Registrant No. 33-1719
Investment Company File No. 811-4494
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PRE-EFFECTIVE AMENDMENT No.
POST-EFFECTIVE AMENDMENT No. 14
X
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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AMENDMENT No. 16
X
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THE GABELLI ASSET FUND
(Exact Name of Registrant as Specified in Charter)
One Corporate Center, Rye, New York 10580-1434
(Address of Principal Executive Office)
Registrant's Telephone Number (800) 422-3554
Bruce N. Alpert
Gabelli Funds, Inc.
One Corporate Center, Rye, New York 10580-1434
(Name Address of Agent for Service)
Copies to:
James E. McKee, Esq. Richard T. Prins, Esq.
Gabelli Funds, Inc. Skadden, Arps, Slate, Meagher & Flom
One Corporate Center 919 Third Avenue
Rye, New York 10580-1434 New York, New York 10022
(212) 735-2000
It is proposed that this filing will become effective (check appropriate
box): immediately upon filing pursuant to paragraph (b); or X on May 1,
1997 pursuant to paragraph (b); or 60 days after filing pursuant to
paragraph (a); or on [date] pursuant to paragraph (a) 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.
Registrant has registered an indefinite number of its shares of beneficial
interest pursuant to Rule 24f-2 under the Investment Company Act of 1940, as
amended and has filed a Rule 24f-2 Notice for its most recent fiscal year ended
December 31, 1996 on February 27, 1997.
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<TABLE>
<CAPTION>
THE GABELLI ASSET FUND
CROSS REFERENCE SHEET
(Pursuant to Rule 495(a))
Part A
Item No. Prospectus Captions
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Table of Fees and Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant The Fund and Its Investment Policies,
Special Investment Methods
5. Management of the Fund Management of the Fund
5A. Management's Discussion of Fund Performance Not applicable
6. Capital Stock and Other Securities General Information
7. Purchase of Securities Being Offered Purchase of Shares
8. Redemption or Repurchase Redemption of Shares
9. Pending Legal Proceedings Not applicable
</TABLE>
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<TABLE>
<CAPTION>
Part B Statement of Additional
Item No. Information Caption
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Cover Page
12. General Information and History Not Applicable
13. Investment Objectives and Policies (Prospectus "The Fund and Its Investment
Policies") Investment Policies; Special
Investment Methods; Special Risks;
Investment Restrictions
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Holders of Securities Trustees and Officers
16. Investment Advisory and Other Services (Prospectus - "Management of the Fund");
Investment Adviser
17. Brokerage Allocation (Prospectus - "Management of the Fund")
Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities (Prospectus - "General Information");
General Information
19. Purchase, Redemption and Pricing (Prospectus - "Purchase of Shares,
of Securities Being Offered Redemption of Shares"); Redemption of
Shares; Net Asset Value
20. Tax Status (Prospectus - "Dividends, Distribution and
Taxes")
21. Underwriters Distributor
22. Calculation of Performance Data Investment Performance Information
23. Financial Statements Report of Independent Accountants;
Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
THE GABELLI ASSET FUND
PART A
THE
GABELLI
ASSET
FUND
PROSPECTUS
May 1, 1997
GABELLI FUNDS, INC.
Investment Adviser
GABELLI & COMPANY, INC.
Distributor
<PAGE>
TABLE OF CONTENTS
Page
Table of Fees and Expenses............................2
Financial Highlights................................3
The Fund and Its Investment Policies...4.............
Special Investment Methods....................6......
Management of the Fund............................7..
Distribution Plan........................ .......9
Purchase of Shares.................................9.
Redemption of Shares..............................12..
Retirement Plans....................................13
Dividends, Distributions and Taxes.......14...........
Calculation of Investment Performance.....14.......
General Information................................15
Custodian, Transfer Agent and Dividend Disbursing Agent....15..
No dealer, salesman or other person has been authorized to give any information
or to make any representation other than those contained in this Prospectus, the
Statement of Additional Information and in the Fund's official sales literature,
and if given or made, such information or representation may not be relied upon
as authorized by the Fund, its Investment Adviser, Distributor or any affiliate
thereof. This Prospectus does not constitute an offer to sell or a solicitation
of any offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such offer in such state.
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19
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THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
Telephone: 1-800-GABELLI (1-800-422-3554)
http://www.gabelli.com
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PROSPECTUS
May 1, 1997
The Gabelli Asset Fund (the "Fund") is an open-end, no-load mutual fund, the
primary investment objective of which is growth of capital. Current income
is a secondary investment objective. See "The Fund and its Investment
Policies". ---------------
Shares of the Fund may be purchased without a sales load at the next determined
per share net asset value (see "Purchase of Shares"). There is no deferred
sales or other charge on the redemption of shares. The Fund pays 0.25%
of its average net assets in any fiscal year for certain promotional and
distribution expenses and shareholder services (see "Distribution Plan").
The minimum initial investment is $1,000 except for investments made through the
Automatic Investment Plan (see "Purchase of Shares - Automatic Investment
Plan"). For further information, contact Gabelli & Company, Inc. at the address
or telephone number shown above.
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This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. A Statement of Additional Information,
dated May 1, 1997, containing additional and more complete information about the
Fund (the "Additional Statement") has been filed with the Securities and
Exchange Commission (the "SEC") and is incorporated in its entirety by reference
into this Prospectus. For a free copy, write or call the Fund at the telephone
number or address set forth above. Also, the Additional Statement is available
for reference, along with other materials, on the SEC Internet web site
(http://www.sec.gov).
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Shares of the Fund are not deposits or obligations of or guaranteed by any bank,
and are not insured or guaranteed by any bank, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Fund involves investment risks, including the possible loss of principal.
----------------
This Prospectus should be retained by investors for
future reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
TABLE OF FEES AND EXPENSES
<S> <C>
Shareholder Transaction Expenses:
Maximum sales load imposed on purchases or reinvestment of dividends................................. None
Contingent deferred sales loads upon redemption of investments....................................... None
Redemption Fees...................................................................................... None *
Exchange Fees........................................................................................ None
Annual Fund Operating Expenses:
(Percent of average net assets)
Management Fees...................................................................................... 1.00%
Distribution (Rule 12b-1) Expenses (a)............................................................... .24%
Other Expenses...................................................................................... .10%
----
Total Operating Expenses........................................................................ 1.34%
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</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Example: ** 1 year 3 years 5 years 10 years
- ------- ------ ------- ------- --------
You would pay the following expenses on a $1,000 investment
assuming a 5% annual return and redemption at the end of each time period: $14 $42 $73 $161
.........
* Broker-dealers holding a shareholder's shares may charge a fee for redemptions.
** The amounts listed in this example should not be considered as
representative of past or future expenses and actual expenses may be
greater or less than those indicated. Moreover, while the example assumes a
5% annual return, the Fund's actual performance will vary and may result in
an actual return greater or less than 5%.
(a) The foregoing table is to assist you in understanding the various costs and
expenses that an investor in the Fund will bear directly or indirectly.
The expenses shown are at the levels incurred during the past fiscal year.
The maximum level of distribution expenses which may be borne by the Fund
is 0.25% of its average net assets (see "Distribution Plan"). As a result,
long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc. ("NASD").
</TABLE>
Management's Discussion and Analysis of the Fund's performance during the fiscal
year ended December 31, 1996 is included in the Fund's Annual Report to
Shareholders dated December 31, 1996. The Fund's Annual Report to Shareholders
may be obtained upon request and without charge by writing or calling the Fund
at the address or telephone number listed on the Prospectus cover.
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<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following information, insofar as it pertains to each of the five years in
the period ended December 31, 1996, has been audited by Price Waterhouse LLP,
independent accountants, whose unqualified report appears in the Additional
Statement. This table should be read in conjunction with the Financial
Statements and related notes that are included in the Additional Statement.
Per share amounts for a Fund share outstanding throughout each year ended
December 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of year.. $25.75 $22.21 $23.30 $19.88 $17.96 $15.63 $17.26 $14.69 $12.61 $11.28
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income (a)........... 0.15 0.26 0.26 0.16 0.26 0.39 0.76 0.55 0.24 0.14
Net realized and unrealized gain/(loss)
on investments................. 3.29 5.28 (0.30) 4.18 2.41 2.45 (1.62) 3.30 3.45 1.69
--------- ------- ------- ----- ----- ----- ------- ----- ----- -----
Total from investment operations.... 3.44 5.54 (0.04) 4.34 2.67 2.84 (0.86) 3.85 3.69 1.83
--------- ------- ------- ----- ----- ----- ------- ----- ----- -----
Distributions to shareholders from:
Net investment income.......... (0.15) (0.25) (0.25) (0.16) `(0.25)` (0.39) `(0.77) (0.56) (0.38) (0.09)
Distributions in excess of net
investment income.......... __ __ (0.01) __ __ __ __ __ __ __
Net realized gains............. (2.61) (1.75) (0.76) (0.76) (0.50) (0.12) __ (0.72) (1.23) (0.41)
Distributions in excess of net
realized gains............. (0.01) (0.00)(c) (0.03) ---- ---- ---- ---- ---- ---- ----
------ ------- ------- ---- ---- ---- ---- ---- ---- ----
Total distributions................. (2.77) (2.00) (1.05) (0.92) (0.75) (0.51) (0.77) (1.28) (1.61) (0.50)
------ ------- ------- ------ ------- ------- ------- ------- ------- -------
Net asset value, end of year........ $26.42 $25.75 $ 22.21 $23.30 $19.88 $17.96 $15.63 $17.26 $14.69 $12.61
====== ====== ======= ====== ====== ====== ====== ====== ====== ======
Total return*....................... 13.4% 24.9% (0.1%) 21.8% 14.9% 18.1% (5.0%) 26.2% 31.1% 16.2%
======== ===== ====== ====== ====== ===== ======= ===== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of year (in 000's) $1,080,639 $1,091,539 $982,250 $945,408 $632,575 $483,865 $342,710 $359,443 $143,050
$76,810
Ratio of net investment income to
average net assets......... 0.52% 0.95% 1.10% 0.82% 1.42% 2.34% 4.51% 4.17% 2.04% 1.19%
Ratio of operating expenses to
average net assets (b)..... 1.34% 1.33% 1.28% 1.31% 1.31% 1.30% 1.20% 1.26% 1.31% 1.26%
Portfolio turnover rate............. 14.9% 26.4% 18.7% 16.0% 14.4% 20.1% 55.7% 49.3% 47.3% 89.9%
Average commission rate
(per share of security) (d)... $0.0484 N/A N/A N/A N/A N/A N/A N/A N/A N/A
<FN>
.........
* Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends.
(a) Net investment income before expenses reimbursed by Adviser for the years ended December 31, 1988 and 1987
was $0.23 and $0.11, respectively.
(b) Operating expense ratios before expenses reimbursed by Adviser for the
years ended December 31, 1988 and 1987 were 1.38% and 1.52%, respectively.
(c) Amount represents less than $0.005 per share.
(d) Average commission rate (per share of security) as required by amended SEC
disclosure requirements effective for fiscal years beginning after
September 1, 1995.
</FN>
</TABLE>
.........
<PAGE>
THE FUND AND ITS INVESTMENT POLICIES
The Fund is an open-end, no-load, diversified management investment company
organized as a Massachusetts Business Trust on November 25, 1985. The primary
investment objective of the Fund is to seek growth of capital and investments
will be made based on management's perception of their potential for capital
appreciation. Current income, to the extent it may affect potential growth of
capital, is a secondary objective. There is no assurance that the Fund will
achieve its investment objectives. The investment objectives of the Fund
together with the percentage restrictions set forth below under "Special
Investment Methods" and its investment restrictions which are described in the
Additional Statement, are fundamental and may not be changed without shareholder
approval. Its other investment policies indicated below may be changed by the
Board of Trustees without shareholder approval. The Fund expects that its
assets will be invested primarily in a diversified portfolio of readily
marketable equity securities (including common stock, preferred stocks and
securities representing the right to acquire stocks), at least 80% of which will
be listed on a nationally recognized securities exchange or traded on the NASDAQ
National Market System of the National Association of Securities Dealers.
Gabelli Funds, Inc. (the "Adviser") will invest in companies that, in the public
market, are selling at a significant discount to their private market value or
that value the Adviser believes an informed industrialist would be willing to
pay to acquire companies with similar characteristics. Factors considered by the
Adviser include price, earnings expectations, earnings and price histories,
balance sheet characteristics and perceived management skills. Also considered
are changes in economic and political outlooks as well as individual corporate
developments. Fund investments which lose their perceived value relative to
other investment alternatives are sold. When deemed appropriate by the
Adviser, the Fund may without limit invest temporarily in defensive securities
such as preferred stocks, high-grade debt securities, obligations of the U.S.
Government, its agencies or instrumentalities, or in short-term (maturing less
than one year) money market instruments, including commercial paper rated A-1 or
better by Standard & Poor's Ratings Service, a division of McGraw-Hill
Companies, Inc. ("S&P"), or P-1 or better by Moody's Investors Service, Inc.
("Moody's").
Corporate Reorganizations
Subject to the diversification requirements of its investment restrictions, the
Fund may invest not more than 35% of its total assets in securities for which a
tender or exchange offer has been made or announced and in the securities of
companies for which a merger, consolidation, liquidation or similar
reorganization proposal has been announced if, in the judgment of the Adviser,
there is a reasonable prospect of capital appreciation significantly greater
than the added portfolio turnover expenses inherent in the short-term nature of
such transactions. The 35% limitation does not apply to the securities of
companies which may be involved in simply consummating an approved or agreed
upon merger, acquisition, consolidation, liquidation or reorganization. The
principal risk is that such offers or proposals may not be consummated within
the time and under the terms contemplated at the time of the investment in which
case, unless replaced by an equivalent or increased offer or proposal which is
consummated, the Fund may sustain a loss. For further information on such
investments, see "Special Investment Methods
- Corporate Reorganizations" in the Additional Statement.
Convertible Securities
Convertible securities may include corporate notes or preferred stock but are
ordinarily a long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality. However, when the market price of
the common stock underlying a convertible security exceeds the conversion price,
the price of the convertible security tends to reflect the value of the
underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield basis,
and thus may not depreciate to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks on an issuer's capital
structure and are consequently of higher quality and entail less risk than the
issuer's common stock, although the extent to which such risk is reduced depends
in large measure upon the degree to which the convertible security sells above
its value as a fixed income security.
The Fund may invest in convertible securities when it appears to the Adviser
that it may not be prudent to be fully invested in common stocks. In evaluating
a convertible security, the Adviser places primary emphasis on the
attractiveness of the underlying common stock and the potential for capital
appreciation through conversion. See "Special Investment Methods -
Convertible Securities" in the Additional Statement.
The Fund will normally purchase only investment grade convertible securities
having a rating of, or equivalent to, at least an S&P rating of BBB (which
securities may have speculative characteristics) or, if unrated, judged by
the
Adviser to be of comparable quality. However, the Fund may also invest up to 25%
of its assets in more speculative convertible debt securities which appear to
present an advantageous means of acquiring common stock having potential capital
appreciation provided such securities have a rating of, or equivalent to, at
least an S&P rating of B or, if unrated, judged by the Adviser to be of
comparable quality. Corporate debt obligations having a B rating will likely
have some quality and protective characteristics which, in the judgment of the
rating organization, are outweighed by large uncertainties or major risk
exposures to adverse conditions. Although lower rated debt securities generally
have higher yields, they are also more subject to market price volatility based
on increased sensitivity to changes in interest rates and economic conditions or
the liquidity of their secondary trading market. A description of corporate debt
ratings is contained in the Additional Statement.
Debt Securities
The Fund may invest up to 5% of its assets in low rated and unrated corporate
debt securities (often referred to in the financial press as "junk bonds") which
are perceived by the Adviser to present an opportunity for significant capital
appreciation, if, in the judgment of the Adviser, the ability of the issuer to
repay principal and interest when due is underestimated by the market. See
"Special Investment Methods - Debt Securities" in the Additional
Statement.
Investments in Small, Unseasoned Companies
The Fund may invest in small, less well-known companies which have operated less
than three years (including predecessors). The securities of such companies may
have limited liquidity.
Warrants and Rights
The Fund may invest in warrants or rights (other than those acquired in units or
attached to other securities) which entitle the holder to buy equity securities
at a specific price for a specific period of time but will do so only if such
equity securities are deemed appropriate by the Adviser for inclusion in the
Fund's portfolio.
Foreign Securities
The Fund may invest up to 25% of its total assets in the securities of non-U.S.
issuers. These investments involve certain risks not ordinarily associated with
investments in securities of domestic issuers. These risks include fluctuations
in foreign exchange rates (which the Fund will not seek to hedge), future
political and economic developments, and the possible imposition of exchange
controls or other foreign governmental laws or restrictions. In addition, with
respect to certain countries, there is the possibility of expropriation of
assets, confiscatory taxation, political or social instability or diplomatic
developments which could adversely affect investments in those countries.
Theremay be less publicly available information about a foreign company than
about a U.S. company, and foreign companies may not be subject to
accounting, auditing and financial reporting standards and requirements
comparable to or as uniform as those of U.S. companies. Non-U.S. securities
markets, while growing in volume have, for the most part, substantially
less volume than U.S. markets, and securities of many foreign companies are
less liquid and their prices more volatile than securities of comparable
U.S. companies. Transaction costs of investing in non-U.S. securities
markets are generally higher than in the U.S. There is generally less
government supervision and regulation of exchanges, brokers and issuers
than there is in the U.S. The Fund might have greater difficulty taking
appropriate legal action in non-U.S. courts. Non-U.S. markets also have
different clearance and settlement procedures which in some markets have at
times failed to keep pace with the volume of transactions, thereby creating
substantial delays and settlement failures that could adversely affect the
Fund's performance.
Dividend and interest income from non-U.S. securities will generally be subject
to withholding taxes by the country in which the issuer is located and may not
be recoverable by the Fund or the investor.
Other Investment Companies
The Fund does not intend to purchase the shares of other open-end investment
companies but reserves the right to invest up to 10% of its total assets in the
securities of closed-end investment companies including small business
investment companies (not more than 5% of its total assets may be invested in
more than 3% of the securities of any investment company). To the extent that
the Fund invests in the securities of other investment companies, shareholders
in the Fund may be subject to duplicative advisory and administrative fees.
SPECIAL INVESTMENT METHODS
The Fund will not invest, in the aggregate , more than 10% of its net assets in
small, unseasoned companies, securities which are restricted for public sale,
securities for which market quotations are not readily available, and in
repurchase agreements maturing or terminable in more than seven days. Securities
freely salable among qualified institutional investors under special rules
adopted by the SEC may be treated as liquid if they satisfy liquidity standards
established by the Board of Trustees. The continued liquidity of such securities
is not as well assured as that of publicly traded securities, and accordingly,
the Board of Trustees monitors their liquidity. Further information on the
investment methods and policies of the Fund are set forth in the Additional
Statement. The Fund may purchase and sell securities on a "when, as and
if issued basis" under which the issuance of the security depends upon the
occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring. For further information, see "Special
Investment Methods - When Issued, Delayed Delivery Securities & Forward
Commitments" in the Additional Statement. Repurchase Agreements
The Fund may enter into repurchase agreements with "primary dealers" in U.S.
Government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. In a repurchase agreement, an investor (e.g., the
Fund) purchases a debt security from a seller which undertakes to repurchase the
security at a specified resale price on an agreed future date (ordinarily a week
or less). The resale price generally exceeds the purchase price by an amount
which reflects an agreed-upon market interest rate for the term of the
repurchase agreement. The primary risk is that, if the seller defaults, the
Fund might suffer a loss to the extent that the proceeds from the sale of the
underlying securities and other collateral held by the Fund are less than the
repurchase price. Except for repurchase agreements for a period of a week or
less in respect to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, not more than 5% of the Fund's total assets may
be so invested.
<PAGE>
Borrowing
The Fund may not borrow money except for (i) short-term credits from banks as
may be necessary for the clearance of portfolio transactions, and (ii)
borrowings from banks for temporary or emergency purposes, including the meeting
of redemption requests, which would otherwise require the untimely disposition
of its portfolio securities. Borrowing for any purpose including redemptions may
not, in the aggregate, exceed 15%, and borrowing for purposes other than meeting
redemptions may not exceed 5%, of the value of the Fund's total assets at the
time a borrowing is made. The Fund will not make any additional purchases of
portfolio securities at any time its borrowings exceed 5% of its assets. The
Fund will not mortgage, pledge or hypothecate any of its assets except that, in
connection with the foregoing, not more than 20% of the assets of the Fund may
be used as collateral.
MANAGEMENT OF THE FUND
The Fund's Board of Trustees (who, with its officers, are described in the
Additional Statement) has overall responsibility for the management of the Fund.
The Trustees decide upon matters of general policy and review the actions of the
Adviser and Gabelli & Company, Inc., the Fund's distributor (the "Distributor").
Pursuant to an Investment Advisory Contract (the "Advisory Contract") with the
Fund, the Adviser provides a continuous investment program for the Fund's
portfolio; provides all facilities and personnel, including officers, required
for its administrative management; and pays the compensation of all officers and
Trustees of the Fund who are its affiliates. As compensation for its services
and the related expenses borne by the Adviser, the Fund pays the Adviser a fee,
computed daily and payable monthly, equal, on an annual basis, to 1.00% of the
Fund's average net assets. The advisory fee paid by the Fund for its fiscal year
ended December 31, 1996 was 1.00% of its average net assets and its total
expenses for the same period were 1.34% of its average net assets.
The Additional Statement contains further information about the Advisory
Contract including a more complete description of the advisory and expense
arrangements, exculpatory and brokerage provisions, as well as information
on the brokerage practices of the Fund.
Gabelli Funds, Inc. acts as Adviser to the Fund. The Adviser was formed in 1980
and as of April 1, 1997 acts as investment adviser to the following funds
with aggregate assets of $4.0 billion:
<TABLE>
<CAPTION>
Net Assets
<S> <C>
04/01/97
Open-end funds:
(in millions)
Gabelli Asset Fund $1,027
Gabelli Growth Fund 615
Gabelli Value Fund Inc. 437
Gabelli Small Cap Growth Fund 205
Gabelli Equity Income Fund 60
Gabelli U.S. Treasury Money Market Fund 261
Gabelli ABC Fund 23
Gabelli Global Telecommunications Fund 99
Gabelli Global Convertible Securities Fund 11
Gabelli Global Interactive Couch Potato(R)Fund 29
Gabelli Gold Fund, Inc. 16
Gabelli Capital Asset Fund 52
Gabelli International Growth Fund, Inc. 18
Closed-end funds:
Gabelli Equity Trust Inc. 1,005
Gabelli Convertible Securities Fund, Inc. 90
Gabelli Global Multimedia Trust Inc. 91
</TABLE>
GAMCO Investors, Inc. ("GAMCO"), a majority-owned subsidiary of the Adviser,
acts as investment adviser for individuals, pension trusts, profit-sharing
trusts and endowments, having aggregate assets in excess of $4.9 billion as of
April 1, 1997. Teton Advisers LLC, an affiliate of the Adviser, acts as
investment adviser to the Westwood Funds and had aggregate assets in excess of
$123 million as of April 1, 1997. The Distributor, which is the principal
distributor of the Fund for the sale of its shares, is an indirect
majority-owned subsidiary of the Adviser. Mr. Mario J. Gabelli may be deemed a
"controlling person" of the Adviser and the Distributor on the basis of his
ownership of stock of the Adviser. Mario J. Gabelli, CFA has
been designated by the Adviser to be primarily responsible for the day to day
management of the Fund. The Adviser relies to a considerable extent on the
expertise of Mr. Gabelli, who may be difficult to replace in the event of his
death, disability or resignation. Mr. Gabelli has been Chairman, Chief Executive
Officer and Chief Investment Officer of the Adviser since its inception in 1980.
The Adviser's address is the same as the Fund
as shown on the cover of this Prospectus.
Affiliates of the Adviser may, in the ordinary course of their business,
acquire for their own account or for the accounts of their advisory clients,
significant (and possibly controlling) positions in the securities of companies
that may also be suitable for investment by the Fund. The securities in which
the Fund might invest may thereby be limited to some extent. For instance, many
companies in the past several years have adopted so-called "poison pill" or
other defensive measures designed to discourage or prevent the completion of
non-negotiated offers for control of the company. Such defensive measures may
have the effect of limiting the shares of the company which might otherwise be
acquired by the Fund if the affiliates of the Adviser or their advisory accounts
have or acquire a significant position in the same securities. However, the
Adviser does not believe that the investment activities of its affiliates will
have a material adverse effect upon the Fund in seeking to achieve its
investment objectives. Securities purchased or sold pursuant to contemporaneous
orders entered on behalf of the investment company accounts of the Adviser or
the advisory accounts managed by its affiliates for their unaffiliated clients
are allocated pursuant to principles believed to be fair and not disadvantageous
to any such accounts. In addition, all such orders are accorded priority of
execution over orders entered on behalf of accounts in which the Adviser or its
affiliates have a substantial pecuniary interest. The Adviser may on occasion
give advice or take action with respect to other clients that differ from the
actions taken with respect to the Fund. The Fund may invest in the securities
of companies which are investmentmanagement
clients of GAMCO, a subsidiary of the Adviser. In addition, portfolio companies
or their officers or directors may be minority shareholders of the Adviser or
its affiliates.
The Advisory Contract contains provisions relating to the selection of
securities brokers to effect the portfolio transactions of the Fund. Under those
provisions, subject to applicable law and procedures adopted by the Trustees,
the Adviser may (i) direct Fund portfolio brokerage to the Distributor, a
broker-dealer affiliate of the Adviser; (ii) pay commissions to brokers other
than the Distributor which are higher than might be charged by another qualified
broker to obtain brokerage and/or research services considered by the Adviser to
be useful or desirable for its investment management of the Fund and/or other
advisory accounts of itself and any investment adviser affiliated with it; and
(iii) consider the sales of shares of the Fund by brokers other than the
Distributor as a factor in its selection of brokers for Fund portfolio
transactions.
The Adviser has entered into a Sub-Administration Agreement with First Data
Investor Services Group, Inc., a subsidiary of First Data Corporation (the
"Sub-Administrator"). Under the Sub-Administration Agreement, the
Sub-Administrator provides certain administrative services necessary for the
Fund's operations including the preparation and distribution of materials for
meetings of the Fund's Board of Trustees, compliance testing of Fund activities
and assistance in the preparation of proxy statements, reports to shareholders
and other documentation. For such services and related expenses borne by the
Sub-Administrator, the Adviser pays the Sub-Administrator a monthly fee based on
the aggregate average daily net assets of all Funds under its administration
managed by the Adviser as follows: up to $1 billion--0.10%; $1 billion to $1.5
billion--0.08%; $1.5 billion to $3 billion--0.03%; over $3 billion--0.02%. No
additional amount will be paid by the Fund for services by the
Sub-Administrator. The Sub-Administrator has its principal office at Exchange
Place, Boston, Massachusetts 02109.
DISTRIBUTION PLAN
On May 11, 1992, the shareholders of the Fund approved a Distribution Plan which
authorizes payments by the Fund in connection with the distribution of its
shares at an annual rate, as determined from time to time by the Board of
Trustees, of up to .25% of the Fund's average daily net assets. Payments may be
made by the Fund under the Distribution Plan for the purpose of financing any
activity primarily intended to result in the sales of shares of the Fund as
determined by the Board of Trustees. Such activities typically include
advertising; compensation for sales and sales marketing activities of the
Distributor and other banks, broker-dealers and service providers; shareholder
account servicing; production and dissemination of prospectus and sales and
marketing materials; and capital or other expenses of associated equipment,
rent, salaries, bonuses, interest and other overhead. To the extent any activity
is one which the Fund may finance without a Distribution Plan, the Fund may also
make payments to compensate such activity outside of the Plan and not subject to
its limitations. On February 26, 1997, the Trustees of the Fund approved an
amendment to the Plan such that payments under the Plan are not solely dependent
on distribution expenses actually incurred by the Distributor.
The Plan has been implemented by written agreements between the Fund and/or the
Distributor and each person (including the Distributor) to which payments may be
made. Administration of the Plan is regulated by Rule 12b-1 under the Investment
Company Act of 1940 (the "Act"), which includes requirements that the Board of
Trustees receive and review at least quarterly reports concerning the nature and
qualification of expenses which are made, that the Board of Trustees approve all
agreements implementing the Plan and that the Plan may be continued from year to
year only if the Board of Trustees concludes at least annually that continuation
of the Plan is likely to benefit shareholders.
To the extent that payments under the Plan are based on allocation by the
Distributor, the Fund may be considered to be participating in joint
distribution activities with other funds distributed by the Distributor. Any
such allocations would be subject to approval by the Fund's non-interested
Trustees and would be based on such factors as the net assets of each Fund, the
number of shareholders, inquiries and similar pertinent criteria.
In approving the Plan, the Trustees determined, in the exercise of their
business judgment and in light of their fiduciary duties, that there is a
reasonable likelihood that the Plan will benefit the Fund and its shareholders.
During the fiscal year ended December 31, 1996, the distribution fees paid to
the Distributor totaled $2,706,466 or 0.24% of the Fund's average daily net
assets.
PURCHASE OF SHARES
Shares of the Fund are offered without a sales load as an investment vehicle for
individuals, institutions, fiduciaries and retirement plans. Prospectuses, sales
material and applications can be obtained from the Distributor. The Fund and the
Distributor are authorized to reject any purchase order.
The minimum initial investment is $1,000 for all accounts. Accounts
establishing an Automatic Investment Plan require no initial minimum
investment (see "Automatic Investment Plan"). There is no minimum for
subsequent investments. All purchase payments accompanied by a purchase
order in proper form as described below will be effective as of the date
received by the Transfer Agent and will be invested in full and fractional
shares at the per share net asset value of the Fund next determined after
such receipt. Although most shareholders elect not to receive stock
certificates, certificates for whole shares only can be obtained on
specific written request to the Transfer Agent. The Fund may waive or
reduce the minimum initial investment for certain accounts or classes of
accounts from time to time.
Shares of the Fund may also be purchased through authorized broker-dealers who
may charge for their services. No such charge is imposed by the Fund or the
Distributor. Such charges may vary among broker-dealers who may impose
higher initial or subsequent minimum investment requirements than those
established by the Fund. Services provided by such broker-dealers may
include holding Fund shares in the name of the broker-dealer for the
brokerage accounts of its customers and allowing investors to borrow on the
value of their Fund shares by establishing a margin account with the
broker-dealer. Shares so held may be redeemed or transferred only by
arrangement with the broker-deasler. It is the responsibility of the
shareholder's agent to establish procedures which would assure that upon
receipt of an order to purchase shares of the Fund, the order will be
transmitted so that it will be received by the Distributor before the time
when the price applicable to the buy order expires.
The Fund's net asset value per share is calculated on each day, Monday
through Friday, except days on which the New York Stock Exchange ("NYSE") is
closed. The NYSE is currently scheduled to be closed on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas and on the preceding Friday or subsequent Monday when
a holiday falls on a Saturday or Sunday, respectively. The Fund's net
asset value per share is determined as of the close of regular trading on the
NYSE, normally 4:00 p.m., New York time and is computed by dividing the value of
the Fund's net assets (i.e., the value of its securities and other assets less
its liabilities, including expenses payable or accrued by excluding capital
stock and surplus) by the total number of shares outstanding at the time the
determination is made. The Fund uses market quotations in valuing its portfolio
securities. Short-term investments that mature in 60 days or less are valued at
amortized cost. See the Additional Statement for further information. Mail
To make an initial purchase of shares of the Fund, send a completed subscription
order form with a check for the amount of the investment payable to "The Gabelli
Asset Fund" to: The Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308.
Subsequent purchases do not require a completed application and can be made by
(i) mailing a check to the same address noted above; (ii) bank wire; (iii)
personal delivery; or (iv) by telephone as indicated below. The exact name
and number of the shareholder's account should be clearly indicated.
Checks will be accepted if drawn in U.S. currency on a domestic bank for less
than $100,000. U.S. dollar checks drawn against a non-U.S. bank may be
subject to collection delays and will be accepted only upon actual receipt
of funds by the Fund's Transfer Agent. Bank collection fees may apply. Bank
or certified checks for investments of $100,000 or more will be required
unless the investor elects to invest by bank wire as described below.
Checks made payable to a third party are not acceptable.
