SCHWARTZ & FREEMAN
LAW OFFICES
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401 NORTH MICHIGAN AVENUE FACSIMILE (312) 222-0818
SUITE 1900 TELEX 754506 SF LAW UD
CHICAGO, ILLINOIS 60611-4206
(312) 222-0800 WRITER'S DIRECT LINE:
(312) 222-6657
January 28, 1997
VIA EDGAR
- ---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: KEELEY SMALL CAP VALUE FUND, INC.
SECURITIES ACT REGISTRATION NO. 33-63562
INVESTMENT COMPANY ACT FILE NO. 811-7760
----------------------------------------
Ladies and Gentlemen:
On behalf of Keeley Small Cap Value Fund, Inc. (the "Fund"), enclosed for
filing in connection with the subject registration statements is one copy of an
Amendment to the Fund's Registration Statement on Form N-1A (Post-effective
Amendment No. 4 to the Registration Statement under the Securities Act of 1933
and Amendment No. 6 to the Registration Statement under the Investment Company
Act of 1940) together with each of the exhibits being filed herewith.
A copy of the revised cross-reference sheet is included with the Amendment.
This Amendment includes a report and consent of the independent accountants.
This Amendment includes year-end financial statements, brings other information
up to date, and in conjunction therewith, makes other non-material changes.
Accordingly, this Amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b) of Rule 485.
Very truly yours,
SCHWARTZ & FREEMAN
Stephen E. Goodman
SEG:bg
Enclosures
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1997
SECURITIES ACT REGISTRATION NO. 33-63562
INVESTMENT COMPANY ACT FILE NO. 811-7760
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
-------------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( )
POST-EFFECTIVE AMENDMENT NO. 4 (X)
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ( )
AMENDMENT NO. 6 (X)
KEELEY SMALL CAP VALUE FUND, INC.
(Registrant)
401 South LaSalle Street
Suite 1201
Chicago, Illinois 60605
Telephone Number: (312) 786-5050
--------------------------
John L. Keeley, Jr. Stephen E. Goodman
Keeley Asset Management Corp. Schwartz & Freeman
401 South LaSalle Street 401 North Michigan Avenue
Suite 1201 Suite 1900
Chicago, Illinois 60605 Chicago, Illinois 60611
(Agents for service)
------------------------------------------------------------------
Registrant proposes that this Post-effective Amendment No. 4 will become
effective on January 29, 1997, or as close to the date as possible,
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933.
------------------------------------------------------------------
Page 1 of 94 sequential pages (including exhibits).
The index of exhibits is on page 42.
KEELEY SMALL CAP VALUE FUND, INC.
CROSS-REFERENCE SHEET PURSUANT TO RULE 495(A) OF REGULATION C
ITEM LOCATION OR CAPTION<F1>
- ---- -------------------
PART A (PROSPECTUS)
-------------------
1(a) & (b) Front cover
2(a) Fund Expenses
2(b)-(c) Not applicable
3(a) & (b) Financial Highlights
3(c) Performance Information
4(a)(i) General Information
4(a)(ii) & (b) Investment Objectives and Policies; Investment
Restrictions
4(c) Risk Factors
5(a)-(c) Management of the Fund
5(d) & (e) Management of the Fund; General Information
5(f) Fund Expenses; Management of the Fund
5(g) Management of the Fund; Portfolio Transactions
5A Not applicable (in annual report)
6(a) General Information
6(b) Certain Stockholders
6(c)-(d) Not applicable
6(e) General Information
6(f) Dividends and Distributions
6(g) Taxation; Exchange Privilege
7 Purchasing Shares
7(a) Management of the Fund; Purchasing Shares
7(b) Fund Expenses; Purchasing Shares; Net Asset Value;
Exchange Privilege
7(c) & (d) Purchasing Shares; Exchange Privilege
7(e) & (f) Distribution Plan
8(a)-(d) Redemption and Repurchase of Shares
9 Not applicable
PART B (STATEMENT OF ADDITIONAL INFORMATION)
--------------------------------------------
10(a) & (b) Front cover
11 Table of Contents
ITEM LOCATION OR CAPTION<F1>
- ---- -------------------
12 History of the Fund
13(a)-(c) Investment Policies; Investment Restrictions
13(d) Part A - Investment Objectives and Policies
14(a) & (b) Directors and Officers
14(c) Not applicable
15(a) & (b) Certain Stockholders
15(c) Directors and Officers
16(a) & (b) Investment Adviser; Part A - Management of the Fund
16(c)-(e) Not applicable
16(f) Distribution of Shares; Part A - Distribution Plan
16(g) Not Applicable
16(h) Custodian; Independent Public Accountants
16(i) Not applicable
17(a) Portfolio Transactions
17(b) Portfolio Transactions
17(c) Portfolio Transactions
17(d) Portfolio Transactions
17(e) Not applicable
18 Not applicable
19(a) & (b) Purchasing and Redeeming Shares
19(c) Not applicable
20 Additional Tax Information
21(a) Distribution of Shares
21(b) & (c) Performance Information
22(a) Not applicable
22(b) Performance Information
23 Financial Statements
PART C (OTHER INFORMATION)
--------------------------
24 Financial Statements and Exhibits
25 Persons controlled by or under common
control with registrant
26 Number of holders of securities
27 Indemnification
28 Business and other connections of investment adviser
29 Principal underwriters
ITEM LOCATION OR CAPTION<F1>
- ---- -------------------
30 Location of accounts and records
31 Management services
32 Not applicable
- ----------------------
<F1> References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
KEELEY SMALL CAP VALUE FUND, INC.
401 SOUTH LASALLE STREET, SUITE 1201
CHICAGO, ILLINOIS 60605
312-786-5050
800-533-5344
JANUARY 29, 1997
PROSPECTUS
KEELEY Small Cap Value Fund, Inc. (the "Fund") is a diversified, open-end
management investment company. The Fund's investment objective is to seek
capital appreciation; current dividend or interest income is not a factor in the
selection of securities to be held by the Fund in its portfolio. The Fund
follows a strategy of investing in securities believed by its investment adviser
to have above average potential for capital appreciation with an emphasis on
companies with a relatively small market capitalization, less than $1 billion at
the time of investment. The Fund will emphasize companies undergoing substantial
changes, such as companies involved in spin-offs and recapitalizations,
companies trading near or below perceived or actual book value and companies
emerging from bankruptcy or other financial restructuring.
This Prospectus sets forth certain information about the Fund that a
prospective investor should know before investing. Investors should read and
retain this Prospectus for future reference.
A Statement of Additional Information about the Fund, dated January 29,
1997, as may be supplemented from time to time, has been filed with the
Securities and Exchange Commission and contains further information about the
Fund. A copy of the Statement of Additional Information may be obtained without
charge by calling or writing the Fund at the telephone number or address listed
above. The Statement of Additional Information is incorporated herein by
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Fund Expenses.................................................3
Financial Highlights..........................................4
Investment Objectives and Policies............................5
Risk Factors..................................................6
Investment Restrictions.......................................6
Management of the Fund........................................7
Purchasing Shares.............................................8
Redemption and Repurchase of Shares..........................11
Distribution Plan............................................12
Exchange Privilege...........................................12
Determination of Net Asset Value.............................14
Distributions and Taxes......................................14
IRA Plan.....................................................15
Performance Information......................................15
Certain Stockholders.........................................16
General Information..........................................16
Stockholder Reports and Inquiries............................16
KEELEY SMALL CAP VALUE FUND, INC.
INVESTMENT ADVISER: DISTRIBUTOR:
Keeley Asset Management Corp. Keeley Investment Corp.
401 South LaSalle Street 401 South LaSalle Street
Suite 1201 Suite 1201
Chicago, Illinois 60605 Chicago, Illinois 60605
312-786-5000 800-621-5084 312-786-5000 800-621-5084
No dealer, salesperson, or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus and, if given or made, such other information or representations must
not be relied upon as having been authorized by the Fund or its Distributor.
This Prospectus does not constitute an offer by the Fund or by the Distributor
to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful for the Fund or
the Distributor to make such offer or solicitation in such jurisdiction.
FUND EXPENSES
STOCKHOLDER TRANSACTION EXPENSES
Maximum Sales Load on Purchases<F2>
(as a percentage of offering price) 4.50%
Sales Load on Reinvested Dividends None
Deferred Sales Load (as a percentage
of offering price) None
Redemption Fees (as a percentage of
amount redeemed, as applicable)<F3> None
Exchange Fees<F3> None
ANNUAL FUND OPERATING EXPENSES
Management Fees 1.00%
12b-1 Fees<F4> 0.25%
Other Expenses (after expense
reimbursements)<F5> 1.25%
-----
Total Fund Operating Expenses (after
expense reimbursements) 2.50%
=====
EXAMPLE
An investor would pay the One Three Five Ten
following expenses on a Year Years Years Years
$1,000 investment (based on the ---- ----- ----- -----
Total Fund Operating Expenses after $70 $121 $175 $322
expense reimbursements above)
assuming (1) 5% annual return; (2)
reinvestment of all dividends and
capital gains distributions; and
(3) redemption at the end of each
time period:
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<F2> Sales charges are reduced for purchases of $50,000 or more. See
"Purchasing Shares."
<F3> The Fund's Transfer Agent charges a fee of $10 for each wire redemption and
$5 for each telephone exchange.
<F4> The Rule 12b-1 Fee is an annual fee paid by the Fund (and indirectly by
stockholders). See "Distribution Plan." Over time, long-term
stockholders may pay more in distribution related charges through the
imposition of the Rule 12b-1 Fee than the economic equivalent of the
maximum front-end sales charge applicable to mutual funds sold by members
of the National Association of Securities Dealers, Inc. (the "NASD").
<F5> The Adviser has agreed to waive a portion of its fee to the extent that
total ordinary operating expenses during the current fiscal year as a
percentage of average net assets exceed 2.50%. Absent fee waivers and
reimbursements for the fiscal year ended September 30, 1996, Other Expenses
and Total Fund Operating Expenses would have been 1.69% and 2.94%,
respectively.
The Management Fee to be paid by the Fund is higher than that paid by most
other investment companies. The Board of Directors believes that the Fund's
Management Fee is appropriate in light of the Fund's investment objective
and policies.
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that stockholders bear either directly or
indirectly. The information disclosed in the table under the heading
"Stockholder Transaction Expenses" is based on the maximum sales load now in
effect for the Fund. See "Purchasing Shares" and "Redemption and Repurchase
of Shares" below for more complete descriptions of those expenses, including a
description of available reductions in the sales charge. The "Other Expenses"
information contained in the table reflects reimbursements to the Fund made by
the Adviser as a result of an expense limitation agreement. If the expense
reimbursements were removed, the expenses contained in the Example would
increase. The Example shown is based on the Total Fund Operating Expenses above
and should not be considered a representation of future expenses. Actual Fund
Expenses may be greater or lesser than those shown in the Example or in the
table.
FINANCIAL HIGHLIGHTS
The financial information for a Fund share outstanding during the periods
specified in the following table has been derived from the financial records of
the Fund which have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon was unqualified and is included in the
Statement of Additional Information. The table should be read in conjunction
with the financial statements and related notes included in the Statement of
Additional Information. Further information about the performance of the Fund
is contained in the Fund's Annual Report to Shareholders, copies of which may be
obtained without charge upon request.
YEAR YEAR YEAR
ENDED ENDED ENDED
9/30/96 9/30/95 9/30/94
Net asset value, beginning of period .......... $12.52 $10.26 $10.00
Income from investment operations:
Net investment loss ........................ (0.19) (0.13) (0.06)
Net realized and unrealized gains
on investments ............................. 2.22 2.39 0.32
------ ------ ------
Total from investment operations ........... 2.03 2.26 0.26
------ ------ ------
Less distributions of net realized gains ...... (0.03) -- --
------ ------ ------
Net asset value, end of period ................ $14.52 $12.52 $10.26
====== ====== ======
Total return<F6> ............................... 16.23% 22.03% 2.60%
Supplemental data and ratios:
Net assets, end of period (in 000s) ........ $10,815 $7,616 $4,503
Ratio of net expenses to average
net assets<F7> ............................ 2.50% 2.50% 2.49%
Ratio of net investment loss to
average net assets<F7> .................... (1.61)% (1.46)% (0.96)%
Portfolio turnover rate .................... 52.43% 70.59% 63.20%
Average commission rate paid on
portfolio investment
transactions ............................. $0.0501 N/A N/A
- --------------------------------------------------------------------------------
<F6> The total return calculation does not reflect the 4.50% sales load imposed
on the purchase of shares.
<F7> Without fees waived, the ratio of expenses to average net assets would have
been 2.94%, 3.94% and 5.98% for the years ended September 30, 1996, 1995
and 1994, respectively; and the ratio of net investment loss to average net
assets would have been (2.05)%, (2.90)% and (4.45)% for the years ended
September 30, 1996, 1995 and 1994, respectively.
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is to seek capital appreciation; current
dividend or interest income is not a factor in the selection of securities to be
held by the Fund in its portfolio. The Fund seeks to achieve this objective by
investing primarily in companies which have a relatively small market
capitalization, less than $1 billion at time of investment. Under normal market
conditions, the Fund will have at least 65% of its total assets invested in
common stocks and other equity-type securities of such companies. Other equity-
type securities include preferred stock, convertible debt securities and
warrants. Within this group of companies, the Fund will emphasize two basic
categories. The first is companies involved in various types of corporate
reorganizations, such as spin-offs and recapitalizations. From time to time,
the Fund may invest a significant portion of its net assets in this first
category. The second is companies which the Adviser believes are undergoing
substantial changes, such as significant changes in markets or technologies,
management and financial structure. The Fund generally seeks companies that
trade at prices at or below perceived or actual book value.
The Fund compares itself to both the Standard and Poor's Composite Stock
Index ("S&P 500") and the Russell 2000 Index ("Russell 2000"). Although the
portfolio is expected to have significant differences when compared to the S&P
500, it is included because it is a commonly recognized, broad-based stock
index. The Russell 2000 consists of smaller capitalized issues which may be a
more appropriate reflection of the Fund's portfolio holdings.
Although the Fund invests principally in common stocks, the Fund also invests
in nonconvertible fixed-income securities when the Adviser believes these
securities offer capital appreciation possibilities. The Fund will not invest
in or hold more than 5% of its net assets in debt securities (including such
nonconvertible fixed income securities) rated lower than Aa by Moody's Investors
Service ("Moody's") or AA by Standard & Poor's Corporation ("S&P") or unrated
but determined by the Adviser to be of comparable quality. See the Statement of
Additional Information and the Appendix thereto for a discussion of these
securities.
When, in the judgment of the Adviser, market or economic conditions warrant a
temporary defensive posture, the Fund may invest without limitation in U.S.
Treasury bills and notes and short-term corporate fixed income securities,
including master demand notes (rated Aa or higher by Moody's or AA or higher by
S&P or unrated but determined by the Adviser to be of comparable quality). The
Fund may also hold such securities in amounts deemed adequate to meet
anticipated redemption requests or pending investment or reinvestment. The Fund
invests in securities that are traded in the over-the-counter market as well as
in securities listed on a stock exchange, and in securities that may have above
average volatility of price movement.
The Fund will not invest more than 5% of the value of its net assets in
securities of foreign issuers. Foreign investments involve certain risks which
may be different than the risks in domestic securities, which include political
or economic matters, differing standards of regulation, accounting and
disclosure, trade, tax and currency risks.
The emphasis on appreciation and small capitalization companies may result in
a greater risk than is inherent in other investment alternatives. The Fund will
likely have somewhat greater volatility than the stock market in general, as
measured by the S&P 500. In addition, because the Fund does not seek current
income, an investor should not consider a purchase of shares of the Fund as
equivalent to a complete investment program.
Securities will be sold when, among other things, management believes that
anticipated appreciation is realized or no longer probable, alternative
investments offer superior appreciation prospects, or risk of decline in market
price is too great. Because of its policy with respect to sales of investments,
the Fund may realize short-term gains or losses. To the extent that the
investment policy of the Fund results in a greater number of purchases and sales
of investments than may be the case in an investment which does not emphasize
capital appreciation, the Fund will incur greater expenses, brokerage fees and
taxes. See the preceding "Financial Highlights" table for the Fund's
portfolio turnover rate.
RISK FACTORS
The Adviser believes that under normal market conditions, the Fund will
invest primarily in common stocks. Generally, such securities will be issued by
publicly traded small capitalization companies. Such issuers often have more
limited financial, managerial or other resources and may be subject to numerous
risks not normally associated with securities issued by publicly traded
companies with larger market capitalizations. Typically, smaller publicly
traded companies depend for their success on the management talents and efforts
of one person or a small group of persons, they frequently have smaller product
lines and market shares and are often more vulnerable to economic downturns.
Such companies may also experience substantial variations in operating results.
In addition, many small capitalization public companies may not be well-known to
the investing public, may not have significant institutional ownership and may
be followed by relatively few securities analysts, if any, which could result in
limited availability of information and chronic undervaluation. Although many
small capitalization companies are traded on national securities exchanges, many
are traded in the over-the-counter market and may have fewer market makers, a
wider spread between quoted bid and asked prices and lower trading volumes.
Such factors may result in comparatively greater price volatility and less
liquidity than the securities of larger public companies.
Fluctuations in the price of some of the stocks owned by the Fund could cause
the net asset value of the Fund to vary significantly. The Fund's focus on
companies undergoing substantial changes, those which the Adviser believes are
undervalued and those which are emerging from bankruptcy or other financial
restructuring may result in emphasizing in the Fund's portfolio the risks
associated with investments in smaller capitalization companies. The Fund does
not constitute a full investment program, and should be considered only as a
part of a complete investment portfolio.
INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions which, like the
investment objective, may not be changed without approval by a majority vote of
the Fund's stockholders. These restrictions provide, among other things, that
the Fund will not:
1. With respect to 75% of the Fund's net assets, invest more than 5% of such
net assets in the securities of any one issuer (except the United States
government).
2. With respect to 75% of the Fund's net assets, acquire securities of any one
issuer which, at the time of investment, represents more than 10% of the
outstanding voting securities of that issuer.
3. Make loans except by the purchase of bonds or other debt obligations of
types commonly offered publicly or privately, including investment in
repurchase agreements.
4. Borrow, except that the Fund may borrow from banks as a temporary measure
amounts up to 10% of its total assets, provided that (i) the total of
reverse repurchase agreements and such borrowings will not exceed 10% of
the Fund's total assets and (ii) the Fund will not purchase securities when
its borrowings (including reverse repurchase agreements) exceed 5% of total
assets.
Notwithstanding the right of the Fund to invest in reverse repurchase
agreements, the Fund does not currently intend to do so. All of the Fund's
investment restrictions are listed in the Statement of Additional Information.
MANAGEMENT OF THE FUND
The Fund is an open-end diversified management investment company, commonly
called a mutual fund. Through the purchase of shares of the Fund, investors with
goals similar to the investment objective of the Fund can participate in the
investment performance of the portfolio of investments held by the Fund. Under
the laws of the State of Maryland, the management and affairs of the Fund are
supervised by the Fund's Board of Directors.
INVESTMENT ADVISER
Keeley Asset Management Corp. (the "Adviser"), 401 South LaSalle Street,
Suite 1201, Chicago, Illinois 60605, is the Fund's investment adviser, and in
that capacity provides investment advice and portfolio management services to
the Fund. The Adviser is also responsible, subject to the authority of the
Fund's Board of Directors, for overall management of the Fund's business
affairs.
For its services, the Adviser receives from the Fund a fee, computed daily
and payable monthly, equal to an annual rate of 1% of the Fund's average net
assets. The rate of the advisory fee is higher than that paid by most mutual
funds. However, the Directors believe the advisory fee is appropriate for the
Fund in light of the Fund's investment objective and policies. The Investment
Advisory Agreement provides that the Adviser will waive a portion of its
advisory fee or reimburse the Fund to the extent that its total annual operating
expenses exceed the lower of 2.5% of net assets or the amount permitted by the
most restrictive state in which the Fund elects to qualify to sell its shares,
currently believed to be 2.5%. This limitation is exclusive of (i) taxes, (ii)
interest charges, (iii) litigation and other extraordinary expenses, and (iv)
brokerage commissions and other charges relating to the purchase and sale of the
Fund's portfolio securities.
The Adviser is a registered investment adviser incorporated in Illinois on
December 28, 1981. John L. Keeley, Jr., the President, Treasurer and a Director
of the Fund, is the sole stockholder of the Adviser. Mr. Keeley is primarily
responsible for the day-to-day management of the Fund's portfolio and has been
since the Fund's inception. Mr. Keeley has been the President of the Adviser
since its organization in 1981, and the person primarily responsible for
investment management for the Adviser's clients. At September 30, 1996, the
Adviser had total assets under management in excess of $200 million. Officers
of the Adviser are also officers of the Fund.
ADMINISTRATOR
Pursuant to an Administration Agreement (the "Administration Agreement"),
Sunstone Financial Group, Inc. (the "Administrator"), 207 East Buffalo Street,
Suite 400, Milwaukee, Wisconsin 53202, oversees the Fund's Custodian and
Transfer Agent, prepares and files all federal and state tax returns and
required tax filings (other than those required to be made by the Fund's
Custodian or Transfer Agent), oversees the Fund's insurance relationships,
participates in the preparation of the Fund's registration statement, proxy
statements and reports, prepares compliance filings pursuant to state securities
laws, compiles data for and prepares notices to the Securities and Exchange
Commission, prepares annual and semiannual reports to the Securities and
Exchange Commission and current stockholders, monitors the Fund's expense
accounts, monitors the Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
monitors the Fund's arrangements with respect to services provided pursuant to
the Fund's Distribution Plan, monitors compliance with the Fund's investment
policies and restrictions and generally assists in the Fund's administrative
operations. The Administrator, at its own expense and without reimbursement
from the Fund, furnishes office space and all necessary office facilities,
equipment, supplies and clerical and executive personnel for performing the
services required to be performed by it under the Administration Agreement.
Compensation of the Administrator, based upon the average daily net assets of
the Fund, is computed daily and payable monthly at the annual rate of 0.15% on
the first $50 million, and 0.05% on all assets over $50 million. The minimum
fee is $38,500 per year.
BROKERAGE
Consistent with the policies described in the Statement of Additional
Information regarding allocation of the Fund's portfolio transactions, the
Adviser may place orders for portfolio transactions with Keeley Investment
Corp., the principal underwriter for the Fund and an affiliate of the Adviser,
and may consider sales of Fund shares as a factor in placing orders for
portfolio transactions with other brokers.
EXPENSES
The Fund's expenses are accrued daily and deducted from its total income
before dividends are paid. These expenses will include, but are not limited to,
fees paid to the Adviser and the Administrator; taxes; legal fees; custodian and
auditing fees; transfer agent and distribution fees; and printing and other
expenses paid by the Fund. The Adviser has agreed to waive its management fee
and/or reimburse other Fund operating expenses. See "Investment Adviser."
PURCHASING SHARES
HOW TO PURCHASE SHARES
Keeley Investment Corp. (the "Distributor"), located at 401 South LaSalle
Street, Suite 1201, Chicago, Illinois 60605, is the principal underwriter of
the Fund and, acting as exclusive agent, sells shares of the Fund to the public
on a continuous basis. John L. Keeley, Jr., the President, Treasurer and a
Director of the Fund, is also the President, Treasurer and a Director of the
Distributor, and as such is an "affiliated person" of each. Officers of the
Fund are also officers of the Distributor.
Shares of the Fund are sold in a continuous offering and may be purchased
from the Distributor or from broker/dealers and others that have entered into
agreements with the Distributor with respect to their assistance in distributing
shares of the Fund ("Selected Dealers"). Only the Distributor and Selected
Dealers are authorized to sell shares of the Fund. However, brokers other than
Selected Dealers may offer to place orders for the purchase of shares. Such a
broker may charge the investor a transaction fee as determined by the broker.
That fee will be in addition to the sales charge payable by the investor. Once
an account is established, subsequent orders for shares may be made at the
investor's option with the Distributor or dealers or mailed or wired directly to
Firstar Trust Company (the "Transfer Agent" or "Firstar"). See "Direct
Purchases by Mail or Wire." For further information, reference is made to the
caption "Distribution of Shares" in the Fund's Statement of Additional
Information. Purchases will be effected at the public offering price next
computed after an order is received by the Transfer Agent (either directly from
the investor or transmitted by the Distributor or Selected Dealer.) See "Net
Asset Value and Offering Price."
The minimum investment is $250 on initial orders and $50 on subsequent
orders. There are no minimum investment requirements on initial or subsequent
orders for IRA accounts. These minimums are subject to change at any time. No
stock certificates representing shares purchased will be issued. The Fund's
management reserves the right to reject any purchase order if, in its opinion,
it is in the Fund's best interest to do so.
DIRECT PURCHASES BY MAIL OR WIRE
Purchase Application forms are included with this Prospectus, and should be
sent to: KEELEY Small Cap Value Fund, Inc., c/o Firstar Trust Company, P.O. Box
701, Milwaukee, Wisconsin 53201-0701. If using overnight delivery, use the
following address: KEELEY Small Cap Value Fund, Inc., c/o Firstar Trust Company,
615 East Michigan Street, 3rd Floor, Milwaukee, Wisconsin 53202. All
applications must be accompanied by payment in the form of a check or money
order made payable to KEELEY Small Cap Value Fund, Inc., or by direct wire
transfer. All purchases must be made in U.S. dollars and checks must be drawn
on U.S. banks. Cash will not be accepted. Accounts with checks returned will
be charged a $20 processing fee. In addition, the investor will be responsible
for any losses suffered by the Fund as a result. Investors having an account
with a commercial bank that is a member of the Federal Reserve System may
purchase shares of the Fund by requesting their bank to transmit funds by wire
to: Firstar Bank Milwaukee, N.A., ABA Routing No. 075000022, Credit Firstar
Trust Company, Account Number 112952137, Further credit: KEELEY Small Cap Value
Fund, Inc. The investor's name and account number must be specified in the
wire. The investor's bank may impose a fee for investments by wire. Before
making an initial investment by wire, an investor must first telephone 800-338-
1579 to inform the Transfer Agent of the wire to ensure proper credit. The
investor's name, account number, taxpayer identification or social security
number, and address must be specified in the wire. In addition, the Purchase
Application which accompanies this Prospectus should be promptly forwarded to
KEELEY Small Cap Value Fund, Inc., c/o Firstar Trust Company, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701. Additional investments may be made at any
time through the wire procedures described above, which must include the
investor's name and account number.
- -------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE
The public offering price is the net asset value (see "Determination of Net
Asset Value") plus a sales charge which varies in accordance with the amount of
the purchase as follows:
Sales Charges Dealer Reallowance
as a Percentage of as a Percentage
Offering Net Amount of Offering
Amount of Single Transaction Price Invested Price
- ---------------------------- -------- ---------- -----------
Less than $50,000 4.50% 4.71% 4.00%
$50,000 but less than $100,000 4.00% 4.17% 3.50%
$100,000 but less than $250,000 3.00% 3.09% 2.50%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 and over 2.00% 2.04% 1.50%
- -------------------------------------------------------------------------------
The Distributor retains the entire sales charge when it makes sales directly
to the public. The Distributor has the right to increase the dealer re-
allowance. Dealers who receive 90% or more of the entire sales charge may be
deemed to be underwriters under the Securities Act of 1933. In addition, the
Adviser and/or Distributor in their discretion may from time to time, pursuant
to objective criteria established by the Adviser and/or Distributor, sponsor
programs designed to reward Selected Dealers for certain services or activities
which are primarily intended to result in the sale of shares of the Fund. Such
payments are made out of their own assets, and not out of the assets of the Fund
or any distribution fees paid by the Fund. These programs will not change the
price paid for shares or the amount that the Fund will receive from such sale.
RIGHT OF ACCUMULATION
Reduced sales charges are available through a right of accumulation under
which purchasers may add to their investments in the Fund by purchasing shares
at the offering price applicable to the total of (a) the dollar amount of shares
of the Fund then being purchased plus (b) an amount equal to the greater of the
original cost or the net asset value of the shares owned by the purchaser. (A
"purchaser" is defined to include an individual and his or her spouse.) In
order to receive the cumulative quantity discount, the previous purchases of
shares of the Fund must be called to the attention of the Fund or the
Distributor in writing at the time of the current purchase. This privilege may
be modified or terminated upon 60 days' written notice to each stockholder prior
to the modification or termination taking effect.
SALES AT NET ASSET VALUE
Purchases of the Fund's shares at net asset value may be made by the
following persons: (a) nondealer assisted (or assisted only by the Distributor)
tax-exempt entities (including pension and profit sharing plans) whose minimum
initial investment is $50,000 or more, (b) nondealer assisted (or assisted only
by the Distributor) purchases by a bank or trust company in a single account
where such bank or trust company is named as trustee and the minimum initial
investment is over $50,000, (c) nondealer assisted (or assisted only by the
Distributor) purchases by banks, insurance companies, insurance company separate
accounts and other institutional purchasers, (d) a registered investment adviser
purchasing shares on behalf of a client or on his own behalf through an
intermediary service institution offering a separate and established program for
registered investment advisers and notifying the Fund and its Distributor of
such arrangement, (e) any current or retired officer, Director or employee, or
any member of the immediate family of such person, of the Fund, Adviser,
Distributor or its affiliates thereof, (f) the Fund's Adviser, Distributor or
any affiliated company thereof, (g) any employee benefit plan established for
employees of the Adviser, Distributor or its affiliates, (h) advisory clients of
the Adviser, (i) registered representatives and their spouses and minor children
and employees of Selected Dealers, (j) for-fee clients of investment advisers
registered under the Investment Advisers Act of 1940, who have for-fee clients
with at least $50,000 of net asset value of shares in the Fund after giving
effect to the purchase, and who have directed their for-fee clients to the Fund,
(k) stockholders of the Fund, solely with respect to their reinvestment of
dividends and distributions from the Fund, (l) shares exchanged in accordance
with the Fund's exchange privilege on which a sales charge has been paid in
connection with the previous purchase of shares of the Fund (see "Exchange
Privilege"), (m) employees, pension, profit sharing and retirement plans of the
Administrator of the Fund, (n) consultants to the Adviser of the Fund, their
employees and pension, profit sharing and retirement plans for those employees,
and (o) pension, profit sharing and retirement plans for employees of Directors
and employees of business entities owned and controlled by Directors of the
Fund. In the opinion of the Fund's management, these sales will result in less
selling effort and expense. In order to qualify for these waivers, sufficient
information must be submitted at the time of purchase with the application to
determine whether the account is entitled to the waiver of the sales charge.
AUTOMATIC INVESTMENT PLAN
The Fund offers an Automatic Investment Plan ("AIP") whereby an investor
may automatically make purchases of shares of the Fund on a regular, convenient
basis ($50 minimum per transaction). Under the AIP, an investor's designated
bank or other financial institution debits a preauthorized amount from the
investor's account each month and applies the amount to the purchase of Fund
shares. The AIP must be implemented with a financial institution that is a
member of the Automated Clearing House. No service fee is currently charged by
the Fund for participating in the AIP. A fee of $20 will be imposed by the
Transfer Agent if sufficient collected funds are not available in the investor's
account at the time of the automatic transaction. To establish the AIP,
complete the appropriate section on the Purchase Application when opening an
account or, after an account is established, complete an AIP Application which
is available from the Fund. The Fund's applicable minimum initial investment
must be met before the AIP may be established. The AIP may be terminated by the
Fund at any time.
REDEMPTION AND REPURCHASE OF SHARES
Stockholders may require the Fund to redeem their shares by sending a written
request, signed by the record owner(s), to KEELEY Small Cap Value Fund, Inc.,
c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
Stockholders with accounts at the Distributor or a Selected Dealer may submit
redemption requests to such firm. If shares are held in a broker's street name,
the redemption must be made through the broker. If the redemption is sent
directly to the Transfer Agent and either the amount requested is greater than
$10,000 or the proceeds are to be sent to a location other than the address of
record, each registered owner's signature must be guaranteed by an "eligible
guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange
Act of 1934. A redemption request made within 15 days of an address change must
be in writing and signed by each registered holder of the account with
signatures guaranteed by an "eligible guarantor institution." Eligible
guarantor institutions include banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. A broker/dealer guaranteeing signatures must be a member
of a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signature guarantees
will be accepted from any eligible guarantor institution which participates in a
signature guarantee program. Further documentation may be required from
corporations, executors, administrators, trustees, guardians, agents and
attorneys-in-fact. The redemption price shall be the net asset value per share
next computed after receipt by the Transfer Agent of the redemption request.
