<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 13, 1998
SECURITIES ACT FILE NO. 33-66262
INVESTMENT COMPANY ACT FILE NO. 811-7896
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 8 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 9 [X]
(CHECK APPROPRIATE BOX OR BOXES)
----------------------
GABELLI GLOBAL SERIES FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
ONE CORPORATE CENTER RYE, NEW YORK 10580-1434
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER: (800) 422-3554
BRUCE N. ALPERT
GABELLI FUNDS, INC.
ONE CORPORATE CENTER, RYE, NEW YORK 10580-1434
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------------------
COPIES TO:
JAMES E. MCKEE, ESQ. RICHARD T. PRINS, ESQ.
GABELLI FUNDS, INC. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE CORPORATE CENTER, 919 THIRD AVENUE
RYE, NEW YORK 10580-1434 NEW YORK, NEW YORK 10022
(212) 735-2000
----------------------
</TABLE>
It is proposed that this filing will become effective (check
appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[X] on April 15, 1998 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
----------------------
<PAGE> 2
GABELLI GLOBAL SERIES FUNDS, INC.
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 481(A))
<TABLE>
<CAPTION>
N-1A ITEM NO.
PART A PROSPECTUS HEADING
----------- --------------
<S> <C> <C>
1. Cover Page........................... Cover Page
2. Synopsis............................. Table of Fees and Expenses for each of the Funds
3. Condensed Financial Information...... Financial Highlights
4. General Description of Registrant.... Cover Page; Investment Objectives and Policies;
Associated Risk Factors; General Information
5. Management of the Fund............... Management of the Funds; Investment Objectives and
Policies; General Information
5(a) Management's Discussion
of Performance................... Not Applicable
6. Capital Stock and Other Securities... Dividends, Distributions and Taxes; General Information
7. Purchase of Securities Being Offered. Purchase of Shares; Distribution Plan
8. Redemption or Repurchase............. Redemption of Shares
9. Pending Legal Proceedings............ Not applicable
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
LOCATION IN
PART B STATEMENT OF
ITEM NO. ADDITIONAL INFORMATION
------ ----------------
<S> <C> <C>
10. Cover Page........................... Cover Page
11. Table of Contents.................... Cover Page
12. General Information and History...... Not Applicable
13. Investment Objective and Policies.... Investments; Investment Restrictions
14. Management of the Fund............... The Adviser
15. Control Persons and Principal
Holders of Securities............ Directors and Officers
16. Investment Advisory and
Other Services................... The Adviser; The Distributor
17. Brokerage Allocation and
Other Practices.................... Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities... Prospectus-- General Information;
Determination of Net Asset Value
19. Purchase, Redemption and Pricing of
Securities Being Offered......... Prospectus-- Purchase of Shares; Redemption of
Shares
20. Tax Status........................... Dividends, Distributions and Taxes
21. Underwriters......................... Prospectus-- Purchase of Shares; The Distributor
22. Calculation of Performance Data...... Investment Performance Information
23. Financial Statements................. Portfolio of Investments; Statement of Assets and
Liabilities; Statement of Operations; Statement of
Changes in Net Assets; Notes to Financial Statements;
Financial Highlights
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE> 4
- --------------------------------------------------------------------------------
Gabelli Global Series Funds, Inc.
ONE CORPORATE CENTER, RYE, NEW YORK 10580-1434
TELEPHONE: 1-800-GABELLI (1-800-422-3554)
HTTP://WWW.GABELLI.COM
================================================================================
PROSPECTUS
APRIL 15, 1998
Gabelli Global Series Funds, Inc., a Maryland corporation (the "Corporation") is
currently comprised of four active series:
<TABLE>
<S> <C>
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R)
FUND
(the "Global Telecommunications Fund") (the "Global Interactive Couch Potato(R) Fund")
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND THE GABELLI GLOBAL OPPORTUNITY FUND
(the "Global Convertible Securities Fund") (the "Global Opportunity Fund")
(collectively, the "Funds")
</TABLE>
----------------------
Each Fund is no-load, open-end and non-diversified. The Global
Telecommunications Fund, the Global Interactive Couch Potato(R) Fund and the
Global Opportunity Fund (formerly the Global Growth Fund) seek capital
appreciation as a primary investment objective and current income as a secondary
objective. These Funds will seek to achieve their investment objectives through
investments primarily in the common stocks and other securities of foreign and
domestic companies. The Global Convertible Securities Fund seeks a high level of
total return as its investment objective. The Global Convertible Securities Fund
will seek to achieve this investment objective through a combination of current
income and capital appreciation by investing in the convertible securities of
foreign and domestic companies. See "Investment Objectives and Policies".
----------------------
Each Fund has a distribution plan which permits it to pay .25% per year of its
average daily net assets for marketing and shareholder services and expenses.
The minimum initial investment for each Fund is $1,000. However, the initial
minimum of the funds acquired through intermediary organizations maintaining
omnibus accounts with the Fund may establish their own minimum investment
criteria. Additionally, accounts establishing an Automatic Investment Plan do
not require any minimum initial investment. See "Purchase of Shares."
----------------------
The Statement of Additional Information (the "Additional Statement"), dated
April 15, 1998, which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and Exchange
Commission (the "SEC") and is available for reference, along with other
materials on the SEC Internet Web Site (http://www.sec.gov) and is incorporated
herein by reference. For a free copy, write to Gabelli Global Series Funds, Inc.
at One Corporate Center, Rye, New York 10580-1434 or call 1-(800) GABELLI
(1-800-422-3554). Purchase orders and redemption requests may be directed to the
Gabelli Funds at P.O. Box 8308, Boston, Massachusetts 02266-8909.
----------------------
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<PAGE> 5
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As each of the Funds is non-diversified, each Fund will have the ability to
invest a larger portion of its assets in a single issuer than would be the case
if it were diversified. As a result of this non-diversified status, each Fund
may experience greater fluctuations in net asset value than investment companies
which invest in a broad range of issuers.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, AND ARE NOT
INSURED OR GUARANTEED BY ANY BANK, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. AN INVESTMENT IN THE FUND
INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
TABLE OF FEES AND EXPENSES FOR EACH OF THE FUNDS
<TABLE>
<CAPTION>
GABELLI GLOBAL
INTERACTIVE
GABELLI GLOBAL COUCH GABELLI GLOBAL GABELLI GLOBAL
TELECOMMUNICATIONS POTATO(R) CONVERTIBLE SECURITIES OPPORTUNITY
FUND FUND FUND FUND (d)
------------------ -------------- ---------------------- --------------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on
Purchases or Reinvested Dividends... None None None None
Deferred Sales Load................... None None None None
Redemption Fees....................... None None None None
Exchange Fees......................... None None None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net
assets):
Management Fees (a)................... 1.00% 1.00% 1.00% 1.00%
12b-1 Expenses (b).................... .25% .25% .25% .25%
Other Expenses (c).................... .53% .53% 1.23% 1.25%
----- ----- ----- -----
Total Operating Expenses for
each fund................... 1.78% 1.78% 2.48% 2.50%
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
EXAMPLE: ------ ------- ------- --------
<S> <C> <C> <C> <C>
Gabelli Global Telecommunications Fund...................... $18 $56 $ 96 $209
Gabelli Global Interactive Couch Potato(R) Fund............. $18 $56 $ 96 $209
Gabelli Global Convertible Securities Fund.................. $25 $77 $132 $282
Gabelli Global Opportunity Fund(d).......................... $25 $78 $133 $284
</TABLE>
- --------------------------------------------------------------------------------
The amounts listed in examples should not be considered as representative of
future expenses, and actual expenses may be greater or less than those
indicated. Moreover, while the example assumes a 5% annual return, each Fund's
actual performance will vary and may result in an actual return greater or less
than 5%.
The information contained in the foregoing table relates to each of the Funds
and is provided to assist you in understanding the various direct and indirect
costs and expenses that an investor in any of the Funds would bear.
(a) Subject to potential reduction as a result of the Adviser's expense
reimbursement obligations.
(b) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the rules of the National
Association of Securities Dealers.
(c) Such expenses include custodian and transfer agency fees and other customary
Fund expenses.
(d) Formerly the Gabelli Global Growth Fund. This Fund has had no prior
operating history.
- --------------------------------------------------------------------------------
2
<PAGE> 6
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FINANCIAL HIGHLIGHTS
The following has been audited by Grant Thornton LLP, independent auditors,
whose unqualified report thereon is incorporated by reference in the Additional
Statement. This information should be read in conjunction with the financial
statements. Selected data for a share of capital stock outstanding throughout
each period appears below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
-------------------------------------------------------
1997 1996 1995 1994 1993(+)
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value:
beginning of period..................................... $ 11.28 $ 11.12 $ 9.73 $ 10.20 $ 10.00
-------- -------- -------- -------- -------
Net investment income..................................... 0.00(e) 0.05 0.06 0.07 0.01
Net realized and unrealized gain (loss) on securities..... 3.59 0.95 1.51 (0.44) 0.29
-------- -------- -------- -------- -------
Total from investment operations.......................... 3.59 1.00 1.57 (0.37) 0.30
-------- -------- -------- -------- -------
Less distributions:
Distributions from net investment income.............. -- (0.05) (0.06) (0.07) (0.01)
Distributions from realized gain on investments....... (1.55) (0.79) (0.12) (0.03) (0.09)
-------- -------- -------- -------- -------
Total distributions....................................... (1.55) (0.84) (0.18) (0.10) (0.10)
-------- -------- -------- -------- -------
Net asset value: end of period............................ $ 13.32 $ 11.28 $ 11.12 $ 9.73 $ 10.20
======== ======== ======== ======== =======
Total Return (a).......................................... 31.9% 9.0% 16.2% (3.7)% 3.0%
-------- -------- -------- -------- -------
RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $117,872 $108,544 $122,845 $137,731 $45,290
Ratio of operating expenses to average net
assets(b)........................................... 1.78% 1.72% 1.75% 1.80% 2.54%(c)
Ratio of net investment income to average net
assets.............................................. 0.01% 0.34% 0.53% 0.74% 1.28%(c)
Portfolio turnover rate................................... 9% 7% 24% 14% --
Average commission rate per share (d)..................... $ 0.0207 $ 0.0365 -- -- --
</TABLE>
- ------------
<TABLE>
<C> <S>
+ From commencement of operations on November 1, 1993.
(a) Total return represents aggregate total return of a
hypothetical $1,000 investment at the beginning of the
period and sold at the end of the period including
reinvestment of dividends. Total return for the period of
less than one year is not annualized.
(b) The Fund incurred interest expense during the year ended
December 31, 1997. If interest expense had not been
incurred, the ratio of operating expenses to average net
assets would have been 1.74%.
(c) Annualized.
(d) For fiscal years beginning on or after September 1, 1995,
the SEC requires a fund to disclose its average commission
rate paid per share.
(e) Amount represents less than $0.005 per share.
</TABLE>
- --------------------------------------------------------------------------------
3
<PAGE> 7
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<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
THE GABELLI GLOBAL THE GABELLI GLOBAL
INTERACTIVE COUCH POTATO(R) FUND CONVERTIBLE SECURITIES FUND
---------------------------------------- ----------------------------------------
1997 1996 1995 1994+ 1997 1996 1995 1994++
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING
PERFORMANCE:
Net asset value:
beginning of
period............. $ 11.75 $ 11.72 $ 10.25 $ 10.00 $ 10.18 $ 10.79 $ 9.93 $ 10.00
------- ------- ------- ------- ------- ------- ------- -------
Net investment income.... (0.07) (0.09) (0.01) (0.01) 0.11 0.43 0.39 0.16
Net realized and
unrealized gain (loss)
on securities.......... 4.97 1.56 1.84 0.26 0.17 0.16 0.86 (0.07)
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations............. 4.90 1.47 1.83 0.25 0.28 0.59 1.25 0.09
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Distributions from
net investment
income............. -- (1.44) (0.36) -- (0.14) (0.43) (0.39) (0.16)
Distributions from
realized gain on
investments........ (2.37) -- -- -- (0.90) (0.77) -- --
In excess of net
realized gain on
investments........ -- -- -- -- (0.03) -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions...... (2.37) (1.44) (0.36) -- (1.07) (1.20) (0.39) (0.16)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value: end of
period................. $ 14.28 $ 11.75 $ 11.72 $ 10.25 $ 9.39 $ 10.18 $ 10.79 $ 9.93
======= ======= ======= ======= ======= ======= ======= =======
Total Return(a).......... 41.7% 12.5% 17.9% 2.5% 2.8% 5.5% 12.6% 0.9%
------- ------- ------- ------- ------- ------- ------- -------
RATIOS TO AVERAGE NET
ASSETS/ SUPPLEMENTAL
DATA:
Net assets, end of period
(in thousands)......... $40,558 $37,779 $31,439 $24,831 $ 9,375 $13,527 $15,742 $15,574
Ratio of operating
expenses to average
net assets(b)...... 1.78% 2.06% 2.47% 2.47%(c) 2.48% 2.35% 2.41% 2.49%(c)
Ratio of net
investment income
to average net
assets............. (0.61)% (0.70)% (0.07)% (0.13)%(c) 1.17% 2.00% 2.90% (2.80)%(c)
Portfolio turnover
rate................... 68% 47% 33% 14% 100% 126% 152% 329%
Average commission rate
per share (d).......... $0.0336 $0.0226 -- -- $0.0083 $0.0175 -- --
</TABLE>
- ------------
<TABLE>
<C> <S>
+ From commencement of operations on February 3, 1994.
++ From commencement of operations on February 7, 1994.
(a) Total return represents aggregate total return of a
hypothetical $1,000 investment at the beginning of the
period and sold at the end of the period including
reinvestment of dividends. Total return for the period of
less than one year is not annualized.
(b) The Funds incurred interest expense during the year ended
December 31, 1997. If interest expense had not been
incurred, the ratio of operating expenses to average net
assets would have been 1.64% and 2.46% for the Interactive
Couch Potato(R) Fund and the Convertible Securities Fund,
respectively. In addition, the ratio does not include a
reduction of expenses for custodian fee credits. Including
such credits, the ratio for the Convertible Securities Fund
would have been 2.47%.
(c) Annualized.
(d) For fiscal years beginning on or after September 1, 1995,
the SEC requires a fund to disclose its average commission
rate paid per share.
</TABLE>
Management's Discussion and Analysis of each Fund's performance during the
fiscal year ended December 31, 1997 is included in each Fund's Annual Report to
Shareholders dated December 31, 1997. Each Fund's Annual Report to Shareholders
may be obtained upon request and without charge by writing or calling the Fund
at the address or telephone number listed on the Prospectus cover. The Global
Opportunity Fund has had no prior operating history.
- --------------------------------------------------------------------------------
4
<PAGE> 8
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INVESTMENT OBJECTIVES AND POLICIES
The Global Telecommunications Fund, Global Interactive Couch Potato(R) Fund and
Global Opportunity Fund each seek capital appreciation as a primary investment
objective and current income as a secondary objective. These Funds will seek to
achieve these objectives through investments primarily in the common stocks and
other securities of the particular types of foreign and domestic companies
described below for each Fund.
The Global Convertible Securities Fund seeks a high level of total return as its
investment objective. The Global Convertible Securities Fund will seek to
achieve this investment objective through a combination of current income and
capital appreciation by investing in the convertible securities of foreign and
domestic companies.
Although these Funds may invest in the securities of any issuer and may use
various special investment techniques, under normal market conditions these
Funds will invest at least 65% of their respective total assets in securities of
the particular types of companies or securities described for that Fund. With
respect to the Global Telecommunications Fund and the Global Interactive Couch
Potato(R) Fund, such companies will derive at least 50% of either their revenues
or earnings from activities in the particular industry described for each Fund,
or will devote at least 50% of their assets to such activities, based on such
companies' most recent fiscal year for which audited financial information is
available.
Under normal circumstances each Fund will invest in securities of issuers
located in at least three countries, which may include the United States. Risks
inherent in each Fund's investment objectives and policies are discussed below.
See "Associated Risk Factors." Each Fund's investment objectives and the
industry concentration policies of the Global Telecommunications Fund and the
Global Interactive Couch Potato(R) Fund are fundamental and cannot be changed
without shareholder approval.
The Adviser believes that at the present time investment by the Funds in the
securities of companies located throughout the world presents great potential
for accomplishing each Fund's respective investment objective. While the Adviser
expects that a substantial portion of each Fund's assets may be invested in the
securities of domestic companies, a significant portion of each Fund's portfolio
may also be comprised of the securities of issuers headquartered outside the
United States.
THE GLOBAL TELECOMMUNICATIONS FUND. Under normal market conditions, the Global
Telecommunications Fund will invest at least 65% of its total assets in the
telecommunications industry. The telecommunications companies in which the
Global Telecommunications Fund may invest are engaged in the following products
and services: regular telephone service throughout the world; wireless
communications services and equipment, including cellular telephone, microwave
and satellite communications, paging, and other emerging wireless technologies;
equipment and services for both data and voice transmission, including computer
hardware and software; electronic components and communications equipment; video
conferencing; electronic mail; local and wide area networking, and linkage of
data and word processing systems; publishing and information systems; video text
and teletext; emerging technologies combining television, telephone and computer
systems; broadcasting, including television and radio via VHF, UHF, satellite
and microwave transmission and cable television.
Mr. Mario J. Gabelli, President, is primarily responsible for the day-to-day
management of the Global Telecommunications Fund. Mr. Gabelli has been Chairman,
President and Chief Executive Officer of the Adviser since its organization in
1980. He is assisted by Associate Portfolio Manager Marc J. Gabelli.
- --------------------------------------------------------------------------------
5
<PAGE> 9
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THE GLOBAL INTERACTIVE COUCH POTATO(R) FUND. Under normal market conditions, the
Global Interactive Couch Potato(R) Fund will invest at least 65% of its total
assets in securities of companies involved with communications, creativity and
copyright. Such companies, which are participating in emerging technological
advances in interactive services and products that are accessible to individuals
in their homes or offices through consumer electronics devices such as
telephones, televisions, radios and personal computers, are typically associated
with the entertainment and media industries, which include communications and
publishing.
The communications companies in which the Global Interactive Couch Potato(R)
Fund may invest are engaged in the development, manufacture or sale of
communications services or equipment throughout the world including the
following products or services: regular telephone service; wireless
communications services and equipment, including cellular telephone, microwave
and satellite communications, paging, and other emerging wireless technologies;
equipment and services for both data and voice transmission, including computer
hardware and software; electronic components and communications equipment; video
conferencing; electronic mail; local and wide area networking, and linkage of
data and word processing systems; publishing and information systems; video text
and teletext; emerging technologies combining television, telephone and computer
systems; broadcasting, including television and radio via VHF, UHF, satellite
and microwave transmission and cable television.
The entertainment, media and publishing companies in which the Global
Interactive Couch Potato(R) Fund may invest are engaged in providing the
following products or services: the creation, packaging, distribution, and
ownership of entertainment programming throughout the world including
pre-recorded music, feature length motion pictures, made for T.V. movies,
television series, documentaries, animation, game shows, sports programming and
news programs; live events such as professional sporting events or concerts,
theatrical exhibitions, television and radio broadcasting via VHF, UHF,
satellite and microwave transmission, cable television systems and programming,
broadcast and cable networks, wireless cable television and other emerging
distribution technologies, home video, interactive and multimedia programming
including home shopping and multiplayer games; publishing, including newspapers,
magazines and books, advertising agencies and niche advertising mediums such as
in-store or direct mail, emerging technologies combining television, telephone
and computer systems, computer hardware and software, and equipment used in the
creation and distribution of entertainment programming such as that required in
the provision of broadcast, cable or telecommunications services.
Mr. Marc J. Gabelli is primarily responsible for the day-to-day management of
the Global Interactive Couch Potato(R) Fund. Mr. Gabelli is a Managing Director
of the Adviser, and has been an analyst with the Adviser, Gabelli Funds, Inc.
since 1993 and Associate Portfolio Manager of The Gabelli Global
Telecommunications Fund since the Fund's inception. Prior to 1993 he worked at
Lehman Brothers in equity research and arbitrage.
THE GLOBAL CONVERTIBLE SECURITIES FUND. Under normal market conditions, the
Global Convertible Securities Fund will invest at least 65% of its total assets
in convertible securities. A convertible security is a bond, debenture,
corporate note, preferred stock or other similar security that may be converted
into or exchanged for a prescribed amount of common stock or other equity
security of the same or a different issuer within or at a particular period of
time at a specified price or formula. Before conversion, convertible securities
have characteristics similar to nonconvertible debt securities in that they
ordinarily provide a stream of income with generally higher yields than those of
common stock of the same or similar issuers. Convertible securities are senior
in rank to common stock in a corporation's capital
- --------------------------------------------------------------------------------
6
<PAGE> 10
- --------------------------------------------------------------------------------
structure and, therefore, generally entail less risk than the corporation's
common stock, although the extent to which such risk is reduced depends in large
measure upon the credit quality of the issuer. The Global Convertible Securities
Fund may invest without limit in securities that are not considered investment
grade and that accordingly have greater risk of loss of principal and interest.
The characteristics of convertible securities make them appropriate investments
for investors who seek a high level of total return with additional credit risk.
These characteristics include the potential for capital appreciation if the
value of the underlying common stock increases, the relatively high yield
received from dividend or interest payments as compared to common stock
dividends and decreased risks of decline in value, relative to the underlying
common stock due to their fixed income nature. As a result of the conversion
feature, however, the interest rate or dividend preference on a convertible
security is generally less than would be the case if the securities were not
convertible. During periods of rising interest rates, it is possible that the
potential for capital gain on a convertible security may be less than that of a
common stock equivalent if the yield on the convertible security is at a level
which causes it to sell at a discount. Any common stock or other equity security
received by conversion will not be included in the calculation of the percentage
of total assets invested in convertible securities.
Mr. A. Hartswell Woodson III, Vice President -- Portfolio Manager, is primarily
responsible for the day-to-day management of the Global Convertible Securities
Fund. Mr. Woodson joined the Adviser as a portfolio manager in 1993. Prior to
that he was employed by ABN Amro Bank N.V. in Amsterdam for more than the
previous five years with responsibility for equity-linked new issue securities
(including convertible securities) in all currencies.
THE GLOBAL OPPORTUNITY FUND. Under normal market conditions, the Global
Opportunity Fund will invest at least 65% of its total assets in companies which
the Adviser believes are likely to have rapid growth in revenues and earnings
and potential for above average capital appreciation or are undervalued.
Although the Global Opportunity Fund may also invest in any type of fixed income
instrument and may use various hedging techniques, under normal market
conditions the Global Opportunity Fund will invest at least 65% of its total
assets in equity securities. Equity securities are common stock, preferred stock
and securities convertible into or exchangeable for common or preferred stock.
Messrs. Marc Gabelli and Caesar Bryan will be primarily responsible for the
day-to-day management of the Global Opportunity Fund. Mr. Gabelli is a Director
of the Adviser since 1995 and a Portfolio Manager of the Gabelli Global
Interactive Couch Potato(R) Fund. Prior to 1993, he worked at Lehman Brothers in
equity research and arbitrage. Mr. Bryan is President and Portfolio Manager of
the Gabelli Gold Fund and the Gabelli International Growth Fund and has been a
Senior Vice President of GAMCO Investors, Inc., a wholly owned subsidiary of the
Adviser since May 1994. Mr. Bryan served as Senior Vice President and Portfolio
Manager of Lexington Management Corporation from 1986 until May 1994.
INVESTMENT METHODOLOGY AND POLICIES. In selecting securities for each of the
Funds, the Adviser normally will consider the following factors, among others:
(1) the Adviser's own evaluations of the private market value, cash flow,
earnings per share and other fundamental aspects of the underlying assets and
business of the company; (2) the potential for capital appreciation of the
securities; (3) the interest or dividend income generated by the securities; (4)
the prices of the securities relative to other comparable securities; (5)
whether the securities are entitled to the benefits of call protection or other
protective covenants; (6) the existence of any anti-dilution protections or
guarantees of the security; and (7) the diversification of each Fund's portfolio
as to issuers. The Adviser's investment philosophy with respect to equity
securities seeks to identify assets that are selling
- --------------------------------------------------------------------------------
7
<PAGE> 11
- --------------------------------------------------------------------------------
in the public market at a discount to their private market value, which the
Adviser defines as the value informed purchasers are willing to pay to acquire
assets with similar characteristics. The Adviser also normally evaluates the
issuers' free cash flow and long-term earnings trends. Finally, the Adviser
looks for a catalyst -- something in the company's industry or indigenous to the
company or country itself that will surface additional value.
Subject to each Fund's policy of investing at least 65% of its total assets in
particular industries or securities, each Fund may invest in common stock,
preferred stock, convertible securities, depository receipts, bonds, notes and
other debt obligations of any maturity, mortgage-backed securities, warrants,
options and futures contracts on securities and securities indices, and
securities of companies in bankruptcy or reorganization. Such securities may be
issued by domestic or foreign corporations or other types of entities,
governments or agencies or instrumentalities of governments or supranational
agencies. There is no minimum rating or credit quality of fixed income
securities in which each Fund may invest. Each Fund may also utilize other
investment strategies such as short selling, buying or selling when-issued
securities, entering into forward commitments, buying securities of unseasoned
companies and engaging in various hedging strategies such as the use of futures
and options and repurchase agreements, and foreign currency transactions.
Common stocks represent the residual ownership interest in an issuer and are
entitled to the income and increase in the value of the assets and business of
the entity after all of its obligations and preferred stock are satisfied.
Common stocks fluctuate in price in response to many factors including
historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity. Preferred stock has a preference over common stock in liquidation
(and generally dividends as well) but is subordinated to the liabilities of the
issuer in all respects. As a general rule the market value of preferred stock
with a fixed dividend rate and no conversion element varies inversely with
interest rates and perceived credit risk, while the market price of convertible
preferred stock generally also reflects some element of conversion value. Bonds,
debentures, notes, asset and mortgage-backed securities and money market
instruments such as commercial paper and bankers acceptances represent
obligations of the issuer. Debt securities that are convertible into or
exchangeable for preferred or common stock are liabilities of the issuer but are
generally subordinated to more senior elements of the issuer's balance sheet.
Although such securities also generally reflect an element of conversion value,
their market value also varies with the interest rates and perceived risk.
Depository receipts are utilized to make investing in a particular security
(usually foreign) more convenient for investors.
Each of the Funds other than the Global Convertible Securities Fund may invest
up to 25% of its assets in fixed income securities rated, at the time of
investment, lower than BBB by Standard & Poor's Rating Group ("S&P") or Baa by
Moody's Investors Service, Inc. ("Moody's") or unrated but determined by the
investment adviser to be of equivalent quality. These Funds do not expect to
invest in excess of 10% of its assets in such securities. Securities rated below
BBB or Baa are typically referred to as "junk bonds" and have speculative
characteristics that result in a greater risk of loss of principal and interest.
Because many convertible securities are rated below investment grade, the Global
Convertible Securities Fund may invest without limit in securities rated lower
than BBB by S&P and Baa by Moody's. It is expected that not more than 50% of the
Fund's portfolio will consist of securities rated CCC or lower by S&P or Caa or
lower by Moody's or, if unrated, are of comparable quality as determined by the
Adviser. These securities and securities rated BB or lower by S&P or Ba or lower
by Moody's may include securities of issuers in default. Such securities are
considered by
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the rating agencies to be predominantly speculative and may involve major risk
exposures such as increased sensitivity to interest rate and economic changes
and limited liquidity resulting in the possibility that prices realized upon the
sale of such securities will be less than the prices used in calculating the
Global Convertible Security Fund's net asset value. See "Associated Risk
Factors."
Each Fund's investments in securities of issuers in default will be limited to
not more than 5% of the total assets of the Fund. Further, each Fund will invest
in securities of issuers in default only when the Adviser believes that such
issuers will emerge from bankruptcy and/or the value of such securities will
appreciate. By investing in securities of issuers in default the Funds bear the
risk that such issuers will not emerge from bankruptcy or that the value of such
securities will not appreciate. See Appendix to Prospectus -- Description of
Ratings.
Each Fund may invest in securities for which a tender offer or exchange offer
has been made or announced and in securities of companies for which a merger,
consolidation, liquidation or similar proposal has been announced. Each Fund
also may invest up to 5% of its assets in options and up to 5% of its assets in
warrants to buy securities. Each Fund may invest up to 10% of its assets in
securities issued by real estate investment trusts. Each Fund may also invest up
to 10% of its assets (5% per issuer) in securities issued by other unaffiliated
investment companies.
Each Fund may enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis, in excess
of customary settlement periods for the type of security involved. Securities
purchased under a forward commitment are subject to market fluctuation, and no
interest (or dividends) accrues to the Fund prior to the settlement date.
Each Fund may make short sales of securities. A short sale is a transaction in
which a Fund sells a security it does not own in anticipation that the market
price of that security will decline. The market value of the securities sold
short of any one issuer will not exceed either 5% of any Fund's total assets or
5% of such issuer's voting securities. None of the Funds will make a short sale,
if, after giving effect to such sale, the market value of all securities sold
short exceeds 25% of the value of its assets or that Fund's aggregate short
sales of a particular class of securities exceeds 25% of the outstanding
securities of that class. Each Fund may also make short sales "against the box"
without respect to such limitations. In this type of short sale, at the time of
the sale, the Fund owns or has the immediate and unconditional right to acquire
at no additional cost the identical security.
Each Fund may invest in repurchase agreements with respect to any securities it
owns. Repurchase agreements are considered loans to the counter party, and will
be fully collateralized at all times with liquid high grade securities and will
only be entered into with financial institutions approved by the Board of
Directors.
Each Fund may also lend securities to dealers or others and invest the
collateral in accordance with the Fund's investment objective and policies. Each
Fund may borrow from banks for temporary or emergency purposes or to satisfy
redemptions requests in amounts not in excess of 15% of each Fund's total
assets, with such borrowing not to exceed 5% of each Fund's total assets for
purposes other than satisfying redemption requests. Each Fund will not purchase
securities when borrowings exceed 5%.
Each Fund may invest up to 15% of its net assets in illiquid securities for
which market quotations are not readily available.
See the Additional Statement for more information about these securities and
investment practices.
ASSOCIATED RISK FACTORS
All securities investments are subject to risks. The equity securities in which
each Fund may
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invest are generally subordinated to the claims of creditors and market prices
are subject to the performance of the issuer, its financial health and market
perceptions. The value of securities of an issuer engaged in a tender offer,
restructuring or exchange offer may decline substantially if the transaction
fails to occur.
INDUSTRY RISKS. Each Fund will invest a significant portion of its assets in
particular types of companies, and, as a result, the value of each Fund's
respective shares will be more susceptible to factors affecting those particular
types of companies. The communications industry is subject to governmental
regulation and the products and services of telecommunications companies may be
subject to rapid obsolescence. Certain companies in the United States, for
example, are subject to both state and federal regulations affecting permitted
rates of return and the kinds of services that may be offered. Such companies
are becoming subject to increasing levels of competition. As a result stocks of
these companies may be subject to greater price volatility.
The risks of investing in the entertainment and media industry and publishing
industry are largely the same as investing in the communications industry,
except that such industries are subject to less federal and state regulation.
Additional risks particular to the entertainment and media industry involve a
greater price volatility than the overall market, rapid obsolescence of
entertainment products and services resulting from changing consumer tastes,
intense competition and strong market reactions to technological developments
throughout the industry.
Various types of ownership restrictions are imposed by the Federal
Communications Commission ("FCC") on investments both in mass media companies,
such as broadcasters and cable operators, as well as in common carrier
companies, such as the providers of local telephone service and cellular radio.
For example, the FCC's broadcast multiple ownership rules, which apply to the
radio and television industries, provide that investment advisers are deemed to
have an "attributable" interest whenever the adviser has the right to determine
how more than five percent of the issued and outstanding voting stock of a
broadcast company may be voted. These same broadcast rules limit the holding of
an attributable interest in AM and FM radio broadcast stations and television
stations nationally. Similar types of restrictions apply in the mass media and
common carrier industries.
The attributable interests that result from the role of the Adviser and its
principals vis-a-vis other funds, managed accounts and companies may limit the
investments of the Funds.
SMALLER COMPANIES. While the Funds intend to focus on the securities of
established suppliers of accepted products and services, each Fund may invest in
smaller companies which may benefit from the development of new products and
services. These smaller companies may present greater opportunities for capital
appreciation, and may also involve greater investment risk than large,
established issuers. For example, smaller companies may have limited product
lines, market or financial resources, and their securities may trade less
frequently and in lower volume than the securities of larger, more established
companies. As a result, the prices of the securities of such smaller companies
may fluctuate to a greater degree than the prices of securities of other
issuers.
LOWER RATED SECURITIES. Securities rated below investment grade are subject to
certain risks that may not be present with higher rated securities. The market
prices and market value adjusted yields of fixed income securities generally
increase as interest rates fall and decrease as interest rates rise. However,
the prices and price adjusted yields of lower rated securities have been found
to be less sensitive to interest rate changes than higher-rated investments and
have been more sensitive to broad economic changes, changes in the equity
markets and individual corporate developments. Thus, periods of economic
uncertainty and change can be
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expected to result in increased volatility in the market prices and yields of
lower rated securities and thus in each Fund's net asset value. Similarly, a
strong economic downturn or a substantial period of rising interest rates can be
expected to severely affect the market for lower rated securities in that highly
leveraged or weak performing companies would generally be perceived to encounter
difficulties meeting profit goals and their principal and interest payment
obligations or obtaining additional financing and thus a higher incidence of
default can be expected. This would affect the value of such securities and thus
each Fund's net asset value.
Many lower-rated securities are typically traded by a small number of
broker-dealers rather than in a broad secondary market. Trades are primarily on
a principal basis without disclosure of markups and prices are not reported in
any organized manner. As a result of these and other factors, many lower-rated
securities are not as liquid as higher-grade securities of the same maturity and
amount outstanding. The Fund's responsibility to value accurately and its
ability to sell lower-rated securities at the value placed on them by the Fund
will be made more difficult to the extent that such securities are thinly traded
or illiquid. During such periods, there may be less reliable objective
information available and the judgment of the Corporation's Board of Directors
plays a greater role. Further, adverse publicity about either the economy or a
particular issuer may adversely affect investors' perceptions of the value, and
thus liquidity, of a high yield security, whether or not such perceptions are
based on a fundamental analysis.
The credit ratings issued by credit rating services may not fully reflect the
true risks of an investment. Although the Adviser considers the ratings of
recognized rating services such as Moody's and S&P in determining investments,
the Adviser primarily relies on its own credit analysis, which includes a study
of existing debt, capital structure, ability to service debts and to pay
dividends, the issuer's sensitivity to changes in economic conditions, its
operating history and the current trend of earnings, cash flow and other
factors.
MISCELLANEOUS INVESTMENT TECHNIQUE. Repurchase agreements have the risk that
collateral may not be able to be disposed of at a desirable price, delays as a
result of bankruptcy of the counter party or encumbrances of collateral or
restrictions on its disposition. Mortgage-backed securities have the credit
risks of delinquency and default as well as the risk that prepayments of
principal generally may be made at any time without penalty. Lending of
securities can result in a failure to deliver the original security by the
borrower, and similar risks with respect to disposition of the collateral. When
issued and delayed delivery securities transactions and forward commitments
involve potential loss to a Fund if the counterparty to the transaction fails to
perform. Hedging transactions also have certain risks including imperfect market
correlations, dependence on the credit of the counter party, possible inability
to enter into offsetting transactions and market fluctuations that can result in
a Fund being in a worse position than if the hedging had not occurred. Currency
transactions also include the risk securities losses could be magnified by
changes in the value of the currency in which a security is denominated relative
to the U.S. dollar. While the Adviser may try to hedge such risks, entering into
hedging transactions can result in even greater losses.
The purchaser of an option risks a total loss of the premium paid for the option
if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
forgoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Fund the credit risk that
the counterparty will fail to honor its obligations. If the price of the
security sold short increases
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between the time of the short sale and the time a Fund replaces the borrowed
security, the Fund will incur a loss; conversely, if the price declines, a Fund
will realize a capital gain. Although a Fund's gain is limited to the price at
which it sold the security short, its potential loss is theoretically unlimited.
Disposition of illiquid securities often takes more time than for more liquid
securities, may result in higher selling expenses and may not be able to be made
at desirable prices.
FOREIGN SECURITIES. Investments in foreign securities involve certain risks not
ordinarily associated with investments in securities of domestic issuers,
including fluctuations in foreign exchange rates, future political and economic
developments, and the possible imposition of exchange controls or other foreign
governmental laws or restrictions. In addition, with respect to certain
countries, there is the possibility of expropriation of assets, confiscatory
taxation, political or social instability or diplomatic developments which could
adversely affect investments in those countries.
There may be less publicly available information about a foreign company than
about a U.S. company, and accounting, auditing and financial reporting standards
and requirements may not be comparable. Securities of many foreign companies are
less liquid and their prices more volatile than securities of comparable U.S.
companies. Transaction costs of investing in non-U.S. securities markets are
generally higher than in the U.S. There is generally less government supervision
and regulation of exchanges, brokers and issuers than there is in the U.S. The
Fund might have greater difficulty taking appropriate legal action in non-U.S.
courts. Depository receipts that are not sponsored by the issuer may be less
liquid.
Dividend and interest income from non-U.S. securities will generally be subject
to withholding taxes by the country in which the issuer is located and may not
be recoverable by the Fund or the investor.
The Adviser will attempt to manage these risks so that such strategies and
investments benefit each Fund, but no assurance can be given that they will be
successfully managed.
MANAGEMENT OF THE FUNDS
The Corporation's Board of Directors (who, with its officers, are described in
the Additional Statement) has overall responsibility for the management of each
Fund. The Board of Directors decides upon matters of general policy and reviews
the actions of Gabelli & Company, Inc. (the "Distributor") and the Adviser.
Pursuant to separate Investment Advisory Contracts with the Corporation on
behalf of each Fund, the Adviser under the supervision of the Corporation's
Board of Directors, provides a continuous investment program for each Fund's
portfolio; provides investment research and makes and executes recommendations
for the purchase and sale of securities; provides facilities and personnel, and
the exercise of all voting and other rights appertaining thereto required for
each Fund's administrative management; supervises the per-
formance of administrative and professional services provided by others; and
pays the compensation of the Administrator and all officers and directors of
each Fund who are its affiliates. As compensation for its services and the
related expenses borne by the Adviser, each Fund pays the Adviser a fee,
computed daily and payable monthly, equal, on an annual basis, to 1.00% of each
Fund's average daily net assets, which is higher than that paid by most mutual
funds. The Adviser is located at One Corporate Center, Rye, New York 10580-1434.
The Adviser was formed in 1980 and as of March 31, 1998 acts as investment
adviser to the following funds with aggregate assets in excess of $6.6 billion:
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<TABLE>
<CAPTION>
NET ASSETS
3/31/98
Open-end funds: (in millions)
- --------------- -------------
<S> <C>
Gabelli Asset Fund $ 1,559
Gabelli Growth Fund 1,401
Gabelli Gold Fund, Inc. 12
Gabelli Value Fund Inc. 763
Gabelli Small Cap Growth Fund 348
Gabelli Equity Income Fund 88
Gabelli U.S. Treasury Money Market Fund 308
Gabelli ABC Fund 62
Gabelli Global Telecommunications Fund 150
Gabelli Global Interactive Couch Potato(R)
Fund 96
Gabelli Global Convertible Securities Fund 9
Gabelli International Growth Fund, Inc. 29
Gabelli Capital Asset Fund 138
CLOSED-END FUNDS:
- ------------------------------------------
Gabelli Convertible Securities Fund, Inc. 125
Gabelli Equity Trust Inc. 1,319
Gabelli Global Multimedia Trust Inc. 159
</TABLE>
Gabelli & Company, Inc., the Distributor of each open-end Fund's respective
shares, is an indirect majority owned subsidiary of the Adviser. GAMCO
Investors, Inc. ("GAMCO"), a wholly owned subsidiary of the Adviser, acts as
investment adviser for individuals, pension trusts, profit sharing trusts and
endowments. As of March 31, 1998, GAMCO had aggregate assets in excess of $7.2
billion under its management. Gabelli Advisers, Inc., an affiliate of the
Adviser, acts as Investment Adviser of the Gabelli Westwood Funds with assets
under management in excess of $349 million. Gabelli Fixed Income LLC is an
affiliated Investment Adviser to The Treasurer's Fund, Inc. and separate
accounts with aggregate assets in excess of $1.2 billion. Mr. Mario J. Gabelli
may be deemed a "controlling person" of the Adviser and the Distributor on the
basis of his ownership of stock of the Adviser.
In addition to the fee of the Adviser, each Fund is responsible for the payment
of all its other operating expenses, which include, among other things, expenses
for legal and independent auditor services, costs of printing all materials sent
to shareholders, charges of State Street Bank and Trust Company (the
"Custodian", "Transfer Agent" and "Dividend Disbursing Agent") and any other
persons hired by each respective Fund, securities registration fees, fees and
expenses of unaffiliated directors, accounting and printing costs for reports
and similar materials sent to shareholders, membership fees in trade
organizations, fidelity bond and liability coverage for the Corporation's
directors, officers and employees, interest, brokerage and other trading costs,
taxes, expenses of qualifying each Fund for sale in various jurisdictions,
expenses of its distribution plan adopted under Rule 12b-1, expenses of
personnel performing shareholder servicing functions, litigation and other
extraordinary or non-recurring expenses and other expenses properly payable by
each Fund.
The Additional Statement contains further information about the Investment
Advisory Contracts, including a more complete description of the advisory and
expense arrangements and administrative provisions.
Affiliates of the Adviser may, in the ordinary course of their business, acquire
for their own account or for the accounts of their advisory clients, significant
(and possibly controlling) positions in the securities of companies that may
also be suitable for investment by the Funds. The securities in which the Funds
might invest may thereby be limited to some extent. However, the Adviser does
not believe that the investment activities of its affiliates will have a
material adverse effect upon the Funds in seeking to achieve their investment
objectives. The Adviser may on occasion give advice or take action with respect
to other clients that differs from the actions taken with respect to the Funds.
SUB-ADMINISTRATOR. The Adviser has entered into a Sub-Administration Contract
with BISYS Fund Services L.P. ("BISYS" or the "Sub-Administrator"), pursuant to
which the Sub-Administrator provides certain administrative services necessary
for each Fund's operations. These services include the preparation and
distribution of materials for meetings of the Corporation's Board of Directors,
compliance testing of Fund activities and assistance in the preparation of proxy
statements, reports to shareholders and other documentation. The
Sub-Administrator's services do not include the investment advisory and
portfolio management services of the Adviser. The Adviser pays the
Sub-Administrator
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a prorated monthly fee at the annual rate of .0625% of the average daily net
assets (with a minimum annual fee of $30,000 per portfolio) on the first $350
million of all the funds advised by the Adviser and affiliates and administered
by BISYS; .0425% of any assets above $350 million and .0225% of any assets above
$700 million which, together with the services to be rendered, are subject to
negotiation between the parties and both parties retain the right unilaterally
to terminate the arrangement on not less than 60 days' notice. The
Sub-Administrator has its principal office at 3435 Stelzer Road, Columbus, Ohio
43219.
DISTRIBUTION PLAN
The Board of Directors of the Corporation has approved on behalf of each
respective Fund as being in the best interests of each Fund and its respective
shareholders separate Distribution Plans which authorize payments by each Fund
in connection with the distribution of its shares at an annual rate, as
determined from time to time by the Board of Directors, of .25% of each Fund's
average daily net assets.
Payments may be made by a Fund under its Distribution Plan for the purpose of
financing any activity primarily intended to result in the sale of its
respective shares as determined by the Board of Directors. Such activities
typically include advertising; compensation for sales and marketing activities
of the Distributor, banks, broker-dealers and service providers; shareholder
account servicing; production and dissemination of prospectus and sales and
marketing materials; and capital or other expenses of associated equipment,
rent, salaries, bonuses, interest and other overhead. To the extent any activity
is one which a Fund may finance without its Distribution Plan, such Fund may
also make payments to finance such activity outside of the Plan and not subject
to its limitations.
Each Plan has been implemented by written agreements between the Corporation on
behalf of each Fund and/or the Distributor and each person (including the
Distributor) to which payments may be made. Administration of the Plan is
regulated by Rule 12b-1 under the Investment Company Act of 1940 (the "Act"),
which includes requirements that the Board of Directors receive and review at
least quarterly reports concerning the nature and qualification of expenses for
which payments are made, that the Board of Directors approve all agreements
implementing the Plan and that the Plan may be continued from year to year only
if the Board of Directors concludes at least annually that continuation of each
Plan is likely to benefit shareholders.
The Board of Directors has initially implemented each Plan by having the
Corporation enter into an agreement with the Distributor authorizing payment to
the Distributor and its affiliates the .25% rate authorized by the Plan for
distribution activities of the types listed above. To the extent any of the
expenditures are based on allocations by the Distributor, each Fund may be
considered to be participating in joint distribution activities with other funds
distributed by the Distributor. Any such allocations would be subject to
approval by the Corporation's non-interested Directors and would be based on
such factors as the net assets of each Fund, the number of shareholder or
perspective shareholder inquiries and similar pertinent criteria. For the fiscal
year ended December 31, 1997, the Funds incurred distribution costs of $380,160
or 0.25% of average net assets under the Plan.
PURCHASE OF SHARES
The minimum initial investment for each Fund is $1,000. However, the initial
minimum of the Funds acquired through intermediary organizations may establish
their own minimum investment criteria. There is no minimum for subsequent
investments in any Fund. Investments through an Individual Retirement Account or
other retirement plans, and Automatic Investment Plans, however, have different
requirements. Shares of each Fund are sold at the net asset value per share next
determined after receipt of an order by that Fund's Distributor or transfer
agent in proper form with accompanying
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check or bank wire or other payment arrangements satisfactory to the applicable
Fund. Although most shareholders elect not to receive stock certificates,
certificates for whole shares only can be obtained on specific written request
to the Transfer Agent.
Shares of each Fund may also be purchased through shareholder agents that are
not affiliated with the Funds or the Distributor. There is no sales or service
charge imposed by each Fund, but agents who do not receive distribution payments
or sales charges may impose a charge to the investor for their services. Such
fees may vary among agents, and such agents may impose higher initial or
subsequent investment requirements than those established by the Funds. Services
provided by broker-dealers may include allowing the investor to establish a
margin account and to borrow on the value of each Fund's shares in that account.
It is the responsibility of the shareholder's agent to establish procedures
which would assure that upon receipt of an order to purchase shares of the Fund
the order will be transmitted so that it will be received by the Distributor
before the time when the price applicable to the buy order expires.
Prospectuses, sales material and applications may be obtained from the
Distributor. Each Fund and its Distributor reserve the right in their sole
discretion (1) to suspend the offerings of any Fund's shares and (2) to reject
purchase orders when, in the judgment of a Fund's management, such rejection is
in the best interest of such Fund.
