<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 3, 1999
FILE NO. 2-87607
FILE NO. 811-3896
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 17 /x/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 17 /x/
----------------------
FPA PERENNIAL FUND, INC.
(Exact Name of Registrant as Specified in Charter)
11400 West Olympic Boulevard, Suite 1200
Los Angeles, California 90064
(Address of Principal Executive Offices)
(310)473-0225
(Registrant's Telephone Number, including Area Code)
----------------------
J. RICHARD ATWOOD, Treasurer Copy to:
FPA PERENNIAL FUND, INC. LAWRENCE J. SHEEHAN, Esq.
11400 West Olympic Boulevard, Suite 1200 O'Melveny & Myers LLP
Los Angeles, California 90064 1999 Avenue of the Stars
(Name and Address of Agent for Service) Los Angeles, California 90067
----------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER REGISTRATION STATEMENT BECOMES EFFECTIVE.
It is proposed that this filing will become effective (check appropriate box)
/x/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Title of Securities Being Registered: Common Stock, $0.01 par value
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS.
1. Articles of Incorporation.
1.1 Certificate of Amendment, dated November 29, 1983, to Articles of
Incorporation.
2. Amended and Restated By-Laws.
3. Specimen Common Stock Certificate was filed as Exhibit 4 to
Post-Effective Amendment No. 16 of Registrant's Registration Statement
on Form N-1A and is incorporated herein by reference.
4. Investment Advisory Agreement, dated June 27, 1991, between Registrant
and First Pacific Advisors, Inc.
5. Distribution Agreement, dated September 3, 1991, between Registrant
and FPA Fund Distributors, Inc.
5.1 Specimen Selling Group Agreement.
5.2 Smith Barney Inc. Mutual Fund Dealer Agreement was filed as Exhibit
6.2 to Post-Effective Amendment No. 14 of Registrant's Registration
Statement on Form N-1A and is incorporated herein by reference.
7. Custodian Agreement between Registrant and State Street Bank and Trust
Company.
7.1 Amendment to the Custodian Contract, dated November 1, 1988.
7.2 Custodian Fee Schedule Addendum for GNMA Securities Traded through
Participants Trust Company.
7.4 Amendment to the Custodian Contract was filed as Exhibit 8.4 to
Post-Effective Amendment No. 13 of Registrant's Registration Statement
on Form N-1A and is incorporated herein by reference.
C-1
<PAGE>
7.5 Amendment to the Custodian Contract was filed as Exhibit 8.5 to
Post-Effective Amendment No. 15 of Registrant's Registration Statement
on Form N-1A and is incorporated herein by reference.
8. State Street Bank and Trust Company Universal Individual Retirement
Account Information Kit was filed as Exhibit 14.1 to Post-Effective
Amendment No. 15 of Registrant's Registration Statement on Form N-1A
and is incorporated herein by reference.
9. Opinion and Consent of Counsel was filed as Exhibit 10 to
Post-Effective Amendment No. 14 of Registrant's Registration Statement
on Form N-1A and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on the 30th day of April, 1999.
FPA PERENNIAL FUND, INC.
By: /s/ ERIC S. ENDE
-----------------------
Eric S. Ende, President
C-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ERIC S. ENDE President
- ----------------------------- (Principal Executive April 30, 1999
Eric S. Ende Officer)
/s/ J. RICHARD ATWOOD Treasurer
- ----------------------------- (Principal Financial April 30, 1999
J. Richard Atwood Officer and Principal
Accounting Officer)
- ----------------------------- Director April , 1999
Willard H. Altman
JULIO J. DE PUZO, JR.*
- ----------------------------- Director April 30, 1999
Julio J. de Puzo, Jr.
JOHN P. ENDICOTT*
- ----------------------------- Director April 30, 1999
John P. Endicott
LEONARD MAUTNER*
- ----------------------------- Director April 30, 1999
Leonard Mautner
LAWRENCE J. SHEEHAN*
- ----------------------------- Director April 30, 1999
Lawrence J. Sheehan
</TABLE>
*By: /s/ JULIO J. DE PUZO, JR.
---------------------------
Julio J. de Puzo, Jr.
Attorney-in-Fact pursuant to Power-of-
Attorney included as page C-7 on
Registrant's Post-Effective Amendment
No. 14 to the Registration Statement
which was filed May 1, 1997.
C-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- --------
<S> <C>
1. Articles of Incorporation.
1.1 Certificate of Amendment, dated November 29, 1983, to Articles of
Incorporation.
2. Amended and Restated By-Laws.
4. Investment Advisory Agreement, dated June 27, 1991, between Registrant
and First Pacific Advisors, Inc.
5. Distribution Agreement, dated September 3, 1991, between Registrant
and FPA Fund Distributors, Inc.
5.1 Specimen Selling Group Agreement.
7. Custodian Agreement between Registrant and State Street Bank and Trust
Company.
7.1 Amendment to the Custodian Contract, dated November 1, 1988.
7.2 Custodian Fee Schedule Addendum for GNMA Securities Traded through
Participants Trust Company.
</TABLE>
All other applicable exhibits are incorporated herein by reference.
C-4
<PAGE>
STATE OF MARYLAND
[logo] 16882
STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION
301 West Preston Street, Baltimore, Maryland 21201
THIS IS TO CERTIFY THAT the within instrument is a true copy of the
ARTICLES OF INCORPORATION
OF
FPA PERENNIAL FUND, INC.
as approved and received for record by the State Department of Assessments
and Taxation of Maryland, September 14, 1983
at 11:23 o'clock AM
AS WITNESS my hand and official seal of the said
Department at Baltimore this 11th day
of Oct , 1983
/s/ Paul B. Anderson
----------------------------
Paul B. Anderson
Charter Specialist
<PAGE>
ARTICLES OF INCORPORATION
OF
FPA PERENNIAL FUND, INC.
ARTICLE I
The undersigned, Lawrence P. McNeil, whose mailing address is 10301
West Pico Boulevard, Los Angeles, California 90064, being an adult, does
hereby act as an incorporator, under and by virtue of the General Laws of the
State of Maryland authorizing the formation of corporations and with the
intent of forming a corporation.
ARTICLE II
The name of the corporation is FPA PERENNIAL FUND, INC. (hereinafter
called the "Corporation").
The Corporation acknowledges that it is adopting its corporate name
through permission of First Pacific Advisors, Inc., a California corporation
(hereinafter referred to as "FPA"), and agrees that if FPA or a successor to
its business (whether such succession be by merger, consolidation, purchase
of assets or otherwise) should, at any time and for any cause, cease to be
the investment adviser to the Corporation, the Corporation shall at the
written request of FPA and/or any such successor eliminate the initials "FPA"
from the Corporation's corporate name and from the designations of its shares
and will not thereafter use the initials "FPA" in any form or combination
whatsoever in the conduct of the Corporation's business. The Corporation
further acknowledges that FPA reserves the right to grant the non-exclusive
right to use the initials "FPA" to any other corporation, including other
investment companies, whether now in existence or hereafter created. The
foregoing agreements on the part of the Corporation are hereby made binding
upon it, its directors, officers, shareholders, creditors and all other
persons claiming under or through it.
<PAGE>
ARTICLE III
The purpose or purposes for which the Corporation is formed and the
business or objects to be transacted, carried on and promoted by it are as
follows:
(1) To operate as, and carry on the business of, an investment company.
(2) To hold, invest and reinvest its assets, and in connection
therewith to hold part or all of its assets in cash, and to purchase,
subscribe for or otherwise acquire, hold for investment or otherwise, sell,
assign, negotiate, transfer, exchange, pledge, lend or otherwise dispose of
or realize upon, securities (which term "securities" shall for the purposes
of these Articles of Incorporation, without limitation of the generality
hereof, be deemed to include any stocks, shares, bonds, debentures, notes,
certificates of deposit, mortgages, obligations, evidences of indebtedness,
and any certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or in any property or
assets, or in general any interest or instrument commonly known as a
security, whether domestic or foreign) and other assets and investments
created, issued or guaranteed by any persons, firms, associations,
corporations, syndicates, combinations, organizations, governments or
political subdivisions, agencies or instrumentalities thereof; and to
exercise, as owner or holder of any securities, all rights, powers and
privileges in respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and/or enhancement in value of any and
all of its assets.
(3) To borrow money and pledge assets in connection with any of the
objects and purposes of the Corporation, and to issue notes or other
obligations evidencing such borrowings.
(4) To issue and sell shares of its own common stock in such amounts
and on such terms and conditions, for such purposes and for such amount or
kind of consideration (including, without limitation, securities) now or
hereafter permitted by the laws of the State of Maryland and by these Articles
of Incorporation, as its Board of Directors may determine.
2
<PAGE>
(5) To redeem, repurchase or otherwise acquire, hold, dispose of,
resell, transfer, reissue or cancel (all without the vote or consent of the
shareholders of the Corporation) shares of its common stock, in any manner
and to the extent now or hereafter permitted by the laws of the State of
Maryland and by these Articles of Incorporation, and, to redeem, at its
option, any shareholder account with a net asset value of less than $500
provided that there has been no purchase of shares in the account during a
continuous period of at least twelve months.
(6) To conduct its business at one or more offices in any part of the
world, without restriction or limit as to the extent.
(7) To carry out all of any of the foregoing objects and purposes as
principal or agent, and alone or with associates or, to the extent now or
hereafter permitted by the laws of the State of Maryland, as a member of, or
as the owner or holder of any security of, or interest in, any firms,
association, corporation, trust or syndicate; and in connection therewith to
make or enter into such deeds or contracts with any persons, firms,
associations, corporations, syndicates, governments or political
subdivisions or agencies or instrumentalities thereof and to do such acts and
things and to exercise such powers, as a natural person could lawfully make,
enter into, do or exercise.
(8) To do any and all such further acts or things and to exercise any
and all such further powers or rights as may be necessary, incidental,
relative, conducive, appropriate or desirable for the accomplishment,
carrying out or attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference
from, the terms of any other clause of this or any other Article of these
Articles of Incorporation, and shall each be regarded as independent and
construed as powers as well as objects and purposes, and the enumeration of
specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the general powers of
the Corporation now or hereafter conferred by the laws of the State of
Maryland, nor shall the expression of one thing be deemed to exclude another,
though it be of like natures, not expressed; provided, however, that the
Corporation shall not have power to carry on within the State of Maryland any
3
<PAGE>
business whatsoever the carrying on of which would preclude it from being
classified as an ordinary business corporation under the laws of said State.
ARTICLE IV
The post office address of the principal office of the Corporation in
the State of Maryland is c/o the Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. The name of the registered agent of the
Corporation in the State of Maryland is The Corporation Trust Incorporated, a
Corporation of the State of Maryland, and the post office address of the
resident agent is 32 South Street, Baltimore, Maryland 21202.
ARTICLE V
(1) The total number of shares of stock which the Corporation has
authority to issue is twenty five million (25,000,000) shares of common stock
of the par value of $0.01 each, all of one class, entitled common stock, and
of the aggregate par value of two hundred and fifty thousand dollars
($250,000).
(2) Any fractional share shall carry proportionally all of the rights
of a whole share, excepting any right to receive a certificate evidencing
such fractional share, but including the right to vote and the right to
receive dividends.
(3) All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of these Articles of Incorporation
and the Corporation's By-Laws.
(4) All shares of the common stock of the Corporation now or hereafter
authorized shall be "subject to redemption" and "redeemable," in the sense
used in the General Laws of the State of Maryland authorizing the formation of
corporations, at the redemption price of any such shares, determined in the
manner set out in these Articles of Incorporation. In the absence of any
specification as to the purposes for which shares of the common stock of the
Corporation are redeemed or repurchased by it, all shares so redeemed or
repurchased shall be deemed to be "purchased for retirement" in the sense
4
<PAGE>
contemplated by the laws of the State of Maryland. The number of authorized
shares of the common stock of the Corporation shall not be reduced by the
number of any shares redeemed or repurchased by it.
(5) At all meetings of shareholders of the Corporation, each
shareholder shall be entitled to one vote for reach share of stock standing in
his or her name on the books of the Corporation, on the date fixed in
accordance with the By-Laws for determination of shareholders entitled to
vote at such meeting. The presence in person or by proxy of the holders of a
majority of the shares of common stock of the Corporation entitled to vote
thereat shall constitute a quorum at any meeting of the shareholders. If at
any meeting of the shareholders there shall be less than a quorum present,
the shareholders present at such meeting may, without further notice, adjourn
the same from time to time until a quorum can attend.
(6) Notwithstanding any provision of the laws of the State of Maryland
requiring any action to be taken or authorized by the affirmative vote of the
holders of a majority or other designated proportion of the shares, or to be
otherwise taken or authorized by a vote of the shareholders, such action
shall be effective and valid if taken or authorized by the affirmative vote
of the holders of majority of the total number of shares outstanding and
entitled to vote thereon pursuant to the provisions of these Articles of
Incorporation and the By-Laws of the Corporation.