See "Determination of Net Asset Value." In addition, the Distributor is
authorized as agent for the Fund to offer to repurchase shares which are
presented by telephone or telegraph to the Distributor by Selected Dealers. The
repurchase price is the net asset value per share next determined after the
request is received. See "Determination of Net Asset Value." Broker/dealers
may charge a fee for their services in connection with the repurchase, but the
Distributor and its affiliates will not charge any fee for such repurchase.
Payment for shares presented for repurchase or redemption by Selected Dealers
will be made within seven days after receipt by the Transfer Agent of a written
redemption request in proper order. Redemption proceeds may also be paid by
wire upon request. The Transfer Agent imposes a $10 fee for each wire of
redemption proceeds. The right of redemption and payment of redemption proceeds
are subject to suspension for any period during which the New York Stock
Exchange is closed, other than customary weekend and holiday closings, or when
trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission; during any period when an emergency as
defined by the rules and regulations of the Securities and Exchange Commission
exists; or during any period when the Securities and Exchange Commission has by
order permitted such suspension. The Fund will not mail or wire redemption
proceeds until checks (including certified checks or cashier's checks) received
for the shares purchased have cleared, which can be as long as 15 days after the
purchase date. The value of shares on repurchase or redemption may be more or
less than the investor's cost depending upon the market value of the Fund's
portfolio securities at the time of redemption. No redemption fee is charged
for the redemption of shares.
Because it can be more expensive for the Fund to maintain small accounts, the
Fund has reserved the right on 60 days' written notice to the stockholder, to
redeem shares in any account and send the proceeds to the owner, if the account
has a value of less than $500 as a result of redemptions. It is the Fund's
current policy not to exercise its right to redeem small accounts. No change in
that policy would be implemented without advance notice having been given to
stockholders. The Fund may make payment for certain redemptions in securities
of the Fund, rather than in cash. Investors would bear any brokerage or other
transaction costs incurred in converting the securities to cash.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-
1 under the Investment Company Act of 1940 (the "1940 Act"), whereby the Fund
may pay up to 0.25% per annum of its average daily net assets to the Distributor
for the purpose of financing any activity which is primarily intended to result
in the sale of Fund shares. The Plan is designed to reimburse the Distributor
for certain promotional and other sales related costs, and to implement a dealer
incentive program which provides for periodic payment by the Fund to Selected
Dealers who furnish assistance to their customers in connection with the
purchase of shares of the Fund and who provide administrative support services
to customers who own shares of the Fund. In addition, certain banks who sell
shares of the Fund on an agency basis may receive payments by the Fund pursuant
to the Plan. The Fund will obtain a representation from financial institutions
that they are licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Activities appropriate for
financing under the Plan include, but are not limited to, the preparation and
distribution of advertising material and sales literature; expenses of
organizing and conducting sales seminars; printing of Prospectuses and
Statements of Additional Information and supplements thereto and reports for
other than existing stockholders; supplemental payments to dealers under a
dealer incentive program; and costs of administrating the Plan. Unreimbursed
amounts may be carried forward and paid in a subsequent year.
The fees payable to a Selected Dealer who participates in the program are
calculated at the annual rate up to 0.25% of the average daily net asset value
of those Fund shares that are held in such dealer's customers' accounts. Under
no circumstances will the Fund pay a fee pursuant to the Plan, the effect of
which would be to exceed the NASD's limitations on asset based compensation.
See "Distribution of Shares" in the Statement of Additional Information.
EXCHANGE PRIVILEGE
All or part of the Fund shares owned by an investor may be exchanged for
shares in the Portico Money Market Fund (the "Money Market Fund") in an
identically registered account. Investors may subsequently exchange such shares
and shares purchased with reinvested dividends for shares of the Fund. A
stockholder who has moved an investment from the Fund to the Money Market Fund
and then decides at a later date to move the investment back to the Fund may do
so without the imposition of any additional sales charges, so long as the
investment has been continuously invested in shares of the Money Market Fund
during the period between withdrawal and investment. Use of this expanded
exchange privilege is subject to the minimum purchase and redemption amounts set
forth in the Prospectus for the Money Market Fund. Stockholders must obtain a
copy of that Prospectus from the Fund or the Distributor, and are advised to
read it carefully before authorizing any investment in shares of the Money
Market Fund. Exchange requests are subject to a $1,000 minimum, and each
stockholder is limited to a maximum of four exchanges in any twelve month
period.
Exchange requests may be subject to other limitations that may be established
from time to time to ensure that the exchanges do not disadvantage the Fund or
its investors. Investors will be notified at least 60 days in advance of any
changes in such limitations and may obtain the terms of any such limitations by
writing to the Fund, c/o Shareholder Services Center, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701. Except as stated above, the Fund currently does not
impose any limitations on exchanges. Exchanges may be made by telephone once a
stockholder has authorized telephone exchanges either by checking the
appropriate box on the Purchase Application or, once an account is established,
by sending the Transfer Agent the appropriate form which is available from the
Fund. There will be a $5 fee charged to the investor's account for each
telephone exchange transacted by the investor. This fee will be charged to the
account from which the funds are being withdrawn prior to effecting the
exchange. There is no fee for a written exchange request. However, the
Distributor is entitled to receive a fee from the Money Market Fund for certain
distribution and support services at the annual rate of 0.20 of 1% of the
average daily net asset value of the shares for which it is the holder or dealer
of record.
An exchange involves a redemption of all or a portion of the shares in the
Fund and the investment of the redemption proceeds in shares of the Money Market
Fund. The redemption will be made at the per share net asset value of the
shares to be redeemed next determined after the exchange request is received as
described above. The shares of the Money Market Fund to be acquired will be
purchased at the per share net asset value of those shares next determined
coincident with or after the time of redemption. For federal income tax
purposes, an exchange of shares is a taxable event and, accordingly, the
investor may realize a capital gain or loss. Before making an exchange request,
the investor should consult a tax or other financial adviser to determine the
tax consequences of a particular exchange. For further information regarding
the exchange privilege, see "Exchange Privilege" in the Fund's Statement of
Additional Information.
The Fund has implemented procedures designed to reasonably assure that
telephone exchange instructions are genuine. These procedures include
requesting verification of various pieces of personal information, restricting
transmittal of redemption proceeds to preauthorized designations, recording all
such telephone calls and sending written confirmations to the address of record.
If the Fund, the Distributor or the Transfer Agent or any of their employees
fails to abide by these procedures, the Fund may be liable to a stockholder for
losses suffered from any resulting unauthorized transaction. However, none of
the Fund, Distributor, Transfer Agent or any of their employees will be liable
for losses suffered by a stockholder which results from following telephone
instructions reasonably believed to be authentic after verification pursuant to
these procedures.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is computed daily, Monday through Friday, as of
4:00 p.m., Eastern Time, except that the net asset value will not be computed on
the following holidays: New Year's Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net
asset value per share is computed by deducting total liabilities from total
assets of the Fund and dividing the remainder by the total number of shares
outstanding. The net asset value so computed will be used for all purchase
orders and redemption requests received between such computation and the
preceding computation. Portfolio securities listed on an exchange or quoted on a
national market system are valued at the last sales price. Securities traded on
only over-the-counter markets are valued at the last sales price on days in
which the security is traded, otherwise they are valued on the basis of closing
over-the-counter bid prices. In the event a listed security is traded on more
than one exchange, it is valued at the last sale price on the exchange on which
it is principally traded. If there are no transactions in a security during the
day, it is valued at the most recent bid price. However, debt securities (other
than short-term obligations) including listed issues, are valued on the basis of
valuations furnished by a pricing service which utilizes electronic data
processing techniques to determine valuations for normal institutional size
trading units of debt securities, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations (debt securities which are
purchased within 60 days of their stated maturity date) are valued at amortized
cost, which approximates current value. Securities as to which market
quotations are not readily available and other assets held by the Fund, if any,
are valued at their fair value as determined in good faith by the Board of
Directors.
DISTRIBUTIONS AND TAXES
Distributions (whether treated for tax purposes as ordinary income or capital
gains) to stockholders of the Fund are paid in additional shares of the Fund
with no sales charge, unless otherwise instructed in writing by a stockholder.
A stockholder who prefers to have dividends paid in cash, rather than in
additional shares of the Fund, should give such instructions in writing to the
Transfer Agent. Cash dividends and distributions will be paid by check unless
the Fund's Transfer Agent receives a voided check or deposit ticket to enable
the dividends or distributions to be directly deposited into the stockholder's
bank account. The Fund will pay any dividends from investment company taxable
income annually, and intends to make any distributions representing capital gain
annually. The Fund will advise each stockholder annually of the amounts of
dividends from investment company taxable income and of net capital gain
distributions reinvested or paid in cash to the stockholder during the calendar
year.
The Fund intends to continue to qualify as a regulated investment company
under the federal tax law. As such, the Fund generally will not pay federal
income tax on the income and capital gains it pays as dividends to its
stockholders. In order to avoid a 4% federal excise tax, the Fund intends to
distribute each year all of its net income and capital gains. Stockholders will
be taxed on distributions received from the Fund, regardless of whether received
in cash or reinvested in additional shares. Stockholders must treat
distributions, other than long-term capital gain distributions, as ordinary
income. Dividends designated as capital gain dividends are taxable to
stockholders as long-term capital gains regardless of how long the stockholder
owned the shares of the Fund. Investors are advised to consult their tax
advisers with respect to the particular tax consequences to them of an
investment in the Fund.
IRA PLAN
The Fund has a master individual retirement account (IRA) plan which allows
an investor to invest in the Fund. Income and capital gains earned by an IRA
are sheltered from taxation until withdrawal. There is no minimum investment.
The plan also permits an investor to "roll over" to the Fund IRA a lump sum
distribution from a qualified pension or profit sharing plan, including a direct
transfer from the plan trustee, thereby postponing the investor's federal income
tax on the distribution if rolled over within 60 days.
If an investor's employer has a Simplified Employee Pension Plan (SEP), the
investor may establish an IRA with the Fund to which his employer may
contribute. Detailed information about the IRA, including related documents and
charges of Firstar, as custodian, may be obtained from the Fund.
PERFORMANCE INFORMATION
The Fund may from time to time include figures indicating the Fund's total
return or average annual total return in advertisements or reports to
stockholders or prospective investors. Average annual total return and total
return figures represent the increase (or decrease) in the value of an
investment in the Fund over a specified period. Both calculations assume that
all income dividends and capital gain distributions during the period are
reinvested at net asset value in additional Fund shares. Quotations of the
average annual total return may reflect the deduction of the maximum sales
charge and a proportional share of Fund expenses on an annual basis. The
results, which are annualized, represent an average annual compounded rate of
return on a hypothetical investment in the Fund over a period of 1, 5 and 10
years ending on the most recent calendar quarter (but not for a period greater
than the life of the Fund). Quotations of total return, which are not
annualized, represent historical earnings and asset value fluctuations. Total
return figures used in advertisements or sales literature will not usually
reflect the deduction of the maximum sales charges which, if deducted, would
reduce the Fund's total return. Total return is based on past performance and
is not a guarantee of future results.
Performance information for the Fund may be compared in reports and
promotional literature to: (a) the S&P 500, the Russell 2000, the Value Line
Index, the Dow Jones Industrial Average, New York Stock Exchange Composite
Index, the Nasdaq Composite Index or other appropriate unmanaged indices of
performance of various types of investments, so that investors may compare the
Fund's results with those of indices widely regarded by investors as
representative of the securities markets in general; (b) other groups of mutual
funds tracked by Lipper Analytical Services, Inc., Morningstar, Inc., Value Line
Publishing, Inc., Micropal Data, Inc. or CDA Investment Technologies, Inc.; and
(c) the Consumer Price Index (measure of inflation) to assess the real rate of
return from an investment in the Fund. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions for
administrative and management costs and expenses. Performance information for
the Fund reflects only the performance of a hypothetical investment in the Fund
during the particular time period on which the calculations are based.
Performance information should be considered in light of the Fund's investment
objective and policies, the types and quality of the Fund's portfolio
investments, market conditions during the particular time period and operating
expenses. Such information should not be considered as a representation of the
Fund's future performance. For a description of the methods used to determine
the Fund's average annual total return and total return, see "Performance
Information" in the Statement of Additional Information.
CERTAIN STOCKHOLDERS
As of September 30, 1996, John L. Keeley, Jr., owned 240,265 shares of the
Fund, which represented 32.25% of the outstanding shares of the Fund. As a
holder of more than 25% of the outstanding shares of the Fund, John L. Keeley,
Jr., is presumed (under the 1940 Act) to "control" the Fund.
GENERAL INFORMATION
The Fund is an open-end diversified management investment company, as defined
in the 1940 Act, as amended. It was incorporated in Maryland on May 17, 1993.
The Fund has an authorized capitalization of 10,000,000 shares of $0.01 par
value common stock. There is no other class of security outstanding. All
shares have equal voting and liquidation rights and have one vote per share.
Voting rights are noncumulative, which means that holders of more than 50% of
the shares voting for the election of Directors may elect 100% of the Directors
if they choose to do so, and in such event the holders of the remaining less
than 50% of the shares voting for the Directors will not be able to elect any
Directors. All shares have equal dividend rights, are fully paid, nonassessable
and freely transferable and have no conversion, preemptive or subscription
rights. Fractional shares have the same rights, pro rata, as full shares. The
Fund's securities are held by Firstar, 615 East Michigan Street, Milwaukee,
Wisconsin 53202-5207 , under a Custodian Agreement with the Fund. Firstar also
acts as both Transfer Agent and dividend paying agent for the Fund.
Under the General Corporation Law of Maryland, the Fund is not required to
hold, and does not intend to hold, an annual meeting of its stockholders unless
required under the 1940 Act. However, stockholders have the right to require
the Secretary of the Fund to call a stockholders' meeting upon the written
request of stockholders entitled to vote not less than ten percent of all votes
entitled to be cast at such meeting, provided that (a) such request shall state
the purposes of such meeting and matters proposed to be acted on, and (b) the
stockholders requesting such meeting shall have paid to the Fund the reasonably
estimated cost of preparing and mailing the notice thereof, which the Secretary
shall determine and specify to such stockholders. No meeting shall be called
upon the request of stockholders to consider any matter which is substantially
the same as a matter voted upon at any special meeting of the stockholders held
during the preceding twelve months, unless requested by the holders of a
majority of all shares entitled to be voted at such meeting. In addition, the
holders of not less than 10% of the shares entitled to vote at a special meeting
have the right to call such meeting for the purpose of removing one or more of
the Directors. See the Statement of Additional Information for more information.
STOCKHOLDER REPORTS AND INQUIRIES
Stockholders will be provided at least semi-annually with a report showing
the Fund's portfolio and other information and annually after the close of the
Fund's fiscal year, which ends September 30, with an annual report containing
audited financial statements. Stockholders who have questions about the Fund
including inquiries about investment or redemption procedures, should call the
Fund at 800-338-1579, or contact their brokers.
<TABLE>
KEELEY SMALL CAP VALUE FUND, INC.
PURCHASE APPLICATION
<C> <C> <C> <C>
Mail To: KEELEY Small Cap Value Fund, Inc. Overnight Express Mail To: KEELEY Small Cap Value Fund, Inc.
C/O Firstar Trust Company Mutual Fund Services
P.O. Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
Use this form for individual, custodial, trust, profit sharing or pension plan accounts. Do not use this form for KEELEY Small Cap
Value Fund sponsored IRA or SEP IRA accounts. For any additional information, please call KEELEY Small Cap Value Fund, Inc. at 1-
800-338-1579.
A. INVESTMENT
( ) KEELEY Small Cap Value Fund Please indicate the amount you wish to invest $ ($250 minimum)
------------
( ) Portico Money Market Fund Please indicate the amount you wish to invest $ ($100 minimum)
------------
( ) By check: Payable to KEELEY Small Cap Value Fund. Amount $
------------
( ) By wire: Call 1-800-338-1579. Indicate total amount and date of wire $ Date
------------ ------------
B. REGISTRATION
( ) Individual
Name (First) (Initial) (Last)
--------------- ----- ----------------------------------------------------------------------
Social Security Number Birthdate Citizen of ( ) U.S. ( ) Other Country of tax residency
--------------- ------------ --------
( ) Joint Owner*
Name (First) (Initial) (Last)
---------------- ----- ---------------------------------------------------------------------
Social Security Number Birthdate Citizen of ( ) U.S. ( ) Other Country of tax residency
--------------- ----------- --------
* Registration will be Joint Tenants With Rights Of Survivorship, unless otherwise specified.
( ) Transfer to Minor
Name of Custodian (only one permitted) (First) (Initial) (Last)
--------------- ----- -----------------------------------
Name of Minor (only one permitted) (First) (Initial) (Last)
--------------- ----- ---------------------------------------
Minor's Social Security Number Minor's Birthdate (Mo/Day/Yr)
--------------------------- ------------------------------
State of Residence Minor is citizen of ( ) U.S. ( ) Other Country of tax residency
------------------- -----------------
( ) Corporation/Trust<F8>, Partnership<F9> or Other Entity<F9>
Name of Trustee(s) (If to be included in registration)
---------------------------------------------------------------
Name of Trust/Corporation/Partnership
--------------------------------------------------------------------------------
Social Security or Taxpayer Identification Number
--------------------------------------------------------------------
Date of Agreement (Mo/Day/Yr)
-----------------------------------------------------------------------------------------
<F8>Corporate Resolution is required. <F9>Additional documentation and certification may be required.
C. MAILING ADDRESS
Address
-------------------------------------------------------------------------------------------------------------
City/State/Zip
------------------------------------------------------------------------------------------------------
Daytime Phone Number Evening Phone Number
------------------- ---------------------
( ) Duplicate Confirmation to:
Name
-----------------------------------------------------------------------------------------------------------
Address
--------------------------------------------------------------------------------------------------------
City/State/Zip
-------------------------------------------------------------------------------------------------
D. DISTRIBUTION OPTIONS
Capital gains and dividends will be reinvested if no option is selected.
Dividends and Dividends and
Capital Gains Capital Gains
Reinvested in Cash
( ) KEELEY Small Cap Value Fund ( ) ( )
( ) Portico Money Market Fund ( ) ( )
Unless otherwise indicated, cash distributions will be mailed to the address in Section C. -over-
E. TELEPHONE EXCHANGE (OPTIONAL)
( ) Yes, I would like the telephone exchange feature available to me. This allows exchanges between identically registered
accounts in the KEELEY Small Cap Value Fund and Portico Money Market Fund. A $250 minimum applies to exchanges. A $5 fee
will be applied to any telephone exchange.
F. AUTOMATIC INVESTMENT PLAN Your signed Application must be received at least 15 business days prior to initial transaction. An
unsigned voided check (for checking accounts) or a savings account deposit slip is required with your Application.
Please start my Automatic Investment Plan as described in the Prospectus beginning: Month Year .
---------- ----------
I hereby instruct Firstar Trust Company, Transfer Agent for the KEELEY Small Cap Value Fund, to automatically transfer $
-------
(minimum $50) directly from my checking, NOW or savings account named below on the of each month or the first business
--------
day thereafter. I understand that I will be assessed a $20 fee if the automatic purchase cannot be made due to insufficient
funds, stop payment, or any other reason. Automatic Investment Plan contributions to my IRA will be reported as current year
contributions.
Name(s) on Bank Account
--------------------------------------------------------------
Bank Name Account Number
--------------------------- -----------------------------------
Bank Address
-------------------------------------------------------------------------
Bank Routing Number
------------------------------------------------------------------
Signature of Bank Account Owner
------------------------------------------------------
Signature of Joint Owner
-------------------------------------------------------------
G. RIGHTS OF ACCUMULATION
( ) I or my spouse currently have the following account(s) which may make me eligible for sales charge discounts through Rights of
Accumulation as described in the Prospectus.
Account Number Account Number
-------------- --------------
H. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE
I have received and read the Prospectus for the KEELEY Small Cap Value Fund (the "Fund"). I understand the Fund's investment
objectives and policies and agree to be bound by the terms of the Prospectus. I am of legal age in my state of residence and
have full authority to purchase shares of the Fund and to establish and use any related privileges.
Neither the Fund nor its Transfer Agent will be responsible for the authenticity of transaction instructions received by
telephone, provided that reasonable security procedures have been followed. If an account has multiple owners, the Fund may
rely on the telephone instructions of any one account owner.
By selecting the option in Section F, I hereby authorize the Fund to initiate debits to my account at the bank indicated and
for the bank to debit the same to such account through the Automated Clearing House ("ACH") system.
UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER SHOWN ON THIS
FORM IS MY CORRECT SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER, AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING
EITHER BECAUSE I AM EXEMPT FROM BACKUP WITHHOLDING, I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS NOTIFIED ME THAT I
AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. CERTIFICATION INSTRUCTIONS: I MUST CROSS OUT ITEM (2) ABOVE IF THE IRS HAS PROVIDED
NOTIFICATION THAT I AM CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON MY TAX
RETURN. THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID
BACKUP WITHHOLDING.
Signature of Owner<F10> Date
----------------------------------------------- -----------------------
Signature of Joint Owner (if any) Date
------------------------------------- -----------------------
<F10> If shares are to be registered in: (1) joint names, both persons should sign; (2) a custodian for a minor, the custodian
should sign; (3) a trust, the trustee(s) should sign; or (4) a corporation or other entity, an officer should sign and print
name and title on the space provided below.
Print Name and Title of officer signing for a corporation or other entity
--------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
I. DEALER INFORMATION (Please be sure to complete representative's first name and middle initial.)
Dealer Name
----------------------------------------------------------------------------------------------------------------
DEALER MAIN OFFICE
Address
--------------------------------------------------------------------------------------------------------------------
City/State/Zip
-------------------------------------------------------------------------------------------------------------
Telephone Number
-----------------------------------------------------------------------------------------------------------
Representative Name (Last) (First) (Initial)
-------------------------------- ------------------- -----------
REPRESENTATIVE BRANCH OFFICE
Address
-------------------------------------------------------------------------------------------------------------------
City/State/Zip
------------------------------------------------------------------------------------------------------------
Telephone Number Rep's A.E. Number
--------------------------------- ------------------------------------------------------
1/97
</TABLE>
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STATEMENT OF ADDITIONAL INFORMATION
January 29, 1997
KEELEY SMALL CAP VALUE FUND, INC. 401 SOUTH LASALLE STREET
SUITE 1201
CHICAGO, ILLINOIS 60605
312-786-5050
800-533-5344
This Statement of Additional Information is not a prospectus, but provides
information about KEELEY Small Cap Value Fund, Inc. (the "Fund") that should be
read in conjunction with the Fund's Prospectus dated January 29, 1997, and any
additional supplements to the Prospectus and the Fund's financial statements.
The Prospectus and additional copies of the annual report may be obtained
without charge by writing or telephoning the Fund at the address or telephone
number set forth above.
TABLE OF CONTENTS
History of the Fund 2
Investment Policies and Risk Considerations 2
Investment Restrictions 5
Performance Information 7
Investment Adviser 8
Directors and Officers 9
Certain Stockholders 10
Purchasing and Redeeming Shares 10
Exchange Privilege 11
Additional Tax Information 11
Distribution of Shares 11
Portfolio Transactions 13
Removal of Directors by Stockholders 14
Custodian 15
Independent Public Accountants 16
Financial Statements and Reports 16
Appendix
HISTORY OF THE FUND
The Fund was incorporated in Maryland on May 17, 1993, and registered under
the Investment Company Act of 1940 (the "1940 Act") on July 27, 1993.
INVESTMENT POLICIES AND RISK CONSIDERATIONS
The Fund's investment objective is to seek capital appreciation; current
dividend or interest income is not a factor in the selection of securities to be
held by the Fund in its portfolio. The Fund's investment objective may not be
changed by the Board of Directors without stockholder approval.
DEBT SECURITIES
The Fund may invest in debt securities, including debt securities that are
not rated or are rated below investment grade by the recognized rating agencies
(i.e., Baa or higher by Moody's Investor Services, Inc. ("Moody's") or BBB or
higher by Standard & Poor's Corporation ("S&P"). However, the Fund will not
invest in or hold more than 5% of its net assets in debt securities other than
U.S. Treasury bills and notes, short-term corporate fixed income securities,
including master demand notes (rated Aa or higher by Moody's or AA or higher by
S&P, or unrated but determined by the Adviser to be of comparable quality).
Securities rated Baa or BBB are considered to be medium grade and to have
speculative characteristics. Lower-rated debt securities are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Investment in medium- or lower-quality debt securities involves
greater investment risk, including the possibility of issuer default or
bankruptcy. An economic downturn could severely disrupt the market for such
securities and adversely affect the value of such securities. In addition,
lower-quality bonds are less sensitive to interest rate changes than
higher-quality instruments and generally are more sensitive to adverse economic
changes or individual corporate developments. During a period of adverse
economic changes, including a period of rising interest rates, issuers of such
bonds may experience difficulty in servicing their principal and interest
payment obligations.
To the extent the Fund invests in lower-rated debt securities, achievement
by the Fund of its investment objective will be more dependent on the Adviser's
credit analysis than would be the case if the Fund were investing in higher
quality debt securities. Since the ratings of rating services (which evaluate
the safety of principal and interest payments, not market risks) are used only
as preliminary indicators of investment quality, the Adviser employs its own
credit research and analysis. These analyses may take into consideration such
quantitative factors as an issuer's present and potential liquidity,
profitability, internal capability to generate funds, debt/equity ratio and debt
servicing capability, and such qualitative factors as an assessment of
management, industry characteristics, accounting methodology, and foreign
business exposure.
Medium- and lower-quality debt securities tend to be less marketable than
higher-quality debt securities because the market for them is less broad. The
market for unrated debt securities is even narrower. During periods of thin
trading in these markets, the spread between bid and asked prices is likely to
increase significantly, and the Fund may have greater difficulty selling this
type of security. The market value of these securities and their liquidity may
be affected by adverse publicity and investor perceptions.
A description of the ratings used by Moody's and S&P is included as an
appendix to this Statement of Additional Information.
FOREIGN SECURITIES
The Fund may invest in foreign securities, which may entail a greater
degree of risk (including risks relating to exchange rate fluctuations, tax
provisions, or expropriation of assets) than does investment in securities of
domestic issuers.
To the extent positions in portfolio securities are denominated in foreign
currencies, the Fund's investment performance is affected by the strength or
weakness of the U.S. dollar against these currencies. For example, if the
dollar falls in value relative to the Japanese yen, the dollar value of a
Japanese stock held in the portfolio will rise even though the price of the
stock remains unchanged. Conversely, if the dollar rises in value relative to
the yen, the dollar value of the Japanese stock will fall.
Investors should understand and consider carefully the risks involved in
foreign investing. Investing in foreign securities, which are generally
denominated in foreign currencies, and utilization of forward foreign currency
exchange contracts involve certain considerations comprising both risks and
opportunities not typically associated with investing in U.S. securities. These
considerations include: fluctuations in exchange rates of foreign currencies;
possible imposition of exchange control regulation or currency restrictions that
would prevent cash from being brought back to the United States; less public
information with respect to issuers of securities; less governmental supervision
of stock exchanges, securities brokers, and issuers of securities; lack of
uniform accounting, auditing, and financial reporting standards; lack of uniform
settlement periods and trading practices; less liquidity and frequently greater
price volatility in foreign markets than in the United States; possible
imposition of foreign taxes; possible investment in securities of companies in
developing as well as developed countries; and sometimes less advantageous
legal, operational, and financial protection applicable to foreign subcustodial
arrangements.
Although the Fund intends to invest in companies and governments of
countries having stable political environments, there is the possibility of
expropriation or confiscatory taxation, seizure or nationalization of foreign
bank deposits or other assets, establishment of exchange controls, the adoption
of foreign government restrictions, or other adverse political, social or
diplomatic developments that could affect investment in these nations.
SHORT SALES
The Fund may make short sales of securities if at all times when a short
position is open the Fund owns an equal amount of such securities or securities
convertible into or exchangeable for, without payment of any further
consideration, securities of the same issue as, and equal in amount to, the
securities sold short. This technique is called selling short "against the
box." Although permitted by its investment restrictions, the Fund does not
currently intend to sell securities short.
In a short sale against the box, the Fund does not deliver from its
portfolio the securities sold and does not receive immediately the proceeds from
the short sale. Instead, the Fund borrows the securities sold short from a
broker-dealer through which the short sale is executed, and the broker-dealer
delivers such securities, on behalf of the Fund, to the purchaser of such
securities. Such broker-dealer is entitled to retain the proceeds from the
short sale until the Fund delivers to such broker-dealer the securities sold
short. In addition, the Fund is required to pay to the broker-dealer the amount
of any dividends paid on shares sold short. Finally, to secure its obligation
to deliver to such broker-dealer the securities sold short, the Fund must
deposit and continuously maintain in a separate account with the Fund's
custodian an equivalent amount of the securities sold short or securities
convertible into or exchangeable for such securities without the payment of
additional consideration. The Fund is said to have a short position in the
securities sold until it delivers to the broker-dealer the securities sold, at
which time the Fund receives the proceeds of the sale. Because the Fund
ordinarily will want to continue to hold securities in its portfolio that are
sold short, the Fund will normally close out a short position by purchasing on
the open market and delivering to the broker-dealer an equal amount of the
securities sold short, rather than by delivering portfolio securities.
Short sales may protect the Fund against the risk of losses in the value of
its portfolio securities because any unrealized losses with respect to such
portfolio securities should be wholly or partially offset by a corresponding
gain in the short position. However, any potential gains in such portfolio
securities should be wholly or partially offset by a corresponding loss in the
short position. The extent to which such gains or losses are offset will depend
upon the amount of securities sold short relative to the amount the Fund owns,
either directly or indirectly, and, in the case where the Fund owns convertible
securities, changes in the conversion premium. The Fund will incur transaction
costs in connection with short sales.
In addition to enabling the Fund to hedge against market risk, short sales
may afford the Fund an opportunity to earn current income to the extent the Fund
is able to enter into arrangements with broker-dealers through which the short
sales are executed to receive income with respect to the proceeds of the short
sales during the period the Fund's short positions remain open.
UNSEASONED ISSUERS
The Fund may invest up to 5% of its net assets in the securities of
unseasoned issuers, that is, issuers that, together with predecessors, have been
in operation less than three years. The Adviser believes that investment in
securities of unseasoned issuers may provide opportunities for long-term capital
growth, although the risks of investing in such securities are greater than with
common stock of more established companies because unseasoned issuers have only
a brief operating history and may have more limited markets and financial
resources.
ILLIQUID SECURITIES
The Fund may invest up to 5% of its net assets in securities for which
there is no ready market ("illiquid securities"), including any securities that
are not readily marketable either because they are restricted securities or for
other reasons. Restricted securities are securities that have not been
registered under the Securities Act of 1933 and are thus subject to restrictions
on resale. Under the supervision of the Board of Directors, the Adviser
determines the liquidity of the Fund's investments. Securities that may be sold
pursuant to Rule 144A under the Securities Act may be considered liquid by the
Adviser. A position in restricted securities might adversely affect the
liquidity and marketability of a portion of the Fund's portfolio, and the Fund
might not be able to dispose of its holdings in such securities promptly or at
reasonable prices. In those instances where the Fund is required to have
restricted securities held by it registered prior to sale by the Fund and the
Fund does not have a contractual commitment from the issuer or seller to pay the
costs of such registration, the gross proceeds from the sale of securities would
be reduced by the registration costs and underwriting discounts.
INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions. The following
restrictions supplement those set forth in the Prospectus. Unless otherwise
noted, whenever an investment restriction states a maximum percentage of the
Fund's assets that may be invested in any security or other asset, such
percentage restriction will be determined immediately after and as a result of
the Fund's acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, total assets, or other circumstances
will not be considered when determining whether the investment complies with the
Fund's investment limitations.
The Fund has adopted the following fundamental investment restrictions,
which cannot be changed without the approval of the holders of the lesser of (i)
67% of the Fund's shares present or represented at a stockholders' meeting at
which the holders of more than 50% of such shares are present or represented; or
(ii) more than 50% of the outstanding shares of the Fund:
1. With respect to 75% of the Fund's net assets, the Fund will not invest
more than 5% of such net assets (valued at the time of investment) in securities
of any one issuer, except in U.S. government obligations.