The net asset value per share of each Fund is determined as of the close of the
regular session of the New York Stock Exchange, which is generally 4:00 p.m.,
eastern time, on each day that trading is conducted on the New York Stock
Exchange, by dividing the value of each respective Fund's net assets (i.e., the
value of its securities and other assets less its liabilities, including
expenses payable or accrued but excluding capital stock and surplus) by the
number of shares outstanding at the time the determination is made. Foreign
securities are valued as of the close of trading on the primary exchange on
which they trade. Portfolio securities for which market quotations are readily
available are valued at market value as determined by the last quoted sale price
prior to the valuation time on the valuation date in the case of securities
traded on securities exchanges or other markets for which such information is
available. Other readily marketable securities are valued at the average of the
latest bid and asked quotations for such securities prior to the valuation time.
Debt securities with remaining maturities of 60 days or less are valued at
amortized cost, which the Board of Directors believes represents fair value. All
other assets are valued at fair value as determined by or under the supervision
of the Board of Directors. See "Determination of Net Asset Value" in the
Additional Statement.
MAIL. To make an initial purchase by mail, send a completed subscription order
form with a check for the amount of the investment payable to the particular
fund in which you wish to invest to:
THE GABELLI FUNDS
P.O. BOX 8308
BOSTON, MA 02266-8308
Subsequent purchases do not require a completed application and can be made by
(1) mailing a check to the same address noted above or by (2) bank wire, as
indicated below. The exact name and number of the shareholder's account should
be clearly indicated.
Checks will be accepted if drawn in U.S. currency on a domestic bank for less
than $100,000. U.S. dollar checks drawn against a non-U.S. bank may be subject
to collection delays and will be accepted only upon actual receipt of funds by
the Transfer Agent. Bank collection fees may apply. The funds will not accept
checks made payable to a third party
BANK WIRE. To initially purchase shares of a Fund using the wire system for
transmittal of money among banks, an investor should first telephone the Fund at
1-800-422-3554 to obtain a new account number. The investor should then
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instruct a Federal Reserve System member bank to wire funds to:
State Street Bank and Trust Company
ABA # 011-0000-28 REF DDA # 99046187
Attn: Shareholder Services
Re: [Name of Fund]
A/C#
Account of (Registered Owner)
225 Franklin Street, Boston, MA 02110
For initial purchases, the investor should promptly complete and mail the
subscription order form to the address shown above for mail purchases. There may
be a charge by your bank for transmitting the money by bank wire but State
Street Bank and Trust Company does not charge investors in the Fund for the
receipt of wire transfers. If you are planning to wire funds, it is suggested
that you instruct your bank early in the day so the wire transfer can be
accomplished the same day.
OVERNIGHT MAIL OR PERSONAL DELIVERY. Deliver a check made payable to the
particular Fund in which you wish to invest along with a completed subscription
order form to:
THE GABELLI FUNDS
THE BFDS BUILDING, 6TH FLOOR
TWO HERITAGE DRIVE
NORTH QUINCY, MA 02171
TELEPHONE INVESTMENT PLAN. You may purchase additional shares of a Fund by
telephone through the Automated Clearinghouse (ACH) system as long as your bank
is a member of the ACH system and you have a completed, approved Investment Plan
application on file with our Transfer Agent. The funding for your purchase will
be automatically deducted from the ACH eligible account you designate on the
application. Your investment will normally be credited to your Mutual Fund
account on the first business day following your telephone request. Your request
must be received no later than 4:00 p.m. eastern time. There is a minimum of
$100 for each telephone investment. Any subsequent changes in banking
information must be submitted in writing and accompanied by a sample voided
check. To initiate an ACH purchase, please call 1-800-GABELLI (422-3554) or
1-800-872-5365. Fund shares purchased through the Telephone or Automatic
Investment Plan will not be available for redemption for up to fifteen (15) days
following the purchase date.
AUTOMATIC INVESTMENT PLAN. The Funds offer an automatic monthly investment
plan, details of which can be obtained from the Distributor. There is no minimum
initial investment for accounts establishing an automatic investment plan.
SYSTEMATIC WITHDRAWAL PLAN. The Funds offer a systematic withdrawal program for
shareholders whereby they can authorize an automatic redemption on a monthly,
quarterly or annual basis. Details can be obtained from the Distributor.
OTHER INVESTORS. No minimum initial investment is required for officers,
directors or full-time employees of the Funds, other investment companies
managed by the Adviser, the Adviser, the Sub-Administrator, the Transfer Agent,
the Distributor or their affiliates, including members of the "immediate family"
of such individuals and retirement plans and trusts for their benefit. The term
"immediate family" refers to spouses, children and grandchildren (adopted or
natural), parents, grandparents, siblings, a spouse's siblings, a sibling's
spouse and a sibling's children.
REDEMPTION OF SHARES
Upon receipt by the Distributor or the Transfer Agent of a redemption request in
proper form, shares of a Fund will be redeemed at their next determined net
asset value. Redemption requests received after the time as of which that Fund's
net asset value is determined on a particular day will be redeemed at the net
asset value of that Fund determined on the next day that net asset value is
determined. Checks for redemption proceeds will normally be mailed to the
shareholder's address of record within seven days, but will not be mailed until
all checks in payment for the purchase of the shares to be redeemed have been
honored, which may take
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up to 15 days. Redemption requests may be made by letter to the Transfer Agent,
specifying the name of the particular Fund, the dollar amount or number of
shares to be redeemed, and the account number. The letter must be signed in
exactly the same way the account is registered (if there is more than one owner
of the shares, all must sign) and, if any certificates for the shares to be
redeemed are outstanding, presentation of such certificates properly endorsed is
also required. Signatures on a redemption request and/or certificates must be
guaranteed by an "eligible guarantor institution" which includes certain banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations (signature guarantees by notaries public are
not acceptable). Shareholders may also redeem a Fund's shares through
shareholder agents, who have made arrangements with such Fund permitting them to
redeem shares by telephone or facsimile transmission and who may charge
shareholders a fee for this service if they have not received any payments under
the appropriate Distribution Plan. It is the responsibility of the shareholder's
agent to establish procedures which would assure that upon receipt of a
shareholder's order to redeem shares of a Fund the order will be transmitted so
that it will be received by such Fund before the time when the price applicable
to the order expires.
Further documentation, such as copies of corporate resolutions and instruments
of authority, are normally requested from corporations, administrators,
executors, personal representatives, trustees or custodians to evidence the
authority of the person or entity making the redemption request.
Each Fund may suspend the right of redemption or postpone the date of payment
for more than seven days during any period when (1) trading on the New York
Stock Exchange is restricted or the Exchange is closed, other than customary
weekend and holiday closings; (2) the Securities and Exchange Commission has by
order permitted such suspension or (3) an emergency, as defined by rules of the
Securities and Exchange Commission, exists making disposal of portfolio
investments or determination of the value of the net assets of the Fund not
reasonably practicable.
To minimize expenses, each Fund reserves the right to redeem, upon not less than
30 days' notice, all shares of a Fund in an account (other than an IRA) which as
a result of shareholder redemption has a value below $500. However, a
shareholder will be allowed to make additional investments prior to the date
fixed for redemption to avoid liquidation of the account.
TELEPHONE REDEMPTION BY CHECK. Each Fund accepts telephone requests for
redemption of unissued shares, subject to a $25,000 limitation. By calling
either 1-800-GABELLI (422-3554) or 1-800-872-5365, you may request that a check
be mailed to the address of record on the account, provided that the address has
not changed within thirty (30) days prior to your request. The check will be
made payable to the person in whose name the account is registered and will
normally be mailed within seven (7) days.
BY BANK WIRE. Each Fund accepts telephone requests from any investor for wire
redemption in excess of $1,000 (but subject to a $25,000 limitation) to a
predesignated bank either on the subscription order form or in a subsequent
written authorization with the signature guaranteed. Each Fund accepts signature
guaranteed written requests for redemption by bank wire without limitation. The
proceeds are normally wired on the following business day. Your bank must be
either a member of the Federal Reserve System or have a correspondent bank which
is a member. Any change to the banking information made at a later date must be
submitted in writing with a signature guarantee. The Funds will not impose a
wire service fee. A shareholder's agent or the predesignated bank, however, may
impose its own service fee on wire transfers.
Requests for telephone redemption must be received between 9:00 a.m. and 4:00
p.m. east-
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17
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ern time. If your telephone call is received after this time or on a day when
the New York Stock Exchange is not open, the request will be entered for the
following business day. Shares are redeemed at the net asset value next
determined following your request. Any Fund's shares purchased by check or
through the automatic purchase plan will not be available for redemption for up
to fifteen (15) days following the purchase. Shares held in certificate form
must be returned to the Transfer Agent for redemption of shares. Telephone
redemption is not available for IRAs. The proceeds of a telephone redemption may
be directed to an account in another mutual fund advised by Gabelli Funds, Inc.,
or its affiliate, provided the account is registered in the redeeming
shareholder's name. Such purchase will be made at the respective net asset value
plus applicable sales charge, if any, with credit for any sales charge
previously paid to the Distributor.
The Funds and their transfer agent will not be liable for following telephone
instructions reasonably believed to be genuine. In this regard, the Funds and
their transfer agent require personal identification information before
accepting a telephone redemption. If the Funds or their transfer agent fail to
use reasonable procedures, the Funds might be liable for losses due to
fraudulent instructions.
RETIREMENT PLANS
Each Fund has available a form of Individual Retirement Account ("IRA") for
investment in shares which may be obtained from the Distributor. The minimum
investment required to open an IRA for investment in shares of a Fund is $1,000
for an individual except that both the individual and his or her spouse may
establish separate IRAs if their combined investment is $1,250. There is no
minimum for additional investment in an IRA account. For tax years beginning
after December 31, 1997, investors may be eligible to make contributions to a
new type of individual retirement account (a "Roth IRA"). An investor can open a
Roth IRA if he meets certain income limits specified in the Internal Revenue
Code of 1986, as amended (the "Code"). Any contributions made by an investor to
a Roth IRA are nondeductible for U.S. Federal income tax purposes. Distributions
from a Roth IRA are not included in the investor's gross income and are not
subject to a 10% penalty for early withdrawal if the distributions are made
after the end of the five-year period beginning with the first tax year in which
the investor made a contribution to the Roth IRA and the distributions meet
other criteria set forth in the Code. The maximum annual aggregate contribution
that can be made to IRAs and Roth IRAs is $2,000. In addition, for tax years
beginning after December 31, 1997, certain low and middle-income investors may
open an education individual retirement account (an "Education IRA"). Eligible
individuals are permitted to contribute up to $500 per year per beneficiary
under 18 years old to an Education IRA. The minimum initial investment for an
Education IRA through the Fund is $250. A distribution from an education IRA is
generally excludable from gross income to the extent that such distribution does
not exceed qualified higher education expenses incurred by the beneficiary
during the year in which the distribution is made.
Investors who are self-employed may purchase shares of a Fund through
tax-deductible contributions to retirement plans for self-employed persons,
known as Keogh or H.R. 10 plans. The Funds do not currently act as Sponsors for
such plans. Any Fund's shares may also be a suitable investment for other types
of qualified pension or profit-sharing plans which are employer-sponsored,
including deferred compensation or salary reduction plans known as "401(k)
Plans" which give participants the right to defer portions of their compensation
for investment on a tax-deferred basis until distributions are made from the
plans. The minimum initial investment for an individual under such plans is
$1,000 and there is no minimum for additional investments. Under the Code,
individuals may make wholly or partly tax deductible IRA contributions of up to
$2,000 annually, depending on whether they are active
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18
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participants in an employer-sponsored retirement plan and on their income level.
However, dividends and distributions held in the account are not taxed until
withdrawn in accordance with the provisions of the Code. An individual with a
non-working spouse may establish a separate IRA for the spouse under the same
conditions and contribute a maximum of $4,000 annually provided that no more
than $2,000 may be contributed to the IRA of either spouse.
Investors should be aware that they may be subject to penalties or additional
tax on contributions or withdrawals from IRAs or other retirement plans which
are not permitted by the applicable provisions of the Internal Revenue Code.
Persons desiring information concerning investments through IRA accounts or
other retirement plans should write or telephone the Distributor.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each dividend and capital gains distribution, if any, declared by a Fund on its
outstanding shares will, unless the shareholder elects otherwise, be paid on the
payment date fixed by the Board of Directors in additional shares of such Fund
having an aggregate net asset value as of the ex-dividend date of such dividend
or distribution equal to the cash amount of such distribution. An election to
receive dividends and distributions may be changed by notifying the applicable
Fund in writing at any time prior to the record date for a particular dividend
or distribution. There are no sales or other charges in connection with the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no assurance that any Fund will pay any
dividends or realize any capital gains. However, each Fund currently intends to
pay dividends and capital gains distributions, if any, on an annual basis.
Each Fund intends to qualify for tax treatment as a "Regulated Investment
Company" under the Internal Revenue Code in order to be relieved of Federal
income tax on that part of its net investment income and realized capital gains
which it pays out to its shareholders.
Dividends out of net investment income and distributions of realized short-term
capital gains are taxable to the recipient shareholders as ordinary income. In
the case of corporate shareholders, such distributions are eligible for the
dividends received deduction subject to proportionate reduction if the aggregate
qualifying dividends received by a Fund from domestic corporations in any year
are less than its "gross income" as defined by the Code. Distributions out of
long-term capital gains are taxable to the recipient as long-term capital gains.
Shareholders will be advised as to what portion of capital gains are to be
treated as "28% rate gain" or "20% rate gain" with respect to the maximum tax
rate for such gains (i.e, the portion of such capital gains that relates to
assets held for more than 12 months but not more than 18 months and the portion
that relates to assets held more than 18 months). Dividends and distributions
declared by the Funds may also be subject to state and local taxes. Prior to
investing in shares of any Fund, prospective shareholders may wish to consult
their tax advisers concerning the Federal, state and local tax consequences of
such investment.
GENERAL INFORMATION
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES. Each Fund is a series of
Gabelli Global Series Funds, Inc. (the "Corporation"), which was incorporated in
Maryland on July 16, 1993. The authorized capital stock consists of one billion
shares of stock having a par value of one tenth of one cent ($.001) per share,
200,000,000 shares of which have been classified as shares for each of the
Funds. The Corporation is not required, and does not intend, to hold regular
annual shareholder meetings, but may hold special meetings for consideration of
proposals requiring shareholder approval, such as changing fundamental policies
or upon the written request of 10% of the Fund's shares to replace its
Directors. The Corporation's Board of Directors is authorized to divide the
unissued shares into separate series of stock, each series representing a
separate, additional portfolio.
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There are no conversion or preemptive rights in connection with any shares of
the Funds. All shares, when issued in accordance with the terms of the offering,
will be fully paid and nonassessable. Shares will be redeemed at net asset
value, at the option of the shareholder.
Each Fund sends semi-annual and annual reports to all respective shareholders
which include lists of portfolio securities and each Fund's financial statements
which shall be audited annually. Unless it is clear that a shareholder is a
nominee for the account of an unrelated person or a shareholder otherwise
specifically requests in writing, the Funds may send a single copy of
semi-annual, annual and other reports to shareholders to all accounts at the
same address and all accounts of any person at that address.
The shares of the Funds have noncumulative voting rights which means that the
holders of more than 50% of the shares can elect 100% of the directors if the
holders choose to do so, and, in that event, the holders of the remaining shares
will not be able to elect any person or persons to the Board of Directors.
Unless specifically requested by an investor who is a shareholder of record, the
Funds do not issue certificates evidencing shares.
PORTFOLIO TURNOVER. The investment policies of the Funds may lead to frequent
changes in investments, particularly in periods of rapidly fluctuating interest
or currency exchange rates. The portfolio turnover may be higher than that of
other investment companies. During the year ended December 31, 1997, the
portfolio turnover rates for the Gabelli Global Telecommunications Fund, The
Gabelli Global Couch Potato(R) Fund, and The Gabelli Global Convertible
Securities Fund were 9%, 68% and 100%, respectively. During the year ended
December 31, 1996, the portfolio turnover rates for the Gabelli
Telecommunications Fund, The Gabelli Global Couch Potato(R) Fund, and The
Gabelli Convertible Securities Fund were 7%, 47%, and 126%, respectively.
Portfolio turnover generally involves some expense to a Fund, including
brokerage commissions or dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. The portfolio turnover rate
is computed by dividing the lesser of the amount of the securities purchased or
securities sold by the average monthly value of securities owned during the year
(excluding securities whose maturities at acquisition were one year or less).
PERFORMANCE INFORMATION. The Funds may furnish data about their investment
performance in advertisements, sales literature and reports to shareholders.
"Total return" represents the annual percentage change in value of $1,000
invested at the maximum public offering price for the one, five and ten year
periods (if applicable) and the life of a Fund through the most recent calendar
quarter, assuming reinvestment of all dividends and distributions. Quotations of
"yield" will be based on the investment income per share earned during a
particular 30 day period, less expenses accrued during the period, with the
remainder being divided by the maximum offering price per share on the last day
of the period. The Funds may also furnish total return and yield calculations
for other periods and/or based on investments at various sales charge levels or
net asset values. Any performance data which is based on a Fund's net asset
value per share would be reduced if a sales charge were taken into account.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. State Street Bank and
Trust Company is the Custodian for each Fund's cash and securities as well as
the Transfer and Dividend Disbursing Agent for its shares. Boston Financial Data
Services, Inc., an affiliate of State Street Bank and Trust Company performs the
shareholder services on behalf of State Street and is located at The BFDS
Building, Two Heritage Drive, North Quincy, MA 02171. State Street Bank and
Trust Company does not assist in and is not responsible for investment decisions
involving assets of the Funds.
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INDEPENDENT AUDITORS. Grant Thornton LLP has been appointed independent
auditors for each of the Funds, and is located at 7 Hanover Square, 6th Floor,
New York, New York 10004.
INFORMATION FOR SHAREHOLDERS. All shareholder inquiries regarding
administrative procedures including the purchase and redemption of shares should
be directed to the Distributor, Gabelli & Company, Inc., One Corporate Center,
Rye, New York 10580-1434. For assistance, call 1-800-GABELLI (1-800-422-3554) or
through the internet at http://www.gabelli.com.
Upon request, Gabelli & Company, Inc. will provide without charge, a paper copy
of this Prospectus to investors or their representatives who received this
Prospectus in an electronic format.
This Prospectus omits certain information contained in the Registration
Statement filed with the Securities and Exchange Commission. Copies of the
Registration Statement including items omitted herein, may be obtained from the
Commission by paying the charges prescribed under its rules and regulations. The
Statement of Additional Information included in such Registration Statement may
be obtained without charge from the Funds or their Distributor.
YEAR 2000 UPDATE. As the year 2000 approaches, an issue has emerged regarding
how existing application software programs and operating systems can accommodate
this date value. Failure to adequately address this issue could have potentially
serious repercussions. The Adviser is in the process of working with the Fund's
service providers to prepare for the year 2000. Based on information currently
available, the Adviser does not expect that the Fund will incur significant
operating expenses or be required to incur material costs to be year 2000
compliant. Although the Adviser does not anticipate that the year 2000 issue
will have a material impact on the Fund's ability to provide service at current
levels, there can be no assurance that steps taken in preparation for the year
2000 will be sufficient to avoid any adverse impact on the Fund.
APPENDIX TO PROSPECTUS
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S ("MOODY'S") CORPORATE BOND
RATINGS. Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues. Aa:
Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which made
the long term risks appear somewhat larger than in Aaa securities. A: Bonds
which are rated A possess many favorable investment attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future. Baa: Bonds which
are rated Baa are considered as medium grade obligations, i.e., they are neither
highly protected nor poorly secured. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have speculative
characteristics as well. Ba: Bonds which are rated Ba are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class. B: Bonds which are
rated B generally
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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 which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. Ca: Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C: Bonds which are rated C are the lowest rated class of
bonds and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Note: Moody's may apply numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
DESCRIPTION OF STANDARD & POOR'S RATING GROUP ("S&P'S") CORPORATE DEBT RATINGS.
AAA: Debt rated AAA has the highest rating assigned by S&P's. Capacity to pay
interest and repay principal is extremely strong. AA: Debt rated AA has a very
strong capacity to pay interest and repay principal and differs from the highest
rated issues only in small degree. A: Debt rated A has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. BBB: Debt rated BBB is regarded as having adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than for debt in higher rated categories. BB, B, CCC,
CC, C: Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and C the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions. CI: The rating CI
is reserved for income bonds on which no interest is being paid. D: Debt rated D
is in payment default. The D rating category is used when interest payments or
principal payments are not made on the date due even if the applicable grace
period has not expired, unless S&P's believes that such payments will be made
during such grace period. The D rating also will be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
DESCRIPTION OF MOODY'S PREFERRED STOCK RATINGS. aaa: An issue which is rated
aaa is considered to be a top-quality preferred stock. This rating indicates
good asset protection and the least risk of dividend impairment within the
universe of preferred stocks. aa: An issue which is rated aa is considered a
high-grade preferred stock. This rating indicates that there is reasonable
assurance that earnings and asset protection will remain relatively well
maintained in the foreseeable future. a: An issue which is rated a is considered
to be an upper medium grade preferred stock. While risks are judged to be
somewhat greater than in the aaa and aa classifications, earnings and asset
protection are, nevertheless expected to be maintained at adequate levels. baa:
An issue which is rated baa is considered to be medium grade, neither highly
protected nor poorly secured. Earnings and asset protection appear adequate at
present but may be questionable over any great length of time. ba: An issue
which is rated ba is considered to have speculative elements and its future
cannot be considered well assured. Earnings and asset protection may be very
moderate and
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not well safeguarded during adverse periods. Uncertainty of position
characterizes preferred stocks in this class. b: An issue which is rated b
generally lacks the characteristics of a desirable investment. Assurance of
dividend payments and maintenance of other terms of the issue over any long
period of time may be small. caa: An issue which is rated caa is likely to be in
arrears on dividend payments. This rating designation does not purport to
indicate the future status of payment. ca: An issue which is rated ca is
speculative in a high degree and is likely to be in arrears on dividends with
little likelihood of eventual payment. c: This is the lowest rated class of
preferred or preference stock. Issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
Note: Moody's may apply numerical modifiers 1, 2 and 3 in each rating
classification from "aa" through "b" in its preferred stock rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
DESCRIPTION OF S&P'S PREFERRED STOCK RATINGS. AAA: This is the highest rating
that may be assigned by S&P's to a preferred stock issue and indicates an
extremely strong capacity to pay the preferred stock obligations. AA: A
preferred stock issue rated AA also qualifies as a high-quality fixed income
security.
The capacity to pay preferred stock obligations is very strong, although not as
overwhelming as for issues rated AAA. A: An issue rated A is backed by a sound
capacity to pay the preferred stock obligations, although it is somewhat more
susceptible to the adverse effect of changes in circumstances and economic
conditions. BBB: An issue rated BBB is regarded as backed by an adequate
capacity to pay the preferred stock obligations. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to make payments
for a preferred stock in this category than for issues in the A category. BB, B,
CCC: Preferred stock rated BB, B, and CCC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay preferred
stock obligations. BB indicates the lowest degree of speculation and CCC the
highest degree of speculation. While such issues will likely have some quality
and protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions. CC: The rating CC is reserved for a
preferred stock in arrears on dividends or sinking fund payments but that is
currently paying. C: A preferred stock rated C is a non-paying issue. D: A
preferred stock rated D is a non-paying issue with the issuer in default on debt
instruments.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Table of Fees and Expenses........... 2
Financial Highlights................. 3
Investment Objective and Policies.... 5
Associated Risk Factors.............. 9
Management of the Funds.............. 12
Distribution Plan.................... 14
Purchase of Shares................... 14
Redemption of Shares................. 16
Retirement Plans..................... 18
Dividends, Distributions and Taxes... 19
General Information.................. 19
Appendix............................. 21
</TABLE>
- ------------------------------------------------------
No dealer, salesman or other person has been authorized to give any information
or to make any representation other than those contained in this Prospectus, and
if given or made, such information or representation may not be relied upon as
being authorized by the Fund, the Adviser, the Sub-Administrator, the
Distributor or any affiliate thereof.
- ------------------------------------------------------
GABELLI
GLOBAL
SERIES
FUNDS, INC.
PROSPECTUS
APRIL 15, 1998
- - THE GABELLI GLOBAL
TELECOMMUNICATIONS FUND
- - THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
- - THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
- - THE GABELLI GLOBAL OPPORTUNITY FUND
GABELLI FUNDS, INC.
INVESTMENT ADVISER
GABELLI & COMPANY, INC.
DISTRIBUTOR
- --------------------------------------------------------------------------------
<PAGE> 28
GABELLI GLOBAL SERIES FUNDS, INC.
ONE CORPORATE CENTER, RYE, NEW YORK 10580-1434
TELEPHONE: 1-800-GABELLI (1-800-422-3554)
HTTP//WWW.GABELLI.COM
STATEMENT OF ADDITIONAL INFORMATION
APRIL 15, 1998
This Statement of Additional Information ("Additional Statement") relates to The
Gabelli Global Telecommunications Fund (the "Global Telecommunications Fund"),
The Gabelli Global Interactive Couch Potato(R) Fund (the "Global Interactive
Couch Potato(R) Fund"), The Gabelli Global Convertible Securities Fund (the
"Global Convertible Fund") and The Gabelli Global Opportunity Fund (the "Global
Opportunity Fund", formerly the Global Growth Fund) (collectively, the
"Funds"), each of which is a series of Gabelli Global Series Funds, Inc., a
Maryland corporation (the "Corporation"), and is not a prospectus and is only
authorized for distribution when preceded or accompanied by the Funds'
prospectus dated April 15, 1998, as supplemented from time to time (the
"Prospectus"). This Additional Statement contains information in addition to
that set forth in the Prospectus into which this document is incorporated by
reference and should be read in conjunction with the Prospectus. Additional
copies of this document may be obtained without charge by writing or telephoning
the Funds at the address and telephone number set forth above.
B-1
<PAGE> 29
TABLE OF CONTENTS
PAGE
----
Investments.................................................... B-3
The Adviser.................................................... B-10
The Distributor................................................ B-12
Directors and Officers......................................... B-12
Investment Restrictions........................................ B-15
Portfolio Transactions and Brokerage........................... B-16
Purchase and Redemption of Shares.............................. B-18
Dividends, Distributions and Taxes............................. B-18
Determination of Net Asset Value............................... B-20
Investment Performance Information............................. B-21
Counsel and Independent Auditors............................... B-22
Shares of Beneficial Interest.................................. B-22
B-2
<PAGE> 30
THE FOLLOWING INFORMATION SUPPLEMENTS THAT IN THE PROSPECTUS
INVESTMENTS
Subject to each Fund's policy of investing at least 65% of its assets in the
appropriate securities of foreign and domestic companies, each Fund may invest
in any of the securities described below.
EQUITY SECURITIES
Because each Fund in seeking to achieve its respective investment objective may
invest in the common stocks of both domestic and foreign issuers, an investment
in a Fund should be made with an understanding of the risks inherent in any
investment in common stocks including the risk that the financial condition of
the issuers of each Fund's portfolio securities may become impaired or that the
general condition of the stock market may worsen (both of which may contribute
directly to a decrease in the value of the securities and thus in the value of a
Fund's Shares). Additional risks include risks associated with the right to
receive payments from the issuer which is generally inferior to the rights of
creditors of, or holders of debt obligations or preferred stock issued by, the
issuer.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither a fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Fund's portfolio thus may be expected to fluctuate.
Preferred stocks are usually entitled to rights on liquidation which are senior
to those of common stocks. For these reasons, preferred stocks generally entail
less risk than common stocks. Such securities may pay cumulative dividends.
Because the dividend rate is pre-established, and they are senior to common
stocks, such securities tend to have less possibility of capital appreciation.
Some of the securities in the Funds may be in the form of depository receipts.
Depository receipts usually represent common stock or other equity securities of
non-U.S. issuers deposited with a custodian in a depository. The underlying
securities are usually withdrawable at any time by surrendering the depository
receipt. Depository receipts are usually denominated in U.S. dollars and
dividends and other payments from the issuer are converted by the custodian into
U.S. dollars before payment to receipt holders. In other respects depository
receipts for foreign securities have the same characteristics as the underlying
securities. Depository receipts that are not sponsored by the issuer may be less
liquid and there may be less readily available public information about the
issuer.
NONCONVERTIBLE FIXED INCOME SECURITIES
The category of fixed income securities which are not convertible or
exchangeable for common stock includes preferred stocks, bonds, debentures,
notes, asset and mortgage backed securities and money market instruments such as
commercial paper and bankers acceptances. There is no minimum credit rating for
these securities in which the Funds may invest. Accordingly, each Fund could
invest in securities in default although no Fund will invest more than 5% of its
assets in such securities.
Up to 25% of each Fund's assets may be invested in lower quality debt securities
although each Fund does not expect to invest more than 10% of its assets in such
securities. The foregoing limitations do not apply
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to the Global Convertible Securities Fund, which may invest in lower quality
securities without limit. The market values of lower quality fixed income
securities tend to be less sensitive to changes in prevailing interest rates
than higher-quality securities but more sensitive to individual corporate
developments than higher-quality securities. Such lower-quality securities also
tend to be more sensitive to economic conditions than are higher-quality
securities. Accordingly, these lower-quality securities are considered
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation and will
generally involve more credit risk than securities in the higher-quality
categories. Even securities rated Baa or BBB by Moody's Investor Services, Inc.
("Moody's") and Standard & Poors Rating Group ("S&P") respectively, which
ratings are considered investment grade, possess some speculative
characteristics. There are risks involved in applying credit ratings as a method
for evaluating high yield obligations in that credit ratings evaluate the safety
of principal and interest payments, not market value risk. In addition, credit
rating agencies may not change credit ratings on a timely basis to reflect
changes in economic or company conditions that affect a security's market value.
The Funds will rely on the Adviser's judgment, analysis and experience in
evaluating the creditworthiness of an issuer. In this evaluation, the Adviser
will take into consideration, among other things, the issuer's financial
resources and ability to cover its interest and fixed charges, factors relating
to the issuer's industry and its sensitivity to economic conditions and trends,
its operating history, the quality of the issuer's management and regulatory
matters.
The risk of loss due to default by the issuer is significantly greater for the
holders of lower quality securities because such securities are generally
unsecured and are often subordinated to other obligations of the issuer. During
an economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of lower quality securities may experience financial stress
and may not have sufficient revenues to meet their interest payment obligations.
An issuer's ability to service its debt obligations may also be adversely
affected by specific corporate developments, its inability to meet specific
projected business forecasts, or the unavailability of additional financing.
Factors adversely affecting the market value of high yield and other securities
will adversely affect the Funds' net asset value. In addition, each Fund may
incur additional expenses to the extent it is required to seek recovery upon a
default in the payment of principal of or interest on its portfolio holdings.
From time to time, proposals have been discussed regarding new legislation
designed to limit the use of certain high yield debt securities by issuers in
connection with leveraged buy-outs, mergers and acquisitions, or to limit the
deductibility of interest payments on such securities. Such proposals, if
enacted into law, could reduce the market for such debt securities generally,
could negatively affect the financial condition of issuers of high yield
securities by removing or reducing a source of future financing, and could
negatively affect the value of specific high yield issues and the high yield
market in general. For example, under a provision of the Internal Revenue Code
enacted in 1989, a corporate issuer may be limited from deducting all of the
original issue discount on high-yield discount obligations (i.e., certain types
of debt securities issued at a significant discount to their face amount). The
likelihood of passage of any additional legislation or the effect thereof is
uncertain.
The secondary trading market for lower-quality fixed income securities is
generally not as liquid as the secondary market for higher-quality securities
and is very thin for some securities. The relative lack of an active secondary
market may have an adverse impact on market price and each Fund's ability to
dispose of particular issues when necessary to meet liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The relative lack of an active secondary market
for certain securities may also make it more difficult for each Fund to obtain
accurate market quotations for purposes of valuing their respective portfolios.
Market quotations are generally available on many high yield issues only from a
limited number of dealers and may not necessarily represent firm bids of such
dealers or prices for actual sales. During such times, the responsibility of the
Board of Directors to value the securities becomes more difficult and judgment
plays a greater role in valuation because there is less reliable, objective data
available.
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CONVERTIBLE SECURITIES
Each of the Global Telecommunications Fund, the Global Interactive Couch
Potato(R) Fund and the Global Opportunity Fund may invest up to 25% of its
assets in convertible securities rated, at the time of investment, less than BBB
by S&P or Baa by Moody's or are unrated but of equivalent credit quality in the
judgment of the Adviser. The Global Convertible Securities Fund may invest in
such securities without limit.
Some of the convertible securities in each Fund's portfolio may be "Pay-In-Kind"
securities. During a designated period from original issuance, the issuer of
such a security may pay dividends or interest to the holder by issuing
additional fully paid and nonassessable shares or units of the same or another
specified security.
SOVEREIGN DEBT SECURITIES
Each Fund may invest in securities issued or guaranteed by any country and
denominated in any currency. Each Fund (other than the Global Convertible
Securities Fund) expects that it generally will invest in developed countries
including Australia, Canada, Finland, France, Germany, the Netherlands, Japan,
Italy, New Zealand, Norway, Spain, Sweden, the United Kingdom and the United
States. The obligations of governmental entities have various kinds of
government support and include obligations issued or guaranteed by governmental
entities with taxing power. These obligations may or may not be supported by the
full faith and credit of a government. Debt securities issued or guaranteed by
foreign governmental entities have credit characteristics similar to those of
domestic debt securities but include additional risks. These additional risks
include those resulting from devaluation of currencies, future adverse political
and economic developments and other foreign governmental laws. The Global
Convertible Securities Fund may invest in securities issued by undeveloped or
emerging market countries, such as those in Latin America, Eastern Europe and
much of Southeast Asia. These securities are generally not considered investment
grade and have risks similar to those of other debt securities rated less than
investment grade. Such securities are regarded as predominantly speculative with
respect to an issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve risk exposure to
adverse conditions.
Each Fund may also purchase securities issued by semi-governmental or
supranational agencies such as the Asian Development Bank, the International
Bank for Reconstruction and Development, the Export-Import Bank and the European
Investment Bank. The governmental members, or "stockholders," usually make
initial capital contributions to the supranational entity and in many cases are
committed to make additional capital contributions if the supranational entity
is unable to repay its borrowings. Each Fund will not invest more than 25% of
its assets in the securities of such supranational entities.
Each Fund may invest in securities denominated in a multi-national currency
unit. An illustration of a multi-national currency unit is the European Currency
Unit (the "ECU"), which is a "basket" consisting of specified amounts of the
currencies of the member states of the European Community, a Western European
economic cooperative organization that includes France, Germany, the
Netherlands, the United Kingdom and other countries. The specific amounts of
currencies comprising the ECU may be adjusted by the Council of Ministers of the
European Community to reflect changes in relative values of the underlying
currencies. Such investments involve credit risks associated with the issuer and
currency risks associated with the currency in which the obligation is
denominated.
SECURITIES SUBJECT TO REORGANIZATION
Each Fund may invest without limit in securities for which a tender or exchange
offer has been made or announced and in securities of companies for which a
merger, consolidation, liquidation or reorganization proposal has been announced
if, in the judgment of Gabelli Funds, Inc. (the "Adviser"), there is a
reasonable prospect of high total return significantly greater than the
brokerage and other transaction expenses involved.
In general, securities which are the subject of such an offer or proposal sell
at a premium to their historic market price immediately prior to the
announcement of the offer or may also discount what the stated or
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appraised value of the security would be if the contemplated transaction were
approved or consummated. Such investments may be advantageous when the discount
significantly overstates the risk of the contingencies involved; significantly
undervalues the securities, assets or cash to be received by shareholders of the
prospective portfolio company as a result of the contemplated transaction; or
fails adequately to recognize the possibility that the offer or proposal may be
replaced or superseded by an offer or proposal of greater value. The evaluation
of such contingencies requires unusually broad knowledge and experience on the
part of the Adviser which must appraise not only the value of the issuer and its
component businesses as well as the assets or securities to be received as a
result of the contemplated transaction but also the financial resources and
business motivation of the offer and the dynamics and business climate when the
offer of proposal is in process. Since such investments are ordinarily
short-term in nature, they will tend to increase the turnover ratio of the Funds
thereby increasing its brokerage and other transaction expenses. The Adviser
intends to select investments of the type described which, in its view, have a
reasonable prospect of capital appreciation which is significant in relation to
both risk involved and the potential of available alternate investments.
LOWER RATED SECURITIES
Securities which are not investment grade are viewed by rating agencies as being
predominantly speculative in character and are characterized by substantial risk
concerning payments of interest and principal, sensitivity to economic
conditions and changes in interest rates, as well as by market price volatility
and/or relative lack of secondary market trading among other risks and may
involve major risk exposure to adverse conditions or be in default. However,
each Fund does not expect to invest more than 5% of its assets in securities
which are in default at the time of investment and will invest in such
securities only when the Adviser expects that the securities will appreciate in
value. There is no minimum rating of securities in which the Funds may invest.
Securities rated less than BBB by S&P or Baa by Moody's or comparable unrated
securities are typically referred to as "junk bonds."
Lower rated securities are less sensitive to interest rate changes than other
fixed income investments but are more sensitive to broad economic changes and
individual corporate developments. The high yield securities market is
relatively new and periods of economic change can be expected to result in
increased market price volatility. As lower rated securities may be traded by a
smaller number of broker-dealers, it may be more difficult for the Corporation's
Board of Directors to value these securities and the Board's judgment will play
a greater role as less reliable, objective data is available.
OPTIONS
Each Fund may purchase or sell options on individual securities as well as on
indices of securities as a means of achieving additional return or of hedging
the value of its portfolio.
A call option is a contract that gives the holder of the option the right, in
return for a premium paid, to buy from the seller the security underlying the
option at a specified exercise price at any time during the term of the option
or, in some cases, only at the end of the term of the option. The seller of the
call option has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price. A put option is a
contract that gives the holder of the option the right in return for a premium
to sell to the seller the underlying security at a specified price. The seller
of the put option, on the other hand, has the obligation to buy the underlying
security upon exercise at the exercise price. The Fund's transactions in options
may be subject to specific segregation requirements. See "Hedging Transactions"
below.
If a Fund has sold an option, it may terminate its obligation by effecting a
closing purchase transaction. This is accomplished by purchasing an option of
the same series as the option previously sold. There can be no assurance that a
closing purchase transaction can be effected when the Fund so desires.
The purchaser of an option risks a total loss of the premium paid for the option
if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
foregoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Fund the credit risk that
the counterparty
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will fail to honor its obligations. A Fund will not purchase options if, as a
result, the aggregate cost of all outstanding options exceeds 5% of such Fund's
assets. To the extent that puts, straddles and similar investment strategies
involve instruments regulated by the Commodity Futures Trading Commission, each
Fund is limited to an investment not in excess of 5% of its total assets.
WARRANTS AND RIGHTS
Each Fund may invest up to 5% of its assets in warrants or rights (other than
those acquired in units or attached to other securities) which entitle the
holder to buy equity securities at a specific price for or at the end of a
specific period of time.
WHEN ISSUED, DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS
Each Fund may enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis in excess
of customary settlement periods for the type of security involved. In some
cases, a forward commitment may be conditioned upon the occurrence of a
subsequent event, such as approval and consummation of a merger, corporate
reorganization or debt restructuring, i.e., a when, as and if issued security.
When such transactions are negotiated, the price is fixed at the time of the
commitment, with payment and delivery taking place in the future, generally a
month or more after the date of the commitment. While a Fund will only enter
into a forward commitment with the intention of actually acquiring the security,
such Fund may sell the security before the settlement date if it is deemed
advisable.
Securities purchased under a forward commitment are subject to market
fluctuation, and no interest (or dividends) accrues to a Fund prior to the
settlement date. The Funds will segregate with its custodian cash or liquid
securities with the Funds' custodian in an aggregate amount at least equal to
the amount of its outstanding forward commitments.
SHORT SALES
Each Fund may make short sales of securities. A short sale is a transaction in
which a Fund sells a security it does not own in anticipation that the market
price of that security will decline. The Funds expect to make short sales both
to obtain capital gains from anticipated declines in securities and as a form of
hedging to offset potential declines in long positions in the same or similar
securities. The short sale of a security is considered a speculative investment
technique.
When a Fund makes a short sale, it must borrow the security sold short and
deliver it to the broker-dealer through which it made the short sale in order to
satisfy its obligation to deliver the security upon conclusion of the sale. The
Funds may have to pay a fee to borrow particular securities and are often
obligated to pay over any payments received on such borrowed securities.
The Funds' obligation to replace the borrowed security will be secured by
collateral deposited with the broker-dealer, usually cash, U.S. government
securities or other liquid securities. The Funds will also be required to
deposit similar collateral with its Custodian to the extent, if any, necessary
so that the value of both collateral deposits in the aggregate is at all times
equal to the greater of the price at which the security is sold short or 100% of
the current market value of the security sold short. Depending on arrangements
made with the broker-dealer from which it borrowed the security regarding
payment over of any payments received by a Fund on such security, such Fund may
not receive any payments (including interest) on its collateral deposited with
such broker-dealer. If the price of the security sold short increases between
the time of the short sale and the time a Fund replaces the borrowed security,
such Fund will incur a loss; conversely, if the price declines, such Fund will
realize a capital gain. Any gain will be decreased, and any loss increased, by
the transaction costs described above. Although a Fund's gain is limited to the
price at which it sold the security short, its potential loss is theoretically
unlimited.
The market value of the securities sold short of any one issuer will not exceed
either 5% of each Fund's total assets or 5% of such issuer's voting securities.
A Fund will not make a short sale, if, after giving effect to such sale, the
market value of all securities sold short exceeds 25% of the value of its assets
or such Fund's aggregate short sales of a particular class of securities exceeds
25% of the outstanding securities of that class. A Fund may also make short
sales "against the box" without respect to such
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limitations. In this type of short sale, at the time of the sale, such Fund owns
or has the immediate and unconditional right to acquire at no additional cost
the identical security.
RESTRICTED AND ILLIQUID SECURITIES
Each Fund may invest up to a total of 15% of its net assets in securities that
are subject to restrictions on resale and securities the markets for which are
illiquid. Illiquid securities include most of the securities the disposition of
which is subject to substantial legal or contractual restrictions. The sale of
illiquid securities often requires more time and results in higher brokerage
charges or dealer discounts and other selling expenses than does the sale of
securities eligible for trading on national securities exchanges or in the
over-the-counter markets. Restricted securities may sell at a price lower than
similar securities that are not subject to restrictions on resale. Securities
freely salable among qualified institutional investors under special rules
adopted by the Securities and Exchange Commission or otherwise determined to be
liquid may be treated as liquid if they satisfy liquidity standards established
by the Board of Directors. Unseasoned issuers are companies (including
predecessors) that have operated less than three years. The continued liquidity
of such securities is not as well assured as that of publicly traded securities,
and accordingly the Board of Directors will monitor their liquidity. The Board
will review pertinent factors such as trading activity, reliability of price
information and trading patterns of comparable securities in determining whether
to treat any such security as liquid for purposes of the foregoing 15% test. To
the extent the Board treats such securities as liquid, temporary impairments to
trading patterns of such securities may adversely affect the Fund's liquidity.
REPURCHASE AGREEMENTS
Each Fund may invest in repurchase agreements, which are agreements pursuant to
which securities are acquired by a Fund from a third party with the
understanding that they will be repurchased by the seller at a fixed price on an
agreed date. These agreements may be made with respect to any of the portfolio
securities in which a Fund is authorized to invest. Repurchase agreements may be
characterized as loans secured by the underlying securities. Each Fund may enter
into repurchase agreements with (i) member banks of the Federal Reserve System
having total assets in excess of $500 million and (ii) securities dealers,
provided that such banks or dealers meet the creditworthiness standards
established by the Fund's board of directors ("Qualified Institutions"). The
Adviser will monitor the continued creditworthiness of Qualified Institutions,
subject to the supervision of the Board of Directors. The resale price reflects
the purchase price plus an agreed upon market rate of interest which is
unrelated to the coupon rate or date of maturity of the purchased security. The
collateral is marked to market daily. Such agreements permit a Fund to keep all
its assets earning interest while retaining "overnight" flexibility in pursuit
of investments of a longer-term nature.
The use of repurchase agreements involves certain risks. For example, if the
seller of securities under a repurchase agreement defaults on its obligation to
repurchase the underlying securities, as a result of its bankruptcy or
otherwise, a Fund will seek to dispose of such securities, which action could
involve costs or delays. If the seller becomes insolvent and subject to
liquidation or reorganization under applicable bankruptcy or other laws, such
Fund's ability to dispose of the underlying securities may be restricted.
Finally, it is possible that a Fund may not be able to substantiate its interest
in the underlying securities. To minimize this risk, the securities underlying
the repurchase agreement will be held by the Funds' custodian at all times in an
amount at least equal to the repurchase price, including accrued interest. If
the seller fails to repurchase the securities, a Fund may suffer a loss to the
extent proceeds from the sale of the underlying securities are less than the
repurchase price. Each Fund will not enter into repurchase agreements of a
duration of more than seven days if taken together with all other illiquid
securities in the Fund's portfolio, more than 15% of its net assets would be so
invested.
LOANS OF PORTFOLIO SECURITIES
To increase income, each Fund may lend its portfolio securities to securities
broker-dealers or financial institutions if (1) the loan is collateralized in
accordance with applicable regulatory requirements including collaterization
continuously at no less than 100% by marking to market daily, (2) the loan is
subject to termination by the Fund at any time, (3) the Fund receives reasonable
interest or fee payments on the loan,
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(4) the Fund is able to exercise all voting rights with respect to the loaned
securities and (5) the loan will not cause the value of all loaned securities to
exceed 33 1/3% of the value of the Fund's assets.
If the borrower fails to maintain the requisite amount of collateral, the loan
automatically terminates and the Fund could use the collateral to replace the
securities while holding the borrower liable for any excess of replacement cost
over the value of the collateral. As with any extension of credit, there are
risks of delay in recovery and in some cases even loss of rights in collateral
should the borrower of the securities fail financially.
BORROWING
Each Fund may not borrow money except for (1) short-term credits from banks as
may be necessary for the clearance of portfolio transactions, and (2) borrowings
from banks for temporary or emergency purposes, including the meeting of
redemption requests, which would otherwise require the untimely disposition of
its portfolio securities. Borrowing may not, in the aggregate, exceed 15% of
assets after giving effect to the borrowing and borrowing for purposes other
than meeting redemptions may not exceed 5% of the value of each Fund's assets
after giving effect to the borrowing. Each Fund will not make additional
investments when borrowings exceed 5% of assets. Each Fund may mortgage, pledge
or hypothecate assets to secure such borrowings.
HEDGING TRANSACTIONS
FUTURES CONTRACTS. Each Fund may enter into futures contracts only for certain
bona fide hedging, yield enhancement and risk management purposes. Each Fund may
enter into futures contracts for the purchase or sale of debt securities, debt
instruments, or indices of prices thereof, stock index futures, other financial
indices, and U.S. Government Securities.
A "sale" of a futures contract (or a "short" futures position) means the
assumption of a contractual obligation to deliver the securities underlying the
contract at a specified price at a specified future time. A "purchase" of a
futures contract (or a "long" futures position) means the assumption of a
contractual obligation to acquire the securities underlying the contract at a
specified price at a specified future time.
