greater investment flexibility yet remain diversified mutual funds.
Davis Real Estate Fund would become a non-diversified mutual fund and thus have
the flexibility to make more concentrated investments in the Adviser's favorite
companies. The other Davis Funds would all adopt the proposed uniform
fundamental policy regarding diversification, but this would not result in a
material change in their fundamental policies regarding diversification.
Appendix K shows each Davis Fund's current fundamental policy.
This element of Proposal 3 would give Davis New York Venture Fund, Davis Growth
Opportunity Fund and Davis Real Estate Fund greater investment flexibility by
permitting the Funds to acquire larger positions in the securities of
individual companies. The Adviser believes that this increased flexibility may
provide opportunities to enhance investment performance. At the same time,
investing a larger percentage of a Fund's assets in a single issuer's
securities increases the Fund's exposure to risks associated with that issuer's
financial condition and business operations. The Adviser will use the increased
flexibility to invest more than 5% of a Fund's total assets in an issuer's
securities only when it believes the securities' potential return justifies
accepting the risks associated with the higher level of investment.
THE NEW FUNDAMENTAL POLICY ON DIVERSIFICATION FOR ALL DAVIS FUNDS (OTHER THAN
DAVIS REAL ESTATE FUND) WOULD BE:
Diversification. The Fund may not make any investment that is inconsistent with
its classification as a diversified investment company under the 1940 Act.
Further Explanation of Diversification Policy. To remain classified as a
diversified investment company under the 1940 Act, the Fund must conform with
the following: With respect to 75% of its total assets, a diversified
investment company may not invest more than 5% of its total assets, determined
at market or other fair value at the time of purchase, in the securities of any
one issuer, or invest in more than 10% of the outstanding voting securities of
any one issuer determined at the time of purchase. These limitations do not
apply to investments in securities issued or guaranteed by the United States
("U.S.") government or its agencies or instrumentalities.
THE NEW FUNDAMENTAL POLICY ON DIVERSIFICATION FOR DAVIS REAL ESTATE FUND WOULD
BE:
Diversification. The Fund is not required to diversify its investments.
Further Explanation of Diversification Policy. The Fund intends to remain
classified as a regulated investment company under the Internal Revenue Code.
This requires the Fund to conform with the following: At the end of each
quarter of the taxable year, at least 50% of the value of the Fund's total
assets
16
<PAGE>
must be represented by cash and cash items; U.S. government securities;
securities of other regulated investment companies; and "other securities." For
this purpose, "other securities" does not include investments in the securities
of any one issuer that represent more than 5% of the value of the Fund's total
assets or more than 10% of the issuer's outstanding voting securities.
PROPOSAL 3B:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING CONCENTRATION
Davis Financial Fund and Davis Real Estate Fund both concentrate their
investments in specific industries. Each of the other Davis Funds is prohibited
from investing 25% or more of its assets in companies considered to be in a
single industry. A fund that concentrates its investments in a single industry
may be subject to greater risks than a fund that does not concentrate its
investments. The fund's investment performance, both good and bad, may be
expected to reflect the economic performance of the industry in which it
concentrates.
This element of Proposal 3 would allow Davis Financial Fund greater flexibility
in meeting its concentration requirements. Currently, Davis Financial Fund must
invest at least 25% of its total assets in companies principally in banking and
another 25% of its total assets in companies principally engaged in financial
services. The Adviser believes that the banking industry is in fact a sub-sector
of the financial services industry. If approved, the new fundamental investment
policy would require Davis Financial Fund to invest 25% or more of its total
assets in the financial services industry. In addition, current SEC
interpretations would increase the amount that the Fund must invest in the
financial industry from 25% or more to 65% or more. SEC regulations may change
in the future. Davis Financial Fund would have the flexibility to meet this 65%
or more requirement by investing in all manner of companies in the financial
services industry. Davis Financial Fund would continue to be prohibited from
investing 25% or more of its total assets in any other industry.
This element of Proposal 3 would simplify Davis Real Estate Fund's fundamental
policy regarding concentration, but would not result in a material change. Each
of the other Davis Funds would adopt uniform concentration language, but this
would not result in a material change in their fundamental policies regarding
concentration. Appendix K shows each Davis Fund's current fundamental policy.
THE NEW FUNDAMENTAL POLICY ON CONCENTRATION FOR DAVIS FINANCIAL FUND WOULD BE:
Concentration. Davis Financial Fund concentrates its investments in the
financial services industry.
Further Explanation of Concentration Policy. During normal market conditions,
the Fund is required to invest 25% or more of its total assets in companies
"principally engaged" in financial services. The Fund currently intends to
invest 65% or more of its total assets in companies principally engaged in
financial services during normal market conditions.
A company is "principally engaged" in financial services if it owns financial
services related assets constituting at least 50% of the total value of its
assets, or if at least 50% of its revenues are derived from its provision of
financial services. Companies in the financial services industry include
commercial banks, industrial banks, savings institutions, finance companies,
diversified financial services companies, investment banking firms, securities
brokerage houses, investment advisory companies, leasing companies, insurance
companies and companies providing similar services.
The Fund may not invest 25% or more of its total assets, taken at market value,
in the securities of issuers primarily engaged in any particular industry (other
than issuers in the financial services industry or securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities).
17
<PAGE>
THE NEW FUNDAMENTAL POLICY ON CONCENTRATION FOR DAVIS REAL ESTATE FUND WOULD BE:
Concentration. Davis Real Estate Fund concentrates its investments in real
estate securities.
Further Explanation of Concentration Policy. During normal market conditions,
the Fund is required to invest 25% or more of its total assets in real estate
securities. The Fund currently intends to invest 65% or more of its total
assets in real estate securities during normal market conditions.
Real estate securities are issued by companies that have at least 50% of the
value of their assets, gross income, or net profits attributable to ownership,
financing, construction, management or sale of real estate, or to products or
services that are related to real estate or the real estate industry. Real
estate companies include real estate investment trusts or other securitized
real estate investments, brokers, developers, lenders and companies with
substantial real estate holdings such as paper, lumber, hotel and entertainment
companies.
The Fund may not invest 25% or more of its total assets, taken at market value,
in the securities of issuers primarily engaged in any particular industry
(other than real estate securities or securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities).
THE NEW FUNDAMENTAL POLICY ON CONCENTRATION FOR ALL DAVIS FUNDS (OTHER THAN
DAVIS FINANCIAL FUND AND DAVIS REAL ESTATE FUND) WOULD BE:
Concentration. The Fund may not concentrate its investments in the securities
of issuers primarily engaged in any particular industry.
Further Explanation of Concentration Policy. The Fund may not invest 25% or
more of its total assets, taken at market value, in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities).
PROPOSAL 3C:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES
REGARDING SENIOR SECURITIES
Currently, each of the Davis Funds (except for Davis New York Venture Fund and
Davis Growth & Income Fund) has a non-fundamental policy governing the issuance
of senior securities. The 1940 Act currently requires all mutual funds to adopt
fundamental policies restricting the issuance of senior securities. Issuing
senior securities generally leverages a fund's assets and potentially exposes
the fund to leveraged losses. If this element of Proposal 3 is adopted, each of
the Davis Funds will adopt the uniform fundamental policy regarding senior
securities. Appendix K shows Davis New York Venture Fund's and Davis Growth &
Income Fund's current fundamental policies.
THE NEW FUNDAMENTAL POLICY ON ISSUING SENIOR SECURITIES FOR ALL DAVIS FUNDS
WOULD BE:
Issuing Senior Securities. The Fund may not issue senior securities, except as
permitted under applicable law, including the 1940 Act and published SEC staff
positions.
Further Explanation of Issuing Senior Securities. The Fund may not issue senior
securities nor sell short more than 5% of its total assets, except as provided
by the 1940 Act and any rules, regulations or orders issued thereunder. This
limitation does not apply to selling short against the box. The 1940 Act defines
a "Senior Security" as any bond, debenture, note, or similar obligation
constituting a security and evidencing indebtedness.
18
<PAGE>
PROPOSAL 3D:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING BORROWING
The current fundamental policy regarding borrowing by each Davis Fund, except
Davis Growth & Income Fund, is more restrictive than required by the 1940 Act.
It is proposed that each Davis Fund adopt a new fundamental policy regarding
borrowing that provides more flexibility. Appendix K shows each Davis Fund's
current fundamental policy.
This element of Proposal 3 would increase the borrowing limits for each of the
Davis Funds, except Davis Growth & Income Fund. The borrowing limits for Davis
Growth & Income Fund would remain unchanged. Neither the current policy nor the
proposed policy allows the funds to purchase additional portfolio securities if
borrowing exceeds 5% of total assets. This prevents the Funds from borrowing
money for the purpose of leveraging their portfolios. The Funds' current policy
limits borrowing to 10% of total assets and limits the collateral that may be
pledged to 15% of total assets. The proposed policy would adopt the 1940 Act
limits, which are currently 33% of total assets with no limits on collateral
that may be pledged.
The expanded borrowing limits may be useful in a number of situations, such as
to meet unanticipated redemptions without selling portfolio securities at
disadvantageous prices. Borrowing money to meet redemptions rather than
immediately selling portfolio securities would have the effect of temporarily
leveraging a fund's assets and potentially exposing the fund to leveraged
losses. The Adviser believes that this more flexible fundamental borrowing
policy is in the best interests of the funds and their shareholders because it
will allow the Davis Funds, subject to approval by the Board of Directors, to
adapt to future developments in investment practices and changes in the
governing laws and regulations without the delay and cost of a shareholder
meeting.
THE NEW FUNDAMENTAL POLICY ON BORROWING FOR ALL DAVIS FUNDS WOULD BE:
Borrowing. The Fund may not borrow money, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.
Further Explanation of Borrowing Policy. The Fund may borrow from banks and
enter into reverse repurchase agreements in an amount up to 33 1/3% of its total
assets, taken at market value. The Fund may also borrow up to an additional 5%
of its total assets from banks or others. The Fund may borrow only as a
temporary measure for extraordinary or emergency purposes such as the redemption
of Fund shares. The Fund may purchase additional securities so long as
borrowings do not exceed 5% of its total assets. The Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. In the event that market fluctuations cause borrowing
to exceed the limits stated above, the Adviser would act to remedy the situation
as promptly as possible (normally within three business days), although it is
not required to dispose of portfolio holdings immediately if the Fund would
suffer losses as a result.
PROPOSAL 3E:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING UNDERWRITING
Each of the Davis Funds currently has a fundamental policy that prevents it from
engaging in the underwriting of securities, except in connection with the
disposition of securities from its investment portfolio. Appendix K shows each
Davis Fund's current fundamental policy. Underwriting securities can result in
losses due to the volatility of equity markets. The Davis Funds have not engaged
in underwriting in the past and do not intend to do so regardless of whether or
not this element of Proposal 3 is approved. Replacing the current fundamental
policy with a more flexible fundamental policy could provide investment
flexibility in the future by allowing the Board of Directors to adopt
appropriate policies without the time and expense of holding a meeting of
shareholders. Accordingly, the Board of Directors believes that approval of this
element of Proposal 3 is in the best interests of the Funds and their
shareholders.
19
<PAGE>
THE NEW FUNDAMENTAL POLICY ON UNDERWRITING FOR ALL DAVIS FUNDS WOULD BE:
Underwriting. The Fund may not underwrite securities of other issuers except to
the extent permitted by applicable law, including the 1940 Act and published SEC
staff positions.
Further Explanation of Underwriting Policy. The Fund may not underwrite
securities of other issuers, except insofar as the Fund may be deemed to be an
underwriter in connection with the disposition of its portfolio securities.
PROPOSAL 3F:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES
REGARDING INVESTMENTS IN COMMODITIES AND REAL ESTATE
The 1940 Act requires every mutual fund to adopt a fundamental policy regarding
investment in commodities and real estate. Each of the Davis Funds' current
fundamental policy restricting investments in commodities and real estate is
more restrictive than required by the 1940 Act. Appendix K shows each Davis
Fund's current fundamental policy.
This element of Proposal 3 would adopt a new fundamental policy restricting
investments in commodities and real estate, which provides more flexibility. The
proposed fundamental policy will not prevent Davis Real Estate Fund (or the
other equity funds) from investing in securities issued by real estate
companies. Investments in commodities can be volatile and are often leveraged.
Direct investments in real estate (as opposed to investing in securities issued
by real estate companies) can be illiquid. The Davis Funds do not intend to
change their investment strategies and invest in either commodities or directly
in real estate as a result of a change in this policy. The Adviser believes that
this more flexible fundamental policy restricting investments in commodities and
real estate is in the best interests of the funds and their shareholders because
it will allow the Davis Funds, subject to approval by the Board of Directors, to
adapt to future developments in investment practices and changes in the
governing laws and regulations without the delay and cost of a shareholder
meeting.
THE NEW FUNDAMENTAL POLICY FOR ALL DAVIS FUNDS REGARDING INVESTMENTS IN
COMMODITIES AND REAL ESTATE WOULD BE:
Investments in Commodities and Real Estate. The Fund may not purchase or sell
commodities or real estate, except to the extent permitted by applicable law,
including the 1940 Act and published SEC staff positions.
Further Explanation of Policy Restricting Investments in Commodities and Real
Estate. The Fund may purchase or sell financial futures contracts, options on
financial futures contracts, currency contracts, and options on currency
contracts as described in its prospectus and Statement of Additional
Information. The Fund may not purchase or sell real estate, except that the
Fund may invest in securities that are directly or indirectly secured by real
estate, or securities issued by issuers that invest in real estate.
