<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Gabelli Equity Series Funds, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] 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:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
1,000,000,000
-----------------------------------------------------------------------
(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):
N/A
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
GABELLI EQUITY SERIES FUNDS, INC.
One Corporate Center
Rye, New York 10580-1434
April 12, 1999
Dear Fellow Shareholder:
I would like to invite you to a Special Meeting of Shareholders of Gabelli
Equity Series Funds, Inc. (the "Fund") to be held at the Greenwich Hyatt
Regency, 1800 East Putnam Avenue, Greenwich, Connecticut, 06870 on Tuesday, May
18, 1999 at 10:00 a.m. eastern time. At this meeting, shareholders will consider
a proposal to amend the Fund's Charter to permit the Fund to offer additional
classes of shares. The enclosed Proxy Statement describes this proposal in
detail.
We started the Gabelli Equity Series Funds, Inc. on October 22, 1991. We
are a no-load fund. For existing shareholders, we intend to remain a no-load
fund. At the same time, mutual fund distributors are increasingly employing a
variety of different types and combinations of sales charge arrangements for
different classes of shares that are targeted to the needs of particular types
of investors. Your Board of Directors believes that the Fund should be able to
provide the distribution alternatives and investment flexibility provided by
other similarly situated funds that offer multiple classes of shares. We believe
that approval of the proposal to amend the Fund's charter to permit the Fund to
offer additional classes of shares will enhance the potential for the Fund to
attract additional investors in a manner that could provide additional benefits
for all investors in the Fund. Again, to repeat, approval of this proposal will
not diminish the ability of existing and future shareholders to purchase and
redeem shares at net asset value.
We believe that this proposal would benefit the shareholders, and we urge
you to give it your careful consideration. I look forward to your comments.
Very truly yours,
/s/ Mario J. Gabelli
MARIO J. GABELLI
Chairman and
Chief Investment Officer
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING OF SHAREHOLDERS, PLEASE
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN THE SAME AS SOON AS
POSSIBLE IN THE ENCLOSED POSTPAID ENVELOPE.
<PAGE> 3
GABELLI EQUITY SERIES FUNDS, INC.
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on May 18, 1999
------------------------
A Special Meeting of Shareholders of GABELLI EQUITY SERIES FUNDS, INC. (the
"Fund") will be held at the Greenwich Hyatt Regency, 1800 East Putnam Avenue,
Greenwich, Connecticut 06870, on May 18, 1999, at 10:00 a.m. eastern time, for
the following purposes:
1. To consider and act upon Articles of Amendment to the Fund's Charter to
permit each series of the Fund to offer additional classes of shares
(PROPOSAL 1);
2. To elect nine (9) Directors of the Fund (PROPOSAL 2);
3. To ratify the selection of Ernst & Young LLP as independent accountants
of the Fund for the year ending December 31, 1999 (PROPOSAL 3); and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Directors have fixed the close of business on March 24, 1999 as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting and any adjournments thereof.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE FUND.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE
WHICH NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES. INSTRUCTIONS
FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER.
By Order of the Directors
JAMES E. MCKEE
Secretary
April 12, 1999
<PAGE> 4
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. All Other Accounts: The capacity of the individuals signing the proxy
card should be indicated unless it is reflected in the form of
registration. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
- ------------ ---------------
<S> <C> <C>
CORPORATE ACCOUNTS
(1) ABC Corp.......................................... ABC Corp.
(2) ABC Corp.......................................... John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer......................... John Doe
(4) ABC Corp., Profit Sharing Plan.................... John Doe, Trustee
FUND ACCOUNTS
(1) ABC Fund.......................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78.................................. Jane Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Custodian
f/b/o John B. Smith, Jr. UGMA................... John B. Smith
(2) John B. Smith..................................... John B. Smith, Jr., Executor
</TABLE>
<PAGE> 5
GABELLI EQUITY SERIES FUNDS, INC.
---------------------
SPECIAL MEETING OF SHAREHOLDERS
To be Held on May 18, 1999
---------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation on
behalf of the board of directors (the "Board of Directors") of Gabelli Equity
Series Funds, Inc. (the "Fund") of proxies to be voted at a Special Meeting of
Shareholders of the Fund to be held on Tuesday, May 18, 1999, at 10:00 a.m.
eastern time, at the Greenwich Hyatt Regency, 1800 East Putnam Avenue,
Greenwich, Connecticut, and at any adjournments thereof (the "Meeting"), for the
purposes set forth in the accompanying Notice of Special Meeting of
Shareholders.
The Fund consists of two series, The Gabelli Small Cap Growth Fund and The
Gabelli Equity Income Fund (each, together with any subsequently created series,
a "Series").