(7) No holders of stock of the Corporation shall, as such holder, have
any right to purchase or subscribe for any shares of the common stock of the
Corporation of any class or any other security of the Corporation which it
may issue or sell (whether out of the number of shares authorized by these
Articles of Incorporation, or out of any shares of the common stock of the
Corporation acquired by it after the issue thereof, or otherwise) other than
such right, if any, as the Board of Directors in its discretion may determine.
(8) The shareholders of the Corporation shall not be liable for, and
their private property shall not be subject to, claim, levy or other
encumbrance on account of debts or liabilities of the Corporation, to any
extent whatsoever.
(9) The Corporation shall be entitled to treat the person in whose name
any share of the common stock of the Corporation is registered as the owner
thereof for purposes of dividends and other distributions in the course of
business
5
<PAGE>
or in the course of recapitalization, consolidation, merger, reorganization,
liquidation, sale of the property and assets of the Corporation, or
otherwise, and for the purpose of votes, approvals and consents by
shareholders, and for the purpose of notices to shareholders, and for all
other purposes whatever; and the Corporation shall not be bound to recognize
any equitable or other claim to or interest in such share, on the part of
any other person, whether or not the Corporation shall have notice thereof,
save as expressly required by statute.
ARTICLE VI
(1) The number of directors of the Corporation shall be three (3), and
the names of those who shall act as such until the first annual meeting or
until their successors are duly chosen and qualify are as follows:
Christopher Linden
George Michaelis
Lawrence P. McNeil
however, the By-Laws of the Corporation may fix the number of directors at a
number greater than that named in these Articles of Incorporation and may
authorize the Board of Directors, by the vote of a majority of the entire
Board of Directors, to increase or decrease the number of directors fixed by
these Articles of Incorporation or by the By-Laws within limits specified in
the By-Laws and to fill the vacancies created by any such increase in the
number of directors provided that in no case shall the authorized number of
directors be less than three. The directors of the Corporation need not be
shareholders of the Corporation.
(2) Any director, or any officer elected or appointed by the Board of
Directors or by any committee of said Board or by the shareholders or
otherwise, may be removed at any time, with or without cause, by the Board of
Directors or by any committee or superior officers upon which or whom said
power of removal may be conferred, in such lawful manner as may be provided
in the By-Laws of the Corporation or as may otherwise be provided by Maryland
law.
(3) Both shareholders and directors of the Corporation shall have power
to hold their meetings and to have one or more offices within or without the
State of Maryland and to keep the books of the Corporation outside of the
State of
6
<PAGE>
Maryland at such places as may from time to time be designated by the Board
of Directors.
(4) The Board of Directors of the Corporation shall have the power to
issue and sell, or to cause to issuance and sale, of shares of the
Corporation's common stock in such amounts and on such terms and conditions,
for such purposes and for such amount or kind of consideration (including,
without limitation, securities) now or hereafter permitted by the laws of the
State of Maryland and by these Articles of Incorporation, as the Board of
Directors may determine.
(5) In addition to the powers and authority hereinbefore, hereinafter
or by statute expressly conferred upon them, the Board of Directors may
exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation subject, nevertheless, to the express provisions
of the laws of the State of Maryland, of these Articles of Incorporation and
of the By-Laws the Corporation.
(6) Any director or officer, individually, or any firm of which any
director or officer may be a member, or any corporation, trust or association
of which any director or officer may be an officer or director or in which
any director or officer may be directly or indirectly interested as the
holder of any amount of its common stock or otherwise, may be a party to, or
may be financially or otherwise interested in, any contract or transaction of
the Corporation, and in the absence of fraud no contract or other transaction
shall be thereby affected or invalidated; provided, that the fact of any such
interests or relationships shall be disclosed or shall have been known to the
Board of Directors or a majority thereof; and any such director or officer of
the Corporation may be counted in determining the existence of a quorum at
the meeting of the Board of Directors of the Corporation which shall
authorize any such contract or transaction, and may vote thereat to authorize
any such contract or transaction, with like force and effect as if such other
interests or relationships did not exist. In furtherance and not in
limitation of the foregoing, the Board of Directors of the Corporation is
expressly authorized to contract for management services of any nature, with
respect to the conduct of the business of the Corporation with any entity,
person or company, incorporated or unincorporated, on such terms as the Board
of Directors may deem desirable. Any such contract may provide for the
rendition of management services of any nature with respect to the conduct of
the business of the Corporation, and for the management or direction of the
7
<PAGE>
business and activities of the Corporation to such extent as the Board of
Directors may determine, whether or not the procedure involves delegation of
functions usually or customarily performed by the Board of Directors or
officers of the Corporation. The Board of Directors is further expressly
authorized to contract with any person or company on such terms as the Board
of Directors may deem desirable for the distribution of shares of the
Corporation and to contract for other services, including, without
limitation, services as transfer agent for the Corporation's shares, with any
entity, person or company, incorporated or unincorporated, on such terms as
the Board of Directors may deem desirable. Any entity, person or company
which enters into one or more of such contracts may also perform similar or
identical services for other investment companies and other persons and
companies without restriction by reason of the relationship with the
Corporation.
ARTICLE VII
(1) The Corporation shall on the request of any registered owner of its
shares redeem such shares, at the price, in the manner and on the terms and
conditions set forth below:
(a) The certificates for the shares to be repurchased must be tendered
to the Corporation or its designated agent for repurchase during business
hours on a day on which the New York Stock Exchange or its successor is open
for a normal business day, at an office or offices designated by the Board of
Directors for receipt of such tenders. Redemption of such shares by the
Corporation is subject to such reasonable requirements, such as endorsement,
as may be imposed by the Corporation or the Corporation's transfer agent.
Shares tendered on business days on which such Exchange is not open for a
normal business day will be considered to have been tendered on the next
succeeding day on which such Exchange is open for a normal business day.
(b) The redemption price of the shares shall be a sum equal to 100% of
their net asset value as first determined subsequent to said tender, said
determination of net asset value to be made in the manner hereinafter set
forth, which determination shall be made at least once on each day on which
the New York Stock Exchange or its successor is open for a normal business
day at such specific time as determined by the Board of Directors; provided,
however, that any deferred sales charge payable upon such redemption shall be
deducted from the redemption price.
8
<PAGE>
(c) The net asset value of the Corporation's shares, for the purpose of
computing the price at which the shares shall be redeemed by the Corporation,
shall be determined in the following manner:
(i) Portfolio securities and other assets shall be valued at fair
value as determined in good faith by or at the direction of the Board of
Directors.
(ii) There shall be deducted from the total assets of the
Corporation so determined, the liabilities of the Corporation, including
proper accruals of interest or taxes and other expense items, and reserves
for contingent or undetermined liabilities.
(iii) The net asset value of the Corporation so obtained shall
then be divided by the total number of shares outstanding (excluding
treasury shares) and the result, rounded to the nearer cent, shall be the
net asset value per share of common stock.
(d) In addition to the foregoing, the Board of Directors is empowered,
in its absolute discretion, to establish other bases or times or both, for
determining the net asset value of each share of common stock of the
Corporation in accordance with the Investment Company Act of 1940 and to
authorize the voluntary purchase by the Corporation, either directly or
through an agent, of shares of common stock of the Corporation upon such
terms and conditions and for such consideration as the Board of Directors
shall deem advisable in accordance with any such provision, rule or
regulation.
(e) The redemption price (100% of net asset value less any applicable
deferred sales charge) shall be paid in cash or by check on current funds and
shall be paid on or before the seventh day following the day on which the
shares are properly tendered for redemption.
(f) Redemption is conditional upon the Corporation having funds legally
available therefor.
(2) The obligations set forth in this Article VII may be suspended for
any period during which the New York Stock Exchange or its successor shall
be closed other than for customary weekend and holiday closings or during
which trading on such Exchange is restricted; for any period during which an
emergency exists as a result of which the disposal by the Corporation of
securities owned by it is not reasonably practicable, or it is not reasonably
practicable for the
9
<PAGE>
Corporation fairly to determine the value of its net assets; or for such
other periods as the Securities and Exchange Commission, or any successor
governmental authority, may by order permit for the protection of security
holders of the Corporation.
(3) The right of the holder of shares of common stock repurchased by
the Corporation as provided in this Article VII to receive dividends thereon
and all other rights of such holder with respect to such shares shall
forthwith cease and terminate from and after the time as of which the
redemption or repurchase price of such shares has been determined (except the
right of such holder to receive (a) the redemption or repurchase price of
such shares from the Corporation or its designated agent, and (b) any unpaid
dividend or distribution to which such holder had previously become entitled
as the record holder of such shares on the record date for such dividend or
distribution).
ARTICLE VIII
Any determination made in good faith, so far as accounting matters are
involved, in accordance with accepted accounting practice by or pursuant to
the direction of the Board of Directors (i) as to the amount of the assets,
obligations or liabilities of the Corporation; (ii) as to the amount of the
net income of the Corporation from dividends and interest for any period or
amounts at any time legally available for the payment of dividends; (iii) as
to the amount of any reserves or charges set up and the propriety thereof;
(iv) as to the time of or purpose for creating any reserves or charges and as
to the use, alteration or cancellation of any reserves or charges (whether or
not any obligation or liability for which such reserves or charges shall have
been created shall have been paid or discharged or shall be then or
thereafter required to be paid or discharged); (v) as to the price or closing
bid or asked price of any security owned or held by the Corporation; (vi) as
to the market value of any security or fair value of any other asset owned by
the Corporation; (vii) as to the number of shares of the Corporation
outstanding or deemed to be outstanding; (viii) as to the impracticability or
impossibility of liquidating securities in orderly fashion; (ix) as to any
other matters relating to the issue, sale, repurchase, and/or other
acquisition or disposition of securities or shares of the common stock of the
Corporation; and (x) any reasonable determination made in good faith by the
Board of Directors as to whether any
(10)
<PAGE>
transaction constitutes a purchase of any securities on "margin," a sale of
any securities "short," or an underwriting of the sale of, or a participation
in any underwriting or selling group in connection with the public
distribution of, any securities, shall be final and conclusive, and shall be
binding upon the Corporation; and all holders of shares of its common stock
of the Corporation are issued and sold on the condition and understanding,
evidenced by acceptance of certificates for such shares, than any and all
such determinations shall be binding as aforesaid.
No provisions of these Articles of Incorporation shall be effective to
(a) require a waiver of compliance with any provision of the Securities Act
of 1933, as amended, or the Investment Company Act of 1940, as amended, or of
any valid rule, regulation or order of the Securities and Exchange Commission
thereunder, or (b) protect or purport to protect any director or officer of
the Corporation against any liability to the Corporation or its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE IX
The Corporation shall have perpetual existence.
ARTICLE X
From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed (including any amendment
which changes the terms of any of the outstanding stock by classification,
reclassification or otherwise), upon the vote of the holders of a majority of
the shares of common stock of the Corporation at the time entitled to vote;
and other provisions which might under the statutes of the State of Maryland
at the time in force be lawfully contained in Articles of Incorporation, may
be added or inserted upon the vote of the holders of a majority of the shares
of common stock of the Corporation at the time entitled to vote; and all
rights at any time conferred upon the shareholders of the Corporation by these
Articles of Incorporation are granted subject to the provisions of this
Article X.
11
<PAGE>
The term "these Articles of Incorporation" as used herein and in the
By-Laws of the Corporation shall be deemed to mean these Articles of
Incorporation as from time to time amended and restated.
IN WITNESS WHEREOF, the undersigned incorporator of FPA PERENNIAL FUND,
INC. hereby executes the foregoing Articles of Incorporation and acknowledges
the same to be his act.
Dated the 6th day of September, 1983.
/s/ Lawrence P. McNeil
----------------------
Lawrence P. McNeil
12
<PAGE>
STATE OF MARYLAND
[LOGO]
STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION
301 WEST PRESTON STREET, BALTIMORE, MARYLAND 21201
THIS IS TO CERTIFY THAT THE WITHIN INSTRUMENT IS A TRUE COPY OF THE
ARTICLES OF AMENDMENT
OF
FPA PERENNIAL FUND, INC.
AS APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF MARYLAND, NOVEMBER 29, 1983 AT 9:40 O'CLOCK AM
AS WITNESS MY HAND AND OFFICIAL SEAL OF THE SAID
DEPARTMENT AT BALTIMORE THIS 5TH DAY OF JANUARY, 1984
/s/ Paul B. Anderson
-----------------
Paul B. Anderson
Charter Specialist
<PAGE>
ARTICLES OF AMENDMENT
OF
FPA PERENNIAL FUND, INC.
FPA Perennial Fund, Inc., a Maryland corporation, having its
principal office in the City of Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by the
addition of the following new paragraph (1)(g) to Article VII of the Articles
of Incorporation:
(g) The Corporation shall, to the extent permitted by applicable
law, have the right at any time to redeem the shares owned by any holder of
common stock of the Corporation if the value of such shares in the account
maintained by the Corporation or its transfer agent is less than $500;
provided, however, that such shareholder shall be notified that the value of
the account is less than $500 and allowed sixty days to make additional
purchases of shares before such redemption is effected by the Corporation.