PROPOSAL 3G:
-------------------------------------------------------------------------------
PROPOSAL TO AMEND FUNDAMENTAL POLICIES REGARDING MAKING LOANS
The 1940 Act requires every mutual fund to adopt a fundamental policy regarding
making loans. Each of the Davis Funds' current fundamental policy restricting
making loans is more restrictive than required by the 1940 Act. Currently Davis
New York Venture Fund and Davis Growth & Income Fund may not lend money but may
engage in securities lending. Currently the other Davis Funds may neither lend
money nor engage in securities lending. Appendix K shows each Davis Fund's
current fundamental policy. It is
20
<PAGE>
proposed that each Davis Fund adopt a new fundamental policy restricting making
loans, which provides more flexibility. Even Funds that do not pursue current
income as an investment objective may benefit from the incremental income
earned from activities such as stock lending. This additional income may offset
a portion of the Fund's operational expenses. Lending money or securities
involves the risk that a Fund may suffer a loss if a borrower does not repay a
loan when due. To manage this risk the Davis Funds deal only with
counter-parties they believe to be creditworthy and require that the
counter-party deposit collateral with the Funds.
THE NEW FUNDAMENTAL POLICY FOR ALL DAVIS FUNDS REGARDING MAKING LOANS WOULD BE:
Making Loans. The Fund may not make loans to other persons, except as allowed by
applicable law, including the 1940 Act and published SEC staff positions.
Further Explanation of Lending Policy. The acquisition of investment securities
or other investment instruments is not be deemed to be the making of a loan.
To generate income and offset expenses, the Fund may lend portfolio securities
to brokerdealers and other financial institutions that the Adviser believes to
be creditworthy in an amount up to 33 1/3% of its total assets, taken at market
value. While securities are on loan, the borrower will pay the Fund any income
accruing on the security. The Fund may invest any collateral it receives in
additional portfolio securities, such as U.S. Treasury notes, certificates of
deposit, other highgrade, shortterm obligations or interestbearing cash
equivalents. The Fund is still subject to gains or losses due to changes in the
market value of securities which it has lent.
When the Fund lends its securities, it will require the borrower to give the
Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.
PROPOSAL 3H:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN UNSEASONED ISSUERS
The Davis Funds' (other than Davis Growth & Income Fund) current fundamental
policies limit the Funds' ability to purchase securities issued by "unseasoned
issuers" (i.e., issuers who have less than three years of operations) to 5% of
total assets. Appendix K shows each Davis Fund's current fundamental policy.
Each Fund's current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares and the 1940 Act does not mandate the
current fundamental policy. If this policy is eliminated and the Adviser
determines it is advisable to so invest, shareholders would have a greater
exposure to the risks associated with companies with shorter operating
histories, including less stable revenues, weaker balance sheets, fewer
customers and less diversified lines of business. The Adviser does not believe
that elimination of the current fundamental policy would materially increase
the risks to the Davis Funds or their shareholders because the Adviser does not
currently intend to make material investments in such companies. The Board of
Directors believes that elimination of the current fundamental policies
regarding investment in "unseasoned issuers" is in the best interests of the
Davis Funds and their shareholders.
21
<PAGE>
PROPOSAL 3I:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN OPTIONS
The Davis Funds' current fundamental policies limit the Funds' ability to
purchase or sell put and call options. Appendix K shows each Davis Fund's
current fundamental policy. Each Fund's current fundamental policy is based on
requirements imposed by the administrators of securities laws in various states.
However, federal legislation passed in 1996 preempted substantive state
regulation of mutual funds and the sale of their shares and the 1940 Act does
not require the current fundamental policy. Investing in options can involve
substantial risks, including the potential loss of the entire premium paid when
purchasing options and a potentially unlimited risk when selling options without
owning the underlying securities. If this policy is eliminated and the Adviser
determines it is advisable to so invest, shareholders would have a greater
exposure to these risks. Because the Adviser does not currently intend to engage
in material purchases or sales of options, it does not believe that elimination
of the current fundamental policy would materially increase the risks to the
Davis Funds or their shareholders. In the future, if the Adviser deemed it
advisable to engage in purchases or sales of options, it would only do so in
conformance with the Funds' then current registration statement. Accordingly,
the Board of Directors believes that elimination of the current fundamental
policies regarding investment in options is in the best interests of the Davis
Funds and their shareholders.
PROPOSAL 3J:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Davis Funds' (other than Davis Growth & Income Fund) current fundamental
policies limit the Funds' ability to invest in other registered investment
companies. Appendix K shows each Davis Fund's current fundamental policy. Each
Fund's current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds. Investment in shares of other investment companies is specifically
addressed by section 12(d)(1) of the 1940 Act and is further limited for money
market funds by Rule 2a-7. The 1940 Act generally limits a fund to (i)
purchasing 3% of the total outstanding voting stock of a single other investment
company, (ii) investing 5% of its total assets in the securities of a single
other investment company, and (iii) investing 10% of its total assets in
securities of all other investment companies.
Rule 2a-7 imposes additional limitations on the money market funds' investments
in other investment companies because Rule 2a-7 limits money market fund
investments to high quality instruments that present minimal credit risk.
Accordingly, money market funds generally may only invest in other investment
companies if the investment companies are money market funds.
Elimination of the current fundamental policy will allow each Fund to invest in
other investment companies to the extent permitted by the 1940 Act. To the
extent a Fund invests in shares of other investment companies, shareholders may
indirectly bear a portion of the expenses of the investment companies in which
the Fund invests. The investment adviser will take these expenses into account
prior to deciding that such an investment is suitable for a fund and its
shareholders.
The Adviser does not believe that elimination of the current fundamental policy
would materially increase the risks to the Davis Funds or their shareholders
both because the Adviser has no current intention to invest in other investment
companies and also because of the 1940 limitations. The Board of Directors
believes that elimination of the current fundamental policies regarding
investment in other investment companies is in the best interests of the Davis
Funds and their shareholders.
22
<PAGE>
PROPOSAL 3K:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICIES
REGARDING SHORT SELLING, MARGIN AND ARBITRAGE
The Davis Funds' (other than Davis Growth & Income Fund) current fundamental
policies limit the Funds' ability to sell short or buy on margin. Davis New York
Venture Fund, Davis Growth Opportunity Fund and Davis Government Bond Fund are
prohibited from engaging in arbitrage. Appendix K shows each Davis Fund's
current fundamental policy.
Each Fund's current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares and the 1940 Act does not require the current
fundamental policy. Selling securities short theoretically incurs the risk of
unlimited losses. Using margin risks leveraging the investment portfolio, which
can magnify both gains and losses. Engaging in arbitrage risks substantial
losses if the securities that are matched are not treated as identical
securities in the market. Because the Adviser does not currently intend to
engage in any of these activities, it does not believe that elimination of the
current fundamental policy would materially increase the risks to the Davis
Funds or their shareholders. In the future, if the Adviser deemed it advisable
to engage in short selling, margin, or arbitrage, it would only do so in
conformance with the Funds' then current registration statement. Accordingly,
the Board of Directors believes that elimination of the current fundamental
policies regarding short selling, margin and arbitrage is in the best interests
of the Davis Funds and their shareholders.
PROPOSAL 3L:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY
REGARDING INVESTING FOR CONTROL
The Davis Funds' (other than Davis Growth & Income Fund) current fundamental
policies prohibit the Funds from investing for the purpose of exercising control
or management of other companies. Appendix K shows each Davis Fund's current
fundamental policy.
The 1940 Act does not require mutual funds to have a fundamental policy
regarding investing for the purpose of exercising control of an issuer. Each
Fund's current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares. Because the Adviser does not currently
intend to invest for the purpose of exercising control or management of other
companies, it does not believe that elimination of the current fundamental
policy would materially increase the risks to the Davis Funds or their
shareholders. In the future, if the Adviser deemed it advisable to invest for
the purpose of exercising control or management of other companies, it would
only do so in conformance with the Funds' then current registration statement.
Approval of this element of Proposal 3 would allow the Board of Directors to
take appropriate and timely action to adopt or amend a nonfundamental policy
without the expense and delay associated with a shareholder meeting.
Accordingly, the Board of Directors believes that approval of this element of
Proposal 3 would be in the best interests of the Davis Funds and their
shareholders.
PROPOSAL 3M:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE THE FUNDAMENTAL POLICY REGARDING INVESTMENTS IN COMPANIES
WITH AFFILIATED OWNERSHIP
The Davis Funds' (other than Davis Growth & Income Fund) current fundamental
policies limit the Funds' ability to purchase securities of issuers whose
securities are owned by officers or directors of the Funds or by the Adviser.
Appendix K shows each Davis Fund's current fundamental policy.
23
<PAGE>
The 1940 Act does not require mutual funds to adopt fundamental policies
regarding investments in companies with affiliated ownership. Each Fund's
current fundamental policy is based on requirements imposed by the
administrators of securities laws in various states. However, federal
legislation passed in 1996 preempted substantive state regulation of mutual
funds and the sale of their shares. This fundamental policy was intended to
prevent potential conflicts of interest and self-dealing. Because the Davis
Funds invest primarily in established companies, it is unlikely that any of the
Funds' officers or directors would own 1/2 of 1 percent or more of a company
that the Funds would invest in, or that the Fund's officers and directors would,
in aggregate own 5% or more of a company that the Funds would invest in.
Moreover, the Adviser believes that even if such cross ownership existed, it is
unlikely that such ownership actually would result in conflicts of interest or
self-dealing. The Adviser believes that the burden of the paperwork that the
current fundamental policy imposes exceeds any potential benefits. Accordingly,
the Board of Directors believes that approval of this element of Proposal 3
would be in the best interests of the Davis Funds and their shareholders.
PROPOSAL 3N:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE FUNDAMENTAL POLICY
REGARDING INVESTMENTS IN ILLIQUID SECURITIES
Davis New York Venture Fund has a fundamental policy prohibiting the Fund from
purchasing more illiquid securities if, after the purchase, more than 15% of the
value of the Fund's net assets would be invested in such securities. None of the
other Davis Funds has a fundamental policy restricting investments in illiquid
securities. Appendix K shows Davis New York Venture Fund's current fundamental
policy.
Current SEC rules, which have changed in the past and may be changed in the
future, limit a mutual fund's investment in illiquid securities to not more than
15% of total assets. If this element of Proposal 3 is approved, Davis New York
Venture Fund intends to adopt a non-fundamental policy, similar to the other
Davis Funds (except the money market fund), limiting investments in illiquid
securities to no more than 15% of the value of total assets. In the event the
Fund's illiquid holdings exceeded 15% of its assets (perhaps due to market
appreciation) the Adviser would act promptly to remedy the situation as promptly
as possible, although it is not required to dispose of portfolio holdings
immediately if the Fund would suffer losses as a result.
The Adviser does not believe that elimination of the current fundamental policy
and adoption of the similar non-fundamental policy would materially increase the
risks to Davis New York Venture Fund or its shareholders. Approval of this
element of Proposal 3 would allow the Board of Directors to take appropriate and
timely action to adopt or amend a non-fundamental policy, without the expense
and delay associated with a shareholder meeting. Accordingly, the Board of
Directors believes that approval of this element of Proposal 3 would be in the
best interests of the Davis New York Venture Fund and its shareholders.
PROPOSAL 3O:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE FUNDAMENTAL POLICY
MAKING THE INVESTMENT OBJECTIVE FUNDAMENTAL
Davis New York Venture Fund's investment objective is "growth of capital." The
Fund has a policy making this objective fundamental. This is more restrictive
than is required under the 1940 Act and none of the other Davis Funds has such
a fundamental policy. Appendix K shows Davis New York Venture Fund's current
fundamental policy.
Because the Adviser does not currently intend to change Davis New York Venture
Fund's investment objective, and because shareholders would be notified of any
change, and because the Fund's prospectus
24
<PAGE>
would be amended to reflect the change, the Adviser does not believe that
elimination of the current fundamental policy would materially increase the
risks to the Davis New York Venture Fund or its shareholders. In the future, if
the Adviser deemed it advisable to change the Fund's investment objective, and
the Board of Directors agreed, then shareholders would be notified and the
prospectus amended before the Fund pursued the new investment objective.
Approval of this element of Proposal 3 would allow the Board of Directors to
take appropriate and timely action to adopt or amend the Fund's investment
objective without the expense and delay associated with a shareholder meeting.
Accordingly, the Board of Directors believes that approval of this element of
Proposal 3 would be in the best interests of the Davis New York Venture Fund
and its shareholders.
PROPOSAL 3P:
-------------------------------------------------------------------------------
PROPOSAL TO ELIMINATE FUNDAMENTAL POLICIES REGARDING MATURITY, RESTRICTED
SECURITIES AND INVESTMENTS IN OIL, GAS AND MINERALS
Davis Government Money Market Fund's current fundamental policies prohibits the
Fund from purchasing any security that has a maturity date exceeding that
prescribed in Rule 2a-7 under the 1940 Act, prohibit the Fund from investing in
restricted securities and also prohibit it from investing in oil, gas or other
mineral exploration or development programs. Appendix K shows Davis Government
Money Market Fund's current fundamental policies.
The 1940 Act does not require any of these three fundamental policies. Current
SEC rules, which have changed in the past and may be changed in the future,
limit a money market fund's ability to purchase securities with maturities of
more than 397 days, limit the purchase of illiquid securities to not more than
10% of net assets and prohibit investment in excessively risky securities, such
as unproven mineral exploration or development programs. If this element of
Proposal 3 is approved, Davis Government Money Market Fund intends to adopt
non-fundamental policies prohibiting it from purchasing any security that has a
maturity date exceeding that prescribed by SEC rules and regulations governing
money market funds and prohibiting the Fund from purchasing illiquid securities
if more than 10% of the value of the Fund's net assets would be invested in such
securities. Davis Government Money Market Fund would not adopt an explicit
prohibition against investing in oil, gas or other mineral exploration or
development programs as such a policy would be irrelevant to the Fund's
investment strategy.