In addition to the solicitation of proxies by mail, officers of the Fund
and officers and regular employees of State Street Bank & Trust Company, the
Fund's transfer agent, and affiliates of State Street Bank & Trust Company or
other representatives of the Fund also may solicit proxies by telephone,
telegraph or in person. In addition, the Fund expects to retain Georgeson and
Company Inc. to assist in the solicitation of proxies for a minimum fee of
$3,000 plus reimbursement of expenses. The costs of solicitation and the
expenses incurred in connection with preparing the Proxy Statement and its
enclosures will be paid by the Fund. The Fund will reimburse brokerage firms and
others for their expenses in forwarding solicitation materials to the beneficial
owners of shares. The Fund's most recent annual report is available upon
request, without charge, by writing the Fund at One Corporate Center, Rye, New
York, 10580-1434 or calling the Fund at 1-800-422-3554.
If the enclosed proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented thereby will be voted FOR Proposals 1, 2
and 3 listed in the accompanying Notice of Special Meeting of Shareholders,
unless instructions to the contrary are marked thereon, and in the discretion of
the proxy holders as to the transaction of any other business that may properly
come before the Meeting. Any shareholder who has given a proxy has the right to
revoke it at any time prior to its exercise either by attending the Meeting and
voting his or her shares in person or by submitting a letter of revocation or a
later-dated proxy to the Fund at the above address prior to the date of the
Meeting.
If sufficient votes to approve any of the proposed items are not received
(and regardless of whether or not a quorum exists at the meeting), the persons
named as proxies may propose one or more adjournments of such Meeting to permit
further solicitation of proxies. A shareholder vote may be taken on one or more
of the proposals prior to such adjournment if sufficient votes have been
received and it is otherwise appropriate. Any such adjournment will require the
affirmative vote of a majority of those shares present at the Meeting in person
or by proxy and the persons named as proxies will vote those proxies which they
are entitled to vote FOR or AGAINST any such proposal in their discretion.
The close of business on March 24, 1999 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Meeting and all adjournments thereof.
Each shareholder is entitled to one vote for each full share and an
appropriate fraction of a vote for each fractional share held. On the record
date there were 18,971,682.78 shares of common stock of the Fund outstanding.
To the knowledge of the management of the Fund, no person owns of record or
beneficially 5% or more of the shares of the Fund except that, as of March 24,
1999, Charles Schwab & Co. owns approximately 16.0% of the outstanding shares of
the Fund on behalf of its clients and disclaims beneficial ownership.
This Proxy Statement is first being mailed to shareholders on or about
April 12, 1999.
<PAGE> 6
PROPOSAL 1: TO CONSIDER AND ACT UPON ARTICLES OF AMENDMENT
TO THE FUND'S CHARTER TO PERMIT EACH SERIES
TO OFFER ADDITIONAL CLASSES OF SHARES
Shares of each Series may be purchased and redeemed at net asset value
without charge. Approval of Proposal 1 will not diminish the ability of
shareholders to purchase and redeem shares at net asset value without charge.
Rather, Proposal 1 is designed to permit the Fund to offer additional classes of
shares to new investors through additional distribution channels. Mutual fund
distributors are increasingly employing a variety of different types and
combinations of sales charge arrangements targeted to the needs of particular
types of investors. Management of the Fund believes that the Fund should be
structured to be in a position to provide the distribution alternatives and
investment flexibility provided by other similarly situated funds that offer
multiple classes of shares. Management believes that approval of Proposal 1 will
enhance the potential for the Fund to attract additional investors in a manner
that could provide additional benefits for all investors in the Fund.
Over the past year, management of the Fund has examined ways for new
shareholders to participate in our management discipline and style. This
includes various distribution alternatives for the Fund. Following this
analysis, and based on a review of mutual fund distribution alternatives and
discussions with experts in mutual fund marketing, management recommended that
the Board of Directors consider obtaining shareholder authorization to convert
each Series of the Fund to a multiple-class structure authorized to offer
separate sub-series ("classes") of shares in each Series with different
distribution and service arrangements. On February 17, 1999, the Board of
Directors unanimously approved amendments to the Fund's Articles of
Incorporation (the "Charter") that will enable each Series of the Fund to offer
additional classes of shares. The Board of Directors also approved the adoption
of a plan on behalf of each Series pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "1940 Act") pursuant to which each Series
may issue multiple classes of shares with varying distribution and service
arrangements.
Management of the Fund believes that the Fund and each Series may benefit
by having the flexibility to offer multiple classes of shares within each Series
and targeting niches within the load and no-load product markets. Moreover,
management believes that by having the flexibility to offer multiple classes of
shares, the Fund will be able to offer a wider variety of exchange options
between the Fund and other funds managed by Gabelli Funds, LLC (the "Adviser")
or an affiliate, at net asset value, thereby increasing shareholders' investment
flexibility. To the extent multiple classes are implemented for a Series and
such Series raises additional assets, use of the multiple class system would
likely result in some reduction in annual expenses per share for that Series.
