Registrant Nos. 33-10583 and 811-4873
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT No.
POST-EFFECTIVE AMENDMENT No. 18 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT No. 19 [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 (800) 422-3554
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center, Rye, New York 10580-1434
(Name and Address of Agent for Service)
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Copies to:
James E. McKee, Esq. Richard T. Prins, Esq.
The Gabelli Growth Fund Skadden, Arps, Slate, Meagher
& Flom
One Corporate Center Four Time Square
Rye, New York 10580-1434 New York, New York 10036
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to Rule 485(b); or
[X] on May 1, 2000 pursuant to paragraph (b); or
[ ] 60 days after filing pursuant to Rule 485(a)(1); or
[ ] on [____] pursuant to paragraph (a)(1); or
[ ] 75 days after filing pursuant to Rule 485(a)(2); or
[ ] on [____] pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
<PAGE>
THE
GABELLI
GROWTH
FUND
CLASS AAA SHARES
PROSPECTUS
MAY 1, 2000
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
SHARES DESCRIBED IN THIS PROSPECTUS OR DETERMINED WHETHER THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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INVESTMENT AND PERFORMANCE SUMMARY
INVESTMENT OBJECTIVE:
The Gabelli Growth Fund (the "Fund") seeks to provide capital appreciation.
Capital is the amount of money you invest in the Fund. Capital appreciation is
an increase in the value of your investment. The Fund's secondary goal is to
produce current income.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund will primarily invest in common stocks and may also invest in
securities which may be converted into common stocks. The Fund may also invest
in foreign securities. The Fund focuses on securities of companies which appear
to have favorable, yet undervalued, prospects for earnings growth and price
appreciation. The Fund's investment adviser, Gabelli Funds, LLC (the "Adviser"),
invests the Fund's assets in companies which it believes have above-average or
expanding market shares, profit margins and returns on equity.
PRINCIPAL RISKS:
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. Stocks are subject to market, economic and business
risks that cause their prices to fluctuate. When you sell Fund shares, they may
be worth less than what you paid for them. Consequently, you can lose money by
investing in the Fund. Foreign securities are subject to currency, information
and political risks. The Fund is also subject to the risk that the Adviser's
judgments about the above-average growth potential of particular companies'
stocks is incorrect and the perceived value of such stocks is not realized by
the market, or their prices decline.
WHO MAY WANT TO INVEST:
The Fund's Class AAA Shares offered herein are offered only to investors who
acquire them directly through Gabelli & Company, Inc., the Fund's distributor
(the "Distributor"), or through a select number of financial intermediaries with
whom the Distributor has entered into selling agreements specifically
authorizing them to offer Class AAA Shares.
The Fund may appeal to you if:
o you are a long-term investor
o you seek both growth of capital and some income
o you believe that the market will favor growth over value stocks over
the long term
o you wish to include a growth strategy as a portion of your over all
investments
You may not want to invest in the Fund if:
o you are seeking a high level of current income
o you are conservative in your investment approach
o you seek stability of principal more than potential growth of capital
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PERFORMANCE:
The bar chart and table shown below provide an indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year (since 1990), and by showing how the Fund's average annual returns for one
year, five years, ten years and the life of the Fund compare to those of a
broad-based securities market index. As with all mutual funds, the Fund's past
performance does not predict how the Fund will perform in the future. Both the
chart and the table assume reinvestment of dividends and distributions.
THE GABELLI GROWTH FUND
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1990 -2.0%
1991 34.3%
1992 4.5%
1993 11.3%
1994 -3.4%
1995 32.7%
1996 19.4%
1997 42.6%
1998 29.8%
1999 46.3%
During the period shown in the bar chart, the highest return for a quarter was
30.2% (quarter ended December 31, 1998) and the lowest return for a quarter was
(14.5)% (quarter ended September 30, 1998).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS SINCE APRIL 10,
(FOR THE PERIODS ENDED DECEMBER 31, 1999) PAST ONE YEAR PAST FIVE YEARS PAST TEN YEARS 1987*
- ----------------------------------------- ------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
The Gabelli Growth Fund Class AAA Shares.......... 46.25% 33.82% 20.29% 21.35%
S&P(REGISTRATION MARK) 500 Stock Index**.......... 21.03% 28.54% 18.19% 16.13%
<FN>
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* Commencement of investment operations.
** The S&P(REGISTRATION MARK) 500 Composite Stock Price Index is a widely
recognized, unmanaged index of common stock prices. The performance of the
Index does not include expenses or fees.
</FN>
</TABLE>
FEES AND EXPENSES OF THE FUND:
This table describes the fees and expenses that you may pay if you buy and hold
Class AAA Shares of the Fund.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):
Management Fees.................................................... 1.00%
Distribution (Rule 12b-1) Expenses................................. 0.25%
Other Expenses..................................................... 0.12%
----
Total Annual Fund Operating Expenses............................... 1.37%
====
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EXPENSE EXAMPLE:
This example is intended to help you compare the cost of investing in Class AAA
Shares of the Fund with the cost of investing in other mutual funds. The example
assumes (1) you invest $10,000 in the Fund for the time periods shown, (2) you
redeem your shares at the end of those periods, (3) your investment has a 5%
return each year and (4) the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$139 $434 $750 $1,646
INVESTMENT AND RISK INFORMATION
The Fund's primary investment objective is capital appreciation, and current
income is a secondary objective. The investment objective of the Fund may not be
changed without shareholder approval.
The Fund focuses on securities of companies which appear to have favorable, yet
undervalued, prospects for earnings growth and price appreciation. The Adviser
will invest the Fund's assets primarily in companies which it believes have
above-average or expanding market shares, profit margins and returns on equity.
The Adviser will sell any Fund investments which lose their perceived value when
compared to other investment alternatives.
The Adviser uses fundamental security analysis to develop earnings forecasts for
companies and to identify investment opportunities. The Adviser bases its
analysis on general economic and industry data 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 Adviser makes
investment decisions first by looking at individual companies and then by
scrutinizing their growth prospects in relation to their industries and the
overall economy. The Adviser seeks to invest in companies with high future
earnings potential relative to their current market valuations.
The Fund's assets will be invested primarily in a broad range of readily
marketable equity securities consisting of common stock, preferred stock and
securities which may be converted at a later time into common stock. Many of the
common stocks the Fund will buy will not pay dividends; instead, stocks will be
bought for the potential that their prices will increase, providing capital
appreciation for the Fund. The value of equity securities will fluctuate due to
many factors, including the past and predicted earnings of the issuer, the
quality of the issuer's management, general market conditions, the forecasts for
the issuer's industry and the value of the issuer's assets. Holders of equity
securities only have rights to value in the company after all debts have been
paid, and they could lose their entire investment in a company that encounters
financial difficulty. Warrants are rights to purchase securities at a specified
time at a specified price.
The Fund may also use the following investment techniques:
o FOREIGN SECURITIES. The Fund may invest up to 25% of its total assets
in securities of non-U.S. issuers.
o DEFENSIVE INVESTMENTS. When adverse market or economic conditions
occur, the Fund may temporarily invest all or a portion of its assets
in defensive investments. Such investments include investment grade
debt securities, obligations of the U.S. Government and its agencies
and instrumentalities, and short-term money market instruments. When
following a defensive strategy, the Fund will be less likely to achieve
its investment goal.
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Investing in the Fund involves the following risks:
o EQUITY RISK. The principal risk of investing in the Fund is equity
risk. Equity risk is the risk that the prices of the securities held by
the Fund will change due to general market and economic conditions,
perceptions regarding the industries in which the companies issuing the
securities participate and the issuer company's particular
circumstances.
o FUND AND MANAGEMENT RISK. The Fund invests in growth stocks issued by
larger companies. The Fund's price may decline if the market favors
other stocks or small capitalization stocks over stocks of larger
companies. If the Adviser is incorrect in its assessment of the growth
prospects of the securities it holds, then the value of the Fund's
shares may decline.
o FOREIGN SECURITIES RISK. Prices of the Fund's investments in foreign
securities may decline because of unfavorable foreign government
actions, political instability or the absence of accurate information
about foreign issuers. Also, a decline in the value of foreign
currencies relative to the U.S. dollar will reduce the value of
securities denominated in those currencies. Foreign securities are
sometimes less liquid and harder to value than securities of U.S.
issuers.
MANAGEMENT OF THE FUND
THE ADVISER. Gabelli Funds, LLC, with principal offices located at One Corporate
Center, Rye, New York 10580-1434, serves as investment adviser to the Fund. The
Adviser makes investment decisions for the Fund and continuously reviews and
administers the Fund's investment program under the supervision of the Fund's
Board of Trustees. The Adviser also manages several other open-end and
closed-end investment companies in the Gabelli family of funds. The Adviser is a
New York limited liability company organized in 1999 as successor to Gabelli
Group Capital Partners, Inc. (formerly named Gabelli Funds, Inc.), a New York
corporation organized in 1980. The Adviser is a wholly-owned subsidiary of
Gabelli Asset Management Inc. ("GAMI"), a publicly held company listed on the
New York Stock Exchange ("NYSE").
As compensation for its services and the related expenses borne by the Adviser,
for the fiscal year ended December 31, 1999, the Fund paid the Adviser a fee
equal to 1.00% of the value of the Fund's average daily net assets.
THE PORTFOLIO MANAGER. Howard F. Ward is primarily responsible for the
day-to-day management of the Fund. Mr. Ward is a Portfolio Manager of the
Adviser, and he joined the Adviser in 1995. 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.
RULE 12B-1 PLAN. The Fund has adopted a plan under Rule 12b-1 (the "Plan") which
authorizes payments by the Fund on an annual basis of 0.25% of the Fund's
average daily net assets attributable to Class AAA Shares to finance
distribution of the Fund's Class AAA Shares. The Fund may make payments under
the Plan for the purpose of financing any activity primarily intended to result
in the sale of Class AAA Shares of the Fund. To the extent any activity is one
that the Fund may finance without a distribution plan, the Fund may also make
payments to compensate such activity outside of the Plan and not be subject to
its limitations.
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PURCHASE OF SHARES
You can purchase the Fund's shares on any day the NYSE is open for trading (a
"Business Day"). You may purchase shares directly through the Distributor,
directly from the Fund through the Fund's transfer agent or through registered
broker-dealers that have entered into selling agreements with the Distributor.
o BY MAIL OR IN PERSON. You may open an account by mailing a completed
subscription order form with a check or money order payable to "The
Gabelli Growth Fund" to:
BY MAIL BY PERSONAL DELIVERY
------- --------------------
THE GABELLI FUNDS THE GABELLI FUNDS
P.O. BOX 8308 C/O BFDS
BOSTON, MA 02266-8308 66 BROOKS DRIVE
BRAINTREE, MA 02184
You can obtain a subscription order form by calling 1-800-GABELLI
(1-800-422-3554). Checks made payable to a third party and endorsed by the
depositor are not acceptable. For additional investments, send a check to the
above address with a note stating your exact name and account number, the name
of the Fund and class of shares you wish to purchase.
o BY BANK WIRE. To open an account using the bank wire transfer system,
first telephone the Fund at 1-800-GABELLI (1-800-422-3554) to obtain a
new account number. Then instruct a Federal Reserve System member bank
to wire funds to:
STATE STREET BANK AND TRUST COMPANY
[ABA #011-0000-28 REF DDA #99046187]
RE: THE GABELLI GROWTH FUND
ACCOUNT #__________
ACCOUNT OF [REGISTERED OWNERS]
225 FRANKLIN STREET, BOSTON, MA 02110
If you are making an initial purchase, you should also complete and
mail a subscription order form to the address shown under "By Mail."
Note that banks may charge fees for wiring funds, although State Street
Bank and Trust Company ("State Street") will not charge you for
receiving wire transfers.
SHARE PRICE. The Fund sells its Class AAA Shares at the net asset value next
determined after the Fund receives your completed subscription order form and
your payment. See "Pricing of Fund Shares" for a description of the calculation
of net asset value.
MINIMUM INVESTMENTS. Your minimum initial investment must be at least $1,000.
See "Retirement Plans" and "Automatic Investment Plan" regarding minimum
investment amounts applicable to such ~plans. There is no minimum for subsequent
investments. Broker-dealers may have different minimum investment requirements.
RETIREMENT PLANS. The Fund has available a form of IRA, "Roth" IRA and Education
IRA for investment in Fund shares that may be obtained from the Distributor by
calling 1-800-GABELLI (1-800-422-3554). Self-employed investors may purchase
shares of the Fund through tax-deductible contributions to existing retirement
plans for self-employed persons, known as "Keogh" or "H.R.-10" plans. The Fund
does not currently act as a sponsor to such Plans. Fund shares may also 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." The minimum initial investment in all
such retirement plans is $250. There is no minimum subsequent investment
requirement for retirement plans.
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AUTOMATIC INVESTMENT PLAN. The Fund offers an automatic monthly investment plan.
There is no minimum initial investment for accounts establishing an automatic
investment plan. Call the Distributor at 1-800-GABELLI (1-800-422-3554) for more
details about the plan.
TELEPHONE OR INTERNET INVESTMENT PLAN. You may purchase additional shares of the
Fund by telephone and/or over the Internet if your bank is a member of the
Automated Clearing House ("ACH") system. You must also have a completed,
approved Investment Plan application on file with the Fund's transfer agent.
There is a minimum of $100 for each telephone or Internet investment. To
initiate an ACH purchase, please call 1-800-GABELLI (1-800-422-3554) or
1-800-872-5365 or visit our website @ www.gabelli.com.
GENERAL. State Street will not issue share certificates unless requested by you.
The Fund reserves the right to (i) reject any purchase order if, in the opinion
of the Fund's management, it is in the Fund's best interest to do so, (ii)
suspend the offering of shares for any period of time and (iii) waive the Fund's
minimum purchase requirement.
REDEMPTION OF SHARES
You can redeem shares of the Fund on any Business Day without a redemption fee.
The Fund may temporarily stop redeeming its shares when the NYSE is closed or
trading on the NYSE is restricted, when an emergency exists and the Fund cannot
sell its shares or accurately determine the value of its assets, or if the
Securities and Exchange Commission orders the Fund to suspend redemptions.
The Fund redeems its shares at the net asset value next determined after the
Fund receives your redemption request. See "Pricing of Fund Shares" for a
description of the calculation of net asset value.
You may redeem shares through the Distributor or directly from the Fund through
the Fund's transfer agent.
o BY LETTER. You may mail a letter requesting redemption of shares to:
THE GABELLI FUNDS, P.O. BOX 8308, BOSTON, MA 02266-8308. Your letter
should state the name of the Fund and the share class, the dollar
amount or number of shares you wish to redeem and your account number.
You must sign the letter in exactly the same way the account is
registered and if there is more than one owner of shares, all must
sign. A signature guarantee is required for each signature on your
redemption letter. You can obtain a signature guarantee from financial
institutions such as commercial banks, brokers, dealers and savings
associations. A notary public cannot provide a signature guarantee.
o BY TELEPHONE OR THE INTERNET. You may redeem your shares in an account
directly registered with State Street by calling either 1-800-GABELLI
(1-800-422-3554) or 1-800-872-5365 (617-328-5000 from outside the
United States) or visiting our website at www.gabelli.com, subject to a
$25,000 limitation. You may not redeem shares held through an IRA by
telephone or the Internet. If State Street properly acts on telephone
or Internet instructions and follows reasonable procedures to protect
against unauthorized transactions, neither State Street nor the Fund
will be responsible for any losses due to telephone or Internet
transactions. You may be responsible for any fraudulent telephone or
Internet order as long as State Street or the Fund takes reasonable
measures to verify the order. You may request that redemption proceeds
be mailed to you by check (if your address has not changed in the prior
30 days), forwarded to you by bank wire or invested in another mutual
fund advised by the Adviser (see "Exchange of Shares").
1. TELEPHONE OR INTERNET REDEMPTION BY CHECK. The Fund will make
checks payable to the name in which the account is registered
and normally will mail the check to the address of record
within seven days.
2. TELEPHONE OR INTERNET REDEMPTION BY BANK WIRE. The Fund accepts
telephone or Internet requests for wire redemption in amounts
of at least $1,000. The Fund will send a wire to either
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a bank designated on your subscription order form or on a subsequent letter with
a guaranteed signature. The proceeds are normally wired on the next Business
Day.
AUTOMATIC CASH WITHDRAWAL PLAN. You may automatically redeem shares on a
monthly, quarterly or annual basis if you have at least $10,000 in your account
and if your account is directly registered with State Street. Call 1-800-GABELLI
(1-800-422-3554) for more information about this plan.
INVOLUNTARY REDEMPTION. The Fund may redeem all shares in your account (other
than an IRA account) if its value falls below $1,000 as a result of redemptions
(but not as a result of a decline in net asset value). You will be notified in
writing if the Fund initiates such action and allowed 30 days to increase the
value of your account to at least $1,000.
REDEMPTION PROCEEDS. A redemption request received by the Fund will be effected
at the net asset value next determined after the Fund receives the request. If
you request redemption proceeds by check, the Fund will normally mail the check
to you within seven days after receipt of your redemption request. If you
purchased your Fund shares by check or through the Automatic Investment Plan,
you may not receive proceeds from your redemptions until the check clears, which
may take up to as many as 15 days following purchase. While the Fund will delay
the processing of the redemption until the check clears, your shares will be
valued at the next determined net asset value after receipt of your redemption
request.
The Fund may pay you your redemption proceeds wholly or partly in portfolio
securities. Payments would be made in portfolio securities only in the rare
instance that the Fund's Board of Trustees believes that it would be in the
Fund's best interest not to pay redemption proceeds in cash.
EXCHANGE OF SHARES
You can exchange shares of the Fund you hold for shares of the same class of
another fund managed by the Adviser or their affiliates based on their relative
net asset values. To obtain a list of the funds whose shares you may acquire
through an exchange call 1-800-GABELLI (1-800-422-3554). You may also exchange
your shares for shares of a money market fund managed by the Adviser or its
affiliates.
In effecting an exchange:
o you must meet the minimum investment requirements for the fund
whose shares you purchase through exchange
o if you are exchanging into a fund with a higher sales charge,
you must pay the difference at the time of exchange
o you may realize a taxable gain or loss
o you should read the prospectus of the fund whose shares you are
purchasing through exchange. Call 1-800-GABELLI(1-800-422-3554)
to obtain the prospectus.
You may exchange shares through the Distributor, directly through the Fund's
transfer agent or through a registered broker-dealer.
o EXCHANGE BY TELEPHONE. You may give exchange instructions by telephone
by calling 1-800-GABELLI (1-800-422-3554). You may not exchange shares
by telephone if you hold share certificates.
o EXCHANGE BY MAIL. You may send a written request for exchanges to: THE
GABELLI FUNDS, P.O. BOX 8308, BOSTON, MA 02266-8308. Your letter should
state your name, your account number, the dollar amount or number of
shares you wish to exchange, the name and class of the fund whose
shares you wish to exchange, and the name of the fund whose shares you
wish to acquire.
o EXCHANGE THROUGH THE INTERNET. You may also give exchange instructions
via the Internet at www.gabelli.com. You may not exchange shares
through the Internet if you hold share certificates.
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We may modify or terminate the exchange privilege at any time. You will be given
notice 60 days prior to any material change in the exchange privilege.
PRICING OF FUND SHARES
The Fund's net asset value per share of the Class AAA Shares is calculated on
each Business Day. The NYSE is open Monday through Friday, but currently is
scheduled to be closed on New Year's Day, Dr. Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent
Monday when a holiday falls on a Saturday or Sunday, respectively.
The Fund's net asset value per share of the Class AAA Shares is determined as of
the close of regular trading on the NYSE, normally 4:00 p.m., Eastern Time. Net
asset value 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 its 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, which
the Trustees of the Fund believe represents fair value. The price of Fund shares
for purposes of purchase and redemption orders will be based upon the next
calculation of net asset value after the purchase or redemption order is
received in proper form.
Because the Fund is not open for business every day that its assets trade, the
net asset value of the Fund's shares may change on days when shareholders will
not be able to purchase or redeem the Fund's shares.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to pay dividends and capital gains distributions, if any, on an
annual basis. You may have dividends or capital gains distributions that are
declared by the Fund automatically reinvested at net asset value in additional
shares of the Fund. You will make an election to receive dividends and
distributions in cash or Fund shares at the time you purchase your shares. You
may change this election 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.
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net investment
income and net realized capital gains. Capital gains may be taxed at different
rates depending on the length of time the Fund holds the asset giving rise to
such capital gains. Dividends out of net investment income and distributions of
net realized short-term capital gains (i.e. gains from assets held by the Fund
for one year or less) are taxable to you as ordinary income. Distributions of
net long-term capital gains are taxable to you at long-term capital gain rates.
The Fund's distributions, whether you receive them in cash or reinvest them in
additional shares of the Fund, generally will be subject to federal, state or
local taxes. An exchange of the Fund's shares for shares of another fund will be
treated for tax purposes as a sale of the Fund's shares, and any gain you
realize on such a transaction generally will be taxable. Foreign shareholders
may be subject to a federal withholding tax.
This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of your investment
in the Fund.
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance for the past five fiscal years of the Fund. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund's Class AAA Shares. This information has been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report along with the
Fund's financial statements and related notes are included in the annual report,
which is available upon request.
Per share amounts for the Fund's Class AAA Shares outstanding throughout each
fiscal year ended December 31,
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---------- ---------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of year ...... $ 35.40 $ 28.63 $ 24.14 $ 22.16 $ 19.68
---------- ---------- --------- -------- --------
Net investment income/(loss) ............ (0.23) (0.07) (0.06) 0.03 0.05
Net realized and unrealized
gain on investments ................ 16.50 8.58 10.34 4.27 6.39
---------- ---------- --------- -------- --------
Total from investment operations ........ 16.27 8.51 10.28 4.30 6.44
---------- ---------- --------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ................... - - (0.00)(a) (0.02) (0.05)
In excess of net investment income ...... - - (0.00)(a) -
Net realized gain on investments ........ (5.16) (1.74) (5.79) (2.30) (3.91)
In excess of net realized gain
on investments ..................... - (0.00)(a) (0.00)(a) - -
---------- ---------- --------- -------- --------
Total distributions ..................... (5.16) (1.74) (5.79) (2.32) (3.96)
---------- ---------- --------- -------- --------
Net asset value, end of year ............ $ 46.51 $ 35.40 $ 28.63 $ 24.14 $ 22.16
========== ========== ========= ======== ========
Total return(DAGGER)..................... 46.3% 29.8% 42.6% 19.4% 32.7%
========== ========== ========= ======== ========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of year (in 000's)....... $3,158,448 $1,864,556 $ 943,985 $609,405 $533,041
Ratio of net investment income/(loss)
to average net assets .............. (0.68)% (0.33)% (0.23)% 0.12% 0.22%
Ratio of operating expenses
to average net assets .............. 1.37% 1.41% 1.43% 1.43% 1.44%
Portfolio turnover rate ................. 52% 40% 83% 88% 140%
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<FN>
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) Amount represents less than $0.005 per share.
</FN>
</TABLE>
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THE GABELLI GROWTH FUND
CLASS AAA SHARES
================================================================================
FOR MORE INFORMATION:
For more information about the Fund, the following documents are available free
upon request:
ANNUAL/SEMI-ANNUAL REPORTS:
The Fund's semi-annual and annual reports to shareholders contain additional
information on the Fund's investments. In the Fund's annual report, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Fund, including its
operations and investments policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
- --------------------------------------------------------------------------------
You can get free copies of these documents and prospectuses of other funds in
the Gabelli family, or request other information and discuss your questions
about the Fund by contacting:
The Gabelli Growth Fund
One Corporate Center
Rye, NY 10580
Telephone: 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
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You can review the Fund's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. Information on the operation of the Public
Reference Room may be obtained by calling the Commission at 1-202-942-8090. You
can get text-only copies:
o For a fee, by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102 or by calling 1-202-942-8090, or by
electronic request at the following email address: [email protected].
o Free from the Commission's Website at http://www.sec.gov.
(Investment Company Act file no. 811-4873)
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<PAGE>
THE GABELLI GROWTH FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
HTTP://WWW.GABELLI.COM
EMAIL : [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
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QUESTIONS?
Call 1-800-GABELLI
or your investment representative.
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TABLE OF CONTENTS
INVESTMENT AND PERFORMANCE SUMMARY .............. 2-4
INVESTMENT AND RISK INFORMATION ................. 4-5
MANAGEMENT OF THE FUND .......................... 5
Purchase of Shares ......................... 6
Redemption of Shares ....................... 7
Exchange of Shares ......................... 8
Pricing of Fund Shares ..................... 9
Dividends and Distributions ................ 9
Tax Information ............................ 9
FINANCIAL HIGHLIGHTS ............................ 10
<PAGE>
THE
GABELLI
GROWTH
FUND
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
PROSPECTUS
May 1, 2000
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
SHARES DESCRIBED IN THIS PROSPECTUS OR DETERMINED WHETHER THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE
TO STATE OTHERWISE.
<PAGE>
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INVESTMENT AND PERFORMANCE SUMMARY
INVESTMENT OBJECTIVE:
The Gabelli Growth Fund (the"Fund") seeks to provide capital appreciation.
Capital is the amount of money you invest in the Fund. Capital appreciation is
an increase in the value of your investment. The Fund's secondary goal is to
produce current income.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund will primarily invest in common stocks and may also invest in
securities which may be converted into common stocks. The Fund may also invest
in foreign securities. The Fund focuses on securities of companies which appear
to have favorable, yet undervalued, prospects for earnings growth and price
appreciation. The Fund's investment adviser, Gabelli Funds, LLC (the"Adviser"),
invests the Fund's assets in companies which it believes have above-average or
expanding market shares, profit margins and returns on equity.
PRINCIPAL RISKS:
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. Stocks are subject to market, economic and business
risks that cause their prices to fluctuate. When you sell Fund shares, they may
be worth less than what you paid for them. Consequently, you can lose money by
investing in the Fund. Foreign securities are subject to currency, information
and political risks. The Fund is also subject to the risk that the Adviser's
judgments about the above-average growth potential of particular companies'
stocks is incorrect and the perceived value of such stocks is not realized by
the market, or their prices decline.