Because the Adviser does not currently intend to invest a material portion of
the assets of Davis Government Money Market Fund in any security that has a
maturity date exceeding that prescribed in Rule 2a-7 under the 1940 Act, in
restricted securities, or in oil, gas or other mineral exploration or
development programs, the Adviser does not believe that elimination of the
current fundamental policy would materially increase the risks to Davis
Government Money Market Fund or its shareholders. In the future, if the Adviser
deemed it advisable to make such investments, it would only do so in conformance
with the Fund's then current registration statement. Approval of this element of
Proposal 3 would allow the Board of Directors to take appropriate and timely
action to adopt or amend a nonfundamental policy without the expense and delay
associated with a shareholder meeting. Accordingly, the Board of Directors
believes that approval of this element of Proposal 3 would be in the best
interests of Davis Government Money Market Fund and its shareholders.
25
<PAGE>
PROPOSAL 4:
-------------------------------------------------------------------------------
TO RATIFY THE SELECTION OF KPMG LLP AS
INDEPENDENT ACCOUNTANTS OF THE FUNDS
By a vote of the Independent Directors, the firm of KPMG LLP has been selected
as independent accountants for each of the Davis Funds to sign or certify any
financial statements of each Fund required by any law or regulation to be
certified by an independent accountant and filed with the SEC or any state.
Pursuant to the 1940 Act, such selection requires the ratification of
shareholders. In addition, as required by the 1940 Act, the vote of the
Directors is subject to the right of the Davis Funds, by vote of a majority of
their eligible votes at any meeting called for the purpose of voting on such
action, to terminate such employment without penalty. KPMG LLP has advised the
Davis Funds that to the best of its knowledge and belief, as of the record date,
no KPMG LLP professional had any direct or material indirect ownership interest
in the Davis Funds inconsistent with the independence standards pertaining to
accountants.
The independent accountants examine annual financial statements for the Davis
Funds and provide other audit and tax-related services. In recommending the
selection of the Davis Fund's accountants, the Audit Committee reviewed the
nature and scope of the services to be provided (including nonaudit services)
and whether the performance of such services would affect the accountants'
independence. Representatives of KPMG LLP are not expected to be present at the
Meeting, but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
LIST OF APPENDICES
APPENDIX A: Definitions of Some Terms used in this Proxy
APPENDIX B: Eligible Votes of Each Davis Fund
APPENDIX C: Nominees owning over 1% of any Class
and Shareholders owning over 5% of any Class
APPENDIX D: Audit Committee Charter
APPENDIX E: Officers of the Davis Funds, the Adviser, and the
Sub-Adviser
APPENDIX F: New Advisory Agreements
APPENDIX G: New Sub-Advisory Agreements
APPENDIX H: Dates that the Existing Advisory and Sub-Advisory Agreements
were most recently submitted to shareholders
APPENDIX I: Other Investment Companies that
Davis Selected Advisers serves as Investment Adviser
APPENDIX J: Proposed Fundamental Policies
APPENDIX K: Current Fundamental Policies for Each Davis Fund
26
<PAGE>
APPENDIX A:
-------------------------------------------------------------------------------
DEFINITIONS OF SOME TERMS USED IN THIS PROXY
1940 ACT: The Investment Company Act of 1940 and the rules and regulations
thereunder.
ADVISER: Davis Selected Advisers, L.P.
BOARD OR BOARD OF DIRECTORS: The board of directors for each Fund. The term is
used in the singular because the board for each fund is comprised of the same
individuals.
CLASS: The Funds are each authorized to issue four Classes of shares (A, B, C
and Y), each with different expenses and different net asset values.
CORPORATION: The Davis Funds are organized as two Maryland corporations: Davis
New York Venture Fund, Inc., and Davis Series, Inc.
DAVIS FUNDS: Eight of the Davis Funds offered to the public: Davis New York
Venture Fund, Davis Growth & Income Fund, Davis Growth Opportunity Fund, Davis
Financial Fund, Davis Real Estate Fund, Davis Convertible Securities Fund,
Davis Government Bond Fund and Davis Government Money Market Fund.
DIRECTOR: A member of the Board of Directors.
ELIGIBLE VOTE: The holder of each full share of a Fund outstanding as of the
close of business on the record date is entitled to one vote for each dollar of
net asset value and each fractional share is entitled to a proportionate share
of one vote upon each matter properly submitted to the meetings.
EXISTING ADVISORY AGREEMENTS: The existing advisory agreements between the
Adviser and Davis New York Venture Fund, Inc., and Davis Series, Inc.
EXISTING SUB-ADVISORY AGREEMENTS: The existing sub-advisory agreements between
the Adviser and Davis Selected Advisers - NY, Inc., on behalf of Davis New York
Venture Fund, Inc., and Davis Series, Inc.
FUND: Any of the eight Davis Funds.
INDEPENDENT ACCOUNTANTS: KPMG LLP serves as independent accountants of the
Davis Funds.
INDEPENDENT DIRECTORS: Those directors of a Davis Fund who, under the 1940 Act,
are not considered "interested persons" of the Fund.
INVESTMENT POLICIES: The investment objectives, policies and restrictions
described in a Fund's prospectus and Statement of Additional Information.
MEETING: A Fund's Special Meeting of Shareholders of the Funds and any
adjournment(s) thereof.
MEETINGS: The meetings of any two or all of the Davis Funds.
NEW ADVISORY AGREEMENTS: The proposed advisory agreements between the Adviser
and Davis New York Venture Fund, Inc., and Davis Series, Inc. The New Advisory
Agreements are both substantially identical except for the fees paid to the
Adviser. All terms of the New Advisory Agreements are in substance identical to
those of the Existing Advisory Agreements, no new fees are being proposed and
no fees are being increased.
<PAGE>
APPENDIX A:
-------------------------------------------------------------------------------
DEFINITIONS OF SOME TERMS USED IN THIS PROXY (CONT.)
NEW SUB-ADVISORY AGREEMENTS: The proposed sub-advisory agreements between the
Adviser and Davis Selected Advisers - NY, Inc., on behalf of Davis New York
Venture Fund, Inc., and Davis Series, Inc. All terms of the New Sub-Advisory
Agreements are in substance identical to those of the Existing Sub-Advisory
Agreements, no new fees are being proposed and no fees are being increased.
NOMINEE: An individual nominated for election or re-election to the Board of
Directors.
PROPOSAL: One of the four proposals described in the proxy statement.
PROXY STATEMENT: The proxy statement itself, not including supplemental
material.
RECORD DATE: The date for determining which Fund shareholders are entitled to
notice of and to vote at a meeting and any adjournment(s) thereof.
SEC: The Securities and Exchange Commission.
STATEMENT OF ADDITIONAL INFORMATION: A legal document which supplements the
prospectus and provides more detailed information about each of the Davis
Funds. You may obtain a copy without charge by calling the Davis Funds at
1-800-279-0279.
SUB-ADVISER: Davis Selected Advisers - NY, Inc.
<PAGE>
APPENDIX B:
-------------------------------------------------------------------------------
ELIGIBLE VOTES
as of September 8, 2000
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C CLASS Y TOTAL
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Davis New York 10,391,721,024 6,227,710,386 3,381,664,169 1,129,733,653 21,130,829,232
Davis Growth and 50,952,823 25,104,173 9,367,687 113,819 85,538,502
Income
DAVIS NEW YORK 10,442,673,847 6,252,814,559 3,391,031,856 1,129,847,472 21,216,367,734
VENTURE FUND, INC.
Davis Growth 86,043,212 69,454,450 9,765,331 4,222,189 169,485,182
Opportunity Fund
Davis Financial Fund 577,550,637 416,321,444 115,085,534 16,344,943 1,125,302,558
Davis Real Estate 162,928,407 88,802,852 33,610,359 41,530,706 326,872,324
Fund
Davis Convertible 115,978,618 83,964,722 18,541,621 37,151,193 255,636,154
Securities Fund
Davis Government 12,678,295 16,919,267 1,904,251 48,314 31,550,127
Bond Fund
Davis Government 532,564,124 23,103,783 3,708,058 -- 559,375,965
Money Market Fund
DAVIS SERIES, INC. 1,487,743,293 698,566,518 182,615,154 99,297,345 2,468,222,310
</TABLE>
<PAGE>
Appendix C:
NOMINEES AND SHAREHOLDERS
NOMINEES OWNING MORE THAN 1% OF SHARES OF ANY CLASS
The following list sets forth each nominee who, as of September 8, 2000, owns
more than 1% of the total outstanding shares of any Class of any of the Funds.
<TABLE>
<CAPTION>
% OF SHARES NO. OF SHARES
NOMINEE NAME FUND(S) IN WHICH OWNERSHIP IS >1% OUTSTANDING OWNED
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CHRISTOPHER C. DAVIS Davis Growth & Income Fund -- Class A 5.98% 263,011.631
Davis Financial Fund -- Class A 2.80% 434,130.986
Davis Government Money Market Fund -- Class A 1.20% 6,366,791.600
Davis Growth Opportunity Fund -- Class A 5.22% 174,268.233
Davis Real Estate Fund -- Class A 3.57% 271,269.093
ANDREW A. DAVIS Davis Real Estate Fund -- Class A 1.31% 99,732.939
The following table sets forth the name and holdings of any persons known by
the Davis Funds to be a record owner of more than 5% of the outstanding shares
of any Class of its Funds as of September 8, 2000. Other than as indicated
below, Davis Funds are not aware of any shareholder that beneficially owns in
excess of 25% of the Funds' total outstanding shares.
SHAREHOLDERS OWNING MORE THAN 5% OF SHARES OF ANY CLASS
% OF CLASS NUMBER OF
NAME AND ADDRESS OF SHAREHOLDER OUTSTANDING SHARES OWNED
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS NEW YORK VENTURE FUND -- CLASS A SHARES
Merrill Lynch Pierce Fenner & Smith 19.67% 62,845,862.112
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS NEW YORK VENTURE FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 31.52% 61,946,067.576
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS NEW YORK VENTURE FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 40.87% 43,274,827.827
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
<PAGE>
Appendix C:
NOMINEES AND SHAREHOLDERS (CONT.)
% OF CLASS NUMBER OF
NAME AND ADDRESS OF SHAREHOLDER OUTSTANDING SHARES OWNED
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS NEW YORK VENTURE FUND -- CLASS Y SHARES
Merrill Lynch Pierce Fenner & Smith 22.19% 7,627,103.398
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
Mitra & Co. 8.35% 2,871,074.864
c/o Marshall & Ilsley Trust Co.
P.O. Box 2977
Milwaukee, WI 53201-2977
Boston Safe Deposit & Trust Co. 10.61% 3,646,602.726
TTEE For The Southwest Airlines
Pilots' Retirement Saving Plan
One Cabot Road 028-0036
Medord, MA 02155-5141
DAVIS GROWTH & INCOME FUND -- CLASS A SHARES
Shelby Cullom Davis & Co. 58.31% 2,563,078.425
Investment # 3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
Christopher C. Davis 5.98% 263,011.631
9 East 81st Street
New York, NY 10028-0205
DAVIS GROWTH & INCOME FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 21.17% 462,880.265
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS GROWTH & INCOME FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 22.98% 181,144.274
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
<PAGE>
Appendix C:
-------------------------------------------------------------------------------
NOMINEES AND SHAREHOLDERS (CONT.)
% OF CLASS NUMBER OF
NAME AND ADDRESS OF SHAREHOLDER OUTSTANDING SHARES OWNED
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS GROWTH & INCOME FUND-- CLASS Y SHARES
Merrill Lynch Pierce Fenner & Smith 65.49% 6,415.029
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
LPL Financial Services 7.82% 766.177
Account 19639116
9785 Towne Centre Dr.
San Diego, CA 92121-1968
DAVIS GROWTH OPPORTUNITY FUND -- CLASS A SHARES
SAC & Co. 7.76% 259,014.799
80452131
12 E. 49th Street, 41st Floor
New York, NY 10017
Christopher C. Davis 5.22% 174,268.233
609 Fifth Ave., 11th Floor
New York, NY 10017
DAVIS GROWTH OPPORTUNITY FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 13.86% 404,670.774
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS GROWTH OPPORTUNITY FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 9.44% 37,055.480
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS GROWTH OPPORTUNITY FUND -- CLASS Y SHARES
Naidot & Co. 94.31% 155,916.275
Bessemer Trust Company
100 Woodbridge Ctr. Drive
Woodbridge, NJ 07095-1125
Merrill Lynch Pierce Fenner & Smith 5.69% 9,398.477
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
<PAGE>
Appendix C:
-------------------------------------------------------------------------------
NOMINEES AND SHAREHOLDERS (CONT.)
% OF CLASS NUMBER OF
NAME AND ADDRESS OF SHAREHOLDER OUTSTANDING SHARES OWNED
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS FINANCIAL FUND -- CLASS A SHARES
Shelby Cullom Davis & Co. 17.91% 2,767,895.176
Investment # 3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
Merrill Lynch Pierce Fenner & Smith 5.47% 844,714.194
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
Charles Schwab and Co., Inc. 6.33% 978,666.899
101 Montgomery St.
San Francisco, CA 94104-4122
DAVIS FINANCIAL FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 24.64% 2,844,112.236
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS FINANCIAL FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 31.33% 980,711.684
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS FINANCIAL FUND -- CLASS Y SHARES
Merrill Lynch Pierce Fenner & Smith 80.73% 347,535.000
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS REAL ESTATE FUND -- CLASS A SHARES
Charles Schwab and Co., Inc. 10.08% 766,031.802
101 Montgomery St.
San Francisco, CA 94104-4122
DAVIS REAL ESTATE FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 24.22% 1,009,255.521
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
<PAGE>
Appendix C:
-------------------------------------------------------------------------------
NOMINEES AND SHAREHOLDERS (CONT.)