<PAGE>
SECOND: The foregoing amendment to the Charter has been duly
approved by a majority of the entire Board of Directors of the Corporation
and no stock entitled to be voted on the matter was outstanding or subscribed
for at the time of approval.
IN WITNESS WHEREOF, FPA Perennial Fund, Inc. has caused these
Articles of Amendment to be signed in its name and on its behalf by its
Senior Vice President and its corporate seal to be hereunto affixed and
attested by its Secretary on this 17th day of November, 1983.
FPA PERENNIAL FUND, INC.
By /s/ Lawrence P. McNeil
----------------------
Lawrence P. McNeil
Senior Vice President
(SEAL)
ATTEST:
/s/ Alan L. Manning
- -------------------
Alan L. Manning
Secretary
-2-
<PAGE>
CERTIFICATE
THE UNDERSIGNED, Senior Vice President of FPA Perennial Fund, Inc.,
who executed on behalf of said Corporation the foregoing Articles of
Amendment, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said Corporation, the foregoing Articles of
Amendment to be the corporate act of said Corporation and certifies that, to
the best of his knowledge, information and belief, the matters and facts set
forth therein with respect to authorization and approval are true in all
material respects, under the penalties of perjury.
/s/ Lawrence P. McNeil
----------------------
Lawrence P. McNeil
Senior Vice President
-3-
<PAGE>
FPA PERENNIAL FUND, INC.
AMENDED AND RESTATED BY-LAWS
AS IN EFFECT MAY 3, 1999
ARTICLE I
STOCKHOLDERS
SECTION 1.01 ANNUAL MEETINGS. THE Corporation is not required to hold
an annual meeting of its stockholders in any year in which the election of
directors is not required to be acted upon under the Investment Company Act of
1940. If the Corporation is required by the Investment Company Act of 1940 to
hold a meeting of stockholders to elect directors, such meeting shall be held at
a date and time set by the Board of Directors in accordance with the Investment
Company Act of 1940 and no later than 120 days after the occurrence of the event
requiring the meeting. Any stockholders' meeting held in accordance with the
preceding sentence shall for all purposes constitute the annual meeting of
stockholders for the fiscal year of the Corporation in which the meeting is
held. Except as the charter or statute provides otherwise, any business may be
considered at an annual meeting without the purpose of the meeting having been
specified in the notice. Failure to hold an annual meeting does not invalidate
the Corporation's existence or affect any otherwise valid corporate acts.
SECTION 1.02 SPECIAL MEETINGS. At any time in the interval between
annual meetings, a special meeting of stockholders may be called by the Chairman
of the Board or the President or by a majority of the Board of Directors by vote
at a meeting or in writing (addressed to the Secretary of the Corporation) with
or without a meeting. The Secretary of the Corporation shall call a special
meeting of stockholders on the written request of stockholders entitled to cast
at least ten percent of all the votes entitled to be cast at the meeting. A
request for a special meeting shall state the purpose of the meeting and the
matters proposed to be acted on at it. The Secretary shall inform the
stockholders who make the request of the reasonably estimated costs of preparing
and mailing a notice of the meeting and, on payment of these costs to the
Corporation, notify each stockholder entitled to notice of the meeting. Unless
requested by stockholders entitled to cast a majority of all the votes entitled
to be cast at the meeting, a special meeting need not be called to consider any
matter which is substantially the same as a matter voted on at any special
meeting of stockholders held in the preceding 12 months.
<PAGE>
SECTION 1.03 PLACE OF MEETINGS. Meetings of stockholders shall be held
at such place in the United States as is set from time to time by the Board of
Directors.
SECTION 1.04 NOTICE OF MEETINGS: WAIVER OF NOTICE. Not less than ten
nor more than 90 days before each stockholders' meeting, the Secretary shall
give written notice of the meeting to each stockholder entitled to vote at the
meeting and each other stockholder entitled to notice of the meeting. The notice
shall state the time and place of the meeting and, if the meeting is a special
meeting or notice of the purpose is required by statute, the purpose of the
meeting. Notice is given to a stockholder when it is personally delivered to
him, left at his residence or usual place of business, or mailed to him at his
address as it appears on the records of the Corporation. Notwithstanding the
foregoing provisions, each person who is entitled to notice waives notice if he
before or after the meeting signs a waiver of the notice which is filed with the
records of stockholders' meetings, or is present at the meeting in person or by
proxy.
SECTION 1.05 QUORUM: VOTING. Unless statute or the charter provides
otherwise, at a meeting of stockholders the presence in person or by proxy of
stockholders entitled to cast a majority of all the votes entitled to be cast at
the meeting constitutes a quorum, and a majority of all the votes cast at a
meeting at which a quorum is present is sufficient to approve any matter which
properly comes before the meeting, except that a plurality of all the votes cast
at a meeting at which a quorum is present is sufficient to elect a director.
SECTION 1.06 ADJOURNMENTS. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time without further notice by a majority vote of the
stockholders present in person or by proxy to a date not more than 120 days
after the original record date. Any business which might have been transacted at
the meeting as originally notified may be deferred and transacted at any such
adjourned meeting at which a quorum shall be present.
SECTION 1.07 RECORD DATE AND CLOSING OF TRANSFER BOOKS. The Board of
Directors may set a record date or direct that the stock transfer books be
closed for a stated period for the purpose of making any proper determination
with respect to stockholders, including which stockholders are entitled to
notice of a meeting, vote at a meeting, receive a dividend, or be allotted other
rights. The record date may not be prior to the close of business on the day the
record date is fixed nor, subject to Section 1.06, more than 90 days before the
date on which the action requiring the determination will be taken; the transfer
books may not be closed for a period longer than 20 days; and, in the case of a
meeting of stockholders, the record date or the closing of the transfer books
shall be at least ten days before the date of the meeting.
2
<PAGE>
SECTION 1.08 GENERAL RIGHT TO VOTE: PROXIES. Unless the charter
provides for a greater or lesser number of votes per share or limits or denies
voting rights, each outstanding share of stock, regardless of class or series,
is entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. In all elections for directors, each share of stock may be voted
for as many individuals as there are directors to be elected and for whose
election the share is entitled to be voted. A stockholder may vote the stock he
owns of record either in person or by written proxy signed by the stockholder or
by his duly authorized attorney in fact. Unless a proxy provides otherwise, it
shall not be valid for more than 11 months after its date.
SECTION 1.09 LIST OF STOCKHOLDERS. At each meeting of stockholders, a
full, true and complete list of all stockholders entitled to vote at such
meeting, showing the number and class or series of shares held by each and
certified by the transfer agent for such class or series or by the Secretary,
shall be furnished by the Secretary.
SECTION 1.10 CONDUCT OF BUSINESS AND VOTING. At all meetings of
stockholders, unless the voting is conducted by inspectors, the proxies and
ballots shall be received, and all questions touching the qualification of
voters and the validity of proxies, the acceptance or rejection of votes and
procedures for the conduct of business not otherwise specified by these By-Laws,
the charter or law, shall be decided or determined by the chairman of the
meeting. If demanded by stockholders, present in person or by proxy, entitled to
cast ten percent in number of votes entitled to be cast, or if ordered by the
chairman, the vote upon any election or question shall be taken by ballot and,
upon like demand or order, the voting shall be conducted by one or more
inspectors, in which event the proxies and ballots shall be received, and all
questions touching the qualification of voters and the validity of proxies and
the acceptance or rejection of votes shall be decided, by such inspectors.
Unless so demanded or ordered, no vote need be by ballot and voting need not be
conducted by inspectors. The stockholders at any meeting may choose an inspector
or inspectors to act at such meeting, and in default of such election the
chairman of the meeting may appoint an inspector or inspectors. No candidate for
election as a director at a meeting shall serve as an inspector thereat.
SECTION 1.11 INFORMAL ACTION BY STOCKHOLDERS. Any action required or
permitted to be taken at a meeting of stockholders may be taken without a
meeting if there is filed with the records of stockholders' meetings an
unanimous written consent which sets forth the action and is signed by each
stockholder entitled to vote on the matter and a written waiver of any right to
dissent signed by each stockholder entitled to notice of the meeting but not
entitled to vote at it.
3
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. ELECTION AND POWERS. The number of directors shall be
fixed from time to time by resolution of the Board of Directors adopted by a
majority of the directors then in office; provided, however, that the number
of directors shall in no event be less than three (3) nor more than nine (9).
The business, affairs and property of the Corporation shall be managed by the
Board of Directors, which may exercise all such powers of the Corporation and
do all such lawful acts and things as are not by statute, the Charter, or
these By-laws required to be exercised or done by the stockholders. The
members of the Board of Directors shall be elected by the stockholders at
their annual meeting and each Director shall hold office until the annual
meeting next after his election and until his successor shall have been duly
elected and qualified, until he shall have resigned, or until he shall have
been removed as provided in Section 11 of this Article II.
SECTION 2. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice on such dates as the Board may from
time to time determine.
SECTION 3. SPECIAL MEETINGS. Special meetings of the Board of
Directors shall be held whenever called by
4
<PAGE>
the Chairman of the Board, President or by a majority of the directors either
in writing or by vote at a meeting.
SECTION 4. NOTICE OF SPECIAL MEETINGS. Notice of the place, day
and hour of every special meeting shall be delivered personally to each
director or mailed, telegraphed or cabled to his address on the books of the
Corporation at least one (1) day before the meeting. It shall not be
requisite to the validity of any meeting of the Board of Directors that
notice thereof shall have been given to any director who is present thereat,
or, if absent, waives notice thereof in writing filed with the records of the
meeting either before or after the holding thereof.
SECTION 5. PLACE OF MEETINGS. The Board of Directors may hold its
regular and special meetings at such place or places within or without the
State of Maryland as the Board may from time to time determine.
SECTION 6. QUORUM AND BOARD ACTION. Except as otherwise provided
by statute or by the Charter: (a) one-half (1/2) of the entire Board of
Directors shall be necessary to constitute a quorum for the transaction of
business at each meeting of the Board; (b) the action of a majority of the
directors present at a meeting at which a quorum is present shall be the
action of the Board; and (c) if at any meeting there be less than a quorum
present, a majority of those directors present may adjourn the meeting from
time to time, but not for a period greater than thirty (30) days at any one
time, without notice other than by announcement at the meeting until a quorum
shall attend. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted at
the meeting as originally scheduled.
SECTION 7. CHAIRMAN. The Board of Directors may at any time
appoint one of its members as Chairman of the Board, who shall serve at the
pleasure of the Board and who shall perform and execute such duties and
powers as may be conferred upon or assigned to him by the Board or these
By-Laws, but who shall not by reason of performing and executing these duties
and powers be deemed an officer or employee of the Corporation.
SECTION 8. ORGANIZATION. At every meeting of the Board of
Directors, the Chairman of the Board, if one has been selected and is present,
and, if not, the President, or in the absence of the Chairman of the Board and
the President, a Vice President, or in the absence of the Chairman of the
5
<PAGE>
Board, the President and all the Vice Presidents, a chairman chosen by a
majority of the directors present, shall preside; and the Secretary, or in
his absence, an Assistant Secretary, or in the absence of the Secretary and
all the Assistant Secretaries, a person appointed by the chairman, shall act
as secretary.
SECTION 9. VACANCIES. Any vacancy on the Board of Directors
occurring by reason of any increase in the number of directors may be filled
by a majority of the entire Board of Directors. Any vacancy on the Board of
Directors occurring for any other cause may be filled by a majority of the
remaining members of the Board of Directors, whether or not these members
constitute a quorum under Section 6 of this Article II. Any director so
chosen to fill a vacancy shall hold office until the next annual meeting of
stockholders and until his successor shall have been duly elected and
qualified.
SECTION 10. REMOVAL. At any meeting of the stockholders called
for that purpose, the stockholders of the Corporation may remove from office
any director, with or without cause, by the affirmative vote of a majority of
the votes entitled to be cast for the election of directors, and another
director may be elected in the place of the director so removed to serve for
the remainder of the term of the removed director.
SECTION 11. RESIGNATIONS. Any director may resign at any time by
giving written notice to the Board of Directors, the President or the
Secretary. Any such resignation shall take effect at the time of the receipt
of such notice or at any later time specified therein; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary
to make it effective.
SECTION 12. COMMITTEES. The Board of Directors may appoint from
among its members an executive and other committees of the Board composed of
two (2) or more directors. To the extent permitted by law, the Board of
Directors may delegate to any such committee or committees any of the powers
of the Board of Directors in the management of the business, affairs and
property of the Corporation and may authorize the seal of the Corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Each committee shall keep
regular minutes of its meetings and report the same to the Board of Directors
when required. The members of a committee present at any meeting, whether or
not they
6
<PAGE>
constitute a quorum, may appoint a director to act in the place of an absent
member.
