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.
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POST-EFFECTIVE AMENDMENT No. 14
X
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and
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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AMENDMENT No. 15
X
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THE GABELLI GROWTH 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 (914) 921-5100
Bruce N. Alpert
Gabelli Funds, Inc.
One Corporate Center, Rye, New York 10580-1434
(Name and Address of Agent for Service)
Copies to:
James E. McKee, Esq. Richard T. Prins, Esq.
Gabelli Funds, Inc. Skadden, Arps, Slate, Meagher & Flom
One Corporate Center 919 Third Avenue
Rye, New York 10580-1434 New York, New York 10022
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) (1); or
on [date] pursuant to paragraph (a) (1).
75 days after filing pursuant to paragraph (a)(2)
on [date] pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box: this post-effective amendment
designates a new effective date for a previously filed post-effective
amendment.
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 (the "1940 Act"), and has filed a Rule 24f-2 Notice for its most recent
fiscal year ended December 31, 1996 on February 27, 1997.
<PAGE>
<TABLE>
<CAPTION>
THE GABELLI GROWTH FUND
CROSS REFERENCE SHEET
(Pursuant to Rule 495(a))
Part A
Item No. Prospectus Caption
<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, Dividends,
Distributions and Taxes
5. Management of the Fund Management of the Fund, Custodian,
Transfer Agent and Dividend Disbursing
Agent
5A. Management's Discussion of Fund Performance Not applicable
6. Capital Stock and Other Securities General Information, Dividends,
Distributions and Taxes
7. Purchase of Securities Being Offered Purchase of Shares, Distribution Plan
8. Redemption or Repurchase Redemption of Shares
9. Pending Legal Proceedings Not applicable
</TABLE>
<PAGE>
<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; Distributor;
Distribution Plan; Counsel and Independent
Accountants; (Prospectus - "Custodian,
Transfer Agent and Dividend Disbursing
Agent")
17. Brokerage Allocation and Other Practices 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, Distributions
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 GROWTH FUND
PART A
THE
GABELLI
GROWTH
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 4
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
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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 and
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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<PAGE>
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2
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THE GABELLI GROWTH 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 Growth Fund (the "Fund") is an open-end, no-load mutual fund which
seeks capital appreciation by investing in securities which are perceived by its
management to have favorable, yet undervalued, prospects for earnings growth.
Current income is a secondary investment objective. See "The Fund and its
Investment Policies".
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Shares of the Fund may be purchased without a sales load at the next determined
per share net asset value. 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
(see "Purchase of Shares") 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.
_______________
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 Bank, or any other agency. An
investment in the Fund involves investment risks, including the possible
loss of principal.
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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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<PAGE>
<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 load 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)............................................................... .25%
Other Expenses....................................................................................... .18%
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Total Fund Operating Expenses................................................................... 1.43%
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</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Example: ** 1 year 3 years 5 years 10 years
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You would pay the following expenses on a
$1,000 investment, assuming a 5% annual
return and redemption at the end of each period..........$15 $45 $78 $171
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* 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%.
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(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 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.
<PAGE>
3
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
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 period/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.. $22.16 $19.68 $ 23.26 $ 21.59 $ 21.28 $ 16.27 $ 17.07 $ 12.65 $ 9.51 $10.00
------ ------- ------- ------- ------- ------- ------- ------ ------
Net investment income (a)........... 0.03 0.05 0.07 0.06 0.08 0.16 0.37 0.18 0.05 0.15
Net realized and unrealized gain/(loss)
on investments................... 4.27 6.39 (0.86) 2.37 0.88 5.42 (0.71) 4.89 3.62 (0.64)
------- -------- ---------- ---------------- -------- --------- ------- ------- -------
Total from investment operations. 4.30 6.44 (0.79) 2.43 0.96 5.58 (0.34) 5.07 3.67 (0.49)
------- -------- ---------- ---------------- -------- --------- ------- ------- -------
Distributions to shareholders from:
Net investment income...........(0.02) (0.05) (0.08) (0.05) (0.09) (0.15) (0.39) (0.17) (0.20) ---
Distributions in excess of net
investment income............ --- --- (0.01) --- --- --- --- --- --- ---
Net realized gains............. (2.30) (3.91) (2.39) (0.67) (0.56) (0.42) (0.07) (0.48) (0.33) ---
Distributions in excess of net realized
gains...................... --- --- (0.31) (0.04) --- --- --- --- --- ---
----- ------ -------------------- ---- ----- ----- ----- ----- ----
Total distributions.............. (2.32) (3.96) (2.79) (0.76) (0.65) (0.57) (0.46) (0.65) (0.53) ---
-------- ---------------------------------------------------------- -----------------------
Net asset value, end of year.. $ 24.14 $ 22.16 $ 19.68 $ 23.26 $ 21.59 $ 21.28 $ 16.27 $ 17.07 $ 12.65 $ 9.51
======== ======== ============================ =================================== ======
Total return **.............. 19.4% 32.7% (3.4)% 11.3% 4.5% 34.3% (2.0)% 40.1% 39.2% (4.9)%
========= ========= ============================= =============================================
Ratios to average net assets/
supplemental data:
Net assets, end of year (in 000's) $609,405 $533,041 $482,471 $695,013 $625,050 $422,589 $202,971 $113,187 $11,968 $3,532
Ratio of net investment income to average
net assets.............. 0.12% 0.22% 0.31% 0.22% 0.46% 0.97% 2.67% 2.24% 0.72% 2.94%+
Ratio of operating expenses to average
net assets (b)............. 1.43% 1.44% 1.36% 1.41% 1.41% 1.45% 1.50% 1.85% 2.30% 2.00%+
Portfolio turnover rate....... 88.2% 140.2% 40.3% 80.7% 45.9% 49.9% 74.7% 47.8% 81.7% 80.0%
Average commission rate (per share
of security) (c)............ $0.0500 N/A N/A N/A N/A N/A N/A N/A N/A N/A
- -----------------
* The Fund commenced operations on April 10, 1987.
** 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. Total return for the period of less
than one year is not annualized.
+ Annualized.
(a) Net investment loss before expenses reimbursed by Adviser for the year
ended December 31, 1988 and the period ended December 31, 1987 was $(0.09)
and $(0.08), respectively.
(b) Operating expense ratios before expenses reimbursed by Adviser for the year
ended December 31, 1988 and the period ended December 31, 1987 were 4.38%
and 6.45%, respectively.
(c) Average commission rate (per share of security) as required by amended SEC disclosure requirements effective for fiscal
years beginning after September 1, 1995.
</TABLE>
<PAGE>
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18
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The Fund is an open-end, no-load diversified, management investment company
organized as a Massachusetts Business Trust on October 24, 1986. In seeking its
primary objective of capital appreciation, the Fund will emphasize investments
in securities of companies with favorable earnings dynamics and prospects for
significant price appreciation. Current income, to the extent it may affect
potential growth in capital, is a secondary objective. There is no assurance
that the Fund will achieve its investment objectives. The Fund has certain
investment restrictions which, together with its investment objectives and the
percentage restrictions listed below under "Special Investment Methods", 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 common stocks and securities convertible into
similar common stocks which are perceived by Gabelli Funds, Inc. (the "Adviser")
to be undervalued in relation to prevailing market multiples. Investments are
expected to be made largely in companies which are judged to have above-average
or expanding market shares, profit margins and returns on equity. When the
Fund's investments lose their perceived value relative to other similar or
alternative investments, they are sold. When deemed appropriate by the Adviser,
the Fund may, without limit, invest temporarily in defensive securities such as
investment grade debt securities; obligations of the U.S. Government, its
agencies or instrumentalities; or 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").
The Fund may also, subject to the diversification requirements of its investment
restrictions, 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 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. Fundamental security analysis is used to
develop earnings forecasts for companies and to identify investment
opportunities. Specific sources of information employed include general economic
and industry data as provided by the United States Government, various trade
associations and other sources and published corporate financial data such as
annual reports, 10-Ks and quarterly statements as well as direct interviews with
company management. Generally, the investment decision process begins with
looking at individual companies and then scrutinizing their prospects in the
framework of their industries and the overall economy. Research is directed
towards locating pockets of inefficiency in terms of future earnings potential
relative to current market valuations.
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 saleable 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. Information regarding the
investment restrictions of the Fund as well as further information on its
investment methods and policies of the Fund are set forth in the Additional
Statement.
<PAGE>
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. Investment in Small, Unseasoned Companies The Fund may
invest up to 5% of its net assets in small, less well known companies which have
operated less than three years (including predecessors). The securities of such
companies may have limited liquidity. Convertible Securities
Convertible securities may include corporate notes or preferred stock but are
ordinarily long-term debt obligations of the issuer convertible at a stated
exchange rate during a specified period into common stock of the issuer. 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. As with all debt securities, the market value of
convertible securities tends to vary inversely to changes in the prevailing
interest rates and when the market price of the underlying common stock exceeds
the conversion price, to reflect the value of the underlying common stock.
Although convertible securities generally offer lower interest or dividend
yields than non-convertible securities of similar quality, they rank senior to
common stocks in the capital structure of an issuer and are consequently of
higher quality and may entail less risk than its common stock. However, the
extent to which such risk is reduced depends largely on the degree to which the
convertible security sells above its value as a fixed-income security. For
further information, see "Special Investment Methods--Convertible Securities" in
the Additional Statement. The Fund will normally purchase only
investment grade, convertible debt securities having a rating of, or equivalent
to, an S&P rating of at least "BBB", or, if unrated, are judged by the Adviser
to be of comparable quality. However, the Fund reserves the right to invest up
to 15% of its assets in lower-rated convertible debt securities if, in the
judgment of the Adviser, such purchase does not involve the acceptance of overly
significant credit risks and such securities have at least a rating of, or
equivalent to, an S&P rating of "B" or, if unrated, are judged by the Adviser to
be of equivalent quality. Although lower-rated debt securities generally have
higher yields, they are also subject to a greater risk of default and 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. Debt securities having an S&P rating of, or equivalent to, less
than "A" may have speculative characteristics. An S&P rating of, or equivalent
to, "B" means that the security will likely have some quality and protective
features which, in the judgment of the rating organization, are outweighed by
large uncertainties or major risk exposures to adverse conditions. A description
of corporate debt ratings including convertible securities is contained in
Appendix A to the Additional Statement. Warrants and Rights The Fund
may invest up to 5% of its total assets in warrants and 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.
Loans of Portfolio Securities
To increase income and pay a portion of its expenses, the Fund may lend its
portfolio securities to securities broker-dealers or financial institutions if
(i) the loan is collateralized in accordance with and otherwise satisfies all
applicable regulatory requirements and (ii) no loan will cause the value of all
loaned securities to exceed 25% of the value of the Fund's net assets. In the
event that a borrower of portfolio securities defaults on its obligation to
return securities to the Fund, the Fund may suffer a loss to the extent that the
value of the collateral held by the Fund is less than the value of the loaned
securities at the time.
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. A
repurchase agreement is an instrument under which 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 principal 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.
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 borrowing exceeds 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.
Other Investment Companies
The Fund does not invest in the securities 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 one investment company). To the extent
the Fund invests in the securities of other investment companies, shareholders
in the Fund may be subject to duplicative advisory and administrative fees.
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 Amended and Restated 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 to 1.00% per annum
of the Fund's average daily 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 1.43% of its average net assets.
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. Net Assets
4/1/97
(in millions)
Open-end funds:
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
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. 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 under its
management as of April 1, 1997. Teton Advisers LLC, an affiliate of the Adviser,
acts as investment adviser to the Westwood Funds and, as of April 1, 1997, had
aggregate assets under management in excess of $123 million. 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.
The Adviser's address is the same as the Fund as shown on the cover of this
Prospectus.
Howard Frank Ward has been designated by the Adviser as the portfolio manager
primarily responsible for the day-to-day management of the Fund. Prior to
joining the Adviser, Mr. Ward was a Managing Director and Director of the
Quality Growth Equity Management Group of Scudder, Stevens and Clark, Inc., with
which he had been associated since 1982 and where he also served as a lead
portfolio manager for several of its registered investment companies. In
addition to the fees of the Adviser and the expenses which it agrees to bear in
its Distribution Plan (described below), the Fund is responsible for the payment
of all of its other expenses. The Additional Statement contains further
information on the Advisory Contract including a more complete description of
the advisory and expense arrangements, the exculpatory and brokerage provisions
of that Agreement as well as information on the brokerage practices of the Fund.