% OF CLASS NUMBER OF
NAME AND ADDRESS OF SHAREHOLDER OUTSTANDING SHARES OWNED
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS REAL ESTATE FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 14.80% 231,001.561
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 322460-6484
DAVIS REAL ESTATE FUND -- CLASS Y SHARES
Naidot & Co. 57.88% 1,115,969.907
Bessemer Trust Company
100 Woodbridge Center Drive
Woodbridge, NJ 07095
Philip O. Grier, President 16.28% 313,825.834
Armard Hammer United World College
P.O. Box 248
Montezuma, NM 87731-0248
Abilene Christian University Endowment 10.03% 193,350.910
Attention: Ken Rideout
ACU Box 29120
Abilene, TX 79699-0001
DAVIS CONVERTIBLE SECURITIES FUND -- CLASS A SHARES
Shelby Cullom Davis & Co. 24.98% 1,052,542.686
Investment # 3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
The Bank of New York, TRS for Shelby Cullom Davis 7.12% 300,000.000
FBO the Bank of New York as Pledgee
One Wall Street
New York, NY 10005-2501
DAVIS CONVERTIBLE SECURITIES FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 24.92% 768,170.124
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS CONVERTIBLE SECURITIES FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 21.97% 147,078.022
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
<PAGE>
Appendix C:
-------------------------------------------------------------------------------
NOMINEES AND SHAREHOLDERS (CONT.)
% OF CLASS NUMBER OF
NAME AND ADDRESS OF SHAREHOLDER OUTSTANDING SHARES OWNED
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dean Witter FBO 6.12% 40,975.833
Gary Ruben Inc. MP Plan
P.O. Box 250
New York, NY 10008-0250
DAVIS CONVERTIBLE SECURITIES FUND -- CLASS Y SHARES
Naidot & Co. 93.94% 1,262,267.118
Bessemer Trust Company
100 Woodbridge Center Drive
Woodbridge, NJ 07095
DAVIS GOVERNMENT BOND FUND -- CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith 35.44% 1,112,047.958
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS GOVERNMENT BOND FUND -- CLASS C SHARES
Merrill Lynch Pierce Fenner & Smith 45.34% 159,305.212
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
PaineWebber for the benefit of Elinor F. Filupait TTEE 15.77% 55,391.277
P.O. Box 4371
Lantana, FL 33465-4371
PaineWebber for the benefit of Gary F. Filupait Trustee 5.93% 20,842.495
29 Dorchester Circle
PGA National
Palm Beach Gardens, FL 33418-7102
DAVIS GOVERNMENT BOND FUND -- CLASS Y SHARES
Merrill Lynch Pierce Fenner & Smith 99.71% 8,885.814
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS GOVERNMENT MONEY MARKET FUND -- CLASS A SHARES
Shelby Cullom Davis & Co. 69.59% 370,666,262.03
Investment #3
609 5th Avenue, 11th Floor
New York, NY 10017-1021
Davis Selected Advisers, L.P. 9.80% 52,191,402.440
Attention: Ron Moore
2949 E. Elvira Road, Suite 101
Tucson, AZ 85706
</TABLE>
<PAGE>
APPENDIX D:
-------------------------------------------------------------------------------
DAVIS FUNDS AUDIT COMMITTEE CHARTER
as amended 12/07/99
1. The Audit Committee shall be composed entirely of independent directors.
2. The purposes of the Audit Committee are:
(a) to oversee the Funds' accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal
controls of certain service providers;
(b) to oversee the quality and objectivity of the Funds' financial
statements and the independent audit thereof; and
(c) to act as a liaison between the Funds' independent auditors and the
full Board of Directors.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control and the auditor's responsibility to plan and perform a proper
audit.
3. To carry out its purposes, the Audit Committee shall have the following
duties and powers:
(a) to recommend the selection, retention or termination of auditors and,
in connection therewith, to evaluate the independence of the
auditors, including whether the auditors provide any consulting
services to the manager, and to receive the auditors' specific
representations as to their independence;
(b) to meet with the Funds' independent auditors, including private
meetings, as necessary (i) to review the arrangements for and scope
of the annual audit and any special audits, (ii) to discuss any
matters of concern relating to the Funds' financial statements,
including any adjustments to such statements recommended by the
auditors, or other results of said audit(s), (iii) to consider the
auditors' comments with respect to the Funds' financial policies,
procedures and internal accounting controls and management's
responses thereto, and (iv) to review the form of opinion the
auditors propose to render to the Board and shareholders;
(c) to consider the effect upon the Funds of any changes in accounting
principles or practices proposed by management or the auditors;
(d) to review the fees charged by the auditors for audit and non-audit
services;
(e) to investigate improprieties or suspected improprieties in fund
operations;
(f) to consider such other matters as the full Board shall request the
Committee to review, including but not limited to, advisory,
sub-advisory and underwriting agreements, Rule 12b-1 distribution
plans, custodian and shareholder servicing issues, regulatory matters
and taxation issues; and
(g) to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other matters
as the Committee may deem necessary or appropriate.
4. The Committee shall meet on a regular basis and is empowered to hold
special meetings as circumstances require.
5. The Committee shall regularly meet with the Treasurer of the Funds and
with internal auditors, if any, for the management company.
<PAGE>
APPENDIX D:
-------------------------------------------------------------------------------
DAVIS FUNDS AUDIT COMMITTEE CHARTER (CONT.)
6. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain special
counsel and other experts or consultants at the expense of the appropriate
Fund(s).
7. The Committee shall review this Charter at least annually and recommend
any changes to the full Board of Directors.
<PAGE>
APPENDIX E:
-------------------------------------------------------------------------------
OFFICERS OF THE DAVIS FUNDS, THE ADVISER AND THE SUB-ADVISER
OFFICERS OF THE DAVIS FUNDS
<TABLE>
<CAPTION>
NAME BIRTHDATE POSITION
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHRISTOPHER C. DAVIS(1)* July 13, 1965 Chief Executive Officer, Davis Series;
President, Davis New York Venture Fund, Davis
Growth & Income Fund, Davis Growth
Opportunity Fund and Davis Financial Fund
ANDREW A. DAVIS(2)* June 25, 1963 President, Davis Real Estate Fund and Davis
Convertible Securities Fund; Vice President,
all Davis Funds
CRESTON KING, III(3) April 19, 1963 President, Davis Government Bond Fund and
Davis Government Money Market Fund
KENNETH C. EICH(3)* August 14, 1953 Vice President, all Davis Funds
SHARRA L. REED(3)* September 25, 1966 Vice President, Treasurer and Assistant
Secretary, all Davis Funds
THOMAS D. TAYS(3)* March 7, 1957 Vice President and Secretary, all Davis Funds
</TABLE>
* These persons are also officers of the Adviser.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York, New York
10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe, New
Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
<PAGE>
APPENDIX E:
-------------------------------------------------------------------------------
OFFICERS OF THE DAVIS FUNDS, THE ADVISER AND THE SUB-ADVISER (CONT.)
OFFICERS OF THE ADVISER
AS GENERAL PARTNER, DAVIS INVESTMENTS, LLC WILL MANAGE THE BUSINESS
AFFAIRS OF THE ADVISER. THE DIRECTORS AND OFFICERS OF
DAVIS INVESTMENTS, LLC, ARE:
<TABLE>
<CAPTION>
NAME BIRTHDATE POSITION
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHRISTOPHER C. DAVIS(1) July 13, 1965 Chairman (Sole Member), Chief Executive Officer
SHELBY M.C. DAVIS(1) March 20, 1937 Founder and Senior Research Adviser
ANDREW A. DAVIS(2) June 25, 1963 President
KENNETH C. EICH(3) August 14, 1953 Chief Operating Officer
RUSSELL O. WIESE(1) May 18, 1966 Chief Marketing Officer
GARY P. TYC(3) May 27, 1956 Vice President, Chief Financial Officer, Treasurer
and Assistant Secretary
SHARRA L. REED(3) September 25, 1966 Vice President
SANDRA E. DURAN(2) June 2, 1970 Vice President
THOMAS D. TAYS(3) March 7, 1957 Vice President, General Counsel and Secretary
</TABLE>
Shelby M.C. Davis is the father of Andrew A. Davis and Christopher C. Davis.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York, New York
10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe, New
Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706
<PAGE>
APPENDIX E:
-------------------------------------------------------------------------------
OFFICERS OF THE DAVIS FUNDS, THE ADVISER AND THE SUB-ADVISER (CONT.)
OFFICERS OF THE SUB-ADVISER
The Sub-Adviser is a wholly owned subsidiary of the Adviser
organized as a Delaware corporation. Its officers and directors are:
Name Position
Christopher C. Davis(1) Chairman (Director), Chief Executive Officer
& President
Andrew A. Davis(2) Director, Vice President
Russell O. Wiese(1) Director, Vice President
Kenneth C. Eich(3) Vice President, Chief Operating Officer
Gary P. Tyc(3) Vice President, Treasurer and Assistant Secretary
Thomas D. Tays(3) Vice President, General Counsel and Secretary
The principal occupation of each of the directors and officers is working
for the Adviser and/or Sub-Adviser.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York, New York
10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe, New
Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
<PAGE>
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC. AND DAVIS SERIES, INC.
DAVIS NEW YORK VENTURE FUND, INC.
INVESTMENT ADVISORY AGREEMENT
JANUARY 1, 2001
Davis Selected Advisers, L.P.
2949 E. Elvira Road, Suite 101
Tucson, Arizona 85706
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. Management. We desire to employ the capital of Davis New York Venture
Fund, Inc. (the "Company") by investing and reinvesting the same in
securities 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. Officers, Directors, Employees. 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 compensation of all
such persons. We understand that, during the continuance of this
agreement, officers of your firm will, if elected, serve as directors of
our corporation and as its principal officers.
3. Authority, Reporting. You are to have complete and exclusive authority to
develop and handle for us any business of the type above mentioned 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 portfolio 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. Standard of Care. We shall expect you to use 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
<PAGE>
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
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. Expenses. 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 verifications related thereto, and interfacing with our
auditors, (v) verification of our security ledger and preparation and
maintenance of other corporate books and records, (vi) brokerage fees and
commissions; (vii) stockholders' and Directors' meetings, (viii) corporate
reports and proxy materials, including their preparation, printing and
distribution, (ix) fees of disinterested Directors, (x) 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 stockholders, 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
reinvestment 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. Fees. The Company has formed two funds, consisting of separate investment
portfolios, and wishes to employ you to supervise and assist in the
management of both funds upon the terms and conditions described in this
Agreement. In consideration of such services, we shall pay you a fee
calculated at the following annual rates based upon the daily net asset
value of each separate portfolio:
DAVIS NEW YORK VENTURE FUND
ANNUAL RATE DAILY NET ASSET VALUE
0.75% of First $250,000,000
0.65% of First $250,000,000
0.55% of Next $2,500,000,000
0.54% of Next $2,500,000,000
0.53% of Next $1,000,000,000
0.52% of Next $1,000,000,000
0.51% of Next $1,000,000,000
0.50% of Amount in excess of $7,000,000,000
<PAGE>
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
DAVIS GROWTH & INCOME FUND
ANNUAL RATE DAILY NET ASSET VALUE
0.75% of First $250,000,000
0.65% of Next $250,000,000
0.55% of Amount in excess of $500,000,000
For this purpose, the daily net asset value shall be computed in the same
manner as the value of such daily net assets are computed in connection with
the determination of the net asset value of our shares. The fee shall be
accrued daily and paid monthly on the first business day following the end of
the month in which the services were rendered.
7. Portfolio Transactions.
(a) You are authorized to place purchase and sale orders for our
portfolio transactions with brokers and/or dealers who, 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 research 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 discretion (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 required 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 demonstrating 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
comparable 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 Directors 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.
<PAGE>
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
(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 transactions, 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 nonmember
brokers.
8. NonExclusive, Use of "Davis" Name. 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 "Davis" in our corporate title. If for any
reason you no longer act as our investment adviser, we shall remove the
name "Davis" from our corporate title upon demand made by you.
9. Term and Termination. 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 thereafter, 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) January 1, 2001, or (ii) the date this Agreement has been
approved as required by the Investment Company Act of 1940. As of such
effective date, this Agreement shall supersede all prior investment
advisory agreements between the parties. This Agreement may be terminated
at any time, without the payment of any penalty, by our Board of Directors
or by vote of a majority of our outstanding 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).
10. Series of Shares. As of the date of this Agreement, the Company has two
series of shares ("Funds"). 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,
DAVIS NEW YORK VENTURE FUND, INC.
By:____________________________
Accepted as of the day and year first above written.
DAVIS SELECTED ADVISERS, L.P.
By: DAVIS INVESTMENTS, LLC., General Partner
By:_______________________________________
<PAGE>
APPENDIX F:
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INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
DAVIS SERIES, INC.
INVESTMENT ADVISORY AGREEMENT
JANUARY 1, 2001
Davis Selected Advisers, L.P.
2949 E. Elvira Road, Suite 101
Tucson, Arizona 85706
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. Management. We desire to employ the capital of Davis Series, Inc. (the
"Company") by investing and reinvesting the same in securities 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. Officers, Directors, Employees. 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 compensation of all
such persons. We understand that, during the continuance of this
agreement, officers of your firm will, if elected, serve as directors of
our corporation and as its principal officers.
3. Authority, Reporting. You are to have complete and exclusive authority to
develop and handle for us any business of the type above mentioned 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 portfolio 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. Standard of Care. 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.