WHO MAY WANT TO INVEST:
The Fund may appeal to you if:
o you are a long-term investor
o you seek both growth of capital and some income
o you believe that the market will favor growth over value stocks over
the long term
o you wish to include a growth strategy as a portion of your overall
investments
You may not want to invest in the Fund if:
o you are seeking a high level of current income
o you are conservative in your investment approach
o you seek stability of principal more than potential growth of capital
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2
<PAGE>
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PERFORMANCE:
The bar chart and table shown below provide an indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year (since 1990), and by showing how the Fund's average annual returns for one
year, five years, ten years and the life of the Fund compare to those of a
broad-based securities market index. As with all mutual funds, the Fund's past
performance does not predict how the Fund will perform in the future. Both the
chart and the table assume reinvestment of dividends and distributions.
THE GABELLI GROWTH FUND
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1990 -2.0%
1991 34.3%
1992 4.5%
1993 11.3%
1994 -3.4%
1995 32.7%
1996 19.4%
1997 42.6%
1998 29.8%
1999 46.3%
- -----------------
* The bar chart above shows the total returns for Class AAA Shares (not
including sales load). The Class A, Class B and Class C Shares are new
classes of the Fund for which performance is not yet available. The Class
AAA Shares of the Fund are offered in a separate prospectus. The returns
for the Class A, Class B and Class C Shares will be substantially similar
to those of the Class AAA Shares shown in the chart above because all
shares of the Fund are invested in the same portfolio of securities. The
annual returns of the different classes of shares will differ only to the
extent that the expenses of the classes differ.
Class A, B and C Share sales loads are not reflected in the above chart. If
sales loads were reflected, the Fund's returns would be less than those shown.
During the period shown in the bar chart, the highest return for a quarter was
30.2% (quarter ended December 31, 1998) and the lowest return for a quarter was
(14.5)% (quarter ended September 30, 1998).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS SINCE APRIL 10,
(FOR THE PERIODS ENDED DECEMBER 31, 1999) PAST ONE YEAR PAST FIVE YEARS PAST TEN YEARS 1987*
- ----------------------------------------- ------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
The Gabelli Growth Fund Class AAA Shares...... 46.25% 33.82% 20.29% 21.35%
S&P(REGISTRATION MARK) 500 Stock Index**...... 21.03% 28.54% 18.19% 16.13%
- -----------------
<FN>
* Commencement of investment operations.
** The S&P(REGISTRATION MARK) 500 Composite Stock Price Index is a widely
recognized, unmanaged index of common stock prices. The performance of the
Index does not include expenses or fees.
</FN>
</TABLE>
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3
<PAGE>
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FEES AND EXPENSES OF THE FUND:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
--------- --------- ---------
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment:)
Maximum Sales Charge (Load) on Purchases
(as a percentage of offering price) ........................ 5.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption price4) ..................... None 5.00%(3) 1.00%(3)
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):
Management Fees .............................................. 1.00% 1.00% 1.00%
Distribution and Service (Rule 12b-1) Expenses ............... 0.25% 1.00% 1.00%
Other Expenses ............................................... 0.12% 0.12% 0.12%
----- ----- -----
Total Annual Fund Operating Expenses ......................... 1.37% 2.12% 2.12%
===== ===== =====
- --------------------------
<FN>
(1) The sales charge declines as the amount invested increases.
(2) If no sales charge was paid at the time of purchase as part of an
investment that is greater than $2,000,000, shares redeemed within 24
months of such purchase may be subject to a deferred sales charge of
1.00%.
(3) The Fund imposes a sales charge upon redemption of Class B Shares if you
sell your shares within seventy-two months after purchase. The sales
charge declines the longer the investment remains in the Fund. A maximum
sales charge of 1.00% applies to redemptions of Class C Shares within
twenty-four months after purchase.
(4) "Redemption price" equals the net asset value at the time of investment or
redemption, whichever is lower.
</FN>
</TABLE>
EXPENSE EXAMPLE:
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes (1) you
invest $10,000 in the Fund for the time periods shown, (2) you redeem your
shares at the end of those periods, except as noted, (3) your investment has a
5% return each year and (4) the Fund's operating expenses remain the same. Your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Class A Shares.......................................... $ 706 $ 948 $ 1,282 $ 2,127
Class B Shares
- assuming redemption................................. $ 715 $ 964 $ 1,339 $ 2,261
- assuming no redemption.............................. $ 215 $ 664 $ 1,139 $ 2,261
Class C shares
- assuming redemption................................. $ 315 $ 664 $ 1,139 $ 2,452
- assuming no redemption.............................. $ 215 $ 664 $ 1,139 $ 2,452
</TABLE>
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4
<PAGE>
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INVESTMENT AND RISK INFORMATION
The Fund's primary investment objective is capital appreciation, and current
income is a secondary objective. The investment objective of the Fund may not be
changed without shareholder approval.
The Fund focuses on securities of companies which appear to have favorable, yet
undervalued, prospects for earnings growth and price appreciation. The Adviser
will invest the Fund's assets primarily in companies which it believes have
above-average or expanding market shares, profit margins and returns on equity.
The Adviser will sell any Fund investments which lose their perceived value when
compared to other investment alternatives.
The Adviser uses fundamental security analysis to develop earnings forecasts for
companies and to identify investment opportunities. The Adviser bases its
analysis on general economic and industry data 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 Adviser makes
investment decisions first by looking at individual companies and then by
scrutinizing their growth prospects in relation to their industries and the
overall economy. The Adviser seeks to invest in companies with high future
earnings potential relative to their current market valuations.
The Fund's assets will be invested primarily in a broad range of readily
marketable equity securities consisting of common stock, preferred stock and
securities which may be converted at a later time into common stock. Many of the
common stocks the Fund will buy will not pay dividends; instead, stocks will be
bought for the potential that their prices will increase, providing capital
appreciation for the Fund. The value of equity securities will fluctuate due to
many factors, including the past and predicted earnings of the issuer, the
quality of the issuer's management, general market conditions, the forecasts for
the issuer's industry and the value of the issuer's assets. Holders of equity
securities only have rights to value in the company after all debts have been
paid, and they could lose their entire investment in a company that encounters
financial difficulty. Warrants are rights to purchase securities at a specified
time at a specified price.
The Fund may also use the following investment techniques:
o FOREIGN SECURITIES. The Fund may invest up to 25% of its total assets
in securities of non-U.S. issuers.
o DEFENSIVE INVESTMENTS. When adverse market or economic conditions
occur, the Fund may temporarily invest all or a portion of its assets
in defensive investments. Such investments include investment grade
debt securities, obligations of the U.S. Government and its agencies
and instrumentalities, and short-term money market instruments. When
following a defensive strategy, the Fund will be less likely to achieve
its investment goal.
Investing in the Fund involves the following risks:
o EQUITY RISK. The principal risk of investing in the Fund is equity
risk. Equity risk is the risk that the prices of the securities held by
the Fund will change due to general market and economic conditions,
perceptions regarding the industries in which the companies issuing the
securities participate and the issuer company's particular
circumstances.
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5
<PAGE>
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o FUND AND MANAGEMENT RISK. The Fund invests in growth stocks issued by
larger companies. The Fund's price may decline if the market favors
value stocks over growth stocks, or small capitalization stocks over
stocks of larger companies. If the Adviser is incorrect in its
assessment of the growth prospects of the securities it holds, then the
value of the Fund's shares may decline.
o FOREIGN SECURITIES RISK. Prices of the Fund's investments in foreign
securities may decline because of unfavorable foreign government
actions, political instability or the absence of accurate information
about foreign issuers. Also, a decline in the value of foreign
currencies relative to the U.S. dollar will reduce the value of
securities denominated in those currencies. Foreign securities are
sometimes less liquid and harder to value than securities of U.S.
issuers.
MANAGEMENT OF THE FUND
THE ADVISER. Gabelli Funds, LLC, with principal offices located at One Corporate
Center, Rye, New York 10580-1434, serves as investment adviser to the Fund. The
Adviser makes investment decisions for the Fund and continuously reviews and
administers the Fund's investment program under the supervision of the Fund's
Board of Trustees. The Adviser also manages several other open-end and
closed-end investment companies in the Gabelli family of funds. The Adviser is a
New York limited liability company organized in 1999 as successor to Gabelli
Group Capital Partners, Inc. (formerly named Gabelli Funds, Inc.) a New York
corporation organized in 1980. The Adviser is a wholly-owned subsidiary of
Gabelli Asset Management Inc.("GAMI"), a publicly held company listed on the New
York Stock Exchange ("NYSE").
As compensation for its services and the related expenses borne by the Adviser,
for the fiscal year ended December 31, 1999, the Fund paid the Adviser a fee
equal to 1.00% of the value of the Fund's average daily net assets.
THE PORTFOLIO MANAGER. Howard F. Ward is primarily responsible for the
day-to-day management of the Fund. Mr. Ward is a Portfolio Manager of the
Adviser, and he joined the Adviser in 1995. 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.
CLASSES OF SHARES
Three classes of the Fund's shares are offered in this prospectus - Class A
Shares, Class B Shares and Class C Shares. The table below summarizes the
differences among the classes of shares.
o A"front-end sales load," or sales charge, is a one-time fee charged at
the time of purchase of shares.
o A"contingent deferred sales charge" ("CDSC") is a one-time fee charged
at the time of redemption.
o A"Rule 12b-1 fee" is a recurring annual fee for distributing shares and
servicing shareholder accounts based on the Fund's average daily net
assets attributable to the particular class of shares.
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6
<PAGE>
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Front-End Sales Load? Yes. The percentage No. No.
declines as the amount
invested increases
- ------------------------------------------------------------------------------------------------------------------------------------
Contingent Deferred Yes, for shares redeemed Yes, for shares redeemed Yes, for shares redeemed
sales charge? within twenty- four months redeemed within seventy- within seventy-two months
after purchase as part of two months after purchase. after purchase.
an investment greater than Declines over time. Declines over time.
$2 million if no front-end
sales charge was paid at the
time of purchase.
- ------------------------------------------------------------------------------------------------------------------------------------
Rule 12b-1 Fee 0.25% 1.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible to No. Yes. Automatically No.
Another Class? converts to Class A Shares
approximately ninety-six
months after purchase.
- ------------------------------------------------------------------------------------------------------------------------------------
Fund Expense Levels Lower annual expenses Higher annual expenses than Higher annual expenses than
than Class B or Class A Shares. Class A Shares.
Class C Shares.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In selecting a class of shares in which to invest, you should consider
o the length of time you plan to hold the shares
o the amount of sales charge and Rule 12b-1 fees, recognizing that your
share of 12b-1 fees as a percentage of your investment increases if the
Fund's assets increase in value and decreases if the Fund's assets
decrease in value
o whether you qualify for a reduction or waiver of the Class A sales
charge
o that Class B Shares convert to Class A Shares approximately ninety-six
months after purchase
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOU... THEN YOU SHOULD CONSIDER...
- ------------------------------------------------------------------------------------------------------------------------------------
<S><C> <C>
o do not qualify for a reduced or waived front-end purchasing Class C Shares instead of either Class A
sales load and intend to hold your shares for only a Shares or Class B Shares
few years
- ------------------------------------------------------------------------------------------------------------------------------------
o do not qualify for a reduced or waived front-end purchasing Class B Shares instead of either Class A
sales load and intend to hold your shares for several years Shares or Class C Shares
- ------------------------------------------------------------------------------------------------------------------------------------
o do not qualify for a reduced or waived front-end purchasing Class A Shares
sales load and intend to hold your shares indefinitely
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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7
<PAGE>
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SALES CHARGE - CLASS A SHARES. The sales charge is imposed on Class A Shares in
accordance with the following schedule:
<TABLE>
<CAPTION>
Sales Charge Sales Charge Reallowance
as % of the as % of to
Amount of Investment Offering Price* Amount Invested Broker-Dealers
- -------------------- ---------------- ----------------- ----------------
<S> <C> <C> <C>
Under $50,000.................................. 5.75% 6.10% 5.00%
$50,000 but under $100,000..................... 4.50% 4.71% 3.75%
$100,000 but under $250,000.................... 3.50% 3.62% 2.75%
$250,000 but under $500,000.................... 2.50% 2.56% 2.00%
$500,000 but under $1 million.................. 2.00% 2.04% 1.75%
$1 million but under $2 million................ 1.00% 1.01% 1.00%
$2 million but under $3 million................ 0.00%** 0.00% 1.00%
$3 million or more ............................ 0.00%** 0.00% 0.50%
<FN>
- -------------------------
* Includes front-end sales load
** Subject to a 1.00% CDSC for two years after purchase
</FN>
</TABLE>
SALES CHARGE REDUCTIONS AND WAIVERS - CLASS A SHARES:
Reduced sales charges are available to (1) investors who are eligible to combine
their purchases of Class A Shares to receive volume discounts and (2) investors
who sign a Letter of Intent and agree to make purchases over time. Certain types
of investors are eligible for sales charge waivers.
1. VOLUME DISCOUNTS. Investors eligible to receive volume discounts are
individuals and their immediate families, tax-qualified employee benefit plans
and a trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account even though more than one beneficiary is involved. You
also may combine the value of Class A Shares you already hold in the Fund and
other funds advised by the Adviser or its affiliates along with the value of the
Class A Shares being purchased to qualify for a reduced sales charge. For
example, if you own Class A Shares of the Fund that have an aggregate value of
$100,000, and make an additional investment in Class A Shares of the Fund of
$4,000, the sales charge applicable to the additional investment would be 3.50%,
rather than the 5.75% normally charged on a $4,000 purchase. If you want more
information on volume discounts, call your broker.
2. LETTER OF INTENT. If you initially invest at least $1,000 in Class A Shares
of the Fund and submit a Letter of Intent to Gabelli & Company, Inc. (the
"Distributor"), you may make purchases of Class A Shares of the Fund during a
13-month period at the reduced sales charge rates applicable to the aggregate
amount of the intended purchases stated in the Letter. The Letter may apply to
purchases made up to 90 days before the date of the Letter. You will have to pay
sales charges at a higher rate if you fail to honor your Letter of Intent. For
more information on the Letter of Intent, call your broker.
3. INVESTORS ELIGIBLE FOR SALES CHARGE WAIVERS. Class A Shares of the Fund may
be offered without a sales charge to: (1) any other investment company in
connection with the combination of such company with the Fund by merger,
acquisition of assets or otherwise; (2) shareholders who have redeemed shares in
the Fund and who wish to reinvest in the Fund, provided the reinvestment is made
within 30 days of the redemption; (3) tax-exempt organizations enumerated in
Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code") and private,
charitable foundations that in each case make lump-sum purchases of $100,000 or
more; (4) qualified employee benefit plans established pursuant to Section 457
of the Code that have established omnibus accounts with the Fund; (5) qualified
employee benefit plans having more
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8
<PAGE>
- --------------------------------------------------------------------------------
than one hundred eligible employees and a minimum of $1 million in plan assets
invested in the Fund (plan sponsors are encouraged to notify the Fund's
Distributor when they first satisfy these requirements); (6) any unit investment
trusts registered under the Investment Company Act of 1940 (the"1940 Act") which
have shares of the Fund as a principal investment; (7) financial institutions
purchasing Class A Shares of the Fund for clients participating in a fee based
asset allocation program or wrap fee program which has been approved by the
Distributor; and (8) registered investment advisers or financial planners who
place trades for their own accounts or the accounts of their clients and who
charge a management, consulting or other fee for their services; and clients of
such investment advisers or financial planners who place trades for their own
accounts if the accounts are linked to the master account of such investment
adviser or financial planner on the books and records of a broker or agent.
Investors who qualify under the categories described above should contact their
brokerage firm:
CONTINGENT DEFERRED SALES CHARGES.
You will pay a CDSC when you redeem:
o Class A Shares within approximately twenty-four months of buying them
as part of an investment of greater than $2 million if no front-end
sales load was paid at the time of purchase
o Class B Shares within approximately seventy-two months of buying them
o Class C Shares within approximately twenty-four months of buying them
The CDSC payable upon redemption of Class A Shares or Class C Shares in the
circumstances described above is 1.00%. The CDSC schedule for Class B Shares is
set forth below. The CDSC is based on the net asset value at the time of your
investment or the net asset value at the time of redemption, whichever is lower.
Class B Shares
Years Since Purchase CDSC
- -------------------- --------------
First ............................................................. 5.00%
Second ............................................................ 4.00%
Third ............................................................. 3.00%
Fourth ............................................................ 3.00%
Fifth ............................................................. 2.00%
Sixth ............................................................. 1.00%
Seventh and thereafter ............................................ 0.00%
The Distributor pays sales commissions of up to 4.00% of the purchase price of
Class B Shares of the Fund to brokers at the time of sale that initiate and are
responsible for purchases of such Class B Shares of the Fund.
The Distributor pays sales commissions of up to 1.00% of the purchase price of
Class C Shares of the Fund to brokers at the time of sale that initiate and are
responsible for purchase of such Class C Shares of the Fund.
You will not pay a CDSC to the extent that the value of the redeemed shares
represents reinvestment of dividends or capital gains distributions or capital
appreciation of shares redeemed. When you redeem shares, we will assume that you
are first redeeming shares representing reinvestment of dividends and capital
gains distributions, then any appreciation on shares redeemed, and then
remaining shares held by you for the longest period of time. We will calculate
the holding period of shares acquired through an exchange of shares of another
fund from the date you acquired the original shares of the other fund. The time
you hold shares in a money market fund, however, will not count for purposes of
calculating the applicable CDSC.
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
We will waive the CDSC payable upon redemptions of shares for:
o redemptions and distributions from retirement plans made after the
death or disability of a shareholder
o minimum required distributions made from an IRA or other retirement
plan account after you reach age 591/2
o involuntary redemptions made by the Fund
o a distribution from a tax-deferred retirement plan after your
retirement
o returns of excess contributions to retirement plans following the
shareholder's death or disability
Conversion Feature - Class B Shares
o Class B Shares automatically convert to Class A Shares of the Fund on
the first business day of the ninety-seventh month following the month
in which you acquired such shares.
o After conversion, your shares will be subject to the lower Rule 12b-1
fees charged on Class A Shares, which will increase your investment
return compared to the Class B Shares.
o You will not pay any sales charge or fees when your shares convert, nor
will the transaction be subject to any tax.
o If you exchange Class B Shares of one fund for Class B Shares of
another fund, your holding period for calculating the CDSC will be
calculated from the time of your original purchase of Class B Shares.
If you exchange shares into a Gabelli money market fund, however, your
holding period will be suspended.
o The dollar value of Class A shares you receive will equal the dollar
value of the Class B shares converted.
The Board of Trustees may suspend the automatic conversion of Class B Shares to
Class A Shares for legal reasons or due to the exercise of its fiduciary duty.
If the Board determines that such suspension is likely to continue for a
substantial period of time, it will create another class of shares into which
Class B Shares are convertible.
RULE 12B-1 PLAN. The Fund has adopted a plan under Rule 12b-1 (the"Plan") for
each of its classes of shares. Under the Plan, the Fund may use its assets to
finance activities relating to the sale of its shares and the provision of
certain shareholder services.
For the classes covered by this Prospectus, the Rule 12b-1 fees vary by class as
follows:
Class A Class B Class C
--------- --------- ---------
Service Fees......................... 0.25% 0.25% 0.25%
Distribution Fees.................... None 0.75% 0.75%
These are annual rates based on the value of each of these Class's average daily
net assets. Because the Rule 12b-1 fees are higher for Class B and Class C
Shares than Class A Shares, Class B and Class C Shares will have higher annual
expenses. Because Rule 12b-1 fees are paid out of the Fund's assets on an
on-going basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges. Due to payments
of Rule12b-1 fees, long-term shareholders may indirectly pay more than the
equivalent of the maximum permitted front-end sales load.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
PURCHASE OF SHARES
You can purchase the Fund's shares on any day the NYSE is open for trading
(a"Business Day"). You may purchase shares through registered broker-dealers or
other financial intermediaries that have entered into selling agreements with
the Distributor
The broker-dealer or other financial intermediary will transmit a purchase order
and payment to State Street Bank and Trust Company ("State Street") on your
behalf. Broker-dealers and other financial intermediaries may send you
confirmations of your transactions and periodic account statements showing your
investments in the Fund.
o BY MAIL OR IN PERSON. Your broker-dealer or financial consultant can
obtain a subscription order form by calling 1-800-GABELLI
(1-800-422-3554). Checks made payable to a third party and endorsed by
the depositor are not acceptable. For additional investments, send a
check to the following address with a note stating your exact name and
account number, the name of the Fund and class of shares you wish to
purchase.
BY MAIL BY PERSONAL DELIVERY
------- --------------------
THE GABELLI FUNDS THE GABELLI FUNDS
P.O. BOX 8308 C/O BFDS
BOSTON, MA 02266-8308 66 BROOKS DRIVE
BRAINTREE, MA 02184
o BY BANK WIRE. To open an account using the bank wire transfer system,
first telephone the Fund at 1-800-GABELLI (1-800-422-3554) to obtain a
new account number. Then instruct a Federal Reserve System member bank
to wire funds to:
STATE STREET BANK AND TRUST COMPANY
[ABA #011-0000-28 REF DDA #99046187]
RE: THE GABELLI GROWTH FUND
ACCOUNT #__________
ACCOUNT OF [REGISTERED OWNERS]
225 FRANKLIN STREET, BOSTON, MA 02110
If you are making an initial purchase, you should also complete and
mail a subscription order form to the address shown under"By Mail."
Note that banks may charge fees for wiring funds, although State Street
will not charge you for receiving wire transfers.
SHARE PRICE. The Fund sells its shares at the net asset value next determined
after the Fund receives your completed subscription order form and your payment,
subject to a sales charge in the case of Class A Shares. See"Pricing of Fund
Shares" for a description of the calculation of net asset value as described
under"Classes of Shares - Sales Charges - Class A Shares."
MINIMUM INVESTMENTS. Your minimum initial investment must be at least $1,000.
See"Retirement Plans" and"Automatic Investment Plan" regarding minimum
investment amounts applicable to such plans. There is no minimum for subsequent
investments. Broker-dealers may have different minimum investment requirements.
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RETIREMENT PLANS. The Fund has available a form of IRA,"Roth" IRA and Education
IRA for investment in Fund shares that may be obtained from the Distributor by
calling 1-800-GABELLI (1-800-422-3554). Self-employed investors may purchase
shares of the Fund through tax-deductible contributions to existing retirement
plans for self-employed persons, known as"Keogh" or"H.R. 10" plans. The Fund
does not currently act as sponsor to such plans. Fund shares may also 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." The minimum initial investment in all
such retirement plans is $250. There is no subsequent investment requirement for
retirement plans.
AUTOMATIC INVESTMENT PLAN. The Fund offers an automatic monthly investment plan.
There is no minimum initial investment for accounts establishing an automatic
investment plan. Call the Distributor at 1-800-GABELLI (1-800-422-3554) for more
details about the plan.
GENERAL. State Street will not issue share certificates unless requested by you.
The Fund reserves the right to (i) reject any purchase order if, in the opinion
of the Fund's management, it is in the Fund's best interest to do so, (ii)
suspend the offering of shares for any period of time and (iii) waive the Fund's
minimum purchase requirement.
REDEMPTION OF SHARES
You can redeem shares of the Fund on any Business Day. The Fund may temporarily
stop redeeming its shares when the NYSE is closed or trading on the NYSE is
restricted, when an emergency exists and the Fund cannot sell its shares or
accurately determine the value of its assets, or if the Securities and Exchange
Commission orders the Fund to suspend redemptions.
The Fund redeems its shares at the net asset value next determined after the
Fund receives your redemption request, subject in some cases to a CDSC as
described under"Classes of Shares - Contingent Deferred Sales Charges."
See"Pricing of Fund Shares" for a description of the calculation of net asset
value.
You may redeem shares through a broker-dealer or other financial intermediary
that has entered into a selling agreement with the Distributor. The
broker-dealer or financial intermediary will transmit a redemption order to
State Street on your behalf. The redemption request will be effected at the net
asset value next determined (less any applicable CDSC) after State Street
receives the request. If you hold share certificates, you must present the
certificates endorsed for transfer. A broker-dealer may charge you fees for
effecting redemptions for you.
In the event that you wish to redeem shares and you are unable to contact your
broker-dealer or other financial intermediary, you may redeem shares by mail.
You may mail a letter requesting redemption of shares to: THE GABELLI FUNDS,
P.O. BOX 8308, BOSTON, MA 02266-8308. Your letter should state the name of the
Fund and the share class, the dollar amount or number of shares you wish to
redeem and your account number. You must sign the letter in exactly the same way
the account is registered and if there is more than one owner of shares, all
must sign. A signature guarantee is required for each signature on your
redemption letter. You can obtain a signature guarantee from financial
institutions such as commercial banks, brokers, dealers and savings
associations. A notary public cannot provide a signature guarantee.
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12
<PAGE>
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INVOLUNTARY REDEMPTION. The Fund may redeem all shares in your account (other
than an IRA account) if their value falls below $1,000 as a result of
redemptions (but not as a result of a decline in net asset value). You will be
notified in writing if the Fund initiates such action and allowed 30 days to
increase the value of your account to at least $1,000.
REDEMPTION PROCEEDS. A redemption request received by the Fund will be effected
at the net asset value next determined after the Fund receives the request. If
you request redemption proceeds by check, the Fund will normally mail the check
to you within seven days after it receives your redemption request. If you
purchased your Fund shares by check or through an Automatic Investment Plan, you
may not receive proceeds from your redemptions until the check clears, which may
take up to as many as 15 days following purchase. While the Fund will delay the
processing of the redemption until the check clears, your shares will be valued
at the next determined net asset value after receipt of your redemption request.
The Fund may pay to you your redemption proceeds wholly or partly in portfolio
securities. Payments would be made in portfolio securities, only in the rare
instance that the Fund's Board of Trustees believes that it would be in the
Fund's best interest not to pay redemption proceeds in cash.
EXCHANGE OF SHARES
You can exchange shares of the Fund you hold for shares of the same class of
another fund managed by the Adviser or its affiliates based on their relative
net asset values. To obtain a list of the funds whose shares you may acquire
through exchange call your broker. Class B and Class C Shares will continue to
age from the date of the original purchase of such shares and will assume the
CDSC rate they had at the time of exchange. You may also exchange your shares
for shares of a money market fund managed by the Adviser or its affiliates
without imposition of any CDSC at the time of exchange. Upon subsequent
redemption from such money market funds or the Fund (after re-exchange into the
Fund), such shares will be subject to the CDSC calculated by excluding the time
such shares were held in the money market fund.