SECTION 13. TELEPHONE CONFERENCE. Members of the Board of
Directors or any committee thereof may participate in a meeting of the Board
or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at the meeting.
SECTION 14. COMPENSATION OF DIRECTORS. Any director, whether or
not he is a salaried officer, employee or agent of the Corporation, may be
compensated for his services as a director or as a member of a committee, or
as Chairman of the Board or chairman of a committee, and in addition may be
reimbursed for transportation and other expenses, all in such manner and
amounts as the directors may from time to time determine.
ARTICLE III
OFFICERS
SECTION 1. NUMBER. The officers of the Corporation shall be a
President, a Secretary and a Treasurer, and may include one or more Vice
Presidents, one or more Assistant Secretaries, and one or more Assistant
Treasurers, and such other officers as the Board of Directors may from time
to time determine. Any officer may hold more than one office in the
Corporation, except that an officer may not serve concurrently as both the
President and a Vice President.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
Corporation shall be elected by the Board of Directors and, subject to
earlier termination of office, each officer shall hold office for one year
and until his successor shall have been elected and qualified.
SECTION 3. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Board of Directors or to the President, or the
Secretary of the Corporation. Any such resignation shall take effect at the
date of the receipt of such notice or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
7
<PAGE>
SECTION 4. REMOVAL. If the Board of Directors in its judgment
finds that the best interests of the Corporation will be served, the Board may
remove any officer of the Corporation at any time.
SECTION 5. PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall have general supervision over the
business and operations of the Corporation, subject, however, to the control
of the Board of Directors. He, or such persons as he shall designate, shall
sign, execute, acknowledge, verify, deliver and accept, in the name of the
Corporation, deeds, mortgages, bonds, contracts and other instruments
authorized by the Board of Directors, except in the case where the signing,
execution, acknowledgement, verification, delivery or acceptance thereof
shall be delegated by the Board to some other officer or agent of the
Corporation; and, in general, he shall have general executive powers as well
as other powers and duties as from time to time may be conferred upon or
assigned to him by the Board.
SECTION 6. THE VICE PRESIDENTS. In the absence or disability of
the President, or when so directed by the President, any Vice President
designated by the Board of Directors may perform any or all of the duties of
the President, and, when so acting, shall have all the powers of, and be
subject to all the restrictions upon, the President; provided, however, that
no Vice President shall act as a member of or as chairman of any committee of
which the President is a member or chairman by designation or ex-officio,
except when designated by the Board. Each Vice President shall perform such
other duties as from time to time may be conferred upon or assigned to him by
the Board or the President.
SECTION 7. THE SECRETARY. The Secretary shall record all the
votes of the stockholders and the directors and the minutes of the meetings
of the stockholders and of the Board of Directors in a book or books to be
kept for that purpose; he shall see that notices of meetings of the
stockholders and the Board of Directors are given and that all records and
reports are properly kept and filed by the Corporation as required by law; he
shall be the custodian of the seal of the Corporation and shall see that it
is affixed to all documents to be executed on behalf of the Corporation under
its seal, provided that in lieu of affixing the corporate seal to any
document, it shall be sufficient to meet the requirements of any law, rule or
regulation relating to a corporate seal to affix the world "(SEAL)" adjacent
to the signature of the authorized officer of the Corporation; and,
8
<PAGE>
in general, he shall perform all duties incident to the office of Secretary,
and such other duties as from time to time may be conferred upon or assigned
to him by the Board or the President.
SECTION 8. ASSISTANT SECRETARIES. In the absence or disability of
the Secretary, or when so directed by the Secretary, any Assistant Secretary
may perform any or all of the duties of the Secretary, and, when so acting,
shall have all the powers of, and be subject to all restrictions upon, the
Secretary. Each Assistant Secretary shall perform such other duties as from
time to time may be conferred upon or assigned to him by the Board of
Directors, the President or the Secretary.
SECTION 9. THE TREASURER. Subject to the provisions of any
contract which may be entered into with any custodian pursuant to authority
granted by the Board of Directors, the Treasurer shall have charge of all
receipts and disbursements of the Corporation and shall have or provide for
the custody of its funds and securities; he shall have full authority to
receive and give receipts for all money due and payable to the Corporation,
and to endorse checks, drafts and warrants, in its name and on its behalf,
and to give full discharge for the same; he shall deposit all funds of the
Corporation, except such as may be required for current use, in such banks or
other places of deposit as the Board of Directors may from time to time
designate; and, in general, he shall perform all duties incident to the
office of Treasurer and such other duties as from time to time may be
conferred upon or assigned to him by the Board or the President.
SECTION 10. ASSISTANT TREASURERS. In the absence or disability of
the Treasurer, or when so directed by the Treasurer, any Assistant Treasurer
may perform any or all of the duties of the Treasurer, and, when so acting,
shall have all the powers of, and be subject to all the restrictions upon,
the Treasurer. Each Assistant Treasurer shall perform all such other duties
as from time to time may be conferred upon or assigned to him by the Board of
Directors, the President or the Treasurer.
SECTION 11. COMPENSATION OF OFFICERS. The compensation of all
officers shall be fixed from time to time by the Board of Directors, or any
committee or officer authorized by the Board so to do. No officer shall be
precluded from receiving such compensation by reason of the fact that he is
also a director of the Corporation.
9
<PAGE>
ARTICLE IV
STOCK
SECTION 1. CERTIFICATES. Each stockholder shall be entitled
upon written request to a stock certificate or certificates, representing and
certifying the number and kind of full shares held by him, signed by the
President, a Vice President or the Chairman of the Board and countersigned by
the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer, which signatures may be either manual or facsimile signatures, and
sealed with the seal of the Corporation, which seal may be either facsimile
or any other form of seal. Stock certificates shall be in such form, not
inconsistent with law or with the Charter, as shall be approved by the Board
of Directors.
SECTION 2. TRANSFER OF SHARES. Transfers of shares shall be
made on the books of the Corporation at the direction of the person named on
the Corporation's books or named in the certificate or certificates for such
shares (if issued), or by his attorney lawfully constituted in writing, upon
surrender of such certificate or certificates (if issued) properly endorsed,
together with a proper request for redemption, to the Corporation's Transfer
Agent, with such evidence of the authenticity of such transfer, authorization
and such other matters as the Corporation or its agents may reasonably
require, and subject to such other reasonable terms and conditions as may be
required by the Corporation or its agents; or, if the Board of Directors
shall by resolution so provide, transfer of shares may be made in any other
manner provided by law.
SECTION 3. TRANSFER AGENTS AND REGISTRARS. The Corporation may
have one or more Transfer Agents and one or more Registrars of its stock,
whose respective duties the Board of Directors may, from time to time,
define. No certificate of stock shall be valid until countersigned by a
Transfer Agent, if the Corporation shall have a Transfer Agent, or until
registered by a Registrar, if the Corporation shall have a Registrar. The
duties of Transfer Agent and Registrar may be combined.
SECTION 4. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES. The
Board of Directors, by standing resolution or by resolutions with respect to
particular cases, may authorize the issuance of a new stock certificate in
lieu of any stock certificate lost, stolen, destroyed or mutilated, upon such
terms and conditions as the Board may direct. The Board may
10
<PAGE>
in its discretion refuse to issue such a new certificate, unless ordered to
do so by a court of competent jurisdiction.
SECTION 5. STOCK LEDGERS. The Corporation shall not be required to
keep original or duplicate stock ledgers at its principal office in the City
of Baltimore, Maryland, but stock ledgers shall be kept at the respective
offices of the Transfer Agents of the Corporation's capital stock.
ARTICLE V
SEAL
The seal of the Corporation shall be in such form as the Board of
Directors shall prescribe.
ARTICLE VI
SUNDRY PROVISIONS
SECTION 1. AMENDMENTS. (a) BY STOCKHOLDERS. By-Laws may be adopted,
altered, amended or repealed in the manner provided in Section 5 of Article I
hereof at any annual or special meeting of the stockholders.
(b) BY DIRECTORS. By-Laws may be adopted, altered, amended
or repealed in the manner provided in Section 6 of Article II hereof by the
Board of Directors at any regular or special meeting of the Board.
SECTION 2. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a)
INDEMNIFICATION. Any person who was or is a party or is threatened to be made
a party in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that such person is a current or former director or officer of the
Corporation, or is or was serving while a director or officer of the
Corporation at the request of the Corporation as a director, officer,
partner, trustee, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, enterprise or employee benefit plan, shall
be indemnified by the Corporation against judgments, penalties, fines, excise
taxes, settlements and reasonable expenses (including attorney's fees)
actually incurred by such person in connection with such action, suit or
proceeding to the full extent permissible under the General Laws of the State
of Maryland, the Securities Act of 1933 and the Investment Company Act of
1940, as such statutes are now or hereafter in force, except that such
indemnity shall not protect any such person against any liability to the
Corporation or any stockholder thereof to which such person would otherwise be
11
<PAGE>
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
(b) ADVANCES. Any current or former director or officer of
the Corporation claiming indemnification within the scope of this Section 2
shall be entitled to advances from the Corporation for payment of the
reasonable expenses incurred by him in connection with proceedings to which
he is a party in the manner and to the full extent permissible under the
General Laws of the State of Maryland, the Securities Act of 1933 and the
Investment Company Act of 1940, as such statutes are now or hereafter in
force.
(c) PROCEDURE. On the request of any current or former
director or officer requesting indemnification or an advance under this
Section 2, the Board of Directors shall determine, or cause to be determined,
in a manner consistent with the General Laws of the State of Maryland, the
Securities Act of 1933 and the Investment Company Act of 1940, as such
statutes are now or hereafter in force, whether the standards required by
this Section 2 have been met.
(d) OTHER RIGHTS. The indemnification provided by this
Section 2 shall not be deemed exclusive of any other right, in respect of
indemnification or otherwise, to which those seeking such indemnification may
be entitled under any insurance or other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action by a director or
officer of the Corporation in his official capacity and as to action by such
person in another capacity while holding such office or position, and shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
12
<PAGE>
IN WITNESS WHEREOF, the undersigned Secretary of FPA Perennial Fund,
Inc. hereby certifies that the foregoing are the true and correct By-Laws as
in effect May 3, 1999.
/s/ Sherry Sasaki
------------------------
Sherry Sasaki, Secretary
13
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made this 27th day of June, 1991, between FPA PERENNIAL FUND,
INC., a Maryland corporation (hereinafter called the "Fund"), and FIRST PACIFIC
ADVISORS, INC., a Massachusetts corporation (hereinafter called the "Adviser").
WITNESSETH:
WHEREAS, the Fund and the Adviser wish to enter into an Agreement setting
forth the terms on which the Adviser will perform certain investment advisory
and management services for the Fund.
NOW, THEREFORE, in consideration of the premises and covenants hereinafter
contained, the Fund and the Adviser agree as follows:
1. EMPLOYMENT OF ADVISER
The Fund hereby employs the Adviser to manage the investment and
reinvestment of the assets of the Fund and to administer its affairs, to the
extent described herein, subject to the supervision of the Board of Directors of
the Fund, for the period and on the terms set forth in this Agreement. The
Adviser hereby accepts such employment and agrees during such period to render
the services and to assume the obligations herein set forth. The Adviser agrees
to use its best efforts and judgment in the performance of its obligations
hereunder. The Adviser shall, for all purposes herein, be deemed an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way, or otherwise be deemed an
agent of the Fund.
2. ADVISORY SERVICES
Subject to any general directions furnished by the Board of Directors
of the Fund, the Adviser agrees to formulate and implement a continuing program
for the management of the assets of the Fund and to determine from time to time
what securities or other property shall be purchased or sold by the Fund, and
the portion of its assets to be held in cash or cash equivalents, giving due
consideration to, among other things, the policies of the Fund as expressed in
the Fund's Certificate of Incorporation, By-Laws, Registration Statement under
the Investment Company Act of 1940, as amended (the "1940 Act"); Registration
Statement under the Securities Act of 1933, as amended (the "1933 Act"), and
reports under the Securities Exchange Act of 1934 (the "1934 Act"), as well as
to the factors affecting the Fund's status as a regulated investment company
under the Internal Revenue Code of 1954, as amended. The Adviser shall obtain
and evaluate such statistical, financial, and other information relating to the
economy, industries, businesses, securities markets, and securities as it may
deem necessary or useful in the performance of its obligations hereunder.
<PAGE>
3. OTHER SERVICES AND EXPENSES OF ADVISER
The Adviser shall furnish to the Fund the following services and
facilities:
(a) Office space, furniture, equipment and supplies, which may
be the same as occupied or used by the Adviser;
(b) Qualified personnel for administering the affairs, managing
the investments, and preparing and maintaining the books of
account, records, reports and tax returns of the Fund,
except as specified in Section 5 hereof;
(c) Adequate facilities and qualified personnel for the
placement with broker-dealers of orders for the purchase and
sale of portfolio securities for the Fund;
(d) Members of the Adviser's organization to serve without
compensation from the Fund (except as specified otherwise in
Section 5 hereof) as officers or agents of the Fund, if
desired by the Fund;
(e) General purpose accounting forms, supplies, stationery and
postage and telephones and utilities relating to the
obligations of the Adviser hereunder.