<PAGE>
-------------------------------------------------------------------------------
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
5. Expenses. 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 verifications related thereto, and interfacing with our
auditors, (v) verification of our security ledger and preparation and
maintenance of other corporate books and records, (vi) brokerage fees and
commissions, (vii) stockholders' and Directors' meetings, (viii) corporate
reports and proxy materials, including their preparation, printing and
distribution, (ix) fees of disinterested Directors, (x) 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 stockholders, 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
reinvestment 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. Fees. 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
-------------------------------------------------------------------------------
ALL FUNDS EXCEPT DAVIS GOVERNMENT MONEY MARKET FUND & DAVIS GOVERNMENT BOND
FUND
1/12 of 0.75%
of..........................................First $250,000,000 1/12 of 0.65%
of..........................................Next $250,000,000 1/12 of 0.55%
of..........................................Amount in excess of $500,000,000
DAVIS GOVERNMENT MONEY MARKET FUND
1/12 of 0.50%
of..........................................First $250,000,000 1/12 of 0.45%
of..........................................Next $250,000,000 1/12 of 0.40%
of..........................................Amount in excess of $500,000,000
DAVIS GOVERNMENT BOND FUND
1/12 of 0.50%...............................All assets
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.
<PAGE>
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
7. Portfolio Transactions.
(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 research 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 discretion (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 required 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 demonstrating 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 comparable 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 Directors
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 transactions, 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 nonmember
brokers.
8. Non-Exclusive. You may act as investment adviser for any other person, firm
or corporation.
9. Term and Termination. 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 thereafter, if its
continuance is approved at least annually as required by the Investment
Company Act of 1940. The effective date of this
<PAGE>
APPENDIX F:
-------------------------------------------------------------------------------
INVESTMENT ADVISORY AGREEMENTS,
DAVIS NEW YORK VENTURE FUND, INC., AND DAVIS SERIES, INC. (CONT.)
Agreement shall be the later of (i) January 1, 2001, or (ii) the date this
Agreement has been approved as required by the Investment Company Act of
1940. As of such effective date, this Agreement shall supersede all prior
investment advisory agreements between the parties. This Agreement may be
terminated at any time, without the payment of any penalty, by our Board
of Directors or by vote of a majority of our outstanding 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).
10. Series of Shares. As of the date of this Agreement, the Company has six
series of shares ("Funds"), namely Davis Growth Opportunity Fund, Davis
Financial Fund, Davis Real Estate Fund, Davis Convertible Securities Fund,
Davis Government Bond Fund, and Davis Government Money Market Fund. In the
event that the Company shall create any 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 future Fund shall be
the date as 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,
DAVIS SERIES, INC.
By:______________________________
Accepted as of the day and year first above written.
DAVIS SELECTED ADVISERS, L.P.
By: DAVIS INVESTMENTS, LLC, General Partner
By:______________________________________
<PAGE>
APPENDIX G:
------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC.
DAVIS NEW YORK VENTURE FUND, INC.
SUB-ADVISORY AGREEMENT
JANUARY 1, 2001
This is to confirm that Davis Selected Advisers, L.P. (the "Adviser") is
retaining Davis Selected Advisers - NY, Inc. ("DSA-NY"), as investment
sub-adviser for the portfolios of Davis New York Venture Fund, Inc. (the
"Fund").
The terms and conditions of your retention are as follows:
1. Service as Sub-Adviser. DSA-NY shall act as an investment sub-adviser for
the Fund and will provide such investment management and research services
as the Adviser shall request subject to the general supervision of the
Board of Directors of the Fund, the Adviser and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Fund, (b) the prospectus, statement of
additional information and other information set forth in the Fund's
registration documents under the Securities Act of 1933 and the Investment
Company Act of 1940 ("1940 Act"), including any supplements thereto, (c)
the Investment Advisory Agreement between the Adviser and the Fund (the
"Investment Advisory Agreement"), the Adviser's and the Fund's Code of
Ethics and (d) any additional policies or guidelines established by the
Fund's Board of Directors or the Adviser. DSA-NY acknowledges receipt of
copies of the above documents as in effect on the date of acceptance of
this letter. The Adviser agrees that it will promptly deliver to DSA-NY
any amendments, changes or additions of or to these documents.
2. Conform to Guidelines. DSA-NY agrees that all securities transactions will
conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies or guidelines
directed by the Board of Directors of the Fund, any committee thereof and
the Adviser.
3. Independent Contractor. DSA-NY shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of the Fund, DSA-NY shall have no authority to represent the
Fund or the Adviser in any way or otherwise be an agent of the Adviser or
the Fund, except with regard to the execution of securities transactions
on behalf of the Fund with registered broker/dealers, including
broker/dealers affiliated with the Adviser, provided transactions with
affiliated broker/dealers comply with Rule 17e-1 of the 1940 Act.
4. Reports and Documentation. DSA-NY shall provide the Adviser with any
reports, analyses or other documentation the Adviser requests including
those related to placement of security transactions, its administrative
responsibilities and its responsibility to monitor compliance with stated
investment objectives, policies and limitations and the investment
performance of the Fund. DSA-NY agrees, directly or through an agent, to
provide daily information in respect to any portfolio transactions of the
Fund to the Adviser. DSA-NY agrees to provide all documentation reasonably
required by the Adviser to maintain the Fund's accounting records in
accordance with the 1940 Act and the Investment Advisers Act of 1940 and
the regulations issued thereunder, and to preserve copies of all documents
and records related to asset transactions, positions and
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC.(CONT.)
valuations related to the Fund in the manner and for the periods
prescribed by such regulations. DSA-NY further agrees that all documents
and records it maintains relating to the Fund, are the property of the
Fund and will be surrendered to the Adviser or the Fund upon the request
of either. DSA-NY agrees to provide information and to allow inspection of
such documents and records at reasonable times by any authorized
representative of the Adviser, the Fund's Board of Directors or any
committee thereof, the Fund's independent public accountants or
appropriate regulatory authorities. DSA-NY shall provide to the Adviser a
copy of its Form ADV as filed with the SEC and as amended from time to
time and a written list of persons DSA-NY has authorized to give written
and/or oral instructions to the Adviser and the Fund custodian.
5. Access to Personnel. DSA-NY agrees to make its personnel who are engaged
in activities on behalf of the Fund available at reasonable times for
consultations with the Adviser's personnel and the Fund's Board of
Directors or any committee thereof, including attendance at their
meetings, wherever situated. In addition, personnel of DSA-NY, at the
request of the Adviser, will attend other meetings to be scheduled at
mutually convenient times.
6. Facilities, Equipment, and Personnel. DSA-NY agrees to provide all office
facilities, equipment and personnel needed for carrying out its duties
hereunder at its own expense. In addition, DSA-NY shall, if requested by
the Adviser or the Fund, employ at its own expense and subject to the
prior written approval of the Adviser which approval shall not be
unreasonably withheld (i) a public auditing firm, (ii) attorneys and (iii)
such other professional staff as in the sole discretion of the Adviser are
necessary to assure the fulfillment of the terms and conditions of this
agreement.
7. Non-Exclusive. It is agreed that DSA-NY's services are not to be deemed
exclusive and DSA-NY shall be free to render similar services or other
services to others provided that (i) its services hereunder are not
impaired and are not in violation of federal or state securities laws and
(ii) that it shall not provide services to any registered investment
company other than the Fund or other investment companies managed by the
Adviser without the Adviser's prior express written permission.
8. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties hereunder,
DSA-NY, its officers, directors and employees shall not be subject to
liability for any act or omission in the cause of, or connected with,
rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security. In the event of any claim,
arbitration, suit, or administrative proceedings in which DSA-NY or the
Adviser is a party and in which it is finally determined that there is
liability or wrongdoing by only one of us, the party liable or found to be
the wrongdoer shall pay for all liability and expenses of such claim or
proceeding including reasonable attorneys' fees. If it is determined that
there is liability or wrongdoing by both or none of us, then each shall
pay their own liability and expenses. In the event of any settlement of
any such claim, arbitration, suit or proceeding before final determination
by a court or arbitrator(s), the liability and expenses shall be assumed
as agreed between the parties, but if there is no agreement within thirty
(30) days of such settlement, then the assumption of liability and
expenses shall be settled by arbitration, in accordance with the then
applicable rules of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator shall be final and binding and may be
entered in any court having jurisdiction. The parties shall pay for their
own costs and expenses in respect to any such arbitration and such costs
may be included in the arbitrator's award.
9. Compliance with Applicable Law. As investment sub-adviser, DSA-NY
understands that it will be responsible for complying with all provisions
of applicable law, including the 1940 Act, the Investment Advisers Act of
1940, and the Insider Trading and Securities Fraud Enforcement Act of 1988
and all rules and regulations
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC. (CONT.)
thereunder. DSA-NY agrees to adopt and comply with the "Code of Ethics of
and for Davis Selected Advisers, L.P. and the Companies For Which It Acts
As Investment Adviser" as in effect from time to time and to keep in
effect a policy and supervisory procedures designed to prevent insider
trading.
10. Common Control, Fees. The parties acknowledge that DSA-NY is controlled by
or under common control with the Adviser. The Adviser shall pay DSA-NY all
reasonable direct and indirect costs associated with the maintenance of an
office and the performance of the terms of this Agreement. The Adviser
shall also reimburse expenses expressly approved for reimbursement by the
Adviser. Payment for DSA-NY's services and reimbursement of expenses
approved by the Adviser shall be made monthly, in arrears, by the 15th day
of the following month.
11. Term. This Agreement shall become effective on the later of January 1,
2001, or the first business day after the date this Agreement is approved
in accordance with the 1940 Act (provided that it is reflected in an
effective post-effective amendment under the Securities Act of 1933 and
the 1940 Act). Unless sooner terminated as hereunder provided, it shall
initially remain in effect for a period not exceeding two years.
Thereafter, subject to the termination provisions herein, this Agreement
shall continue in force from year to year thereafter, but only as long as
such continuance is specifically approved at least annually in the manner
required by the 1940 Act; provided, however, that if the continuation of
this Agreement is not approved, DSA-NY may continue to serve in the manner
and to the extent permitted by the 1940 Act and the rules and regulations
thereunder.
12. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without payment of
any penalty at any time (a) upon sixty (60) days' written notice to DSA-NY
by the Adviser or upon such sixty (60) days' written notice to DSA-NY by
the Fund pursuant to action by its Board of Directors or by the vote of a
majority of the outstanding voting securities of the Fund, or (b) upon
sixty (60) days' written notice by DSA-NY to the Adviser. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and
regulations thereunder. Termination of this Agreement shall not affect
DSA-NY's right to receive payments on any unpaid balance of the
compensation earned and reimbursable expenses incurred prior to such
termination. Upon receipt of notification of termination as provided above
DSA-NY shall immediately cease all activities in connection with the Fund
except as otherwise directed by the Adviser.
13. Use of Names. DSA-NY agrees that it shall abide by the terms of the
agreement of the Adviser with the Fund as to the names of the Fund and the
Adviser and shall not use the name of the Adviser or the Fund without the
prior written consent of the Adviser or the Fund.
14. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute or rule or otherwise, the remainder
shall not be thereby affected.
15. Choice of Law. This Agreement shall be construed according to the laws of
the State of New Mexico. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
If the foregoing terms and conditions are acceptable to you, please acknowledge
in the space provided. Upon your acceptance, the retention and the mutual
obligations in respect thereto shall be effective as provided herein.
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC. (CONT.)
Sincerely,
Davis Selected Advisers, L.P.
By Davis Investments, LLC,
General Partner
By:_________________________
Its:_________________________
Accepted and Approved this 1st day of January, 2001
Davis Selected Advisers - NY, Inc.
By:__________________________
Its:__________________________
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC. (CONT.)
DAVIS SERIES, INC.
SUB-ADVISORY AGREEMENT
JANUARY 1, 2001
This is to confirm that Davis Selected Advisers, L.P. (the "Adviser") is
retaining Davis Selected Advisers - NY, Inc. ("DSA-NY"), as investment
sub-adviser for the portfolios of Davis Series, Inc. (the "Fund").
The terms and conditions of your retention are as follows:
1. Service as Sub-Adviser. DSA-NY shall act as an investment sub-adviser for
the Fund and will provide such investment management and research services
as the Adviser shall request subject to the general supervision of the
Board of Directors of the Fund, the Adviser and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Fund, (b) the prospectus, statement of
additional information and other information set forth in the Fund's
registration documents under the Securities Act of 1933 and the Investment
Company Act of 1940 ("1940 Act"), including any supplements thereto, (c)
the Investment Advisory Agreement between the Adviser and the Fund (the
"Investment Advisory Agreement"), the Adviser's and the Fund's Code of
Ethics and (d) any additional policies or guidelines established by the
Fund's Board of Directors or the Adviser. DSA-NY acknowledges receipt of
copies of the above documents as in effect on the date of acceptance of
this letter. The Adviser agrees that it will promptly deliver to DSA-NY
any amendments, changes or additions of or to these documents.
2. Conform to Guidelines. DSA-NY agrees that all securities transactions will
conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies or guidelines
directed by the Board of Directors of the Fund, any committee thereof and
the Adviser.
3. Independent Contractor. DSA-NY shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of the Fund, DSA-NY shall have no authority to represent the
Fund or the Adviser in any way or otherwise be an agent of the Adviser or
the Fund, except with regard to the execution of securities transactions
on behalf of the Fund with registered broker/dealers, including
broker/dealers affiliated with the Adviser, provided transactions with
affiliated broker/dealers comply with Rule 17e-1 of the 1940 Act.