In effecting an exchange:
o you must meet the minimum investment requirements for the fund
whose shares you purchase through exchange
o if you are exchanging into a fund with a higher sales charge,
you must pay the difference at the time of exchange
o you may realize a taxable gain or loss
o you should read the prospectus of the fund whose shares you are
purchasing through exchange (call your broker to obtain the
prospectus)
o you should be aware that brokers may charge a fee for handling
an exchange for you
You may exchange shares by telephone, by mail, over the Internet or through a
registered broker-dealer or other financial intermediary.
o EXCHANGES BY TELEPHONE. You may give exchange instructions by telephone
by calling 1-800-GABELLI (1-800-422-3554). You may not exchange shares
by telephone if you hold share certificates.
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13
<PAGE>
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o EXCHANGES BY MAIL. You may send a written request for exchanges to: The
Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. Your letter should
state your name, your account number, the dollar amount or number of
shares you wish to exchange, the name and class of the funds whose
shares you wish to exchange, and the name of the fund whose shares you
wish to acquire.
o EXCHANGE THROUGH THE INTERNET. You may also give exchange instructions
via the Internet at www.gabelli.com. You may not exchange shares
through the Internet if you hold share certificates.
We may modify or terminate the exchange privilege at any time. You will be given
notice 60 days prior to any material change in the exchange privilege.
PRICING OF FUND SHARES
The Fund's net asset value per share is calculated separately for each class of
shares on each Business Day. It is calculated on each Business Day. The NYSE is
open Monday through Friday, but currently is scheduled to be closed on New
Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
and on the preceding Friday or subsequent Monday when a holiday falls on a
Saturday or Sunday, respectively.
The Fund's net asset value is calculated separately for each class and is
determined as of the close of regular trading on the NYSE, normally 4:00 p.m.,
Eastern Time. Net asset value 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 its 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, which the Trustees of the Fund believe represents fair value.
The price of Fund shares for purposes of purchase and redemption orders will be
based upon the next calculation of net asset value after the purchase or
redemption order is received in proper form.
Because the Fund is not open for business every day that its assets trade, the
net asset value of the Fund's shares may change on days when shareholders will
not be able to purchase or redeem the Fund's shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions may differ for different classes of shares. The Fund
intends to pay dividends and capital gains distributions, if any, on an annual
basis. You may have dividends or capital gains distributions that are declared
by the Fund automatically reinvested at net asset value in additional shares of
the Fund. You will make an election to receive dividends and distributions in
cash of Fund shares at the time you purchase your shares. You may change this
election 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.
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14
<PAGE>
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TAX INFORMATION
The Fund expects that its distributions will consist primarily of net investment
income and net realized capital gains. Capital gains may be taxed at different
rates depending on the length of time the Fund holds the asset giving rise to
such capital gains Dividends out of net investment income and distributions of
net realized short-term capital gains (i.e. gains from assets held by the Fund
for one year or less) are taxable to you as ordinary income. Distributions of
net long-term capital gains are taxable to you at long-term capital gain rates.
The Fund's distributions, whether you receive them in cash or reinvest them in
additional shares of the Fund, generally will be subject to federal, state or
local taxes. An exchange of the Fund's shares for shares of another fund will be
treated for tax purposes as a sale of the Fund's shares, and any gain you
realize on such a transaction generally will be taxable. Foreign shareholders
may be subject to a federal withholding tax.
This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of your investment
in the Fund.
FINANCIAL HIGHLIGHTS
The Class A, Class B and Class C Shares of the Fund have not previously been
offered and therefore do not have previous financial history.
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15
<PAGE>
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THE GABELLI GROWTH FUND
CLASS A, B, C SHARES
================================================================================
FOR MORE INFORMATION:
For more information about the Fund, the following documents are available free
upon request:
ANNUAL/SEMI-ANNUAL REPORTS:
The Fund's semi-annual and annual reports to shareholders contain additional
information on the Fund's investments. In the Fund's annual report, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Fund, including its
operations and investments policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
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You can get free copies of these documents and prospectuses of other funds in
the Gabelli family, or request other information and discuss your questions
about the Funds by contacting:
The Gabelli Growth Fund
One Corporate Center
Rye, NY 10580
Telephone: 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
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You can review the Fund's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. Information on the operation of the Public
Reference Room may be obtained by calling the Commission at 1-202-942-8090. You
can get text-only copies:
o For a fee, by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102 or by calling 1-202-942-8090, or by
electronic request at the following email address: [email protected].
o Free from the Commission's Website at http://www.sec.gov.
(Investment Company Act file no. 811-4873)
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<PAGE>
THE GABELLI GROWTH FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
HTTP://WWW.GABELLI.COM
EMAIL: [email protected]
(Net Asset Value may be obtained daily by calling 1-800-GABELLI after 6:00 p.m.)
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QUESTIONS?
Call 1-800-GABELLI
or your investment representative.
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TABLE OF CONTENTS
-----------------
INVESTMENT AND PERFORMANCE SUMMARY .............. 2-4
INVESTMENT AND RISK INFORMATION ................. 5-6
MANAGEMENT OF THE FUND .......................... 6
Classes of Shares .......................... 6
Purchase of Shares ......................... 11
Redemption of Shares ....................... 12
Exchange of Shares ......................... 13
Pricing of Fund Shares ..................... 14
Dividends and Distributions ................ 14
Tax Information ............................ 15
FINANCIAL HIGHLIGHTS ............................ 15
<PAGE>
THE GABELLI GROWTH FUND
Statement of Additional Information
May 1, 200
This Statement of Additional Information (the "SAI"), which is not a prospectus,
describes The Gabelli Growth Fund (the "Fund"). This SAI should be read in
conjunction with the Fund's Prospectuses for Class A Shares, Class B Shares,
Class C Shares and Class AAA Shares, each dated May 1, 2000. For a free copy of
the Prospectuses, please contact the Fund at the address, telephone number or
Internet Web site printed below.
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
HTTP://WWW.GABELLI.COM
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION............................................................1
INVESTMENT STRATEGIES AND RISKS................................................1
INVESTMENT RESTRICTIONS........................................................6
TRUSTEES AND OFFICERS..........................................................7
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS....................................11
INVESTMENT ADVISORY AND OTHER SERVICES........................................11
DISTRIBUTION PLANS............................................................15
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................16
REDEMPTION OF SHARES..........................................................18
DETERMINATION OF NET ASSET VALUE..............................................18
DIVIDENDS AND DISTRIBUTIONS...................................................19
TAXATION......................................................................19
INVESTMENT PERFORMANCE INFORMATION............................................23
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES..........................23
FINANCIAL STATEMENTS..........................................................20
APPENDIX A ..................................................................A-1
<PAGE>
GENERAL INFORMATION
The Fund is a diversified, open-end, management investment company organized
under the laws of the Commonwealth of Massachusetts on October 24, 1986. The
Fund commenced investment operations on April 10, 1987.
INVESTMENT STRATEGIES AND RISKS
The Fund's Prospectuses discuss the investment objective of the Fund and the
principal strategies to be employed to achieve that objective. This SAI contains
supplemental information concerning certain types of securities and other
instruments in which the Fund may invest, additional strategies that the Fund
may utilize and certain risks associated with such investments and strategies.
CONVERTIBLE SECURITIES
The Fund may invest in convertible securities when it appears to Gabelli Funds,
LLC, the Fund's adviser (the "Adviser") that it may not be prudent to be fully
invested in common stocks. The Fund will normally purchase only investment
grade, convertible debt securities having a rating of, or equivalent to, a
Standard & Poor's Rating Service ("S&P") rating of at least "BBB" (which
securities may have speculative characteristics) or, if unrated, judged by the
Adviser to be of comparable quality. However, the Fund may also invest up to 15%
of its assets in more speculative convertible debt securities which appear to
present an advantageous means of acquiring common stock having potential capital
appreciation provided such securities have a rating of, or equivalent to, at
least an S&P rating of "B" or, if unrated, judged by the Adviser to be of
comparable quality. Corporate debt obligations having a "B" rating will likely
have some quality and protective characteristics which, in the judgment of the
rating organization, are outweighed by large uncertainties or major risk
exposures to adverse conditions. Although lower rated debt securities generally
have higher yields, they are also more subject to market price volatility based
on increased sensitivity to changes in interest rates and economic conditions or
the liquidity of their secondary trading market. A description of corporate debt
ratings including convertible securities is contained in Appendix A.
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
<PAGE>
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.
BORROWING
The Fund may not borrow money except for (1) short-term credits from banks as
may be necessary for the clearance of portfolio transactions, and (2) borrowing
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 may not, in the aggregate, exceed 15% of
assets after giving effect to the borrowing and borrowing for purposes other
than meeting redemptions may not exceed 5% of the value of the Fund's assets
after giving effect to the borrowing. The Fund will not make additional
investments when borrowings exceed 5% of assets. The Fund may mortgage, pledge
or hypothecate up to 20% of its assets to secure such borrowings.
Borrowing may exaggerate the effect on net asset value of any increase or
decrease in the market value of securities purchased with borrowed funds. Money
borrowed will be subject to interest costs which may or may not be recovered by
an appreciation of securities purchased.
INVESTMENTS IN 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 or at the end of a
specific period of time.
Investing in rights and warrants can provide a greater potential for profit or
loss than an equivalent investment in the underlying security, and thus can be a
speculative investment. The value of a right or warrant may decline because of a
decline in the value of the underlying security, the passage of time, changes in
interest rates or in the dividend or other policies of the Fund whose equity
underlies the warrant or a change in the perception as to the future price of
the underlying security, or any combination thereof. Rights and warrants
generally pay no dividends and confer no voting or other rights other than to
purchase the underlying security.
<PAGE>
INVESTMENTS IN SMALL, UNSEASONED COMPANIES AND OTHER ILLIQUID SECURITIES
The Fund may invest up to 5% of its net assets in small, less well-known
companies which have operated for less than three years (including
predecessors). The securities of such 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.
The Fund will not in the aggregate invest more than 10% of its net assets in
illiquid securities. These securities include securities which are restricted
for public sale, securities for which market quotations are not readily
available, and repurchase agreements maturing or terminable in more than seven
days. Securities freely salable among qualified institutional investors under
special rules adopted by the Securities and Exchange Commission ("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
will monitor their liquidity.
LOANS OF PORTFOLIO SECURITIES
To increase income and pay a portion of its expenses, the Fund may lend its
portfolio securities to broker-dealers or financial institutions, provided the
loan is (1) collateralized according to the regulatory requirements discussed
below and (2) limited so that the value of all loaned securities does not exceed
25% of the value of the Fund's net assets. 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 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
In general, securities of companies engaged in reorganization transactions sell
at a premium to their historic market price immediately prior to the
announcement of a tender offer or reorganization 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 progress.
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. 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.
<PAGE>
WHEN ISSUED, DELAYED DELIVERY SECURITIES & FORWARD COMMITMENTS
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 with its custodian cash or liquid
high-grade debt securities in an aggregate amount at least equal to the amount
of its outstanding forward commitments.
OTHER INVESTMENT COMPANIES
The Fund does not intend to purchase the shares of other open-end investment
companies but reserves the right to invest up to 10% of its total assets in the
securities of closed-end investment companies including small business
investment companies (not more than 5% of its total assets may be invested in
more than 3% of the securities of any investment company). To the extent that
the Fund invests in the securities of other investment companies, shareholders
in the Fund may be subject to duplicative advisory and administrative fees.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with banks and non-bank dealers of
U.S. Government securities which are listed as reporting dealers of the Federal
Reserve Bank and which furnish collateral at least equal in value or market
price to the amount of their repurchase obligation. In a repurchase agreement,
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. 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 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. 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 invested in repurchase agreements. In addition, 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. These percentage limitations are fundamental and
may not be changed without shareholder approval.
Writing Covered Call Options
The Fund may write (sell) "covered" call options and purchase options to close
out options previously written by the Fund. In writing covered call options, the
Fund expects to generate additional premium income which should serve to enhance
the Fund's total return and reduce the effect of any price decline of the asset
involved in the option.
A call option gives the holder (buyer) the "right to purchase" a security,
currency or other asset at a specified price (the exercise price) at expiration
of the option (European style) or at any time until a certain date (the
expiration date) (American style). So long as the obligation of the writer of a
call option continues, he may be assigned an exercise notice by the
broker-dealer through whom such option was sold, requiring him to deliver the
underlying security or currency against payment of the exercise price. This
obligation terminates upon the expiration of the call option, or such earlier
time at which the writer effects a closing purchase transaction by repurchasing
an option identical to that previously sold. To secure his obligation to deliver
the underlying security or currency in the case of a call option, a writer is
required to deposit in escrow the underlying security or currency or other
assets in accordance with the rules of a clearing corporation. The Fund will
write only covered call options. This means that the Fund will own at least the
same quantity of the security, currency or other assets subject to the option or
an option to purchase the same underlying security, currency or other asset,
having an exercise price equal to or less than the exercise price of the
"covered" option, or will establish and maintain with its custodian for the term
of the option, an account consisting of cash or liquid securities having a value
equal to the fluctuating market value of the optioned assets.
Portfolio assets on which call options may be written will be purchased solely
on the basis of investment considerations consistent with the Fund's investment
objectives. Writing covered call options may be used by the Fund to reduce its
exposure to securities it does not wish to sell at the time it writes the
option. When writing a covered call option, the Fund, in return for the premium,
gives up the opportunity for profit from a price increase in the underlying
asset above the exercise price, retains the risk of loss should the price
decline and also gives up, to some degree, control over the timing of sale of
the underlying assets. If a call option which the Fund has written expires, the
Fund will realize a gain in the amount of the premium; however, such gain may be
offset by a decline in the market value of the underlying asset during the
option period. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the underlying asset. The Fund does not consider an asset
covering a call to be "pledged" as that term is used in the Fund's policy which
limits the pledging or mortgaging of its assets.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying asset from being called, or to
permit the sale of the underlying asset. Furthermore, effecting a closing
transaction will permit the Fund to write another call option on the underlying
asset with either a different exercise price or expiration date or both. The
Fund will be unable to control losses or effect such strategies through closing
transactions where a liquid secondary market for options on such assets does not
exist. If the Fund desires to sell a particular asset from its portfolio on
which it has written a call option, or purchased a put option, it will seek to
effect a closing transaction prior to, or concurrently with, the sale of the
asset. If the Fund cannot enter into such a transaction, it may be required to
hold an asset that it might otherwise have sold. There is, of course, no
assurance that the Fund will be able to effect such closing transactions at a
favorable price.
Call options written by the Fund will normally have expiration dates of less
than nine months from the date written. The exercise price of the options may be
below, equal to, or above the current market values of the underlying securities
or currencies at the time the options are written. From time to time, the Fund
may purchase an underlying asset for delivery in accordance with an exercise
notice of a call option assigned to it, rather than delivering such asset from
its portfolio. In such cases, additional costs may be incurred.
The Fund will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more than the premium received from the
writing of the option. Because increases in the market price of a call option
will generally reflect increases in the market price of the underlying asset,
any loss resulting from the repurchase of a call option is likely to be offset
in whole or in part by appreciation of the underlying asset owned by the Fund.
However, gains and losses on investments in options depend in part on the
Adviser's ability to predict correctly the direction of stock prices, interest
rates and other economic factors. Options may fail as hedging techniques in
cases where the price movements of the securities underlying the options do not
follow the price movements of the portfolio securities subject to the hedge.
Purchasing Put Options
The Fund may purchase put options in securities, currencies or other assets
owned by the Fund or on options to purchase the same underlying security,
currency or other assets, having an exercise price equal to or less than the
exercise price of the put option. As the holder of a put option, the Fund would
have the right to sell the underlying asset at the exercise price at any time
during the option period or at the expiration of the option. The Fund may enter
into closing sale transactions with respect to such options, exercise them or
permit them to expire. The Fund may purchase put options for defensive purposes
in order to protect against an anticipated decline in the value of its assets.
An example of such use of put options is provided below.
The Fund may purchase a put option on an underlying asset owned by the Fund (a
"protective put") but does not wish to sell at that time as a defensive
technique in order to protect against an anticipated decline in the value of the
asset. Such hedge protection is provided only during the life of the put option
when the Fund, as the holder of the put option, is able to sell the underlying
asset at the put exercise price regardless of any decline in the underlying
asset's value. For example, a put option may be purchased in order to protect
unrealized appreciation of an asset where the Adviser deems it desirable to
continue to hold the asset because of tax considerations. The premium paid for
the put option and any transaction costs would reduce any capital gain otherwise
available for distribution when the asset is eventually sold.
<PAGE>
INVESTMENT RESTRICTIONS
The Fund's investment objectives and the following investment restrictions are
fundamental and may not be changed without the approval of a majority of the
Fund's shareholders, defined as the lesser of (1) 67% of the Fund's shares
present at a meeting if the holders of more than 50% of the outstanding shares
are present in person or by proxy, or (2) more than 50% of the Fund's
outstanding shares. All other investment policies or practices are considered by
the Fund not to be fundamental and accordingly may be changed without
shareholder approval. If a percentage restriction on investment or the use of
assets set forth below is adhered to at the time the transaction is effected,
later changes in percentage resulting from changing market values or total
assets of the Fund will not be considered a deviation from policy.
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 this
SAI;
(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;
<PAGE>
(11) Sell securities short or invest in options, except that the Fund
may (i) buy put options on assets it holds or has the right to obtain, (ii) sell
call options on securities it holds or has the right to obtain, and (iii) buy
and sell offsetting options to terminate the Fund's obligations;
(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
Under Massachusetts law, the Fund's Board of Trustees is responsible for
establishing the Fund's policies and for overseeing the management of the Fund.
The Board also elects the Fund's officers who conduct the daily business of the
Fund. The Trustees and executive officers of the Fund, their ages and their
principal occupations during the last five years and their affiliations, if any
with the Adviser, are set forth below. Trustees deemed to be "interested
persons" of the Fund for purposes of the 1940 Act are indicated by an asterisk.
Unless otherwise specified, the address of each such person is One Corporate
Center, Rye, New York 10580-1434.
NAME, AGE AND POSITION(S)
WITH FUND PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------ -------------------------------------------------
Mario J. Gabelli* Chairman of the Board and Chief Investment
Trustee Officer of Gabelli Asset Management Inc. and
Age: 57 Chief Investment Officer of Gabelli Funds, LLC
and GAMCO Investors, Inc.; Chairman of the Board
and Chief Executive Officer of Lynch Corporation
(diversified manufacturing company) and Chairman
of the Board of Lynch Interactive Corporation
(multimedia and services company); Director of
Spinnaker Industries, Inc. (manufacturing
company); Director or Trustee of 16 other mutual
funds advised by Gabelli Funds LLC and its
affiliates..
Felix J. Christiana, Formerly Senior Vice President of Dry Dock
Trustee Savings Bank; Director or Trustee of 10 other
Age: 75 mutual funds advised by Gabelli Funds, LLC and
its affiliates.
Anthony J. Colavita President and Attorney at Law in the law firm of
Trustee Anthony J. Colavita, P.C. since 1961; Director
Age: 64 or Trustee of 17 other mutual funds advised by
Gabelli Funds, LLC and its affiliates.
James P. Conn, Former Managing Director and C hief Investment
Trustee Officer of Financial Security Assurance Holdings
Age: 62 Ltd. 1992-1998; Director of Meditrust Corporation
(real estate investment trust) and First Republic
Bank; Director or Trustee of 5 other mutual funds
advised by Gabelli Funds, LLC and its affiliates.
<PAGE>
NAME, AGE AND POSITION(S)
WITH FUND PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------ -------------------------------------------------
Karl Otto Pohl*+ Member of the Shareholder Committee of Sal
Trustee Oppenheim Jr. & Cie (private investment bank);
Age: 70 Director of Gabelli Asset Management Inc.,
(investment management), Zurich Allied (insurance
company), and TrizecHahn Corp. (real estate
company); Former President of the Deutsche
Bundesbank and Chairman of its Central Bank
Council from 1980 through 1991; Director or
Trustee of all other mutual funds advised by
Gabelli Funds, LLC and its affiliates.
Anthony R. Pustorino, CPA, Certified Public Accountant; Professor of
Trustee Accounting, Pace University, since 1965; Director
Age: 74 or Trustee of 10 other mutual funds advised by
Gabelli Funds, LLC and its affiliates.
Anthony Torna,* Registered Representative with Herzog, Heine &
Trustee Geduld, Inc.
Age: 73
Anthonie C. van Ekris, Managing Director of Balmac International;
Trustee Director of Spinnaker Industries, Inc.; Director
Age: 66 of Stahel Hardmeyer A.Z.; Director or Trustee of
10 other mutual funds advised by Gabelli Funds,
LLC and its affiliates.
Bruce N. Alpert Executive Vice President and Chief Operating
Vice President and Officer of Gabelli Funds, LLC since 1988;
Treasurer President and Director of Gabelli Advisers, Inc.
Age: 48 and an Officer of all mutual funds advised by
Gabelli Funds, LLC and its affiliates.
James E. McKee, Secretary of Gabelli Funds, LLC; Vice President,
Secretary Secretary and General Counsel of GAMCO Investors,
Age: 36 Inc. since 1993 and of Gabelli Asset Management
Inc. since 1999; Secretary of all mutual funds
advised by Gabelli Funds, LLC and Gabelli
Advisers, Inc. since August 1995.
- ----------------------
+ Mr. Pohl is a Director of the parent company of the Adviser.
<PAGE>
The Fund, its investment adviser and principal underwriter have adopted a code
of ethics (the "Code of Ethics") under Rule 17j-1 of the 1940 Act. The Code of
Ethics permits personnel, subject to the Code of Ethics and its restrictive
provisions, to invest in securities, including securities that may be purchased
or held by the Fund.
No director, officer or employee of Gabelli & Company, Inc. ("Gabelli & Company"
or the "Distributor") or the Adviser or of any affiliate of Gabelli & Company 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 in person or by telephone 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.
<TABLE>
<CAPTION>
COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------------------
(1) (2) (3)
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM THE FUND AND FUND
NAME OF PERSON, POSITION FROM THE FUND COMPLEX PAID TO TRUSTEES*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mario J. Gabelli $ 0 $ 0 (17)
Trustee
Anthony J. Colavita $10,000 $ 94,875 (18)
Trustee
Felix J. Christiana $10,000 $ 99,250 (11)
Trustee
James P. Conn $8,000 $ 53,625 (6)
Trustee
Dugald A. Fletcher** $8,500 $ 17,000 (2)
Adviser
Karl Otto Pohl $2,000 $ 7,042 (19)
Trustee
Anthony R. Pustorino $11,500 $ 107,250 (11)
Trustee
Anthony Torna $9,000 $ 9,000 (1)
Trustee
Anthonie C. van Ekris $8,500 $ 60,000 (11)
Trustee
Salvatore J. Zizza** $8,500 $ 58,750 (5)
Adviser
<FN>
- ------------------
* The total compensation paid to such persons during the calendar year ending
December 31, 1999 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 Trustees of the Fund on
March 11, 1997 and March 19, 1997, respectively. They continue to serve as
advisors to the Trustees for which they receive compensation as indicated
above.
</FN>
</TABLE>
<PAGE>
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of April 17, 2000, the following persons owned of record or beneficially 5%
or more of the Fund's outstanding shares:
NAME AND ADDRESS % OF CLASS NATURE OF OWNERSHIP
---------------- ---------- -------------------
Charles Schwab & Co. Inc. 19.56% Record(a)
Special Custody Account
FBO Customers
101 Montgomery Street
San Francisco, CA 94104-4122
- ---------------
(a) Charles Schwab disclaims beneficial ownership and has not indicated that any
account holder owns beneficially more than 5% of the shares of the Fund.
As of April 17, 2000, as a group, the Trustees and officers of the Fund (other
than Mr. Gabelli) owned less than 1% of the outstanding shares of common stock
of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
The Adviser is a New York limited liability company which also serves as Adviser
to 13 other open-end investment companies and 4 closed-end investment companies
with aggregate assets in excess of $10.6 billion as of December 31, 1999. The
Adviser is a registered investment adviser under the Investment Advisers Act of
1940, as amended. Mr. Mario J. Gabelli may be deemed a "controlling person" of
the Adviser on the basis of his controlling interest of the parent company of
the Adviser. The Adviser has several affiliates that provide investment advisory
services: GAMCO Investors, Inc. ("GAMCO"), a wholly-owned subsidiary of the
Adviser, acts as investment adviser for individuals, pension trusts,
profit-sharing trusts and endowments, and had aggregate assets in excess of $9.4
billion under its management as of December 31, 1999. Gabelli Advisers, Inc.
acts as investment adviser to the Gabelli Westwood Funds with assets under
management of approximately $390 million as of December 31, 1999; Gabelli
Securities, Inc. acts as investment adviser to certain alternative investments
products, consisting
<PAGE>
primarily of risk arbitrage and merchant banking limited partnerships and
offshore companies, with assets under management of approximately $230 million
as of December 31, 1999; and Gabelli Fixed Income LLC acts as investment adviser
for the five portfolios of The Treasurer's Fund, Inc. and separate accounts
having assets under management of approximately $1.4 billion as of December 31,
1999.
Affiliates of the Adviser may, in the ordinary course of their business, acquire
for their own account or for the accounts of their advisory clients, significant
(and possibly controlling) positions in the securities of companies that may
also be suitable for investment by the Fund. The securities in which the Fund
might invest may thereby be limited to some extent. For instance, many companies
in the past several years have adopted so-called "poison-pill" or other
defensive measures designed to discourage or prevent the completion of
non-negotiated offers for control of the company. Such defensive measures may
have the effect of limiting the shares of the company which might otherwise be
acquired by the Fund if the affiliates of the Adviser or their advisory accounts
have or acquire a significant position in the same securities. However, the
Adviser does not believe that the investment activities of its affiliates will
have a material adverse effect upon the Fund in seeking to achieve its
investment objectives. Securities purchased or sold pursuant to contemporaneous
orders entered on behalf of the investment company accounts of the Adviser or
the advisory accounts managed by its affiliates for their unaffiliated clients
are allocated pursuant to principles believed to be fair and not disadvantageous
to any such accounts. In addition, all such orders are accorded priority of
execution over orders entered on behalf of accounts in which the Adviser or its
affiliates have a substantial pecuniary interest. The Adviser may on occasion
give advice or take action with respect to other clients that differ from the
actions taken with respect to the Fund. The Fund may invest in the securities of
companies which are investment management clients of GAMCO. In addition,
portfolio companies or their officers or directors may be minority shareholders
of the Adviser or its affiliates.