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 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. 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.
Although such activities may limit to some extent the ability of the Fund to
make such investments, the Adviser does not believe that any such limitations
will have a material adverse effect on the ability of the Fund 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 differs from the
actions taken with respect to the Fund. The Fund may invest in the securities of
companies which are investment management clients of GAMCO, 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 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 finance 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, 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 $1,457,893 or 0.25%
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. Purchase
payments accompanied by a purchase order in proper form as described below will
be invested in full and fractional shares at the per share net asset value of
the Fund next determined after receipt thereof by the Transfer Agent. 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
investor 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-dealer. 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.
<PAGE>
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 after 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 but
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 Growth 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 accepted. 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 Growth 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 Fund investors 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
the investor's 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 Growth 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, please call 1-800-GABELLI (422-3554) or 1-800-872-5365. Fund
shares purchased 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 (422-3554) 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. If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders of the Fund to
make payment wholly or partly in cash, the Fund may, in conformity with
applicable rules of the SEC, pay the redemption price in whole or part by a
distribution of portfolio securities selected in the discretion of the Board of
Trustees at the values used in determining the net asset value of the Fund.
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.
However, 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.
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 the two 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 an IRA 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 IRA accounts or other retirement plans should
write or telephone the Distributor.
DIVIDENDS, DISTRIBUTIONS 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 of net long-term capital gains,
of which shareholders will be notified, are taxable to the recipient as
long-term capital gains. Dividends and distributions declared by the Fund may
also be subject to state and local taxes. 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 since its inception, for the five-year period and for 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 returns for the 1 year and 5 year periods ended December
31, 1996 and from inception through December 31, 1996 were 19.4%, 12.2% and
16.3%, 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 33 1/3% 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 should be directed
to the Distributor, Gabelli & Company, Inc., One Corporate Center, Rye, New York
10580-1435. For assistance, call 1-800-GABELLI (422-3554).
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 GROWTH FUND
PART B
THE GABELLI GROWTH 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 Growth 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
Page
Investment Policies..................................
Special Investment Methods..........................
Convertible Securities..........................
Repurchase Agreements..........................
Investments in Warrants and Rights............
Investments in Small, Unseasoned Companies....
Loans of Portfolio Securities.................
Corporate Reorganizations.....................
When Issued, Delayed Delivery Securities
& Forward Commitments.....................
Investment Restrictions.....................
Trustees and Officers........................
Investment Adviser...........................
Distributor..................................
Distribution Plan...........................
Portfolio Transactions and Brokerage........
Redemption of Shares.......................
Net Asset Value............................
Investment Performance Information..
Counsel and Independent Accountants.........
General Information.........................
Financial Statements........................
Appendix A - Description of Corporate Debt Ratings....
<PAGE>
INVESTMENT POLICIES
The Fund expects that, for most periods, 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. Under the
circumstances described in the Prospectus, the Fund may also invest in U.S.
Treasury or other government obligations, investment grade corporate bonds,
preferred stocks, convertible securities, foreign securities and/or short term
money market instruments.
SPECIAL INVESTMENT METHODS
Convertible Securities
The Fund may invest in convertible securities as set forth in the
Prospectus. Prior to conversion, convertible securities have the same general
characteristics as non-convertible securities. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality. However, when the market price of
the common stock underlying a convertible security exceeds the conversion price,
the price of the convertible security tends to reflect the value of the
underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield basis,
and thus may not depreciate to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks on an issuer's capital
structure and are consequently of higher quality and entail less risk than the
issuer's common stock, although the extent to which such risk is reduced depends
in large measure upon the degree to which the convertible security sells above
its value as a fixed-income security.
In selecting convertible securities for the Fund, the Adviser relies
primarily on its own evaluation of the issuer and the potential for capital
appreciation through conversion. It does not rely on the rating of the security
or sell because of a change in rating absent a change in its own evaluation of
the underlying common stock and the ability of the issuer to pay principal and
interest or dividends when due without disrupting its business goals. Interest
or dividend yield is a factor only to the extent it is reasonably consistent
with prevailing rates for securities of similar quality and thereby provides a
support level for the market price of the security. The Fund will purchase the
convertible securities of highly leveraged issuers only when, in the judgment of
the Adviser, the risk of default is outweighed by the potential for capital
appreciation.
The issuers of debt obligations having speculative characteristics may
experience difficulty in paying principal and interest when due in the event of
a downturn in the economy or unanticipated corporate developments. The market
prices of such securities may become increasingly volatile in periods of
economic uncertainty. Moreover, adverse publicity or the perceptions of
investors over which the Adviser has no control, whether or not based on
fundamental analysis, may decrease the market price and liquidity of such
investments. Although the Adviser will attempt to avoid exposing the Fund to
such risks, there is no assurance that it will be successful or that a liquid
secondary market will continue to be available for the disposition of such
securities.
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.
Investments in Warrants and Rights
Warrants basically are options to purchase equity securities at a
specified price valid for a specified 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.
Investments 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.
Loans of Portfolio Securities
The Fund may lend its portfolio securities subject to the restrictions
stated in the Prospectus. Under applicable regulatory requirements (which are
subject to change), the loan collateral must be cash, a letter of credit from a
U.S. bank or U.S. Government securities and must at all times at least equal the
value of the loaned securities. The Fund must be subject to determination of the
Fund at any time; and the Fund must receive reasonable interest on the loan, any
distributions on the securities and any increase in their market value. The Fund
may also pay reasonable finder's, custodian and administrative fees. The terms
of the Fund's loans must meet applicable tests under the Internal Revenue Code
of 1986, as amended (the "Code") and permit it to reacquire loaned securities on
five days' notice or in time to vote on any important matter.
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 dynamics 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 requirement
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 turnover ratio of the Fund 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 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
security 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.
<PAGE>
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 pursuant to the conditions set forth in the
Prospectus or for the purchase of debt securities;
(5) Borrow money except subject to the restrictions set forth in the Prospectus
under "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
combinations 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
<TABLE>
<CAPTION>
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 Act are indicated by an asterisk.
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
Trustee Chief 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 Asset 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.
Felix J. Christiana, 72 Formerly Senior Vice President of Dry Dock Savings
Trustee Bank 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
Asset Fund.
Anthony J. Colavita, 62 President and Attorney at Law in the law firm of
Trustee Anthony 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 Asset Fund, The
Gabelli Money Market Funds
and the Westwood Funds.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Name, Address, Age and Position(s) with Fund Principal Occupations During Past Five Years
<S> <C>
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 Asset Fund, The
Gabelli Growth Fund and the
Westwood Funds.
Karl Otto Pohl,* +67 Managing Partner of Sal. Oppenheim jr. & Cie.
Trustee (private investment bank); Board Member of IBM World Trade Europe/Middle
East/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.
Anthony R. Pustorino, CPA, 71 Certified Public Accountant; Professor of Accounting,
Trustee Pace University; Director of 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., Gabelli Capital Series
Funds, Inc. and The Treasurer's Fund, Inc. and Trustee of The Gabelli Asset
Fund.
Anthony Torna,* 70 Registered Representative with Herzog, Heine &
Trustee Geduld, Inc.
Anthonie C. van Ekris, 63 Managing Director of Balmac International; Director of
Trustee Stahel Hardmeyer AG;
Trustee of The Gabelli
Asset 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.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Name, Address, Age and Position(s) with Fund Principal Occupations During Past Five Years
<S> <C>
Bruce N. Alpert, 45 Vice President and Chief Operating Officer of the
President and Treasurer investment advisory division of the Adviser; Vice President and Treasurer of
The Gabelli Equity Trust Inc., The Gabelli Global Multimedia Trust, Inc.,
Gabelli Equity Series Funds, Inc., Gabelli Convertible Securities Fund, Inc.,
Gabelli International Growth Fund, Inc., The Gabelli Value Fund Inc., Gabelli
Global Series Funds, Inc., Gabelli Capital Series Funds, Inc., Gabelli
Investor Funds, Inc. and The Gabelli Money Market Funds; President and
Treasurer of The Gabelli Asset Fund; Vice President of the Westwood Funds; and
Manager of Teton Advisers LLC.
James E. McKee, 33 Vice President and General Counsel of GAMCO
Secretary Investors, 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's
independence would be questioned.
</TABLE>
Remuneration. 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 $78,643.
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
(1) (2) (3)
Name of Person, Aggregate Compensation Total Compensation
Position from Registrant for from Registrant and Fund
Fiscal Year Complex Paid to Trustees
for Calendar Year *
<S> <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
Dugald A. Fletcher** $8,000 $19,000 (2)
Trustee
Anthony Torna $8,000 $8,000 (1)
Trustee
Anthonie C. van Ekris $8,000 $49,000 (10)
Trustee
Salvatore J. Zizza** $8,000 $42,500 (5)
Trustee
- --------------------
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.
** Dugald A. Fletcher and Salvatore J. Zizza resigned as Directors of the Fund on March 11, 1997 and March 19, 1997,
respectively. Messrs. Fletcher and Zizza are expected, however, to continue as advisors to the Trustees and the Fund.
</TABLE>
On April 1, 1997, 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:
Name and Address % of Class Nature of Ownership
Charles Schwab & Co. Inc. 8.72% 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 Asset Fund, The Gabelli Value Fund Inc., The Gabelli Small Cap
Growth Fund, The Gabelli Convertible Securities 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, The
Gabelli U.S. Treasury Money Market Fund, The Gabelli Equity Income 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 Contact, which was
approved by 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 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 it 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."
By its terms, the Contract will remain in effect from year to year,
provided each such annual continuance is specifically approved by the Fund's
Board of Trustees or by a "majority" (as defined in the 1940 Act) vote of its
shareholders and, in either case, by a majority vote of the Trustees who are not
parties to the Contract or interested persons of any such party, cast in person
at a meeting called specifically for the purpose of voting on the Contract. The
Contract is terminable without penalty by the Fund on sixty days' written notice
when authorized either by majority vote of its outstanding voting shares or by a
vote of a majority of its Board of Trustees, or by the Adviser on sixty days'
written notice, and will automatically terminate in the event of its
"assignment" as defined by the 1940 Act. For the fiscal years ended
December 31, 1994, December 31, 1995 and December 31, 1996, the Adviser received
advisory fees of $5,651,929, $4,985,525, and $5,831,475, 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 expended 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 th
e Distributor for distribution expenses under the
Plan in the amount of $1,457,893. Pursuant to the Plan, the Distributor incurred
the following expenses: $707,800 was spent on advertising, $190,200 on
printing, postage and stationary, $142,293 on overhead support expenses and
$417,600 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 wherever 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 $847,967 on portfolio
transactions in the principal amounts of $922,256,564 during 1996. The average
commission on these transactions was $0.0500 per share. The Adviser may
also place orders for the purchase or sale of portfolio securities with Gabelli
& 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 of other qualified brokers. As
required by Rule 17e-1 under the 1940 Act, the Board of Trustees of the Fund 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 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. Fiscal Year EndedCommissions
<TABLE>
<CAPTION>
December 31, Paid
<S> <C> <C>
Total Brokerage Commissions............................................................. 1994 $728,490
1995 $1,559,985
1996 $847,967
Commissions paid to Gabelli & Company................................................... 1994 $39,134
1995 $82,790
1996 $22,360
Commissions paid to Keeley Investment Corp.............................................. 1994 $13,385
1995 $0
1996 $0
% of Total Brokerage Commissions paid to Gabelli & Company.............................. 1996 2.6%
% of Total Brokerage Commissions paid to Keeley Investment Corp......................... 1996 0%
% of Total Transactions involving Commissions paid to................................... 1996 2.2%
Gabelli & Company
% of Total Transactions involving Commissions paid to................................... 1996 0%
Keeley Investment Corp.
</TABLE>
......The Fund's portfolio turnover rate for the fiscal years ended December
31, 1995 and December 31, 1996, was 140.2% and 88.2%, respectively. The higher
portfolio turnover rate during the fiscal year ended December 31, 1995 was due
to restructuring of the portfolio by a new portfolio manager.
