SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant[X]
Filed by a Party other than the Registrant / /
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) of ss.240.14a-12
The Treasurer's Fund Inc.
(Name of Persons(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/X/ Fee paid previously with preliminary materials.
10082.0000 431483.1
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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10082.0000 431483.1
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THE TREASURER'S FUND, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
April 14, 1997
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19 Old Kings Highway South
Darien, Connecticut 06820-4526
(203) 655-1999
A Special Meeting of Shareholders of The Treasurer's Fund, Inc. (the
"Corporation") will be held at 9:00 a.m. on April 14, 1997 at the offices of the
Corporation at 19 Old Kings Highway South, Darien, Connecticut 06820-4526 for
the following purposes, all of which are more fully described in the
accompanying Proxy Statement dated March 27, 1997.
1. To approve or disapprove a new Advisory Agreement to be effective upon
the consummation of a purchase of certain partnership interests in
Gabelli-O'Connor Fixed Income Mutual Funds Management Co. (the
"Advisor") by Gabelli Funds, Inc., such Agreement to be substantially
identical in all material respects to the Advisory Agreement in effect
for the Corporation immediately prior to such transaction (see page 2
of the attached Proxy Statement);
2. To elect thirteen directors of the Corporation, each to hold office
until his successor is duly elected and qualified;
3. To ratify or reject the selection of Ernst & Young LLP as independent
accountants of the Corporation for its fiscal year ending October 31,
1997; and
4. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on March 19, 1997 are
entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors
JUDITH FABRIZI, Secretary
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YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD DATE.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY BALLOT, DATE AND
SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE CORPORATION OF FURTHER SOLICITATION, WE ASK
FOR YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
C/M: 11536.0001 428573.4
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PROXY STATEMENT
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INTRODUCTION...................................................................1
PROPOSAL 1. APPROVAL OR DISAPPROVAL OF A NEW ADVISORY AGREEMENT TO BE
EFFECTIVE AT THE TIME OF THE TRANSACTION.................... 2
PROPOSAL 2. ELECTION OF DIRECTORS........................................6
PROPOSAL 3. RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT
ACCOUNTANTS.................................................11
INFORMATION REGARDING THE CURRENT ADVISOR.....................................11
ALLOCATION OF PORTFOLIO BROKERAGE.............................................13
OTHER MATTERS.................................................................14
EXHIBIT A (ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON BEHALF OF U.S.
TREASURY MONEY MARKET PORTFOLIO, AND GABELLI FIXED INCOME
L.L.C.).................................................... 15
EXHIBIT B (ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON BEHALF OF
DOMESTIC PRIME MONEY MARKET PORTFOLIO, AND GABELLI FIXED
INCOME L.L.C.)..............................................18
EXHIBIT C (ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON BEHALF OF
TAX EXEMPT MONEY MARKET PORTFOLIO, AND GABELLI FIXED INCOME
L.L.C.).....................................................21
EXHIBIT D (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE ADVISOR)........24
C/M: 11536.0001 428573.4
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THE TREASURER'S FUND, INC.
19 OLD KINGS HIGHWAY SOUTH
DARIEN, CONNECTICUT 06820-4526
PROXY STATEMENT
INTRODUCTION
This statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Treasurer's Fund, Inc. (the
"Corporation") for use at a Special Meeting of Shareholders to be held at the
offices of the Corporation at 19 Old Kings Highway South, Darien, Connecticut
06820-4526 on April 14, 1997 at 9 a.m. Such solicitation will be made primarily
by the mailing of this statement and the materials accompanying it. Supplemental
solicitations may be made by mail, telephone, or personal interviews by officers
and representatives of the Corporation. The expenses in connection with
preparing and mailing this statement and the material accompanying it, and of
such supplemental solicitations, will be borne by the Advisor (as hereinafter
defined). This Proxy Statement and the accompanying Proxy are first being sent
to shareholders on or about March 27, 1997. The Corporation's most recent annual
report is available upon request.
The outstanding voting stock of the Corporation as of the close of
business on March 19, 1997 consisted of 112,804,832.490 shares of common stock
of the U.S. Treasury Money Market Portfolio, 263,046,763.710 shares of common
stock of the Domestic Prime Money Market Portfolio, and 187,373,891.870 shares
of common stock of the Tax Exempt Money Market Portfolio (each Portfolio is
together referred to herein as the "Portfolios"), each whole share being
entitled to one vote and each fraction of a share being entitled to a
proportionate fraction of a vote. The Global Money Market Portfolio, Limited
Term Portfolio and Tax Exempt Limited Term Portfolio, as of this date, have not
been activated by the Advisor. Therefore, there are no outstanding shares of
common stock of these portfolios. Only shareholders of record at the close of
business on March 19, 1997 are entitled to vote at the meeting. Any shareholder
may revoke his proxy at any time prior to its exercise by a written notification
of such revocation, such notification to include the shareholder's name and
account number, and which must be signed, addressed to the Secretary of the
Corporation at its principal executive office, 19 Old Kings Highway South,
Darien, Connecticut 06820-4526, and received prior to the meeting to be
effective, or by signing another proxy of a later date, or by personally casting
his vote at the meeting of shareholders.
Among the purposes of this Special Meeting of the Shareholders of the
Corporation is the approval as to each Portfolio of the Corporation of a new
investment advisory agreement (the "Advisory Agreement") between the
Corporation, on behalf of each Portfolio, and Gabelli Fixed Income L.L.C.
("GFI"), the successor in interest to the current advisor, Gabelli-O'Connor
Fixed Income Mutual Funds Management Co. (the "Advisor"). Your consideration of
the Advisory Agreements is necessitated by reason of a definitive purchase
agreement between Thomas E. O'Connor & Co. L.P. ("TOC & Co. L.P."), a Delaware
limited partnership, the owner of a 50% general partnership interest in the
Advisor and Gabelli Funds, Inc ("Gabelli"), a New York corporation currently
owning the remaining 50% general partnership interest in the Advisor, pursuant
to which Gabelli intends to purchase substantially all of the TOC & Co. L.P.
partnership interest in the Advisor. In addition, the terms of the purchase
agreement provide for the purchase by Gabelli of the partnership interests
currently owned by TOC & Co. L.P. in an affiliated company, Gabelli-O'Connor
Fixed Income Management Co. The Advisor and its affiliated company will upon
consummation of the purchase transaction merge into GFI. Upon the consummation
of the Acquisition (as defined herein), Gabelli Fixed Income, Inc., a
wholly-owned subsidiary of Gabelli, will hold 81% of the interests in such
entity and the remaining 19% interest will be owned by senior officers of the
Advisor. The transaction as described, hereinafter referred to as the
Acquisition (the "Acquisition"), for purposes of the Investment Company Act of
1940, as amended (the "1940 Act"), constitutes a change of control of the
Advisor. Under the 1940 Act, such a change of control constitutes an
"assignment" (as defined in the 1940 Act) and, as a result, the termination of
the existing Advisory Agreements between the Advisor and the Corporation. The
Directors have approved, and recommend that the shareholders of the Corporation
approve as to each Portfolio, the new Advisory Agreements to be effective at the
time of the closing of the Acquisition. The proposed new Advisory Agreements
will be substantially identical in all material respects to the Advisory
Agreements in effect immediately prior to the Acquisition, except for (i) the
dates of execution and termination, (ii) the name of the Advisor, and (iii) the
classification of the Advisor as to a
C/M: 11536.0001 428573.4
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limited liability company. As a result, the new Advisor will continue to perform
investment advisory services for the Corporation after the Acquisition, on the
same terms as are in effect immediately before the Acquisition.
In addition to the above, the other purposes for this Special Meeting
of Shareholders include: (i) the election of directors and (ii) the ratification
of the selection of independent accountants.
One third of the outstanding shares of the Corporation, represented in
person or by proxy, shall be required to constitute a quorum at the meeting
although more than one third of the outstanding shares may be required to be
present to approve a particular issue. If a quorum is not present at the
meeting, or if a quorum is present but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. In
determining whether to adjourn the meeting, the following factors may be
considered: the nature of the proposals that are the subject of the meeting, the
percentage of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation and the information to be provided
to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
represented at the meeting in person or by proxy. A shareholder vote may be
taken on one or more of the proposals in this proxy statement prior to any
adjournment if sufficient votes have been received for approval. Any signed
proxy will be voted in favor of the proposals unless a choice is indicated to
vote against or to abstain from voting on that proposal. An abstention on any
proposal will have the same legal effect as a vote against such proposal.
Further, the proposals are considered "discretionary" and brokers that are
record or nominee holders of shares of the Corporation who have received no
instructions from their clients have discretion to vote on these matters. Absent
voting by the particular beneficial owners of such shares, such "broker
non-votes" will be considered as votes cast in determining the outcome of the
proposals.
As of March 19, 1997, the following persons or entities owned as much
as 5% of the indicated Portfolio's outstanding shares:
<TABLE>
<CAPTION>
Nature of
Name & Address % of Class Ownership
______________ __________ _________
<S> <C> <C>
U.S. Treasury Money Market
Portfolio
Bear, Stearns Profit Sharing Corp. 7.389% Record
c/o Custodial Trust Company
Attn: Accounting Department
101 Carnegie Center
Princeton, New Jersey 08540-6231
Bear, Stearns Securities Corp. 6.658% Record
1 Metrotech Center North
Brooklyn, NY 11201-3857
</TABLE>
The shares held by the above Bear, Stearns entities are held on behalf
of individual client accounts.
As of March 19, 1997, the officers and directors of the Corporation,
collectively, beneficially owned, directly or indirectly (including the power to
vote or to dispose of any shares), less than 1% of the shares of the total
outstanding shares of each of the Corporation's Portfolios.