Certain futures contracts are settled on a net cash payment basis rather than by
the sale and delivery of the securities underlying the futures contracts. U.S.
futures contracts have been designed by exchanges that have been designated as
"contract markets" by the Commodity Futures Trading Commission (the "CFTC"), an
agency of the U.S. Government, and must be executed through a futures commission
merchant (i.e., a brokerage firm) which is a member of the relevant contract
market. Futures contracts trade on these contract markets and the market.
Futures contracts trade on these contract markets and the exchange's affiliated
clearing organization guarantees performance of the contracts as between the
clearing members of the exchange.
These contracts entail certain risks, including but not limited to the
following: no assurance that futures contracts transactions can be offset at
favorable prices, possible reduction of the Fund's yield due to the use of
hedging, possible reduction in value of both the securities hedged and the
hedging instrument, possible lack of liquidity due to daily limits on price
fluctuation, imperfect correlation between the contracts and the securities
being hedged, and potential losses in excess of the amount invested in the
futures contracts themselves.
CURRENCY TRANSACTIONS. Each Fund may enter into various currency transactions,
including forward foreign currency contracts, currency swaps, foreign currency
or currency index futures contracts and put and call options on such contracts
or on currencies. A forward foreign currency contract involves an obligation to
purchase or sell a specific currency for a set price at a future date. A
currency swap is an arrangement whereby each party exchanges one currency for
another on a particular date and agrees to reverse the exchange on a later date
at a specific exchange rate. Forward foreign currency contracts and currency
swaps are established in the interbank market conducted directly between
currency traders (usually large commercial banks or other financial
institutions) on behalf of their customers. Futures contracts are similar to
forward contracts except that they are traded on an organized exchange and the
obligations thereunder may be offset by taking an equal but opposite position to
the original contract, with
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profit or loss determined by the relative prices between the opening and
offsetting positions. Each Fund expects to enter into these currency contracts
and swaps in primarily the following circumstances: to "lock in" the U.S. dollar
equivalent price of a security the Fund is contemplating to buy or sell that is
denominated in a non-U.S. currency; or to protect against a decline against the
U.S. dollar of the currency of a particular country to which the Fund's
portfolio has exposure. The Fund anticipates seeking to achieve the same
economic result by utilizing from time to time for such hedging a currency
different from the one of the given portfolio security as long as, in the view
of the Adviser, such currency is essentially correlated to the currency of the
relevant portfolio security based on historic and expected exchange rate
patterns.
The Adviser may choose to use such instruments on behalf of the Funds depending
upon market conditions prevailing and the perceived investment needs of each
Fund. Futures contracts, interest rate swaps, and options on securities, indices
and futures contracts and certain currency contracts sold by the Funds are
generally subject to segregation and coverage requirement with the result that,
if the Funds do not hold the security or futures contract underlying the
instrument, the Funds will be required to segregate on an ongoing basis with its
custodian, cash, U.S. government securities, or other liquid securities in an
amount at least equal to the Funds' obligations with respect to such
instruments. Such amounts fluctuate as the obligations increase or decrease. The
segregation requirement can result in the Funds maintaining securities positions
it would otherwise liquidate or segregating assets at a time when it might be
disadvantageous to do so.
THE ADVISER
The Adviser is a New York corporation with principal offices located at One
Corporate Center, Rye, New York 10580-1434.
Pursuant to separate Investment Advisory Contracts which were approved by each
respective Fund's sole shareholder on October 1, 1993 with respect to the Global
Telecommunications Fund and the Global Opportunity Fund (formerly the Global
Growth Fund), and on January 3, 1994 with respect to the Global Interactive
Couch Potato(R) Fund and the Global Convertible Securities Fund the Adviser
furnishes a continuous investment program for each Fund's portfolio, makes the
day-to-day investment decisions for the Funds, arranges the portfolio
transactions for the Funds and generally manages each Fund's investments in
accordance with the stated policies of each Fund, subject to the general
supervision of the Board of Directors of the Corporation.
Under the Investment Advisory Contract, the Adviser also (1) provides the Funds
with the services of persons competent to perform such supervisory,
administrative, and clerical functions as are necessary to provide efficient
administration of the Funds, including maintaining certain books and records and
overseeing the activities of the Fund's Custodian and Transfer Agent; (2)
oversees the performance of administrative and professional services provided to
the Funds by others, including the Funds' Custodian, Transfer Agent and Dividend
Disbursing Agent, as well as legal, accounting, auditing and other services
performed for the Funds; (3) provides the Funds, if requested, with adequate
office space and facilities: (4) prepares, but does not pay for, periodic
updating of the Funds' registration statement, Prospectus and Additional
Statement, including the printing of such documents for the purpose of filings
with the Securities and Exchange Commission; (5) supervises the calculation of
the net asset value of shares of the Funds; (6) prepares, but does not pay for,
all filings under state "Blue Sky" laws of such states or countries as are
designated by the Distributor, which may be required to register or qualify, or
continue the registration or qualification, of the Funds and/or its shares under
such laws; and (7) prepares notices and agendas for meetings of the Funds' Board
of Directors and minutes of such meetings in all matters required by the
Investment Company Act of 1940 (the "Act") to be acted upon by the Board.
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The Adviser has entered into a Sub-Administration Contract with BISYS Fund
Services L.P. ("BISYS" or the "Sub-Administrator") pursuant to which the
Sub-Administrator provides certain administrative services necessary for the
Funds' operations but which do not concern the investment advisory and portfolio
management services provided by the Adviser. For such services and the related
expenses borne by the Sub-Administrator, the Adviser pays a prorated monthly fee
at the annual rate of .0625% of the average net assets of the Fund (minimum
annual fee of $30,000 per portfolio) on the first $350 million of all of the
funds advised by the Adviser and its affiliates and administered by BISYS and
.0425% of any net assets above $350 million, and .0225% of any assets above $700
million which, together with the services to be rendered, is subject to
negotiation between the parties and both parties retain the right unilaterally
to terminate the arrangement on not less than 60 days' notice.
The Investment Advisory Contracts provide that absent willful misfeasance, bad
faith, gross negligence or reckless disregard of its duty, the Adviser and its
employees, officers, directors and controlling persons are not liable to the
Funds or any of their investors for any act or omission by the Adviser or for
any error of judgment or for losses sustained by the Funds. However, the
Contracts provide that the Funds are not waiving any rights it may have with
respect to any violation of law which cannot be waived. The Contracts also
provide indemnification for the Adviser and each of these persons for any
conduct for which they are not liable to the Funds. The Investment Advisory
Contracts in no way restrict the Adviser from acting as adviser to others. Each
Fund has agreed by the terms of its Investment Advisory Contract that the word
"Gabelli" in its name is derived from the name of the Adviser which in turn is
derived from the name of Mario J. Gabelli; that such name is the property of the
Adviser for copyright and/or other purposes; and that therefore, such name may
freely be used by the Adviser for other investment companies, entities or
products. Each Fund has further agreed that in the event that for any reason,
the Adviser ceases to be its investment adviser, it will, unless the Adviser
otherwise consents in writing, promptly take all steps necessary to change its
name to one which does not include "Gabelli."
Each Investment Advisory Contract is terminable without penalty by the
Corporation on not more than sixty days' written notice when authorized by the
Directors of the Corporation, by the holders of a majority, as defined in the
Act, of the outstanding shares of the Corporation, or by the Adviser. Each
Investment Advisory Contract will automatically terminate in the event of its
assignment, as defined in the Act and rules thereunder except to the extent
otherwise provided by order of the Commission or any rule under the Act and
except to the extent the Act no longer provides for automatic termination, in
which case the approval of a majority of the disinterested directors is required
for any "assignment." Each Investment Advisory Contract provides in effect, that
unless terminated it will remain in effect from year to year so long as
continuance of the Investment Advisory Contract is approved annually by the
Directors, or the shareholders of each Fund and in either case, by a majority
vote of the Directors who are not parties to the Investment Advisory Contract or
"interested persons" as defined in the Act of any such person cast in person at
a meeting called specifically for the purpose of voting on the continuance of
the Investment Advisory Contract.
Each Investment Advisory Contract also provides that the Adviser is obligated to
reimburse to each Fund any amount up to the amount of its advisory fee by which
its aggregate expenses including advisory fees payable to the Adviser (but
excluding interest, taxes, Rule 12b-1 expenses, brokerage commissions,
extraordinary expenses and any other expenses not subject to any applicable
expense limitation) during the portion of any fiscal year in which the Contract
is in effect exceed the most restrictive expense limitation imposed by the
securities law of any jurisdiction in which shares of each Fund are registered
or qualified for sale. For purposes of this expense limitation each Fund's
expenses are accrued monthly and the monthly fee otherwise payable to the
Adviser postponed to the extent that each Fund's includable expenses to date
exceed the proportionate amount of such limitation to date.
B-11
<PAGE> 39
ADVISORY FEES PAID BY THE FUNDS
FOR THE YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Global Telecommunications Fund $1,285,648 $1,195,023 $1,080,470
Global Interactive Couch Potato(R) Fund $289,830 $349,604 $324,399
Global Convertible Securities Fund $170,164 $156,876 $111,722
</TABLE>
THE DISTRIBUTOR
The Corporation on behalf of each Fund has entered into a Distribution Agreement
with Gabelli & Company, Inc. (the "Distributor"), a New York corporation which
is a subsidiary of Gabelli Funds, Inc., having principal offices located at One
Corporate Center, Rye, New York 10580-1434. The Distributor acts as agent of
each Fund for the continuous offering of their shares on a best efforts basis.
The Distribution Agreement is terminable by the Distributor or the Corporation
at any time without penalty on not more than sixty nor less than thirty days'
written notice, provided, that termination by the Corporation must be directed
or approved by the Board of Directors of the Corporation, by the vote of the
holders of a majority of the outstanding securities of the Corporation, or by
written consent of a majority of the directors who are not interested persons of
the Corporation or the Distributor. The Distribution Agreement will
automatically terminate in the event of its assignment, as defined in the Act.
The Distribution Agreement provides that, unless terminated, it will remain in
effect from year to year, so long as continuance of the Distribution Agreement
is approved annually by the Corporation's Board of Directors or by a majority of
the outstanding voting securities of the Corporation, and in either case, also
by a majority of the Directors who are not interested persons of the Corporation
or the Distributor with respect to the Global Telecommunications Fund, the
Global Opportunity Fund, the Global Interactive Couch Potato(R) Fund and the
Global Convertible Securities Fund.
During the fiscal year ended December 31, 1997, The Gabelli Global
Telecommunications Fund paid distribution expenses under the Distribution Plan
of $270,798. Of this amount, $600 was spent on advertising, $34,600 on printing,
postage and stationery, $168,698 on overhead support expenses and $66,900 on
salaries of personnel of the Distributor.
During the year ended December 31, 1997, The Gabelli Global Interactive Couch
Potato(R) Fund paid distribution expenses under the Distribution Plan of
$81,089. Of this amount, $24,100 was spent on printing, postage and stationery,
$25,389 on overhead support expenses and $31,600 on salaries of personnel of the
Distributor.
During the year ended December 31, 1997, The Gabelli Global Convertible
Securities Fund paid distribution expenses under the Distribution Plan of
$28,273. Of this amount, $100 was spent on advertising, $9,600 on printing,
postage and stationery, $6,973 on overhead support expenses and $11,600 on
salaries of personnel of the Distributor.
DIRECTORS AND OFFICERS
The Directors and Executive Officers of the Corporation, their principal
business occupations during the last five years and their affiliations, if any,
with the Adviser or the Administrator, are shown below. Directors deemed to be
"interested persons" of any Fund for purposes of the Investment Company Act of
1940 are indicated by an asterisk.
B-12
<PAGE> 40
<TABLE>
<S> <C>
Name, Position With Fund and Address Principal Occupations During Last Five Years; Affiliations
- ------------------------------------------- With the Adviser or Administrator.
------------------------------------------------------------
Mario J. Gabelli * Chairman of the Board and President of the Fund since 1989;
President, Director and Chief Investment Chairman of the Board, Chief Executive Officer and Chief
Officer Investment Officer of Gabelli Funds, Inc. and GAMCO
One Corporate Center Investors, Inc., Chairman of the Board and Chief Executive
Rye, New York 10580 Officer of Lynch Corporation, a diversified manufacturing,
Age: 55 communications and services company; Director of East/West
Communications, Inc.; Governor of
the American Stock Exchange and
officer and/or Director or Trustee
of 12 other Gabelli funds.
Felix J. Christiana Formerly Senior Vice President of Dry Dock Savings Bank.
Director Director or Trustee of 8 other Gabelli funds.
One Corporate Center
Rye, New York 10580
Age: 72
Anthony J. Colavita President and Attorney at law in the law firm of Anthony J.
Director Colavita, P.C. since 1961; Director or Trustee of 12 other
One Corporate Center Gabelli funds.
Rye, New York 10580
Age: 63
John D. Gabelli * Vice President of Gabelli & Company, Inc.; Director of
Director Gabelli Advisers, Inc.; Director of 1 other Gabelli fund.
One Corporate Center
Rye, New York 10580
Age: 53
Karl Otto Pohl * Partner of Sal Oppenheim Jr. & Cie. (private investment
Director bank); Former President of the Deutsche Bundesbank (Germany's
One Corporate Center Central Bank) and Chairman of its Central Bank Council
Rye, New York 10580 (1980-1991); Currently board member of IBM World Trade
Age: 68 Europe/Middle East/ Africa Corp.; Bertelsmann AG; Zurich
Versicherungs-Gesellschaft (insurance); the
International Advisory Board of General Electric
Company; the International Council for JP Morgan &
Co.; the Board of Supervisory Directors of ROBECo/o
Group; and the Supervisory Board of Royal Dutch
(petroleum company); Advisory Director of Unilever
N.V. and Unilever Deutschland; German Governor,
International Monetary Fund (1980-1991); Board
Member, Bank for International Settlements
(1980-1991); Chairman, European Economic Community
Central Bank Governors (1990-1991); Director or
Trustee of all Funds managed by the Adviser and its
affiliates.
Werner Roeder, M.D. Director of Surgery, Lawrence Hospital, and practicing
Director private physician. Director or Trustee of 6 other Gabelli
One Corporate Center funds.
Rye, New York 10580
Age: 57
</TABLE>
B-13
<PAGE> 41
<TABLE>
<S> <C>
Name, Position With Fund and Address Principal Occupations During Last Five Years; Affiliations
- ------------------------------------------- With the Adviser or Administrator.
------------------------------------------------------------
Anthonie C. van Ekris Managing Director of Balmac International Ltd.; Director of
Director Stahal Hardmayer A.Z. and Spinnaker Industries, Inc.; Director
One Corporate Center or Trustee of 9 other Gabelli funds.
Rye, New York 10580
Age: 63
Bruce N. Alpert Vice President, Chief Operating Officer of the Investment
Vice President and Treasurer Advisory Division of Gabelli Funds, Inc. (the "Adviser");
One Corporate Center officer of each mutual fund managed by the Adviser or its
Rye, New York 10580 affiliates.
Age: 46
Mr. A. Hartswell Woodson III Portfolio Manager for the Adviser since 1993. Employed by
Vice President -- Portfolio Manager ABN Ambro Bank N.V. from 1988-1993.
One Corporate Center
Rye, New York 10580
Age: 40
James E. McKee Vice President and General Counsel of GAMCO Investors, Inc.
Secretary since 1993 and of Gabelli Funds, Inc. since August 1995;
One Corporate Center Secretary of all Funds advised by Gabelli Funds, Inc. and
Rye, New York 10580 Gabelli Advisers, Inc. since August 1995. Branch Chief with
Age: 34 the U.S. Securities and Exchange Commission in New York 1992
through 1993. Staff attorney with the U.S. Securities and
Exchange Commission in New York from 1989 through 1992.
</TABLE>
The Corporation pays each Director who is not an employee of the Adviser or an
affiliated company an annual fee of $1,500 and $500 for each meeting of the
Board of Directors attended by the Director, and reimburses Directors for
certain travel and other out-of-pocket expenses incurred by them in connection
with attending such meetings. Directors and officers of each Fund who are
employed by the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Corporation. The following table sets forth
certain information regarding the compensation of the Fund's directors and
officers. Except as disclosed below, no executive officer or person affiliated
with the Fund received compensation from the Fund for the calendar year ended
December 31, 1997 in excess of $60,000.
<TABLE>
<CAPTION>
COMPENSATION TABLE
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM REGISTRANT
NAME OF PERSON, FROM REGISTRANT AND FUND COMPLEX
POSITION FOR FISCAL YEAR PAID TO DIRECTORS*
----------- ----------- -------------
<S> <C> <C>
Mario J. Gabelli................................................... $ 0 $ 0
President, Director and Chief Investment Officer
Felix J. Christiana................................................ $ 3,500 $84,999(9)
Director
Anthony J. Colavita................................................ $ 3,500 $79,190(13)
Director
John D. Gabelli.................................................... $ 0 $ 0
Director
</TABLE>
B-14
<PAGE> 42
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM REGISTRANT
NAME OF PERSON, FROM REGISTRANT AND FUND COMPLEX
POSITION FOR FISCAL YEAR PAID TO DIRECTORS*
----------- ----------- -------------
<S> <C> <C>
Karl Otto Pohl..................................................... $ 3,000 $85,620(15)
Director
Werner Roeder, M.D................................................. $ 3,500 $19,691(7)
Director
Anthonie C. van Ekris.............................................. $ 3,500 $55,189(10)
Director
</TABLE>
- -------------
* Represents the total compensation paid to such persons during the calendar
year ending December 31, 1997 (and, with respect to the Fund Complex). The
parenthetical number represents the number of investment companies
(including the Corporation) from which such person receives compensation
that are considered part of the same fund complex as the Corporation,
because, among other things, they have a common investment adviser.
INVESTMENT RESTRICTIONS
Each Fund's investment objective and the following investment restrictions are
fundamental and cannot be changed without the approval of the holders of a
majority of each Fund's outstanding voting securities (defined in the 1940 Act
as the lesser of (a) more than 50% of the outstanding shares or (b) 67% or more
of the shares represented at a meeting at which more than 50% of the outstanding
shares are represented). All other investment policies or practices are
considered by each Fund not to be fundamental and accordingly may be changed
without stockholder approval. If a percentage restriction on investment or use
of assets set forth below is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing market values or total
assets of each Fund will not be considered a deviation from policy. No Fund may:
(1) issue senior securities, except that each Fund may borrow money,
including on margin if margin securities are owned and enter into
reverse repurchase agreements in an amount up to 33 1/3% of its total
assets (including the amount of such enumerated senior securities
issued but excluding any liabilities and indebtedness not constituting
senior securities) and except that each Fund may borrow up to an
additional 5% of its total assets for temporary purposes; or pledge its
assets other than to secure such issuances or in connection with
hedging transactions, short sales, when-issued and forward commitment
transactions and similar investment strategies. Each Fund's obligations
under reverse repurchase agreements and the foregoing investment
strategies are not treated as senior securities;
(2) make loans of money or property to any person, except through loans of
portfolio securities, the purchase of fixed income securities or the
acquisition of securities subject to repurchase agreements;
(3) underwrite the securities of other issuers, except to the extent that
in connection with the disposition of portfolio securities or the sale
of its own shares a Fund may be deemed to be an underwriter;
(4) invest for the purpose of exercising control over management of any
company;
(5) purchase real estate or interests therein, including limited
partnerships that invest primarily in real estate equity interests,
other than mortgage-backed securities, publicly traded real estate
investment trusts and similar instruments; or
(6) purchase or sell commodities or commodity contracts except for certain
bona fide hedging, yield enhancement and risk management purposes or
invest in any oil, gas or mineral interests.
B-15
<PAGE> 43
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser is authorized on behalf of each Fund to employ brokers to effect the
purchase or sale of portfolio securities with the objective of obtaining prompt,
efficient and reliable execution and clearance of such transactions at the most
favorable price obtainable ("best execution") at reasonable expense.
Transactions in securities other than those for which a securities exchange is
the principal market are generally done through a principal market maker.
However, such transactions may be effected through a brokerage firm and a
commission paid whenever it appears that the broker can obtain a more favorable
overall price. In general, there may be no stated commission in the case of
securities traded on the over-the-counter markets, but the prices of those
securities may include undisclosed commissions or markups. Options transactions
will usually be effected through a broker and a commission will be charged. Each
Fund also expects that securities will be purchased at times in underwritten
offerings where the price includes a fixed amount of compensation generally
referred to as the underwriter's concession or discount.
The Adviser currently serves as Adviser to a number of investment company
clients and may in the future act as adviser to others. Affiliates of the
Adviser act as investment adviser to numerous private accounts. It is the
practice of the Adviser and its affiliates to cause purchase and sale
transactions to be allocated among each Fund and others whose assets they manage
in such manner as it deems equitable. In making such allocations among each Fund
and other client accounts, the main factors considered are the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of each Fund and other client accounts.
The policy of each Fund regarding purchases and sales of portfolio securities is
that primary consideration will be given to obtaining the most favorable prices
and efficient execution of transactions. In seeking to implement each Fund's
policies, the Adviser effects transactions with those brokers and dealers who
the Adviser believes provide the most favorable prices and are capable of
providing efficient executions. If the Adviser believes such price and execution
are obtainable from more than one broker or dealer, it may give consideration to
placing portfolio transactions with those brokers and dealers who also furnish
research and other services to each Fund or the Adviser of the type described in
Section 28(e) of the Securities Exchange Act of 1934. In doing so, each Fund may
also pay higher commission rates than the lowest available when the Adviser
believes it is reasonable to do so in light of the value of the brokerage and
research services provided by the broker effecting the transaction. Such
services may include, but are not limited to, any one or more of the following:
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investment; wire
services; and appraisals or evaluations of portfolio securities.
Research services furnished by brokers or dealers through which the Fund effects
securities transactions are used by the Adviser and its advisory affiliates in
carrying out their responsibilities with respect to all of their accounts over
which they exercise investment discretion. Such investment information may be
useful only to one or more of the other accounts of the Adviser and its advisory
affiliates, and research information received for the commissions of those
particular accounts may be useful both to the Fund and one or more of such other
accounts. The purpose of this sharing of research information is to avoid
duplicative charges for research provided by brokers and dealers.
Neither the Fund nor the Adviser has any legally binding agreement with any
broker or dealer regarding any specific amount of brokerage commissions which
will be paid in recognition of such services. However, in determining the amount
of portfolio commissions directed to such brokers or dealers, the Adviser does
consider the level of services provided.
The following charts show brokerage commissions paid by the Adviser on behalf of
each Fund, the amount and percentage of commissions paid by each Fund to Gabelli
& Company, Inc. and the percentage of all transactions involving the payment of
commissions to Gabelli & Company, Inc.
B-16
<PAGE> 44
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. $105,853 $49,410 $61,219
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. $34,089 $16,320 $7,785
% of aggregate brokerage commissions............... 32.2% 33.0% 12.7%
% of transactions effected through
Gabelli & Company, Inc......................... 36.9% 28.0% 20.6%
</TABLE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. $42,378 $67,823 $106,631
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. $2,480 $8,486 $15,255
% of aggregate brokerage commissions............... 8.0% 12.5% 14.3%
% of transactions effected through
Gabelli & Company, Inc......................... 6.3% 12.8% 12.0%
</TABLE>
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. $42,378 $21,357 $9,993
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. $670 $50 $0
% of aggregate brokerage commissions............... 2.0% .23% 0.0%
% of transactions effected through
Gabelli & Company, Inc......................... 1.5% .04% 0.0%
</TABLE>
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli & Company, Inc. ("Gabelli"), a broker-dealer member of
the National Association of Securities Dealers, Inc. and an affiliate of the
Adviser, when it appears that, as an introducing broker or otherwise, Gabelli
can obtain a price and execution which is at least as favorable as that
obtainable by other qualified brokers. The Adviser may also consider sales of
shares of each Fund and any other registered investment companies managed by the
Adviser and its affiliates by brokers and dealers other than the Distributor as
a factor in its selection of brokers and dealers to execute portfolio
transactions for each Fund.
As required by Rule 17e-1 under the Act, the Board of Directors of each Fund has
adopted "Procedures" which provide that the commissions paid to Gabelli on stock
exchange transactions may not exceed that which would have been charged by
another qualified broker or member firm able to effect the same or a comparable
transaction at an equally favorable price. Rule 17e-1 and the Procedures contain
requirements that the Boards, including independent Directors, conduct periodic
compliance reviews of such brokerage allocations and review such schedule at
least annually for its continuing compliance with the foregoing standard. The
Adviser and Gabelli are also required to furnish reports and maintain records in
connection with such reviews.
B-17
<PAGE> 45
To obtain the best execution of portfolio trades on the New York Stock Exchange
("Exchange"), Gabelli controls and monitors the execution of such transactions
on the floor of the Exchange through independent "floor brokers" or through the
Designated Order Turnaround ("DOT") System of the Exchange. Such transactions
are then cleared, confirmed to the Fund for the account of Gabelli, and settled
directly with the Custodian of each Fund by a clearing house member firm which
remits the commission less its clearing charges to Gabelli. Gabelli may also
effect portfolio transactions on behalf of each Fund in the same manner and
pursuant to the same arrangements on other national securities exchanges which
adopt direct access rules similar to those of the New York Stock Exchange.
PURCHASE AND REDEMPTION OF SHARES
Cancellation of purchase orders for shares of any Fund (as, for example, when
checks submitted to purchase shares are returned unpaid) cause a loss to be
incurred when the net asset value of that Fund's shares on the date of
cancellation is less than on the original date of purchase. The investor is
responsible for such loss, and that Fund may reimburse shares from any account
registered in that shareholder's name, or by seeking other redress. If that Fund
is unable to recover any loss to itself, it is the position of the SEC that the
Distributor will be immediately obligated to make that Fund whole.
To minimize expenses, the Fund reserves the right to redeem, upon not less than
30 days' notice, all shares of the Fund in an account (other than an IRA) which
as a result of shareholder redemption has a value below $500 and has reserved
the ability to raise this amount to up to $10,000. However, a shareholder will
be allowed to make additional investments prior to the date fixed for redemption
to avoid liquidation of the account.
DIVIDENDS, DISTRIBUTIONS AND TAXES
GENERAL
Each Fund will determine either to distribute or to retain all or part of any
net long-term capital gains in any year for reinvestment. If any such gains are
retained by any Fund, that Fund will be subject to a tax of 34% of such amount.
In that event, each Fund expects that it will designate the retained amount as
undistributed capital gains in a notice to its shareholders, each of whom (1)
will be required to include in income for tax purposes as long-term capital
gains, its share of undistributed amount, (2) will be entitled to credit its
proportionate share of the tax paid by that Fund against its Federal income tax
liability and to claim refunds to the extent the credit exceeds such liability,
and (3) will increase its basis in its shares of that Fund by an amount equal to
66% of the amount of undistributed capital gains included in such shareholder's
gross income.
Under the Code, amounts not distributed on a timely basis in accordance with a
calendar year distribution requirement are subject to a nondeductible 4% excise
tax. To avoid the tax, each Fund must distribute during each calendar year, an
amount equal to, at the minimum, the sum of (1) 98% of its ordinary income (not
taking into account any capital gains or losses) for the calendar year, (2) 98%
of its capital gains in excess of its capital losses for the twelve-month period
ending on October 31 of the calendar year, (unless an election is made by a fund
with a November or December year-end to use the Fund's fiscal year) and (3) all
ordinary income and net capital gains for previous years that were not
previously distributed. A distribution will be treated as paid during the
calendar year if it is paid during the calendar year or declared by a Fund in
October, November or December of the year, payable to shareholders of record on
a date during such month and paid by that Fund during January of the following
year. Any such distributions paid during January of the following year will be
deemed to be received on December 31 of the year the distributions are declared,
rather than when the distributions are received.
Gains or losses on the sales of securities by each Fund will be long-term
capital gains or losses if the securities have been held by the Fund for more
than twelve months. Gains or losses on the sale of securities held for twelve
months or less will be short-term capital gains or losses.
B-18
<PAGE> 46
Each Fund intends to qualify as a regulated investment company under Subchapter
M of the Code. If so qualified, each Fund will not be subject to Federal income
tax on its net investment income and net short-term capital gains, if any,
realized during any fiscal year in which it distributes such income and capital
gains to its shareholders.
HEDGING TRANSACTIONS
Certain options, futures contracts and options on futures contracts are "section
1256 contracts". Any gains or losses on section 1256 contracts are generally
considered 60% long-term and 40% short-term capital gains or losses ("60/40").
Also, section 1256 contracts held by each Fund at the end of each taxable year
are "marked-to-market" with the result that unrealized gains or losses are
treated as though they were realized and the resulting gain or loss is treated
as 60/40 gain or loss.
Generally, the hedging transactions undertaken by each Fund may result in
"straddles" for U.S. Federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by each Fund. In addition, losses
realized by each Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which such losses are realized.
Further, each Fund may be required to capitalize, rather than deduct currently,
any interest expense on indebtedness incurred or continued to purchase or carry
any positions that are part of a straddle. Because only a few regulations
implementing the straddle rules have been promulgated, the tax consequences of
hedging transactions to each Fund are not entirely clear.
Each Fund may make one or more of the elections available under the Code which
are applicable to straddles. If a Fund makes any of the elections, the amount,
character and timing of the recognition of gains or losses from the affected
straddle positions will be determined under rules that vary according to the
election(s) made. The rules applicable under certain of the elections accelerate
the recognition of gains or losses from the affected straddle positions.
Because application of the straddle rules may affect the character of gains or
losses, defer losses and/ or accelerate the recognition of gains or losses from
the affected straddle positions, and require the capitalization of interest
expense, the amount which must be distributed to shareholders, and which will be
taxed to shareholders as ordinary income or long-term capital gain, may be
increased or decreased substantially as compared to a fund that did not engage
in such hedging transactions.
DISTRIBUTIONS
Distributions of investment company taxable income (which includes taxable
interest income and the excess of net short-term capital gains over long-term
capital losses) are taxable to a U.S. shareholder as ordinary income, whether
paid in cash or shares. Dividends paid by each Fund will qualify for the 70%
deduction for dividends received by corporations to the extent each Fund's
income consists of qualified dividends received from U.S. corporations.
Distributions of net capital gains (which consists of the excess of long-term
capital gains over net short-term capital losses), if any, are taxable as
long-term capital gains, whether paid in cash or in shares, and are not eligible
for the dividends received deduction. Shareholders receiving distributions in
the form of newly issued shares will have a basis in such shares of each Fund
equal to the fair market value of such shares on the distribution date. If the
net asset value of shares is reduced below a shareholder's cost as a result of a
distribution by a Fund, such distribution will be taxable even though it
represents a return of invested capital. The price of shares purchased at this
time may reflect the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will receive a distribution which will nevertheless
be taxable to them.
SALES OF SHARES
Upon a sale or exchange of his or her shares, a shareholder will realize a
taxable gain or loss depending upon his or her basis in the shares. Such gain or
loss will be long-term, mid-term, or short-term, generally depending upon the
shareholder's holding period for the shares. Any loss realized on a sale or
exchange
B-19
<PAGE> 47
will be disallowed to the extent the shares disposed of are replaced
within a period of 61 days beginning 30 days before and ending 30 days after the
shares are disposed of. In such case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss.
Any loss realized by a shareholder on the sale of any Fund's shares held by the
shareholder for six months or less will be greater for tax purposes as a
long-term capital loss to the extent of any distributions of net capital gains
received by the shareholder with respect to such shares.
BACKUP WITHHOLDING
The Corporation may be required to withhold Federal income tax at the rate of
31% of all taxable distributions payable to shareholders who fail to provide the
Fund or Funds in which they invest with their correct taxpayer identification
number or to make required certifications, or who have been notified by the
Internal Revenue Service that they are subject to backup withholding. Backup
withholding is not an additional tax. Any amounts withheld may be credited
against a shareholder's Federal income tax liability.
FOREIGN WITHHOLDING TAXES
Income received by each Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine the rate of foreign tax in
advance since the amount of each Fund's assets to be invested in various
countries is not known. Because each Fund may have more than 50% of its total
assets invested in securities of foreign governments or corporations, each Fund
may be entitled to "pass-through" to shareholders the amount of foreign taxes
paid by each Fund. Shareholders are urged to consult their attorneys or tax
advisers regarding specific questions as to Federal, state or local taxes.
The Corporation reserves the right to create and issue a number of series
shares, in which case the shares of each series would participate equally in the
earnings, dividends, and assets of the particular series and would vote
separately to approve management agreements or changes in investment policies,
but shares of all series would vote together in the election or selection of
Directors, principal underwriters and auditors and on any proposed material
amendment to the Corporation's Certificate of Incorporation.
Upon liquidation of the Corporation or any series, shareholders of the affected
series would be entitled to share pro rata in the net assets of their respective
series available for distribution to such shareholders.
DETERMINATION OF NET ASSET VALUE
For purposes of determining each Fund's net asset value per share, readily
marketable portfolio securities listed on the New York Stock Exchange are
valued, except as indicated below, at the last sale price reflected at the close
of the regular trading session of the New York Stock Exchange on the business
day as of which such value is being determined. If there has been no sale on
such day, the securities are valued at the mean of the closing bid and asked
prices on such day. If no bid or asked prices are quoted on such day, then the
security is valued by such method as the Board of Directors shall determine in
good faith to reflect its fair market value. Readily marketable securities not
listed on the New York Stock Exchange but listed on other national securities
exchanges or admitted to trading on the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") National List are valued in like
manner. Portfolio securities traded on more than one national securities
exchange are valued at the last sale price on the business day as of which such
value is being determined as reflected on the tape at the close of the exchange
representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter market, including
listed securities whose primary market is believed by the Adviser to be
over-the-counter but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the
National Quotation Bureau or such other comparable sources as the Board of
Directors deems appropriate to reflect their fair value.
B-20
<PAGE> 48
United States Government obligations and other debt instruments having sixty
days or less remaining until maturity are stated at amortized cost, which
approximates value. Debt instruments having a greater remaining maturity will be
valued at the highest bid price obtained from a dealer maintaining an active
market in that security or on the basis of prices obtained from a pricing
service approved as reliable by the Board of Directors. All other investment
assets, including restricted and not readily marketable securities, are valued
under procedures established by and under the general supervision and
responsibility of the Board of Directors designed to reflect in good faith the
fair value of such securities.
As indicated in the Prospectus, the net asset value per share of each Fund's
shares will be determined on each day that the New York Stock Exchange is open
for trading. That Exchange annually announces the days on which it will not be
open for trading; the most recent announcement indicates that it will not be
open on the following days: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. However, that Exchange may close on days not
included in that announcement.
INVESTMENT PERFORMANCE INFORMATION
Each Fund may furnish data about its investment performance in advertisements,
sales literature and reports to shareholders. "Total return" represents the
annual percentage change in value of $1,000 invested at the maximum public
offering price for the one year period and the life of each Fund through the
most recent calendar quarter, assuming reinvestment of all dividends and
distributions. Each Fund may also furnish total return calculations for these
and other periods, based on investments at various sales charge levels or net
asset value. Any performance data which is based on each Fund's net asset value
per share would be reduced if a sales charge were taken into account.
Quotations of yield will be based on the investment income per share earned
during a particular 30 day period, less expenses accrued during the period ("net
investment income") and will be computed by dividing net investment income by
the maximum offering price per share on the last day of the period, according to
the following formula:
a-b
YIELD = 2[ (cd - 1)6 - 1]
where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of any reimbursements), c = the average daily number of
shares outstanding during the period that were entitled to receive dividends,
and d = the maximum offering price per share on the last day of the period. With
respect to The Gabelli Global Telecommunications Fund for the 30-day period
ended December 31, 1997, the Fund's yield was (0.01)%. With respect to The
Gabelli Global Interactive Couch Potato(R) Fund for the 30-day period ended
December 31, 1997, the Fund's yield was (1.20)%. With respect to The Gabelli
Global Convertible Securities Fund for the 30-day period ended December 31,
1997, the Fund's yield was (2.82)%.
Quotations of total return will reflect only the performance of a hypothetical
investment in any Fund during the particular time period shown. Each Fund's
total return and current yield may vary from time to time depending on market
conditions, the compositions of its portfolio and operating expenses. These
factors and possible differences in the methods used in calculating yield should
be considered when comparing each Fund's current yield to yields published for
other investment companies and other investment vehicles. Total return and yield
should also be considered relative to change in the value of each Fund's shares
and the risks associated with each Fund's investment objectives and policies. At
any time in the future, total returns and yield may be higher or lower than past
total returns and yields and there can be no assurance that any historical
return or yield will continue.
From time to time evaluations of performance are made by independent sources
that may be used in advertisements concerning each Fund. These sources include:
Lipper Analytical Services, CDA/ Weisenberger Investment Company Service,
Barron's, Business Week, Kiplinger's Personal Finance,
B-21
<PAGE> 49
Financial World, Forbes, Fortune, Money, Personal Investor, Sylvia Porter's
Personal Finance, Bank Rate Monitor, Morningstar and The Wall Street Journal.
In connection with communicating its yield or total return to current or
prospective shareholders, each Fund may also compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indexes which may assume reinvestment of dividends but generally
do not reflect deductions for administrative and management costs.
Quotations of each Fund's total return will represent the average annual
compounded rate of return of a hypothetical investment in each Fund over periods
of 1, 5, and 10 years (up to the life of each Fund), and are calculated pursuant
to the following formula:
P (1+T)(n) = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV = the redeemable value at the end
of the period of a $1,000 payment made at the beginning of the period). All
total return figures will reflect the deduction of Fund expenses (net of certain
expenses reimbursed by the Adviser) on an annual basis, and will assume that all
dividends and distributions are reinvested and will deduct the maximum sales
charge, if any is imposed. The table below displays the total returns for the
year ended December 31, 1997 and average annual returns since inception.
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN
1997 SINCE
FUND TOTAL RETURN INCEPTION
---- --------- -----------
<S> <C> <C>
Global Telecommunications....................................... 31.9% 12.9%
Global Interactive Couch Potato(R).............................. 41.7% 18.3%
Global Convertible Securities................................... 2.8% 5.5%
</TABLE>
COUNSEL AND INDEPENDENT AUDITORS
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York
10022, serves as counsel to the Fund.
Grant Thornton LLP, 7 Hanover Square, New York, New York 10004-2616, have been
appointed independent auditor for the Fund.
SHARES OF BENEFICIAL INTEREST
As of March 31, 1998, the Officers and Directors of the Fund as a group owned
2.8% of the outstanding shares of the Gabelli Global Convertible Securities
Fund.
As of March 31, 1998, the following persons were 5% or greater shareholders of
the Funds:
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
FUND/SHAREHOLDER OUTSTANDING
------------- --------------
<S> <C>
The Gabelli Global Telecommunications Fund/
Charles Schwab & Co., Inc.(2) 9.04% (1)
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104-4122
The Gabelli Global Interactive Couch Potato(R) Fund/
National Financial Serv. Corp. 25.43% (1)
For the Exclusive Benefit of Our Customers
200 Liberty Street
New York, NY 10281-1003
</TABLE>
B-22
<PAGE> 50
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
FUND/SHAREHOLDER OUTSTANDING
<S> <C> <C>
------------- --------------
The Gabelli Global Interactive Couch Potato(R) Fund/
Charles Schwab & Co., Inc. (2) 14.52% (1)
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104-4122
The Gabelli Global Interactive Couch Potato(R) Fund/
FTC & Company 5.07% (1)
Attn.: Datalynx #035
P.O. Box 173736
Denver, Co 80217-3736
The Gabelli Global Convertible Securities Fund/
National Financial Serv. Corp. 6.23% (1)
For the Exclusive Benefit of Our Customers
200 Liberty Street
New York, NY 10281-1003
- ----------
(1) Represents shares owned of record only.
(2) Charles Schwab & Co., Inc. disclaims beneficial ownership.
</TABLE>
B-23
<PAGE> 51
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
(1) Financial information included in Part A, the Prospectus:
Table of Fees and Expenses
Financial Highlights
(2) Financial Statements included in Part B, the Statement
of Additional Information and incorporated by reference
to the Fund's Annual Reports dated December 31, 1997:
Gabelli Global Series Funds, Inc.:
The Gabelli Telecommunications Fund (GGTF)
The Gabelli Global Convertible Securities Fund (GGCSF)
The Gabelli Global Interactive Couch Potato(R) Fund,
Inc. (GGICPF)
-- Portfolio of Investments, year ended December 31,
1997 (all)*
-- Statement of Assets and Liabilities, year ended
December 31, 1997 (all)*
-- Statements of Changes in Net Assets for the fiscal
years ended December 31, 1997 and December 31, 1996
(all)*
-- Notes to Financial Statements (all)*
-- Financial Highlights for the fiscal years ended
December 31, 1997, 1996, 1995 and 1994 and for the
period November 1, 1993 (Commencement of Operations)
through December 31, 1993 (GGTF); for the fiscal
years ended December 31, 1997, 1996 and 1995 and
for the period February 3, 1994 (Commencement of
Operations) through December 31, 1994 (GGCSF); for
the fiscal years ended December 31, 1997, 1996 and
1995 and for the period February 7, 1994
(Commencement of Operations) through December 31,
1994 (GGICPF)*
-- Reports of Grant Thornton LLP Independent Auditors
(all)*
The Gabelli Global Opportunity Fund
-- None -- The Gabelli Global Opportunity Fund is
currently not offering shares.
(b) Exhibits:
(1) Articles of Incorporation, as amended, of the
Registrant***
(2) By-Laws of the Registrant***
(3) Not Applicable
(4) (a) Specimen Share Certificate for The Gabelli Global
Interactive Couch Potato(R) Fund**
(b) Specimen Share Certificate for The Gabelli
Global Convertible Securities Fund**
(5) (a) Investment Advisory Agreement with Gabelli
Funds, Inc. ("Gabelli Funds" or the "Adviser")
relating to The Gabelli Global
Telecommunications Fund, The Gabelli Global
Entertainment and Media Fund and The Gabelli
Global (Growth) Opportunity Fund***
<PAGE> 52
(b) Investment Advisory Agreement with Gabelli
Funds, Inc. ("Gabelli Funds" or the "Adviser")
for each of The Gabelli Global Interactive Couch
Potato(R) Fund***
(c) Investment Advisory Agreement with Gabelli Funds,
Inc. ("Gabelli Funds" or the "Adviser") for The
Gabelli Global Convertible Securities Fund***
(6) (a) Distribution Agreement with Gabelli and Company,
Inc. relating to The Gabelli Global
Telecommunications Fund***
(b) Distribution Agreement with Gabelli and Company,
Inc. relating to The Gabelli Global Opportunity
Fund***
(c) Distribution Agreement with Gabelli and Company,
Inc. relating to The Gabelli Global Interactive
Couch Potato(R) Fund***
(d) Distribution Agreement with Gabelli and Company,
Inc. relating to The Gabelli Global Convertible
Securities Fund***
(7) Not Applicable
(8) Custodian Agreement between the Registrant and State
Street Bank and Trust Company***
(9.1) Sub-Administration Agreement between the Gabelli
Funds, Inc. and BISYS Fund Services, Inc.***
(9.2) Transfer Agency Agreement between the Registrant and
State Street Bank and Trust Company ***
(10) Opinion and Consent of counsel for the Registrant**
(11) (a) Consent of Independent Accountants.***
(12) Not Applicable
(13) (a) Agreements with Initial Shareholder relating to
The Gabelli Global Telecommunications Fund, The
Gabelli Global Entertainment and Media Fund and
The Gabelli Global Opportunity Fund**
(b) Agreements with Initial Shareholder relating to
The Gabelli Global Interactive Couch Potato(R)
Fund and The Gabelli Global Convertible
Securities Fund**
(14) Model IRA Plan***
(15) (a) Distribution Plan relating to The Gabelli Global
Telecommunications Fund***
(b) Distribution Plan relating to The Gabelli Global
Opportunity Fund***
(c) Distribution Plan relating to The Gabelli Global
Interactive Couch Potato(R) Fund***
(d) Distribution Plan relating to The Gabelli Global
Convertible Securities Fund***
(16) Computation of Performance Quotations***
(17) Financial Data Schedule***
- ----------
* Previously filed with the Fund's Annual Report for the year ended
December 31, 1997 and incorporated by reference herein.
** Previously filed as an exhibit to Post-Effective Amendment No. 2 to
Registration Statement No. 33-66262 on January 5, 1994 and incorporated
by reference herein.
<PAGE> 53
*** Filed herewith.
Item 25. Persons Controlled by or Under Common Control with Registrant.
Insofar as the following have substantially identical boards of directors or
trustees they may be deemed with Registrant to be under common control: The
Gabelli ABC Fund, The Gabelli Asset Fund, Gabelli Gold Fund, Inc., The Gabelli
Growth Fund, The Gabelli Value Fund Inc., The Gabelli Capital Asset Fund, The
Gabelli Small Cap Growth Fund, Gabelli Equity Income Fund, The Gabelli Westwood
Funds and The Gabelli U.S. Treasury Money Market Fund.
Item 26. Number of Holders of Securities.
As of March 31, 1998, the approximate number of record holders were:
(1) (2)
Number of
Record
Title of Class Holders
--------- -------
The Gabelli Global Telecommunications Fund Stock,
par value $.001 per share.................................... 14,214
The Gabelli Global Interactive Couch Potato(R) Fund Stock,
par value $.001 per share.................................... 5,862
The Gabelli Global Convertible Securities Fund Stock,
par value $.001 per share.................................... 1,695
Item 27. Indemnification.
The basic effect of the respective indemnification provisions of the
Registrant's By-Laws, the Investment Advisory Agreement with Gabelli Funds, Inc.
for The Gabelli Global Series Funds, Inc., and Section 2-418 of the Maryland
General Corporation Law is to indemnify each officer and director of both the
Registrant and Gabelli Funds, Inc. to the full extent permitted under the
General Laws of the State of Maryland, except that such indemnity shall not
protect any such person against any liability to which such person 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 liability arising under the Securities Act of
1933, as amended (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant and the investment advisor and distributor
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 director, officer or controlling person of the Registrant in and
the principal underwriter in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person or the distributor in connection with the shares
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 Advisor.
See "Management of the Funds" in the Prospectus and "Directors and Officers" in
the Statement of Additional Information as well as the Adviser's current Form
ADV which is incorporated herein by reference.
3
<PAGE> 54
Item 29. Principal Underwriters.
(a) The Distributor, Gabelli & Company, Inc., is also the principal
underwriter for The Gabelli ABC Fund, The Gabelli Growth Fund, The
Gabelli Asset Fund, The Gabelli Value Fund, Inc., The Gabelli Capital
Asset Fund, The Gabelli Small Cap Growth Fund, Gabelli Equity Income
Fund, Gabelli Gold Fund, Inc., The Gabelli International Growth Fund,
Inc., The Gabelli Westwood Funds and The Gabelli U.S. Treasury Money
Market Fund.
(b) The information required with respect to the directors and executive
officers of the Distributor is set forth under the heading "Directors
and Officers" in the Statement of Additional Information as well as in
Gabelli & Company, Inc.'s current Form BD, which are each incorporated
herein by reference.