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 PFPC
Inc., the Fund's Sub-Administrator and State Street Bank & Trust Company, the
Fund's 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,
Prospectuses 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 Gabelli & Company Inc. (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.
<PAGE>
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.
ADVISORY FEES EARNED AND ADVISORY FEES WAIVED
FOR THE FISCAL YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1997 Fees 1998 Fees 1999 Fees |
-------------------------------------------------------|
Earned Earned Earned |
------------------------------------- -----------------|
$7,701,864 $14,542,759 $22,489,007 |
-------------------------------------------------------|
SUB-ADMINISTRATOR
PFPC Inc. (formerly known as First Data Investor Services Group, Inc.) (the
"Sub-Administrator"), a majority-owned subsidiary of PNC Bank Corp. which is
located at 101 Federal Street, Boston Massachusetts 02110, serves as
Sub-Administrator to the Fund pursuant to a Sub-Administration Agreement with
the Adviser (the "Sub-Administration Agreement"). Under the Sub-Administration
Agreement, the Sub-Administrator (a) assists in supervising all aspects of the
Fund's operations except those performed by the Adviser under its advisory
agreement with the Fund; (b) supplies the Fund with office facilities (which may
be in the Sub-Administrator'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 the
Fund, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; (c) prepares and
distributes materials for all Fund Board of Trustees' Meetings including the
mailing of all Board materials and collates the same materials into the Board
books and assists in the drafting of minutes of the Board Meetings; (d) prepares
reports to Fund shareholders, tax returns and reports to and filings with the
SEC and state "Blue Sky" authorities; (e) calculates the Fund's net asset value
per share, provides any equipment or services necessary for the purpose of
pricing shares or valuing the Fund's investment portfolio and, when requested,
calculates the amounts permitted for the payment of distribution expenses
<PAGE>
under any distribution plan adopted by the Fund; (f) provides compliance testing
of all Fund activities against applicable requirements of the 1940 Act and the
rules thereunder, the Code, and the Fund's investment restrictions; (g)
furnishes 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; and (h) generally provides all administrative services that
may be required for the ongoing operation of the Fund in a manner consistent
with the requirements of the 1940 Act.
For the services it provides, the Advisor pays the Sub-Administrator an annual
fee based on the value of the aggregate average daily net assets of all funds
under its administration managed by the Adviser as follows: up to $10 billion -
0.0275%; $10 billion to $15 billion - .0125%; over $15 billion - 0.01%.
COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York
10036, serves as the Fund's legal counsel.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers 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.
<PAGE>
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street, 225 Franklin Street, Boston, MA 02110, is the Custodian for the
Fund's cash and securities. Boston Financial Data Services, Inc. ("BFDS"), an
affiliate of State Street located at the BFDS Building, Two Heritage Drive,
Quincy, Massachusetts 02171, performs the services of transfer agent and divided
disbursing agent for the Fund. Neither BFDS nor State Street assists in or is
responsible for investment decisions involving assets of the Fund.
DISTRIBUTOR
To implement the Fund's Rule 12b-1 Plan, the Fund has entered into a
Distribution Agreement with the Distributor, a New York corporation which is an
indirect majority owned subsidiary of Gabelli Asset Management Inc., 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 PLANS
The Fund has adopted a Plan of Distribution (a "Plan") pursuant to Rule 12b-1
under the 1940 Act on behalf of each of the Class AAA Shares, Class A Shares,
Class B Shares and Class C Shares. Payments may be made by the Fund under each
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 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 be subject to its limitations. Payments under the
Plan are not solely dependent on distribution expenses actually incurred by the
Distributor. The Plan is intended to benefit the Fund by increasing assets and
thereby reducing the Fund's expense ratio.
Under its terms, each 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"). No Plan may 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 any Plan must also be
approved by the Trustees in the manner described above. Each 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 each Plan, the
Distributor will provide the Trustees periodic reports of amounts expended under
each Plan and the purpose for which expenditures were made. During the fiscal
year ended December 31, 1999, the Fund made distribution payments to the
Distributor pursuant to the Class AAA Share Plan in the amount of $5,622,252, or
0.25% of the Fund's average net assets. Of this amount $152,400 was spent on
advertising, $228,500 for printing, postage and stationary, $381,400 for
overhead support expenses, $612,900 for salaries of personnel of the Distributor
and $2,311,800 to brokers-dealers. The Plan compensates the Distributor
regardless of expenses.
<PAGE>
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.
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. The Adviser is permitted to (1) direct Fund portfolio
brokerage to Gabelli & Company, a broker-dealer affiliate of the Adviser; (2)
pay commissions to brokers other than Gabelli & Company which are higher than
might be charged by another qualified broker to obtain brokerage and/or research
services considered by the Adviser to be useful or desirable for its investment
management of the Fund and/or other advisory accounts under the management of
the Adviser and any investment adviser affiliated with it; and (3) consider the
sales of shares of the Fund by brokers other than Gabelli & Company as a factor
in its selection of brokers for Fund portfolio transactions. 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
<PAGE>
brokerage commissions of $0 on portfolio transactions in the principal amounts
of $0 during 1999. The average commission on these transactions was $0 per
share.
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli & Company when it appears that, as an introducing broker
or otherwise, Gabelli & Company 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 & Company 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. Rule 17e-1 and the procedures contain
requirements that the Board, including its "Independent Trustees," conduct
periodic compliance reviews of such brokerage allocations. 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 & Company 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 & Company,
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 &
Company. Pursuant to an agreement with the Fund, Gabelli & Company 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 & Company 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 & Company 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.
<TABLE>
<CAPTION>
Fiscal Year
Ended
DECEMBER 31, Commissions
PAID
<S> <C> <C>
Total Brokerage Commissions 1997 $ 894,602
1998 $ 1,330,436
1999 $ 590,796
Commissions paid to Gabelli & Company 1997 $ 3,750
1998 $ 0
1999 $ 0
% of Total Brokerage Commissions paid to Gabelli & Company 1999 0%
% of Total Transactions involving Commissions paid to 1999 0%
Gabelli & Company
</TABLE>
<PAGE>
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 "Computation of Net Asset Value"), or partly
in cash and partly in portfolio securities. However, payments will be made
wholly in cash unless the shareholder has redeemed more than $250,000 over the
preceeding three months and the Adviser believes that economic conditions exist
which would make payments in cash 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.
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. If the Fund is unable to
recover any loss to itself, it is the position of the SEC that the Distributor
will be immediately obligated to make the Fund whole.
DETERMINATION OF NET ASSET VALUE
Net asset value ("NAV") is calculated separately for each class of the Fund. The
NAV of Class B Shares and Class C Shares of the Fund will generally be lower
than the NAV of Class A Shares or Class AAA Shares as a result of the higher
distribution-related fee to which Class B Shares and Class C Shares are subject.
It is expected, however, that the NAV per share of each class will tend to
converge immediately after the recording of dividends, if any, which will differ
by approximately the amount of the distribution and/or service fee expense
accrual differential among the classes.
For purposes of determining the Fund's NAV 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
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 average 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.
<PAGE>
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 short-term debt instruments
having 60 days or less remaining until maturity are stated at amortized cost.
Short-term 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.
DIVIDENDS AND DISTRIBUTIONS
Each dividend and capital gains distribution, if any, declared by the Fund on
its outstanding shares will, unless you have elected otherwise, 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 distribution. An election to
receive dividends and distributions in cash or in additional shares may be
changed by notifying the Fund in writing at any time prior to the record date
for a particular dividend or distribution. No sales charges or other fees are
imposed on shareholders in connection with the reinvestment of dividends and
capital gains distribution. There is no fixed dividend rate, and there can be no
assurance that the Fund will pay any dividends or realize any capital gains.
TAXATION
GENERAL
Set forth below is a discussion of certain U.S. federal income tax issues
concerning the Fund and the purchase, ownership and disposition of Fund shares.
This discussion is based upon present provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the regulations promulgated thereunder, and
judicial and administrative ruling authorities, all of which are subject to
change and which may be retroactive. This discussion does not purport to be
complete or to deal with all aspects of U.S. federal income taxation that may be
relevant to investors in light of their particular circumstances. Prospective
investors should consult their own tax advisers with regard to the U.S. federal
tax consequences of the purchase, ownership, or disposition of Fund shares, as
well as the tax consequences arising under the laws of any state, foreign
country, or other taxing jurisdiction.
TAX STATUS OF THE FUND
The Fund has qualified and intends to remain qualified to be taxed as a
regulated investment company under Subchapter M of the Code. Accordingly, the
Fund must, among other things, (a) derive in each taxable year at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, and gains from the sale or other disposition of stock,
securities or foreign currencies, or other income (including but not limited to
gains from options, futures, or forward contracts) derived with respect to its
business of investing in such stock, securities or currencies; and (b) diversify
its holdings so that, at the end of each fiscal quarter (i) at least 50% of the
value of the Fund's total assets is represented by cash and cash items, U.S.
Government securities, the securities of other regulated investment companies
and other securities, with such other securities limited, in respect of any one
issuer, to an amount not greater than 5% of the value of the Fund's total assets
and 10% of the outstanding voting securities of such issuer, and (ii) not more
than 25% of the value of its total assets is invested in the securities (other
than U.S. Government securities and the securities of other regulated investment
companies) of any one issuer or of any two or more issuers that it controls and
that are determined to be engaged in the same or similar trades or businesses or
related trades or businesses.
As a regulated investment company, the Fund generally is not subject to U.S.
federal income tax on income and gains that it distributes to shareholders, if
at least 90% of the Fund's investment company taxable income (which includes,
among other items, dividends, interest and the excess of any net short-term
capital gains over net long-term capital losses) for the taxable year is
distributed. [THE FUND INTENDS TO DISTRIBUTE SUBSTANTIALLY ALL OF SUCH INCOME.]
<PAGE>
Amounts not distributed on a timely basis in accordance with a calendar year
distribution requirement are subject to a nondeductible 4% excise tax at the
Fund level. To avoid the tax, the Fund must distribute during each calendar year
an amount equal to the sum of (1) at least 98% of its ordinary income (not
taking into account any capital gains or losses) for the calendar year, (2) at
least 98% of its capital gains in excess of its capital losses (adjusted for
certain ordinary losses) for a one-year period generally ending on [OCTOBER 31]
[HAS THE FUND ELECTED TO USE NOVEMBER 321 OR DECEMBER 31?] of the calendar year,
and (3) all ordinary income and capital gains for previous years that were not
distributed during such years. [TO AVOID APPLICATION OF THE EXCISE TAX, THE FUND
INTENDS TO MAKE DISTRIBUTIONS IN ACCORDANCE WITH THE CALENDAR YEAR DISTRIBUTION
REQUIREMENT.]
A distribution will be treated as paid on December 31 of a calendar year if it
is declared by the Fund in October, November or December of that year with a
record date in such a month and paid by the Fund during January of the following
year. Such a distribution will be taxable to shareholders in the calendar year
in which the distribution is declared, rather than the calendar year in which it
is received.
DISTRIBUTIONS
Distributions of investment company taxable income (which includes taxable
interest and dividend income and the excess of net short-term capital gains over
long-term capital losses) are taxable to U.S. shareholders as ordinary income,
whether paid in cash or shares. Dividends paid by the Fund to a corporate
shareholder, to the extent such dividends are attributable to dividends received
by the Fund from U.S. corporations and to the extent the aggregate amount of
such dividends do not exceed the aggregate dividends received by the Fund for
the taxable year, may, subject to limitations, be eligible for the dividends
received deduction. The alternative minimum tax applicable to corporations,
however, may reduce the value of the dividends received deduction.
Capital gains may be taxed at different rates depending on how long the Fund
held the asset giving rise to such gains. Distributions of the excess of net
long-term capital gains over net short-term capital losses realized, if any,
properly designated by the Fund, whether paid in cash or reinvested in Fund
shares, will generally be taxable to shareholders at the rates applicable to
long-term capital gains, regardless of how long a shareholder has held Fund
shares. Distributions of net capital gains from assets held for one year or less
will be taxable to shareholders at rates applicable to ordinary income.
To the extent that the Fund retains any net long-term capital gains, it may
designate them as "deemed distributions" and pay a tax thereon for the benefit
of its shareholders. In that event, the shareholders report their share of the
Fund's retained realized capital gains on their individual tax returns as if it
had been received, and report a credit for the tax paid thereon by the Fund. The
amount of the deemed distribution net of such tax is then added to the
shareholder's cost basis for his shares. Shareholders who are not subject to
U.S. federal income tax or tax on capital gains should be able to file a return
on the appropriate form or a claim for refund that allows them to recover the
tax paid on their behalf.
Shareholders will be notified annually as to the U.S. federal tax status of
distributions, and shareholders receiving distributions in the form of newly
issued shares will receive a report as to the net asset value of the shares
received.
<PAGE>
Investors should be careful to consider the tax implications of buying shares of
the Fund just prior to the record date of a distribution (including a capital
gain dividend). The price of shares purchased at such a time will reflect the
amount of the forthcoming distribution, but the distribution will generally be
taxable to the shareholder.
FOREIGN TAXES
The Fund may be subject to certain taxes imposed by the countries in which it
invests or operates. The Fund will not have more than 50% of its total assets
invested in securities of foreign governments or corporations and consequently
will not qualify to elect to treat any foreign taxes paid by the Fund as having
been paid by the Fund's shareholders.
DISPOSITIONS
Upon a redemption, sale or exchange of shares of the Fund, a shareholder will
realize a taxable gain or loss depending upon his basis in the shares. A gain or
loss will be treated as capital gain or loss if the shares are capital assets in
the shareholder's hands, and for noncorporate shareholders the rate of tax will
depend upon the shareholder's holding period for the shares. Any loss realized
on a redemption, sale or exchange will be disallowed to the extent the shares
disposed of are replaced (including through reinvestment of dividends) within a
period of 61 days, beginning 30 days before and ending 30 days after the shares
are disposed of. In such a case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss. If a shareholder holds Fund shares for
six months or less and during that period receives a distribution taxable to the
shareholder as long-term capital gain, any loss realized on the sale of such
shares during such six month period would be a long-term capital loss to the
extent of such distribution.
BACKUP WITHHOLDING
The Fund generally will be required to withhold U.S. federal income tax at a
rate of 31% ("backup withholding") from dividends paid, capital gain
distributions, and redemption proceeds to shareholders if (1) the shareholder
fails to furnish the Fund with the shareholder's correct taxpayer identification
number or social security number, (2) the IRS notifies the shareholder or the
Fund that the shareholder has failed to report properly certain interest and
dividend income to the IRS and to respond to notices to that effect, or (3) when
required to do so, the shareholder fails to certify that he or she is not
subject to backup withholding. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability.
OTHER TAXATION
Distributions may be subject to additional state, local and foreign taxes,
depending on each shareholder's particular situation. Non-U.S. shareholders may
be subject to U.S. tax rules that differ significantly from those summarized
above, including the likelihood that ordinary income dividends distributed to
them will be subject to withholding of U.S. tax at a rate of 30% (or a lower
treaty rate, if applicable). Non-U.S. investors should consult their own tax
advisers regarding U.S. federal, state, local and foreign tax considerations.
FUND INVESTMENTS
OPTIONS, FUTURES AND FORWARD CONTRACTS. Any regulated futures contracts and
certain options in which the Fund may invest may be "section 1256 contracts."
Gains (or losses) on these contracts generally are considered to be 60%
long-term and 40% short-term capital gains or losses. Also, section 1256
contracts held by the Fund at the end of each taxable year (and on certain other
dates prescribed in the Code) are "marked to market" with the result that
unrealized gains or losses are treated as though they were realized. Code
section 1092, which applies to certain straddles, may affect the taxation of the
Fund's sales of securities and transactions in financial futures contracts and
related options. Under section 1092, the Fund may be required to postpone
recognition of losses incurred in certain sales of securities and certain
closing transactions in financial futures contracts or related options.
<PAGE>
Special Code provisions applicable to Fund investments, discussed above, may
affect characterization of gains and losses realized by the Fund, and may
accelerate recognition of income or defer recognition of losses. The Fund will
monitor these investments and when possible will make appropriate elections in
order to mitigate unfavorable tax treatment.
<PAGE>
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.
Quotations of the Fund's total return will represent the average annual
compounded rate of return of a hypothetical investment in the Fund over periods
of 1, 5, and 10 years (up to life of the Fund), and are calculated pursuant to
following formula:
P(1+T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV= the redeemable value at the end
of the period of a $1,000 payment made at the beginning of period. Total return
figures will reflect the deduction of Fund expenses (net of certain expense
reimbursement by the Adviser) on an annual basis, and will assume that all
dividends and distributions are reinvested and will deduct the maximum sales
charge, if any is imposed.
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.
The Fund's average annual total return figures for Class AAA Shares are
as follows:
46.3% for the one year fiscal period from January 1, 1999 through
December 31, 1999
33.8% for the five year period from January 1, 1995 through December
31, 1999
20.3% for the ten year period from January 1, 1990 through December 31,
1999
21.4% for the period from the Fund's inception on April 10, 1987
through December 31, 1999
As of December 31, 1999 the Fund had not commenced offering Class A, Class B and
Class C Shares to the public.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund may issue an unlimited number of full and fractional shares of
beneficial interest (par value $.01 per share). The Fund's shares have no
preemptive or conversion rights.
<PAGE>
VOTING RIGHTS
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. 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.
In addition, the Fund's 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. The Declaration of Trust, as amended
and supplemented, 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. 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.
LIABILITIES
The Fund's Declaration of Trust, as amended and supplemented, 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, as amended and supplemented, 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.
FINANCIAL STATEMENTS
The Fund's Financial Statements for the year ended December 31, 1999, including
the report of PricewaterhouseCoopers LLP, independent accountants, is
incorporated by reference to the Fund's Annual Report. The Fund's Annual Report
is available upon request and without charge. PricewaterhouseCoopers LLP
provides audit services, tax preparation and assistance and consultation in
connection with certain SEC filings.
<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 not rated
as a matter of policy.
3. There is a lack of essential data pertaining to the issue
or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's Investors Services, Inc.'s publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Those bonds in the Aa A, Baa Ba and B groups which Moody's 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>
PART C: OTHER INFORMATION
Item 23. EXHIBITS
(a)(1) Declaration of Trust is filed herewith.
(a)(2) Supplemental Declaration of Trust is filed herewith.
(a)(3) Articles of Amendment are filed herewith.
(b) Registrant's By-laws are incorporated by reference to
Post-Effective Amendment No. 14 to the Registration Statement
on Form N-1A as filed with the SEC on April 30, 1997
("Post-Effective Amendment No. 14").
(c) Not Applicable.
(d)(1) Amended and Restated Investment Advisory Agreement between the
Registrant and Gabelli Funds, Inc. dated May 12, 1992 is
incorporated by reference to Post-Effective Amendment No. 14.
(d)(2) Amendment No. 1 dated February 17, 1999 to the Amended and
Restated Investment Advisory Agreement dated May 12, 1992 is
filed herewith.
(e) Amended and Restated Distribution Agreement between the
Registrant and Gabelli & Company, Inc. dated April 28, 2000 is
filed herewith.
(f) Not Applicable.
(g)(1) Custody Agreement between the Registrant and State Street
Trust & Bank Company ("State Street") dated January 22, 1986
is incorporated by reference to Post-Effective Amendment No.
14.
(g)(2) Amendment to Custody Agreement dated February 14, 1991 is
incorporated by reference to Post-Effective Amendment No. 14.
(g)(3) Amendment to Custody Agreement dated May 13, 1991 is
incorporated by reference to Post-Effective Amendment No. 14.
(h)(1) Transfer Agency Agreement between the Registrant and State
Street is incorporated by reference to Post-Effective
Amendment No. 14.
(i) Opinion and Consent of Counsel is filed herewith.
<PAGE>
(j)(1) Consent of Independent Accountants is filed herewith.
(j)(2) 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 C. van Ekris are
incorporated by reference to Post-Effective Amendment No. 14.
(j)(3) Power of Attorney for John D. Gabelli is incorporated by
reference to Post-Effective Amendment No. 17 to the
Registration Statement as filed with the SEC via EDGAR on
April 30, 1999 ("Post-Effective Amendment No. 17").
(k) Not Applicable.
(l)(1) Agreement with initial shareholder is incorporated by
reference to Post-Effective Amendment No. 14.
(l)(2) Purchase Agreement with respect to Class A Series Shares of
the Fund is filed herewith.
(l)(3) Purchase Agreement with respect to Class B Series Shares of
the Fund is filed herewith.
(l)(4) Purchase Agreement with respect to Class C Series Shares of
the Fund is filed herewith.
(m)(1) Amended and Restated Plan of Distribution pursuant to Rule
12b-1 is incorporated by reference to Post-Effective Amendment
No. 14.
(m)(2) Amended and Restated Plan of Distribution pursuant to Rule
12b-1 relating to Class AAA Series Shares is incorporated by
reference to Post-Effective Amendment No. 16 to the
Registration Statement as filed with the SEC via EDGAR on
March 1, 1999 ("Post-Effective Amendment No. 16.")
(m)(3) Plan of Distribution pursuant to Rule 12b-1 relating to Class
A Series Shares is incorporated by reference to Post-Effective
Amendment No. 16.
(m)(4) Plan of Distribution pursuant to Rule 12b-1 relating to Class
B Series Shares is incorporated by reference to Post-Effective
Amendment No. 16.
(m)(5) Plan of Distribution pursuant to Rule 12b-1 relating to Class
C Series Shares is incorporated by reference to Post-Effective
Amendment No. 16.
(n) Rule 18f-3 Multi-Class Plan is incorporated by reference to
Post-Effective Amendment No. 16.
(o) Not Applicable.
<PAGE>
(p) Code of Ethics for the Registrant, Gabelli Funds, LLC and
Gabelli & Company, Inc. is filed herewith.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
WITH REGISTRANT
None
Item 25. INDEMNIFICATION
Reference is made to Subdivision (c) of Section 12 of Article
Seventh of Registrant's Declaration of Trust.
Insofar as indemnification of liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses
incurred or paid by a trustee, officer or controlling person
of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Declaration of Trust, its
By-laws, the Management Agreement, the Sub-Advisory Agreement,
the Administration Agreement and the Distribution Agreement in
a manner consistent with Release No. 11330 of the Securities
and Exchange Commission under the 1940 Act.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Gabelli Funds, LLC (the "Adviser") is a registered investment
adviser providing investment management and administrative
services to the Registrant. The Adviser also provides similar
services to other mutual funds.
The information required by this Item 26 of directors,
officers or partners of the Adviser, together with information
as to any other business, profession, vocation or employment
of a substantial nature engaged in by the Adviser or such
directors, officers or partners during the past two years, is
incorporated by reference to Form ADV filed by the Adviser
under 1940 Act (SEC File No. 801-37706).
Item 27. PRINCIPAL UNDERWRITER
<PAGE>
(a) Gabelli & Company, Inc. ("Gabelli & Company") currently acts
as distributor for The Gabelli ABC Fund, The Gabelli Asset
Fund, The Gabelli Blue Chip Value Fund, The Gabelli Capital
Asset Fund, The Gabelli Convertible Securities Fund, Inc.,
Gabelli Equity Series Funds, Inc., The Gabelli Equity Trust
Inc., The Gabelli Global Convertible Securities Fund, The
Gabelli Global Growth Fund, The Gabelli Global Multimedia
Trust Inc., The Gabelli Global Telecommunications Fund,
Gabelli Gold Fund, The Gabelli Growth Fund, Gabelli
International Growth Fund, Inc., The Gabelli Global
Opportunity Fund, The Gabelli Mathers Fund, The Gabelli U.S.
Treasury Money Market Fund, The Gabelli Utilities Fund, The
Gabelli Utility Trust, The Gabelli Value Fund, Inc., The
Treasurer's Fund, Inc. and the Gabelli Westwood Funds.
(b) The information required by this Item 27 with respect to each
director, officer or partner of Gabelli & Company is
incorporated by reference to Schedule A of Form BD filed by
Gabelli & Company under the Securities Exchange Act of 1934,
as amended (SEC File No. 8-21373).
(c) Not applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS
All such accounts, books and other documents required by
Section 31(a) of the 1940 Act and Rules 31a-1 through 31a-3
thereunder are maintained at the offices of the Adviser,
Gabelli Funds, LLC, One Corporate Center, Rye, New York
10580-1434, PFPC Inc., 101 Federal Street, Boston,
Massachusetts 02110, State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts, 02110 and Boston
Financial Data Services, Inc., Two Heritage Drive, North
Quincy, Massachusetts, 02171.
Item 29. MANAGEMENT SERVICES
Not applicable.
Item 30. UNDERTAKINGS
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant, THE GABELLI GROWTH
FUND, certifies that it meets all of the requirements for effectiveness of this
Post-Effective Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933, as amended, and has duly caused this
Post-Effective Amendment No. 18 to its 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 28th day of April, 2000.