4. EXPENSES OF THE FUND
Except to the extent expressly assumed by the Adviser herein, the Fund
will pay all costs and expenses in connection with its operations. Without
limiting the generality of the foregoing, the Fund shall pay the following costs
and expenses:
(a) Fees and charges of independent accountants, custodian and
depository and legal counsel for the Fund;
(b) Fees and charges of the Fund's transfer agent, including the
costs of maintaining the Fund's shareholder account books
and records, dividend disbursing agent and registrar, if
any;
(c) Costs of designing, printing, engraving and issuing
certificates representing shares of the Fund;
(d) Expenses, including fees and disbursements of counsel, in
connection with litigation by or against the Fund;
(e) Taxes, including franchise, income, issue, transfer,
business license and other corporate fees payable by the
Fund to Federal, State or other governmental agencies;
-2-
<PAGE>
(f) Premiums for the fidelity bond maintained by the Fund
pursuant to Section 17 of the 1940 Act and for any errors
and omissions insurance policy maintained by the Fund;
(g) Dues for the Fund's membership in trade organizations;
(h) Interest on indebtedness, if any, incurred by the Fund;
(i) Costs of designing, printing and mailing periodic and other
reports to shareholders, proxy statements, dividend notice
and other communications to the Fund's shareholders;
(j) Expenses of meeting of shareholders and directors of the
Fund;
(k) Brokers' commissions, issued and transfer taxes and other
costs chargeable to the Fund in connection with security
transactions to which the Fund is a party or with securities
owned by the Fund;
(1) Fees and expenses in connection with maintaining
registration of the Fund under the Federal securities laws
and under the laws of states which regulate the sale of the
Fund's shares and complying with the requirements of the
Securities and Exchange Commission under the 1940 Act, the
1933 Act, the 1934 Act and applicable state securities laws.
The advisory fee payable hereunder has been negotiated on the
understanding, and the parties hereto agree, that the Adviser has received, and
shall continue to receive, supplementary research and other information from
broker-dealers which execute portfolio transactions for the Fund.
5. COMPENSATION OF ADVISER
For the services to be rendered pursuant to this Agreement, the Fund
shall pay to the Adviser a monthly fee computed at the annual rates of 0.75% on
the first $50 million of the Fund's average net asset value and 0.65% on the
excess over $50 million of the Fund's average net asset value. Such average net
asset value shall be determined by taking the average of all of the
determinations of net asset value, made in the manner provided in the Fund's
Certificate of Incorporation, for each business day during a given calendar
month. Such fee shall be payable for each calendar month as soon as practicable
after the end of the month.
In addition to the above-stated fee, the Fund shall reimburse the
Adviser monthly for the costs incurred by the Adviser in providing financial
services to the Fund including, among other normal financial services for the
Fund, maintaining the accounts, books and other documents which constitute the
record forming the basis for the Fund's financial statements, preparation of
such financial statements, preparation of such financial statements and other
the Fund documents and reports of a financial nature required by Federal and
state laws, calculating daily net asset value of the Fund, and participating in
the production of the Fund's registration statements, prospectuses,
-3-
<PAGE>
proxy solicitation materials and reports to stockholders (including compensation
of the Treasurer or other principal financial officer of the Fund, compensation
of personnel working under such person's direction and expenses of office space,
facilities and equipment used by such personnel in the performance of their
financial services duties to the Fund); provided, however, that such
reimbursement shall not exceed for any fiscal year of the Fund 0.10% of the
average net asset value of the Fund. Such maximum reimbursement shall be
calculated in the same manner as the fee referred to in the preceding paragraph.
The fees and reimbursements to be paid to the Adviser shall be payable
for the period commencing on the date hereof and ending on the date of
termination hereof. If this Agreement is terminated, the fees and reimbursements
shall be prorated for any fraction of a month at termination.
The fees and reimbursements payable hereunder shall be reduced by an
amount which is equivalent to any solicitation fees received by the Adviser, or
any affiliated person of the Adviser, in connection with a tender of portfolio
securities of the Fund in acceptance of an exchange or tender offer. The Adviser
shall use its best efforts to recapture any available solicitation fees.
The Adviser also agrees to reduce the advisory fee and reimbursement
payable hereunder by the amount by which certain operating expenses of the Fund
(after the exclusions described below and after reflecting any advisory fee and
reimbursement reduction provided for in the preceding paragraph) for any fiscal
year shall exceed 1 1/2 % of the first $30 million of the Fund's average net
asset value taken at the close of business on the last business day of each
calendar month of such year, plus 1 % of the remaining average net asset value
of the Fund so taken. For purposes of this expense limitation provision, the
following expenses shall be excluded from the total operating expenses in
computing "certain operating expenses": (i) interest, (ii) taxes, (iii) any
expenditures pursuant to Section 6 hereof for brokerage and research services,
and (iv) any extraordinary expenses, such as those of litigation, merger,
reorganization, or recapitalization, to the extent such extraordinary expenses
are permitted to be excluded by the rules or policies of the states in which
shares of the Fund are from time to time qualified for sale. All expenditures,
including costs incurred in connection with the purchase, holding, or sale of
portfolio securities, which are capitalized in accordance with generally
accepted accounting principles applicable to investment companies, shall be
accounted for as capital items and not as expenses. Any accrued advisory fee
reduction under this expense limitation provision shall be withheld by the Fund
from the fees paid hereunder. Any additional reduction computed at the end of
the fiscal year shall be paid to the Fund within five days of the computation as
a reduction of advisory fees paid during the fiscal year.
For purposes of this Section 5, the term "fiscal year" shall exclude
the portion of the current fiscal year which shall have elapsed prior to the
date hereof and shall include the portion of the then current fiscal year which
shall have elapsed at the date of termination of this Agreement.
6. BROKERAGE AND RESEARCH SERVICES
The advisory fee payable hereunder has been negotiated on the
understanding, and the parties hereto agree, that the Adviser shall receive,
supplementary research and other information from brokers and dealers which
execute portfolio transactions for the Fund. The Adviser may employ, retain, or
otherwise avail itself of the services or facilities of other persons or
organizations
-4-
<PAGE>
for the purpose of providing the Adviser or the Fund with such statistical and
other factual information, such advice regarding economic factors and trends,
such advice as to occasional transactions in specific securities or such other
information, advice or assistance as the Adviser may deem necessary, appropriate
or convenient for the discharge of its obligations hereunder or otherwise
helpful to the Fund, or in the discharge of Adviser's overall responsibilities
with respect to any other accounts which it might serve as investment adviser.
The Adviser and any person performing executive, administrative or trading
functions for the Fund, whose services were made available to the Fund by the
Adviser, are specifically authorized to allocate brokerage and principal
business to firms that provide such services or facilities and to cause the Fund
to pay a member of a securities exchange, or any other securities broker or
dealer, an amount of commission for effecting a securities transaction in excess
of the amount of commission another member of an exchange, broker or dealer
would have charged for effecting that transaction, if the Adviser or such person
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services (as such services
are defined in Section 28(e) of the 1934 Act) provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to the accounts as to which the
Adviser exercises investment discretion (as that term is defined in Section
3(a)(35) of the 1934 Act). Subject to seeking best execution, the Adviser may
also consider sales of shares of the Fund as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund.
7. OTHER ACTIVITIES
The Adviser may perform investment advisory, management or distribution
services for other investment companies and other persons or companies, and
affiliates of the Adviser may engage in other related or unrelated businesses.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of the Fund may be a shareholder, director,
officer or employee of, or be otherwise interested in, the Adviser, and in any
person controlled by or under common control with the Adviser, and the Adviser,
and any person controlled by or under common control with the Adviser, may have
an interest in the Fund.
8. LIABILITY OF ADVISER
Neither the Adviser nor any of its officers, directors or employees, nor
any person performing executive, administrative or trading functions for the
Funds whose services were made available to the Fund by the Adviser, shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
for loss resulting from willful misfeasance, bad faith or negligence in the
performance of its or his duties, or from reckless disregard by the Adviser or
any such person of the duties of the Adviser under this Agreement. Without
limiting the generality of the foregoing, neither the Adviser nor any such
person shall be deemed to have acted unlawfully or to have breached any duty to
the Fund under State or Federal law in effect at the date of the enactment of
Section 28(e) of the 1934 Act solely by reason of having caused the Fund to pay
a member of any securities exchange or any other securities broker or dealer, an
amount of commission for effecting a securities transaction in excess of the
commission another member of a securities exchange or another securities broker
or dealer would have charged for effecting that transaction if the Adviser or
such person determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage
-5-
<PAGE>
and research services provided by such member, broker or dealer, viewed in terms
of either that particular transaction or the overall responsibilities of the
Adviser with respect to the account as to which the Adviser exercises investment
discretion.
9. TERM OF AGREEMENT
This Agreement shall continue in effect to April 30, 1993. It may be
continued in effect thereafter by mutual consent, provided that such continuance
shall be specifically approved at least annually by (i) the Board of Directors
of the Fund, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of the Fund, and (ii) by a majority of directors
who are not parties to this Agreement or interested persons (as defined in the
1940 Act) of any such party, cast in person at a meeting called for the purpose
of voting on such approval.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund or by the vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities of the Fund, on
sixty (60) days' written notice to the Adviser, or by the Adviser on like notice
to the Fund. This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized and the corporate seals
to be affixed as of the day and year first above written.
FPA PERENNIAL FUND, INC.
(SEAL) By: /s/ Christopher Linden
----------------------
Christopher Linden
President
FIRST PACIFIC ADVISORS, INC.
(SEAL) By: /s/ George H. Michaelis
-----------------------
George H. Michaelis
President
-6-
<PAGE>
DISTRIBUTION AGREEMENT
Agreement dated as of this 3rd day of September, 1991, by and between
FPA PERENNIAL FUND, INC., a Maryland corporation (hereinafter called the
"Fund"), and FPA FUND DISTRIBUTORS, INC., a California corporation (hereinafter
called the "Distributor").
WITNESSETH:
WHEREAS, the Fund is registered under the Investment Company Act of
1940 as an open-end investment company and it is a part of the business of the
Fund, and affirmatively in the interest of the Fund, to offer its shares for
sale, either continuously, or from time to time, by means of such arrangements
as are determined by its Board of Directors to be appropriate; and
WHEREAS, the Distributor proposes to engage in the business of
promoting the distribution of shares of investment companies through securities
broker-dealers, and has the ability to create appropriate and effective sales
literature, advertising, and other sales promotional aids; and
WHEREAS, the Fund and the Distributor wish to enter into an Agreement
with each other to promote the growth of the Fund and facilitate the
distribution of its shares;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the Fund and the Distributor agree as follows:
1. DISTRIBUTOR IS EXCLUSIVE AGENT OF FUND. The Fund hereby appoints
the Distributor as the agent of the Fund exclusively authorized to act as the
principal underwriter and distributor of the shares of the Fund during the term
of this Agreement. The Distributor agrees to accept such appointment, and to act
as the agent of the Fund in accordance with the terms of this Agreement, as the
principal underwriter and exclusive distributor of the shares of the Fund.
2. TERM OF AGREEMENT. This Agreement shall have an initial term of
two years from the date hereof. It may be continued in effect thereafter by
mutual consent, provided that such continuance shall be specifically approved at
least annually by (i) the Board of Directors of the Fund, or by a vote of the
majority (as defined in the Investment Company Act of 1940) of the outstanding
voting securities of the Fund, and (ii) by a majority of the Directors who are
not parties to this Agreement or interested persons (as defined in the
Investment Company Act of 1940) of any such party, cast in person in a meeting
called for the purpose of voting on such approval.
3. DUTIES OF THE FUND.
(a) The Fund agrees that it will use its best efforts to keep
authorized and registered under the Securities Act of 1933, but unissued,
sufficient shares of its common stock to meet the reasonable requirements of the
Distributor. The Fund further agrees to use its best efforts to prepare, file
and keep effective registration statements, prospectuses, and qualifications
covering
<PAGE>
sufficient shares of the Fund to meet the Distributor's reasonable requirements
in all jurisdictions approved by the Fund and the Distributor in which shares of
the Fund may lawfully be sold.
(b) The Fund will not arbitrarily or without reasonable cause
refuse to accept or confirm orders for the purchase of its shares obtained by
the Distributor as agent of the Fund and submitted by the Distributor to the
Fund (or to another agent of the Fund designated by the Fund to receive and/or
act upon such orders). In all proper cases, the Fund (or its agent) will confirm
orders upon their receipt either through the Distributor as agent for the Fund
or through another agent of the Fund authorized to deliver proper confirmations.