4. Reports and Documentation. DSA-NY shall provide the Adviser with any
reports, analyses or other documentation the Adviser requests including
those related to placement of security transactions, its administrative
responsibilities and its responsibility to monitor compliance with stated
investment objectives, policies and limitations and the investment
performance of the Fund. DSA-NY agrees, directly or through an agent, to
provide daily information in respect to any portfolio transactions of the
Fund to the Adviser. DSA-NY agrees to provide all documentation reasonably
required by the Adviser to maintain the Fund's accounting records in
accordance with the 1940 Act and the Investment Advisers Act of 1940 and
the regulations issued thereunder, and to preserve copies of all documents
and records related to asset transactions, positions and valuations
related to the Fund in the manner and for the periods prescribed by such
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC. (CONT.)
regulations. DSA-NY further agrees that all documents and records it
maintains relating to the Fund, are the property of the Fund and will be
surrendered to the Adviser or the Fund upon the request of either. DSA-NY
agrees to provide information and to allow inspection of such documents
and records at reasonable times by any authorized representative of the
Adviser, the Fund's Board of Directors or any committee thereof, the
Fund's independent public accountants or appropriate regulatory
authorities. DSA-NY shall provide to the Adviser a copy of its Form ADV as
filed with the SEC and as amended from time to time and a written list of
persons DSA-NY has authorized to give written and/or oral instructions to
the Adviser and the Fund custodian.
5. Access to Personnel. DSA-NY agrees to make its personnel who are engaged
in activities on behalf of the Fund available at reasonable times for
consultations with the Adviser's personnel and the Fund's Board of
Directors or any committee thereof, including attendance at their meetings
wherever situated. In addition, personnel of DSA-NY at the request of the
Adviser, will attend other meetings to be scheduled at mutually convenient
times.
6. Facilities, Equipment, and Personnel. DSA-NY agrees to provide all office
facilities, equipment and personnel needed for carrying out its duties
hereunder at its own expense. In addition, DSA-NY shall, if requested by
the Adviser or the Fund, employ at its own expense and subject to the
prior written approval of the Adviser which approval shall not be
unreasonably withheld (i) a public auditing firm, (ii) attorneys and (iii)
such other professional staff as in the sole discretion of the Adviser are
necessary to assure the fulfillment of the terms and conditions of this
agreement.
7. Non-Exclusive. It is agreed that DSA-NY's services are not to be deemed
exclusive and DSA-NY shall be free to render similar services or other
services to others provided that (i) its services hereunder are not
impaired and are not in violation of federal or state securities laws and
(ii) that it shall not provide services to any registered investment
company other than the Fund or other investment companies managed by the
Adviser without the Adviser's prior express written permission.
8. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties hereunder,
DSA-NY, its officers, directors and employees shall not be subject to
liability for any act or omission in the cause of, or connected with,
rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security. In the event of any claim,
arbitration, suit, or administrative proceedings in which DSA-NY or the
Adviser is a party and in which it is finally determined that there is
liability or wrongdoing by only one of us, the party liable or found to be
the wrongdoer shall pay for all liability and expenses of such claim or
proceeding including reasonable attorneys' fees. If it is determined that
there is liability or wrongdoing by both or none of us, then each shall
pay their own liability and expenses. In the event of any settlement of
any such claim, arbitration, suit or proceeding before final determination
by a court or arbitrator(s), the liability and expenses shall be assumed
as agreed between the parties, but if there is no agreement within thirty
(30) days of such settlement, then the assumption of liability and
expenses shall be settled by arbitration, in accordance with the then
applicable rules of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator shall be final and binding and may be
entered in any court having jurisdiction. The parties shall pay for their
own costs and expenses in respect to any such arbitration and such costs
may be included in the arbitrator's award.
9. Compliance with Applicable Law. As investment sub-adviser, DSA-NY
understands that is will be responsible for complying with all provisions
of applicable law, including the 1940 Act, the Investment
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC. (CONT.)
Advisers Act of 1940, and the Insider Trading and Securities Fraud
Enforcement Act of 1988 and all rules and regulations thereunder. DSA-NY
agrees to adopt and comply with the "Code of Ethics of and for Davis
Selected Advisers, L.P. and the Companies For Which It Acts As Investment
Adviser" as in effect from time to time and to keep in effect a policy and
supervisory procedures designed to prevent insider trading.
10. Common Control, Fees. The parties acknowledge that DSA-NY is controlled by
or under common control with the Adviser. The Adviser shall pay DSA-NY all
reasonable direct and indirect costs associated with the maintenance of an
office and the performance of the terms of this Agreement. The Adviser
shall also reimburse expenses expressly approved for reimbursement by the
Adviser. Payment for DSA-NY's services and reimbursement of expenses
approved by the Adviser shall be made monthly, in arrears, by the 15th day
of the following month.
11. Term. This Agreement shall become effective on the later of January 1,
2001, or the first business day after the date this Agreement is approved
in accordance with the 1940 Act (provided that it is reflected in an
effective post-effective amendment under the Securities Act of 1933 and
the 1940 Act). Unless sooner terminated as hereunder provided, it shall
initially remain in effect for a period not exceeding two years.
Thereafter, subject to the termination provisions herein, this Agreement
shall continue in force from year to year thereafter, but only as long as
such continuance is specifically approved at least annually in the manner
required by the 1940 Act; provided, however, that if the continuation of
this Agreement is not approved, DSA-NY may continue to serve in the manner
and to the extent permitted by the 1940 Act and the rules and regulations
thereunder.
12. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without payment of
any penalty at any time (a) upon sixty (60) days' written notice to DSA-NY
by the Adviser or upon such sixty (60) days' written notice to DSA-NY by
the Fund pursuant to action by its Board of Directors or by the vote of a
majority of the outstanding voting securities of the Fund, or (b) upon
sixty (60) days' written notice by DSA-NY to the Adviser. The terms
"assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth in the 1940 Act and the rules and
regulations thereunder. Termination of this Agreement shall not affect
DSA-NY's right to receive payments on any unpaid balance of the
compensation earned and reimbursable expenses incurred prior to such
termination. Upon receipt of notification of termination as provided above
DSA-NY shall immediately cease all activities in connection with the Fund
except as otherwise directed by the Adviser.
13. Use of Names. DSA-NY agrees that it shall abide by the terms of the
agreement of the Adviser with the Fund as to the names of the Fund and the
Adviser and shall not use the name of the Adviser or the Fund without the
prior written consent of the Adviser or the Fund.
14. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute or rule or otherwise, the remainder
shall not be thereby affected.
15. Choice of Law. This Agreement shall be construed according to the laws of
the State of New Mexico. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
<PAGE>
APPENDIX G:
-------------------------------------------------------------------------------
SUB-ADVISORY AGREEMENTS - DAVIS NEW YORK VENTURE FUND, INC.,
AND DAVIS SERIES, INC. (CONT.)
If the foregoing terms and conditions are acceptable to you, please acknowledge
in the space provided. Upon your acceptance, the retention and the mutual
obligations in respect thereto shall be effective as provided herein.
Sincerely,
Davis Selected Advisers, L.P.
By Davis Investments, LLC
General Partner
By:
----------------------------------------
Its:
----------------------------------------
Accepted and approved this 1st day of January, 2001
Davis Selected Advisers - NY, Inc.
By:
----------------------------------------
Its:
----------------------------------------
<PAGE>
APPENDIX H:
--------------------------------------------------------------------------------
MOST RECENT SHAREHOLDER APPROVALS OF EXISTING ADVISORY AND SUB-ADVISORY
AGREEMENTS
ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
DATE LAST
SUBMITTED TO
EXISTING ADVISORY AGREEMENTS VOTE OF PURPOSE
SHAREHOLDERS
------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS NEW YORK VENTURE FUND March 15, 1993 Approving a change in control of the
Adviser
DAVIS GROWTH & INCOME FUND March 16, 1998 Initial approval of agreement
DAVIS GROWTH OPPORTUNITY FUND March 15, 1993 Approving a change in control of the
Adviser
DAVIS FINANCIAL FUND March 15, 1993 Approving a change in control of the
Adviser
DAVIS REAL ESTATE FUND March 15, 1993 Approving a change in control of the
Adviser
DAVIS CONVERTIBLE SECURITIES FUND March 15, 1993 Approving a change in control of the
Adviser
DAVIS GOVERNMENT BOND FUND March 15, 1993 Approving a change in control of the
Adviser
DAVIS GOVERNMENT MONEY MARKET FUND March 15, 1993 Approving a change in control of the
Adviser
</TABLE>
<PAGE>
APPENDIX H:
--------------------------------------------------------------------------------
MOST RECENT SHAREHOLDER APPROVALS OF EXISTING ADVISORY AND SUB-ADVISORY
AGREEMENTS (CONT.)
SUB-ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
EXISTING SUB-ADVISORY AGREEMENTS DATE LAST SUBMITTED TO VOTE PURPOSE
OF SHAREHOLDERS
------------------------------------------------------------------------------------------------------
<S> <C> <C>
DAVIS NEW YORK VENTURE FUND October 16, 1996 Initial approval of
agreement
DAVIS GROWTH & INCOME FUND March 16, 1998 Initial approval of
agreement
DAVIS GROWTH OPPORTUNITY FUND March 25, 1997 Initial approval of
agreement
DAVIS FINANCIAL FUND March 25, 1997 Initial approval of
agreement
DAVIS REAL ESTATE FUND March 25, 1997 Initial approval of
agreement
DAVIS CONVERTIBLE SECURITIES FUND March 25, 1997 Initial approval of
agreement
DAVIS GOVERNMENT BOND FUND March 25, 1997 Initial approval of
agreement
DAVIS GOVERNMENT MONEY MARKET FUND March 25, 1997 Initial approval of
agreement
</TABLE>
<PAGE>
APPENDIX I:
--------------------------------------------------------------------------------
INVESTMENT COMPANIES WITH INVESTMENT OBJECTIVES SIMILAR TO THE DAVIS FUNDS FOR
WHICH DAVIS SELECTED ADVISERS, L.P., SERVES AS INVESTMENT ADVISER
<TABLE>
<CAPTION>
FUND MANAGEMENT FEES PAID AS AN NET ASSETS*
ANNUAL % OF NET ASSETS
----------------------------------------------------------------------------------------------------
<S> <C> <C>
LARGE CAP EQUITY FUNDS
Davis Value Portfolio 0.75% $12,677,844
Selected American Shares 0.57% $3,704,369,529
MID CAP FUND
Selected Special Shares 0.69% $107,591,763
FINANCIAL SECTOR FUND
Davis Financial Portfolio 0.75% $3,471,003
REAL ESTATE SECTOR FUND
Davis Real Estate Portfolio 0.75% $609,783
GOVERNMENT BOND FUND
Selected U.S. Government Income Fund 0.42% $4,412,798
GOVERNMENT MONEY MARKET FUND
Selected Daily Government Fund 0.30% $131,342,413
</TABLE>
* As of the most recently completed fiscal year-end.
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES
Each Davis Fund operates in accordance with the investment objectives, policies
and restrictions described in its prospectus and Statement of Additional
Information.
Each Davis Fund which approves all elements of Proposal 3 will adopt the
fundamental investment policies set forth below, which may not be changed
without a shareholder vote. Where necessary, an explanation beneath a
fundamental policy describes the Fund's practices with respect to that policy,
as allowed by current law. If the law governing a policy changes, the Fund's
practices may change accordingly without a shareholder vote.
Except for the fundamental investment policies regarding illiquid securities and
borrowing, all percentage restrictions apply as of the time of an investment
without regard to any later fluctuations in the value of portfolio securities or
other assets. All references to the assets of the Fund are in terms of current
market value.
A. DIVERSIFICATION
The New Fundamental Policy on Diversification for all Davis Funds (other than
Davis Real Estate Fund) would be:
DIVERSIFICATION. The Fund may not make any investment that is inconsistent with
its classification as a diversified investment company under the 1940 Act.
FURTHER EXPLANATION OF DIVERSIFICATION POLICY. To remain classified as a
diversified investment company under the 1940 Act, the Fund must conform with
the following: With respect to 75% of its total assets, a diversified investment
company may not invest more than 5% of its total assets, determined at market or
other fair value at the time of purchase, in the securities of any one issuer,
or invest in more than 10% of the outstanding voting securities of any one
issuer, determined at the time of purchase. These limitations do not apply to
investments in securities issued or guaranteed by the United States ("U.S.")
government or its agencies or instrumentalities.
The New Fundamental Policy on Diversification for Davis Real Estate Fund would
be:
DIVERSIFICATION. The Fund is not required to diversify its investments.
FURTHER EXPLANATION OF DIVERSIFICATION POLICY. The Fund intends to remain
classified as a regulated investment company under the Internal Revenue Code.
This requires the Fund to conform to the following: at the end of each quarter
of the taxable year, at least 50% of the value of the Fund's total assets must
be represented by: cash and cash items; U.S. government securities; securities
of other regulated investment
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
companies and "other securities." For this purpose, "other securities" does not
include investments in the securities of any one issuer that represent more than
5% of the value of the Fund's total assets or more than 10% of the issuer's
outstanding voting securities.
B. CONCENTRATION
The New Fundamental Policy on Concentration for Davis Financial Fund would be:
CONCENTRATION. Davis Financial Fund concentrates its investments in the
financial services industry.
FURTHER EXPLANATION OF CONCENTRATION POLICY. During normal market conditions,
the Fund is required to invest 25% or more of its total assets in companies
"principally engaged" in financial services. The Fund currently intends to
invest 65% or more of its total assets in companies principally engaged in
financial services during normal market conditions.
A company is "principally engaged" in financial services if it owns financial
services related assets constituting at least 50% of the total value of its
assets, or if at least 50% of its revenues are derived from its provision of
financial services. Companies in the financial services industry include
commercial banks, industrial banks, savings institutions, finance companies,
diversified financial services companies, investment banking firms, securities
brokerage houses, investment advisory companies, leasing companies, insurance
companies and companies providing similar services.
The Fund may not invest 25% or more of its total assets, taken at market value,
in the securities of issuers primarily engaged in any particular industry (other
than issuers in the financial services industry or securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities).