(c) Not applicable. The Registrant's only principal underwriter is an
affiliated person of an affiliated person of the Registrant.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules thereunder will be
maintained at the offices of the Sub-Administrator, BISYS Fund Services L.P.,
3435 Stelzer Rd., Columbus, Ohio 43219, at the offices of the Fund's Custodian,
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts,
at the offices of the Fund's Transfer Agent and Dividend Disbursing Agent, State
Street Bank & Trust Company, c/o Boston Financial Data Services, Two Heritage
Drive, North Quincy, MA 02171 or at the offices of the Adviser, Gabelli Funds,
Inc., One Corporate Center, Rye, New York 10580-1434.
Item 31. Management Services.
The Registrant is not a party to any management-related service contract.
Item 32. Undertakings.
(c) Registrant hereby undertakes to furnish to each person to whom a
prospectus is delivered a copy of Registrant's latest Annual Report to
Shareholders upon request and without charge.
<PAGE> 55
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Post-Effective Amendment
to the Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933, as amended, and has duly caused this Amendment No. 8 to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Rye, and State of New York on the 13th day of
April, 1998.
THE GABELLI GLOBAL SERIES FUNDS, INC.
/s/ Bruce N. Alpert
-----------------------------------
By: Bruce N. Alpert
Title: Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 8 to the Registration Statement has been signed below by the
following in the capacity and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
President (Principal April 13, 1998
* Executive Officer), and Director
- -----------------------------
Mario J. Gabelli
/s/ Bruce N. Alpert Vice President and Treasurer April 13, 1998
- -----------------------------
Bruce N. Alpert
* Director April 13, 1998
- -----------------------------
Felix J. Christiana
* Director April 13, 1998
- -----------------------------
Anthony J. Colavita
* Director April 13, 1998
- -----------------------------
Anthonie C. van Ekris
* Director April 13, 1998
- -----------------------------
Karl Otto Pohl
* Director April 13, 1998
- -----------------------------
John D. Gabelli
* Director April 13, 1998
- -----------------------------
Werner Roeder, M.D.
*By: /s/ Bruce N. Alpert
-------------------------
Bruce N. Alpert
Attorney-in-Fact
</TABLE>
<PAGE> 1
Exhibit 1
ARTICLES OF INCORPORATION
OF
GABELLI GLOBAL SERIES FUNDS, INC.
* * * * *
ARTICLE I
THE UNDERSIGNED, Joseph Weikel, whose post office address is 10 Light
Street, Baltimore, Maryland 21202, being at least eighteen (18) years of age,
hereby forms a corporation under and by virtue of the Maryland General
Corporation Law.
ARTICLE II
NAME
----
The name of the Corporation is GABELLI GLOBAL SERIES FUNDS, INC. (the
"Corporation").
ARTICLE III
PURPOSES AND POWERS
-------------------
The purposes for which the Corporation is formed are to act as an
investment company under the federal Investment Company Act of 1940 as amended
(the "1940 Act"), and to exercise and enjoy all of the general powers, rights
and privileges granted to, or conferred upon, corporations by the Maryland
General Corporation Law now or hereafter in force.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
-----------------------------------
The post office address of the principal office of the Corporation in
the State of Maryland is c/o The
<PAGE> 2
Corporation Trust incorporated, 32 South Street, Baltimore, Maryland 21202. The
name of the resident agent of the Corporation in the State of Maryland is The
Corporation Trust Incorporated, a corporation of the State of Maryland, and the
post office address of the resident agent is 32 South Street, Baltimore,
Maryland 21202.
ARTICLE V
CAPITAL STOCK
-------------
(1) The total number of shares of stock of all classes which the
Corporation shall have authority to issue is One Billion (1,000,000,000) all of
which stock shall have a par value of one-tenth of one cent ($.001) per share.
The aggregate par value of all authorized shares of stock of the Corporation is
One Million Dollars ($1,000,000).
(2) (a) The Board of Directors of the Corporation is authorized to
classify or to reclassify, from time to time, any unissued shares of stock of
the Corporation, whether now or hereafter authorized, by setting, changing or
eliminating the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, and qualifications or terms and
conditions of or rights to require redemption of the stock and, pursuant to such
classification or reclassification, to increase or decrease the number of
authorized shares of any class, but the number of shares of any class shall not
be reduced by the Board of Directors below the number of shares thereof then
outstanding.
(b) Without limiting the generality of the foregoing, the dividends and
distributions of investment income and capital gains with respect to the stock
of the Corporation, and with respect to each class that hereafter may be
created, shall be in such amount as may be declared from time to time by the
Board of Directors, and such dividends and distributions may vary from class to
class to such extent and for such purposes as the Board of Directors may deem
appropriate, including, but not limited to, the purpose of complying with
requirements of regulatory or legislative authorities.
(c) Without limiting the generality of the foregoing, the Board of
Directors may designate, from
2
<PAGE> 3
time to time, any unissued shares of stock of the Corporation, whether now or
hereafter authorized, as a class or classes or a number of series of preferred
or special stock that is excluded from the definition of "senior security" set
forth in section 18(g) of the 1940 Act (or in any successor statute).
(3) Until such time as the Board of Directors shall provide otherwise
pursuant to the authority granted in section (2) of this Article V, Five Hundred
million (500,000,000) shares of the authorized shares of the Corporation are
designated as The Gabelli Global Communications Fund Stock ("Communications
Stock"), Two Hundred and Fifty Million (250,000,000) shares of the authorized
shares of the Corporation are designated as The Gabelli Global Entertainment and
Media Fund Stock ("Entertainment Stock") and Two Hundred and Fifty Million
(250,000,000) shares of the authorized shares of the Corporation are designated
as The Gabelli Global Growth Fund Stock ("Growth Stock"). The respective shares
of the Communications Stock, the Entertainment Stock and the Growth Stock and
the respective holders thereof, and shares of any class or series of the type
referred to in subsection (c) of section (2) of this Article V and the holders
thereof, shall be subject to the following provisions, provided, however, that
if no shares of any class or series of the type referred to in subsection (c) of
section (2) of this Article V are outstanding, the respective shares of the
Communications Stock, the Entertainment Stock and the Growth Stock and the
respective holders thereof shall nevertheless be subject to the following
provisions except to the extent that such provisions are by their terms
applicable only when shares of two or more classes are outstanding.
(a) As more fully set forth hereafter, the assets and liabilities and
the income and expenses of each class of the Corporation's stock shall be
determined separately and, accordingly, the net asset value, the distributions
payable to holders, and the amounts distributable in the event of dissolution of
the Corporation to holders, of shares of the Corporation's stock may vary from
class to class. Except for these differences and certain other differences
hereafter set forth, each class of the Corporation's stock shall have the same
preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, qualifica-
3
<PAGE> 4
tions and terms and conditions of and rights to require redemption.
(b) All consideration received by the Corporation for the issue or sale
of shares of a class of the Corporation's stock, together with all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be (collectively
referred to as "assets belonging to" that class), shall irrevocably belong to
that class for all purposes, subject only to the rights of creditors, and shall
be so recorded upon the books of account of the Corporation. For purposes of the
preceding sentence, the assets of any corporation or business trust merged with
and into the Corporation pursuant to a merger in which the Corporation is the
surviving corporation shall be deemed to be assets belonging to that class of
the Corporation's stock the shares of which are issued by the Corporation
pursuant to the merger.
(c) For purposes of determining the net asset value per share of stock
of a class, the assets belonging to such class of the Corporation's stock shall
be charged with the liabilities of the Corporation with respect to that class
and with that class' share of the liabilities of the Corporation not
attributable to any particular class, in the latter case in the proportion that
the net asset value of that class (determined without regard to such
liabilities) bears to the net asset value of all classes of the Corporation's
stock (determined without regard to such liabilities) as determined in
accordance with procedures adopted by the Board of Directors. The determination
of the Board of Directors shall be conclusive as to the allocation of
liabilities, including accrued expenses and reserves, and assets to a particular
class or classes. The liabilities of any corporation or business trust merged
with and into the Corporation pursuant to a merger in which the Corporation is
the surviving corporation shall be charged to that class of the Corporation's
stock the shares of which are issued by the Corporation pursuant to the merger.
(d) Each holder of stock of the Corporation, upon request to the
Corporation (accompanied by surrender of the appropriate stock certificate or
certificates in proper form for transfer, if any certificates have been
4
<PAGE> 5
issued to represent such shares) shall be entitled to require the Corporation to
redeem, to the extent that the Corporation may lawfully effect such redemption
under the laws of the State of Maryland and the federal securities laws but
subject to any right of the Corporation to postpone or suspend such right of
redemption pursuant to the federal securities laws, all or any part of the
shares of stock standing in the name of such holder on the books of the
Corporation at a price per share equal to the net asset value per share.
(e) Payment by the Corporation for shares of stock of the Corporation
surrendered to it for redemption shall be made by the Corporation within seven
business days of such surrender out of the funds legally available therefor,
provided that the Corporation may suspend the right of the holders of stock of
the Corporation to redeem shares of stock and may postpone the right of such
holders to receive payment for any shares when permitted or required to do so by
applicable statutes or regulations. Payment of the aggregate price of shares
surrendered for redemption may be made in cash or, at the option of the
Corporation, wholly or partly in such portfolio securities or other assets of
the Corporation as the Corporation shall select.
(f) The right of any holder of stock of the Corporation redeemed by the
Corporation as provided in subsection (d) of this section (3) to receive
dividends thereon and all other rights of such holder with respect to such
shares shall terminate at the time as of which the purchase or redemption price
of such shares is determined, except the right of such holder to receive (i) the
redemption price of such shares from the Corporation or its designated agent and
(ii) any dividend or distribution to which such holder had previously become
entitled as the record holder of such shares on the record date for such
dividend or distribution.
(g) The Corporation shall have the power to redeem shares of any series
at a redemption price determined in accordance with subsection (d) of this
section (3) if at any time the total investment in such account does not have a
value of at least $500. In the event the Corporation determines to exercise its
power to redeem Shares provided in this subsection (g), the Shareholder shall be
notified that the value of his account is less than the applicable minimum
amount and shall be allowed
5
<PAGE> 6
30 days to make an appropriate investment before such mandatory redemption is
processed.
(h) The Corporation shall be entitled to purchase shares of its stock,
to the extent that the Corporation may lawfully effect such purchase under the
laws of the State of Maryland, upon such terms and conditions and for such
consideration as the Board of Directors shall deem advisable, at a price not
exceeding the net asset value per share.
(i) The net asset value of each share of each class of the
Corporation's stock issued and sold or redeemed or purchased at net asset value
shall be the current net asset value per share of the shares of that class as
determined in accordance with procedures adopted from time to time by the Board
of Directors which comply with the 1940 Act with such current net asset value to
be based on the assets belonging to each such class less the liabilities charged
to each such class.
(j) In the absence of any specification as to the purpose for which
shares of stock of the Corporation are redeemed or purchased by it, all shares
so redeemed or purchased shall be deemed to be retired in the sense contemplated
by the laws of the State of Maryland and the number of the authorized shares of
stock of the Corporation shall not be reduced by the number of any shares
redeemed or purchased by it. Until their classification is changed in accordance
with section (2) of this Article V, all shares so redeemed or purchased shall
continue to belong to the same class or series to which they belonged at the
time of their redemption or purchase.
(k) Shares of each class of stock shall be entitled to such dividends
or distributions, in stock or in cash or both, as may be declared from time to
time by the Board of Directors, acting in its sole discretion, with respect to
such class, provided that dividends or distributions shall be paid on shares of
a class of stock only out of lawfully available assets belonging to that class.
(1) In the event of the liquidation or dissolution of the Corporation,
the stockholders of a class of the Corporation's stock shall be entitled to
receive, as a class, out of the assets of the Corporation available for
distribution to stockholders, the assets belonging to
6
<PAGE> 7
that class. The assets so distributable to the stockholders of a class shall be
distributed among such stockholders in proportion to the number of shares of
that class held by them and recorded on the books of the Corporation. In the
event that there are any assets available for distribution that are not
attributable to any particular class of stock, such assets shall be allocated to
all classes in proportion to the net assets of the respective classes and then
distributed to the holders of stock of each class in proportion to the number of
shares of that class held by the respective holders. The liquidation of any
particular class in which there are shares then outstanding may be authorized by
vote of the majority of the Board of Directors then in office, subject to the
approval of the majority of outstanding securities of that class, as defined in
the 1940 Act, and without the vote of the holders of any other class. The
liquidation or dissolution of a particular class may be accomplished, in whole
or in part, by the transfer of assets belonging to such class to another class
or by the exchange of shares of such class for the shares of another class.
(m) On each matter submitted to a vote of the stockholders for
approval, each, holder, of a share of stock shall be entitled to one vote for
each such share standing in his name on the books of the Corporation
irrespective of the class or series thereof, and all shares of all classes or
series shall vote as a single class or series ("Single Class Voting"); provided,
however, that (a) as to any matter with respect to which a separate vote of any
class or series is required by the 1940 Act or by the Maryland General
Corporation Law, such requirement as to a separate vote by that class or series
shall apply in lieu of Single Class Voting as described above; (b) in the event
that the separate vote requirements referred to in (a) above apply with respect
to one or more classes of series, then, subject to (c) below, the shares of all
other classes or series shall vote as a single class or series; and (c) as to
any matter which does not affect the interest of all classes or series including
liquidation of a particular class as described in subsection (1) above, only the
holders of shares of the one or more affected classes or series shall be
entitled to vote.
(n) The Corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares in fractional
denominations
7
<PAGE> 8
shall be shares of stock having proportionately to the respective fractions
represented thereby all the rights of whole shares, including without
limitation, the right to vote, the right to receive dividends and distributions,
and the right to participate upon liquidation of the Corporation, but excluding
the right to receive a stock certificate representing fractional shares.
(4) All persons who shall acquire stock or other securities of the
Corporation shall acquire the same subject to the provisions of these Articles
of Incorporation, as from time to time amended.
ARTICLE VI
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF
THE CORPORATION AND OF THE DIRECTORS
AND STOCKHOLDERS
------------------------------------
(1) The number of directors of the Corporation shall be one (1), which
number may be altered by and pursuant to the By-Laws of the Corporation but
shall never be less than one nor more than fifteen. The name of the person who
shall act as the director until his successors are duly elected and qualify is:
Bruce N. Alpert.
The term of office for a director is until the next annual meeting of
stockholders at which directors are elected or until death, resignation,
retirement or reelection, or until a successor is elected and qualified. In no
case shall a decrease in the number of directors shorten the term of any
incumbent director. Any vacancy on the Board of Directors that results from an
increase in the number of directors may be filled by a majority of the entire
Board of Directors, provided that a quorum is present, and any other vacancy
occurring in the Board of Directors may be filled by a majority of the directors
then in office, whether or not sufficient to constitute a quorum, or by a sole
remaining director. A director elected by the Board of Directors to fill any
vacancy in the Board of Directors shall serve until the next meeting of
stockholders and until his successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office. At any meeting of stockholders,
8
<PAGE> 9
stockholders shall be entitled to elect directors to fill any vacancies in the
Board of Directors that have arisen since the preceding meeting of stockholders
(whether or not any such vacancy has been filled by election of a new director
by the Board of Directors) and any director so elected by the stockholders shall
hold office until the next meeting of stockholders or until death, resignation
or retirement or until a successor is elected and qualified. A director may be
removed for cause or without cause, and only by action of the stockholders taken
by the holders of at least a majority of the shares of capital stock then
entitled to vote in an election of directors.
(2) The Board of Directors of the Corporation is hereby empowered to
authorize the issuance from time to time of shares of capital stock, whether now
or hereafter authorized, for such consideration as the Board of Directors may
deem advisable, subject to such limitations as may be set forth in these
Articles of Incorporation or in the By-Laws of the Corporation or in the
Maryland General Corporation Law.
(3) Each person who at any time is or was a Director or officer of
the Corporation shall be indemnified by the Corporation to the fullest extent
permitted by the Maryland General Corporation Law as it may be amended or
interpreted from time to time, including the advancing of expenses, subject to
any limitations imposed by the 1940 Act. Furthermore, to the fullest extent
permitted by Maryland law, as it may be amended or interpreted from time to
time, subject to the limitations imposed by the 1940 Act, no Director or officer
of the Corporation shall be personally liable to the Corporation or its
stockholders. No amendment of the Charter of the Corporation or repeal of any
of its provisions shall limit or eliminate any of the benefits provided to any
person who at any time is or was a Director or officer of the Corporation under
this Section in respect of any act or omission that occurred prior to such
amendment or repeal.
(4) The Board of Directors of the Corporation shall have the exclusive
authority to make, alter or repeal from time to time any of the By-Laws of the
Corporation except any particular By-Law which is specified as not subject to
alteration or repeal by the Board of Directors, subject to the requirements of
the 1940 Act.
9
<PAGE> 10
(5) The Board of Directors may designate, from time to time, the
location of the offices of the Corporation.
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
---------------------------
No stockholder of the Corporation shall by reason of his holding shares
of capital stock have any preemptive or preferential right to purchase or
subscribe to any shares of capital stock of the Corporation, now or hereafter
authorized, or any notes, debentures, bonds or other securities convertible into
shares of capital stock, now or hereafter to be authorized, whether or not the
issuance of any such shares of capital stock, or notes, debentures, bonds or
other securities would adversely affect the dividend or voting rights of such
shareholder; and the Board of Directors may issue shares of any class of capital
stock of the Corporation, or any notes, debentures, bonds, other securities
convertible into shares of any class of capital stock of the Corporation, either
whole or in part, to the existing stockholders for such lawful consideration and
on such terms as the Board of Directors, in its sole discretion, may determine.
ARTICLE VIII
MAJORITY VOTES OF STOCKHOLDERS
------------------------------
Except as otherwise provided in these Articles of Incorporation or as
required under the 1940 Act, and notwithstanding any provision of the Maryland
General Corporation Law 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 upon 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.
10
<PAGE> 11
ARTICLE IX
DETERMINATION BINDING
---------------------
Any determination made in good faith, so far as accounting matters are
involved, in accordance with accepted accounting practice by or pursuant to the
authority of the direction of the Board of Directors, as to the amount of
assets, obligations or liabilities of the Corporation, as to the amount of net
income of the Corporation from dividends and interest for any period or amounts
at any time legally available for the payment of dividends, as to the amount of
any reserves or charges set up and the propriety thereof, as to the time of or
purpose for creating reserves or as to the use, alteration or cancellation of
any reserves or charges (whether or not any obligation or liability for which
such reserves or charges shall have been created, shall have been paid or
discharged or shall be then or thereafter required to be paid or discharged), as
to the price of any security owned by the Corporation or as to any other matters
relating to the issuance, sale, redemption or other acquisition or disposition
of securities or shares of capital stock of the Corporation, and any reasonable
determination made in good faith by the Board of Directors shall be final and
conclusive, and shall be binding upon the Corporation and all holders of its
capital stock, past, present and future, and shares of the capital stock of the
Corporation are issued and sold on the condition and understanding, evidenced by
the purchase of shares of capital stock or acceptance of share certificates,
that any and all such determinations shall be binding as aforesaid. No provision
of these Articles of Incorporation shall be effective to (a) require a waiver of
compliance with any provision of the Securities Act of 1933, as amended, or the
1940 Act, or of any valid rule, regulation or order of the Securities and
Exchange Commission thereunder or (b) protect or purport to protect any director
or officer of the Corporation against any liability to the Corporation or its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
11
<PAGE> 12
ARTICLE X
PRIVATE PROPERTY OF STOCKHOLDERS
--------------------------------
The private property of stockholders shall not be subject to the
payment of corporate debts to any extent whatsoever.
ARTICLE XI
PERPETUAL EXISTENCE
-------------------
The duration of the Corporation shall be perpetual.
ARTICLE XII
AMENDMENT
---------
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation. All amendments shall require the
affirmative vote of a majority of the Corporation's outstanding stock entitled
to vote.
12
<PAGE> 13
IN WITNESS WHEREOF, the undersigned incorporator of GABELLI GLOBAL
SERIES FUNDS, INC. hereby executes the foregoing Articles of Incorporation and
acknowledges the same to be his act and further acknowledges that, to the best
of his knowledge, the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated the lst day of July, 1993.
/s/ Joseph Weikel
-----------------------------
Joseph Weikel
13
<PAGE> 14
STATE OF MARYLAND Department of Assessments and Taxation
CHARTER DIVISION
WILLIAM DONALD SCHAEFER
Governor Room ???
301 West Preston Street
LLOYD W JONES Baltimore, Maryland 2XXXX
Director
PAUL B. ANDERSON
Administrator
DOCUMENT CODE 02 BUSINESS CODE 03 COUNTY 79
------ ------ ------
# P.A. Religious Close X Stock Nons
--------------- --- --- --- --- ---
Merging Surviving
(Transferor) (Transferee)
------------------------- ------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
CODE AMOUNT FEE REMITTED
- ---- ------ ------------
10 70 Expedited Fee
-----
20 200 Organ. & Capitalization
-----
61 20 Rec. Fee (Arts. of Inc.)
-----
62 Rec. Fee (Amendment)
-----
63 Rec. Fee (Merger, Consol.)
-----
64 Rec. Fee (Transfer)
-----
65 Rec. Fee (Dissolution)
-----
66 Rec. Fee (Revival)
-----
52 Foreign Qualification
-----
50 Cert. of Qual. or Reg.
-----
51 Foreign Name Registration
-----
13 33 2 Certified Copy 26
----- --- ----
56 Penalty
-----
54 For. Supplemental Cert.
-----
53 Foreign Resolution
-----
73 Certificate of Conveyance
-----
-------------------------------
-------------------------------
76 Certificate of Merger/Transfer
-----
-------------------------------
75 Special Fee
-----
80 For. Limited Partnership
-----
83 Cert. Limited Partnership
-----
84 Amendment to Limited Partnership
-----
85 Termination of Limited Partnership
-----
21 Recordation Tax
-----
22 State Transfer Tax
-----
23 Local Transfer Tax
-----
31 Corp. Good Standing
----- -----
NA Foreign Corp. Registration
-----
87 Limited Part. Good Standing
----- -----
71 Financial
-----
600 Personal
----- ----------------------------
Property Reports and
----------------
late filing penalties
70 Change of P.O., R.A. or R.A.A.
-----
91 Amend/Cancellation, For. Limited Part.
-----
99 Art. of Organization (LLC)
-----
(New Name)
---------------------------------
- -------------------------------------------
- -------------------------------------------
Change of Name
-----
Change of Principal Office
-----
Change of Resident Agent
-----
Change of Resident Agent Address
-----
Resignation of Resident Agent
-----
Designation of Resident Agent and Resident Agent's Address
-----
Other Change
----- ------------------------------
------------------------------------------
CODE 045
---------
ATTENTION:
-----------------------------------
---------------------------------------------
---------------------------------------------
MAIL TO ADDRESS:
-----------------------------
---------------------------------------------
<PAGE> 1
Exhibit 2
BY-LAWS
OF
GABELLI GLOBAL SERIES FUNDS, INC.
ARTICLE I
Offices
-------
Section 1. Principal Office. The principal office of the Corporation
shall be in the City of Baltimore, State of Maryland.
Section 2. Principal Executive Office. The principal executive office
of the Corporation shall be at The Corporate Center at Rye, 555 Theodore Fremd
Avenue, Rye, New York 10580.
Section 3. Other Offices. The Corporation may have such other offices
in such places as the Board of Directors may from time to time determine.
ARTICLE II
Meetings of Stockholders
------------------------
Section 1. Annual Meetings. The Corporation is not 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 (the "1940 Act"), but it
may hold annual meetings (whether or not required by the 1940 Act). Any meeting
held for the purpose of electing directors shall be designated the annual
meeting of stockholders for that year. If the Corporation is required to hold a
meeting of stockholders to elect directors pursuant to the Investment Company
Act of 1940, the annual meeting shall be held no later than 120 days after the
occurrence of the event requiring the meeting. All other annual meetings shall
be held on a day in the month of May selected by the Board of Directors.
Section 2. Special Meetings. Special meetings of the stockholders,
unless otherwise provided by law or
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<PAGE> 2
by the Articles of Incorporation (the "Articles") may be called for any purpose
or purposes by a majority of the Board of Directors, the President, or on the
written request of the holders of at least 25% of the outstanding capital stock
of the Corporation entitled to vote at such meeting.
Section 3. Place of Meetings. Annual and special meetings of the
stockholders shall be held at such place within the United States as the Board
of Directors may from time to time determine.
Section 4. Notice of Meetings; Waiver of Notice. Notice of the place,
date and time of the holding of each annual and special meeting of the
stockholders and the purpose or purposes of each special meeting shall be given
personally or by mail, not less than ten nor more than ninety days before the
date of such meeting, to each stockholder entitled to vote at such meeting and
to each other stockholder entitled to notice of the meeting. Notice by mail
shall be deemed to be duly given when deposited in the United States mail
addressed to the stockholder at his address as it appears on the records of the
Corporation, with postage thereon prepaid.
Notice of any meeting of stockholders shall be deemed waived by any
stockholder who shall attend such meeting in person or by proxy, or who shall,
either before or after the meeting, submit a signed waiver of notice which is
filed with the records of the meeting. When a meeting is adjourned to another
time and place, unless the Board of Directors, after the adjournment, shall fix
a new record date for an adjourned meeting, or the adjournment is for more than
one hundred and twenty days after the original record date, notice of such
adjourned meeting need not be given if the time and place to which the meeting
shall be adjourned were announced at the meeting at which the adjournment is
taken.
Section 5. Quorum. At all meetings of the stockholders, the holders of
a majority of the shares of stock of the Corporation entitled to vote at the
meeting, present in person or by proxy, shall constitute a quorum for the
transaction of any business, except as otherwise provided by statute, the 1940
Act and the Rules promulgated thereunder (the "1940 Act Rules"), or the
Articles. In the absence of a quorum no business may be transacted, except that
the holders of a majority of the shares of
2
<PAGE> 3
stock present in person or by proxy and entitled to vote may adjourn the meeting
from time to time, without notice other than announcement thereat except as
otherwise required by these By-Laws, until the holders of the requisite amount
of shares of stock shall be so present. At any such adjourned meeting at which a
quorum may be present any business may be transacted which might have been
transacted at the meeting as originally called. The absence from any meeting, in
person or by proxy, of holders of the number of shares of stock of the
Corporation in excess of a majority thereof which may be required by the laws of
the State of Maryland, the 1940 Act, or other applicable statute, the Articles,
or these By-Laws, for action upon any given matter shall not prevent action at
such meeting upon any other matter or matters which may properly come before the
meeting, if there shall be present thereat, in person or by proxy, holders of
the number of shares of stock of the Corporation required for action in respect
of such other matter or matters. A quorum shall be present with respect to
matters as to which only the holders of one class of stock may vote if a
majority of the shares of that class are present at the meeting in person or by
proxy, and the absence of holders of a majority of shares with respect to one
class shall have no effect with respect to any other class of stock.
Section 6. Organization. At each meeting of the stockholders, the
Chairman of the Board (if one has been designated by the Board), or in the
Chairman of the Board's absence or inability to act, the President, or in the
absence or inability of the Chairman of the Board and the President, a Vice
President, shall act as chairman of the meeting. The Secretary, or in the
Secretary's absence or inability to act, any person appointed by the chairman of
the meeting, shall act as secretary of the meeting and keep the minutes thereof.
Section 7. Order of Business. The order of business at all meetings of
the stockholders shall be as determined by the chairman of the meeting.
Section 8. Voting. Pursuant to Article V, section (3)(m) of the
Corporation's Articles, stockholders shall be entitled to one vote on each
matter submitted to the stockholders for approval for every share of such stock
standing in such stockholder's name on the record of stockholders of the
Corporation as of the record date determined pursuant to Section 9 of this Arti-
3
<PAGE> 4
cle or if such record date shall not have been so fixed, then at the later of
(i) the close of business on the day on which notice of the meeting is mailed or
(ii) the thirtieth day before the meeting.
Each stockholder entitled to vote at any meeting of stockholders may
authorize another person or persons to act for him by a proxy signed by such
stockholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date thereof, unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the stockholder
executing it, except in those cases where such proxy states that it is
irrevocable and where an irrevocable proxy is permitted by law. Except as
otherwise provided by statute, the 1940 Act, the 1940 Act Rules, the Articles or
these By-Laws, any corporate action to be taken by vote of the stockholders
shall be authorized by a majority of the total votes cast at a meeting of
stockholders by the holders of shares present in person or represented by proxy
and entitled to vote on such action.
If a vote shall be taken on any question other than the election of
directors, which shall be by written ballot, then unless required by statute,
the 1940 Act, the 1940 Act Rules or these By-Laws, or determined by the chairman
of the meeting to be advisable, any such vote need not be by ballot. on a vote
by ballot, each ballot shall be signed by the stockholder voting, or by his
proxy, if there be such proxy, and shall state the number of shares voted.
Section 9. Fixing of Record Date. The Board of Directors may set a
record date for the purpose of determining stockholders entitled to vote at any
meeting of the stockholders. The record date, which may not be prior to the
close of business on the day the record date is fixed, shall be not more than
ninety nor less than ten days before the date of the meeting of the
stockholders. All persons who were holders of record of shares at such time, and
not others, shall be entitled to vote at such meeting and any adjournment
thereof.
Section 10. Inspectors. The Board may, in advance of any meeting of
stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If the inspector shall not be so appointed or if any of
them shall fail to appear or act, the chairman
4
<PAGE> 5
of the meeting may, and on the request of any stockholder entitled to vote
thereat shall, appoint inspectors. Each inspector, before entering upon the
discharge of his duties, shall take and sign an oath to execute faithfully the
duties of inspector at such meeting with strict impartiality and according to
the best of his ability. The inspectors shall determine the number of shares
outstanding and the voting powers of each, the number of shares represented at
the meeting, the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do such acts as are proper
to conduct the election or vote with fairness to all stockholders. On request of
the chairman of the meeting or any stockholder entitled to vote thereat, the
inspectors shall make a report in writing of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as inspector of an
election of directors. Inspectors need not be stockholders.
Section 11. Consent of Stockholders in Lieu of Meeting. Except as
otherwise provided by statute, the 1940 Act, the 1940 Act Rules or the Articles,
any action required to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice and
without a vote, if the following are filed with the records of stockholders
meetings: (i) a unanimous written consent which sets forth the action and is
signed by each stockholder entitled to vote on the matter and (ii) a written
waiver of any right to dissent signed by each stockholder entitled to notice of
the meeting but not entitled to vote thereat.
ARTICLE III
Board of Directors
------------------
Section 1. General Powers. Except as otherwise provided in the
Articles, the business and affairs of the Corporation shall be managed under the
direction of the Board of Directors. All powers of the Corporation
5
<PAGE> 6
may be exercised by or under authority of the Board of Directors except as
conferred on or reserved to the stockholders by law or by the Articles or these
By-Laws.
Section 2. Number of Directors. The number of directors shall be fixed
from time to time by resolution of the Board of Directors adopted by a majority
of the directors then in office; provided, however, that the number of directors
shall in no event be less than one nor more than fifteen. Any vacancy created by
an increase in the number of Directors may be filled in accordance with Section
6 of this Article III. No reduction in the number of directors shall have the
effect of removing any director from office prior to the expiration of his term.
Directors need not be stockholders.
Section 3. Election and Term of Directors. Directors shall be elected
by written ballot at a meeting of stockholders, held for that purpose unless
otherwise provided by statute or the Articles. The term of office of directors
shall be from the time of their election and qualification until the next annual
meeting of stockholders and until their successors are elected and qualify.
Section 4. Resignation. A director of the Corporation may resign at any
time by giving written notice of his resignation to the Board or the Chairman of
the Board or the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 5. Removal of Directors. Any director of the Corporation may be
removed for cause or without cause by the stockholders by a vote of a majority
of the votes entitled to be cast for the election of directors.
Section 6. Vacancies. Subject to the provisions of the 1940 Act, any
vacancies in the Board, whether arising from death, resignation, removal, an
increase in the number of directors or any other cause, shall be filled by a
vote of the Board of Directors in accordance with the Articles.
6
<PAGE> 7
Section 7. Place of Meetings. Meetings of the Board may be held at such
place as the Board may from time to time determine or as shall be specified in
the notice of such meeting.
Section 8. Regular Meeting. Regular meetings of the Board may be held
without notice at such time and place as may be determined by the Board of
Directors.
Section 9. Special Meetings. Special meetings of the Board may be
called by two or more directors of the Corporation or by the Chairman of the
Board or the President.
Section 10. Post Stockholder Meetings. A meeting of the Board of
Directors shall be held as soon as practicable after each meeting of
stockholders at which directors were elected. No notice of such meeting shall be
necessary if held immediately after the adjournment, and at the site, of the
meeting of stockholders. If not so held, notice shall be given as hereinafter
provided for special meetings of the Board of Directors.
Section 11. Notice of Special Meetings. Notice of each special meeting
of the Board shall be given by the Secretary as hereinafter provided, in which
notice shall be stated the time and place of the meeting. Notice of each such
meeting shall be delivered to each director, either personally or by telephone
or any standard form of telecommunication, at least twenty-four hours before the
time at which such meeting is to be held, or mailed by first-class mail, postage
prepaid, addressed to him at his residence or usual place of business, at least
three days before the day on which such meeting is to be held.
Section 12. Waiver of Notice of Meetings. Notice of any special meeting
need not be given to any director who shall, either before or after the meeting,
sign a written waiver of notice which is filed with the records of the meeting
or who shall attend such meeting. Except as otherwise specifically required by
these ByLaws, a notice or waiver of notice of any meeting need not state the
purpose of such meeting.
Section 13. Quorum and Voting. One-third, but not less than two, of the
members of the entire Board shall be present in person at any meeting of the
Board in
7
<PAGE> 8
order to constitute a quorum for the transaction of business at such meeting,
and except as otherwise expressly required by statute, the 1940 Act, the 1940
Act Rules, the Articles, these By-Laws, or other applicable statute, the act of
a majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board; provided, however, that the approval of any
contract with an investment adviser or principal underwriter, as such terms are
defined in the 1940 Act, which the Corporation enters into or any renewal or
amendment thereof, and the selection of the Corporation's independent public
accountants shall each require the affirmative vote of a majority of the
directors who are not interested persons, as defined in the 1940 Act, of the
Corporation cast in person at such meeting and the approval of the fidelity bond
required by the 1940 Act shall require the approval of a majority of such
directors. In the absence of a quorum at any meeting of the Board, a majority of
the directors present thereat may adjourn such meeting to another time and place
until a quorum shall be present thereat. Notice of the time and place of any
such adjourned meeting shall be given to the directors who were not present at
the time of the adjournment and, unless such time and place were announced at
the meeting at which the adjournment was taken, to the other directors. At any
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally called.
Section 14. Organization. The Board may, by resolution adopted by a
majority of the entire Board, designate a Chairman of the Board, who shall
preside at each meeting of the Board. In the absence or inability of the
Chairman of the Board to preside at a meeting, the President or, in his absence
or inability to act, another director chosen by a majority of the directors
present, shall act as chairman of the meeting and preside thereat. The Secretary
(or, in his absence or inability to act, any person appointed by the Chairman)
shall act as secretary of the meeting and keep the minutes thereof.
Section 15. Written Consent of Directors in Lieu of a Meeting. Subject
to the provisions of the Investment Company Act of 1940, as amended, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if all members of the Board
or
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<PAGE> 9
committee, as the case may be, consent thereto in writing, and the writings or
writing are filed with the minutes of the proceedings or the Board or committee.
Section 16. Compensation. Directors may receive compensation for
services to the Corporation in their capacities as directors or otherwise in
such manner and in such amounts as may be fixed from time to time by the Board.
ARTICLE IV
Committees
----------
Section 1. Committees of the Board. The Board of Directors may from
time to time, by resolution adopted by a majority of the whole Board, designate
one or more committees of the Board, each such committee to consist of two or
more directors and to have such powers and duties as the Board of Directors may,
by resolution, prescribe.
Section 2. General. One-third, but not less than two, of the members of
any committee shall be present in person at any meeting of such committee in
order to constitute a quorum for the transaction of business at such meeting,
and the act of a majority present shall be the act of such committee. The Board
may designate a chairman of any committee and such chairman or any two members
of any committee may fix the time and place of its meetings unless the Board
shall otherwise provide. In the absence or disqualification of any member of any
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. The Board shall
have the power at any time to change the membership of any committee, to fill
all vacancies, to designate alternate members to replace any absent or
disqualified member, or to dissolve any such committee. Nothing herein shall be
deemed to prevent the Board from appointing one or more committees consisting in
whole or in part of persons who are not directors of the Corporation; provided,
however, that no such committee shall have or may exercise any authority or
power of
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<PAGE> 10
the Board in the management of the business or affairs of the Corporation.
ARTICLE V
Officers, Agents and Employees
------------------------------
Section 1. Officers. The officers of the Corporation shall be a
President, who shall be a director of the Corporation, a Secretary and a
Treasurer, each of whom shall be elected by the Board of Directors. The Board of
Directors may elect or appoint one or more Vice Presidents and may also appoint
such other officers, agents and employees as it may deem necessary or proper.
Any two or more offices may be held by the same person, except the offices of
President and Vice President, but no officer shall execute, acknowledge or
verify any instrument as an officer in more than one capacity. Such officers
shall be elected by the Board of Directors to serve at the pleasure of the
Board, each to hold office until the next meeting of stockholders and until
their successors shall have been duly elected and shall have qualified, or until
death, resignation, or removal, as hereinafter provided in these By-Laws. The
Board may from time to time elect, or delegate to the President the power to
appoint, such officers (including one or more Assistant Vice Presidents, one or
more Assistant Treasurers and one or more Assistant Secretaries) and such
agents, as may be necessary or desirable for the business of the Corporation.
Such officers and agents shall have such duties and shall hold their offices for
such terms as may be prescribed by the Board or by the appointing authority.
Section 2. Resignations. Any officer of the Corporation may resign at
any time by giving written notice of resignation to the Board, the Chairman of
the Board, President or the Secretary. Any such resignation shall take effect at
the time specified therein or, if the time when it shall become effective shall
not be specified therein, immediately upon its receipt; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 3. Removal of Officer, Agent or Employee. Any officer, agent or
employee of the Corpora-
10
<PAGE> 11
tion may be removed by the Board of Directors with or without cause at any time,
and the Board may delegate such power of removal as to agents and employees not
elected or appointed by the Board of Directors. Such removal shall be without
prejudice to such person's contract rights, if any, but the appointment of any
person as an officer, agent or employee of the Corporation shall not of itself
create contract rights.
Section 4. Vacancies. A vacancy in any office, either arising from
death, resignation, removal or any other cause, may be filled for the unexpired
portion of the term of the office which shall be vacant, in the manner
prescribed in these By-Laws for the regular election or appointment to such
office.
Section 5. Compensation. The compensation of the officers of the
Corporation shall be fixed by the Board of Directors, but this power may be
delegated to any officer in respect of other officers under his control.
Section 6. Bonds or Other Security. If required by the Board, any
officer, agent or employee of the Corporation shall give a bond or other
security for the faithful performance of his duties, in such amount and with
such surety or sureties as the Board may require.
Section 7. President. The President shall be the chief executive
officer of the Corporation. In the absence of the Chairman of the Board (or if
there be none), he shall preside at all meetings of the stockholders and of the
Board of Directors. He shall have, subject to the control of the Board of
Directors, general charge of the business and affairs of the Corporation. He may
employ and discharge employees and agents of the Corporation, except such as
shall be appointed by the Board, and he may delegate these powers.
Section 8. Vice President. Each Vice President shall have such powers
and perform such duties as the Board of Directors or the President may from time
to time prescribe.
11
<PAGE> 12
Section 9. Treasurer. The Treasurer shall
(a) have charge and custody of, and be responsible for, all
the funds and securities of the Corporation, except those which the Corporation
has placed in the custody of a bank or trust company or member of a national
securities exchange (as that term is defined in the Securities Exchange Act of
1934, as amended) pursuant to a written agreement designating such bank or trust
company or member of a national securities exchange as a custodian or
sub-custodian of the property of the Corporation;
(b) keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation;
(c) cause all moneys and other valuables to be deposited to
the credit of the Corporation;
(d) receive, and give receipts for, moneys due and payable, to
the Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and supervise the
investment of its funds as ordered or authorized by the Board, taking proper
vouchers therefor;
(f) provide assistance to the Audit Committee of the Board and
report to such committee as necessary;
(g) be designated as principal accounting officer for purposes
of Section 32 of the 1940 Act; and
(h) in general, perform all the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the Board or the President.
Section 10. Secretary. The Secretary shall
(a) keep or cause to be kept in one or more books provided for
the purpose, the minutes of all meetings of the Board, the committees of the
Board and the stockholders;
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<PAGE> 13
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the
Corporation and affix and attest the seal to all stock certificates of the
Corporation (unless the seal of the Corporation on such certificates shall be a
facsimile, as hereinafter provided) and affix and attest the seal to all other
documents to be executed on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are properly
kept and filed; and
(e) in general, perform all the duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
by the Board or the President.
Section 11. Delegation of Duties. In case of the absence of any officer
of the Corporation, or for any other reason that the Board may deem sufficient,
the Board may confer for the time being the powers or duties, or any of them, of
such officer upon any other officer or upon any director.
ARTICLE VI
Indemnification
---------------
Each officer and director of the Corporation shall be indemnified by
the Corporation to the full extent permitted under the General Laws of the State
of Maryland, except that such indemnity shall not protect any such person
against any liability to the Corporation or any stockholder thereof to which
such person 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. Absent a court determination that an officer or director
seeking indemnification was not liable on the merits or guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office, the decision by the Corporation to
indemnify
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<PAGE> 14
such person must be based upon the reasonable determination of independent
counsel or nonparty independent directors, after review of the facts, that such
officer or director is not guilty of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
The Corporation may purchase insurance on behalf of an officer,
director, employee or other agent of the Corporation protecting such person to
the full extent permitted under the General Laws of the State of Maryland, from
liability arising from his activities as officer or director of the Corporation.
The Corporation, however, may not purchase insurance on behalf of any officer or
director of the Corporation that protects or purports to protect such person
from liability to the Corporation or to its stockholders to which such officer
or director 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.
ARTICLE VII
Capital Stock
-------------
Section 1. Stock Certificates. Each holder of stock of the Corporation
shall be entitled upon request to have a certificate or certificates, in such
form as shall be approved by the Board, representing the number of shares of the
Corporation owned by him, provided, however, that certificates for fractional
shares will not be delivered in any case. The certificates representing shares
of stock shall be signed by or in the name of the Corporation by the President
or a Vice President and by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer and sealed with the seal of the Corporation.
Any or all of the signatures or the seal on the certificate may be a facsimile.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate shall be
issued, it may be issued by the Corporation with the same effect as if such
officer, transfer agent or registrar were still in office at the date of issue.
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<PAGE> 15
Section 2. Books of Accounts and Record of Stockholders. There shall be
kept at the principal executive office of the Corporation correct and complete
books and records of account of all the business and transactions of the
Corporation. There shall be made available upon request of any stockholder, in
accordance with Maryland law, a record containing the number of shares of stock
issued during a specified period not to exceed twelve months and the
consideration received by the Corporation for each such share.
Section 3. Transfers of Shares. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only by the
registered holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary or with a transfer agent or
transfer clerk, and or surrender of the certificate or certificates, if issued,
for such shares properly endorsed or accompanied by a duly executed stock
transfer power and the payment of all taxes thereon. Except as otherwise
provided by law the Corporation shall be entitled to recognize the exclusive
rights of a person in whose name any share or shares stand on the record of
stockholders as the owner of such share or shares for all purposes, including,
without limitation, the rights to receive dividends or other distributions, and
to vote as such owner, and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or shares on the part
of any other person.
Section 4. Regulations. The Board may make such additional rules and
regulations, not inconsistent with these By-Laws, as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
stock of the Corporation. It may appoint, or authorize any officer or officers
to appoint, one or more transfer agents or one or more transfer clerks and one
or more registrars and may require all certificates for shares of stock to bear
the signature or signatures of any of them.
Section 5. Lost, Destroyed or Mutilated Certificates. The holder of any
certificates representing shares of stock of the Corporation shall immediately
notify the Corporation of any loss, destruction or mutilation of such
certificate, and the Corporation may issue a new certificate of stock in the
place of any certifi-
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<PAGE> 16
cate therefore issued by it which the owner thereof shall allege to have been
lost or destroyed or which shall have been mutilated, and the Board may, in its
discretion, require such owner or his legal representatives to give to the
Corporation a bond in such sum, limited or unlimited, and in such form and with
such surety or sureties, as the Board in its absolute discretion shall
determine, to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such
certificate, or issuance of a new certificate. Anything herein to the contrary
notwithstanding, the Board, in its absolute discretion, may refuse to issue any
such new certificate, except pursuant to legal proceedings under the laws of the
State of Maryland.
Section 6. Fixing of a Record Date for Dividends and Distributions. The
Board may fix, in advance, a date not more than ninety days preceding the date
fixed for the payment of any dividend or the making of any distribution. Once
the Board of Directors fixes a record date as the record date for the
determination of the stockholders entitled to receive any such dividend or
distribution, in such case only the stockholders of record at the time so fixed
shall be entitled to receive such dividend or distribution.
Section 7. Information to Stockholders and Others. Any stockholder of
the Corporation or his agent may inspect and copy during usual business hours
the Corporation's By-Laws, minutes of the proceedings of its stockholders,
annual statements of its affairs, and voting trust agreements on file at its
principal office.
ARTICLE VIII
Seal
----
The seal of the Corporation shall be circular in form and shall bear,
in addition to any other emblem or device approved by the Board of Directors,
the name of the Corporation, the year of its incorporation and the words
"Corporate Seal" and "Maryland". Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any other manner reproduced.
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<PAGE> 17
ARTICLE IX
Fiscal Year
-----------
Unless otherwise determined by the Board, the fiscal year of the
Corporation shall end on the 31st day of December.
ARTICLE X
Depositories and Custodians
---------------------------
Section 1. Depositories. The funds of the Corporation shall be
deposited with such banks or other depositories as the Board of Directors of the
corporation may from time to time determine.
Section 2. Custodians. All securities and other investments shall be
deposited in the safe keeping of such banks or other companies as the Board of
Directors of the Corporation may from time to time determine. Every arrangement
entered into with any bank or other company for the safe keeping of the
securities and investments of the Corporation shall contain provisions complying
with the 1940 Act, and the general rules and regulations thereunder.
ARTICLE XI
Execution of Instruments
------------------------
Section 1. Checks, Notes, Drafts, etc. Checks, notes, drafts,
acceptances, bills of exchange and other orders or obligations for the payment
of money shall be signed by such officer or officers or person or persons as the
Board of Directors by resolution shall from time to time designate.
Section 2. Sale or Transfer of Securities. Stock certificates, bonds or
other securities at any time owned by the Corporation may be held on behalf of
the Corporation or sold, transferred or otherwise disposed of subject to any
limits imposed by these By-Laws and pursuant to authorization by the Board and,
when so authorized to be held on behalf of the Corporation or sold, transferred
or otherwise disposed of, may be transferred from
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<PAGE> 18
the name of the Corporation by the signature of the President or a Vice
President or the Treasurer or pursuant to any procedure approved by the Board of
Directors, subject to applicable law.