Bank Wire
To purchase shares of the Fund using the wire system for transmittal of money
among banks, the investor should instruct a Federal Reserve System member bank
to wire funds to:
State Street Bank and Trust Company
ABA # 011-0000-28 REF DDA # 9904-6187
Attn.: Shareholder Services
Re: The Gabelli Asset Fund
A/C # ______________________________
(Registered Owner)
Account of ___________________________
SS # / Tax I.D. # ______________________
225 Franklin Street, Boston, MA 02110
For initial purchases, an investor should first telephone the Fund at
1-800-GABELLI (422-3554) to obtain a new account number. The investor
should then mail a completed subscription order form to the Gabelli Funds
at the address shown above for mail purchases. State Street Bank and Trust
Company does not charge investors in the Fund for the receipt of wire
transfers but there may be a charge by the investor's bank for transmitting
the money by bank wire. If the investor is planning to wire funds, it is
suggested that the investor instruct his or her bank early in the day so
the wire transfer can be accomplished the same day. Personal Delivery
Deliver a check made payable to "The Gabelli Asset Fund" (with a completed
subscription order form for an initial purchase) to: The Gabelli Funds, The BFDS
Building, 7th Floor, Two Heritage Drive, North Quincy, MA 02171.
Telephone Investment Plan
An investor may purchase additional shares of the Fund by telephone through the
Automated Clearing House ("ACH") system as long as the investor's bank is a
member of the ACH system and the investor has a completed, approved Investment
Plan application on file with the Fund's Transfer Agent. The funding for the
investor's purchase will be automatically deducted from the ACH eligible account
the investor designates on the application. The investor's investment will
normally be credited to his or her mutual fund account on the first business day
following his or her telephone request. The investor's request must be received
no later than 4:00 p.m., Eastern time. There is a minimum of $100 for each
telephone investment. Any subsequent changes in banking information must be
submitted in writing and accompanied by a sample voided check. To initiate an
ACH purchase, the investor should call 1-800-GABELLI (422-3544) or
1-800-872-5365. Fund shares purchase through the Investment Plan will not be
available for redemption for fifteen (15) days following the purchase date.
Automatic Investment Plan
The Fund offers an automatic monthly investment plan through the ACH system,
details of which can be obtained from the Distributor. There is no minimum
initial investment for accounts establishing an automatic investment plan.
Systematic Withdrawal Plan
Any shareholder who owns shares of the Fund with an aggregate value of $10,000
or more may establish a Systematic Withdrawal Plan under which he or she offers
to sell to the Fund at net asset value the number of full and fractional shares
which will produce the monthly, quarterly or annual payments specified.
Systematic withdrawals deplete the investor's principal and are treated as
redemptions, which may be taxable transactions. Investors contemplating
participation in this plan should consult their tax advisers. Shareholders
wishing to utilize this plan may do so by completing an application which may be
obtained by writing or calling the Distributor. No additional charge to the
shareholder is made for this service.
Other Investors
No minimum initial investment is required for (i) officers or Trustees of the
Fund; (ii) officers, directors or full-time employees of the Adviser, the
Distributor or their affiliates, including members of the "immediate family" of
such employees. The term "immediate family" refers to spouses, children and
grandchildren adopted or natural, parents, grandparents, siblings, a spouse's
siblings, a sibling's spouse and a sibling's children; (iii) retirement plans
established for such employees; or (iv) investments made through the Fund's
Automatic Investment Plan.
REDEMPTION OF SHARES
Upon receipt by the Transfer Agent of a redemption request in proper form,
shares of the Fund will be redeemed at their next determined net asset value.
Checks for redemption proceeds will normally be mailed to the shareholder's
address of record within seven days, but will not be mailed until all checks in
payment for the purchase of the shares to be redeemed have been honored, which
may take up to 15 days. There is no charge on the redemption of shares
regardless of when purchased. The proceeds of a redemption may be more or less
than the amount invested and, therefore, a redemption may result in gain or loss
for income tax purposes.
By Letter
Redemption requests may be made by letter to the Transfer Agent, specifying the
name of the Fund, the dollar amount or number of shares to be redeemed, and the
account number. The letter must be signed in exactly the same way the account is
registered (if there is more than one owner of the shares, all must sign) and,
if any certificates for the shares to be redeemed are outstanding, presentation
of such certificates properly endorsed is also required. Signatures on a
redemption request and/or certificates must be guaranteed by an eligible
guarantor institution which includes a domestic bank, a savings and loan
institution, a domestic credit union, a member bank of the Federal Reserve
System or a member firm of a national securities exchange; pursuant to the
Fund's Transfer Agent's standards and procedures (signature guarantees by
notaries public are not acceptable). Further documentation, such as copies of
corporate resolutions and instruments of authority, are normally requested from
corporations, administrators, executors, personal representatives, trustees or
custodians to evidence the authority of the person or entity making the
redemption request.
Telephone Redemption By Check
The Fund accepts
telephone requests for redemption of uncertificated shares from shareholders
subject to a $25,000 limitation. By calling either 1-800-GABELLI (442-3554) or
1-800-872-5365, an investor may request that a check be mailed to the address of
record on the account provided that the address has not changed within thirty
(30) days prior to the investor's request. The check will be made payable to the
account as registered and mailed within seven (7) days.
By Bank Wire
The Fund accepts telephone requests for wire redemption in excess of $1,000 but
subject to a $25,000 limitation to a predesignated bank either on the
subscription order form or in a subsequent written authorization with the
signature guaranteed. The Fund accepts signature guaranteed written requests for
redemptions by bank wire without limitation. The proceeds are normally wired on
the following business day. The investor's bank must be either a member of the
Federal Reserve System or have a correspondent bank which is a member. Any
change to the banking information made at a later date must be submitted in
writing with a signature guarantee.
Requests for telephone redemption must be received between 9:00 a.m. and 4:00
p.m., Eastern time. If the investor's telephone call is received after this time
or on a day when the New York Stock Exchange is not open, the request will be
processed the following business day. Shares are redeemed at the net asset
value next determined following the investor's request. Fund shares purchased by
check or through the automatic purchase plan will not be available for
redemption for fifteen (15) days following the purchase. Shares held in
certificate form must be returned to the Transfer Agent for redeposit prior to
the redemption of shares. Telephone redemption is not available for Individual
Retirement Accounts. The proceeds of a telephone redemption may be directed to
an existing account in another mutual fund advised by Gabelli Funds, Inc.
provided the registration of such account is the same. Such a purchase will be
made at the respective net asset value plus applicable sales charge, if any.
Unless other instructions are given in proper form, a check for the proceeds
of a redemption will be sent to the shareholder's address of record and
generally will be mailed within seven days after receipt of the request.
Shareholders may also redeem Fund shares through registered broker-dealers
holding such shares who have made arrangements with the Fund permitting them to
redeem such shares by telephone or facsimile transmission and who may charge a
fee for this service.
The Fund may suspend the right of redemption during
any period when (i) trading on the NYSE is restricted or the
NYSE is closed, other than customary weekend and holiday closings; (ii) the SEC
has by order permitted such suspension or (iii) an emergency, as defined by
rules of the SEC, exists making disposal of portfolio investments or
determination of the value of the net assets of the Fund not reasonably
practicable. The Fund may postpone for more than seven days the date of payment
for redemptions during any period the right to redeem has been suspended.
To minimize expenses, the Fund reserves the right to redeem, upon not less than
30 days' notice, all shares of the Fund in an account (other than an IRA) which
has a value below $500 due to prior shareholder redemptions. However, a
shareholder will be allowed to make additional investments prior to the date
fixed for redemption to avoid liquidation of the account. The Fund and its
Transfer Agent will not be liable for following telephone instructions
reasonably believed to be genuine. In this regard the Fund and its Transfer
Agent require personal identification information before accepting a telephone
redemption. If the Fund or its Transfer Agent fail to use reasonable procedures,
the Fund may be liable for losses due to fraudulent instructions.
RETIREMENT PLANS
The Fund has available a form of IRA for investment in Fund shares which may be
obtained from its Distributor. The minimum investment required to open an
IRA for investment in shares of the Fund is $1,000. There is no minimum for
additional investment in an IRA account. Self-employed investors may
purchase shares of the Fund through tax-deductible contributions to
existing retirement plans for self-employed persons, known as Keogh or H.R.
10 plans. The Fund does not currently act as sponsor to such plans. Fund
shares may be a suitable investment for other types of qualified pension or
profit-sharing plans which are employer sponsored, including deferred
compensation or salary reduction plans known as "401(k) Plans" which give
participants the right to defer portions of their compensation for
investment on a tax-deferred basis until distributions are made from the
plans. The minimum initial investment for an individual under such plans is
$1,000 and there is no minimum for additional investments.
Under the Internal Revenue Code of 1986, as amended (the "Code"), individuals
may make wholly or partly tax deductible IRA contributions of up to $2,000
annually, depending on whether they are active participants in an
employer-sponsored retirement plan and on their income level. However, dividends
and distributions held in the account are not taxed until withdrawn in
accordance with the provisions of the Code. An individual with a non-working
spouse may establish a separate IRA for the spouse under the same conditions and
contribute a combined maximum of $4,000 annually to both IRAs provided that no
more than $2,000 may be contributed to the IRA of either spouse. Other
provisions permit additional IRA contributions which are not tax deductible but
the tax on reinvested dividends and distributions is deferred while held in the
account. There are also rules on the amount of tax deductible contributions
which may be made to other retirement plans.
Investors should be aware that they may be subject to penalties or additional
tax on contributions to or withdrawals from IRAs or other retirement plans which
are not permitted by the applicable provisions of the Code and
prior to a withdrawal, shareholders may be required to certify their age and
awareness of such restrictions in writing. Persons desiring information
concerning investments through IRAs or other retirement plans should write or
telephone the Distributor.
DIVIDENDS, DISTRIBUTION AND TAXES
Each dividend and capital gains distribution, if any, declared by the Fund on
its outstanding shares will, at the election of each shareholder, be paid
on the payment date fixed by the Board of Trustees in additional shares of
the Fund having an aggregate net asset value as of the ex-dividend date of
such dividend or distribution equal to the cash amount of such dividend or
distribution. An election to receive dividends and distributions in cash or
shares is made at the time shares are subscribed for and may be changed by
notifying the Fund in writing at any time prior to the record date for a
particular dividend or distribution. There are no sales or other charges in
connection with the reinvestment of dividends and capital gains
distributions. There is no fixed dividend rate, and there can be no
assurance that the Fund will pay any dividends or realize any capital
gains.
The Fund has qualified and intends to continue to qualify for tax treatment as a
"Regulated Investment Company" under the Code in order to be relieved of Federal
income tax on that part of its net investment income and realized capital gains
which it pays out to its shareholders. To qualify, the Fund must meet certain
relatively complex tests, including the requirement that less than 30% of its
gross income must be derived from gains from the sale or other disposition of
securities held for less than three months. Because of such requirements,
qualification in any given year may not be feasible.
Dividends out of net investment income and distributions of realized short-term
capital gains are taxable to the recipient shareholders as ordinary income. In
the case of corporate shareholders, all or a portion of such distributions may
be eligible for the dividends-received deduction. Dividends and distributions
declared by the Fund may also be subject to state and local taxes. Distributions
out of long-term capital gains, of which shareholders will be notified, are
taxable to the recipient as long-term capital gains. The foregoing summary of
Federal income tax consequences is intended for general informational purposes
only. Prior to investing in shares of the Fund, prospective shareholders should
consult their tax advisers concerning the Federal, state and local tax
consequences of such an investment.
CALCULATION OF INVESTMENT PERFORMANCE
The investment performance of the Fund quoted in advertising for the sale of its
shares will be calculated on a "total return" basis which assumes the
reinvestment of all dividends and distributions. Total return is generally
quoted as a percentage calculated by combining the income and principal changes
of an assumed investment in shares of the Fund during the period specified and
dividing by the amount of the assumed initial investment. To illustrate the
components of its overall performance, investment performance may be given on a
cumulative basis (for periods greater than one year); for consecutive annual
periods; for consecutive quarterly or semi-annual periods as well as for the
year including such interim periods; or separately for investment income results
and capital gain or loss. Such performance quotations will reflect all recurrent
charges.
In each case, the average annual total return of the Fund for the past ten
years, the past five years, and the twelve-month period through the most recent
calendar quarter will also be given. The average annual total return will be
calculated pursuant to a standardized formula to reflect the hypothetical
annually compounded rate of return which would have produced the same cumulative
total return. Investors should recognize that an average annual return tends to
smooth out variations in the Fund's performance level and is therefore not the
same as actual year by year results. The Fund's average annual total return for
the 1-year, 5-year and 10-year periods ended December 31, 1996 were 13.4%, 14.6%
and 15.6%, respectively.
GENERAL INFORMATION
Description of Shares, Voting Rights and Liabilities
As a Massachusetts Business Trust, the Fund is not required, and does not
intend, to hold regular annual shareholder meetings but may hold special
meetings for the consideration of proposals requiring shareholder approval
such as changing fundamental policies or, upon the written request of the
recordholders of 331/3% of outstanding shares (10% in the case of removing
one or more Trustees) for any other purpose. The Fund will facilitate
shareholder communications in this regard. Shares of the Fund have equal
rights with respect to voting and each share represents an equal
proportionate interest in the Fund with each other share. The Fund may
issue an unlimited number of full and fractional shares of beneficial
interest (par value $.01 per share) and the Trustees may divide or combine
the shares into a greater or lesser number of shares without changing the
proportionate beneficial interests in the Fund. When issued, shares are
fully paid and non-assessable (except as described in the Additional
Statement under "General Information") and have no pre-emptive or
conversion rights.
The Fund sends semi-annual unaudited and annual audited reports to all its
shareholders which include a list of portfolio securities. Unless it is clear
that a shareholder holds as nominee for the account of an unrelated person or a
shareholder otherwise specifically requests in writing, the Fund may send a
single copy of semi-annual, annual and other reports to shareholders to all
accounts at the same address and all accounts of any person at that address.
Information for Shareholders
All shareholder inquiries regarding administrative procedures including the
purchase and redemption of shares should be directed to the Distributor. For
assistance, call 1-800-GABELLI (422-3554). The Distributor's address is Gabelli
& Company, Inc., One Corporate Center, Rye, New York 10580-1435.
Upon request, Gabelli & Company will provide, without charge, a paper copy of
this Prospectus to investors or their representatives who received this
Prospectus in an electronic format.
This Prospectus omits certain information contained in the Registration
Statement filed with the SEC. Copies of the Registration Statement, including
items omitted herein, may be obtained from the SEC by paying the charges
prescribed under its rules and regulations. The Additional Statement included in
such Registration Statement may be obtained without charge from the Fund or the
Distributor.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, is the Custodian for the Fund's cash and securities. Boston
Financial Data Services, Inc., located at Two Heritage Drive, North Quincy, MA
02171, an affiliate of State Street, performs the services of Transfer and
Dividend Disbursing Agent for the Fund on behalf of State Street. State Street
does not assist in and is not responsible for investment decisions involving
assets of the Fund.
<PAGE>
THE GABELLI ASSET FUND
PART B
THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
Telephone: 1-800-GABELLI (1-800-422-3554)
http://www.gabelli.com
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1997
This Statement of Additional Information ("Additional Statement") is not
a prospectus and is only authorized for distribution when preceded or
accompanied by The Gabelli Asset Fund's (the "Fund") prospectus dated May 1,
1997, as supplemented from time to time (the "Prospectus"). This Additional
Statement contains additional and more detailed information than that set
forth in the Prospectus and should be read in conjunction with the Prospectus,
additional copies of which may be obtained without charge by writing or
telephoning the Fund at the address and telephone number set forth above.
Also, this Additional Statement is available for reference, along with other
materials, on the Securities and Exchange Commission ("SEC") Internet web site
(http://www.sec.gov).
TABLE OF CONTENTS
Investment Policies......................................2
Special Investment Methods........................2.......
Convertible Securities...................................2
Debt Securities..........................................2
Investments in Warrants and Rights.......3................
Investments in Small, Unseasoned Companies...............3
Corporate Reorganizations.............................3..
When Issued, Delayed Delivery Securities & Forward Commitments.......4.
Repurchase Agreements................................................4
Investment Restrictions..............................................5.
Trustees and Officers.................................................6
Investment Adviser...................................................11
Distributor..........................................................12
Distribution Plan...................................................12
Portfolio Transactions and Brokerage...............................13
Redemption of Shares.................................................15
Net Asset Value......................................................16
Investment Performance Information...................................16
Counsel and Independent Accountants.................................18.
General Information..................................................18
Financial Statements.................................................19
Appendix A - Description of Corporate Debt Ratings................A-1
<PAGE>
INVESTMENT POLICIES
The Fund expects that, for most periods, a substantial portion, if not
all, of its assets will be invested in a diversified portfolio of common stocks
judged by Gabelli Funds, Inc. (the "Adviser") to have favorable value to price
characteristics. The Fund may also invest in U.S. Government or Government
Agency obligations, investment grade corporate bonds, preferred stocks,
convertible securities, foreign securities, debt securities and/or short term
money market instruments when deemed appropriate by the Adviser.
SPECIAL INVESTMENT METHODS
Convertible Securities
The Fund may, as an interim alternative to investment in common stocks,
purchase investment grade convertible debt securities having a rating of, or
equivalent to, at least "BBB" by Standard & Poor's Ratings Service, a division
of McGraw-Hill Companies, Inc. ("S&P") or, if unrated, judged by the
Adviser to be of comparable quality. Securities rated less than "A" by
S&P may have speculative characteristics. The Fund may also invest up to
25% of its assets in convertible debt securities which have a lesser rating or
are unrated. However, the Adviser will not purchase securities rated lower than
"B" by S&P or "Caa" by Moody's Investors' Services, Inc. ("Moody's"). Unrated
convertible securities which, in the judgment of the Adviser, have equivalent
credit worthiness may also be purchased for the Fund. Although lower rated bonds
generally have higher yields, they are more speculative and subject to a greater
risk of default with respect to the issuer's capacity to pay interest and repay
principal than are higher rated debt securities.
In selecting convertible securities for the Fund, the Adviser relies
primarily on its own evaluation of the issuer and the potential for capital
appreciation through conversion. It does not rely on the rating of the security
or sell because of a change in rating absent a change in its own evaluation of
the underlying common stock and the ability of the issuer to pay principal and
interest or dividends when due without disrupting its business goals. Interest
or dividend yield is a factor only to the extent it is reasonably consistent
with prevailing rates for securities of similar quality and thereby provides a
support level for the market price of the security. The Fund will purchase the
convertible securities of highly leveraged issuers only when, in the judgment of
the Adviser, the risk of default is outweighed by the potential for capital
appreciation.
The issuers of debt obligations having speculative characteristics may
experience difficulty in paying principal and interest when due in the event of
a downturn in the economy or unanticipated corporate developments. The market
prices of such securities may become increasingly volatile in periods of
economic uncertainty. Moreover, adverse publicity or the perceptions of
investors over which the Adviser has no control, whether or not based on
fundamental analysis, may decrease the market price and liquidity of such
investments. Although the Adviser will attempt to avoid exposing the Fund to
such risks, there is no assurance that it will be successful or that a liquid
secondary market will continue to be available for the disposition of such
securities.
Debt Securities
Non-convertible corporate debt securities which are either unrated or
have a predominantly speculative rating (often referred to in the financial
press as "junk bonds") may present opportunities for significant long-term
capital appreciation if the ability of the issuer to repay principal and
interest when due is underestimated by the market or the rating organizations.
Because of its perceived credit weakness, the issuer is generally required to
pay a higher interest rate and/or its debt securities may be selling at a
significantly lower market price than the debt securities of issuers actually
having similar strength. When the inherent value of such securities is
recognized, the market value of such securities may appreciate significantly.
The Adviser believes that its research on the credit and balance sheet strength
of certain issuers may enable it to select a limited number of corporate debt
securities, which in certain markets, will better serve the objective of capital
appreciation than alternative investments in common stocks. Of course, there can
be no assurance that the Adviser will be successful. In its evaluation, the
Adviser will not rely exclusively on ratings and the receipt of income is only
an incidental consideration.
As in the case of the convertible debt securities discussed above, low
rated and unrated corporate debt securities are generally considered to be more
subject to default and therefore significantly more speculative than those
having an investment grade rating. They also are more subject to market price
volatility based on increased sensitivity to changes in interest rates and
economic conditions or the liquidity of their secondary trading market. The Fund
does not intend to purchase debt securities for which a liquid trading market
does not exist but there can be no assurance that such a market will exist for
the sale of such securities.
Investments in Warrants and Rights
Warrants basically are options to purchase equity securities at a
specified price valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities. Rights are
similar to warrants, but normally have a short duration and are distributed
directly by the issuer to its shareholders. Rights and warrants have no voting
rights, receive no dividends and have no rights with respect to the assets of
the issuer.
Investment in Small, Unseasoned Companies
The securities of small, unseasoned companies may have a limited
trading market, which may adversely affect their disposition and can result in
their being priced lower than might otherwise be the case. If other investment
companies and investors who invest in such issuers trade the same securities
when the Fund attempts to dispose of its holdings, the Fund may receive lower
prices than might otherwise be obtained.
Corporate Reorganizations
The Fund may invest up to 35% of its total assets in securities for
which a tender or exchange offer has been made or announced and in securities of
companies for which a merger, consolidation, liquidation or reorganization
proposal has been announced if, in the judgment of the Adviser, there is
reasonable prospect of capital appreciation significantly greater than the
brokerage and other transaction expenses involved. The 35% limitation does not
apply to the securities of companies which may be involved in simply
consummating an approved or agreed upon merger, acquisition, consolidation,
liquidation or reorganization. The primary risk of such investments is that if
the contemplated transaction is abandoned, revised, delayed or becomes subject
to unanticipated uncertainties, the market price of the securities may decline
below the purchase price paid by the Fund.
In general, securities which are the subject of such an offer or
proposal sell at a premium to their historic market price immediately prior to
the announcement of the offer or proposal. However, the increased market price
of such securities may also discount what the stated or appraised value of the
security would be if the contemplated transaction were approved or consummated.
Such investments may be advantageous when the discount significantly overstates
the risk of the contingencies involved; significantly undervalues the
securities, assets or cash to be received by shareholders of the prospective
portfolio company as a result of the contemplated transaction; or fails
adequately to recognize the possibility that the offer or proposal may be
replaced or superseded by an offer or proposal of greater value. The evaluation
of such contingencies requires unusually broad knowledge and experience on the
part of the Adviser which must appraise not only the value of the issuer and its
component businesses as well as the assets or securities to be received as a
result of the contemplated transaction, but also the financial resources and
business motivation of the offeror as well as the dynamic of the business
climate when the offer or proposal is in process.
In making such investments, the Fund will not violate any of its
diversification requirements or investment restrictions (see below,
"Investment Restrictions") including the requirements that, except for the
investment of up to 25% of its assets in any one company or industry, not
more than 5% of its assets may be invested in the securities of any issuer.
Since such investments are ordinarily short term in nature, they will tend
to increase the Fund's portfolio turnover ratio thereby increasing
its brokerage and other transaction expenses as well as make it more
difficult for the Fund to meet the tests for favorable tax treatment as a
"Registered Investment Company" specified by the Internal Revenue Code of
1986, as amended (the "Code") (see the Prospectus, "Dividends,
Distributions and Taxes"). The Adviser intends to select investments of the
type described which, in its view, have a reasonable prospect of capital
appreciation which is significant in relation to both the risk involved and
the potential of available alternate investments as well as monitor the
effect of such investments on the tax qualification tests of the Code.
When Issued, Delayed Delivery Securities & Forward Commitments
The Fund is authorized to buy and sell when issued securities as an
additional investment strategy in furtherance of its investment objectives.
In utilizing this strategy, the Fund may enter into forward commitments
for the purchase or sale of securities, including on a "when issued" or "delayed
delivery" basis in excess of customary settlement periods for the type of
securities involved. In some cases, a forward commitment may be conditioned upon
the occurrence of a subsequent event, such as approval and consummation of a
merger, corporate reorganization or debt restructuring, i.e., a when, as and if
issued security. When such transactions are negotiated, the price is fixed at
the time of the commitment, with payment and delivery taking place in the
future, generally a month or more after the date of the commitment. While the
Fund will only enter into a forward commitment with the intention of actually
acquiring the security, the Fund may sell the security before the settlement
date if it is deemed advisable.
Securities purchased under a forward commitment are subject to market
fluctuation and no interest (or dividends) accrues to the Fund prior to the
settlement date. The Fund will segregate cash or liquid high-grade debt
securities with its custodian in an aggregate amount at least equal to
the amount of its outstanding forward commitments.
Repurchase Agreements
The Fund may engage in repurchase agreements as set forth in the
Prospectus. A repurchase agreement is an instrument under which the purchaser
(i.e., the Fund) acquires a debt security and the seller agrees, at the time of
the sale, to repurchase the obligation at a mutually agreed upon time and price,
thereby determining the yield during the purchaser's holding period. This
results in a fixed rate of return insulated from market fluctuations during such
period. The underlying securities are ordinarily U.S. Treasury or other
government obligations or high quality money market instruments. The Fund will
require that the value of such underlying securities, together with any other
collateral held by the Fund, always equals or exceeds the amount of the
repurchase obligations of the counter party. While the maturities of the
underlying securities in repurchase agreement transactions may be more than one
year, the term of each repurchase agreement will always be less than one year.
The Fund's risk is primarily that, if the seller defaults, the proceeds from the
disposition of underlying securities and other collateral for the seller's
obligation are less than the repurchase price. If the seller becomes bankrupt,
the Fund might be delayed in selling the collateral. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), repurchase agreements are
considered loans. Repurchase agreements usually are for short periods, such as
one week or less, but could be longer. The Fund will not enter into repurchase
agreements of a duration of more than seven days if, taken together with
restricted securities and other securities for which there are no readily
available quotations, more than 10% of its total assets would be so invested.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions which may
not be changed without the approval of the Fund's shareholders. Under such
restrictions, the Fund may not:
(1)......Purchase the securities of any one issuer, other than the
United States Government, or any of its agencies or instrumentalities, if
immediately after such purchase more than 5% of the value of its total assets
would be invested in such issuer or the Fund would own more than 10% of the
outstanding voting securities of such issuer, except that up to 25% of the value
of the Fund's total assets may be invested without regard to such 5% and 10%
limitations;
(2)......Invest more than 25% of the value of its total assets in any particular
industry;
(3)......Purchase securities on margin, but it may obtain such short-term
credits from banks as may be necessary for the clearance of purchase and
sales of securities;
(4)......Make loans of its assets except for the purchase of debt securities;
(5)......Borrow money except subject to the restrictions set forth in the
prospectus under " Special Investment Methods - Borrowing";
(6)......Mortgage, pledge or hypothecate any of its assets except that, in
connection with permissible borrowings mentioned in paragraph 5 above, not
more than 20% of the assets of the Fund (not including amounts borrowed)
may be used as collateral;
(7)......Invest more than 5% of its total assets in more than 3% of the
securities of another investment company or invest more than 10% of its total
assets in the securities of other investment companies, nor make any such
investments other than through purchase in the open market where to the best
information of the Fund no commission or profit to a sponsor or dealer (other
than the customary broker's commission) results from such purchase;
(8)......Act as an underwriter of securities of other issuers;
(9)......Invest, in the aggregate, more than 10% of the value of its
total assets in securities for which market quotations are not readily
available, securities which are restricted for public sale, or in repurchase
agreements maturing or terminable in more than seven days;
(10).....Purchase or otherwise acquire interests in real estate, real estate
mortgage loans or interests in oil, gas or other mineral exploration or
development programs;
(11).....Sell securities short or invest in puts, calls, straddles, spreads or
combination thereof;
(12).....Purchase or acquire commodities or commodity contracts;
(13).....Issue senior securities, except insofar as the Fund may be deemed to
have issued a senior security in connection with any permitted borrowing;
(14).....Participate on a joint, or a joint and several, basis in any securities
trading account; or
(15).....Invest in companies for the purpose of exercising control.
TRUSTEES AND OFFICERS
The Trustees and principal officers of the Fund, and their principal
occupations for the past five years, are listed below. Unless otherwise
specified, the address of each such person is One Corporate Center, Rye, New
York 10580-1434. Trustees deemed to be "interested persons" of the Fund for
purposes of the 1940 Act are indicated by an asterisk.
<TABLE>
<CAPTION>
Name, Address, Age and
Position(s) with Fund Principal Occupations During Past Five Years
<S> <C>
Mario J. Gabelli,* 54 Chairman of the Board, Chief Executive Officer and Chief
Trustee Investment Officer of Gabelli Funds, Inc. and of GAMCO
Investors, Inc.; Chairman
of the Board, President
and Chief Investment
Officer of Gabelli
Capital Series Fund,
Inc., The Gabelli Equity
Trust Inc., The Gabelli
Global Multimedia Trust
Inc. and The Gabelli
Value Fund, Inc.;
President, Director and
Chief Investment Officer
of Gabelli Global Series
Funds, Inc., Gabelli
Investor Funds, Inc.,
Gabelli Equity Series
Funds, Inc. and The
Gabelli Convertible
Securities Fund, Inc.;
Trustee of The Gabelli
Growth Fund; President
and Trustee of The
Gabelli Money Market
Funds; Director of
Gabelli Gold Fund, Inc.,
Gabelli International
Growth Fund, Inc. and The
Treasurer's Fund, Inc.;
and Chairman and Chief
Executive Officer of
Lynch Corporation.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Name, Address, Age and
Position(s) with Fund Principal Occupations During Past Five Years
<S> <C>
Felix J. Christiana, 72 Formerly Senior Vice President of Dry Dock Savings Bank
Trustee in White Plains, New York; Director of Gabelli Global
Series Funds, Inc., The Gabelli Equity Trust Inc., The
Gabelli Global Multimedia Trust Inc., The Gabelli
Convertible Securities Fund, Inc., Gabelli Equity Series
Funds, Inc., The Gabelli Value Fund Inc. and The
Treasurer's Fund, Inc.; and Trustee of The Gabelli Growth
Fund.
Anthony J. Colavita, 62 President and Attorney at Law in the law firm of Anthony
Trustee J. Colavita, P.C.; Director of Gabelli Equity Series Funds,
Inc., Gabelli Global
Convertible Securities
Fund, Inc., Gabelli
Investor Funds, Inc., The
Gabelli Convertible
Securities Fund, Inc.,
The Gabelli Value Fund,
Inc., Gabelli Gold Fund,
Inc., Gabelli Capital
Series Funds, Inc., and
The Treasurer's Fund,
Inc.; and Trustee of The
Gabelli Growth Fund, The
Gabelli Money Market
Funds and the Westwood
Funds.
James P. Conn, 59 Managing Director/Chief Investment Officer of Financial
Trustee Security Assurance Holdings Ltd. since 1992; Director of
Santa Anita Operating
Company since 1995;
Director of California
Jockey Club since 1983;
President and Chief
Executive Officer of Bay
Meadows Operating Company
from 1988 through 1992;
Director of The Gabelli
Equity Trust Inc. and The
Gabelli Global Multimedia
Trust Inc.; and Trustee
of The Gabelli Growth
Fund and the Westwood
Funds.
Karl Otto Pohl,*+ 67 Managing Partner of Sal. Oppenheim jr. & Cie. (private
Trustee investment bank); Board Member of IBM World Trade
Europe/MiddleEast/Africa
Corp., Bertelsman AG,
Zurich Versicherungs -
Gesellschaft (insurance);
the International
Advisory Board of General
Electric Company; the
International Advisory
Board of JP Morgan & Co.;
Supervisory Board Member
of Royal Dutch ROBECo/o
Group (petroleum
company); Advisory
Director of Unilever N.V.
and Unilever Deutschland;
Director or Trustee of
all Funds advised by
Gabelli Funds, Inc.; and
Director of The
Treasurer's Fund,
Inc.
<PAGE>
Name, Address, Age and
Position(s) with Fund Principal Occupations During Past Five Years
Anthony R. Pustorino, CPA, 71 Certified Public Accountant; Professor of Accounting,
Trustee Pace University; Trustee of The Gabelli Growth Fund; and
Director of The Gabelli Value Fund Inc., The Gabelli
Convertible Securities Fund, Inc., Gabelli Equity Series
Funds, Inc., The Gabelli Equity Trust Inc., The Gabelli
Global Multimedia Trust Inc., Gabelli Capital Series Funds,
Inc. and The Treasurer's Fund, Inc.
Anthonie C. van Ekris, 63 Managing Director of Balmac International; Director of
Trustee Stahel Hardmeyer AG; Trustee of The Gabelli Growth Fund
and The Gabelli Money Market Funds; and Director of The
Gabelli Convertible Securities Fund, Inc., Gabelli Equity
Series Funds, Inc., The Gabelli Global Series Fund Inc.,
Gabelli Gold Fund, Inc., Gabelli Capital Series Funds,
Inc., Gabelli International Growth Fund, Inc. and The
Treasurer's Fund, Inc.