2. With respect to 75% of the Fund's net assets, the Fund will not
acquire securities of any one issuer which at the time of investment represent
more than 10% of the voting securities of the issuer.
3. The Fund will not act as an underwriter or distributor of securities
other than its own capital stock, except insofar as it may be deemed an
underwriter for purposes of the Securities Act of 1933 on disposition of
securities acquired subject to legal or contractual restrictions on resale.
4. The Fund will not lend money, but this restriction shall not prevent
the Fund from investing in (i) a portion of an issue of debt securities or (ii)
repurchase agreements.
5. The Fund will not purchase or sell real estate, interests in real
estate or real estate limited partnerships, although it may invest in marketable
securities of issuers that invest in real estate or interests in real estate.
6. The Fund will not pledge any of its assets, except to secure
indebtedness permitted by the Fund's investment restrictions.
7. The Fund will not concentrate its investments by investing 25% or more
of the value of the Fund's total assets taken at market value at the time of the
investment (other than U. S. Government securities) in companies of any one
industry.
8. The Fund will not purchase and sell commodities or commodity contracts
except that it may enter into forward contracts to hedge securities transactions
made in foreign currencies. This limitation does not apply to financial
instrument futures and options on such futures.
9. The Fund will not borrow, except that the Fund may borrow from banks
as a temporary measure amounts up to 10% of its total assets, provided (i) that
the total of reverse repurchase agreements<F11> and such borrowings will not
exceed 10% of the Fund's total assets and (ii) the Fund will not purchase
securities when its borrowings (including reverse repurchase agreements)
exceed 5% of total assets.
10. The Fund will not issue senior securities, except for reverse
repurchase agreements and borrowings as permitted by the Fund's other investment
restrictions.
In addition to the fundamental restrictions listed above, the Fund has
adopted the following restrictions that may be changed by the Board of Directors
without stockholder approval:
1. The Fund will not invest in interests in oil, gas or other mineral
exploration or development programs or leases, although it may invest in
marketable securities of issuers engaged in oil, gas or mineral exploration.
2. The Fund will not purchase or hold securities of an issuer if all of
the officers and Directors of the Fund and its Adviser who individually own
beneficially more than one-half of 1% of the securities of such issuer
collectively own beneficially more than 5% of such securities.
3. The Fund will not invest more than 5% of its net assets (valued at the
time of investment) in securities of issuers with less than three years'
operation (including predecessors).
4. The Fund will not invest more than 5% of its net assets in securities
for which there is no ready market (including restricted securities and
repurchase agreements maturing in more than seven days).
5. The Fund will not participate in a joint trading account, purchase
securities on margin (other than short-term credits as necessary for the
clearance of purchases and sales of securities) or sell securities short (unless
the Fund owns an equal amount of such securities, or owns securities that are
convertible or exchangeable without payment of further consideration into an
equal amount of such securities).<F12>
6. The Fund will not invest for the purpose of exercising control or
management of any company.
7. The Fund will not invest more than 2% of its net assets (valued at the
time of investment) in warrants not listed on the New York or American stock
exchanges, nor more than 5% of its net assets in warrants. Warrants acquired by
the Fund in units or attached to securities are not subject to this restriction.
- --------------------------
<F11> The Fund does not currently intend to enter into reverse repurchase
agreements.
<F12> The Fund does not currently intend to sell securities short even under the
conditions described in Investment Restrictions.
8. The Fund will not acquire securities of other investment companies
except (i) by purchase in the open market, where no commission or profit to a
sponsor or dealer results from such purchase other than the customary broker's
commission and (ii) where the acquisition results from a dividend or a merger,
consolidation or other reorganization.<F13>
9. The Fund will not invest in or write options, puts, calls, straddles
or spreads.
10. The Fund will not invest more than 5% of its net assets in foreign
securities.
11. The Fund will not invest more than 5% of its net assets in forward
contracts, financial instrument futures and options on such futures.
The Fund may make commitments more restrictive than the restrictions listed
above so as to permit the sale of shares of the Fund in certain states. Should
the Fund determine that a commitment is no longer in the best interest of the
Fund and its stockholders, the Fund reserves the right to revoke the commitment
by terminating the sale of Fund shares in the state involved.
PERFORMANCE INFORMATION
From time to time the Fund may give information about its performance by
quoting total return figures in advertisements and sales literature. "Total
return" for a period is the percentage change in value of an investment in Fund
shares, including the value of shares acquired through reinvestment of all
dividends and capital gains distributions. Average annual total return is the
average annual compounded rate of change in value represented by the total
return for the period.
Average annual total return is computed as follows:
ERV 1/N
T = (--------) -1
P
Where: P = the amount of an assumed initial investment in Fund shares
T = average annual total return
N = number of years from initial investment to the end of the
period
ERV = ending redeemable value of shares held at the end of the
period
- --------------------------
<F13>In addition to this investment restriction, the 1940 Act provides that the
Fund may neither purchase more than 3% of the voting securities of any one
investment company nor invest more than 10% of the Fund's assets (valued at
time of investment) in all investment company securities purchased by the
Fund.
The Fund imposes a maximum 4.50% sales charge and pays distribution
expenses equal to 0.25% of net assets. Income taxes payable by stockholders are
not taken into account. The Fund's performance is a result of conditions in the
securities market, portfolio management, and operating expenses. Although
information such as that described above may be useful in reviewing the Fund's
past performance and in providing some basis for comparison with other
investment alternatives, it is not necessarily indicative of future performance
and should not be used for comparison with other investments using different
reinvestment assumptions or time periods. After deduction of initial sales
charge, the Fund's total return for the year ended September 30, 1996 was
11.00%. The average annual total return for the period from October 1, 1993
(commencement of operations) through September 30, 1996, after deduction of
initial sales charge, was 11.60%.
The Fund may also compare its performance to various stock indices (groups
of unmanaged common stocks) including the S&P 500, the Russell 2000, the Value
Line Index, the New York Stock Exchange Composite Index, the Nasdaq Composite
Index and the Dow Jones Industrial Average, or to the Consumer Price Index or
groups of comparable mutual funds, including rankings determined by, but not
limited to, Lipper Analytical Services, Inc., Morningstar, Inc., Value Line
Publishing, Inc., Micropal Data, Inc. and CDA Investment Technologies, Inc. The
Fund may also note its mention or recognition in newspapers, magazines, or other
media from time to time. However, the Fund assumes no responsibility for the
accuracy of such data. Newspapers and magazines which might mention the Fund
include, but are not limited to, THE WALL STREET JOURNAL, THE CHICAGO TRIBUNE,
THE CHICAGO SUN-TIMES, THE NEW YORK TIMES, USA TODAY, INVESTOR'S BUSINESS DAILY,
BARRON'S, MONEY and FORBES.
INVESTMENT ADVISER
The Fund's investment adviser, Keeley Asset Management Corp. (the
"Adviser"), furnishes continuing investment supervision to the Fund and is
responsible for overall management of the Fund's business affairs. It furnishes
office space, equipment and personnel to the Fund and assumes the expenses of
printing and distributing the Fund's Prospectus and reports to prospective
investors. The Fund pays all of its expenses except those specifically assumed
by the Adviser, including but not limited to printing and postage charges
related to current stockholders; securities registration, custodian and transfer
agency fees; audit and legal fees; and expenses in connection with its
organization.
For its services, the Adviser receives a monthly fee at an annual rate of
1% of the average daily net assets of the Fund. The Investment Advisory
Agreement provides that the Adviser will waive a portion of its management fee
or reimburse the Fund to the extent that its total annual operating expenses
exceed 2.50%, exclusive of (i) taxes, (ii) interest charges, (iii) litigation
and other extraordinary expenses, and (iv) brokers' commissions and other
charges relating to the purchase and sale of the Fund's portfolio securities.
In addition, in order to comply with regulations applicable to the sale of Fund
shares in California, the Adviser has undertaken to waive its management fee to
the extent the Fund's annual operating expenses exceed 2.50% of the first $30
million of average net assets, 2.00% of the next $70 million, and 1.50% of
average net assets in excess of $100 million. The Investment Advisory Agreement
also provides that the Adviser shall not be liable to the Fund or its
shareholders from or as a consequence of any act or omission of the Adviser, or
of any of the directors, officers, employees or agents of the Adviser, in
connection with or pursuant to this Agreement, except by willful misfeasance,
bad faith or gross negligence on the part of the Adviser in the performance of
its duties or by reason of reckless disregard by the Adviser of its obligations
and duties under this Agreement.
The Adviser is a registered investment adviser organized on December 28,
1981. John L. Keeley, Jr., is the sole stockholder of the Adviser. For the
year ended September 30, 1996, the Adviser earned $50,569 (net of fee waivers of
$40,643). For the year ended September 30, 1995, the Adviser waived its entire
advisory fee of $54,624 and reimbursed the Fund an additional $24,297 for
operating expenses that exceeded the 2.50% expense limitation. For the year
ended September 30, 1994, the Adviser waived its entire advisory fee of $28,262
and reimbursed the Fund an additional $71,031 for operating expenses that
exceeded the 2.50% expense limitation.
DIRECTORS AND OFFICERS
The Directors and officers of the Fund and their principal business
activities during the past five years are:
Positions Held Principal Occupations
Name and Address with Fund and Other Affiliations
- ---------------- -------------- ----------------------
John L. Keeley, Jr.<F14> Director, President Director, President and
401 South LaSalle Street and Treasurer Treasurer of Keeley Asset
Suite 1201 Management Corp. and of
Chicago, Illinois 60605 Keeley Investment Corp.
Michael J. O'Brien Director President, O'Brien Bros.
53 West Jackson Boulevard Trading Co. (Commodities
Suite 1240 Trading), Registered
Chicago, Illinois 60604 Commodity Trading Advisor,
Commodity Pool Operator
and Introducing Broker
John F. Lesch Director Attorney, Nisen & Elliott,
200 West Adams Street a partnership
Suite 2500
Chicago, Illinois 60606
John G. Kyle Director Owner and operator, Shell
10 Skokie Highway Oil Service Stations and
Highland Park, Illinois 60035 Gasoline Distributor
Elwood P. Walmsley Director Director of Sales, Miles
166 East Hillside Road Laboratories
Barrington, Illinois 60010
Mary G. Filice Vice President Senior Vice President,
401 South LaSalle Street Keeley Asset Management
Suite 1201 Corp. and Keeley
Chicago, Illinois 60605 Investment Corp.
Mary A. Ferrari Secretary Corporate Secretary,
401 South LaSalle Street Keeley Asset Management
Suite 1201 Corp. and Keeley
Chicago, Illinois 60605 Investment Corp. since
1992
Each of the above persons has held the position and engaged in the
principal occupation described above for more than five years.
<F14> John L. Keeley, Jr., is an "interested person" of the Fund as defined in
the 1940 Act.
Mr. O'Brien is a general partner in a limited partnership that is a limited
partner in an investment partnership in which Mr. Keeley and the Adviser are
general partners. Such investments were made under the same terms and
conditions applicable to all other partners. Mr. Keeley is a limited partner in
a commodity trading partnership in which Mr. O'Brien is the general partner.
Such investment by Mr. Keeley was made under the same terms and conditions
applicable to all the other limited partners.
Mr. Lesch has performed legal services (principally related to Federal
income tax matters) for Mr. Keeley on an individual basis, unrelated to the
business of Keeley Asset Management Corp. or Keeley Investment Corp. Fees paid
by Mr. Keeley to Mr. Lesch were approximately $5,100 for the last year and
$4,400 for each of the previous two years.
Mr. Kyle and Mr. Walmsley maintain brokerage accounts with Keeley
Investment Corp., the Fund's principal underwriter.
At September 30, 1996, the Directors and officers owned 255,085 shares,
representing 34.24% of the outstanding shares of the Fund.
The Fund has agreed to pay to Directors, other than Mr. Keeley, a fee of
$250 for each meeting attended. The fee may be changed at any time.
CERTAIN STOCKHOLDERS
As of September 30, 1996, John L. Keeley, Jr., (whose address is set forth
in the table above) owned 240,265 shares of the Fund's common stock. These
shares represent 32.25% of the issued and outstanding shares of common stock of
the Fund.
PURCHASING AND REDEEMING SHARES
Purchases and redemptions are discussed in the Fund's Prospectus under the
headings "Purchasing Shares," "Redemption and Repurchase of Shares" and
"Determination of Net Asset Value." All of that information is incorporated
herein by reference.
For purposes of computing the net asset value of a share of the Fund,
securities listed on an exchange, or quoted on a national market system are
valued at the last sales price at the time of valuation or lacking any reported
sales on that day, at the most recent bid quotations. Securities traded on only
the over-the-counter markets are valued on the basis of the closing over-the-
counter bid prices when there is no last sale price available. Securities for
which quotations are not available and any other assets are valued at a fair
value as determined in good faith by the Board of Directors. Money market
instruments having a maturity of 60 days or less from the valuation date are
valued on an amortized cost basis.
The Fund's net asset value will not be determined on any day on which the
New York Stock Exchange is not open for trading. That Exchange is regularly
closed on Saturdays and Sundays and on New Year's Day, the third Monday in
February, Good Friday, the last Monday in May, Independence Day, Labor Day,
Thanksgiving and Christmas. If one of these holidays falls on a Saturday or
Sunday, the Exchange will be closed on the preceding Friday or the following
Monday, respectively.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which it is obligated to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund during any 90 day
period for any one stockholder. Redemptions in excess of the above amounts will
normally be paid in cash, but may be paid wholly or partly by a distribution in
kind of securities.
Investments by corporations must include a certified copy of corporate
resolutions indicating which officers are authorized to act on behalf of the
account. Investments by trustees must include a copy of the title and signature
page of the trust agreement and pages indicating who is authorized to act.
EXCHANGE PRIVILEGE
Investors may exchange shares of the Fund having a value of $1,000 or more
for shares of the Portico Money Market Fund (the "Money Market Fund") at their
net asset value and at a later date exchange such shares and shares purchased
with reinvested dividends for shares of the Fund at net asset value. Investors
who are interested in exercising the exchange privilege should first contact the
Fund to obtain instructions and any necessary forms. The exchange privilege
does not in any way constitute an offering of, or recommendation on the part of
the Fund or the Adviser of, an investment in the Money Market Fund. Any investor
who considers making such an investment through the exchange privilege should
obtain and review the prospectus of the Money Market Fund before exercising
the exchange privilege.
The exchange privilege will not be available if (i) the proceeds from a
redemption of shares are paid directly to the investor or at his or her
discretion to any persons other than the Money Market Fund or (ii) the proceeds
from redemption of the shares of the Money Market Fund are not immediately
reinvested in shares of the Fund. The exchange privilege may be terminated by
the Fund upon at least 60 days prior notice to investors.
For federal income tax purposes, a redemption of shares pursuant to the
exchange privilege will result in a capital gain if the proceeds received exceed
the investor's tax-cost basis of the shares redeemed. Such a redemption may
also be taxed under state and local tax laws, which may differ from the Code.
ADDITIONAL TAX INFORMATION
The Fund intends to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code and thus not be subject to
federal income taxes on amounts it distributes to stockholders. The Fund
intends to manage its portfolio so as to minimize or eliminate any additional
tax liability. To the extent, if at all, the Fund is subject to tax, payment of
that tax would reduce the Fund's total return for the period in which the
liability accrued.
DISTRIBUTION OF SHARES
The Fund has entered into an Underwriting Agreement (the "Underwriting
Agreement") between the Fund and the Distributor, an affiliate of the Adviser,
pursuant to which the Distributor acts as underwriter of the shares of the Fund.
The Underwriting Agreement provides that the Distributor will use its best
efforts to distribute the shares of the Fund on a continuous basis and will
receive commissions on such sales as described in the Prospectus under
"Purchasing Shares." The Underwriting Agreement further provides that the
Distributor bears the costs of advertising and any other costs attributable to
the distribution of the shares of the Fund. (A portion of these costs may be
reimbursed by the Fund pursuant to the Fund's Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act described below). The Distributor may
receive brokerage commissions for executing portfolio brokerage for the Fund.
The Distributor may enter into sales agreements with other entities to assist in
the distribution effort. Any compensation to these other entities will be paid
by the Distributor from the proceeds of the sales charge. The Distributor may
also compensate these entities out of the distribution fee received from the
Fund. For the years ended September 30, 1996, 1995 and 1994 the Distributor
received $52,077, $45,543 and $93,065, respectively in front-end sales
commissions and paid $20,311, $18,644 and $26,188, respectively of such proceeds
to dealers as sales concessions as described in the Prospectus.
The Plan was adopted in anticipation that the Fund will benefit from the
Plan through increased sales of shares of the Fund thereby reducing the Fund's
expense ratio and providing an asset size that allows the Adviser greater
flexibility in management. The Plan may be terminated at any time by a vote of
the Directors of the Fund who are not interested persons of the Fund and who
have no direct or indirect financial interest in the Plan or any agreement
related thereto (the "Rule 12b-1 Directors") or by a vote of a majority of the
outstanding shares of the Fund. Any change in the Plan that would materially
increase the distribution expenses of the Fund provided for in the Plan requires
the approval of the stockholders and the Board of Directors, including the Rule
12b-1 Directors.
While the Plan is in effect, the selection and nomination of Directors who
are not interested persons of the Fund will be committed to the discretion of
the Directors of the Fund who are not interested persons of the Fund. The Board
of Directors of the Fund must review the amount and purposes of expenditures
pursuant to the Plan quarterly as reported to it by the Adviser. The Plan will
continue in effect for as long as its continuance is specifically approved at
least annually by a majority of the Directors, including the Rule 12b-1
Directors.
For the years ended September 30, 1996, 1995 and 1994, the Distributor
received $18,354, $10,667 and $4,471, respectively, pursuant to the Plan.
During the same periods, the Fund paid an additional $3,780, $2,357 and $1,689,
respectively, pursuant to the Plan, all of which represented compensation to
dealers.
Amounts paid under the Plan (which may not exceed a maximum monthly
percentage of 1/12 of 0.25% (0.25% per annum) of the Fund's average daily net
assets) are paid to the Distributor in connection with its services as
distributor. Payments, if any, are made monthly and shall be based on reports
submitted by the Distributor to the Fund which sets forth all amounts expended
by Distributor pursuant to the Plan. Under no circumstances will the Fund pay a
fee pursuant to the Plan, the effect of which would be to exceed the National
Association of Securities Dealers' ("NASD") limitations on asset based
compensation described below.
The NASD has rules which may limit the extent to which the Fund may make
payments under the Plan. Although the NASD's rules do not apply to the Fund
directly, the rules apply to members of the NASD such as the Distributor and
prohibit them from offering or selling shares of the Fund if the sale charges
(including 12b-1 fees) imposed on such shares exceed the NASD's limitations.
The rules impose two related limits on 12b-1 fees paid by investors: an
annual limit and a rolling cap. The annual limit is 0.75% of assets (with an
additional 0.25% permitted as a service fee). The rolling cap on the total of
all sales charges (including front end charges, contingent deferred sales
charges and asset based charges such as 12b-1 payments) is 6.25% of new sales
(excluding sales resulting from the reinvestment of dividends and distributions)
for funds that charge a service fee and 7.25% of new sales for funds that do not
assess a service fee.
Whether the rolling applicable maximum sales charge has been exceeded
requires periodic calculations of the Fund's so-called "remaining amount." The
remaining amount is the amount to which the Fund's total sales charges are
subject for purposes of ensuring compliance with the NASD limits. The Fund's
remaining amount is generally calculated by multiplying the Fund's new sales by
its appropriate NASD maximum sales charge (6.25% or 7.25%). From this amount is
subtracted the Fund's sales charges on the new sales and the 12b-1 payments
accrued or paid over the period. The Fund's remaining amount increases with new
sales of the Fund (because the Fund's front end sales charge is less than the
applicable NASD maximum) and decreases as the 12b-1 charges are accrued. The
NASD rules permit the remaining amount to be credited periodically with interest
based on the rolling balance of the remaining amount. If the Fund's remaining
amount reaches zero, it must stop accruing its 12b-1 charges until it has new
sales that increase the remaining amount. The Fund's remaining amount may be
depleted as a result of the payment of 12b-1 fees if, for example, the Fund
experiences an extended period of time during which no new sales are made or
during which new sales are made but in an amount insufficient to generate
increases in the remaining amount to offset the accruing 12b-1 charges.
PORTFOLIO TRANSACTIONS
The Adviser has discretion to select brokers and dealers to execute
portfolio transactions initiated by the Adviser and to select the markets in
which such transactions are to be executed. The primary responsibility
regarding portfolio transactions is to select the best combination of net price
and execution for the Fund. When executing transactions for the Fund, the
Adviser will consider all factors it deems relevant, including the breadth of
the market in the security, the price of the security, the financial condition
and execution capability of the broker or dealer and the reasonableness of the
commission. It is anticipated that the Adviser will select the Distributor from
time to time to execute portfolio transactions, subject to best price and
execution. In any such transaction, the Distributor will charge commissions at
a substantial discount from retail rates, regardless of the size of the
transaction. Portfolio transactions executed by the Distributor will comply
with all applicable provisions of Section 17(e) of the 1940 Act. Transactions
of the Fund in the over-the-counter market may be executed with primary market
makers acting as principal except where it is believed that better prices and
execution may be obtained elsewhere.
In selecting brokers or dealers to execute particular transactions and in
evaluating the best net price and execution available, the Adviser is authorized
to consider "brokerage and research services" (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934), statistical quotations,
specifically the quotations necessary to determine the Fund's asset value, and
other information provided to the Fund or the Adviser. The Adviser is also
authorized to cause the Fund to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction. The Adviser must
determine in good faith, however, that such commission was reasonable in
relation to the value of the brokerage and research services provided, viewed in
terms of that particular transaction or in terms of all the accounts over which
the Adviser exercises investment discretion. It is possible that certain of the
services received by the Adviser attributable to a particular transaction will
benefit one or more other accounts for which investment discretion is exercised
by the Adviser. The "bunching" of orders for the sale or purchase of marketable
portfolio securities with other accounts under management of the Adviser to save
brokerage costs or average prices among them is not deemed to result in a
securities trading account.
In valuing research services, the Adviser makes a judgment of the
usefulness of research and other information provided by a broker to the Adviser
in managing the Fund's investment portfolio. In some cases, the information,
e.g., data or recommendations concerning particular securities relates to the
specific transaction placed with the broker but for greater part the research
consists of a wide variety of information concerning companies, industries,
investment strategy and economic, financial and political conditions and
prospects, useful to the Adviser in advising the Fund.
The Adviser is the principal source of information and advice to the Fund
and is responsible for making and initiating the execution of investment
decisions by the Fund. However, the Board of Directors of the Fund recognizes
that it is important for the Adviser, in performing its responsibilities to the
Fund, to continue to receive the broad spectrum of economic and financial
information that many securities brokers have customarily furnished in
connection with brokerage transactions, and that in compensating brokers for
their services, it is in the interest of the Fund to take into account the value
of the information received for use in advising the Fund. The extent, if any,
to which the obtaining of such information may reduce the expenses of the
Adviser in providing management services to the Fund is not determinable. In
addition, it is understood by the Board of Directors that other clients of the
Adviser might also benefit from the information obtained for the Fund, in the
same manner that the Fund might also benefit from the information obtained by
the Adviser in performing services for others.
Although investment decisions for the Fund are made independently from
those for other investment advisory clients of the Adviser, it may develop that
the same investment decision is made for both the Fund and one or more other
advisory clients. If both the Fund and other clients purchase or sell the same
class of securities on the same day, the transactions will be allocated as to
amount and price in a manner considered equitable to each.
For the years ended September 30, 1996, 1995 and 1994, the Fund paid to
brokers, other than the Distributor, brokerage commissions totaling $860, $1,429
and $4,827, respectively, on transactions having a total market value of
$275,750, $445,087 and $1,051,751, respectively. All of such brokers provided
research services. For the years ended September 30, 1996, 1995 and 1994, the
Fund paid the Distributor brokerage commissions of $25,755, $20,414 and $20,322,
respectively, on transactions involving the payment of commissions having a
total market value of $8,491,525, $5,878,662 and $5,271,189, respectively. Of
the brokerage commissions paid by the Fund for the years ended September 30,
1996, 1995 and 1994, 97%, 93% and 81%, respectively, were paid to the
Distributor and such commissions paid to the Distributor were paid in connection
with transactions involving securities having a market value equal to 97%, 93%
and 83%, respectively, of the total market value of securities on which the Fund
paid commissions.
REMOVAL OF DIRECTORS BY STOCKHOLDERS
The Fund's By-Laws contain procedures for the removal of Directors by its
stockholders. At any meeting of stockholders, duly called and at which a quorum
is present, the stockholders may, by the affirmative vote of the holders of a
majority of the votes then entitled to vote at an election of Directors, remove
any Director or Directors from office and may elect a successor or successors to
fill any resulting vacancies for the unexpired terms of removed Directors.
Upon the written request of the holders of shares entitled to not less than
ten percent (10%) of all of the votes entitled to be cast at such meeting, the
Secretary of the Fund shall promptly call a special meeting of stockholders for
the purpose of voting upon the question of removal of any Director. Whenever
ten or more stockholders of record who have been such for at least six months
preceding the date of application, and who hold in the aggregate either shares
having a net asset value of at least $25,000 or at least one percent (1%) of the
total outstanding shares, whichever is less, shall apply to the Fund's Secretary
in writing, stating that they wish to communicate with other stockholders with a
view to obtaining signatures to a request for a meeting as described above and
accompanied by a form of communication and request which they wish to transmit,
the Secretary shall within five business days after such application either; (i)
afford to such applicants access to a list of the names and addresses of all
stockholders as recorded on the books of the Fund; or (ii) inform such
applicants as to the approximate number of stockholders of record and the
approximate cost of mailing to them the proposed communication and form of
request.
If the Secretary elects to follow the course specified in clause (ii) of
the last sentence of the preceding paragraph, the Secretary, upon the written
request of such applicants, accompanied by a tender of the material to be mailed
and of the reasonable expenses of mailing, shall, with reasonable promptness,
mail such material to all stockholders of record at their addresses as recorded
on the books unless within five business days after such tender the Secretary
shall mail to such applicants and file with the Securities and Exchange
Commission (the "SEC"), together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Board of Directors to the
effect that in their opinion either such material contains untrue statements of
fact or omits to state facts necessary to make the statements contained therein
not misleading, or would be in violation of applicable law, and specifying the
basis of such opinion.
After opportunity for hearing upon the objections specified in the written
statement so filed, the SEC may, and if demanded by the Board of Directors or by
such applicants shall, enter an order either sustaining one or more of such
objections or refusing to sustain any of them. If the SEC shall enter an order
refusing to sustain any of such objections, or if, after the entry of an order
sustaining one or more of such objections, the SEC shall find, after notice and
opportunity for hearing, that all objections so sustained have been met, and
shall enter an order so declaring, the Secretary shall mail copies of such
material to all stockholders with reasonable promptness after the entry of such
order and the renewal of such tender.
CUSTODIAN
Firstar Trust Company, (the "Custodian") 615 East Michigan Avenue,
Milwaukee, Wisconsin 53201-0701, is the custodian for the Fund. It is
responsible for holding all securities and cash of the Fund, receiving and
paying for securities purchased, delivering against payment securities sold,
receiving and collecting income from investments, making all payments covering
expenses of the Fund, and performing other administrative duties, all as
directed by authorized persons of the Fund. The Custodian does not exercise any
supervisory function in such matters as purchase and sale of portfolio
securities, payment of dividends, or payment of expenses of the Fund. The Fund
has authorized the Custodian to deposit certain portfolio securities in central
depository systems as permitted under federal law. The Fund may invest in
obligations of the Custodian and may purchase or sell securities from or to the
Custodian.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P., Milwaukee, Wisconsin, audits and reports on the
Fund's annual financial statements, reviews certain regulatory reports, reviews
the Fund's income tax returns, and performs other professional accounting,
auditing, tax and advisory services when engaged to do so by the Fund.
FINANCIAL STATEMENTS AND REPORTS
Stockholders will receive audited annual and unaudited semi-annual reports
when published, and will receive written confirmation of all confirmable
transactions in their accounts.
The following audited financial information is attached hereto:
1 Report of Independent Accountants
2 Statement of Assets and Liabilities
3 Schedule of Investments
4 Statement of Operations
5 Statements of Changes in Net Assets
6 Financial Highlights
7 Notes to the Financial Statements
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
KEELEY Small Cap Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
KEELEY Small Cap Value Fund, Inc., including the schedule of investments, as of
September 30, 1996, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1996 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
KEELEY Small Cap Value Fund, Inc. as of September 30, 1996, and the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and financial highlights for each of
the periods indicated, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand, LLP
Milwaukee, Wisconsin
October 24, 1996
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $8,373,138) $10,848,205
Cash 556
Receivables for shares issued 7,449
Dividends and interest receivable 5,632
Prepaid expenses 9,738
Organization costs, net of accumulated amortization 8,961
-----------
Total Assets 10,880,541
-----------
LIABILITIES:
Payable to Adviser 7,224
Payable for securities purchased 16,737
Payables for shares redeemed 308
Other accrued expenses 40,968
-----------
Total Liabilities 65,237
-----------
NET ASSETS $10,815,304
===========
NET ASSETS CONSIST OF:
Capital stock $7,949,171
Accumulated net realized gain on investments 391,066
Unrealized net appreciation on investments 2,475,067
-----------
TOTAL NET ASSETS $10,815,304
===========
CAPITAL STOCK, $0.01 PAR VALUE
Authorized 10,000,000
Issued and outstanding 744,959
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $14.52
===========
OFFERING PRICE PER SHARE $15.20
===========
</TABLE>
See notes to the financial statements.
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
COMMON STOCK 96.30%
BUILDING MATERIALS 1.27%
10,000 Nortek, Inc.<F15> $ 137,500
-----------
CHEMICALS 1.19%
3,000 Praxair, Inc. 129,000
-----------
COMMUNICATIONS AND MEDIA 12.38%
5,000 360 Communications Co.<F15> 117,500
4,500 Ackerley Communications, Inc. 150,188
4,000 Airtouch Communications, Inc.<F15> 110,500
12,000 Anacomp, Inc.<F15> 99,000
4,500 Associated Group, Inc. Class A<F15> 142,875
5,000 Billing Information Concepts Corp.<F15> 111,250
5,000 Cox Communications, Inc.