THE GABELLI GROWTH FUND
By: /S/BRUCE N. ALPERT
-----------------------
Bruce N. Alpert
President and Treasurer
- --------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 18 to its Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/S/MARIO J. GABELLI* Principal Executive Officer and Trustee April 28, 2000
- -----------------------------
Mario J. Gabelli
/S/BRUCE N. ALPERT President and Treasurer April 28, 2000
- -----------------------------
Bruce N. Alpert
/S/ FELIX J. CHRISTIANA* Trustee April 28, 2000
- -----------------------------
Felix J Christiana
/S/ ANTHONY J. COLAVITA* Trustee April 28, 2000
- -----------------------------
Anthony J. Colavita
/S/ JAMES P. CONN* Trustee April 28, 2000
- -----------------------------
James P. Conn
/S/ JOHN D. GABELLI* Trustee April 28, 2000
- ---------------------------
John J. Gabelli
/S/ KARL OTTO POHL* Trustee April 28, 2000
- -----------------------------
Karl Otto Pohl
/S/ ANTHONY R. PUSTORINO* Trustee April 28, 2000
- -----------------------------
Anthony R. Pustorino
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/S/ ANTHONY TORNA* Trustee April 28, 2000
Anthony Torna
/S/ ANTHONIE C. VAN EKRIS* Trustee April 28, 2000
- --------------------------
Anthonie C. van Ekris
*By: /S/BRUCE N. ALPERT
------------------
Bruce N. Alpert
Attorney-in-fact
</TABLE>
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT
-------
(a)(1) Declaration of Trust
(a)(2) Supplemental Declaration of Trust
(a)(3) Articles of Amendment
(d)(2) Amendment No. 1 to Amended and Restated Investment Advisory
Agreement
(e) Amended and Restated Distribution Agreement
(i) Opinion and Consent of Counsel
(j) Consent of Independent Accountants
(l)(2) Purchase Agreement for Class A Series Shares
(l)(3) Purchase Agreement for Class B Series Shares
(l)(4) Purchase Agreement for Class C Series Shares
(p) Code of Ethics
Exhibit (a)(1)
THE GABELLI GROWTH FUND
DECLARATION OF TRUST
DECLARARTION OF TRUST, made October 24, 1986, by and among the
individuals executing this Declaration of Trust as the initial Trustees:
WHEREAS, the Trustees desire to establish a trust fund under the laws
of the Commonwealth of Massachusetts, for the investment and reinvestment of
funds contributed thereto;
NOW THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under this
Declaration of Trust IN TRUST as herein set forth below.
FIRST: This Trust shall be known as The Gabelli Growth Fund
SECOND: Whenever used herein, unless otherwise required by the context
or specifically provided:
1. All terms used in this Declaration of Trust which are defined in the
1940 Act shall have the meaning given to them in the 1940 Act.
2. The "Trust" refers to The Gabelli Growth Fund.
3. "Shareholder" means a record owner of Shares of the Trust.
4. The "Trustees" refer to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for the time
being in office as such trustees.
5. "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time and
includes fractions of Shares as well as whole Shares.
6. The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
7. "Commission" means the Securities and Exchange Commission.
8. "Board" or "Board of Trustees" means the Board of Trustees of the
Trust.
THIRD: The purpose or purposes for which the Trust is formed and the
business or objects to be transacted, carried on and promoted by it are as
follows:
1. To hold, invest and reinvest its funds, and in connection therwith
to hold part or all of its funds in cash, and to purchase or otherwise acquire,
hold for investment or otherwise, sell, sell short, assign, negotiate, transfer,
exchange or otherwise dispose of or turn to account or realize upon, securities
(which term "securities" shall for the purposes of this Declaration of Trust,
without limitation of the generality thereof, be deemed to include and
<PAGE>
stocks, Shares, bonds, debentures, notes, mortgages or other obligations, and
any certificates, receipts, warrants or other instruments representing rights to
receive, purchase or subscribe for the same, or evidencing or representing any
other rights or interests therein, or in any property or assets) created or
issued by any issuer (which term "issuer" shall for the purposes of this
Declaration of Trust, without limitation of the generality thereof be deemed to
include any persons, firms, associations, corporations, syndicates,
combinations, organizations, governments, or subdivisions thereof) or in any
other financial instruments whether or not considered as securities or
commodities; and to exercise, as owner or holder of any securities or other
financial instruments, all rights, powers and privileges in respect thereof; and
to do any and all acts and things for the preservation, protection, improvement
and enhancement in value of any or all such securities or other financial
instruments.
2. To borrow money and pledge assets in connection with any of the
objects or purposes of the Trust, and to issue notes or other obligations
evidencing such borrowings to the extent permitted by the 1940 Act and by the
Trust's fundamental investment policies under the 1940 Act.
3. To issue and sell its Shares in such amounts and on such terms and
conditions, for such purposes and for such amount or kind of consideration
(including without limitation thereto, securities) now or hereafter permitted by
the laws of the Commonwealth of Massachusetts and by this Declaration of Trust,
as the Trustees may Determine.
4. To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the Shareholders
of the Trust) its Shares, in any manner and to the extent now or hereafter
permitted by the laws of Commonwealth of Massachusetts and by this Declaration
of Trust.
5. To conduct its business in all its branches at one or more offices
in the Commonwealth of Massachusetts and elsewhere in any part of the world,
without restriction or limit as to extent.
6. To carry out all or any of the foregoing objects and purposes as
principal or agent and alone or with associates or, to the extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts, as a
member of, or as the owner or holder of any stock of, or share of interest in,
any issuer, and in connection therewith to make or enter into such deeds or
contracts with any issuers and to do such acts and things and to exercise such
powers, as a natural person could lawfully make, enter into, do or exercise.
7. To do any and all such further acts and things and to exercise any
and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out or
attainment of all or any of the foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other Articles of this Declaration
of Trust, and shall each be regarded as independent and construed as powers as
well as objects and purposes, and the enumeration of specific purposes, objects
and powers shall not be construed to limit or restrict in any manner the meaning
of general terms or the general powers of the Trust now or hereafter conferred
by the laws of the Commonwealth of Massachusetts nor shall the expression of one
thing be deemed to exclude another, though it be of like nature, not expressed;
provided, however, that the Trust shall not carry on any business, or exercise
any powers, in any state, territory, district or country except to the extent
that the same may lawfully be carried on or exercised under the laws thereof.
FOURTH: The beneficial interest in the TRUST shall at all times be
divided into an unlimited number of transferable Shares, each such Share having
a par value of one cent per share, each of which shall represent an equal
proportionate interest in the Trust with each other
<PAGE>
share outstanding, none having priority or preference over another. The Trustees
may from time to time divide or combine the Shares into a greater or lesser
number without thereby changing the proportionate beneficial interests in the
Trust. Contributions to the Trust may be accepted for, and Shares shall be
redeemed as, whole Shares and/or 1/1,000ths of a share or multiple thereof. The
Board of Trustees of the Trust may classify unissued Shares into one or more
additional classes which shall, together with the issued Shares of beneficial
interest of the Trust have such designations as the Board shall determine, and
which shall be treated for all purposes other than as to dividends as if all
Shares were Shares of one class. The dividends payable to the holders of each
such class shall, subject to any applicable rule, regulation or order of the
Commission or other applicable law or regulation, be determined by the Board and
need not be individually declared but may be declared and paid in accordance
with a formula adopted by the Board. The Board of Trustees of the Trust may in
the alternative classify unissued Shares into one or more additional classes
which shall, together with the issued Shares of beneficial interest of the
Trust, have such designations as the Board may determine (but which shall
include the word "Series") and shall, subject to any applicable rule, regulation
or order of the Commission or other applicable law or regulation, have the
characteristics set forth in (a) through and including (b) below.
(a) All consideration received by the Trust for the issue or sale of
Shares of each such class, together with all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, shall irrevocably belong to the
class of Shares with respect to which such assets, payments, or funds were
received by the Trust for all purposes, subject only to the rights of creditors,
and shall be so handled upon the books of account of the Trust. Such assets,
income, earnings, profits and proceeds thereof, any asset derived from any
reinvestment of such proceeds, in whatever form the same may be, are herein
referred to as "assets belonging to" such class.
(b) Dividends or distributions on Shares of any such class, whether
payable in Shares or cash, shall be paid only out of earnings, surplus or other
assets belonging to such class.
(c) In the event of the liquidation or dissolution of
the Trust or of such a class, Shareholders of each such class shall be entitled
to receive, as a class, out of the assets of the Trust available for
distribution to Shareholders, but other than general assets not belonging to any
particular class, the assets belonging to such class; and the assets so
distributable to the Shareholders of any such class shall be distributed among
such Shareholders in proportion to the number of Shares of such class held by
them and recorded on the books of the Trust. In the event that there are any
general assets not belonging to any particular class of Shares and available for
distribution, such distribution shall be made to the holders of Shares of all
classes in proportion to the asset value of the respective classes.
(d) The assets belonging to any such class of Shares shall be charged
with the liabilities in respect to such class and shall be charged with their
share of the general liabilities of the Trust, in proportion to the asset value
of the respective classes. The determination of the Board of Trustees shall be
conclusive as to the amount of liabilities, including accrued expenses and
reserves, and as to the allocation of the same as to a given class, and as to
whether the same, or general assets of the Trust, are allocable to one or more
classes. The liabilities so allocated to a class are herein referred to as
"liabilities belonging to" such class.
(e) At all meetings of Shareholders, each Shareholder of each share of
each such class of the Trust shall be entitled to one vote for each share of
each such class of the Trust shall be entitled to one vote for each share,
irrespective of the class, standing in his name on the books of the Trust,
except that where a vote of the holders of the Shares of any
<PAGE>
class, or of more than one class, voting by class, is required by the 1940 Act
and/or Massachusetts law as to any proposal, only the holders of such class or
classes, voting by class, shall be entitled to vote upon such proposal and the
holders of any other class or classes shall not be entitled to vote thereon. Any
fractional share, if any such fractional Shares are outstanding, shall carry
proportionately all the rights of a whole share, including the right to vote and
the right to receive dividends. There shall be no cumulative voting rights with
respect to any Shares or class of Shares of the Trust.
(f) The provisions of Article FIFTH relating to voting shall apply when
the Trust has only one class of Shares outstanding or when the Trust has more
than one class of Shares outstanding but which differ only as to their dividend
rights.
(g) When the Trust has more than one class of Shares outstanding having
separate assets and liabilities (each such class being sometimes hereinafter
referred to as a "Series"'): (i) the redemption rights provided to the holders
of the Trust's Shares shall be deemed to apply only to the assets belonging to
the series in question; and (ii) the net asset value per share computation as
provided for in Article SEVENTH shall be applied as if each such series were the
Trust as referred to in such computation, but with its assets limited to the
assets belonging to such series and its liabilities limited to the liabilities
belonging to such series.
(h) The ownership of Shares shall be recorded in the books of the Trust
or a transfer agent. The trustees may make such rules as they consider
appropriate for the transfer of Shares and similar matters. The record books of
the Trust or any transfer agent, as the case may be, shall be conclusive as to
who are the holders of Shares and as to the number of Shares held from time to
time by each.
(i) The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize.
(j) Shareholders shall have no pre-emptive or other right to subscribe
to any additional Shares or other securities issued by the Trust or the
Trustees. FIFTH: The following provisions are hereby adopted with respect to
voting Shares of the Trust and certain other rights:
1. The Shareholders shall have power to vote (i) for the election of
Trustees when that issue is submitted to them, (ii) with respect to the
amendment of this Declaration of Trust, except as stated in Article EIGHTH as to
the name of the Trust, and (iii) with respect to such additional matters
relating to the Trust as may be required by the 1940 Act or authorized by law,
by this Declaration of Trust, or the By-Laws of the Trust with the commission or
any State, or as the Trustees may consider desirable.
2. At all meetings of Shareholders each Shareholder shall be entitled
to one vote for each share standing in his name on the books of the Trust on the
date, fixed in accordance with the By-Laws, for determination of Shareholders
entitled to vote at such meeting except (if so determined by the Board of
Trustees) for Shares redeemed prior to the meeting. Any fractional share shall
carry proportionately all the rights of a whole share, including the right to
vote and the right to receive dividends. The presence in person or by proxy of
the holders of one-third of the Shares outstanding and entitled to vote thereat
shall constitute a quorum at any meeting of the Shareholders. If at any meeting
of the Shareholders there shall be less than a quorum present, the Shareholders
present at such meeting may, without further notice, adjourn the same from time
to time until a quorum 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.
3. Each Shareholder, upon request to the Trust in proper form
determined by the Trust, shall be entitled to require the Trust to redeem all or
any part of the Shares standing in the name of such Shareholder. The method of
computing such net asset
<PAGE>
value, the time at which such net asset value shall be computed and the time
within which the Trust shall make payment therefor, shall be determined as
hereinafter provided in Article SEVENTH of this Declaration of Trust.
Notwithstanding the foregoing, the Trustees, when permitted or required to do so
by the 1940 Act, may suspend the right of the Shareholders to require the Trust
to redeem Shares.
4. No Shareholder shall, as such holder, have any right to purchase or
subscribe for any security of the Trust which it may issue or sell, other than
such right, if any, as the Trustee, in their discretion, may determine.
5. All persons who shall acquire Shares shall acquire the same subject
to the provisions of this Declaration of Trust.
6. Notwithstanding anything elsewhere contained in this Declaration of
Trust or in the By-Laws of the Trust, so long as the By-Laws of the Trust do not
provide for regular annual meetings of Shareholders of the Trust, the
Shareholders of the Trust shall have such rights, and the Trust, the Board of
Trustees, and the Trustees shall have such obligations as would exist if the
Trust were a common law trust covered by Section 16(C) of the 1940 Act. In the
event that the Trust has outstanding two or more series, each such series shall
be considered as if it were a separate common law trust covered by said Section
16 (C). However, the Trust may at any time or from time to time apply to the
Commission for one or more exemptions from all or part of said Section 16 (C)
and, if an exemptive order or orders are issued by the Commission, such order or
orders shall be deemed part of said Section 16 (C) for the purposes of this
paragraph 6.
SIXTH: The persons who shall act as initial Trustees are the
Trustees initially executing this Declaration of Trust or any counterpart
thereof. However, the By-Laws of the Trust may fix the number of Trustees at a
number greater than that of the number of initial Trustees and may authorize the
Trustees, by the vote of a majority of the entire number of Trustees, to
increase or decrease the number of Trustees fixed by this Declaration of Trust
or by the By-Laws within limits specified in the By-Laws, provided that in no
case shall the number of Trustees be less than one, and to fill the vacancies
created by any such increase in the number of Trustees. Unless otherwise
provided by the By-Laws of the Trust, the Trustees need not be Shareholders.
SEVENTH: The following provisions are hereby adopted for the
purpose of defining, limiting and regulating the powers of the Trust and of the
Trustees and Shareholders.
1. As soon as any Trustee is duly elected by the Shareholders or the
Trustees and shall have accepted this trust, the Trust estate shall vest in the
new Trustee or Trustees; together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder.
2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
3. The assets of the Trust shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. All of the assets of the Trust shall at
all times be considered as vested in the Trustees. Except as provided in this
Declaration of Trust, no Shareholder shall have, as such holder of beneficial
interest in the Trust, any authority, power or right whatsoever to transact
business for or on behalf of the Trust, or on behalf of the Trustees, in
connection with the property or assets of the Trust, or in any part thereof,
except the rights to receive the income and distributable amounts arising
therefrom as set forth herein.
4. The Trustees in all instances shall act as principals, and are and
shall be free from the control of the Shareholders. The Trustees shall have full
power and authority to
<PAGE>
do any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in connection with
the management of the Trust. The Trustees shall not in any way be bound or
limited by present or future laws or customs in regard to Trust investments, but
shall have full authority and power to make any and all investments which they,
in their uncontrolled discretion, shall deem proper to accomplish the purposes
of this Trust. Subject to any applicable limitation in this Declaration of Trust
or in the By-Laws of the Trust, the Trustees shall have power and authority:
(a) to adopt By-Laws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders;
(b) to elect and remove such officers and appoint and terminate such
officers as they consider appropriate with or without cause;
(c) to employ a bank or trust company as custodian of any assets of the
Trust subject to any conditions set forth in this Declaration of Trust or in the
By-Laws;
(d) to retain a transfer agent and Shareholder servicing agent, or
both;
(e) to provide for the distribution of Shares either through a
principal underwriter or the Trust itself or both;
(f) to set record dates in the manner provided for in the By-Laws of
the Trust;
(g) to delegate such authority as they consider desirable to any
officers of the Trust and to any agent, custodian or underwriter;
(h) to vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property hold in Trust hereunder; and to
execute and deliver powers of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities held in trust hereunder;
(j) to hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form; or either in
its own name or in the name of a custodian or an nominee or nominees, subject in
either case to proper safeguards according to the usual practice of
Massachusetts business trusts or investment companies;
(k) to consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust;
(l) to compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(m) to make, in the manner provided in the By-Laws, distributions of
income and of capital gains to Shareholders;
(n) to borrow money to the extent and in the manner permitted by the
1940 Act and the Trust's fundamental policy thereunder as to borrowing and
(o) To enter into investment advisory, management or administrative
contracts, subject to the 1940 Act, with any one or more corporations,
partnerships, trusts, associations or other persons; if the other party or
parties to any such
<PAGE>
contract are authorized to enter into securities transactions on behalf of the
Trust, such transactions shall be deemed to have been authorized by all of the
Trustees.
1. No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred by the Trustees upon
their order.
2. (a) The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of money
or assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription to any Shares or otherwise. Every
note, bond, contract or other undertaking issued by or on behalf of the Trust or
the Trustees relating to the Trust shall include a recitation limiting the
obligation represented thereby to the Trust and its assets (but the omission of
such a recitation shall not operate to bind any Shareholder).
(b) Except as otherwise provided in this Declaration of Trust or the
By-Laws, whenever this Declaration of Trust calls for or permits any action to
be taken by the Trustees hereunder, such action shall mean that taken by the
Board of Trustees by vote of the majority of a quorum of Trustees as set forth
from time to time in the By-Laws of the Trust or as required pursuant to the
provisions of the 1940 Act and the rules and regulations promulgated thereunder.
(c) The Trustees shall possess and exercise any and all such additional
powers as are reasonably implied from the powers herein contained such as may be
necessary or convenient in the conduct of any business or enterprise of the
Trust, to do and perform anything necessary, suitable, or proper for the
accomplishment of any of the purposes, or the attainment of any one or more of
the objects, herein enumerated, or which shall at any time appear conducive to
or expedient for the protection or benefit of the Trust, and to do and perform
all other Acts or things necessary or incidental to the purposes herein before
set forth, or that may be deemed necessary by the Trustees.
(d) The Trustees shall have the power to determine conclusively whether
any moneys, securities, or other properties of the Trust property are, for the
purposes of this Trust, to be considered as capital or income and in what manner
any expenses or disbursements are to be borne as between capital and income
whether or not in the absence of this provision such moneys, securities, or
other properties would be regarded as capital or income and whether or not in
the absence of this provision such expenses or disbursements would ordinarily be
charged to capital or to income.
1. The By-Laws of the Trust may divide the Trustees into classes and
prescribe the tenure of office of the several classes, but no class shall be
elected for a period shorter than that from the time of the election following
the division into classes until the next annual meeting and thereafter for a
period shorter than the interval between annual meetings or for a period shorter
than the interval between annual meetings or for a period longer than five
years, and the term of office of at least one class shall expire each year.
2. The Shareholder shall have the right to inspect the records,
documents, accounts and books of the Trust, subject to reasonable regulations of
the Trustees, not contrary to Massachusetts law, as to whether and to what
extent, and at what times and places, and under what conditions and regulations,
such right shall be exercised.
3. Any Trustee, or any officer elected or appointed by the Trustees or
by any committee of the Trustees or by the Shareholder or otherwise, may be
removed at any time, with or without cause, in such lawful manner as may be
provided in the By-Laws of the Trust.
4. If the By-Laws so provide, the Trustees shall have power to hold
their meetings, to have an office or offices and, subject to the provisions of
the laws of
<PAGE>
Commonwealth of Massachusetts, to keep the books of the Trust outside of said
Commonwealth at such places as may from time to time be designated by them.
5. Securities held by the Trust shall be voted in person or by proxy by
the President or a Vice President, or such officer or officers of the Trust as
the Trustees shall designate for the purpose, or by a proxy or proxies thereunto
duly authorized by the Trustees, except as otherwise ordered by vote of the
holders of a majority of the Shares outstanding and entitled to vote in respect
thereto.
6. (a) Subject to the provisions of the 1940 Act, any Trustee, officer
or employee, individually, or any partnership of which any Trustee, officer or
employee may be a member, or any corporation or association of which any
Trustee, officer or employee may be an officer, director, trustee, employee or
stockholder, may be a party to, or may be pecuniarily or otherwise interested
in, any contract or transaction of the Trust, and in the absence of fraud no
contract or other transaction shall be thereby affected or invalidated; provided
that in case a Trustee, or a partnership, corporation or association of which a
Trustee is a member, officer, director, trustee, employee or stockholder is so
interested, such fact shall be disclosed or shall have been known to the
Trustees or a majority thereof; and any trustee who is so interested, or who is
also a director, officer, trustee, employee or stockholder of such other
corporation or association or a member of such partnership which is so
interested, may be counted in determining the existence of a quorum at any
meeting of the Trustees which shall authorize any such contract or transaction,
and may vote thereat to authorize any such contract or transaction, and may vote
thereat to authorize any such contract or transaction, with like force and
effect as if he were not such director, officer, trustee, employee or
stockholder of such other trust or corporation or association or a member of a
partnership so interested
(b) Specifically, but without limitation of the foregoing, the Trust
may enter into a management or investment advisory contract or underwriting
contract and other contracts with, and may otherwise do business with any
manager or investment adviser and/or any sub-adviser for the Trust and/or
principal underwriter of the Shares of the Trust or any subsidiary or affiliate
of any such manager or investment adviser and/or sub-adviser and/or principal
underwriter and may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or corporation relating to
the Trust notwithstanding that the Trustee of the Trust may be composed in part
of partners, directors, officers or employees of any such firm or corporation,
and officers of the Trust may have been or may be or become partners, directors,
officers or employees of any such firm or corporation, and in the absence of
fraud the Trust and any such firm or corporation may deal freely with each
other, and no such contract or transaction between the Trust and any such firm
or corporation shall be invalidated or in any wise affected thereby, nor shall
any Trustee or officer of the Trust be liable to the Trust or to any Shareholder
or creditor thereof or to any other person for any loss incurred by it or him
solely because of the existence of any such contract or transaction; provided
that nothing herein shall protect any Trustee or officer of the Trust against
any liability to the Trust or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
(c) (1) As used in this paragraph the following terms shall have the
meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former Trustee or
officer of another trust or corporation whose securities are or were owned by
the Trust or of which the Trust is or was a creditor and who served or serves in
such capacity at the request of the Trust, any present or former investment
adviser, sub-adviser, administrator or principal underwriter of the Trust and
the heir, executors, administrators, successors and assigns of any of
<PAGE>
the foregoing; however, whenever conduct by an indemnitee is referred to, the
conduct shall be that of the original indemnitee rather than that of the heir
executor, administrator, successor or assignee;
(ii) the term "covered proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which an indemnitee is or was a party or is
threatened to be made a party by reason of the fact or facts under which he or
it is an indemnitee as defined above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office in question;
(iv) the term "covered expenses" shall mean expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by an indemnities in connection with a covered
proceeding; and
(v) the term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse determination as to the
indemnitee whether by judgement, order, settlement, conviction or upon a plea of
noIo contendere of its equivalent.
(b) The Trust shall not indemnify any indemnitee for any covered
expenses in any covered proceeding if there has been an adjudication of
liability against such indemnitee expressly based on a finding of disabling
conduct.
(c) Except as set forth in (d) above, the Trust shall indemnify any
indemnitee for covered expenses in any covered proceeding, whether or not there
is an adjudication of liability as to such indemnitee, if a determination has
been made that the indemnitee was not liable by reason of disabling conduct by
(i) a final decision of the court or other body before which the covered
proceeding was brought: or (ii) in the absence of such decision, a reasonable
determination, based on a review of the facts, by either (a) the vote of a
majority of a quorum of Trustees who are neither "interested persons", as
defined in the 1940 Act nor parties to the covered proceeding or (b) an
independent legal counsel in a written opinion; provided that such Trustees or
counsel, in reaching such determination, may but need not presume the absence of
disabling conduct on the part of the indemnitee by reason of the manner in which
the covered proceeding was terminated.
(d) Covered expenses incurred by an indemnitee in connection with a
covered proceeding shall be advanced by the Trust to an indemnitee prior to the
final deposition of a covered proceeding upon the request of the indemnitee for
such advance and the undertaking by or on behalf of the indemnitee to repay the
advance unless it is ultimately determined that the indemnitee is entitled to
indemnification thereunder, but only if one or more of the following is the
case: (i) the indemnitee shall provide a security for such undertaking; (ii) the
Trust shall be insured against losses arising out of any lawful advances; or
(iii) there shall have been a determination, based on a review of the readily
avail le facts (as opposed to a full trial-type inquiry) that there is a reason
to believe that the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a written opinion or by
the vote of a majority of a quorum of trustees who are neither "interested
persons" as defined in the 1940 Act nor parties to the covered proceeding.
(e) Nothing herein shall be deemed to affect the right of the Trust
and/or any indemnitee to acquire and pay for any insurance covering any or all
indemnitees
<PAGE>
to the extent permitted by the 1940 Act or to affect any other indemnification
rights to which any indemnitee may be entitled to the extent permitted by the
1940 Act.
1. For purposes of the computation of net asset value, as in this
Declaration of Trust referred to, the following rules shall apply:
(a) The net asset value of each share of the Trust tendered to the
Trust tendered to the Trust for redemption shall be determined as of the close
of business on the New York Stock Exchange next succeeding the tender of such
share;
(b) The net asset value of each share of the Trust for the purpose of
the issue of such Shares shall be determined as of the issue of such Shares
shall be determined as of the close of business on the New York Stock Exchange
next succeeding the receipt of an order to purchase such Shares;
(c) The net asset value of each share of the Trust, as of time of
valuation on any day, shall be the quotient obtained by dividing the value, as
at such time, of the net assets of the Trust (i.e., the value of the assets of
the Trust less its liabilities exclusive of its surplus) by the total number of
Shares outstanding at such time. The assets and liabilities of the Trust shall
be determined in accordance with generally accepted accounting principles;
provided, however, that in determining the liabilities of the Trust there shall
be included such reserves for taxes or contingent liabilities as may be
authorized or approved by the Trustees, and provided further that in determining
the value of the assets of the Trust for the purpose of obtaining the net asset
value, each security listed on the New York Stock Exchange shall be valued on
the basis of the closing sale at the time of valuation on the business day as of
which such value is being determined; if there be no sale on such day, then the
security shall be valued on the basis of the mean between closing bid and asked
prices on such day; if no bid and asked prices are quoted for such day, then the
security shall be valued by such method as the Trustees shall deem in good faith
to reflect its fair market value securities not listed on the New York Stock
Exchange and other financial instruments shall be valued in like manner on the
basis of quotations on any other stock or commodities exchange which the
Trustees may from time to time approve for that purpose; readily marketable
securities traded in the over-the -counter market shall be valued at the mean
between their bid and asked prices, or, if the Trustees shall so determine, at
their bid prices; and all other assets of the Trust and all securities as to
which the Trust might be considered an "underwriter" (as that term is used in
the Securities Act of 1933), whether or not such securities are listed or traded
in the over-the-counter market, shall be valued by such method as they shall
deem in good faith to reflect their fair market value. In connection with the
accrual of any fee or refund payable to or by an investment adviser of the
Trust, the amount of which accrual is not definitely determinable as of any time
at which the net asset value of each share of the Trust is being determined due
to the contingent nature of such fee or refund, the Trustees are authorized to
establish from time to time formulae for such accrual, on the basis of the
contingencies in question of the date of such determination, or on such other
basis as the Trustees may establish.