Salvatore J. Zizza,*+ 51 President and Chief Executive Officer of The Lehigh
Trustee Group, Inc. (an electric supply wholesaler); Director of The Gabelli Equity
Trust Inc., The
Gabelli Global Multimedia Trust Inc., Gabelli Convertible
Securities Fund, Inc., Gabelli Series Fund, Inc. and Debe
Computer Systems Corp.; and Chairman of the Executive Committee and
Director of Binnings Building
Products, Inc.
Bruce N. Alpert, 45 Vice President and Chief Operating Officer of the
President and Treasurer investment advisory division of the Adviser; President and
Treasurer of The Gabelli
Growth Fund; Vice
President and Treasurer
of The Gabelli Equity
Trust Inc., The Gabelli
Global Multimedia Trust
Inc., The Gabelli Value
Fund Inc., Gabelli Global
Series Funds, Inc.,
Gabelli Investor Funds,
Inc., Gabelli Capital
Series Funds, Inc.,
Gabelli International
Growth Fund, Inc.,
Gabelli Equity Series
Funds, Inc., Gabelli
Convertible Securities
Fund, Inc., and The
Gabelli Money Market
Funds; Vice President of
the Westwood Funds; and
Manager of Teton Advisers
LLC.
<PAGE>
Name, Address, Age and
Position(s) with Fund Principal Occupations During Past Five Years
James E. McKee, 33 Vice President and General Counsel of GAMCO Investors,
Secretary Inc. since 1993 and of Gabelli Funds, Inc. since August
1995; Secretary of all Funds advised by Gabelli Funds,
Inc. and Teton Advisers LLC since August 1995. Branch
Chief with the SEC in New York (1992-1993). Staff attorney
with the SEC in New York (1989-1992).
..................
+ Mr. Pohl receives fees from the Adviser but has no obligation to provide
any services to the Adviser. Although this relationship does not appear to
require designation of Mr. Pohl as an interested person, the Fund is
currently making such designation in order to avoid the possibility that
Mr. Pohl independence would be questioned. Mr. Zizza may be an "interested person"
as a result of his association with Bennings Building Products, Inc., an entity controlled
by GCI, Inc., an affiliate of the Adviser.
</TABLE>
Renumeration. No director, officer or employee of Gabelli & Company,
Inc. or the Adviser or of any affiliate of Gabelli & Company, Inc. or the
Adviser receives any compensation from the Fund for serving as an officer or
Trustee of the Fund. The Fund pays each of its Trustees who is not a director,
officer or employee of the Adviser or any of their affiliates, $6,000 per annum
plus $500 per meeting attended and reimburses each Trustee for related travel
and out-of-pocket expenses. The Fund also pays each Trustee serving as a member
of the Audit, Proxy or Nominating Committees a fee of $500 per committee meeting
if held on a day other than a regularly scheduled board meeting, and the
Chairman of each committee receives $1,000 per annum. For the fiscal year ended
December 31, 1996, such fees totaled $64,107.
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
- ----------------------------------------- ---------------------------------- ---------------------------------------
(1) (2) (3)
Total Compensation
from Registrant and Fund Complex Paid
Aggregate Compensation from to Trustees
Name of Person, Position Registrant for Fiscal Year for Calendar Year*
- ----------------------------------------- ---------------------------------- ---------------------------------------
<S> <C> <C> <C>
Mario J. Gabelli $ 0 $ 0
Trustee
Anthony J. Colavita $ 9,000 $70,000 (12)
Trustee
Felix J. Christiana $ 9,000 $74,000 (9)
Trustee
James P. Conn $ 8,000 $36,500 (4)
Trustee
Anthony R. Pustorino $ 11,000 $84,500 (9)
Trustee
Karl Otto Pohl $ 7,000 $77,760 (14)
Trustee
Anthonie C. van Ekris $ 8,000 $49,000 (10)
Trustee
Salvatore J. Zizza $ 8,000 $42,500 (5)
Trustee
<FN>
* The total compensation paid to such persons during the calendar year ending
December 31, 1996 by investment companies (including the Fund) from which
such person receives compensation that are part of the same Fund complex as
the Fund, because they have common or affiliated investment advisers. The
number in parentheses represents the number of such investment
companies.
</FN>
</TABLE>
As a group, the officers and Trustees of the Fund owned
beneficially, directly or indirectly, less than 1% of its outstanding voting
shares.
Set forth below is certain information as to persons who owned 5% or more of
the Fund's outstanding shares as of April 1, 1997.
<PAGE>
Name and Address % of Fund Nature of Ownership
Charles Schwab & Co. Inc. 9.21% Record (a)
101 Montgomery Street
San Francisco, CA 94104-4122
(a) Charles Schwab & Co. disclaims beneficial ownership and no one underlying
shareholder owns beneficially more than 5% of the shares of the Fund.
INVESTMENT ADVISER
The Adviser is a New York corporation with principal offices located at
One Corporate Center, Rye, New York 10580-1434. The Adviser also serves as
Adviser to The Gabelli Growth Fund, The Gabelli Value Fund Inc., The
Gabelli Equity Income Fund, The Gabelli U.S. Treasury Money Market Fund, The
Gabelli Small Cap Growth Fund, Inc., The Gabelli ABC Fund, The Gabelli Global
Telecommunications Fund, The Gabelli Global Convertible Securities Fund, The
Gabelli Global Interactive Couch Potato (R) Fund, Gabelli Gold Fund Inc.,
Gabelli Capital Asset Fund and Gabelli International Growth Fund, Inc., open-end
investment companies, and The Gabelli Equity Trust Inc., The Gabelli Convertible
Securities Fund, Inc., and The Gabelli Global Multimedia Trust Inc., closed-end
investment companies. The Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended.
Pursuant to an Amended and Restated Investment Advisory
Contract, which was approved by the shareholders of the Fund at a meeting held
on May 11, 1992 (the "Contract") , the Adviser furnishes a continuous
investment program for the Fund's portfolio, makes the day-to-day investment
decisions for the Fund, arranges the portfolio transactions of the Fund and
generally manages the Fund's investments in accordance with the stated policies
of the Fund, subject to the general supervision of the Board of Trustees of the
Fund.
Under the Contract, the Adviser also (i) provides the Fund with
the services of persons competent to perform such supervisory, administrative,
and clerical functions as are necessary to provide effective administration of
the Fund, including maintaining certain books and records and overseeing the
activities of the Fund's Custodian and Transfer Agent; (ii) oversees the
performance of administrative and professional services to the Fund by others,
including the Fund's Sub-Administrator, Custodian, Transfer Agent and
Dividend Disbursing Agent, as well as accounting, auditing and other services
performed for the Fund; (iii) provides the Fund with adequate office space and
facilities; (iv) prepares, but does not pay for, the periodic updating of the
Fund's registration statement, Prospectus and Additional Statement,
including the printing of such documents for the purpose of filings with the
SEC and state securities administrators, the Fund's tax returns, and
reports to the Fund's shareholders and the SEC ; (v) calculates the net
asset value of shares in the Fund; (vi) prepares, but does not pay for, all
filings under the securities or "Blue Sky" laws of such states or countries as
are designated by the Distributor, which may be required to register or qualify,
or continue the registration or qualification, of the Fund and/or its shares
under such laws; and (vii) prepares notices and agendas for meetings of the
Fund's Board of Trustees and minutes of such meetings in all matters required by
the Act to be acted upon by the Board.
Pursuant to a contract with the Adviser, First Data Investor Services
Group, Inc. (the "Sub-Administrator"), a subsidiary of First Data Corporation
(which is located at Exchange Place, Boston, Massachusetts 02109), administers
on behalf of the Adviser the operations of the Fund which do not concern the
investment advisory and portfolio management services of the Adviser. For such
services and the related expenses borne by the Sub-Administrator, the Adviser
pays an annual fee based on the aggregate average daily net assets of the Funds
under its administration advised by the Adviser as follows: up to $1 billion -
0.10%; $1 billion to $1.5 billion - 0.08%; $1.5 billion to $3 billion - 0.03%;
over $3 billion - 0.02%. The Sub-Administrator's fee is paid by the Adviser and
will result in no additional expense to the Fund.
The Contract provides that absent willful misfeasance, bad
faith, gross negligence or reckless disregard of its duty, the Adviser and its
employees, officers, directors and controlling persons are not liable to the
Fund or any of its investors for any act or omission by the Adviser or for any
error of judgment or for losses sustained by the Fund. However, the Contract
provides that the Fund is not waiving any rights it may have with respect to any
violation of law which cannot be waived. The Contract also provides
indemnification for the Adviser and each of these persons for any conduct for
which they are not liable to the Fund. The Contract in no way restricts
the Adviser from acting as Adviser to others. The Fund has agreed by the terms
of the Contract that the word "Gabelli" in its name is derived from the
name of the Adviser which in turn is derived from the name of Mario J. Gabelli;
that such name is the property of the Adviser for copyright and/or other
purposes; and that, therefore, such name may freely be used by the Adviser for
other investment companies, entities or products. The Fund has further agreed
that in the event that for any reason, the Adviser ceases to be its investment
adviser, the Fund will, unless the Adviser otherwise consents in writing,
promptly take all steps necessary to change its name to one which does not
include "Gabelli."
The Contract is terminable without penalty by the Fund on sixty
days' written notice when authorized either by majority vote of its outstanding
voting shares or by a vote of a majority of its Board of Trustees, or by the
Adviser on sixty days' written notice, and will automatically terminate in the
event of its "assignment" as defined by the Act. The Contract provides that,
unless terminated, it will remain in effect from year to year as long as such
continuance is annually approved by the Board of Trustees or the shareholders of
the Fund and, in either case, by a majority vote of the Trustees who are not
parties to the Agreement or "interested persons", as defined by the 1940 Act, of
any such party cast in person at a meeting called specifically for the purpose
of voting on the continuance of the Contract.
For the Fund's fiscal years ended December 31, 1994, December 31,
1995 and December 31, 1996, the fee paid to the Adviser was $9,992,690,
$10,714,960 and $11,146,282, respectively.
DISTRIBUTOR
To implement the Fund's 12b-1 Plan, the Fund has entered into a
Distribution Agreement with Gabelli & Company, Inc. (the "Distributor"), a New
York corporation which is an indirect subsidiary of the Adviser, having
principal offices located at One Corporate Center, Rye, New York 10580-1434. The
Distributor acts as agent of the Fund for the continuous offering of its shares
on a best efforts basis.
DISTRIBUTION PLAN
On February 26, 1997, the Fund adopted a Second Amended and Restated
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act.
Under its terms, the Plan remains in effect so long as its continuance is
specifically approved at least annually by vote of the Fund's Board of Trustees,
including a majority of the Trustees who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Fund ("Independent Trustees"). The Plan may not be amended to increase
materially the amount to be spent for services provided by the Distributor
thereunder without shareholder approval, and all material amendments of the Plan
must also be approved by the Trustees in the manner described above. The Plan
may be terminated at any time, without penalty, by vote of a majority of the
Independent Trustees, or by a vote of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act). Under the Plan, the
Distributor will provide the Trustees periodic reports of amounts expanded under
the Plan and the purpose for which expenditures were made.
No interested person of the Fund or any Independent Trustee of the Fund
had a direct or indirect financial interest in the operation of the Plan or
related agreements.
During the fiscal year ended December 31, 1996, the Fund reimbursed the
Distributor for distribution expenses under the Plan in the amount of
$2,706,466. Pursuant to the Plan, the Distributor incurred the following
expenses: $1,310,500 was spent on advertising, $228,800 on printing, postage and
stationary, $599,366 on overhead support expenses and $567,800 on salaries of
personnel of the Distributor.
Portfolio Transactions and Brokerage
Under the Contract , the Adviser is authorized on behalf of the
Fund to employ brokers to effect the purchase or sale of portfolio securities
with the objective of obtaining prompt, efficient and reliable execution and
clearance of such transactions at the most favorable price obtainable ("best
execution") at reasonable expense. Transactions in securities other than those
for which a securities exchange is the principal market are generally
executed through a brokerage firm and a commission is paid whenever it
appears that the broker can obtain a more favorable overall price. In general,
there may be no stated commission on principal transactions in over-the-counter
securities, but the prices of such securities may usually include undisclosed
commissions or markups.
When consistent with the objective of obtaining best execution, Fund
brokerage may be directed to brokers or dealers which furnish brokerage or
research services to the Fund or the Adviser of the type described in Section
28(e) of the Securities Exchange Act of 1934, as amended. The commissions
charged by a broker furnishing such brokerage or research services may be
greater than that which another qualified broker might charge if the Adviser
determines, in good faith, that the amount of such greater commission is
reasonable in relation to the value of the additional brokerage or research
services provided by the executing broker, viewed in terms of either the
particular transaction or the overall responsibilities of the Adviser or its
advisory affiliates to the accounts over which they exercise investment
discretion. Since it is not feasible to do so, the Adviser need not attempt to
place a specific dollar value on such services or the portion of the commission
which reflects the amount paid for such services but must be prepared to
demonstrate a good faith basis for its determinations.
Investment research obtained by allocations of Fund brokerage is used
to augment the scope and supplement the internal research and investment
strategy capabilities of the Adviser but does not reduce the overall expenses of
the Adviser to any material extent. Such investment research may be in written
form or through direct contact with individuals and includes information on
particular companies and industries as well as market, economic or institutional
activity areas. Research services furnished by brokers through which the Fund
effects securities transactions are used by the Adviser and its advisory
affiliates in carrying out their responsibilities with respect to all of their
accounts over which they exercise investment discretion. Such investment
information may be useful only to one or more of the other accounts of the
Adviser and its advisory affiliates, and research information received for the
commissions of those particular accounts may be useful both to the Fund and one
or more of such other accounts.
Neither the Fund nor the Adviser has any agreement or legally binding
understanding with any broker regarding any specific amount of brokerage
commissions which will be paid in recognition of such services. However, in
determining the amount of portfolio commissions directed to such brokers, the
Adviser does consider the level of services provided and, based on such
determinations, has allocated brokerage commissions of $494,944 on
portfolio transactions in the principal amounts of $359,241,795 during
1996. The average commission on these transactions was $0.0484 per
share.
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli and Company, Inc. ("Gabelli"), a broker-dealer member of
the National Association of Securities Dealers which is an affiliate of the
Adviser, when it appears that, as an introducing broker or otherwise, Gabelli
can obtain a price and execution which is at least as favorable as that
obtainable by other qualified brokers. As required by Rule 17e-1 under the
1940 Act, the Board of Trustees has adopted "Procedures" which provide
that commissions paid to Gabelli on stock exchange transactions may not exceed
that which would have been charged by another qualified broker or member firm
able to effect the same or a comparable transaction at an equally favorable
price and contains a schedule setting forth maximum commission charges for such
transactions designed to reflect that standard. Rule 17e-1 and the Procedures
contain requirements that the Board, including its "independent" Trustees,
conduct periodic compliance reviews of such brokerage allocations and review
such schedule at least annually for its continuing compliance with the foregoing
standard. The Adviser and Gabelli are also required to furnish reports and
maintain records in connection with such reviews.
To obtain the best execution of portfolio transactions on the New York Stock
Exchange ("NYSE"), Gabelli controls and monitors the execution of such
transactions on the floor of the NYSE through independent "floor brokers"
or through the Designated Order Turnaround System of the NYSE. Such
transactions are then cleared, confirmed to the Fund for the account of
Gabelli, and settled directly with the Custodian of the Fund by a clearing
house member firm which remits the commission less its clearance charges to
Gabelli. Pursuant to an agreement with the Fund, Gabelli pays all charges
incurred for such services and reports at least quarterly to the Board the
amount of such expenses and commissions. The net compensation realized by
Gabelli for its brokerage services is subject to the approval of the Board
and the "independent" Trustees of the Fund who must approve the continuance
of the arrangement at least annually. Commissions paid by the Fund pursuant
to the arrangement may not exceed the commission level specified by the
Procedures described above. Gabelli may also effect Fund portfolio
transactions in the same manner and pursuant to the same arrangements on
other national securities exchanges which adopt direct order access rules
similar to those of the NYSE.
The following table sets forth certain information regarding the Fund's
payment of brokerage commissions including commissions paid to Gabelli &
Company and Keeley Investment Corp. ("Keeley"). A significant shareholder
of Keeley is a director of a company that is an affiliate of the Adviser.
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year Ended Commissions
December 31, Paid
<S> <C> <C>
Total Brokerage Commissions.................................................. 1994 $355,059
1995 $438,241
1996 $494,944
Commissions paid to Gabelli & Company........................................ 1994 $ 24,043
1995 $ 93,418
1996 $130,061
Commissions paid to Keeley Investment Corp................................... 1994 $ 11,650
1995 $ 3,578
1996 $ 5,550
% of Total Brokerage Commissions paid to Gabelli & Company................... 1996 26.3%
% of Total Brokerage Commissions paid to Keeley Investment Corp.............. 1996 1.1%
% of Total Transactions involving Commissions paid to Gabelli & Company 1996 27.4%
% of Total Transactions involving Commissions paid to Keeley Investment Corp. 1996 0.9%
</TABLE>
The Fund's portfolio turnover rate for the fiscal years ended December 31, 1995
and December 31, 1996 were 26.4% and 14.9%, respectively.
REDEMPTION OF SHARES
Payment of the redemption price for shares redeemed may be made either
in cash or in portfolio securities (selected in the discretion of the Board of
Trustees of the Fund and taken at their value used in determining the Fund's net
asset value per share as described under "Net Asset Value"), or partly in cash
and partly in portfolio securities. However, payments will be made wholly in
cash unless the Board of Trustees believes that economic conditions exist which
would make such a practice detrimental to the best interests of the Fund. If
payment for shares redeemed is made wholly or partly in portfolio securities,
brokerage costs may be incurred by the investor in converting the securities to
cash. The Fund will not distribute in-kind portfolio securities that are not
readily marketable. The Fund has filed a formal election with the SEC
pursuant to which the Fund will only effect a redemption in portfolio securities
where the particular shareholder of record is redeeming more than $250,000 or 1%
of the Fund's total net assets, whichever is less, during any 90 day period. In
the opinion of the Fund's management, however, the amount of a redemption
request would have to be significantly greater than $250,000 before a redemption
wholly or partly in portfolio securities would be made.
Cancellation of purchase orders for Fund shares (as, for example, when
checks submitted to purchase shares are returned unpaid) causes a loss to be
incurred when the net asset value of the Fund shares on the date of cancellation
is less than on the original date of purchase. The investor is responsible for
such loss, and the Fund may reimburse itself or the Distributor for such loss by
automatically redeeming shares from any account registered at any time in that
shareholder's name, or by seeking other redress. In the event shares held in the
account of such shareholder are not sufficient to cover such loss, the
Distributor will promptly reimburse the Fund for the amount of such unrecovered
loss.
NET ASSET VALUE
For purposes of determining the Fund's net asset value per share,
readily marketable portfolio securities listed on the NYSE are valued,
except as indicated below, at the last sale price reflected at the close of the
regular trading session of the NYSE on the business day as of which such
value is being determined. If there has been no sale on such day, the securities
are valued at the mean of the closing bid and asked prices on such day. If no
asked prices are quoted on such day, then the security is valued at the closing
bid price on such day. If no bid or asked prices are quoted on such day,
then the security is valued by such method as the Board of Trustees shall
determine in good faith to reflect its fair market value. Readily marketable
securities not listed on the NYSE but listed on other national securities
exchanges or admitted to trading on the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") National List are valued in like
manner.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the Adviser to
be over-the-counter but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the
National Quotation Bureau or such other comparable sources as the Board of
Trustees deems appropriate to reflect their fair value. If no asked prices
are quoted on such day, then the security is valued at the closing bid price on
such day. If no bid or asked prices are quoted on such day, then the security is
valued by such method as the Board of Trustees shall determine in good faith to
reflect its fair market value.
Portfolio securities traded on more than one national securities
exchange or market are valued according to the broadest and most representative
market as determined by the Adviser. Securities traded primarily on foreign
exchanges are valued at the closing price on such foreign exchange immediately
prior to the close of the NYSE.
United States Government obligations and other debt instruments having
60 days or less remaining until maturity are stated at amortized cost.
Debt instruments having a greater remaining maturity will be valued at the
highest bid price obtained from a dealer maintaining an active market in that
security or on the basis of prices obtained from a pricing service approved as
reliable by the Board of Trustees. All other investment assets, including
restricted and not readily marketable securities, are valued under procedures
established by and under the general supervision and responsibility of the
Fund's Board of Trustees designed to reflect in good faith the fair value of
such securities.
INVESTMENT PERFORMANCE INFORMATION
The investment performance of the Fund quoted in advertising or sales
literature for the sale of its shares will be calculated on a total return basis
which assumes the reinvestment of all dividends and distributions. Total return
is computed by comparing the value of an assumed investment in Fund shares at
the offering price in effect at the beginning of the period shown with the
redemption price of the same investment at the end of the period (including
share(s) accrued thereon by the reinvestment of dividends and distributions).
Performance quotations given as a percentage will be derived by dividing the
amount of such total return by the amount of the assumed investment. When the
period shown is greater than one year, the result is referred to as cumulative
performance or cumulative total return.
Performance quotations will ordinarily be accompanied by the average annual
total return of the Fund for the past ten years as well as its total
return for the past five years and for the twelve months as of the end of
the most recent calendar quarter. Quotations of average annual total
return for periods greater than one year will be the compounded annual rate
of return which equates to the result of the previously described
calculation of cumulative total return. Computed in the manner described,
the total return of the Fund has been:
Year ended Total Return
---------- ------------
12/31/87 16.2%
12/31/88 31.1%
12/31/89 26.2%
12/31/90 (5.0)%
12/31/91 18.1%
12/31/92 14.9%
12/31/93 21.8%
12/31/94 (0.1)%
12/31/95 24.9%
12/31/96 13.4%
The Fund's average annual total return figures are as follows:
13.4% for the one year period from January 1, 1996 through December 31, 1996
14.6% for the five year period from January 1, 1992 through December 31, 1996
15.6% for the ten year period from January 1, 1987 through December 31, 1996
15.6%for the period from the Fund's inception on March 3, 1986 through December
31, 1996
The formula for computing the foregoing annual rate of total return is:
P (1 + T) n = ERV
P = Investment at the beginning of the period. T = Compounded annual rate of
total return. n = Number of years. ERV = Redemption value of the
same investment at the end of the period assuming the reinvestment of all
dividends and distributions.
Investors are cautioned that past results are not necessarily representative of
future results; that investment returns and principal value will fluctuate;
that investment performance is primarily a function of portfolio management
(which is affected by the economic and market environment as well as the
volatility of portfolio investments) and operating expenses; and that
performance information, such as that described above, may not provide a
valid basis of comparison with other investments and investment companies
using a different method of computing performance data.
<PAGE>
COUNSEL AND INDEPENDENT ACCOUNTANTS
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New
York 10022, is counsel to the Fund.
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York,
10036, independent accountants, have been selected to audit, and express their
opinion on, the Fund's annual financial statements.
GENERAL INFORMATION
The Fund's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office. Under Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable as partners for a trust's
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Fund
itself is unable to meet its obligations since the Declaration of Trust provides
for indemnification and reimbursement of expenses out of the property of the
Fund to any shareholder held personally liable for any obligation of the Fund
and also provides that the Fund shall, if requested, assume the defense of any
claim made against any shareholder for any act or obligation of the Trust and
satisfy any judgment recovered thereon.
The Fund reserves the right to create and issue a number of series of
shares, in which case the shares of each series would participate equally in the
earnings, dividends and assets of the particular series and would vote
separately to approve management agreements or changes in investment policies,
but shares of all series would vote together in the election or selection of
Trustees, principal underwriters and accountants and on any proposed material
amendment to the Fund's Declaration of Trust. Upon liquidation of the Fund,
shareholders of each series would be entitled to share pro rata in the net
assets of their respective series available for distribution to shareholders.
Shareholders are entitled to one vote for each share held (and
fractional vote for fractional shares) and may vote on the election of Trustees
and on other matters submitted to meetings of shareholders. It is not
contemplated that regular annual meetings of shareholders will be held. The
Declaration of Trust provides that the Fund's shareholders have the right, upon
the declaration in writing or vote of more than two thirds of its outstanding
shares, to remove a Trustee. The Trustees will call a meeting of shareholders to
vote upon the written request of the shareholders of 33 1/3 % of its shares (10%
in the case of removal of a Trustee). In addition, ten shareholders holding the
lesser of $25,000 worth or one percent of Fund shares may advise the Trustees in
writing that they wish to communicate with other shareholders for the purpose of
requesting a meeting to remove a Trustee. The Trustees will then, if requested
by the applicants, mail at the applicants' expense, the applicants'
communication to all other shareholders. Except for a change in the name of the
Trust, no amendment may be made to the Declaration of Trust without the
affirmative vote of the holders of more than 50% of its outstanding shares.
Shareholders have no preemptive or conversion rights. The Fund may be terminated
upon the sale of its assets to another issuer, if such sale is approved by the
vote of the holders of more than 50% of its outstanding shares. If not so
terminated, the Fund intends to continue indefinitely.