If Proposal 1 is approved, each Series will continue to offer its existing
class of shares as a no-load class with a continuing service fee and the Fund
will be in a position to begin offering (although it may decide not to do so)
one or more of the following new classes of shares within each Series: Class A
Shares subject to a front-end sales charge and a continuing Rule 12b-1
distribution fee; Class B Shares subject to a declining contingent deferred
sales charge ("CDSC") until held for eighty-four months, a continuing 12b-1
distribution fee and a continuing service fee; and Class C Shares subject to a
CDSC until held for twenty-four months, a continuing Rule 12b-1 distribution fee
and a service fee. Class B Shares will convert to Class A Shares on the first
business day of the eighty-fifth calendar month following the calendar month in
which such shares were issued. The existing class of shares of each Series will
be redesignated as Class AAA without change in its rights and privileges.
2
<PAGE> 7
The proposed amendments to the Fund's Charter will, among other things:
- Enable the Board of Directors to classify and reclassify authorized but
unissued shares of each Series of the Fund into multiple classes with
different sales charge and distribution financing alternatives as they
deem appropriate and in the best interest of the Fund and its
shareholders; and
- Enable the Board of Directors to classify and reclassify authorized but
unissued shares of each Series of the Fund into multiple classes and, in
connection therewith, to permit the Board to provide for the automatic
conversion of one or more classes of each Series into another class of
that Series upon terms and conditions established by the Board from time
to time pursuant to the Charter and set forth in the Fund's current
registration statement at the time of purchase.
A copy of the proposed amendments to the Fund's Charter is set forth in
Exhibit A.
REQUIRED VOTE
Approval of Proposal 1 requires the affirmative vote of a majority of the
shares of the Fund outstanding as of the record date.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 1.
PROPOSAL 2: TO ELECT NINE DIRECTORS OF THE FUND
At the Meeting, nine Directors of the Fund are to be elected to hold office
until their successors are elected and qualified. Unless authority is withheld,
it is the intention of the persons named in the proxy to vote the proxy FOR the
election of the nominees named below. Each nominee has indicated that he will
serve if elected, but if any nominee should be unable to serve, the proxy will
be voted for any other person determined by the persons named in the proxy in
accordance with their judgment. Each of the Directors of the Fund has served in
that capacity since the organizational meeting of the Fund. The address of each
of the Directors is One Corporate Center, Rye, New York 10580.
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE OF
POSITION WITH THE FUND SHARES OF BENEFICIALLY OWNED**
NAME (AGE) AND PRINCIPAL OCCUPATION DIRECTLY OR INDIRECTLY ON
POSITION DURING PAST FIVE YEARS MARCH 24, 1999
---------- ------------------------ ------------------------------
<S> <C> <C>
MARIO J. GABELLI* (56) Chairman of the Board and President of the Fund; 67,942.00****
President, Director and Chairman of the Board and Chief Executive Officer of
Chief Investment Gabelli Asset Management Inc. and Chief Investment
Officer Officer of the Adviser, Gabelli Asset Management Inc.
and GAMCO Investors, Inc.; Chairman of the Board and
Chief Executive Officer of Lynch Corporation, a
diversified manufacturing and communications services
company, and Director of East/West Communications,
Inc. (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)
(11)(12)(15)(16)
FELIX J. CHRISTIANA (73) Formerly Senior Vice President of Dollar Dry Dock 3,222.88***
Director Savings Bank. (1)(2)(3)(4)(5)(8)(10)(13)(15)(16)
ANTHONY J. COLAVITA (64) President and Attorney at Law in the law firm of 3,750.52***
Director Anthony J. Colavita, P.C. since 1961.
(1)(2)(3)(4)(5)(6)(7)(8)(9)
(11)(12)(13)(14)
VINCENT D. ENRIGHT (56) Former Senior Vice President and Chief Financial 3,400.19***
Director Officer of KeySpan Energy Corporation. (5)(6)(7)
JOHN D. GABELLI* (54) Senior Vice President of Gabelli & Company, Inc.; 427.28***
Director Director of Gabelli Advisers, Inc. (5)(8)(16)
ROBERT J. MORRISSEY (58) Partner in the law firm of Morrissey & Hawkins. (3)(5) 2,129.55***
Director
</TABLE>
3
<PAGE> 8
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE OF
POSITION WITH THE FUND SHARES OF BENEFICIALLY OWNED**
NAME (AGE) AND PRINCIPAL OCCUPATION DIRECTLY OR INDIRECTLY ON
POSITION DURING PAST FIVE YEARS MARCH 24, 1999
---------- ------------------------ ------------------------------
<S> <C> <C>
KARL OTTO POHL* (69) Former President of the Deutsche Bundesbank (Germany's 0.00***
Director Central Bank) and Chairman of its Central Bank Council
(1980-1991); Currently board member of Zurich Allied
(insurance); TrizecHahn Corp. (real estate) and member
of the shareholder committee of Sal. Oppenheim Jr. &
Cie. (private investment bank).