ARTICLE XII
Independent Public Accountants
------------------------------
The firm of independent public accountants which shall sign or certify
the financial statements of the Corporation which are filed with the Securities
and Exchange Commission shall be selected annually by the Board of Directors and
ratified by the stockholders to the extent required by the 1940 Act and the 1940
Act Rules.
ARTICLE XIII
Annual Statement
----------------
The books of account of the Corporation shall be examined by an
independent firm of public accountants at the close of each annual period of the
Corporation and at such other times as may be directed by the Board. A report to
the stockholders based upon each such examination shall be mailed to each
stockholder of the Corporation of record on such date with respect to each
report as may be determined by the Board, at his address as the same appears on
the books of the Corporation. Such annual statement shall also be available at
the annual meeting of stockholders and be placed on file at the Corporation's
principal office in the State of Maryland. Each such report shall show the
assets and liabilities of the Corporation as of the close of the annual or
quarterly period covered by the report and the Securities in which the funds of
the Corporation were then invested. Such report shall also show the
Corporation's income and expenses for the period from the end of the
Corporation's preceding fiscal year to the close of the annual or quarterly
period covered by the report and any other information required by the 1940 Act,
and shall set forth such other matters as the Board or such firm of independent
public accountants shall determine.
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<PAGE> 19
ARTICLE XIV
Amendments
----------
The Board of Directors, by affirmative vote of a majority thereof,
shall have the right to amend, alter or repeal these By-Laws at any regular or
special meeting of the Board of Directors, except any particular By-Law which is
specified as not subject to alteration or repeal by the Board of Directors.
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<PAGE> 1
Exhibit 5a
INVESTMENT ADVISORY AGREEMENT
-----------------------------
INVESTMENT ADVISORY AGREEMENT, dated September 23, 1993, between
Gabelli Global Series Funds, Inc. (the "Company"), a Maryland corporation, and
Gabelli Funds, Inc. (the "Adviser"), a Delaware Corporation.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. In General
----------
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Company with respect to the investment of the assets
of the Company allocated to The Gabelli Global Telecommunications Fund Stock,
The Gabelli Global Entertainment and Media Fund Stock and The Gabelli Global
Growth Fund Stock (the "Funds") and to supervise and arrange the purchase and
sale of assets held in the investment portfolios of the Funds.
2. Duties and obligations of the Adviser with
respect to investments of assets of the Funds
---------------------------------------------
(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and control of the Company's Board of Directors, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of each Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Funds and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Funds; (ii)
arrange for the purchase and sale of securities and other assets held in the
investment portfolio of each Fund and (iii) oversee the administration of all
aspects of each Fund's business and affairs and provide, or arrange for others
whom it believes to be competent to provide, certain services as specified in
subparagraph (b) below. Nothing contained herein shall be construed to restrict
the Company's right to hire its own employees or to contract for administrative
services to be performed by third parties, including but not limited to, the
calculation of the net asset value of each Fund's shares.
<PAGE> 2
(b) The specific services to be provided or arranged for by
the Adviser for the Funds are (i) maintaining each Fund's books and records,
such as journals, ledger accounts and other records in accordance with
applicable laws and regulations to the extent not maintained by each Fund's
custodian, transfer agent and dividend disbursing agent; (ii) transmitting
purchase and redemption orders for each Fund's shares to the extent not
transmitted by each Fund's distributor or others who purchase and redeem shares;
(iii) initiating all money transfers to each Fund's custodian and from each
Fund's custodian for the payment of each Fund's expenses, investments, dividends
and share redemptions; (iv) reconciling account information and balances among
each Fund's custodian, transfer agent, distributor, dividend disbursing agent
and the Adviser; (v) providing the Funds, upon request, with such office space
and facilities, utilities and office equipment as are adequate for each Fund's
needs; (vi) preparing, but not paying for, all reports by the Company, on behalf
of each Fund, to their shareholders and all reports and filings required to
maintain the registration and qualification of each Fund's shares under federal
and state law including periodic updating of the Company's registration
statement and Prospectus (including its Statement of Additional Information);
(vii) supervising the calculation of the net asset value of each Fund's shares;
and (viii) preparing notices and agendas for meetings of each Fund's
shareholders and the Company's Board of Directors as well as minutes of such
meetings in all matters required by applicable law to be acted upon by the Board
of Directors.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940 (the "Act"), and of any rules or regulations in
force thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Articles of Incorporation and By-Laws of the Company, as such
documents are amended from time to time; (iv) the investment objectives,
policies and restrictions applicable to the Funds as set forth in the Company's
Registration Statement on Form N-lA and (v) any policies and determinations of
the Board of Directors of the Company with respect to the Funds.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses (including any
overhead
2
<PAGE> 3
and personnel costs) incurred in connection with its duties hereunder and shall
bear the costs of any salaries or directors fees of any officers or directors
of the Company who are affiliated persons (as defined in the Act) of the
Adviser. If in any fiscal year any Fund's aggregate expenses (excluding
interest, taxes, distribution expenses, brokerage commissions and extraordinary
expenses) exceed the most restrictive expense limitation imposed by the
securities law of any state in which the shares of that Fund are registered or
qualified for sale, the Adviser will reimburse the Company for the amount of
such excess up to the amount of fees accrued for such fiscal year hereunder. The
amount of such reimbursement shall be calculated monthly and an appropriate
amount shall be held back or released to the Adviser each month so that the
aggregate amount held back at any particular time shall equal the net amount of
the reimbursement on a cumulative year-to-date basis. As of the end of the year
the final amount of the total reimbursement shall be calculated and the
appropriate amount released to the Funds or the Adviser or paid to the Funds by
the Adviser. Subject to the foregoing, the Company shall be responsible for the
payment of all the Funds' other expenses, including (i) payment of the fees
payable to the Adviser under paragraph 4 hereof; (ii) organizational expenses;
(iii) brokerage fees and commissions; (iv) taxes; (v) interest charges on
borrowings; (vi) the cost of liability insurance or fidelity bond coverage for
the Company officers and employees, and directors' and officers' errors and
omissions insurance coverage; (vii) legal, auditing and accounting fees and
expenses; (viii) charges of the Funds' custodian, transfer agent and dividend
disbursing agent; (ix) the Funds' pro rata portion of dues, fees and charges of
any trade association of which the Company is a member; (x) the expenses of
printing, preparing and mailing proxies, stock certificates and reports,
including each Fund's prospectuses and statements of additional information, and
notices to shareholders; (xi) filing fees for the registration or qualification
of each Fund and its shares under federal or state securities laws; (xii) the
fees and expenses involved in registering and maintaining registration of each
Fund's shares with the Securities and Exchange Commission; (xiii) the expenses
of holding shareholder meetings; (xiv) the compensation, including fees, of any
of the Company's directors, officers or employees who are not affiliated persons
of the Adviser; (xv) all expenses of computing each Fund's net asset value per
share, including any equipment or services obtained solely for the purpose of
pricing shares or valuing each Fund's invest-
3
<PAGE> 4
ment portfolio; (xvi) expenses of personnel performing shareholder servicing
functions and all other distribution expenses payable by the Company; and (xvii)
litigation and other extraordinary or non-recurring expenses and other expenses
properly payable by the Funds.
(e) The Adviser shall give the Funds the benefit of its best
judgment and effort in rendering services hereunder, but neither the Adviser nor
any of its officers, directors, employees, agents or controlling persons shall
be liable for any act or omission or for any loss sustained by the Funds in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement; provided, however, that the
foregoing shall not constitute a waiver of any rights which the Company may have
which may not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Adviser or any
of its directors, officers, employees or agents from buying, selling or trading
any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting.
3. Portfolio Transactions
----------------------
In the course of the Adviser's execution of portfolio transactions for
the Funds, it is agreed that the Adviser shall employ securities brokers and
dealers which, in its judgment, will be able to satisfy the policy of the Funds
to seek the best execution of its portfolio transactions at reasonable expenses.
For purposes of this agreement, "best execution" shall mean prompt, efficient
and reliable execution at the most favorable price obtainable. Under such
conditions as may be specified by the Company's Board of Directors in the
interest of its shareholders and to ensure compliance with applicable law and
regulations, the Adviser may (a) place orders for the purchase or sale of each
Fund's portfolio securities with its affiliate, Gabelli & Company, Inc.; (b) pay
commissions to brokers other than its affiliate which are higher than might be
charged by another qualified broker to
4
<PAGE> 5
obtain brokerage and/or research services considered by the Adviser to be useful
or desirable in the performance of its duties hereunder and for the investment
management of other advisory accounts over which it or its affiliates exercise
investment discretion; and (c) consider sales by brokers (other than its
affiliate distributor) of shares of the Funds and any other mutual fund for
which it or its affiliates act as investment adviser, as a factor in its
selection of brokers and dealers for each Fund's portfolio transactions.
4. Compensation of the Adviser
---------------------------
(a) Subject to paragraph 2(b), the Company agrees to pay to
the Adviser out of each Fund's assets and the Adviser agrees to accept as full
compensation for all services rendered by or through the Adviser (other than any
amounts payable to the Adviser pursuant to paragraph 4(b)) a fee computed daily
and payable monthly in an amount equal on an annualized basis to 1.0% of each
Fund's daily average net asset value. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.
(b) The Company will pay the Adviser separately for any costs
and expenses incurred by the Adviser in connection with distribution of each
Fund's shares in accordance with the terms (including proration or nonpayment as
a result of allocations of payments) of a Plan of Distribution (the "Plan")
adopted for each Fund pursuant to Rule 12b-1 under the Act as such Plan may be
in effect from time to time; provided, however, that no payments shall be due or
paid to the Adviser hereunder unless and until this Agreement shall have been
approved by Director Approval and Disinterested Director Approval (as such terms
are defined in such Plan). The Company reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule 12b-1, and
this subparagraph shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of the funds pursuant to this Agreement and the Plan shall provide to
the Company's Board of Directors, and the Directors shall review, at least
quarterly a written report of the amount so paid and the purposes for which such
expenditures were made.
(c) For purposes of this Agreement, the
5
<PAGE> 6
net asset of the Fund shall be calculated pursuant to the procedures adopted by
resolutions of the Directors of the Company for calculating the net asset value
of each Fund's shares.
5. Indemnity.
----------
(a) The Company hereby agrees to indemnify the Adviser and
each of the Adviser's directors, officers, employees, and agents (including any
individual who serves at the Adviser's request as director, officer, partner,
trustee or the like of another corporation) and controlling persons (each such
person being an "indemnitee) against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable
corporate law) reasonably incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which he
may be or may have been involved as a party or otherwise or with which he may be
or may have been threatened, while acting in any capacity set forth above in
this paragraph or thereafter by reason of his having acted in any such capacity,
except with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Company and furthermore, in the case of any criminal
proceeding, so long as he had no reasonable cause to believe that the conduct
was unlawful, provided, however, that (1) no indemnitee shall be indemnified
hereunder against any liability to the Company or its shareholders or any
expense of such indemnitee arising by reason of (i) willful misfeasance, (ii)
bad faith, (iii) gross negligence (iv) reckless disregard of the duties involved
in the conduct of his position (the conduct referred to in such clauses (i)
through (v) being sometimes referred to herein as "disabling conduct"), (2) as
to any matter disposed of by settlement or a compromise payment by such
indemnitee, pursuant to a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be provided unless there has
been a determination that such settlement or compromise is in the best interests
of the Company and that such indemnitee appears to have acted in good faith in
the reasonable belief that his action was in the best interest of the Company
and did not involve disabling conduct by such indemnitee and (3) with respect to
any action, suit or other proceeding voluntarily prosecuted
6
<PAGE> 7
by any indemnitee as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such indemnitee was
authorized by a majority of the full Board of the Company. Notwithstanding the
foregoing the Company shall not be obligated to provide any such indemnification
to the extent such provision would waive any right which the Company cannot
lawfully waive.
(b) The Company shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by a court or
other body before whom the proceeding was brought that such indemnitee is not
liable by reason of disabling conduct or, (2) in the absence of such a decision,
by (i) a majority vote of a quorum of the Disinterested Non-party Directors of
the Company, or (ii) if such a quorum is not obtainable or even, if obtainable,
if a majority vote of such quorum so directs, independent legal counsel in a
written opinion.
The rights accruing to any indemnitee under these provisions
shall not exclude any other right to which he may be lawfully entitled.
7
<PAGE> 8
6. Duration and Termination
------------------------
This Agreement shall become effective upon on the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Company sixty days written notice (which notice may be
waived by the Company) and may be terminated by the Company at any time without
penalty upon giving the Adviser sixty days notice (which notice may be waived by
the Adviser), provided that such termination by the Company shall be directed or
approved by the vote of a majority of the Directors of the Company in office at
the time or by the vote of the holders of a "majority of the voting securities"
(as defined in the Act) of the Funds at the time outstanding and entitled to
vote or, with respect to paragraph 4(b), by a majority of the Directors of the
Company who are not "interested persons" of the Company and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to the Plan. This Agreement shall terminate automatically in the event
of its assignment (as assignment is defined in the Act and the rules
thereunder.)
It is understood and hereby agreed that the word "Gabelli" is the
property of the Adviser for copyright and other purposes. The Company further
agrees that the word "Gabelli" in its name is derived from the name of Mario J.
Gabelli and such name may freely be used by the Adviser for other investment
companies, entities or products. The Company further agrees that, in the event
that the Adviser shall cease to act as investment adviser to the Company with
respect to the investment of assets allocated to the Funds, both the Company and
the Fund shall promptly take all necessary and appropriate action to change
their names to names which do not include the word "Gabelli"; provided, however,
that the Company and the Funds may continue to use the word "Gabelli" if the
Adviser consents in writing to such use.
7. Notices
-------
Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the
receipt of
8
<PAGE> 9
such notice and shall be deemed to be received on the earlier of the date
actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. Governing Law
-------------
This Agreement shall be construed in accordance with the laws of the
State of New York for contracts to be performed entirely therein and in
accordance with the applicable provisions of the Act.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
GABELLI GLOBAL SERIES FUNDS, INC.
By /s/ Bruce N. Alpert
-------------------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI FUNDS, INC.
By /s/ J. Hamilton Crawford, Jr.
-------------------------------
Name: J. Hamilton Crawford, Jr.
Title: SVP and General Counsel
10
<PAGE> 1
Exhibit 5b
INVESTMENT ADVISORY AGREEMENT
-----------------------------
INVESTMENT ADVISORY AGREEMENT, dated January 18, 1994, between Gabelli
Global Series Funds, Inc. (the "Company"), a Maryland corporation, and Gabelli
Funds, Inc. (the "Adviser"), a Delaware Corporation.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. In General
----------
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Company with respect to the investment of the assets
of the Company allocated to The Gabelli Global Interactive Couch Potato Fund
Stock (the "Fund") and to supervise and arrange the purchase and sale of assets
held in the investment portfolios of the Fund.
2. Duties and obligations of the Adviser with
respect to investments of assets of the Fund
--------------------------------------------
(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and control of the Company's Board of Directors, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Fund and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Fund; (ii)
arrange for the purchase and sale of securities and other assets held in the
investment portfolio of the Fund and (iii) oversee the administration of all
aspects of the Fund's business and affairs and provide, or arrange for others
whom it believes to be competent to provide, certain services as specified in
subparagraph (b) below. Nothing contained herein shall be construed to restrict
the Company's right to hire its own employees or to contract for administrative
services to be performed by
123
<PAGE> 2
third parties, including but not limited to, the calculation of the net asset
value of the Fund's shares.
(b) The specific services to be provided or arranged for by
the Adviser for the Fund are (i) maintaining the Fund's books and records, such
as journals, ledger accounts and other records in accordance with applicable
laws and regulations to the extent not maintained by the Fund's custodian,
transfer agent and dividend disbursing agent; (ii) transmitting purchase and
redemption orders for the Fund's shares to the extent not transmitted by the
Fund's distributor or others who purchase and redeem shares; (iii) initiating
all money transfers to the Fund's custodian and from the Fund's custodian for
the payment of the Fund's expenses, investments, dividends and share
redemptions; (iv) reconciling account information and balances among the Fund's
custodian, transfer agent, distributor, dividend disbursing agent and the
Adviser; (v) providing the Fund, upon request, with such office space and
facilities, utilities and office equipment as are adequate for the Fund's needs;
(vi) preparing, but not paying for, all reports by the Company, on behalf of the
Fund, to their shareholders and all reports and filings required to maintain the
registration and qualification of the Fund's shares under federal and state law
including periodic updating of the Company's registration statement and
Prospectus (including its Statement of Additional Information); (vii)
supervising the calculation of the net asset value of the Fund's shares; and
(viii) preparing notices and agendas for meetings of the Fund's shareholders and
the Company's Board of Directors as well as minutes of such meetings in all
matters required by applicable law to be acted upon by the Board of Directors.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940 (the "Act"), and of any rules or regulations in
force thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Articles of Incorporation, as amended, and By-Laws of the
Company, as such documents are amended from time to time; (iv) the investment
objectives, policies and restrictions applicable to the Fund as set forth in the
Company's Registration Statement on Form N-1A and (v) any
124
<PAGE> 3
policies and determinations of the Board of Directors of the Company with
respect to the Fund.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses (including any
overhead and personnel costs) incurred in connection with its duties hereunder
and shall bear the cost of any salaries or directors fees of any officers or
directors of the Company who are affiliated persons (as defined in the Act) of
the Adviser. If in any fiscal year the Fund's aggregate expenses (excluding
interest, taxes, distribution expenses, brokerage commissions and extraordinary
expenses) exceed the most restrictive expense limitation imposed by the
securities law of any state in which the shares of the Fund are registered or
qualified for sale, the Adviser will reimburse the Company for the amount of
such excess up to the amount of fees accrued for such fiscal year hereunder. The
amount of such reimbursement shall be calculated monthly and an appropriate
amount shall be held back or released to the Adviser each month so that the
aggregate amount held back at any particular time shall equal the net amount of
the reimbursement on a cumulative year-to-date basis. As of the end of the year
the final amount of the total reimbursement shall be calculated and the
appropriate amount released to the Fund or the Adviser or paid to the Fund by
the Adviser. Subject to the foregoing, the Company shall be responsible for the
payment of all the Fund's other expenses, including (i) payment of the fees
payable to the Adviser under paragraph 4 hereof; (ii) organizational expenses;
(iii) brokerage fees and commissions; (iv) taxes; (v) interest charges on
borrowings; (vi) the costs of liability insurance or fidelity bond coverage for
the Company officers and employees, and directors' and officers' errors and
omissions insurance coverage; (vii) legal, auditing and accounting fees and
expenses; (viii) charges of the Fund's custodian, transfer agent and dividend
disbursing agent; (ix) the Fund's pro rata portion of dues, fees and charges of
any trade association of which the Company is a member; (x) the expenses of
printing, preparing and mailing proxies, stock certificates and reports,
including the Fund's prospectus and statement of additional information, and
notices to shareholders; (xi) filing fees for the registration or qualification
of the Fund and its shares under federal or state securities laws; (xii) the
fees and expenses involved in registering
125
<PAGE> 4
and maintaining registration of the Fund's shares with the Securities and
Exchange Commission; (xiii) the expenses of holding shareholder meetings; (xiv)
the compensation, including fees, of any of the Company's directors, officers or
employees who are not affiliated persons of the Adviser; (xv) all expenses of
computing the Fund's net asset value per share, including any equipment or
services obtained solely for the purpose of pricing shares or valuing the Fund's
investment portfolio; (xvi) expenses of personnel performing shareholder
servicing functions and all other distribution expenses payable by the Company;
and (xvii) litigation and other extraordinary or non-recurring expenses and
other expenses properly payable by the Fund.
(e) The Adviser shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but neither the Adviser nor
any of its officers, directors, employees, agents or controlling persons shall
be liable for any act or omission or for any loss sustained by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement; provided, however, that the
foregoing shall not constitute a waiver of any rights which the Company may have
which may not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Adviser or any
of its directors, officers, employees or agents from buying, selling or trading
any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting.
3. Portfolio Transactions
----------------------
In the course of the Adviser's execution of portfolio transactions for
the Fund, it is agreed that the Adviser shall employ securities brokers and
dealers which, in its judgment, will be able to satisfy the
126
<PAGE> 5
policy of the Fund to seek the best execution of its portfolio transactions at
reasonable expenses. For purposes of this agreement, "best execution" shall mean
prompt, efficient and reliable execution at the most favorable price obtainable.
Under such conditions as may be specified by the Company's Board of Directors in
the interest of its shareholders and to ensure compliance with applicable law
and regulations, the Adviser may (a) place orders for the purchase or sale of
the Fund's portfolio securities with its affiliate, Gabelli & Company, Inc.; (b)
pay commissions to brokers other than its affiliate which are higher than might
be charged by another qualified broker to obtain brokerage and/or research
services considered by the Adviser to be useful or desirable in the performance
of its duties hereunder and for the investment management of other advisory
accounts over which it or its affiliates exercise investment discretion; and (c)
consider sales by brokers (other than its affiliate distributor) of shares of
the Fund and any other mutual fund for which it or its affiliates act as
investment adviser, as a factor in its selection of brokers and dealers for the
Fund's portfolio transactions.
4. Compensation of the Adviser
---------------------------
(a) Subject to paragraph 2(b), the Company agrees to pay to
the Adviser out of the Fund's assets and the Adviser agrees to accept as full
compensation for all services rendered by or through the Adviser (other than any
amounts payable to the Adviser pursuant to paragraph 4(b)) a fee computed daily
and Payable monthly in an amount equal on an annualized basis to 1.0% of the
Fund's daily average net asset value. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.
(b) The Company will pay the Adviser separately for any costs
and expenses incurred by the Adviser in connection with distribution of the
Fund's shares in accordance with the terms (including proration or nonpayment as
a result of allocations of payments) of a Plan of Distribution (the "Plan")
adopted for the Fund pursuant to rule 12b-1 under the Act as such Plan may be in
effect from time to time; provided, however, that no
127
<PAGE> 6
payments shall be due or paid to the Adviser hereunder unless and until this
Agreement shall have been approved by Director Approval and Disinterested
Director Approval (as such terms are defined in such Plan). The Company reserves
the right to modify or terminate such Plan at any time as specified in the Plan
and Rule 12b-1, and this subparagraph shall thereupon be modified or terminated
to the same extent without further action of the parties. The persons authorized
to direct the payment of the funds pursuant to this Agreement and the Plan shall
provide to the Company's Board of Directors, and the Directors shall review, at
least quarterly a written report of the amount so paid and the purposes for
which such expenditures were made.
(c) For purposes of this Agreement, the net asset of the Fund
shall be calculated pursuant to the procedures adopted by resolutions of the
Directors of the Company for calculating the net asset value of the Fund's
shares.
5. Indemnity.
----------
(a) The Company hereby agrees to indemnify the Adviser and
each of the Adviser's directors, officers, employees, and agents (including any
individual who serves at the Adviser's request as director, officer, partner,
trustee or the like of another corporation) and controlling persons (each such
person being an "indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable
corporate law) reasonably incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which he
may be or may have been involved as a party or otherwise or with which he may be
or may have been threatened, while acting in any capacity set forth above in
this paragraph or thereafter by reason of his having acted in any such capacity,
except with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Company and furthermore, in the case of any criminal
proceeding, so long as he had no reasonable cause to believe that the conduct
was unlawful,
128
<PAGE> 7
provided, however, that (i) no indemnitee shall be indemnified hereunder against
any liability to the Company or its shareholders or any expense of such
indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith, (iii)
gross negligence (iv) reckless disregard of the duties involved in the conduct
of his position (the conduct referred to in such clauses (i) through (v) being
sometimes referred to herein as "disabling conduct"), (2) as to any matter
disposed of by settlement or a compromise payment by such indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a determination
that such settlement or compromise is in the best interests of the Company and
that such indemnitee appears to have acted in good faith in the reasonable
belief that his action was in the best interest of the Company and did not
involve disabling conduct by such indemnitee and (3) with respect to any action,
suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such indemnitee was authorized by a majority of the full
Board of the Company. Notwithstanding the foregoing the Company shall not be
obligated to provide any such indemnification to the extent such provision would
waive any right which the Company cannot lawfully waive.
(b) The Company shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an
129
<PAGE> 8
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by a court or
other body before whom the proceeding was brought that such indemnitee is not
liable by reason of disabling conduct or, (2) in the absence of such a decision,
by (i) a majority vote of a quorum of the Disinterested Non-party Directors of
the Company, or (ii) if such a quorum is not obtainable or even, if obtainable,
if a majority vote of such quorum so directs, independent legal counsel in a
written opinion.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
6. Duration and Termination
------------------------
This Agreement shall become effective upon on the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Company sixty days written notice (which notice may be
waived by the Company) and may be terminated by the Company at any time without
penalty upon giving the Adviser sixty days notice (which notice may be waived by
the Adviser), provided that such termination by the Company shall be directed or
approved by the vote of a majority of the Directors of the Company in office at
the time or by the vote of the holders of a "majority of the voting securities"
(as defined in the Act) of the Fund at the time outstanding and entitled to vote
or, with respect to paragraph 4(b), by a majority of the Directors of the
Company who are not "interested persons" of the Company and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to the Plan. This Agreement shall terminate automatically in the event
of
130
<PAGE> 9
its assignment (as "assignment" is defined in the Act and the rules thereunder.)
It is understood and hereby agreed that the word "Gabelli" is the
property of the Adviser for copyright and other purposes. The Company further
agrees that the word "Gabelli" in its name is derived from the name of Mario J.
Gabelli and such name may freely be used by the Adviser for other investment
companies, entities or products. The Company further agrees that, in the event
that the Adviser shall cease to act as investment adviser to the Company with
respect to the investment of assets allocated to the Fund, both the Company and
the Fund shall promptly take all necessary and appropriate action to change
their names to names which do not include the word "Gabelli"; provided, however,
that the Company and the Fund may continue to use the word "Gabelli" if the
Adviser consents in writing to such use.
7. Notices
-------
Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. Governing Law
-------------
This Agreement shall be construed in accordance with the laws of the
State of New York for contracts to be performed entirely therein and in
accordance with the applicable provisions of the Act.
131
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
GABELLI GLOBAL SERIES FUNDS, INC.
By /s/ Bruce N. Alpert
--------------------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI FUNDS, INC.
By /s/ J. Hamilton Crawford, Jr.
--------------------------------
Name: J. Hamilton Crawford, Jr.
Title: SVP and General Counsel
132
<PAGE> 1
Exhibit 5c
INVESTMENT ADVISORY AGREEMENT
-----------------------------
INVESTMENT ADVISORY AGREEMENT, dated January 18, 1994, between Gabelli
Global Series Funds, Inc. (the "Company"), a Maryland corporation, and Gabelli
Funds, Inc. (the "Adviser"), a Delaware Corporation.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. In General
----------
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Company with respect to the investment of the assets
of the Company allocated to The Gabelli Global Convertible Securities Fund Stock
(the "Fund") and to supervise and arrange the purchase and sale of assets held
in the investment port- folios of the Fund.
2. Duties and obligations of the Adviser with
respect to investments of assets of the Fund
--------------------------------------------
(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and control of the Company's Board of Directors, the
Adviser shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Fund and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Fund; (ii)
arrange for the purchase and sale of securities and other assets held in the
investment portfolio of the Fund and (iii) oversee the administration of all
aspects of the Fund's business and affairs and provide, or arrange for others
whom it believes to be competent to provide, certain services as specified in
subparagraph (b) below. Nothing contained herein shall be construed to restrict
the Company's right to hire its own employees or to contract for administrative
services to be performed by
<PAGE> 2
third parties, including but not limited to, the calculation of the net asset
value of the Fund's shares.
(b) The specific services to be provided or arranged for by
the Adviser for the Fund are (i) maintaining the Fund's books and records, such
as journals, ledger accounts and other records in accordance with applicable
laws and regulations to the extent not maintained by the Fund's custodian,
transfer agent and dividend disbursing agent; (ii) transmitting purchase and
redemption orders for the Fund's shares to the extent not transmitted by the
Fund's distributor or others who purchase and redeem shares; (iii) initiating
all money transfers to the Fund's custodian and from the Fund's custodian for
the payment of the Fund's expenses, investments, dividends and share
redemptions; (iv) reconciling account information and balances among the Fund's
custodian, transfer agent, distributor, dividend disbursing agent and the
Adviser; (v) providing the Fund, upon request, with such office space and
facilities, utilities and office equipment as are adequate for the Fund's needs;
(vi) preparing, but not paying for, all reports by the Company, on behalf of the
Fund, to their shareholders and all reports and filings required to maintain the
registration and qualification of the Fund's shares under federal and state law
including periodic updating of the Company's registration statement and
Prospectus (including its Statement of Additional Information); (vii)
supervising the calculation of the net asset value of the Fund's shares; and
(viii) preparing notices and agendas for meetings of the Fund's shareholders and
the Company's Board of Directors as well as minutes of such meetings in all
matters required by applicable law to be acted upon by the Board of Directors.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940 (the "Act"), and of any rules or regulations in
force thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Articles of Incorporation, as amended, and By-Laws of the
Company, as such documents are amended from time to time; (iv) the investment
objectives, policies and restrictions applicable to the Fund as set forth in the
Company's Registration Statement on Form N-lA and (v) any
2
<PAGE> 3
policies and determinations of the Board of Directors of the Company with
respect to the Fund.
(d) The Adviser will seek to provide qualified personnel to
fulfill its duties hereunder and will bear all costs and expenses (including any
overhead and personnel costs) incurred in connection with its duties hereunder
and shall bear the costs of any salaries or directors fees of any officers or
directors of the Company who are affiliated persons (as defined in the Act) of
the Adviser. If in any fiscal year the Fund's aggregate expenses (excluding
interest, taxes, distribution expenses, brokerage commissions and extraordinary
expenses) exceed the most restrictive expense limitation imposed by the
securities law of any state in which the shares of the Fund are registered or
qualified for sale, the Adviser will reimburse the Company for the amount of
such excess up to the amount of fees accrued for such fiscal year hereunder. The
amount of such reimbursement shall be calculated monthly and an appropriate
amount shall be held back or released to the Adviser each month so that the
aggregate amount held back at any particular time shall equal the net amount of
the reimbursement on a cumulative year-to-date basis. As of the end of the year
the final amount of the total reimbursement shall be calculated and the
appropriate amount released to the Fund or the Adviser or paid to the Fund by
the Adviser. Subject to the foregoing, the Company shall be responsible for the
payment of all the Fund's other expenses, including (i) payment of the fees
payable to the Adviser under paragraph 4 hereof; (ii) organizational expenses;
(iii) brokerage fees and commissions; (iv) taxes; (v) interest charges on
borrowings; (vi) the cost of liability insurance or fidelity bond coverage for
the Company officers and employees, and directors' and officers' errors and
omissions insurance coverage; (vii) legal, auditing and accounting fees and
expenses; (viii) charges of the Fund's custodian, transfer agent and dividend
disbursing agent; (ix) the Fund's pro rata portion of dues, fees and charges of
any trade association of which the Company is a member; (x) the expenses of
printing, preparing and mailing proxies, stock certificates and reports,
including the Fund's prospectus and statement of additional information, and
notices to shareholders; (xi) filing fees for the registration or qualification
of the Fund and its shares under federal or state securities laws; (xii) the
fees and expenses involved in registering
3
<PAGE> 4
and maintaining registration of the Fund's shares with the Securities and
Exchange Commission; (xiii) the expenses of holding shareholder meetings; (xiv)
the compensation, including fees, of any of the Company's directors, officers or
employees who are not affiliated persons of the Adviser; (xv) all expenses of
computing the Fund's net asset value per share, including any equipment or
services obtained solely for the purpose of pricing shares or valuing the Fund's
investment portfolio; (xvi) expenses of personnel performing shareholder
servicing functions and all other distribution expenses payable by the Company;
and (xvii) litigation and other extraordinary or non-recurring expenses and
other expenses properly payable by the Fund.
(e) The Adviser shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, but neither the Adviser nor
any of its officers, directors, employees, agents or controlling persons shall
be liable for any act or omission or for any loss sustained by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement; provided, however, that the
foregoing shall not constitute a waiver of any rights which the Company may have
which may not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Adviser or any
of its directors, officers, employees or agents from buying, selling or trading
any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting.
3. Portfolio Transactions
----------------------
In the course of the Adviser's execution of portfolio transactions for
the Fund, it is agreed that the Adviser shall employ securities brokers and
dealers which, in its judgment, will be able to satisfy the
4
<PAGE> 5
policy of the Fund to seek the best execution of its portfolio transactions at
reasonable expenses. For purposes of this agreement, "best execution" shall mean
prompt, efficient and reliable execution at the most favorable price obtainable.
Under such conditions as may be specified by the Company's Board of Directors in
the interest of its shareholders and to ensure compliance with applicable law
and regulations, the Adviser may (a) place orders for the purchase or sale of
the Fund's portfolio securities with its affiliate, Gabelli & Company, Inc.; (b)
pay commissions to brokers other than its affiliate which are higher than might
be charged by another qualified broker to obtain brokerage and/or research
services considered by the Adviser to be useful or desirable in the performance
of its duties hereunder and for the investment management of other advisory
accounts over which it or its affiliates exercise investment discretion; and (c)
consider sales by brokers (other than its affiliate distributor) of shares of
the Fund and any other mutual fund for which it or its affiliates act as
investment adviser, as a factor in its selection of brokers and dealers for the
Fund's portfolio transactions.
4. Compensation of the Adviser
---------------------------
(a) Subject to paragraph 2(b), the Company agrees to pay to
the Adviser out of the Fund's assets and the Adviser agrees to accept as full
compensation for all services rendered by or through the Adviser (other than any
amounts payable to the Adviser pursuant to paragraph 4(b)) a fee computed daily
and payable monthly in an amount equal on an annualized basis to 1.0% of the
Fund's daily average net asset value. For any period less than a month during
which this Agreement is in effect, the fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30 or 31 days, as
the case may be.
(b) The Company will pay the Adviser separately for any costs
and expenses incurred by the Adviser in connection with distribution of the
Fund's shares in accordance with the terms (including proration or nonpayment as
a result of allocations of payments) of a Plan of Distribution (the "Plan")
adopted for the Fund pursuant to Rule 12b-1 under the Act as such Plan may be in
effect from time to time; provided, however, that no
5
<PAGE> 6
payments shall be due or paid to the Adviser hereunder unless and until this
Agreement shall have been approved by Director Approval and Disinterested
Director Approval (as such terms are defined in such Plan). The Company reserves
the right to modify or terminate such Plan at any time as specified in the Plan
and Rule 12b-1, and this subparagraph shall thereupon be modified or terminated
to the same extent without further action of the parties. The persons authorized
to direct the payment of the funds pursuant to this Agreement and the Plan shall
provide to the Company's Board of Directors, and the Directors shall review, at
least quarterly a written report of the amount so paid and the purposes for
which such expenditures were made.
(c) For purposes of this Agreement, the net asset of the Fund
shall be calculated pursuant to the procedures adopted by resolutions of the
Directors of the Company for calculating the net asset value of the Fund's
shares.
5. Indemnity.
----------
(a) The Company hereby agrees to indemnify the Adviser and
each of the Adviser's directors, officers, employees, and agents (including any
individual who serves at the Adviser's request as director, officer, partner,
trustee or the like of another corporation) and controlling persons (each such
person being an "indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable
corporate law) reasonably incurred by such indemnitee in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body in which he
may be or may have been involved as a party or otherwise or with which he may be
or may have been threatened, while acting in any capacity set forth above in
this paragraph or thereafter by reason of his having acted in any such capacity,
except with respect to any matter as to which he shall have been adjudicated not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Company and furthermore, in the case of any criminal
proceeding, so long as he had no reasonable cause to believe that the conduct
was unlawful,
6
<PAGE> 7
provided, however, that (1) no indemnitee shall be indemnified hereunder against
any liability to the Company or its shareholders or any expense of such
indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith, (iii)
gross negligence (iv) reckless disregard of the duties involved in the conduct
of his position (the conduct referred to in such clauses (i) through (v) being
sometimes referred to herein as "disabling conduct"), (2) as to any matter
disposed of by settlement or a compromise payment by such indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a determination
that such settlement or compromise is in the best interests of the Company and
that such indemnitee appears to have acted in good faith in the reasonable
belief that his action was in the best interest of the Company and did not
involve disabling conduct by such indemnitee and (3) with respect to any action,
suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such indemnitee was authorized by a majority of the full
Board of the Company. Notwithstanding the foregoing the Company shall not be
obligated to provide any such indemnification to the extent such provision would
waive any right which the Company cannot lawfully waive.
(b) The Company shall make advance payments in connection with
the expenses of defending any action with respect to which indemnification might
be sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an
7
<PAGE> 8
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
(c) All determinations with respect to indemnification
hereunder shall be made (1) by a final decision on the merits by a court or
other body before whom the proceeding was brought that such indemnitee is not
liable by reason of disabling conduct or, (2) in the absence of such a decision,
by (i) a majority vote of a quorum of the Disinterested Non-party Directors of
the Company, or (ii) if such a quorum is not obtainable or even, if obtainable,
if a majority vote of such quorum so directs, independent legal counsel in a
written opinion.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
6. Duration and Termination
------------------------
This Agreement shall become effective upon on the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Company sixty days written notice (which notice may be
waived by the Company) and may be terminated by the Company at any time without
penalty upon giving the Adviser sixty days notice (which notice may be waived by
the Adviser), provided that such termination by the Company shall be directed or
approved by the vote of a majority of the Directors of the Company in office at
the time or by the vote of the holders of a "majority of the voting securities"
(as defined in the Act) of the Fund at the time outstanding and entitled to vote
or, with respect to paragraph 4(b), by a majority of the Directors of the
Company who are not "interested persons" of the Company and who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to the Plan. This Agreement shall terminate automatically in the event
of
8
<PAGE> 9
its assignment (as "assignment" is defined in the Act and the rules thereunder.)
It is understood and hereby agreed that the word "Gabelli" is the
property of the Adviser for copyright and other purposes. The Company further
agrees that the word "Gabelli" in its name is derived from the name of Mario J.
Gabelli and such name may freely be used by the Adviser for other investment
companies, entities or products. The Company further agrees that, in the event
that the Adviser shall cease to act as investment adviser to the Company with
respect to the investment of assets allocated to the Fund, both the Company and
the Fund shall promptly take all necessary and appropriate action to change
their names to names which do not include the word "Gabelli"; provided, however,
that the Company and the Fund may continue to use the word "Gabelli" if the
Adviser consents in writing to such use.
7. Notices
-------
Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. Governing Law
-------------
This Agreement shall be construed in accordance with the laws of the
State of New York for contracts to be performed entirely therein and in
accordance with the applicable provisions of the Act.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
GABELLI GLOBAL SERIES FUNDS, INC.
By /s/ Bruce N. Alpert
--------------------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI FUNDS, INC.
By /s/ J. Hamilton Crawford, Jr.
--------------------------------
Name: J. Hamilton Crawford, Jr.
Title: SVP and General Counsel
10
<PAGE> 1
Exhibit 6a
DISTRIBUTION AGREEMENT
FOR
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
DISTRIBUTION AGREEMENT, dated January 5, 1994, between Gabelli
Global Series Funds, Inc., a Maryland corporation (the "Company"), and Gabelli &
Company, Inc., a New York corporation (the "Distributor"). The Company is
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), and an indefinite number of shares (the "Shares") of The
Gabelli Global Telecommunications Fund, (the "Fund"), par value $.001 per share
(the "Shares"), have been registered under the Securities Act of 1933 (the "1933
Act") to be offered for sale to the public in a continuous public offering in
accordance with terms and conditions set forth in the Prospectus and Statement
of Additional Information (the "Prospectus") of the Fund included in the
Company's Registration Statement on Form N-1A as such documents may be amended
from time to time.
In this connection, the Company desires that the Distributor
act as its exclusive sales agent and distributor for the sale and distribution
of Shares. The Distributor has advised the Company that it is willing to act in
such capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive
sales agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Company further
agrees from and after the commencement of such continuous public offering that
it will not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such
<PAGE> 2
Shares, provided, however, that when requested by the Fund at any time for any
reason the Distributor will suspend such efforts. The Company may also withdraw
the offering of Shares at any time when required by the provisions of any
statute, order, rule or regulation of any governmental body having jurisdiction.
It is understood that the Distributor does not undertake to sell all or any
specific portion of the Shares.
3. The Distributor represents that it is a member in good
standing of the National Association of Dealers, Inc. and agrees that it will
use all reasonable efforts to maintain such status and to abide by the Rules of
Fair Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Company by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Company's agent and subject to its
approval. The Company reserves the right to reject any order in whole or in
part. The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Company, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares on
behalf of the Company or otherwise act as the Company's agent for any purpose.
The Distributor shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such other materials
as the Company shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and
terms described in the then current Prospectus relating to the Shares and may be
sold either through persons with whom it has selling agreements in a form
approved by the Company's Board of Directors or directly to prospective
purchasers. To facilitate sales, the Company will furnish the Distributor with
the net asset value of its Shares promptly after each calculation thereof.
2
<PAGE> 3
5. The Company has delivered to the Distributor a copy of the
current Prospectus for the Fund. It agrees that it will use its best efforts to
continue the effectiveness of its Registration Statement filed under the 1933
Act and the 1940 Act. The Company further agrees to prepare and file any
amendments to its Registration Statement as may be necessary and any
supplemental data in order to comply with such Acts. The Company will furnish
the Distributor at the Distributor's expense with a reasonable number of copies
of the Prospectus and any amended Prospectus for use in connection with the sale
of Shares.
6. At the Distributor's request, the Company will take such
steps at its own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of America and
in the District of Columbia in accordance with the laws thereof, and to renew or
extend any such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
a. It will furnish to the Company any pertinent
information required to be inserted with respect to the Distributor as
exclusive sales agent and distributor within the purview of Federal and
state securities laws in any reports or registrations required to be
filed with any government authority;
b. It will not make any representations inconsistent
with the information contained in the Registration Statement or
Prospectus filed under the Securities Act of 1933, as in effect from
time to time;
c. It will not use or distribute or authorize the use
or distribution of any statements other than those contained in the
Fund's then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Company; and
3
<PAGE> 4
d. Subject to paragraph 9 below, the Distributor will
bear the costs and expenses of printing and distributing any copies of
any prospectuses and annual and interim reports of the Fund (after such
items have been prepared and set in type) which are used in connection
with the offering of Shares, and the costs and expenses of preparing,
printing and distributing any other literature used by the Distributor
or furnished by the Distributor for use in connection with the offering
of the Shares and the costs and expenses incurred by the Distributor in
advertising, promoting and selling Shares of the Fund to the public.
8. The Company will pay its legal and auditing expenses and
the cost of composition of any prospectuses of annual or interim reports of the
Fund.
9. The Company will pay the Distributor for costs and expenses
incurred by the Distributor in connection with distribution of Shares by the
Distributor in accordance with the terms of a Plan of Distribution (the "Plan")
adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may
be in effect from time to time; provided, however, that no payments shall be due
or paid to the Distributor hereunder unless and until this Agreement shall have
been approved by Director Approval and Disinterested Director Approval (as such
terms are defined in such Plan). The Company reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule 12b-1, and
this Section 9 shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of funds pursuant to this Agreement and the Plan shall provide to the
Company's Board of Directors, and the Directors shall review, at least quarterly
a written report of the amounts so paid and the purposes for which such
expenditures were made.
10. The Company agrees to indemnify, defend and hold the
Distributor, its officers, directors, employees and agents and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act (each,
an "indemnitee"), free and harmless from any and all liabilities and expenses,
including costs of investigation or defense (including reasonable counsel fees)
incurred by such indemnitee in connection with the de-
4
<PAGE> 5
fense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Company expressly for
use in any such Prospectus; provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Company or the shareholders
of the Fund or any expense of such indemnitee with respect to any matter as to
which such indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Company and that such indemnitee appears to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the
Company, its Directors, officers, employees and agents and any person who
controls the Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investiga-
5
<PAGE> 6
tion or defense (including reasonable counsel fees) incurred by such indemnitee,
but only to the extent that such liability or expense shall arise out of or be
based upon any untrue or alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor of the Company expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading or arising by reason of disabling conduct
by such indemnitee or any person selling Shares pursuant to an agreement with
the Distributor.
The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-party Directors of the
Company, or (ii) if such a quorum is not obtainable or even, if
6
<PAGE> 7
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective on the date first
set forth above and shall remain in effect for up to two years from such date
(one year in the case of Section 9) and thereafter from year to year provided
such continuance is specifically approved at least annually prior to each
anniversary of such date by (a) Director Approval or by vote at a meeting of
shareholders of the Fund of the lesser of (i) 67 per cent of the Shares present
or represented by proxy and (ii) 50 per cent of the outstanding Shares and (b)
by Disinterested Director Approval.
12. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty (60) days' written notice to the
Company which notice may be waived by the Company; or (b) by the Company at any
time without penalty upon sixty (60) days' written notice to the Distributor
(which notice may be waived by the Distributor); provided, however, that any
such termination by the Company shall be directed or approved in the same manner
as required for continuance of this Agreement by Section 11(a) (or, in the case
of termination of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in
writing signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the case of
amendment of Section 9, by Section 11(b)). Any such amendment or change shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, but this Agreement shall not be assigned by either party
and shall automatically terminate upon assignment (as such term is defined in
the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made
invalid or unenforceable by a court deci-
7
<PAGE> 8
sion, statute, rule or otherwise, the remainder of this Agreement shall not be
affected or impaired thereby.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
GABELLI GLOBAL SERIES FUNDS, INC.
By: /s/ Bruce N. Alpert
----------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI & COMPANY, INC.
By: /s/ Bruce N. Alpert
----------------------
Name: Bruce N. Alpert
Title:
9
<PAGE> 1
Exhibit 6b
DISTRIBUTION AGREEMENT
FOR
THE GABELLI GLOBAL GROWTH FUND
DISTRIBUTION AGREEMENT, dated January 5, 1994, between Gabelli
Global Series Funds, Inc., a Maryland corporation (the "Company"), and Gabelli &
Company, Inc., a New York corporation (the "Distributor"). The Company is
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), and an indefinite number of shares (the "Shares") of The
Gabelli Global Growth Fund, (the "Fund"), par value $.001 per share (the
"Shares"), have been registered under the Securities Act of 1933 (the "1933
Act") to be offered for sale to the public in a continuous public offering in
accordance with terms and conditions set forth in the Prospectus and Statement
of Additional Information (the "Prospectus") of the Fund included in the
Company's Registration Statement on Form N-1A as such documents may be amended
from time to time.
In this connection, the Company desires that the Distributor
act as its exclusive sales agent and distributor for the sale and distribution
of Shares. The Distributor has advised the Company that it is willing to act in
such capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive
sales agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Company further
agrees from and after the commencement of such continuous public offering that
it will not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such
<PAGE> 2
Shares, provided, however, that when requested by the Fund at any time for any
reason the Distributor will suspend such efforts. The Company may also withdraw
the offering of Shares at any time when required by the provisions of any
statute, order, rule or regulation of any governmental body having jurisdiction.