Class A<F15> 91,875
3,000 GC Companies, Inc.<F15> 108,000
3,500 Lin Television Corp.<F15> 143,500
4,500 Telemundo Group, Inc. Class A<F15> 154,125
6,500 U.S. West Media Group, Inc.<F15> 109,687
-----------
1,338,500
-----------
CONSUMER SERVICE 2.42%
8,000 Kinder Care Learning Centers, Inc.<F15> 128,000
3,000 Pittway Corp. Class A 133,875
-----------
261,875
-----------
CONTAINERS 2.48%
5,500 Alltrista Corp.<F15> 116,875
8,000 Premark International, Inc. 151,000
-----------
267,875
-----------
DISTRIBUTORS--CONSUMER PRODUCTS 0.97%
15,500 Primesource Corp. 104,625
-----------
ELECTRICAL EQUIPMENT 2.17%
6,500 AMETEK, Inc. 122,688
6,000 Westinghouse Electric Corp. 111,750
-----------
234,438
-----------
ELECTRONICS 3.92%
6,000 Imation Corp.<F15> 147,000
5,500 Moog, Inc. Class B<F15> 127,875
2,400 Western Atlas, Inc.<F15> 149,400
-----------
424,275
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
ENGINEERING AND CONSTRUCTION 3.84%
6,500 Bucyrus International, Inc.<F15> $ 60,125
11,500 Commercial Intertech Corp. 132,250
7,000 Emcor Group, Inc.<F15> 105,875
12,000 Morrison Knudsen Corp.<F15> 117,000
-----------
415,250
-----------
ENTERTAINMENT AND LEISURE 1.05%
13,000 Aztar Corp.<F15> 113,750
-----------
ENVIRONMENTAL CONTROL 2.34%
3,000 Culligan Water Technologies, Inc.<F15> 113,625
9,000 Cuno, Inc.<F15> 139,500
-----------
253,125
-----------
FINANCE COMPANY 1.30%
5,500 Lehman Brothers Holdings, Inc. 140,250
-----------
FINANCIAL SERVICES 3.71%
5,500 Duff & Phelps Credit Rating Corp. 121,687
17,000 Phoenix Duff & Phelps Corp. 106,250
2,800 White River Corp.<F15> 173,600
-----------
401,537
-----------
FOOD, BEVERAGE AND TOBACCO 5.82%
6,050 Consolidated Products, Inc.<F15> 95,288
4,000 Earthgrains Co. 154,000
4,000 Interstate Bakeries Corp. 146,000
8,500 Tasty Baking Co. 107,312
5,500 Whitman Corp. 127,188
-----------
629,788
-----------
FURNITURE/HOME APPLIANCES 2.48%
11,000 Eljer Industries, Inc.<F15> 107,250
11,000 Furniture Brands International, Inc.<F15> 160,875
-----------
268,125
-----------
HOUSEHOLD PRODUCTS 2.70%
4,500 Masco Corp. 135,000
6,000 U.S. Industries, Inc.<F15> 157,500
-----------
292,500
-----------
HOUSING 3.06%
8,500 Kaufman & Broad Home Corp. 110,500
15,500 MDC Holdings, Inc. 104,625
9,000 Walter Industries, Inc.<F15> 115,875
-----------
331,000
-----------
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ------------
<C> <S> <C> <C>
INSURANCE 7.99%
4,500 American Financial Group, Inc. $ 141,750
5,500 Equitable Companies, Inc. 141,625
2,000 Finova Group, Inc. 120,000
7,500 Highlands Insurance Group, Inc.<F15> 150,000
2,700 Transport Holdings, Inc. Class A<F15> 187,650
2,500 Unitrin, Inc. 123,125
------------
864,150
------------
LODGING 4.99%
9,500 Host Marriott Corp.<F15> 137,750
16,900 Host Marriott Services Corp.<F15> 137,313
3,000 Marriott International, Inc. 165,375
6,000 Prime Hospitality Corp.<F15> 99,000
------------
539,438
------------
MACHINERY 4.10%
4,500 Gardner Denver Machinery, Inc.<F15> 137,250
5,500 Global Industrial Technologies, Inc.<F15> 101,062
17,000 IMO Industries, Inc.<F15> 93,500
14,000 TransPro, Inc. 112,000
------------
443,812
------------
MANUFACTURING 2.24%
7,000 ACX Technologies, Inc. 121,625
5,000 ITT Industries, Inc. 120,625
------------
242,250
------------
OIL AND GAS--EQUIPMENT & SERVICES 3.80%
2,500 Cooper Cameron Corp.<F15> 143,437
10,500 Lone Star Technologies, Inc.<F15> 153,562
10,000 RPC, Inc.<F15> 113,750
------------
410,749
------------
PHARMACEUTICALS AND HEALTHCARE PRODUCTS 2.24%
15,000 Community Psychiatric Centers<F15> 140,625
8,500 Morrison Health Care, Inc. 102,000
------------
242,625
------------
PRINTING AND PUBLISHING 3.61%
5,500 Bowne & Co., Inc. 125,812
4,000 Media General, Inc. Class A 126,000
2,800 Meredith Corp. 138,250
------------
390,062
------------
RAILROAD 3.08%
3,000 Kansas City Southern Industries, Inc. 128,250
10,000 Katy Industries, Inc. 108,750
13,000 Providence and Worcester Railroad Co. 95,875
------------
332,875
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- -----------
<C> <S> <C> <C>
REAL ESTATE 1.07%
7,000 Castle & Cooke, Inc.<F15> $ 115,500
-----------
RETAIL 5.17%
15,000 Genesco, Inc.<F15> 140,625
3,000 Harcourt General, Inc. 165,750
16,000 Phar-Mor, Inc.<F15> 100,000
7,000 Zale Corp.<F15> 153,125
-----------
559,500
-----------
SOFTWARE 1.08%
6,000 Wang Laboratories, Inc.<F15> 117,000
-----------
TEXTILE AND APPAREL 2.52%
14,000 Griffon Corp.<F15> 138,250
4,000 Payless ShoeSource, Inc.<F15> 134,500
-----------
272,750
-----------
TRANSPORTATION 1.31%
4,500 Pittston Brink's Group 141,188
-----------
TOTAL COMMON STOCKS 10,415,312
-----------
(cost $8,059,901)
WARRANTS AND RIGHTS 3.79%
4,320 Anacomp, Inc.<F15> 3,780
4,000 BJ Services Co.<F15> 56,000
6,000 Federated Department Stores Series C<F15> 76,500
4,000 Fleet Financial Group, Inc.<F15> 45,500
6,000 Glendale Federal Savings Bank<F15> 48,000
5,500 Lone Star Industries, Inc.<F15> 88,000
7,500 U.S. Home Corp. Class B<F15> 40,313
3,500 USG Corp.<F15> 52,500
-----------
TOTAL WARRANTS AND RIGHTS 410,593
-----------
(cost $290,937)
<CAPTION>
PAR VALUE
---------
<C> <S> <C> <C>
DEMAND NOTES 0.21%
$22,300 Johnson Controls 22,300
-----------
TOTAL DEMAND NOTES 22,300
-----------
(cost $22,300)
TOTAL INVESTMENTS 100.30%
(cost $8,373,138) 10,848,205
Liabilities less
cash and other assets (0.30%) (32,901)
-----------
NET ASSETS 100.00% $10,815,304
===========
<F15>Non-income producing
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $66,953
Interest income 13,991
----------
80,944
----------
EXPENSES:
Investment advisory fees 91,212
Administration fees 35,000
Transfer agent fees and expenses 31,137
Professional fees 27,455
Fund accounting fees 23,136
12b-1 fees 22,803
Federal and state registration fees 13,894
Custody fees 8,070
Reports to shareholders 6,280
Amortization of organization costs 4,480
Directors' fees 3,280
Other 1,925
----------
Total expenses before waiver 268,672
Waiver of fees (40,643)
----------
Net expenses 228,029
----------
Net investment loss (147,085)
----------
REALIZED AND UNREALIZED GAINS:
Net realized gain on investments 451,325
Increase in unrealized appreciation on investments 1,090,906
----------
Net gain on investments 1,542,231
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,395,146
==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (147,085) $ (79,494)
Net realized gain on investments 451,325 101,874
Increase in unrealized appreciation on investments 1,090,906 1,225,751
----------- ----------
Net increase in net assets resulting from operations 1,395,146 1,248,131
----------- ----------
DISTRIBUTIONS:
Net realized gains (17,153) --
----------- ----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from 194,103 and 187,949 shares issued,
respectively 2,587,358 2,054,266
Proceeds from 1,327 and 0 shares of distributions
reinvested, respectively 16,410 --
Cost of 58,634 and 18,472 shares redeemed,
respectively (782,791) (188,727)
----------- ----------
Net increase from capital stock transactions 1,820,977 1,865,539
----------- ----------
TOTAL INCREASE IN NET ASSETS 3,198,970 3,113,670
NET ASSETS:
Beginning of period 7,616,334 4,502,664
----------- ----------
End of period $10,815,304 $7,616,334
=========== ==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1994<F16>
------------- ------------ ------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 12.52 $ 10.26 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.19) (0.13) (0.06)
Net realized and
unrealized gains on
investments 2.22 2.39 0.32
----------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 2.03 2.26 0.26
----------- ---------- ----------
LESS DISTRIBUTIONS:
Net realized gains (0.03) -- --
----------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $ 14.52 $ 12.52 $ 10.26
=========== ========== ==========
TOTAL RETURN <F17> 16.23% 22.03% 2.60%
SUPPLEMENTAL DATA AND
RATIOS:
Net assets, end of
period $10,815,304 $7,616,334 $4,502,664
Ratio of net expenses to
average net assets <F18> 2.50% 2.50% 2.49%
Ratio of net investment
loss to average net
assets<F18> (1.61)% (1.46)% (0.96)%
Portfolio turnover rate 52.43% 70.59% 63.20%
Average commission rate
paid on portfolio
investment transactions $ 0.0501 N/A N/A
</TABLE>
<F16> The Fund commenced operations on October 1, 1993.
<F17> The total return calculation does not reflect the 4.50% sales load imposed
on the purchase of shares.
<F18> Without fees waived, the ratio of net expenses and net investment loss to
average net assets would have been 2.94% and (2.05)% for the year ended
September 30, 1996; 3.94% and (2.90)% for the year ended September 30,
1995 and 5.98% and (4.45)% for the year ended September 30, 1994.
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
1. ORGANIZATION
The KEELEY Small Cap Value Fund, Inc. (the "Fund") was incorporated on May
17, 1993 as a Maryland Corporation and is registered as a diversified open-
end investment company under the Investment Company Act of 1940 (the "1940
Act"). The Fund commenced operations on October 1, 1993.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a recognized stock
exchange are valued at the last sale price on the securities exchange on
which such securities are primarily traded or at the last sale price on a
national securities exchange. Exchange-traded securities for which there
were no transactions are valued at the current bid prices. Securities traded
on only over-the-counter markets are valued on the basis of closing over-
the-counter bid prices when there is no last sale price available. Debt
securities which are purchased within 60 days of their stated maturity date
are valued at amortized cost, which approximates current value. Securities
for which quotations are not readily available and other assets are valued
at fair value as determined in good faith by the Board of Directors.
b) Federal Income Taxes - No provision for federal income taxes has been
made since the Fund has complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intends to
continue to so comply in future years.
c) Distributions to Shareholders - Dividends from net investment income will
be declared and paid annually. Distributions of net realized gains, if any,
will be declared and paid annually. Distributions to shareholders are
recorded on the ex-dividend date. The Fund may periodically make
reclassifications among certain of its capital accounts as a result of the
timing and characterization of certain income and realized gains
distributions determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. Accordingly,
at September 30, 1996, reclassifications were recorded from accumulated net
investment losses to reduce capital stock by $147,085.
d) Other - Investment transactions are recorded on the trade date plus one.
The Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sale proceeds. Dividend income is recognized on the ex-dividend date
and interest income is recognized on an accrual basis.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
3. INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with the Keeley Asset Management Corp. (the
"Adviser"), with whom certain officers and directors of the Fund are
affiliated, to furnish investment advisory services to the Fund. Under the
terms of this agreement, the Fund will pay the Adviser a monthly fee at the
annual rate of 1.00% of the Fund's average net assets. Under the investment
advisory agreement, if the aggregate annual operating expenses (excluding
interest, taxes, brokerage commissions and other costs incurred in
connection with the purchase or sale of portfolio securities, and
extraordinary items) exceed the lowest limitations imposed by state
securities administrators, the Adviser will reimburse the Fund for the
amount of such excess. Accordingly, for the year ended September 30, 1996,
the Adviser reimbursed the Fund $40,643. As of September 30, 1996, John
Keeley, Jr., President of the Adviser, controlled either directly or
indirectly 32.3% of the Fund's outstanding shares.
4. DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. The Plan is designed to reimburse Keeley
Investment Corp. (the "Distributor") for certain promotional and other sales
related costs and to permit the Fund to employ other dealers of its shares.
Unreimbursed amounts may be carried forward and paid in a subsequent year.
The Fund paid to the Distributor and each dealer a monthly fee at the rate
of 0.25% per annum of the aggregate daily net asset value of the Fund shares
beneficially owned by the Distributor's and each dealer's existing brokerage
clients. For the period from October 1, 1995 to September 30, 1996, the Fund
paid $18,354 of distribution fees to the Distributor.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for the period from October 1, 1995 to September
30, 1996, were $6,745,815 and $4,666,947, respectively. For the period from
October 1, 1995 to September 30, 1996, the Fund paid $25,755 of brokerage
commissions on trades of securities to the Distributor.
At September 30, 1996, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $8,409,421,
were as follows:
<TABLE>
<S> <C>
Appreciation $2,753,676
Depreciation (314,892)
----------
Net appreciation on
investments $2,438,784
==========
</TABLE>
During the year, the Fund utilized its net realized loss carryforward of
$22,394.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
6. OFFERING PRICE PER SHARE
The public offering price is the net asset value plus a sales charge which
varies in accordance with the amount of the purchase as follows:
<TABLE>
<CAPTION>
SALES CHARGE
AS A PERCENTAGE OF
AMOUNT OFFERING PRICE
------ ------------------
<S> <C>
Less than $50,000 4.50%
$50,000 but less
than $100,000 4.00%
$100,000 but less
than $250,000 3.00%
$250,000 but less
than $500,000 2.50%
$500,000 and over 2.00%
</TABLE>
The Distributor retains the entire sales charge when it makes sales
directly to the public. Otherwise, when sales are made through dealers, the
Distributor receives a portion of the related sales charge. For the period
from October 1, 1995 to September 30, 1996, the Fund was advised that the
Distributor received $52,077 of sales charges.
Reduced sales charges are available through a right of accumulation and
certain sales of Fund shares are made at net asset value per share, as
specified in the Fund's Prospectus.
<PAGE>
APPENDIX
DESCRIPTION OF BOND RATINGS
Ratings of a rating service represent the service's opinion as to the credit
quality of the security being rated. However, the ratings are general and are
not absolute standards of quality or guarantees as to the creditworthiness of an
issuer. Consequently, the Adviser believes that the quality of debt securities
in which the Fund invests should be continuously reviewed and that individual
analysts give different weightings to the various factors involved in credit
analysis. A rating is not a recommendation to purchase, sell or hold a
security. It does not take into account market value or suitability for a
particular investor. When a security has received a rating from more than one
service, each rating should be evaluated independently. Ratings are based on
current information furnished by the issuer or obtained by the ratings services
from other sources which they consider reliable. Ratings may be changed,
suspended or withdrawn as a result of changes in or unavailability of such
information, or for other reasons.
The following is a description of the rating characteristics used by Moody's and
S&P.
RATINGS BY MOODY'S
Aaa - Bonds rated Aaa are judged to be the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt-edge". Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. Although the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such bonds.
Aa - Bonds rated Aa are judged to be high quality by all standards. Together
with the Aaa group they compose what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa bonds or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long
term risk appear somewhat larger than in Aaa bonds.
A - Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba - Bonds rated Ba are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
B - Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa - Bonds rated Caa are of poor standing. Such bonds may be in default or
there may be present elements of danger with respect to principal or interest.
Ca - Bonds rated Ca represent obligations which are speculative in a high
degree. Such bonds are often in default or have other marked shortcomings.
S&P RATINGS
AAA - Bonds rated AAA have the highest rating. Capacity to pay principal and
interest is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay principal and interest
and differ from AAA bonds only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this capacity
than for bonds in higher rated categories.
BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation among such bonds and CC the highest degree of
speculation. Although such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(A) FINANCIAL STATEMENTS:
--------------------
(i) Financial statements included in Part A of this Amendment to
registration statement:
Audited financial information
(a) Financial Highlights
(ii) Financial statements included in Part B of this Amendment to
registration statement:
Audited financial information
(a) Report of Independent Accountants
(b) Statement of Assets and Liabilities
(c) Schedule of Investments
(d) Statement of Operations
(e) Statement of Changes in Net Assets
(f) Financial Highlights
(g) Notes to Financial Statement
Note: Schedules II, III, IV, V, VI and VII have been omitted as the required
information is not present.
(B) EXHIBITS
--------
1 Articles of Incorporation
2 Bylaws, as amended through December 2, 1996
3 None
5 Investment Advisory Agreement between the
Fund and Keeley Asset Management Corp.
6.1 Underwriting Agreement between the Fund and
Keeley Investment Corp.
6.2 Form of Broker/Dealer Agreement between
Keeley Investment Corp. and Dealers
7 None
8 Custodian Agreement between the Fund and
Firstar Trust Company
9.1 Fund Accounting Servicing Agreement between
the Fund and Firstar Trust Company
9.2 Transfer Agent Agreement between the Fund
and Firstar Trust Company
9.3 Administration Agreement between the Fund
and Sunstone Financial Group, Inc.
9.4 Amendment No. 1 to the Administration
Agreement
10 Opinion of Schwartz & Freeman
11 Consent of Independent Public Accountants
12 None
13 Subscription Agreement with John L. Keeley, Jr.,
regarding initial capital and funding
14 Individual Retirement Account Disclosure
Statement, Application and Transfer Form
15 Distribution Plan
16 Schedule of Computation of Performance Quotations
17 Financial Data Schedule
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
-------------------------------------------------------------
The information in the prospectus under the caption "Certain
Stockholders" is incorporated by reference. Except as described therein, the
Registrant does not consider that there are any persons directly or indirectly
controlling, controlled by, or under common control with, the Registrant within
the meaning of this item.
The information in the prospectus under the caption "Management of
the Fund" and in the Statement of Additional Information under the caption
"Directors and Officers" is incorporated by reference.
ITEM 26. NUMBERS OF HOLDERS OF SECURITIES
--------------------------------
(1) (2)
Number of Record Holders
Title of Class as of December 31, 1996
--------------------------------------------------------------------
Common Stock 1,072
ITEM 27. INDEMNIFICATION
---------------
Section 2-418 of the General Corporation Law of Maryland authorizes
the registrant to indemnify its directors and officers under specified
circumstances. Article Tenth of the Charter of the registrant (Exhibit 1 to
this registration statement, which is incorporated herein by reference) provides
in effect that the registrant shall provide certain indemnification of its
directors and officers. In accordance with section 17(h) of the Investment
Company Act, this provision of the charter shall not protect any person against
any liability to the registrant or its stockholders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
----------------------------------------------------
The information in the prospectus under the caption "Management of
the Fund - Investment Adviser" is incorporated by reference. Except as noted
therein and below, neither Keeley Asset Management Corp., nor any of its
directors or officers, has at any time during the past two years been engaged in
any other business, profession, vocation or employment of a substantial nature
either for its or his own account or in the capacity of director, officer,
employee, partner or trustee.
ITEM 29. PRINCIPAL UNDERWRITERS
----------------------
(a) None
(b) NAME AND PRINCIPAL POSITION AND OFFICE POSITION AND OFFICE
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
------------------ ------------------- -------------------
John L. Keeley, Jr. Director, President Director, President
Keeley Investment Corp. and Treasurer and Treasurer
401 South LaSalle Street
Suite 1201
Chicago, Illinois 60605
(c) None
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the physical possession of Registrant,
Registrant's Custodian, Registrant's Transfer Agent and Registrant's
Administrator as follows: the documents required to be maintained by paragraphs
(5), (6), (7), (10) and (11) of Rule 31a-l(b) will be maintained by the
Registrant; the documents required to be maintained by paragraph (4) of Rule
31a-l(b) will be maintained by Registrant's Administrator; information described
in Rule 31a-1(b)(2)(iv) shall be maintained by the Fund's Transfer Agent; and
all other records will be maintained by the Registrant's Custodian.
ITEM 31. MANAGEMENT SERVICES
-------------------
None
ITEM 32. UNDERTAKINGS
------------
None
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it has duly caused
this amendment to registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Chicago, Illinois, on January 15,
1997. Registrant certifies that it meets all the requirements for effectiveness
of this registration statement pursuant to Rule 485(b) under the Securities Act
of 1933.
KEELEY SMALL CAP VALUE FUND, INC.
By: /S/ JOHN L. KEELEY, JR.
----------------------------
John L. Keeley, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Name Title Date
- ---- ----- ----
/S/ JOHN L. KEELEY, JR. Director, President and Treasurer
- ----------------------- (principal executive and financial
John L. Keeley, Jr. officer) 1/06/97
/S/ MICHAEL J. OBRIEN Director 1/06/97
- -----------------------
Michael J. O'Brien
/S/ JOHN F LESCH Director 1/07/97
- -----------------------
John F. Lesch
/S/ JOHN G. KYLE Director 1/10/97
- -----------------------
John G. Kyle
/S/ ELWOOD P. WALMSLEY Director 1/15/97
- -----------------------
Elwood P. Walmsley
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBER DESCRIPTION NUMBERED PAGE
- -------------- ----------- -------------
1 Articles of Incorporation
2 Bylaws, as amended through December 2, 1996
3 None
5 Investment Advisory Agreement between the
Fund and Keeley Asset Management Corp.
6.1 Underwriting Agreement between the Fund and
Keeley Investment Corp.
6.2 Form of Broker/Dealer Agreement between
Keeley Investment Corp. and Dealers
7 None
8 Custodian Agreement between the Fund and
Firstar Trust Company
9.1 Fund Accounting Servicing Agreement between
the Fund and Firstar Trust Company
9.2 Transfer Agent Agreement between the Fund
and Firstar Trust Company
9.3 Administration Agreement between the Fund
and Sunstone Financial Group, Inc.
9.4 Amendment No. 1 to the Administration
Agreement
10 Opinion of Schwartz & Freeman
11 Consent of Independent Public Accountants
12 None
13 Subscription Agreement with John L. Keeley, Jr.,
regarding initial capital and funding
14 Individual Retirement Account Disclosure
Statement, Application and Transfer Form
15 Distribution Plan
16 Schedule of Computation of Performance Quotations
17 Financial Data Schedule
EXHIBIT 1
ARTICLES OF INCORPORATION
KEELEY SMALL CAP VALUE FUND, INC.
The undersigned, being a natural person and acting as incorporator, hereby
adopts the following articles of incorporation for the purpose of forming a
business corporation under and by virtue of the General Laws of the State of
Maryland.
FIRST. INCORPORATION. The incorporator is Stephen E. Goodman, who is at
least eighteen years of age and whose address is 401 North Michigan Avenue,
Suite 1900, Chicago, Illinois 60611. He is forming the corporation named in
these articles of incorporation under the General Laws of the State of Maryland.
SECOND. NAME. The name of the corporation is KEELEY SMALL CAP VALUE FUND,
INC.
THIRD. PURPOSES. The purposes for which the corporation is formed are:
1. To engage in the business of an open-end, diversified investment
company registered under the Investment Company Act of 1940.
2. To invest and reinvest in, to buy or otherwise acquire, to hold for
investment or otherwise, and to sell or otherwise dispose of:
a. Securities of all kinds, however evidenced, and rights or
warrants to acquire securities, of private and public companies,
corporations, associations, trusts and other enterprises and organizations;
b. Obligations issued or guaranteed by national and state
governments and their instrumentalities and subdivisions;
c. Deposits in banks, savings banks, trust companies and savings
and loan associations;
d. Assets and interests other than securities or deposits.
FOURTH. PRINCIPAL OFFICE AND RESIDENT AGENT. The post office address of
the principal office of the corporation in the State of Maryland is c/o
Prentice-Hall Corporation System, Maryland, 11 East Chase Street, Baltimore
City, Maryland 21202. The name and post office address of the resident agent
of the corporation in the State of Maryland is The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. The resident agent is
a Maryland corporation.
FIFTH. CAPITAL STOCK.
A. AUTHORIZED STOCK. The total number of shares of capital stock that
the corporation shall have authority to issue is 10,000,000 shares, all of one
class called common stock, $0.01 par value per share (common stock), having an
aggregate par value of $100,000.
B. SALE OF SHARES. The board of directors may authorize the sale and
issuance from time to time of shares of common stock, whether now or hereafter
authorized, for such consideration as the board of directors considers
advisable, but not less than par value, subject to such limitations as may be
set forth in these articles of incorporation, the bylaws, the General Laws of
the State of Maryland and other applicable laws.
C. FRACTIONAL SHARES. Stock may be issued in fractions of whole
shares, to which attach pro rata all of the rights of whole shares, including
the right of voting and of receipt of dividends, except that there shall be no
right of receipt of a certificate representing any fraction of a whole share.
D. NO PREEMPTIVE RIGHTS. No holder of shares of the corporation,
whether now or hereafter authorized, shall be entitled as a matter of right to
acquire from the corporation any shares of the corporation, whether now or
hereafter authorized.
SIXTH. REDEMPTION OF SHARES. Any stockholder of the corporation, by
delivery to the corporation of an order for redemption in good form, may at any
time require the corporation to redeem all or any part of the shares of common
stock registered in the name of such stockholder, except as specified below at
the net asset value of the shares which is next computed after the time of
receipt for any order of redemption on that date.
An order for redemption in good form shall mean receipt by the corporation or
its designated agent of a written unconditional and irrevocable instruction of
the stockholder to redeem, in form acceptable to the corporation or its
designated agent, together with any certificates which may have been issued
therefor, endorsed or accompanied by proper instrument of transfer, and such
other documents as the corporation or its designated agent may require.
The corporation may pay the redemption price in whole or in part by a
distribution in kind of securities from the portfolio of the corporation, in
lieu of money, valuing such securities at their value employed for determining
the net asset value governing such redemption price, and selecting the
securities in such manner as may be determined to be fair and equitable by or
under the authority of the board of directors.
The net asset value shall be determined as of such times as the board of
directors shall prescribe by resolution. In the absence of any such resolution
of the board of directors, the net asset value shall be determined as of the
time of the close of trading on the New York Stock Exchange on any day on which
that exchange is open for trading and there is a purchase or redemption of
shares of the corporation.
The net asset value of each share of the corporation shall be determined by
or under the authority of the board of directors in accordance with the
provisions of, and the rules of the Securities and Exchange Commission under,
the Investment Company Act of 1940, and as to matters of accounting, in
conformity with generally accepted accounting principles. The board of
directors may appoint persons to assist it in the determination of the value of
assets, liabilities and net asset value per share, and to make the actual
calculations pursuant to the direction of the board of directors.
SEVENTH. BYLAWS. The board of directors is authorized to adopt, alter and
repeal the bylaws of the corporation, except to the extent that the bylaws
provide otherwise.
EIGHTH. BOARD OF DIRECTORS.
1. The total number of directors constituting the board of directors
of the corporation shall be three, which number may be increased from time to
time in accordance with the bylaws of the corporation but shall not be less than
three. No decrease in the number of directors shall have the effect of
shortening the term of any director then in office.
2. The names of the persons who will serve as the initial directors of
the corporation are as follows:
John L. Keeley, Jr.
Michael J. O'Brien
John L. Lesch
3. Any vacancy occurring in the board of directors may be filled by a
majority of the directors in office. A new directorship resulting from an
increase in the number of directors shall be construed not to be a vacancy. Any
director elected to fill a vacancy shall have the same remaining term as that of
the predecessor.
4. A majority of the total number of directors fixed in the bylaws
shall be required to constitute a quorum at meetings of the board of directors.
NINTH. MAJORITY VOTES OF STOCKHOLDERS. Notwithstanding any provision of
the laws of the State of Maryland requiring approval by the stockholders of any
action by the affirmative vote of a greater proportion than a majority of the
votes entitled to be cast on the matter, any such action may be taken or
authorized upon the concurrence of a majority of the number of votes entitled to
be cast thereon.
TENTH. INDEMNIFICATION. The corporation shall, to the fullest extent
permitted by the Maryland General Corporation Law, as the same may be amended
and supplemented, and, without limiting the generality of the foregoing, in
accordance with Section 2-418 of said Maryland General Corporation Law,
indemnify any and all persons whom it shall have power to indemnify under said
law from and against any and all of the expenses, liabilities or other matters
referred to in or covered by said Maryland General Corporation Law.
ELEVENTH. LIABILITY OF DIRECTORS AND OFFICERS. The liability of the
directors of the corporation is limited to the fullest extent permitted by the
provisions of Section 2-405.2 of the Maryland General Corporation Law, as the
same may be amended and supplemented.
TWELFTH. AMENDMENT OF ARTICLES OF INCORPORATION. The corporation reserves
the right to amend, alter, change or repeal any provision contained in its
articles of incorporation, in the manner now or hereafter prescribed by statute,
and any rights conferred upon the stockholders are granted subject to this
reservation.
IN WITNESS WHEREOF, I have signed these articles of incorporation and have
acknowledged the same to be my act on this 14th day of May, 1993.
/s/Stephen E. Goodman
---------------------
Stephen E. Goodman
EXHIBIT 2
BY-LAWS
OF
KEELEY SMALL CAP VALUE FUND, INC.
(As amended through December 2, 1996)
ARTICLE I
---------
OFFICES
-------
The corporation shall continuously maintain in the State of Maryland a
registered office and a registered agent whose office is identical with such
registered office, and may have other offices within or without the state.
ARTICLE II
----------
STOCKHOLDERS
------------
2.1 ANNUAL MEETING. An annual meeting of the stockholders shall be held
at such place, either within or without the State of Illinois, and time as may
be determined by resolution of the board of directors. The corporation shall
not be required to hold an annual meeting in any year in which the election of
directors is not required to be acted upon under the Investment Company Act of
1940.
2.2 SPECIAL MEETINGS.
(a) Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by the Maryland General Corporation Law,
may be called by the president or the board of directors, or by the secretary in
the event that the holders of at least 10% of all of the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting
sign, date and deliver to the corporation one or more written demands for the
meeting describing one or more purposes for which it is to be held. The
corporation shall give notice of such a special meeting within thirty (30) days
after the date that the demand is delivered to the corporation.
(b) Whenever ten or more stockholders of record who have been such
for at least six (6) months preceding the date of application, and who hold in
the aggregate either shares having a net asset value of at least Twenty-Five
Thousand Dollars ($25,000) or at least one percent (1%) of the total outstanding
shares, whichever is less, shall apply to the corporation's secretary in
writing, stating that they wish to communicate with other stockholders with a
view to obtaining signatures to a request for a meeting pursuant to subsection
(a) above and accompanied by a form of communication and request which they wish
to transmit, the secretary shall within five (5) business days after receipt of
such application either (1) afford to such applicants access to a list of the
names and addresses of all stockholders as recorded on the books of the
corporation; or (2) inform such applicants as to the approximate number of
stockholders of record and the approximate cost of mailing to them the proposed
communication and form of request.
(c) If the secretary elects to follow the course specified in clause
(2) of subsection (b) above, the secretary, upon the written request of such
applicant, accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, shall, with reasonable promptness, mail such
material to all stockholders of record as of a date selected by the corporation
at their addresses as recorded on the books, unless within five (5) business
days after such tender the secretary shall mail to such applicants and file with
the Securities and Exchange Commission, together with a copy of the material to
be mailed, a written statement signed by at least a majority of the board of
directors to the effect that in their opinion either such material contains
untrue statements of fact or omits to state facts necessary to make the
statements contained therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.
(d) After opportunity for hearing upon the objections specified in
the written statement so filed, the Securities and Exchange Commission may, and
if demanded by the board of directors or by such applicants shall, enter an
order either sustaining one or more of such objections or refusing to sustain
any of them. If the Securities and Exchange Commission shall enter an order
refusing to sustain any of such objections, or if, after the entry of an order
sustaining one or more of such objections, the Securities and Exchange
Commission shall find, after notice and opportunity for hearing, that all
objections so sustained have been met, and shall enter an order so declaring,
the secretary shall mail copies of such material to all stockholders with
reasonable promptness after the entry of such order and the renewal of such
tender.
2.3 NOTICE OF MEETINGS. Written notice stating the place, date, and hour
of the meeting, and in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered not less than ten (10) nor
more than ninety (90) days before the date of the meeting, or in the case of a
merger, consolidation, share exchange, dissolution or sale, lease or exchange of
assets not less than twenty (20) nor more than sixty (60) days before the date
of the meeting, either personally or by mail, by or at the direction of the
president, or the secretary, or the officer or persons calling the meeting, to
each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his or her address as it appears on the records
of the corporation, with postage thereon prepaid. When a meeting is adjourned
to another time or place, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken.
2.4 FIXING OF RECORD DATE. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend, or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion or exchange of shares or for the purpose of any other lawful action,
the board of directors of the corporation may fix in advance a record date which
shall not be more than ninety (90) days and, for a meeting of stockholders, not
less than ten (10) days. If no record date is fixed, the record date for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall be the later of the date on which notice of the meeting is
mailed or the thirtieth (30th) day before the meeting, and the record date for
the determination of stockholders for any other purpose shall be the date on
which the board of directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting.
2.5 QUORUM. The holders of a majority of the outstanding shares of the
corporation entitled to vote on a matter, present in person or represented by
proxy, shall constitute a quorum at any meeting of stockholders; provided that
if less than a majority of the outstanding shares are represented at said
meeting, a majority of the shares so represented may adjourn the meeting at any
time without further notice. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting shall be the act of the
stockholders, unless the vote of a greater number or voting by classes is
required by The Maryland General Corporation Law, the articles of incorporation
or these by-laws. At any adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted at the original
meeting. Withdrawal of stockholders from any meeting shall not cause failure of
a duly constituted quorum at that meeting.