<PAGE>
FINANCIAL STATEMENTS
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS--98.3%
AEROSPACE--0.5%
75,000 Honeywell, Inc. .......... $ 3,267,189 $ 4,931,250
----------- -------------
AGRICULTURE--0.3%
130,000 Archer-Daniels-Midland
Co. ..................... 2,312,058 2,860,000
----------- -------------
AUTOMOTIVE--1.4%
264,500 General Motors
Corporation.............. 8,982,890 14,745,875
----------- -------------
AUTOMOTIVE: PARTS AND ACCESSORIES--5.5%
33,500 APS Holding Corporation,
Class A+................. 519,250 519,250
33,000 Borg-Warner Automotive,
Inc...................... 842,685 1,270,500
200,000 Echlin Inc. .............. 2,607,499 6,325,000
200,000 Federal-Mogul
Corporation.............. 3,786,560 4,400,000
675,000 GenCorp Inc. ............. 3,881,263 12,234,375
245,000 Genuine Parts Company..... 8,476,926 10,933,125
129,032 Handy & Harman............ 1,785,529 2,258,060
100,000 Johnson Controls, Inc. ... 2,659,139 8,287,500
20,000 LucasVarity plc, ADR+..... 474,638 760,000
130,000 Modine Manufacturing
Company.................. 1,259,406 3,477,500
39,875 Myers Industries, Inc. ... 139,536 672,890
165,000 Quaker State
Corporation.............. 2,229,022 2,330,625
40,000 Republic Automotive Parts,
Inc.+.................... 230,625 675,000
115,000 Standard Motor Products,
Inc. .................... 1,008,713 1,595,625
13,200 Superior Industries
International, Inc. ..... 76,515 305,250
100,000 TransPro Inc. ............ 784,174 912,500
148,000 UAP Inc., Class A......... 1,601,202 1,726,333
18,000 Wynn's International,
Inc. .................... 344,142 569,250
----------- -------------
32,706,824 59,252,783
----------- -------------
AVIATION: PARTS AND SERVICES--3.4%
88,000 Boeing Co. ............... 5,766,017 9,361,000
10,000 BE Aerospace Inc.+........ 193,625 271,250
420,000 Coltec Industries Inc.+... 5,738,871 7,927,500
101,000 Curtiss-Wright
Corporation.............. 2,532,272 5,087,875
115,000 General Motors
Corporation, Class H..... 5,355,433 6,468,750
60,000 Hi-Shear Industries
Inc. .................... 510,932 157,500
36,100 Hudson General
Corporation.............. 972,612 1,344,725
115,000 Precision Castparts
Corp. ................... 4,372,225 5,706,875
----------- -------------
25,441,987 36,325,475
----------- -------------
BROADCASTING--6.0%
13,200 BHC Communications, Inc.,
Class A.................. 1,162,780 1,338,150
397,206 Chris-Craft Industries,
Inc. .................... 8,421,873 16,633,001
65,560 Chris-Craft Industries,
Inc., Class B(a)......... 1,132,465 2,745,325
115,000 Gray Communications
Systems, Inc., Class B... 2,212,406 1,955,000
291,400 Grupo Televisa S.A.,
GDR+..................... 5,953,245 7,467,125
76,000 Liberty Corporation....... 1,759,798 2,983,000
53,000 LIN Television
Corporation+............. 587,795 2,239,250
14,100 Osborn Communications
Corporation+............. 71,426 209,958
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
BROADCASTING (CONTINUED)
100,000 Paxson Communications
Corporation, Class A+.... $ 1,104,809 $ 787,500
10,000 Providence Journal
Company, Class A+........ 182,037 306,250
100,000 Renaissance Communication
Corporation+............. 3,555,000 3,575,000
420,000 Television Broadcasting
Ltd. ORD................. 1,893,731 1,677,937
247,500 United Television,
Inc. .................... 15,847,291 21,315,938
75,000 Westinghouse Electric
Corp. . 1,121,126 1,490,625
----------- -------------
45,005,782 64,724,059
----------- -------------
BUSINESS SERVICES--1.8%
42,000 BBN Corporation+.......... 926,548 945,000
50,000 Berlitz International,
Inc., New+............... 725,813 1,043,750
50,000 Ecolab Inc. .............. 1,571,512 1,881,250
12,546 Hach Company ............. 148,380 238,374
85,000 International Business
Machines Corporation..... 4,090,224 12,835,000
71,000 Landauer, Inc. ........... 441,367 1,739,500
72,000 Nashua Corporation........ 2,313,818 864,000
----------- -------------
10,217,662 19,546,874
----------- -------------
CABLE--3.6%
70,000 BET Holdings, Inc., Class
A+....................... 1,285,712 2,012,500
160,000 Cablevision Systems
Corporation, Class A+.... 6,920,649 4,900,000
40,000 Comcast Corporation, Class
A........................ 593,113 705,000
35,791 Comcast Corporation, Class
A, Special............... 663,913 637,527
400,000 International Family
Entertainment, Inc.,
Class B+................. 4,832,941 6,200,000
40,000 Shaw Communications Inc.,
Class B.................. 363,398 221,971
30,000 Shaw Communications Inc.,
Class B, Conv............ 191,728 166,478
100,000 TCI Satellite
Entertainment
Inc., Class A+........... 1,374,608 987,500
810,000 Tele-Communications, Inc.,
Class A+................. 12,127,597 10,580,625
383,000 Tele-Communications,
Inc./Liberty Media Group,
Class A+................. 8,971,422 10,939,438
60,000 United International
Holdings, Inc., Class
A+....................... 824,424 735,000
50,000 US WEST Media Group+...... 832,425 925,000
----------- -------------
38,981,930 39,011,039
----------- -------------
CLOSED-END FUNDS--0.1%
85,322 Royce Value Trust,
Inc. .................... 962,762 1,077,190
----------- -------------
COMMUNICATIONS
EQUIPMENT--0.4%
115,000 Allen Group Inc. ......... 712,812 2,558,750
40,000 Lucent Technologies
Inc. .................... 1,777,872 1,850,000
----------- -------------
2,490,684 4,408,750
----------- -------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
CONSUMER PRODUCTS--8.9%
375,000 American Brands, Inc. .... $13,164,115 $ 18,609,375
400,000 Carter-Wallace, Inc. ..... 6,253,615 6,250,000
220,000 Church & Dwight Co.,
Inc. .................... 4,983,260 5,032,500
22,000 Culbro Corporation+....... 1,055,143 1,427,250
45,000 Department 56, Inc.+...... 1,053,389 1,113,750
22,000 Duracell International
Inc. .................... 625,711 1,537,250
65,000 Eastman Kodak Company..... 3,662,540 5,216,250
155,000 Fieldcrest Cannon,
Inc.+.................... 2,212,147 2,480,000
70,000 First Brands
Corporation.............. 948,401 1,986,250
215,000 General Electric
Company.................. 10,455,131 21,258,125
50,000 Gillette Company.......... 1,420,489 3,887,500
23,000 Harley Davidson, Inc...... 227,175 1,081,000
230,000 Ralston Purina Group...... 8,779,158 16,876,250
90,000 Scotts Company, Class
A+....................... 1,566,705 1,788,750
120,000 Syratech Corporation+..... 2,409,981 3,780,000
100,000 Tambrands Inc. ........... 4,083,475 4,087,500
----------- -------------
62,900,435 96,411,750
----------- -------------
CONSUMER SERVICES--0.5%
50,000 HSN, Inc.+................ 1,174,841 1,187,500
205,000 Rollins, Inc.............. 2,676,982 4,100,000
45,000 Ticketmaster Group
Inc.+.................... 635,000 545,625
----------- -------------
4,486,823 5,833,125
----------- -------------
DIVERSIFIED
INDUSTRIAL--3.8%
12,000 Anixter International
Inc.+.................... 108,105 193,500
225,000 Crane Co. ................ 3,970,482 6,525,000
76,100 GATX Corporation.......... 2,443,121 3,690,850
170,000 ITT Industries Inc. ...... 2,780,236 4,165,000
150,000 Katy Industries, Inc. .... 1,357,500 2,175,000
6,500 Kyocera Corporation,
ADR...................... 448,062 793,000
360,000 Lamson & Sessions Co.+.... 1,947,317 2,610,000
166,000 Lawter International,
Inc. .................... 1,599,025 2,095,750
75,000 Minnesota Mining and
Manufacturing Company.... 4,613,390 6,215,625
79,000 National Service
Industries, Inc. ........ 1,844,836 2,952,625
80,000 Thomas Industries Inc. ... 1,298,410 1,670,000
200,000 Trinity Industries,
Inc. .................... 2,724,402 7,500,000
----------- -------------
25,134,886 40,586,350
----------- -------------
ELECTRONICS--0.1%
2,000 Hitachi, Ltd., ADR........ 221,767 185,000
11,000 Imation Corporation+...... 224,636 309,375
10,000 Sony Corporation, ADR..... 544,303 656,250
----------- -------------
990,706 1,150,625
----------- -------------
ENERGY--3.8%
50,000 Atlantic Richfield
Company.................. 5,368,509 6,631,250
35,000 British Petroleum Company
plc, ADR................. 1,568,033 4,948,125
50,000 Burlington Resources
Inc. .................... 2,097,021 2,518,750
30,000 Chevron Corporation....... 1,016,500 1,950,000
165,000 Eastern Enterprises....... 4,444,700 5,836,875
60,000 Enron Oil & Gas Company... 548,976 1,515,000
105,000 Exxon Corporation......... 6,387,342 10,290,000
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
ENERGY (CONTINUED)
20,000 Halliburton Company....... $ 840,758 $ 1,205,000
120,000 Kaneb Services, Inc.+..... 361,400 390,000
40,000 PacifiCorp................ 778,355 820,000
80,000 Southwest Gas
Corporation.............. 1,378,722 1,540,000
30,000 Texaco Inc. .............. 1,890,875 2,943,750
----------- -------------
26,681,191 40,588,750
----------- -------------
ENTERTAINMENT--5.6%
110,000 EMI Group plc, Sponsored
ADR...................... 1,251,853 2,611,400
220,458 Gaylord Entertainment
Company, Class A......... 4,548,699 5,042,977
100,000 GC Companies, Inc.+....... 2,897,746 3,462,500
150,000 Havas, Sponsored ADR...... 2,933,915 2,568,750
20,000 PolyGram NV............... 574,275 995,000
690,000 Time Warner Inc. ......... 20,062,217 25,875,000
11,000 Todd-AO Corporation,
Class A.................. 30,000 112,750
200,000 Viacom Inc., Class A+..... 4,479,891 6,900,000
210,000 Viacom Inc., Class B+..... 5,698,160 7,323,750
75,000 Walt Disney Company....... 3,540,448 5,221,875
----------- -------------
46,017,204 60,114,002
----------- -------------
EQUIPMENT AND SUPPLIES--11.4%
355,000 AMETEK, Inc. ............. 5,065,510 7,898,750
100,000 AMP Incorporated.......... 3,799,733 3,837,500
22,000 Amphenol Corporation,
Class A+................. 253,636 489,500
195,000 AptarGroup, Inc. ......... 2,813,792 6,873,750
60,000 Caterpillar Inc. ......... 1,619,251 4,515,000
65,000 CLARCOR Inc. ............. 1,239,362 1,438,125
100,000 CTS Corporation........... 2,084,351 4,275,000
420,000 Deere & Company........... 6,531,193 17,062,500
230,000 Donaldson Company, Inc. .. 2,699,344 7,705,000
40,000 EG&G Inc. ................ 709,125 805,000
163,600 Gerber Scientific, Inc. .. 1,642,712 2,433,550
340,000 IDEX Corporation.......... 4,097,480 13,557,500
86,000 Ingersoll-Rand Company.... 3,250,039 3,827,000
200,000 Kollmorgen Corporation.... 1,861,980 2,200,000
90,000 Lufkin Industries, Inc. .. 1,627,761 2,250,000
60,000 Manitowoc Company, Inc. .. 889,180 2,430,000
240,000 Mark IV Industries,
Inc. .................... 1,745,369 5,430,000
400,000 Navistar International
Corporation+............. 6,347,992 3,650,000
10,000 PACCAR Inc. .............. 522,021 680,000
120,000 Pittway Corporation....... 1,529,486 6,255,000
241,000 Pittway Corporation,
Class A.................. 2,175,914 12,893,500
50,000 Sequa Corporation,
Class A+................. 1,974,636 1,962,500
86,000 Sequa Corporation,
Class B+................. 4,177,785 4,300,000
84,000 SPS Technologies, Inc.+... 2,480,544 5,397,000
21,500 TRINOVA Corporation....... 628,063 782,063
15,000 Valmont Industries,
Inc. .................... 242,908 618,750
----------- -------------
62,009,167 123,566,988
----------- -------------
FINANCIAL SERVICES--5.7%
1 Al-Zar Ltd.+ (a).......... 0 350
450,000 American Express
Company.................. 10,365,809 25,425,000
220 Berkshire Hathaway
Inc.+.................... 874,549 7,502,000
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
70,000 Commerzbank AG,
Sponsored ADR............ $ 1,365,494 $ 1,767,500
140,000 Deutsche Bank AG,
Sponsored ADR............ 6,094,375 6,440,000
100,000 H&R Block Inc. ........... 3,218,021 2,900,000
255,000 Lehman Brothers Holdings
Inc. .................... 4,600,725 8,000,625
86,000 Midland Company........... 2,706,145 3,311,000
60,000 Salomon Inc. ............. 2,259,574 2,827,500
25,000 State Street Boston
Corporation.............. 717,712 1,612,500
20,000 SunTrust Banks, Inc. ..... 424,879 985,000
11,941 Transamerica Corporation.. 583,636 944,832
8,000 Value Line, Inc. ......... 115,500 354,000
----------- -------------
33,326,419 62,070,307
----------- -------------
FOOD AND BEVERAGE--7.4%
76,300 Brown-Forman Corporation,
Class A.................. 2,574,752 3,462,113
74,263 Chock Full o'Nuts
Corporation.............. 451,406 371,315
46,000 Coca-Cola Company......... 395,569 2,420,750
17,000 CPC International Inc. ... 602,088 1,317,500
50,000 Delchamps, Inc. .......... 1,171,317 968,750
4,500 Farmer Brothers Company... 476,380 684,000
62,500 General Mills, Inc. ...... 1,396,165 3,960,937
35,000 Heinz Company (H.J.)...... 897,409 1,260,000
64,000 Hershey Foods
Corporation.............. 1,360,163 2,800,000
82,000 Kellogg Company........... 3,106,755 5,381,250
25,000 LVHM Moet Hennessy Louis
Vuitton, Sponsored ADR... 971,562 1,400,000
530,000 PepsiCo, Inc. ............ 11,550,232 15,502,500
300,000 Quaker Oats Company....... 9,569,551 11,437,500
60,000 Ralcorp Holdings, Inc.+... 895,290 1,267,500
20,000 Rykoff-Sexton, Inc. ...... 316,400 317,500
285,000 Seagram Company Ltd. ..... 8,381,697 11,043,750
59,140 Tootsie Roll Industries,
Inc. .................... 1,978,948 2,343,423
300,000 Whitman Corporation....... 2,746,742 6,862,500
130,000 Wrigley (Wm.) Jr.
Company.................. 5,904,862 7,312,500
----------- -------------
54,747,288 80,113,788
----------- -------------
HEALTH CARE--2.9%
13,000 Amgen Inc.+............... 237,446 706,875
20,000 Biogen, Inc.+............. 299,450 775,000
10,000 BioWhittaker, Inc.+....... 40,787 80,000
48,000 Chiron Corporation+....... 663,895 894,000
100,000 Genentech, Inc.+.......... 4,804,136 5,362,500
160,000 Johnson & Johnson......... 3,213,734 7,960,000
70,000 Mallinckrodt Group,
Inc. .................... 2,175,407 3,088,750
75,000 Merck & Co., Inc. ........ 2,539,850 5,943,750
85,000 Pfizer Inc. .............. 2,841,294 7,044,375
----------- -------------
16,815,999 31,855,250
----------- -------------
HOTELS/GAMING--2.8%
35,000 Circus Circus Enterprises,
Inc.+.................... 973,791 1,203,125
40,000 GTECH Holdings
Corporation+............. 755,188 1,280,000
14,000 Harrah's Entertainment
Inc.+.................... 131,836 278,250
500,000 Hilton Hotels
Corporation.............. 6,829,916 13,062,500
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
HOTELS/GAMING (CONTINUED)
200,000 ITT Corporation, New+..... $ 7,289,764 $ 8,675,000
200,000 Ladbroke Group plc........ 522,219 791,174
210,000 Mirage Resorts,
Incorporated+............ 1,079,227 4,541,250
30,000 Santa Anita Realty
Enterprises, Inc. ....... 473,664 787,500
----------- -------------
18,055,605 30,618,799
----------- -------------
HOUSING RELATED--0.3%
165,000 Nortek, Inc.+............. 659,077 3,300,000
4,333 Nortek, Inc., Special
Common+(a)............... 59,049 60,662
----------- -------------
718,126 3,360,662
----------- -------------
METALS AND MINING--0.6%
34,350 Barrick Gold Corporation.. 733,755 983,269
105,000 Echo Bay Mines Ltd. ...... 1,104,369 695,625
45,000 Homestake Mining Company.. 776,062 641,250
33,000 Newmont Gold Company...... 1,375,428 1,443,750
220,000 Pegasus Gold Inc.+........ 3,093,995 1,663,750
17,500 Placer Dome Inc. ......... 336,400 380,625
200,000 Royal Oak Mines Inc.+..... 840,247 650,000
----------- -------------
8,260,256 6,458,269
----------- -------------
PAPER AND FOREST PRODUCTS--1.1%
160,000 Greif Bros. Corporation,
Class A.................. 3,084,010 4,560,000
115,000 St. Joe Corp. ............ 3,925,871 7,475,000
----------- -------------
7,009,881 12,035,000
----------- -------------
PUBLISHING--2.9%
75,000 American Media Inc.,
Class A+................. 732,562 440,625
5,000 E.W. Scripps Company,
Class A.................. 62,219 175,000
300,000 Golden Books Family
Entertainment, Inc.+..... 4,201,294 3,337,500
35,000 McClatchy Newspapers,
Inc., Class A............ 723,251 1,225,000
138,000 McGraw-Hill Companies,
Inc. .................... 3,924,626 6,365,250
372,000 Media General, Inc.,
Class A.................. 9,109,696 11,253,000
45,000 Meredith Corporation...... 1,821,494 2,373,750
90,000 New York Times Company,
Class A.................. 1,419,273 3,420,000
15,000 News Corporation Limited,
ADS...................... 255,587 313,125
70,000 Reader's Digest
Association, Inc.,
Class B.................. 2,793,360 2,537,500
----------- -------------
25,043,362 31,440,750
----------- -------------
REAL ESTATE--0.4%
280,000 Catellus Development
Corporation+............. 2,215,000 3,185,000
12,000 Florida East Coast
Industries, Inc. ........ 631,838 1,048,500
----------- -------------
2,846,838 4,233,500
----------- -------------
RETAIL--2.1%
46,000 Aaron Rents, Inc. ........ 159,101 546,250
20,000 Aaron Rents, Inc.,
Class A.................. 83,263 280,000
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL (CONTINUED)
160,000 Burlington Coat Factory
Warehouse Corporation+... $ 2,109,612 $ 2,080,000
125,000 Earl Scheib, Inc.+........ 885,924 875,000
50,000 Fingerhut Companies,
Inc. .................... 711,335 612,500
91,000 Lillian Vernon
Corporation.............. 1,287,334 1,114,750
675,000 Neiman Marcus Group,
Inc.+.................... 9,760,037 17,212,500
27,500 Thorn plc, ADR+........... 357,147 470,938
----------- -------------
15,353,753 23,191,938
----------- -------------
RETAIL: FOOD AND DRUG--1.0%
80,000 Albertson's, Inc. ........ 2,645,875 2,850,000
100,000 American Stores Company... 2,530,213 4,087,500
46,000 Giant Food Inc.,
Class A.................. 1,565,675 1,587,000
45,000 Kroger Co.+............... 1,043,500 2,092,500
----------- -------------
7,785,263 10,617,000
----------- -------------
SPECIALTY CHEMICAL--1.1%
50,000 E.I. du Pont de Nemours
and Company.............. 3,122,625 4,718,750
240,000 Ferro Corporation......... 5,146,540 6,810,000
----------- -------------
8,269,165 11,528,750
----------- -------------
TELECOMMUNICATIONS--8.5%
120,000 Aliant Communications
Inc. .................... 1,725,367 2,040,000
170,000 AT&T Corp. ............... 6,333,990 7,395,000
100,000 BC TELECOM Inc. .......... 1,768,699 2,164,944
290,000 BCE Inc. ................. 9,927,875 13,847,500
22,500 BellSouth Corporation..... 577,998 908,437
100,000 Cable & Wireless plc,
Sponsored ADR............ 2,083,454 2,462,500
275,000 C-TEC Corporation+........ 5,507,314 6,668,750
46,500 C-TEC Corporation,
Class B+................. 730,744 1,104,375
70,000 Frontier Corporation...... 1,286,117 1,583,750
27,000 Globalstar
Telecommunications+...... 488,250 1,701,000
235,000 GTE Corporation........... 5,019,945 10,692,500
35,000 Hong Kong
Telecommunications Ltd.,
Sponsored ADR............ 545,695 568,750
55,000 Motorola, Inc. ........... 753,575 3,375,625
25,000 Northern Telecom Limited.. 941,875 1,546,875
40,000 NYNEX Corporation......... 1,728,725 1,925,000
15,000 Pacific Telesis Group
Inc. .................... 404,013 551,250
140,000 Rogers Communications,
Inc., Class B+........... 1,259,862 997,500
25,000 Royal PTT Nederland,
Sponsored ADR............ 668,718 946,875
55,000 SBC Communications Inc. .. 1,400,393 2,846,250
28,000 Southern New England
Telecommunications
Corporation.............. 942,025 1,088,500
180,000 Sprint Corporation........ 3,495,790 7,177,500
165,000 STET -- Societa
Finanziaria Telefonica
SpA, Sponsored ADR....... 3,943,073 7,321,875
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
TELECOMMUNICATIONS (CONTINUED)
1,400,000 Telecom Italia SpA ORD.... $ 1,635,559 $ 3,636,124
98,000 Telecomunicacoes
Brasileiras SA
(Telebras), Sponsored
ADR...................... 2,989,234 7,497,000
65,224 Telecomunicacoes de Sao
Paulo SA (Telesp)+....... 10,474 14,099
1,521,945 Telecomunicacoes de Sao
Paulo SA (Telesp)
Preference Shares........ 190,268 329,552
17,500 Telefonica de Espana,
Sponsored ADR............ 595,858 1,211,875
18,000 Telefonos De Mexico SA,
Class L, ADR............. 598,837 594,000
----------- -------------
57,553,727 92,197,406
----------- -------------
TRANSPORTATION--0.9%
105,000 AMR Corporation+.......... 6,535,020 9,253,125
----------- -------------
WIRELESS COMMUNICATIONS--3.5%
200,000 AirTouch Communications
Inc.+.................... 4,649,781 5,050,000
22,500 Associated Group, Inc.,
Class A+................. 201,448 691,875
18,500 Associated Group, Inc.,
Class B+................. 98,787 550,375
398,000 Century Telephone
Enterprises, Inc. ....... 9,074,938 12,288,250
200,000 COMSAT Corporation,
Series 1................. 4,344,970 4,925,000
65,000 NEXTEL Communications,
Inc., Class A+........... 798,199 849,062
2,400,000 Telecom Italia Mobile
SpA...................... 2,171,791 6,067,238
150,000 Telephone and Data
Systems, Inc. ........... 1,821,004 5,437,500
100,000 360 degrees Communications
Company+................. 1,285,093 2,312,500
----------- -------------
24,446,011 38,171,800
----------- -------------
TOTAL COMMON STOCKS..................... 685,356,893 1,062,281,229
----------- -------------
PREFERRED STOCKS--0.3%
CONSUMER PRODUCTS--0.1%
35,000 Fieldcrest Cannon, Inc.,
Series A, 6.00%, Conv.
Pfd., 144A(c)............ 1,933,750 1,373,750
----------- -------------
EQUIPMENT AND SUPPLIES--0.1%
20,000 Sequa Corporation, $5.00,
Cumulative Conv. Pfd. ... 1,538,833 1,400,000
----------- -------------
METALS AND MINING--0.0%
10,000 Freeport-McMoRan Inc.,
Depository Shares, 7.00%,
Cumulative Conv. Pfd. ... 213,000 277,500
----------- -------------
TELECOMMUNICATIONS--0.1%
13,500 Sprint Corporation, 8.25%,
Conv. Pfd. .............. 430,312 484,312
----------- -------------
TOTAL PREFERRED STOCKS.................. 4,115,895 3,535,562
----------- -------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- -----
<C> <S> <C> <C>
COMMON STOCK WARRANTS--0.0%
115,000 Jacor Communications
Inc., Warrants,
expires 09/18/2001+... $ 301,875 $ 230,000
------------ --------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C> <C>
CORPORATE BONDS--0.3%
AUTOMOTIVE PARTS AND ACCESSORIES--0.1%
$ 400,000 GenCorp Inc., Conv.
Sub. Deb., 8.00% due
08/01/2002............ 396,055 457,000
------------ --------------
ENTERTAINMENT--0.2%
FRF 593,750 Havas, Conv. Bonds,
Payment-in-kind, 3.00%
due 12/31/1997........ 158,702 147,759
$ 2,700,000 Viacom Inc., Sub. Deb.,
8.00% due 07/07/2006.. 1,845,888 2,608,875
------------ --------------
2,004,590 2,756,634
------------ --------------
TOTAL CORPORATE BONDS................ 2,400,645 3,213,634
------------ --------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- -----
<C> <S> <C> <C>
U.S. TREASURY BILLS--2.7%
$28,935,000 4.71% to 5.06%++ due
01/09/1997
-- 02/06/1997........ $ 28,851,448 $ 28,851,448
------------ --------------
TOTAL INVESTMENTS............. 101.6% $721,026,756(b) 1,098,111,873
============
OTHER ASSETS AND LIABILITIES
(NET)........................ (1.6) (17,472,601)
----- --------------
NET ASSETS.................... 100.0% $1,080,639,272
===== ==============
</TABLE>
- ---------------
(a) Security fair valued by the Board of Trustees.
(b) Aggregate cost for Federal tax purposes was $722,056,749. Net unrealized
appreciation for Federal tax purposes was $376,055,124 (gross unrealized
appreciation was $392,187,132 and gross unrealized depreciation was
$16,132,008).
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. The market value
of these securities at December 31, 1996 was $1,373,750, representing 0.13%
of total net assets.
+ Non-income producing security
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt ADS -- American Depositary Share
FRF -- French Franc GDR -- Global Depositary Receipt ORD -- Ordinary Share
See Notes to Financial Statements.
22
<PAGE>
THE GABELLI ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
- ----------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost
$721,026,756)................... $1,098,111,873
Cash.............................. 123,772
Receivable for investments sold... 5,327,352
Dividends and interest
receivable...................... 1,628,996
Receivable for Fund shares sold... 541,221
--------------
Total Assets.................... 1,105,733,214
--------------
LIABILITIES:
Payable for investments
purchased....................... 13,849,400
Dividend payable.................. 7,676,685
Payable for Fund shares redeemed.. 2,236,593
Payable for investment advisory
fee............................. 929,039
Payable for distribution fees..... 272,000
Accrued expenses and other
payables........................ 130,225
--------------
Total Liabilities............... 25,093,942
--------------
Net assets applicable to
40,907,365 shares of
beneficial interest
outstanding................... $1,080,639,272
==============
NET ASSETS CONSIST OF:
Shares of beneficial interest at
par value....................... $ 409,074
Additional paid-in capital........ 704,247,412
Distributions in excess of net
realized gain on investments.... (1,104,816)
Net unrealized appreciation of
investments..................... 377,087,602
--------------
Total Net Assets................ $1,080,639,272
==============
Net Asset Value, offering and
redemption price per share
($1,080,639,272 / 40,907,365
shares outstanding; unlimited
number of shares authorized of
$0.01 par value).................. $26.42
=====
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
- ----------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income (net of foreign
withholding taxes of $238,039).... $ 17,652,082
Interest income..................... 3,042,593
------------
Total Investment Income........... 20,694,675
------------
EXPENSES:
Investment advisory fee............. 11,146,282
Distribution fees................... 2,706,466
Shareholder services fees........... 896,639
Trustees' fees...................... 64,107
Legal and audit fees................ 39,300
Other............................... 93,976
------------
Total Expenses.................... 14,946,770
------------
NET INVESTMENT INCOME................. 5,747,905
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on securities
sold.............................. 97,354,924
Net realized gain on foreign
currency transactions............. 3,292
------------
Net realized gain on
investments..................... 97,358,216
------------
Net unrealized appreciation of
securities, foreign currency and
other assets and liabilities:
Beginning of year................. 341,177,313
End of year....................... 377,087,602
------------
Change in net unrealized
appreciation of securities,
foreign currency and other
assets and liabilities........ 35,910,289
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS......................... 133,268,505
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS..................... $139,016,410
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
12/31/96 12/31/95
-------------- --------------
<S> <C> <C>
Net investment income.................................................................... $ 5,747,905 $ 10,225,688
Net realized gain on investments......................................................... 97,358,216 69,013,606
Net change in unrealized appreciation of investments..................................... 35,910,289 157,165,724
-------------- --------------
Net increase in net assets resulting from operations..................................... 139,016,410 236,405,018
Distributions to shareholders from:
Net investment income.................................................................. (5,681,295) (10,040,428)
Net realized gain on investments....................................................... (97,358,216) (69,013,606)
Distributions in excess of net realized gain on investments............................ (410,434) (94,875)
Net decrease in net assets from Fund share transactions.................................. (46,466,539) (47,966,474)
-------------- --------------
Net increase/(decrease) in net assets.................................................... (10,900,074) 109,289,635
NET ASSETS:
Beginning of year........................................................................ 1,091,539,346 982,249,711
-------------- --------------
End of year.............................................................................. $1,080,639,272 $1,091,539,346
============== ==============
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
THE GABELLI ASSET FUND -- NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli Asset Fund (the "Fund") was
organized on November 25, 1985 as a Massachusetts business trust. The Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), whose primary
objective is growth of capital. The Fund commenced operations on March 3, 1986.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements.
SECURITY VALUATION. Portfolio securities which are traded only on a nationally
recognized securities exchange or in the over-the-counter market which are
National Market System Securities are valued at the last sale price as of the
close of business on the day the securities are being valued, or lacking any
sales, at the mean between closing bid and asked prices. Other over-the-counter
securities are valued at the mean between current bid and asked prices as
reported by NASDAQ, the National Quotation Bureau or such other comparable
sources as the Board of Trustees deems appropriate to reflect their fair value.
Portfolio securities which are traded both in the over-the-counter market and on
a stock exchange are valued according to the broadest and most representative
market, as determined by Gabelli Funds, Inc. (the "Adviser"). Securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Board of
Trustees of the Fund. Short-term investments that mature in more than 60 days
are valued at the highest bid price obtained from a dealer maintaining an active
market in that security. Short-term investments that mature in 60 days or fewer
are valued at amortized cost, unless the Board of Trustees determines that such
valuation does not constitute fair value. Debt instruments having a greater
maturity are valued at the highest bid price obtained from a dealer maintaining
an active market in those securities or on the basis of prices obtained from a
pricing service approved as reliable by the Board of Trustees.
FOREIGN CURRENCY. The books and records of the Fund are maintained in United
States (U.S.) dollars. Foreign currencies, investments and other assets and
liabilities are translated into U.S. dollars at the exchange rates prevailing at
the end of the period, and purchases and sales of investment securities, income
and expenses are translated on the respective dates of such transactions.
Unrealized gains and losses, not relating to securities, which result from
changes in foreign currency exchange rates have been included in unrealized
appreciation/depreciation of foreign currency and other assets and liabilities.
Unrealized gains and losses of securities, which result from changes in foreign
exchange rates as well as changes in market prices of securities, have been
included in unrealized appreciation/depreciation of investment securities. Net
realized foreign currency gains and losses resulting from changes in exchange
rates include foreign currency gains and losses between trade date and
settlement date on investment securities transactions, foreign currency
transactions and the difference between the amounts of interest and dividends
recorded on the books of the Fund and the amounts actually received. The portion
of foreign currency gains and losses related to fluctuation in exchange rates
between the initial trade date and subsequent sale trade date is included in
realized gain/(loss) on investments sold.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined using specific identification as the cost method. Interest income
(including amortization of premium and accretion of discount) is recorded as
earned. Dividend income is recorded on the ex-dividend date.
24
<PAGE>
THE GABELLI ASSET FUND -- NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund. Permanent
differences incurred during the year ended December 31, 1996 resulting from
different book and tax accounting policies for currency gains and losses and
capital gain distributions, are reclassified between net investment income and
net realized gains at year end. The reclassifications for the year ended
December 31, 1996 were a decrease to undistributed net investment income of
$64,802 and a decrease to distributions in excess of net realized gain on
investments of $64,802.
PROVISION FOR INCOME TAXES. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
2. AGREEMENTS WITH AFFILIATED PARTIES. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00 percent of the value of the Fund's average daily net
assets. In accordance with the Advisory Agreement, the Adviser provides a
continuous investment program for the Fund's portfolio, provides all facilities
and personnel, including offices, required for its administrative management,
and pays the compensation of all officers and Trustees of the Fund who are its
affiliates. The Adviser is obligated to reimburse the Fund in the event the
Fund's expenses exceed the most restrictive expense ratio limitation imposed by
any state. No such reimbursement was required during the year ended December 31,
1996.
3. DISTRIBUTION PLAN. The Fund has adopted a plan of distribution (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. Pursuant to this Plan, the
Distributor, Gabelli & Company, Inc. ("Gabelli & Company"), an indirect
majority-owned subsidiary of the Adviser, is authorized to purchase advertising,
sales literature and other promotional material and to pay its own salespeople.
The Fund will reimburse the Distributor for these expenditures up to 0.25
percent on an annual basis of the value of the Fund's average daily net assets.
In addition, if and to the extent that the fee the Fund pays to the Adviser, as
well as other payments the Fund makes, are considered as indirectly financing
any activity which is primarily intended to result in the sale of the Fund's
shares, such payments are authorized under the Plan. For the year ended December
31, 1996, the Fund incurred distribution costs under the Plan of $2,706,466,
representing 0.24 percent of the value of the Fund's average daily net assets.
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from sales of
securities for the year ended December 31, 1996, other than U.S. government and
short-term securities, aggregated $158,882,028 and $297,698,687, respectively.
5. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 1996, the
Fund paid brokerage commissions of $135,611 to Gabelli & Company and its
affiliates.
25
<PAGE>
THE GABELLI ASSET FUND -- NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
6. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
12/31/96 12/31/95
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold............................................... 6,138,309 $ 168,589,644 6,338,311 $ 156,103,869
Shares issued upon reinvestment of dividends.............. 3,624,998 95,772,441 2,772,475 71,391,947
Shares redeemed........................................... (11,251,210) (310,828,624) (10,946,512) (275,462,290)
----------- ------------- ------------ -------------
Net decrease.............................................. (1,487,903) $ (46,466,539) (1,835,726) $ (47,966,474)
=========== ============= ============ =============
</TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Per share amounts for a Fund share outstanding throughout each year ended
December 31,
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of year........................ $ 25.75 $ 22.21 $ 23.30 $ 19.88 $ 17.96
---------- ---------- -------- -------- --------
Net investment income..................................... 0.15 0.26 0.26 0.16 0.26
Net realized and unrealized gain/(loss) on investments.... 3.29 5.28 (0.30) 4.18 2.41
---------- ---------- -------- -------- --------
Total from investment operations.......................... 3.44 5.54 (0.04) 4.34 2.67
---------- ---------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................... (0.15) (0.25) (0.25) (0.16) (0.25)
Distributions in excess of net investment income........ -- -- (0.01) -- --
Net realized gains...................................... (2.61) (1.75) (0.76) (0.76) (0.50)
Distributions in excess of net realized gains........... (0.01) (0.00)(a) (0.03) -- --
---------- ---------- -------- -------- --------
Total distributions....................................... (2.77) (2.00) (1.05) (0.92) (0.75)
---------- ---------- -------- -------- --------
Net asset value, end of year.............................. $ 26.42 $ 25.75 $ 22.21 $ 23.30 $ 19.88
========== ========== ======== ======== ========
Total return*............................................. 13.4% 24.9% (0.1)% 21.8% 14.9%
========== ========== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's)........................ $1,080,639 $1,091,539 $982,250 $945,408 $632,575
Ratio of net investment income to average net assets.... 0.52% 0.95% 1.10% 0.82% 1.42%
Ratio of operating expenses to average net assets....... 1.34% 1.33% 1.28% 1.31% 1.31%
Portfolio turnover rate................................... 14.9% 26.4% 18.7% 16.0% 14.4%
Average commission rate (per share of security)(b)........ $ 0.0484 N/A N/A N/A N/A
</TABLE>
- ---------------
* Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends.
(a) Amount represents less than $0.005 per share.
(b) Average commission rate (per share of security) as required by amended SEC
disclosure requirements effective for fiscal years beginning after September
1, 1995.
26
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
THE GABELLI ASSET FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Asset Fund (the "Fund")
at December 31, 1996, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 14, 1997
- --------------------------------------------------------------------------------
1996 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
For the year ended December 31, 1996, the Fund paid to shareholders, on December
31, 1996, ordinary income dividends (comprised of net investment income and
short-term capital gains) totaling $0.273 per share. Additionally, on that date,
the Fund paid $2.497 per share in long-term capital gains. For 1996, 63.06% of
the ordinary income dividend qualifies for the dividend received deduction
available to corporations.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during fiscal
1996 which was derived from U.S. Treasury securities was 10.16%. Such income may
be exempt from state and local income tax in all states. However, many states,
including New York and California, allow a tax exemption for a portion of the
income earned only if a mutual fund has invested at least 50% of its assets at
the end of each quarter of the Fund's fiscal year in U.S. Government securities.
The Gabelli Asset Fund did not meet this strict requirement in 1996. Due to the
diversity in state and local tax law, it is recommended that you consult your
personal tax advisor for the applicability of the information provided as to
your own situation.
<PAGE>
APPENDIX A
DESCRIPTION OF CORPORATE DEBT RATINGS
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues. Aa:
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat large than
in Aaa securities. A: Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future. Baa: Bonds which are
rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well. Ba:
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class. B Bonds which are rated B
generally lack characteristics of a desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small. Caa: Bonds which are
rated Caa are of poor standing. Such issues may be in default or there may
be present elements of danger with respect to principal or interest. Ca:
Bonds which are rated Ca represent obligations which are speculative in
high degree. Such issues are often in default or have other marked
shortcomings. C: Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
<PAGE>
Unrated: Where no rating has been assigned or where a rating has been suspended
or withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted. 2. The issue or
issuer belongs to a group of securities that are not rated as a matter of
policy. 3. There is a lack of essential data pertaining to the issue or
issuer. 4. The issue was privately placed, in which case the rating is not
published in Moody's Investors Services, Inc.'s publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Those bonds in the Aa A, Baa Ba and B groups which Moody's believes
possess the strongest investment attributes are designated by the
symbols Aa-1, A-1, Baa-1 and B-1.