PROPOSAL 1. APPROVAL OR DISAPPROVAL OF A NEW ADVISORY AGREEMENT TO BE
EFFECTIVE AT THE TIME OF THE TRANSACTION
The Directors of the Corporation unanimously recommend that the
shareholders of each Portfolio vote to approve a new Advisory Agreement for the
Corporation, on behalf of each of the Portfolios, to be effective at the time of
the
C/M: 11536.0001 428573.4
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Acquisition. The new Advisory Agreements will be substantially identical in all
material respects to the existing investment advisory agreements in effect for
the Corporation immediately prior to the time of the Acquisition. As explained
above, the Acquisition is, for purposes of the 1940 Act, a change of control of
the Advisor. The 1940 Act provides that such a change of control constitutes an
"assignment" of the Advisory Agreement under which the Advisor provides advisory
services to the Corporation. The 1940 Act further provides that such an
"assignment" will result in the automatic termination of each of those
agreements, at the time of the Acquisition.
The Acquisition. Gabelli and TOC & Co. L.P., the general partners of
the Advisor each owning 50% of the partnership interest in the Advisor, entered
into a definitive purchase agreement whereby Gabelli will purchase substantially
all of TOC & Co. L.P.'s general partnership interest in the Advisor (the
"Acquisition Agreement") for cash. Simultaneously occurring will be the purchase
of a 11.5% interest by Henley Smith and an 7.5% interest by Ron Eaker (currently
senior officers of the Advisor) in the Advisor and Gabelli will retain an 81%
interest. Immediately preceding the Acquisition will be the creation and
organization of GFI, a Delaware limited liability company into which the Advisor
and its affiliate, Gabelli-O'Connor Fixed Income Management Co., will be merged.
GFI will be the successor registered investment advisor, and the management of
GFI will essentially be identical to that of the Advisor. Mr. Thomas E.
O'Connor, the chairman and director of the Corporation since its inception, as
well as the president and sole stockholder of Thomas E. O'Connor & Co., Inc.,
the general partner of TOC & Co. L.P., the general partner of the Advisor, will
enter into a Consulting Agreement with GFI upon his resignation as chairman of
the Corporation which will occur simultaneously with the Acquisition. Mr.
O'Connor will remain on the Board of Directors of the Corporation. Mr. Eaker and
Mr. Smith, who have each been employed by the Advisor since 1987 as the
Corporation's senior portfolio managers and who have each been officers of the
Corporation will continue in such capacities after the Acquisition.
In addition, consummation of the Acquisition is subject to fulfillment
of a number of other conditions, although the parties may waive some or all of
these conditions. There is no assurance that the Acquisition will in fact be
consummated. In addition, because it is impossible to predict with certainty
when other conditions to the Acquisition will be fulfilled, it is not known, as
of the date of this Proxy Statement, when the Acquisition will occur. The
parties currently expect, however, that the Acquisition will occur on or about
May 15, 1997.
Under the purchase agreement, the Advisor agrees that it will use its
best efforts to satisfy the conditions of Section 15(f) of the 1940 Act. Section
15(f) provides that an investment adviser to a registered investment company
(such as the Corporation), and affiliated persons of such investment adviser,
may receive any amount or benefit in connection with the sale of securities of,
or a sale of any other interest in, such investment adviser which results in an
assignment of an investment advisory contract with such investment company, if
(1) for a period of 3 years after the time of such action, at
least 75% of the board of such investment company are not interested
persons of such company's investment adviser or predecessor investment
adviser, and
(2) there is not imposed an unfair burden on such investment
company as a result of such transaction or any express or implied
terms, conditions, or understandings applicable thereto. The term
"unfair burden" is defined by the 1940 Act to include any arrangement,
during the two-year period after the sale, whereby the investment
adviser (or predecessor or successor adviser), or any interested person
of such adviser, receives or is entitled to receive any compensation,
directly or indirectly, (i) from any person in connection with the
purchase or sale of securities or other property to, from, or on behalf
of the investment company, other than bona fide ordinary compensation
as principal underwriter for such company; or (ii) from the investment
company or its security holders for other than bona fide investment
advisory or other services.
Satisfaction of condition (1) above is not expected to require any changes in
the current composition of the Corporation's Board of Directors and will also be
met upon the election of the six additional directors, two of whom are
"interested" persons as defined in the 1940 Act. As to the satisfaction of
condition (2) above, the Advisor is not aware of any express or implied term,
condition, arrangement or understanding which would impose an "unfair burden" on
the Corporation as a result of the Acquisition.
Information About Gabelli. Gabelli, a New York corporation with offices
at One Corporate Center, Rye, New York 10580, through its affiliates, acts as an
investment manager, administrator or advisor for assets aggregating in excess of
$9.3 billion as of December 31, 1996. Gabelli will be the control person of
Gabelli Fixed Income L.L.C.
C/M: 11536.0001 428573.4
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Directors' Recommendation. The Directors unanimously recommend that
shareholders approve the new Advisory Agreement between the Advisor and the
Corporation, on behalf of each of the Portfolios, to be effective at the time of
the Acquisition. The new Advisory Agreements will be substantially identical in
all material respects to the investment advisory agreements in effect
immediately before the Acquisition which is described on page 2 of this Proxy
Statement except (i) that the new Advisory Agreements will be dated the date of
the Acquisition and will be in effect initially for a period of two years and
from year to year thereafter provided that its continuance is approved in
accordance with the terms of the contract and the applicable provisions of the
1940 Act, (ii) that the name of the Advisor will be changed and (iii) the
classification of the Advisor as a limited liability company.
In coming to the recommendation set forth above, the Directors reviewed
extensive information about the Corporation, the Advisor and Gabelli. The
Directors noted that, for purposes of the 1940 Act, the Acquisition constitutes
a change of control of the Advisor as well as its affiliates that act as
advisers or sub-advisers for various other clients. Although the Acquisition is
being treated as a change of control of the Advisor and of the various
affiliated entities with the Advisor, the Acquisition is not expected to result
in any significant change in the personnel, operations or financial condition of
GFI as successor to the Advisor or of its affiliates. Gabelli has indicated that
GFI is not expected to change the investment approaches or styles of the
Advisor.
The Directors accordingly concluded that it is appropriate and
desirable for the Corporation to continue, after the Acquisition, the same
investment advisory arrangements as is in effect immediately before the
Acquisition. Under the 1940 Act, such continuation requires, in the case of the
Corporation, the approval of each Portfolio's shareholders, by vote of the
lesser of (1) 67% of the shares of that Portfolio represented at the Meeting, if
more than 50% of the shares of that Portfolio are represented at the Meeting, or
(2) more than 50% of the outstanding shares of the Portfolio.
In order that each Portfolio may continue to receive investment
advisory services following the Acquisition, on the same basis as before the
Acquisition, the Directors unanimously recommend that shareholders of each
Portfolio vote in favor of Proposal 1.
If the shareholders of the Portfolios do not approve Proposal 1, the
Acquisition will not be consummated, or if the Acquisition is not consummated
for any other reason, then the existing investment advisory agreement relating
to that Portfolio will continue in effect and the Advisor will continue to
manage the Portfolios.
Comparison of the Current Advisory Agreements with the New Advisory
Agreements.
The Current Advisory Agreements. Pursuant to the Advisory Agreements
for each of the Portfolios, the Advisor manages the Corporation's portfolio of
securities and makes decisions with respect to the purchase and sale of
investments, subject to the general control of the Board of Directors of the
Corporation.
The Advisor provides persons satisfactory to the Board of Directors of
the Corporation to serve as officers of the Corporation. Such officers, as well
as certain other employees and directors of the Corporation, may be directors,
officers or employees of the Advisor or its affiliates. The Advisor also
provides the Corporation with supervisory personnel who will be responsible for
supervising the performance of administrative services, accounting and related
services, net asset value and yield calculation, reports to and filings with
regulatory authorities, and services relating to such functions. The personnel
rendering such supervisory services may be employees of the Advisor, of its
affiliates or of other organizations. The Board has also approved subject to be
consummation of the Acquisition, a new Administrator Services Agreement with
Gabelli to act as Administrator to the Corporation to perform the same
administrative services as are set forth in the current Administrator Services
Agreement. Gabelli will subcontract with the current administrator BISYS Fund
Services Limited Partnership d/b/a BISYS Fund Services ("BISYS") to provide
personnel who will be responsible for performing the operational components of
such services. BISYS recently became the successor to Furman Selz LLC which had
served as the Administrator since the Corporation's inception.
The Advisory Agreements for the Corporation, on behalf of each
Portfolio were most recently approved, as amended, on October 16, 1996 by the
Board of Directors, including a majority of the directors who are not interested
persons (as defined in the 1940 Act) of the Corporation or the Advisor. The
Advisory Agreements for the Domestic Prime Money Market Portfolio and the Tax
Exempt Money Market Portfolio were approved by a majority of the shareholders of
each such Portfolio at a meeting of the shareholders on March 6, 1989. The
Advisory Agreement for the U.S. Treasury Money Market Portfolio was approved by
a majority of the shareholders of that Portfolio on March 14, 1991.
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The Advisory Agreements have a term which extends to October 31, 1997,
and may be continued in force thereafter for successive twelve-month periods
beginning each November 1, provided that such continuance is specifically
approved annually by a majority vote of the respective Portfolio's outstanding
voting securities or by the Fund's Board of Directors, and in either case by a
majority of the directors who are not parties to the Advisory Agreement or
interested persons of any such party, by votes cast in person at a meeting
called for the purpose of voting on such matter.