(1) Shares to be issued shall be deemed to be outstanding as of the
time of the determination of the net asset value per share applicable to such
issuance and the net price thereof shall be deemed to be an asset of the Trust;
(2) Shares to be redeemed by the Trust shall be deemed to be
outstanding until the time of the determination of the net asset value
applicable to such redemption and thereupon and until paid the redemption price
thereof shall be deemed to be a liability of the Trust: and
(3) Shares voluntarily purchased or contracted to be purchased by the
Trust pursuant to the provisions of paragraph 13 (d) of this Article SEVENTH
shall be deemed to be outstanding until whichever is the later of (i) the time
of the making of
<PAGE>
such purchases or contract of purchase, and (ii) the time as of which the
purchase price is determined, and thereupon and until paid, the purchase price
thereof shall be deemed to be a liability of the Trust.
(a) The net asset value of each Share of the Trust, as of any time
other than the close of business on the New York Stock Exchange on any day, may
be determined by applying to the net asset value as of the close of business on
that Exchange on the preceding business day, computed as provided in this
Article SEVENTH, such adjustments as are authorized by or pursuant to the
direction of the Trustees and designed reasonably to reflect any material
changes in the market value of securities and other assets held and any other
material changes in the assets or liabilities of the Trust and in the number of
its outstanding Shares which shall have taken place since the close of business
on such preceding business day.
(b) In addition to the foregoing, the Trustees are empowered, in their
absolute discretion, to establish other bases or times, or both, for determining
the net asset value of each share of the Trust in accordance with the 1940 Act
and to authorize the voluntary purchase by the Trust, either directly or through
an agent, of Shares of the Trust upon such terms and conditions and for such
consideration as the Trustees shall deem advisable in accordance with any such
provision, rule or regulation.
(c) Payment of the net asset value of Shares of the Trust properly
surrendered to it for redemption shall be made by the Trust within seven days
after tender of such Shares to the Trust for such purpose plus any period of
time during which the right of the holders of the Shares of the Trust to require
the Trust to redeem such Shares has been suspended. Any such payment may be made
in portfolio securities of the Trust and/or in cash, as the Trustees shall deem
advisable, and no Shareholder shall have a right, other than as determined by
the Trustees, to have his Shares redeemed in kind.
EIGHTH:
1. In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his being or having been a Shareholder and
not because of his acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his heirs, executors, administrators or other legal
representatives or in the case or a corporation or other entity, its corporate
or other general successor) shall be entitled out of the Trust estate to be held
harmless from and indemnified against all loss and expense arising from such
liability. This Trust shall, upon request by the Shareholder, assume the defense
of any claim made against any Shareholder for any act or obligation of the Trust
and satisfy any judgment thereon.
2. It is hereby expressly declared that a trust and not a partnership
is created hereby. No Trustee hereunder shall have any power to bind personally
either the Trust's officers or any Shareholder. All persons extending credit to,
contracting with or having any claim against the Trust or the Trustee shall look
only to the assets of the Trust for payment under such credit, contract or
claim, and neither the Shareholders nor the Trustees, nor any of their agents,
whether past, present or future, shall be personally liable therefor, nothing in
this Declaration of Trust shall protect a Trustee against any liability to which
such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
3. The exercise by the Trustee of their powers and discretion hereunder
in good faith and with reasonable care under the circumstances then prevailing,
shall be binding upon everyone interested, subject to the provisions of
paragraph 2 of this Article EIGHTH, the Trustee shall not be liable for errors
of judgment or mistakes of fact or law. The Trustees may take advice of counsel
or other experts with respect to the meaning and operations of this Declaration
of Trust, and subject to the provisions of paragraph 2 of this Article EIGHTH,
shall be under no liability for any act or omission in accordance with such
advice or for failing to
<PAGE>
follow such advice. The Trustees shall not be required to give any bond as such,
nor any surety if a bond is required.
4. This Trust shall continue without limitation of time but subject to
the provisions of sub-sections (a), (b) and (c) of this paragraph 4.
(a) The Trustees, with the favorable vote of the holders of more than
50% of the outstanding Shares entitled to vote, or the favorable vote of the
holders of more than 50% of the Shares of any affected Series, may sell and
convey the assets of the Trust or of any Series, (which sale may be subject to
the retention of assets for the payment of liabilities and expenses) to another
issuer for a consideration which may be or include securities of such issuer.
Upon making provision for the payment of liabilities, by assumption by such
issuer or otherwise, the Trustees shall distribute the remaining proceeds
ratably among the holders of the Shares of the Trust, or Shares of such Series,
then outstanding.
(b) The Trustees with the favorable vote of the holders of more than
50% of the outstanding Shares entitled to vote, or the favorable vote of the
holders of more than 50% of the Shares of any affected series, may at any time
sell and convert into money all the assets of the Trust or of any Series. Upon
making provision for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust, the Trustees shall distribute
the remaining assets of the Trust ratably among the holders of the outstanding
Shares, or Shares of such series.
(c) If the action relates to the entire Trust, upon completion of the
distribution of the remaining proceeds or the remaining assets as provided on
sub-sections (a) and (b), the Trust shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder and the
right, title and interest of all parties shall be cancelled and discharged.
1. The original or a copy of this instrument and of each declaration of
trust supplemental hereto shall be kept at the office of the Trust where it may
be inspected by any Shareholder. A copy of this instrument and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
supplemental declarations of trust have been made and as to any matters in
connection with the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such supplemental declaration of trust. In this
instrument or in any such supplemental declaration of trust. In this instrument
in any such supplemental declaration of trust, references to this instrument,
and all expressions like "herein", "hereof" and "hereunder" shall be deemed to
refer to this instrument as amended or affected by any such supplemental
declaration of trust. This instrument may be executed in any number of
counterparts, each of which shall be deemed an original.
2. The trust set forth in this instrument is created under and is to be
governed by and construed and administered according to the laws of the
Commonwealth of Massachusetts. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
3. The Board of Trustees is empowered to cause the redemption of the
Shares held in any account if the aggregate net asset value of such Shares
(taken at cost or value, as determined by the Board) has been reduced by a
Shareholder to $500 or less upon such notice (not less than 30 days) to the
Shareholders in question, with such permission to increase the investment in
question, and upon such other terms and conditions as may be fixed by the Board
of Trustees in accordance with the 1940 Act. The Board of Trustees is also
empowered to
<PAGE>
cause the redemption of Shares held in one or more accounts upon such notice
(not less than 30 days) to the Shareholders n question if the beneficial
ownership of the account or accounts in question is held by one person or entity
and the account or accounts in question total more than 5% of the outstanding
Shares of the Trust, to the extent necessary to reduce such beneficial
holding(s) to 5%. Such beneficial ownership shall mean voting and/or investment
control of the Shares in question and a determination by the Board of Trustees
as to whether such beneficial ownership exists shall be final and binding on all
persons. Subject to the direction and control of the Board and such other terms
and conditions as the Board may fix in accordance with the 1940 Act, any officer
or officers of the Trust may also make final and binding determinations as to
(i) the allocation of one or more accounts of the Shares to be redeemed; and
(ii) the date as of which the net asset value of the Shares to be redeemed is
determined.
4. In the event that any person advances the organizational expenses of
the Trust, such advances shall become an obligation of the Trust subject to such
terms and conditions as may be fixed by, and on a date fixed by, or determined
in accordance with criteria fixed by the Board of Trustees, to be amortized over
a period or periods to be fixed by the Board.
5. Whenever any action is taken under this Declaration of Trust under
any authorization to take action which is permitted by the 1940 Act, such action
shall be deemed to have been properly taken if such action is in accordance with
the construction of the 1940 Act then in effect as expressed in "no action"
letters of the staff of the Commission or any release, rule, regulation or order
under the 1940 Act or any decision of a court of competent jurisdiction,
notwithstanding that any of the foregoing shall later be found to be invalid or
otherwise reversed or modified by any of the foregoing.
6. Any section which may be taken by the Board of Trustees under this
Declaration of Trust or its By-Laws may be taken by the description thereof in
the then effective prospectus and/or statement of additional information
relating to the Shares under the Securities Act of 1933 or in any proxy
statement of the Trust rather than by formal resolution of the Board.
7. Whenever under this Declaration of Trust, the Board of Trustees is
permitted or required to place a value on assets of the Trust, such action may
be delegated by the Board, and/or determined in accordance with a formula
determined by the Board, to the extent permitted by the 1940 Act.
8. If authorized by vote of the Trustees and the favorable vote of the
holders of more than 50% of the outstanding Shares entitled to vote, or by any
larger vote which may be required by applicable law in any particular case, the
Trustees shall amend or otherwise supplement this instrument, by making a
Declaration of Trust supplemental hereto, which thereafter shall form a part
hereof: however, any such supplemental declaration of Trust supplemental hereto,
which thereafter shall form a part hereof: however, any such supplemental
declaration of Trust may be authorized by the vote of a majority of the Trustees
then in office without any Shareholder vote if the sole purpose of such
supplemental declaration of trust is to change the name of the Trust; any
supplemental declaration of trust may be executed by and on behalf of the Trust
and the Trustees by any officer or officers of the Trust.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
24th day of October, 1986.
/S/NICHOLAS E. E. DESTEFANO
- ---------------------------
NICHOLAS E.E. DESTEFANO
<PAGE>
STATE OF NEW YORK)
COUNTY OF NEW YORK)
On this 24th day of October, 1986 before me personally appeared
Nicholas E.E. DeStefano, to me known to be one of the persons described in and
who executed the foregoing instrument, and acknowledged that he executed the
same as his free act and deed.
/S/NOTARY PUBLIC
Notary Public
Exhibit (a)(2)
SUPPLEMENTAL DECLARATION OF TRUST
TO THE
DECLARATION OF TRUST
OF
THE GABELLI GROWTH FUND
SUPPLEMENTAL DECLARATION OF TRUST to the DECLARATION OF TRUST of The
Gabelli Growth Fund (the "Trust") made October 24, 1986 and filed on October 31,
1986 and amended on April 18, 2000 (the "Declaration of Trust").
WHEREAS, Paragraph 12 of Article EIGHTH of the Declaration of Trust
permits the Trustees of the Trust to supplement the Declaration of Trust without
any shareholder vote to classify or reclassify, or to establish or modify the
designations, powers, preferences, voting, conversion or other rights or
limitations of, any issued and outstanding Shares by making a Supplemental
Declaration of Trust, if authorized by a vote of a majority of the Trustees then
in office; and
WHEREAS, at a Special Meeting the Board of Trustees of the Trust on
March 9, 1999 a majority of the Trustees approved this Supplemental Declaration
of Trust.
NOW THEREFORE, the undersigned, being the Trustees of the Trust, acting
pursuant to Article EIGHTH of the Declaration of Trust, hereby supplement the
Declaration of Trust as follows:
Section 1. The Board of Trustees of the Trust at a meeting held on
March 9, 1999, adopted resolutions (i) reclassifying the unissued shares of
beneficial interest of the Trust into three sub-series: The Gabelli Growth Fund
Class A Shares ("Class A Shares"); the Gabelli Growth Fund Class B Shares
("Class B Shares"); and The Gabelli Growth Fund Class C Shares ("Class C
Shares"), and (ii) reclassifying the issued shares of beneficial interest of
Trust into a sub-series to be known as The Gabelli Growth Fund Class AAA Shares
("Class AAA Shares").
Section 1. The Class A Shares, Class B Shares and Class C Shares shall
represent interests in the same portfolio of assets, together with the Class AAA
Shares and any other classes of beneficial interests of the Trust so designated
in the future, which assets shall be allocated to each of the foregoing Classes
in accordance with subsection (a) of Article FOURTH of the Declaration of Trust
in the proportion that the net assets of such Class bears to the net assets of
all such Classes and which assets shall be charged with the liabilities of the
Trust with respect to each such Class in accordance with subsection (a) of
Article FOURTH of the Declaration of Trust. The Class A Shares, Class B Shares
and Class C Shares shall have the same preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption as each other Class, all as set forth in the
Declaration of Trust, except for the differences hereinafter set forth:
(1) The dividends and distributions ("Dividends") per share of the
Class A Shares, Class B Shares and Class C Shares shall be in such amounts as
may be declared from time to time by the Board of Trustees, and such Dividends
may vary with respect to the shares of
<PAGE>
each such Class from the Dividends with respect to the shares of such
other Classes, to reflect differing allocations of the expenses and liabilities
of the Trust among such classes and any resultant difference among the net asset
values per share of such Classes, to such extent and for such purposes as the
Board of Trustees may deem appropriate consistent with the Declaration of Trust
and this Supplemental Declaration of Trust.
(1) Each Class B Share shall be converted automatically, and without
any action or choice on the part of the holder thereof, into a Class A Share on
the Conversion Date. The term "Conversion Date" means, with respect to each
Class B Share, the first business day of the eighty-fifth calendar month
following the calendar month in which such Class B Share was issued; provided,
however, that, subject to the provisions of the next sentence, for any Class B
Shares acquired through an exchange, or through a series of exchanges, as
permitted by the Trust and as provided in the Prospectus of the Trust relating
to the Class B Shares (the "Prospectus"), from another investment company or a
class of shares (including the Class B Shares) of the Trust (an "Eligible
Investment Company"), the Conversion Date shall be the conversion date
applicable to the shares of the Eligible Investment Company originally
subscribed for in lieu of the Conversion Date of any shares acquired through
exchange if such eligible investment company issuing the Share originally
subscribed for had a conversion feature, but not later than the Conversion Date
determined as provided above. For the purpose of calculating the holding period
required for conversion, the date of issuance of a Class B Share shall mean (i)
in the case of a Class B Share obtained by the holder thereof through an
original subscription to the Trust, the date of the issuance of such Class B
Share, or (ii) in the case of a Class B Share obtained by the holder thereof
through an exchange, or through a series of exchanges, from an Eligible
Investment Company, the date of issuance of the share of the Eligible Investment
Company to which the holder originally subscribed plus the number of days, if
any, that such share had been exchanged for, and was held as, shares of an
Eligible Investment Company that holds itself out as a money market fund
pursuant to Rule 2a-7 under the 1940 Act.
(1) Each Class B Share (i) purchased through automatic reinvestment of
a Dividend with respect to that Class B Share or the corresponding class of any
other investment company or of any other class of the Trust issuing such class
of Shares, or (ii) issued pursuant to an exchange privilege granted by the Trust
in an exchange or series of exchanges for Shares originally purchased through
the automatic reinvestment of a dividend or distribution with respect to Shares
of an Eligible Investment Company, shall be segregated in a separate sub-account
on the Share records of the Trust for each of the holders thereof. On any
Conversion Date, a number of the Class B Shares held in the separate sub-account
of the holder, calculated in accordance with the next following sentence, shall
be converted automatically, and without any action or choice on the part of the
holder, into Class A Shares. The number of the Class B Shares in the holder's
separate sub-account so converted shall (i) bear the same ratio to the total
number of Shares maintained in the separate sub-account on the Conversion Date
(immediately prior to
<PAGE>
conversion) as the number of Shares of the holder converted on the Conversion
Date pursuant to paragraph (2)(a) hereof bears to the total number of Class B
Shares of the holder on the Conversion Date (immediately prior to conversion)
after subtracting the Shares then maintained in the holder's separate
sub-account, or (ii) be such other number as may be calculated in such other
manner as may be determined by the Board of Trustees in accordance with a Rule
18f-3 Plan adopted pursuant to rules and regulations of the Securities and
Exchange Commission and set forth in the Prospectus.
(1) The number of Class A Shares into which a Class B Share is
converted pursuant to Section 2(b) and Section 2(c) hereof shall equal the
number (including for this purpose fractions of a Share) obtained by dividing
the net asset value per Share of such Class B Share for purposes of sales and
redemption thereof on the Conversion Date by the net asset value per share of
the Class A Shares for purposes of sales and redemption thereof on the
Conversion Date.
(1) On the Conversion Date, the Class B Shares converted into Class A
Shares will no longer be deemed outstanding and the rights of the holders
thereof, except the right to (i) receive the number of Class A Shares into which
such Class B Shares have been converted and (ii) receive declared but unpaid
Dividends that have been declared as to Class B Shares held as of a record date
occurring on or before the Conversion Date and (iii) vote converting Class B
Shares held as of any record date occurring on or before the Conversion Date and
theretofore set with respect to any meeting held after the Conversion Date),
will cease.
(1) The automatic conversion of Class B Shares to Class A Shares may be
suspended by the Board of [Directors] [Trustees] at any time it determines such
suspension to be required under applicable law or in the exercise of their
fiduciary duties; provided, however, that if the Board determines that the
suspension is likely to continue for a substantial period of time, the Board of
[Directors] [Trustees] will seek to create an additional class or additional
classes of shares into which Class B Shares are eligible for conversion under
the rules of the Securities and Exchange Commission and other applicable law.
(1) Notwithstanding the foregoing, if any amendment to a plan of
distribution relating to the Class A Shares that would increase materially the
amount to be borne by the Trust in respect of the Class A Shares under such plan
of distribution is proposed, no Class B Shares shall thereafter convert into
Class A Shares until the holders of Class B Shares shall have approved the
proposed amendment.
(1) The holders of Class A Shares, Class B Shares, Class C Shares
and/or Class AAA Shares, as the case may be, shall vote as a separate class or
classes on any matter submitted to the holders of Class A Shares, Class B
Shares, Class C Shares and/or Class AAA Shares with respect to which the
interest of the class in question is
<PAGE>
different from the interest of one or more of such other classes. Only the
holders of Class A Shares, Class B Shares, Class C Shares or Class AAA Shares
shall vote on any matter submitted to shareholders of the Trust relating solely
to such class.
(1) Class A Shares, Class B Shares and/or Class C Shares may be subject
to deduction of a contingent deferred sales charge from the proceeds of any
redemption thereof in amounts and for time periods as may be determined by the
Board of Trustees from time to time and set forth in the Prospectus.
Section 1. The assets belonging to each Class and the liabilities
belonging to each Class shall be based upon the allocations required by the Rule
18f-3 Plan.
Section 1. The method of determining the purchase price and the price,
terms and manner of redemption of each Class of Shares shall be established by
the Trustees in accordance with the provisions of the Declaration of Trust, this
Supplemental Declaration of Trust and the Rule 18f-3 Plan and shall be set forth
in the prospectus of the Trust with respect to each Class, as amended from time
to time, under the Securities Act of 1933, as amended.
<PAGE>
IN WITNESS WHEREOF, The Gabelli Growth Fund has caused this
Supplemental Declaration of Trust to be signed in its name and on its behalf on
this 18th day of April, 2000 by its President and Treasurer, who acknowledges
that this Supplemental Declaration of Trust is the act of The Gabelli Growth
Fund and that to the best of his knowledge, information and belief and under
penalties of perjury, all matters and facts contained herein are true in all
material respects.
ATTEST: THE GABELLI GROWTH FUND
/S/JAMES E. MCKEE By:/S/BRUCE N. ALPERT (SEAL)
- --------------------------------- ---------------------------------
James E. McKee Bruce N. Alpert
Secretary President and Treasurer
Exhibit (a)(3)
ARTICLES OF AMENDMENT
OF
THE GABELLI GROWTH FUND
The Gabelli Growth Fund, a Massachusetts business trust, having its
principal office at One Corporate Center, Rye, New York 10580 (the "Trust"),
certifies as follows:
FIRST: The Declaration of Trust of the Trust (the "Declaration of
Trust") is hereby amended by deleting the words "equal proportionate" from the
definition of "Shares" in Article SECOND thereof, so that such definition reads
as follows:
5. "Shares" means the units of interest into which the beneficial
interest in the Trust shall be divided from time to time and includes fractions
of Shares as well as whole Shares.
SECOND: The Declaration of Trust of the Trust (the "Declaration of
Trust") is hereby amended by deleting Article FOURTH thereof and inserting in
its place the following:
FOURTH: The beneficial interest in the Trust shall at all times be
divided into an unlimited number of transferable Shares. Contributions to the
Trust may be accepted for, and Shares shall be redeemed as, whole Shares and/or
1/1,000ths of a Share or multiple thereof. The Board of Trustees of the Trust
may classify and reclassify issued and unissued Shares into one or more classes
and one or more sub-series of any or all of such classes, each of which classes
and sub-series thereof shall, subject to the provisions set forth in (a) through
(f) below, have such designations, powers, preferences, voting, conversion and
other rights, limitations, qualifications and terms and conditions as the Board
of Trustees of the Trust shall determine from time to time with respect to each
such class or sub-series; provided, however, that no reclassification of any
issued and outstanding Shares and no modifications of any of the designations,
powers, preferences, voting, conversion or other rights, limitations,
qualifications and terms and conditions of any issued and outstanding Shares may
be made by the Board of Trustees without the approval of not less than a
majority of the issued and outstanding Shares of all classes or sub-series (or,
to the extent provided herein, each class or sub-series) affected by such
reclassification or modification or, if less, not less than two-thirds of the
Shares of such class or classes or sub-series or sub-series present and voting
thereon at a meeting at which at least one-half of such issued and outstanding
Shares are present and voting if such reclassification or such modifications in
the aggregate would be materially adverse to the designations, powers,
preferences, voting, conversion and other rights and terms and conditions then
in effect for such class or classes or sub-series or sub-series.
(a) All consideration received by the Trust for the issue or sale of
Shares of each such class, together with all income, earnings, profits and
proceeds thereof, including any proceeds derived form the sale, exchange or
liquidation thereof, and any funds or payments derived form any reinvestment of
such proceeds in whatever form the same may be, together with such class' share
of any assets of the Trust not otherwise allocated to any particular class,
shall irrevocably belong to the class of Shares with respect to which such
assets, payments, or funds were received by the Trust for all purposes, subject
only to the rights of creditors, shall be so handled upon the books of account
of the Trust,
<PAGE>
and are herein referred to as "assets belonging to" such class. Assets not
otherwise allocated to any particular class shall belong to each class in the
proportion that the aggregate net assets otherwise belonging to each such class
bears to the aggregate net assets (other than such unallocated assets) of the
Trust.
(b) Dividends or distributions on Shares of any such class, whether
payable in Shares, in assets belonging to such class or in cash, shall be paid
only out of earnings, surplus or other assets belonging to such class.
(c) In the event of the liquidation or dissolution of the Trust or of
any such class, Shareholders of each affected class shall be entitled to
receive, out of the assets of the Trust available for distribution to
Shareholders, the assets belonging to such class; and the assets so
distributable to the Shareholders of any such class shall be distributed among
such Shareholders in proportion to the number of Shares of such class held by
them and recorded on the books of the Trust, or, if such class has more than one
sub-series, to the Shareholders of each such sub-series in an aggregate amount
equal to the proportion of the aggregate net assets belonging to such class that
the product of the net asset value per Share of such sub-series on the
applicable date times the number of Shares of such sub-series outstanding on
such date bears to the aggregate net assets belonging to such class and to each
such Shareholder in proportion to the number of Shares of such sub-series held
by such Shareholder and recorded on the books of the Trust.
(d) The assets belonging to any such class of Shares shall be charged
with the liabilities allocable to such class. Liabilities not otherwise
allocated to any particular class shall belong to each class in the proportion
that the aggregate net assets belonging to each such class bears to the
aggregate net assets of the Trust, in each case without taking such unallocated
liabilities into account. The liabilities so allocated to a class are herein
referred to as "liabilities belonging to" such class. The liabilities belonging
to each class shall be further allocated to each sub-series of such class. The
determination of the Board of Trustees shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, as to whether any
liabilities are allocable to one or more classes or one or more sub-series of a
class, and as to the allocation of any of the same as to a given class or
sub-series.
(e) At all meetings of Shareholders, each shareholder of each Share of
each such class of the Trust shall be entitled to one vote for each Share on
each matter presented to Shareholders at any such meeting, irrespective of the
class, standing in his name on the books of the Trust, except that where a vote
of the holders of the Shares of any class or sub-series, or of more than one
class or sub-series, or of only a certain class or sub-series of only certain
classes or sub-series, voting by class or sub-series, is required by the 1940
Act, any rules or regulations thereunder or any plan adopted by the Board of
Trustees pursuant thereto, and/or by Massachusetts law as to any matter, the
holders of such class or classes or sub-series or sub-series, by class or
sub-series, shall be entitled to vote upon such
<PAGE>
matter by class or sub-series and, to the extent so required, the holders of any
other class or classes or sub-series or sub-series shall not be entitled to vote
thereon. Any fractional Share, if any such fractional Shares are outstanding,
shall carry proportionately all the rights of a whole Share, including the right
to vote and the right to receive dividends.
(f) When the Trust has more than one class of Shares outstanding, (i)
the redemption rights provided to the holders of the Trust's Shares shall be
deemed to apply only to the assets belonging to each respective class; and (ii)
the net asset value per Share computation as provided for in Article SEVENTH
shall be applied to each respective class and to each sub-series of each such
class as if each such class were the Trust as referred to in such computation,
but with its assets limited to the assets belonging to such class and its
liabilities limited to the liabilities belonging to such class, with all such
liabilities being allocated among the sub-series of such class in accordance
with (d) above for purposes of determining the net asset value per Share of each
such sub-series.