(1)(2)(3)(4)(5)(6)(7)(8)(9)
(10)(11)(12)(13)(14)(15)(16)
ANTHONY R. PUSTORINO, CPA Professor of Accounting at Pace University 4,178.23***
(72) (1965 -- present). Formerly President, consultant, and
Director shareholder, Pustorino Puglisi & Co., certified public
accountants (1961 -- 1989).
(1)(2)(3)(4)(5)(10)(11)(13)(15)(16)
ANTHONIE C. VAN EKRIS Managing Director of Balmac International Ltd.; 18,451.57***
(63) Director of Stahal Hardmayer A.Z. and Spinnaker
Director Industries, Inc. (1)(2)(4)(5)(6)(8)(9)(11)(12)(13)
</TABLE>
- ------------
* "Interested person" of the Fund, as defined in the 1940 Act. Mr. Mario
Gabelli is an "interested person" of each fund as a result of his employment as
an officer of the fund and the Adviser. Mr. Mario Gabelli and Mr. John Gabelli
are registered representatives of a broker-dealer that is controlled by Gabelli
Asset Management Inc., the parent company of the Adviser. Mr. Pohl is a director
of the parent company of the Adviser.
** For this purpose "beneficial ownership" is defined under Section 13(d) of
the Securities Exchange Act of 1934, as amended. The information as to
beneficial ownership is based upon information furnished to the Equity Trust by
the Directors.
*** Less than 1%.
**** Less than 1%. This figure includes 41,033 shares owned by Gabelli Funds,
Inc. or its subsidiaries, 26,896 shares held in discretionary investment
advisory accounts by clients of GAMCO Investors, Inc., and 13 shares owned by a
limited partnership of which Mr. Gabelli is the general partner. Mr. Gabelli
disclaims beneficial ownership of the shares owned by the clients of GAMCO
Investors, Inc. and, except to the extent of the interest therein, by Gabelli
Funds, Inc. and its subsidiaries and the partnership.
<TABLE>
<S> <C>
(1) Trustee of The Gabelli Asset Fund. (9) Director of Gabelli Gold Fund, Inc.
(2) Trustee of The Gabelli Growth Fund. (10) Director of The Gabelli Global Multimedia Trust Inc.
(3) Director of The Gabelli Value Fund Inc. (11) Director of Gabelli Capital Series Funds, Inc.
(4) Director of The Gabelli Convertible Securities (12) Director of Gabelli International Growth Fund, Inc.
Fund, Inc. (13) Director of the Treasurer's Fund, Inc.
(5) Director of Gabelli Equity Series Funds, Inc. (14) Trustee of the Gabelli Westwood Funds
(6) Trustee of The Gabelli Money Market Funds (15) Director of The Gabelli Equity Trust Inc.
(7) Director of Gabelli Investor Funds, Inc. (16) Trustee of The Gabelli Utility Fund.
(8) Director of Gabelli Global Series Funds, Inc.
</TABLE>
As of March 24, 1999, the directors and executive officers as a group
beneficially owned 111,206 shares (less than 1%) of the Fund.
The Fund pays each Director not affiliated with the Adviser or its
affiliates, a fee of $1,500 per year plus $500 per meeting attended in person
and by telephone, together with the Director's actual out-of-pocket expenses
relating to attendance at meetings. The aggregate remuneration paid by the Fund
to such Directors during the fiscal year ended December 31, 1998, amounted to
$17,500. Committee members receive $500 per meeting.
During the year ended December 31, 1998, the Directors of the Fund met five
times. Each Director then serving in such capacity attended at least 75% of the
meetings of Directors and of any Committee of which he is a member. Messrs.
Christiana, Colavita and Roeder serve on the Fund's Audit Committee and these
Directors are not "interested persons" of the Fund as defined in the 1940 Act.
The Audit Committee is
4
<PAGE> 9
responsible for recommending the selection of the Fund's independent accountants
and reviewing all audit as well as non-audit accounting services performed for
the Fund. During the fiscal year ended December 31, 1998, the Audit Committee
met two times.
The Directors serving on the Fund's Nominating Committee are Messrs.
Colavita (Chairman) and Christiana. The Nominating Committee is responsible for
recommending qualified candidates to the Board in the event that a position is
vacated or created. The Nominating Committee would consider recommendations by
shareholders if a vacancy were to exist. Such recommendations should be
forwarded to the Secretary of the Fund. The Nominating Committee did not meet
during the fiscal year ended December 31, 1998. The Fund does not have a
standing compensation committee.
The following table sets forth certain information regarding the
compensation of the Fund's Directors. Each officer of the Fund is also employed
by the Adviser and receives no additional compensation or expense reimbursement
from the Fund.
COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM THE FUND
NAME OF PERSON FROM THE AND FUND COMPLEX
AND POSITION FUND PAID TO DIRECTORS*
- -------------- ------------ ------------------
<S> <C> <C>
MARIO J. GABELLI $ 0 $ 0(13)
President, Director and
Chief Investment Officer
JOHN D. GABELLI $ 0 $ 0(4)
Director
FELIX J. CHRISTIANA $10,000 $ 88,500(9)
Director
ANTHONY J. COLAVITA $10,000 $ 82,000(13)
Director
VINCENT D. ENRIGHT $10,000 $ 18,000(3)
Director
ROBERT J. MORRISSEY $ 9,000 $ 24,500(2)
Director
KARL OTTO POHL $10,000 $102,466(15)
Director
ANTHONY R. PUSTORINO $10,000 $100,500(9)
Director
ANTHONIE C. VAN EKRIS $10,000 $ 57,500(10)
Director
</TABLE>
- ------------
* Represents the total compensation paid to such persons during the calendar
year ended December 31, 1998 by investment companies (including the Fund) from
which such person receives compensation that are considered part of the same
fund complex as the Fund because they have common or affiliated investment
advisers. The number in parenthesis represents the number of such investment
companies.
Bruce N. Alpert, Vice President and Treasurer of the Fund and James E.
McKee, Secretary of the Fund are the only executive officers of the Fund not
included in the listing of Directors above. Mr. Alpert is 47 years old and has
served as an officer of the Fund since its inception. He currently serves as
Executive Vice President and Chief Operating Officer of the Adviser and as an
officer of each mutual fund managed by the Adviser and its affiliates. Mr. McKee
is 36 years old and has served as Secretary of the Fund since August, 1995. He
has served as Vice President, General Counsel and Secretary of Gabelli Asset
Management Inc. since February, 1999, of the Adviser since August, 1995, and of
GAMCO Investors, Inc. since December, 1993. Mr. McKee also serves as Secretary
for each mutual fund managed by the Adviser and its affiliates. The business
address of each of these officers is One Corporate Center, Rye, New York
10580-1434.
5
<PAGE> 10
REQUIRED VOTE
The affirmative vote of holders of a plurality of the shares of the Fund
present at the Meeting is required to elect each of the Directors named above.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
PROPOSAL 3: TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE FUND
FOR ITS FISCAL YEAR ENDING DECEMBER 31, 1999
The Board of Directors, including a majority of the Directors who are not
"interested persons" of the Fund, at a meeting called for that purpose, has
selected the firm of Ernst & Young LLP, 787 Seventh Avenue, New York, New York,
10019 to serve as independent accountants for the Fund's fiscal year ending
December 31, 1999. The Fund knows of no direct or indirect financial interest of
such firm in the Fund. Ernst & Young LLP has advised the Fund that it is
independent with respect to the Fund in accordance with the applicable
requirements of the American Institute of Certified Public Accountants and the
Securities and Exchange Commission.
Representatives of Ernst & Young LLP will attend the Meeting to answer
appropriate questions only if such questions are submitted to the management of
the Fund prior to the Meeting.
REQUIRED VOTE
Approval of Proposal 3 requires the affirmative vote of a majority of the
shares of the Fund present at the Meeting.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
THE INVESTMENT ADVISER
Gabelli Funds, LLC, a newly-formed New York limited liability company and
successor to Gabelli Funds, Inc., acts as investment adviser to the Fund. The
business address for the Adviser is One Corporate Center, Rye, New York
10580-1434.
THE ADMINISTRATOR
BISYS Fund Services acts as administrator of the Fund. The business address
for the administrator is 3435 Stelzer Road, Suite 1000, Columbus, OH 43219.
THE PRINCIPAL UNDERWRITER/DISTRIBUTOR
Gabelli & Company, Inc. acts as the principal underwriter/distributor for
the Fund. The business address for the principal underwriter/distributor is One
Corporate Center, Rye, New York 10580-1434.
BROKER NON-VOTES AND ABSTENTIONS
The presence at the Meeting, in person or by proxy, of shareholders
entitled to cast a majority of all votes entitled to be cast at the Meeting is
necessary to constitute a quorum for the Meeting. Shareholders of record who are
present at the Meeting, in person or by proxy, and those who abstain, including
brokers holding shares of record for customers who cause abstentions to be
recorded at the Meeting, are considered shareholders who are present and
entitled to vote and are counted for purposes of determining if a quorum exists.
Brokers holding shares of record for customers generally are not entitled
to vote on certain matters, such as the Proposal 1, unless they receive voting
instructions from their customers. The shares for which brokers have not
received voting instructions from the beneficial owner are generally referred to
as "uninstructed
6
<PAGE> 11
shares." As used herein, "broker non-votes" means the votes that could have been
cast on the matter in question by brokers with respect to uninstructed shares if
the brokers had received their customers' instructions. The Fund will apply the
principles set forth below with respect to broker non-votes.