The Advisory Agreements are terminable without penalty by the Portfolio
on sixty days' written notice when authorized either by majority vote of the
outstanding voting shares of the Portfolio or by a vote of a majority of the
Corporation's Board of Directors, or by the Advisor on sixty days' written
notice, and will automatically terminate in the event of an assignment. The
Advisory Agreements provide that in the absence of willful misfeasance, bad
faith or gross negligence on the part of the Advisor, or of reckless disregard
of its obligations thereunder, the Advisor shall not be liable for any action or
failure to act in accordance with its duties thereunder.
Set forth below as a percentage of average daily net assets are the
advisory fees paid to the Advisor for each Portfolio pursuant to the Advisory
Agreements: the U.S. Treasury Money Market Portfolio, .30%; the Domestic Prime
Money Market Portfolio, .30%; the Global Money Market Portfolio, .30%; the Tax
Exempt Money Market Portfolio, .30%; the Limited Term Portfolio, .45%; and the
Tax Exempt Limited Term Portfolio, .45%. Any portion of the total fees received
by the Advisor may be used by the Advisor to provide shareholder and
administrative services and for distribution of the Corporation's shares.
The fees paid under the applicable Advisory Agreements for the fiscal
years ended October 31, 1994, 1995 and 1996, were: $440,162, $403,955, and
$455,634, respectively, for the Tax Exempt Money Market Portfolio; $457,770,
$458,599 and $657,103, respectively, for the Domestic Prime Money Market
Portfolio; and $542,100, $307,543 and $263,957, respectively, for the U.S.
Treasury Money Market Portfolio. As of the date hereof, the other three
Portfolios have not been activated by the Advisor. The Advisor may, in the
future, irrevocably waive its rights to any portion of the advisory fees and may
use any portion of the advisory fees for purposes of shareholder and
administrative services and distribution of the Corporation's shares pursuant to
the Corporation's Distribution and Service Plans.
The New Advisory Agreements. The new Advisory Agreements are identical
in all material respects to the current Advisory Agreements except for (i) the
dates of execution and termination, (ii) the name of the Advisor and (iii) the
classification of the Advisor as a limited liability company.
GFI, the successor in interest to Gabelli-O'Connor Fixed Income Mutual
Funds Management Co., is organized as a limited liability company whose
management and operation will be substantially similar to the Advisor, including
the continued employment of Mr. Eaker and Mr. Smith, as well as several other
officers and employees. In addition, Mr. O'Connor will enter into a Consulting
Agreement with GFI pursuant to which he will provide various consulting services
to GFI for a three year period. The corporate structure of a limited liability
company means that GFI will be managed in a manner similar to the Advisor but
unlike the current general partnership structure currently in existence for the
Advisor, members of a limited liability company have limited liability similar
to a corporation's stockholder.
In addition to the new Advisory Agreements, the Board of Directors has
approved a new Administration Services Agreement with Gabelli Funds, Inc. and a
new Distribution Agreement with Gabelli Fixed Income Distributors, Inc.
Administrative Services Agreements. The responsibilities of the Advisor
under the Advisory Agreements include supervising the performance of certain
administrative services. The Board of Directors of the Corporation, on behalf of
each of the Portfolios, has decided to retain Gabelli as Administrator to be
responsible for the performance of all administrative services currently
provided to the Corporation and to allow Gabelli to subcontract the operational
aspects of those services to BISYS without incurring any fee increase. In so
doing, the Board has approved the Corporation, on behalf of each of the
Portfolios, to enter into an Administrative Services Agreement with Gabelli
pursuant to which Gabelli will be responsible for the administrative functions
formerly conducted by BISYS. Subsequently, Gabelli will enter into a
Sub-Administration Services Agreement with BISYS and BISYS as Sub-Administrator
will perform the operational components of administrative functions and services
as set forth in such agreement, subject to the overall supervision of GFI.
Pursuant to the new Administrative Services Agreement, Gabelli will receive the
administrative services fee currently paid to BISYS, (i) .10% of the first $500
million of aggregate average daily net assets of the Corporation, (ii) .065% of
the next $250 million of such assets, (iii) .055% of the next $250 million of
such assets, and (iv) .050% of all such assets
C/M: 11536.0001 428573.4
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over $1 billion, from which Gabelli will compensate BISYS for all fees and
expenses arising out of its performance under the Sub-Administrative Services
Agreement.
PROPOSAL 2. ELECTION OF DIRECTORS
At the meeting, thirteen directors are to be elected, each to hold
office until his successor has been elected and has qualified. Mr. O'Connor, Mr.
Christiana, Mr. Kolodny, Mr. Roubos and Mr. Pustorino were elected to the Board
and all except for Mr. O'Connor to the Audit and Nominating Committees and have
served as such since the Corporation's inception in 1987. Mr. Merritt was
elected to the Board and the Audit and Nominating Committees and has served as
such since January 23, 1991. Ms. Hauck was elected to the Board and has served
as such and on the Audit and Nominating Committee since April 8, 1992. The
biographies for Mr. Gabelli, Mr. Colavita, Dr. Roeder, Mr. van Ekris, Mr. Pohl
and Mr. Daniel as nominees for director are set forth below. All such persons
have consented to be named in this Proxy Statement and to serve as directors of
the Corporation if elected. The Board of Directors, which met four times during
the Corporation's fiscal year ended October 31, 1996, has no compensation
committee. Each director attended at least 75% of the board meetings held. The
Corporation has an Audit Committee of the Board of Directors, comprised of Mr.
Christiana, Mr. Kolodny, Mr. Pustorino, Mr. Roubos, Mr. Merritt and Ms. Hauck
who are not "interested persons" of the Corporation within the meaning of
Section 2(a)(19) of the 1940 Act. The Audit Committee meets annually to review
the Corporation's financial statements with the independent accountants and to
report on its findings to the Board of Directors. In addition, pursuant to a
Distribution and Service Plan adopted by the Corporation in accordance with the
provisions of Rule 12b-1 under the 1940 Act, the Corporation has a Nominating
Committee of the Board of Directors comprised of Mr. Christiana, Mr. Kolodny,
Mr. Pustorino, Mr. Roubos, Mr. Merritt and Ms. Hauck, to whose discretion the
selection and nomination of directors who are not "interested persons" of the
Corporation is committed. Upon the Election by the Shareholders of the new
directors, Mr. van Ekris, Mr. Colavita, Dr. Roeder and Mr. Daniel, all "non-
interested" persons of the Corporation will also serve on the Audit and
Nominating Committees. The Nominating Committee recently met to approve the
nomination of Mr. Gabelli, Mr. Colavita, Dr. Roeder, Mr. Pohl, Mr. van Ekris and
Mr. Daniel. The Nominating Committee currently does not consider nominees
recommended by shareholders. The election of each director requires the approval
of a majority present at the meeting in person or by proxy.
The following is a list of the members of the Board of Directors and
the nominees for Director, any other positions each may now hold with the
Corporation, the principal occupation of each Director and nominee during the
past five years and the nature, amount and percentage of shares held by each in
the Corporation. The names marked with an (*) are "interested persons" of the
Corporation, as defined in the 1940 Act. Names marked with a (+) are directors,
trustees or officers of one or more investment companies advised by Gabelli.
<TABLE>
<CAPTION>
Amount &
Nature
of Beneficial
Principal Occupation Ownership at % of
Name, Address and Age During Preceding Five Years 3/19/97 Shares
_____________________ ___________________________ _____________ ______
<S> <C> <C> <C>
+*Thomas E. O'Connor, 53 President of Thomas E. O'Connor & Co., 634,232.355 0.001
Chairman of the Board Inc., the general partner of Thomas E.
19 Old Kings Highway South O'Connor & Co. L.P. which is a general
Darien, Connecticut 06820-4526 partner of the Advisor. Prior to forming
the Advisor and its affiliated management
company, Gabelli-O'Connor Fixed Income
Management Co., he was a Managing
Director of Bear, Stearns & Co. Inc. He
began his affiliation with Bear, Stearns &
Co. Inc. in 1972 and became a General
Partner of Bear, Stearns & Co. (the
predecessor partnership) in 1977, and
became manager of the Public Finance
Department in 1978.
C/M: 11536.0001 428573.4
6
<PAGE>
+Felix J. Christiana, 72 Retired Senior Vice President, Dollar Dry 13,885.750 0.000
Director Dock Savings Bank. Director/Trustee of
35 Club Point Drive The Gabelli Asset Fund, Gabelli Equity
White Plains, New York 10604 Series Funds, Inc., Gabelli Global Series
Funds, Inc., Gabelli Global Multimedia
Trust Inc., The Gabelli Value Fund Inc.,
The Gabelli Convertible Securities Fund,
Inc., The Gabelli Equity Trust Inc. and The
Gabelli Growth Fund.
Robert C. Kolodny, M.D., 53, Physician, author and lecturer (self- 0 0
Director employed) (1983-present). General Partner
885 Oenoke Ridge Road of KBS Partnership, KBS II Investment
New Canaan, Connecticut 06840 Partnership, KBS III Investment
Partnership, KBS IV Limited Partnership,
KBS New Dimensions, L.P., KBS Global
Opportunities, L.P. and KBS VII Limited
Partnership, private investment partnerships
(1981-present). Medical Director and
Chairman of the Board of the Behavioral
Medicine Institute (1983-present).
+Anthony R. Pustorino, 71 Retired President of (1961-1989) and 10,791.510 0.000
Director consultant to Pustorino, Puglisi & Co.,
515 Madison Avenue P.C., certified public accountants;
New York, New York 10022 Professor, Pace University (1965-present).
Director/Trustee of The Gabelli
Asset Fund, The Gabelli Growth Fund,
The Gabelli Value Fund Inc., The
Gabelli Convertible Securities Fund,
The Gabelli Equity Trust Inc.,
Gabelli Capital Series Fund, Inc.,
Gabelli Global Multimedia Trust Inc.
and Gabelli Equity Series Funds,
Inc.