The New Fundamental Policy on Concentration for Davis Real Estate Fund would be:
CONCENTRATION. Davis Real Estate Fund concentrates its investments in real
estate securities.
FURTHER EXPLANATION OF CONCENTRATION POLICY. During normal market conditions,
the Fund is required to invest 25% or more of its total assets in real estate
securities. The Fund currently intends to invest 65% or more of its total assets
in real estate securities during normal market conditions.
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
Real estate securities are issued by companies that have at least 50% of the
value of their assets, gross income, or net profits attributable to ownership,
financing, construction, management or sale of real estate, or to products or
services that are related to real estate or the real estate industry. Real
estate companies include real estate investment trusts or other securitized real
estate investments, brokers, developers, lenders and companies with substantial
real estate holdings such as paper, lumber, hotel and entertainment companies.
The Fund may not invest 25% or more of its total assets, taken at market value,
in the securities of issuers primarily engaged in any particular industry (other
than real estate securities or securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities).
The New Fundamental Policy on Concentration for all Davis Funds (other than
Davis Financial Fund and Davis Real Estate Fund) would be:
CONCENTRATION. The Fund may not concentrate its investments in the securities of
issuers primarily engaged in any particular industry.
FURTHER EXPLANATION OF CONCENTRATION POLICY. The Fund may not invest 25% or more
of its total assets, taken at market value, in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities).
C. SENIOR SECURITIES
The New Fundamental Policy on Issuing Senior Securities for all Davis Funds
would be:
ISSUING SENIOR SECURITIES. The Fund may not issue senior securities, except as
permitted under applicable law, including the 1940 Act and published SEC staff
positions.
FURTHER EXPLANATION OF ISSUING SENIOR SECURITIES. The Fund may not issue senior
securities nor sell short more than 5% of its total assets, except as provided
by the 1940 Act and any rules, regulations or orders issued thereunder. This
limitation does not apply to selling short against the box. The 1940 Act defines
a "Senior Security" as any bond, debenture, note, or similar obligation
constituting a security and evidencing indebtedness.
A. BORROWING
The New Fundamental Policy on Borrowing for All Davis Funds would be:
BORROWING. The Fund may not borrow money, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
FURTHER EXPLANATION OF BORROWING POLICY. The Fund may borrow from banks and
enter into reverse repurchase agreements in an amount up to 33 1/3% of its total
assets, taken at market value. The Fund may also borrow up to an additional 5%
of its total assets from banks or others. The Fund may borrow only as a
temporary measure for extraordinary or emergency purposes such as the redemption
of Fund shares. The Fund may purchase additional securities so long as
borrowings do not exceed 5% of its total assets. The Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. In the event that market fluctuations cause borrowing
to exceed the limits stated above, the Adviser would act to remedy the situation
as promptly as possible (normally within 3 business days), although it is not
required to dispose of portfolio holdings immediately if the Fund would suffer
losses as a result.
B. UNDERWRITING
The New Fundamental Policy on Underwriting for All Davis Funds would be:
UNDERWRITING. The Fund may not underwrite securities of other issuers except to
the extent permitted by applicable law, including the 1940 Act and published SEC
staff positions.
FURTHER EXPLANATION OF UNDERWRITING POLICY. The Fund may not underwrite
securities of other issuers, except insofar as the Fund may be deemed to be an
underwriter in connection with the disposition of its portfolio securities.
C. COMMODITIES AND REAL ESTATE
The New Fundamental Policy for All Davis Funds Regarding Investments in
Commodities and Real Estate would be:
INVESTMENTS IN COMMODITIES AND REAL ESTATE. The Fund may not purchase or sell
commodities or real estate, except to the extent permitted by applicable law,
including the 1940 Act and published SEC staff positions.
FURTHER EXPLANATION OF POLICY RESTRICTING INVESTMENTS IN COMMODITIES AND REAL
ESTATE. The Fund may purchase or sell financial futures contracts, options on
financial futures contracts, currency contracts, and options on currency
contracts as described in its prospectus and Statement of Additional
Information. The Fund may not
<PAGE>
APPENDIX J:
--------------------------------------------------------------------------------
PROPOSED UNIFORM FUNDAMENTAL INVESTMENT POLICIES (CONT.)
purchase or sell real estate, except that the Fund may invest in securities that
are directly or indirectly secured by real estate, or securities issued by
issuers that invest in real estate.
D. LOANS
The New Fundamental Policy for All Davis Funds Regarding Making Loans would be:
MAKING LOANS. The Fund may not make loans to other persons, except as allowed by
applicable law, including the 1940 Act and published SEC staff positions.
FURTHER EXPLANATION OF LENDING POLICY. The acquisition of investment securities
or other investment instruments is not deemed to be the making of a loan.
To generate income and offset expenses, the Fund may lend portfolio securities
to broker-dealers and other financial institutions which the Adviser believes to
be creditworthy in an amount up to 33 1/3% of its total assets, taken at market
value. While securities are on loan, the borrower will pay the Fund any income
accruing on the security. The Fund may invest any collateral it receives in
additional portfolio securities, such as U.S. Treasury notes, certificates of
deposit, other high-grade, short-term obligations or interest-bearing cash
equivalents. The Fund is still subject to gains or losses due to changes in the
market value of securities which it has lent.
When the Fund lends its securities, it will require the borrower to give the
Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES
DAVIS NEW YORK VENTURE FUND FUNDAMENTAL INVESTMENT POLICIES
1. INVESTMENT OBJECTIVE. The Fund's investment objective is growth of capital.
2. DIVERSIFICATION. 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.)
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.
3. CONCENTRATION. 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.)
4. COMMODITIES AND FUTURES CONTRACTS. The Fund may not buy or sell commodities
or commodity contracts except contracts with respect to foreign currencies
for hedging (risk reduction) purposes.
5. OPTIONS. 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 with respect to foreign currencies for hedging purposes.
6. REAL ESTATE. 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.
7. UNSEASONED ISSUERS. 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. OTHER INVESTMENT COMPANIES. 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. SHORT SELLING, MARGIN AND ARBITRAGE. The Fund may not sell short, buy on
margin or engage in arbitrage transactions. This restriction does not apply
to transactions with respect to foreign currencies for hedging purposes.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
10. ILLIQUID SECURITIES. 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. INVESTING FOR CONTROL. The Fund does not invest for the purpose of
exercising control or management of other companies.
12. 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. (These restrictions do not apply
to the use of margin deposits in connection with transactions in foreign
currencies for hedging purposes.)
13. AFFILIATED OWNERSHIP. 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. UNDERWRITING. 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. LENDING MONEY OR SECURITIES. 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 that
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.
16. SENIOR SECURITIES. The Fund may not issue senior securities nor sell short
more than 5% of its total assets, except as provided by the 1940 Act and
any rules, regulations or orders issued thereunder. This limitation does
not apply to selling short against the box.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
DAVIS GROWTH & INCOME FUND FUNDAMENTAL INVESTMENT POLICIES
1. SENIOR SECURITIES. The Fund may not issue senior securities nor sell short
more than 5% of its total assets. This limitation does not apply to selling
short against the box.
2. BORROWING. The Fund may borrow money from any source for temporary purposes
in an amount not exceeding 5% of total assets. The Fund may borrow money
from banks as a temporary measure in amounts not exceeding 33 1/3% of the
amount of its total assets (reduced by the amount of all liabilities and
indebtedness other than such borrowing) when deemed desirable or
appropriate to effect redemptions. The Fund will not purchase portfolio
securities on margin and will not purchase additional portfolio securities
while borrowings exceed 5% of the total assets of the Fund.
3. UNDERWRITING. The Fund does not engage in the underwriting of securities;
however, the Fund may technically be considered an "underwriter" if it
sells restricted securities.
4. REAL ESTATE. 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.
5. COMMODITIES, FUTURES CONTRACTS, AND OPTIONS. The Fund may not purchase or
sell futures contracts, forward contracts, options, and other derivative
investments except for the sole purpose of hedging the portfolio against
market, currency, interest rate, and other risks. Hedging transactions
include, but are not limited to, writing covered calls, purchasing
protective puts, selling futures to hedge existing positions, and buying
futures in anticipation of purchasing the underlying securities. This
prohibition does not limit the Fund's ability to purchase warrants or
adjustable rate debt obligations.
6. LENDING. 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 that 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, U.S.
Government Securities, or other liquid securities. The Fund will not lend
securities if such a loan would cause more than 33 1/3% of the total value
of its assets (including collateral received) to then be subject to such
loans.
7. DIVERSIFICATION. With respect to 75% of its total assets the Fund will not:
(a) make an investment that will cause more than 5% of the value of its
total assets to be invested in securities of any one issuer, except such
limitation shall not apply to obligations issued or guaranteed by the
United States ("U.S.") Government, its agencies or instrumentalities, or
(b) acquire more than 10% of the voting securities of any one issuer.
8. CONCENTRATION. The Fund does not concentrate its investments in any one
industry and may not buy the securities of companies in any one industry if
25% or more 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.)
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
FUNDAMENTAL INVESTMENT POLICIES COMMON TO ALL OF THE DAVIS SERIES FUNDS
(Davis Growth Opportunity Fund, Davis Financial Fund, Davis Real Estate Fund,
Davis Convertible Securities Fund, Davis Government Bond Fund and Davis
Government Money Market Fund)
1. COMMODITIES AND COMMODITIES CONTRACTS. The Funds may not purchase or sell
commodities or commodity contracts, except that the Funds, other than Davis
Government Bond Fund and Davis Government Money Market Fund, may invest in
contracts with respect to foreign currencies for hedging (risk reduction)
purposes.
2. REAL ESTATE. The Funds, other than Davis Government Money Market Fund, may
invest in securities secured by real estate or interests therein or
securities issued by companies that invest in real estate or interests
therein, but will not otherwise invest in real estate. (This does not
prevent a Fund from owning and liquidating real estate or real estate
interests incident to a default on portfolio securities.) Davis Government
Money Market Fund may not invest in real estate, interests therein, or real
estate investment trusts.
3. DIVERSIFICATION. The Funds, other than Davis Government Money Market Fund,
may not purchase more than 10% of any one class of an issuer's securities,
other than securities issued or guaranteed by the U.S. Government, its
agencies and instrumentalities ("U.S. Government Securities"), repurchase
agreements relating thereto, certificates of deposit or the like, bankers'
acceptances or bank repurchase agreements. For purposes of this
restriction, all debt securities of an issuer are deemed to comprise a
single class. Davis Government Money Market Fund may not purchase more than
10% of the outstanding debt securities (other than U.S. Government
Securities and repurchase agreements related thereto) of any one issuer.
The Funds may not purchase the securities (other than U.S. Government
Securities or repurchase agreements related thereto) of any issuer if
immediately after such purchase more than 5% of the value of a Fund's total
assets would be invested in such issuer; except that up to 25% of the value
of the total assets of Davis Financial Fund, Convertible Securities Fund
and Davis Real Estate Fund may be invested without regard to this 5%
limitation. This restriction does not apply to Davis Government Money
Market Fund.
4. OPTIONS. The Funds may not invest in or write puts, calls or combinations
thereof ("option transactions"), except that a Fund, other than Davis
Government Money Market Fund, may (a) write calls so long as at the time of
so doing the security underlying the call is listed on a national
securities exchange, the call is issued by the Options Clearing Corporation
and is traded on a registered securities exchange, such calls do not exceed
10% of that Fund's total assets and are covered calls, (b) make closing
purchase transactions in order to close out outstanding call options
previously written by a Fund and, (c) engage in option transactions with
respect to foreign currencies for hedging purposes. (The convertible
feature of convertible securities is not deemed to be puts, calls or
combinations thereof.) With respect to Davis Government Money Market Fund,
it may not invest in puts, calls, straddles, spreads or any combination
thereof.
5. UNSEASONED ISSUERS. The Funds may not buy the securities of companies in
continuous operation for less than three years (including predecessors) if
more than 5% of a Fund's total assets would then be invested in such
securities. This does not apply to Davis Government Bond Fund or Davis
Government Money Market Fund, which both invest in U.S. Government
Securities, or to investments made by Davis Real Estate Fund in real estate
investment trusts ("REITs").
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
6. OTHER REGISTERED INVESTMENT COMPANIES. The Funds may not buy securities of
other registered investment companies, except that Funds other than Davis
Government Bond Fund and Davis Government Money Market Fund may invest in
shares of investment companies investing primarily in foreign securities,
provided that such purchase does not cause a 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. All Funds may acquire securities of other
registered companies as a part of a merger, consolidation, reorganization
or acquisition of assets.
7. PURCHASES ON MARGIN, SHORT SALES. The Funds may not purchase securities on
margin, make short sales of securities or maintain a short position, except
that: (i) all Funds except Davis Growth Opportunity Fund and Davis
Government Money Market Fund may engage in such investments when at the
time of sale a Fund has, by reason of its ownership of other securities,
the right to obtain securities equivalent in kind and amount to the
securities sold without payment of additional consideration, and such other
securities are retained so long as the Fund is in a short position; and
(ii) these restrictions do not apply to transactions with respect to
foreign currencies for hedging purposes.
8. INVESTING FOR CONTROL. The Funds may not invest for the purpose of
exercising control or management of other companies.
9. BORROWING MONEY, PLEDGING ASSETS. The Funds, other than Davis Government
Money Market Fund, may not borrow money except from banks for extraordinary
or emergency purposes in amounts not exceeding 10% of the value of a Fund's
total assets (excluding the amount borrowed) at the time of such borrowing.
The Funds may not pledge or hypothecate any of their assets, except in
connection with permitted borrowing in amounts not exceeding 15% of the
value of a Fund's total assets (excluding the amount 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. Davis Government Money Market Fund may not borrow, except from
banks for extraordinary emergency purposes in amounts not exceeding 25% of
the value of its total assets (including the amount borrowed), and may
pledge or hypothecate assets not exceeding 10% of the value of its net
assets (including any amount borrowed) in connection with such borrowing.