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 1.00% 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 sixty 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 since inception as well as the total return for
the past five years and for the twelve months through 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:
Period/Year Ended Total Return
----------------- ----------------
12/31/87 * (4.9)%
12/31/88 39.2%
12/31/89 40.1%
12/31/90 (2.0)%
12/31/91 34.3%
12/31/92 4.5%
12/31/93 11.3%
12/31/94 (3.4)%
12/31/95 32.7%
12/31/96 19.4%
* From inception on 4/10/87
The Fund's average annual total return figures are as follows:
19.4%for the one year fiscal period from January 1, 1996 through December
31, 1996
12.2%for the five year period from January 1, 1992 through December 31,
1996
16.3%for the period from the Fund's inception on April 10, 1987 through
December 31, 1996
<PAGE>
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.
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 this
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 Fund 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
votes 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 331/3% 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 GROWTH FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 100.0%
ADVERTISING -- 1.0%
132,700 Interpublic Group of
Companies............ $ 4,706,539 $ 6,303,250
------------- -------------
AEROSPACE -- 9.6%
150,600 Allied-Signal Inc...... 7,541,935 10,090,200
78,000 Boeing Co.............. 5,445,376 8,297,250
113,000 Honeywell, Inc......... 5,483,300 7,429,750
100,400 Lockheed Martin
Corp................. 8,510,444 9,186,600
196,200 Sundstrand Corp........ 6,812,261 8,338,500
62,000 Textron Inc............ 4,973,137 5,843,500
138,000 United Technologies.... 6,454,263 9,108,000
------------- -------------
45,220,716 58,293,800
------------- -------------
BROADCASTING -- 0.9%
157,000 Infinity Broadcasting
Corp., Class A+...... 3,428,475 5,335,841
------------- -------------
BUILDING AND CONSTRUCTION -- 1.2%
112,000 Fluor Corporation...... 5,675,022 7,028,000
------------- -------------
BUSINESS SERVICES -- 9.2%
188,000 Automatic Data
Processing, Inc...... 6,145,262 8,060,500
153,500 Ceridian
Corporation +........ 5,945,828 6,216,750
98,000 Computer Sciences
Corp. +.............. 7,107,307 8,048,250
142,000 Electronic Data Systems
Corp................. 6,202,225 6,141,500
524,800 First Data
Corporation.......... 14,758,099 19,155,200
40,000 Reuters Holdings plc,
Class B, ADR......... 1,742,178 3,060,000
174,000 Sysco Corporation...... 5,148,726 5,676,750
------------- -------------
47,049,625 56,358,950
------------- -------------
CONGLOMERATES -- 4.5%
182,000 General Electric
Company.............. 12,222,905 17,995,250
172,000 General Motors
Corporation, Class
H.................... 7,419,389 9,675,000
------------- -------------
19,642,294 27,670,250
------------- -------------
CONSUMER PRODUCTS -- 16.6%
110,000 Coca-Cola Company...... 2,134,737 5,788,750
119,000 ConAgra, Inc........... 5,287,083 5,920,250
100,000 Duracell International
Inc.................. 4,120,676 6,987,500
102,000 General Mills, Inc..... 5,585,188 6,464,250
202,000 Gillette Company....... 6,925,091 15,705,500
60,000 Kimberly-Clark
Corporation.......... 4,774,512 5,715,000
333,700 Nabisco Holdings Corp.,
Class A.............. 9,696,885 12,972,587
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
4,000 Nestle Corporation,
ADR.................. $ 217,750 $ 213,750
337,000 PepsiCo, Inc........... 7,007,438 9,857,250
133,000 Philip Morris Companies
Inc.................. 10,514,755 15,095,500
80,000 Procter & Gamble
Company.............. 4,837,651 8,600,000
57,000 Ralston Purina Group... 2,684,118 4,182,375
20,000 Unilever N.V., ADR..... 3,412,750 3,505,000
------------- -------------
67,198,634 101,007,712
------------- -------------
DIVERSIFIED INDUSTRIAL -- 3.1%
78,000 Emerson Electric
Company.............. 7,706,663 7,546,500
79,000 Illinois Tool Works,
Inc.................. 1,905,805 6,310,125
61,000 Minnesota Mining and
Manufacturing
Company.............. 4,734,425 5,055,375
------------- -------------
14,346,893 18,912,000
------------- -------------
ENTERTAINMENT -- 2.4%
18,000 Viacom Inc., Class
A +.................. 607,725 621,000
107,000 Viacom Inc., Class
B +.................. 4,747,665 3,731,625
146,000 Walt Disney Company.... 7,617,440 10,165,250
------------- -------------
12,972,830 14,517,875
------------- -------------
FINANCIAL SERVICES -- 22.3%
113,000 American Express
Company.............. 3,246,840 6,384,500
83,000 American International
Group, Inc........... 5,588,328 8,984,750
61,000 Associates First
Capital Corporation.. 2,079,677 2,691,625
71,000 Bancorp Hawaii Inc..... 2,584,820 2,982,000
99,000 BankAmerica Corp....... 5,402,735 9,875,250
232,000 Barnett Banks Inc...... 5,365,851 9,541,000
120,000 Citicorp............... 7,157,356 12,360,000
58,000 General Re
Corporation.......... 7,981,725 9,149,500
270,000 Mellon Bank
Corporation.......... 12,565,645 19,170,000
146,000 Norwest Corporation.... 3,254,656 6,351,000
240,400 State Street Boston
Corporation.......... 8,077,615 15,505,800
45,000 Swiss Reinsurance
Company, Sponsored
ADR.................. 2,447,500 2,362,500
224,000 T. Rowe Price
Associates Inc....... 5,744,497 9,744,000
77,499 Wells Fargo &
Company.............. 19,024,667 20,905,355
------------- -------------
90,521,912 136,007,280
------------- -------------
HEALTH CARE -- 9.8%
151,000 Abbott Laboratories.... 6,392,500 7,663,250
81,000 Amgen Inc. +........... 1,471,631 4,404,375
102,000 Chirex Inc. +.......... 1,326,000 1,224,000
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
132,000 Johnson & Johnson...... $ 2,553,423 $ 6,567,000
76,000 Lilly (Eli) & Co....... 2,681,926 5,548,000
183,000 Merck & Co., Inc....... 9,486,031 14,502,750
66,000 Pfizer Inc............. 3,377,038 5,469,750
88,000 Schering-Plough
Corporation.......... 3,196,641 5,698,000
115,000 Warner-Lambert
Company.............. 6,653,251 8,625,000
------------- -------------
37,138,441 59,702,125
------------- -------------
PUBLISHING -- 2.1%
75,000 Gannett Inc............ 5,053,753 5,615,625
94,000 Tribune Co............. 5,925,363 7,414,250
------------- -------------
10,979,116 13,029,875
------------- -------------
RESTAURANTS -- 0.8%
114,000 McDonald's
Corporation.......... 3,651,763 5,158,500
------------- -------------
RETAIL -- 4.8%
383,906 Home Depot, Inc........ 17,116,163 19,243,297
170,000 Mattel, Inc............ 3,290,577 4,717,500
128,000 Walgreen Co............ 2,478,937 5,120,000
------------- -------------
22,885,677 29,080,797
------------- -------------
TECHNOLOGY -- 11.2%
130,000 Computer Associates
International,
Inc.................. 4,386,039 6,467,500
138,000 Hewlett-Packard Co..... 5,290,042 6,934,500
136,000 Intel Corporation...... 13,475,924 17,807,500
95,500 International Business
Machines
Corporation.......... 11,027,723 14,420,500
76,000 Microsoft
Corporation +........ 4,611,234 6,279,500
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
49,500 Molex Incorporated..... $ 1,001,581 $ 1,936,688
245,062 Molex Incorporated,
Class A.............. 6,497,944 8,730,335
210,000 Sun Microsystems
Inc. +............... 3,297,565 5,394,375
------------- -------------
49,588,052 67,970,898
------------- -------------
TELECOMMUNICATIONS -- 0.5%
25,000 Globalstar
Telecommunications +... 500,000 1,575,000
80,000 Loral Space &
Communications
Ltd. +............... 940,000 1,470,000
------------- -------------
1,440,000 3,045,000
------------- -------------
TOTAL COMMON STOCKS................. 436,445,989 609,422,153
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C> <C>
U.S. TREASURY BILLS -- 3.3%
$20,024,000 4.914% to
4.924%++ due
02/13/1997 -
02/20/1997.... 19,907,623 19,907,623
------------ ------------
TOTAL INVESTMENTS.......... 103.3% $456,353,612(a) 629,329,776
============
OTHER ASSETS AND
LIABILITIES (NET)........ (3.3) (19,924,768)
----- ------------
NET ASSETS................. 100.0% $609,405,008
===== ============
</TABLE>
- ---------------
(a) Aggregate cost for Federal tax purposes was $457,042,355. Net unrealized
appreciation for Federal tax purposes was $172,287,421 (gross unrealized
appreciation was $173,715,349 and gross unrealized depreciation was
$1,427,928).
+ Non-income producing security
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt
See Notes to Financial Statements.
10
<PAGE>
THE GABELLI GROWTH FUND
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
- -------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value (Cost
$456,353,612)....................... $ 629,329,776
Cash.................................. 816,498
Dividends receivable.................. 800,574
Receivable for Fund shares sold....... 552,927
-------------
Total Assets........................ 631,499,775
-------------
LIABILITIES:
Payable for Fund shares redeemed...... 16,563,856
Dividend payable...................... 2,473,376
Payable for investments purchased..... 2,290,225
Payable for investment advisory fee... 534,093
Payable for distribution fees......... 230,600
Accrued expenses and other payables... 2,617
-------------
Total Liabilities................... 22,094,767
-------------
Net assets applicable to 25,249,834
shares of beneficial interest
outstanding....................... $ 609,405,008
=============
NET ASSETS CONSIST OF:
Shares of beneficial interest at par
value............................... $ 252,498
Additional paid-in capital............ 436,336,210
Distributions in excess of net
realized gain on investments........ (206,977)
Undistributed net investment income... 47,113
Net unrealized appreciation of
investments......................... 172,976,164
-------------
Total Net Assets.................... $ 609,405,008
=============
Net Asset Value, offering and
redemption price per share
($609,405,008 / 25,249,834 shares
outstanding; unlimited number of
shares authorized of $0.01 par
value).............................. $24.14
======
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
- -------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividend income....................... $ 8,449,263
Interest income....................... 568,231
-------------
Total Investment Income............. 9,017,494
-------------
EXPENSES:
Investment advisory fee............... 5,831,475
Distribution fees..................... 1,457,893
Shareholder services fees............. 602,272
Trustees' fees........................ 78,643
Legal and audit fees.................. 40,300
Other................................. 327,000
-------------
Total Expenses...................... 8,337,583
-------------
NET INVESTMENT INCOME................... 679,911
-------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments
sold................................ 53,997,190
-------------
Net unrealized appreciation of
investments:
Beginning of year................... 123,489,913
End of year......................... 172,976,164
-------------
Change in net unrealized
appreciation of investments..... 49,486,251
-------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS........................... 103,483,441
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $ 104,163,352
=============
</TABLE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR YEAR
ENDED ENDED
12/31/96 12/31/95
------------ ------------
<S> <C> <C>
Net investment income........................................................................ $ 679,911 $ 1,117,828
Net realized gain on investments............................................................. 53,997,190 80,758,385
Net change in unrealized appreciation of investments......................................... 49,486,251 58,094,733
------------ ------------
Net increase in net assets resulting from operations......................................... 104,163,352 139,970,946
Distributions to shareholders from:
Net investment income.................................................................... (632,798) (1,002,446)
Net realized gain on investments......................................................... (53,778,195) (80,041,525)
Net increase/(decrease) in net assets from Fund share transactions........................... 26,611,524 (8,356,403)
------------ ------------
Net increase in net assets................................................................... 76,363,883 50,570,572
NET ASSETS:
Beginning of year............................................................................ 533,041,125 482,470,553
------------ ------------
End of year (including undistributed net investment income of $47,113 at December 31,
1996)...................................................................................... $609,405,008 $533,041,125
============ ============
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
THE GABELLI GROWTH FUND -- NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli Growth Fund (the "Fund") was
organized on October 24, 1986 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 capital appreciation. The Fund commenced operations on April 10,
1987. 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.