The Fund (or its agent) will make appropriate book entries and/or will deliver
certificates for such shares to the Distributor or to the designated record
owner upon receipt by the Fund (or by its agent) of payment therefore in cash
(or cash equivalent) together with receipt of proper registry or transfer
instructions. The Distributor agrees to cause such payment and such instructions
to be delivered promptly to the Fund (or to the agent or agents of the Fund
designated by it in writing as authorized to receive such payment and/or such
instructions).
(c) The Fund will not during the term of this Agreement offer
any of its shares for sale directly or through any person other than the
Distributor, excepting shares sold or issued at net asset value without sales
charge upon reinvestment of income dividends or capital gain distributions paid
by the Fund. Provided, however, that in the event the Distributor should be
unable to continue to distribute shares of the Fund for reasons that do not
apply to the sale of shares of the Fund by any other person, the Fund may at its
option make arrangements for the offer and sale of its shares within the
jurisdiction or jurisdictions in which distribution and sale thereof by the
Distributor has been prevented, except that if the Distributor shall have
removed all material obstacles to resuming the offer and sale within said
jurisdictions within 90 days from its first restraint or inability, then the
right of the Fund to distribute through instrumentalities other than the
Distributor shall be extinguished, subject only to the provisions of paragraph 2
hereof. The Fund further agrees that the Distributor may act as principal
underwriter and distributor for the shares of other investment companies
registered under the Investment Company Act of 1940.
(d) The compensation and expenses of the transfer agent acting
for the Fund and acting as plan agent under the Fund's Investor Service Plans
shall be borne by the Fund.
4. DUTIES OF THE DISTRIBUTOR.
(a) The Distributor shall exercise its best efforts lawfully and
properly to promote the sale of shares of the Fund by broker-dealers that are
members in good standing of the National Association of Securities Dealers, Inc.
("NASD").
(b) The Distributor is, and shall do all things necessary to
continue to be, a broker-dealer in securities registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, a member in good
standing of the NASD, and a licensed broker-dealer in the States in which its
activities require it to be so licensed.
(c) The Distributor shall enter into Selling Group Agreements
with broker-dealer members of the NASD selected by the Distributor, authorizing
such broker-dealers to
-2-
<PAGE>
offer and sell shares of the Fund to the public upon the terms and conditions
set forth therein, which shall not be inconsistent with the provisions of this
Agreement. The Distributor shall continue each such Selling Group Agreement in
effect, or terminate it, upon its sole discretion. Such Selected Dealer
Agreements shall provide that the selected dealer shall act as principal and not
as an agent of the Fund.
(d) Upon the Distributor's receipt from broker-dealers that have
entered into Selling Group Agreements with it of unconditional orders for the
purchase of shares of the Fund, the Distributor will transmit such orders to the
Fund (or to another agent of the Fund authorized by it in writing to receive
such orders). In so doing, the Distributor will act solely as the agent of the
Fund.
(e) The Distributor agrees that it will not directly or
indirectly withhold orders for the purchase of shares of the Fund or purchase
shares of the Fund in anticipation of orders, and further agrees that in all its
Selling Group Agreements with broker-dealers the Distributor will require a
similar contractual undertaking of the broker-dealer. The Distributor agrees to
pay the Fund, on a monthly basis, the amount of any net dilution resulting from
the cancellation or reversal of a confirmed purchase or repurchase order for
shares of the Fund resulting from the failure of a Selling Group member to
settle the trade. All gains and losses realized each month from such "fails"
shall be netted, and any net gain for a month shall be carried forward to offset
any net losses for any subsequent month in the same fiscal year of the Fund.
(f) The Distributor will print and distribute copies of the
Fund's prospectuses as from time to time in effect under the Securities Act of
1933, as amended, and will prepare, print and distribute all advertising and
sales literature relating to the Fund. The Distributor will not publicly
distribute supplemental literature or advertising except such as shall be lawful
under state and federal securities laws and regulations. The Distributor agrees
to file with the Securities and Exchange Commission and/or the NASD, and with
such other regulatory authorities as may be required, copies of any
advertisements, pamphlet, circular, form letter, or other sales literature
relating to the Fund or its shares, addressed to or intended for distribution to
prospective investors, within the time required by such regulatory authorities.
The Distributor will furnish to the Fund at its principal office a copy of all
such material prior to its use, and will not use any such material to which the
Fund reasonably and promptly objects.
(g) The Distributor shall maintain or retain a dealer
service organization suitable to the promotion of the sale of shares of the Fund
by the broker-dealers that have entered into Selling Group Agreements with the
Distributor.
(h) Except with respect to sales and repurchases of shares of
the Fund, the Distributor shall act as principal in all matters relating to
promotion of the growth of the Fund and shall enter into all of its engagements,
agreements, and contracts as principal on its own account.
(i) The Distributor shall act in the performance of its duties
hereunder in a manner that effects compliance with the current prospectus of the
Fund from time to time in effect under the Securities Act of 1933, the Articles
of Incorporation and the By-Laws of the Fund, and with applicable laws and
regulations of the United States and of the individual states within which
-3-
<PAGE>
the Distributor or the Fund may do business, or in which shares of the Fund are
offered for sale, and will conduct its affairs with relation to the Fund,
broker-dealers, and investors in accordance with the Rules of Fair Practice of
the NASD.
5. PUBLIC OFFERING PRICE OF FUND'S SHARES TO BE MAINTAINED. Shares of
the Fund shall be offered and sold only at a public offering price described in
the current prospectus of the Fund, and shall be composed of the sum of (i) the
current net asset value per share furnished to the Distributor by the Fund at
least once on each day on which the New York Stock Exchange is open for trading,
(ii) the Distributor's commission, if any, as set forth in the current
prospectus of the Fund, and (iii) the broker-dealer's mark-up, if any, described
in the Selling Group Agreement referred to in paragraph 4(c) hereof.
6. DISTRIBUTOR'S COMMISSIONS. As compensation for its services
hereunder, the Distributor shall be paid, if at all, only such commissions on
sales of shares of the Fund (except shares sold or issued at net asset value in
accordance with Section 3(c) hereof) as is described in the current prospectus
of the Fund and subject to any reductions or quantity discounts described in
such current prospectus.
7. OTHER PROVISIONS.
(a) The Distributor may, but is not obligated to, act as agent
for the Fund without commission on repurchases of shares of the Fund.
(b) This Agreement shall not be construed as authorizing any
dealer or other person to act as agent either of the Fund or of the Distributor.
(c) The books and records of the Distributor, insofar as they
relate to sales of shares of the Fund, shall be open to inspection during
business hours by the officers and authorized representatives of the Fund, and
the books and records of the Fund relating to the determination of the offering
price of shares shall be open to inspection during business hours by the
officers and authorized representatives of the Distributor.
(d) This Agreement may be terminated at any time without payment
of any penalty by the Board of Directors of the Fund or by the vote of a
majority of the outstanding voting securities of the Fund on 60 days' written
notice to the Distributor, or by the Distributor on like notice to the Fund. In
the absence of the issuance of an Order by the Securities and Exchange
Commission providing an exemption from the provisions of Section 15(b) of the
Investment Company Act of 1940, this Agreement shall automatically terminate in
the event of its assignment (as defined in the Investment Company Act of 1940)
by the Distributor.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers duly authorized and their corporate seal to be
affixed as of the day and year first above written.
FPA PERENNIAL FUND, INC.
(Seal)
By /s/ Christopher Linden
------------------------------
Christopher Linden,
President
FPA FUND DISTRIBUTORS, INC.
(Seal)
By /s/ Lawrence P. McNeil
-----------------------------
Lawrence P. McNeil,
President
-5-
<PAGE>
FPA FUND DISTRIBUTORS, INC.
11400 WEST OLYMPIC BOULEVARD - SUITE 1200 - LOS ANGELES, CALIFORNIA 90064
800-982-4372
SELLING GROUP AGREEMENT FOR FPA FUNDS
Gentlemen:
As the general distributor and agent for FPA Funds (herinafter
referred to as the "Fund" or collectively as the "Funds"), we invite you to
become a member of the Selling Group to distribute the shares of the Funds on
the following terms:
1. Orders for shares received from you and accepted by us will only
be at the public offering price applicable to each order as established by
and determined in accordance with the then effective Prospectus of the Funds.
All orders are subject to acceptance by us and both we and the Funds reserve
the right in our sole discretion to reject any order. The Funds also reserve
the right to withhold or withdraw shares from sale temporarily or
permanently. The minimum purchase is as expressed in the applicable current
prospectus and no order for less than such amount will be accepted.
2. As members of the Selling Group, you will be allowed a discount
from the regular offering price in accordance with the Commission Schedule
in effect at the time of the order. The Commission Schedule may be amended
from time to time in our sole discretion. A description of the current
Commission Schedule and policies is attached hereto and is effective as of
the date hereof. In the event the Commission Schedule and policies are
amended, we will promptly notify you of the change.
3. The Funds encourage reinvestment of dividends and capital gain
distributions without sales charge, and no commission or compensation shall
be paid to you on account of any such reinvestment.
4. If any shares are repurchased by the Funds or by us, or are
tendered for redemption within seven business days after confirmation by us
of the original purchase order from you for such securities, you shall
forthwith refund to us (or forfeit) the full concession allowed to you on the
original sale, which (when received) is to be paid forthwith by us to the
Funds with our share of the sales charge on the original sale by us. We will
notify you of such repurchase or redemption within ten days of the date on
which a request for redemption or certificates for such securities are
delivered to us or the Funds.
5. We reserve the right to cancel this Agreement at any time,
without notice, if any shares are offered for sale by you at less than the
regular offering price as determined by or for the Funds.
6. We generally are authorized on behalf of the Funds to repurchase
from you shares of the Funds offered by your customers for repurchase.
Orders for such repurchase price are determined in the manner described in
the then effective Prospectus of the Funds.
7. We will be pleased to furnish you, without charge, reasonable
quantities of the prospectuses, shareholders reports, application forms and
other sales material or supplemental literature issued or prepared by us or
the Funds from time to time.
8. As a member of the Selling Group, you act as principal and are
not employed by us as broker, agent or employee; you are not authorized to
act for us nor to make any representations in our behalf; and in purchasing
or selling shares hereunder, you are entitled to rely only upon the
information contained in the then current propsectuses of the Funds. You
shall forward to whom any offer or sale of shares of the Funds is made, at
or prior to the time of such offer or sale, a copy of the then current
prospectus with respect to such shares. In the offer and sale of shares of
the Funds you shall not use any prospectus or supplemental literature not
approved in writing by the Funds or the Distributor. No person is authorized
to make any representations concerning shares of the Funds except those
contained in the current prospectus of the Funds as amended or supplemented.
You also agree that every effort shall be made by you to place orders on an
investment basis.
9. Shares purchased shall be delivered or deposited by the Funds
only against receipt by the Funds of the purchase price in collected clearing
house funds, as specified from time to time by the Funds, subject to deduction
<PAGE>
for your discount and our commission on such sale. If payment for the shares
purchased is not received within three days after confirmation of your order,
the sale may be cancelled forthwith by us or the Funds, without any
responsibility or liability on our part or on the part of the Funds. At our
option, we may sell the shares ordered back to the Funds, in which case we
may hold you responsible for any loss, including loss of profit suffered by
us, resulting from your failure to make payment as aforesaid.
10. We shall have no responsibility for the qualification of shares
for sale under the laws regulating the sale of securities in any
jurisdiction, and shall not in any event be liable or responsible (except for
liabilities arising under the Securities Act of 1933) for the issue, form,
validity, enforceability or value of shares, nor for any matter in connection
therewith. No obligation not expressly assumed by us in this Agreement shall
be implied therefrom. You agree to sell shares of the Funds only in states
in which you are authorized to sell such shares and in which such shares are
qualified for sale.
11. Each party to this Agreement represents that it is (and will
continue to be during the life of the Agreement) a member in good standing of
the National Association of Securities Dealers, Inc., and agrees to abide by
the Rules of Fair Practice of the Association. This Agreement shall be
construed to include among its terms each of the provisions required by
Section 26 of the said Rules of Fair Practice to be set forth in a sales
agreement, and each party agrees to be bound by such provisions. You also
represent that you are a properly registered or licensed broker or dealer
under applicable federal and state securities laws and regulations. You
agree to notify us immediately if you cease to be so registered or licensed
or a member in good standing of the Association.
12. Either party hereto may cancel this Agreement by written notice
to the other.
13. This agreement shall be binding upon receipt by us in Los
Angeles, California, of a duplicate copy duly accepted and signed by you, and
shall be construed in accordance with the laws of the State of California.
Dated: 19
------------------- -----
FPA FUND DISTRIBUTORS, INC.
By
------------------------------------
The undersigned accepts your invitation to become a member of the
Selling Group and agrees to abide by the foregoing terms and conditions. The
undersigned acknowledges receipt of prospectuses for use in connection with
this offering.
Dated: 19
------------------- -----
(Dealer)
------------------------------
By (Signature)
------------------------
Print Name
----------------------------
Title
---------------------------------
Address
-------------------------------
-------------------------------
Phone ( )
--------------------------------
CRD#
----------------------------------
Please return signed copies to:
FPA FUND DISTRIBUTORS, INC.