<PAGE>
STANDARD & POOR'S RATINGS SERVICE
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
Ratings Service, a division of McGraw Hill Companies, Inc. Capacity to pay
interest and repay principal is extremely strong. AA: Bonds rated AA have a
very strong capacity to pay interest and repay principal and differ from
the higher rated issues only in small degree. A: Bonds rated A have a
strong capacity to pay interest and
repay principal although they are somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than bonds in the highest rated categories. BBB: Bonds rated BBB
are regarded as having an adequate capacity to pay interest and repay
principal. Whereas they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal for bonds
in this category than in higher rated categories. BB, B Bonds rated BB, B,
CCC, CC and C are regarded, on balance, as predominantly speculative with
CCC, respect to capacity to pay interest and repay principal in accordance
with the terms of this CC, C: obligation. BB indicates the lowest degree of
speculation and C the highest degree of speculation. While such bonds will
likely have some quality and protective characteristics, they are
outweighed by large uncertainties of major risk exposures to adverse
conditions. C1: The rating C1 is reserved for income bonds on which no
interest is being paid. D: Bonds rated D are in default, and payment of
interest and/or repayment of principal is in arrears. Plus (+) The ratings
from AA to CCC may be modified by the addition of a plus or minus sign to
show Or relative standing within the major rating categories. Minus (-) NR:
Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
<PAGE>
THE GABELLI ASSET FUND
PART C
<PAGE>
PART C: OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Prospectus:
Financial Highlights
Included in the Statement of Additional Information:
Audited financial statements for the fiscal year ended
December 31, 1996 including: Portfolio of
Investments, December 31, 1996 Statement of Assets &
Liabilities, December 31, 1996 Statement of
Operations, year ended December 31, 1996 Statement of
Changes in Net Assets, years ended December 31, 1995
and December 31, 1996
Notes to Financial Statements, December 31, 1996
Financial Highlights
Report of Independent Accountants
(b) Exhibits
(1) Declaration of Trust will be filed by amendment.
(2) By-laws are filed herewith.
(3) Not applicable.
(4) Not applicable.
(5) Amended and Restated Investment Advisory Agreement with Gabelli Funds, Inc.
dated May 12, 1992 is filed herewith. (6) Amended and Restated Distribution
Agreement dated May 11, 1992 is filed herewith. (7) Not applicable.
(8) Custody Agreement dated January 11, 1986 is filed herewith.
8b) Amendment to Custody Agreement dated December 7, 1989 is filed herewith.
(8C) Amendment to Custody Agreement dated May 13, 1991 is filed herewith.
(9)(a) Transfer Agency Agreement is filed herewith.
(9)(b) Sub-Administration Agreement with The Shareholder Services Group, Inc.
(now known as First
Data Investor Services Group, Inc.) dated May 1, 1995 is filed herewith.
(10) Not applicable.
(11) Consent of Independent Accountants is filed herewith.
(11b) Powers of Attorney for Mario J. Gabelli, Felix J. Christiana,
Anthony J. Colavita, James P.
Conn, Karl Otto Pohl, Anthony R. Pustorino,
Anthonie C. van Ekris and Salvatore J. Zizza are
filed herewith.
(12) Not applicable.
(13) Agreement with initial shareholder is filed herewith.
(14) Form of Instructions and Agreement for Individual Retirement
Account (IRA) is incorporated by reference to the Registration
Statement on Form N-1A as filed with the Securities and
Exchange Commission ("SEC").
(15) Amended and Restated Plan of Distribution pursuant to Rule 12b-1 is filed
herewith.
(16) Sample Total Return Computation is incorporated by reference
to Post-Effective Amendment No. 10 to the Registration Statement as filed
with the SEC on May 3, 1993.
(17) Financial Data Schedule is filed herewith.
(18) Not applicable.
<PAGE>
ITEM 25. Persons Controlled by or Under Common Control with Registrant
None
ITEM 26. Number of Holders of Securities
(1) (2)
Number of Record Holde
Title of Class as of April 25, 1997
-------------- --------------------
Beneficial Interest Value
$.01 per share 43,234
ITEM 27. Indemnification
Reference is made to Subdivision (c) of Section 12 of Article
Seventh of Registrant's Declaration of Trust.
Insofar as indemnification of liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses
incurred or paid by a trustee, officer or controlling person
of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Declaration of Trust, its
By-laws, the Management Agreement, the Sub-Advisory Agreement,
the Administration Agreement and the Distribution Agreement in
a manner consistent with Release No. 11330 of the Securities
and Exchange Commission under the 1940 Act.
ITEM 28. Business and Other Connections of Investment Adviser
Gabelli Funds, Inc. is the investment adviser of the Registrant. For information
as to its business, profession, vocation or employment of a substantial
nature, reference is made to Form ADV filed by it under the Investment
Advisers Act of 1940. (SEC File No. 801-37706)
<PAGE>
ITEM 29. Principal Underwriter
(a) The Distributor, Gabelli & Company, Inc., is also the
principal underwriter for The Gabelli ABC Fund, The Gabelli
Growth Fund, The Gabelli Value Fund, Inc., The Gabelli Small
Cap Growth Fund, Gabelli Equity Income Fund, Gabelli Gold
Fund, The Gabelli U.S. Treasury Money Market Fund, The Gabelli
Global Telecommunications Fund, The Gabelli Global Interactive
Couch Potato(R) Fund, The Gabelli International Growth Fund,
Inc., Gabelli Capital Asset Fund, The Gabelli Global
Convertible Securities Fund and the Westwood Funds.
(b) For information as to such principal underwriter, reference is made to
Schedule A of Form BD filed by it under the Securities Exchange Act of
1934. (SEC File No. 8-21373)
ITEM 30. Location of Accounts and Records
All such accounts, books and other documents required by
Section 31(a) of the 1940 Act and Rules 31a-1 through 31a-3
thereunder are maintained at the offices of the Adviser,
Gabelli Funds, Inc., One Corporate Center, Rye, New York
10580-1434, First Data Investor Services Group, Inc., Exchange
Place, Boston, Massachusetts 02109, State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts,
02110 and BFDS, Two Heritage Drive, North Quincy,
Massachusetts, 02171.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable. (c) The Registrant hereby undertakes to furnish to each
person to whom a prospectus is delivered a copy of the Registrant's latest
Annual Report to shareholders upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant, THE GABELLI ASSET FUND,
certifies that it meets the requirements for effectiveness of this
Post-Effective Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933, and the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of New York and
State of New York, on the 29th day of April, 1997.
THE GABELLI ASSET FUND
By: /s/ Bruce N. Alpert
Bruce N. Alpert
President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment to its 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/ Mario J. Gabelli* Principal Executive Officer and Trustee 4/29/97
Mario J. Gabelli
/s/ Bruce N. Alpert Principal Financial and Accounting Officer 4/29/97
Bruce N. Alpert
/s/ Felix J. Christiana* Trustee 4/29/97
Felix J Christiana
/s/ Anthony J. Colavita* Trustee 4/29/97
Anthony J. Colavita
/s/ James P. Conn* Trustee 4/29/97
James P. Conn
/s/ Karl Otto Pohl* Trustee 4/29/97
Karl Otto Pohl
/s/ Anthony R. Pustorino* Trustee 4/29/97
Anthony R. Pustorino
/s/ Anthonie C. van Ekris* Trustee 4/29/97
Anthonie C. van Ekris
/s/ Salvatore J. Zizza* Trustee 4/29/97
Salvatore J. Zizza
*By: /s/ Bruce N. Alpert
Bruce N. Alpert
Attorney-in-fact
</TABLE>
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT
NUMBER EXHIBIT
(2) By-laws
(5) Amended Investment Advisory Agreement
(6) Amended and Restated Distribution Agreement
(8)(a) Custody Agreement
(8)(b) Amendment to Custody Agreement
(8)(c) Amendment to Custody Agreement
(9)(a) Transfer Agency and Service Agreement
(9)(b) Sub-Administration Agreement
(11)(a) Consent of Independent Accountants
(11)(b) Powers of Attorney
(13) Agreement with Initial Shareholder
(15) Amended and Restated Distribution Plan
(17) Financial Data Schedule
<PAGE>
THE GABELLI ASSET FUND
BY-LAWS
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meetings. All meetings of the Shareholders (which terms as
used herein shall, together with all other terms defined in the Declaration of
Trust, have the same meaning as in the Declaration of Trust) shall be held at
the principal office of the Trust or at such other place as may from time to
time be designated by the Board of Trustees and stated in the notice of meeting.
Section 2. Shareholder Meetings. Meetings of the shareholders for any purpose or
purposes may be called by the Chairman of the Board of Trustees or by the
President or by the Board of Trustees and shall be called by the Secretary upon
receipt of the request in writing signed by Shareholders holding not less than
one third in amount of the entire number of Shares issued and outstanding and
entitled to vote thereat. Such request shall state the purpose or purposes of
the proposed meeting. In addition, special meetings of the Shareholders shall be
called by the Board of Trustees upon receipt of the request in writing signed by
Shareholders holding not less than ten percent in amount of the entire number of
Shares issued and outstanding and entitled to vote thereat, stating that the
purpose of the proposed meeting is the removal of a Trustee.
Section 3. Notice of Meetings of Shareholders. Not less than ten days' and not
more than ninety days' written or printed notice of every meeting of
Shareholders, stating the time and place thereof (and the general nature of the
business proposed to be transacted at any special or extraordinary meeting),
shall be given to each Shareholder entitled to vote thereat by leaving the same
with him or at his residence or usual place of business or by mailing it,
postage prepaid and addressed to him at his address as it appears upon the books
of the Trust.
No notice of the time, place or purpose of any meeting of Shareholders need be
given to any Shareholder who attends in person or by proxy or to any Shareholder
who, in writing executed and filed with the records of the meeting, either
before or after the holding thereof, waives such notice.
Section 4. Record Dates. The Board of Trustees may fix, in advance, a date, not
exceeding sixty days and not less then ten days preceding the date of any
meeting of Shareholders and not exceeding sixty days preceding any dividend
payment date or any date on which Shareholders are entitled to receive such
dividends or rights for the allotment of rights, as a record date for the
determination of the Shareholders entitled to receive such dividends or rights,
as the case may be; and only Shareholders of record on such date and entitled to
receive such dividends or rights shall be entitled to notice of and to vote at
such meeting or to receive such dividends or rights, as the case may be.
Section 5. Access to Shareholder List. The Board of Trustees shall make
available a list of the names and addresses of all Shareholders as recorded on
the books of the Trust, upon receipt of the request in writing signed by not
less than ten Shareholders holding Shares of the Trust valued at $25,000 or more
at current offering price (as defined in the Trust's Prospectus), or holding not
less than one percent in amount of the entire number of shares of the Trust
issued and outstanding; such request must state that such Shareholders wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a meeting pursuant to Section 2 of Article II of these By-Laws and
accompanied by a form of communication to the Shareholders. The Board of
Trustees may, in its discretion, satisfy its obligation under this Section 5 by
either making available the Shareholder List to such Shareholders at the
principal offices of the Trust, or at the offices of the Trust's transfer
agents, during regular business hours, or by mailing a copy of such
Shareholders' proposed communication and form of request, at their expense, to
all other Shareholders.
Section 6. Quorum, Adjournment of Meetings. The presence in person or by proxy
of the holders of record of one-third of the Shares of stock of the Trust issued
and outstanding and entitled to vote thereat, shall constitute a quorum at all
meetings 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 shall
attend, but no business shall be transacted at any such adjourned meeting except
such as might have been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of Shareholders, every
Shareholder of record entitled to vote thereat shall be entitled to vote at such
meeting either in person or by proxy appointed by instrument in writing
subscribed by such Shareholder or his duly authorized attorney-if-fact.
All elections of Trustees shall be had by a plurality of the votes cast and all
questions shall be decided by a majority of the votes case, in each case at a
duly constituted meeting, except as otherwise provided in the Declaration of
Trust or in these By-Laws or by specific statutory provision superseding the
restrictions and limitations contained in the Declaration of Trust or in these
By-Laws.
At any election of Trustees, the Board of Trustees prior thereto may, or if they
have not so acted, the Chairman of the meeting may, and upon the request of the
holders of ten percent (10%) of the Shares entitled to vote at such election
shall, appoint two inspectors of election who shall first subscribe an oath or
affirmation to execute faithfully the duties of inspectors at such election with
strict impartiality and according to the best of their ability, and shall after
the election make a certificate of the result of the vote taken. No candidate
for the office of Trustee shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken upon any
election or matter, and such vote shall be taken upon any election or matter,
and such vote shall be taken upon the request of the holders of ten percent
(10%) of the Shares entitled to vote on such election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings of the Shareholders
shall be presided over by the Chairman of the Board of Trustees or, if he shall
not be present, by the President or any Vice-President, or, if neither the
Chairman of the Board of Trustees, the President nor any Vice-President is
present, by a chairman to be elected at the meeting. The Secretary of the Trust,
if present, shall act as Secretary of such meetings, or if he is not present, an
Assistant Secretary shall so act, if neither the Secretary not an Assistant
Secretary is present, then a secretary shall be elected at the meeting.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At every meeting of the
Shareholders, all proxies shall be received and taken in charge of and all
ballots shall be received and canvassed by the secretary of the meeting, who
shall decide all questions regarding the qualification of voters, the validity
of the proxies, and the acceptance or rejection of votes, unless inspectors of
election shall have been appointed as provided in Section 7 of this Article, in
which event such inspectors of election shall decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section l. Number and Tenure of Office. The business and property of the Trust
shall be conducted and managed by a Board of Trustees consisting of the number
of initial Trustees, which number may be increased or decreased as provided in
Section 2 of this Article. Each Trustee shall, except as otherwise provided
herein, hold office until the meeting of Shareholders of the Trust next
succeeding his election or until his successor is duly elected and qualifies.
Trustees need not be Shareholders.
Section 2. Increase or Decrease in Number of Trustees; Removal. The Board of
Trustees, by the vote of a majority of the entire Board, may increase the number
of Trustees to a number not exceeding fifteen, and may elect Trustees to fill
the vacancies occurring for any reason, including vacancies created by any such
increase in the number of Trustees until the next annual meeting or until their
successors are duly elected and qualify; the Board of Trustees, by vote of a
majority of the entire Board, may likewise decrease the number of Trustees to a
number not less than two but the tenure of office of any Trustee shall not be
affected by any such decrease. In the event that after the proxy materials has
been printed for a meeting of Shareholders at which Trustees are to be elected
and any one or more nominees named in such proxy material dies or becomes
incapacitated, the authorized number of Trustees shall be automatically reduced
by the number of such nominees, unless the Board of Trustees prior to the
meeting shall otherwise determine. A Trustee at any time may be removed either
with or without cause by resolution duly adopted by the affirmative vote of the
holders of the majority of the outstanding Shares of the Trust, present in
person or by proxy at any meeting of Shareholders at which such vote may be
taken, provided that a quorum is present. Any Trustee at any time may be removed
for cause by resolution duly adopted at any meeting of the Board of Trustees
provided that notice thereof is contained in the notice of such meeting and that
such resolution is adopted by the vote of at least two thirds of the Trustees
whose removal is not proposed. As used herein, "for cause" shall mean any cause
which under Massachusetts law would permit the removal of a Trustee of a
business trust.
Section 3. Place of Meeting. The Trustees may hold their meetings, have one or
more offices, and keep the books of the Trust outside Massachusetts, at any
office or offices of the Trust or at any other place as they may from time to
time by resolution determine, or, in the case of meetings, as they may from time
to time by resolution determine or as shall be specified or fixed in the
respective notices or waivers of notion thereof.
Section 4. Regular Meetings. Regular meetings of the Board of Trustees shall be
held at such time and on such notice, if any, as the Trustees may from time to
time determine. One such regular meeting during each fiscal year of the Trust
shall be designated an annual meeting of the Board of Trustees.
Section 5. Special Meeting. Special meetings of the Board of Trustees may be
from time to time upon call of the Chairman of the Board of Trustees, the
President or two or more of the Trustees, by oral, telegraphic or written notice
duly served on or sent or mailed to each Trustee not less than one day before
such meeting. No notice need be given to any Trustee who attends in person or to
any Trustee who in writing executed and filed with the records of the meeting
either before or after the holding thereof, waives such notice. Such notice or
waiver of notice need not state the purpose or purposes of such meeting.
Section 6. Quorum. One-third of the Trustees then in office shall constitute a
quorum for the transaction of business, provided that a quorum shall in no case
be less than two Trustees. If at any meeting of the Board there shall be less
than a quorum present (in person or by open telephone line, to the extent
permitted by the Investment Company Act of 1940 )the "1940 Act")), a majority of
those present may adjourn the meeting from time to time until a quorum shall
have been obtained. The act of the majority of the Trustees present at any
meeting at which there is a quorum shall be the act of the Board, except as may
be otherwise specifically provided by statute, by the 1940 Act, by the
Declaration of Trust or by these By-Laws.
Section 7. Committees. The Board of Trustees, by the affirmative vote of a
majority of the entire Board, will appoint an Audit Committee and such other
committees as it may determine, in its discretion, which shall in each case
consist of such number of members (not less than two) and shall have and may
exercise such powers as the Board may determine in the resolution appointing
them. A majority of all members of any such committee may determine its action,
and fix the time and place of its meetings, unless the Board of Trustees shall
otherwise provide. The Board of Trustees shall have power at any time to change
the members and powers of any such committee, to fill vacancies, and to
discharge any such committee.
Section 8. Informal Action by and Telephone Meetings of Trustees and Committees.
Any action required or permitted to be taken at any meeting of the Board of
Trustees or any committee thereof may be taken without a meeting, if a written
consent to such action is signed by all members of the Board, or of such
committee, as the case may be. Trustees or members of a committee of the Board
of Trustees may participate in a meeting by means of a conference telephone or
similar communications equipment; such participation shall, except as otherwise
required by the 1940 Act, have the same effect as present in person.
Section 9. Compensation of Trustees. Trustees shall be entitled to receive such
compensation from the Trust for their services as may from time to time be voted
by the Board of Trustees.
Section 10. Dividends. Dividends or distributions payable on the Shares of any
Series of the Trust may, but need not be, declared by specific resolution of the
Board as to each dividend or distribution; in lieu of such specific resolution,
the Board may, by general resolution, determine the method of computation
thereof, the method of determining the Shareholders of the Series to which they
are payable and the methods of determining whether and to which Shareholders
they are to be paid in cash or in additional Shares.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the Trust will include
a President, one or more Vice-President, a Secretary and a Treasurer to be
elected by the Board of Trustees which may also, in its discretion, elect
Assistant Secretaries, Assistant Treasurers, and other officers, agents and
employees, who shall have such authority and perform such duties as the Board
may determine. The Board of Trustees may fill any vacancy which may occur in any
office. Any two offices, except those of President and Vice-President, may be
held by the same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by law or
these By-Laws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. The term of office of all officers shall be until
their respective successors are chosen and qualify; however, any officer may be
removed from office at any time with or without cause by the vote of a majority
of the entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Trustee shall have such powers
and duties as generally pertain to their respective offices, as well as such
powers and duties as may from time to time be conferred by the Board of
Trustees.
ARTICLE IV
SHARES
Section 1. Share Certificates. Each Shareholder of any series of the Trust may
be issued a certificate or certificates for his Shares of that Series, in such
form as the Board of Trustees may from time to time prescribe, but only to the
extent and on the conditions prescribed by the Board.
Section 2. Transfer of Shares. Shares of any Series shall be transferable on the
books of the Trust by the holder thereof in person by his duly authorized
attorney or legal representative, upon surrender and cancellation of
certificates, if any, for the same number of Shares of that Series, duly
endorsed or accompanied by proper instruments of assignment and transfer, with
such proof of that authenticity of the signature as the Trust or its agent may
reasonably require; in the case of shares not represented by certificates, the
same or similar requirements may be imposed by the Board of Trustees.
Section 3. Share Ledgers. The share ledgers of the Trust, containing the name
and address of the Shareholders of each Series of the Trust and the number of
Shares of that Series, held by them respectively, shall be kept at the principal
offices of the Trust or, if the Trust employs a transfer agent, at the offices
of the transfer agent of the Trust.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of Trustees may
determine the conditions upon which a new certificate may be issued in place of
a certificate which is alleged to have been lost, stolen or destroyed; and may,
in their discretion, require the owner of such certificate or his legal
representative to give bond, with sufficient surety to the Trust and the
transfer agent, if any, to indemnify it and such transfer agent against any and
all loss of claims which may arise by reason of the issue of a new certificate
in the place of the one so lost, stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the Trust, in such form
and bearing such inscriptions as it may determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Trust shall be fixed by the Board of Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Trust may be altered, amended, added to or repealed by the
Shareholders or by majority vote of the entire Board of Trustees, but any such
alteration, amendment, addition or repeal of the By-Laws by action of the Board
of Trustees may be altered or repealed by the Shareholders.
<PAGE>
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT, dated May 12, 1992,
between The Gabelli Asset Fund (the "Fund"), a Massachusetts business trust, and
Gabelli Funds, Inc. (the "Adviser"), a Delaware Corporation.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, and in order to amend and restate the advisory agreement dated
February 27, 1987 between the Fund and the Adviser it is agreed by and between
the parties hereto that the foregoing agreement is hereby amended and restated
to read in its entirety as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of the assets of
the Fund and to supervise and arrange the purchase and sale of assets held in
the investment portfolio of the Fund.
2. Duties and obligations of the Adviser with
respect to investments of assets of the Fund
(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and control of the Fund's Board of Trustees, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Fund and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Fund; (ii)
arrange for the purchase and sale of securities and other assets held in the
investment portfolio of the Fund and (iii) oversee the administration of all
aspects of the Fund's business and affairs and provide, or arrange for others
whom it believes to be competent to provide, certain services as specified in
subparagraph (b) below. Nothing contained herein shall be construed to restrict
the Fund's right to hire its own employees or to contract for administrative
services to be performed by third pa ties, including but not limited to, the
calculation of the net asset value of the Fund's shares.
(b) The specific services to be provided or arranged for by the
Adviser for the Fund are (i) maintaining the Fund's books and records, such as
journals, ledger accounts and other records in accordance with applicable laws
and regulations to the extent not maintained by the Fund's custodian, transfer
agent and dividend disbursing agent; (ii) transmitting purchase and redemption
orders for Fund shares to the extent not transmitted by the Fund's distributor
or others who purchase and redeem shares; (iii) initiating all money transfers
to the Fund's custodian and from the Fund's custodian for the payment of the
Fund's expenses, investments, dividends and share redemptions; (iv) reconciling
account information and balances among the Fund's custodian, transfer agent,
distributor, dividend disbursing agent and the Adviser; (v) providing the Fund,
upon request, with such office space and facilities, utilities and office
equipment as are adequate for the Fund's needs; (vi) preparing, but not paying
for, all reports by the Fund to its shareholders and all reports and filings
required to maintain the registration and qualification of the Fund's shares
under federal and state law including periodic updating of the Fund's
registration statement and Prospectus (including its Statement of Additional
Information); (vii) supervising the calculation of the net asset value of the
Fund's shares; and (viii) preparing notices and agendas for meetings of the
Fund's shareholders and the Fund's Board of Trustees as well as minutes of such
meetings in all matters required by applicable law to be acted upon by the Board
of Trustees.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940 (the "Act"), and of any rules or regulations in
force thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Declaration of Trust and By-Laws of the Fund, as such
documents are amended from time to time; (iv) the investment objective, policies
and restrictions applicable to the Fund as set forth in the Fund's Registration
Statement on Form N-lA and (v) any policies and determinations of the Fund's
Board of Trustees.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses (including any
overhead and personnel costs) incurred in connection with its duties hereunder
and shall bear the costs of any salaries or trustees fees of any officers or
trustees of the Fund who are affiliated persons (as defined in the Act) of the
Adviser. If in any fiscal year the Fund's aggregate expenses (excluding
interest, taxes, distribution expenses, brokerage commissions and extraordinary
expenses) exceed the most restrictive expense limitation imposed by the
securities law of any state in which the shares of the Fund are registered or
qualified for sale, the Adviser will reimburse the Fund for the amount of such
excess up to the amount of fees accrued for such fiscal year hereunder. The
amount of such reimbursement shall be calculated monthly and an appropriate
amount shall be held back or released to the Adviser each month so that the
aggregate amount held back at any particular time shall equal the net amount of
the reimbursement on a cumulative year-to-date basis. As of the end of the year
the final amount of the total reimbursement shall be calculated and the
appropriate amount released to the Fund or the Adviser or paid to the Fund by
the Adviser. Subject to the foregoing, the Fund shall be responsible for the
payment of all of its other expenses, including (i) payment of the fees payable
to the Adviser under paragraph 4 hereof; (ii) organizational expenses; (iii)
brokerage fees and commissions; (iv) taxes; (v) interest charges on borrowings;
(vi) the cost of liability insurance or fidelity bond coverage for the Fund
officers and employees, and trustees' and officers' errors and omissions
insurance coverage; (vii) legal, auditing and accounting fees and expenses;
(viii) charges of the Fund's custodian, transfer agent and dividend disbursing
agent; (ix) the Fund's pro rata portion of dues, fees and charges of any trade
association of which the Fund is a member; (x) the expenses of printing,
preparing and mailing proxies, stock certificates and reports, including the
Fund's prospectuses and statements of additional information, and notices to
shareholders; (xi) filing fees for the registration or qualification of the Fund
and its shares under federal or state securities laws; (xii) the fees and
expenses involved in registering and maintaining registration of the Fund's
shares with the Securities and Exchange Commission; (xiii) the expenses of
holding shareholder meetings; (xiv) the compensation, including fees, of any of
the Fund's trustees, officers or employees who are not affiliated persons of the
Adviser; (xv) all expenses of computing the Fund's net asset value per share,
including any equipment or services obtained solely for the purpose of pricing
shares or valuing the Fund's investment portfolio; (xvi) expenses of personnel
performing shareholder servicing functions and all other distribution expenses
payable by the Fund; and (xvii) litigation and other extraordinary or
nonrecurring expenses and other expenses properly payable by the Fund.
(e) The Adviser shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but neither the Adviser nor
any of its officers, directors, employees, agents or controlling persons shall
be liable for any act or omission or for any loss sustained by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement; provided, however, that the
foregoing shall not constitute a waiver of any rights which the Fund may have
which may not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Adviser or any
of its directors, officers, employees or agents from buying, selling or trading
any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting.
3. Portfolio Transactions
In the course of the Adviser's execution of portfolio transactions for
the Fund, it is agreed that the Adviser shall employ securities brokers and
dealers which, in its judgment, will be able to satisfy the policy of the Fund
to seek the best execution of its portfolio transactions at reasonable expenses.
For purposes of this agreement, "best execution" shall mean prompt, efficient
and reliable execution at the most favorable price obtainable. Under such
conditions as may be specified by the Fund's Board of Trustees in the interest
of its shareholders and to ensure compliance with applicable law and
regulations, the Adviser may (a) place orders for the purchase or sale of the
Fund's portfolio securities with its affiliate, Gabelli & Company, Inc.; (b) pay
commissions to brokers other than its affiliate which are higher than might be
charged by another qualified broker to obtain brokerage and/or research services
considered by the Adviser to be useful or desirable in the performance of its
duties hereunder and for the investment management of other advisory accounts
over which it or its affiliates exercise investment discretion; and (c) consider
sales by brokers (other than its affiliate distributor) of shares of the Fund
and any other mutual fund for which it or its affiliates act as investment
adviser, as a factor in its selection of brokers and dealers for Fund portfolio
transactions.
<PAGE>
4 Compensation of the Adviser
(a) Subject to paragraph 2(b), the Fund agrees to pay to the
Adviser out of the Fund's assets and the Adviser agrees to accept as full
compensation for all services rendered by or through the Adviser (other than any
amounts payable to the Adviser pursuant to paragraph 4(b)) a fee computed and
payable monthly in an amount equal on an annualized basis to 1.0% of the Fund's
daily average net asset value. For any period less than a month during which
this Agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.
(b) The Fund will pay the Adviser separately for any costs and
expenses incurred by the Adviser in connection with distribution of the Fund's
shares in accordance with the terms (including proration or nonpayment as a
result of allocations of payments) of a Plan of Distribution (the "Plan")
adopted for the Fund pursuant to Rule 12b-1 under the Act as such Plan may be in
effect from time to time; provided, however, that no payments shall be due or
paid to the Adviser hereunder unless and until this Agreement shall have been
approved by Trustee Approval and Disinterested Trustee Approval (as such terms
are defined in such Plan). The Fund reserves the right to modify or terminate
such Plan at any time as specified in the Plan and Rule 12b-1, and this
subparagraph shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of the funds pursuant to this Agreement and the Plan shall provide to
the Fund's Board of Trustees, and the Trustees shall review, at least quarterly
a written report of the amount so paid and the purposes for which such
expenditures were made.
(c) For purposes of this Agreement, the net asset of the Fund
shall be calculated pursuant to the procedures adopted by resolutions of the
Trustees of the Fund for calculating the net asset value of the Fund's shares.
5. Indemnity.
(a) The Fund hereby agrees to indemnify the Adviser and each of
the Adviser's directors, officers, employees, and agents (including any
individual who serves at the Adviser's request as director, officer, partner,
trustee or the like of another corporation) and controlling persons (each such
person being an "indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable
corporate law) reasonably incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which he
may be or may have been involved as a party or otherwise or with which he may be
or may have been threatened, while acting in any capacity set forth above in
this paragraph or thereafter by reason of his having acted in any such capacity,
except with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Fund and furthermore, in the case o(pound) any criminal
proceeding, so long as he had no reasonable cause to believe that the conduct
was unlawful, provided, however, that (1) no indemnitee shall be indemnified
hereunder against any liability to the Fund or its shareholders or any expense
of such indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith,
(iii) gross negligence or (iv) reckless disregard of the duties involved in the
conduct of his position (the conduct referred to in such clauses (i) through
(iv) being sometimes referred to herein as "disabling conduct"), (2) as to any
matter disposed of by settlement or a compromise payment by such indemnitee,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best interests of the
Fund and that such indemnitee appears to have acted in good faith in the
reasonable belief that his action was in the best interest of the Fund and did
not involve disabling conduct by such indemnitee and (3) with respect to any
action, suit or other proceeding voluntarily prosecuted by any indemnitee as
plaintiff, indemnification shall be mandatory only if the prosecution of such
action, suit or other proceeding by such indemnitee was authorized by a majority
of the full Board of the Fund. Notwithstanding the foregoing the Fund shall not
be obligated to provide any such indemnification to the extent such provision
would waive any right which the Fund cannot lawfully waive.
(b) The Fund shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Fund receives a written affirmation of the indemnitee's
good faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to reimburse the Fund unless it is
subsequently determined that he is entitled to such indemnification and if the
trustees of the Fund determine that the facts then known to them would not
preclude indemnification. In addition, at least one of the following conditions
must be met: (A) the indemnitee shall provide a security for his undertaking,
(B) the Fund shall be insured against losses arising by reason of any lawful
advances, or (C) a majority of a quorum of trustees of the Fund who are neither
n interested persons of the Fund (as defined in Section 2(a)(19) of the Act) nor
parties to the proceeding ("Disinterested Non-Party Trustees") or an independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the indemnitee ultimately will be found entitled to
indemnification.
(c) All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-party Trustees of the Fund,
or (ii) if such a quorum is not obtainable or even, if obtainable, if a majority
vote of such quorum so directs, independent legal counsel in a written opinion.
The rights accruing to any indemnitee under these provisions shall
not exclude any other right to which he may be lawfully entitled.
6. Duration and Termination
This Agreement shall become effective upon on the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Fund sixty days written notice (which notice may be
waived by the Fund) and may be terminated by the Fund at any time without
penalty upon giving the Adviser sixty days notice (which notice may be waived by
the Adviser), provided that such termination by the Fund shall be directed or
approved by the vote of a majority of the Trustees of the Fund in office at the
time or by the vote of the holders of a "majority of the voting securities" (as
defined in the Act) of the Fund at the time outstanding and entitled to vote or,
with respect to paragraph 4(b), by a majority of the Trustees of the Fund who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or any agreements related to the
Plan. This Agreement shall terminate automatically in the event of its
"assignment" (as "assignment" is defined in the Act and the rules thereunder.)
It is understood and hereby agreed that the word "Gabelli" is the
property of the Adviser for copyright and other purposes. The Fund further
agrees that the word "Gabelli" in its name is derived from the name of Mario J.
Gabelli and such name may freely be used by the Adviser for other investment
companies, entities or products. The Fund further agrees that, in the event that
the Adviser shall cease to act as investment adviser to the Fund with respect to
the investment of assets allocated to the Fund, both the Fund and the Fund shall
promptly take all necessary and appropriate action to change their names to
names which do not include the word "Gabelli"; provided, however, that the Fund
and the Fund may continue to use the word "Gabelli" if the Adviser consents in
writing to such use.
7. Notices
Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. Governing Law
This Agreement shall be construed in accordance with the laws of the
State of New York for contracts to be performed entirely therein and in
accordance with the applicable provisions of the Act.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
THE GABELLI ASSET FUND
By BRUCE N. ALPERT
Name: Bruce N. Alpert
Title: Vice President and Treasurer
GABELLI FUNDS, INC.