Quorum Requirements: Broker non-votes will not be counted for purposes of
determining whether a quorum exists. The existence of a quorum will be
determined based upon the number of shares held by shareholders present in
person plus the largest number of shares represented by proxies in which votes
have been cast or as to which authority to vote has not be withheld on any
proposal. Accordingly, if a broker has exercised discretionary authority with
respect to a proposal or has not withheld authority to vote on a proposal, those
shares may be counted as votes entitled to be cast at the Meeting for quorum
purposes and the number of shares entitled to be voted for quorum purposes will
not be reduced by broker non-votes on a different proposal.
Proposal 1: To be adopted, the Articles of Amendment must receive the
affirmative vote of holders of at least a majority of the Fund's outstanding
shares voting as a single class, regardless of whether the holders are present
in person or by proxy at the Meeting. Uninstructed shares may not be voted on
this matter, and abstentions and broker non-votes will have the effect of votes
against the Articles of Amendment.
Proposal 2: Directors are elected by a plurality, and the nine (9)
nominees who receive the most votes cast at the Meeting will be elected.
Accordingly, abstentions and broker non-votes will not be taken into account in
determining the outcome of the election.
Proposal 3: To be approved, this matter must receive the affirmative vote
of the majority of votes cast with respect to this matter at the Meeting.
Therefore, abstentions and broker non-votes will not be counted in determining
the outcome.
Shareholders of the Fund will be informed of the voting results of the
Meeting in the Fund's Semi-Annual Report for the period ended June 30, 1999.
OTHER MATTERS TO COME BEFORE THE MEETING
The Directors do not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with their judgment.
SHAREHOLDER PROPOSALS
The Fund does not hold regular annual meetings. Any shareholder of the Fund
desiring to present a proposal for inclusion in the Fund's proxy statement and
proxy relating to the Fund's next meeting of shareholders should submit such
proposal to the Fund.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
7
<PAGE> 12
Exhibit A
ARTICLES OF AMENDMENT
OF
GABELLI EQUITY SERIES FUNDS, INC.
Gabelli Equity Series Funds, Inc., a Maryland corporation, having its
principal office at One Corporate Center, Rye, New York 10580 (the
"Corporation"), certifies as follows:
FIRST: The Articles of Incorporation of the Corporation (the "Articles
of Incorporation") are hereby amended by deleting Article V thereof and
inserting in its place the following:
ARTICLE V
CAPITAL STOCK
(1) The total number of shares of stock of all classes which the
Corporation shall have authority to issue is One Billion (1,000,000,000) all of
which stock shall have a par value of one-tenth of one cent ($.001) per share.
The aggregate par value of all authorized shares of stock of the Corporation is
One Million Dollars ($1,000,000).
(2) (a) The Board of Directors of the Corporation is authorized
to classify or to reclassify (and to designate one or more classes of capital
stock and one or more subseries of a class or classes of capital stock) from
time to time, any unissued shares of stock of the Corporation, whether now or
hereafter authorized, by setting, changing or eliminating the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, and qualifications or terms and conditions of or rights to require
redemption of the stock and, pursuant to such classification or
reclassification, to increase or decrease the number of authorized shares of
any class or subseries thereof, but the number of shares of any class or
subseries shall not be reduced by the Board of Directors below the number of
shares thereof then outstanding. Without limiting the generality of the
foregoing, the Board of Directors may designate from time to time any unissued
shares of stock of the Corporation as a class representing interests in the
same portfolio of assets or one or
<PAGE> 13
more subseries of a class which shall represent interests in the same portfolio
of assets attributable to such class. The Board of Directors may also establish
in Articles Supplementary creating a class and/or a subseries of a class
different conversion, redemption and other rights for a class or among or with
respect to different subseries of a class (including subseries of the classes
classified, designated and authorized herein) and may establish such other
powers, preferences, restrictions, limitations, qualifications and terms and
conditions for any class or subseries of a class (including subseries of the
classes classified, designated and authorized herein) as shall not be
inconsistent with the requirements of the 1940 Act or any rule thereunder
respecting multiple classes or subseries of stock of a corporation registered
as an open-end investment management company under the 1940 Act or any order of
the Securities and Exchange Commission applicable to the Corporation.
(b) Without limiting the generality of the foregoing, the
dividends and distributions of investment income and capital gains with respect
to the stock of the Corporation, and with respect to each class or subseries
that hereafter may be created, shall be in such amount as may be declared from
time to time by the Board of Directors, and such dividends and distributions
may vary from class to class and among subseries of a class to such extent and
for such purposes as the Board of Directors may deem appropriate, including,
but not limited to, the purpose of complying with requirements of regulatory or
legislative authorities.
(c) Without limiting the generality of the foregoing, the Board
of Directors may designate, from time to time, any unissued shares of stock of
the Corporation, whether now or hereafter authorized, as a class or classes of
preferred or special stock that is excluded from the definition of "senior
security" set forth in section 18(g) of the 1940 Act (or in any successor
statute) or as one or more subseries of any such class.