Gary L. Roubos, 60 Chairman of the Board of Dover Corp., a 0 0
Director diversified industrial manufacturing
280 Park Avenue company, since 1981.
New York, New York 10017
William A. Merritt Jr., 60 Financial Consultant/Mergers and 0 0
Director Acquisitions (1992-present). Managing
One Dock Street Member of Seaboard Properties, Inc., The
Suite 602 KM Group, and Navigator Communications
Stamford, Connecticut 06902 Systems, LLC (1995-present). President
and Chief Operating Officer of WilTel
Communications Systems, Inc. (1990-
1992).
C/M: 11536.0001 428573.4
7
<PAGE>
Mary E. Hauck, 52 Retired Senior Portfolio manager of the 14,812.520 0.000
Director Advisor. Prior to joining the Advisor in
21 Bishop Park Road 1987, she was a senior vice president and
P.O. Box 295 portfolio manager of municipal mutual
Pound Ridge, New York 10576 funds at the Dreyfus Corporation, where
she began in 1977.
+*Mario J. Gabelli, 53 Chairman, Chief Executive Officer and a 259,992.035 0.000
Nominee for Director Director of Gabelli Funds, Inc. and of
One Corporate Center GAMCO Investors Inc. President and
Rye, New York 10580 Chairman of The Gabelli Equity Trust Inc.
and The Gabelli Global Multimedia Trust
Inc. President, Chief Investment Officer
and Director of the Gabelli Value Fund
Inc., The Gabelli Convertible Securities
Fund, Inc., Gabelli Investor Funds, Inc.,
Gabelli Capital Services Funds, Inc., and
Gabelli Global Series Funds, Inc. Director
of Gabelli International Growth Fund, Inc.,
and Gabelli Gold Fund, Inc. Trustee of
The Gabelli Asset Fund, The Gabelli
Money Market Funds, and The Gabelli
Growth Fund. Chairman, Director and
Chief Executive Officer of Lynch
Corporation.
+Anthonie C. van Ekris, 61 Managing Director of Balmac International, 0 0
Nominee for Director Ltd. Formerly Chairman and Chief
One Corporate Center Executive Officer of Balfour MacLaine
Rye, New York 10580 Corporation and Kay Corporation (through
1990). Director of Stahal Hardmayer A.Z.
(through present). Director of Gabelli
Equity Series Funds, Inc., Gabelli
Convertible Securities Fund, Inc., Gabelli
International Growth Fund, Inc., Gabelli
Investor Funds, Inc., Gabelli Gold Fund,
Inc., and Gabelli Global Series Funds, Inc.
Trustee of The Gabelli Asset Fund, The
Gabelli Growth Fund, and The Gabelli
Money Market Funds.
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<PAGE>
+*Karl Otto Pohl, 65 Partner of Sal Oppenheim Jr. & Cie. 0 0
Nominee for Director (private investment bank); Former
One Corporate Center President of the Deutsche Bundesbank
Rye, New York 10580 (Germany's Central Bank) and Chairman of
its Central Bank Council(1980-1991);
Currently board member of IBM World
Trade Europe/Middle East/Africa Corp.;
Bertlesmann AG; Zurich Versicherungs-
Gesellshaft (insurance); the International
Advisory Board of General Electric
Company; the International Council
for JP Morgan & Co.; the Board of
Supervisory Directors of ROBECo/o
Group; and the Supervisory Board of
Royal Dutch (petroleum company);
Advisory Director of Unilever N.V.
and Unilever Deutschland; German
Governor; International Monetary
Fund (1980-1991); Board Member, Bank
for International Settlements (1980-1991);
Chairman, European Governors (1990-1991);
Director/Trustee of all Funds managed by
Gabelli.
+Anthony J. Colavita, 60 President and Attorney at Law in the law 0 0
Nominee for Director firm of Anthony J. Colavita, P.C. Director
One Corporate Center of The Gabelli Value Fund Inc. and The
Rye, New York 10580 Gabelli Convertible Securities Fund, Inc.,
Gabelli Investor Funds Inc., and Gabelli
Global Series Funds, Inc. Trustee of The
Gabelli Asset Fund, The Gabelli Growth
Fund, The Gabelli Money Market Funds
and The Westwood Funds.
+Werner J. Roeder, M.D., 54 Director of Surgery, Lawrence Hospital 0 0
Nominee for Director and practicing private physician. Director,
77 Pondfield Road Gabelli Investor Funds, Inc., Gabelli
Bronxville, New York 10708 Global Series Funds, Inc., Gabelli
International Growth Fund, Inc., and
Gabelli Gold Fund, Inc., and Trustee of the
Westwood Funds.
Richard Nicholas Daniel, 60
Nominee for Director
One Corporate Center Chairman and Chief Executive Officer,
Rye, New York 10580 Handy & Harman. 0 0
</TABLE>
C/M: 11536.0001 428573.4
9
<PAGE>
In addition to Mr. O'Connor, who has served as Chairman of the
Corporation since September 1987, the officers of the Corporation are:
<TABLE>
<CAPTION>
Name,Age, Position(s) Principal Occupations During
with Fund and Address Past Five Years
______________________ ____________________________
<S> <C>
Ronald S. Eaker, 36 Senior Portfolio manager of the Advisor. Prior to joining the
President and Chief Investment Advisor in 1987, he was Supervisor of Administrative Operations
Officer at Frank Henjes & Co., where he began in 1983.
19 Old Kings Highway South
Darien, Connecticut 06820-4526
Henley L. Smith, 40 Senior Portfolio manager of the Advisor. Prior to joining the
Vice President and Advisor in 1987, he was portfolio manager at Manufacturers
Investment Officer Hanover Investment Corp. where he began in 1984. From 1982-
19 Old Kings Highway South 1984 he was a portfolio manager for Manufacturers Hanover Trust
Darien, Connecticut 06820-4526 Company.
Judith Fabrizi, 29 Employee of the Advisor since 1989.
Secretary, Treasurer and
Investment Officer
19 Old Kings Highway South
Darien, Connecticut 06820-4526
Georgette L. Horton, 31 Director of the Administrator since October 1996. Prior to joining
Vice President the Administrator, she was Assistant Vice President of Regional
125 West 55th Street Sales at Paine Webber from June 1993 to September 1996. From
New York, New York 10019 June 1992 to May 1993, she was a Marketing Representative for
Eaton Vance Distributors.
Lisa Ling, 36 Registration and Compliance Officer, Fund Administration of the
Vice President Administrator since November 1995. Prior to joining the
3435 Stelzer Road Administrator, she was a Manager of Financial Services
Columbus, Ohio 43219 Department at Federated Investors from June 1989 to October
1995.
Michael Sakala, 31 Vice President and Treasurer of the Administrator since December
Assistant Treasurer 1996 and Associate Director of Fund Accounting of the
125 West 55th Street Administrator from April 1996 to December 1996. Prior to joining
New York, New York 10019 the Administrator, he was head of Worldwide Fund Administration
at Banque Paribas Luxembourg from April 1994 to April 1996.
From June 1989 to April 1994, he was Accounting Manager at Fidelity
Investments in Boston, MA.
Alaina V. Metz, 29 Chief Administrative Officer of the Administrator since June 1995.
Assistant Secretary Prior to joining the Administrator, she was Supervisor of the Blue
3435 Stelzer Road Sky Department at Alliance Capital Management, L.P. from May
Columbus, Ohio 43219 1989 to June 1995.
Bruce Treff, 30 Counsel of the Administrator since September 1995. Prior to
Assistant Secretary joining the Administrator, he was Manager at Alliance Capital
3435 Stelzer Road Management, L.P.
Columbus, Ohio 43219
Sheryl Hirschfeld, 36 Manager-Legal Services ofthe Administrator since January 1997.
Assistant Secretary Prior to joining the Administrator, she was
125 West 55th Street Director, Corporate Assistant Secretary Secretary Services at Furman
New York, New York 10019 Selz LLC from November 1994 to 125 West 55th Street December 1996.
From 1982 to 1994, she was an employee of The New York, New York
10019 Dreyfus Corporation.
</TABLE>
C/M: 11536.0001 428573.4
10
<PAGE>
The Corporation paid an aggregate remuneration of $40,500 to its
directors with respect to its fiscal year ended October 31, 1996, all of which
was paid in the aggregate to the six disinterested directors.
<TABLE>
<CAPTION>
(1) (2) (3)
Total Compensation From Corporation
Aggregate Compensation and Corporation Complex Paid to
Name of Person, Position From Corporation Directors*
<S> <C> <C>
Thomas E. O'Connor 0 0
Felix J. Christiana, Director $7,000 $7,000
Dr. Robert C. Kolodny, Director $7,000 $7,000
Anthony R. Pustorino, Director $7,000 $7,000
Gary L. Roubos, Director $6,500 $6,500
William A. Merritt, Jr., Director $7,000 $7,000
Mary E. Hauck, Director $6,000 $6,000
</TABLE>
* The total compensation paid to such persons by the Corporation and
Corporation Complex for the fiscal year ending October 31, 1996.
PROPOSAL 3. RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT
ACCOUNTANTS
The Board of Directors recommends that the shareholders ratify the
selection of Ernst & Young LLP, independent public accountants, to audit the
accounts of the Corporation for the fiscal year ending October 31, 1997. Ernst &
Young LLP have audited the accounts of the Corporation since its inception and
do not have any direct financial interest or any material indirect financial
interest in the Corporation.
A representative of Ernst & Young LLP is not expected to be present at
the shareholders' meeting. If the shareholders do not ratify the Board's
recommendation, the Board will submit another proposal to the shareholders with
a recommendation for independent public accountants. The ratification of
selection of Independent Accountants requires the approval of a majority present
at the meeting in person or by proxy.