Mutual Fund Administration
11400 West Olympic Boulevard, Suite 1200
Los Angeles, California 90064
<PAGE>
CUSTODIAN CONTRACT
This Contract between FPA Perennial Fund, Inc., a Maryland corporation,
hereinafter called the "Fund," and State Street Bank and Trust Company,
hereinafter called the "Custodian,"
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
I. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
The Fund hereby employs the Custodian as the Custodian of its
assets. The Fund agrees to deliver to the Custodian all securities and
similar investments and all cash owned or received by it, including all
payments of income or capital received by it with respect to all securities
and similar investments owned by the Fund from time to time and the cash or
other consideration received by it for such shares of common stock ("Shares")
of the Fund as may be issued or sold from time to time. The Custodian shall
not be responsible for any property of the Fund held or received by the Fund
and not delivered to the Custodian.
The Custodian may from time to time employ one or more
sub-custodians, but only in accordance with applicable action by the
Directors of the Fund, and provided that so long as the Custodian has
exercised reasonable care in the selection of any sub-custodian, the
Custodian shall have no more or less responsibility or liability to the Fund
on account of any actions or omissions of any sub-custodian so employed than
any such sub-custodian has to the Custodian.
II. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN.
A. HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, including all
securities owned by the Fund, other than securities which are
maintained pursuant to Section L of Article II hereof in a
"Securities System" as defined in such section.
B. DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by the Fund held
1
<PAGE>
by the Custodian or in a Securities System account of the Custodian
only upon receipt of "Proper Instructions," as defined in Section P
of Article II hereof which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
1. Upon the sale of such securities for the account of the Fund and
receipt of payment thereof;
2. Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3. In the case of a sale effected through a Securities System, in
accordance with the provisions of Section L of Article II hereof;
4. To the depository agent in connection with tender or other
similar offers for such securities;
5. To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
PROVIDED that, in any such case, the cash or other consideration
is to be delivered to the Custodian;
6. To the issuer thereof or its agent for transfer into the name of
any nominee or nominees of the Custodian or into the name or
nominee name of any agent appointed pursuant to Section K of
Article II hereof or into the name or nominee name of any
sub-custodian appointed pursuant to Article I hereof; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number
of units; or for exchange of interim receipts or temporary
securities for definitive securities; PROVIDED that in any such
case, the new securities are to be delivered to the Custodian;
7. To the broker selling the same for examination in accordance with
the "street delivery" custom; PROVIDED that the Custodian shall
adopt such procedures, as the Fund from time to time shall
approve, to ensure their prompt return
2
<PAGE>
to the Custodian by the broker in the event the broker elects not
to accept them;
8. For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; PROVIDED that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
9. In the case of warrants, rights or similar securities, the
surrender thereof upon the exercise of such warrants, rights or
similar securities; PROVIDED that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
10. For delivery in connection with any loans of securities made by
the Fund, BUT ONLY against receipt of adequate collateral as
specified from time to time by action of the Directors of the
Fund, which may be in the form of cash or obligations issued by
the United States government, its agencies or instrumentalities;
11. For delivery as security in connection with any borrowings by the
Fund requiring a pledge or hypothecation of assets by the Fund,
BUT ONLY against receipt of amounts borrowed;
12. For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act")
and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
13. Upon receipt of instructions from the transfer agent for the
Fund, for delivery to such
3
<PAGE>
transfer agent or to holders of Shares of the Fund in connection
with distributions in kind, as may be described from time to time
in the Fund's currently effective prospectus, in satisfaction of
requests by holders of Shares of the Fund for repurchase or
redemption; and
14. For any other proper corporate purposes, BUT ONLY upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Directors or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purposes to be proper corporate purposes, and
naming the person or persons to whom delivery of such securities
shall be made.
C. REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund
or in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund,
UNLESS the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered investment
companies having the same investment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to Section K of
Article II hereof or in the name or nominee name of any sub-custodian
appointed pursuant to Article I hereof. All securities accepted by
the Custodian on behalf of the Fund under the terms of this Contract
shall be in "street" or other good delivery form. The Fund shall from
time to time furnish the Custodian appropriate instruments to enable
the Custodian to register in the name of the nominee of the Custodian
any securities held by the custodian hereunder which may be registered
in the name of the Fund.
D. BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Contract,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash
4
<PAGE>
received by it from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for the Fund may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in
such other banks or trust companies as it may in its discretion deem
necessary or desirable; PROVIDED, however, that every such bank or
trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall be approved by action of the Directors of the Fund.
Such funds shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the Custodian only in that
capacity. If requested by the Fund, the Custodian shall furnish the
Fund, not later than twenty days after the last business day of each
month, a statement reflecting the current status of its internal
reconciliation of the closing balance as of that day in all accounts
described in this Paragraph to the balance shown on the daily cash
report for that day rendered to the Fund.
E. PAYMENTS FOR SHARES. The Custodian shall receive from the distributor
of the Fund's Shares or from the transfer agent of the Fund (the
"Transfer Agent") and deposit into the Fund's account such payments
as are received for Shares of the Fund issued or sold from time to
time by the Fund. The Custodian will provide timely notification to
the Fund and the Transfer Agent of any receipt by it of payments for
Shares of the Fund.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall, upon the
receipt of Proper Instructions, which may be continuing instructions
when deemed appropriate by the parties:
1. Invest in such instruments as may be set forth in such
instructions on the same day as received all federal funds
received after a time agreed upon between the Custodian and the
Fund; and
5
<PAGE>
2. Make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in
the amount of checks received in payment for Shares of the Fund
which are deposited into the Fund's account.
G. COLLECTION OF INCOME. The Custodian shall collect on a timely basis
all income and other payments with respect to registered securities
held hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on a
timely basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or agent thereof and shall deposit such
income, as collected, into the Fund's account. Without limiting the
generality of the foregoing, the Custodian shall detach and present
for payment all coupons and other income items requiring presentation
as and when they become due, shall collect interest when due on
securities held hereunder, and shall endorse and deposit, in the name
of the Fund, checks, drafts and other negotiable instruments on the
same day as received. All securities accepted by the Custodian
pursuant to Subsection 1 of Section H of Article II hereof shall be
accompanied by payment of, or a "due bill" for, any dividends,
interest, or other distributions of the issuer, due to the Fund.
H. PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases
only:
1. Upon the purchase of securities for the account of the Fund BUT
ONLY (a) against the delivery of such securities to the Custodian
(or any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this purpose)
registered in the name of the Fund or in the name of a nominee
of the Custodian referred to in Section C
6
<PAGE>
of Article II hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities System,
in accordance with the conditions set forth in Section L of
Article II hereof; or (c) in the case of repurchase agreements
entered into between the Fund and the Custodian, or another
bank, or a broker-dealer which is a member of the NASD, (i)
against delivery of the securities either in certificate form
or through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities; or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written evidence
of the agreement by the Custodian to repurchase such
securities from the Fund provided that the specific securities
purchased by the Fund are identified by book-entry in the
records of the Custodian bank;
2. In connection with the conversion, exchange or surrender of
securities owned by the Fund as set forth in Section B of
Article II hereof;
3. For the redemption or repurchase of Shares of the Fund as set
forth in Section J of Article II hereof;
4. For the payment of any expense of liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5. For the repayment of any loan made by the Fund but only (a)
against surrender of the note or notes evidencing the loan and
(b) against redelivery of any securities pledged or
hypothecated to secure such loan;
6. For the payment of any dividends or other distributions
declared pursuant to the governing documents of the Fund; and
7
<PAGE>
7. For any other proper purposes, BUT ONLY upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Directors or of the Executive Committee of
the Fund signed by an officer of the Fund and certified by its
Secretary or an assistant secretary, specifying the amount of
such payment, setting forth the purpose for which such payment
is to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment is to be
made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASE.
In any and every case where payment for purchase of securities for
the account of the Fund is made by the Custodian in advance of the
receipt of the securities purchased in the absence of specific
written instructions from the Fund to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been
received by the Custodian, EXCEPT that in the case of repurchase
agreements entered into by the Fund with a bank which is a member
of the Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of written evidence
that the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated nonproprietary account
of the Custodian maintained with the Federal Reserve Bank of Boston
or of the Safe-keeping receipt, provided that such securities have
in fact been so transferred by book-entry.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND. From
such funds as may be available for the purpose but subject to the
limitations of the governing documents of the Fund and any
applicable action of the Directors of the Fund pursuant thereto,
the Custodian shall, upon receipt of instructions from the Transfer
Agent, make funds available for payment to holders of Shares of the
Fund who have delivered to the Transfer Agent a request for
redemption or repurchase of Shares of the Fund. In connection with
the redemption or repurchase of shares of the Fund, the Custodian
is authorized upon receipt of instructions from the
8
<PAGE>
Transfer Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian shall
honor checks drawn on the Custodian by a holder of such Shares,
which checks have been furnished by the Fund to the holder of such
Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to
time between the Fund and the Custodian.
K. APPOINTMENT OF AGENTS. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the Investment
Company Act of 1940, as amended, to act as a custodian, as its
agent to carry out such of the provisions of this Article II as the
Custodian may from time to time direct; PROVIDED, however, that the
appointment of any agent shall not relieve the Custodian of any of
its responsibilities or liabilities hereunder, and that the
Custodian shall hold the Fund harmless from the acts and omissions
of any agent appointed pursuant to this paragraph.
L. DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities Systems" in
accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to
the following provisions:
1. The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian, or otherwise for
customers;
9
<PAGE>
2. The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall
identify by book-entry those securities belonging to the Fund;
3. The Custodian shall pay for securities purchased for the
account of the Fund upon (i) receipt of the advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities
sold for the account of the Fund upon (i) receipt of advice
from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advices
from the Securities System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the Fund at its
request. The Custodian shall furnish the Fund confirmation of
each transfer to or from the account of the Fund in the form
of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the
Fund on the next business day;
4. The Custodian shall provide the Fund with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
5. The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article VIII,
hereof; and
6. Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage
to the Fund resulting from use of the Securities System by
10
<PAGE>
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees or from any failure of the Custodian or any such
agents to enforce effectively such rights as it may have
against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent
that the Fund has not been made whole for any such loss or
damage.
M. SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Section B(12) of Article II hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the
NASD, relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange, or
of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the Fund,
(ii) for the purposes of compliance by the Fund with the procedures
required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iii) for other proper
corporate purposes, BUT ONLY, in the case of clause (iii), upon
receipt of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes to
be proper corporate purposes.
11
<PAGE>
N. OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificate and affidavits for all
federal and state tax purposes in connection with receipt of income
or other payments with respect to securities of the Fund held by it
and in connection with transfers of securities.
0. PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than
in the name of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly
deliver to the Fund such proxies, all proxy soliciting materials
and all notices relating to such securities.
P. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian
shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of conversion and other rights in
connection therewith and notices of exercise of call options
written by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Fund
all written information received by the Custodian from issuers of
the securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer. If the
Fund desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Fund shall
notify the Custodian at least three business days prior to the date
on which the Custodian is to take such action.
Q. PROPER INSTRUCTIONS. "Proper Instructions" as used throughout this
Article II means a writing signed by one or more person or persons as
shall have been from time to time authorized by action of the
Directors of the Fund. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian
reasonably believes
12
<PAGE>
them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund
shall cause all oral instructions to be confirmed in writing by the
following business day. The Custodian shall use reasonable efforts
to insure that all such written confirmations are received in a
timely manner from the Fund. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the
Directors of the Fund accompanied by a detailed description of
procedures approved by the Directors, Proper Instructions may
include communications effected directly between electro-mechanical
or electronic devices provided that the Directors and the Custodian
are satisfied that such procedures afford adequate safeguards for
the Fund's assets.
R. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Fund:
1. Make payments to itself or others for minor expenses of
handling securities or other similar items relating to its duties
under this Contract, PROVIDED that all such payments shall be
accounted for to the Fund;
2. Surrender securities in temporary form for securities in
definitive form; and
3. In general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by action of the
Directors of the Fund.
S. EVIDENCE OF AUTHORITY. The Custodian shall be protected in acting
upon any instructions, notice, request, consent, certificate or
other instrument or paper believed by it to be genuine and to have
been properly executed by or on behalf of the Fund. The custodian
may receive and accept a certified copy of action of the Directors
of the fund as conclusive evidence (a) of the authority of any
person to act in accordance with such vote or (b) of any
determination or of any action by the Directors pursuant to the
governing instruments of the Funds
13
<PAGE>
as described in such vote, and such vote may be considered as in full
force and effect until receipt by the Custodian of written notice to
the contrary.
III. RECORDS AND REPORTS.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Fund. All
such records shall remain the property of the Fund, shall be subject to the
provisions of Article IX hereof, and shall be open to the inspection and
audit at reasonable times by duly authorized officers, employees or agents of
the Fund and employees and agents of the Securities and Exchange Commission.