(3) Until such time as the Board of Directors shall provide
otherwise pursuant to the authority granted in section (2) of this Article V,
500,000,000 shares of the authorized shares of the Corporation are designated
and classified as The Gabelli Small Cap Growth Fund Stock ("Small Cap Stock")
and 500,000,000 shares of the authorized shares of the Corporation are
designated and classified as The Gabelli Equity Income Fund Stock ("Equity
Income Stock"). Until such time as the Board of Directors may provide otherwise
in Articles Supplementary creating a new class or subseries of capital stock of
the Corporation (including new subseries of the Small Cap Stock and the Equity
Income Stock) all classes of the Corporation's capital
2
<PAGE> 14
stock and any subseries thereof and the respective holders thereof shall have
the same preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of and
rights to require redemption and shall be subject to the following provisions.
(a) As more fully set forth hereinafter, the assets and
liabilities and the income and expenses of each class (and, if subseries of a
class have been issued, each such subseries) of the Corporation's stock shall
be determined separately and, accordingly, the net asset value, the
distributions payable to holders, and the amounts distributable in the event of
dissolution of the Corporation to holders, of shares of the Corporation's stock
may vary from class to class and subseries to subseries.
(b) All consideration received by the Corporation for the issue
or sale of shares of a class of the Corporation's stock, together with all
income, earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation thereof, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be
(collectively referred to as "assets belonging to" that class), shall
irrevocably belong to that class for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the
Corporation. For purposes of the preceding sentence, the assets of any
corporation or business trust merged with and into the Corporation pursuant to
a merger in which the Corporation is the surviving corporation shall be deemed
to be assets belonging to that class of the Corporation's stock the shares of
that class or subseries thereof are issued by the Corporation pursuant to the
merger. Except to the extent shares of a subseries of a class are to be charged
with certain liabilities and expenses in a manner different from other
subseries of that class, each share of a class shall have equal rights with
each other share of that class with respect to the assets of the Corporation
belonging to that class.
(c) For purposes of determining the net asset value per share of
stock of a class or subseries, the assets belonging to each class of the
Corporation's stock shall be charged with the liabilities of the Corporation
with respect to that class (and in the case of a subseries of that class,
liabilites allocable to such subseries) and with that class' share of the
liabilities of the Corporation not attributable to any particular class, in the
latter case in the proportion that the net asset value of that class
(determined without regard to such liabilities) bears to the net asset value of
all classes of the Corporation's stock (determined without regard to such
liabilities) as determined by or in accordance with procedures adopted by the
Board of Directors from time to time. In cases where a class of capital stock
has more than one sub
3
<PAGE> 15
series, for purposes of determining the net asset value per share of each
subseries, each subseries of the class shall be further charged with
liabilities that are allocable to such subseries (including, without
limitation, liabilities relating to distribution charges or service charges
payable pursuant to a plan of distribution or multi-class plan adopted by or
applicable to such subseries in accordance with the 1940 Act or any rule or
order of the Securities and Exchange Commission thereunder) as deter mined by
and in accordance with procedures adopted by the Board of Directors from time
to time. The determination of the Board of Directors shall be conclusive as to
the allocation of liabilities, including accrued expenses and reserves, and
assets to a particular class or classes or subseries of any such class. The
liabilities of any corporation or business trust merged with and into the
Corporation pursuant to a merger in which the Corporation is the surviving
corporation shall be charged to that class (and, if applicable, subseries) of
the Corporation's stock the shares of which are issued by the Corporation
pursuant to the merger.
(d) Each holder of stock of the Corporation, upon request to the
Corporation (accompanied by surrender of the appropriate stock certificate or
certificates in proper form for transfer, if any certificates have been issued
to repre sent such shares) shall be entitled to require the Corporation to
redeem, to the extent that the Corporation may lawfully effect such redemption
under the laws of the State of Maryland and the federal securities laws but
subject to any right of the Corpora tion to postpone or suspend such right of
redemption pursuant to the federal securi ties laws, all or any part of the
shares of stock standing in the name of such holder on the books of the
Corporation at a price per share equal to the net asset value per share.
(e) Payment by the Corporation for shares of stock of the
Corporation surrendered to it for redemption shall be made by the Corporation
within seven business days of such surrender out of the funds legally available
therefor, provided that the Corporation may suspend the right of the holders of
stock of the Corporation to redeem shares of stock and may postpone the right
of such holders to receive payment for any shares when permitted or required to
do so by applicable statutes or regulations. Payment of the aggregate price of
shares surrendered for redemption may be made in cash or, at the option of the
Corporation, wholly or partly in such portfolio securities or other assets of
the Corporation as the Corporation shall select.