INFORMATION REGARDING THE CURRENT ADVISOR
The investment advisor for the Corporation is Gabelli-O'Connor Fixed
Income Mutual Funds Management Co., with offices at 19 Old Kings Highway South,
Darien, Connecticut 06820-4526, a Delaware partnership organized in 1987. As of
the date of this Proxy, the Advisor is an investment manager, administrator or
advisor only for the assets of the Corporation. Gabelli-O'Connor Fixed Income
Mutual Funds Management Co. is a registered investment advisor under the 1940
Act. Mr. O'Connor is President and sole shareholder of Thomas E. O'Connor & Co.,
Inc., the general partner of Thomas E. O'Connor & Co. L.P., which is a general
partner of the Advisor. Mario J. Gabelli is the Chairman of the Board of
Directors and Chief Executive Officer of Gabelli Funds, Inc., which is the other
general partner of the Advisor. As a result of these relationships, Messrs.
Thomas E. O'Connor and Mario J. Gabelli may each be deemed to be a "controlling
person" of the Advisor. As of December 31, 1996 the Advisor served as investment
advisor for assets aggregating in excess of $735 million. The Advisor is an
affiliate of Gabelli-O'Connor Fixed Income Management Co., a registered
investment advisor that is an investment manager or advisor to corporations,
institutions, pension trusts, profit sharing trusts and high net worth
individuals and which, as of December 31, 1996, served as an investment advisor
for assets aggregating in excess of $1 billion. The Advisor is an affiliate of
Quantum/Gabelli-O'Connor L.P. which, as of December 31, 1996, served as
investment advisor for assets aggregating in excess of $125 million. The Advisor
is also
C/M: 11536.0001 428573.4
11
<PAGE>
an affiliate of Gabelli Funds, Inc. which, through its affiliates, acts
as an investment manager, administrator or advisor for assets aggregating in
excess of $9.3 billion as of December 31, 1996.
Expense Limitation. The Advisor has agreed to reimburse a Portfolio for
its expenses (exclusive of interest, taxes, brokerage, and extraordinary
expenses) which in any year exceed the limits on investment company expenses
prescribed by any state in which the Portfolio's shares are qualified for sale.
For the purpose of this obligation to reimburse expenses, the Portfolio's annual
expenses are estimated and accrued daily, and any appropriate estimated payments
are made to it on a monthly basis. From time to time, the Advisor may
voluntarily assume certain expenses of any Portfolio of the Corporation. This
would have the effect of lowering the overall expense ratio of that Portfolio
and of increasing yield to investors in that Portfolio. Subject to the
obligations of the Advisor to reimburse a Portfolio for its excess expenses as
described above, the Portfolios have, under the respective Advisory Agreements,
confirmed their obligation for payment of all their other expenses, including
without limitation: fees payable to the Advisor, Administrator, Custodian,
Transfer Agent and Dividend Agent; brokerage and commission expenses; federal,
state or local taxes, including issuance and transfer taxes incurred by or
levied on them; commitment fees, certain insurance premiums and membership fees
and dues in investment company organizations; interest charges on borrowings;
telecommunications expenses; recurring and non-recurring legal and accounting
expenses; costs of organizing and maintaining the Corporation's existence as a
corporation; compensation, including directors' fees, of any directors, officers
or employees who are not also officers of the Advisor or its affiliates and
costs of other personnel providing administrative and clerical services; costs
of stockholders' services and costs of stockholders' reports, proxy
solicitations, and corporate meetings; fees and expenses of registering their
shares under the appropriate Federal securities laws and of qualifying their
shares under applicable state securities laws, including expenses attendant upon
the initial registration and qualification of these shares and attendant upon
renewals of, or amendments to, those registrations and qualifications; and
expenses of preparing, printing and delivering the Prospectus to existing
shareholders and of printing shareholder application forms for shareholder
accounts.
The Corporation may from time to time hire its own employees or
contract to have management services performed by third parties, and the
management of the Corporation intends to do so whenever it appears advantageous
to the Corporation. The Corporation's expenses for employees and for such
services are among the expenses subject to the expense limitation described
above. As a result of the recent passage of the National Securities Markets
Improvement Act of 1996, all state expense limitations have been eliminated at
this time.
Distribution and Service Plan. Pursuant to Rule 12b-1 under the 1940
Act, the Securities and Exchange Commission has required that an investment
company which bears any direct or indirect expense of distributing its shares
must do so only in accordance with a plan permitted by the Rule. The
Corporation's Board of Directors has adopted a distribution and service plan for
each Portfolio of the Corporation (the "Plans") and, pursuant to the Plans, the
Corporation and the Advisor have entered into a Distribution Agreement and a
Shareholder Servicing Agreement with GOC Fund, Distributors Inc. ("Distributor")
as distributor of the Corporation's shares. Upon the consummation of the
Acquisition, Gabelli Fixed Income Distributors Inc. will succeed the
Distributor. The Plans will be amended and restated to reflect the new
distributor and the Distributor Agreements and Shareholder Servicing Agreements
will be re-executed, all as approved by the Board of Directors to take effect if
the new Advisory Agreements are approved by the shareholders of the Corporation.
Although there are no fees or expenses chargeable to the Corporation under the
Plans, the Corporation's Board of Directors has adopted the Plans in case
certain expenses of the Corporation might be considered to constitute indirect
payments by the Corporation of distribution expenses. If a payment by the
Corporation to the Advisor of advisory fees should be deemed to be indirect
financing by the Corporation of the distribution of its shares, such payments
would be authorized under the Plans. The new Distribution Agreements and
Shareholder Servicing Agreements would replace the current Distribution
Agreements with the Distributor and would be identical to those agreements,
except for (i) the dates of execution and effectiveness and (ii) the name of the
Distributor.
The Plans provide that the Advisor may make payments from time to time
from its own resources, which may include the advisory fee and past profits for
the following purposes: to pay promotional and administrative expenses in
connection with the offer and sale of the shares of the Portfolios, including
payments to participating organizations for performing shareholder servicing and
related administrative functions and for providing assistance in distributing
the Corporation's shares. "Participating Organizations" are securities brokers,
banks and financial institutions or other industry professionals or
organizations which have entered into shareholder servicing agreements with the
Distributor with respect to investment of their customer accounts in the
Corporation. The Advisor, in its sole discretion, will determine the amount of
such payments made pursuant to the Plans, provided that such payments will not
increase the amount which the Corporation is required to pay to the Advisor for
any fiscal year under the Advisory Agreement in effect for that year.
C/M: 11536.0001 428573.4
12
<PAGE>
The Glass-Steagall Act limits the ability of a depository institution
to become an underwriter or distributor of securities. However, it is the
Corporation management's position that banks are not prohibited from acting in
other capacities for investment companies, such as providing administrative and
shareholder account maintenance services and receiving compensation from the
Advisor for providing such services. However, this is an unsettled area of the
law and if a determination contrary to the Corporation management's position is
made by a bank regulatory agency or court concerning shareholder servicing and
administration payments to banks from the Advisor, any such payments will be
terminated and any shares registered in the banks' names, for their underlying
customers, will be reregistered in the name of the customers at no cost to the
Corporation or its shareholders. In addition, state securities laws on this
issue may differ from the interpretation of federal law expressed herein and
banks and financial institutions may be required to register as dealers pursuant
to state law.
The Plans provide that they may continue in effect for successive
annual periods provided they are approved by the shareholders or by the Board of
Directors, including a majority of directors who are not interested persons of
the Corporation and who have no direct or indirect interest in the operation of
the Plans, or in the agreements related to the Plans. On October 16, 1996, the
Board of Directors approved the continuance of all of the Plans until October
31, 1997. The Plans for the Domestic Prime Money Market Portfolio and the Tax
Exempt Money Market Portfolio were approved by a majority of the affected
Portfolio's shareholders at the annual meeting on March 6, 1989. The Plan for
the U.S. Treasury Money Market Portfolio was approved by a majority of that
Portfolio's shareholders on March 14, 1991. The Plans further provide that they
may not be amended to increase materially the costs which may be spent by the
Corporation for distribution pursuant to the Plans without shareholder approval,
and the other material amendments must be approved by the directors in the
manner described in the preceding sentence. The Plans may be terminated at any
time by a vote of a majority of the disinterested directors of the Corporation
or the Corporation's shareholders. Although there are no fees or expenses
chargeable to the Corporation under the Plans, for the fiscal year ended October
31, 1996, the Advisor made payments under each Plan to or on behalf of
Participating Organizations in amounts of $80,147, $151,873, and $213,907 with
regard to the U.S. Treasury Money Market Portfolio, the Tax Exempt Money Market
Portfolio and the Domestic Prime Money Market Portfolio, respectively
(representing .10% of the average daily net assets of each of those Portfolios).
Although these payments were not made by the Corporation each may be deemed an
indirect payment by the Corporation.
ALLOCATION OF PORTFOLIO BROKERAGE
The Corporation's purchases and sales of portfolio securities usually
are principal transactions. Portfolio securities are normally purchased directly
from the issuer, from banks and financial institutions or from an underwriter or
market maker for the securities. There usually are not brokerage commissions
paid for such purchases. Any transactions for which the Corporation pays a
brokerage commission will be effected at the best price and execution available.
Purchases from underwriters of portfolio securities include a commission or
concession paid by the issuer to the underwriter, and purchases from dealers
serving as market makers include the spread between the bid and asked price. The
Corporation may purchase participation certificates in variable rate municipal
obligations with a demand feature from banks or other financial institutions at
a negotiated yield to the Corporation based on the applicable interest rate
adjustment index for the security. The interest received by the Corporation is
net of a fee charged by the issuing institution for servicing the underlying
obligation and issuing the participation certificate, letter of credit,
guarantee or insurance and providing the demand repurchase feature.