2.6 PROXIES. A stockholder may appoint a proxy to vote or otherwise act
for him or her by signing an appointment form and delivering it to the person so
appointed.
No proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy continues in full
force and effect until revoked by the person executing it prior to the vote
pursuant thereto, except as otherwise provided herein. Such revocation may be
effected by a writing delivered to the corporation stating that the proxy is
revoked or by a subsequent proxy executed by, or by attendance at the meeting
and voting in person by, the person executing the proxy. The dates contained on
the forms of proxy presumptively determine the order of execution, regardless of
the postmark dates on the envelopes in which they are mailed.
An appointment of a proxy is revocable by the stockholder unless the
appointment form conspicuously stated that it is irrevocable and the appointment
is coupled with an interest in the shares or in the corporation generally. An
appointment made irrevocable as provided herein becomes revocable when the
interest in the proxy terminates. A transferee for value of shares subject to
an irrevocable appointment may revoke the appointment if the transferee was
ignorant of its existence when the share were acquired and both the existence of
the appointment and its revocability were not noted conspicuously on the
certificate (or information statement for shares without certificates)
representing the shares.
The death or incapacity of the stockholder appointing a proxy does not
revoke the proxy's authority unless notice of the death or incapacity is
received by the officer or agent who maintains the corporation's share transfer
book before the proxy exercises his or her authority under the appointment.
Unless the appointment of a proxy contains an express limitation on the
proxy's authority, a corporation may accept the proxy's vote or other action as
that of the stockholder making the appointment. If the proxy appointed fails to
vote or otherwise act in accordance with the appointment, the stockholder is
entitled to such legal or equitable relief as is appropriate in the
circumstances.
2.7 VOTING OF SHARES. Except as otherwise provided in the articles of
incorporation or the Maryland General Corporation Law, each outstanding share,
regardless of class, shall be entitled to one (1) vote upon each matter
submitted to vote at a meeting of stockholders.
2.8 VOTING OF SHARES BY CERTAIN HOLDERS. Shares of the corporation's own
stock held by the corporation in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares entitled to vote
at any given time.
Shares registered in the name of another corporation, domestic or foreign,
may be voted by any officer agent, proxy or other legal representative
authorized to vote such shares under the law of incorporation of such
corporation. The president or other person holding the position of chief
executive officer of such other corporation may be treated as authorized to vote
such shares, together with any other person indicated and any other holder of an
office indicated by the corporate stockholder to the corporation as a person or
an office authorized to vote such shares.
Shares registered in the name of a deceased person, a minor ward or a person
under legal disability may be voted by his or her administrator, executor, or
court appointed guardian, either in person or by proxy without a transfer of
such shares into the name of such administrator, executor, or court appointed
guardian. Shares registered in the name of a trustee may be voted by him or
her, either in person or by proxy.
Shares registered in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his or her name if authority so to do
is contained in an appropriate order of the court by which such receiver was
appointed.
A stockholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Any number of stockholders may create a voting trust for the purpose of
conferring upon a trustee or trustees the right to vote or otherwise represent
their share, for a period not to exceed ten (10) years, by entering into a
written voting trust agreement specifying the terms and conditions of the voting
trust, and by transferring their shares to such trustee or trustees for the
purpose of the agreement. Any such trust agreement shall not become effective
until a counterpart of the agreement is deposited with the corporation at its
registered office. The counterpart of the voting trust agreement so deposited
with the corporation shall be subject to the same right of examination by a
stockholder of the corporation, in person or by agent or attorney, as is the
record of the stockholders of the corporation, and shall be subject to
examination by any holder of a beneficial interest in the voting trust, either
in person or by agent or attorney, at any reasonable time for any proper
purpose.
2.9 INSPECTORS. At any meeting of stockholders, the presiding officer
may, or upon the request of any stockholder shall, appoint one (1) or more
persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares represented
at the meeting, based upon their determination of the validity and effect of
proxies; count all votes and report the results; and do such other acts as are
proper to conduct the election and voting with impartiality and fairness to all
the stockholders.
Each report of an inspector shall be in writing and signed by him or by a
majority of them if there be more than one (1) inspector acting at such meeting.
If there is more than one (1) inspector, the report of a majority shall be the
report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
2.10 INFORMAL ACTION BY STOCKHOLDERS. Any action required to be taken at
any annual or special meeting of the stockholders of the corporation, or any
other action which may be taken at a meeting of the stockholders, may be taken
without a meeting and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by all of the stockholders entitled to vote
with respect to the subject matter thereof.
2.11 VOTING BY BALLOT. Voting on any question or in any election may be by
voice unless the presiding officer shall order or any stockholder shall demand
that voting be by ballot.
ARTICLE III
-----------
DIRECTORS
---------
3.1 GENERAL POWERS. The business of the corporation shall be managed by
its board of directors.
3.2 NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the
corporation shall be not less than three (3) nor more than fifteen (15). Except
as provided in Section 3.13 of this Article, each director shall hold office
until the next annual meeting of stockholders or until his successor shall have
been elected and qualified. Directors need not be residents of Maryland or
stockholders of the corporation. The number of directors may be increased or
decreased from time to time by the amendment of this section; but no decrease
shall have the effect of shortening the term of any incumbent director.
3.3 REGULAR MEETINGS. A regular meeting of the board of directors shall
be held without other notice than this by-law, immediately after the annual
meeting of stockholders. The board of directors may provide, by resolution, the
time and place for the holding of additional regular meetings without other
notice than such resolution.
3.4 SPECIAL MEETINGS. Special meetings of the board of directors may be
called by or at the request of the president or any director. The person or
persons authorized to call special meetings of the board of directors may fix
any place as the place for holding any special meeting of the board of directors
called by them.
3.5 NOTICE. Notice of any special meeting shall be given at least ten
(10) days previous thereto by written notice to each director at his business
address as it appears in records of the corporation. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegram company. The attendance of a director at any meeting shall constitute
a waiver of notice of such meeting, except where a director attends a meeting
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
3.6 QUORUM. A majority of the number of directors provided for by these
by-laws shall constitute a quorum for transaction of business at any meeting of
the board of directors, provided that if less than a majority of such number of
directors are present at said meeting, a majority of the directors present may
adjourn the meeting at any time without further notice. Unless specifically
prohibited by the articles of incorporation or these by-laws, members of the
board of directors or of any committee of the board of directors may participate
in and act at any meeting of such board or committee through the use of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other; provided, however,
that the board of directors shall not use a conference telephone or other
communication equipment to hold a meeting at which an investment advisory
agreement, selection of auditors or Rule 12b-1 distribution plan is renewed or
approved. Participation in such meeting shall constitute attendance and
presence in person at the meeting of the person or persons so participating.
3.7 MANNER OF ACTING. The act of the majority of the directors present at
a meeting at which a quorum is present shall be the act of the board of
directors, unless the act of a greater number is required by statute, these by-
laws, or the articles of incorporation.
3.8 VACANCIES. Any vacancy occurring in the board of directors and any
directorship to be filled by reason of an increase in the number of directors,
may be filled by election at an annual meeting or at a special meeting of
stockholders called for that purpose. Alternatively in the case of vacancies
arising between stockholder meetings, whether by reason of an increase in the
number of directors or otherwise, the vacancies may be filled by the majority
vote of the remaining directors though not constituting a quorum. A director
elected by the stockholders to fill a vacancy shall hold office for the balance
of the term for which he or she was elected. A director appointed to fill a
vacancy shall serve until the next meeting of the stockholders at which
directors are to be elected.
3.9 ACTION WITHOUT A MEETING. Unless specifically prohibited by the
articles of incorporation or by-laws, any action required to be taken at a
meeting of the board of directors, or any other action which may be taken at a
meeting of the board of directors, or of any committee thereof may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all the directors entitled to vote with respect to the
subject matter thereof, or by all the members of such committee, as the case
may be; provided, however, that the board of directors shall not approve or
renew an investment advisory agreement, selection of auditors or Rule 12b-1
distribution plan by written consent. Any such consent signed by all the
directors or all the members of the committee shall have the same effect as a
unanimous vote, and may be stated as such in any document filed with the
Secretary of State or with anyone else.
3.10 COMPENSATION. The board of directors, by the affirmative vote of a
majority of directors then in office, and irrespective of any personal interest
of any of its members, shall have authority to establish reasonable compensation
of all directors for services to the corporation as directors, officers, or
otherwise. By resolution of the board of directors the directors may be paid
their expenses, if any, of attendance at each meeting of the board. No such
payment previously mentioned in this section shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
3.11 PRESUMPTION OF ASSENT. A director of the corporation who is present
at a meeting of the board of directors at which action on any corporate matter
is taken shall be conclusively presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the secretary of the corporation immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
3.12 COMMITTEES. A majority of the directors may create one (1) or more
committees and appoint members of the board to serve on the committee or
committees. Each committee shall have two (2) or more members, who serve at the
pleasure of the board.
(a) Unless the appointment by the board of directors requires a
greater number, a majority of any committee shall constitute a quorum and a
majority of a quorum is necessary for committee action. A committee may act
by unanimous consent in writing without a meeting, and subject to the
provisions of the by-laws or action by the board of directors, the committee
by majority vote of its members shall determine the time and place of
meetings and the notice required therefor.
(b) To the extent specified by the board of directors or in the
articles of incorporation or these by-laws, each committee may exercise the
authority of the board of directors under Section 2-411 of the Maryland
General Corporation Law; provided, however, a committee may not:
(i) authorize dividends or distributions on stock;
(ii) issue stock, except as permitted under Section 20411(b) of
the Maryland General Corporation Law;
(iii) recommend to stockholders any act required by law to be
approved by stockholders;
(iv) amend the by-laws; or
(v) approve any merger or share exchange which does not
require stockholder approval;
Vacancies in the membership of the committee shall be filled by the board of
directors at a regular or special meeting of the board of directors. The
executive committee shall keep regular minutes of its proceedings and report the
same to the board when required.
3.13 REMOVAL OF DIRECTORS. Any director may be removed, with or without
cause, at a meeting of stockholders by the affirmative vote of the holders of a
majority of the outstanding shares then entitled to vote at an election of
directors.
ARTICLE IV
----------
OFFICERS
--------
4.1 NUMBER. The officers of the corporation shall be a president, a
treasurer, a secretary, and such vice presidents, assistant treasurers,
assistant secretaries or other officers as may be elected by the board of
directors. Any two (2) or more offices may be held by the same person, except
the office president and vice president.
4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation shall be
elected annually by the board of directors at the first meeting of the board of
directors held after each annual meeting of stockholders. If the election of
officers shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer shall
hold office until his or her successor shall have been duly elected and shall
have qualified or until his or her death or until he or she shall resign or
shall have been removed in the manner hereinafter provided. Election of an
officer shall not of itself create contract rights.
4.3 REMOVAL. Any officer elected or appointed by the board of directors
may be removed by the board of directors whenever in its judgment the best
interests of the corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
4.4 PRESIDENT. The president shall be the principal executive officer of
the corporation. Subject to the direction and control of the board of directors
he or she shall be in charge of the business of the corporation; shall see that
the resolutions and directions of the board of directors are carried into effect
except in those instances in which that responsibility is specifically assigned
to some other person by the board of directors; and, in general, shall discharge
all duties incident to the office of president and such other duties as may be
prescribed by the board of directors from time to time. He or she shall preside
at all meetings of the stockholders and of the board of directors. Except in
those instances in which the authority to execute is expressly delegated to
another officer or agent of the corporation or a different mode of execution is
expressly prescribed by the board of directors or these by-laws, he or she may
execute for the corporation certificates for its shares, and any contracts,
deeds, mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, and he or she may accomplish such execution either
under or without the seal of the corporation and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized by
the board of directors, according to the requirements of the form of the
instrument. He or she may vote all securities which the corporation is entitled
to vote except as and to the extent such authority shall be vested in a
different officer or agent of the corporation by the board of directors.
4.5 THE VICE-PRESIDENT(S). The vice-president(s), if any, shall assist
the president in the discharge of his or her duties as the president may direct
and shall perform such other duties as from time to time may be assigned to him
by the president or by the board of directors. In the absence of the president
or in the event of his inability or refusal to act, the vice-president (or in
the event there be more than one (1) vice-president, the vice-presidents in the
order designated by the board of directors, or by the president if the board of
directors has not made such a designation, or in the absence of any designation,
then in the order of seniority of tenure as vice-president) shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. Except in those instances
in which the authority to execute is expressly delegated to another officer or
agent of the corporation or a different mode of execution is expressly
prescribed by the board of directors or these by-laws, the vice-president (or
each of them if there are more than one (1)) may execute for the corporation
certificates for its shares and any contracts, deeds, mortgages, bonds or other
instruments which the board of directors has authorized to be executed, and he
or she may accomplish such execution either under or without the seal of the
corporation and either individually or with the secretary, any assistant
secretary, or any other officer thereunto authorized by the board of directors,
according to the requirements of the form of the instrument.
4.6 THE TREASURER. The treasurer shall be the principal accounting and
financial officer of the corporation. He or she shall: (a) have charge of and
be responsible for the maintenance of adequate books of account for the
corporation; (b) have charge and custody of all funds and securities of the
corporation, and be responsible therefor and for the receipt and disbursement
thereof; and (c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him or her by the
president or by the board of directors. If required by the board of directors,
the treasurer shall give a bond for the faithful discharge of his or her duties
in such sum and with such surety or sureties as the board of directors may
determine.
4.7 THE SECRETARY. The secretary shall: (a) record the minutes of the
stockholders' and of the board of directors' meetings in one (1) or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation; (d) keep a register of
the post-office address of each stockholder which shall be furnished to the
secretary by such stockholder; (e) sign with the president, or a vice-president,
or any other officer thereunto authorized by the board of directors,
certificates for shares of the corporation, the issue of which shall have been
authorized by the board of directors, and any contracts, deeds, mortgages,
bonds, or other instruments which the board of directors has authorized to be
executed, according to the requirements of the form of the instrument, except
when a different mode of execution is expressly prescribed by the board of
directors or these by-laws; (f) have general charge of the stock transfer books
of the corporation; (g) have authority to certify the by-laws, resolutions of
the stockholders and board of directors and committees thereof, and other
documents of the corporation as true and correct copies thereof, and (h) perform
all duties incident to the office of secretary and such other duties as from
time to time may be assigned to him or her by the president or by the board of
directors.
4.8 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant
treasurers and assistant secretaries shall perform such duties as shall be
assigned to them by the treasurer or the secretary, respectively, or by the
president or the board of directors. The assistant secretaries may sign with
the president, or a vice-president, or any other officer thereunto authorized by
the board of directors, certificates for shares of the corporation, the issue of
which shall have been authorized by the board of directors, and any contracts,
deeds, mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these by-laws. The assistant treasurers shall
respectively, if required by the board of directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the board of
directors shall determine.
4.9 SALARIES. The salaries of the officers shall be fixed from time to
time by the board of directors and no officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of the corporation.
ARTICLE V
---------
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
5.1 CONTRACTS. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
5.2 LOANS. No loans shall be contracted on behalf of the corporation and
no evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the board of directors. Such authority may be general or confined
to specific instances.
5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes, or other evidences of indebtedness issued in the name
of the corporation, shall be signed by such officer or officers, agent or agents
of the corporation and in such manner as shall from time to time be determined
by resolution of the board of directors.
5.4 DEPOSITS. All funds of the corporation not otherwise employed shall
be deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositaries as the board of directors may select.
ARTICLE VI
----------
CERTIFICATES FOR SHARES AND THEIR TRANSFER
------------------------------------------
6.1 CERTIFICATES FOR SHARES. The issued shares of a corporation shall be
represented by certificates or shall be uncertified shares. Certificates
representing shares of the corporation shall be signed by the appropriate
corporate officers and may be sealed with the seal, or a facsimile of the seal,
of the corporation, if the corporation uses a seal. In case the seal of the
corporation is changed after the certificate is sealed with the seal or a
facsimile of the seal of the corporation, but before it is issued, the
certificate may be issued by the corporation with the same effect as if the seal
had not been changed. If a certificate is countersigned by a transfer agent or
registrar, other than the corporation itself or its employee, any other
signatures or countersignature on the certificate may be facsimiles. In case
any officer of the corporation, or any officer or employee of the transfer agent
or registrar who has signed or whose facsimile signature has been placed upon
such certificate ceases to be an officer of the corporation, or an officer or
employee of the transfer agent or registrar before such certificate is issued,
the certificate may be issued by the corporation with the same effect as if the
officer of the corporation, or the officer or employee of the transfer agent or
registrar had not ceased to be such at the date of its issue.
Each certificate representing shares shall also state:
(a) That the corporation is organized under the laws of the State of
Maryland.
(b) The name of the person to whom issued.
(c) The number and class of shares, and the designation of the
series, if any, which such certificate represents.
No certificate shall be issued for any share until such share is fully paid.
Unless otherwise provided by the articles of incorporation or by-laws, the
board of directors of a corporation may provide by resolution that its shares
shall be uncertificated shares, provided that such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Within a reasonable time after the issuance or transfer of
uncertificated shares, the corporation shall send to the registered owner
thereof a written notice containing the information required on certificates
pursuant to Section 2-211 of the Maryland General Corporation Law. Except as
otherwise expressly provided by law, the rights and obligations of the holders
of uncertificated shared and rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical.
The name and address of each stockholder, the number and class of shares
held and the date on which the certificates for the shares were issued shall be
entered on the books of the corporation. The person in whose name shares stand
on the books of the corporation shall be deemed the owner thereof for all
purposes as regards the corporation.
6.2 LOST CERTIFICATES. If a certificate representing shares has allegedly
been lost or destroyed the board of directors may in its discretion, except as
may be required by law, direct that a new certificate be issued upon such
indemnification and other reasonable requirements as it may impose.
6.3 TRANSFERS OF SHARES. Transfers of shares of the corporation shall be
recorded on the books of the corporation and, except in the case of a lost or
destroyed certificate, on surrender for cancellation of the certificate for such
shares. A certificate presented for transfer must be duly endorsed and
accompanied by proper guaranty of signature and other appropriate assurances
that the endorsement is effective. Transfer of an uncertificated share shall be
made on receipt by the corporation of an instruction from the registered owner
or other appropriate person. The instruction shall be in writing or a
communication in such form as may be agreed upon in writing by the corporation.
ARTICLE VII
-----------
CUSTODIAN
---------
7.1 QUALIFICATIONS. The corporation shall at all times employ, pursuant
to a written contract, a bank or trust company having an aggregate capital,
surplus and undivided profits (as shown in its last published report) of a least
$2,000,000 as custodian to hold the funds and securities of the corporation.
7.2 CONTRACT. Such contract shall be upon such terms and conditions and
may provide for such compensation as the board of directors deems necessary or
appropriate, provided such contract shall further provide that the custodian
shall deliver securities owned by the corporation only upon sale of such
securities for the account of the corporation and receipt of payment therefor by
the custodian or when such securities may be called, redeemed, retired or
otherwise become payable. Such limitation shall not, however, prevent:
(a) the delivery of securities for examination to the broker selling
the same in accord with the "street delivery" custom whereby such
securities are delivered to such broker in exchange for a delivery receipt
exchanged on the same day for an uncertified check of such broker to be
presented on the same day for certification;
(b) the delivery of securities of an issuer in exchange for or
conversion into other securities alone or cash and other securities pursuant
to any plan of merger, consolidation, reorganization, recapitalization or
readjustment of the securities of such issuer;
(c) the conversion by the custodian of securities owned by the
corporation pursuant to the provisions of such securities into other
securities;
(d) the surrender by the custodian of warrants, rights or similar
securities owned by the corporation in the exercise of such warrants, rights
or similar securities, or the surrender of interim receipts or temporary
securities for definitive securities;
(e) the delivery of securities as collateral on borrowing effected by
the corporation;
(f) the delivery of securities owned by the corporation as a
redemption in kind of securities issued by the corporation.
The custodian shall deliver funds of the corporation only upon the purchase of
securities for the portfolio of the corporation and the delivery of such
securities to the custodian, but such limitation shall not prevent the release
of funds by the custodian for payment of interest, dividend disbursements, taxes
and management fees, for payments in connection with the conversion, exchange or
surrender of securities owned by the corporation as set forth in subparagraphs
(b), (c) and (d) above and for operating expenses of the corporation.
7.3 TERMINATION OF CONTRACT. The contract of employment of the custodian
shall be terminable by either party on sixty (60) days written notice to other
party. Upon any termination, the board of directors shall use its best efforts
to obtain a successor custodian, but lacking success in the appointment of a
successor custodian, the question of whether the corporation shall be liquidated
or shall function without a custodian shall be submitted to the stockholders
before delivery of any funds or securities of the corporation to any person
other than a successor custodian, including a temporary successor selected by
the retiring custodian. If a successor custodian is found, the retiring
custodian shall deliver funds and securities owned by the corporation directly
to the successor custodian.
7.4 AGENTS OF CUSTODIAN. The provisions of any other section of these by-
laws to the contrary notwithstanding, any contract of employment of a custodian
to hold the funds and securities of the corporation may authorize the custodian,
upon approval of the board of directors, to appoint other banks or trust
companies meeting the requirements of this article, domestic and foreign
(including domestic and foreign branches), to perform all or a part of the
duties of the custodian under its contract with the corporation.
7.5 NEGOTIABLE INSTRUMENTS. Except as otherwise authorized by the board
of directors, all checks and drafts for the payment of money shall be signed in
the name of the corporation by the custodian, and all requisitions or orders for
the payment of money by the custodian or for the issue of checks and drafts
therefor, all promissory notes, all assignments of shares or securities standing
in the name of the corporation, and all requisitions or orders for the
assignment of shares or securities standing in the name of the custodian or its
nominee, or for the execution of powers to transfer the same, shall be signed in
the name of the corporation by not less than two (2) of its officers.
Promissory notes, checks or drafts payable to the corporation may be endorsed
only to the order of the custodian or its agent.
ARTICLE VIII
------------
FISCAL YEAR
-----------
The fiscal year of the corporation shall be fixed by resolution of the board
of directors.
ARTICLE IX
----------
DIVIDENDS
---------
9.1 The board of directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its articles of incorporation.
9.2 The board of directors shall cause any dividend payment to be
accompanied by a written statement if paid wholly or partly from any source
other than:
(a) the corporation's accumulated undistributed net income,
determined in accordance with generally accepted accounting principles and
the rules and regulations of the Securities and Exchange Commission
applicable to investment companies registered under the Investment Company
Act of 1940 ("Registered Investment Companies") then in effect, and not
including profits or losses realized upon the sale of securities or other
properties; or
(b) the corporation's net income so determined for the current or
preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe as applicable to Registered Investment
Companies.
ARTICLE X
---------
SEAL
----
The corporate seal may have inscribed thereon the name of the corporation
and the words "Corporate Seal, Maryland". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner reproduced,
provided that the affixing of the corporate seal to an instrument shall not give
the instrument additional force or effect, or change the construction thereof,
and the use of the corporate seal is not mandatory.
ARTICLE XI
----------
WAIVER OF NOTICE
----------------
Whenever any notice is required to be given under the provisions of these
by-laws or under the provisions of the articles of incorporation or under the
provisions of the Maryland General Corporation Law, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice. Attendance at any meeting shall constitute waiver of notice thereof
unless the person at the meeting objects to the holding of the meeting because
proper notice was not given.
ARTICLE XII
-----------
AMENDMENTS
----------
Unless the power to make, alter, amend or repeal by-laws is reserved to the
stockholders by the articles of incorporation, the by-laws of the corporation
may be made, altered, amended or repealed by the stockholders or the board of
directors; provided, however, that Section 2.5 of Article II, Section 3.6 of
Article III, Article VII and Section 9.2 of Article IX may be altered, amended
or updated only with the approval of the holders of a "majority of the
outstanding voting securities" of the corporation, as that term is defined in
Section 2(a)(40) of the Investment Company Act of 1940.
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
KEELEY SMALL CAP VALUE FUND, INC., a Maryland corporation (the "Fund"), and
KEELEY ASSET MANAGEMENT CORP., an Illinois corporation (the "Adviser"), agree
that:
1. ENGAGEMENT OF THE ADVISER. The Adviser shall manage the investment and
reinvestment of the assets of the Fund, subject to the supervision of the board
of directors of the Fund, for the period and on the terms set forth in this
Agreement. The Adviser shall give due consideration to the investment policies
and restrictions and the other statements concerning the Fund in the Fund's
articles of incorporation, bylaws, and to the provisions of any applicable law.
The Adviser shall be deemed for all purposes to be an independent contractor and
not an agent of the Fund, and unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund in any way.
The Adviser is authorized to make the decisions to buy and sell
securities of the Fund, to place the Fund's portfolio transactions with
securities broker-dealers, and to negotiate the terms of such transactions,
including brokerage commissions on brokerage transactions, on behalf of the
Fund. The Adviser is authorized to exercise discretion within the Fund's policy
concerning allocation of its portfolio brokerage, including allocation to
brokers who provide research and other services to the Fund, and to Keeley
Investment Corp., as permitted by law, and in each case in so doing shall not be
required to make any reduction in its investment advisory fees.
2. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its
own expense, office space to the Fund and all necessary office facilities,
equipment and personnel for managing the assets of the Fund. The Adviser shall
also assume and pay all other expenses incurred by it in connection with
managing the assets of the Fund.
3. EXPENSES TO BE PAID BY THE FUND. The Fund shall pay all charges of
depositories, custodians and other agencies for the safekeeping and servicing of
its cash, securities and other property and of its transfer agents, registrars
and its dividend disbursing and redemption agents, if any; all payments to the
Administrator; all charges of legal counsel and of independent auditors; dues
organizational expenses of the Fund; all expenses in determination of price
computations, placement of securities orders and related bookkeeping; all
compensation of directors other than those affiliated with the Adviser and all
expenses incurred in connection with their services to the Fund; all 12b-1 plan
expenses; all expenses of publication of notices and reports to its
shareholders; all expenses of proxy solicitations of the Fund or its board of
directors; all taxes and corporate fees payable to federal, state or other
governmental agencies, domestic or foreign; all stamp or other transfer taxes;
all expenses of printing and mailing certificates for shares of the Fund; and
all expenses of bond and insurance coverage required by law or deemed advisable
by the Fund's board of directors. In addition to the payment of expenses, the
Fund shall also pay all brokers' commissions and other charges relative to the
purchase and sale of Portfolio securities, and all other expenses not paid by
the Administrator.
4. COMPENSATION OF THE ADVISER. For the services to be rendered and the
charges and expenses to be assumed and to be paid by the Adviser hereunder, the
Fund shall pay to the Adviser a monthly fee of 1/12 of 1% of the net asset value
of the Fund, as determined on a daily basis, which fee shall be payable monthly
on or before the 15th day immediately following each month.
5. LIMITATION OF EXPENSES OF THE FUND. During the term of this Agreement,
the total expenses of the Fund, exclusive of fees paid to the Adviser pursuant
to Paragraph 4 above, shall not in any fiscal year exceed the lower of 21/2% of
the average net asset value of the Fund as determined by valuations made on a
daily basis or the maximum amount permitted by any state in which the Fund
qualifies to sell shares, and the Adviser agrees to waive a portion of its
compensation or to pay any excess expenses or to reimburse the Fund for any sums
expended for such expenses in excess of that amount on a monthly basis. For
this purpose, brokers' commissions and other charges for extraordinary items,
such as litigation, relative to the purchase and sale of portfolio securities
shall not be regarded as expenses.
6. SERVICES OF THE ADVISER NOT EXCLUSIVE. The services of the Adviser to
the Fund hereunder are not to be deemed exclusive, and the Adviser shall be free
to render similar services to others so long as its services under this
Agreement are not impaired by such other activities.
7. SERVICES OTHER THAN AS THE ADVISER. Within the limits permitted by law
the Adviser may receive compensation from the Fund for services performed by it
for the Fund which are not within the scope of the duties of the Adviser under
this Agreement.
8. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be liable
to the Fund or its shareholders for any loss suffered by the Fund or its
shareholders from or as a consequence of any act or omission of the Adviser, or
of any of the directors, officers, employees or agents of the Adviser, in
connection with or pursuant to this Agreement, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or by reason of reckless disregard by the Adviser of
its obligations and duties under this Agreement.
9. DURATION, RENEWAL AND TERMINATION. This Agreement shall continue in
effect until two years from the date of its execution, and thereafter from year
to year only so long as such continuance is specifically approved at least
annually by the board of directors of the Adviser and by either the board of
directors of the Fund (including a majority of those directors who are not
parties to this Agreement or "interested persons" of any such party) or by vote
of the holders of a "majority of the outstanding shares of the Fund" (which term
as used throughout this Agreement shall be construed in accordance with the
definition of "vote of a majority of the outstanding voting securities of a
company" in section 2(a)(42) of the Investment Company Act of 1940). This
Agreement may be terminated by action of a majority of the directors of the Fund
or by the holders of a majority of the outstanding shares of the Fund upon sixty
(60) days written notice to the Adviser.
10. AMENDMENT. This Agreement may not be amended without the affirmative
vote of a majority of the directors of the Fund and of the holders of a majority
of the outstanding shares of the Fund.
Dated: September 8, 1993 KEELEY SMALL CAP VALUE FUND, INC.
By: /s/ John L. Keeley, Jr.
-----------------------
KEELEY ASSET MANAGEMENT CORP.
By: /s/ John L. Keeley, Jr.
-----------------------
President
EXHIBIT 6.1
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT is made and entered into on September 8, 1993,
by and between KEELEY SMALL CAP VALUE FUND, INC., a Maryland corporation (the
"Fund"), and KEELEY INVESTMENT CORP., an Illinois corporation (the
"Distributor").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940 (collectively with the rules
and regulations promulgated thereunder, the "1940 Act"), and proposes to offer
for sale to the public shares of its common stock, par value $0.01 per share
(the "Shares"); and
WHEREAS, the Board of Directors of the Fund has adopted a Distribution
Plan, dated as of September 8, 1993 (the "Distribution Plan"), which is
incorporated herein by reference and pursuant to which the Fund desires to enter
into this Underwriting Agreement; and
WHEREAS, the Fund wishes to engage the Distributor to provide certain
services with respect to the distribution of Shares, and Distributor is willing
to provide such services to the Fund on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. The Fund grants to the Distributor the right, as agent of the Fund, to
sell Shares upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Distributor agrees to use its
best efforts to find purchasers for Shares. The Fund hereby acknowledges that
the Distributor may render distribution and other services to other parties,
including other investment companies. The Distributor shall have the right, as
agent of the Fund, to order from the Fund the Shares needed, but not more than
the Shares needed (except for clerical errors and errors of transmission), to
fill unconditional orders for Shares placed with the Distributor by any dealer,
all such orders to be made in the manner set forth in the Fund's then-current
registration statement ("Registration Statement") filed by the Fund with the
Securities and Exchange Commission (the "Commission") under the 1940 Act and the
Securities Act of 1933 (the "1933 Act") and the related then-current prospectus
(the "Prospectus") and then-current statement of additional information (the
"Statement of Additional Information"). The price ("offering price") which
shall be paid to the Fund for the Shares so purchased shall be the equal to (a)
their net asset value (determined in the manner set forth in Fund's Registration
Statement and Prospectus) plus, except to those classes of persons set forth in
the Prospectus, (b) a sales charge which shall be the percentage of the offering
price of such Shares as set forth in the Fund's Prospectus. The offering price,
if not an exact multiple of one cent, shall be adjusted to the nearest cent.
2. The Distributor may enter into selling agreements ("Broker/Dealer
Agreements") with qualified broker/dealers and other persons with respect to the
offering of Shares to the public, and in so doing, Distributor will act only on
its own behalf as principal. No broker/dealer or other person who enters into a
Broker/Dealer Agreement with the Distributor shall be authorized to act as agent
for the Fund in connection with the offering or sale of Shares to the public or
otherwise. The Shares shall be sold at the offering price by the Distributor on
behalf of the Fund to or through any broker/dealer or other person having a
Broker/Dealer Agreement; provided, however, that orders may be placed directly
by any such broker/dealer or other person directly with the Transfer Agent of
the Fund. Distributor may allow such concessions or reallowances to
broker/dealers and other persons as it may from time to time determine and as
set forth in the Prospectus. The Distributor may also pay commissions out of
its own funds to broker/dealers and others in connection with their effectuation
of sales of Shares in such amounts and pursuant to such terms and conditions as
the Distributor may from time to time determine.