It is understood that the Distributor does not undertake to sell all or any
specific portion of the Shares.
3. The Distributor represents that it is a member in good
standing of the National Association of Dealers, Inc. and agrees that it will
use all reasonable efforts to maintain such status and to abide by the Rules of
Fair Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Company by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Company's agent and subject to its
approval. The Company reserves the right to reject any order in whole or in
part. The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Company, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares on
behalf of the Company or otherwise act as the Company's agent for any purpose.
The Distributor shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such other materials
as the Company shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and
terms described in the then current Prospectus relating to the Shares and may
be sold either through persons with whom it has selling agreements in a form
approved by the Company's Board of Directors or directly to prospective
purchasers. To facilitate sales, the Company will furnish the Distributor with
the net asset value of its Shares promptly after each calculation thereof.
2
<PAGE> 3
5. The Company has delivered to the Distributor a copy of the
current Prospectus for the Fund. It agrees that it will use its best efforts to
continue the effectiveness of its Registration Statement filed under the 1933
Act and the 1940 Act. The Company further agrees to prepare and file any
amendments to its Registration Statement as may be necessary and any
supplemental data in order to comply with such Acts. The Company will furnish
the Distributor at the Distributor's expense with a reasonable number of copies
of the Prospectus and any amended Prospectus for use in connection with the sale
of Shares.
6. At the Distributor's request, the Company will take such
steps at its own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of America and
in the District of Columbia in accordance with the laws thereof, and to renew or
extend any such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
a. It will furnish to the Company any pertinent
information required to be inserted with respect to the Distributor as
exclusive sales agent and distributor within the purview of Federal and
state securities laws in any reports or registrations required to be
filed with any government authority;
b. It will not make any representations inconsistent
with the information contained in the Registration Statement or
Prospectus filed under the Securities Act of 1933, as in effect from
time to time;
c. It will not use or distribute or authorize the use
or distribution of any statements other than those contained in the
Fund's then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Company; and
3
<PAGE> 4
d. Subject to paragraph 9 below, the Distributor will
bear the costs and expenses of printing and distributing any copies of
any prospectuses and annual and interim reports of the Fund (after
such items have been prepared and set in type) which are used in
connection with the offering of Shares, and the costs and expenses of
preparing, printing and distributing any other literature used by the
Distributor or furnished by the Distributor for use in connection with
the offering of the Shares and the costs and expenses incurred by the
Distributor in advertising, promoting and selling Shares of the Fund to
the public.
8. The Company will pay its legal and auditing expenses and
the cost of composition of any prospectuses of annual or interim reports of the
Fund.
9. The Company will pay the Distributor for costs and expenses
incurred by the Distributor in connection with distribution of Shares by the
Distributor in accordance with the terms of a Plan of Distribution (the "Plan")
adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may
be in effect from time to time; provided, however, that no payments shall be due
or paid to the Distributor hereunder unless and until this Agreement shall have
been approved by Director Approval and Disinterested Director Approval (as such
terms are defined in such Plan). The Company reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule 12b-1, and
this Section 9 shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of funds pursuant to this Agreement and the Plan shall provide to the
Company's Board of Directors, and the Directors shall review, at least quarterly
a written report of the amounts so paid and the purposes for which such
expenditures were made.
10. The Company agrees to indemnify, defend and hold the
Distributor, its officers, directors, employees and agents and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act
(each, an "indemnitee"), free and harmless from any and all liabilities and
expenses, including costs of investigation or defense (including reasonable
counsel fees) incurred by such indemnitee in connection with the de-
4
<PAGE> 5
fense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Company expressly for
use in any such Prospectus; provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Company or the shareholders
of the Fund or any expense of such indemnitee with respect to any matter as to
which such indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Company and that such indemnitee appears to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the
Company, its Directors, officers, employees and agents and any person who
controls the Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investiga-
5
<PAGE> 6
tion or defense (including reasonable counsel fees) incurred by such indemnitee,
but only to the extent that such liability or expense shall arise out of or be
based upon any untrue or alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor of the Company expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading or arising by reason of disabling conduct
by such indemnitee or any person selling Shares pursuant to an agreement with
the Distributor.
The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-party Directors of the
Company, or (ii) if such a quorum is not obtainable or even, if
6
<PAGE> 7
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective on the date first
set forth above and shall remain in effect for up to two years from such date
(one year in the case of Section 9) and thereafter from year to year provided
such continuance is specifically approved at least annually prior to each
anniversary of such date by (a) Director Approval or by vote at a meeting of
shareholders of the Fund of the lesser of (i) 67 per cent of the Shares present
or represented by proxy and (ii) 50 per cent of the outstanding Shares and (b)
by Disinterested Director Approval.
12. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty (60) days' written notice to the
Company which notice may be waived by the Company; or (b) by the Company at any
time without penalty upon sixty (60) days' written notice to the Distributor
(which notice may be waived by the Distributor); provided, however, that any
such termination by the Company shall be directed or approved in the same manner
as required for continuance of this Agreement by Section 11(a) (or, in the case
of termination of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in
writing signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the case of
amendment of Section 9, by Section 11(b)). Any such amendment or change shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, but this Agreement shall not be assigned by either party
and shall automatically terminate upon assignment (as such term is defined in
the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made
invalid or unenforceable by a court deci-
7
<PAGE> 8
sion, statute, rule or otherwise, the remainder of this Agreement shall not be
affected or impaired thereby.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
GABELLI GLOBAL SERIES FUNDS, INC.
By: /s/ Bruce N. Alpert
--------------------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI & COMPANY, INC.
By: /s/ Bruce N. Alpert
--------------------------------
Name: Bruce N. Alpert
Title:
9
<PAGE> 1
Exhibit 6c
DISTRIBUTION AGREEMENT
FOR
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO FUND
DISTRIBUTION AGREEMENT, dated January 5, 1994, between Gabelli
Global Series Funds, Inc., a Maryland corporation (the "Company"), and Gabelli &
Company, Inc., a New York corporation (the "Distributor"). The Company is
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), and an indefinite number of shares (the "Shares") of The
Gabelli Global Interactive Couch Potato Fund, (the "Fund"), par value $.001 per
share (the "Shares"), have been registered under the Securities Act of 1933
(the "1933 Act") to be offered for sale to the public in a continuous public
offering in accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Fund included in
the Company's Registration Statement on Form N-1A as such documents may be
amended from time to time.
In this connection, the Company desires that the Distributor
act as its exclusive sales agent and distributor for the sale and distribution
of Shares. The Distributor has advised the Company that it is willing to act in
such capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive
sales agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Company further
agrees from and after the commencement of such continuous public offering that
it will not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such
<PAGE> 2
Shares, provided, however, that when requested by the Fund at any time for any
reason the Distributor will suspend such efforts. The Company may also withdraw
the offering of Shares at any time when required by the provisions of any
statute, order, rule or regulation of any governmental body having jurisdiction.
It is understood that the Distributor does not undertake to sell all or any
specific portion of the Shares.
3. The Distributor represents that it is a member in good
standing of the National Association of Dealers, Inc. and agrees that it will
use all reasonable efforts to maintain such status and to abide by the Rules of
Fair Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Company by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Company's agent and subject to its
approval. The Company reserves the right to reject any order in whole or in
part. The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Company, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares on
behalf of the Company or otherwise act as the Company's agent for any purpose.
The Distributor shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such other materials
as the Company shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and
terms described in the then current Prospectus relating to the Shares and may
be sold either through persons with whom it has selling agreements in a form
approved by the Company's Board of Directors or directly to prospective
purchasers. To facilitate sales, the Company will furnish the Distributor with
the net asset value of its Shares promptly after each calculation thereof.
2
<PAGE> 3
5. The Company has delivered to the Distributor a copy of the
current Prospectus for the Fund. It agrees that it will use its best efforts to
continue the effectiveness of its Registration Statement filed under the 1933
Act and the 1940 Act. The Company further agrees to prepare and file any
amendments to its Registration Statement as may be necessary and any
supplemental data in order to comply with such Acts. The Company will furnish
the Distributor at the Distributor's expense with a reasonable number of copies
of the Prospectus and any amended Prospectus for use in connection with the sale
of Shares.
6. At the Distributor's request, the Company will take such
steps at its own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of America and
in the District of Columbia in accordance with the laws thereof, and to renew or
extend any such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
a. It will furnish to the Company any pertinent
information required to be inserted with respect to the Distributor as
exclusive sales agent and distributor within the purview of Federal and
state securities laws in any reports or registrations required to be
filed with any government authority;
b. It will not make any representations inconsistent
with the information contained in the Registration Statement or
Prospectus filed under the Securities Act of 1933, as in effect from
time to time;
c. It will not use or distribute or authorize the use
or distribution of any statements other than those contained in the
Fund's then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Company; and
3
<PAGE> 4
d. Subject to paragraph 9 below, the Distributor will
bear the costs and expenses of printing and distributing any copies of
any prospectuses and annual and interim reports of the Fund (after
such items have been prepared and set in type) which are used in
connection with the offering of Shares, and the costs and expenses of
preparing, printing and distributing any other literature used by the
Distributor or furnished by the Distributor for use in connection with
the offering of the Shares and the costs and expenses incurred by the
Distributor in advertising, promoting and selling Shares of the Fund to
the public.
8. The Company will pay its legal and auditing expenses and
the cost of composition of any prospectuses of annual or interim reports of the
Fund.
9. The Company will pay the Distributor for costs and expenses
incurred by the Distributor in connection with distribution of Shares by the
Distributor in accordance with the terms of a Plan of Distribution (the "Plan")
adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may
be in effect from time to time; provided, however, that no payments shall be due
or paid to the Distributor hereunder unless and until this Agreement shall have
been approved by Director Approval and Disinterested Director Approval (as such
terms are defined in such Plan). The Company reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule 12b-1, and
this Section 9 shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of funds pursuant to this Agreement and the Plan shall provide to the
Company's Board of Directors, and the Directors shall review, at least quarterly
a written report of the amounts so paid and the purposes for which such
expenditures were made.
10. The Company agrees to indemnify, defend and hold the
Distributor, its officers, directors, employees and agents and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act
(each, an "indemnitee"), free and harmless from any and all liabilities and
expenses, including costs of investigation or defense (including reasonable
counsel fees) incurred by such indemnitee in connection with the de-
4
<PAGE> 5
fense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Company expressly for
use in any such Prospectus; provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Company or the shareholders
of the Fund or any expense of such indemnitee with respect to any matter as to
which such indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Company and that such indemnitee appears to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the
Company, its Directors, officers, employees and agents and any person who
controls the Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investiga-
5
<PAGE> 6
tion or defense (including reasonable counsel fees) incurred by such indemnitee,
but only to the extent that such liability or expense shall arise out of or be
based upon any untrue or alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor of the Company expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading or arising by reason of disabling conduct
by such indemnitee or any person selling Shares pursuant to an agreement with
the Distributor.
The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-party Directors of the
Company, or (ii) if such a quorum is not obtainable or even, if
6
<PAGE> 7
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective on the date first
set forth above and shall remain in effect for up to two years from such date
(one year in the case of Section 9) and thereafter from year to year provided
such continuance is specifically approved at least annually prior to each
anniversary of such date by (a) Director Approval or by vote at a meeting of
shareholders of the Fund of the lesser of (i) 67 per cent of the Shares present
or represented by proxy and (ii) 50 per cent of the outstanding Shares and (b)
by Disinterested Director Approval.
12. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty (60) days' written notice to the
Company which notice may be waived by the Company; or (b) by the Company at any
time without penalty upon sixty (60) days' written notice to the Distributor
(which notice may be waived by the Distributor); provided, however, that any
such termination by the Company shall be directed or approved in the same manner
as required for continuance of this Agreement by Section 11(a) (or, in the case
of termination of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in
writing signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the case of
amendment of Section 9, by Section 11(b)). Any such amendment or change shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, but this Agreement shall not be assigned by either party
and shall automatically terminate upon assignment (as such term is defined in
the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made
invalid or unenforceable by a court deci-
7
<PAGE> 8
sion, statute, rule or otherwise, the remainder of this Agreement shall not be
affected or impaired thereby.
9
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
GABELLI GLOBAL SERIES FUNDS, INC.
By: /s/ Bruce N. Alpert
-------------------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI & COMPANY, INC.
By: /s/ Bruce N. Alpert
-------------------------------
Name: Bruce N. Alpert
Title:
9
<PAGE> 1
Exhibit 6d
DISTRIBUTION AGREEMENT
FOR
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
DISTRIBUTION AGREEMENT, dated January 5, 1994, between Gabelli
Global Series Funds, Inc., a Maryland corporation (the "Company"), and Gabelli &
Company, Inc., a New York corporation (the "Distributor"). The Company is
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), and an indefinite number of shares (the "Shares") of The
Gabelli Global Convertible Securities Fund, (the "Fund"), par value $.001 per
share (the "Shares"), have been registered under the Securities Act of 1933
(the "1933 Act") to be offered for sale to the public in a continuous public
offering in accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Fund included in
the Company's Registration Statement on Form N-1A as such documents may be
amended from time to time.
In this connection, the Company desires that the Distributor
act as its exclusive sales agent and distributor for the sale and distribution
of Shares. The Distributor has advised the Company that it is willing to act in
such capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive
sales agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Company further
agrees from and after the commencement of such continuous public offering that
it will not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 1940 Act.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such
<PAGE> 2
Shares, provided, however, that when requested by the Fund at any time for any
reason the Distributor will suspend such efforts. The Company may also withdraw
the offering of Shares at any time when required by the provisions of any
statute, order, rule or regulation of any governmental body having jurisdiction.
It is understood that the Distributor does not undertake to sell all or any
specific portion of the Shares.
3. The Distributor represents that it is a member in good
standing of the National Association of Dealers, Inc. and agrees that it will
use all reasonable efforts to maintain such status and to abide by the Rules of
Fair Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Company by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Company's agent and subject to its
approval. The Company reserves the right to reject any order in whole or in
part. The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Company, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares on
behalf of the Company or otherwise act as the Company's agent for any purpose.
The Distributor shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such other materials
as the Company shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and
terms described in the then current Prospectus relating to the Shares and may
be sold either through persons with whom it has selling agreements in a form
approved by the Company's Board of Directors or directly to prospective
purchasers. To facilitate sales, the Company will furnish the Distributor with
the net asset value of its Shares promptly after each calculation thereof.
2
<PAGE> 3
5. The Company has delivered to the Distributor a copy of the
current Prospectus for the Fund. It agrees that it will use its best efforts to
continue the effectiveness of its Registration Statement filed under the 1933
Act and the 1940 Act. The Company further agrees to prepare and file any
amendments to its Registration Statement as may be necessary and any
supplemental data in order to comply with such Acts. The Company will furnish
the Distributor at the Distributor's expense with a reasonable number of copies
of the Prospectus and any amended Prospectus for use in connection with the sale
of Shares.
6. At the Distributor's request, the Company will take such
steps at its own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of America and
in the District of Columbia in accordance with the laws thereof, and to renew or
extend any such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
a. It will furnish to the Company any pertinent
information required to be inserted with respect to the Distributor as
exclusive sales agent and distributor within the purview of Federal and
state securities laws in any reports or registrations required to be
filed with any government authority;
b. It will not make any representations inconsistent
with the information contained in the Registration Statement or
Prospectus filed under the Securities Act of 1933, as in effect from
time to time;
c. It will not use or distribute or authorize the use
or distribution of any statements other than those contained in the
Fund's then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Company; and
3
<PAGE> 4
d. Subject to paragraph 9 below, the Distributor will
bear the costs and expenses of printing and distributing any copies of
any prospectuses and annual and interim reports of the Fund (after
such items have been prepared and set in type) which are used in
connection with the offering of Shares, and the costs and expenses of
preparing, printing and distributing any other literature used by the
Distributor or furnished by the Distributor for use in connection with
the offering of the Shares and the costs and expenses incurred by the
Distributor in advertising, promoting and selling Shares of the Fund to
the public.
8. The Company will pay its legal and auditing expenses and
the cost of composition of any prospectuses of annual or interim reports of the
Fund.
9. The Company will pay the Distributor for costs and expenses
incurred by the Distributor in connection with distribution of Shares by the
Distributor in accordance with the terms of a Plan of Distribution (the "Plan")
adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may
be in effect from time to time; provided, however, that no payments shall be due
or paid to the Distributor hereunder unless and until this Agreement shall have
been approved by Director Approval and Disinterested Director Approval (as such
terms are defined in such Plan). The Company reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule 12b-1, and
this Section 9 shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of funds pursuant to this Agreement and the Plan shall provide to the
Company's Board of Directors, and the Directors shall review, at least quarterly
a written report of the amounts so paid and the purposes for which such
expenditures were made.
10. The Company agrees to indemnify, defend and hold the
Distributor, its officers, directors, employees and agents and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act
(each, an "indemnitee"), free and harmless from any and all liabilities and
expenses, including costs of investigation or defense (including reasonable
counsel fees) incurred by such indemnitee in connection with the de-
4
<PAGE> 5
fense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Company expressly for
use in any such Prospectus; provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Company or the shareholders
of the Fund or any expense of such indemnitee with respect to any matter as to
which such indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Company and that such indemnitee appears to have acted in good
faith in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the
Company, its Directors, officers, employees and agents and any person who
controls the Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investiga-
5
<PAGE> 6
tion or defense (including reasonable counsel fees) incurred by such indemnitee,
but only to the extent that such liability or expense shall arise out of or be
based upon any untrue or alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor of the Company expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading or arising by reason of disabling conduct
by such indemnitee or any person selling Shares pursuant to an agreement with
the Distributor.
The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Company receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Company
unless it is subsequently determined that he is entitled to such indemnification
and if the directors of the Company determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the indemnitee shall provide a security for his
undertaking, (B) the Company shall be insured against losses arising by reason
of any lawful advances, or (C) a majority of a quorum of directors of the
Company who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Act) nor parties to the proceeding ("Disinterested
Non-Party Directors") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the indemnitee
ultimately will be found entitled to indemnification.
All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-party Directors of the
Company, or (ii) if such a quorum is not obtainable or even, if
6
<PAGE> 7
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective on the date first
set forth above and shall remain in effect for up to two years from such date
(one year in the case of Section 9) and thereafter from year to year provided
such continuance is specifically approved at least annually prior to each
anniversary of such date by (a) Director Approval or by vote at a meeting of
shareholders of the Fund of the lesser of (i) 67 per cent of the Shares present
or represented by proxy and (ii) 50 per cent of the outstanding Shares and (b)
by Disinterested Director Approval.
12. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty (60) days' written notice to the
Company which notice may be waived by the Company; or (b) by the Company at any
time without penalty upon sixty (60) days' written notice to the Distributor
(which notice may be waived by the Distributor); provided, however, that any
such termination by the Company shall be directed or approved in the same manner
as required for continuance of this Agreement by Section 11(a) (or, in the case
of termination of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in
writing signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the case of
amendment of Section 9, by Section 11(b)). Any such amendment or change shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, but this Agreement shall not be assigned by either party
and shall automatically terminate upon assignment (as such term is defined in
the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made
invalid or unenforceable by a court deci-
7
<PAGE> 8
sion, statute, rule or otherwise, the remainder of this Agreement shall not be
affected or impaired thereby.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
GABELLI GLOBAL SERIES FUNDS, INC.
By: /s/ Bruce N. Alpert
-------------------------------
Name: Bruce N. Alpert
Title: Vice President
GABELLI & COMPANY, INC.
By: /s/ Bruce N. Alpert
------------------------------
Name: Bruce N. Alpert
Title:
9
<PAGE> 1
Exhibit 8
CUSTODIAN CONTRACT
Between
GABELLI GLOBAL SERIES FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
1. Employment of Custodian and Property to be Held By It ...................1
2. Duties of the Custodian with Respect to Property of the Fund Held by
the Custodian in the United States ......................................3
2.1 Holding Securities ............................................3
2.2 Delivery of Securities ........................................3
2.3 Registration of Securities ....................................8
2.4 Bank Accounts .................................................9
2.5 Availability of Federal Funds ................................10
2.6 Collection of Income .........................................10
2.7 Payment of Fund Monies .......................................11
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased ..............................14
2.9 Appointment of Agents ........................................15
2.10 Deposit of Fund Assets in Securities System ..................15
2.10A Fund Assets Held in the Custodian's Direct Paper System ......18
2.11 Segregated Account ...........................................20
2.12 Ownership Certificates for Tax Purposes ......................21
2.13 Proxies ......................................................22
2.14 Communications Relating to Portfolio Securities ..............22
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States .............................23
3.1 Appointment of Foreign Sub-Custodians ........................23
3.2 Assets to be Held ............................................23
3.3 Foreign Securities Depositories ..............................24
3.4 Agreements with Foreign Banking Institutions .................24
3.5 Access of Independent Accountants of the Fund ................25
3.6 Reports by Custodian .........................................25
3.7 Transactions in Foreign Custody Account ......................26
3.8 Liability of Foreign Sub-Custodians...........................27
3.9 Liability of Custodian .......................................27
3.10 Reimbursement for Advances ...................................28
3.11 Monitoring Responsibilities ..................................29
3.12 Branches of U.S. Banks .......................................29
3.13 Tax Law ......................................................30
4. Payments for Sales or Repurchase or Redemptions
of Shares of the Fund ..................................................31
5. Proper Instructions ....................................................32
6. Actions Permitted Without Express Authority ............................33
7. Evidence of Authority ..................................................33
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income ......................34
<PAGE> 3
9. Records ................................................................34
10. Opinion of Fund's Independent Accountants ..............................35
11. Reports to Fund by Independent Public Accountants ......................35
12. Compensation of Custodian ..............................................36
13. Responsibility of Custodian ............................................36
14. Effective Period, Termination and Amendment ............................38
15. Successor Custodian ....................................................40
16. Interpretive and Additional Provisions .................................41
17. Additional Funds .......................................................42
18. Massachusetts Law to Apply .............................................42
19. Prior Contracts ........................................................42
20. Shareholder Communications .............................................43
<PAGE> 4
CUSTODIAN CONTRACT
------------------
This Contract between Gabelli Global Series Funds, Inc., a corporation
organized and existing under the laws of Maryland, having its principal place of
business at One Corporate Center, Rye, New York, 10580-1434, hereinafter called
the "Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to initially offer shares in three series,
The Gabelli Global Telecommunications Fund, The Gabelli Global Entertainment and
Media Fund and The Gabelli Global Growth Fund, (such series together with all
other series subsequently established by the Fund and made subject to this
Contract in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic
<PAGE> 5
securities") and securities it desires to be held outside the United States
("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund representing interests in the Portfolios, ("Shares") as may be issued
or sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Directors of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
-2-
<PAGE> 6
2. Duties of the Custodian with Respect to Property of the Fund Held By
--------------------------------------------------------------------
the Custodian in the United States
- ----------------------------------
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System" and
(b) commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
pursuant to Section 2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
-3-
<PAGE> 7
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Portfolio;
3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section
2.10 hereof;
4) To the depository agent in connection with tender or
other similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise
become payable; provided that, in any such case, the
cash or other consideration is to be delivered to the
custodian;
6) To the issuer thereof, or its agent, for transfer
into the name of the Portfolio or into the name of
any nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed pursuant
to Section 2.9 or into the name or nominee name of
any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; provided
that, in any such case, the new securities are to be
delivered to the Custodian;
-4-
<PAGE> 8
7) Upon the sale of such securities for the account of
the Portfolio, to the broker or its clearing agent,
against a receipt, for examination in accordance with
"street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or
liability for any loss arising from the delivery of
such securities prior to receiving payment for such
securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities of
the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities
and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar
securities, the surrender thereof in the exercise of
such warrants, rights or similar securities or the
surrender of interim receipts or temporary securities
for
-5-
<PAGE> 9
definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of
securities made by the Portfolio, but only against
receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund on behalf
of the Portfolio, which may be in the form of cash or
obligations issued by the United States government,
its agencies or instrumentalities, except that in
connection with any loans for which collateral is to
be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department
of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities
owned by the Portfolio prior to the receipt of such
collateral;
11) For delivery as security in connection with any
borrowings by the Fund on behalf of the Portfolio
requiring a pledge of assets by the Fund on behalf of
the Portfolio, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio,
the Custodian and a
-6-
<PAGE> 10
broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of
any similar organization or organizations, regarding
escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio,
the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating
to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding
account deposits in connection with transactions by
the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be
described
-7-
<PAGE> 11
from time to time in the currently effective
prospectus and statement of additional information of
the Fund, related to the Portfolio ("Prospectus"), in
satisfaction of requests by holders of Shares for
repurchase or redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from
the Fund on behalf of the applicable Portfolio, a
certified copy of a resolution of the Board of
Directors or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or
an Assistant Secretary, specifying the securities of
the Portfolio to be delivered, setting forth the
purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized
in writing the appointment of a nominee to
-8-
<PAGE> 12
be used in common with other registered investment companies having the
same investment adviser as the Portfolio, or in the name or nominee
name of any agent appointed pursuant to Section 2.9 or in the name or
nominee name of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Portfolio under
the terms of this Contract shall be in "street name" or other good
delivery form. If, however, the Fund directs the Custodian to maintain
securities in "street name", the Custodian shall utilize its best
efforts only to timely collect income due the Fund on such securities
and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department
-9-
<PAGE> 13
of the custodian or in such other banks or trust companies as it may in
its discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each such
bank or trust company and the funds to be deposited with each such bank
or trust company shall on behalf of each applicable Portfolio be
approved by vote of a majority of the Board of Directors of the Fund.
Such funds shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the Custodian only in that
capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund
on behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio 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
such Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall
-10-
<PAGE> 14
collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer,
such securities are held by the Custodian or its agent thereof and
shall credit such income, as collected, to such Portfolio's custodian
account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other
income items requiring presentation as and when they become due and
shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Fund with such information or data as may be necessary
to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts for
the account of the Portfolio but only (a) against the
delivery
-11-
<PAGE> 15
of such securities or evidence of title to such
options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm
or trust company doing business in the United States
or abroad which is qualified under the Investment
Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as
its agent for this purpose) registered in the name of
the Portfolio or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in
accordance with the conditions set forth in Section
2.10 hereof; (c) in the case of a purchase involving
the Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; (d) in the
case of repurchase agreements entered into between
the Fund on behalf of the Portfolio and the
Custodian, or another bank, or a broker-dealer which
is a member of NASD, (i) against delivery of the
securities either in certificate form or through an
entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or
-12-
<PAGE> 16
(ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the
Custodian along with written evidence of the
agreement by the Custodian to repurchase such
securities from the Portfolio or (e) for transfer to
a time deposit account of the Fund in any bank,
whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a
broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender
of securities owned by the Portfolio as set forth in
Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by
the Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred
by the Portfolio, including but not limited to the
following payments for the account of the Portfolio:
interest, taxes, management, accounting, transfer
agent and legal fees, and operating expenses of the
Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
-13-
<PAGE> 17
5) For the payment of any dividends on Shares of the
Portfolio declared pursuant to the governing
documents of the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but only upon receipt
of, in addition to Proper Instructions from the Fund
on behalf of the Portfolio, a certified copy of a
resolution of the Board of Directors or of the
Executive Committee of the Fund signed by an officer
of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such
payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to
whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt
of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the
-14-
<PAGE> 18
same extent as if the securities had been received by the
Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in
a Securities System provided that such securities are
represented in an account ("Account") of the
Custodian in the
-15-
<PAGE> 19
Securities System which shall not include any assets
of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to
securities of the Portfolio which are maintained in a
Securities System shall identify by book-entry those
securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for
the account of the Portfolio upon (i) receipt of
advice from the Securities System that such
securities have been transferred to the Account, and
(ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for
the account of the Portfolio. The Custodian shall
transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the
Securities System that payment for such securities
has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of
the Portfolio. Copies of all advices from the
Securities System of transfers of securities for the
-16-
<PAGE> 20
account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request.
Upon request, the Custodian shall furnish the Fund on
behalf of the Portfolio confirmation of each transfer
to or from the account of the Portfolio in the form
of a written advice or notice and shall furnish to
the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions
in the Securities System for the account of the
Portfolio.
4) The Custodian shall provide the Fund for the
Portfolio with any report obtained by the Custodian
on the Securities System's accounting system,
internal accounting control and procedures for
safeguarding securities deposited in the Securities
System;
5) The Custodian shall have received from the Fund on
behalf of the Portfolio the initial or annual
certificate, as the case may be, required by Article
14 hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Fund for the benefit of the Portfolio for any loss or
damage to the
-17-
<PAGE> 21
Portfolio resulting from use of the Securities System
by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or
of any of its or their employees or from failure of
the Custodian or any such agent to enforce
effectively such rights as it may have against the
Securities System; at the election of the Fund, it
shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the
Securities System or any other person which the
Custodian may have as a consequence of any such loss
or damage if and to the extent that the Portfolio has
not been made whole for any such loss or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System
The Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper System of the Custodian subject to the
following provisions:
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of
Proper Instructions from the Fund on behalf of the
Portfolio;
2) The Custodian may keep securities of the Portfolio in
the Direct Paper System only if such securities are
represented in an account
-18-
<PAGE> 22
("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the
Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
3) The records of the Custodian with respect to
securities of the Portfolio which are maintained in
the Direct Paper System shall identify by book-entry
those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for
the account of the Portfolio upon the making of an
entry on the records of the Custodian to reflect such
payment and transfer of securities to the account of
the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon
the making of an entry on the records of the
Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from
the account of the Portfolio, in the form of a
written advice or notice, of Direct Paper on the next
business day following such transfer and shall
furnish
-19-
<PAGE> 23
to the Fund on behalf of the Portfolio copies of
daily transaction sheets reflecting each day's
transaction in the Securities System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal
accounting control as the Fund may reasonably request
from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund on
behalf of the Portfolio, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with
-20-
<PAGE> 24
transactions by the Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or options
thereon purchased or sold by the Portfolio, (iii) for the purposes of
compliance by the Portfolio with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, but only, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a resolution of
the Board of Directors or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held by
it and in connection with transfers of securities.
-21-
<PAGE> 25
2.13 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.14 Communications Relating to Portfolio Securities
Subject to the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund for each Portfolio all written information
(including, without limitation, pendency of calls and maturities of
domestic securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund on
behalf of the Portfolio and the maturity of futures contracts purchased
or sold by the Portfolio) received by the Custodian from issuers of the
securities being held for the Portfolio. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Portfolio
all written information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party (or
his agents) making the tender or exchange offer. If the Portfolio
desires to take action with respect to any tender offer, exchange offer
or any other similar transaction, the
-22-
<PAGE> 26
Portfolio shall notify the Custodian at least three business days prior
to the date on which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held
-----------------------------------------------------------------
Outside of the United States
- ----------------------------
3.1 Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Portfolio's securities and other assets
maintained outside the United States the foreign banking institutions
and foreign securities depositories designated on Schedule A hereto
("foreign sub-custodians"). Upon receipt of "Proper Instructions", as
defined in Section 5 of this Contract, together with a certified
resolution of the Fund's Board of Directors, the Custodian and the Fund
may agree to amend Schedule A hereto from time to time to designate
additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the
employment of any one or more such sub-custodians for maintaining
custody of the Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash
-23 -
<PAGE> 27
equivalents in such amounts as the Custodian or the Fund may determine
to be reasonably necessary to effect the Portfolio's foreign securities
transactions. The Custodian shall identify on its books as belonging to
the Fund, the foreign securities of the Fund held by each foreign
sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Portfolios
shall be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set
forth in Exhibit 1 hereto and shall provide that: (a) the assets of
each Portfolio will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking
institution or its creditors or agent, except a claim of payment for
their safe custody or administration; (b) beneficial ownership for the
assets of each Portfolio will be freely transferable without the
payment of money or value other than for custody or administration; (c)
adequate records will be maintained
-24-
<PAGE> 28
identifying the assets as belonging to each applicable Portfolio; (d)
officers of or auditors employed by, or other representatives of the
Custodian, including to the extent permitted under applicable law the
independent public accountants for the Fund, will be given access to
the books and records of the foreign banking institution relating to
its actions under its agreement with the Custodian; and (e) assets of
the Portfolios held by the foreign sub-custodian will be subject only
to the instructions of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement
with the Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities and other
assets and advices or notifications of any transfers of securities to
or from each custodial account maintained by a foreign banking
institution for the
-25-
<PAGE> 29
Custodian on behalf of each applicable Portfolio indicating, as to
securities acquired for a Portfolio, the identity of the entity having
physical possession of such securities.
3.7 Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section 3.7,
the provision of Sections 2.2 and 2.7 of this Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such
purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of this Contract, and the Fund agrees to
hold
-26-
<PAGE> 30
any such nominee harmless from any liability as a holder of record of
such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and each Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
3.9 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.12 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization,
-27-
<PAGE> 31
expropriation, currency restrictions, or acts of war or terrorism or
any loss where the sub-custodian has otherwise exercised reasonable
care. Notwithstanding the foregoing provisions of this paragraph 3.9,
in delegating custody duties to State Street London Ltd., the Custodian
shall not be relieved of any responsibility to the Fund for any loss
due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street London Ltd. not
caused by political risk) due to Acts of God, nuclear incident or other
losses under circumstances where the Custodian and State Street London
Ltd. have exercised reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's
own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the
-28-
<PAGE> 32
applicable Portfolio shall be security therefor and should the Fund
fail to repay the Custodian promptly, the Custodian shall be entitled
to utilize available cash and to dispose of such Portfolios assets to
the extent necessary to obtain reimbursement.
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that
its shareholders' equity will decline below $200 million (U.S. dollars
or the equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles).
3.12 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the provisions
hereof shall not apply where the custody of
-29-
<PAGE> 33
the Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom
shall be maintained in an interest bearing account established for the
Fund with the Custodian's London branch, which account shall be subject
to the direction of the Custodian, State Street London Ltd. or both.
3.13 Tax Law
The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the
tax law of jurisdictions other than those mentioned in the above
sentence, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with
regard to such tax law shall be to use reasonable efforts
-30-
<PAGE> 34
to assist the Fund with respect to any claim for exemption or refund
under the tax law of jurisdictions for which the Fund has provided such
information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
----------------------------------------------------------------------
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund
-31-
<PAGE> 35
to the holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Fund and the Custodian.
5. Proper Instructions
-------------------
Proper Instructions as used throughout this Contract means a writing
signed or initialled by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.11.
-32-
<PAGE> 36
6. Actions Permitted without Express Authority
-------------------------------------------
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolio except as otherwise directed
by the Board of Directors of the Fund.
7. Evidence of Authority
---------------------
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and
-33-
<PAGE> 37
such vote may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and
------------------------------------------------------------
Calculation of Net Asset Value and Net Income
- ---------------------------------------------
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such Portfolio
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the daily income of each Portfolio shall be made at the time or times
described from time to time in the Fund's currently effective prospectus related
to such Portfolio.
9. Records
-------
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940,
-34-
<PAGE> 38
with particular attention to Section 31 thereof and Rules 3la-1 and 3la-2
thereunder. All such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by the
Fund and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
----------------------------------------
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-lA, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
-------------------------------------------------
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a
-35-
<PAGE> 39
Securities System, relating to the services provided by the Custodian under this
Contract; such reports, shall be of sufficient scope and in sufficient detail,
as may reasonably be required by the Fund to provide reasonable assurance that
any material inadequacies would be disclosed by such examination, and, if there
are no such inadequacies, the reports shall so state.
12. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act
-36-
<PAGE> 40
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Article 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody of any
securities or cash of the Fund in a foreign country including, but not limited
to, losses resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
-37-
<PAGE> 41
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement)
for the benefit of a Portfolio including the purchase or sale of foreign
exchange or of contracts for foreign exchange or in the event that the Custodian
or its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Contract, except such as may arise from its or its nominee's own negligent
action, negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
14. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or
-38-
<PAGE> 42
an Assistant Secretary that the Board of Directors of the Fund has approved the
initial use of a particular Securities System by such Portfolio and the receipt
of an annual certificate of the Secretary or an Assistant Secretary that the
Board of Directors has reviewed the use by such Portfolio of such Securities
System, as required in each case by Rule 17f-4 under the Investment Company Act
of 1940, as amended and that the Custodian shall not with respect to a Portfolio
act under Section 2.10A hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Directors has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however, that the Fund
shall not amend or terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Articles of Incorporation,
and further provided, that the Fund on behalf of one or more of the Portfolios
may at any time by action of its Board of Directors (i) substitute another bank
or trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
-39-
<PAGE> 43
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
-------------------
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Directors of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided
-40-
<PAGE> 44
profits, as shown by its last published report, of not less than $25,000,000,
all securities, funds and other properties held by the Custodian on behalf of
each applicable Portfolio and all instruments held by the Custodian relative
thereto and all other property held by it under this Contract on behalf of each
applicable Portfolio and to transfer to an account of such successor custodian
all of the securities of each such Portfolio held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor of
this Contract. Any such interpretive or additional provisions shall be in a
-41-
<PAGE> 45
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Articles of Incorporation
of the Fund. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
17. Additional Funds
----------------
In the event that the Fund establishes one or more series of Shares in
addition to The Gabelli Global Telecommunications Fund, The Gabelli Global
Entertainment and Media Fund and The Gabelli Global Growth Fund, with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
18. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
-42-
<PAGE> 46
20. Shareholder Communications
--------------------------
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, we need you to indicate whether you authorize us to provide your name,
address, and share position to requesting companies whose stock you own. If you
tell us "no", we will not provide this information to requesting companies. If
you tell us "yes" or do not check either "yes" or "no" below, we are required by
the rule to treat you as consenting to disclosure of this information for all
securities owned by you or any funds or accounts established by you. For your
protection, the Rule prohibits the requesting company from using your name and
address for any purpose other than corporate communications. Please indicate
below whether you consent or object by checking one of the alternatives below.
YES [ ] You are authorized to release our name, address, and share
positions.
NO [X] You are not authorized to release our name, address, and share
positions.
-43-
<PAGE> 47
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 23rd day of September, 1993.
ATTEST GABELLI GLOBAL SERIES FUNDS, INC.
By /s/ BRUCE N. ALPERT
- ------------------------------ ------------------------------
Secretary Vice President
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ ED McKENZIE By /s/ THOMAS E. LOGUE
- ------------------------------ ------------------------------
Assistant Secretary Executive Vice President
-44-
<PAGE> 48
Schedule A
----------
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Gabelli Global
Series Funds, Inc. with respect to its portfolio, The Gabelli Global
Telecommunications Fund for use as sub-custodians for the Fund's securities and
other assets:
Country Subcustodian Central Depository
- ------- ------------ ------------------
Malaysia Standard Chartered Bank None
Hong Kong Standard Chartered Bank The Central Clearing
and Settlement System
Italy Morgan Guaranty Trust Co. Monte Titoli S.p.A.
Japan Sumitomo Trust & Banking Co. None
Singapore The Development Bank of The Central Depository
Singapore (pte) Limited (CDP)
Certified:
/s/ BRUCE ALPERT
- ---------------------------
Fund's Authorized Officer
Date: November 16, 1993
45
<PAGE> 49
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and Gabelli Global Series Funds, Inc. (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated September 23, 1993 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed as a sealed instrument in its name and behalf by its duly authorized
representative this ____ day of _____________, 1995.
GABELLI GLOBAL SERIES FUNDS, INC.
By: /s/ BRUCE N. ALPERT
-------------------------------
Title: Vice President and Treasurer
----------------------------
STATE STREET BANK AND TRUST COMPANY
By:
-------------------------------
Title: Executive Vice President
----------------------------
<PAGE> 1
Exhibit 9.1
SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of May, 1997, by and between
GABELLI FUNDS, INC. (the "Administrator"), and BISYS FUND SERVICES LIMITED
PARTNERSHIP, d/b/a BISYS FUND SERVICES ("BISYS").
WHEREAS, the Administrator is the investment adviser for the registered
investment companies (hereinafter referred to individually as a "Company" and
collectively as the "Companies") set forth in Schedule A attached hereto and is
responsible for the provision of administrative services to such Companies and
each of the Portfolios (hereinafter referred to individually as a "Portfolio"
and collectively as the "Portfolios") of such Companies;
WHEREAS, each Company is a management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator desires to retain BISYS to assist it in
performing administrative services with respect to each Portfolio and BISYS is
willing to perform such services on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Administrator and BISYS hereby agree as follows:
ARTICLE 1. Retention of BISYS. The Administrator hereby engages BISYS
to furnish each Portfolio with the administrative services as set forth in
Article 2 below (collectively, the "Services"). BISYS shall, for all purposes
herein, be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Administrator or the Companies in any way.
ARTICLE 2. Administrative Services. BISYS shall perform or supervise
the performance by others of administrative services in connection with the
operations of the Portfolios, and, on behalf of the Companies, will investigate,
assist in the selection of and conduct relations with custodians, depositories,
accountants, legal counsel, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and persons in any other capacity deemed to be
necessary or desirable for the Portfolios' operations. BISYS shall provide the
Directors/Trustees (hereafter, the "Directors") of the Companies with such
reports regarding investment performance as they may reasonably request but
shall have no responsibility for supervising the performance by any investment
adviser or sub-adviser of its responsibilities.
BISYS shall provide the Companies with regulatory reporting, all
necessary office space, equipment, personnel, compensation and facilities
(including facilities for meetings of shareholders ("Shareholders") and
Directors of the Companies) for handling the affairs of the Portfolios and such
other services as BISYS and the Administrator shall, from time to time,
determine to be necessary
<PAGE> 2
to perform BISYS' obligations under this Agreement. In addition, at the request
of the Boards of Directors, BISYS shall make reports to the Companies' Directors
concerning the performance of its obligations hereunder.
Without limiting the generality of the foregoing, BISYS shall:
(a) calculate contractual Company expenses and provide necessary
instructions for all disbursements for the Companies, and as
appropriate compute each Company's yields, total return,
expense ratios, portfolio turnover rate, average commission
rate and, if required, portfolio average dollar-weighted
maturity;
(b) assist Company counsel with the preparation of prospectuses,
statements of additional information, registration statements
and proxy materials;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register each
Company's Shares with state securities authorities, monitor
the sale of Company Shares for compliance with state
securities laws, and file with the appropriate state
securities authorities the registration statements and reports
for each Company and each Company's Shares and all amendments
thereto, as may be necessary or convenient to register and
keep effective each Company and its Shares with state
securities authorities to enable each Company to make a
continuous offering of its Shares;
(d) develop and prepare, with the assistance of the Administrator,
communications to Shareholders, including the annual report to
Shareholders, coordinate the mailing of prospectuses, notices,
proxy statements, proxies and other reports to Shareholders,
and supervise and facilitate the proxy solicitation process
for all shareholder meetings, including the tabulation of
shareholder votes;
(e) administer contracts on behalf of each Company with, among
others, each Company's investment adviser, distributor,
custodian, transfer agent and fund accountant;
(f) supervise the Companies' transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
(g) calculate performance data of the Portfolios for dissemination
to information services covering the investment company
industry;
(h) prepare or cause to be prepared at its expense the filing of
each Company's tax returns;
2
<PAGE> 3
(i) examine and review the operations and performance of the
various organizations providing services to the Companies or
any Portfolio, including, without limitation, the investment
adviser, distributor, custodian, fund accountant, transfer
agent, outside legal counsel and independent public
accountants, and, at the request of a Company's Board of
Directors, report to the Board on the performance of such
organizations;
(j) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and
printing of each Company's quarterly, semi-annual and annual
reports to Shareholders;
(k) assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives,
policies and structure;
(l) provide individuals reasonably acceptable to each Company's
Board of Directors to serve as officers of the Company, who
will be responsible for the management of certain of the
Company's affairs as determined by the Company's Board of
Directors;
(m) advise each Company and its Board of Directors on matters
concerning the Company and its affairs;
(n) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for each
Company in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act as such bonds and policies are
approved by the Company's Board of Directors;
(o) monitor and advise each Company and its Portfolios on their
regulated investment company status under the Internal Revenue
Code of 1986, as amended;
(p) perform all administrative services and functions of each
Company and each Portfolio to the extent administrative
services and functions are not provided to the Company or such
Portfolio pursuant to the Company's or such Portfolio's
administration agreement, investment advisory agreement,
distribution agreement, custodian agreement, transfer agent
agreement and fund accounting agreement;
(q) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Administrator and BISYS shall determine desirable;
(r) prepare and file with the SEC the semi-annual report for each
Company on Form N-SAR and all required notices pursuant to
Rule 24f-2;
3
<PAGE> 4
(s) assist each Company with respect to SEC examinations,
including the furnishing of documents and information, as
appropriate, and responding to SEC examination letters; and
(t) assist each Company in preparing for Board meetings by (i)
coordinating board book production and distribution, (ii)
preparing Board agendas, (iii) preparing the BISYS section of
Board materials, (iv) preparing special Board meeting
materials, including but not limited to, materials relating to
annual contract approvals and 12b-1 plan approvals, as agreed
upon by the parties, and (v) such other Board meeting
functions that are agreed upon by the parties.
BISYS shall perform in such other services for each Company that are
mutually agreed upon by the parties from time to time. Such services may include
performing internal audit examinations; mailing the annual reports of the
Portfolios; preparing an annual list of Shareholders; and mailing notices of
Shareholders' meetings, proxies and proxy statements, for all of which the
Administrator will pay or cause to be paid BISYS' reasonable out-of-pocket
expenses.
ARTICLE 3. Allocation of Charges and Expenses.
(A) BISYS. BISYS shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations under
this Agreement. BISYS shall also provide the items which it is obligated to
provide under this Agreement, and shall pay all compensation, if any, of
officers of each Company as well as all Directors of each Company who are
affiliated persons of BISYS or any affiliated company of BISYS; provided,
however, that unless otherwise specifically provided, BISYS shall not be
obligated to pay the compensation of any employee of a Company retained by the
Directors of such Company to perform services on behalf of the Company.
(B) The Administrator. The Administrator hereby represents that each
Company has undertaken to pay or cause to be paid all other expenses of the
Company not otherwise allocated herein, including, without limitation,
organization costs, taxes, expenses for legal and auditing services, the
expenses of preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, proxy solicitation material
and notices to existing Shareholders, all expenses incurred in connection with
issuing and redeeming Shares, the costs of custodial services, the cost of
initial and ongoing registration of the Shares under Federal and state
securities laws, fees and out-of-pocket expenses of Directors who are not
affiliated persons of the Administrator or the Investment Adviser to the Company
or any affiliated corporation of the Administrator or the Investment Adviser,
insurance, interest, brokerage costs, litigation and other extraordinary or
nonrecurring expenses, and all fees and charges of investment advisers to the
Company.
4
<PAGE> 5
ARTICLE 4. Compensation of BISYS.
(A) Sub-Administration Fee. For the services rendered, the facilities
furnished and the expenses assumed by BISYS pursuant to this Agreement, the
Administrator shall pay to BISYS compensation at an annual rate specified in
Schedule A attached hereto.