Allocation of transactions, including their frequency, to various
dealers is determined by the Advisor in its best judgment and in a manner deemed
in the best interest of shareholders of the Corporation rather than by a
formula. The primary consideration is prompt execution of orders in an effective
manner at the most favorable price. No preference in purchasing portfolio
securities will be given to banks or dealers that are Participating
Organizations.
Investment decisions for the Corporation will be made independently
from those for any other investment companies or accounts that may be or become
advised or managed by the Advisor or its affiliates. If, however, the
Corporation and other investment companies or accounts managed by the Advisor
are simultaneously engaged in the purchase or sale of the same security, the
transactions may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by the Corporation or the size of the position obtainable for the
Corporation. In addition, when purchases or sales of the same security for the
Corporation and for other
C/M: 11536.0001 428573.4
13
<PAGE>
investment companies managed by the Advisor occur contemporaneously, the
purchase or sale orders may be aggregated in order to obtain any price advantage
available to large denomination purchasers or sellers.
No portfolio transactions are executed with the Advisor or its
affiliates acting as principal. In addition, the Corporation will not buy
bankers' acceptances, certificates of deposit or commercial paper from the
Advisor or its affiliates.
OTHER MATTERS
As a Maryland corporation, the Corporation is not required, and does
not intend, to hold regular annual meetings. Shareholders who wish to present
proposals at any future shareholder meeting must present such proposals to the
Board at a reasonable time prior to the solicitation of any shareholder proxy.
The management does not know of any matters to be presented at this
Special Meeting of Shareholders other than those mentioned in this Proxy
Statement. If any of the persons listed above is unavailable for election as a
director, an event not now anticipated, or if any other matters properly come
before the meeting, the shares represented by proxies will be voted with respect
thereto in accordance with the best judgment of the person or persons voting the
proxies.
By Order of the Board of Directors
JUDITH FABRIZI, Secretary
March 27, 1997
C/M: 11536.0001 428573.4
14
<PAGE>
EXHIBIT A (ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON BEHALF OF
U.S. TREASURY MONEY MARKET PORTFOLIO, AND GABELLI FIXED
INCOME L.L.C.)
ADVISORY AGREEMENT
THE TREASURER'S FUND, INC.
U.S. TREASURY MONEY MARKET PORTFOLIO
Darien, Connecticut
__________ __, 1997
Gabelli Fixed Income L.L.C.
19 Old Kings Highway South
Darien, Connecticut 06820-4526
Gentlemen:
This Agreement is being executed to reflect that, effective ,
Gabelli Fixed Income L.L.C. has succeeded Gabelli-O'Connor Fixed Income Mutual
Funds Management Co. .
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting our assets in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By-Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectus forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by our Board of Directors. We
enclose copies of the documents listed above and will furnish you such
amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of our Board of Directors,
you will make decisions with respect to all purchases and sales of our portfolio
securities. To carry out such decisions, you are hereby authorized, as our agent
and attorney-infact, for our account and at our risk and in our name, to place
orders for the investment and reinvestment of our assets. In all purchases,
sales and other transactions in our portfolio securities you are authorized to
exercise full discretion and act for us in the same manner and with the same
force and effect as our corporation itself might or could do with respect to
such purchases, sales or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
(c) You will report to our Board of Directors at each meeting
thereof all changes in our portfolio since your prior report, and will also keep
us in touch with important developments affecting our portfolio and, on your own
initiative, will furnish us from time to time with such information as you may
believe appropriate for this purpose, whether concerning the individual entities
whose securities are included in our portfolio, the activities in which such
entities engage, Federal income tax policies applicable to our investments, or
the conditions prevailing in the money market or the economy generally. You will
also furnish us with such statistical and analytical information with respect to
our portfolio securities as you may believe appropriate or as we may reasonably
request. In making such purchases and sales of our portfolio securities, you
will comply with the policies set from time to time by our Board of Directors as
well as the limitations imposed by our Articles of Incorporation, the provisions
of the Internal Revenue Code relating to regulated investment companies and the
1940 Act, and the limitations contained in the Registration Statement.
C/M: 11536.0001 428573.4
15
<PAGE>
(d) It is understood that you will from time to time employ,
subcontract with or otherwise associate with yourself, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder. While this agreement is in effect, you or
persons affiliated with you, other than us ("your affiliates"), will provide
persons satisfactory to our Board of Directors to be elected or appointed
officers or employees of our corporation. These shall be a president, a
secretary, a treasurer, and such additional officers and employees as may
reasonably be necessary for the conduct of our business.
(e) You or your affiliates will also provide supervisory
personnel without charge, who may be our officers and who will be responsible
for supervising the performance of administrative services, accounting and
related services, net asset value and yield calculations, reports to and filings
with regulatory authorities, and services relating to such functions. Such
personnel may be your employees or employees of your affiliates or of other
organizations. It is understood that we may retain, at our expense, an
administrator to perform the operational components of the functions and
services listed herein.
(f) You or your affiliates will also furnish us, without
charge, such additional administrative and management supervision and such
office facilities as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. You or your affiliates will also pay the expenses of promoting and
advertising the sale of our shares (other than the costs of preparing, printing
and filing our Registration Statement, printing copies of the Prospectus
contained therein for existing shareholders of the Fund and complying with other
applicable regulatory requirements), and of printing and distributing the Fund's
Prospectus to prospective investors. To the extent that you or your affiliates
directly, or through Gabelli Fixed Income Distributors, Inc. (the
"Distributor"), may make payments to securities dealers and other third parties
who engage in the sale of our shares or who render shareholder support services,
and that such payments may be deemed indirect financing of an activity primarily
intended to result in the sale of shares of the Portfolios within the context of
Rule 12b-1 under the 1940 Act (the "Rule"), then such payments by you shall be
deemed to be authorized under the Portfolio's Distribution and Service Plan
adopted pursuant to the Rule. You will, in your sole discretion, determine the
amount of such payments and may from time to time in your sole discretion
increase or decrease the amount of such payments; provided, however, that no
such payment will increase the amount the Portfolio is required to pay you or
the Distributor under this Agreement or any agreement. Any payments made by you
for the purpose of distributing shares of the Portfolio are subject to
compliance with the terms of written agreements in a form satisfactory to the
Fund's Board of Directors to be entered into by you and the participating
organization. It is understood that you, in your sole discretion, may reimburse
the Distributor for any of such expenses that it may incur on your behalf.
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) Federal, state or
local taxes, including issue and transfer taxes incurred by or levied on us; (c)
commitment fees, certain insurance premiums and membership fees and dues in
investment company organizations; (d) interest charges on borrowings; (e)
charges and expenses of our custodian and administrator; (f) charges and
expenses relating to the issuance, redemption, transfer and dividend disbursing
functions for us; (g) telecommunications expenses; (h) recurring and
non-recurring legal and accounting expenses; (i) costs of organizing and
maintaining our existence as a corporation; (j) compensation, including
directors' fees, of any of our directors, officers or employees who are not your
officers or officers of your affiliates, and costs of other personnel providing
administrative and clerical services to us; (k) costs of providing shareholders'
services and costs of shareholders' reports, proxy solicitations, and corporate
meetings; (1) fees and expenses of registering our shares under the appropriate
Federal securities laws and of qualifying our shares under applicable state
securities laws, including expenses attendant upon the initial registration and
qualification of our shares and attendant upon renewals of, or amendment to,
those registrations and qualifications; (m) expenses of preparing, printing and
delivering our initial registration statement and of preparing, printing and
delivering our Prospectus to our existing shareholders and of printing
shareholder application forms for shareholder accounts; and (n) payment of the
fees provided for herein, in the Distribution Agreement and in the
Administrative Services Agreement. Our obligation for the foregoing expenses is
limited by your agreement to be responsible, while this Agreement is in effect,
for any amount by which our annual operating expenses (excluding taxes,
brokerage, interest and extraordinary expenses) exceed the limits on investment
company expenses prescribed by any state in which the Fund's shares are
qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any
C/M: 11536.0001 428573.4
16
<PAGE>
liability to us or to our security holders by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of thirty one-hundredths of one percent (0.30%) of our average
daily net assets. Your fee will be accrued by us daily, and will be payable on
the last day of each calendar month for services performed hereunder during that
month or on such other schedule as you shall request of us in writing. You may
waive your right to any fee to which you are entitled hereunder, provided such
waiver is delivered to us in writing. Any reimbursement of our expenses, to
which we may become entitled pursuant to paragraph 3 hereof, will be paid to us
at the end of the month for which those expenses are accrued, at the same time
as we pay you your fee for that month.
6. This Agreement will become effective on __, 1997 and shall
continue in effect until ____________, 199__ and thereafter for successive
twelve-month periods (computed from each ____________), provided that such
continuation is specifically approved at least annually by our Board of
Directors or by a majority vote of the holders of our outstanding voting
securities, as defined in the 1940 Act, and, in either case, by a majority of
those of our directors who are neither party to this Agreement nor, other than
by their service as directors of the corporation, interested persons, as defined
in the 1940 Act, of any such person who is party to this Agreement. Upon the
effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of a majority of our
outstanding voting securities, as defined in the 1940 Act, or by a vote of a
majority of our entire Board of Directors, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
THE TREASURER'S FUND, INC.
By: ___________________
ACCEPTED: ____________ __, 1997
Gabelli Fixed Income L.L.C.
By:
By: _____________________
C/M: 11536.0001 428573.4
17
<PAGE>
EXHIBIT B (ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON BEHALF OF
DOMESTIC PRIME MONEY MARKET PORTFOLIO, AND GABELLI FIXED
INCOME L.L.C.)
ADVISORY AGREEMENT
THE TREASURER'S FUND, INC.