By: STEPHEN G. BONDI
Name: Stephen G. Bondi
Title: Vice President
<PAGE>
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
dated as of May 11, 1992
AMENDED AND RESTATED DISTRIBUTION AGREEMENT between The Gabelli Asset
Fund, a Massachusetts business trust (the "Fund") and Gabelli & Company, Inc., a
New York corporation (the "Distributor"). The Fund is registered as an
investment company under the Investment Company Act of 1940 (the "1940 Act"),
and an indefinite number of shares (the "Shares") of the Fund have been
registered under the Securities Act of 1933 (the "1933 Act") to be offered for
sale to the public in a continuous public offering in accordance with terms and
conditions set forth in the Prospectus and Statement of Additional Information
(the "Prospectus") of the Fund included in the Fund's Registration Statement on
Form N-lA as such documents may be amended from time to time.
In this connection, the Fund desires to amend and restate its
Distribution Agreement with the Distributor pursuant to which the Distributor
acts as the Fund's exclusive sales agent and distributor for the sale and
distribution of Shares. The Distributor has advised the Fund that it is willing
to act in such capacities, and it is accordingly agreed between them that the
Distribution Agreement between them shall be amended and restated to read in its
entirety as follows:
l. The Fund hereby appoints the Distributor as exclusive sales agent
and distributor for the sale and distribution of Shares pursuant to the
aforesaid continuous public offering of Shares, and the Fund further agrees from
and after the commencement of such continuous public offering that it will not,
without the Distributor's consent, sell or agree to sell any Shares otherwise
than through the Distributor, except the Fund may issue Shares in connection
with a merger, consolidation or acquisition of assets on such basis as may be
authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees to use
its best efforts to sell such Shares, provided, however, that when requested by
the Fund at any time for any reason the Distributor will suspend such efforts.
The Fund may also withdraw the offering of Shares at any time when required by
the provisions of any statute, order, rule or regulation of any governmental
body having jurisdiction. It is understood that the Distributor does not
undertake to sell all or any specific portion of the Shares.
3. The Distributor represents that it is a member in good standing of
the National Association of Dealers, Inc. and agrees that it will use all
reasonable efforts to maintain such status and to abide by the Rules of Fair
Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Fund by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Fund's agent and subject to its
approval. The Fund reserves the right to reject any order in whole or in part.
The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Fund, but this Agreement shall not be construed as authorizing any dealer
or other person to accept orders for sale or repurchase of Shares on behalf of
the Fund or otherwise act as the Fund's agent for any purpose. The Distributor
shall not utilize any materials in connection with the sale or offering of
Shares except the then current Prospectus and such other materials as the Fund
shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and may be sold
either through persons with whom it has selling agreements in a form approved by
the Fund's Board of Trustees or directly to prospective purchasers. To
facilitate sales, the Fund will furnish the Distributor with the net asset value
of its Shares promptly after each calculation thereof.
5. The Fund has delivered to the Distributor a copy of its current
Prospectus. It agrees that it will use its best efforts to continue the
effectiveness of its Registration Statement filed under the 1933 Act and the
1940 Act. The Fund further agrees to prepare and file any amendments to its
Registration Statement as may be necessary and any supplemental data in order to
comply with such Acts. The Fund will furnish the Distributor at the
Distributor's expense with a reasonable number of copies of the Prospectus and
any amended Prospectus for use in connection with the sale of Shares.
6. At the Distributor's request, the Fund will take such steps at its
own expense as may be necessary and feasible to qualify Shares for sale in
states, territories or dependencies of the United States of America and in the
District of Columbia in accordance with the laws thereof, and to renew or extend
any such qualification provided, however, that the Fund shall not he required to
qualify Shares or to maintain the qualification of Shares in any state,
territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
(a) It will furnish to the Fund any pertinent information required to
be inserted with respect to the Distributor as exclusive sales agent and
distributor within the purview of Federal and state securities laws in any
reports or registrations required to be filed with any government authority;
(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus filed under
the Securities Act of 1933, as in effect from time to time;
(c) It will not use or distribute or authorize the use of distribution
of any statements other than those contained in the Fund's then current
Prospectus or in such supplemental literature or advertising as may be
authorized in writing by the Fund; and
(d) Subject to paragraph 9 below, the Distributor will bear the costs
and expenses of printing and distributing any copies of any prospectuses and
annual and interim reports of the Fund (after such items have been prepared and
set in type) which are used in connection with the offering of Shares, and the
costs and expenses of preparing, printing and distributing any other literature
used by the Distributor or furnished by the Distributor for use in connection
with the offering of the Shares and the costs and expenses incurred by the
Distributor in advertising, promoting and selling Shares of the Fund to the
public.
8. The Fund will pay its legal and auditing expenses and the cost of
composition of any prospectuses of annual or interim reports of the Fund and
distribution thereof to existing shareholders.
9. The Fund will pay the Distributor for costs and expenses incurred by
the Distributor in connection with distribution of Shares by the Distributor in
accordance with the terms of a Plan of Distribution (the "Plan") adopted by the
Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may be in effect
from time to time: provided, however, that no payments shall be due or paid to
the Distributor hereunder unless and until this Agreement shall have been
approved by Trustee Approval and Disinterested Trustee Approval (as such terms
are defined in such Plan). The Fund reserves the right to modify or terminate
such Plan at any time as specified in the Plan and Rule 12b-1, and this Section
9 shall thereupon be modified or terminated to the same extent without further
action of the parties. The persons authorized to direct the payment of funds
pursuant to this Agreement and the Plan shall provide to the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly a written report of
the amounts so paid and the purposes for which such expenditures were made.
10. The Fund agrees to indemnify, defend and hold the Distributor, its
officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from any against any and all liabilities and
expenses, including costs of investigation or defense (including reasonable
counsel fees) incurred by such indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which such indemnitee may be or may have been involved as a party or
otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in in any such capacity or arising out of or based upon any untrue
statement of a material fact contained in the then-current Prospectus relating
to the Shares or arising out of or based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of-or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Fund expressly
for use in any such Prospectus provided, however, that (1) no indemnitee shall
be indemnified hereunder against any liability to the Fund or the shareholders
of the Fund or any expense of such indemnitee with respect to any matter as to
which such indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Fund or arising by reason of such indemnitee's willful misfeasance, bad faith,
or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Fund and that such indemnitee appears to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Fund and did not involve disabling conduct by such indemnitee. Notwithstanding
the foregoing the Fund shall not be obligated to provide any such
indemnification to the extent such provision would waive any right which the
Fund cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the Fund, its
Trustees, officers, employees and agents and any person who controls the Fund
within the meaning of Section 15 of the 1933 Act (each, an "indemnitee"), free
and harmless from and against any and all liabilities and expenses, including
costs of investigation or defense (including reasonable counsel fees) incurred
by such indemnitee, but only to the extent that such liability or expense shall
arise out of or be based upon any untrue or alleged untrue statement of a
material fact contained in information furnished in writing by the Distributor
of the Fund expressly for use in a Prospectus or any alleged omission to state a
material fact in connection with such information required to be stated therein
or necessary to make such information not misleading or arising by reason of
disabling conduct by such indemnitee or any person selling Shares pursuant to an
agreement with the Distributor.
The Fund shall make advance payments in connection with the expenses of
defending any action with respect to which indemnification might be sought
hereunder if the Fund receives a written affirmation of the indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Fund unless it is subsequently
determined that he is entitled to such indemnification and if the Trustees of
the Fund determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must be
met: (A) the indemnitee shall provide a security for his undertaking, (B) the
Fund shall be insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of Trustees of the Fund who are neither
"interested persons" of the Fund (as defined in Section 2(a)(19) of the Act) nor
parties to the proceeding ("Disinterested Non-Party Trustees") or an independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the indemnitee ultimately will be found entitled to
indemnification.
All determinations with respect to indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before whom
the proceeding was brought that such indemnitee is not liable by reason of
disabling conduct or, (2) in the absence of such a decision, by (i) a majority
vote of a quorum of the Disinterested Non-party Trustees of the Fund, or !ii) if
such a quorum is not obtainable or even, if obtainable, if a majority vote of
such quorum so directs, independent legal counsel in a written opinion.
11. This Agreement shall become effective on the date first set forth
above and shall remain in effect for up to two years from such date (one year in
the case of Section 9) and thereafter from year to year provided such
continuance is specifically approved at least annually prior to each anniversary
of such date by (a) Trustee Approval or by vote at a meeting of shareholders of
the Fund of the lesser of (i) 67 per cent of the Shares present or represented
by proxy and (ii) 50 per cent of the outstanding Shares and (b) by Disinterested
Trustee Approval.
12. This Agreement may be terminated (a) by the Distributor at any time
without penalty by giving sixty (60) days' written notice to the Fund which
notice may be waived by the Fund; or (b) by the Fund at any time without penalty
upon sixty (60) days' written notice to the Distributor (which notice may be
waived by the Distributor); provided, however, that any such termination by the
Fund shall be directed or approved in the same manner as required for
continuance of this Agreement by Section 11(a) (or, in the case of termination
of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in writing
signed by each of the parties hereto and approved in the same manner as provided
for continuance of this Agreement in Section 11(a) (or, in the case of amendment
of Section 9, by Section 11(b)). Any such amendment or change shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, but this Agreement shall not be assigned by either party and shall
automatically terminate upon assignment (as such term is defined in the 1940 Act
and the rules thereunder).
14. This Agreement shall be construed in accordance with the laws of
the State of New York applicable to agreements to be performed entirely therein
and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made invalid or
unenforceable by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their only authorized officers as of the date first written above.
The Gabelli Asset Fund
By:BRUCE N. ALPERT
Name: Bruce N. Alpert
Title: Vice President, Treasurer
Gabelli & Company, Inc.
By:STEPHEN G. BONDI
Name: Stephen G. Bondi
Title: Vice President
<PAGE>
CUSTODY AGREEMENT
Agreement made as of this 22nd day of January, 1986, between The Gabelli
Asset Fund, a Massachusetts business trust organized and existing under the laws
of the Commonwealth of Massachusetts, having its principal office and place of
business at 655 Third Avenue, New York, NY 10017 (hereinafter called the
"Fund"), and THE BANK OF NEW YORK, a New York corporation authorized to do a
banking business, having its principal office and place of business at 48 Wall
Street, New York, New York 10015 (hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth the
Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include any person, whether or not
such person is an Officer or employee of the Fund, duly authorized by the Board
of Trustees of the Fund to give Oral Instructions and Written Instructions on
behalf of the Fund and listed in the Certificate annexed hereto as Appendix A or
such other Certificate as may be received by the Custodian from time to time.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
3. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to the Custodian
which is actually received by the custodian and signed on behalf of the Fund by
any two Officers.
4. "Call Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of the
exercise price, as specified therein, to purchase from the writer thereof the
specified underlying Securities.
5. "Covered Call Option" shall mean an exchange traded option entitling the
holder, upon timely exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying Securities
(excluding Futures Contracts) which are owned by the writer thereof and subject
to appropriate restrictions.
6. "Clearing Member" shall mean a registered broker-dealer which is a clearing
member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Custodian to be such a clearing
member.
7. "Collateral Account" shall mean a segregated account so denominated which
is specifically allocated to a Series and pledged to the Custodian as security
for, and in consideration of, the Custodian's issuance of (a) any Put Option
guarantee letter or similar document described in paragraph 8 of Article V
herein, or (b) any receipt described in Article V or VIII herein.
8. "Depository" shall mean The Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange Commission, its successor or
successors and its nominee or nominees. The term "Depository" shall further mean
and include any other person authorized to act as a depository under the
Investment Company Act of 1940, its successor or successors and its nominee or
nominees, specifically identified in a certified copy of a resolution of the
Fund's Board of Trustees specifically approving deposits therein by the
Custodian.
9. "Financial Futures Contract" shall mean the firm commitment to buy or sell
fixed income securities including, without limitation, U.S. Treasury Bills,
U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank certificates of
deposit, and Eurodollar certificates of deposit, during a specified month
at an agreed upon price.
10. o "Futures Contract" shall mean a Financial Futures Contract and/or Stock
Index Futures Contracts.
11. "Futures Contract Option" shall mean an option with respect to a Futures
Contract.
12. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the Custodian's effecting
an appropriate entry in its books and records.
13. "Money Market Security" shall be deemed to include, without limitation,
certain Reverse Repurchase Agreements, debt obligations issued or guaranteed as
to interest and principal by the government of the United States or agencies or
instrumentalities thereof, any tax, bond or revenue anticipation note issued by
any state or municipal government or public authority, commercial paper,
certificates of deposit and bankers' acceptances, repurchase agreements with
respect to the same and bank time deposits, where the purchase and sale of such
securities normally requires settlement in federal funds on the same day as such
purchase or sale.
14. "O.C.C." shall mean the Options Clearing Corporation, a clearing agency
registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
15. "Officers" shall be deemed to include the President, any Vice President,
the Secretary, the Clerk, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Clerk, any Assistant Treasurer, and any other person or
persons, whether or not any such other person is an officer of the Fund, duly
authorized by the Board of Trustees of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
16. "Option" shall mean a Call Option, Covered Call Option, Stock Index Option
and/or a Put Option.
17. "Oral Instructions" shall mean verbal instructions actually received by
the Custodian from an Authorized Person or from a person reasonably believed by
the Custodian to be an Authorized Person.
18. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and tender of the
specified underlying Securities, to sell such Securities to the writer thereof
for the exercise price.
19. "Reverse Repurchase Agreement" shall mean an agreement pursuant to which
the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
20. "Security" shall be deemed to include, without limitation, Money Market
Securities, Call Options, Put Options, Stock Index Options, Stock Index Futures
Contracts, Stock Index Futures Contract Options, Financial Futures Contracts,
Financial Futures Contract Options, Reverse Repurchase Agreements, common stocks
and other securities having characteristics similar to common stocks, preferred
stocks, debt obligations issued by state or municipal governments and by public
authorities, (including, without limitation, general obligation bonds, revenue
bonds and industrial bonds and industrial development bonds), bonds, debentures,
notes, mortgages or other obligations, and any certificates, receipts, warrants
or other instruments representing rights to receive, purchase, sell or subscribe
for the same, or evidencing or representing any other rights or interest
therein. or any property or assets.
21. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such transactions
as the Fund may from time to time determine.
22. "Series" shall mean the various portfolios, if any, of the Fund as
described from time to time in the current and effective prospectus for the
Fund.
23. "Stock Index Futures Contract" shall mean a bilateral agreement pursuant
to which the parties agree to take or make delivery of an amount of cash equal
to a specified dollar amount times the difference between the value of a
particular stock index at the close of the last business day of the contract and
the price at which the futures contract is originally struck.
24. "Stock Index Option" shall mean an exchange traded option entitling the
holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.
25. "Shares" shall mean the shares of beneficial interest of the Fund, each of
which is in the case of a Fund having Series allocated to a particular
Series.
26. "Written Instructions" shall mean written communications actually received
by the Custodian from an Authorized Person or from a person reasonably believed
by the Custodian to be an Authorized Person by telex or any other such system
whereby the receiver of such communications is able to verify by codes or
otherwise with a reasonable degree of certainty the identity of the sender of
such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian of the
Securities and moneys at any time owned b~ the Fund during the period of this
Agreement.
2. The Custodian hereby accepts appointment as such custodian and agrees to
perform the duties thereof as hereinafter set forth.
<PAGE>
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in Article
VIII, the Fund will deliver or cause to be delivered to the Custodian all
Securities and all moneys owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate and apart. The
Custodian will not be responsible for any Securities and moneys not actually
received by lt. The Custodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and moneys are
not finally collected. The Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund, substantially in the form of
Exhibit A hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System all Securities
eligible for deposit therein, regardless of the Series to which the same are
specifically allocated and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and returns of Securities collateral. Prior
to a deposit of Securities specifically allocated to a Series in the Depository,
the Fund shall deliver to the Custodian a certified resolution of the Board of
Trustees of the Fund, substantially in the form of Exhibit B hereto, approving,
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate actually received by the
Custodian to deposit in the Depository all Securities specifically allocated to
such Series eligible for deposit therein, and to utilize the Depository to the
extent possible with respect to such Securities in connection with its
performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys deposited
in either the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for customers,
including, but not limited to, accounts in which the Custodian acts in a
fiduciary or representative capacity. Prior to the Custodian's accepting,
utilizing and acting with respect to Clearing Member confirmations for Options
and transactions in Options for a Series as provided in this Agreement, the
Custodian shall have received a certified resolution of the Fund's Board of
Trustees, substantially in the form of Exhibit C hereto, approving, authorizing
and instructing the Custodian on a continuous and on-going basis, until
instructed to the contrary by a Certificate actually received by the Custodian,
to accept, utilize and act in accordance with such confirmations as provided in
this Agreement with respect to such Series.
2. The Custodian shall establish and maintain separate accounts, in the name
of each Series, and shall credit to the separate account for each Series all
moneys received by it for the account of the Fund with respect to such Series.
Money credited to a separate account for a Series shall be disbursed by the
Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth the name and address of the
person to whom the payment is to be made, the Series account from which payment
is to be made, and the purpose for which payment is to be made; or
(c) In payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day the Custodian shall
furnish the Fund with confirmations and a summary, on a per Series basis, of all
transfers to or from the account of the Fund for a Series, either hereunder or
with any co-custodian or sub-custodian appointed in accordance with this
Agreement during said day. Where Securities are transferred to the account of
the Fund for a Series, the Custodian shall also by book-entry or otherwise
identify as belonging to such Series a quantity of Securities in a fungible bulk
of Securities registered in the name of the Custodian (or its nominee) or shown
on the Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian shall furnish
the Fund with a detailed statement, on a per Series basis, of the Securities and
moneys held by the Custodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in Article
VIII, all Securities held by the Custodian hereunder, which are issued or
issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the name
of any duly appointed registered nominee of the Custodian as the Custodian may
from time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry System or the
Depository any Securities which it may hold hereunder and which may from time to
time be registered in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not held in the
Book-Entry System or in the Depository in a separate account in the name of such
Series physically segregated at all times from those of any other person or
persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or through
the use of the Book-Entry System or the Depository with respect to Securities
held hereunder and therein deposited, shall with respect to all Securities held
for the Fund hereunder in accordance with preceding paragraph 4:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon such Securities
which are called, but only if either (i) the Custodian receives a written notice
of such call, or (ii) notice of such call appears in one or more of the
publications listed in Appendix C annexed hereto, which may be amended at any
time by the Custodian without the prior notification or consent of the Fund;
(c) Present for payment and collect the amount payable upon all Securities
which mature;
(d) Surrender Securities in temporary form for definitive Securities;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the Federal Income Tax Laws or the laws or regulations of any
other taxing authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or the Depository with
respect to Securities therein deposited, for the account of a Series, all rights
and similar securities issued with respect to any Securities held by the
Custodian for such Series hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian, directly or
through the use of the Book-Entry System or the Depository, shall:
(a) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other instruments whereby
the authority of the Fund as owner of any Securities held by the Custodian
hereunder for the Series specified in such Certificate may be exercised;
(b) Deliver any Securities held by the Custodian hereunder for the Series
specified in such Certificate in exchange for other Securities or cash issued or
paid in connection with the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the exercise of any
conversion privilege and receive and hold hereunder specifically allocated to
such Series any cash or other Securities received in exchange;
(c) Deliver any Securities held by the Custodian hereunder for the Series
specified in such Certificate to any protective committee, reorganization
committee or other person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets of any corporation,
and receive and hold hereunder specifically allocated to such Series such
certificates of deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Series specified
in such Certificate, and take such other steps as shall be stated in such
Certificate to be for the purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation or recapitalization of the
Fund; and
(e) Present for payment and collect the amount payable upon Securities not
described in preceding paragraph 5(b) of this Article which may be called as
specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the Custodian
shall not be required to obtain possession of any instrument or certificate
representing any Futures Contract, any Option, or any Futures Contract Option
until after it shall have determined, or shall have received a Certificate from
the Fund stating, that any such instruments or certificates are available. The
Fund shall deliver to the Custodian such a Certificate no later than the
business day preceding the availability of any such instrument or certificate.
Prior to such availability, the Custodian shall comply with Section 17f of the
Investment Company Act of 1940, as amended, in connection with the purchase,
sale, settlement, closing out or writing of Futures Contracts, Options, or
Futures Contract Options by making payments or deliveries specified in
Certificates received by the Custodian in connection with any such purchase,
sale, writing, settlement or closing out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation reasonably
believed by the Custodian to be in the form customarily used by brokers,
dealers, or future commission merchants with respect to such Futures Contracts,
Options, or Futures Contract Options, as the case may be, confirming that such
Security is held by such broker, dealer or futures commission merchant, in
book-entry form or otherwise, in the name of the Custodian (or any nominee of
the Custodian) as custodian for the Fund, provided, however, that payments to or
deliveries from the Margin Account shall be made in accordance with the terms
and conditions of the Margin Account Agreement. Whenever any such instruments or
certificates are available, the Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any Futures Contract,
Option, or Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Future Contract, Option or
Futures Contract Option for which such instruments or such instruments or such
certificates are available only- against receipt by the Custodian of payment
therefor. Any such instrument or certificate delivered to the Custodian shall be
held by the Custodian hereunder in accordance with, and subject to, the
provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than a
purchase of an Option, a Futures Contract, or a Futures Contract Option, the
Fund shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate, Oral
Instructions or Written Instructions, specifying with respect to each such
purchase:
(a) the Series to which such Securities are to be specifically allocated; (b)
the name of the issuer and the title of the Securities; (c) the number of shares
or the principal amount purchased and accrued interest, if any; (d) the date of
purchase and settlement; (e) the purchase price per unit; (f) the total amount
payable upon such purchase; (g) the name of the person from whom or the broker
through whom the purchase was made, and the name of the clearing broker, if any;
and (h) the name of the broker to whom payment is to be made. The Custodian
shall, upon receipt of Securities purchased by or for the Fund, pay to the
broker specified in the Certificate out of the moneys held for the account of
such Series the total amount payable upon such purchase, provided that the same
conforms to the total amount payable as set forth in such Certificate, Oral
Instructions or Written Instructions.
2. Promptly after each sale of Securities by the Fund, other than a sale of
any Option, Futures Contract, Futures Contract Option, or any Reverse Repurchase
Agreement, the Fund shall deliver to the Custodian (i) with respect to each sale
of Securities which are not Money Market Securities, a Certificate, and (ii)
with respect to each sale of Money Market Securities, a Certificate, Oral
Instructions or Written Instructions, specifying with respect to each such sale:
(a) the Series to which such Securities were specifically allocated; (b) the
name of the issuer and the title of the Security; (c) the number of shares or
principal amount sold, and accrued interest, if any; (d) the date of sale; (e)
the sale price per unit; (f) the total amount payable to the Fund upon such
sale; (g) the name of the broker through whom or the person to whom the sale was
made, and the name of the clearing broker, if any; and (h) the name of the
broker to whom the Securities are to be delivered. The Custodian shall deliver
the Securities specifically allocated to such Series to the broker specified in
the Certificate upon the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions.
ARTICLE V
OPTIONS
l. Promptly after the purchase of any Option by the Fund, the Fund shall
deliver to the Custodian a Certificate specifying with respect to each Option
purchased: (a) the Series to which such Option is specifically allocated; (b)
the type of Option (put or call); (c) the name of the issuer and the title and
number of shares subject to such Option or, in the case of a Stock Index Option,
the stock index to which such Option relates and the number of Stock Index
Options purchased; (d) the expiration date; (e) the exercise price; (f) the
dates of purchase and settlement; (g) the total amount payable by the Fund in
connection with such purchase; (h) the name of the Clearing Member through whom
such Option was purchased; and (i) the name of the broker to whom payment is to
be made. The Custodian shall pay, upon receipt of a Clearing Member's statement
confirming the purchase of such Option held by such Clearing Member for the
account of the Custodian (or any duly appointed and registered nominee of the
Custodian) as custodian for the Fund, out of moneys held for the account of the
Series to which such Option is to be specifically allocated, the total amount
payable upon such purchase to the Clearing Member through whom the purchase was
made, provided that the same conforms to the total amount payable as set forth
in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund pursuant to
paragraph l hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) the Series to which such Option
was specifically allocated; (b) the type of Option (put or call); (c) the name
of the issuer and the title and number of shares subject to such Option or, in
the case of a Stock Index Option, the stock index to which such Option relates
and the number of Stock Index Options sold; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the Clearing Member through whom the sale was
made. The Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph l of this Article with respect to such Option against
payment to the Custodian of the total amount payable to the Fund, provided that
the same conforms to the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased by the
Fund pursuant to paragraph l hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Call Option: (a) the Series to which
such Call Option was specifically allocated; (b) the name of the issuer and the
title and number of shares subject to the Call Option; (c) the expiration date;
(d) the date of exercise and settlement; (e) the exercise price per share; (f)
the total amount to be paid by the Fund upon such exercise; and (g) the name of
the Clearing Member through whom such Call Option was exercised. The Custodian
shall, upon receipt of the Securities underlying the Call Option which was
exercised, pay out of the moneys held for the account of the Series to which
such Call Option was specifically allocated the total amount payable to the
Clearing Member through whom the Call Option was exercised, provided that the
same conforms to the total amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased by the
Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Put Option: (a) the Series to which
such Put Option was specifically allocated; (b) the name of the issuer and the
title and number of shares subject to the Put Option; (c) the expiration date;
(d) the date of exercise and settlement; (e) the exercise price per share; (f)
the total amount to be paid to the Fund upon such exercise; and (g) the name of
the Clearing Member through whom such Put Option was exercised. The Custodian
shall, upon receipt of the amount payable upon the exercise of the Put Option,
deliver or direct the Depository to deliver the Securities specifically
allocated to such Series, provided the same conforms to the amount payable to
the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Stock Index Option: (a)
the Series to which such Stock Index Option was specifically allocated; (b) the
type of Stock Index Option (put or call); (c) the number of Options being
exercised; (d) the stock index to which such Option relates; (e) the expiration
date; (f) the exercise price; (g) the total amount to be received by the Fund in
connection with such exercise; and (h) the Clearing Member from whom such
payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Covered
Call Option: (a) the Series for which such Covered Call Option was written; (b)
the name of the issuer and the title and number of shares for which the Covered
Call Option was written and which underlie the same; (c) the expiration date;
(d) the exercise price; (e) the premium to be received by the Fund; (f) the date
such Covered Call Option was written; and (g) the name of the Clearing Member
through whom the premium is to be received. The Custodian shall deliver or cause
to be delivered, in exchange for receipt of the premium specified in the
Certificate with respect to such Covered Call option, such receipts as are
required in accordance with the customs prevailing among Clearing Members
dealing in Covered Call Options and shall impose, or direct the Depository to
impose, upon the underlying Securities specified in the Certificate specifically
allocated to such Series such restrictions as may be required by such receipts.
Notwithstanding the foregoing, the Custodian has the right, upon prior written
notification to the Fund, at any time to refuse to issue any receipts for
Securities in the possession of the Custodian and not deposited with the
Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver, or
to direct the Depository to deliver, the Securities subject to such Covered Call
Option and specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares subject
to the Covered Call Option; (c) the Clearing Member to whom the underlying
Securities are to be delivered; and (d) the total amount payable to the Fund
upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian shall deliver,
or direct the Depository to deliver, the underlying Securities as specified in
the Certificate for the amount to be received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to such Put Option: (a) the
Series for which such Put Option was written; ~b) the name of the issuer and the
title and number of shares for which the Put Option is written and which
underlie the same; (c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund; (f) the date such Put Option is written; (g)
the name of the Clearing Member through whom the premium is to be received and
to whom a Put Option guarantee letter is to be delivered; (h) the amount of
cash, and/or the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited in the Senior Security Account for such Series;
and (i) the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be deposited into the Collateral Account for such
Series. The Custodian shall, after making the deposits into the Collateral
Account specified in the Certificate, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the Certificate against
receipt of the premium specified in said Certificate. Notwithstanding the
foregoing, the Custodian shall be under no obligation to issue any Put Option
guarantee letter or similar document if it is unable to make any of the
representations contained therein.
9. Whenever a Put Option written by the Fund and described in the preceding
paragraph is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Put Option was written; (b)
the name of the issuer and title and number of shares subject to the Put Option;
(c) the Clearing Member from whom the underlying Securities are to be received;
(d) the total amount payable by the Fund upon such delivery; (e) the amount of
cash and/or the amount and kind of Securities specifically allocated to such
Series to be withdrawn from the Collateral Account for such Series and (f) the
amount of cash and/or the amount and kind of Securities, specifically allocated
to such Series, if any, to be withdrawn from the Senior Security Account. Upon
the return and/or cancellation of any Put Option guarantee letter or similar
document issued by the Custodian in connection with such Put Option, the
Custodian shall pay out of the moneys held for the account of the Series to
which such Put Option was specifically allocated the total amount payable to the
Clearing Member specified in the Certificate as set forth in such Certificate,
and shall make the withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Stock
Index Option: (a) the Series for which such Stock Index Option was written; (b)
whether such Stock Index Option is a put or a call; (c) the number of options
written; (d) the stock index to which such Option relates; (e) the expiration
date; (f) the exercise price; (g) the Clearing Member through whom such Option
was written; (h) the premium to be received by the Fund; (i) the amount of cash
and/or the amount and kind of Securities, if any, specifically allocated to such
Series to be deposited in the Senior Security Account for such Series; (j) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in the Collateral Account for such
Series; and (k) the amount of cash and/or the amount and kind of Securities, if
any, specifically allocated to such Series to be deposited in a Margin Account,
and the name in which such account is to be or has been established. The
Custodian shall, upon receipt of the premium specified in the Certificate, make
the deposits, if any, into the Senior Security Account specified in the
Certificate, and either (1) deliver such receipts, if any, which the Custodian
has specifically agreed to issue, which are in accordance with the customs
prevailing among Clearing Members in Stock Index Options and make the deposits
into the Collateral Account specified in the Certificate, or (2) make the
deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in the
preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Stock
Index Option: (a) the Series for which such Stock Index Option was written; (b)
such information as may be necessary to identify the Stock Index Option being
exercised; (c) the Clearing Member through whom such Stock Index Option is being
exercised; (d) the total amount payable upon such exercise, and whether such
amount is to be paid by or to the Fund; (e) the amount of cash and/or amount and
kind of Securities, if any, to be withdrawn from the Margin Account; and (f) the
amount of cash and/or amount and kind of Securities, if any, to be withdrawn
from the Senior Security Account for such Series; and the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn from the Collateral
Account for such Series. Upon the return and/or cancellation of the receipt, if
any, delivered pursuant to the preceding paragraph of this Article, the
Custodian shall pay out of the moneys held for the account of the Series to
which such Stock Index Option was specifically allocated to the Clearing Member
specified in the Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical to a previously written
Option described in paragraphs, 6, 8 or 10 of this Article in a transaction
expressly designated as a "Closing Purchase Transaction" in order to liquidate
its position as a writer of an Option, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to the Option being purchased:
(a) that the transaction is a Closing Purchase Transaction; (b) the Series for
which the option was written; (c) the name of the issuer and the title and
number of shares subject to the Option, or, in the case of a Stock Index Option,
the stock index to which such Option relates and the number of Options held; (d)
the exercise price; (e) the premium to be paid by the Fund; (f) the expiration
date; (g) the type of Option (put or call) (h) the date of such purchase; (i)
the name of the Clearing Member to whom the premium is to be paid; and (j) the
amount of cash and/or the amount and kind of Securities, if any, to be withdrawn
from the Collateral Account, a specified Margin Account, or the Senior Security
Account for such Series. Upon the Custodian's payment of the premium and the
return and/or cancellation of any receipt issued pursuant to paragraphs 6, 8 or
l0 of this Article with respect to the Option being liquidated through the
Closing Purchase Transaction, the Custodian shall remove, or direct the
Depository to remove, the previously imposed restrictions on the Securities
underlying the Call Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to, any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 Article III herein, and
upon the return and/or cancellation of any receipts issued by the Custodian,
shall make such withdrawals from the Collateral Account, and the Margin Account
and/or the Senior Security Account as may be specified in a Certificate received
in connection with such expiration, exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such Futures
Contract, (or with respect to any number of identical Futures Contract(s)): (a)
the Series for which the Futures Contract is being entered; (b) the category of
Futures Contract (the name of the underlying stock index or financial
instrument); (c) the number of identical Futures Contracts entered into; (d) the
delivery or settlement date of the Futures Contract(s); (e) the date the Futures
Contract(s) was (were) entered into and the maturity date; (f) whether the Fund
is buying (going long) or selling (going short) on such Futures Contract(s); (g)
the amount of cash and/or the amount and kind of Securities, if any, to be
deposited in the Senior Security Account for such Series; (h) the name of the
broker, dealer, or futures commission merchant through whom the Futures Contract
was entered into; and (i) the amount of fee or commission, if any, to be paid
and the name of the broker, dealer, or futures commission merchant to whom such
amount is to be paid. The Custodian shall make the deposits, if any, to the
Margin Account in accordance with the terms and conditions of the Margin Account
Agreement. The Custodian shall make payment out of the moneys specifically
allocated to such Series of the fee or commission, if any, specified in the
Certificate and deposit in the Senior Security Account for such Series the
amount of cash and/or the amount and kind of Securities specified in said
Certificate.