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.
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.
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, to provide a continuous investment program for the Fund's portfolio,
provide 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
12
<PAGE>
THE GABELLI GROWTH FUND -- NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 $1,457,893,
representing 0.25 percent of the value of the Fund's average daily net assets,
the annual limitation under the Plan. The Board of Trustees has approved that
distribution costs incurred by Gabelli & Company in the amount of $81,500, which
are in excess of the 0.25 percent limitation, may be recovered from the Fund in
future periods, subject to such limitation.
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 $505,862,257 and $522,601,081, respectively.
5. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 1996, the
Fund incurred brokerage commissions of $22,360 to Gabelli & Company and its
affiliates.
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................................................. 18,297,462 $ 445,159,849 7,723,981 $ 177,580,810
Shares issued upon reinvestment of dividends................ 2,151,430 51,935,527 3,489,327 77,284,488
Shares redeemed............................................. (19,258,689) (470,483,852) (11,667,885) (263,221,701)
----------- ------------- ----------- -------------
Net increase/(decrease)..................................... 1,190,203 $ 26,611,524 (454,577) $ (8,356,403)
=========== ============= =========== =============
</TABLE>
13
<PAGE>
THE GABELLI GROWTH FUND
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............................. $ 22.16 $ 19.68 $ 23.26 $ 21.59 $ 21.28
-------- -------- -------- -------- --------
Net investment income.......................................... 0.03 0.05 0.07 0.06 0.08
Net realized and unrealized gain/(loss) on investments......... 4.27 6.39 (0.86) 2.37 0.88
-------- -------- -------- -------- --------
Total from investment operations............................... 4.30 6.44 (0.79) 2.43 0.96
-------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income........................................ (0.02) (0.05) (0.08) (0.05) (0.09)
Distributions in excess of net investment income............. -- -- (0.01) -- --
Net realized gains........................................... (2.30) (3.91) (2.39) (0.67) (0.56)
Distributions in excess of net realized gains................ -- -- (0.31) (0.04) --
-------- -------- -------- -------- --------
Total distributions............................................ (2.32) (3.96) (2.79) (0.76) (0.65)
-------- -------- -------- -------- --------
Net asset value, end of year................................... $ 24.14 $ 22.16 $ 19.68 $ 23.26 $ 21.59
======== ======== ======== ======== ========
Total return*.................................................. 19.4% 32.7% (3.4)% 11.3% 4.5%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's)............................. $609,405 $533,041 $482,471 $695,013 $625,050
Ratio of net investment income to average net assets......... 0.12% 0.22% 0.31% 0.22% 0.46%
Ratio of operating expenses to average net assets............ 1.43% 1.44% 1.36% 1.41% 1.41%
Portfolio turnover rate........................................ 88.2% 140.2% 40.3% 80.7% 45.9%
Average commission rate (per share of security)(a)............. $ 0.0500 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. Total return for the period of less than one year is
not annualized.
(a) Average commission rate (per share of security) as required by amended SEC disclosure requirements effective for fiscal
years beginning after September 1, 1995.
</TABLE>
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
THE GABELLI GROWTH 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 Growth 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 $0.814 per share. Additionally, on that date,
the Fund paid $1.510 per share in long-term capital gains. For 1996, 30.39% 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 1.86%. 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 the U.S. Government
securities. The Gabelli Growth 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 larger than in Aaa
securities. A: Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future. Baa: Bonds which
are rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative
characteristics as well. Ba: Bonds which are rated Ba are judged to
have speculative elements; their future cannot be considered as well
assured. Often the protection of interest and principal payments may
be very moderate and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position characterizes bonds
in this class. B: Bonds which are rated B generally lack
characteristics of a desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the contract
over any long period of time may be small. Caa: Bonds which are rated
Caa are of poor standing. Such issues may be in default or there may
be present elements of danger with respect to principal or interest.
Ca: Bonds which are rated Ca represent obligations which are
speculative in high degree. Such issues are often in default or have
other marked shortcomings. C: Bonds which are rated C are the lowest
rated class of bonds, and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment
standing. Unrated: Where no rating has been assigned or where a rating
has been suspended or withdrawn, it may be for reasons unrelated to
the quality of the issue.
<PAGE>
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 no
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 believe possess the strongest investment
attributes are
designated by the symbols Aa-1, A-1, Baa-1 and B-1.
STANDARD & POOR'S RATINGS SERVICE
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
Ratings Service, a division of McGraw-Hill Companies, Inc. ("S&P").
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 CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of this
obligation. BB indicates the lowest degree of speculation and C the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, they are outweighed by large
uncertainties of major risk exposures to adverse conditions. C1: The
rating C1 is reserved for income bonds on which no interest is being
paid. D: Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears. Plus(+) Or Minus(-): The ratings
from AA to CCC may be modified by the addition of a plus or minus sign
to show relative standing within the major rating categories. NR:
Indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does
not rate a particular type of obligation as a matter of policy.
<PAGE>
THE GABELLI GROWTH 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
Statement of Assets and Liabilities Statement of
Operations Statement of Changes in Net Assets Notes
to Financial Statements 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)(a) Custody Agreement dated January 22, 1986 is filed herewith.
(8)(b) Amendment to Custody Agreement dated February 14, 1991 is
filed herewith.
(8)(c) Amendment to Custody Agreement dated May 13, 1991 is filed
herewith.
(9)(a) Transfer Agency and Service 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 herein.
(10) Not applicable.
(11)(a) Consent of Independent Accountants is filed herewith.
(11)(b) Powers of Attorney for Mario J. Gabelli, Felix J. Christiana,
Anthony J. Colavita, James P. Conn, Karl Otto Pohl,
Anthony R. Pustorino, Anthony Torna, and Anthonie van Ekris
are filed herewith.
(12) Not applicable.
(13) Agreement with initial shareholder is filed herewith.
(14) Instructions and Agreement for Individual Retirement Account
(IRA) is incorporated by reference to Post-Effective
Amendment No. 8 to the Registration Statement as filed with
the Securities and Exchange Commission ("SEC") on May
3, 1993 ("Post-Effective Amendment No. 8").
(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. 8.
(17) Financial Data Schedule is filed herewith.
(18) Not applicable.
ITEM 25. Persons Controlled by or Under Common Control with Registrant
None
ITEM 26. Number of Holders of Securities
(1) (2)
Title of Class Number of Record Holders
as of April 25, 1997
Beneficial Interest Value
$.01 per share 39,001
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, as amended (the "Act"), may be permitted to trustees,
officers and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Amended and
Restated Investment Advisory Contract and the Second Amended and
Restated 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)
ITEM 29. Principal Underwriter
(a) The Distributor, Gabelli & Company, Inc., is also the principal
underwriter for The Gabelli ABC Fund, The Gabelli Asset 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, Gabelli Capital Asset Fund and
The Gabelli International Growth Fund, Inc., 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)
(c) Not applicable.
<PAGE>
ITEM 30. Location of Accounts and Records
All such accounts, books and other documents 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 certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Rye and State of New York, on the 29th day of
April, 1997.
THE GABELLI GROWTH FUND
(Registrant)
By: /s/ Bruce N. Alpert
Bruce N. Alpert
President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature: Title: Date:
/s/ Bruce N. Alpert President and Treasurer 4/29/97
Bruce N. Alpert
/s/Mario J. Gabelli* Trustee 4/29/97
Mario J. Gabelli
/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/Anthony Torna* Trustee 4/29/97
Anthony Torna
/s/Anthonie van Ekris* Trustee 4/29/97
Anthonie van Ekris
*By: /s/ Bruce N. Alpert
Bruce N. Alpert
Attorney-in-Fact
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT
NUMBER EXHIBIT
(2) By-laws
(5) Amended and Restated 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 Plan of Distribution pursuant to Rule 12b-1
(17) Financial Data Schedule
<PAGE>
</TABLE>
THE GABELLI GROWTH FUND
BY-LAWS
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. 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 the
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-in-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 cast,
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 per cent (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 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 nor 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 1. 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 the 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 material 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 notice 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 held 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-Presidents, 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. Shares 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 or 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 or claims which may arise by reason of the issue of a new
certificate in the place of the one so lost, stolen or destroyed.
<PAGE>
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 Growth 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 in its entirety to read 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 connect
therewith have complete discretion in purchasing and selling
securities and other assets for the Fund and in voting, exercising
consents and exercising all other rights appertaining to such
securities and other assets on behalf of the Fund; (ii) arrange for
the purchase and sale of securities and other assets held in the
investment portfolio of the Fund and (iii) oversee the administration
of all aspects of the Fund's business and affairs and provide, or
arrange for others whom it believes to be competent to provide,
certain services as specified in subparagraph (b) below. Nothing
contained herein shall be construed to restrict the Fund's right to
hire its own employees or to contract for administrative services to
be performed by third parties, including but not limited to, the
calculation of the net asset value of the Fund's shares.
(b) The specific services to be provided or arranged for by the Adviser
for the Fund are (i) maintaining the Fund's books and records, such as
journals, ledger accounts and other records in accordance with
applicable laws and regulations to the extent not maintained by the
Fund's custodian, transfer agent and dividend disbursing agent; (ii)
transmitting purchase and redemption orders for 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 or 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 laws 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
hereon; (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 non-recurring expenses and other
expenses properly payable by the Fund.
(e) The Adviser shall give the Fund the benefit of its best judgment and
effort in rendering services hereunder, but neither the Adviser nor
any of its officers, directors, employees, agents or controlling
persons shall be liable for any act or omission or for any loss
sustained by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence in the performance of its duties, or by
reason of its reckless disregard of its obligations and duties under
this Agreement; provided, however, that the foregoing shall not
constitute a waiver of any rights which the Fund may have which may
not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the Adviser or any director,
officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in
any other lawful activity, and shall not in any way limit or restrict
the Adviser or any of its directors, officers, employees or agents
from buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may be
acting.
3. Portfolio Transactions
In the course of the Adviser's execution of portfolio
transactions for the Fund, it is agreed that the Adviser shall employ securities
brokers and dealers which, in its judgment, will be able to satisfy the policy
of the Fund to seek the best execution of its portfolio transactions at
reasonable expenses. For purposes of this agreement, "best execution" shall mean
prompt, efficient and reliable execution at the most favorable price obtainable.
Under such conditions as may be specified by the Fund's Board of Trustees in the
interest of its shareholders and to ensure compliance with applicable law and
regulations, the Adviser may (a) place orders for the purchase or sale of the
Fund's portfolio securities with its affiliate, Gabelli & Company, Inc.; (b) pay
commissions to brokers other than its affiliate which are higher than might be
charged by another qualified broker to obtain brokerage and/or research services
considered by the Adviser to be useful or desirable in the performance of its
duties hereunder and for the investment management of other advisory accounts
over which it or its affiliates exercise investment discretion; and (c) consider
sales by brokers (other than its affiliate distributor) of shares of the Fund
and any other mutual fund for which it or its affiliates act as investment
adviser, as a factor in the 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 of any criminal
proceeding, so long as he had no reasonable cause to believe that the
conduct was unlawful, provided, however, that (1) no indemnitee shall
be indemnified hereunder against any liability to the Fund or its
shareholders or any expense of such indemnitee arising by reason of
(i) willful misfeasance, (ii) bad faith, (iii) gross negligence 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 "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
[FN]
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 GROWTH FUND
By: /s/ Bruce N. Alpert
Bruce Alpert
Title: Vice President & Treasurer
GABELLI FUNDS, INC.
By: /s/ 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 Growth 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:
1. The Fund hereby appoints the Distributor as exclusive sales
agent and distributor for the sale and distribution of Shares pursuant to the
aforesaid continuous public offering of Shares, and the Fund further agrees from
and after the commencement of such continuous public offering that it will not,
without the Distributor's consent, sell or agree to sell any Shares otherwise
than through the Distributor, except the Fund may issue Shares in connection
with a merger, consolidation or acquisition of assets on such basis as may be
authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such Shares, provided, however, that when
requested by the Fund at any time for any reason the Distributor will suspend
such efforts. The Fund may also withdraw the offering of Shares at any time when
required by the provisions of any statute, order, rule or regulation of any
governmental body having jurisdiction. It is understood that the Distributor
does not undertake to sell all or any specific portion of the Shares.