(f) The right of any holder of stock of the Corporation redeemed
by the Corporation as provided in subsection (d) of this section (3) to receive
dividends thereon and all other rights of such holder with respect to such
shares shall terminate
4
<PAGE> 16
at the time as of which the purchase or redemption price of such shares is
determined, except the right of such holder to receive (i) the redemption
price of such shares from the Corporation or its designated agent and (ii) any
dividend or distribution to which such holder had previously become entitled
as the record holder of such shares on the record date for such dividend or
distribution.
(g) The Corporation shall have the power to redeem shares of any
class or subseries at a redemption price determined in accordance with
subsection (d) of this section (3) if at any time the total investment in such
account does not have a net asset value of at least $2,500. In the event the
Corporation determines to exercise its power to redeem shares provided in this
subsection (g), the holder shall be notified that the value of his account is
less than the applicable minimum amount and shall be allowed 30 days to make an
appropriate investment before such mandatory redemption is processed.
(h) The Corporation shall be entitled to purchase shares of its
stock, to the extent that the Corporation may lawfully effect such purchase
under the laws of the State of Maryland, upon such terms and conditions and for
such consideration as the Board of Directors shall deem advisable, at a price
not exceeding the net asset value per share.
(i) The net asset value of each share of each class or subseries
of such class of the Corporation's stock issued and sold or redeemed or
purchased at net asset value shall be the current net asset value per share of
the shares of that class or subseries as determined by or in accordance with
procedures adopted by the Board of Directors from time to time which comply
with the 1940 Act with such current net asset value to be based on the assets
belonging to each such class less the liabilities charged to each such class
and, in the case of any such subseries, the liabilities charged to such
subseries.
(j) In the absence of any specification as to the purpose for
which shares of stock of the Corporation are redeemed or purchased by it, all
shares so redeemed or purchased shall be deemed to be retired in the sense
contemplated by the laws of the State of Maryland and the number of the
authorized shares of stock of the Corporation shall not be reduced by the
number of any shares redeemed or purchased by it. Until their classification is
changed in accordance with section (2) of this Article V, all shares so
redeemed or purchased shall continue to belong to the same class and subseries
to which they belonged at the time of their redemption or purchase.
5
<PAGE> 17
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
<TABLE>
<S> <C>
1) To consider and act upon Articles
GABELLI EQUITY of Amendment to the Fund's Charter
SERIES FUNDS, INC. to permit each Series to offer additional
classes of shares.
For Withhold For all
All Authority Except
[ ] [ ] [ ]
2) To elect nine (9) Directors of the Fund: Mario J.
Gabelli, Felix J. Christiana, Anthony J.
Colavita, Vincent D. Enright, John D. Gabelli,
Robert J. Morrissey, Karl Otto Pohl, Anthony R.
Pustorino and Anthonie C. van Ekris.
NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR"
A A PARTICULAR NOMINEE(S), MARK THE "FOR ALL
EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME(S)
OF THE NOMINEE(S). YOUR SHARES WILL BE VOTED FOR
THE REMAINING NOMINEE(S).
For Against Abstain
[ ] [ ] [ ]
3) To ratify the selection of Ernst & Young LLP as
the independent accountants of the Fund for the
year ending December 31, 1999.
For Against Abstain
[ ] [ ] [ ]
4) To transact such other business as may properly
come before the Meeting or any adjournment
thereof.
Please be sure to sign Date
and date this
Proxy.
----------------------
Shareholder sign here Co-owner sign here
- ---------------------- ----------------------
Mark box at right if comments [ ]
or address changes have been noted on
the reverse side of this card.
</TABLE>
DETACH CARD
<PAGE> 18
GABELLI EQUITY SERIES FUNDS, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot.
The enclosed proxy materials discuss the proposals in detail.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Special Meeting of Shareholders, May
18, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Gabelli Equity Series Funds, Inc.
11
<PAGE> 19
GABELLI EQUITY SERIES FUNDS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Mario J. Gabelli, Bruce N. Alpert, and James E.
McKee, and each of them, attorneys and proxies of the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to vote
on behalf of the undersigned all shares of Gabelli Equity Series Funds, Inc.
(the "Fund") which the undersigned is entitled to vote at a Special Meeting of
Shareholders of the Fund to be held at the Greenwich Hyatt Regency, 1800 East
Putnam Avenue, Greenwich, Connecticut 06870, on May 18, 1999 at 10:00 a.m.
(eastern standard time), and at any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting of Shareholders
and Proxy Statement and hereby instructs said attorneys and proxies to vote
said shares as indicated herein. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Meeting.
A majority of the proxies present, and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned shareholder. If no direction is made as to any Proposal, this proxy
will be voted FOR the Proposals. Please refer to the Proxy Statement for a
discussion of each of the Proposals.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE
Please sign this proxy exactly as your name(s) appear(s) on the books of the
Fund. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, the signature should be that
of an authorized officer who should state his or here title.
<TABLE>
<CAPTION>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
<S> <C>
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</TABLE>