(B) Survival of Compensation Rights. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Limitation of liability of BISYS. The duties of BISYS shall
be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against BISYS hereunder. BISYS shall not be liable
for any error of judgment or mistake of law or for any loss arising out of any
act or omission in carrying out its duties hereunder, except a loss resulting
from willful misfeasance, bad faith or negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
law which cannot be waived or modified hereby. (As used in this Article 5, the
term "BISYS" shall include partners, officers, employees and other agents of
BISYS as well as BISYS itself.)
So long as BISYS acts in good faith and with due diligence and without
negligence, the Administrator assumes full responsibility and shall indemnify
BISYS and hold it harmless from and against any and all actions, suits and
claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of BISYS' actions taken or nonactions with
respect to the performance of services hereunder. The indemnity and defense
provisions set forth herein shall indefinitely survive the termination of this
Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Administrator may be asked to indemnify or
hold BISYS harmless, the Administrator shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it is further
understood that BISYS will use all reasonable care to identify and notify the
Administrator promptly concerning any situation which presents or appears likely
to present the probability of such a claim for indemnification against the
Administrator, but failure to do so in good faith shall not affect the rights
hereunder.
The Administrator shall be entitled to participate at its own expense
or, if it so elects, to assume the defense of any suit brought to enforce any
claims subject to this indemnity provision. If the Administrator elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Administrator and satisfactory to BISYS, whose approval shall not
be unreasonably withheld. In the event that the Administrator elects to assume
the defense of any suit
5
<PAGE> 6
and retain counsel, BISYS shall bear the fees and expenses of any additional
counsel retained by it. If the Administrator does not elect to assume the
defense of a suit, it will reimburse BISYS for the reasonable fees and expenses
of any counsel retained by BISYS.
BISYS may apply to the Administrator at any time for instructions and
may consult counsel for the Administrator or its own counsel and with
accountants and other experts with respect to any matter arising in connection
with BISYS' duties, and BISYS shall not be liable or accountable for any action
taken or omitted by it in good faith in accordance with such instruction or with
the opinion of such counsel, accountants or other experts.
Also, BISYS shall be protected in acting upon any document which it
reasonably believes to be genuine and to have been signed or presented by the
proper person or persons. BISYS will not be held to have notice of any change of
authority of any officers, employees or agents of the Administrator until
receipt of written notice thereof from the Administrator.
ARTICLE 6. Activities of BISYS. The services of BISYS rendered
hereunder are not to be deemed to be exclusive. BISYS is free to render such
services to others and to have other businesses and interests. It is understood
that directors, officers, employees and Shareholders are or may be or become
interested in BISYS, as officers, employees or otherwise and that partners,
officers and employees of BISYS and its counsel are or may be or become
similarly interested in the Companies, and that BISYS may be or become
interested in the Companies as a Shareholder or otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in Schedule A hereto.
ARTICLE 8. Assignment. This Agreement shall not be assignable by either
party without the written consent of the other party; provided, however, that
BISYS may, with the prior consent of the Administrator, at its expense,
subcontract with any entity or person concerning the provision of the services
contemplated hereunder. BISYS shall not, however, be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that BISYS shall be responsible, to the extent provided in
Article 5 hereof, for all acts of such subcontractor as if such acts were its
own. This Agreement shall be binding upon, and shall inure to the benefit of,
the parties hereto and their respective successors and permitted assigns.
ARTICLE 9. Amendments. This Agreement may be amended if such amendment
is specifically approved in writing by the parties hereto.
ARTICLE 10. Certain Records. BISYS shall maintain customary records in
connection with its duties as specified in this Agreement. Any records required
to be maintained and preserved pursuant to Rules 3la-1 and 3la-2 under the 1940
Act which are prepared or maintained by BISYS on behalf of each Company shall be
prepared and maintained at the expense of BISYS, but shall be
6
<PAGE> 7
the property of each Company and will be made available to or surrendered
promptly to each Company on request.
In case of any request or demand for the inspection of such records by
another party, BISYS shall notify the Administrator and follow the
Administrator's instructions as to permitting or refusing such inspection;
provided that BISYS may exhibit such records to any person in any case where it
is advised by its counsel that it may be held liable for failure to do so,
unless (in cases involving potential exposure only to civil liability) the
Administrator or the appropriate Company has agreed to indemnify BISYS against
such liability.
ARTICLE 11. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 12. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the following address: if to BISYS, to it at 3435 Stelzer Road,
Columbus, Ohio 43219, Attention: George O. Martinez, Esq.; if to the
Administrator, to it at One Corporate Center, Rye, New York 10580-1434,
Attention: Bruce N. Alpert, or at such other address as such party may from time
to time specify in writing to the other party pursuant to this Section.
ARTICLE 13. Confidential Information. Each party acknowledges that it
may acquire knowledge and information relating to the other party and its
affiliates or the Companies including, but not limited to, information
pertaining to business plans, employees, customers and/or suppliers, and that
all such knowledge and information acquired or developed is and shall be
confidential and proprietary information (all such confidential and proprietary
information is herein collectively referred to as the "Confidential
Information"). Each party agrees to hold the Confidential Information in strict
confidence, to refrain from directly or indirectly disclosing it to others or
using it in any way except for purposes of performing services hereunder, and to
prevent any unauthorized person access to it either before or after termination
of this Agreement, without the prior written consent of the other party. Both
parties further agree to take all action reasonable and necessary to protect the
confidentiality of the Confidential Information. The parties shall use their
best efforts to have their directors, officers, employees and agents agree to
the terms of this Section. The obligations of the parties contained in this
section shall survive termination of this Agreement. Neither party's
confidentiality obligations under this provision shall apply to such information
that (i) was in the public domain or available to a third party without
restrictions at or prior to the time such information was made known to such
party, (ii) had been independently known to such party at the time of disclosure
from persons who were not subject to similar confidentiality obligations, or
(iii) is required to be disclosed by law (except that each party will use best
efforts to give the other party written notice prior to any such disclosure).
7
<PAGE> 8
ARTICLE 14. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
ARTICLE 15. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
GABELLI FUNDS, INC.
By: /s/ Bruce N. Alpert
---------------------------
Title: Vice President and Chief
Operating Officer
------------------------
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS Fund Services, Inc.
General Partner
By: /s/ George O. Marting
---------------------------
Title: Senior Vice President
------------------------
8
<PAGE> 9
SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
DATED AS OF MAY 1, 1997
BETWEEN GABELLI FUNDS, INC.
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
Portfolios: This Agreement shall apply to all Portfolios, either now or
hereafter created of the Companies set forth below. The current
Portfolios of such Companies are also set forth below.
GABELLI CONVERTIBLE SECURITIES FUND, INC.
GABELLI EQUITY SERIES FUNDS, INC.
Gabelli Small Cap Fund
Gabelli Equity Income Fund
GABELLI GLOBAL SERIES FUNDS, INC.
Gabelli Global Telecommunications Fund
Gabelli Global Convertible Securities Fund
Gabelli Global Interactive Couch Potato Fund
Gabelli Global Entertainment & Media Fund
Gabelli Global Growth Fund
GABELLI GOLD FUND, INC.
Gabelli Gold Fund
GABELLI INTERNATIONAL GROWTH FUND, INC.
Gabelli International Growth Fund
GABELLI INVESTOR FUNDS, INC.
Gabelli ABC Fund
Fees: Pursuant to Article 4, in consideration of services rendered and
expenses assumed pursuant to this Agreement, the Administrator
will pay BISYS on the first business day of each month, or at
such time(s) as BISYS shall request and the parties hereto shall
agree, a fee based upon a prorated portion (as more particularly
described below) of the assets of all registered management
investment companies for which BISYS serves as Subadministrator
that are advised by Teton Advisers LLC, Gabelli Fixed Income
L.L.C., Gabelli Funds, Inc. or their affiliates
("BISYS-administered Investment Companies"). Such fee shall be
computed daily at the annual rate of:
A-1
<PAGE> 10
Six and one-quarter one-hundredths of one percent (.0625%)
of the BISYS-administered Investment Companies' average
daily net assets up to $350 million.
Four and one-quarter one-hundredths of one percent
(.0425%) of the BISYS-administered Investment Companies'
average daily net assets in excess of $350 million up to
$700 million.
Two and one-quarter one-hundredths of one percent (.0225%)
of the BISYS-administered Investment Companies' average
daily net assets in excess of $700 million.
The prorated portion of the fees that are payable to BISYS under
this Agreement shall be that portion of the fees described above
that is attributable to the average daily net assets of the
Portfolios. The fees set forth above shall be subject to a
minimum annual fee amount of $30,000 for each Portfolio. Such
fees shall be payable to BISYS on the first business day of each
month or at such other time(s) as the parties may agree upon.
The parties hereby acknowledge and agree that the compensation
under this Agreement due to BISYS shall be reduced in each month
(or other applicable payment period) by the amount of
compensation payable to BISYS Fund Services, Inc. under its Fund
Accounting Agreement with the Administrator with respect to the
Companies. The fee for the period from the day of the month this
Agreement is entered into until the end of that month shall be
prorated 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 prorated 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.
For purposes of determining the fees payable to BISYS, the value
of the net assets of a particular Portfolio shall be computed in
the manner described in each Company's Articles of Incorporation
or in the Prospectus or Statement of Additional Information
respecting that Portfolio as from time to time is in effect for
the computation of the value of such net assets in connection
with the determination of the liquidating value of the shares of
such Portfolio.
The parties hereby confirm that the fees payable hereunder shall
be applied to each Portfolio as a whole, and not to separate
classes of shares within the Portfolios.
A-2
<PAGE> 11
Term: The initial term of this Agreement (the "Initial Term") shall
commence on May 1, 1997 and shall remain in effect through
December 31, 1997. This Agreement shall be renewed automatically
for successive periods of one year after the Initial Term, unless
written notice of nonrenewal is provided by either party not less
than 90 days prior to the end of the Initial Term or 90 days
advance written notice of termination is provided by either party
at any time following the Initial Term. In the event of any
breach of this Agreement by either party, the non-breaching party
shall notify the breaching party in writing of such breach and
upon receipt of such notice, the breaching party shall have 45
days to remedy the breach. In the event any material breach is
not remedied within such time period, the nonbreaching party may
immediately terminate this Agreement.
Notwithstanding the foregoing, after such termination for so long
as BISYS, with the written consent of the Administrator, in fact
continues to perform any one or more of the services contemplated
by this Agreement or any schedule or exhibit hereto, the
provisions of this Agreement, including without limitation the
provisions dealing with indemnification, shall continue in full
force and effect. Compensation due BISYS and unpaid by the
Administrator upon such termination shall be immediately due and
payable upon and notwithstanding such termination. BISYS shall be
entitled to collect from the Administrator, in addition to the
compensation described in this Schedule A, all costs reasonably
incurred in connection with BISYS' activities in effecting such
termination, including without limitation, the delivery to each
Company and/or its designees of the Company's property, records,
instruments and documents, or any copies thereof. To the extent
that BISYS may retain in its possession copies of any Company
documents or records subsequent to such termination which copies
had not been requested by the Administrator on behalf of a
Company in connection with the termination process described
above, BISYS will provide such Company with reasonable access to
such copies; provided, however, that, in exchange therefor, the
Administrator shall reimburse BISYS for all costs reasonably
incurred in connection therewith.
A-3
<PAGE> 1
Exhibit 9.2
TRANSFER AGENCY AND SERVICE AGREEMENT
between
GABELLI GLOBAL SERIES FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
Article 1 Terms of Appointment; Duties of the Bank .......................2
Article 2 Fees and Expenses ..............................................6
Article 3 Representations and Warranties of the Bank .....................7
Article 4 Representations and Warranties of the Fund .....................7
Article 5 Data Access and Proprietary Information ........................8
Article 6 Indemnification ...............................................10
Article 7 Standard of Care ..............................................13
Article 8 Covenants of the Fund and the Bank ............................13
Article 9 Termination of Agreement ......................................14
Article 10 Additional Funds ..............................................15
Article 11 Assignment ....................................................15
Article 12 Amendment .....................................................16
Article 13 Massachusetts Law to Apply ....................................16
Article 14 Force Majeure .................................................16
Article 15 Consequential Damages .........................................16
Article 16 Merger of Agreement ...........................................17
Article 17 Counterparts ..................................................17
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made as of the 23rd day of September, 1993, by and between
GABELLI GLOBAL SERIES FUNDS, INC., a Maryland corporation, having its principal
office and place of business at one Corporate Center, Rye, New York, 10580-1434
(the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company having its principal office and place of business at 225 Franklin
Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to initially offer shares in three series,
The Gabelli Global Telecommunications Fund, The Gabelli Global Entertainment and
Media Fund and The Gabelli Global Growth Fund (each such series, together with
all other series subsequently established by the Fund and made subject to this
Agreement in accordance with Article 10, being herein referred to, as a
"Portfolio", and collectively as the "Portfolios");
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the
Bank as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities and the
Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
<PAGE> 4
Article 1 Terms of Appointment; Duties of the Bank
----------------------------------------
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund, on behalf of the Portfolios, hereby employs and appoints the Bank to
act as, and the Bank agrees to act as its transfer agent for the authorized and
issued shares of capital stock of the Fund representing interests in each of the
respective Portfolios ("Shares"), dividend disbursing agent, custodian of
certain retirement plans and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of each of the
respective Portfolios of the Fund ("Shareholders") and set out in the currently
effective prospectus and statement of additional information ("prospectus") of
the Fund on behalf of the applicable Portfolio, including without limitation any
periodic investment plan or periodic withdrawal program.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund on behalf of each of the Portfolios, as applicable
and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof
to the Custodian of the Fund authorized pursuant to the
Articles of Incorporation of the Fund (the "Custodian");
-2-
<PAGE> 5
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof
to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and (iii)
above, the Bank shall execute transactions directly with
broker-dealers authorized by the Fund who shall thereby be
deemed to be acting on behalf of the Fund;
(v) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over
or cause to be paid over in the appropriate manner such monies
as instructed by the redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and distributions
declared by the Fund on behalf of the applicable Portfolio;
(viii) Issue replacement certificates for those certificates alleged
to have been lost, stolen or destroyed upon receipt by the
Bank of indemnification satisfactory to the Bank and
protecting the Bank and the Fund, and the Bank at
-3-
<PAGE> 6
its option, may issue replacement certificates in place of
mutilated stock certificates upon presentation thereof and
without such indemnity;
(ix) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(x) Record the issuance of Shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total number
of Shares of the Fund which are authorized, based upon data
provided to it by the Fund, and issued and outstanding. The
Bank shall also provide the Fund on a regular basis with the
total number of Shares which are authorized and issued and
outstanding and shall have no obligation, when recording the
issuance of Shares, to monitor the issuance of such Shares or
to take cognizance of any laws relating to the issue or sale
of such Shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall: (i) perform the
customary services of a transfer agent, dividend disbursing agent, custodian of
certain retirement plans 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: maintaining all Shareholder accounts, preparing Shareholder meeting
lists,
-4-
<PAGE> 7
mailing proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident alien
accounts, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in Shareholder
accounts, preparing and mailing activity statements for Shareholders, and
providing Shareholder account information and (ii) provide a system which will
enable the Fund to monitor the total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to the Bank in writing
those transactions and assets to be treated as exempt from blue sky reporting
for each State and (ii) verify the establishment of transactions for each State
on the system prior to activation and thereafter monitor the daily activity for
each State. The responsibility of the Bank for the Fund's blue sky State
registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and the reporting of
such transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these services in
Article 1 may be established from time to time by agreement between the Fund on
behalf of each Portfolio and the Bank per the attached service responsibility
schedule. The Bank may at times perform only a portion of these services and the
Fund or its agent may perform these services on the Fund's behalf.
-5-
<PAGE> 8
(e) The Bank shall provide additional services on behalf of the Fund
(i.e., escheatment services) which may be agreed upon in writing between the
Fund and the Bank.
Article 2 Fees and Expenses
-----------------
2.01 For the performance by the Bank pursuant to this Agreement, the
Fund agrees on behalf of each of the Portfolios to pay the Bank an annual
maintenance fee for each Shareholder account as set out in the initial fee
schedule attached hereto. Such fees and out-of-pocket expenses and advances
identified under Section 2.02 below may be changed from time to time subject to
mutual written agreement between the Fund and the Bank.
2.02 in addition to the fee paid under Section 2.01 above, the Fund
agrees on behalf of each of the Portfolios to reimburse the Bank for
out-of-pocket expenses, including but not limited to confirmation production,
postage, forms, telephone, microfilm, microfiche, tabulating proxies, records
storage or advances incurred by the Bank for the items set out in the fee
schedule attached hereto. In addition, any other expenses incurred by the Bank
at the request or with the consent of the Fund, will be reimbursed by the Fund
on behalf of the applicable Portfolio.
2.03 The Fund agrees on behalf of each of the Portfolios to pay all
fees and reimbursable expenses within five days following the receipt of the
respective billing notice. Postage for mailing of dividends, proxies, Fund
reports and other mailings to all Shareholder accounts shall be advanced to the
Bank by the Fund at least seven (7) days prior to the mailing date of such
materials.
-6-
<PAGE> 9
Article 3 Representations and Warranties of the Bank
------------------------------------------
The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth
of Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to the Bank that:
4.01 It is a corporation duly organized and existing and in good
standing under the laws of Maryland.
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4.04 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
-7-
<PAGE> 10
4.05 A registration statement under the Securities Act of 1933, as
amended on behalf of each of the Portfolios 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.
Article 5 Data Access and Proprietary Information
---------------------------------------
5.01 The Fund acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Fund by the Bank as part of the Fund's ability to
access certain Fund-related data ("Customer Data") maintained by the Bank on
data bases under the control and ownership of the Bank or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to the Bank or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Fund agrees to treat all Proprietary
Information as proprietary to the Bank and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder. Without limiting the foregoing, the Fund agrees for
itself and its employees and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in accordance
with the Bank's applicable user documentation;
-8-
<PAGE> 11
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any portion
of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such
fact and dispose of such information in accordance with the
Bank's instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer
facility or other location, except with the prior written
consent of the Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
Proprietary Information at common law, under federal copyright
law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this Article 5. The obligations of this Article
shall survive any earlier termination of this Agreement.
5.02 If the Fund notifies the Bank that any of the Data Access Services
do not operate in material compliance with the most recently issued user
documentation for such services,
-9-
<PAGE> 12
the Bank shall endeavor in a timely manner to correct such failure.
organizations from which the Bank may obtain certain data included in the Data
Access Services are solely responsible for the contents of such data and the
Fund agrees to make no claim against the Bank arising out of the contents of
such third-party data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE BANK
EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
5.03 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information (such transactions constituting a "COEFI"), then in such
event the Bank shall be entitled to rely on the validity and authenticity of
such instruction without undertaking any further inquiry as long as such
instruction is undertaken in conformity with security procedures established by
the Bank from time to time.
Article 6 Indemnification
---------------
6.01 The Bank shall not be responsible for, and the Fund shall on
behalf of the applicable Portfolio indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to:
-10-
<PAGE> 13
(a) All actions of the Bank or its agent or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or willful misconduct
which arise out of the breach of any representation or warranty of the Fund
hereunder.
(c) The reliance on or use by the Bank or its agents or subcontractors
of information, records, documents or services which (i) are received by the
Bank or its agents or subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of the Fund
including but not limited to any previous transfer agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Fund on behalf of the
applicable Portfolio.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or regulations
of any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.
6.02 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and
-11-
<PAGE> 14
the Bank and its agents or subcontractors shall not be liable and shall be
indemnified by the Fund on behalf of the applicable Portfolio for any action
taken or omitted by it in reliance upon such instructions or upon the opinion of
such counsel. The Bank, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document furnished by or on behalf of
the Fund, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or
documents provided the Bank or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by the Fund, and
shall not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. The Bank, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar.
6.03 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments
concerning such claim. The Fund shall have the option to participate with the
Bank in the defense of such claim or to defend against said claim in its own
name or in the name of the
-12-
<PAGE> 15
Bank. The Bank shall in no case confess any claim or make any compromise in any
case in which the Fund may be required to indemnify the Bank except with the
Fund's prior written consent.
Article 7 Standard of Care
----------------
7.01 The Bank shall at all times act in good faith and agrees to use
its best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct of that of its employees.
Article 8 Covenants of the Fund and the Bank
----------------------------------
8.01 The Fund shall on behalf of each of the Portfolios promptly
furnish to the Bank the following:
(a) A certified copy of the resolution of the Directors of the Fund
authorizing the appointment of the Bank and the execution and delivery of this
Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund and
all amendments thereto.
8.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
8.03 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it
-13-
<PAGE> 16
may deem advisable. To the extent required by Section 31 of the Investment
Company Act of 1940, as amended, and the Rules thereunder, the Bank agrees that
all such records prepared or maintained by the Bank relating to the services to
be performed by the Bank 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 promptly to the Fund on and in accordance with
its request.
8.04 The Bank and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
Article 9 Termination of Agreement
------------------------
9.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
9.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of
-14-
<PAGE> 17
records and material will be borne by the Fund on behalf of the applicable
Portfolio(s). Additionally, the Bank reserves the right to charge for any other
reasonable expenses associated with such termination and/or a charge equivalent
to the average of three (3) months' fees.
Article 10 Additional Funds
----------------
10.01 In the event that the Fund establishes one or more series of
Shares in addition to The Gabelli Global Telecommunications Fund, The Gabelli
Global Entertainment and Media Fund and The Gabelli Global Growth Fund with
respect to which it desires to have the Bank render services as transfer agent
under the terms hereof, it shall so notify the Bank in writing, and if the Bank
agrees in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
Article 11 Assignment
----------
11.01 Except as provided in Section 11.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
11.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
11.03 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to
-15-
<PAGE> 18
Section 17A(c)(1) of the Securities Exchange Act of 1934, as amended ("Section
17A(c)(1)"), (ii) a BFDS subsidiary duly registered as a transfer agent pursuant
to Section 17A(c)(1) or (iii) a BFDS affiliate; provided, however, that the Bank
shall be as fully responsible to the Fund for the acts and omissions of any
subcontractor as it is for its own acts and omissions.
Article 12 Amendment
---------
12.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Directors of the Fund.
Article 13 Massachusetts Law to Apply
--------------------------
13.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 14 Force Majeure
-------------
14.01 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
Article 15 Consequential Damages
---------------------
15.01 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
-16-
<PAGE> 19
Article 16 Merger of Agreement
-------------------
16.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
Article 17 Counterparts
- -----------------------
17.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
GABELLI GLOBAL SERIES FUNDS, INC.
BY: /s/ Bruce N. Alpert
----------------------------
Vice President and Treasurer
ATTEST:
- ----------------------------------
Secretary
STATE STREET BANK AND TRUST COMPANY
BY:
----------------------------
Executive Vice President
ATTEST:
- ----------------------------------
Assistant Sectary
-17-
<PAGE> 20
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
1. Receives orders for the purchase of Shares. X
2. Issue Shares and hold Shares in Shareholders X
accounts.
3. Receive redemption requests. X
4. Effect transactions 1-3 above directly with X X
broker-dealers.
5. Pay over monies to redeeming Shareholders. X
6. Effect transfers of Shares. X
7. Prepare and transmit dividends and X
distributions.
8. Issue Replacement Certificates. X
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and accurate X
control book for each issue of securities.
12. Mail proxies. X X
13. Mail Shareholder reports. X
14. Mail prospectuses to current Shareholders. X X
15. Withhold taxes on U.S. resident and non-resident X
alien accounts.
16. Prepare and file U.S. Treasury Department forms. X
17. Prepare and mail account and confirmation X
statements for Shareholders.
<PAGE> 21
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
18. Provide Shareholder account information. X
19. Blue sky reporting. X X
* Such services are more fully described in Article 1.02 (a), (b) and (c) of
the Agreement.
GABELLI GLOBAL SERIES FUNDS, INC.
BY: /s/ Bruce N. Alpert
----------------------------
Vice President and Treasurer
ATTEST:
- ----------------------------------
Secretary
STATE STREET BANK AND TRUST COMPANY
BY:
----------------------------
Executive Vice President
ATTEST:
- ----------------------------------
Assistant Sectary
-19-
<PAGE> 1
Exhibit 11a
CONSENT OF INDEPENDENT AUDITORS
The Gabelli Global Telecommunications Fund,
The Gabelli Global Opportunity Fund (formerly The Gabelli Global Growth Fund),
The Gabelli Global Interactive Couch Potato(R) Fund,
The Gabelli Global Convertible Securities Fund
each a Series of Gabelli Global Series Funds, Inc.
We hereby consent to the incorporation by reference in Post-Effective Amendment
No. 8 to Registration Statement No. 33-66262 on Form N-1A of our Report of
Independent Auditors dated February 26, 1998, accompanying the financial
statements.
We also consent to the use of our name under the headings "Financial Highlights"
and "Independent Auditors" in the Prospectus, and "Counsel and Independent
Auditors" in the Statement of Additional Information, which is also part of such
Registration Statement.
Grant Thornton LLP
New York, New York
April 14, 1998
<PAGE> 1
EXHIBIT 14
THE
GABELLI
FUNDS
IRA INFORMATION GUIDE
Introducing the new ROTH
CONTAINS:
o IRA Q & A
o DISCLOSURE STATEMENT
o CUSTODIAL AGREEMENT
GABELLI FUNDS, INC.
ONE CORPORATE CENTER
RYE, NEW YORK 10580
This material must be preceded or If you have questions or
accompanied by a prospectus. The require assistance, call our
Funds' prospectuses contain complete IRA specialists at:
information, including fees and
expenses. The prospectus(es) should 1-800-GABELLI
be read carefully prior to investing. www.gabelli.com o [email protected]
<PAGE> 2
HOW TO OPEN A GABELLI FUNDS IRA*:
If you have questions or
require assistance, call our
IRA specialists at:
1-800-GABELLI (1-800-422-3554)
www.gabelli.com o [email protected]
PHOTOCOPIES OF ANY FORM ARE ACCEPTABLE.
SIGNATURES MUST BE ORIGINAL.
* Including the Gabelli Westwood Funds.
TO OPEN A GABELLI REGULAR IRA OR ROTH IRA, YOU NEED:
o An Individual Retirement Account Application.
o One copy of the Custodial Agreement and Disclosure Statement included
herein for your records.
o The appropriate Fund Prospectus.
1. Carefully review the enclosed material, including the Prospectus and
Disclosure Statement.
2. Complete, sign and date the Application.
3. To transfer an existing IRA, see instructions below.
4. To convert an existing Regular IRA to a Roth IRA, see instructions
below.
5. For a spousal IRA, your spouse must complete a separate
Application.
6. Make your check payable to State Street Bank and Trust Company or to the
specific Gabelli Fund in which you are investing your contribution.
7. Indicate the tax year for which this contribution applies. NOTE: if no
tax year is given, the custodian will assume the contribution applies to
the calendar year in which it was received.
8. Mail the form along with your check(s) to: The Gabelli Funds P.O. Box
8308 Boston, MA 02266-8308
TO TRANSFER AN EXISTING IRA OR RETIREMENT PLAN DISTRIBUTION TO THE GABELLI FUNDS
* Only for transferring: Regular IRA to a Regular IRA, Roth IRA to a Roth
IRA or Employer Retirement Plan to a Regular IRA. (You MAY NOT transfer an
Employer Retirement Plan to a Roth IRA.)
Follow the instructions described above, and:
1. Complete the Transfer Request Form, instructing your present
Custodian/Trustee to transfer the assets of your existing IRA to State
Street Bank and Trust Company as successor. (Consult your present
Custodian/Trustee for any special additional requirements, e.g. signature
guarantees)
2. Send the Transfer Request Form and your IRA application to establish
your account with State Street Bank and Trust Company.
3. The transfer of your IRA to a Gabelli Funds IRA will be completed by
State Street Bank and Trust Company and your present Custodian/Trustee.
TO CONVERT AN EXISTING REGULAR IRA TO A ROTH IRA
1. Complete the Roth IRA Conversion Form.
2. If your Regular IRA is currently held at another institution, complete
the Roth IRA Conversion Form and the attached IRA Conversion/Transfer
Request Form. The transfer of your Regular IRA to a Gabelli Funds Roth
Conversion IRA will be completed by State Street Bank and Trust Company and
your present Custodian/Trustee.
3. To do a rollover/conversion (if you have taken a rollover distribution
from your present Regular IRA), complete the Roth IRA Conversion Form and
include a check for the rollover/converted amount. Be aware of the tax
consequences of doing such a rollover incorrectly.
<PAGE> 3
QUESTIONS AND ANSWERS
PART 1: REGULAR IRAs
ELIGIBILITY
Q. WHO MAY CONTRIBUTE TO A REGULAR IRA?
A. Generally, any one under age 70-1/2 who earns income from employment may
make annual contributions to a Regular IRA.
Q. HOW LONG MAY I CONTRIBUTE?
A. You may make contributions to your Regular IRA for each year you have
earned income up to the year you attain age 701/2.
CONTRIBUTIONS
Q. HOW MUCH CAN I CONTRIBUTE TO MY REGULAR IRA?
A. You can contribute 100% of your earned income up to a maximum of $2,000
per tax year. However, all or a portion of your contribution may not be
deductible. If you and your spouse have spousal Regular IRAs, each spouse
may contribute up to $2,000 to his or her Regular IRA for a year as long
as the combined compensation of both spouses for the year is at least
$4,000. The maximum contribution to either spouse's Regular IRA is $2,000
for the year.
Q. CAN I CONTRIBUTE TO A REGULAR IRA FOR MY SPOUSE?
A. For each year before the year when your spouse attains age 70-1/2, you
can contribute to a separate Regular IRA for your spouse, regardless of
whether your spouse had any compensation or earned income in that year.
This is called a "spousal IRA." To make a contribution to a Regular IRA
for your spouse, you must file a joint tax return for the year with your
spouse. For a spousal IRA, your spouse must set up a different Regular
IRA, separate from yours, to which you contribute.
DEDUCTIBILITY
Q. WILL MY REGULAR IRA CONTRIBUTIONS BE DEDUCTIBLE FOR FEDERAL INCOME TAX
PURPOSES?
A. The deductibility of your contribution depends upon whether you and your
spouse are active participants in an employer-sponsored retirement plan,
and on your adjusted gross income (AGI) (See the chart below.) Your IRA
contributions will be fully deductible for Federal income tax purposes if:
o You are not an active participant in an employer-maintained retirement
plan, regardless of your AGI.
OR
o You are not an active participant in an employer-maintained retirement
plan, but your spouse is a participant, and your AGI does not exceed
$150,000.
OR
o you are an active participant in an employer maintained retirement plan,
and your individual AGI if you are single does not exceed $30,000, or if
you are married, you and your spouse's combined AGI does not exceed
$50,000. (These income limits will gradually increase to $50,000 for
individuals by the year 2005, $80,000 for couples by the year 2007.)
Q. WILL MY IRA CONTRIBUTIONS BE FULLY DEDUCTIBLE IF I AM NOT COVERED BY AN
EMPLOYER RETIREMENT PLAN?
A. Yes - If neither you nor your spouse (if you are married) is an active
participant in an employer-maintained retirement plan, your IRA
contributions will be fully deductible regardless of your income level.
Beginning in 1998, there is increased eligibility for deductible IRAs. The
chart below applies for 1998.
Income Income Covered by a Type of Annual
Family Individual Pension Plan Contribution
------ ---------- ------------ ------------
(Joint Filing) (You or Spouse)
Fully
no limit no limit No deductible
$50,000* $30,000* Fully
and under and under Yes deductible
$150,000 $150,000 Fully
and under and under Spouse only deductible
You/and or your Non
no limit no limit spouse participate deductible
Note: The rules differ when husband and wife file separately.
* These income limits will gradually increase to $50,000 for individuals by
the year 2005, $80,000 for couples by the year 2007.
Q. CAN I MAKE NONDEDUCTIBLE IRA CONTRIBUTIONS?
A. You are permitted to make designated non-deductible contributions to your
Regular IRA to the extent that you are not eligible to make deductible
Regular IRA contributions. Earnings on nondeductible IRA contributions are
not subject to Federal income tax until they are withdrawn.
Q. CAN MY REGULAR IRA CONTAIN BOTH DEDUCTIBLE AND NONDEDUCTIBLE
CONTRIBUTIONS?
A. Yes. There is no advantage to maintaining separate Regular IRAs for
deductible and nondeductible contributions since all Regular IRAs you
maintain are aggregated for purposes of determining the taxable amount of
any distribution.
<PAGE> 4
Q. ARE THE EARNINGS ON MY REGULAR IRAS TAXED?
A. Any dividends on or growth of the investments held in your Regular IRA are
generally exempt from current federal income taxes and will not be taxed
until withdrawn by you, unless the tax exempt status of your Regular IRA
is revoked.
TRANSFERS AND ROLLOVERS TO
REGULAR IRAs
Q. IF I ALREADY HAVE A REGULAR IRA WITH ANOTHER TRUSTEE, MAY I TRANSFER THESE
ASSETS TO A GABELLI REGULAR IRA?
A. Yes, you are permitted to transfer your existing Regular IRA assets to a
Gabelli Regular IRA without paying taxes, subject to any rules and
restrictions on your existing account.
Q. IF I TAKE A DISTRIBUTION FROM AN EXISTING REGULAR IRA, MAY I ROLL OVER
THIS AMOUNT TO A GABELLI REGULAR IRA?
A. If you take a distribution from your existing IRA, you may roll over part
or all of the distribution to a Gabelli Regular IRA. You must complete the
rollover transaction within 60 days of receipt in order to avoid paying
income or penalty taxes. You are permitted to roll over such amount in
this manner only once every 12 months.
Q. CAN I ROLL OVER A DISTRIBUTION FROM ANOTHER QUALIFIED RETIREMENT PLAN TO A
GABELLI REGULAR IRA?
A. Most distributions from employer-sponsored retirement plans may be rolled
over on a tax-free basis to a Gabelli Regular IRA. Amounts not eligible
for tax-free rollover include required minimum distributions after age
70-1/2, certain periodic payments over long periods of time, and amounts
representing your after-tax contributions to the plan. To determine
whether a particular plan distribution is eligible for rollover to a
Gabelli Regular IRA, you should check with your plan administrator.
Q. WHAT ELSE SHOULD I KNOW ABOUT ROLLOVERS FROM ANOTHER RETIREMENT PLAN?
A. Before you receive an eligible rollover distribution, your plan
administrator is required to give you a written notice describing
important tax rules affecting your distribution. Among other things, this
notice will explain that there are two ways to accomplish a tax-free
rollover to a Regular IRA. First, you may have your distribution paid
directly to an IRA custodian (such as State Street Bank and Trust Company)
as a direct rollover, thereby avoiding Federal income tax withholding on
your distribution. Or, if you have the distribution paid directly to you,
20% of your payout will be withheld for Federal income taxes. If the
distribution is paid directly to you, you then have 60 days from receipt
of the payment to roll over the funds to an IRA. (You may--but need
not--add other monies to the plan payout amount to make up the 20% that
was withheld).
DISTRIBUTIONS
Q. WHEN CAN I START TO TAKE DISTRIBUTIONS?
A. Generally, you may start distributions from your Regular IRA as early as
age 59-1/2. Distributions must begin by April 1 following the year you
attain age 70-1/2.
o Earlier distributions are allowed without penalty under certain
circumstances. Before age 59-1/2, the 10% early withdrawal penalty will
not apply to qualified distributions, which include a first-time home
purchase (up to $10,000), postsecondary (college and beyond) education
expenses, disability and death. Taxes will be paid on any realized
earnings and deductible contributions.
Q. HOW WILL MY IRA DISTRIBUTIONS BE TAXED?
A. Distributions from your IRA will be taxed as ordinary income. However, if
you have made any nondeductible contributions to your IRA, your IRA
distributions will be treated partly as a non-taxable return of your
nondeductible IRA contributions, and partly as a taxable distribution of
your IRA earnings and any deductible IRA contributions. For these
purposes, every IRA you maintain will be required to be aggregated and a
withdrawal from an account established with a non-deductible contribution
would be partly taxable.
Q. WHAT IF I TAKE A DISTRIBUTION BEFORE AGE 59-1/2?
A. Because an IRA is intended to provide for your retirement, the law imposes
an additional tax of 10% if you take a distribution prior to age 59-1/2
for reasons other than your disability, a first time home purchase (up to
$10,000), or postsecondary education expenses. This 10% penalty tax is
applied to the taxable amount of your distribution and is in addition to
the ordinary income tax you pay on your distribution. The 10% additional
tax will not apply to distributions made to your beneficiary upon your
death. In addition, the 10% tax will not apply to certain installment or
annuity payments made for your life or life expectancy, or for the joint
lives or life expectancies of you and your beneficiary, regardless of when
these payments begin.
<PAGE> 5
Q. WHEN IS THE LATEST DATE AT WHICH I MAY BEGIN DISTRIBUTIONS FROM MY REGULAR
IRA?
A. The law requires that you begin to receive distributions from your
traditional IRA no later than April 1 following the calendar year in which
you reach age 70-1/2.
If you elect to take distributions at that time in installments, certain
minimum distributions (based on your life expectancy or the joint life
expectancies of you and your beneficiary) must begin. A 50% penalty tax
will be imposed if the amount actually distributed to you after age 70-1/2
is less than the amount required by law.
PART 2: ROTH IRAS
ELIGIBILITY
Q. WHO MAY CONTRIBUTE TO A ROTH IRA?
A. Starting in 1998, generally if you earn income from employment, you may
make annual contributions to a Roth IRA, as long as your income does not
exceed certain limits. Any individual (including a non-working spouse) may
contribute to a Roth IRA, regardless of the individual's or spouse's
participation in a retirement plan. Adjusted gross income limits phase out
between $95,000 and $110,000 for individuals, $150,000 and $160,000 for
married couples (filing jointly).
o In contrast to a Regular IRA, with a Roth IRA you may continue making
contributions after you reach age 70-1/2.
Q. CAN I CONTRIBUTE TO A ROTH IRA FOR MY SPOUSE?
A. Starting in 1998, if you meet the eligibility requirements, you can not
only contribute to your own Roth IRA, but also to a separate Roth IRA for
your spouse out of your compensation or earned income regardless of
whether your spouse had any compensation or earned income in that year.
This is called a "spousal Roth IRA." To make a contribution to a Roth IRA
for your spouse, you must file a joint tax return for the year with your
spouse. For a spousal Roth IRA, your spouse must set up a different Roth
IRA, separate from yours, to which you contribute.
CONTRIBUTIONS
Q. CAN I MAKE A CONTRIBUTION TO A ROTH IRA FOR 1997?
A. The Roth IRA is not available until January 1998. Therefore, you may NOT
make a 1997 contribution to a Roth IRA.
Q. HOW MUCH CAN I CONTRIBUTE TO MY ROTH IRA?
A. Total contributions to all Regular and Roth IRAs must not exceed the
lesser of $2,000 per tax year, or 100% of your earned annual income. Your
Roth IRA limit is reduced by any contributions for the same year to a
Regular IRA. If you and your spouse have spousal Roth IRAs, each spouse
may contribute up to $2,000 to his or her Roth IRA for a year as long as
the combined compensation of both spouses for the year is at least $4,000.
The maximum contribution to either spouse's Roth IRA is $2,000 for the
year. For taxpayers with high income levels, the contribution limits may
be reduced (see below):
If You Are If You Are Married Then You
Single Taxpayer Filing Jointly May Make
--------------- ------------------ --------
Up to $95,000 Up to $150,000 Full Contribution
AGI
(Adjusted More than $95,000 More than $150,000 Reduced
but less than but less than Contribution
Gross $110,000 $160,000 (see formula below)
Income) $110,000 and up $160,000 and up No contribution
Q. HOW DO I CALCULATE MY LIMIT IF I FALL IN THE "REDUCED CONTRIBUTION" RANGE?
A. If your AGI falls in the reduced contribution range, you must calculate
your contribution limit as follows:
(a) Subtract your AGI from $110,000 if you are single, $160,000 if you are
married filing jointly.
(b) Divide the difference by $15,000 if you are single, $10,000 if you are
married filing jointly.
(c) Multiply the factor in step (b) by $2,000.
For example, assume that your AGI for the year is $157,555 and you are
married, filing jointly. You would calculate your Roth IRA contribution
limit this way:
(a) $160,000 - $157,555 = $2,445
(b) $2,445 divided by $10,000 = 0.2445
(c) 0.2445 x $2,000 = $489
(Round this number up to the nearest $10)
$490 is your contribution limit to a Roth IRA for that year.
If you fall in the reduced contribution range, the reduction formula
applies to the Roth IRA contribution limit left after subtracting your
contribution for the year to a Regular IRA.
Q. ARE CONTRIBUTIONS TO A ROTH IRA TAX DEDUCTIBLE?
A. No. Contributions to a Roth IRA are not tax deductible. This is a major
difference between
<PAGE> 6
Roth IRAs and Regular IRAs. Contributions to a Regular IRA may be
deductible on your federal income tax return depending on whether or not
you are an active participant in an employer-sponsored plan and on your
income level.
Q. MAY I HAVE BOTH A ROTH IRA AND A REGULAR IRA?
A. Yes. However, total contributions for all IRAs combined for any given tax
year cannot exceed 100% of earned income, up to a maximum of $2,000 per
individual, $4,000 for married couples.
CONVERSION OF EXISTING REGULAR IRA
TO A ROTH IRA
Q: CAN I CONVERT AN EXISTING REGULAR IRA INTO A ROTH IRA?
A: Yes. Starting in 1998 you can convert an existing Regular IRA into a Roth
IRA if you meet the AGI limits described below. Conversion may be
accomplished by completing a Roth Conversion IRA Form, which establishes a
Roth IRA and then transfers the amount in your Regular IRA you wish to
convert to the new Roth IRA. You are eligible to convert a Regular IRA to
a Roth IRA if, for the year of the conversion your AGI is $100,000 or
less. The same limit applies to married and single taxpayers. Married
taxpayers are eligible to convert a Regular IRA to a Roth IRA only if they
file a joint income tax return: married taxpayers filing separately are
not eligible to convert. In order to make a conversion for a year, the
conversion must be completed by December 31 of that year.
CAUTION: You should be extremely cautious in converting an existing
IRA into a Roth IRA early in a year if there is any possibility that your
AGI for the year will exceed $100,000. There may be adverse tax results
for you. Consult your tax advisor or the IRS for the latest developments.
Q. WILL THE CONVERTED AMOUNT BE INCLUDED IN MY AGI FOR DETERMINING
ELIGIBILITY?
A: No. The converted amount is not included in the adjusted gross income
computation in determining eligibility, but the taxable portion of the
amount converted will be included as income for tax purposes for the year
of the conversion.
Q. WHAT ARE THE TAX RESULTS FROM CONVERTING?
A: The taxable amount in the Regular IRA you convert to a Roth IRA will be
considered taxable income on your federal income tax return for the year
of the conversion. All amounts in a Regular IRA are taxable except for
your prior non-deductible contributions to the Regular IRA. (Use IRS Form
8606 to determine the exact amount from your Regular IRA that is taxable.)
NOTE: IF YOU MAKE THE CONVERSION DURING 1998, THE TAXABLE INCOME IS SPREAD
OVER FOUR YEARS. IN OTHER WORDS, YOU WOULD INCLUDE ONE QUARTER OF THE
TAXABLE AMOUNT ON YOUR FEDERAL INCOME TAX RETURN FOR 1998, 1999, 2000 AND
2001.
Q. SHOULD I CONVERT MY REGULAR IRA TO A ROTH IRA?
A. Only you can answer this question, in consultation with your tax or
financial advisors. A number of factors, including the following may be
relevant. Conversion may be advantageous if you expect to leave the
converted funds in your Roth IRA for at least five years or if you expect
to withdraw the funds under circumstances that will not be taxable. The
benefits of converting will also depend on whether you expect to be in the
same tax bracket when you withdraw from your Roth IRA as you are now.
Also, conversion is based upon an assumption that Congress will not change
the tax rules for withdrawals from Roth IRAs in the future, but this
cannot be guaranteed.
NOTE: If a conversion from a Regular IRA to a Roth IRA is being made, only
amounts converted during the same tax year will be accepted in a single
Roth Conversion IRA. A separate Roth Conversion IRA must be established to
hold such amounts from a different tax year. Annual contributions may not
be deposited in a Roth Conversion IRA holding converted amounts. Roth IRA
contributions must be kept in separate accounts from amounts converted to
a Roth Conversion IRA. Each years' amounts converted to a Roth Conversion
IRA will be kept in a separate Roth Conversion IRA account.
Q. HOW DO I DO A CONVERSION?
A. There are 2 ways you may convert a Regular IRA to a Gabelli Roth
Conversion IRA.
o You may receive the distribution from your Regular IRA and rollover the
distribution to your Roth Conversion IRA no later than the earlier of (1)
the last day of the year in which you wish to make the conversion, or (2)
within 60 days after you receive it. To do this, you must complete the
Gabelli Roth Conversion IRA Form, and send it to us along with the check
for the converted amount.
o The second method of converting your Regular IRA to a Roth Conversion IRA
is to have the money transferred directly from your Regular IRA to your
Roth Conversion IRA. To do this, you must complete a
<PAGE> 7
Gabelli IRA Conversion Form and the attached IRA Conversion/Transfer Form,
which gives your current Regular IRA's custodian instructions to transfer
your Regular IRA to a Gabelli Roth Conversion IRA.
TRANSFER/ROLLOVERS TO A ROTH IRA
Q. CAN I TRANSFER OR ROLLOVER A DISTRIBUTION I RECEIVE FROM MY EMPLOYER'S
RETIREMENT PLAN INTO A ROTH IRA?
A. Distributions from qualified employer-sponsored retirement plans or 403(b)
arrangements are NOT eligible for rollover or direct transfer to a Roth
IRA. However, in certain circumstances it may be possible to make a direct
rollover of an eligible distribution to a Regular IRA and then convert the
Regular IRA to a Roth IRA. Consult your tax or financial advisor for
further information on this possibility.
Q. IF I ALREADY HAVE A ROTH IRA WITH ANOTHER TRUSTEE, MAY I TRANSFER THESE
ASSETS TO A GABELLI ROTH IRA?
A. Yes. You are permitted to transfer your existing Roth IRA assets to a
Gabelli Roth IRA without paying taxes, subject to any rules and
restrictions on your existing account. You may authorize a Roth IRA
custodian or trustee to transfer assets directly from one Roth IRA to
another Roth IRA. As long as you do not receive a distribution, you may
transfer funds between Roth IRAs as often as you wish and in any amounts.
Just fill out the Transfer Request Form on the Gabelli Funds IRA
application to make a transfer.
Q. CAN I MAKE A ROLLOVER FROM MY ROTH IRA TO ANOTHER ROTH IRA?
A. You may make a rollover from one Roth IRA to another Roth IRA you have or
you establish to receive the rollover. Such a rollover must be completed
within 60 days after the withdrawal from your first Roth IRA. After making
a rollover from one Roth IRA to another, you must wait a full year (365
days) before you can make another such rollover.