THIRD: The Declaration of Trust of the Trust (the "Declaration of
Trust") is hereby amended by adding the following at the end of Article FIFTH:
7. The ownership of Shares shall be recorded in the books of
the Trust or a transfer agent. The Trustees may make such rules as they
consider appropriate for the transfer of Shares and similar matters.
The record books of the Trust or any transfer agent, as the case may
be, shall be conclusive as to who are the holders of Shares and as to
the number of Shares held from time to time by each.
8. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may from time to time authorize.
9. Shareholders shall have no pre-emptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees.
10. There shall be no cumulative voting rights with respect to
any Shares or class or sub-series of Shares of the Trust.
FOURTH: The Declaration of Trust of the Trust (the "Declaration of
Trust") is hereby amended by deleting sections 4 and 12 of Article EIGHTH
thereof and inserting in their places the following:
4. This Trust shall continue without limitation of time but subject to
the provisions of sub-sections (a), (b) and (c) of this paragraph 4.
(a) The Trustees, with the favorable vote of the holders of
more than 50% of the outstanding Shares entitled to vote, or the
favorable vote of the holders of more than 50% of the Shares of any
affected class, may sell and convey
<PAGE>
as an entirety the assets of the Trust or of such class, (which sale
may be subject to the retention of assets for the payment of
liabilities and expenses) to another issuer for a consideration which
may be or include securities of such issuer. Upon making provision for
the payment of liabilities, by assumption by such issuer or otherwise,
the Trustees shall distribute the remaining proceeds among the holders
of the Shares of the Trust of such class, then outstanding in
accordance with the provisions hereof.
(b) The Trustees, with the favorable vote of the holders of
more than 50% of the outstanding Shares entitled to vote, or the
favorable vote of the holders of more than 50% of the Shares of any
affected Series, may at any time sell and convert into money all the
assets of the Trust or of any class. Upon making provisions for the
payment of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust, the Trustees shall distribute the
remaining assets of the Trust among the holders of the Shares of this
Trust or such class, then outstanding in accordance with the provisions
hereof.
(c) If the action relates to the entire Trust, upon completion
of the distribution of the remaining proceeds or the remaining assets
as provided in sub-sections (a) and (b), the Trust shall terminate and
the Trustees shall be discharged of any and all further liabilities and
duties hereunder and the right, title and interest of all parties shall
be cancelled and discharged.
12. If authorized by vote of the Trustees and the favorable
vote of the holders of more than 50% of the outstanding Shares entitled
to vote on such matter, or by any larger vote which may be required by
applicable law in any particular case, the Trustees shall amend or
otherwise supplement this instrument, by making a Declaration of Trust
supplemental hereto, which thereafter shall form a part hereof;
however, any such supplemental declaration of Trust may be authorized
by the vote of a majority of the Trustees then in office without any
Shareholder vote to change the name of the Trust or to classify or
reclassify, or to establish or modify the designations, powers,
preferences, voting, conversion or other rights or limitations of, any
issued and outstanding Shares to the extent provided by Article FOURTH;
any supplemental Declaration of Trust may be executed by and on behalf
of the Trust and the Trustees by any officer or officers of the Trust.
FIFTH: This amendment was approved by a majority of the Trust's Board
of Trustees and by a majority vote of the holders of shares of beneficial
interest of the Trust currently outstanding at a special meeting of the Trust's
shareholders duly convened on March 9, 1999, all in accordance with the
Massachusetts Business Trust Law and the Declaration of Trust.
<PAGE>
IN WITNESS WHEREOF, the Trust has caused these Articles of Amendment to be
signed in its name and on its behalf on this 18th day of April 2000 by its
President and Treasurer, who acknowledges that these Articles of Amendment are
the act of The Gabelli Growth Fund and that to the best of his knowledge,
information and belief and under penalties for perjury, all matters and facts
contained herein are true in all material respects,
ATTEST: THE GABELLI GROWTH FUND:
/S/JAMES E. MCKEE By: /S/BRUCE N. ALPERT (SEAL)
- ----------------- ---------------------
James E. McKee Bruce N. Alpert
Secretary President and Treasurer
Exhibit (d)(2)
AMENDMENT NO. 1
TO THE INVESTMENT ADVISORY AGREEMENT
This Amendment No. 1 dated as of February 17, 1999 is entered into by
Gabelli Funds, LLC (the "Adviser") and The Gabelli Growth Fund (the "Fund").
WHEREAS, the predecessor to the Adviser and the Fund entered into an
Amended and Restated Investment Advisory Agreement dated as of May 12, 1992 (the
"Investment Advisory Agreement"); and
WHEREAS, the Adviser and the Fund wish to amend the Investment Advisory
Agreement to reflect the change in the identity of the Adviser;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The name "Gabelli Funds, Inc." in the Investment Advisory
Agreement is hereby deleted in all places where it appears and
replaced with the name "Gabelli Funds, LLC".
2. The Investment Advisory Agreement shall remain in full force
and effect in all other respects.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
as of the date and year first written above.
THE GABELLI GROWTH FUND GABELLI FUNDS, LLC
By: /S/BRUCE N. ALPERT By: /S/GUS COUTSOUROS
------------------ -----------------
Bruce N. Alpert Gus Coutsouros
Exhibit (e)
AMENDED AND RESTATED DISTRIBUTION AGREEMENT, dated as of April 28, 2000
between THE GABELLI GROWTH FUND (the "Fund") and GABELLI & COMPANY, INC. (the
"Distributor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Fund, a Massachusetts business trust, is registered as an
investment company under the Investment Company Act of 1940 (the "1940 Act") and
an indefinite number of shares of its beneficial interest (hereinafter referred
to as "shares") 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 the terms and conditions set forth in the Fund's Prospectuses
(collectively, the "Prospectus") and Statement of Additional Information ("SAI")
included in the Fund's Registration Statement as they may be amended from time
to time; and
WHEREAS, the Fund desires that the Distributor act as general
distributor and as agent of the Fund for the sale and distribution of shares
which have been registered as described above and of any additional shares which
may become registered during the term of this Agreement; and
WHEREAS, the Distributor has advised the Fund that it is willing to act
as such general distributor and agent;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration the
receipt and adequacy of which is hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. The Fund hereby appoints the Distributor as its general
distributor and exclusive agent for the sale of its shares pursuant to the
aforesaid continuous public offering of its shares. From and after the date of
this Agreement, the Fund agrees that it will not, without the Distributor's
consent, sell or agree to sell any shares otherwise than through the
Distributor, except that the Fund may (a) sell shares as an investment to its
officers, directors, bona fide full-time employees, its investment adviser and
the affiliates thereof; (b) issue shares in lieu of the cash payments of
dividends and distributions; and (c) issue shares in connection with a merger,
consolidation or acquisition of assets on such basis as may be authorized or
permitted under the 1933 Act.
Section 1. 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 because of market or other economic
considerations or abnormal circumstances of any kind, it will suspend such
efforts. The Fund may also withdraw the offering of the 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 of the
Fund. The Fund acknowledges that the Distributor may enter into sales or
servicing agreements with registered securities brokers and banks and into
servicing agreements with financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms. In entering into such agreements, the Distributor shall act only on its
own behalf as principal underwriter and distributor. The
<PAGE>
Distributor shall not be responsible for making any distribution plan or service
fee payments pursuant to any plans the Fund may adopt or agreements it may enter
into.
Section 1. The offering price of the shares shall be the per-share net
asset value of the Fund, as defined in its Declaration of Trust and determined
as set forth in its Prospectus. The Fund shall furnish the Distributor, with all
possible promptness, an advice of each computation of net asset value. The
Distributor shall have the right to accept or reject orders for the purchase of
shares of the Fund. Any consideration which the Distributor may receive in
connection with a rejected purchase order shall be returned promptly. Section 1.
Section 1. The Distributor agrees promptly to issue, or arrange for the
issuance of, confirmations of all accepted purchase orders and to transmit a
copy of such confirmations to the Fund, or, if so directed, to any duly
appointed transfer or shareholder servicing agent of the Fund. The net asset
value of all shares sold pursuant to the provisions hereof shall be paid
promptly after receipt of payment from the originating dealer or purchaser and
not later than eleven business days after such confirmation even if the
Distributor has not actually received payment from the originating dealer or
purchaser. If the originating dealer or purchaser shall fail to make timely
settlement of its purchase order in accordance with the rules of NASD
Regulation, Inc., then the Distributor shall have the right to cancel such
purchase order and, at its account and risk, to hold responsible the originating
dealer or purchaser. The Distributor agrees promptly to reimburse the Fund for
any amount by which the Fund's losses, attributable to any such cancellation or
to errors on the Distributor's part in relation to the effective date of
accepted purchase orders, exceed contemporaneous gains realized by the Fund for
either of such reasons in respect to other purchase orders.
Section 1. The Fund shall register or cause to be registered all shares
sold pursuant to the provisions hereof in such name or names and amounts as the
Distributor may request from time to time and the Fund shall issue or cause to
be issued certificates evidencing such shares for delivery to the Distributor or
pursuant to the Distributor's direction if and to the extent that the
shareholder account in question contemplates the issuance of such share
certificates. All shares of the Fund, when so issued and paid for, shall be
fully non-assessable.
Section 1. The Fund has delivered to the Distributor a copy of its
current Prospectus and SAI. The Fund agrees that it will use its best efforts to
continue the effectiveness of its Registration Statement filed under the 1933
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 the 1933 Act. The Fund will furnish to the Distributor, at the
Distributor's expense, a reasonable number of copies of the Prospectus and SAI
and any amended Prospectus and SAI for use in connection with the sale of
shares.
Section 1. The Fund has already registered under the 1940 Act as an
investment company, and it will use its best efforts to maintain such
registration and to comply with the requirements of the 1940 Act.
Section 1. The Distributor agrees that:
(1) neither it nor any of its officers shall take any long or
short position in the shares of the Fund; provided, however, that this
subsection (a) shall not prevent the Distributor or its officers from acquiring
shares of the Fund for investment purposes only;
<PAGE>
(1) it shall furnish to the Fund any pertinent information
required to be inserted, with respect to it as Distributor within the purview of
the 1933 Act, in any reports or registration required to be filed with any
governmental authority; and
(1) it shall not make any representations inconsistent with
the information contained in the Registration Statement of the Fund filed under
the 1933 Act, as in effect from time to time.
Section 1. The Fund shall pay its legal and auditing expenses and the
cost of composition, printing and mailing of sufficient copies of its Prospectus
and SAI as shall be required for annual distribution to shareholders and the
expense of registering shares for sale under federal securities laws. The
Distributor shall pay the expenses normally attributable to such sales as it may
make, including advertising and the cost of printing and mailing of the Fund's
Prospectus and SAI other than those furnished to existing shareholders. The Fund
has adopted a separate plan of distribution (collectively, the "Plan") pursuant
to the provisions of rule 12b-1 of the 1940 Act on behalf of its Class A Shares,
Class B Shares, Class C Shares and Class AAA Shares, respectively, each of which
provides for the payment of administrative and sales related expenses in
connection with the distribution of Fund shares and the Distributor agrees to
take no action inconsistent with said 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.
Section 1. 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
provided that such continuance shall be specifically approved at least annually
(a) by the Fund's Board of Trustees, including a vote of a majority of the
Disinterested Non-party Trustees, cast in person at a meeting called for the
purpose of voting on such approval or (b) by the vote of the holders of a
majority of the outstanding voting securities of the Fund and by a vote of the
Board of Trustees.
Section 1. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty days' written notice (which notice may
be waived by the Fund); or (b) by the Fund at any time without penalty upon
sixty days' written notice to the Distributor (which notice may be waived by the
Distributor), provided that such termination by the Fund shall be directed or
approved in the same manner as required for continuance of this Agreement by
Section 10(a) (or, in the case of termination of Section 9, by Section 10(b)).
Section 1. This Agreement may not be amended or changed except in
writing and shall be binding upon and shall enure 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.
Section 1. The Distributor understands and agrees that the obligations
of the Fund under this Agreement are not binding upon any shareholder of the
Fund personally, but only the Fund's property; the Distributor represents that
it has notice of the provisions of the
<PAGE>
Declaration of Trust of the Fund disclaiming shareholder liability for acts or
obligations of the Fund.
Section 1. The date of this Agreement shall be for reference purposes
only and shall not be construed to imply that this Agreement was effective on
the date first above written. This Agreement shall become effective on the date
on which the Registration Statement of the Fund shall become effective in
accordance with the provisions of the 1933 Act. Section 1.
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this
Distribution Agreement as of the date first above written.
THE GABELLI GROWTH FUND
By /S/BRUCE N. ALPERT
GABELLI & COMPANY, INC.
By ROBERT S. ZUCCARO
Exhibit (i)
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3194
---------------------------
(617) 573-4800
April 28, 2000
The Gabelli Growth Fund
One Corporate Center
Rye, NY 10580
Re: The Gabelli Growth Fund
REGISTRATION ON FORM N-1A
Ladies and Gentlemen:
We have acted as special counsel to The Gabelli Growth Fund (the
"Fund"), a voluntary association with transferable shares organized and existing
under and by virtue of the laws of the Commonwealth of Massachusetts (a
"Massachusetts Business Trust"), in connection with the issuance and sale of an
indefinite number of Class AAA shares of beneficial interest of the Fund (the
"Class AAA Shares"), Class A shares of beneficial interest of the Fund (the
"Class A Shares"), Class B shares of beneficial interest of the Fund (the "Class
B Shares") and Class C shares of beneficial interest of the Fund (the "Class C
Shares" and together with the Class AAA Shares, the Class A Shares and the Class
B Shares, the "Shares").
This opinion is being furnished in accordance with the requirements of
Item 23(i) of Form N-1A.
In connection with this opinion, we have examined originals or copies
(including facsimile transmission), certified or otherwise identified to our
satisfaction, of (i) the Registration Statement of the Fund on Form N-1A (File
Nos. 33-10583 and 811-4873), as amended effective May 1, 2000 by Post-Effective
Amendment No. 18 under the Securities Act of 1933, as amended (the "1933 Act"),
and Amendment No. 19 under the Investment Company Act of 1940, as amended (the
"Registration Statement"); (ii) the Declaration of Trust of the Fund, as
currently in effect (the "Declaration"); (iii) the Articles of Amendment to the
Declaration, dated April 18, 2000 (the "Articles of Amendment"); (iv) the
Supplemental Declaration of Trust for the Shares, dated April 18, 2000; (v) the
By-Laws of the Fund, as currently in effect; (vi) a specimen certificate
representing each of the Class AAA Shares, the Class A Shares, the Class B
Shares and the Class C Shares; (vii) the Definitive Proxy Statement of the Fund,
as filed with the Commission on April 13, 1999; (viii) the Rule 18f-3 Plan of
the Fund, as filed with the Commission on March 1, 1999; (ix) the Purchase
Agreements between the Fund and Gabelli & Company, Inc., with respect to the
sale of one (1) share of each of the Class A Shares, Class B Shares, and Class C
Shares
<PAGE>
of the Fund (at the current net asset value per share of the Class AAA Shares);
and (x) certain resolutions of the Board of Trustees of the Fund relating to the
issuance and sale of the Shares and related matters. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such records of the Fund and such agreements, certificates of public officials,
certificates of officers or other representatives of the Fund and others, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed, facsimile or photostatic
copies and the authenticity of the originals of such latter documents. In making
our examination of documents executed or to be executed by parties other than
the Fund, we have assumed that such parties had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and the
validity and binding effect thereof. As to any facts material to the opinions
expressed herein which we have not independently established or verified, we
have relied upon statements and representations of officers and other
representatives of the Fund and others.
<PAGE>
Members of our firm are admitted to the bar in the Commonwealth of
Massachusetts, and we do not express any opinion as to any laws other than the
laws of the Commonwealth of Massachusetts.
Based upon and subject to the foregoing, we are of the opinion that
when Post-Effective Amendment No. 18 to the Registration Statement becomes
effective, the issuance and sale of the Shares by the Fund thereunder will have
been validly authorized and when issued and delivered against payment therefor
as provided in the Distribution Agreement, such Shares will be validly issued,
fully paid and, subject to the statements set forth below regarding the
liability of a shareholder of a Massachusetts business trust, nonassessable.
Pursuant to certain decisions of the Supreme Judicial Court of
Massachusetts, hareholders of a Massachusetts Business Trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
trust. Even if the Fund were held to be a partnership, however, the possibility
of the holders of Shares incurring personal liability for financial loss appears
remote because (i) Article EIGHTH, Paragraph 2 of the Declaration contains an
express disclaimer of liability for holders of Shares for the obligations of the
Fund and Article SEVENTH, Paragraph 6(a) requires that in every note, bond,
contract or other undertaking issued by or on behalf of the Fund include a
recitation limiting the obligation represented thereby to the Fund and its
assets and (ii) Article EIGHTH, Paragraph 1 provides that the Fund shall
indemnify and hold each shareholder of the Fund harmless from and against all
loss and expense arising from liabilities to which such holder may become
subject by reason of being or having been a holder of Shares.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Counsel" in the Registration Statement. In giving
this consent, we do not hereby admit that we are included in the category of
persons whose consent is required under Section 7 of the 1933 Act or the rules
and regulation of the Securities and Exchange Commission.
Very truly yours
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit (j)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Post-Effective
Amendment No.18 to the registration statement on Form N-1A ("Registration
Statement") of our report dated February 11, 2000, relating to the financial
statements and financial highlights which appear in the December 31, 1999 Annual
Report of The Gabelli Growth Fund, which is also incorporated by reference into
the Registration Statement. We also consent to the references to us under the
headings "Financial Highlights", "Independent Accountants" and "Financial
Statements" in such Registration Statement.
PricewaterhouseCoopers LLP
New York, New York
April 27, 2000
Exhibit (l)(2)
PURCHASE AGREEMENT
The Gabelli Growth Fund (the "Fund"), a Massachusetts business trust, and
Gabelli & Company, Inc. (the "Buyer") hereby
agree as follows:
1. The Fund hereby offers the Buyer and the Buyer hereby purchases one
Class A Share (the "Share") of the Fund, at a price of $10.00. The Share is the
"initial Class A Share" of the Fund. The Buyer hereby acknowledges receipt of a
purchase confirmation reflecting the purchase of the Share, and the Fund hereby
acknowledges receipt from the Buyer of funds in the amount of $10 in full
payment for the Share.
2. The Buyer represents and warrants to the Fund that the Share
purchased by the Buyer is being acquired for investment purposes and not for the
purpose of distribution.
3. This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his or her capacity as an officer of the
Fund.
4. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but such counterparts shall, together, constitute
only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 28th day of April, 2000.
Attest: THE GABELLI GROWTH FUND
/S/JAMES E. MCKEE By:/S/BRUCE N. ALPERT
James E. McKee Bruce N. Alpert
Secretary President and Treasurer
Attest: GABELLI & COMPANY, INC.
/S/LUDMILA POMPADUR By:/S/ROBERT S. ZUCCARO
Name:Ludmila Pompadur Name:Robert S. Zuccaro
Title:Vice President Title:Vice President
Exhibit (l)(3
PURCHASE AGREEMENT
The Gabelli Growth Fund (the "Fund"), a Massachusetts business trust, and
Gabelli & Company, Inc. (the "Buyer") hereby agree as follows:
1. The Fund hereby offers the Buyer and the Buyer hereby purchases one
Class B Share (the "Share") of the Fund, at a price of $10.00. The Share is the
"initial Class B Share" of the Fund. The Buyer hereby acknowledges receipt of a
purchase confirmation reflecting the purchase of the Share, and the Fund hereby
acknowledges receipt from the Buyer of funds in the amount of $10 in full
payment for the Share.
2. The Buyer represents and warrants to the Fund that the Share
purchased by the Buyer is being acquired for investment purposes and not for the
purpose of distribution.
3. This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his or her capacity as an officer of the
Fund.
4. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but such counterparts shall, together, constitute
only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 28th day of April, 2000.
Attest: THE GABELLI GROWTH FUND
/S/JAMES E. MCKEE By:/S/BRUCE N. ALPERT
James E. McKee Bruce N. Alpert
Secretary President and Treasurer
Attest: GABELLI & COMPANY, INC.
/S/LUDMILA POMPADUR By:/S/ROBERT S. ZUCCARO
Name:Ludmila Pompadur Name:Robert S. Zuccaro
Title:Vice President Title:Vice President
Exhibit (l)(4)
PURCHASE AGREEMENT
The Gabelli Growth Fund (the "Fund"), a Massachusetts business trust, and
Gabelli & Company, Inc. (the "Buyer") hereby
agree as follows:
1. The Fund hereby offers the Buyer and the Buyer hereby purchases one
Class C Share (the "Share") of the Fund, at a price of $10.00. The Share is the
"initial Class C Share" of the Fund. The Buyer hereby acknowledges receipt of a
purchase confirmation reflecting the purchase of the Share, and the Fund hereby
acknowledges receipt from the Buyer of funds in the amount of $10 in full
payment for the Share.
2. The Buyer represents and warrants to the Fund that the Share
purchased by the Buyer is being acquired for investment purposes and not for the
purpose of distribution.
3. This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his or her capacity as an officer of the
Fund.
4. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but such counterparts shall, together, constitute
only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 28th day of April, 2000.
Attest: THE GABELLI GROWTH FUND
/S/JAMES E. MCKEE By:/S/BRUCE N. ALPERT
James E. McKee Bruce N. Alpert
Secretary President and Treasurer
Attest: GABELLI & COMPANY, INC.
/S/LUDMILA POMPADUR By:/S/ROBERT S. ZUCCARO
Name:Ludmila Pompadur Name:Robert S. Zuccaro
Title:Vice President Title:Vice President
Exhibit (p)
SECTION S
CODE OF ETHICS
Gabelli Funds, LLC
GAMCO Investors, Inc.
Gabelli & Company, Inc.
Gabelli Advisers, Inc.
Gabelli Fixed Income LLC
Each Registered Investment
Company or series thereof (each
of which is considered to be a
Company for this purpose) for
which any of the Companies listed
above presently or hereafter
provides investment advisory or
principal underwriting services,
other than a money market fund or
a fund that does not invest in
Securities.
INTRODUCTION
This Code of Ethics establishes rules of conduct for persons who are
associated with the companies named above or with the registered investment
companies for which such companies provide investment advisory or principal
underwriter services. The Code governs their personal investment and other
investment-related activities.
The basic rule is very simple: put the client's interests first. The
rest of the rules elaborate this principle. Some of the rules are imposed
specifically by law. For example, the laws that govern investment advisers
specifically prohibit fraudulent activity, making statements that are not true
or that are misleading or omit something that is significant in the context and
engaging in manipulative practices. These are general words, of course, and over
the years the courts, the regulators and investment advisers have interpreted
these words and established codes of conduct for their employees and others who
have access to their investment decisions and trading activities. Indeed, the
rules obligate investment advisers to adopt written rules that are reasonably
designed to prevent the illegal activities described above and must follow
procedures that will enable them to prevent such activities.
This Code is intended to assist the companies in fulfilling their
obligations under the law. The first part lays out who the Code applies to, the
second part deals with personal investment activities, the third part deals with
other sensitive business practices, and subsequent parts deal with reporting and
administrative procedures.
The Code is very important to the companies and their employees.
Violations can not only cause the companies embarrassment, loss of business,
legal restrictions, fines and other punishments but for employees can lead to
demotion, suspension, firing, ejection from the securities business and very
large fines.
<PAGE>
I. Applicability
A. The Code applies to each of the following:
1. The Companies named or described at the top of page one of the Code and
all entities that are under common management with these Companies or
otherwise agree to be subject to the Code ("Affiliates"). A listing of
the Affiliates, which is periodically updated, is attached as Exhibit
A.
2. Any officer, director or employee of any Company, Affiliate or Fund
Client (as defined below) whose job regularly involves him in the
investment process. This includes the formulation and making of
investment recommendations and decisions, the purchase and sale of
securities for clients and the utilization of information about
investment recommendations, decisions and trades. Due to the manner in
which the Companies and the Affiliates conduct their business, every
employee should assume that he is subject to the Code unless the
Compliance Officer specifies otherwise.
3. With respect to all of the Companies, Affiliates and Fund Clients
except Gabelli & Company, Inc., any natural person who controls any of
the Companies, Affiliates or Fund Clients and who obtains information
regarding the Companies' or the Affiliates' investment recommendations
or decisions. However, a person whose control arises only as a result
of his official position with such entity is excluded. Disinterested
directors of Fund Clients, for example, are excluded from coverage
under this item.
4. With respect to all of the Companies and Fund Clients except Gabelli &
Company, Inc., any director, officer, general partner or person
performing a similar function even if he has no knowledge of and is not
involved in the investment process. Disinterested directors of Fund
Clients and independent directors of Affiliates are included in
coverage under this item.
5. As an exception, the Code does not apply to any director, officer or
employee of any Fund Client (such as certain of The Gabelli Westwood
Funds) with respect to which the Companies' services do not involve the
formulation or making of investment recommendations or decisions or the
execution of portfolio transactions if that person is also a director,
officer or employee of any entity that does perform such services (such
as Westwood Management Corp.). These individuals are covered by codes
of ethics adopted by such entities.
B. DEFINITIONS
1. ACCESS PERSONS. The Companies and the persons described in items (A)2
and (A)3 above other than those excluded by item (A)5 above.
2. ACCESS PERSON ACCOUNT. Includes all advisory, brokerage, trust or other
accounts or forms of direct beneficial ownership in which one or more
Access Persons and/or one or more members of an Access Person's
immediate family have a substantial proportionate economic interest.
Immediate family includes an Access Person's spouse and minor children
living with the Access Person. A substantial proportionate economic
interest
<PAGE>
will generally be 10% of the equity in the account in the case of any
single Access Person and 25% of the equity in the account in the case
of all Access Persons in the aggregate, whichever is first applicable.
Investment partnerships and similar indirect means of ownership other
than registered open-end investment companies are also treated as
accounts.
As an exception, accounts in which one or more Access Persons and/or
their immediate family have a substantial proportionate interest which
are maintained with persons who have no affiliation with the Companies
and with respect to which no Access Person has, in the judgment of the
Compliance Officer after reviewing the terms and circumstances, any
direct or indirect influence or control over the investment or
portfolio execution process are not Access Person Accounts.