The Custodian shall, at the Fund's request, supply the Fund with a tabulation
of securities owned by the Fund and held by the Custodian and shall, render
to the Fund a daily report of all monies received or paid on behalf of the
Fund and of the resultant cash balance, a list of all security transactions
that remain unsettled at such time, and such other reports as the Fund may
reasonably request.
IV. OPINION OF FUND'S INDEPENDENT ACCOUNTANT.
The Custodian shall take all reasonable action, as the Fund may
from time to time request, to obtain from year to year favorable opinions
from the fund's independent accountants with respect to its activities
hereunder in connection with the preparation of the Fund's Form N-1 and Form
N-1R or other annual reports to the Securities and Exchange Commission and
with respect to any other requirements of such Commission.
V. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS.
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, which shall be of sufficient scope and in sufficient detail, as
may
14
<PAGE>
reasonably be required by the Fund, to provide reasonable assurance that any
material inadequacies would be disclosed, shall state in detail material
inadequacies disclosed by such examination, and, if there are no such
inadequacies, shall so state.
VI. COMPENSATION OF CUSTODIAN.
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund and the Custodian.
VII. RESPONSIBILITY OF CUSTODIAN.
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto received
by it or delivered by it pursuant to this Contract and shall be held harmless
in acting upon any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be signed by the proper party
or parties. The Custodian shall be held to the exercise of reasonable care in
carrying out the provisions of this Contract, but shall be kept indemnified
by and shall be without liability to the Fund for any action taken or omitted
by it in good faith without negligence. It shall be entitled to rely on and
may act upon advice of counsel (who may be counsel for the Fund) on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. Notwithstanding the foregoing, the
responsibility of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered into between the
Custodian and the Fund.
If in any case the Fund may be asked to indemnify the Custodian
hereunder, the Fund shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and the Custodian shall use all
reasonable care to identify and notify the Fund promptly concerning any
situation which presents or appears likely to present the probability of such
a claim for indemnification against the Fund. The Fund shall have the option
to defend the Custodian against any claim which may be the subject of this
indemnification, and in the event that the Fund so elects it will so notify
the Custodian, and thereupon the Fund shall take over complete defense of the
claim, and the Custodian shall sustain no further legal or other expenses in
such situation for which it shall seek indemnification. The Custodian shall
in no case confess any claim or make any compromise in any case in which the
Fund will be asked to indemnify the Custodian except with the Fund's consent.
If the Fund requires the Custodian to take any action with respect
to securities, which action involves the payment of money or which action
may, in the opinion of the Custodian, result in the Custodian or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
15
<PAGE>
VIII. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT.
This contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties hereto and may
be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect
not sooner than thirty (30) days after the date of such delivery or mailing;
PROVIDED, however, that the Custodian shall not act under Section L of
Article II hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Directors of the Fund have
approved the initial use of a particular Securities System and the receipt of
an annual certificate of the Secretary or an Assistant Secretary that the
Directors have reviewed the use by the Fund of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company Act of 1940,
as amended; PROVIDED FURTHER, however, that the Fund shall not amend or
terminate this Contract in contravention of any applicable federal or state
laws or regulations, or any provision of the governing documents of the Fund,
and FURTHER PROVIDED, that the Fund may at any time by action of its
Directors (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately
terminate this Contract in the event of the appointment of a conservator or
receiver for the Custodian by the Comptroller of the Currency or upon the
happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
IX. SUCCESSOR CUSTODIAN.
If a successor custodian shall be appointed by action of the
Directors of the Fund, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian; duly endorsed and in the
form for transfer, all securities then held by it hereunder and all funds and
other properties of the Fund deposited with or held by it hereunder.
If no successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of action of the Directors
of the Fund, deliver at the office of the Custodian such securities, funds
and other properties in accordance with such action.
16
<PAGE>
In the event that no written order designating a successor
custodian or certified copy of action of the Directors shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the Investment Company
Act of 1940, doing business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all securities, funds
and other properties held by the Custodian and all instruments held by the
Custodian relative thereto and all other property held by it under this
Contract. Thereafter, such bank or trust company shall be the successor of
the Custodian under this Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of action referred to above
or of the Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties
and the provisions of this Contract relating to the duties and obligations of
the Custodian shall remain in full force and effect.
X. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Contract, the Custodian
and the Fund may from time to time agree on such provisions interpretive of
or in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, PROVIDED that no such interpretive or
additional provisions shall contravene any applicable federal or state laws
or regulations or any provision of the governing instruments of the Fund. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
XI. DIRECTORS.
All references to actions of or by Directors herein shall require
action by such Directors acting as a Board of Directors and not individually.
17
<PAGE>
XII. MASSACHUSETTS LAW TO APPLY.
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its fully authorized representative
and its seal to be hereunder affixed as of the 19th day of January, 1984.
FPA PERENNIAL FUND, INC.
SEAL By: /s/ Julio de Puzo, Jr. Treas.
------------------------------
STATE STREET BANK AND TRUST
COMPANY
SEAL By: E.D. Hawkes, Jr.
-------------------------------
VICE PRESIDENT
18
<PAGE>
[LOGO]
STATE STREET BANK AND TRUST COMPANY
Custodian Fee Schedule
FPA PARAMOUNT FUND, INC.
FPA PERENNIAL FUND, INC.
* FPA NEW INCOME FUND, INC.
FPA CAPITAL FUND, INC.
SOURCE CAPITAL, INC.
Effective August 1, 1987
- ------------------------------------------------------------------------------
I. ADMINISTRATION
CUSTODY AND PORTFOLIO ACCOUNTING SERVICE - Maintain custody of fund
assets. Settle portfolio purchases and sales. Report buy and sell fails.
Determine and collect portfolio income. Make cash disbursements and
report cash transactions. Maintain investment ledgers, provide selected
portfolio transaction, position and income reports.
The administration fee shown below is an annual charge, billed and
payable monthly, based on average monthly net assets.
ANNUAL FEES PER PORTFOLIO
Custody and
Fund Net Assets Portfolio Acct.
----------------- ---------------
First $20 Million 1/ 40 of 1%
Next $80 Million 1/ 80 of 1%
Excess 1/200 of 1%
Minimum Monthly
Asset Charges $1,000
* The New Income Fund, Inc. will be subject to a minimum monthly charge of
$25O.
II. GLOBAL CUSTODY - Services provided include:
Cash Movements, Foreign Communication, Foreign Exchange
(local currency settlements).
FUND NET ASSETS ANNUAL FEES
----------------- ---------------
First $50 Million 18 Basis Points
Next $50 Million 15 Basis Points
Over $100 Million 12 Basis Points
Minimum Per Client $5,000.00 Annually
<PAGE>
[LOGO]
III. PORTFOLIO TRADES - FOR EACH LINE ITEM PROCESSED
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $12.00
New York Physical Settlements $30.00
All other trades $16.00
IV. OPTIONS
Option charge for each option written or
closing contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
V. LENDING OF SECURITIES
Deliver loaned securities versus cash $20.00
collateral
Deliver loaned securities versus securities
collateral $30.00
Receive/deliver additional cash collateral $ 6.00
Substitutions of securities collateral $30.00
Deliver cash collateral versus receipt of
loaned securities $15.00
Deliver securities collateral versus receipt
of loaned securities $25.00
Loan administration -- mark-to-market per
day, per loan $ 3.00
VI. INTEREST RATE FUTURES
Transactions -- no security movement $ 8.00
VII. COUPON BONDS
Monitoring for calls and processing coupons--
for each coupon issue held -- monthly charge $ 5.00
VIII. HOLDINGS CHARGE
For each issue maintained -- monthly charge $ 5.00
<PAGE>
[LOGO]
IX. PRINCIPAL REDUCTION PAYMENTS
Per paydown $10.00
X. DIVIDEND CHARGES (For items held at the Request
of Traders over record date in street form) $50.00
XI. SPECIAL SERVICES
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security shipments and
the preparation of special reports will be subject to negotiation.
Fees for tax accounting/recordkeeping for options, financial futures,
and other special items will be negotiated separately.
XII. OUT-OF-POCKET EXPENSES
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but
are not limited to the following:
Telephone
Wire Charges ($4.70 per wire in and $4.55 out)
Postage and Insurance
Courier Service
Duplicating
Legal Fees
Supplies Related to Fund Records
Rush Transfer -- $8.00 Each
Transfer Fees
Sub-custodian Charges
Price Waterhouse Audit Letter
Federal Reserve Fee for Return Check items over $2,500
$4.25
GNMA Transfer - $15 each
XIII. PAYMENT
The above fees will be charged against the fund's custodian checking
account five (5) days after the invoice is mailed to the fund's offices
and proper fund authorization is granted.
FPA PARAMOUNT FUND, INC.
FPA PERENNIAL FUND, INC.
FPA NEW INCOME FUND, INC.
FPA CAPITAL FUND, INC.
SOURCE CAPITAL, INC. STATE STREET BANK AND TRUST CO.
By /s/ Julio de Puzo, Jr. By /s/ E.D. Hawkes, Jr.
--------------------------------- ---------------------------
Title TREASURER Title VICE PRESIDENT
------------------------------ -------------------------
Date August 12, 1987 Date August 12, 1987
------------------------------ -------------------------
<PAGE>
AMENDMENT TO THE
CUSTODIAN CONTRACT
AGREEMENT made this 1st day of November 1, 1988 by and between STATE STREET
BANK AND TRUST COMPANY ("Custodian") and FPA PERENNIAL FUND, INC. (the "Fund").
WITNESSETH THAT:
WHEREAS, the Custodian and the Fund are parties to a Custodian Contract
dated January 19, 1984 (as amended to date, the "Contract") which governs the
terms and conditions under which the Custodian maintains custody of the
securities and other assets of the Fund:
NOW THEREFORE, the Custodian and the Fund hereby amend the terms of the
Custodian Contract and mutually agree to the following:
Insert as the final paragraph under RESPONSIBILITY OF CUSTODIAN:
If the Fund requires the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this
Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be
security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash
to the extent necessary to obtain reimbursement, and if
insufficient other sell other Fund assets, PROVIDED THAT Custodian
shall, with respect to Fund assets as to which Custodian has
perfected its lien and which Custodian proposes to dispose of
pursuant to the foregoing right, give the Fund notice identifying
such assets and the Fund shall have three business days from
receipt of such notice to notify the Custodian if the Fund wishes
the Custodian to dispose of Fund assets of equal value other than
those identified in such notice; in the absence of any contrary
notification from the Fund, Custodian shall be free to dispose of
the Fund assets initially identified to the extent necessary to
realize the amounts to which it is entitled hereunder.
<PAGE>
Replace subsection 7. of Section II.B. DELIVERY OF SECURITIES with the
following new subsection 7.:
7. Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt for examination
in accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and on its behalf by a duly authorized officer as of the
day and year first above written.
ATTEST FPA PERENNIAL FUND, INC.
/s/ SHERRY SASAKI /s/ JULIO DE PUZO, JR.
- ----------------------- -----------------------------------
Secretary Treasurer
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ P. MCCLURE /s/ E.D. HAWKES, JR.
- ----------------------- -----------------------------------
Assistant Secretary Vice President
<PAGE>
[LOGO]
STATE STREET BANK AND TRUST COMPANY
CUSTODIAN FEE SCHEDULE ADDENDUM
FOR GNMA SECURITIES
TRADED THROUGH
PARTICIPANTS TRUST COMPANY
FPA NEW INCOME FUND
FPA PERENNIAL FUND
SOURCE CAPITAL
FPA CAPITAL FUND, INC.
- ------------------------------------------------------------------------------
The fees identified in this addendum replace fees for GNMA securities as they
are converted. All other charges not identified herein remain in force.
<TABLE>
<CAPTION>
Description Amount
----------- ------
<S> <C>
I. PORTFOLIO TRADES - FOR EACH LINE ITEM PROCESSED
a. PTC Purchase $25.00
b. PTC Sale $25.00
c. Deposit/Withdrawal of GNMA Certificates $25.00
II. OUT-OF-POCKET EXPENSES
From Participants Trust Company
a. Deposit/Withdrawal of GNMA Certificates for
Same Day Turnarounds $50.00
b. Principal Paydowns Subject to Interim
Accounting by PTC (items settling after
record date) $10.00
c. Interest expense for advancement of monthly
principal and interest payments Variable
</TABLE>
FPA NEW INCOME FUND STATE STREET BANK & TRUST CO.
FPA PERENNIAL FUND
SOURCE CAPITAL
By: FPA CAPITAL FUND, INC. By: E.D. HAWKES JR.
------------------------------- --------------------------
Title: Treasurer Title: VICE PRESIDENT
----------------------------- ------------------------
Signature: /s/ JULIO DE PUZO, JR. Signature: /s/ E.D. HAWKES JR.
------------------------ -------------------
Date: February 14, 1990 Date: JAN 10, 1990
------------------------------ -------------------------