3. The Fund shall have the right to suspend the sale of Shares if,
because of some extraordinary condition, the New York Stock Exchange shall be
closed, or if conditions existing during the hours when the Exchange is open
render such action advisable or for any other reason deemed adequate by the
Fund.
4. If any Shares sold by the Fund are redeemed or repurchased by the Fund
or by Distributor as agent or are tendered for redemption within seven business
days after the date of confirmation of the original purchase of such Shares,
Distributor shall forfeit the amount above the net asset value received by it in
respect of such Shares, provided that the portion, if any, of such amount
reallowed by Distributor to broker/dealers or other persons shall be repayable
to the Fund only to the extent recovered by Distributor from the broker/dealer
or other person concerned. Distributor shall include in the forms of agreement
with such broker/dealers and other persons a corresponding provision for the
forfeiture by them of their concession with respect to Shares sold by them or
their principals and redeemed or repurchased by the Fund or by Distributor as
agent (or tendered for redemption) within seven business days after the date of
confirmation of such initial purchases.
5. The Fund agrees that it will, from time to time, but subject to the
necessary approval, if any, of its stockholders, take all necessary action to
register such number of Shares under the Securities Act of 1933, as amended (the
"1933 Act"), as the Distributor may reasonably be expected to sell. The Fund
shall use its best efforts to qualify and maintain the qualification of an
appropriate number of Shares for sale under the securities laws of such states
as the Distributor and the Fund may approve, and, if necessary or appropriate in
connection therewith, to qualify and maintain the qualification of the Fund as a
broker or dealer in such states; provided that the Fund shall not be required to
amend its Articles of Incorporation or By-Laws to comply with the laws of any
state, to maintain an office in any state, to change the terms of the offering
of Shares in any state from the terms set forth in the Registration Statement
and Prospectus, to qualify as a foreign corporation in any state or to consent
to service of process in any state other than with respect to claims arising out
of the offering of the Shares. The Distributor shall furnish such information
and other material relating to its affairs and activities as may be required by
the Fund in connection with such qualifications. The Fund shall furnish to
Distributor from time to time, for use in connection with the sale of Shares,
such information with respect to the Fund and the Shares as Distributor may
reasonably request, and the Fund warrants that the statements contained in any
such information, when so signed by the Fund's officers, shall be true and
correct. The Fund also shall furnish to Distributor upon request: (a) annual
audited reports of the Fund's books and accounts, made by independent public
accountants regularly retained by Fund, (b) semi-annual reports with respect to
the Fund, prepared by the Fund, and (c) from time to time such additional
information regarding the Fund's financial condition as Distributor may
reasonable request.
6. The Fund represents to Distributor that the Registration Statements
and Prospectus filed by the Fund with the Commission under the 1940 Act and the
1933 Act have been prepared in conformity with the requirements of the 1940 Act
and the 1933 Act and rules and regulations of the Commission thereunder. As
used in this Section 6 and in Section 7, the terms "Registration Statement" and
"Prospectus" shall mean any Registration Statement and Prospectus (together with
the related Statement of Additional Information) filed by the Fund with the
Commission and any amendments and supplements thereto which at any time shall
have been filed with the Commission. The Fund represents and warrants to
Distributor that the Registration Statement and Prospectus, when such
Registration Statement becomes effective, will contain all statements required
to be stated therein in conformity with the Act and the rules and regulations of
the Commission; that all statements of fact contained in the Registration
Statement and Prospectus will be materially true and correct when the
Registration Statement becomes effective; and that neither the Registration
Statement nor the Prospectus, when such Registration Statement becomes effective
will include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Fund (the "Indemnifying Party") will indemnify and hold
harmless the Distributor and each of its Directors and officers and each person,
if any, who controls the Distributor within the meaning of Section 15 of the Act
(the "Indemnified Parties") against all losses, liabilities, damages or expenses
(including the reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees incurred in
connection therewith) arising from any claim, demand, action or suit
(collectively, "Claims"), arising by reason of any person's acquiring any of the
Shares through the Indemnified Party, which may be based on the ground that the
Registration Statement or Prospectus includes or included an untrue statement of
a material fact or omits or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, unless any such fact, statement or omission was made in reliance
upon information furnished by the Distributor to the Fund.
7. The Distributor covenants and agrees that, in selling Shares, it will
use its best efforts in all respects duly to conform with the requirements of
all state and federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. ("NASD") relating to the sale of Shares,
and the Distributor (the "Indemnifying Party") will indemnify and hold harmless
the Fund and each of its Directors and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act (the
"Indemnified Parties") against all losses, liabilities, damages or expenses
(including the reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees incurred in
connection therewith) arising from any claim, demand, action or suit
(collectively, "Claims"), arising by reason of any person's acquiring any of the
Shares through the Distributor, which may be based upon the 1933 Act or any
other statute or common law, on account of any wrongful act of the Distributor
or any of its employees (including any failure to conform with any requirement
of any state or federal law or the Rules of Fair Practice of the NASD relating
to the sale of Shares) or on the ground that the Registration Statement or
Prospectus includes or included an untrue statement of a material fact or omits
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, if and only if any such
fact, statement or omission was made in reliance upon information furnished by
the Distributor to the Fund.
8. In no case is the indemnity of any Indemnifying Party in favor of any
Indemnified Party to be deemed to protect any such Indemnified Party against
liability to which such Indemnified Party would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
or his duties or by reason of its or his reckless disregard of its or his
obligations and duties under this Agreement, or is an Indemnifying Party to be
liable under its indemnity herein with respect to any Claim made against any
Indemnified Party unless such Indemnified Party shall have notified the
Indemnifying Party in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the Claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify an Indemnifying Party of any such Claim shall not relieve it from any
liability which it may have to any Indemnified Party otherwise than on account
of its indemnity herein. The Indemnifying Party shall be entitled to
participate, at its own expense, in the defense, or, if it so elects, to assume
the defense, of any suit brought to enforce any such Claim, and, if the
Distributor elects to assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to each Indemnified Party. In the event
that the Indemnifying Party elects to assume the defense of any such suit and
retain such counsel, each Indemnified Party shall bear the fees and expenses of
any additional counsel retained by its but, in case the Indemnifying Party does
not elect to assume the defense of any such suit, it shall reimburse the
Indemnified Parties for the reasonable fees and expenses of any counsel retained
by them. Except with the prior written consent of the Indemnifying Party, no
Indemnified Party shall confess any Claim or make any compromise in any case in
which the Indemnifying Party will be asked to indemnify such Indemnified Party.
Each Indemnifying Party agrees promptly to notify the Indemnified Party of the
commencement of any litigation or proceeding against it in connection with the
issuance and sale of any of the Shares.
9. The Fund will pay, or cause to be paid:
(a) all costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing
of the Registration Statement, Prospectus and Statement of Additional
Information with respect to Shares, the registration of Shares under the
1933 Act and the 1940 Act, the qualification of Shares for sale in the
various states and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer in any such state, and preparing
and mailing to stockholders Prospectuses, Statements of Additional
Information, statements and confirmations and periodic reports (including
the expense of setting in type the Registration Statement, Prospectus and
Statement of Additional Information or any periodic report with respect to
Shares);
(b) all expenses in connection with maintaining facilities for the
issue and transfer of Shares and for supplying information, prices and
other data to be furnished by the Fund hereunder;
(c) the cost of preparing temporary or permanent certificates for
Shares, if any;
(d) the cost and expenses of delivering to the Distributor at its
office in Chicago, Illinois all Shares purchased through it as agent
hereunder;
(e) a distribution fee at an annual rate of 0.25% of the Fund's
average daily net assets for its then-current fiscal year in anticipation
of, or as reimbursement for, expenses incurred by the Distributor in
connection with the sale of Shares, subject to the Distribution Plan;
(f) all fees and disbursements of the Transfer Agent and Custodian;
(g) a fee to the Administrator of the Fund (pursuant to the
Administration Agreement); and
(h) a fee to the Adviser of the Fund (pursuant to the Investment
Advisory Agreement with such Adviser).
The Distributor agrees that, with respect to the sale of Shares, after
the Prospectus and Statement of Additional Information and periodic reports have
been set in type, it will bear the expense (other than the cost of mailing to
stockholders of the Fund) of printing and distributing any copies thereof which
are to be used in connection with the offering or sale of Shares to any dealer
or prospective investor. The Distributor further agrees that it will bear the
expenses in preparing, printing and distributing any other literature used by
the Distributor or furnished by it for use by any dealer in connection with the
offering of the Shares for sale to the public and any expense of sending
confirmations and statements to any dealer having a Broker/Dealer Agreement with
the Distributor. The Distributor will also bear the cost of any compensation
paid to dealers in connection with the sale of Shares.
10. The Fund may but shall not be obligated to propose from time to time
such amendment or amendments to the Registration Statement and such supplement
or supplements to the Prospectus as, in the light of future developments, may,
in the opinion of the Fund's counsel, be necessary or advisable. If the Fund
shall not propose such an amendment or amendments and/or supplement or
supplements within fifteen days after receipt by the Fund of a written request
from Distributor to do so, Distributor may, at its option, terminate this
agreement. The Fund shall not file any amendment to the Registration Statement
or supplement to the Prospectus without giving Distributor reasonable notice
thereof in advance; provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such amendments to
the Registration Statement and/or supplements to the Prospectus, of whatever
character, as the Fund may deem advisable, such right being in all respects
absolute and unconditional.
11. If, at any time during the term of this Agreement, the Fund shall deem
it necessary or advisable in the best interests of the Fund that any amendment
to this Agreement be made in order to comply with any recommendation or
requirement of the Commission or other governmental authority or to obtain any
advantage under Maryland or federal tax laws, it shall notify the Distributor of
the form of amendment which it deems necessary or advisable and the reasons
therefor. If the Distributor declines to assent to such amendment (after a
reasonable time), the Fund may terminate this Agreement forthwith by written
notice to the Distributor without payment of any penalty. If, at any time
during the term of this Agreement, the Distributor requests the Fund to make any
change in its Articles of Incorporation and Bylaws or in its methods of doing
business which are necessary in order to comply with any requirement of federal
law or regulations of the Commission or of a national securities association of
which the Distributor is or may become a member, relating to the sale of Shares,
and the Fund fails (after a reasonable time to make any such change as
requested, the Distributor may terminate this Agreement forthwith by written
notice to the Fund without payment of any penalty.
12. Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records and other
information relative to the Fund and prior, present or potential stockholders of
the Fund and not to use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where Distributor may be exposed
to civil or criminal contempt proceedings for failure to comply, when requested
to divulge such information by duly constituted authorities, or when so
requested by the Fund.
13. The Distributor shall be an independent contractor and neither the
Distributor nor any of its Directors, officers or employees as such, is or shall
be an employee of the Fund. It is understood that Directors, officers and
stockholders of the Fund are or may become interested in the Distributor, as
Directors, officers, employees, or otherwise and that Directors, officers,
employees, or otherwise and that Directors, officers and employees of the
Distributor are or may become similarly interested in the Fund and that the
Distributor may be or become interested in the Fund as a stockholder or
otherwise. The Distributor is responsible for its own conduct and the
employment, control and conduct (but only with respect to the duties and
obligations of the Distributor hereunder) of its agents and employees and for
any injury to any of such agents or employees or to others through its agents or
employees. The Distributor assumes full responsibility for its agents and
employees under applicable statutes and agrees to pay all employer taxes
thereunder.
14. This Agreement shall become effective upon its execution and shall
continue in force until two years from such date, on which date it will
terminate unless its continuance thereafter is specifically approved at least
annually (i) by the vote of a majority of the Board of Directors of the Fund who
are not "interested persons" of the Fund or of the Distributor at a meeting
specifically called for the purpose of voting on such approval, and (ii) by the
Board of Directors of the Fund, or by the "vote of a majority of the outstanding
voting securities" of the Fund as to which this Agreement is to continue. The
aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act. This Agreement may be terminated at any time by either party without
payment of any penalty on not more than 60 days' notice nor less than 30 days'
written notice to the other party. This Agreement shall automatically terminate
in the event of its assignment.
15. No provision of this agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
16. The terms "vote of a majority of the outstanding voting securities",
"interested person", "assignment" and "specifically approved at least annually"
shall have the respective meanings specified in, and shall be construed in a
manner consistent with, the 1940 Act, subject, however, to the exemptions as may
be granted by the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
KEELEY SMALL CAP VALUE FUND, INC.
By: /s/ John L. Keeley, Jr.
-----------------------
Title: President and Treasurer
KEELEY INVESTMENT CORP.
By: /s/ John L. Keeley, Jr.
-----------------------
Title: President and Treasurer
EXHIBIT 6.2
BROKER/DEALER AGREEMENT
Keeley Investment Corp.
401 South LaSalle Street
Suite 1201
Chicago, Illinois 60605
Gentlemen:
We desire to enter into an Agreement with you for the sale of shares of
common stock in KEELEY Small Cap Value Fund, Inc. (the "Fund") that are now or
hereafter available for sale to our customers. You are the principal
underwriter (as such term is defined in the Investment Company Act of 1940, as
amended) of the offering of shares of the Fund and the agent for the continuous
distribution of such shares. As used herein the term "Prospectus" means the
prospectus of the Fund and, unless the context otherwise requires, related
Statement of Additional Information (the "Statement of Additional Information")
incorporated therein by reference, as the same are amended and supplemented from
time to time.
In consideration for the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. Customers of ours who purchase Fund shares are for all purposes our
customers and not customers of the Fund. We shall be responsible for
opening, approving and monitoring customer accounts and for the review
and supervision of these accounts, all in accordance with the rules of
the Securities and Exchange Commission ("SEC") and National
Association of Securities Dealers, Inc. (the "NASD"). In no
transaction involving Fund shares shall we have any authority to act
as agent for the Fund or for you.
2. All orders for the purchase of any Fund shares shall be executed at
the then current public offering price per share (i e., the net asset
value per share plus the applicable sales load, if any) and all orders
for the redemption of Fund shares shall be executed at the net asset
value share, in each case as described in the Prospectus. The minimum
initial purchase order shall be as set forth in the Prospectus. The
Fund reserves the right to reject any purchase order. Unless
otherwise mutually agreed in writing, each transaction shall be
promptly confirmed in writing to the customer on a fully disclosed
basis. We agree that upon receipt of duplicate confirmations we will
examine the same and promptly notify the Fund of any errors or
discrepancies which we discover and shall promptly bring to the
attention of the Fund any errors in such confirmations claimed by our
customers. The Fund reserves the right, at its discretion and without
notice, to suspend the sale of shares or withdraw entirely the sale of
shares of the Fund.
3. In ordering shares of the Fund, we shall rely solely and conclusively
on the representations contained in the Prospectus. We agree that we
shall not offer or sell shares of the Fund except in compliance with
all applicable federal and state securities laws and the rules and
regulations of applicable regulatory agencies or authorities. In
connection with offers to sell and sales of shares of the Fund, we
agree to deliver or cause to be delivered to each person to whom any
such offer or sale is made, at or prior to the time of such offer or
sale, a copy of the Prospectus, and upon request, the Statement of
Additional Information. We further agree to obtain for each customer
to whom we sell Fund shares any taxpayer identification number
certification required under Section 3406 of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations promulgated
thereunder, and to provide you or your designee with timely written
notice of any failure to obtain such taxpayer identification number
certification in order to enable the implementation of any required
backup withholding in accordance with Section 3406 of the Code and the
regulations thereunder. Unless otherwise mutually agreed in writing,
you shall deliver or cause to be delivered to each customer who
purchases shares of the Fund through us copies of all annual and
interim reports, proxy solicitation materials and any other
information and materials relating to the Fund and prepared by or on
behalf of you, the Fund or its investment adviser, investment
sub-adviser, custodian, transfer agent or dividend disbursing agent
for distribution to such customer. You agree to supply us with copies
of the Prospectus, Statement of Additional Information, annual
reports, interim reports, proxy solicitation materials and any such
other information and materials relating to the Fund in reasonable
quantities upon request. We acknowledge that any material or
information that you furnish to us, other than Prospectuses, annual
and interim reports to stockholders and proxy solicitation materials
prepared by the Fund, are your sole responsibility and not the
responsibility of the Fund.
4. We shall not make any representations concerning Fund shares other
than those contained in the Prospectus or in any promotional materials
or sales literature furnished to us by you or the Fund. We shall not
furnish or cause to be furnished to any person or display or publish
any information or materials relating to the Fund (including, without
limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters,
signs or other similar materials), except such information and
materials as may be furnished to us by you or the Fund, and such other
information and materials as may be approved in writing by you.
5. In determining the amount of any dealer allowance or sales commission
payable to us hereunder, you reserve the right to exclude any sales
which you reasonably determine are not made in accordance with the
terms of the Prospectus and the provisions of this Agreement. Unless
at the time of transmitting an order we advise you or the transfer
agent for the Fund (the "Transfer Agent") to the contrary, the shares
ordered will be deemed to be the total holdings of the specified
investor.
6. a. In accordance with the terms of the Prospectus, a reduced sales
load may be available to customers that purchase shares of a Fund
sold with a sales load at the then-current public offering price
per share applicable to the total value (based on the higher of
current net asset value or the public offering price originally
paid) of (i) current purchases plus (ii) shares of the Fund that
are already beneficially owned at the time of purchase by the
customer on which a sales load has been paid. Certain purchases
made by a customer and certain other persons (for example, a
customer's spouse) as set forth from time to time in the
Prospectus may be combined for purposes of qualifying for a
reduced sales charge. In each case where a reduced sales load is
applicable, we agree to furnish to the Transfer Agent sufficient
information to permit confirmation of qualification for a reduced
sales load, and acceptance of the purchase order is subject to
such confirmation. Reduced sales charges may be modified or
terminated at any time at the sole discretion of the Fund.
a. We acknowledge that certain classes of investors may be entitled
to purchase sales of the Fund at net asset value without a sales
load as from time to time provided in the Prospectus.
b. We agree to advise you promptly at your request as to the amount
of any and all sales by us qualifying for a reduced sales load or
no sales load.
7. The procedures relating to orders and the handling thereof will be
subject to the terms of the Prospectus and instructions received by us
from you or the Transfer Agent from time to time. No conditional
orders will be accepted. We agree that purchase orders placed by us
will be made only for the purpose of covering purchase orders already
received from our customers and that we will not make purchases for
any other securities dealer or broker. Further, we shall place
purchase orders from customers with the Fund immediately and shall not
withhold the placement of such orders so as to profit ourselves;
provided, however, that the foregoing shall not prevent the purchase
of shares of the Fund by us for our own bona fide investment. We
agree that: (a) we shall not effect any transactions (including,
without limitation, any purchases and redemptions) in Fund shares
registered in the name of, or beneficially owned by, any customer
unless such customer has granted us full right, power and authority to
effect such transactions on his or her behalf, and (b) you, the Fund,
the Transfer Agent and your and their respective officers, directors
or trustees, agents, employees and affiliates shall not be liable for,
and shall be fully indemnified and held harmless by us from and
against, any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorneys' fees) which may
be incurred by you or any of the foregoing persons entitled to
indemnification from us hereunder arising out of or in connection with
the execution of any transactions in Fund shares registered in the
name of, or beneficially owed by, any customer in reliance upon any
oral or written instructions believed to be genuine and to have been
given by or on behalf of us. The indemnification agreement contained
in this Paragraph 7 shall survive the termination of this Agreement.
8. a. We agree that payment for orders from us for the purchase of Fund
shares will be made in accordance with the terms of the
Prospectus as follows:
Dealers'
As a % of As a % of Reallowance
Offering Price Net Asset as a % of
Amount of Transaction Per Share Value Offering Price
- --------------------- --------- ------ --------------
Less than $50,000 4.50% 4.71% 4.00%
$ 50,000 but less than $100,000 4.00% 4.17% 3.50%
$100,000 but less than $250,000 3.00% 3.09% 2.50%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 and over 2.00% 2.04% 1.50%
On or before the settlement date of each purchase order for
shares of the Fund, we shall remit to an account designated by
you with the Transfer Agent an amount equal to the then current
public offering price of such Fund shares being purchased without
deduction of our dealer allowance, if any, with respect to such
purchase order as determined by you in accordance with the terms
of the Prospectus, in which case our dealer allowance, if any
shall be payable to us on at least a monthly basis. If we are a
member of the National Securities Clearing Corporation ("NSCC"),
we shall place our orders and settle the transactions through the
NSCC in accordance with its rules and regulations. If payment
for any purchase order is not received in accordance with the
terms of the Prospectus, you reserve the right, without notice,
to cancel the sale and to hold us responsible for any loss
sustained as a result thereof.
a. If any Fund shares sold under the terms of this Agreement are
sold with a sales load and are redeemed by the Fund or
repurchased for the account of the Fund or are tendered for
redemption within seven (7) business days after confirmation of
our purchase order for such Fund shares: (i) we shall forthwith
refund to you the full dealer allowance received by us on the
sale; and (ii) you shall forthwith pay to the Fund your portion
of the sales load on the sale which had been retained by you, if
any, and shall also pay to the Fund the amount refunded by us.
b. In addition to the fees delineated above in paragraph 8(a), you
agree, subject to the other terms and conditions of this
Agreement, to pay us a distribution fee and we agree to accept as
full payment therefore, for distribution and marketing services
in the promotion of the Fund's shares, a distribution fee
calculated daily and payable quarterly and based on the average
daily net assets of Fund shares which are owned of record by us
as nominee for our customers or which are owned by those
customers of our firm whose records, as maintained by the Fund or
its agent, designate us as the customer's dealer of record, equal
to 0.25% on an annual basis.
We acknowledge that the distribution fee paid will be paid from monies
received by you under a Distribution Plan adopted pursuant to Rule
12b-1 (the "Plan") under the Investment Company Act of 1940, as
amended (the "Act"). Under the Plan the Fund is authorized to make
expenditures of Fund assets for various distribution and support
services. Further, we understand and agree that (i) all distribution
fees are subject to the limitations contained in the Fund's Plan,
which may be amended or discontinued at any time, and (ii) our failure
to provide services as agreed will render us ineligible to receive
distribution fees. We shall furnish to you and the Fund such
information as you and the Fund shall reasonably request with respect
to the fees and services hereunder.
9. We hereby represent and warrant that: (a) we are a corporation,
partnership or other entity duly organized and validly existing in
good standing under the laws of the jurisdiction in which we are
organized; (b) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly
authorized by all necessary action and all other authorizations and
approvals (if any) required for our lawful execution and delivery of
this Agreement and our performance hereunder have been obtained; and
(c) upon execution and delivery by us, and assuming due and valid
execution and delivery by you, this Agreement will constitute a valid
and binding agreement, enforceable against us in accordance with its
terms.
10. We further represent and warrant that we are a member of the NASD and,
with respect to any sales in the United States, we agree to abide by
all of the rules and regulations of the NASD, including, without
limitation, its Rules of Fair Practice. We agree to comply with all
applicable federal and state laws, rules and regulations. You agree
to inform us, upon our request, as to the states in which you believe
the shares of the Fund has been qualified for sale under, or exempt
from the requirements of, the respective securities laws of such
states, but you shall have no obligation or responsibility to make
shares of the Fund available for sale to our customers in any
jurisdiction. We agree to notify you immediately in the event of our
expulsion or suspension from the NASD. Our expulsion from the NASD
will automatically terminate this Agreement immediately without
notice. Our suspension from the NASD will terminate this Agreement
effective immediately upon written notice of termination to us.
11. The names and addresses and other information concerning our customers
are and shall remain our sole property, and neither you nor your
affiliates shall use such name, addresses or other information for any
purpose except in connection with the performance of your duties and
responsibilities hereunder and except for servicing and informational
mailings relating to the Fund. Notwithstanding the foregoing, this
Paragraph 11 shall not prohibit you or any of your affiliates from
utilizing for any purpose the names, addresses or other information
concerning any of our customers if such names, addresses or other
information are obtained in any manner other than from us pursuant to
this Agreement. The provisions of this Paragraph 11 shall survive the
termination of this Agreement.
12. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or
joint venture between you and us. Neither party hereto shall be, act
as, or represent itself as, the agent or representative of the other,
nor shall either party have the right or authority to assume, create
or incur any liability or any obligation of any kind, express or
implied, against or in the name of, or on behalf of, the other party.
This Agreement is not intended to, and shall not, create any rights
against either party hereto by any third party solely on account of
this Agreement. Neither party hereto shall use the name of the other
party in any manner without the other party's prior written consent,
except as required by an applicable federal or state law, rule or
regulation, and except pursuant to any promotional programs mutually
agreed upon in writing by the parties hereto.
13. Except as otherwise specifically provided herein, all notices required
or permitted to be given pursuant to this Agreement shall be given in
writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return receipt
requested, or by telex, telegram or similar means of same day delivery
(with confirming copy by mail as provided herein). Unless otherwise
notified in writing, all notices to you shall be given or sent to you
at your office, located at 401 South LaSalle Street, Suite 1201,
Chicago, Illinois 60605, and all notices to us shall be given or sent
to us at our address shown below.
14. This Agreement shall become effective only when accepted and signed by
you, and may be terminated at any time by either party hereto upon
fifteen (15) days' prior written notice to the other party. This
Agreement may be amended only by a written instrument signed by both
of the parties hereto. This Agreement will terminate automatically in
the event if its assignment. This Agreement constitutes the entire
agreement and understanding between the parties hereto relating to the
subject matter hereof and supersedes any and all prior agreements
between the parties relating to said subject matter.
15. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois, without giving effect to
principles of conflicts of laws.
Very truly yours,
- ------------------------------------------------------
Name of Broker/Dealer (Please Print or Type)
- ------------------------------------------------------
Firm
- ------------------------------------------------------
Address
Date: By:
----------- -------------------------
Authorized Officer
NOTE: Please sign and return both copies of this Agreement to Keeley
Investment Corp. Upon acceptance, one countersigned copy will be
returned to you for your files.
Accepted:
KEELEY INVESTMENT CORP.
401 South LaSalle Street
Suite 1201
Chicago, Illinois 60605
Date: By:
----------- -------------------------
Authorized Officer
EXHIBIT 8
CUSTODIAN AGREEMENT
THIS AGREEMENT made on September 8, 1993, between Keeley Small Cap Value
Fund, Inc., a Maryland Corp. (hereinafter called the "Fund"), and FIRST
WISCONSIN TRUST COMPANY, a corporation organized under the laws of the State of
Wisconsin (hereinafter called "Custodian"),
W I T N E S S E T H :
WHEREAS, the Fund desires that its securities and cash shall be hereafter
held and administered by Custodian pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Fund and Custodian agree as follows:
1. Definitions
-----------
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
President, a Vice President, the Secretary and the Treasurer of the Fund, or any
other persons duly authorized to sign by the Board of Directors.
The word "Board" shall mean Board of Directors of Keeley Small Cap Value
Fund, Inc.
2. Names, Titles and Signatures of the Fund's Officers
---------------------------------------------------
An officer of the Fund will certify to Custodian the names and signatures of
those persons authorized to sign the officers' certificates described in Section
1 hereof, and the names of the members of the Board of Directors, together with
any changes which may occur from time to time.
3. Receipt and Disbursement of Money
---------------------------------
A. Custodian shall open and maintain a separate account or accounts in
the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Fund. Custodian shall make payments of cash to, or for
the account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the Fund upon
the delivery of such securities to Custodian, registered in the
name of the Fund or of the nominee of Custodian referred to in
Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of the common stock of
the Fund upon delivery thereof to Custodian, or upon proper
instructions from the Keeley Small Cap Value Fund, Inc.;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held
by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Directors of the Fund.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c) or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Fund.
C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Fund and the Custodian in the amount of checks received in payment for
shares of the Fund which are deposited into the Fund's account.
4. Segregated Accounts
-------------------
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the portfolio, into which
account(s) may be transferred cash and/or securities.
5. Transfer, Exchange, Redelivery, etc. of Securities
--------------------------------------------------
Custodian shall have sole power to release or deliver any securities of the
Fund held by it pursuant to this Agreement. Custodian agrees to transfer,
exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon receipt
by Custodian of payment therefor;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone or
other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or
otherwise;
(e) upon conversion of such securities pursuant to their terms into other
securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary securities
for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of the
Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b), (d), (e),
(f) and (g), securities or cash receivable in exchange therefor shall be
deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g) or (h) of this Section 5 and
also, in respect of item (i), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery or a money market instrument, or any
other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
6. Custodian's Acts Without Instructions
-------------------------------------
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Fund, all necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so.
7. Registration of Securities
--------------------------
Except as otherwise directed by an officers' certificate, Custodian shall
register all securities, except such as are in bearer form, in the name of a
registered nominee of Custodian as defined in the Internal Revenue Code and any
Regulations of the Treasury Department issued hereunder or in any provision of
any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times identifiable in
its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
8. Voting and Other Action
-----------------------
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officer's certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
9. Transfer Tax and Other Disbursements
------------------------------------
The Fund shall pay or reimburse Custodian from time to time for any transfer
taxes payable upon transfers of securities made hereunder, and for all other
necessary and proper disbursements and expenses made or incurred by Custodian in
the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection with
securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
10. Concerning Custodian
--------------------
Custodian shall be paid as compensation for its services pursuant to this
Agreement such compensation as may from time to time be agreed upon in writing
between the two parties. Until modified in writing, such compensation shall be
as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon any
certificate herein described or certified copy of any resolution of the Board,
and may rely on the genuineness of any such document which it may in good faith
believe to have been validly executed.
The Fund agrees to indemnify and hold harmless Custodian and its nominee
from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the Fund for such
items. In the event of any advance of cash for any purpose made by Custodian
resulting from orders or instructions of the Fund, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefor.
11. Subcustodians
-------------
Custodian is hereby authorized to engage another bank or trust company as a
Subcustodian for all or any part of the Fund's assets, so long as any such bank
or trust company is a bank or trust company organized under the laws of any
state of the United States, having an aggregate capital, surplus and undivided
profit, as shown by its last published report, of not less than Two Million
Dollars ($2,000,000) and provided further that, if the Custodian utilizes the
services of a Subcustodian, the Custodian shall remain fully liable and
responsible for any losses caused to the Fund by the Subcustodian as fully as if
the Custodian was directly responsible for any such losses under the terms of
the Custodian Agreement.
Notwithstanding anything contained herein, if the Fund requires the
Custodian to engage specific Subcustodians for the safekeeping and/or clearing
of assets, the Fund agrees to indemnify and hold harmless Custodian from all
claims, expenses and liabilities incurred or assessed against it in connection
with the use of such Subcustodian in regard to the Fund's assets, except as may
arise from its own negligent action, negligent failure to act or willful
misconduct.
12. Reports by Custodian
--------------------
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of Fund.
Custodian shall furnish to the Fund, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and of auditors
employed by, the Fund.
13. Termination or Assignment
-------------------------
This Agreement may be terminated by the Fund, or by Custodian, on ninety
(90) days notice, given in writing and sent by registered mail to Custodian at
P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at 401 S. LaSalle St.,
Suite 1201, Chicago, Illinois 60605, as the case may be. Upon any termination
of this Agreement, pending appointment of a successor to Custodian or a vote of
the shareholders of the Fund to dissolve or to function without a custodian of
its cash, securities and other property, Custodian shall not deliver cash,
securities or other property of the Fund to the Fund, but may deliver them to a
bank or trust company of its own selection, having an aggregate capital, surplus
and undivided profits, as shown by its last published report of not less than
Two Million Dollars ($2,000,000) as a Custodian for the Fund to be held under
terms similar to those of this Agreement, provided, however, that Custodian
shall not be required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting a charge on or
against the properties then held by Custodian or on or against Custodian, and
until full payment shall have been made to Custodian of all its fees,
compensation, costs and expenses, subject to the provisions of Section 10 of
this Agreement.
This Agreement may not be assigned by Custodian without the consent of the
Fund, authorized or approved by a resolution of its Board of Directors.
14. Deposits of Securities in Securities Depositories
-------------------------------------------------
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Directors of the Fund approves by resolution the
use of such central securities clearing agency or securities depository.