2. (a) Any variation margin payment or similar payment required to be made by
the Fund to a broker, dealer, or futures commission merchant with respect to an
outstanding Futures Contract, shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a broker, dealer,
or futures commission merchant to the Fund with respect to an outstanding
Futures Contract, shall be received and dealt with by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is retained by
the Fund until delivery or settlement is made on such Futures Contract, the Fund
shall deliver to the Custodian a Certificate specifying: (a) the Futures
Contract and the Series to which the same relates; (b) with respect to a Stock
Index Futures Contract, the total cash settlement amount to be paid or received,
and with respect to a Financial Futures Contract, the Securities and/or amount
of cash to be delivered or received; (c) the broker, dealer, or futures
commission merchant to or from whom payment or delivery 13 to be made or
received; and (d~ the amount of cash and/or Securities to be withdrawn from the
Senior Security Account for such Series. The Custodian shall make the payment or
delivery specified in the Certificate, and delete such Futures Contract from the
statements delivered to the Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a Futures
Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the items of information required in a
Certificate described in paragraph l of this Article, and (b) the Futures
Contract being offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if any,
specified in the Certificate and delete the Futures Contract being offset from
the statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Senior Security Account for such
Series as may be specified in such Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the Fund, the
Fund shall promptly deliver to the Custodian a Certificate specifying with
respect to such Futures Contract Option: (a) the Series to which such Option is
specifically allocated; (b) the type of Futures Contract Option (put or call);
(c) the type of Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Contract Option
purchased; (d) the expiration date; (e) the exercise price; (f) the dates of
purchase and settlement; (g) the amount of premium to be paid by the Fund upon
such purchase; (h) the name of the broker or futures commission merchant through
whom such option was purchased; and (i) the name of the broker, or futures
commission merchant, to whom payment is to be made. The Custodian shall pay out
of the moneys specifically allocated to such Series the total amount to be paid
upon such purchase to the broker or futures commissions merchant through whom
the purchase was made, provided that the same conforms to the amount set forth
in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by the
Fund pursuant to paragraph l hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such sale: (a) Series to
which such Futures Contract Option was specifically allocated; (b) the type of
Future Contract Option (put or call); (c) the type of Futures Contract and such
other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the broker of futures commission merchant through
whom the sale was made. The Custodian shall consent to the cancellation of the
Futures Contract Option being closed against payment to the Custodian of the
total amount payable to the Fund, provided the same conforms to the total amount
payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the moneys and
Securities specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Futures
Contract Option: (a) the Series for which such Futures Contract Option was
written; (b) the type of Futures Contract Option (put or call); (c) the type of
Futures Contract and such other information as may be necessary to identify the
Futures Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the Fund; (g)
the name of the broker or futures commission merchant through whom the premium
is to be received; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the moneys and Securities specifically allocated to
such Series the deposits into the Senior Security Account, if any, as specified
in the Certificate. The deposits, if any, to be made to the Margin Account shall
be made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a call is
exercised, the Fund shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by the Fund
upon such exercise; and (g) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such Series. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and which
is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures Contract Option
is exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical to a
previously written Futures Contract Option described in this Article in order to
liquidate its position as a writer of such Futures Contract Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with respect to
the Futures Contract Option being purchased: (a) the Series to which such Option
is specifically allocated; (b) that the transaction is a closing transaction;
(c) the type of Future Contract and such other information as may be necessary
to identify the Future Contract underlying the Futures Option Contract; (d) the
exercise price; (e) the premium to be paid by the Fund; (f) the expiration date;
(g) the name of the broker or futures commission merchant to whom the premium is
to be paid; and (h) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawals from the Senior Security Account
specified in the Certificate. The withdrawals, if any, to be made from the
Margin Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing transaction
with respect to, any Futures Contract Option written or purchased by the Fund
and described in this Article, the Custodian shall (a) delete such Futures
Contract Option from the statements delivered to the Fund pursuant to paragraph
3 of Article III herein and, (b) make such withdrawals from and/or in the case
of an exercise such deposits into the Senior Security Account as may be
specified in a Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a Futures
Contract Option described in this Article shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sales by any Series of the Fund, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a) the Series for
which such short sale was made; (b) the name of the issuer and the title of the
Security; (c) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (d) the dates of the sale and settlement; (e) the
sale price per unit; (f) the total amount credited to the Fund upon such sale,
if any, (g) the amount of cash and/or the amount and kind of Securities, if any,
which are to be deposited in a Margin Account and the name in which such Margin
Account has been or is to be established; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in a Senior Security
Account, and (i) the name of the broker through whom such short sale was made.
The Custodian shall upon its receipt of a statement from such broker confirming
such sale and that the total amount credited to the Fund upon such sale, if any,
as specified in the Certificate is held by such broker for the account of the
Custodian (or any nominee of the Custodian) as custodian of the Fund, issue a
receipt or make the deposits into the Margin Account and the Senior Security
Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a certificate specifying with respect to each
such closing-out: (a) the Series for which such transaction is being made; (b)
the name of the issuer and the title of the Security; (c) the number of shares
or the principal amount, and accrued interest or dividends, if any, required to
effect such closing-out to be delivered to the broker; (d) the dates of
closing-out and settlement; (e) the purchase price per unit; (f) the net total
amount payable to the Fund upon such closing-out; (g) the net total amount
payable to the broker upon such closing-out; (h) the amount of cash and the
amount and kind of Securities to be withdrawn, if any, from the Margin Account;
(i) the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account; and (j) the name of the broker
through whom the Fund is effecting such closing-out. The Custodian shall, upon
receipt of the net total amount payable to the Fund upon such closing-out, and
the return and/ or cancellation of the receipts, if any, issued by the Custodian
with respect to the short sale being closed-out, pay out of the moneys held for
the account of the Fund to the broker the net total amount payable to the
broker, and make the withdrawals from the Margin Account and the Senior Security
Account, as the same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with respect
to Securities and money held by the Custodian hereunder, the Fund shall deliver
to the Custodian a Certificate or in the event such Reverse Repurchase Agreement
is a Money Market Security, a Certificate, Oral Instructions, or Written
Instructions specifying: (a) the Series for which the Reverse Repurchase
Agreement is entered; (b) the total amount payable to the Fund in connection
with such Reverse Repurchase Agreement and specifically allocated to such
Series; (c) the broker or dealer through or with whom the Reverse Repurchase
Agreement is entered; (d) the amount and kind of Securities to be delivered by
the Fund to such broker or dealer; (e) the date of such Reverse Repurchase
Agreement; and (f) the amount of cash and/or the amount and kind of Securities,
if any, specifically allocated to such Series to be deposited in a Senior
Security Account for such Series in connection with such Reverse Repurchase
Agreement. The Custodian shall, upon receipt of the total amount payable to the
Fund specified in the Certificate, Oral Instructions, or Written Instructions
make the delivery to the broker or dealer, and the deposits, if any, to the
Senior Security Account, specified in such Certificate, Oral Instructions, or
Written Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph l of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate, Oral Instructions, or Written Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement being terminated and
the Series for which same was entered; (b) the total amount payable by the Fund
in connection with such termination; (c) the amount and kind of Securities to be
received by the Fund and specifically allocated to such Series in connection
with such termination; (d) the date of termination; (e) the name of the broker
or dealer with or through whom the Reverse Repurchase Agreement is to be
terminated; and (f) the amount of cash and/or the amount and kind of Securities
to be withdrawn from the Senior Securities Account for such Series. The
Custodian shall, upon receipt of the amount and kind of Securities to be
received by the Fund specified in the Certificate, Oral Instructions, or Written
Instructions, make the payment to the broker or dealer, and the withdrawals, if
any, from the Senior Security Account, specified in such Certificate; Oral
Instructions, or Written Instructions.
<PAGE>
ARTICLE X
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically allocated to
a Series held by the Custodian hereunder, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect to each such
loan: (a) the Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities, (c) the number of
shares or the principal amount loaned, (d) the date of loan and delivery, (e)
the total amount to be delivered to the Custodian against the loan of the
Securities, including the amount of cash collateral and the premium, if any,
separately identified, and (f) the name of the broker, dealer, or financial
institution to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial institution to
which the loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The custodian may accept payment in
connection with a delivery otherwise than through the Book-Entry System or
Depository only in the form of a certified or bank cashier's check payable to
the order of the Fund or the Custodian drawn on New York Clearing House funds
and may deliver Securities in accordance with the customs prevailing among
dealers in securities.
2. Promptly after each termination of the loan of Securities by the Fund, the
Fund shall deliver or cause to be delivered to the Custodian a Certificate
specifying with respect to each such loan termination and return of Securities:
(a) the Series to which the loaned Securities are specifically allocated; (b)
the name of the issuer and the title of the Securities to be returned, (c) the
number of shares or the principal amount to be returned, (d) the date of
termination, (e) the total amount to be delivered by the Custodian (including
the cash collateral for such Securities minus any offsetting credits as
described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the Certificate.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for which
such deposit or withdrawal is to be made, and the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such Series.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the principal amount
of any particular Securities to be particular Securities to be deposited by the
Custodian into, or withdrawn from, a Senior Securities Account, the Custodian
shall be under no obligation to make any such deposit or withdrawal and shall so
notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin Account to
the broker, dealer, futures commission merchant or Clearing Member in whose
name, or for whose benefit, the account was established as specified in the
Margin Account Agreement.
3. Amounts received by the Custodian as payments or distributions with respect
to Securities deposited in any Margin Account shall be dealt with in accordance
with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security interest in and to
any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may enforce
its lien and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter or similar
document or any receipt issued hereunder by the Custodian. In the event the
Custodian should realize on any such property net proceeds which are less than
the Custodian's obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the Custodian by
the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a statement
with respect to each Margin Account in which money or Securities are held
specifying as of the close of business on the previous business day: (a) the
name of the Margin Account; (b) the amount and kind of Securities held therein;
and (c) the amount of money held therein. The Custodian shall make available
upon request to any broker, dealer, or futures commission merchant specified in
the name of a Margin Account a copy of the statement furnished the Fund with
respect to such Margin Account.
6. Promptly after the close of business on each business day in which cash
and/or Securities are maintained in a Collateral Account for any Series, the
Custodian shall furnish the Fund with a Statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding the
delivery to the Fund of such statement, the Fund shall furnish to the Custodian
a Certificate or Written Instructions specifying the then market value of the
Securities described in such statement. In the event such then market value is
indicated to be less than the Custodian's obligation with respect to any
outstanding Put Option guarantee letter or similar document, the Fund shall
promptly specify in a Certificate the additional cash and/or Securities to be
deposited in such Collateral Account to eliminate such deficiency.
<PAGE>
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of the
Board of Trustees of the Fund, certified by the Secretary, the Clerk, any
Assistant Secretary or any Assistant Clerk, either (i) setting forth with
respect to the Series specified therein the date of the declaration of a
dividend or distribution, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date and the
total amount payable to the Dividend Agent and any subdivided agent or
co-dividend agent of the Fund on the payment date, or (ii) authorizing with
respect to the Series specified therein the declaration of dividends and
distributions on a daily basis and authorizing the Custodian to rely on Oral
Instructions, Written Instructions or a Certificate setting forth the date of
the declaration of such dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the shareholders of
record as of that date and the total amount payable to the Dividend Agent on the
payment date.
2. Upon the payment date specified in such resolution, Oral Instructions,
Written Instructions or Certificate, as the case may be, the Custodian shall pay
out of the moneys held for the account of each Series the total amount payable
to the Dividend Agent, and any sub-dividend agent or co-dividend agent of the
Fund with respect to such Series.
ARTICLE XIII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to the Custodian
a Certificate duly specifying:
(a) The Series, the number of Shares sold, trade date, and price; and
(b) The amount of money to be received by the Custodian for the sale of
such Shares and specifically allocated to the separate account in the name of
such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian shall
credit such money to the separate account in the name of the Series for which
such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money held for
the account of such Series, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Find
desires the Custodian to make payment out of the money held by the Custodian
hereunder in connection with a redemption of any Shares, it shall furnish t~ the
Custodian a Certificate specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the Series
and number of Shares received by the Transfer Agent for redemption and that such
Shares are in good form for redemption, the Custodian shall make payment to the
Transfer Agent out of the moneys held in the separate account in the name of the
Series the total amount specified in the Certificate issued pursuant to the
foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Custodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form for
redemption in accordance with the check redemption procedure, honor the check
presented a~ part of such check redemption privilege out of the moneys held in
the separate account of the Series of the Shares being redeemed.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds on behalf of
any Series which results in an overdraft because the moneys held by the
Custodian in the separate account for such Series .shall be insufficient to pay
the total amount payable upon a purchase of Securities specifically allocated to
such Series, as set forth in a Certificate, Oral Instructions, or Written
Instructions or which results in an overdraft in the separate account of such
Series for some other reason, or if the Fund l.~ for any other reason indebted
to the Custodian with respect to a Series (except a borrowing for investment or
for temporary or emergency purposes using Securities as collateral pursuant to a
separate agreement and subject to the provisions of paragraph 2 of this
Article), such overdraft or indebtedness shall be deemed to be a loan made by
the Custodian to the Fund for such Series payable on demand and shall bear
interest from the date incurred at a rate per annum (based on a 360-day year for
the actual number of days involved) equal to 1/2% over Custodian's prime
commercial lending rate in effect from time to time, such rate to be adjusted on
the effective date of any change in such prime commercial lending rate but in no
event to be less than 6~ per annum. In addition, the Fund hereby agrees that the
Custodian shall have a continuing lien and security interest in and to any
property specifically allocated to such Series at any time held by it for the
benefit of such Series or in which the Fund may have an interest which is then
in the Custodian's possession or control or in possession or control of any
third party acting in the Custodian's behalf. The Fund authorizes the Custodian,
in its sole discretion, at any time to charge any such overdraft or indebtedness
together with interest due thereon against any balance of account standing to
.such Series' credit on the Custodian's books.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver to
the Custodian a Certificate specifying with respect to each such borrowing: (a)
the Series to which such borrowing relates; (b) the name of the bank, (c) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Fund, or other loan
agreement, (d) the time and date, if known, on which the loan is to be entered
into, (e) the date on which the loan becomes due and payable, (f) the total
amount payable to the Fund on the borrowing date, (g) the market value of
Securities to be delivered as collateral for such loan, including the name of
the issuer, the title and the number of shares or the principal amount of any
particular Securities, and (h) a statement specifying whether such loan is for
investment purposes or for temporary or emergency purposes and that such loan is
in conformance with the Investment Company Act of 1940 and the Fund's
prospectus. The Custodian shall deliver on the borrowing date specified in a
Certificate the specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount ~f the loan payable,
provided that the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note or loan
agreement. The Custodian shall deliver such Securities as additional collateral
as may be specified in a Certificate to collateralize further any transaction
described in this paragraph. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian, and the Custodian
shall receive from time to time such return of collateral as may be tendered to
it. In the event that the Fund falls to specify in a Certificate the Series, the
name of the issuer, the title and number of shares or the principal amount of
any particular Securities to be delivered as collateral by the Custodian, the
Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XV
CONCERNING THE CUSTODIAN
l. Except as hereinafter provided, neither the Custodian nor its nominee shall
be liable for any loss or damage, including counsel fees, resulting from its
action or omission to act or otherwise, either hereunder or under any Margin
Account Agreement, except for any such loss or damage arising out of its own
negligence or willful misconduct. The Custodian may, with respect to questions
of law arising hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Fund or of its own counsel, at
the expense of the Fund, and shall be fully protected with respect to anything
done or omitted by it in good faith in conformity with such advice or opinion.
The Custodian shall be liable to the Fund for any loss or damage resulting from
the use of the Book-Entry System or any Depository arising by reason of any
negligence, misfeasance or willful misconduct on the part of the Custodian or
any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold, or written
by or for the Fund, the legality of the purchase, sale or writing thereof, or
the propriety of the amount paid or received therefor;
(b) The legality of the sale or redemption of any Shares, or the propriety of
the amount to be received or paid therefor;
(c) The legality of the declaration or payment of any dividend by the Fund;
(d) The legality of any borrowing by the Fund using Securities as
collateral;
(e) The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it that any cash collateral
delivered to it by a broker, dealer, or financial institution or held by it at
any time as a result of such loan of portfolio Securities of the Fund is
adequate collateral for the Fund against any loss it might sustain as a result
of such loan. The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify the Fund
that the amount of such cash collateral held by it for the Fund is sufficient
collateral for the Fund, but such duty or obligation shall be the sole
responsibility of the Fund. In addition, the Custodian shall be under no duty or
obligatlon to see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article XIV of this
Agreement makes payment to it of any dividends or interest which are payable to
or for the account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due; or
(f) The sufficiency or value of any amounts of money and/or Securities held
in any Margin Account, Senior Security Account, Exempt Account or Collateral
Account in connection with transactions by the Fund. In addition, the Custodian
shall be under no duty or obligation to see that any broker, dealer, futures
commission merchant or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission merchant or Clearing
Member, to see that any payment received by the Custodian from any broker,
dealer, futures commission merchant or Clearing Member is the amount the Fund is
entitled to receive, or to notify the Fund of the Custodian' 3 receipt or
non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to be the Custodian
of, any money, whether or not represented by any check, draft, or other
instrument for the payment of money, received by it on behalf of the Fund until
the Custodian actually receives and collects such money directly or by the final
crediting of the account representing the Fund's interest at the Book-Entry
System or the Depository.
4. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount due to the Fund from the Transfer Agent of the
Fund nor to take any action to effect payment or distribution by the Transfer
Agent of the Fund of any amount paid by the Custodian to the Transfer Agent of
the Fund in accordance with this Agreement.
5. The Custodian shall not be under any duty or obligation to take action to
effect collection of any amount, if the Securities upon which such amount is
payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of reimbursement of
its costs and expenses in connection with any such action.
6. The Custodian may appoint one or more banking institutions as Depository or
Depositories, as Sub-Custodian or Sub-Custodians, or as Co-Custodian or
Co-Custodians including, but not limited to, banking institutions located in
foreign countries, of Securities and moneys at any time owned by the Fund, upon
such terms and conditions as may be approved in a Certificate or contained in an
agreement executed by the Custodian, the Fund and the appointed institution.
7. The Custodian shall not be under any duty or obligation (a) to ascertain
whether any Securities at any time delivered to, or held by it, for the account
of the Fund and specifically allocated to a Series are such as properly may be
held by the Fund or such Series under the provisions of its then current
prospectus, or (b) to ascertain whether any transactions by the Fund, whether or
not involving the Custodian, are such transactions as may properly be engaged in
by the Fund.
8. The Custodian shall be entitled to receive and the Fund agrees to pay to
the Custodian all out-of-pocket expenses and such compensation as may be agreed
upon from time to time between the Custodian and the Fund. The Custodian may
charge such compensation and any expenses with respect to a Series incurred by
the Custodian in the performance of its duties pursuant to such agreement
against any money specifically allocated to such Series. Unless and until the
Fund instructs the Custodian by a Certificate to apportion any loss, damage,
liability or expense among the Series in a specified manner, the Custodian shall
also be entitled to charge against any money held by it for the account of a
Series such Series' pro rata share (based on such Series net asset value at the
time of the charge to the aggregate net asset value of all Series at that time)
of the amount of any loss, damage, liability or expense, including counsel fees,
for which it shall be entitled to reimbursement under the provisions of this
Agreement. The expenses for which the Custodian shall be entitled to
reimbursement hereunder shall include, but are not limited to, the expenses of
sub-custodians and foreign branches of the Custodian incurred in settling
outside of New York City transactions involving the purchase and sale of
Securities of the Fund.
9. The Custodian shall be entitled to rely upon any Certificate, notice or
other instrument in writing received by the Custodian and reasonably believed by
the Custodian to be a Certificate. The Custodian shall be entitled to rely upon
any Oral Instructions and any Written Instructions actually received by the
Custodian hereinabove provided for. The Fund agrees to forward to the Custodian
a Certificate or facsimile thereof confirming such Oral Instructions or Written
Instructions in such manner so that such Certificate or facsimile thereof is
received by the Custodian, whether by hand delivery, telecopier or other similar
device, or otherwise, by the close of business of the same day that such Oral
Instructions or Written Instructions are given to the Custodian. The Fund agrees
that the fact that such confirming instructions are not received by the
Custodian shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund in acting upon
Oral Instructions or Written Instructions given to the Custodian hereunder
concerning such transactions provided such instructions reasonably appear to
have been received from an Authorized Person.
10. The Custodian shall be entitled to rely upon any instrument, instruction
or notice received by the Custodian and reasonably believed by the Custodian to
be given in accordance with the terms and conditions of any Margin Account
Agreement. Without limiting the generality of the foregoing, the Custodian shall
be under no duty to inquire into, and shall not be liable for, the accuracy of
any statements or representations contained in any such instrument or other
notice including, without limitation, any specification of any amount to be paid
to a broker, dealer, futures commission merchant or Clearing Member.
11. The books and records pertaining to the Fund which are in the possession
of the Custodian shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the Investment Company Act of 1940, as
amended, and other applicable securities laws and rules and regulations. The
Fund, or the Fund's authorized representatives, shall have access to such books
and records during the Custodian's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
the Custodian to the Fund or the Fund's authorized representative, and the Fund
shall reimburse the Custodian its expenses of providing such copies.
12. The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry System,
the Depository, or O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time to time.
13. The Fund agrees to indemnify the Custodian against and save the Custodian
harmless from all liability, claims, losses and demands whatsoever, including
attorney's fees, howsoever arising or incurred because of or in connection with
the Custodian's payment or non-payment of checks pursuant to paragraph 6 of
Article XIII as part of any check redemption privilege program of the Fund,
except for any such liability, claim, loss and demand arising out of the
Custodian's own negligence or willful misconduct.
14. Subject to the foregoing provisions of this Agreement, the Custodian may
deliver and receive Securities, and receipts with respect to such Securities,
and arrange for payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or dealers in such
Securities.
15. The Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XVI
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving to the
other party a notice in writing specifying the date of such termination, which
shall be not less than ninety (90) days after the date of giving of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the Board of Trustees of the Fund, certified by the
Secretary, the Clerk, any Assistant Secretary or any Assistant Clerk, electing
to terminate this Agreement and designating a successor custodian or custodians,
each of which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. In the event such notice is
given by the Custodian, the Fund shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of the Board of Trustees of the
Fund, certified by the Secretary, the Clerk, any Assistant Secretary or any
Assistant Clerk, designating a successor custodian or custodians. In the absence
of such designation by the Fund, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the date set forth in
such notice this Agreement shall terminate, and the Custodian shall upon receipt
of a notice of acceptance by the successor custodian on that date deliver
directly to the successor custodian all Securities and moneys then owned by the
Fund and held by it as Custodian, after deducting all fees, expenses and other
amounts for the payment or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the Custodian in
accordance with the preceding paragraph, the Fund shall upon the date specified
in the notice of termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the Book-Entry System
which cannot be delivered to the Fund) and moneys then owned by the Fund be
deemed to be its own custodian and the Custodian shall thereby be relieved of
all duties and responsibilities pursuant to this Agreement, other than the duty
with respect to Securities held in the Book Entry System which cannot be
delivered to the Fund to hold such Securities hereunder in accordance with this
Agreement.
<PAGE>
ARTICLE XVII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the present
Officers of the Fund under its seal, setting forth the names and the signatures
of the present Authorized Persons. The Fund agrees to furnish to the Custodian a
new Certificate in similar form in the event that any such present Authorized
Person ceases to be an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully protected in acting
under the provisions of this Agreement upon Oral Instructions or signatures of
the present Authorized Persons as set forth in the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two of the present
Officers of the Fund under its seal, setting forth the names and the signatures
of the present Officers of the Fund. The Fund agrees to furnish to the Custodian
a new Certificate in similar form in the event any such present Officer ceases
to be an Officer of the Fund, or in the event that other or additional Officers
are elected or appointed. Until such new Certificate shall be received, the
Custodian shall be fully protected in acting under the provisions of this
Agreement upon the signatures of the Officers as set forth in the last delivered
Certificate.
3. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, shall be sufficiently given if addressed
to the Custodian and mailed or delivered to it at its offices at 90 Washington
Street, New York, New York 10015, or at such other place as the Custodian may
from time to time designate in writing.
4. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Fund shall be sufficiently given if addressed to
the Fund and mailed or delivered to it at its office at the address for the Fund
first above written, or at such other place as the Fund may from time to time
designate in writing.
5. This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Trustees of the Fund.
6. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Custodian, or by the Custodian without the written consent of the Fund,
authorized or approved by a resolution of the Fund's Board of Trustees.
7. This Agreement shall be construed in accordance with the laws of the
State of New York.
8. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
9. A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees of the Fund as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
THE GABELLI ASSET FUND
By:NICHOLAS E.E. DESTEFANO
Nicholas E.E. DeStefano
Executive Vice President
Attest:
DOUGLAS R. JAMIESON
Douglas R. Jamieson
Secretary
THE BANK OF NEW YORK
By:ILLEGIBLE
Attest:
ILLEGIBLE
<PAGE>
APPENDIX A
The undersigned, being the Executive Vice President and Secretary of The
Gabelli Asset Fund, a Massachusetts business trust (the "Fund"), do certify
that:
The individuals listed in Class B below have been duly authorized by the
Board of Trustees of the Fund, in conformity with the Fund's Declaration of
Trust and By-Laws to give, on behalf of the Fund, Oral Instructions and Written
Instructions countersigned by one of the individuals listed in Class A below,
and the signatures set forth opposite their respective names are their true and
correct signatures:
Name Signature
Class A Authorized ~ Signatures
Mario J. Gabelli MARIO J. GABELLI
Nicholas E.E. Destefano NICHOLAS E.E. DESTEFANO
Douglas R. Jamieson DOUGLAS R. JAMIESON
Irene Smolicz IRENE SMOLICZ
Jayne Abajian JAYNE ABAJIAN
Class B Authorized Signatures
Bernadette Finn BERNADETTE FINN
Dana Messina DANA MESSINA
Lesley Jones LESLEY JONES
Dated: January 22, 1986
NICHOLAS E.E. DESTEFANO
Nicholas E.E. DeStefano
Executive Vice President
DOUGLAS R. JAMIESON
Douglas R. Jamieson
Secretary
<PAGE>
APPENDIX B
The undersigned, being the Executive Vice President and Secretary of The
Gabelli Asset Fund, a Massachusetts business trust (the "Fund"), do certify
that:
The following individuals serve in the following positions with the Fund and
each has been duly elected or appointed by the Board of Trustees of the Fund to
each such position and qualified therefor in conformity with the Fund's
Declaration of Trust and By-Laws, and the signatures set forth opposite their
respective names are their true and correct signatures:
Name/Signature Position
Mario J. Gabelli Chairman of the Board
and President
Nicholas E.E. Executive
DeStefano Vice President
Douglas R. Vice President and
Jamieson Secretary
William Berkowitz Vice President and Treasurer
Jayne Abajian Assistant Secretary
Dana Messina Assistant Secretary
Bernadette Finn Assistant Secretary
Dated: January 22, 1986
NICHOLAS E. E. DESTEFANO
Nicholas E.E. DeStefano
Executive Vice President
DOUGLAS R. JAMIESON
Douglas R. Jamieson
Secretary
<PAGE>
APPENDIX C
I, Victor R. Vendemio, an Assistant Vice President with THE BANK OF NEW YORK
do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, Douglas R. Jamieson, hereby certifies that he or she is the
duly elected and acting Secretary of The Gabelli Asset Fund, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
January 22, 1986, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
January 22, 1986, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis to deposit in the
Book-Entry System, as defined in the Custody Agreement, all securities
eligible for deposit therein, regardless of the Series to which the
same are specifically allocated, and to utilize the Book-Entry System
to the extent possible in connection with its performance thereunder,
including, without limitation, in connection with settlements of
purchases and sales of securities, loans of securities, and deliveries
and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of The Gabelli
Asset Fund as of the 22nd day January, 1986.
DOUGLAS R. JAMIESON
Douglas R. Jamieson
Secretary
<PAGE>
EXHIBIT B
CERTIFICATION
The undersigned, Douglas R. Jamieson, hereby certifies that he or she is the
duly elected and acting Secretary of The Gabelli Asset Fund, a Massachusetts
business Trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
January 22, 1986, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as of
January 22, 1986, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Depository, as defined in the Custody
Agreement, all securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated, and to utilize
the Depository to the extent possible in connection with its
performance thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of The Gabelli
Asset Funds as of the 22nd day of January, 1986.
DOUGLAS R. JAMIESON
Douglas R. Jamieson
Secretary
<PAGE>
AMENDMENT TO THE CUSTODIAN CONTRACT
AGREEMENT made by and between State Street Bank and Trust Company (the
"Custodian") and The Gabelli Asset Fund (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated December 7, 1989 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the Custodian Contract
to provide for the maintenance of the Fund's foreign securities, and cash
incidental to transactions in such securities, in the custody of certain foreign
banking institutions and foreign securities depositories acting as
sub-custodians in conformity with the requirements of Rule 17f-5 under the
Investment Company Act of 1940;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and conditions;
1. Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained outside the
United States the foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign sub-custodians"). Upon
receipt of "Proper Instructions", as defined in Section 2.17 of the Custodian
Contract, together with a certified resolution of the Fund's Board of Trustees,
the Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper Instructions, the
Fund may instruct the Custodian to cease the employment of any one or more of
such sub-custodians for maintaining custody of the Fund's assets.
2. Assets to be Held
The Custodian shall limit the securities and other assets maintained in
the custody of the foreign sub-custodians to: (a) "foreign securities", as
defined in paragraph (c)(l) of Rule 17f-5 under the Investment Company Act of
1940, and (b) cash and cash equivalents in such amounts as the Custodian or the
Fund may determine to be reasonably necessary to effect the Fund's foreign
securities transactions.
<PAGE>
3. Foreign Securities Depositories
Except as may otherwise be agreed upon in writing by the Custodian and
the Fund, assets of the Fund shall be maintained in foreign securities
depositories only through arrangements implemented by the foreign banking
institutions serving as sub-custodians pursuant to the terms hereof. Where
possible, such arrangements shall include entry into agreements containing the
provisions set forth in Section 5 hereof.
4. Segregation of Securities
The Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian. Each
agreement pursuant to which the Custodian employs a foreign banking institution
shall require that such institution establish a custody account for the
Custodian on behalf of the Fund and physically segregate in that account,
securities and other assets of the Fund, and, in the event that such institution
deposits the Fund's securities in a foreign securities depository, that it shall
identify on its books as belonging to the Custodian, as agent for the Fund, the
securities so deposited.
5. Agreements with Foreign Banking Institutions
Each agreement with a foreign banking institution shall be
substantially in the form set forth in Exhibit 1 hereto and shall provide that:
(a) the Fund's assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking institution
or its creditors or agents, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the Fund's assets will be freely
transferable without the payment of money or value other than for custody or
administration; (c) adequate records will be maintained identifying the assets
as belonging to the Fund; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be given
access to the books and records of the foreign banking institution relating to
its actions under its agreement with the Custodian; and (e) assets of the Fund
held by the foreign sub-custodian will be subject only to the instructions of
the Custodian or its agents.
6. Access of Independent Accountants of the Fund
Upon request of the Fund, the Custodian will use its best efforts to
arrange for the independent accountants of the Fund to be afforded access to the
books and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the performance of
such foreign banking institution under its agreement with the Custodian.
7. Reports by Custodian
The Custodian will supply to the Fund from time to time, as mutually
agreed upon, statements in respect of the securities and other assets of the
Fund held by foreign sub-custodians, including but not limited to an
identification of entities having possession of the Fund's securities and other
assets and advices or notifications of any transfers of securities to or from
each custodial account maintained by a foreign banking institution for the
Custodian on behalf of the Fund indicating, as to securities acquired for the
Fund, the identity of the entity having physical possession of such securities.
8. Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section 8,
the provisions of Sections 2.2 and 2.8 of the Custodian Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the United
States by foreign sub-custodians.
(b) Notwithstanding any provision of the Custodian Contract to the
contrary, settlement and payment for securities received for the account of the
Fund and delivery of securities maintained for the account of the Fund may be
effected in accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as set
forth in Section 2.3 of the Custodian Contract, and the Fund agrees to hold any
such nominee harmless from any liability as a holder of record of such
securities.
9. Liability of Foreign Sub-Custodians
Each agreement pursuant to which the Custodian employs a foreign
banking institution as a foreign sub-custodian shall require the institution to
exercise reasonable care in the performance of its duties and to indemnify, and
hold harmless, the Custodian and each Fund from and against any loss, damage,
cost, expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian with respect
to any claims against a foreign banking institution as a consequence of any such
loss, damage, cost, expense, liability or claim if and to the extent that the
Fund has not been made whole for any such loss, damage, cost, expense, liability
or claim.
10. Liability of Custodian
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in the Custodian Contract and, regardless of whether
assets are maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated by paragraph 13
hereof, the Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism or any loss where the sub-custodian
has otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 10, in delegating custody duties to State Street
London Ltd., the Custodian shall not be relieved of any responsibility to the
Fund for any loss due to such delegation, except such loss as may result from
(a) political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection, civil
strife or armed hostilities) or (b) other losses (excluding a bankruptcy or
insolvency of State Street London Ltd. not caused by political risk) due to Acts
of God, nuclear incident or other losses under circumstances where the Custodian
and State Street London Ltd. have exercised reasonable care.
11. Reimbursement for Advances
If the Fund requires the Custodian to advance cash or securities for
any purpose including the purchase or sale of foreign exchange or of contracts
for foreign exchange, or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except such as
may arise from its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the account of the
Fund shall be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain reimbursement.
12. Monitoring Responsibilities
The Custodian shall furnish annually to the Fund, during the month of
June, information concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope to that furnished
to the Fund in connection with the initial approval of this amendment to the
Custodian Contract. In addition, the Custodian will promptly inform the Fund in
the event that the Custodian learns of a material adverse change in the
financial condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not the subject
of an exemptive order from the Securities and Exchange Commission is notified by
such foreign sub-custodian that there appears to be a substantial likelihood
that its shareholders' equity will decline below $200 million (U.S. dollars or
the equivalent thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted U.S.
accounting principles).
13. Branches of U.S. Banks
(a) Except as otherwise set forth in this amendment to the Custodian
Contract, the provisions hereof shall not apply where the custody of the Fund
assets is maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of 1940
meeting the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by paragraph
1 of the Custodian Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained in
an interest bearing account established for the Fund with the Custodian's London
Branch, which account shall be subject to the direction of the Custodian, State
Street London Ltd. or both.
14. Applicability of Custodian Contract
Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 14th day of February, 1991.
ATTEST: THE GABELLI ASSET FUND
ILLEGIBLE By:BRUCE ALPERT
(Title) SECRETARY (Title) VICE PRESIDENT AND TREASURER
ATTEST: STATE STREET BANK AND TRUST COMPANY
ILLEGIBLE By:JW FLETCHER
Assistant Secretary Vice President
<PAGE>
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of The Gabelli Asset
Fund for use as sub-custodians for the Fund's securities and other assets.
(insert banks and securities depositories)
<PAGE>
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trusts Company (the
"Custodian") and The Gabelli Asset Fund (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated December 7, 1989 as amended May 13, 1991 (the "Custodian Contract")
governing the terms and conditions under which the Custodian maintains custody
of the securities and other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit or its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property so held by the foreign
sub-custodian be held separately from any assets of the foreign sub-custodian or
of others.
2. Except as specifically superseded or modified herein, the terms and
provision of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed as a sealed instrument in its name and behalf by its duly authorized
representative this day of , 1995.
THE GABELLI ASSET FUND
By: BRUCE ALPERT
Title: PRESIDENT
STATE STREET BANK AND TRUST COMPANY
By: ILLEGIBLE
Title: EXECUTIVE VICE PRESIDENT
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE GABELLI ASSET FUND
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
- ----------------------------------------------------------------------
TABLE OF CONTENTS
- ---------------------------------------------------------------------
Page
Article 1 Terms of Appointment; Duties of the Bank............l
Article 2 Fees and Expenses...................................4
Article 3 Representations and Warranties of the Bank..........4
Article 4 Representations and Warranties of the Fund.........5
Article 5 Indemnification....................................5
Article 6 Covenants of the Fund and the Bank.................7
Article 7 Termination of Agreement...........................9
Article 8 Assignment.........................................9
Article 9 Amendment..........................................9
Article 10 Massachusetts Law to Apply........................10
Article 11 Merger of Agreement....................................10
<PAGE>
- ----------------------------------------------------------------------
4
- ---------------------------------------------------------------------
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the __________ day of ____________, 1989, by and
between The Gabelli Asset Fund, a ___________ business trust, having its
principal office and place of business at 655 Third Avenue, New York, New York
10017 (the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company having its principal office and place of business at 225 Franklin
Street, Boston, Massachusetts 02110 (the "Bank"). WHEREAS, the Fund desires to
appoint the Bank as its transfer agent, dividend disbursing agent and agent in
connection with certain other activities, and the Bank desires to accept such
appointment; NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows: Article 1 Terms of Appointment;
Duties of the Bank 1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints the Bank to act as, and the Bank
agrees to act as, its transfer agent for the Fund's authorized and issued shares
of its beneficial interest ("Shares"), dividend disbursing agent and agent in
connection with any accumulation, open-account or similar plans provided to the
shareholders of the Fund ("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus") of the Fund,
including without limitation any periodic investment plan or periodic withdrawal
program. 1.02 The Bank agrees that it will perform the following services: (a)
In accordance with procedures established from time to time by agreement between
the Fund and the Bank, the Bank shall: (i) Receive for acceptance, orders for
the purchase of Shares, and promptly deliver payment and appropriate
documentation therefor to the Custodian of the Fund authorized pursuant to the
Declaration of Trust of the Fund (the "Custodian"); (ii) Pursuant to purchase
orders, issue the appropriate number of Shares and hold such Shares in the
appropriate Shareholder account; (iii) Receive for acceptance redemption
requests and redemption directions and deliver the appropriate documentation
therefor to the Custodian; (iv) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders; (v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions; (vi) Prepare and transmit
payments for dividends and distributions declared by the Fund; (vii) Maintain
records of account for and advise the Fund and its Shareholders as to the
foregoing; and (viii) Record the issuance of shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total number of shares of the
Fund which are authorized, based upon data provided to it by the Fund, and
issued and outstanding. Bank shall also provide the Fund on a regular basis with
the total number of shares which are authorized and issued and outstanding and
shall have no obligation, when recording the issuance of shares, to monitor the
issuance of such shares or to take cognizance of any laws relating to the issue
or sale of such shares, which functions shall be the sole responsibility of the
Fund. (b) In addition to and not in lieu of the services set forth in the above
paragraph (a), the Bank shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including without limitation
any periodic investment plan or periodic withdrawal program), including but not
limited to: maintaining all Shareholder accounts, preparing Shareholder meeting
lists, mailing proxies, receiving and tabulating proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information and (ii) provide
a system which will enable the Fund to monitor the total number of Shares sold
in each State. (c) In addition, the Fund shall: (i) identify to the Bank in
writing those transactions and assets to be treated as exempt from blue sky
reporting for each State and (ii) verify the establishment of transactions for
each State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of the Bank for the Fund's blue sky
State registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and the reporting of
such transactions to the Fund as provided above. Procedures applicable to
certain of these services may be established from time to time by agreement
between the Fund and the Bank. Article 2 Fees and Expenses 2.01 For performance
by the Bank pursuant to this Agreement, the Fund agrees to pay the Bank an
annual maintenance fee for each Shareholder account as set out in the initial
fee schedule attached hereto. Such fees and out-of-pocket expenses and advances
identified under Section 2.02 below may be changed from time to time subject to
mutual written agreement between the Fund and the Bank. 2.02 In addition to the
fee paid under Section 2.01 above, the Fund agrees to reimburse the Bank for
out-of-pocket expenses or advances incurred by the Bank for the items set out in
the fee schedule attached hereto. In addition, any other expenses incurred by
the Bank at the request or with the consent of the Fund, will be reimbursed by
the Fund. 2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the mailing of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to the Bank by the Fund at least seven
(7) days prior to the mailing date of such materials. Article 3 Representations
and Warranties of the Bank The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts. 3.02 It is duly qualified
to carry on its business in The Commonwealth of Massachusetts. 3.03 It is
empowered under applicable laws and by its charter and By-Laws to enter into and
perform this Agreement. 3.04 All requisite corporate proceedings have been taken
to authorize it to enter into and perform this Agreement. 3.05 It has and will
continue to have access to the necessary facilities, equipment and personnel to
perform its duties and obligations under this Agreement. Article 4
Representations and Warranties of the Fund The Fund represents and warrants to
the Bank that: 4.01 It is a business trust duly organized and existing and in
good standing under the laws of ___________________________. 4.02 It is
empowered under applicable laws and by its Declaration of Trust and By-Laws to
enter into and perform this Agreement. 4.03 All corporate proceedings required
by said Declaration of Trust and By-Laws have been taken to authorize it to
enter into and perform this Agreement. 4.04 It is an open-end and diversified
management investment company registered under the Investment Company Act of
1940. 4.05 A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect to all
Shares of the Fund being offered for sale. Article 5 Indemnification 5.01 The
Bank shall not be responsible for, and the Fund shall indemnify and hold the
Bank harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to: (a) All actions of the Bank or its agent or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct. (b) The Fund's refusal or
failure to comply with the terms of this Agreement, or which arise out of the
Fund's lack of good faith, negligence or willful misconduct or which arise out
of the breach of any representation or warranty of the Fund hereunder. (c) The
reliance on or use by the Bank or its agents or subcontractors of information,
records and documents which (i) are received by the Bank or its agents or
subcontractors and furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund. (d) The reliance on, or the carrying out by the Bank or its
agents or subcontractors of any instructions or requests of the Fund. (e) The
offer or sale of Shares in violation of any requirement under the federal
securities laws or regulations or the securities laws or regulations of any
state that such Shares be registered in such state or in violation of any stop
order or other determination or ruling by any federal agency or any state with
respect to the offer or sale of such Shares in such state. 5.02 The Bank shall
indemnify and hold the Fund harmless from and against any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to any action or failure or omission to act by the Bank
as a result of the Bank's lack of good faith, negligence or willful misconduct.
5.03 At any time the Bank may apply to any officer of the Fund for instructions,
and may consult with legal counsel with respect to any matter arising in
connection with the services to be performed by the Bank under this Agreement,
and the Bank and its agents or subcontractors shall not be liable and shall be
indemnified by the Fund for any action taken or omitted by it in reliance upon
such instructions or upon the opinion of such counsel. The Bank, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided the Bank or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have notice
of any change of authority of any person, until receipt of written notice
thereof from the Fund. The Bank, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officers of
the Fund, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar. 5.04 In the event either
party is unable to perform its obligations under the terms of this Agreement
because of acts of God, strikes, equipment or transmission failure or damage
reasonably beyond its control, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes. 5.05
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any act or
failure to act hereunder. 5.06 In order that the indemnification provisions
contained in this Article 5 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion, and
shall keep the other party advised with respect to all developments concerning
such claim. The party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense of such claim.
The party seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent. Article 6 Covenants of the
Fund and the Bank 6.01 The Fund shall promptly furnish to the Bank the
following: (a) A certified copy of the resolution of the Trustees of the Fund
authorizing the appointment of the Bank and the execution and delivery of this
Agreement. (b) A copy of the Declaration of Trust and By-Laws of the Fund and
all amendments thereto. 6.02 The Bank hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for safekeeping of
stock certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices. 6.03 The Bank shall keep records relating to
the services to be performed hereunder, in the form and manner as it may deem
advisable. To the extent required by Section 31 of the Investment Company Act of
1940, as amended, and the Rules thereunder, the Bank agrees that all such
records prepared or maintained by the Bank relating to the services to be
performed by the Bank hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request. 6.04 The Bank and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law. 6.05 In case of any requests
or demands for the inspection of the Shareholder records of the Fund, the Bank
will endeavor to notify the Fund and to secure instructions from an authorized
officer of the Fund as to such inspection. The Bank reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to exhibit the Shareholder
records to such person.
<PAGE>
Article 7 Termination of Agreement 7.01 This Agreement may be terminated by
either party upon one hundred twenty (120) days written notice to the other.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Fund.
Additionally, the Bank reserves the right to charge for any other reasonable
expenses associated with such termination and/or a charge equivalent to the
average of three (3) months' fees. Article 8 Assignment 8.01 Except as provided
in Section 8.03 below, neither this Agreement nor any rights or obligations
hereunder may be assigned by either party without the written consent of the
other party. 8.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns. 8.03 The
Bank may, without further consent on the part of the Fund, subcontract for the
performance hereof with (1) Boston Financial Data Services, Inc., a
Massachusetts corporation ("BFDS") which is duly registered as a transfer agent
pursuant to Section 17A(c)(1) of the Securities Exchange Act of 1934 ("Section
17A(c)(1)"), (ii) a BFDS subsidiary duly registered as a transfer agent pursuant
to Section 17A(c)(1) or (iii) a BFDS affiliate; provided, however, that the Bank
shall be as fully responsible to the Fund for the acts and omissions of any
subcontractor as it is for its own acts and omissions. Article 9 Amendment 9.01
This Agreement may be amended or modified by a written agreement executed by
both parties and authorized or approved by a resolution of the Trustees of the
Fund.
<PAGE>
Article 10 Massachusetts Law to Apply 10.01 This Agreement shall be
construed and the provisions thereof interpreted under and in accordance with
the laws of The Commonwealth of Massachusetts. Article 11 Merger of Agreement
11.01 This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof
whether oral or written.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and year first above
written.
THE GABELLI ASSET FUND
BY: /s/Bruce N. Alpert
Bruce N. Alpert
ATTEST:
/s/signature illigible
Signature Illigible
STATE STREET BANK AND TRUST COMPANY
BY: /s/signature illigible
Signature Illigible
ATTEST:
/s/signature illigible
signature illigible
<PAGE>
SUB-ADMINISTRATION AGREEMENT
May 1, 1995
The Shareholder Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Dear Ladies and Gentlemen:
Gabelli Funds, Inc., a New York corporation (the "Adviser"), as
investment adviser or manager and administrator to the investment companies set
forth on Exhibit A and incorporated herein (each referred to herein as the
"Fund"), confirms its agreement with The Shareholder Services Group, Inc.
("TSSG") as set forth below.
1. Investment Description; Appointment; Governing Law
Each Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the objective, policies and
limitations specified in its Articles of Incorporation or Master Trust Agreement
as amended from time to time (the "Charter"), its By-Laws, as amended from time
to time, in its prospectus filed with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act") and the
Securities Act of 1933, as amended, as part of the Fund's Registration Statement
(the "Registration Statement"), as amended from time to time, and in the manner
and to the extent as may from time to time be approved as set forth in the
Charter. Copies of the Registration Statement, Charter and By-Laws have been
submitted to TSSG. The Fund employs the Adviser as its investment adviser or
manager and administrator and the Adviser desires to employ and hereby appoints
TSSG to act as its sub-administrator. TSSG accepts this appointment and agrees
to furnish the services as set forth in paragraph 2 of this Agreement for the
compensation set forth below. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
the conflict of law rules thereof.
2. Services as Sub-Administrator
Subject to the overall supervision and direction of the Adviser, TSSG
will (a) assist in supervising all aspects of each Fund's operations except
those performed by the Adviser under its investment advisory or management
agreement with each Fund; (b) supply the Adviser with office facilities (which
may be in TSSG's own offices), statistical and research data, data processing
services, clerical, accounting and bookkeeping services, including, but not
limited to, the calculation of the net asset value of shares in each Fund
("Shares"), internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; (c) prepare and
distribute materials for all Fund Board of Directors/Trustees Meetings,
including mailing of all Board materials, collating the same materials into the
Board books and assisting in the drafting of minutes for the Board meetings; (d)
prepare reports to holders of Shares ("Shareholders"), tax returns and reports
to and filings with the Securities and Exchange Commission, state Blue Sky
authorities and the applicable stock exchange; (e) provide any equipment or
services necessary for the purpose of pricing Shares or valuing each Fund's
investment portfolio and, when requested, calculate the amount of all applicable
"Blue Sky" expense limitations; (f) provide compliance testing of all Fund
activities against applicable requirements of the 1940 Act and the rules
thereunder, the Internal Revenue Code of 1986, as amended, and the Fund's
investment restrictions; (g) furnish to the Adviser such statistical and other
factual information and information regarding economic factors and trends as the
Adviser from time to time may require, it being understood and acknowledged by
the Fund and TSSG that TSSG shall not provide any services that would cause TSSG
to be deemed to be an "investment adviser", as that term is defined in Section
2(a)(20) of the 1940 Act, including without limitation, services involving the
making of recommendations with regard to purchases or sales by the Fund of
securities; (h) assist in preparing information in connection with regulatory
examinations; and (i) generally provide all administrative services that may be
required for the ongoing operation of each Fund in a manner consistent with the
requirements of the 1940 Act.
3. Compensation
In consideration of services rendered pursuant to this Agreement, the
Adviser will pay TSSG on the first business day of each month a fee for the
previous month in accordance with the fee schedule set forth on Exhibit B and
incorporated herein. Such fees do not include certain "out-of-pocket"
disbursements for which TSSG shall be entitled to bill separately. Out-of-pocket
disbursements shall include, but shall not be limited to the items specified on
Schedule C and incorporated herein, which schedule may be modified by TSSG upon
not less than 30 days prior written notice to the Adviser. Upon any termination
of this Agreement before the end of any month, the fee for such part of a month
shall be prorated according to the proportion that such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to TSSG, the value of
each Fund's net assets shall be computed at the times and in the manner
specified in the Registration Statement. TSSG will bear all expenses in
connection with the performance of its services under this Agreement with the
exception of costs of printing and mailing stock certificates, prospectuses,
reports and notices, interest on borrowed money, brokerage commissions, taxes
and fees payable to federal, state and other governmental agencies, fees of
Directors or Trustees of each Fund who are not affiliated with TSSG, outside
auditing expenses, outside legal expenses or other expenses not specified in
this Section 3 which may be properly payable by the Adviser or the Fund.
4. Standard of Care
TSSG shall exercise its best judgment in rendering the services listed
in paragraph 2 above. TSSG shall not 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, provided that nothing in this Agreement
shall be deemed to protect or purport to protect TSSG against liability to the
Fund or to its Shareholders to which TSSG would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of TSSG's reckless disregard of its
obligations and duties under this Agreement.
5. Service to Other Companies or Accounts
The Adviser understands that TSSG now acts, will continue to act and
may act in the future as administrator, sub-administrator or transfer agent to
one or more other investment companies, and the Adviser has no objection to
TSSG's so acting. In addition, the Adviser understands that the persons employed
by TSSG to assist in the performance of TSSG's duties under this Agreement will
not devote their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict the right of TSSG or any
affiliate of TSSG to engage in and devote time and attention to other businesses
or to render services of any kind or nature.
6. Term of Agreement
This Agreement shall become effective as of the date hereof and shall
remain in full force and effect for successive annual periods thereafter unless
terminated automatically in the event of its assignment or by either party,
without penalty, on sixty (60) days' written notice to the other party.
7. Amendment to this Agreement
No provision of this Agreement may be changed, discharged or terminated
orally, but only by an instrument in writing signed by each party to the
Agreement.
8. Miscellaneous
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Adviser or TSSG should be sufficiently given if
addressed to the party and received by it at its offices set forth below or at
such other place as it may from time to time designate in writing.
To the Adviser:
Gabelli Funds, Inc.
One Corporate Center
Rye, New York 10580-1434
Attn: Bruce N. Alpert
To TSSG:
The Shareholder Services Group, Inc.
Exchange Place - BOS425
Boston, Massachusetts 02109-2873
Attn: Patricia Bickimer, Esq.
9. Confidentiality
All books, records, information and data pertaining to the business of
the Fund that are exchanged or received pursuant to the performance of TSSG's
duties under this Agreement shall remain confidential and shall not be
voluntarily disclosed to any other person, except as specifically authorized by
the Adviser or as may be required by law.
* * * * * *
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning to us the
enclosed copy of this Agreement.
Very truly yours,
GABELLI FUNDS, INC.
By: BRUCE ALPERT
Title: CFO GABELLI FUNDS DIVISION
Agreed to and Accepted as of May 1, 1995:
THE SHAREHOLDER SERVICES GROUP, INC.
By: RICHARD INGRAM
Title: VICE PRESIDENT AND DIVISION MANAGER
<PAGE>
EXHIBIT A
Effective May 1, 1996
The Gabelli Equity Trust, Inc.
The Gabelli Value Fund Inc.
The Gabelli Growth Fund
The Gabelli Asset Fund
The Gabelli Money Market Funds
- The Gabelli U.S. Treasury Money Market Fund
Gabelli Capital Series Funds, Inc.
- Gabelli Capital Asset Fund
Gabelli Income Series Funds, Inc.
- The Gabelli Global Governments Fund
The Gabelli Global Multimedia Trust Inc.
GABELLI FUNDS, INC.
By: BRUCE ALPERT
Title: CFO GABELLI FUNDS DIVISION
FIRST DATA INVESTOR SERVICES GROUP INC.
By: RICHARD SILVER
Title: EXECUTIVE VICE PRESIDENT
<PAGE>
EXHIBIT B
Fees for each Fund will be calculated based upon the aggregate average daily net
assets of the Funds listed on Exhibit A of this Agreement in accordance with the
following schedule:
Aggregate Assets Charges
$0 to $1 billion .10%
$1 billion to $1.5 billion .08%
$1.5 billion to $3 billion .03%
Over $3 billion .02%
Assets attributed to new funds created after January 1, 1995 will be subject to
a minimum fee of $30,000.
This fee rate will be applied to each Fund's average daily net assets.
<PAGE>
EXHIBIT C
Out-of-Pocket Expenses
Out-of-pocket expenses include, but are not limited to the following:
- - Travel to and from Board meetings outside the city of Boston, MA (subject
to prior approval of the Adviser)
- Any other unusual expenses in
association with the services rendered under this Agreement, such as
duplicating charges related to blue sky filings and Board book production
Consent of Independent Accountants
We hereby consent to the use in the Statement of Additional Information
constituting
part of this Post-Effective Amendment No. 14 to the registration statement
on Form
N-1A (the "Registration Statement") of our report dated February 14, 1997,
relating to
the financial statements and financial highlights of The Gabelli Asset Fund,
which
appears in such Statement of Additional Information, and to the incorporation by
reference of our report into the Prospectus which constitutes part of this
Registration
Statement. We also consent ot the reference to us under the heading
"Counsel and
Independent Accountants" in such Statement of Additional Information
and to the
reference to us under the heading "Financial Highlights" in such Prospectus.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
April 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears
below nominates, constitutes and appoints Mario J. Gabelli, Bruce N. Alpert, and
James E. McKee (with full power to each of them to act alone) his true and
lawful attorney-in-fact and agent, for him and on his behalf and in his place
and stead in any and all capacities, to make execute and sign all amendments and
supplements to the Registration Statement on Form N-1A under the Securities Act
of 1933 and the Investment Company Act of 1940 of THE GABELLI ASSET FUND (the
"Fund"), and to file with the Securities and Exchange Commission, and any other
regulatory authority having jurisdiction over the offer and sale of shares of
beneficial interest, par value $.001 per share, of the Fund, and any and all
amendments and supplements to such Registration Statement, and any and all
exhibits and other documents requisite in connection therewith, granting unto
said attorneys and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises as fully to all intents and purposes as the undersigned officers and
Trustees themselves might or could do.
IN WITNESS WHEREOF, the undersigned officers and Trustees have hereunto
set their hands this 26th day of February, 1997.
/s/Mario J. Gabelli
Mario J. Gabelli
Chairman and Trustee
/s/Bruce N. Alpert
Bruce N. Alpert
President and Treasurer
/s/Felix J. Christiana
Felix J. Christiana
Trustee
/s/Anthony J. Colavita
Anthony J. Colavita
Trustee
/s/James P. Conn
James P. Conn
Trustee
/s/Karl Otto Pohl
Karl Otto Pohl
Trustee
/s/Anthony R. Pustorino
Anthony R. Pustorino
Trustee
Anthonie C. van Ekris
Anthonie C. van Ekris
Trustee
/s/Salvatore J. Zizza
Salvatore J. Zizza
Trustee
<PAGE>
GABELLI FUNDS, INC.
655 Third Avenue
New York, New York 10017
January __, 1986
To the Board of Trustees
of The Gabelli Asset Fund
The undersigned hereby subscribes for 10,000 shares, par value one cent
per share (the "Shares") of the Fund for an aggregate purchase price of
$100,000.
In connection therewith, the undersigned hereby represents and
warrants as follows:
1. The purchase of the Shares is for investment purposes only and
not with the intent to distribute the Shares; and
2.In the event that any of the Shares are redeemed by any holder during
the period of amortization of the Fund's organizational and start up expenses
(as such expenses are set forth on the Fund's Statement of Assets and
Liabilities dated January __, 1986) the redemption proceeds shall be reduced by
any such unamortized organizational expenses in the same proportion as the
number of Shares being redeemed bears to the number of Shares outstanding at the
time of redemption.
Very truly yours,
GABELLI FUNDS, INC.
By: BRUCE ALPERT
ACCEPTED:
THE GABELLI ASSET FUND
By: ILLEGIBLE
<PAGE>
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI ASSET FUND
The Gabelli Asset Fund (the "Fund") is an open-end management
investment company registered as such under the Investment Company Act of 1940
(the "Act"). The Fund intends to employ Gabelli & Company, Inc. and/or others as
the principal underwriter and distributor (the "Distributor") of the shares of
the Fund pursuant to a written distribution agreement. The Fund has adopted a
plan of distribution pursuant to Rule 12b-1 under the Act to assist in the
distribution of shares of the Fund.
The Board of Trustees (the "Board") of the Fund having
determined that it would be desirable to amend the current plan of distribution
in certain respects and to restate such amended plan in its entirety and that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Fund hereby amends and restates
its plan of distribution (the "Plan") pursuant to Rule 12b-1 under the Act to
read in its entirety as follows:
1. In consideration of the services to be provided, and the
expenses to be incurred, by the Distributor pursuant to the distribution
agreement, the Fund will pay to the Distributor as distribution payments (the
"Payments") in connection with the distribution of shares of the Fund an
aggregate amount at a rate of 0.25% per year of the average daily net assets of
the Fund. Such Payments shall be accrued daily and paid monthly in arrears or
shall be accrued and paid at such other intervals as the Board shall determine.
The Fund's obligation hereunder shall be limited to the assets of the Fund and
shall not constitute an obligation of the Fund except out of such assets and
shall not constitute an obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under
this Plan will be used by the Distributor for the purpose of financing or
assisting in the financing of any activity which is primarily intended to result
in the sale of shares of the Fund. The scope of the foregoing shall be
interpreted by the Board, whose decision shall be conclusive except to the
extent it contravenes established legal authority. Without in any way limiting
the discretion of the Board, the following activities are hereby declared to be
primarily intended to result in the sale of shares of the Fund: advertising the
Fund or the Fund's investment advisor's mutual fund activities; compensating
underwriters, dealers, brokers, banks and other selling entities (including the
Distributor and its affiliates) and sales and marketing personnel of any of them
for sales of shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing personnel
(including the Fund's investment adviser and its personnel) of any of them for
providing services to shareholders of the Fund relating to their investment in
the Fund, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; and the ordinary or capital expenses, such as equipment,
rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses relating to any activity for which Payment is
authorized by the Board; and the financing of any activity for which Payment is
authorized by the Board; and profit to the Distributor and its affiliates
arising out of their provision of shareholder services. Notwithstanding the
foregoing, this Plan does not require the Distributor or any of its affiliates
to perform any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered by
this Section 2. In addition, Payments made in a particular year shall not be
refundable whether or not such Payments exceed the expenses incurred for that
year pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into
appropriate written agreements with the Distributor and each other person to
whom the Fund intends to make any Payment, and the Distributor is hereby
authorized and directed to enter into appropriate written agreements with each
person to whom the Distributor intends to make any payments in the nature of a
Payment. The foregoing requirement is not intended to apply to any agreement or
arrangement with respect to which the party to whom Payment is to be made does
not have the purpose set forth in Section 2 above (such as the printer in the
case of the printing of a prospectus or a newspaper in the case of an
advertisement) unless the Board determines that such an agreement or arrangement
should be treated as a "related" agreement for purposes of Rule 12b-1 under the
Act.
4. Each agreement required to be in writing by Section 3 must
contain the provisions required by Rule 12b-1 under the Act and must be approved
by a majority of the Board ("Board Approval") and by a majority of the Trustees
("Disinterested Trustee Approval") who are not interested persons of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or any such agreement, by vote cast in person at a meeting called for the
purposes of voting on such agreement. All determinations or authorizations of
the Board hereunder shall be made by Board Approval and Disinterested Trustee
Approval.
5. The officers, investment adviser or Distributor of the
Fund, as appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this Plan
and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is
also an activity which the Fund may pay for on behalf of the Fund without regard
to the existence or terms and conditions of a plan of distribution under Rule
12b-1 of the Act, this Plan shall not be construed to prevent or restrict the
Fund from paying such amounts outside of this Plan and without limitation hereby
and without such payments being included in calculation of Payments subject to
the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved
by a vote of at least a majority of the outstanding voting securities of the
Fund. This Plan may not be amended in any material respect without Board
Approval and Disinterested Trustee Approval and may not be amended to increase
the maximum level of Payments permitted hereunder without such approvals and
further approval by a vote of at least a majority of the outstanding voting
securities of the Fund. This Plan may continue in effect for longer than one
year after its approval by the shareholders of the Fund only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Trustee Approval.
8. This Plan may be terminated at any time by a vote of the
Trustees who are not interested persons of the Fund and have no direct or
indirect financial interest in the operation of the Plan or any agreement
hereunder, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the outstanding voting
securities of the Fund.
9. For purposes of this Plan the terms "interested person" and
"related agreement" shall have the meanings ascribed to them in the Act and the
rules adopted by the Securities and Exchange Commission thereunder and the term
"vote of a majority of the outstanding voting securities" of the Fund shall mean
the vote, at the annual or a special meeting of the security holders of the Fund
duly called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy or, if less, (b) more than 50% of
the outstanding voting securities of the Fund.
Adopted by Board on February 27, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> GABELLI ASSET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,098,111,873
<RECEIVABLES> 7,497,569
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 123,772
<TOTAL-ASSETS> 1,105,733,214
<PAYABLE-FOR-SECURITIES> 13,849,400
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,244,542
<TOTAL-LIABILITIES> 25,093,942
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 704,656,486
<SHARES-COMMON-STOCK> 40,907,365
<SHARES-COMMON-PRIOR> 42,395,268
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1,104,816)
<ACCUM-APPREC-OR-DEPREC> 377,087,602
<NET-ASSETS> 1,080,639,272
<DIVIDEND-INCOME> 17,652,082
<INTEREST-INCOME> 3,042,593
<OTHER-INCOME> 0
<EXPENSES-NET> 14,946,770
<NET-INVESTMENT-INCOME> 5,747,905
<REALIZED-GAINS-CURRENT> 97,358,216
<APPREC-INCREASE-CURRENT> 35,910,289
<NET-CHANGE-FROM-OPS> 139,016,410
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,681,295)
<DISTRIBUTIONS-OF-GAINS> (97,768,650)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,138,309
<NUMBER-OF-SHARES-REDEEMED> (11,251,210)
<SHARES-REINVESTED> 3,624,998
<NET-CHANGE-IN-ASSETS> (10,900,074)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1,808)
<OVERDIST-NET-GAINS-PRIOR> (759,184)
<GROSS-ADVISORY-FEES> 11,146,282
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,946,770
<AVERAGE-NET-ASSETS> 1,114,628,159
<PER-SHARE-NAV-BEGIN> 25.75
<PER-SHARE-NII> 0.15
<PER-SHARE-GAIN-APPREC> 3.29
<PER-SHARE-DIVIDEND> (0.15)
<PER-SHARE-DISTRIBUTIONS> (2.62)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 26.42
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