Both limits are calculated as of the time of such borrowing.
10. AFFILIATED OWNERSHIP. The Funds may not buy or continue to hold securities
if any officers or directors of the Company, 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.
11. UNDERWRITING SECURITIES. The Funds do not engage in the underwriting of
securities; however, the Funds may technically be considered "underwriters"
if they sell restricted securities.
12. LOANS. The Funds may not make loans except through the purchase of debt
obligations (including entering into repurchase agreements) in accordance
with the Fund's investment objectives and policies.
13. CONCENTRATION.
(A) CONCENTRATION, DAVIS GROWTH OPPORTUNITY FUND AND DAVIS GOVERNMENT BOND
FUND. Neither Davis Growth Opportunity Fund nor Davis Government Bond
Fund may purchase the securities of issuers conducting their principal
business activities in the same industry, if immediately after such
purchase the value of a Fund's investments in such industry would
exceed 25% of the value of its total assets, provided that (a) as to
utility companies, the gas, electric, water and telephone
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
businesses will be considered separate industries, and as to finance
companies, personal credit and business credit will be considered
separate industries, and (b) there is no limitation with respect to or
arising out of investments in U.S. Government Securities and repurchase
agreements with respect thereto, certificates of deposit or the like,
bankers' acceptances and bank repurchase agreements.
(B) CONCENTRATION, DAVIS FINANCIAL FUND. Davis Financial Fund may not
invest less than 25% of its total assets (except investments for
temporary defensive periods) in companies principally engaged in each
of the banking and financial services industries. Companies in the
banking industry include U.S. and foreign commercial and industrial
banking and savings institutions (including their parent holding
companies). Companies in the financial services industry include
commercial and industrial finance companies, diversified financial
services companies, investment banks, securities brokerage firms and
investment advisory companies, leasing companies and insurance and
insurance holding companies.
Except for companies in the industries identified above, Davis
Financial Fund may not purchase the securities of issuers conducting
their principal business activities in the same industry if immediately
after such purchase the value of the Davis Financial Fund's investments
in such industry would constitute 25% or more of the value of the
Fund's total assets, provided that (a) as to utility companies, the
gas, electric, water and telephone businesses will be considered
separate industries, and (b) there is no limitation with respect to or
arising out of investments in U.S. Government Securities and repurchase
agreements fully collateralized by such government securities.
(C) CONCENTRATION, DAVIS CONVERTIBLE SECURITIES FUND. Davis Convertible
Securities Fund may not purchase the securities of issuers conducting
their principal business activities in the same industry if immediately
after such purchase the value of the Davis Convertible Securities
Fund's investments in such industry would constitute 25% or more of the
value of the Fund's total assets, provided that (a) as to utility
companies, the gas, electric, water and telephone businesses will be
considered separate industries, and (b) there is no limitation with
respect to or arising out of investments in U.S. Government Securities
and repurchase agreements fully collateralized by such government
securities.
(D) CONCENTRATION, DAVIS REAL ESTATE FUND. Davis Real Estate Fund may not
purchase the securities of issuers conducting their principal business
activities in the same industry if immediately after such purchase the
value of the Fund's investments in such industry would constitute 25%
or more of the value of the Fund's total assets, provided that (a) as
to utility companies, the gas, electric, water and telephone businesses
will be considered separate industries, and (b) there is no limitation
with respect to or arising out of investments in U.S. Government
Securities and repurchase agreements fully collateralized by such
government securities, or investments in securities of companies in the
real estate industry or that own significant amounts of real estate or
have products or services relating to the real estate industry.
<PAGE>
APPENDIX K:
--------------------------------------------------------------------------------
CURRENT FUNDAMENTAL INVESTMENT POLICIES (CONT.)
FUNDAMENTAL INVESTMENT POLICIES APPLICABLE
ONLY TO SPECIFIC DAVIS SERIES FUNDS
1. ARBITRAGE. Neither Davis Growth Opportunity Fund nor Davis Government Bond
Fund may engage in arbitrage transactions.
2. MATURITY. Davis Government Money Market Fund may not purchase any security
that has a maturity date exceeding that prescribed in Rule 2a-7 under the
Investment Company Act of 1940.
3. RESTRICTED SECURITIES. Davis Government Money Market Fund may not invest in
restricted securities; provided, however, that this restriction shall not
apply to repurchase agreements.
4. OIL, GAS, MINERALS. Davis Government Money Market Fund may not invest in
oil, gas or other mineral exportations or development programs.
<PAGE>
DAVIS GOVERNMENT MONEY MARKET FUND
(As part of the Davis Series, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis Government Money Market Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
PROXY VOTING INSTRUCTIONS
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/rpgxx
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card. Complete, sign and date the card
on the reverse side. Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS GOVERNMENT MONEY MARKET FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy Date
Date
---------------------------------- ----------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H. Biggs,
(03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis, (06) Jerry
D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton, (09) Laurence W. Levine,
(10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -New
York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except" ALL
ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
3P. Proposal to eliminate fundamental policies regarding maturity, restricted
securities and investment in oil, gas and minerals.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS REAL ESTATE FUND
(As part of the Davis Series, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis Real Estate Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/rpfrx
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS REAL ESTATE FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000. Note: Please
sign exactly as your name(s) appear below. If joint owners, EITHER may sign this
Proxy. When signing as attorney, executor, administrator, trustee, guardian, or
custodian for a minor, please give your full title. When signing on behalf of a
corporation or as a partner for a partnership, please give the full corporate or
partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
----------------------------------- ----------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS GROWTH & INCOME FUND
(A series of Davis New York Venture Fund, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis Growth & Income Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/dgiax
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS GROWTH & INCOME FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
------------------------------------ ---------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS CONVERTIBLE SECURITIES FUND
(As part of the Davis Series, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis Convertible Securities Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/rpfcx
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS CONVERTIBLE SECURITIES FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined Proposal within the
enclosed proxy materials or the note on the reverse side of this card. Please be
sure to sign and date this Proxy below.
Date
------------------------------------ ---------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS FINANCIAL FUND
(As part of the Davis Series, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis Financial Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/rpfgx
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS FINANCIAL FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
---------------------------------- ----------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS GOVERNMENT BOND FUND
(As part of the Davis Series, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis Government Bond Fund
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/rfbax
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS GOVERNMENT BOND FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
------------------------------------ ---------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS GROWTH OPPORTUNITY FUND
(As part of the Davis Series, Inc.)
This proxy is solicited on behalf of the
BOARD OF DIRECTORS OF DAVIS GROWTH OPPORTUNITY FUND
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today! Prompt response will save the expense of
additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/rpeax
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2 Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS GROWTH OPPORTUNITY FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
----------------------------------- ------------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
DAVIS NEW YORK VENTURE FUND
(A series of Davis New York Venture Fund, Inc.)
This proxy is solicited on behalf of the
Board of Directors of Davis New York Venture Fund, Inc.
The undersigned, revoking previous proxies for such shares, hereby appoints
Kenneth Eich, Sharra Reed, and Thomas Tays, or any of them, attorneys of the
undersigned with full power of substitution, to vote all shares of the
above-referenced fund (the "Fund"), which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund (the "Meeting") to be held on
December 1, 2000 at 3480 East Britannia Drive, Tucson, Arizona 85706 on December
1, 2000 commencing at 10 a.m. Pacific Time, and at any and all adjournment(s)
thereof. Receipt of the Notice of and Proxy Statement for said Meeting is
acknowledged.
If properly executed and returned, the shares presented by this proxy will be
voted as specified by the undersigned. As to any other matter, the shares will
be voted by said attorneys in accordance with their judgment.
Please vote your proxy today!
Prompt response will save the expense of additional solicitations.
If you do not vote your proxy, a D.F. King representative will request your vote
via telephone.
Choose the voting method that is most convenient for you. The voting methods are
listed in the order that costs the least to your Fund. A portion of these
expenses are passed on indirectly to you the shareholder in the form of your
Fund's expenses.
Proxy voting instructions
1. Internet (Available 24 hours a day, 7 days a week)
Log onto www.eproxyvote.com/nyvtx
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions on the screen.
If you received more than one proxy card, you will have to vote each
card separately.
2. Touch-Tone Phone (Available 24 hours a day, 7 days a week)
Dial 1-877-PRX-VOTE (1-877-779-8683). The call is toll-free.
Enter your control number listed on the reverse side of this card. Each
card has a control number.
Follow the instructions as spoken.
If you received more than one proxy card, you will have to vote each
card separately.
3. Facsimile (Fax) (Available 24 hours a day, 7 days a week)
Read both sides of this proxy card.
Complete, sign and date the card on the reverse side.
Fax the reverse side to 1-781-575-3957.
4. Mail (Available through US Postal Service)
Please complete the reverse side of this proxy card.
Sign and date the reverse side of this proxy card.
Return the card in the enclosed postage paid envelope.
* If you choose one of these methods, do not return your proxy card in the
envelope.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
DAVIS NEW YORK VENTURE FUND
Please refer to the lower portion of this card for the proposal summaries. The
full text of the proposals can be found within the enclosed proxy statement.
These proposals shall be voted at the meeting December 1, 2000.
Note: Please sign exactly as your name(s) appear below. If joint owners, EITHER
may sign this Proxy. When signing as attorney, executor, administrator, trustee,
guardian, or custodian for a minor, please give your full title. When signing on
behalf of a corporation or as a partner for a partnership, please give the full
corporate or partnership name and your title, if any.
CONTROL NUMBER:
RECORD DATE SHARES:
Review the Instructions for Proxy Card Endorsement outlined within the enclosed
proxy materials or the note on the reverse side of this card. Please be sure to
sign and date this Proxy below.
Date
--------------------------------- ------------------------------------
Shareholder sign here Co-owner sign here
Detach this proxy card at the perforation below if you wish to mail your vote.
DETACH CARD
PROPOSAL SUMMARIES
1. Proposal to Elect Directors: (01) Wesley E. Bass, Jr., (02) Jeremy H.
Biggs, (03) Marc P. Blum, (04) Andrew A. Davis, (05) Christopher C. Davis,
(06) Jerry D. Geist, (07) D. James Guzy, (08) G. Bernard Hamilton,
(09) Laurence W. Levine, (10) Christian R. Sonne, (11) Marsha Williams.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
2. To approve of the Advisory and Sub-Advisory Agreements with Davis Selected
Advisers, L.P. and its wholly owned subsidiary, Davis Selected Advisers -
New York, Inc.
FOR WITHHOLD FOR ALL To Withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT And write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
3A. Proposal to Amend Fundamental Policies Regarding Diversification.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3B. Proposal to Amend Fundamental Policies Regarding Concentration.
For Against Abstain
[ ] [ ] [ ]
3C. Proposal to Amend Fundamental Policies Regarding Senior Securities.
For Against Abstain
[ ] [ ] [ ]
3D. Proposal to Amend Fundamental Policies Regarding Borrowing.
For Against Abstain
[ ] [ ] [ ]
3E. Proposal to Amend Fundamental Policies Regarding Underwriting.
For Against Abstain
[ ] [ ] [ ]
3F. Proposal to Amend Fundamental Policies Regarding Investments in Commodities
and Real Estate.
For Against Abstain
[ ] [ ] [ ]
3G. Proposal to Amend Fundamental Policies Regarding Making Loans.
For Against Abstain
[ ] [ ] [ ]
3H. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Unseasoned Issuers.
For Against Abstain
[ ] [ ] [ ]
3I. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Options.
For Against Abstain
[ ] [ ] [ ]
3J. Proposal to Eliminate the Fundamental Policy Regarding Investments in Other
Investment Companies.
For Against Abstain
[ ] [ ] [ ]
3K. Proposal to Eliminate the Fundamental Policies Regarding Short Selling,
Margin and Arbitrage.
For Against Abstain
[ ] [ ] [ ]
3L. Proposal to Eliminate the Fundamental Policy Regarding Investing for
Control.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
3M. Proposal to Eliminate the Fundamental Policy Regarding Investments in
Companies with Affiliated Ownership.
For Against Abstain
[ ] [ ] [ ]
3N. Proposal to Eliminate Fundamental Policy Regarding Investments in Illiquid
Securities.
For Against Abstain
[ ] [ ] [ ]
3O. Proposal to Eliminate Fundamental Policy Making the Investment Objective
Fundamental.
For Against Abstain
[ ] [ ] [ ]
4. Proposal to Ratify the Selection of KPMG LLP as Independent Accountants of
the Funds.
For Against Abstain
[ ] [ ] [ ]
<PAGE>
(Date)
Dear Financial Adviser:
Included in a proxy statement being mailed to all shareholders of Davis Funds
are two proposals that we want to explain further to you.
For shareholders of Davis New York Venture Fund, we are requesting that certain
of its investment restrictions be broadened. The most significant relates to our
status as a diversified fund. While we would maintain this status, we would
replace the current 5% restriction, which prevents portfolio managers from
adding to a holding if it already represents more than 5% of the Fund's assets.
In its place, this 5% restriction would apply to 75% of the portfolio, and
portfolio managers would be allowed to add to 5% or greater positions as long as
the sum of these did not exceed 25%.
Shareholders in all Davis Funds will be requested to vote on a change in control
of the investment adviser, Davis Selected Advisers, L.P. ("DSA"). In essence, a
company controlled by Shelby M.C. Davis will transfer to a company controlled by
myself, Christopher C. Davis, the general partnership shares of DSA. While minor
from an economic standpoint, this transfer would result in a change of control
as defined by the Investment Company Act of 1940 and requires shareholder
approval.
We thank you for your continued support.
Sincerely,
Christopher C. Davis