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 be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
(a) It will furnish to the Fund any pertinent
information required to be inserted with respect to the Distributor as
exclusive sales agent and distributor within the purview of Federal and
state securities laws in any reports or registrations required to be
filed with any government authority;
(b) It will not make any representations inconsistent
with the information contained in the Registration Statement or
Prospectus filed under the Securities Act of 1933, as in effect from
time to time;
(c) It will not use or distribute or authorize the
use 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.
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 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.
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 Growth Fund
By: /s/Bruce N. Alpert
Name: Bruce N. Alpert
Title: Vice President, Treasurer
Gabelli & Company, Inc.
By: /s/Stephen G. Bondi
Name: Stephen G. Bondi
Title: Vice President
CUSTODIAN CONTRACT
Between
THE GABELLI GROWTH FUND
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By It...... l
2. Duties of the Custodian with Respect to Property of the Fund Held
by the Custodian........................................... 2
2.1 Holding Securities................................ 2
2.2 Delivery of Securities............................ 2
2.3 Registration of Securities........................ 7
2.4 Bank Accounts..................................... 8
2.5 Payments for Shares............................... 9
2.6 Availability of Federal Funds..................... 9
2.7 Collection of Income.............................. 9
2.8 Payment of Fund Monies............................. 10
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased............ 13
2.10 Payments for Repurchases or Redemptions of Shares of
the Fund.................. 13
2.11 Appointment of Agents............................. 14
2.12 Deposit of Fund Assets in Securities Systems...... 15
2.12A Fund Assets Held in the Custodian's Direct Paper System 18
2.13 Segregated Account.................................. 19
2.14 Ownership Certificates for Tax Purposes........... 20
2.15 Proxies........................................... 20
2.16 Communications Relating to Fund Portfolio Securities.. 21
2.17 Proper Instructions.................................. 22
2.18 Actions Permitted Without Express Authority.......... 23
2.19 Evidence of Authority............................... 23
3. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income............ 24
4. Records.................................................. 24
5. Opinion of Fund's Independent Accountant................ 25
6. Reports to Fund by Independent Public Accountants.......... 25
7. Compensation of Custodian................................. 26
8. Responsibility of Custodian............................... 26
9. Effective Period, Termination and Amendment............... 27
10. Successor Custodian..................................... 29
11. Interpretive and Additional Provisions................. 30
12. Massachusetts Law to Apply............................. 31
13. Prior Contracts....................................... 31
<PAGE>
========
CUSTODIAN CONTRACT
This Contract between The Gabelli Growth Fund, a business trust
organized and existing under the laws of having its principal place of business
at 655 Third Avenue, New York, NY 10017 hereinafter called the "Fund", and State
Street Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 225 Franklin Street, Boston, Massachusetts,
02110, hereinafter called the ("Custodian").
WITNESSETH, that in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Declaration of Trust. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.17), the Custodian shall from time to time employ one or more sub-custodians,
but only in accordance with an applicable vote by the Board of Trustees of the
Fund, and provided that the Custodian shall have no more or less responsibility
or liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
2 Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, including all
securities owned by the Fund, other than (a) securities which are
maintained pursuant to Section 2.12 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as a
Securities System' and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper ) which is deposited and/or maintained in the Direct
Paper System of the Custodian pursuant to Section 2.12A.
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper book
entry system account ("Direct Paper Account") only upon receipt of
Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and receipt
of payment therefor; 2) Upon the receipt of payment in connection with
any repurchase agreement related to such securities entered into by
the Fund; 3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section 2.12 hereof; 4)
To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund; 5) To the issuer thereof
or its agent when such securities are called, redeemed, retired or
otherwise become payable; provided that, in any such case, the cash or
other consideration is to be delivered to the Custodian; 6) To the
issuer thereof, or its agent, for transfer into the name of the Fund
or into the name of any nominee or nominees of the Custodian or into
the name or nominee name of any agent appointed pursuant to Section
2.11 or into the name or nominee name of any sub-custodian appointed
pursuant to Article l; or for exchange for a different number of
bonds, certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such case, the
new securities are to be delivered to the Custodian; 7) Upon the sale
of such securities for the account of the Fund, to the broker or its
clearing agent, against a receipt, for examination in accordance with
"street delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any loss
arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct; 8) For exchange or conversion
pursuant to any plan of merger, consolidation, recapitalization,
reorganization or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian; 9) In the case of warrants, rights or
similar securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of interim
receipts or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if any, are to be
delivered to the Custodian; 10) For delivery in connection with any
loans of securities made by the Fund, but onIy against receipt of
adequate collateral as agreed upon from time to time by the Custodian
and the Fund, which may be in the form of cash or obligations issued
by the United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the Custodian will
not be held liable or responsible for the delivery of securities owned
by the Fund prior to the receipt of such collateral; 11) For delivery
as security in connection with any borrowings by the Fund requiring a
pledge of assets by the Fund, but only against receipt of amounts
borrowed; --- ---- 12) For delivery in accordance with the provisions
of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the "Exchange
Act") and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Fund; 13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures Commission
Merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Fund; 14) Upon receipt of instructions from the
transfer agent ("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time in the
Fund's currently effective prospectus and statement of additional
information ("prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and 15) For any other proper
corporate purpose, but only upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund or
in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund,
unless the Fund has authorized in writing the appointment of a nominee
to be used in common with other registered investment companies having
the same investment adviser as the Fund, or in the name or nominee name
of any agent appointed pursuant to Section 2.11 or in the name or
nominee name of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Fund under the
terms of this Contract shall be in "street name or other good delivery
form. If, however, the Fund directs the Custodian to maintain
securities in street name , the Custodian shall utilize its best
efforts only to timely collect income due the Fund on such securities
and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Contract,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established
and used in accordance with Rule 17f-3 under the Investment Company Act
of 1940. Funds held by the Custodian for the Fund may be deposited by
it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian
under the Investment Company Act of 1940 and that each such bank or
trust company and the funds to be deposited with each such bank or
trust company shall be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the Custodian
only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the distributor
for the Fund's Shares or from the Transfer Agent of the Fund and
deposit into the Fund's account such payments as are received for
Shares of the Fund issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Fund and the Transfer
Agent of any receipt by it of payments for Shares of the Fund.
2.6 Availability of Federal Funds. Upon mutual agreement between the Fund
and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in
the amount of checks received in payment for Shares of the Fund which
are deposited into the Fund's account.
2.7 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which the Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to the Fund's
custodian account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Fund with such information or data as may be necessary
to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Fund is properly entitled.
2.8 Payment of Fund Monies. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases
only:
1) Upon the purchase of securities, options, futures contracts or options
on futures contracts for the account of the Fund but only (a) against
the delivery of such securities or evidence of title to such options,
futures contracts or options on futures contracts, to the Custodian
(or any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act of 1940, as amended, to act as a custodian and has been
designated by the Custodian as its agent for this purpose) registered
in the name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for transfer; (b)
in the case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.12 hereof; (c)
in the case of a purchase involving the Direct Paper System, in
accordance with the conditions set forth in Section 2.12A; (d) n the
case of repurchase agreements entered into between the Fund and the
Custodian, or another bank, or a broker-dealer which is a member of
NASD, (i) against delivery of the securities either in certificate
form or through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against delivery of
the receipt evidencing purchase by the Fund of securities owned by the
Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund or (e) for
transfer to a time deposit account of the Fund in any bank, whether
domestic or foreign; such transfer may be effected prior to receipt of
a confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined in Section 2.17; 2) In
connection with conversion, exchange or surrender of securities owned
by the Fund as set forth in Section 2.2 hereof; 3) For the redemption
or repurchase of Shares issued by the Fund as set forth in Section
2.10 hereof;
<PAGE>
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: interest, taxes, management, accounting, transfer agent and
legal fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated as deferred
expenses; 5) For the payment of any dividends declared pursuant to the
governing documents of the Fund; 6) For payment of the amount of
dividends received in respect of securities sold short; 7) For any
other proper purpose, but only upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons to whom such
payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of securities for the account of
the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions
from the Fund to so pay in advance, the Custodian shall be absolutely
liable to the Fund for such securities to the same extent as if the
securities had been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of the Fund. From
such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the
Board of Trustees of the Fund pursuant thereto, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds
available for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of their Shares.
In connection with the redemption or repurchase of Shares of the Fund,
the Custodian is authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a commercial bank designated
by the redeeming shareholders. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as are
mutually agreed upon from time to time between the Fund and the
Custodian.
2.11 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2 12 Deposit of Fund Assets in Securities Systems. The Custodian may
deposit and/or maintain securities owned by the Fund in
--------------------------------------------- a clearing agency
registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers; 2) The records of the
Custodian with respect to securities of the Fund which are maintained
in a Securities System shall identify by book-entry those securities
belonging to the Fund; 3) The Custodian shall pay for securities
purchased for the account of the Fund upon (i) receipt of advice from
the Securities System that such securities have been transferred to
the Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer securities sold for the account of
the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund. Copies of all
advices from the Securities System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for the
Fund by the Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund. 4) The Custodian shall
provide the Fund with any report obtained by the Custodian on the
Securities System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities
System; 5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9 hereof; 6)
Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the Securities System or any other
person which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Fund has not been made whole
for any such loss or damage.
2.12A Fund Assets Held in the Custodian's Direct Paper System
The Custodian may deposit and/or maintain securities owned by the Fund
in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper System will
be effected in the absence of Proper Instructions; 2) The Custodian
may keep securities of the Fund in the Direct Paper System only if
such securities are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers; 3) The records of the Custodian
with respect to securities of the Fund which are maintained in the
Direct Paper System shall identify by book-entry those securities
belonging to the Fund; 4) The Custodian shall pay for securities
purchased for the account of the Fund upon the making of an entry on
the records of the Custodian to reflect such payment and transfer of
securities to the account of the Fund. The Custodian shall transfer
securities sold for the account of the Fund upon the making of an
entry on the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Fund; 5) The Custodian shall
furnish the Fund confirmation of each transfer to or from the account
of the Fund, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund copies of dally transaction sheets reflecting each
day's transaction in the Securities System for the account of the
Fund; 6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may reasonably
request from time to time;
<PAGE>
2.13 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Fund, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purpose of compliance by
the Fund with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts
by registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
2.14 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
2.15 Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be Promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.16 Communications Relating to Fund Portfolio Securities Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund all written information (including, without limitation, pendency
of calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts purchased or
sold by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Fund desires to take action
with respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.17 Proper Instructions. Proper Instructions as used throughout this
Article 2 means a writing signed or initialled by one or more person or
persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the
purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Upon receipt of
a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Fund accompanied by a
detailed description of procedures approved by the Board of Trustees,
Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the
Board of Trustees and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a
segregated asset account in accordance with Section 2.13.
2.18 Actions Permitted without Express Authority. The Custodian may
in its discretion, without express authority from the
-----------------------------------------------
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to
the Fund; 2) surrender securities in temporary form for securities in
definitive form; 3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments; and 4) in general,
attend to all non-discretionary details in connection with the sale,
exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Fund except as otherwise directed by
the Board of Trustees of the Fund.
<PAGE>
2.19 Evidence of Authority. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by or on behalf of the Fund. The Custodian may
receive and accept a certified copy of a vote of the Board of Trustees
of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of
any action by the Board of Trustees pursuant to the Declaration of
Trust as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written notice
to the contrary.
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income The Custodian shall
cooperate with and supply necessary information to the entity or
entities appointed by the Board of
Trustees of the Fund to keep the books of account of the Fund and/or compute the
net asset value per share of the outstanding shares of the Fund or, if directed
in writing to do so by the Fund, shall itself keep such books of account and/or
compute such net asset value per share. If so directed, the Custodian shall also
calculate daily the net income of the Fund as described in the Fund's currently
effective prospectus and shall advise the Fund and the Transfer Agent daily of
the total amounts of such net income and, if instructed in writing by an officer
of the Fund to do so, shall advise the Transfer Agent periodically of the
division of such net income among its various components. The calculations of
the net asset value per share and the daily income of the Fund shall be made at
the time or times described from time to time in the Fund's currently effective
prospectus.
4. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by the Fund and
held by the Custodian and shall, when requested to do so by the Fund and for
such compensation as shall be agreed upon between the Fund and the custodian,
include certificate numbers in such tabulations.
5. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants With respect to its activities hereunder in
connection with the preparation of the Fund's Form N-lA, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
6. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports, shall be
of sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
7. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund and the Custodian.
8. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Notwithstanding the
foregoing, the responsibility of the Custodian with respect to redemptions
effected by check shall be in accordance with a separate Agreement entered into
between the Custodian and the Fund.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
<PAGE>
If the Fund requires the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of Fund
assets to the extent necessary to obtain reimbursement.
9. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section ~.12 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Trustees of the Fund has approved the initial use of
a particular Securities System and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has reviewed the
use by the Fund of such Securities System, as required in each case by Rule
17f-4 under the Investment Company Act of 1940, as amended and that the
Custodian shall not act under Section 2.12A hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Trustees has approved the initial use of the Direct Paper System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary that
the Board of Trustees has reviewed the use by the Fund of the Direct Paper
System; provided further, however, that the Fund shall not amend or terminate
this Contract in contravention of any applicable federal or state regulations,
or any provision of the Declaration of Trust, and further provided, that the
Fund may at any time by action of its Board of Trustees (i) substitute another
bank or trust company for the Custodian by giving notice as described above to
the Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
10. Successor Custodian
If a successor custodian shall be appointed by the Board of Trustees of
the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a bank as defined in the Investment Company Act of 1940, doing
business in Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
12. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
13. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day of 1989.
ATTEST THE GABELLI GROWTH FUND
ILLEGIBLE By: ILLEGIBLE
ATTEST STATE STREET BANK AND TRUST COMPANY
ILLEGIBLE By: ILLEGIBLE
Assistant Secretary Vice president
<PAGE>
AMENDMENT TO THE CUSTODIAN CONTRACT
AGREEMENT made by and between State Street Bank and Trust Company (the
"Custodian") and The Gabelli Growth 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 Directors, 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)(1) 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.
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 thereof.
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.
<PAGE>
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.
<PAGE>
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 _________________ day of
________________, 1991.
ATTEST: THE GABELLI GROWTH FUND
ILLEGIBLE By: BRUCE ALPERT
(Title) Vice President and Treasurer
ATTEST: STATE STREET BANK
AND TRUST COMPANY
ILLEGIBLE By: ILLEGIBLE
Assistant Secretary Vice President
<PAGE>
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of The Gabelli Growth
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 Trust Company (the
"Custodian") and The Gabelli Growth Fund (the "Fund").
WHEREAS, the Custodian 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 of 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 GROWTH FUND
By: ILLEGIBLE
Title: ________________________
STATE STREET BANK AND TRUST COMPANY
By: ILLEGIBLE
Title: _________________________
TRANSFER AGENCY AGREEMENT
Agreement made as of the 27th day of February 1987 between
the gabelli growth 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 referred to as 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, NY 10015
(hereinafter referred to as the "Transfer Agents").
witnesseth:
That for and in consideration of the mutual promises
hereinafter set forth, the parties hereto covenant and agree as
follows:
article I
definitions
Whenever used in this Agreement, the following words and
phrases shall have the following meanings:
1. "Approved Institution" shall mean an entity so named
in a Certificate. From time to time the Fund may amend a
previously delivered Certificate by delivering to the Transfer
Agent a Certificate naming an additional entity or deleting any
entity named in a previously delivered Certificate.
2. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent by the Fund which is
signed by any Officer, as hereinafter defined, and actually
received by the Transfer Agent.
3. "Custodian" shall mean The Bank of New York, as
custodian under the terms and conditions of the Custody Agreement
between The Bank of New York and the Fund, or its successor(s).
4. "Fund Business Day" shall be deemed to be each day on
which the New York Stock Exchange, Inc. is open for trading.
5. "Officer" shall be deemed to be the Fund's Chairman of
the Board, the Fund's President, any Vice President of the Fund,
the Fund's Secretary or Clerk, the Fund's Treasurer, the Fund's
Controller, any Assistant Controller of the Fund, any Assistant
Treasurer of the Fund, and any other person 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
named in the Certificate annexed hereto as Appendix A, as such
Certificate may be amended from time to time, and any person
reasonably believed by the Transfer Agent to be such a person.
6. "Series" shall mean the various portfolios of the Fund
as described from time to time in the current and effective
Prospectus.
7. "Shares" shall mean all or any part of each class of
the shares of beneficial interest of the Fund listed in the
Certificate annexed hereto as Appendix B, as may be amended, from
time to time, which from time to time are authorized and/or issued
by the Fund.
8. "Prospectus" shall mean the last Fund prospectus
actually received by the Transfer Agent from the Fund with respect
to which the Fund has indicated a registration statement under the
Federal Securities Act of 1933 has become effective, including the
Statement of Additional Information incorporated by reference
therein.
9. "Transfer Agent" shall mean The Bank of New York, as
transfer agent and dividend disbursing agent under the terms and
conditions of this Agreement, its successor(s) or assign(s).
article ii
appointment of transfer agent
1. The Fund hereby constitutes and appoints the Transfer
Agent as transfer agent of all the Shares of the Fund and as
dividend disbursing agent during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as
transfer agent and dividend disbursing agent and agrees to perform
the duties thereof as hereinafter set forth.
3. In connection with such appointment, the Fund shall
deliver the following documents to the Transfer Agent:
(a) A certified copy of the Declaration of Trust of
the Fund and all amendments thereto;
(b) A certified copy of the By-Laws of the Fund;
(c) A certified copy of a resolution of the Trustees
of the Fund appointing the Transfer Agent and authorizing the
execution of this Transfer Agency Agreement;
(d) A Certificate signed by the Secretary or Clerk
of the Fund specifying with respect to each Series: the number of
authorized Shares, the number of such authorized Shares issued,
and the number of such authorized Shares issued and currently
outstanding, the names and specimen signatures of the Officers of
the Fund, and the name and address of the legal counsel for the
Fund;
(e) Specimen Share certificates for each class of
Shares in the form approved by the Board of Trustees of the Fund,
together with a certificate signed by the Secretary or Clerk of
the Fund as to such approval.
(f) Copies of the Fund's Registration Statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and u under the Investment Company Act of 1940, as amended,
together with any applications filed in connection therewith; and
(g) Opinion of counsel for the Fund with respect to
the validity of the authorized and outstanding Shares, whether
such Shares are fully paid and non-assessable and the status of
such Shares under the Securities Act of 1933, as amended, and any
other applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
Registration Statement has become effective or, if exempt, the
specific grounds therefor).
4. The Fund shall furnish the Transfer Agent with a
sufficient supply of blank Share certificates and from time to
time will renew such supply upon request of the Transfer Agent.
Such blank Share certificates shall be properly signed, by
facsimile or otherwise, by Officers of the Fund authorized by law
or by the by-laws to sign Share certificates, and, if required,
shall bear the seal or facsimile thereof.
article III
authorization and issuance of shares
1. The Fund shall deliver to the Transfer Agent the
following documents on or before the effective date of any
increase or decrease in the total number of Shares authorized to
be issued:
(a) A certified copy of the amendment to the
Declaration of Trust giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of
counsel for the Fund with respect to the validity of the Shares of
the Fund and the status of such Shares under the Securities Act of
1933, as amended, and any other applicable federal law or
regulation (i.e., if subject to registration, that they have been
registered and that the Registration Statement has become
effective or, if exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment
of the Transfer Agent was theretofore expressly limited, a
certified copy of a resolution of the Board of Trustees of the
Fund increasing the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares of the
Fund pursuant to stock dividends or stock splits, etc., and prior
to any reduction in the number of shares outstanding, the Fund
shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by
the Board of Trustees and/or the shareholders of the Fund
authorizing such issuance of additional Shares of the Fund or such
reduction, as the case may be, and
(b) An opinion of counsel for the Fund with respect
to the validity of the Shares of the Fund and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
Registration Statement has become effective, or, if exempt, the
specific grounds therefor).
article iv
recapitalization or capital adjustment
1. In the case of any negative stock split,
recapitalization or other capital adjustment requiring a change in
the form of Share certificates, the Transfer Agent will issue
Share certificates in the new form in exchange for, or upon
transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of Share
certificates in the new form;
(b) A certified copy of any amendment to the
Declaration of Trust with respect to the change;
(c) Specimen Share certificates for each class of
Shares in the new form approved by the Board of Trustees of the
Fund, with a Certificate signed by the Secretary or Clerk of the
Fund as to such approval; and
(d) An opinion of counsel for the Fund with respect
to the validity of the Shares in the new form and the status of
such Shares under the Securities Act of 1933, as amended, and any
other applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
Registration Statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund shall furnish the Transfer Agent with a
sufficient supply of blank Share certificates in the new form, and
from time to time will replenish such supply upon the request of
the Transfer Agent. Such blank Share certificates shall be
properly signed by Officers of the Fund authorized by law or by
the by-laws to sign Share certificates and, if required shall bear
the seal of the Fund or facsimile thereof. The Fund agrees to
indemnify and exonerate, save and hold the Transfer Agent
harmless, from and against any and all claims or demands that may
be asserted against the Transfer Agent with respect to the
genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this section.
article v
issuance, redemption, and transfer of shares
1. (a) The Transfer Agent shall accept with respect to
each Fund Business Day, at such times as are agreed upon from time
to time by the Transfer Agent and the Fund, each (i) purchase
order received from a purchaser, or share-holder, whether or not
an Approved Institution, and (ii) redemption request either
received from a shareholder, whether or not an Approved
Institution, or contained in a Certificate, provided, that (A)
such purchase order or redemption request, as the case may be, is
reasonably believed by the Transfer Agent to be in conformity with
the Fund's purchase and redemption procedures descried in the
Prospectus, and (B) the Transfer Agent has agreed to accept and
act in accordance with such type of purchase order or redemption
request, as the case may be.
(b) The Transfer Agent shall also accept with
respect to each Fund Business Day, at such times as are agreed
upon from time to time by the Transfer Agent and the Fund, a
computer tape consistent in all respects with the Transfer Agent's
tape layout package, as amended from time to time, which is
believed by the Transfer Agent to be furnished by or on behalf of
any Approved Institution.
2. On each Fund Business Day the Transfer Agent shall, as
of the time at which the Fund computes the net asset value of each
Series, issue to, and redeem from, the accounts specified in a
purchase order, redemption request, or computer tape which in
accordance with the Prospectus is effective on such Fund Business
Day the appropriate number of full and fractional Shares based on
the net asset value per Share of such Series specified in an
advice received on such Fund Business Day from the Fund.
Notwithstanding the foregoing, if a redemption specified in a
computer tape is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account,
the Transfer Agent shall not effect such redemption in whole or
part, and shall orally advise both the Fund and the Approved
Institution which supplied such tape of such discrepancy.
3. The Transfer Agent shall, as of each Fund Business Day
specified in a Certificate or resolution described in paragraph 1
of succeeding Article VI, issue Shares of a Series, based on the
net asset value per Share of such Series specified in an advice
received from the Fund on such Fund Business Day, in connection
with a reinvestment of a dividend or distribution on Shares of
such Series.
4. On each Fund Business Day the Transfer Agent shall
supply the Fund with a statement specifying with respect to the
immediately preceding Fund Business Day: the total number of
Shares of each Series (including fractional Shares) issued and
outstanding at the opening of business on such day; the total
number of Shares of each Series sold to The Bank of New York, as
agent for the purchasers, on such day, pursuant to preceding
paragraph 2 of this Article; the total number of Shares of each
Series redeemed by The Bank of New York, as agent for the
respective redeeming shareholders, on such day; the total number
of Shares of each Series, if any, sold The Bank of New York, as
agent for shareholders, on such day pursuant to preceding
paragraph 3 of this Article, and the total number of Shares of
each Series issued and outstanding. On the same day such
statement is received by the Fund, the Fund shall confirm the
information contained therein by delivering to the Transfer Agent
a Certificate with respect to the same.