DOMESTIC PRIME MONEY MARKET PORTFOLIO
Darien, Connecticut
__________ __, 1997
Gabelli Fixed Income L.L.C.
19 Old Kings Highway South
Darien, Connecticut 06820-4526
Gentlemen:
This Agreement is being executed to reflect that, effective,
Gabelli Fixed Income L.L.C. has succeeded Gabelli-O'Connor Fixed Income Mutual
Funds Management Co. as
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting our assets in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By-Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectus forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by our Board of Directors. We
enclose copies of the documents listed above and will furnish you such
amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of our Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as our corporation itself might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions.
(c) You will report to our Board of Directors at each
meeting thereof all changes in our portfolio since your prior report, and will
also keep us in touch with important developments affecting our portfolio and,
on your own initiative, will furnish us from time to time with such information
as you may believe appropriate for this purpose, whether concerning the
individual entities whose securities are included in our portfolio, the
activities in which such entities engage, Federal income tax policies applicable
to our investments, or the conditions prevailing in the money market or the
economy generally. You will also furnish us with such statistical and analytical
information with respect to our portfolio securities as you may believe
appropriate or as we may reasonably request. In making such purchases and sales
of our portfolio securities, you will comply with the policies set from time to
time by our Board of Directors as well as the limitations imposed by our
Articles of Incorporation, the provisions of the Internal Revenue Code relating
to regulated investment companies and the 1940 Act, and the limitations
contained in the Registration Statement.
C/M: 11536.0001 428573.4
18
<PAGE>
(d) It is understood that you will from time to time employ,
subcontract with or otherwise associate with yourself, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder. While this agreement is in effect, you or
persons affiliated with you, other than us ("your affiliates"), will provide
persons satisfactory to our Board of Directors to be elected or appointed
officers or employees of our corporation. These shall be a president, a
secretary, a treasurer, and such additional officers and employees as may
reasonably be necessary for the conduct of our business.
(e) You or your affiliates will also provide supervisory
personnel without charge, who may be our officers, who will be responsible for
supervising the performance of administrative services, accounting and related
services, net asset value and yield calculations, reports to and filings with
regulatory authorities, and services relating to such functions. Such personnel
may be your employees or employees of your affiliates or of other organizations.
It is understood that we may retain, at our expense, an administrator to perform
the operational components of the functions and services listed herein.
(f) You or your affiliates will also furnish us without
charge such additional administrative and management supervision and such office
facilities as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. You or your affiliates will also pay the expenses of promoting and
advertising the sale of our shares (other than the costs of preparing, printing
and filing our Registration Statement, printing copies of the Prospectus
contained therein for existing shareholders of the Fund and complying with other
applicable regulatory requirements), and of printing and distributing the Fund's
Prospectus to prospective investors. To the extent that you or your affiliates
directly, or through Gabelli Fixed Income Distributors, Inc. (the
"Distributor"), may make payments to securities dealers and other third parties
who engage in the sale of our shares or who render shareholder support services,
and that such payments may be deemed indirect financing of an activity primarily
intended to result in the sale of shares of the Portfolios within the context of
Rule 12b-1 under the 1940 Act (the "Rule"), then such payments by you shall be
deemed to be authorized under the Portfolio's Distribution and Service Plan
adopted pursuant to the Rule. You will, in your sole discretion, determine the
amount of such payments and may from time to time in your sole discretion
increase or decrease the amount of such payments; provided, however, that no
such payment will increase the amount the Portfolio is required to pay you or
the Distributor under this Agreement or any agreement. Any payments made by you
for the purpose of distributing shares of the Portfolio are subject to
compliance with the terms of written agreements in a form satisfactory to the
Fund's Board of Directors to be entered into by you and the participating
organization. It is understood that you, in your sole discretion, may reimburse
the Distributor for any of such expenses that it may incur on your behalf.
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) Federal, state or
local taxes, including issue and transfer taxes incurred by or levied on us; (c)
commitment fees, certain insurance premiums and membership fees and dues in
investment company organizations; (d) interest charges on borrowings; (e)
charges and expenses of our custodian and administrator; (f) charges and
expenses relating to the issuance, redemption, transfer and dividend disbursing
functions for us; (g) telecommunications expenses; (h) recurring and
non-recurring legal and accounting expenses; (i) costs of organizing and
maintaining our existence as a corporation; (j) compensation, including
directors' fees, of any of our directors, officers or employees who are not your
officers or officers of your affiliates, and costs of other personnel providing
administrative and clerical services to us; (k) costs of providing shareholders'
services and costs of shareholders' reports, proxy solicitations, and corporate
meetings; (1) fees and expenses of registering our shares under the appropriate
Federal securities laws and of qualifying our shares under applicable state
securities laws, including expenses attendant upon the initial registration and
qualification of our shares and attendant upon renewals of, or amendment to,
those registrations and qualifications; (m) expenses of preparing, printing and
delivering our initial registration statement and of preparing, printing and
delivering our Prospectus to our existing shareholders and of printing
shareholder application forms for shareholder accounts; and (n) payment of the
fees provided for herein, in the Distribution Agreement and in the
Administrative Services Agreement. Our obligation for the foregoing expenses is
limited by your agreement to be responsible, while this Agreement is in effect,
for any amount by which our annual operating expenses (excluding taxes,
brokerage, interest and extraordinary expenses) exceed the limits on investment
company expenses prescribed by any state in which the Fund's shares are
qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any
C/M: 11536.0001 428573.4
19
<PAGE>
liability to us or to our security holders by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of three-tenths of one percent (0.30%) of our average daily net
assets. Your fee will be accrued by us daily, and will be payable on the last
day of each calendar month for services performed hereunder during that month or
on such other schedule as you shall request of us in writing. You may waive your
right to any fee to which you are entitled hereunder, provided such waiver is
delivered to us in writing. Any reimbursement of our expenses, to which we may
become entitled pursuant to paragraph 3 hereof, will be paid to us at the end of
the month for which those expenses are accrued, at the same time as we pay you
your fee for that month.
6. This Agreement will become effective on __, 1997 and shall
continue in effect until ____________, 199__ and thereafter for successive
twelve-month periods (computed from each _____________), provided that such
continuation is specifically approved at least annually by our Board of
Directors or by a majority vote of the holders of our outstanding voting
securities, as defined in the 1940 Act, and, in either case, by a majority of
those of our directors who are neither party to this Agreement nor, other than
by their service as directors of the corporation, interested persons, as defined
in the 1940 Act, of any such person who is party to this Agreement. Upon the
effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of a majority of our
outstanding voting securities, as defined in the 1940 Act, or by a vote of a
majority of our entire Board of Directors, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
THE TREASURER'S FUND, INC.
By:_________________
ACCEPTED: ____________ __, 1997
Gabelli Fixed Income L.L.C.
By:
By:________________________
C/M: 11536.0001 428573.4
20
<PAGE>
EXHIBIT C (ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON BEHALF OF TAX
EXEMPT MONEY MARKET PORTFOLIO, AND GABELLI FIXED INCOME
L.L.C.)
ADVISORY AGREEMENT
THE TREASURER'S FUND, INC.
TAX EXEMPT MONEY MARKET PORTFOLIO
Darien, Connecticut
__________ __, 1997
Gabelli Fixed Income L.L.C.
19 Old Kings Highway South
Darien, Connecticut 06820-4526
Gentlemen:
This Agreement is being executed to reflect that, effective ,
Gabelli Fixed Income L.L.C. has succeeded Gabelli-O'Connor Fixed Income Mutual
Funds Management Co. as
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting our assets in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By-Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectus forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by our Board of Directors. We
enclose copies of the documents listed above and will furnish you such
amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of our Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as our corporation itself might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions.
(c) You will report to our Board of Directors at each
meeting thereof all changes in our portfolio since your prior report, and will
also keep us in touch with important developments affecting our portfolio and,
on your own initiative, will furnish us from time to time with such information
as you may believe appropriate for this purpose, whether concerning the
individual entities whose securities are included in our portfolio, the
activities in which such entities engage, Federal income tax policies applicable
to our investments, or the conditions prevailing in the money market or the
economy generally. You will also furnish us with such statistical and analytical
information with respect to our portfolio securities as you may believe
appropriate or as we may reasonably request. In making such purchases and sales
of our portfolio securities, you will comply with the policies set from time to
time by our Board of Directors as well as the limitations imposed by our
Articles of Incorporation, the provisions of the Internal Revenue Code relating
to regulated investment companies and the 1940 Act, and the limitations
contained in the Registration Statement.
C/M: 11536.0001 428573.4
21
<PAGE>
(d) It is understood that you will from time to time employ,
subcontract with or otherwise associate with yourself, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder. While this agreement is in effect, you or
persons affiliated with you, other than us ("your affiliates"), will provide
persons satisfactory to our Board of Directors to be elected or appointed
officers or employees of our corporation. These shall be a president, a
secretary, a treasurer, and such additional officers and employees as may
reasonably be necessary for the conduct of our business.
(e) You or your affiliates will also provide supervisory
personnel without charge, who may be our officers, who will be responsible for
supervising the performance of administrative services, accounting and related
services, net asset value and yield calculations, reports to and filings with
regulatory authorities, and services relating to such functions. Such personnel
may be your employees or employees of your affiliates or of other organizations.
It is understood that we may retain, at our expense, an administrator to perform
the operational components of the functions and services listed herein.