15. Records
-------
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Fund pursuant to the
provisions of the Investment Company Act of 1940, as amended, or the rules and
regulations promulgated thereunder, Custodian agrees to make any such records
available to the Fund upon request and to preserve such records for the periods
prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRST WISCONSIN TRUST COMPANY
/s/ Andrea Lydolph By: /s/ Joe D. Redwine
- ------------------------------- -----------------------
ASSISTANT SECRETARY VICE PRESIDENT
Attest: KEELEY SMALL CAP VALUE FUND, INC.
/s/ Mary Filice Vice President By: /s/ John L. Keeley, Jr.
- -------------------------------- ----------------------------
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL AGENT SERVICE
ANNUAL FEE SCHEDULE FOR
DOMESTIC PORTFOLIOS
- - Fund groups with an aggregate market value of less than $100 million
- - Annual fee based on market value of assets:
$0.20 per $1,000 (2.0 basis points)
- - Minimum annual fee per fund: $5,000
- - Investment transactions: (purchase, sale, exchange, tender, redemption,
maturity, receipt, delivery)
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$75.00 per Euroclear
$8.00 per principal reduction on pass-through certificates
$35.00 per option/futures contract
$7.50 per variation margin transaction
$7.50 per Fed wire deposit or withdrawal
- - Variable Amount Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is 1/4
of 1%, is deducted from the variable amount note income at the time it is
credited to your account.
- - Extraordinary expenses: Based on time and complexity involved.
- - Out-of-pocket expenses: Charged to the account.
- - Fees are billed quarterly, based on market value at the beginning of the
quarter.
EXHIBIT 9.1
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Keeley Small Cap Value Fund, Inc., a Maryland Corp.,
hereinafter called the "Fund", and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC", is entered into on this 8th day of
September, 1993.
WITNESSETH:
WHEREAS, Keeley Small Cap Value Fund, Inc., is a financial services company
providing investment opportunities through mutual funds to various investors;
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the Fund and FTC do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund accounting
services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date basis using
security trade information communicated from the investment manager on
a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Directors and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Directors shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as
to short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Fund as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
(3) Account for fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other fund share activity as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Fund.
(3) Determine net investment income (earnings) for the Fund as
of each valuation date. Account for periodic distributions of
earnings to shareholders and maintain undistributed net investment
income balances as of each valuation date.
(4) Maintain a general ledger for the Fund in the form as agreed
upon.
(5) For each day the Fund is open as defined in the prospectus,
determine the net asset value of the Fund according to the accounting
policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of Fund operation at such time
as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain tax accounting records for the investment portfolio
of the Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
cost basis defined for the Fund.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the fund accounting records available
to Keeley Small Cap Value Fund, Inc., the Securities and Exchange
Commission, and the outside auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
2. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board
of Directors that affects accounting practices and procedures under this
Agreement shall be effective upon written receipt and acceptance by the FTC.
3. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right
to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Fund under
this Agreement.
4. COMPENSATION. FTC shall be compensated for providing the services set
forth in this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
5. PERFORMANCE OF SERVICE. FTC shall exercise reasonable care in the
performance of its duties under the Agreement. The Keeley Small Cap Value Fund,
Inc. agrees to reimburse and make FTC whole for any loss or damages (including
reasonable fees and expenses of legal counsel) arising out of or in connection
with its actions under this Agreement so long as FTC acts in good faith and is
not negligent or guilty of any willful misconduct.
FTC shall not be liable or responsible for delays or errors occurring
by reason of circumstances beyond its control, including acts of civil or
military authority, natural or state emergencies, fire, mechanical breakdown,
flood or catastrophe, acts of God, insurrection, war, riots or failure of
transportation, communication or power supply.
In the event of a mechanical breakdown beyond its control, FTC shall
take all reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and the correcting of any
errors resulting from such a breakdown will be at the expense of FTC. FTC
agrees that it shall at all times have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of electrical
data processing equipment to the extent appropriate equipment is available.
Representatives of the Fund shall be entitled to inspect FTC's premises and
operating capabilities at any time during regular business hours of FTC, upon
reasonable notice to FTC.
This indemnification includes any act, omission to act, or delay by
FTC in reliance upon, or in accordance with, any written or oral instruction it
receives from any duly authorized officer of the Fund.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
6. NO AGENCY RELATIONSHIP. Nothing herein contained shall be deemed to
authorize or empower FTC or the Fund to act as agent for any other party to this
Agreement, or to conduct business in the name of, or for the account of, any
other party to this Agreement.
7. OWNERSHIP OF RECORDS. All records prepared or maintained by FTC on
behalf of the Fund remain the property of the Fund and will be surrendered
promptly on the written request of an authorized officer of the Fund.
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Fund's business, which is received by FTC during the course of
rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Fund or its agent, which may
be FTC, shall furnish to FTC the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. The Fund will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Fund, or within three (3) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
11. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
12. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by Keeley Small Cap Value Fund, Inc. by written notice
to FTC, FTC will promptly, upon such termination and at the expense of Keeley
Small Cap Value Fund, Inc., transfer to such Successor all relevant books,
records, correspondence and other data established or maintained by FTC under
this Agreement in a form reasonably acceptable to Keeley Small Cap Value Fund,
Inc. (if such form differs from the form in which FTC has maintained the same,
Keeley Small Cap Value Fund, Inc. shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from FTC's
personnel in the establishment of books, records and other data by such
successor.
13. CHOICE OF LAW. This memorandum of understanding shall be construed in
accordance with the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
/s/ Andrea Lydolph By /s/ Joe D. Redwine
- ------------------- ---------------------
ATTEST: Keeley Small Cap Value Fund, Inc.
/s/ Mary Filice By /s/ John L. Keeley, Jr.
- --------------- ---------------------------
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
FUND VALUATION AND ACCOUNTING
ANNUAL FEE SCHEDULE
FOR DOMESTIC PORTFOLIOS
PORTFOLIO SERVICES - FIXED INCOME FUNDS
- - Annual fee per fund based on market value of assets:
$22,000 for the first $40,000,000
2/100 of 1% (2 basis points) on the next $200,000,000
1/100 of 1% (1 basis point) on the balance
- - Out-of-pocket expenses, including daily pricing service
- - Fees are billed monthly
PORTFOLIO SERVICES - EQUITY/BALANCED FUNDS
- - Annual fee per fund based on market value of assets:
$20,000 for the first $40,000,000
2/100 of 1% (2 basis points) on the next $200,000,000
1/100 of 1% (1 basis point) on the balance
- - Out-of-pocket expenses, including daily pricing service
- - Fees are billed monthly
PORTFOLIO SERVICES - MONEY MARKET FUNDS
- - Annual fee per fund based on market value of assets:
$22,000 for the first $40,000,000
5/1000 of 1% (1/2 basis point) on the balance
- - Out-of-pocket expenses, including daily pricing service
- - Fees are billed monthly
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
FUND VALUATION AND ACCOUNTING
ASSET PRICING COSTS
CHARGE PER ITEM PER VALUATION
ASSET TYPE (DAILY, WEEKLY, ETC.)
---------- -----------------------------
Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Gov't/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
Pricing costs are billed monthly
EXHIBIT 9.2
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this 8 day of September, 1993,
by and between Keeley Small Cap Value Fund, Inc. (hereinafter referred to as the
"Fund") and Firstar Trust Company, a corporation organized under the laws of
the State of Wisconsin (hereinafter referred to as the "Agent").
W I T N E S S E T H:
WHEREAS, the Fund is an open-ended management investment company which is
registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions for
the benefit of its customers;
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as
follows:
1. Terms of Appointment; Duties of the Agent
-----------------------------------------
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints the Agent to act as transfer agent and dividend
disbursing agent.
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares, with prompt delivery, where
appropriate, of payment and supporting documentation to the Fund's
custodian;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares
being held in the appropriate shareholder account;
C. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Fund's custodian;
D. Pay monies (upon receipt from the Fund's custodian, where relevant) in
accordance with the instructions of redeeming shareholders;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds;
G. Issue and/or cancel certificates as instructed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory indemnification
or surety bond;
H. Prepare and transmit payments for dividends and distributions declared
by the Fund;
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Section Rule 17ad-10(e), a record of the total number of shares of the
Fund which are authorized, issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Fund; and
O. Provide a Blue Sky System which will enable the Fund to monitor the
total number of shares sold in each state. In addition, the Fund
shall identify to the Agent in writing those transactions and assets
to be treated as exempt from the Blue Sky reporting to the Fund for
each state. The responsibility of the Agent for the Fund's Blue Sky
state registration status is solely limited to the initial compliance
by the Fund and the reporting of such transactions to the Fund.
2. Compensation
------------
The Fund agrees to pay the Agent for performance of the duties listed in
this Agreement; the fees and out-of-pocket expenses include, but are not limited
to the following: printing, postage, forms, stationery, record retention,
mailing, insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Fund and the Agent.
The Fund agrees to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
3. Representations of Agent
------------------------
The Agent represents and warrants to the Fund that:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
B. It is duly qualified to carry on its business in the state of
Wisconsin;
C. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
D. all requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement; and
E. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4. Representations of the Fund
---------------------------
The Fund represents and warrants to the Agent that:
A. The Fund is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Fund is a corporation or business trust organized, existing, and
in good standing under the laws of Corporation;
C. The Fund is empowered under applicable laws and by its Corporate
Charter and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Corporate Charter have been
taken to authorize it to enter into and perform this Agreement;
E. The Fund will comply with all applicable requirements of the
Securities and Exchange Acts of 1933 and 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules and
regulations of governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Fund being offered for sale.
5. Covenants of Fund and Agent
---------------------------
The Fund shall furnish the Agent a certified copy of the resolution of the
Board of Directors of the Fund authorizing the appointment of the Agent and the
execution of this Agreement. The Fund shall provide to the Agent a copy of the
Fund Corporate Charter bylaws of the Corp., and all amendments.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with its request.
6. Indemnification; Remedies Upon Breach
-------------------------------------
The Agent agrees to use reasonable care and act in good faith in performing
its duties hereunder.
Notwithstanding the foregoing, the Agent shall not be liable or responsible
for delays or errors occurring by reason of circumstances beyond its control,
including acts of civil or military authority, national or state emergencies,
fire, mechanical or equipment failure, flood or catastrophe, act of God,
insurrection or war. In the event of a mechanical breakdown beyond its control,
the Agent shall take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond the Agent's control. The
Agent will make every reasonable effort to restore any lost or damaged data, and
the correcting of any errors resulting from such a breakdown will be at the
Agent's expense. The Agent agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of Keeley Small Cap Value Fund, Inc.
shall be entitled to inspect the Agent's premises and operating capabilities at
any time during regular business hours of the Agent, upon reasonable notice to
the Agent.
The Fund will indemnify and hold the Agent harmless against any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any claim, demand, action or suit not
resulting from the Agent's bad faith or negligence, and arising out of or in
connection with the Agent's duties on behalf of the Fund hereunder.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit as a
result of the negligence of the Fund or the principal underwriter (unless
contributed to by the Agent's own negligence or bad faith); or as a result of
the Agent acting upon telephone instructions relating to the exchange or
redemption of shares received by the Agent and reasonably believed by the Agent
to have originated from the record owner of the subject shares; or as a result
of the Agent acting upon any instructions executed or orally communicated by a
duly authorized officer or employee of the Fund, according to such lists of
authorized officers and employees furnished to the Agent and as amended from
time to time in writing by a resolution of the Board of Directors of the Fund;
or as a result of acting in reliance upon any genuine instrument or stock
certificate signed, countersigned or executed by any person or persons
authorized to sign, countersign or execute the same.
In order for this section to apply, it is understood that if in any case
the Fund may be asked to indemnify or hold harmless the Agent, the Fund shall be
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent will use reasonable care to notify the Fund
promptly concerning any situation which presents or appears likely to present a
claim for indemnification against the Fund. The Fund shall have the option to
defend the Agent against any claim which may be the subject of this
indemnification and, in the event that the Fund so elects, the Agent will so
notify the Fund, and thereupon the Fund shall take over complete defense of the
claim and the Agent shall sustain no further legal or other expenses in such
situation for which the Agent shall seek indemnification under this section.
The Agent will in no case confess any claim or make any compromise in any case
in which the Fund will be asked to indemnify the Agent, except with the Fund's
prior written consent.
7. Confidentiality
---------------
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Fund and its
shareholders and shall not be disclosed to any other party, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Agent may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
8. Wisconsin Law to Apply
----------------------
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
9. Amendment, Assignment, Termination and Notice
---------------------------------------------
A. This Agreement may be amended by the mutual written consent of the
parties.
B. After the first full year, this Agreement may be terminated upon
ninety (90) day's written notice given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
D. Any notice required to be given by the parties to each other under the
terms of this Agreement shall be in writing, addressed and delivered,
or mailed to the principal place of business of the other party.
E. In the event that the Fund gives to the Agent its written intention to
terminate and appoint a successor transfer agent, the Agent agrees to
cooperate in the transfer of its duties and responsibilities to the
successor, including any and all relevant books, records and other
data established or maintained by the Agent under this Agreement.
F. Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
paid by the Fund.
Keeley Small Cap Value Fund, Inc. Firstar Trust Company
By: /s/ John L. Keeley, Jr. By: /s/ Joe D. Redwine
------------------------ -------------------
Attest: /s/ Mary Filice Attest: /s/ Andrea Lydolph
-------------------- -------------------
Assistant Secretary
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
SHAREHOLDER ACCOUNTING SERVICES
LOAD FUNDS
ANNUAL FEE SCHEDULE
ANNUAL FEE SCHEDULE
- - $14.00 per shareholder account on the first 20,000 accounts
$13.00 per shareholder account on the next 40,000 accounts
$12.00 per shareholder account on the balance
- - Supplemental charge of:
- $2.00 per shareholder account for daily accrual and/or monthly
dividend fund
- - Minimum annual fees of $24,000 for the first fund and $7,000 for each
additional fund
- $7.50 per Fed wire transfer (billed to investor)
- $5.00 per telephone exchange (billed to investor)
- $1.00 per wire order trade
- - Plus out-of-pocket expenses, including but not limited to:
- Telephone - toll-free lines
- Postage
- Programming
- Stationery/envelopes
- Mailing
- Insurance
- Proxies
- Retention of records
- Microfilm/fiche of records
- Special reports
- All other out-of-pocket expenses
- - Fees are billed monthly
EXHIBIT 9.3
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 8 day of September, 1993 by and between
Keeley Small Cap Value Fund, Inc., a Maryland corporation (the "Fund"), and
Sunstone Financial Group, Inc., a Wisconsin corporation (the "Administrator").
WHEREAS, the Fund is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund and the Administrator desire to enter into an agreement
to provide administrative services for the Fund on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment
-----------
The Fund hereby appoints the Administrator as administrator of the Fund for
the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. Services as Administrator
-------------------------
(a) Subject to the direction and control of the Fund's Board of Directors
and utilizing information provided by the Fund and its agents, the Administrator
will: (1) provide office space, facilities, equipment and personnel to carry
out its services hereunder; (2) compile data for and prepare with respect to
the Fund timely Notices to the Securities and Exchange Commission (the
"Commission") required pursuant to Rule 24f-2 under the Act of 1940 and Semi-
Annual Reports on Form N-SAR; (3) prepare for execution by the Fund and file
all federal income and excise tax returns and state income tax returns (and such
other required tax filings as may be agreed to by the parties) other than those
required to be made by the Fund's custodian and transfer agent; (4) prepare
compliance filings relating to the registration of the securities of the Fund
pursuant to state securities laws with the advice of the Fund's counsel; (5)
prepare the Annual and Semi-Annual Reports required pursuant to Section 30(d)
under the Act; (6) assist to the extent requested by the Fund with the
preparation of the Registration Statement for the Fund (on Form N-1A or any
replacement therefor) and any amendments thereto, and proxy materials; (7)
monitor the Fund's expense accruals and cause all appropriate expenses to be
paid from Fund assets on proper authorization from the Fund; (8) monitor the
Fund's status as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended, from time to time; (9) assist in the
acquisition of the Fund's fidelity bond required by the Act, monitor the amount
of the bond and make the necessary Commission filings related thereto; (10)
from time to time as the Administrator deems appropriate, check the Fund's
compliance with the policies and limitations of the Fund relating to the
portfolio investments as set forth in the Prospectus, Statement of Additional
Information, By-laws and Articles of Incorporation (but this function shall not
relieve the Fund's investment adviser of its primary day-to-day responsibility
for assuring such compliance); (11) maintain, and/or coordinate with the other
service providers the maintenance of, the accounts, books and other documents
required pursuant to Rule 31a-1(a) and (b) under the Act; and (12) generally
assist in the Fund's administrative operations. In addition, the Administrator
will monitor the Fund's arrangements with respect to services provided pursuant
to any plan of distribution including reporting to the Board of Directors with
respect to the amounts paid or payable by the Fund from time to time under the
plan and the nature of the services provided, and maintaining appropriate
records in connection with its monitoring duties. The duties of the
Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder.
(b) The Directors of the Fund shall cause the officers, adviser,
distributor, legal counsel, independent accounts, custodian and transfer agent
for the Fund to cooperate with the Administrator and to provide the
Administrator, upon request, with such information, documents and advice
relating to the Fund as is within the possession or knowledge of such persons,
in order to enable the Administrator to perform its duties hereunder. In
connection with its duties hereunder, the Administrator shall be entitled to
rely, and shall be held harmless by the Fund when acting in reliance, upon the
instruction, advice, information or any documents relating to the Fund provided
to the Administrator by any of the aforementioned persons. Fees charged by such
persons shall be a Fund expense. The Administrator shall be entitled to rely on
any document which is reasonably believes to be genuine and to have been signed
or presented by the proper party. The Administrator shall not be held to have
notice of any change of authority of any officer, agent or employee of the Fund
until receipt of written notice thereof from the Fund.
(c) In compliance with the requirements of Rule 31a-3 under the Act, the
Administrator hereby agrees that all records which it maintains for the Fund are
the property of the Fund and further agrees to surrender promptly to the Fund
any of such records upon the Fund's request. The Administrator further agrees
to preserve for the periods prescribed by Rule 31a-2 under the Act the records
described in (a) above which are maintained by the Administrator for the Fund.
3. Fees; Delegation; Expenses
--------------------------
(a) In consideration of the services rendered pursuant to this Agreement,
the Fund will pay the Administrator a fee, computed daily and payable monthly,
at the annual rate of fifteen one-hundredths of one percent (0.15%) on the first
$50,000,000 of the Fund's average daily net assets and five one-hundredths of
one percent (0.05%) on the Fund's average daily net assets in excess of
$50,000,000. In addition, the Fund will reimburse the Administrator its
reasonable out-of-pocket expenses for travel, lodging and meals in connection
with travel on behalf of the Fund or the Fund's investment adviser. The minimum
annual fee to be paid by the Fund to the Administrator hereunder (exclusive of
out-of-pocket expenses) shall be $35,000 per year. Fees shall be paid at a rate
that would aggregate at least the applicable minimum fee.
(b) For the purpose of determining fees payable to the Administrator, net
asset value shall be computed in accordance with the Fund's Prospectus and
resolutions of the Fund's Board of Directors. The fee for the period from the
day of the month this Agreement is entered into until the end of that month
shall be pro-rated according to the proportion which such period bears to the
full monthly period. Upon any termination of this Agreement before the end of
any month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. Should the Fund be
liquidated, merged with or acquired by another fund, any accrued fees shall be
immediately payable.
(c) The Administrator will from time to time employ or associate itself
with such person or persons as the Administrator may believe to be particularly
fitted to assist it in the performance of this Agreement. Such person or
persons may be officers and employees who are employed by both the Administrator
and the Fund. The compensation of such person or persons shall be paid by
Administrator and no obligation shall be incurred on behalf of the Fund in such
respect.
(d) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise provided
herein. Other costs and expenses to be incurred in the operation of the Fund,
including, but not limited to: taxes; interest; brokerage fees and commissions,
if any; salaries, fees and expenses of officers and Directors; Commission fees
and state Blue Sky fees; advisory and administration fees; charges of
custodians, transfer agents, dividend disbursing and accounting services agents;
security pricing services; insurance premiums; outside auditing and legal
expenses; costs of organization and maintenance of corporate existence;
typesetting, printing and mailing of prospectuses, statements of additional
information, supplements, notices and proxy materials for regulatory purposes
and for distribution to current shareholders; typesetting, printing, mailing and
other costs of shareholder reports; expenses incidental to holding meetings of
the Fund's shareholders and Directors; fund accounting fees including pricing of
portfolio securities; and any extraordinary expenses; will be borne by the Fund
or its investment adviser. Expenses incurred for distribution of fund shares,
including the typesetting, printing and mailing of prospectuses for persons who
are not shareholders of the Fund, will be borne by the Fund, its investment
adviser, or its distributor.
4. Proprietary and Confidential Information
----------------------------------------
The Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records and other
information relative to the Fund and prior, present or potential shareholders of
the Fund (and clients of said shareholders), and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Administrator may be exposed to civil or criminal proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund.
5. Limitation of Liability
-----------------------
(a) The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Notwithstanding any other provision of this
Agreement, the Fund shall indemnify and hold harmless the Administrator from and
against any and all claims, demands, losses, expenses and liabilities (whether
with or without basis in fact or law) of any and every nature which the
Administrator may sustain or incur or which may be asserted against the
Administrator by any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon the instruction, advice,
information or documents provided to the Administrator by any party described in
Section 2(b).
(b) In the event the Fund may be asked to indemnify or hold the
Administrator harmless, the Fund shall be advised of all pertinent facts
concerning the situation in question and the Administrator shall use all
reasonable care to notify the Fund promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification, but failure to do so shall not affect the rights hereunder.
(As used in Sections 5(a) and 5(b) hereof, the term "Administrator" shall
include directors, officers, employees and other corporate agents of the
Administrator as well as the corporation itself).
6. Term
----
(a) This Agreement shall become effective as of the date the registration
of the Fund's securities becomes effective with the Commission (the "Effective
Date") and, unless sooner terminated as provided herein, shall continue in
effect for three (3) years from the Effective Date. Thereafter, if not
terminated, this Agreement shall continue automatically in effect for successive
annual periods, unless written notice not to renew is given by the non-renewing
party to the other party at least sixty days prior to the expiration of the
then-current term; provided such continuance is specifically approved at least
annually (i) by the Fund's Board of Directors or (ii) by a vote of a majority
(as defined in the Act) of the outstanding voting securities of the Fund, and in
either event the continuance is also approved by the majority of the Fund
Directors who are not interested persons (as defined in the Act) of any party to
this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval.
(b) This Agreement may be terminated (1) upon mutual consent of the
parties, (2) by the Administrator upon giving the Fund not less than one
hundred eighty (180) days' written notice (which notice may be waived in writing
by the Fund), or (3) subject to the terms of the following sentence, either by
the Fund's Board of Directors or by vote of a majority (as defined in the Act)
of the outstanding voting securities of the Fund, upon giving the Administrator
not less than one hundred eighty (180) days' written notice (which notice may be
waived in writing by the Administrator). In the event the Fund terminates this
Agreement during the initial term of the Agreement for any reason other than the
mutual agreement of the parties, the liquidation of the Fund or a determination
that the Administrator has acted in a manner that constitutes willful
misfeasance, bad faith, gross negligence or a reckless disregard for its
obligations and duties described herein, the Fund agrees to pay the
Administrator within thirty (30) days of such termination the equivalent of
fifty percent (50%) of the balance due the Administrator for the remainder of
the initial term of the Agreement, assuming for purposes of calculation of the
payment that the asset level of the Fund on the date the Administrator is
terminated remains constant for the balance of the initial term.
(c) The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by a written instrument
signed by the Administrator and the Fund.
7. Non-Exclusivity
---------------
The services of the Administrator rendered to the Fund are not deemed to be
exclusive. The Administrator may render such services and any other services to
others, including other investment companies. The Fund recognizes that from
time to time directors, officers and employees of the Administrator may serve as
directors, trustees, officers and employees of other corporations or trusts
(including other investment companies), that such other entities may include the
name of the Administrator as part of their name and that the Administrator or
its affiliates may enter into investment advisory or other agreements with such
other corporations or trusts.
8. Governing Law; Invalidity
-------------------------
This Agreement shall be governed by Wisconsin law. To the extent that the
applicable laws of the State of Wisconsin, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control,
and nothing herein shall be construed in a manner inconsistent with the Act or
any rule or order of the Commission thereunder. Any provision of this Agreement
which may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
9. Notices
-------
Any notice required or to be permitted to be given by either party to the
other shall be in writing and shall be deemed to have been given when sent by
registered or certified mail, postage prepaid, return receipt requested, as
follows: Notice to the Administrator shall be sent to Sunstone Financial
Services, Inc., 207 East Buffalo Street, Suite 400, Milwaukee, WI, 53202,
Attention Miriam M. Allison, and notice to the Fund shall be sent to Keeley
Investment Corp., 401 South LaSalle Street, Suite 1201, Chicago, Illinois,
60605, Attention John Keeley.
10. Entire Agreement
----------------
This Agreement constitutes the entire Agreement of the parties hereto.
11. Counterparts
------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original agreement but such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
KEELEY SMALL CAP VALUE FUND, INC.
By: /s/ John L. Keeley, Jr.
-----------------------
SUNSTONE FINANCIAL GROUP, INC.
By: /s/ Miriam M. Allison
------------------------
President
EXHIBIT 9.4
AMENDMENT NO. 1 TO THE ADMINISTRATION AGREEMENT
This Amendment, dated as of the 8th day of August, 1996, is entered into between
KEELEY Small Cap Value Fund, Inc., a Maryland corporation (the "Fund"), and
Sunstone Financial Group, Inc., a Wisconsin corporation (the "Administrator").
WHEREAS, the Fund and the Administrator have entered into an Administration
Agreement dated as of September 8, 1993 (the "Agreement"); and
WHEREAS, the Fund and the Administrator desire to amend the Agreement as
provided herein.
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. FEES; DELEGATION; EXPENSES. The parties hereto desire to amend the
Agreement to increase the minimum annual fee payable to the Fund and to expand
the out-of-pocket expenses to which the Administrator is entitled to be
reimbursed. From and after the date hereof, Section (a) of the Agreement shall
be amended in its entirety to read as follows:
(a) In consideration of the services rendered pursuant to this Agreement,
the Fund will pay the Administrator a fee, computed daily and payable monthly,
at the annual rate of fifteen one-hundredths of one percent (0.15%) on the first
$50,000,000 of the Fund's average daily net assets and five one-hundredths of
one percent (0.05%) on the Fund's average daily net assets in excess of
$50,000,000.
Out-of-pocket expenses include, but are not limited to, travel, lodging
and meals in connection with travel on behalf of the Fund, programming and
related expenses (previously incurred or to be incurred by Administrator) in
connection with providing electronic transmission of data between the
Administrator and the Funds' other service providers, brokers, dealers and
depositories, and photocopying, postage and overnight delivery expenses.
The minimum annual fee to be paid by the Fund to the Administrator
hereunder (exclusive of out-of-pocket expenses) shall be $38,500 per year. Fees
shall be paid at a rate that would aggregate at least the applicable minimum
fee.
2. MISCELLANEOUS. Except to the extent amended hereby, the Agreement shall
remain unchanged and in full force and effect, and is hereby ratified and
confirmed in all respects as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date and year first above written.
KEELEY SMALL CAP VALUE FUND, INC. SUNSTONE FINANCIAL GROUP, INC.
By: /s/John L. Keeley, Jr. By: /s/Miriam M. Allison
- -------------------------- ------------------------
John L. Keeley, Jr. Miriam M. Allison
President President
EXHIBIT 10
(312) 222-6657
May 17, 1993
Keeley Small Cap Value Fund, Inc.
401 South LaSalle Street
Suite 1201
Chicago, IL 60605
Dear Sirs:
We have acted as counsel for Keeley Small Cap Value Fund, Inc., a Maryland
corporation (the "Fund"), in connection with the registration under the
Securities Act of 1933 (the "Act") of an indefinite number of shares of its
capital stock, $0.01 par value per share, in the Fund's registration statement
on Form N-1A ("Registration Statement"). In this connection, we have examined
originals, or copies certified or otherwise identified to our satisfaction, of
such documents, corporate and other records, certificates and other papers as we
deemed it necessary to examine for the purpose of this opinion, including the
charter and bylaws of the Fund, resolutions of the board of directors
authorizing the issuance of shares, the form of certificates to evidence the
shares, and the Registration Statement.
Based upon the foregoing examination, we are of the opinion that:
1. The Fund is a corporation duly organized and legally existing in good
standing under the laws of Maryland.
2. Upon the issuance and delivery of the shares in accordance with the
charter of the Fund and the resolutions of the board of directors
authorizing the issuance of its shares and the receipt by the Fund of
a purchase price of not less than the net asset value or the par value
per share, the shares will be legally issued and outstanding, full
paid and nonassessable.
In giving the opinion expressed in subparagraph 2 above, we have assumed that
the number of shares issued at any time will not exceed the total number of
shares authorized to be issued by the Fund's charter.
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the Act.
Very truly yours,
SCHWARTZ & FREEMAN
Stephen E. Goodman
SEG:dg
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
KEELEY Small Cap Value Fund, Inc.
We consent to the inclusion in Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A of KEELEY Small Cap Value Fund, Inc. of our
report dated October 24, 1996 on our audit of the financial statements and
financial highlights of the Fund, which report is included in the Annual Report
to Shareholders for the year ended September 30, 1996 which is also included in
the Registration Statement. We also consent to the reference to our Firm under
the caption "INDEPENDENT ACCOUNTANTS" in the Statement of Additional
Information and under the caption "FINANCIAL HIGHLIGHTS" in the Prospectus.
/S/ COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
January 3, 1997
EXHIBIT 13
SUBSCRIPTION AGREEMENT
For and in consideration of the mutual agreements herein contained, John L.
Keeley, Jr., hereinafter referred to as "Subscriber" hereby agrees to purchase
from Keeley Small Cap Value Fund, Inc. (the "Fund"), a Maryland corporation, and
Fund agrees to sell to Subscriber 10,000 shares of capital stock of Fund, par
value $0.01 a share, at the price of $10 a share. Subscriber agrees to pay
$100,000 to Fund upon demand.
Subscriber agrees that the shares are being purchased for investment with
no present intention of reselling or redeeming said shares.
/s/ John L. Keeley, Jr.
-------------------------
John L. Keeley, Jr.
Subscriber of shares of Keeley Small Cap Value Fund, Inc.
Subscription agreed to:
KEELEY SMALL CAP VALUE FUND, INC.
By: /s/ John L. Keeley, Jr.
Date: August 31, 1993
EXHIBIT 14
KEELEY SMALL CAP VALUE FUND, INC.
401 SOUTH LASALLE STREET, SUITE 1201
CHICAGO, ILLINOIS 60605
312-786-5050
800-533-5344
JANUARY 1, 1997
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
Please read the following information together with the Individual Retirement
Account Custodial Agreement and the Prospectus(es) for the fund(s) you select
for investment of your IRA contributions.
You may revoke this account any time within seven calendar days after it is
established by mailing or delivering a written request for revocation to:
KEELEY SMALL CAP VALUE FUND, c/o Firstar Trust Company, 615 East Michigan
Street, 3rd Floor, Milwaukee, Wisconsin 53202-5207, Attention: Mutual Fund
Department. If your revocation is mailed, the date of the postmark (or the date
of certification if sent by certified or registered mail) will be considered
your revocation date. Upon proper revocation, you will receive a full refund of
your initial contribution, without any adjustments for items such as sales
charges, administrative fees or fluctuations in market value.
1. GENERAL. Your IRA is a custodial account created for your exclusive
benefit, and Firstar Trust Company serves as Custodian. Your interest in the
account is nonforfeitable.
2. INVESTMENTS. All contibutions to your IRA must be in cash, other than
rollover contributions and transfers. Contributions made to your IRA will be
invested in one or more of the regulated investment companies for which Keeley
Asset Management Corp. serves as investment adviser or any other regulated
investment company designated by Keeley Asset Management Corp. No part of your
account may be invested in life insurance contracts; further, the assets of your
account may not be commingled with other property.
3. ELIGIBILITY. Employees and self-employed individuals are eligible to
contribute to an IRA. Employers may also contribute to employer-sponsored IRAs
established for the benefit of their employees. You may also establish an IRA
to receive rollover contributions and transfers from another IRA custodian or
trustee or from certain other retirement plans.