5. In connection with each purchase and each redemption
of Shares, the Transfer Agent shall send such statements as are
described in the Prospectus. If the Prospectus indicates that
certificates for Shares are available, and if specifically
requested in writing by any shareholder, or if otherwise required
hereunder, the Transfer Agent will countersign, issue and mail by
not less than first class insured mail, to such shareholder at the
address set forth in the records of the Transfer Agent, a Share
certificate for any full Shares requested.
6. As of each Fund Business Day the Transfer Agent shall
furnish the Custodian with an advice setting forth the number and
dollar amount of Shares to be redeemed on such Fund Business Day
in accordance with paragraph 2 of this Article.
7. Upon receipt of moneys paid to it by the Custodian in
connection with a redemption of Shares, the Transfer Agent shall
cancel the redeemed Shares and after making appropriate deduction
for any withholding of taxes required of it by applicable law (a)
in the case of a redemption of Shares pursuant to a redemption
described in preceding paragraph 1(a) of this Article, make
payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus, and (b) in the case of a
redemption of Shares pursuant to a computer tape described in
preceding paragraph 1(b) of the Article, make payment by directing
a federal funds wire order to the account previously designated by
the Approved Institution specified in said computer tape.
8. The Transfer Agent shall not be required to issue any
Shares after it has received from an Officer of the Fund or from
an appropriate federal or state authority written notification
that the sale of Shares has been suspended or discontinued, and
the Transfer Agent shall be entitled to rely upon such written
notification.
9. Upon the issuance of any Shares in accordance with the
is Agreement the Transfer Agent shall not be responsible for the
payment of any original issue or other taxes required to be paid
by the Fund in connection with such issuance of any Shares.
10. Shares which are subject to restriction on transfer or
redemption (including, without limitation, Shares acquired
pursuant to a restrictive investment representation, Shares held
by controlling persons, Shares subject to shareholder's
agreements, etc.), other than the general restrictions on the
transferability of the shares described in the Prospectus, must be
issued in Share certificate form and must be stamped on the face
thereof with a legend describing the extent and conditions of the
restriction or referring to the source of such restriction, and
shall be so issued and so legended by the Transfer Agent only if
the Fund so directs in a Certificate. Legended Shares may not be
transferred to redeemed except upon receipt by the Transfer Agent
of an opinion of counsel for the Fund stating that such transfer
or redemption is in accordance with applicable law, and may be
properly effected. The Transfer Agent shall be entitled to rely
upon such opinion and shall be indemnified by the Fund for any
transfer or redemption made in reliance upon any such opinion.
11. The Transfer Agent shall accept a computer tape
consistent with the Transfer Agent's tape layout package, as
amended from time to time, which is reasonably believed by the
Transfer Agent to be furnished by or on behalf of any Approved
Institution and is represented to be instructions with respect to
the transfer of Shares from one account of such Approved
Institution to another such account, and shall effect the
transfers specified in said computer tape.
12. (a) Except as otherwise provided in sub-paragraph
(b) of this paragraph and in paragraph 13 of this Article, Shares
will be transferred to redeemed upon presentation to the Transfer
Agent of Share certificates or instructions properly endorsed for
transfer or redemption, accompanied by such documents as the
Transfer Agent deems necessary to evidence the authority of the
person making such transfer or redemption, and bearing
satisfactory evidence of the payment of stock transfer taxes. In
the case of small estates, where no administration is
contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the Fund,
transfer or redeem Shares registered in the name of a decedent
where the current market value of the Shares being transferred
does not exceed such amount as may from time to time by prescribed
by various states. The Transfer Agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the stock certificate or instructions is valid and
genuine, and for that purpose it will require, unless otherwise
instructed by an authorized officer of the Fund, a guarantee of
signature by a member firm of a National Securities Exchange or by
a bank or trust company acceptable to the Transfer Agent. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to
any claims adverse to such transfer or redemption. The Transfer
Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as
the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer
Agent for any act done or omitted by it in good faith in reliance
upon such laws.
(b) Notwithstanding the foregoing or any other
provision contained in this Agreement to the contrary, the
Transfer Agent shall be fully protected by the Fund in not
requiring any instruments, documents, assurances, endorsements or
guarantees, including, without limitation, any signature
guarantees, in connection with a redemption, or transfer, of
Shares whenever the Transfer Agent reasonably believes that
requiring the same would be inconsistent with the transfer and
redemption procedures as described in the Prospectus.
13. Notwithstanding any provision contained in this
Agreement to the contrary, the Transfer Agent shall not be
required or expected to require, as a condition to any transfer of
any Shares pursuant to paragraph 11 of this computer tape
described in this Article, any documents, including, without
limitation, any documents of the kind described in sub-paragraph
(a) of paragraph 12 of this Article, to evidence the authority of
the person requesting the transfer or redemption and/or the
payment of any stock transfer taxes, and shall be fully protected
in acting in accordance with the applicable provisions of this
Article.
14. (a) As used in this Agreement, the terms "computer
tape" and "computer tape believed by the Transfer Agent to be
furnished by an Approved Institution", shall include any tapes
generated by the Transfer Agent to reflect information believed by
the Transfer Agent to have been inputted by an Approved
Institution, via a remote terminal or other similar link, into a
data processing, storage, or collection system, or similar system
(the "System"), located on the Transfer Agent's premises. For
purposes of paragraph 1 of this Article, such a computer tape
shall be deemed to have been furnished at such times as are agreed
upon from time to time by the Transfer Agent and Fund only if the
information reflected thereon was inputted into the System at such
times as are agreed upon from time to time by the Transfer Agent
and the Fund.
(b) Nothing contained in this Agreement shall
constitute any agreement or representation by the Transfer Agent
to permit, or to agree to permit, any Approved Institution to
input information into a System.
article vi
dividends and distributions
1. The Fund shall furnish to the Transfer Agent a copy of
a resolution of its Board of Trustees, certified by the Secretary
or Clerk or any Assistant Secretary or Assistant Clerk, either (i)
setting forth with respect to a Series the date of the declaration
of a dividend or distribution, the date of accrual or payment, as
the case may be, thereof, the record date as of which Shareholders
entitled to payment, or accrual, as the case may be, shall be
determined, the amount per Share of such dividend or distribution,
the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any, payable to
the Transfer Agent on such payment date, of (ii) authorizing the
declaration of dividends and distributions on a daily or other
periodic basis and authorizing the Transfer Agent to rely on a
Certificate setting forth the information described in subsection
(i) of this paragraph.
2. Upon the payment date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a
cash dividend or distribution, cause the Custodian to pay to the
Transfer Agent an amount of cash, if any, sufficient for the
Transfer Agent to make the payment, if any, specified in such
Certificate or resolution, as the case may be, to the Shareholders
of record as of such payment date. The Transfer Agent will, upon
receipt of any such cash, make payment of such cash dividends or
distributions to the Shareholders of record as of the record date
by: (i) mailing a check, payable to the registered shareholder,
to the address of record or dividend mailing address, or (ii)
wiring such amounts to the accounts previously designated by an
Approved Institution, as the case may be. The Transfer Agent
shall not be liable for any improper payments made in accordance
with a Certificate or resolution described in the preceding
paragraph. If the Transfer Agent shall not receive from the
Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record
date, the Transfer Agent shall, upon notifying the Fund, withhold
payment to all shareholders of record as of the record date until
sufficient cash is provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no
way be responsible for the determination of the rate or form of
dividends or capital gain distributions due to the shareholders.
4. It is understood that the Transfer Agent shall file
such appropriate information returns concerning the payment of
dividends and capital gain distributions with the proper federal,
state and local authorities as are required by law to be filed by
the Fund but shall in no way be responsible for the collection or
withholding of taxes due on such dividends or distributions due to
shareholders, except and only to the extent, required of it by
applicable law.
article vii
concerning the fund
1. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign
Share certificates, Certificates, notifications or requests,
together with a specimen signature of each new Officer. In the
event any Officer who shall have signed manually or whose
facsimile signature shall have been affixed to blank Share
certificates shall die, resign or be removed prior to issuance of
such Share certificates, the Transfer Agent may issue such Share
certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall promptly deliver to the Transfer
Agent such approval, adoption or ratification as may be required
by law.
2. Each copy of the Declaration of Trust of the Fund and
copies of all amendments thereto shall be certified by the
Secretary of Sate (or other appropriate official) of the state of
organization, and if such Declaration of Trust and/or amendments
are required by law also to be filed with a county or other
officer or official body, a certificate of such filing shall be
filed with a certified copy submitted to the Transfer Agent. Each
copy of the By-Laws and copies of all amendments thereto, and
copies of resolutions of the Board of Trustees of the Fund, shall
be certified by the Secretary or Clerk of the Fund under the seal.
3. It shall be the sole responsibility of the Fund to
deliver to the Transfer Agent the Fund's currently effective
Prospectus and, for purposes of this Agreement, the Transfer Agent
shall not be deemed to have notice of any information contained in
such Prospectus until it is actually received by the Transfer
Agent.
article viii
concerning the transfer agent
1. The Transfer Agent shall not be liable and shall be
fully protected in acting upon any computer tape, writing or
document reasonably believed by it to be genuine and to have been
signed or made by the proper person or persons and shall not be
held to have any notice of any change of authority of any person
until receipt of written notice thereof from the Fund or such
person. It shall also be protected in processing Share
certificates which it reasonably believes to bear the proper
manual or facsimile signatures of the Officers of the Fund and the
proper countersignature of the Transfer Agent.
2. The Transfer Agent may establish such additional
procedures, release and regulations governing the transfer or
registration of certificates of stock as it may deem advisable and
consistent with such rules and regulations generally adopted by
bank transfer agents.
3. The Transfer Agent shall keep such records as are
specified in Appendix C hereto in the form and manner, and for
such period, as it may deem advisable but not inconsistent with
the rules and regulations of appropriate government authorities,
in particular Rules 31a-2 and 31a-3 under the federal Investment
Company Act as amended from time to time. The Transfer Agent may
deliver to the Fund from time to time at its discretion, for
safekeeping or disposition by the Fund in accordance with law,
such records, papers, Share certificates which have been canceled
in transfer, exchange or redemption, or other documents
accumulated in the execution of its duties as such Transfer Agent,
as the Transfer Agent may deem expedient, other than those which
the Transfer Agent is itself required to maintain pursuant to
applicable laws and regulations, and the Fund shall assume all
responsibility for any failure thereafter to produce any record,
paper, canceled Share certificate, or other document so returned,
if and when required. The records specified in Appendix C hereto
maintained by the Transfer Agent pursuant to this paragraph 3,
which have not been previously delivered to the Fund pursuant to
the foregoing provisions of this paragraph 3, shall be considered
to be the property of the Fund, shall be made available upon
request for inspection by the officers, employees, and auditors of
the Fund, and records shall be delivered to the Fund upon request
and in any event upon the date of termination of this Agreement,
as specified in Article IX of this Agreement, in the form and
manner kept by the Transfer Agent on such date of termination or
such earlier date as may be requested by the Fund.
4. The Transfer Agent may employ agents or attorneys-in-
fact at the expense of the Fund, and shall not be liable for any
loss or expense arising out of, or in connection with, the actions
or omissions to act of its agents or attorneys-in-fact so long as
the Transfer Agent acts in good faith and without negligence or
willful misconduct in connection with the selection of such agents
or attorneys-in-fact.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or
omissions to act or otherwise, except for any loss or damage
arising out of its own failure to act in good faith, negligence or
willful misconduct.
6. The Fund shall indemnify and exonerate, save and hold
harmless the Transfer Agent from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including attorney's fees) and liabilities of any and every
nature which the Transfer Agent may sustain or incur or which may
be asserted against the Transfer Agent by any person by reason of
or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith and without negligence or willful
misconduct of in reliance upon (i) any provision of this
Agreement; (ii) the Prospectus; (iii) any instruction or order
including, without limitation, any computer tape reasonably
believed by the Transfer Agent to have been received from an
Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized Officer
of the Fund; (v) any Certificate or other instructions of an
Officer; of (vi) any opinion of legal counsel for the Fund or the
Transfer Agent. The Fund shall indemnify and exonerate, save and
hold the Transfer Agent harmless from and against any and all
claims (whether with or without basis in fact or law), demands,
expenses (including attorney's fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by the Transfer Agent in good faith in connection with its
appointment or in reliance upon any law, act, regulation or any
interpretation of the same even though such law, act or regulation
may thereafter have been altered, changed, amended or repealed.