As a further exception, subject to the provisions of Article II(I)7,
bona fide market making accounts of Gabelli & Company, Inc. are not
Access Person Accounts.
As a further exception, subject to the provisions of Article II(I)7,
bona fide error accounts of the Companies and the Affiliates are not
Access Person Accounts.
3. ASSOCIATE PORTFOLIO MANAGERS. Access Persons who are engaged in
securities research and analysis for designated Clients or are
responsible for investment recommendations for designated Clients but
who are not principally responsible for investment decisions with
respect to any Client accounts.
4. CLIENTS. Investment advisory accounts maintained with any of the
Companies or Affiliates by any person, other than Access Person
Accounts. However, Fund Clients covered by item (A)(5) above are
considered Client accounts only with respect to employees specifically
identified by the Compliance Officer as having regular information
regarding investment recommendations or decisions or portfolio
transactions for such Fund Clients.
5. COMPANIES. The companies named or described at the top of page one of
the Code.
6. COMPLIANCE OFFICER. The persons designated as the compliance officers
of the Companies.
7. COVERED PERSONS. The Companies, the Access Persons and the persons
described in item (A)4 above.
8. FUND CLIENTS. Clients that are registered investment companies or
series thereof.
9. PORTFOLIO MANAGERS. Access Persons who are principally responsible for
investment decisions with respect to any Client accounts.
10. SECURITY. Any financial instrument treated as a security for investment
purposes and any related instrument such as a futures, forward or swap
contract entered into with respect to one or more securities, a basket
of or an index of securities or components of securities. However, the
term security does not include securities issued by the Government of
the United States, bankers' acceptances, bank certificates of deposit,
<PAGE>
commercial paper and high quality short-term debt instruments,
including repurchase agreements, or shares of registered open-end
investment companies.
II. Restrictions on Personal Investing Activities
A. Basic Restriction on Investing Activities
If a purchase or sale order is pending or under active consideration
for any Client account by any Company or Affiliate, neither the same
Security nor any related Security (such as an option, warrant or
convertible security) may be bought or sold for any Access Person
Account.
<PAGE>
B. Initial Public Offerings
No Security or related Security may be acquired in an initial public
offering for any Access Person Account.
C. Blackout Period
No Security or related Security may be bought or sold for the
account of any Portfolio Manager or Associate Portfolio Manager
during the period commencing seven (7) days prior to and ending
seven (7) calendar days after the purchase or sale (or entry of an
order for the purchase or sale) of that Security or any related
Security for the account of any Client with respect to which such
person has been designated a Portfolio Manager or Associate
Portfolio Manager, unless the Client account receives at least as
good a price as the account of the Portfolio Manager or Associate
Portfolio Manager and the Compliance Officer determines under the
circumstances that the Client account has not been adversely
affected (including with respect to the amount of such Security able
to be bought by the Client account) by the transaction for the
account of the Portfolio Manager or Associate Portfolio Manager.
D. Short-term Trading
No Security or related Security may, within a 60 day period, be
bought and sold or sold and bought at a profit for any Access Person
Account if the Security or related Security was held at any time
during that period in any Client account.
E. Exempt Transactions
Participation on an ongoing basis in an issuer's dividend
reinvestment or stock purchase plan, participation in any
transaction over which no Access Person had any direct or indirect
influence or control and involuntary transactions (such as mergers,
inheritances, gifts, etc.) are exempt from the restrictions set
forth in paragraphs (A) and (C) above without case by case
preclearance under paragraph (G) below.
F. Permitted Exceptions
Purchases and sales of the following Securities for Access Person
Accounts are exempt from the restrictions set forth in paragraphs A,
C and D above if such purchases and sales comply with the
pre-clearance requirements of paragraph (G) below:
1. Non-convertible fixed income Securities rated at least "A";
2. Equity Securities of a class having a market capitalization in
excess of $1 billion;
3. Equity Securities of a class having a market capitalization in
excess of $500 million if the transaction in question and the
aggregate amount of such Securities
<PAGE>
and any related Securities purchased and sold for the Access Person
Account in question during the preceding 60 days does not exceed 100
shares;
4. Municipal Securities; and
5. Securities transactions effected for federal, state or local
income tax purposes that are identified to the Compliance Officer
at the time as being effected for such purposes.
In addition, the exercise of rights that were received pro rata with other
security holders is exempt if the pre-clearance procedures are satisfied.
G. Pre-Clearance of Personal Securities Transactions
No Security may be bought or sold for an Access Person Account
unless (i) the Access Person obtains prior approval from the
Compliance Officer or, in the absence of the Compliance Officer,
from the general counsel of Gabelli Asset Management Inc.; (ii) the
approved transaction is completed on the same day approval is
received; and (iii) the Compliance Officer or the general counsel
does not rescind such approval prior to execution of the transaction
(See paragraph I below for details of the Pre-Clearance Process.)
H. Private Placements
The Compliance Officer will not approve purchases or sale of
Securities that are not publicly traded, unless the Access Person
provides full details of the proposed transaction (including written
certification that the investment opportunity did not arise by
virtue of such person's activities on behalf of any Client) and the
Compliance Officer concludes, after consultation with one or more of
the relevant Portfolio Managers, that the Companies would have no
foreseeable interest in investing in such Security or any related
Security for the account of any Client.
I. Pre-Clearance Process
1. No Securities may be purchased or sold for any Access Person
Account unless the particular transaction has been approved in
writing by the Compliance Officer or, in his absence, the general
counsel of Gabelli Asset Management Inc. The Compliance Officer
shall review not less frequently than weekly reports from the
trading desk (or, if applicable, confirmations from brokers) to
assure that all transactions effected for Access Person Accounts
are effected in compliance with this Code.
2. No Securities may be purchased or sold for any Access Person
Account other than through the trading desk of Gabelli & Company,
Inc., unless express permission is granted by the Compliance
Officer. Such permission may be granted only on the condition
that the third party broker supply the Compliance Officer, on a
timely basis, duplicate copies of confirmations of all personal
<PAGE>
Securities transactions for such Access Person in the accounts
maintained with such third party broker and copies of periodic
statements for all such accounts.
3. A Trading Approval Form, attached as Exhibit B, must be completed
and submitted to the Compliance Officer for approval prior to
entry of an order.
4. After reviewing the proposed trade, the level of potential
investment interest on behalf of Clients in the Security in
question and the Companies' restricted lists, the Compliance
Officer shall approve (or disapprove) a trading order on behalf
of an Access Person as expeditiously as possible. The Compliance
Officer will generally approve transactions described in
paragraph (F) above unless the Security in question or a related
security is on the Restricted List or the Compliance Officer
believes for any other reason that the Access Person Account
should not trade in such Security at such time.
5. Once an Access Person's Trading Approval Form is approved, the
form must be forwarded to the trading desk (or, if a third party
broker is permitted, to the Compliance Officer) for execution on
the same day. If the Access Person's trading order request is not
approved, or is not executed on the same day it is approved, the
clearance lapses although such trading order request maybe
resubmitted at a later date.
6. In the absence of the Compliance Officer, an Access Person may
submit his or her Trading Approval Form to the general counsel of
Gabelli Asset Management Inc. Trading approval for the Compliance
Officer must be obtained from the general counsel, and trading
approval for the general counsel must be obtained from the
Compliance Officer. In no case will the Trading Desk accept an
order for an Access Person Account unless it is accompanied by a
signed Trading Approval Form.
7. The Compliance Officer shall review all Trading Approval Forms,
all initial, quarterly and annual disclosure certifications and
the trading activities on behalf of all Client accounts with a
view to ensuring that all Covered Persons are complying with the
spirit as well as the detailed requirements of this Code. The
Compliance Officer will review all transactions in the market
making accounts of Gabelli & Company, Inc. and the error accounts
of the Companies and the Affiliates in order to ensure that such
transactions are bona fide market making or error transactions or
are conducted in accordance with the requirements of this Article
II.
III. Other Investment-Related Restrictions
A. Gifts
No Access Person shall accept any gift or other item of more than
$100 in value from any person or entity that does business with or
on behalf of any Client.
<PAGE>
B. Service As a Director
No Access Person shall commence service on the Board of Directors of
a publicly traded company or any company in which any Client account
has an interest without prior authorization from the Compliance
Committee based upon a determination that the Board service would
not be inconsistent with the interests of the Clients. The
Compliance Committee shall include the senior Compliance Officer of
Gabelli Asset Management Inc., the general counsel of Gabelli Asset
Management Inc. and at least two of the senior executives from among
the Companies.
IV. Reports and Additional Compliance Procedures
A. Every Covered Person, except independent directors of Affiliates of
the Companies, must submit a report (a form of which is appended as
Exhibit C) containing the information set forth in paragraph (B) below
with respect to transactions in any Security in which such Covered
Person has or by reason of such transaction acquires, any direct or
indirect beneficial ownership (as defined in Exhibit D) in the
Security, and with respect to any account established by the Covered
Person in which any Securities were held for the direct or indirect
benefit of the Covered Person; PROVIDED, HOWEVER, that:
1. a Covered Person who is required to make reports only because he
is a director of one of the Fund Clients and who is a
"disinterested" director thereof need not make a report with
respect to any transactions other than those where he knew or
should have known in the course of his duties as a director that
any Fund Client of which he is a director has made or makes a
purchase or sale of the same or a related Security within 15 days
before or after the purchase or sale of such Security or related
Security by such director.
2. a Covered Person need not make a report with respect to any
transaction effected for, and Securities held in, any account
over which such person does not have any direct or indirect
influence or control; and
3. a Covered Person will be deemed to have complied with the
requirements of this Article IV insofar as the Compliance Officer
receives in a timely fashion duplicate monthly or quarterly
brokerage statements or transaction confirmations on which all
transactions required to be reported hereunder are described.
B. A Covered Person must submit the report required by this Article to
the Compliance Officer no later than 10 days after the end of the
calendar quarter in which the transaction or account to which the
report relates was effected or established, and the report must contain
the date that the report is submitted.
1. This report must contain the following information with respect
to transactions:
a. The date of the transaction, the title and number of shares
and the principal amount of each Security involved;
b. The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
<PAGE>
c. The price at which the transaction was effected; and
d. The name of the broker, dealer or bank with or through whom
the transaction was effected.
2. This report must contain the following information with respect
to accounts established:
a. The name of the broker, dealer or bank with whom the account
was established; and
b. The date the account was established.
C. Any report submitted to comply with the requirements of this Article
IV may contain a statement that the report shall not be construed as an
admission by the person making such report that he has any direct or
indirect beneficial ownership in the Security to which the report
relates. A person need not make any report under this Article IV with
respect to transactions effected for, and Securities held in, any
account over which the person has no direct or indirect influence or
control
D. No later than 10 days after beginning employment with any of the
Companies or Affiliates or otherwise becoming a Covered Person, each
Covered Person (except for a "disinterested" director of the Fund
Client who is required to submit reports solely by reason of being such
a director) must submit a report containing the following information:
1. The title, number of shares and principal amount of each Security
in which the Covered Person had any direct or indirect beneficial
ownership when the person became a Covered Person;
2. The name of any broker, dealer or bank with whom the Covered
Person maintained an account in which any Securities were held
for the direct or indirect benefit of the Covered Person as of
the date the person became a Covered Person; and
3. The date that the report is submitted.
The form of such report is attached as Exhibit E.
E. Annually each Covered Person must certify that he has read and
understood the Code and recognizes that he is subject to such Code. In
addition, annually each Covered Person must certify that he has
disclosed or reported all personal Securities transactions required to
be disclosed or reported under the Code and that he is not subject to
any regulatory disability described in the annual certification form.
Furthermore, each Covered Person (except for a "disinterested" director
of the Fund Client who is required to submit reports solely by reason
of being such a director) annually must submit a report
<PAGE>
containing the following information (which information must be current
as of a date no more than 30 days before the report is submitted):
1. The title, number of shares and principal amount of each Security
in which the Covered Person had any direct or indirect beneficial
ownership;
2. The name of any broker, dealer or bank with whom the Covered
Person maintains an account in which any Securities are held for
the direct or indirect benefit of the Covered Person; and
3. The date that the report is submitted.
The form of such certification and report is attached as Exhibit F.
F. At least annually (or quarterly in the case of Items 4 and 5 below),
each of the Companies that has a Fund Client or that provides principal
underwriting services for a Fund Client shall, together with each Fund
Client, furnish a written report to the Board of Directors of the Fund
Client that:
1. Describes any issues arising under the Code since the last
report.
2. CERTIFIES THAT THE COMPANIES HAVE DEVELOPED PROCEDURES CONCERNING
COVERED PERSONS' PERSONAL TRADING ACTIVITIES AND REPORTING
REQUIREMENTS RELEVANT TO SUCH FUND CLIENTS THAT ARE REASONABLY
NECESSARY TO PREVENT VIOLATIONS OF THE CODE;
3. RECOMMENDS CHANGES, IF ANY, TO THE FUND CLIENTS' OR THE
COMPANIES' CODES OF ETHICS OR PROCEDURES;
4. PROVIDES A SUMMARY OF ANY MATERIAL OR SUBSTANTIVE VIOLATIONS OF
THIS CODE BY COVERED PERSONS WITH RESPECT TO SUCH FUND CLIENTS
WHICH OCCURRED DURING THE PAST QUARTER AND THE NATURE OF ANY
REMEDIAL ACTION TAKEN; AND
5. DESCRIBES ANY MATERIAL OR SIGNIFICANT EXCEPTIONS TO ANY
PROVISIONS OF THIS CODE OF ETHICS AS DETERMINED UNDER ARTICLE VI
BELOW.
G. The Compliance Officer shall notify each employee of any of the
Companies or Affiliates as to whether such person is considered to be
an Access Person or Covered Person and shall notify each other person
that is considered to be an Access Person or Covered Person.
V. Sanctions
Upon discovering that a Covered Person has not complied with the
requirements of this Code, the Board of Directors of the relevant
Company or of the relevant Fund Client, whichever is most appropriate
under the circumstances, may impose on that person whatever sanctions
the Board deems appropriate, including, among other things,
<PAGE>
disgorgement of profit, censure, suspension or termination of
employment. Material violations of requirements of this Code by
employees of Covered Persons and any sanctions imposed in connection
therewith shall be reported not less frequently than quarterly to the
Board of Directors of any relevant Company or Fund Client, as
applicable.
VI. Exceptions
The Compliance Committee of the Companies reserves the right to decide,
on a case-by-case basis, exceptions to any provisions under this Code.
Any exceptions made hereunder will be maintained in writing by the
Compliance Committee and presented to the Board of Directors of any
relevant Fund Client at its next scheduled meeting.
VII. Preservation of Documents
This Code, a copy of each report by a Covered Person, any written
report made hereunder by the Companies or the Compliance Officer, lists
of all persons required to make reports, a list of any exceptions, and
the reasons therefor, with respect to Article II.B, and any records
under Article II.G with respect to purchases pursuant to Article II.H
above, shall be preserved with the records of the relevant Company and
any relevant Fund Client for the period required by Rule 17j-1.
VIII. Other Laws, Rules and Statements of Policy
Nothing contained in this Code shall be interpreted as relieving any
Covered Person from acting in accordance with the provision of any
applicable law, rule or regulation or any other statement of policy or
procedure governing the conduct of such person adopted by the
Companies, the Affiliates or the Fund Clients.
IX. Further Information
If any person has any question with regard to the applicability of the
provisions of this Code generally or with regard to any Securities
transaction or transactions, he should consult the Compliance Officer.
<PAGE>
EXHIBIT A
LIST OF AFFILIATES OF THE COMPANIES
ALCE Partners, L.P.
Darien Associates LLC
Gabelli Asset Management Inc.
Gabelli Associates Fund
Gabelli Associates Limited
Gabelli Fixed Income Distributors
Gabelli Fixed Income, Inc.
Gabelli Global Partners, L.P.
Gabelli Global Partners, Ltd.
Gabelli International Gold Fund Limited
Gabelli International Limited
Gabelli International II Limited
Gabelli International Securities Limited
Gabelli Multimedia Partners, L.P.
Gabelli Performance Partnership L.P.
Gabelli Securities, Inc.
Gemini Capital Management Ltd.
GLI, Inc.
Gabelli Group Capital Partners, Inc. and its subsidiaries
Gabelli Global Partners, L.P.
Gabelli Global Partners, Ltd.
Gabelli European Partners, Ltd.
Gabelli Fund, LDC
MJG Associates, Inc.
New Century Capital Partners, L.P.
<PAGE>
EXHIBIT B
PRE-CLEARANCE TRADING APPROVAL FORM
I, ______________________________________ (name), am an Access Person or
authorized officer thereof and seek pre-clearance to engage in the transaction
described below for the benefit of myself or another Access Person:
ACQUISITION OR DISPOSITION (circle one)
Name of Account:________________________________________________________________
Account Number:_________________________________________________________________
Date of Request:________________________________________________________________
Security:_______________________________________________________________________
Amount or # of Shares:__________________________________________________________
Broker:_________________________________________________________________________
If the transaction involves a Security that is not publicly traded, a
description of proposed transaction, source of investment opportunity and any
potential conflicts of interest:
I hereby certify that, to the best of my knowledge, the transaction described
herein is not prohibited by the Code of Ethics and that the opportunity to
engage in the transaction did not arise by virtue of my activities on behalf of
any Client.
Signature:_________________________________ Print Name:_________________________
APPROVED OR DISAPPROVED(Circle One)
Date of Approval:__________________________
Signature:_________________________________ Print Name:_________________________
If approval is granted, please forward this form to the trading desk (or if a
third party broker is permitted, to the Compliance Officer) for immediate
execution.
<PAGE>
EXHIBIT C
TRANSACTION REPORT
Report submitted by:____________________________________________________________
Print Name
This transaction report (the "Report") is submitted pursuant to Section IV (B)
of the Code of Ethics of the Companies and supplies information with respect to
transactions in any Security in which you may be deemed to have, or by reason of
such transaction acquire, any direct or indirect beneficial ownership interest,
and with respect to accounts established by you in which any Securities were
held for your direct or indirect benefit, for the period specified below. If you
were not employed by or affiliated with us during this entire period, amend the
dates specified below to cover your period of employment or affiliation.
Unless the context otherwise requires, all terms used in the Report shall have
the same meaning as set forth in the Code of Ethics.
If you have no reportable transactions or new accounts, sign and return this
page only. If you have reportable transactions or new accounts, complete, sign
and return Page 2 and any attachments.
I HAD NO REPORTABLE SECURITIES TRANSACTIONS OR ACCOUNTS ESTABLISHED DURING THE
PERIOD____________________ THROUGH___________________ . I CERTIFY THAT I AM
FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST OF MY KNOWLEDGE,
THE INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
Signature_______________________________________________________________________
Position________________________________________________________________________
Date____________________________________________________________________________
<PAGE>
Page 2
TRANSACTION REPORT
Report submitted by:____________________________________________________________
Print Name
The following tables supply the information required by Section IV (B) of the
Code of Ethics for the period specified below. Transactions reported on
brokerage statements or duplicate confirmations actually received by the
Compliance Officer do not have to be listed although it is your responsibility
to make sure that such statements or confirmations are complete and have been
received in a timely fashion.
<TABLE>
<CAPTION>
TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Whether Purchase,
Sale, Short Sale or Name of Broker/Dealer
Securities Other Type of with or through Whom Nature of
(Name and Date of Disposition or Quantity of Price per Share the Transaction Ownership of
Symbol) Transaction Acquisition Securities or Other Unit was Effected Securities
</TABLE>
<TABLE>
<CAPTION>
NEW ACCOUNTS ESTABLISHED
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name of Broker, Dealer or Bank Account Number Date Account Established
</TABLE>
* To the extent specified above, I hereby disclaim beneficial ownership of any
securities listed in this Report or brokerage statements or transaction
confirmations provided by me.
I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST
OF MY KNOWLEDGE, THE INFORMATION IN THIS REPORT IS TRUE AND CORRECT FOR THE
PERIOD OF ____________ THROUGH____________ .
Signature____________________________________ Date______________________________
Position_____________________________________
<PAGE>
EXHIBIT D
BENEFICIAL OWNERSHIP
For purposes of the attached Code of Ethics, "beneficial ownership" shall be
interpreted in the same manner as it would be in determining whether a person is
subject to the provisions of Section 16 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, except the determination of direct or
indirect beneficial ownership shall apply to all securities that a Covered
Person has or acquires. The term "beneficial ownership" of securities would
include not only ownership of securities held be a Covered Person for his own
benefit, whether in bearer form or registered in his name or otherwise, but also
ownership of securities held for his benefit by others (regardless of whether or
how they are registered) such as custodians, brokers, executors, administrators,
or trustees (including trusts in which he has only a remainder interest), and
securities held for his account by pledges, securities owned by a partnership in
which he is a member if he may exercise a controlling influence over the
purchase, sale of voting of such securities, and securities owned by any
corporation or similar entry in which he owns securities if the shareholder is a
control-ling shareholder of the entity and has or shares investment control over
the entity's portfolio.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which a Covered Person is a legatee or beneficiary
unless there is a specified legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than a year after the decedent's death.
Securities held in the name of another should be considered as beneficially
owned by a Covered Person where such person enjoys "financial benefits
substantially equivalent to ownership." The Securities and Exchange Commission
has said that, although the final determination of beneficial ownership is a
question to be determined in the light of the facts of the particular case,
generally a person is regarded as the beneficial owner of securities held in the
name of his or her spouse and their minor children. Absent special circumstances
such relationship ordinarily results in such person obtaining financial benefits
substantially equivalent to ownership, E.G., application of the income derived
from such securities to maintain a common home, or to meet expenses that such
person otherwise would meet from other sources, or the ability to exercises a
controlling influence over the purchase, sale or voting of such securities.
A Covered Person also may be regarded as the beneficial owner of securities held
in the name of another person, if by reason of any contract, understanding,
relationship, agreement, or other agreement, he obtains therefrom financial
benefits substantially equivalent to those of ownership.
A Covered Person also is regarded as the beneficial owner of securities held in
the name of a spouse, minor children or other person, even though he does not
obtain therefrom the aforementioned benefits of ownership, if he can vest or
revest title in himself at once or at some future time.
<PAGE>
EXHIBIT E
INITIAL HOLDINGS REPORT
Report submitted by:____________________________________________________________
Print Name
This initial holdings report (the "Report") is submitted pursuant to Section IV
(D) of the Code of Ethics of the Companies and supplies information with respect
to any Security in which you may be deemed to have any direct or indirect
beneficial ownership interest and any accounts established by you in which any
Securities were held for your direct or indirect benefit, as of the date you
became subject to the Code of Ethics.
Unless the context otherwise requires, all terms used in the Report shall have
the same meaning as set forth in the Code of Ethics.
If you have no reportable Securities or accounts, sign and return this page
only. If you have reportable Securities or accounts, complete, sign and return
Page 2 and any attachments.
I HAVE NO REPORTABLE SECURITIES OR ACCOUNTS AS OF___________________ . I CERTIFY
THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST OF MY
KNOWLEDGE, THE INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
Signature_______________________________________________________________________
Position________________________________________________________________________
Date____________________________________________________________________________
<PAGE>
Page 2
INITIAL HOLDINGS REPORT
Report submitted by:____________________________________________________________
Print Name
The following tables supply the information required by Section IV (D) of the
Code of Ethics as of the date you became subject to the Code.
<TABLE>
<CAPTION>
SECURITIES HOLDINGS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Name of Broker/Dealer Where Nature of Ownership of
Securities (Name and Symbol) Quantity of Securities Securities Are Held Securities
</TABLE>
ACCOUNTS
- --------------------------------------------------------------------------------
Name of Broker, Dealer or Bank Account Number
I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST
OF MY KNOWLEDGE, THE INFORMATION IN THIS REPORT IS TRUE AND CORRECT AS OF
__________________________________.
Signature____________________________________ Date______________________________
Position_____________________________________
<PAGE>
EXHIBIT F
ANNUAL CERTIFICATION OF CODE OF ETHICS
A. I (a Covered Person) hereby certify that I have read and understood the
Code of Ethics dated February 15, 2000, and recognize that I am subject
to its provisions. In addition, I hereby certify that I have disclosed
or reported all personal Securities transactions required to be
disclosed or reported under the Code of Ethics;
B. Within the last ten years there have been no complaints or disciplinary
actions filed against me by any regulated securities or commodities
exchange, any self-regulatory securities or commodities organization,
any attorney general, or any governmental office or agency regulating
insurance, securities, commodities or financial transactions in the
United States, in any state of the United States, or in any other
country;
C. I have not within the last ten years been convicted of or acknowledged
commission of any felony or misdemeanor arising out of my conduct as an
employee, salesperson, officer, director, insurance agent, broker,
dealer, underwriter, investment manager or investment advisor; and
D. I have not been denied permission or otherwise enjoined by order,
judgment or decree of any court of competent jurisdiction, regulated
securities or commodities exchange, self-regulatory securities or
commodities organization or other federal or state regulatory authority
from acting as an investment advisor, securities or commodities broker
or dealer, commodity pool operator or trading advisor or as an
affiliated person or employee of any investment company, bank,
insurance company or commodity broker, dealer, pool operator or trading
advisor, or from engaging in or continuing any conduct or practice in
connection with any such activity or the purchase or sale of any
security.
E. Unless I am exempt from filing an Annual Holdings Report (as a
"disinterested" director of a Fund Client or an independent director of
an Affiliate), I have attached a completed Annual Holdings Report which
is accurate as of a date no more than 30 days ago.
Print Name:_____________________________________________________________________
Signature:______________________________________________________________________
Date:___________________________________________________________________________
<PAGE>
Page 2
ANNUAL HOLDINGS REPORT
Report submitted by:____________________________________________________________
Print Name
The following tables supply the information required by Section IV (E) of the
Code of Ethics as of a date no more than 30 days before this report is
submitted. If you have no reportable Securities holdings or accounts, write
"None" in the space provided.
<TABLE>
<CAPTION>
SECURITIES HOLDINGS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Name of Broker/Dealer Where Nature of Ownership of
Securities (Name and Symbol) Quantity of Securities Securities Are Held Securities
</TABLE>
ACCOUNTS
- --------------------------------------------------------------------------------
Name of Broker, Dealer or Bank Account Number
Signature____________________________________ Date______________________________
Position_____________________________________