4. TIME OF CONTRIBUTION. You may make regular contributions to your IRA any
time up to and including the due date for filing your tax return for the year,
not including extensions. A contribution can be made after your tax return is
filed, provided it is made before the required filing date; however, you will
not receive a deduction unless you claimed it on your return, or you amend that
return. You may continue to make regular contributions to your IRA up to (but
not including) the calendar year in which you reach 70 1/2. Employer
contributions to a Simplified Employee Pension Plan (SEP)-IRA Plan may be
continued after you attain age 70 1/2. Rollover contributions and transfers may
be made at any time, including after you reach age 70 1/2.
5. AMOUNT OF CONTRIBUTION. You may make annual regular contributions to an
IRA in any amount up to 100% of your compensation for the year or $2,000,
whichever is less. Qualifying rollover contributions and transfers are not
subject to this limitation. In addition, if you are married and file a joint
return, you may make contributions to your spouse's IRA. However, the maximum
amount contributed to both your own and to your spouse's IRA may not exceed 100%
of your combined compensation or $4,000, whichever is less. Moreover, the
annual contribution to either your account or your spouse's account may not
exceed $2,000. Note that a different rule for spousal IRAs applied for tax
years beginning before January 1, 1997. If you (or your spouse) have more than
one IRA, contributions to all of your IRAs are aggregated for purposes of the
annual limits; the annual dollar limit is for all contributions you and your
spouse make in a year to all of your IRAs.
6. ROLLOVERS AND TRANSFERS. You are allowed to "rollover" a distribution
or transfer your assets from one individual retirement account to another
without any tax liability. Rollovers between IRAs may be made once per year and
must be accomplished within 60 days after the distribution. Also, under certain
conditions, you may rollover (tax free) all or a portion of a distribution
received from a qualified plan or tax-sheltered annuity in which you participate
or in which your deceased spouse participated. However, strict limitations
apply to such rollovers, and you should seek competent advice in order to comply
with all of the rules governing rollovers.
Most distributions from qualified retirement plans will be subject to a 20%
income tax withholding requirement. The 20% withholding can be avoided by
directly transferring the amount of the distribution to an individual retirement
account or to certain other types of retirement plans. You should receive more
information regarding these new withholding rules and whether your distribution
can be transferred to an IRA from the plan administrator prior to receiving your
distribution.
7. TAX DEDUCTIBILITY OF ANNUAL CONTRIBUTIONS. Although you may make an IRA
contribution within the limitations described above, all or a portion of your
contribution may be nondeductible. No deduction is allowed for a rollover
contribution or transfer. If you are not married and are not an "active
participant" in an employer-sponsored retirement plan, you may make a fully
deductible IRA contribution in any amount up to $2,000 or 100% of your
compensation for the year, whichever is less. The same limits apply if you are
married and file a joint return with your spouse and neither you nor your spouse
is an "active participant" in an employer-sponsored retirement plan.
An employer-sponsored retirement plan includes any of the following types of
retirement plans:
- a qualified pension, profit sharing, or stock bonus plan established in
accordance with Internal Revenue Code (IRC) 401(a) or 401(k),
- SEP Plan (IRC 408(k)),
- a deferred compensation plan maintained by a governmental unit or agency,
- tax sheltered annuities and custodial accounts (IRC 403(b) and
403(b)(7)),
- a qualified annuity plan under IRC Section 403(a).
Generally, you are considered an "active participant" in a defined
contribution plan if an employer contribution or forfeiture was credited to your
account during the year. You are considered an "active participant" in a
defined benefit plan if you are eligible to participate in a plan, even though
you elect not to participate. You are also treated as an "active participant"
if you make a voluntary or mandatory contribution to any type of plan, even if
your employer makes no contribution to the plan. If you receive a W-2 from your
employer and you are an active participant in the employer's plan, that box
should be checked on your W-2 form.
If you (or your spouse, if filing a joint tax return) are an active
participant in an employer-sponsored retirement plan, your IRA contribution is
fully deductible if your adjusted gross income (or combined income if you file a
joint tax return) does not exceed certain limits. For this purpose, your
adjusted gross income (1) is determined without regard to the exclusions from
income arising under Section 135 (exclusion of certain savings bond interest),
137 (exclusion of certain employer provided adoption expenses) and 911 (certain
exclusions applicable to U.S. citizens or residents living abroad) of the Code;
(2) is not reduced for any deduction that you may be entitled to for IRA
contributions; and (3) takes into account the passive loss limitations under
Section 469 of the Code and any taxable benefits under the Social Security Act
and Railroad Retirement Act as determined in accordance with Section 86 of the
Code.
If you (or your spouse, if filing a joint tax return) are covered by an
employer-sponsored retirement plan, the deduction for your IRA contribution is
reduced proportionately for adjusted gross income which exceeds the applicable
dollar amount. The applicable dollar amount for an individual is $25,000 and
$40,000 for married couples filing a joint tax return. The applicable dollar
limit for married individuals filing separate returns is $0. If your adjusted
gross income exceeds the applicable dollar amount by $10,000 or less, you may
make a deductible IRA contribution. The deductible amount, however, will be
less than $2,000.
To determine the amount of your deductible contribution, use the following
calculations:
1) Subtract the applicable dollar amount from your adjusted gross income.
If the result is $10,000 or more, you can only make a nondeductible contribution
to your IRA.
2) Divide the above figure by $10,000, and multiply that percentage by
$2,000.
3) Subtract the dollar amount (result from #2 above) from $2,000 to
determine the amount which is deductible.
If the deduction limit is not a multiple of $10 then it should be rounded up
to the next $10. There is a $200 minimum floor on the deduction limit if your
adjusted gross income does not exceed $35,000 (for a single taxpayer), $50,000
(for married taxpayers filing jointly) or $10,000 (for a married taxpayer filing
separately).
Even if your income exceeds the limits described above, you may make a
contribution to your IRA up to the contribution limitations described in Section
5 above. To the extent that your contribution exceeds the deductible limits, it
will be nondeductible. However, earnings on all IRA contributions are tax
deferred until distribution.
8. EXCESS CONTRIBUTIONS. Contributions which exceed the allowable maximum
for federal income tax purposes are treated as excess contributions. A
nondeductible penalty tax of 6% of the excess amount contributed will be added
to your income tax for each year in which the excess contribution remains in
your account.
9. CORRECTION OF EXCESS CONTRIBUTION. If you make a contribution in excess
of your allowable maximum, you may correct the excess contribution and avoid the
6% penalty tax for that year by withdrawing the excess contribution and its
earnings on or before the date, including extensions, for filing your tax return
for the tax year for which the contribution was made. Any earnings on the
withdrawn excess contribution will be taxable in the year the excess
contribution was made and may be subject to a 10% early distribution penalty tax
if you are under age 59 1/2. In addition, in certain cases an excess
contribution may be withdrawn after the time for filing your tax return.
Finally, excess contributions for one year may be carried forward and applied
against the contribution limitation in succeeding years.
10. SIMPLIFIED EMPLOYEE PENSION PLAN. An IRA may also be used in connection
with a SEP Plan established by your employer (or by you if you are self-
employed). Your employer (or you if self-employed) may contribute to the IRA of
each eligible participant up to a maximum of 15% of compensation or $30,000,
whichever is less. If your SEP Plan is in effect on December 31, 1996 and
permits salary reduction contributions, you may also elect to have your employer
make salary reduction contributions of up to $9,500 per year. The $9,500 limit
applies for 1997 and is adjusted periodically for cost of living increases.
Certain lower limits may apply for highly compensated participants. In any
event, the combination of your employer's contributions and your salary
reduction contributions (if your SEP Plan is eligible) may not exceed the lesser
of 15% of compensation or $30,000. A number of special rules apply to SEP-IRA,
including a requirement that contributions be made on behalf of all employees of
the employer who satisfy certain minimum participation requirements. It is your
responsibility and that of your employer to see that contributions in excess of
normal IRA limits are made under and in accordance with a valid SEP Plan.
11. FORM OF DISTRIBUTIONS. Distributions may be made in any one of three
methods:
(a) a lump-sum distribution,
(b) installments over a period not extending beyond your life expectancy
(as determined by actuarial tables), or
(c) installments over a period not extending beyond the joint life
expectancy of you and your designated beneficiary (as determined by
actuarial tables).
You may also use your account balance to purchase an annuity contract, in
which case your custodial account will terminate.
12. LATEST TIME TO WITHDRAW. You must begin receiving the assets in your
account no later than April 1 following the calendar year in which you reach age
70 1/2 (your "required beginning date"). In general, the minimum amount that
must be distributed each year is equal to the amount obtained by dividing the
balance in your IRA on the last day of the prior year (or the last day of the
year prior to the year in which you attain age 70 1/2) by your life expectancy,
the joint life expectancy of you and your beneficiary, or the specified payment
term, whichever is applicable. A federal tax penalty may be imposed against you
if the required minimum distribution is not made for the year you reach age 70
1/2 and for each year thereafter. The penalty is equal to 50% of the amount by
which the actual distribution is less than the required minimum.
Unless you or your spouse elects otherwise, your life expectancy and/or the
life expectancy of your spouse will be recalculated annually. An election not
to recalculate life expectancy(ies) is irrevocable and will apply to all
subsequent years. The life expectancy of a nonspouse beneficiary may not be
recalculated.
If you have two or more IRAs, you may satisfy the minimum distribution
requirements by receiving a distribution from one of your IRAs in an amount
sufficient to satisfy the minimum distribution requirements for your other IRAs.
You must still calculate the required minimum distribution separately for each
IRA, but then such amounts may be totalled and the total distribution taken from
one or more of your individual IRAs.
Distribution from your IRA must satisfy the special "incidental death
benefit" rules of the Internal Revenue Code. These provisions set forth
certain limitations on the joint life expectancy of you and your beneficiary.
If your beneficiary is not your spouse, your beneficiary will be generally
considered to be no more than 10 years younger than you for the purpose of
calculating the minimum amount that must be distributed.
13. DISTRIBUTION OF ACCOUNT ASSETS AFTER DEATH. If you die before receiving
the balance of your account, distribution of your remaining account balance is
subject to several special rules. If you die on or after your required
beginning date, distribution must continue in a method at least as rapid as
under the method of distribution in effect at your death. If you die before
your required beginning date, your remaining interest will, at the election of
your beneficiary or beneficiaries, (i) be distributed by December 31 of the year
in which occurs the fifth anniversary of your death, or (ii) commence to be
distributed by December 31 of the year following your death over a period not
exceeding the life or life expectancy of your designated beneficiary or
beneficiaries.
Two additional distribution options are available if your spouse is the
beneficiary: (i) payments to your spouse may commence as late as December 31 of
the year you would have attained age 70 1/2 and be distributed over a period not
exceeding the life or life expectancy of your spouse, or (ii) your spouse can
simply elect to treat your IRA as his or her own, in which case distributions
will be required to commence by April 1 following the calendar year in which
your spouse attains age 70 1/2.
14. TAX TREATMENT OF DISTRIBUTIONS. Amounts distributed to you are generally
includable in your gross income in the taxable year you receive them and are
taxable as ordinary income. To the extent, however, that any part of a
distribution constitutes a return of your nondeductible contributions, it will
not be included in your income. The amount of any distribution excludable from
income is the portion that bears the same ratio as your aggregate nondeductible
contributions bear to the balance of your IRA at the end of the year (calculated
after adding back distributions during the year). For this purpose, all of your
IRAs are treated as single IRA. Furthermore, all distributions from an IRA
during a taxable year are to be treated as one distribution. The aggregate
amount of distributions excludable from income for all years cannot exceed the
aggregate nondeductible contributions for all calendar years.
No distribution to you or anyone else from your account can qualify for
capital gains treatment under the federal income tax laws. Similarly, you are
not entitled to the special five- or ten-year averaging rule for lump-sum
distributions available to persons receiving distributions from certain other
types of retirement plans. All distributions are taxed to the recipient as
ordinary income except the portion of a distribution which represents a return
of nondeductible contributions. The tax on excess distributions under Section
4980A of the Code does not apply with respect to distributions made in 1997,
1998 and 1999. However, the additional estate tax payable with respect to
excess accumulations continues to apply during this period.
Any distribution which is properly rolled over will not be includable in your
gross income.
15. EARLY DISTRIBUTIONS. Distributions from your IRA made before age 59 1/2
will be subject to a 10% nondeductible penalty tax unless the distribution is a
return of nondeductible contributions or is made because of your death,
disability, as part of a series of substantially equal periodic payments over
your life expectancy or the joint life expectancy of you and your beneficiary,
or the distribution is made for medical expenses in excess of 7.5% of adjusted
gross income, is made for reimbursement of medical premiums while you are
unemployed, or is an exempt withdrawal of an excess contribution. The penalty
tax may also be avoided if the distribution is rolled over to another individual
retirement account.
16. QUALIFICATION OF PLAN. Your IRA Plan has been approved as to form by the
Internal Revenue Service. The Internal Revenue Service approval is a
determination only as to the form of the Plan and does not represent a
determination of the merits of the Plan as adopted by you. You may obtain
further information with respect to your Individual Retirement Account from any
district office of the Internal Revenue Service.
17. PROHIBITED TRANSACTIONS. If you or certain members of your family engage
in a "prohibited transaction," as defined in Section 4975 of the Internal
Revenue Code, your account will be disqualified, and the entire balance in your
account will be treated as if distributed to you and will be taxable to you as
ordinary income. Examples of prohibited transactions are:
(a) the sale, exchange, or leasing of any property between you and your
account,
(b) the lending of money or other extensions of credit between you and your
account,
(c) the furnishing of goods, services, or facilities between you and
your account.
If you are under age 59 1/2, you may also be subject to the 10% penalty tax
on early distributions.
18. PENALTY FOR PLEDGING ACCOUNT. If you use (pledge) all or part of your
IRA as security for a loan, then the portion so pledged will be treated as if
distributed to you and will be taxable to you as ordinary income during the year
in which you make such pledge. The 10% penalty tax on early distributions may
also apply.
19. REPORTING FOR TAX PURPOSES. Deductible contributions to your IRA may be
claimed as a deduction on your IRS Form 1040 for the taxable year contributed.
If any nondeductible contributions are made by you during a tax year, such
amounts must be reported on Form 8606 which should be attached to your Federal
Income Tax Return for the year contributed if you file a tax return for that
year. If you do not file a return for that year, Form 8606 is still required to
be filed. If you report a nondeductible contribution to your IRA and do not
make the contribution, you will be subject to a $100 penalty for each
overstatement unless a reasonable cause is shown for not contributing. Other
reporting will be required by you in the event that special taxes or penalties
described herein are due. You must also file Treasury Form 5329 with the IRS
for each taxable year in which the contribution limits are exceeded, a premature
distribution takes place, or less than the required minimum amount is
distributed from your IRA.
20. ALLOCATION OF EARNINGS. The method of computing and allocating annual
earnings is set forth in Article VIII, Section 1 of the Individual Retirement
Account Custodial Agreement. The growth in value of your IRA is neither
guaranteed or projected.
21. INCOME TAX WITHHOLDING. You must indicate on distribution requests
whether or not federal income taxes should be withheld. Redemption requests not
indicating an election not to have federal income tax withheld will be subject
to withholding.
22. OTHER INFORMATION. Information about the shares of each mutual fund
available for investment by your IRA must be furnished to you in the form of a
prospectus governed by rules of the Securities and Exchange Commission. Please
refer to the prospectus for detailed information concerning your mutual fund.
You may obtain further information concerning IRAs from any District Office of
the Internal Revenue Service.
Fees and other expenses of maintaining your account may be charged to you or
your account. The Custodian's current fee schedule is included on the following
page.
SHAREHOLDER FEES
(CHARGED TO INVESTORS)
DEFINED CONTRIBUTION,
403(B)(7), 401(K)
IRA ACCOUNTS PLAN ACCOUNTS
------------ --------------------
1. QUALIFIED PLAN FEES
Annual maintenance fee per account
(cap at $25.00 per SSN) $12.50 $12.50
Transfer to successor trustee 15.00 15.00
Distribution to a participant
(exclusive of systematic
withdrawal plans) 15.00 15.00
Refund of excess contribution 15.00 15.00
AMOUNT
------
2. Additional Shareholder Fees
Any outgoing wire $10.00
Telephone exchange 5.00
Return check fee 20.00
Stop payment fee
(liquidation, dividend, and draft check) 20.00
Research fee per item
(for requested items of the second
calendar year [or previous] to the
request; cap at $25.00) 5.00
THESE FEES ARE SUBJECT TO CHANGE UPON NOTIFICATION BY
FIRSTAR TRUST COMPANY TO THE MUTUAL FUND CLIENT.
<TABLE>
KEELEY SMALL CAP VALUE FUND, INC.
IRA APPLICATION
<C> <C> <C> <C>
Mail To: KEELEY Small Cap Value Fund, Inc. Overnight Express Mail To: KEELEY Small Cap Value Fund, Inc.
C/O Firstar Trust Company C/O Firstar Trust Company
Mutual Fund Services Mutual Fund Services
P.O. Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
Please use this form only for registration of a new IRA or SEP-IRA account. To obtain additional forms or for help in completing
this application please call 1-800-338-1579.
A. REGISTRATION
Name (First) (Initial) (Last)
---------------------------- ------- ----------------------------------
Social Security Number Birthdate (Mo/Day/Yr) (Must be of legal age)
------------- ----------------
B. MAILING ADDRESS
Address
-----------------------------------------------------------------------------------------
City/State/Zip
----------------------------------------------------------------------------------
Daytime Phone Number Evening Phone Number
----------------------- ----------------------
( ) Duplicate Confirmation to:
Name (First) (Initial) (Last)
---------------------------- ------- ------------------------------
Address
------------------------------------------------------------------------------------
City/State/Zip
-----------------------------------------------------------------------------
C. BENEFICIARY DESIGNATION (Optional*)
Name (First) (Initial) (Last)
---------------------------- ------- ----------------------------------
Social Security Number Birthdate (Mo/Day/Yr) (Must be of legal age)
------------- ----------------
Relationship
------------------------------------------------------------------------------------
Address
----------------------------------------------------------------------------------------
City/State/Zip
----------------------------------------------------------------------------------
Daytime Phone Number Evening Phone Number
-------------------- ----------------------
D. TYPE OF IRA (Please select only one of the following account types.)
( ) Individual Retirement Account ($2,000 maximum).
( ) Spousal IRA Account for non-income earning spouse. ($2,000) One application must be completed for each individual.
( ) Rollover IRA. (No minimum)
( ) SEP-IRA. (IRS Form 5305-SEP is required with your application.) One application for each employee.
E. TYPE OF CONTRIBUTION (Please select one of the following types of contributions.)
( ) Yearly Contribution for Tax Year (If prior year, must be mailed on or before April 15th.)
----------
( ) Transfer (Assets are a direct transfer from previous Custodian). Please attach transfer form.
( ) Rollover (You had physical receipt of assets for less than 60 days) from previous IRA.
( ) Direct Rollover of Assets from your employer-sponsored plan (you did not have receipt of assets). Please indicate previous
account type:
( ) Corporate ( ) Pension Plan ( ) Profit Sharing Plan ( ) 401(k) ( ) 403(b) ( ) Other (please specify)-----------------
F. YOUR INVESTMENT INSTRUCTIONS
Fill in the amount to be invested in each Fund. (Minimum investment is $100 for the Portico Money Market Funds;
no minimum for the KEELEY Small Cap Value Fund.)
Amount
( ) KEELEY Small Cap Value Fund $
-----------------
( ) Portico Money Market Fund $
-----------------
(Please remember to sign the reverse side.)
-over-
G. TELEPHONE EXCHANGE PRIVILEGE* (Optional)
( ) Check this box to allow telephone exchanges between identically registered KEELEY Small Cap Value Fund and Portico Money
Market Fund accounts. A $250 minimum applies to exchanges.
*A $5 fee will be applied to any Telephone Exchange.
H. RIGHTS OF ACCUMULATION
( ) I or my spouse currently have the following account(s) which may make me eligible for sales charge discounts through Rights of
Accumulation as described in the Prospectus.
Account Number Account Number
---------------- ----------------
I. ACKNOWLEDGEMENT AND SIGNATURE
I adopt the KEELEY Small Cap Value Fund IRA, appointing Firstar Trust Company to act as Custodian and to perform administrative
services specified in the IRA Custodial Agreement. I have received and read the Prospectus for the Fund(s) in which I am making my
contribution, and have read and understand the IRA Custodial Agreement and Disclosure Statement. I certify under penalties of
perjury that my Social Security Number (above) is correct and that I am of legal age. If I am opening this IRA with a distribution
from an employer-sponsored retirement plan or another individual retirement account, I certify that the distribution qualifies as a
rollover contribution. I understand that the Custodian will charge fees that are shown in the disclosure statement and they may be
separately billed or collected by redeeming sufficient shares from each portfolio account balance. I will supply the Internal
Revenue Service with information as to any taxable year as required.
I have read, accept and incorporate the Custodial Agreement herein, by reference. I appoint Firstar Trust Company or its successors,
as Custodian of the account(s).
J. ACCEPTANCE
Custodian Authorization: Firstar Trust Company hereby accepts its appointment as Custodian of the above IRA account and upon receipt
of assets, will deposit such assets in a KEELEY Small Cap Value Fund IRA or a Portico Money Market IRA on behalf of the Depositor
authorizing this transfer or direct rollover.
FIRSTAR TRUST COMPANY
--------------------------------------------------------------------------------------------------------------------------------
K. DEALER INFORMATION (Please be sure to complete representative's first name and middle initial.)
Dealer Name
------------------------------------------------------------------------------------------
DEALER MAIN OFFICE
Address
----------------------------------------------------------------------------------------------
City/State/Zip
---------------------------------------------------------------------------------------
Telephone Number
-------------------------------------------------------------------------------------
Representative Name (Last) (First) (Initial)
---------------------------- ---------------------- -------
REPRESENTATIVE BRANCH OFFICE
Address
----------------------------------------------------------------------------------------------
City/State/Zip
---------------------------------------------------------------------------------------
Telephone Number Rep's A.E. Number
-------------------- ---------------------
1/97
</TABLE>
<TABLE>
KEELEY SMALL CAP VALUE FUND, INC.
IRA TRANSFER FORM
<C> <C> <C> <C>
Mail To: KEELEY Small Cap Value Fund, Inc. Overnight Express Mail To: KEELEY Small Cap Value Fund, Inc.
C/O Firstar Trust Company C/O Firstar Trust Company
Mutual Fund Services Mutual Fund Services
P.O. Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
Important phone number for the KEELEY Small Cap Value Fund: for fund information, prices and literature 1-800-338-1579.
A. INSTRUCTION
Use this form when transferring funds from an existing IRA to a KEELEY Small Cap Value Fund IRA.
If you are establishing a new account, you must also fill out a KEELEY Small Cap Value Fund IRA Application.
INVESTORS ARE REMINDED THAT:
. Your current custodian/trustee may require that you obtain a signature guarantee to process this transfer.
. A signature guarantee may be obtained by a domestic commercial bank, trust company, a member firm of a national securities
exchange, or a savings and loan association. A signature guarantee by a notary public will NOT be accepted.
B. INVESTOR INFORMATION
Name (First) (Initial) (Last)
---------------------------- ------- ----------------------------------
Social Security Number
--------------------------------------------------------------------------
Address
-----------------------------------------------------------------------------------------
City/State/Zip
----------------------------------------------------------------------------------
Daytime Phone Number Evening Phone Number
----------------------------- --------------------------
C. PLEASE TRANSFER MY IRA FROM:
Name of current Custodian (bank, savings and loan, mutual fund, etc.)
---------------------------
Address
-----------------------------------------------------------------------------------------
City/State/Zip
----------------------------------------------------------------------------------
Account Number or Certificate of Deposit (CD)* *Transfer: ( ) Immediately ( ) At maturity
-----------------------------
Maturity Date (if applicable)
-------------------------------------------------------------------
D. PLEASE CHECK ONE:
( ) Invest in my existing KEELEY Small Cap Value Fund IRA, account number
( ) Open a new* ( ) IRA ( ) SEP-IRA.
( ) KEELEY Small Cap Value Fund ( ) Portico Money Market Fund
*If you are opening a new account, this form must be accompanied by a completed IRA Application.
E. SIGNATURE (Exactly as registered.)
To current Custodian:
Please consider this your authority to sell ( ) all of my assets ( ) $ of my assets in the account identified in Section C
-----
above and prepare a check to KEELEY Small Cap Value Fund. It is my intention to transfer these assets to the above-named fund(s) for
which Firstar Trust Company acts as Custodian.
Please send the check representing the assets, along with a copy of this form to the address below. Send check to:
Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201-0701
I certify that I have received and read the prospectus for the Fund(s) into which I am transferring my IRA. Thank you for your
prompt handling.
Your Signature Date
--------------------------------------------------- -------------------------
Signature Guarantee (if required by current Custodian)
---------------------------------------------
F. ACCEPTANCE
Custodian Authorization: Firstar Trust Company hereby accepts its appointment as Custodian of the above IRA account and upon receipt
of assets, will deposit such assets in a KEELEY Small Cap Value Fund IRA or a Portico Money Market IRA on behalf of the Depositor
authorizing this transfer or direct rollover.
FIRSTAR TRUST COMPANY
1/97
</TABLE>
EXHIBIT 15
DISTRIBUTION PLAN
WHEREAS, KEELEY Small Cap Value Fund (the "Fund") is registered as an
open-end management investment company under the Investment Company Act of 1940
(the "Act") and is authorized to issue shares of common stock; and
WHEREAS, the Fund intends to engage Keeley Investment Corp. (the
"Distributor"), a broker-dealer registered under the Securities Exchange Act of
1934, to distribute shares of the Fund and to render other related
administrative services necessary for the operation of the Fund; and
WHEREAS, the Board of Directors of the Fund has determined to adopt this
Distribution Plan (the "Plan"), in accordance with the requirements of the Act,
and has determined that there is a reasonable likelihood that the Plan will
benefit the Fund and its stockholders;
NOW THEREFORE, the Fund hereby adopts the Plan with respect to the Fund on
the following terms and conditions:
1. The Fund shall pay distribution expenses directly or shall reimburse
the Distributor for costs and expenses incurred in connection with distributing
and marketing shares of the Fund. Such distribution costs and expenses may
include (i) advertising by radio, television, newspapers, magazine, brochures,
sales literature, direct mail or any other form of advertising, (ii) expenses
of sales employees or agents of the Distributor, including salary, commissions,
travel and related expenses, (iii) payments to broker-dealers and financial
institutions for services in connection with the distribution of shares,
including fees calculated with reference to the average daily net asset value
of shares held by stockholders who have a brokerage or other service
relationships with the broker-dealer or institution receiving such fees, (iv)
costs of printing prospectuses and other material to be given or sent to
prospective investors, and (v) such other similar services as the Board of
Directors of the Fund determines to be reasonably calculated to result in the
sale of shares of the Fund.
The Fund shall pay directly or shall reimburse the Distributor
monthly for such costs, expenses or payments up to an annual limit of 0.25% of
the Fund's average daily net assets. To the extent that such amount is not
sufficient to reimburse the Distributor for all of such costs, the unreimbursed
amount may be carried forward and paid in a subsequent year. However, any
amount by which the total annual reimbursement of distribution costs and
expenses for the Fund is less than the annual limit of 0.25% of the Fund's
average daily net assets in any given year shall not be carried over or applied
to the amount of distribution costs and expenses that may be reimbursed in a
subsequent year. The Distributor also may receive and retain brokerage
commissions with respect to portfolio transactions for the Fund to the extent
not prohibited by the Act.
2. The Fund shall pay all costs and expenses in connection with the
implementation and operation of the Plan, including legal and accounting fees
related thereto.
3. The Plan shall not take effect until it has been approved by a vote
of at least a "majority" (as defined in the Act) of the outstanding voting
securities of the Fund.
4. The Plan shall not take effect until it has been approved, together
with any related agreements and supplements, by votes of a majority of both (a)
the Board of Directors of the Fund, and (b) those Directors of the Fund who are
not "interested persons" (as defined in the Act) and have no direct or indirect
financial interest in the operation of the Plan or any agreements related to it
(the "Plan Directors"), cast in person at a meeting (or meetings) called for
the purpose of voting on the Plan and such related agreements.
5. The Plan shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in Paragraph 4.
6. Any person authorized to direct the disposition of monies paid or
payable by the Fund pursuant to the Plan or any related agreement shall provide
the Board of Directors of the Fund, and the Board shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
7. Any agreement related to the Plan shall be in writing and shall
provide: (a) that such agreement may be terminated at any time, without payment
of any penalty, by vote of a majority of the Plan Directors or by vote of a
majority of the outstanding voting securities of the Fund, on not more than 60
days' written notice to any other party to the agreement; and (b) that such
agreement shall terminate automatically in the event of its "assignment" as
defined in the Act.
8. The Plan may be terminated any time without payment of any penalty,
by vote of a majority of the Plan Directors, or by vote of a majority of the
outstanding voting securities of the Fund.
9. The Plan may be amended at any time with by the Board of Directors of
the Fund, provided that (a) any amendment to increase materially the costs
which the Fund may bear for distribution pursuant to the Plan shall be
effective only upon approval by a vote of a majority of the outstanding voting
securities of the Fund, and (b) any material amendments of the terms of the
Plan shall become effective only upon approval as provided in paragraph 4
hereof.
10. While the Plan is in effect, the selection and nomination of
Directors who are not "interested persons" (as defined in the Act) of the Fund
shall be committed to the discretion of the Directors who are not interested
persons of the Fund.
11. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to paragraph 6 hereof, for a period of not less
than six years from the date of the Plan, the agreements or of such report, as
the case may be, the first two years of which shall be in any readily
accessible place.
12. The Fund shall have the right to suspend payments and accruals for
payments under the Plan at any time and from time to time, if, in the opinion
of management of the Fund, payments or accruals at any time are prohibited by
or contrary to any provision of law, or any rules or regulations of the
Securities and Exchange Commission or the National Association of Securities
Dealers, Inc., or any other regulatory or self-regulatory organization having
jurisdiction over the Fund, the Distributor or any person or entity involved in
the sale or distribution of shares of the Fund.
Dated as of September 8, 1993.
EXHIBIT 16
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
For the one year period ended September 30, 1996
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total return = 11.00%
11.00% = (1,109.97/1,000) - 1
For the period from October 1, 1993 (commencement of operations)
to September 30, 1996
Cumulative Total Return = (Ending Redeemable Value/Initial Value) - 1
Total return = 38.99%
38.99% = (1,389.85/1,000) - 1
1/n
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total return = 11.60%
1/3
11.60% = (1,389.85/1,000) - 1
EXHIBIT 17
[ARTICLE] 6
[CIK] 0000906333
[NAME] KEELEY SMALL CAP VALUE FUND, INC.
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] SEP-30-1996
[PERIOD-START] OCT-01-1996
[PERIOD-END] SEP-30-1996
[INVESTMENTS-AT-COST] 8,373,138
[INVESTMENTS-AT-VALUE] 10,848,205
[RECEIVABLES] 13,081
[ASSETS-OTHER] 19,255
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 10,880,541
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 65,237
[TOTAL-LIABILITIES] 65,237
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 7,949,171
[SHARES-COMMON-STOCK] 744,959
[SHARES-COMMON-PRIOR] 608,163
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 391,066
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 2,475,067
[NET-ASSETS] 10,815,304
[DIVIDEND-INCOME] 66,953
[INTEREST-INCOME] 13,991
[OTHER-INCOME] 0
[EXPENSES-NET] 228,029
[NET-INVESTMENT-INCOME] (147,085)
[REALIZED-GAINS-CURRENT] 451,325
[APPREC-INCREASE-CURRENT] 1,090,906
[NET-CHANGE-FROM-OPS] 1,395,146
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (17,153)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 194,103
[NUMBER-OF-SHARES-REDEEMED] 58,634
[SHARES-REINVESTED] 1,327
[NET-CHANGE-IN-ASSETS] 3,198,970
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 91,212
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 268,672
[AVERAGE-NET-ASSETS] 9,123,377
[PER-SHARE-NAV-BEGIN] 12.52
[PER-SHARE-NII] (0.19)
[PER-SHARE-GAIN-APPREC] 2.22
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] (0.03)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 14.52
[EXPENSE-RATIO] 2.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