7. Specifically, but not by way of limitation, the Fund
shall indemnify and exonerate, save and hold the Transfer Agent
harmless from and against any and all claims (whether with or
without basis in fact or law), demands, expenses (including
attorney's fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent by any person in connection with the
genuineness of a Share certificate, the Transfer Agent's capacity
and authorization to issue Shares and the form and amount of
authorized Shares.
8. Notwithstanding the foregoing, the Transfer Agent
shall be liable to the Fund with respect to any redemption check
which the Transfer Agent pays on which the signature of the drawer
is forged, but only to the extent of the lesser of (a) the amount
of such redemption check minus $2,500.00 and (b) the amount of
insurance proceeds received by the Transfer Agent with respect to
such redemption check and only if, and for so long as, each of the
following conditions is satisfied: (i) insurance with respect to
Fund redemption checks is maintained by the Transfer Agent, and
(ii) the Fund pays to the Transfer Agent monthly the amount which
the Transfer Agent determines to be the Fund's pro rata share of
the cost of such insurance coverage. The Fund agrees that the
insurance may be discontinued or canceled without any prior
notice, and that the Transfer Agent shall at all times have the
absolute right, without any prior notice to the Fund, to cease to
maintain such insurance, and the Transfer Agent agrees to notify
the Fund promptly upon canceling or discontinuing any such
insurance or upon learning of any such cancellation or
discontinuance. In the event such insurance is not maintained, or
in the event the Fund does not pay monthly to the Transfer Agent
the amount which the Transfer Agent determines to be the Fund's
pro rate share of the cost of such insurance coverage, the
Transfer Agent shall not be liable for any loss or damage,
including counsel fees, resulting from its paying or not paying
any redemption check, unless such loss or damage arises o
9. At any time the Transfer Agent may apply to an Officer
of the Fund for written instructions with respect to any matter
arising in connection with the Transfer Agent's duties and
obligations under this Agreement, and the Transfer Agent shall not
be liable for any action taken or permitted by it in good faith in
accordance with such written instructions. Such application by
the transfer Agent for written instructions from an Officer of the
Fund may, at the option of the Transfer Agent, set forth in
writing any action proposed to be taken or omitted by the Transfer
Agent with respect to its duties or obligations under this
Agreement and the date on and/or after which such action shall be
taken, and the Transfer Agent shall not be liable for any action
taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein unless,
prior to taking or omitting any such action, the Transfer Agent
has received written instructions in response to such application
specifying the action to be taken or omitted. The Transfer Agent
may consult counsel to the Fund, or 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 accordance with
the advice or opinion of counsel to the Fund or its own counsel.
10. When mail is used for delivery of non-negotiable Share
certificates, the value of which does not exceed the limits of the
Transfer Agent's Blanket Bond, the Transfer Agent shall send such
non-negotiable Share certificates by first class mail, and such
deliveries will be covered while in transit by the Transfer
Agent's Blanket Bond. Non-negotiable Share certificates, the
value of which exceed the limits of the Transfer Agent's Blanket
Bond, will be sent by insured registered mail. Negotiable Share
certificates will be sent by insured registered mail. The
Transfer Agent shall advise the Fund of any Share certificates
returned as undelivered after being mailed as herein provided for.
11. The Transfer Agent may issue new Share certificates in
place of Share certificates represented to have been lost, stolen,
or destroyed upon receiving instructions in writing from an
Officer and indemnity satisfactory to the Transfer Agent. Such
instruction from the Fund shall be in such form as approved by the
Board of Trustees of the Fund in accordance with the provisions of
law or of the By-Laws of the Fund governing such matters. If the
Transfer Agent receives written notification from the owner of the
lost, destroyed, or stolen Share certificate within a reasonable
time after he has notice of it, the Transfer Agent shall promptly
notify the Fund and shall act pursuant to written instructions
signed by an Officer. If the Fund receives such written
notification from the owner of the lost, destroyed or stolen Share
certificate within a reasonable time after he has notice of it,
the Fund shall promptly notify the Transfer Agent and the Transfer
Agent shall act pursuant to written instructions signed by an
Officer. The Transfer Agent shall not be liable for any act done
or omitted by it pursuant to the written instructions described
herein. The Transfer Agent may issue new Share certificates in
exchange for, and upon surrender of, mutilated Share certificates.
12. The Transfer Agent will issue and mail subscription
warrants for Shares of beneficial interest, Shares representing
stock dividends, exchanges or splits, or act as conversion agent
upon receiving written instructions from an Officer and such other
documents as the Transfer Agent may deem necessary.
13. The Transfer Agent will supply shareholder lists to
the Fund from time to time upon receiving a request therefor from
an Officer of the Fund.
14. In case of any requests or demands for the inspection
of the shareholder records of the Fund, the Transfer Agent will
endeavor to notify the Fund and to secure instructions from an
Officer as to such inspection. The Transfer Agent reserves the
right, however, to exhibit the Shareholder records to any person
whenever it receives an opinion from its counsel that there is a
reasonable likelihood that the Transfer Agent will be held liable
for the failure to exhibit the shareholder records to such person.
15. At the request of an Officer, the Transfer Agent will
address and mail such appropriate notices to shareholders as the
Fund may direct.
16. Notwithstanding any of the foregoing provisions of
this Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares,
the sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend
by the Fund, or the legality of the issue of any Shares in payment
of any stock dividend; or
(d) The legality of any recapitalization or
readjustment of the Shares.
17. The Transfer Agent shall be entitled to receive and
the Fund hereby agrees to pay to the Transfer Agent for its
performance hereunder, including its performance of the duties and
functions set forth in Appendix C hereto, (i) its reasonable out-
of-pocket expenses (including legal expenses and attorney's fees)
incurred in connection with this Agreement and its performance
hereunder and (ii) such compensation as may be agreed upon in
writing from time to time by the Transfer Agent and the Fund.
18. The Transfer Agent 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 Transfer Agent.
ARTICLE IX
TERMINATION
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 90 days after
the date of receipt 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 or Clerk or any Assistant Secretary or Assistant Clerk,
electing to terminate this Agreement and designating a successor
transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Fund shall, on or before the
termination date, deliver to the Transfer Agent a copy of a
resolution of its Board of Trustees certified by the Secretary or
Clerk or any Assistant Secretary or Assistant Clerk designating a
successor transfer agent or transfer agents. In the absence of
such designation by the Fund, the Transfer Agent may designate a
successor transfer agent. If the Fund fails to designate a
successor transfer agent and if the Transfer Agent is unable to
find a successor transfer agent, the Fund shall, upon the date
specified in the notice of termination of this Agreement and
delivery of the records maintained hereunder, be deemed to be its
own transfer agent and the Transfer Agent shall thereby be
relieved of all duties and responsibilities pursuant to this
Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in
the Prospectus which would increase or alter the duties and
obligations of the Transfer Agent hereunder, it shall advise the
Transfer Agent of such proposed change at least 30 days prior to
the intended date of the same, and shall proceed with such change
only if it shall have received the written consent of the Transfer
Agent thereto.
2. 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 first above written,
or at such other place as the Fund may from time to time designate
in writing.
3. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Transfer Agent
shall be sufficiently given if addressed to the Transfer Agent and
mailed or delivered to it at its office at 90 Washington Street,
New York, New York 10015 or at such other place as the Transfer
Agent may from time to time designate in writing.
4. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with
the formality of this Agreement, and, except for an amendment to
Appendix B or Appendix C hereto, authorized or approved by a
resolution of the Board of Trustees of the Fund.
5. 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 Transfer
Agent.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
7. 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.
8. The provisions of this Agreement are intended to
benefit only the Transfer Agent and the Fund, and no rights shall
be granted to any other person by virtue of this Agreement.
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 the Board of Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.
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 GROWTH FUND
By:
Nicholas E.E. DeStefano
Executive Vice President
Attest:
Douglas R. Jamieson
Secretary
THE BANK OF NEW YORK
By:
Attest:
STATE OF NEW YORK
COUNTY OF NEW YORK
On this _____________ day of ____________________, 198___,
before me personally appeared __________________________ to me
known, who, being duly sworn, said that he/she is a
______________________ of THE BANK OF NEW YORK, a corporation
described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and
that he/she signed his/her name thereto by like authority.
Notary Public
STATE OF _________________
COUNTY OF _______________
On this 2nd day of March, 1987, before me personally
appeared Nicholas E.E. DeStefano to me known, who, being by me
duly sworn, said that he/she is an Executive Vice President of The
Gabelli Growth Fund, the Massachusetts business trust described in
and which executed the foregoing instrument; that he/she knows the
seal of said trust; that the seal affixed to said instrument is
such seal; that it was so affixed by authority of the Trustees of
said trust, and that he/she signed his/her name thereto by like
authority.
John A. Passantino
Notary Public
TRANSFER AGENCY AGREEMENT
APPENDIX A
The undersigned, being the Executive Vice President and
Secretary of The Gabelli Growth Fund, a Massachusetts Business
Trust (the "Fund"), do certify that:
The following individuals 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 execute any Certificate,
instruction, notice or other instrument, including an amendment to
Appendix B hereto, or to give oral advices on behalf of the Fund,
and the signature set forth opposite their respective names and
their true and correct signatures:
Name Signature
Mario J. Gabelli
Nicholas E.E. DeStefano
Elizabeth R. Bramwell
Douglas R. Jamieson
Irene Smolicz
Bernadette N. Finn
Dana E. Messina
Lesley M. Jones
Dated: February 27, 1987
Nicholas E.E. DeStefano
Executive Vice President
Douglas R. Jamieson
Secretary
TRANSFER AGENCY AGREEMENT
APPENDIX B
The undersigned, being the Executive Vice President and
Secretary of The Gabelli Growth Fund, a Massachusetts Business
trust (the "Fund"), do certify that:
The following is a list of the Series of the Fund issued
and/or authorized by the Fund as of the date of this Transfer
Agreement:
An indefinite number of shares of beneficial interest of the Fund
("Shares"), having par value of $.01 per share, are authorized;
10,000 shares have been issued to Gabelli Fund, Inc., a Delaware
Corporation having its principal office and place of business at
655 Third Avenue, New York, New York, 10017. As of the date
hereof there are no other series of Fund Shares.
Dated: February 27, 1987
Nicholas E.E. DeStefano
Executive Vice President
Douglas R. Jamieson
Secretary
1
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<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
<PAGE>
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 Growth
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 to 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 GROWTH 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.
MARIO J. GABLELLI
Mario J. Gabelli
Chairman and Trustee
BRUCE N. ALPERT
Bruce N. Alpert
President and Treasurer
FELIX J. CHRISTIANA
Felix J. Christiana
Trustee
ANTHONY J. COLAVITA
Anthony J. Colavita
Trustee
JAMES P. CONN
James P. Conn
Trustee
KARL OTTO POHL
Karl Otto Pohl
Trustee
ANTHONY R. PUSTORINO
Anthony R. Pustorino
Trustee
ANTHONIE TORNA
Anthonie Torna
Trustee
ANTHONIE VAN EKRIS
Anthonie van Ekris
Trustee
<PAGE>
GABELLI FUNDS, INC.
655 Third Avenue
New York, New York 10017
February 27, 1987
To the Board of Trustees
of The Gabelli Growth 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 February 27, 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: ILLEGIBLE
ACCEPTED:
THE GABELLI GROWTH FUND
By: ILLEGIBLE
<PAGE>
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GROWTH FUND
The Gabelli Growth 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 26, 1997
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<SERIES>
<NUMBER> 001
<NAME> GABELLI GROWTH FUND
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
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<TOTAL-LIABILITIES> 22,094,767
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<SHARES-COMMON-STOCK> 25,249,834
<SHARES-COMMON-PRIOR> 24,059,631
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<OVERDISTRIBUTION-GAINS> (206,977)
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<DIVIDEND-INCOME> 8,449,263
<INTEREST-INCOME> 568,231
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<EQUALIZATION> 0
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<NUMBER-OF-SHARES-REDEEMED> (19,258,689)
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<ACCUMULATED-NII-PRIOR> 0
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