(f) You or your affiliates will also furnish us without
charge such additional administrative and management supervision and such office
facilities as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. You or your affiliates will also pay the expenses of promoting and
advertising the sale of our shares (other than the costs of preparing, printing
and filing our Registration Statement, printing copies of the Prospectus
contained therein for existing shareholders of the Fund and complying with other
applicable regulatory requirements), and of printing and distributing the Fund's
Prospectus to prospective investors. To the extent that you or your affiliates
directly, or through Gabelli Fixed Income Distributors, Inc. (the
"Distributor"), may make payments to securities dealers and other third parties
who engage in the sale of our shares or who render shareholder support services,
and that such payments may be deemed indirect financing of an activity primarily
intended to result in the sale of shares of the Portfolios within the context of
Rule 12b-1 under the 1940 Act (the "Rule"), then such payments by you shall be
deemed to be authorized under the Portfolio's Distribution and Service Plan
adopted pursuant to the Rule. You will, in your sole discretion, determine the
amount of such payments and may from time to time in your sole discretion
increase or decrease the amount of such payments; provided, however, that no
such payment will increase the amount the Portfolio is required to pay you or
the Distributor under this Agreement or any agreement. Any payments made by you
for the purpose of distributing shares of the Portfolio are subject to
compliance with the terms of written agreements in a form satisfactory to the
Fund's Board of Directors to be entered into by you and the participating
organization. It is understood that you, in your sole discretion, may reimburse
the Distributor for any of such expenses that it may incur on your behalf.
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) Federal, state or
local taxes, including issue and transfer taxes incurred by or levied on us; (c)
commitment fees, certain insurance premiums and membership fees and dues in
investment company organizations; (d) interest charges on borrowings; (e)
charges and expenses of our custodian and administrator; (f) charges and
expenses relating to the issuance, redemption, transfer and dividend disbursing
functions for us; (g) telecommunications expenses; (h) recurring and
non-recurring legal and accounting expenses; (i) costs of organizing and
maintaining our existence as a corporation; (j) compensation, including
directors' fees, of any of our directors, officers or employees who are not your
officers or officers of your affiliates, and costs of other personnel providing
administrative and clerical services to us; (k) costs of providing shareholders'
services and costs of shareholders' reports, proxy solicitations, and corporate
meetings; (1) fees and expenses of registering our shares under the appropriate
Federal securities laws and of qualifying our shares under applicable state
securities laws, including expenses attendant upon the initial registration and
qualification of our shares and attendant upon renewals of, or amendment to,
those registrations and qualifications; (m) expenses of preparing, printing and
delivering our initial registration statement and of preparing, printing and
delivering our Prospectus to our existing shareholders and of printing
shareholder application forms for shareholder accounts; and (n) payment of the
fees provided for herein, in the Distribution Agreement and in the
Administrative Services Agreement. Our obligation for the foregoing expenses is
limited by your agreement to be responsible, while this Agreement is in effect,
for any amount by which our annual operating expenses (excluding taxes,
brokerage, interest and extraordinary expenses) exceed the limits on investment
company expenses prescribed by any state in which the Fund's shares are
qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any
C/M: 11536.0001 428573.4
22
<PAGE>
liability to us or to our security holders by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of three-tenths of one percent (0.30%) of our average daily net
assets. Your fee will be accrued by us daily, and will be payable on the last
day of each calendar month for services performed hereunder during that month or
on such other schedule as you shall request of us in writing. You may waive your
right to any fee to which you are entitled hereunder, provided such waiver is
delivered to us in writing. Any reimbursement of our expenses, to which we may
become entitled pursuant to paragraph 3 hereof, will be paid to us at the end of
the month for which those expenses are accrued, at the same time as we pay you
your fee for that month.
6. This Agreement will become effective on __, 1997 and shall
continue in effect until __________, 199__ and thereafter for successive
twelve-month periods (computed from each ____________), provided that such
continuation is specifically approved at least annually by our Board of
Directors or by a majority vote of the holders of our outstanding voting
securities, as defined in the 1940 Act, and, in either case, by a majority of
those of our directors who are neither party to this Agreement nor, other than
by their service as directors of the corporation, interested persons, as defined
in the 1940 Act, of any such person who is party to this Agreement. Upon the
effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of a majority of our
outstanding voting securities, as defined in the 1940 Act, or by a vote of a
majority of our entire Board of Directors, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limitor restrict your right, or the
right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
THE TREASURER'S FUND, INC.
By:_______________
ACCEPTED: __________ __, 1997
Gabelli Fixed Income L.L.C.
By:
By:_______________
C/M: 11536.0001 428573.4
23
<PAGE>
EXHIBIT D (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE ADVISOR)
<TABLE>
Table of Fees and Expenses for The Treasurer's Fund, Inc.
Annual Fund Operating Expenses
(as a percentage of average net assets)
<CAPTION>
Domestic Prime Tax Exempt U.S. Treasury
Money Market Money Market Money Market
Portfolio Portfolio Portfolio
_______________ ____________ _____________
<S> <C> <C> <C>
Management Fees.................................... .30% .30% .30%
Other Operating Expenses........................... .23% .24% .33%
Interest Expense................................... .01% .00% .00%
---- ---- ----
Total Fund Operating Expenses...................... .54% .54% .63%
</TABLE>
Example:
You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Domestic Prime Tax Exempt U.S. Treasury
Money Market Money Market Money Market
Portfolio Portfolio Portfolio
______________ ____________ _____________
<S> <C> <C> <C>
1 year............................................. $ 6.00 $ 6.00 $ 6.00
3 Years............................................ 17.00 17.00 20.00
5 Years............................................ 30.00 30.00 35.00
10 Years........................................... 68.00 68.00 79.00
</TABLE>
The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in each Portfolio
will bear directly and indirectly. (For more complete descriptions of the
various costs and expenses, see "Comparison of the Current Advisory Agreements
with the New Advisory Agreements"). The Example shown in the table above should
not be considered a representation of past or future expenses and actual
expenses may be greater or less than those shown. At the time, only the Domestic
Prime Money Market, Tax Exempt Money Market and U.S. Treasury Money Market
Portfolios of the Fund have been activated by the Advisor.
C/M: 11536.0001 428573.4
24
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE
PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED TO VOTE, "FOR" EACH
PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS MAY PROPERLY
COME BEFORE THE MEETING. IF YOU DO NOT INTEND TO PERSONALLY ATTEND THE MEETING,
PLEASE COMPLETE, DETACH AND MAIL THE LOWER PORTION OF THIS CARD AT ONCE IN THE
ENCLOSED ENVELOPE.
THE TREASURER'S FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF SHAREHOLDERS - APRIL 14, 1997
THE UNDERSIGNED SHAREHOLDER OF THE TREASURER'S FUND, INC.,
(THE "CORPORATION") HEREBY APPOINTS JUDITH FABRIZI AND JOYCE A. ALLYN AND EACH
OF THEM, AS ATTORNEYS AND PROXIES OF THE UNDERSIGNED, WITH POWER OF
SUBSTITUTION, TO VOTE ALL OF THE SHARES OF COMMON STOCK OF THE CORPORATION
STANDING IN THE NAME OF THE UNDERSIGNED AT THE CLOSE OF BUSINESS ON MARCH 19,
1997 AT THE SPECIAL MEETING OF SHAREHOLDERS OF THE CORPORATION TO BE HELD AT THE
OFFICES OF THE CORPORATION AT 19 OLD KINGS HIGHWAY SOUTH, DARIEN, CT 06820 AT
9:00 A.M. ON APRIL 14, 1997 AND AT ALL ADJOURNMENTS THEREOF, WITH ALL OF THE
POWERS THE UNDERSIGNED WOULD POSSESS IF THEN AND THERE PERSONALLY PRESENT AND
ESPECIALLY (BUT WITHOUT LIMITING THE GENERAL AUTHORIZATION AND POWER THEREBY
GIVEN) TO VOTE AS INDICATED ON THE PROPOSAL. AS MORE FULLY DESCRIBED IN THE
PROXY STATEMENT FOR THE MEETING, AND VOTE AND ACT ON ANY OTHER MATTER WHICH MAY
PROPERLY COME BEFORE THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE
VOTED "FOR" THE PROPOSALS LISTED BELOW UNLESS OTHERWISE INDICATED. TO VOTE MARK
BLOCKS BELOW IN BLUE OR BLA0K INK AS FOLLOWS / X / KEEP THIS PORTION FOR YOUR
RECORDS
- --------------------------------------------------------------------------------
(DETACH HERE AND RETURN THIS PORTION ONLY)
THE TREASURER'S FUND, INC.
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
/ / / / / / I. TO APPROVE OR DISAPPROVE A NEW ADVISORY
AGREEMENT
II. ELECT THE FOLLOWING NOMINEES FOR
DIRECTORS
/ / / / / / 1. Thomas E. O'Connor
/ / / / / / 2. Felix J. Christiana
/ / / / / / 3. Mary E. Hauck
/ / / / / / 4. Robert C. Kolodny, M.D.
/ / / / / / 5. Anthony R. Pustorino
/ / / / / / 6. Gary L. Roubos
/ / / / / / 7. William A. Merritt, Jr.
/ / / / / / 8. Anthonie C. van Ekris
/ / / / / / 9. Karl Otto Pohl
/ / / / / / 10. Mario J. Gabelli
/ / / / / / 11. Anthony J. Colavita
/ / / / / / 12. Werner J. Roeder, M.D.
/ / / / / / 13. Richard N. Daniel
/ / / / / / III. TO RATIFY OR REJECT THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT
ACCOUNTANTS OF THE CORPORATION FOR ITS
FISCAL YEAR ENDING 10/31/97
_______________________________________________________________________________
_______________________________________________________________________________
_________________________ __________________________________________
SIGNATURE SIGNATURE (JOINT OWNERS) DATE
PLEASE SIGN NAME OR NAMES AS PRINTED ABOVE TO AUTHORIZE THE VOTING OF
YOUR SHARES AS INDICATED ABOVE, WHERE SHARES ARE REGISTERED WITH JOINT OWNERS,
ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC. SHOULD SO INDICATE.
C/M: 11536.0001 428573.4
25