Q. HOW DO ROLLOVERS AFFECT MY ROTH IRA CONTRIBUTION LIMITS?
A. Rollover contributions, if properly made, do not count toward the maximum
contribution. You may also make a rollover from one Roth IRA to another
even during a year when you are not eligible to contribute to a Roth IRA
(for example, because your AGI for that year is too high).
DISTRIBUTIONS
Q. WHEN CAN I MAKE WITHDRAWALS FROM MY ROTH IRA?
A. You may withdraw from your Roth IRA at any time. If the withdrawal meets
the requirements discussed below, it is tax-free. This means that you pay
no federal income tax even though the withdrawal includes earnings or
gains on your contributions while they were held in your Roth IRA.
Q. ARE THE EARNINGS ON MY ROTH IRA FUNDS TAXED?
A. Any dividends on or growth of investments held in your Roth IRA are
generally exempt from current federal income taxes and will not be taxed
until withdrawn by you, unless the tax exempt status of your Roth IRA is
revoked. If the withdrawal qualifies as a tax-free withdrawal (see below),
amounts reflecting earnings or growth of assets in your Roth IRA will not
be subject to federal income tax.
Q. WHAT ARE THE REQUIREMENTS FOR A TAX-FREE DISTRIBUTION?
A. To be tax-free, a withdrawal from your Roth IRA must meet two
requirements. First, the initial Roth IRA you established must have been
open for at least 5 years before the withdrawal. Second, at least one of
the following conditions must be satisfied:
o You are age 59-1/2 or older when you make the withdrawal.
o The withdrawal is made by your beneficiary after you die.
o You are disabled (as defined by IRS rules) when you make the withdrawal.
o You are using the withdrawal to cover eligible first-time homebuyer
expenses. These are the costs of purchasing, building or rebuilding a
principal residence. The purchases may be by you, your spouse or a child,
grandchild, parent or grandparent of you or your spouse. The withdrawal
must be used for eligible expenses within 120 days after the withdrawal
(if there is an unexpected delay, or cancellation of the home acquisition,
a withdrawal may be redeposited as a rollover). (There is a lifetime limit
on eligible first-time homebuyer expenses of $10,000 per individual.)
Q. WHAT ARE THE REQUIREMENTS FOR A PENALTY-FREE DISTRIBUTION?
A. The additional 10% penalty does not apply to the taxable amounts
distributed:
o after you are age 59-1/2,
o upon death or disability (as defined by IRS rules),
<PAGE> 8
o for a first-time home purchase, up to $10,000.
o for certain secondary education expenses,
o that are part of a series of subsequently equal payments taken at least
annually over your life expectancy,
o timely rolled over to another Roth IRA,
o for medical expenses that you can deduct for your federal tax return,
o for health insurance premiums while you are unemployed for at least 12
consecutive weeks.
Q. WHEN DOES THE 5-YEAR PERIOD BEGIN FOR ROTH IRAs?
A. For a Roth IRA that you set up with amounts rolled over or converted from
a Regular IRA, the 5 year period for each separate converted Roth IRA
begins with the year in which the conversion or rollover was made. For a
Roth IRA that you started with a normal contribution, the 5 year period
starts with the year for which you make the initial normal contribution.
Converted Roth IRA and normal Roth IRA accounts must be kept in separate
accounts for this reason.
PART 3: REGULAR & ROTH IRAs
Q. WHAT'S THE DIFFERENCE BETWEEN A REGULAR IRA AND A ROTH IRA?
A. With a Regular IRA, an individual can contribute up to $2,000 per year and
may be able to deduct the contribution from taxable income, reducing
income taxes. Taxes on investment growth and dividends are deferred until
the money is withdrawn. Withdrawals are taxed as additional ordinary
income when received. Nondeductible contributions, if any, are withdrawn
tax-free. Withdrawals before age 59-1/2 are assessed a 10% penalty in
addition to income tax, unless an exception applies.
With a Roth IRA, the contribution limits are essentially the same as
Regular IRAs, but there is no tax deduction for contributions. All
dividends and investment growth in the account are free from current
income tax. Most importantly with a Roth IRA: there is no income tax on
qualified withdrawals from your Roth IRA. Additionally, unlike a Regular
IRA, there is no prohibition on making contributions to Roth IRAs after
turning age 70-1/2, and there's no requirement that you begin making
minimum withdrawals at that age.
Q. MAY I HAVE MORE THAN ONE IRA?
A. Yes. However, total contributions for all IRAs combined for any given tax
year cannot exceed 100% of earned income, up to a maximum of $2,000 per
individual.
Q. WHEN MUST I MAKE A CONTRIBUTION FOR A TAX YEAR?
A. Contributions can be made up to the date your tax return for the year is
due. This means that contributions for a particular tax year can be made
up to April 15 of the following year. No extensions are allowed. Roth IRAs
are available starting January 1, 1998. Therefore, you may NOT make a 1997
Roth IRA contribution.
Q. WHAT FEES ARE THERE TO ESTABLISH AND MAINTAIN AN IRA WITH GABELLI?
A. State Street Bank and Trust Company charges a $10.00 annual maintenance
fee for each taxpayer, as identified by social security number. However,
the fee is waived if total assets in combined IRAs exceed $25,000. If you
close your account before the scheduled maintenance fee deduction and have
not prepaid the fee, it will be deducted at the time of liquidation.
Q. HOW DO I TRANSFER MY IRA TO GABELLI?
A. Simply complete a Gabelli IRA Transfer Request Form for each IRA you wish
to transfer and return it to State Street Bank and Trust Company. If you
are opening a new IRA with this transfer, you must also complete the IRA
Application. Your current trustee or custodian liquidates the CDs, or
mutual funds in the account you have designated and sends a check directly
to State Street Bank. Transfers generally take 2-3 weeks to complete. Upon
completion, you will receive a confirmation statement.
THIS IS NOT THE SAME AS CONVERTING YOUR REGULAR IRA TO A ROTH IRA. You may
not transfer from a Roth IRA to a Regular IRA or to a simplified employee
pension (SEP) IRA. Transfers to a Regular IRA or SEP IRA may be made from
another Regular IRA or SEP IRA, qualified employer plan, 403(b)
arrangement, or a SIMPLE IRA account (but not until at least 2 years after
the first contribution to your SIMPLE IRA account). Transfers to a Roth
IRA are possible only from another Roth IRA, not from other types of
tax-deferred accounts.
Q. WHEN AM I CONSIDERED TO BE AN ACTIVE PARTICIPANT IN AN EMPLOYER'S
RETIREMENT PLAN?
A. You are generally considered to be an active participant for a tax year if
you participate in any employer-maintained retirement plan (including any
pension, profit-sharing, 401(k), 403(b), SEP, SIMPLE, or Keogh plan)
during any part of the year. You are
<PAGE> 9
considered an active participant regardless of whether or not you are
vested under the plan. The Form W-2 you receive from your employer each
year should indicate whether or not you are an active participant in the
employer's plan.
Q. HOW DO I DETERMINE MY AGI (ADJUSTED GROSS INCOME)?
A. AGI is your gross income minus those deductions which are available to all
taxpayers even if they don't itemize. Instructions to calculate your AGI
are provided with your income tax Form 1040 or 1040A.
Q. WHAT HAPPENS IF I CONTRIBUTE MORE THAN ALLOWED TO MY IRA?
A. The maximum contribution you can make to a Regular and Roth IRA generally
is $2,000 or 100% of compensation or earned income, whichever is less. Any
amount contributed to all IRAs above the maximum is considered an "excess
contribution." The excess is calculated using your contribution limit, not
the deductible limit. An excess contribution is subject to excise tax of
6% for each year it remains in the IRA.
Q. HOW CAN I CORRECT AN EXCESS CONTRIBUTION?
A. Excess contributions may be corrected without paying a 6% penalty. To do
so, you must withdraw the excess and any earnings on the excess before the
due date (including extensions) for filing your federal income tax return
for the year for which you made the excess contribution. A deduction
should not be taken for any excess contribution. The earnings must be
included in your income for the tax year for which the contribution was
made and may be subject to a 10% premature withdrawal tax if you have not
reached age 59-1/2.
Q. WHAT HAPPENS IF I DON'T CORRECT THE EXCESS CONTRIBUTION BY THE TAX RETURN
DUE DATE?
A. Any excess contribution not withdrawn by the tax return due date
(including any extensions) for the year for which the contribution was
made will be subject to the 6% excise tax. There will be an additional 6%
excise tax for each subsequent year the excess remains in your account.
Under limited circumstances, you may correct an excess contribution after
tax filing time. Please consult your tax adviser for further details. o
THE GABELLI FUNDS
DISCLOSURE STATEMENT
APPLICABLE TO INDIVIDUAL
RETIREMENT ACCOUNTS
Parts of the Disclosure Statement have been discussed previously in the Question
& Answer section. It is required that you be given this Disclosure Statement for
the purpose of ensuring that you are informed and understand the nature of an
Individual Retirement Account ("IRA") sponsored by Gabelli Funds, Inc. This
Disclosure Statement explains the rules governing IRAs including the rules
adopted by the Tax Reform Act of 1986 which took effect on January 1, 1987, and
the Taxpayer Relief Act of 1997, which took effect on January 1, 1998.
Articles I through VII of Part 1 of the Custodial Agreement are in the form
promulgated by the Internal Revenue Service as Form 5305-A. It is anticipated
that, if and when the Internal Revenue Services promulgates changes to Form
5305-A, the Custodian will amend this Agreement correspondingly.
Articles I through VIII of Part 2 of the Custodial Agreement have not been
promulgated or approved by the Internal Revenue Service. It is anticipated that,
if and when the Internal Revenue Service promulgates a model form to establish a
Roth IRA Custodial Account, the Custodian will amend this Agreement to
substitute the provisions of such model Roth IRA Custodial Account form for the
provisions of Part 2 of this Agreement, and the Depositor specifically consents
to such amendment in accordance with Section 13(b) hereof.
Based on our legal advice, State Street Bank believes that the use of a
Universal Individual Retirement Account Information Kit such as this, containing
information and documents for both a Regular IRA or a Roth IRA, will be
acceptable.
If, due to change in the applicable tax laws ruling of the Internal Revenue
Service it is established that the use of the Adoption Agreement or this
Agreement do not establish a Regular IRA or a Roth IRA (as the case may be), the
Custodian will furnish the Depositor with replacement documents and the
Depositor will if necessary sign such replacement documents. Depositor
acknowledges and agrees to such procedures and to cooperate with Custodian to
preserve
<PAGE> 10
the intended tax treatment of the Account. In all cases, to the extent
permitted, State Street Bank will treat your IRA as being opened on the date
your account was opened using the Adoption Agreement in this Kit.
YOUR RIGHT TO REVOKE THIS IRA. You may revoke this IRA at any time within seven
(7) days after the later of the date you received this Disclosure Statement or
the day you established this IRA. For purposes of revocation, it will be assumed
that you received the Disclosure Statement no later than the date of your check
or transfer direction with which you opened your IRA. To revoke the IRA, you
must either mail or deliver a notice of revocation to: THE GABELLI FUNDS, P.O.
BOX 8308, BOSTON, MA 02266-8308.
If after you have established an IRA and during the period in which you are
entitled to revoke the IRA, there becomes effective a material adverse change in
the information set forth in the Disclosure Statement or a material change in
the governing instrument used in establishing the IRA, you are entitled to
revoke your IRA on or before a date not less than seven days after the date on
which you receive such amendment under the same revocation procedure set forth
above.
If a notice of revocation is mailed, it shall be deemed mailed on the date of
the postmark (or if sent by certified or registered mail, the date of
certification or registration) if it is so deposited in the mail in the United
States, first class postage prepaid and properly addressed. If you revoke your
IRA, you are entitled to a return of the entire amount contributed.
TYPES OF IRAs: ELIGIBILITY
There are several types of IRAs. For example, there is a "Regular IRA" to which
you may make contributions for yourself. There is also a "Spousal IRA" which you
may be able to set up for your non-working spouse. There is also a "Rollover
IRA" which you can set up to receive assets from a qualified plan, annuity or
another IRA. Money from a qualified plan and/or annuity may not be rolled over
to a Roth IRA. There is also a Roth IRA. Finally, there is a SEP-IRA (which is
also known as a Simplified Employee Pension Plan) which your employer can
establish for you. Following is a general description of the rules which apply
to each of these types of IRAs and who is eligible to establish them. This
disclosure statement does not describe IRAs established in connection with a
SIMPLE IRA program maintained by your employer. Employers provide special
explanatory materials for accounts established as part of an employer's SIMPLE
IRA program.
REGULAR IRA. You may contribute up to the lesser of $2,000 or 100% of your
compensation if you have not reached age 70-1/2 during the taxable year. You
may make this contribution even if you or your spouse is an active participant
in a qualified employer plan. However, as explained below, the amount of the
contribution which you may deduct may be limited. Compensation includes wages,
salary, commissions, bonuses, tips, etc. but does not include income from
interest, dividends or other earnings or profits from property, or amounts not
includible in your gross income.
SPOUSAL IRA. You may contribute to your IRA and an IRA for your non-working
spouse if: (1) you have received compensation during the taxable year and (2)
you file a joint income tax return for the year with your spouse. Under such an
arrangement, you may qualify for a total contribution equal to the lesser of
$4,000 or 100% of your compensation for the taxable year. You can determine how
to divide the contribution between the two accounts but you cannot contribute
more than $2,000 annually into either one. While you cannot contribute to your
Regular IRA in the taxable year in which you reach 70-1/2, you can still
contribute to your spouse's Regular IRA if he or she has not reached 70-1/2.
If a spousal Roth IRA has been established, there is no age limit at which
contributions must cease. A Spousal IRA does not involve the creation of a
joint account. The account of each spouse is separately owned and treated
independently from the account of the other spouse. This disclosure statement
describes the rules applicable to IRAs beginning January 1, 1998.
ROTH IRA. Roth IRAs are a new kind of IRA available for the first time in 1998.
There are specific income limits which determine an individual's eligibility to
contribute to a Roth IRA. Contributions to a Roth IRA are not permitted for 1997
and are not tax-deductible, but withdrawals that meet certain requirements are
not subject to federal income taxes. This makes the dividends on and growth of
the investment held in your Roth IRA tax-free for federal income tax purposes if
the requirements are met. Withdrawals by you from your Roth IRA are excluded
from your income for federal income tax purposes if certain requirements are
met. State income tax treatment of your Roth IRA may differ from federal
treatment; ask your state tax department or your personal tax advisor for
details.
<PAGE> 11
ROLLOVER IRAs. All or a portion of certain distributions from qualified
retirement plans, annuities and other IRAs may be "rolled over" to a Regular IRA
only, tax-free within sixty (60) days after receipt of the distribution without
regard to the limits on deductible contributions, but no deduction is allowed
with respect to such a contribution. The amount rolled over cannot exceed the
fair market value of all property received, reduced by employee contributions
(except voluntary deductible employee contributions made pursuant to a qualified
plan). Under certain circumstances, the law allows you to make a contribution
from an IRA into a qualified pension or profit-sharing plan, qualified annuity
plan, or tax-sheltered annuity or custodial account; however, such a
contribution cannot be made from an IRA to which you have made any
contributions. Certain partial distributions from qualified plans which you or
your surviving spouse receive may also be rolled over to a rollover Regular IRA.
You may not rollover funds from any qualified retirement plans to a Roth IRA.
You can also transfer assets you hold in one IRA to another IRA by directing the
current trustee or custodian to transfer those assets directly to the new IRA.
You may only do a rollover from a Regular IRA to another Regular IRA, or a
rollover from a Roth IRA to a Roth IRA. A rollover from a Regular IRA to a Roth
IRA is called a Conversion Roth IRA and has special restrictions which are
described below. You can direct such a so-called "trustee to trustee transfer"
at any time. However, you may make a rollover from one IRA to another IRA only
once during a one year period. A decision to make a rollover from a qualified
plan to a Regular IRA, as signified by checking the rollover box on the
Application, is irrevocable.
ROTH IRA CONVERSIONS. Regular IRA money may be rolled over into a Roth IRA as of
January 1, 1998. To do this, your aggregate gross income must be less than
$100,000. Married individuals filing separately can not make such a transfer.
Tax on withdrawals from the deductible IRA may be spread out over four years if
the proceeds are rolled over into a Roth IRA prior to January 1, 1999.
DIRECT ROLLOVER OPTION. If you will be entitled to receive an eligible rollover
distribution from an employer's qualified retirement plan, you may also elect to
have the plan transfer all or any part of your distribution directly to your
Gabelli Funds Regular IRA as a tax-free rollover. If you elect this direct
rollover option, no Federal income taxes will be withheld on your distribution
to the extent it is transferred to your Gabelli Regular IRA. The Plan
Administrator of your employer's plan must give you a written explanation of
your direct rollover option and the other tax rules affecting your eligible
rollover distribution. If you wish to make a direct rollover from your
employer's plan, contact Gabelli at 1-800-422-3554 for further information.
Distributions from qualified employer-sponsored retirement plans or 403(b)
arrangements are not eligible for rollover or direct transfer to a Roth IRA.
PAYMENT OPTION: 20% WITHHOLDING ON REGULAR IRAs. If you elect to have an
eligible rollover distribution from an employer's qualified retirement plan paid
directly to you, your distribution will be subject to 20% Federal income tax
withholding. You will still have the option of making a tax-free rollover
contribution of your eligible rollover distribution to a Gabelli IRA within 60
days of receipt of your distribution. You may roll over any amount up to 100% of
your eligible rollover distribution (including an amount equal to the 20% which
was withheld by coming up with additional monies to make up for the withheld
amount).
Rollover amounts you receive may not be deposited in your spouse's IRA, but if
you should die while still a participant in a qualified plan, in certain cases
your spouse may be allowed to make a tax-free rollover to a Regular IRA of all
or any part of the assets distributed from the qualified plan, excluding any
contributions (other than voluntary deductible employee contributions) made by
you to such plan. The amount of the death payout rolled over by a spouse into a
Regular IRA may not subsequently be rolled over into another employer's
qualified plan or annuity. Strict requirements must be met to qualify for
tax-free rollover treatment. You should consult your personal tax adviser in
connection with rollovers to and from your IRA.
SIMPLIFIED EMPLOYEE PENSION (SEP)-IRA. An employer may adopt a SEP-IRA and
contribute to your SEP-IRA even if you are covered by another retirement plan.
The maximum contribution is the lesser of 15% of your compensation (computed
without regard to the contribution) or $24,000 (or such amount as may be
prescribed by the Secretary of the Treasury) whichever is less. The
contributions are deductible by the employer and are generally not includible in
your income until you receive distributions. To establish a SEP-IRA, your
employer must sign a SEP-IRA agreement and provide you with a copy of the
agreement as well as certain information concerning the rules applicable to such
plans. Your employer can satisfy these requirements by using Form 5305 SEP which
is issued by the Internal Revenue Service.
<PAGE> 12
CONTRIBUTIONS
IN GENERAL. As explained in this part, the amount of your Regular IRA
contributions which you can deduct is subject to limits. Except in the case of
rollover contributions or trustee to trustee transfers, contributions to your
Regular IRA, Roth IRA, Spousal IRA or SEP-IRA must be in cash. Contributions to
your Regular IRA, Roth IRA or Spousal IRA may be made up to the due date for
filing your tax return for the taxable year (excluding extensions thereof) even
if you file before the due date. In making contributions, you must indicate the
tax year to which the contribution applies. If no tax year is designated, the
custodian will assume that the contribution is intended to apply to the calendar
year in which it is received. The time limit for designating the prior tax year
is April 15th.
Contributions made by an employer to your SEP-IRA for a calendar year may be
made no later that the due date of your employer's tax return (including
extensions). In making a SEP-IRA contribution, the tax year to which the
contribution relates must also be specified or it will be deemed to relate to
the calendar year in which it is received. In a SEP-IRA, this designation of the
tax year of a contribution must be made by the due date for contributions
described above.
DEDUCTIBLE CONTRIBUTIONS TO A REGULAR IRA. If you are single and are not an
"active participant" in a retirement plan maintained by your employer, you can
deduct the full amount of your Regular IRA contribution up to the lesser of
$2,000 or 100% of your compensation for the year. If you are married and file a
joint return, you can also deduct the full amount of your Regular IRA
contribution so long as neither you nor your spouse is an "active participant"
in a retirement plan maintained by your respective employers. These plans
include qualified pension, profit sharing, stock bonus or money purchase plans,
401k plans, SEP-IRAs, qualified annuity plans, tax sheltered annuities and
custodial accounts and deferred compensation plans of governmental agencies. You
are considered to be an active participant in a plan if an employer contribution
or forfeiture was credited to your account during the year in the case of a
defined contribution plan or, in the case of a defined benefit plan, you are
eligible to participate even if you choose not to. You are considered to be an
active participant in a plan if you make a contribution to the plan during a
year even if your employer does not. For active participation, it does not
matter whether any interest you have in a plan is vested or unvested. If you or
your spouse is an active participant in a plan, the amount of the deduction you
can claim for an IRA contribution is reduced or totally denied depending upon
the amount by which your adjusted gross income for the year exceeds the
"applicable dollar amount". The applicable dollar amount is $30,000 for single
people and $50,000 for married individuals filing a joint tax return for 1998.
These limits will gradually increase to $50,000 for individuals by the year
2005, $80,000 for couples by the year 2007. If you are not an active participant
in a plan, but your spouse is a participant, your combined AGI must not exceed
$150,000 to make a fully deductible contribution. If you are married but are
filing separate tax returns, your applicable dollar amount is $0.
If your adjusted gross income exceeds your applicable dollar amount by more than
$10,000, you may not deduct any portion of your Regular IRA contribution.
However, if it is between $0 and $10,000 more than your applicable dollar
amount, you can claim a tax deduction for your contribution. To determine the
amount of the deduction, follow these steps. First, determine the amount of the
contribution you can make. If, for example, you have compensation in excess of
$2,000 you could make a $2,000 contribution to your Regular IRA. Next, subtract
the applicable dollar amount from your adjusted gross income. If you are single
and your adjusted gross income is $35,000, the difference would be $5,000. Next
divide this difference by $10,000. In the example $5,000/$10,000 equals 1/2.
Accordingly, you may deduct 1/2 of your contribution. If the deduction
limitation is not a multiple of $10, round the deduction to the next $10.
NONDEDUCTIBLE CONTRIBUTIONS FOR REGULAR IRAS. Even though you may not be
entitled to claim a deduction for contributions to your Regular IRA, you are
still allowed to make the contributions to the extent described in "Types of
IRAs", above. To the extent that the amount of your contribution exceeds the
deduction limit, it is considered a non-deductible contribution for Regular IRA
accounts. Earnings on these contributions are not taxed until distributed just
like the earnings on deductible contributions. It may therefore be worthwhile
making nondeductible contributions.
NONDEDUCTIBLE CONTRIBUTIONS FOR ROTH IRAS. All contributions to Roth IRAs are
nondeductible. For each year when you are eligible, you can contribute up to the
lesser of $2,000 or 100% of your compensation (or earned income, if you are
<PAGE> 13
self employed). Your Roth IRA limit is reduced by any contributions for the same
year to a Regular IRA. Any individual (including a non-working spouse) may
contribute to a Roth IRA, regardless of the individual's or spouse's
participation in a retirement plan. AGI limits phase out between $95,000 and
$110,000 for individuals, $150,000 and $160,000 for married couples filing
jointly.
You are required to specify on your tax return the amount of your nondeductible
contribution. If you overstate this amount, you may be liable for a tax penalty
of $100 per overstatement.
INVESTMENT AND HOLDING OF CONTRIBUTIONS
Contributions to your IRA, and the earnings thereon, are invested in shares of
any mutual fund managed by Gabelli Funds, Inc. or its affiliated advisers and
chosen by you in writing. The assets in your account are held in a custodial
account exclusively for your benefit and the benefit of such beneficiaries as
you may designate in writing and deliver to the Custodian. The balance in your
IRA represents a separate account which is clearly identified as your property
and generally may not be combined for investment with the property of another
individual. Your right to the entire balance in your account is nonforfeitable.
No part of the assets of your account may be invested in life insurance
contracts or in collectibles such as works of art, antiques, coins, stamps, etc.
DISTRIBUTIONS FROM YOUR IRA
DISTRIBUTIONS DURING YOUR LIFE.
Regular IRAs. The law permits distributions to be made from an IRA any time
after you attain age 59-1/2, and requires that distributions commence no later
than April 1st following the calendar year in which you attain age 70-1/2.
Distributions may be in the form of a single payment or, in accordance with
regulations, in monthly, quarterly, or annual payments over your life, the joint
lives of you and your designated beneficiary, or over a period certain not
extending beyond your life expectancy or the joint life and last survivor
expectancy of you and your designated beneficiary. If you direct distributions
over your life or the joint lives of you and your designated beneficiary, the
custodian may, if available, purchase an immediate annuity contract from an
insurance company you choose with your Regular IRA and your payments will be
made under the annuity. You must provide a completed annuity application from
the insurance company of your choosing. Because an IRA is intended to provide
for your retirement, the law implies an additional tax of 10% if you take a
distribution prior to age 59-1/2 for reasons other than your disability, a
first-time home purchase (up to $10,000) or certain post secondary education
expenses.
Any distribution instruction must specify the reason for the distribution.
Examples of such reasons are: premature distribution (i.e. distributions
before age 59-1/2), rollovers, disability, death, normal (59-1/2 or over),
and returns of excess contributions.
ROTH IRAS. You may make a tax-free distribution from a Roth IRA if the
withdrawal meets the following requirements. First, the first Roth IRA account
you ever opened must have been open for at least 5 years. In addition, the
distribution must also satisfy one of the following: you are age 59-1/2 or older
when making the withdrawal, the withdrawal is made by your beneficiary after you
die, you are disabled (or as defined by IRS rules) when making the withdrawal,
or you are using the withdrawal to cover eligible first time homebuyer expenses,
up to $10,000. For a Roth IRA that you set up with amounts converted from a
Regular IRA, the 5-year period for each separate converted Roth IRA begins with
the year in which each conversion was made.
DISTRIBUTIONS AFTER YOUR DEATH. If you die after distributions have commenced to
you, the balance of your Regular or Roth IRA must be distributed to your
designated beneficiary at least as rapidly as under the method of distribution
in effect prior to your death.
If you die before the distribution of your interest has begun, the entire
balance of the account must be distributed by December 31 of the year in which
the 5th anniversary of your death occurs. However, distribution need not be made
within this 5-year period if your beneficiary receives payments over a period
measured by his or her life or life expectancy beginning no later than December
31 of the year following the year in which you die. If the beneficiary is your
spouse, those installment payments don't have to begin until the later of
December 31 of the year following the year in which you die or December 31 of
the year in which you would have reached age 70-1/2. In addition, a distribution
need not be made within 5 years of your death if your spouse is your beneficiary
and he or she elects to treat the entire interest in the IRA (or remaining part
of such interest if distributions have already begun) as his or her own IRA
subject to the IRA distribution requirements. In such a case, your spouse will
be considered to be
<PAGE> 14
the Depositor under the IRA. If you die before the entire IRA has been
distributed to you and your spouse is not your beneficiary, no additional cash
contributions or rollover contributions may be accepted by the IRA.
INCOME AND PENALTY TAXES
INCOME TAX TREATMENT. Income tax on deductible Regular IRA contributions and
earnings on both deductible and nondeductible Regular IRA contributions is
generally deferred until you receive distributions. If you have made both
deductible and nondeductible contributions to Regular IRAs you maintain, a
portion of each distribution you receive from any Regular IRA (whether it is the
one to which you made nondeductible contributions) will be considered to be a
return of nondeductible contributions and therefore not included in your income
for tax purposes. The balance of each distribution will be taxed as ordinary
income regardless of its original source. The amount of any distribution which
is considered to be a return of nondeductible contributions (and therefore not
taxed) is determined by multiplying the amount of the distribution by a
fraction. The numerator of the fraction is the aggregate amount of nondeductible
contributions you have made to all of your IRAs over the years and the
denominator is the balance in all your IRAs at the end of the year (after adding
back any distributions you received during the year). The aggregate amount which
can be excluded from income for all years cannot exceed the amount of
nondeductible contributions that you made in those years.
Taxable distributions from your account are taxed as ordinary income regardless
of their original source. They are not eligible for special tax treatment that
may apply to lump sum distributions from qualified employer plans. A
distribution from your account after you attain age 65 is eligible for the
retirement income credit.
All qualified distributions from a Roth IRA, including withdrawals that contain
earnings, are tax-free from Federal income tax. The criteria necessary for a
distribution to a deemed "qualified" are described above.
Note that, for purposes of determining what portion of any distribution is
includible in income, all of your Roth IRA accounts are considered as one single
account. Amounts withdrawn from any one Roth IRA account are deemed to be
withdrawn from contributions first. Since all your Roth IRAs are considered to
be one account for this purpose, withdrawals from Roth IRA accounts are not
considered to be from earnings or interest until an amount equal to all
contributions made to all of an individual's Roth IRA accounts is withdrawn.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS. Your IRA is intended to provide income
for you upon retirement. Accordingly, the law generally imposes a penalty on
premature distributions. If you receive a taxable distribution from the Regular
or Roth IRA for a nonqualified purpose before reaching age 59-1/2, a
nondeductible 10% tax penalty may be imposed on the portion of the distribution
which is included in your gross income. This penalty is in addition to any
income tax you must pay on the distribution itself. The penalty does not apply
to the extent that the distribution is considered a return of nondeductible
contributions or a return of an excess contribution which is permitted tax-free
(See below). The penalty also will not apply if the distribution is made due to
your permanent disability or death, if the distribution is one of a series of
substantially equal periodic payments made over your life (or life expectancy)
or over the joint lives (or life expectancies) of you and your beneficiary.
Further, the penalty does not apply in the case of a qualifying rollover
distribution. It also does not apply if the distribution does not exceed the
amount of your deductible medical expenses for the year (generally speaking,
medical expenses paid during a year are deductible if they are greater than
70-1/2% of your adjusted gross income for that year), or the distribution does
not exceed the amount you paid for health insurance coverage for yourself, your
spouse and dependents. This exception applies only if you have been unemployed
and received federal or state unemployment compensation payments for at least
twelve weeks; this exception applies to distributions during the year in which
you received the unemployment compensation and during the following year, but
not to any distributions received after you have been reemployed for at least
60 days.
Effective January 1, 1998, there will be no penalty on withdrawals made from
qualified IRAs (both Regular IRAs and Roth IRAs) used to pay for higher
education expenses and first time home purchases. Withdrawals for first time
home purchases are limited to $10,000. Higher education expenses include
tuition, fees, books and supplies required to attend an institution for
post-secondary education. Room and board expenses are also eligible for a
student attending at least half-time. The student may be you, your spouse, or
your child or grandchild. However, expenses that are paid for with a scholarship
or other educational assistance payment are not eligible expenses.
<PAGE> 15
PENALTY TAX FOR EXCESS CONTRIBUTIONS. Contributions to an IRA above the
permissible limits are nondeductible and are subject to an annual nondeductible
excise tax of 6% of the amount of such excess contributions for each year that
the excess is not withdrawn or eliminated. The tax is paid by the person to whom
a deduction is allowed or in the case of a Rollover IRA, by the person for whose
benefit it is established. If the person who contributed the excess takes no
deduction for it and withdraws the excess amount plus the net earnings
attributable to such excess on or before the due date (including extensions) for
filing the Federal income tax return for the year for which the contribution was
made, the 6% excise tax will not be applied but the 10% tax on premature
distributions may be applied to the amount of net earnings. Generally, if the
excess is withdrawn after the due date (including extensions) for filing the tax
return for the year for which the contribution was made, not only will the
excess contribution be subject to the 6% excise tax, but the amount of such
excess and the net income attributable to it will also be includible in income;
and if you have not attained the age of 59-1/2, or are not disabled, you may
also be subject to the previously mentioned 10% penalty tax on premature
distributions (unless an exception to the 10% penalty tax applies). A rollover
contribution from a Roth IRA to a Roth IRA is not subject to this excise tax as
long as the contribution was eligible for rollover and made within 60 days of
receipt. A conversion amount is not subject to this excise tax as long as the
amount was eligible for conversion, and, if done as a rollover, the rollover was
completed within 60 days of receipt of the distribution from the Traditional
IRA. If an amount converted from a Traditional IRA to a Roth IRA was not
eligible for conversion or was improperly converted, the converted amount is
treated as a contribution to the Roth IRA and, therefore, may be an excess
contribution.
The rules discussed above generally apply to SEP-IRAs as well. The law also
allows you to withdraw tax-free and without penalty an excess contribution.
regardless of the amount, made with respect to a rollover contribution
(including an attempted rollover contribution), if the excess contribution
occurred because you reasonably relied on erroneous information required to
be supplied by the plan, trust, or institution making the distribution that
was the subject of the rollover.
As an alternative to withdrawing excess contributions made to an IRA, such
amounts may be eliminated by making reduced contributions; however, you will be
required to pay the 6% excise tax on the amount of the excess for the year of
the contribution and for each subsequent year until the amount of the excess
is deducted in a later year for which you have not contributed the maximum
deductible amount. If a contribution is made to your account in an amount
less than the permissible limit in order to correct an excess contribution
for a previous year for which you did not claim a deduction, under certain
circumstances, taking into account the limits on contributions, you may be
allowed to treat the amount of the reduction in the current year's contribution
as an additional contribution for the current taxable year.
PENALTY TAX FOR UNDER-DISTRIBUTION FROM REGULAR IRAS. If, after April 1st
following the year in which you attain age 70-1/2, the amount distributed is
less than the minimum amount required by law to be distributed, a 50% excise tax
may be imposed on any such deficiency. The Internal Revenue Service may waive
this penalty if the deficiency was due to reasonable error and reasonable steps
are being taken to correct the deficiency.
PENALTY TAX FOR EXCESS DISTRIBUTIONS FOR REGULAR IRAS. In addition, certain
taxpayers with very large accumulations in tax-favored arrangements (including
IRAs, 403(b) arrangements and employer qualified plans) may be subject to a
15% penalty tax (in addition to regular income taxes) if distributions during a
year from all such arrangements exceed a certain amount. This amount is for 1998
(and is indexed for future cost-of-living changes). Distributions from all
tax-favored arrangements during a year are counted in determining whether any
distributions are above the floor amount and are subject to the 15% penalty tax.
There are special rules for grandfathered amounts and for lump sum distributions
from qualified plans. Under current law, this 15% penalty tax will not apply
during calendar years 1997, 1998 and 1999 (however, a related estate tax 15%
penalty tax on certain excess amounts remaining in tax-favored arrangements upon
your death continues to apply during these years). Consult your tax advisor for
additional information on these penalty tax rules.
PROHIBITED TRANSACTIONS AND PLEDGING ACCOUNT ASSETS. If during any taxable year
you engage in a so-called "prohibited transaction" with respect to your IRA, the
account will lose its tax-exempt status. In this event, the fair market value of
all account assets, valued as of the first day of such taxable year will be
deemed distributed to you and includible in your gross
<PAGE> 16
income. These prohibited transactions would include borrowing money from your
account. If you pledge your account or any portion thereof as security for a
loan, such pledged portion will be deemed distributed to you and, to the extent
that it does not represent a return of nondeductible contributions, includible
in your gross income. If you have not yet attained age 59-1/2, an additional tax
equal to 10% of the amount pledged will be imposed on such funds includible in
gross income. If your spouse engages in a prohibited transaction with respect to
his or her account, the results will be the same.
MISCELLANEOUS
FEDERAL INCOME TAX WITHHOLDING.
REGULAR IRA. Distributions from a Regular IRA to the covered individual or to a
beneficiary are subject to Federal income tax withholding unless the covered
individual or beneficiary elects to have no withholding apply. The current
withholding rate required by the Internal Revenue Code is 10%. Additional
information concerning withholding and election forms will be available no
later than at the time a distribution is requested.
ROTH IRA. Federal income tax will be withheld at a flat rate of 10% of any
taxable withdrawal from your Roth IRA unless you elect not to have tax withheld.
Withdrawals from a Roth IRA are not subject to the mandatory 20% income tax
withholding that applies to most distributions from qualified plans or 403(b)
accounts that are not directly rolled over to another plan or IRA.
FEDERAL ESTATE AND GIFT TAXES. Generally, your IRA will be included in your
estate for Federal estate tax purposes. If your spouse is your beneficiary, your
IRA may qualify for a deduction for purposes of that tax. An election under an
IRA to have a distribution payable to a beneficiary on the death of the covered
individual will not be treated as a gift subject to Federal gift tax.
REPORTS TO THE INTERNAL REVENUE SERVICE. You are not required to file Form 5329
with the IRS unless you owe one of the IRA penalty taxes. These are the taxes on
excess contributions, certain premature distributions, prohibited transactions
and under distributions after age 70-1/2 for Regular IRAs. If your beneficiary
fails to make required minimum withdrawals from your Regular or Roth IRA after
your death, your beneficiary may be subject to an exercise tax and be required
to file Form 5329.
For Regular IRAs, you must also report each nondeductible contribution to the
IRS by designating it a nondeductible contribution on your tax return. Use Form
8606. In addition, for any year in which you make a nondeductible contribution
or take a withdrawal, you must include additional information on your tax
return. The information required includes: 1) the amount of your nondeductible
contributions for that year; 2) the amount of withdrawals from Regular IRAs in
that year; 3) the amount by which your total nondeductible contributions for all
the years exceed the total amount of your distributions previously excluded from
gross income; and 4) the total value of all your Regular IRAs as of the end of
the year. If you fail to report any of this information, the IRS will assume
that all your contributions were deductible. This will result in the taxation of
the portion of your withdrawals that should be treated as a nontaxable return of
your nondeductible contributions.
FINANCIAL INFORMATION. The growth in value of the mutual fund shares held in
your account can neither be guaranteed nor projected.
CUSTODIAN CHARGES. State Street Bank and Trust Co. as the Custodian of your
IRA currently charges an annual maintenance fee of $10.00 per taxpayer if the
aggregate of all Gabelli and/or Gabelli Westwood Fund accounts in which you have
an investment is less than $25,000. In the case of a payroll deduction IRA, the
annual maintenance fee may not be imposed if your employer supplies the initial
and subsequent information required by the Custodian on compatible magnetic
tape.
The Custodian may change any of the above fees from time to time. Further
information regarding charges in connection with the administration of your
IRA is contained in the Application and Fund prospectuses.
IRS APPROVAL STATUS. Your IRA has been approved by the Internal Revenue Service
but this determination relates only to form and not to the merits of your
account. Further information concerning IRAs can be obtained from any district
office of the IRS.
THIS SENTENCE WILL BE CONTROLLING. ANY ADDITIONAL ARTICLES THAT ARE NOT
CONSISTENT WITH SECTION 408(A) OF THE CODE AND RELATED REGULATIONS WILL BE
INVALID. o
<PAGE> 17
PART 1: PROVISIONS APPLICABLE TO REGULAR IRAs
INDIVIDUAL RETIREMENT
CUSTODIAL ACCOUNT
(Under Section 408(a) of the Internal Revenue Code)
Derived From
Form 5305-A
(Rev. October 1992)
Department of the Treasury
Internal Revenue Service
- -----------------------------------------------------------------------------
THE DEPOSITOR IS ESTABLISHING AN INDIVIDUAL RETIREMENT ACCOUNT (UNDER SECTION
408(A) OF THE INTERNAL REVENUE CODE) TO PROVIDE FOR HIS OR HER RETIREMENT AND
FOR THE SUPPORT OF HIS OR HER BENEFICIARIES AFTER DEATH.
THE CUSTODIAN HAS GIVEN THE DEPOSITOR THE DISCLOSURE STATEMENT REQUIRED UNDER
REGULATIONS SECTION 1.408-6.
THE DEPOSITOR HAS DEPOSITED WITH THE CUSTODIAN
($ ) IN CASH.
THE DEPOSITOR AND THE CUSTODIAN MAKE THE FOLLOWING AGREEMENT:
SECTION A
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3) or an employer
contribution to a simplified employee pension plan as described in section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5) of the Code).
2. No part of the custodial funds may be invested in collectibles (within the
meaning of Section 408(m)) except as otherwise permitted by section 408(m)(3)
which provides an exception for certain gold and silver coins and coins issued
under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Depositor
and the surviving spouse and shall apply to all subsequent years. The life
expectancy of a non-spouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the Custodial Account must be, or begin
to be, distributed by the Depositor's required beginning date, April 1 following
the calendar year end in which the Depositor reaches age 70-1/2. By that date,
the Depositor may elect, in a manner acceptable to the Custodian, to have the
balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of
the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period that
may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period that
may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
<PAGE> 18
4. If the Depositor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the Depositor's
death. If, however, the beneficiary is the Depositor's surviving spouse,
then this distribution is not required to begin before December 31 of the
year in which the Depositor would have turned age 70-1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually
have been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted
in the account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment
for each year, divide the Depositor's entire interest in the Custodial account
as of the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of distributions
under paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designated
beneficiary as of their birthdays in the year the Depositor reaches age 70-1/2.
In the case of a distribution in accordance with paragraph 4(b)(ii), determine
life expectancy using the attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
alternative method described in Notice 88-38 1988-1 C.B. 524 to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under section 408(i) and
Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear on the IRA application.
SECTION B
ARTICLE VIII
1. The amount of each contribution credited to the Depositor's Account shall
be applied to purchase full and fractional shares of one or more of the open end
mutual funds managed by Gabelli Funds, Inc. or Teton Advisers LLC designated by
the Depositor.
2. All dividends and capital gain distributions received on the shares held
in the Depositor's Account shall (unless received in additional shares of the
Fund) be reinvested in such shares which shall be credited to such account. If
any distribution of the Fund may be received at the election of the shareholder
in additional shares or in cash or other property, the Custodian shall elect to
receive it in additional shares.
3. The Depositor shall have the right, by written notice to the Custodian,
to designate or to change a Beneficiary to receive any benefit to which the
Depositor may be entitled in the event of his death prior to the complete
distribution of
<PAGE> 19
such benefits. If no such designation is in effect upon the Depositor's death,
his Beneficiary shall be his estate.
4. The Custodian shall forward to the Depositor any notices, prospectuses,
financial statements, proxies and proxy soliciting materials relating to such
shares. The Custodian shall not vote any of the shares held in the Account
except in accordance with the written instructions of the Depositor.
5. Any income taxes or other taxes of any kind whatsoever that may be levied
or assessed upon or in respect to the Custodial Account, any transfer taxes
incurred in connection with the investment and reinvestment of the assets of the
Custodial Account, other administrative expenses incurred by the Custodian in
the performance of its duties including fees for legal services rendered to the
Custodian, and reasonable compensation as charged by the Custodian from time to
time, shall, unless paid directly by the Depositor, be deducted from the assets
of the Account and shall, unless allocable to a specific account, be charged
proportionately to the Depositor's accounts.
6. The Custodian shall not be responsible in any way for the collection of
contributions provided for, nor for determining the purpose or the propriety of
any distribution made or of any other action taken at the Depositor's request.
The Depositor shall at all times fully indemnify and save harmless the
Custodian, its successors and assignees from any liability arising from
distributions so made or actions so taken and from any and all other liability
whatsoever which may arise in connection with this Account, except the
obligation of the Custodian to perform its duties under this Account. The
Custodian shall be under no obligation to take any action other than as herein
specified with respect to the Custodial Account unless the Depositor shall
furnish the Custodian with instructions in proper form and the Custodian shall
be protected in acting upon any written order from the Depositor or any other
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed and, so long as it acts in
good faith, in taking or omitting to take any other action. The Custodian may
submit any question it may have to counsel of its choice including its own
general counsel, and shall be protected in acting on the advice of such counsel.
The Custodian shall not be liable for interest on any cash or cash balances
maintained in the Account.
7. This Custodial Agreement shall terminate upon the complete distribution of
the Account to the Depositor or his beneficiaries or to successor individual
retirement accounts or annuities. The Custodian shall have the right to
terminate this Account upon ninety (90) days' notice to the Depositor, or to his
beneficiaries if he shall be dead. In such event, upon expiration of such
period, the Custodian shall distribute the Account into such successor
individual retirement accounts and annuities as the Depositor (or his
beneficiaries) shall designate, or, in the absence of such direction, to the
Depositor, or if he shall be dead, to the beneficiaries, as their interests
shall appear.
8. The Custodian may resign at any time upon ninety (90) days' notice in
writing to the Depositor, Gabelli Funds, Inc. or Gabelli Advisers LLC; and may
be removed by the Depositor or Gabelli Funds, Inc. or Gabelli Advisers LLC,
advisors to the Funds, at any time upon ninety (90) days' notice in writing to
the Custodian. Upon such resignation or removal, the Depositor or Gabelli Funds,
Inc. shall appoint a successor Custodian which shall be a bank (as defined in
Section 401 (d)(1) of the Code) or other person who demonstrates, to the
satisfaction of the Secretary of Treasury or his delegate that the manner in
which he will hold the assets of the Account will be consistent with the
requirements of Section 408 of the Code.
9. Upon receipt by the Custodian of written acceptance of such appointment by
the successor Custodian, the Custodian shall transfer and pay over to such
successor the assets of the Custodial Account and all records pertaining
thereto. The Custodian is authorized, however, to reserve such sum of money as
it may deem advisable for payment of all of its fees, compensation, costs and
expenses, or for payment of any other liability constituting a charge on or
against the assets of the Account or on or against the Custodian, with any
balance of such reserve remaining after the payment of all such items to be paid
over to the successor Custodian. The successor Custodian shall hold the assets
paid over to it under terms similar to those of this Agreement that qualify
under Section 408 of the Internal Revenue Code.
10. If within sixty (60) days after the Custodian's resignation or removal
there has not been appointed a successor Custodian which has accepted such
appointment, the Custodian shall, unless it elects to terminate the Custodial
Agreement pursuant to Section 7 of this Article VIII, appoint such successor
itself.
11. The Custodian is authorized to hire an agent to perform certain of its
duties hereunder, which agent may be the transfer agent for the Fund.
12. Any notice sent from the Custodian to the Depositor shall be effective if
sent by mail to him at his last address of record.
13. This agreement shall be construed, administered and enforced according to
the laws of Massachusetts.
14. In the event of a rollover contribution, described in sections 402(a)(5),
403(a)(4), 408(d)(3) or 409(b)(3)(c) of the
<PAGE> 20
Code, the Custodian shall be under no duty to accept any assets other than cash.
The Custodian may, however, in its complete uncontrolled discretion, accept
assets other than cash upon application by the Depositor. The Custodian will not
accept such assets unless the following conditions are met, but the meeting of
these conditions will in no way affect the Custodian's right to reject any such
application: (a) any securities contributed must be readily marketable, (b) the
Depositor must instruct the Custodian to sell immediately upon receipt of such
securities and reinvest the proceeds in full and fractional shares of the Fund,
(c) the Depositor must indemnify the Custodian and the Fund in accordance with a
form prescribed by the Custodian, (d) all securities must be accompanied by a
stock power with the registered owner's signature properly guaranteed by a bank
or trust company (not a Notary Public) or member firm of a domestic stock
exchange, or by other financial institutions whose guarantees are acceptable to
State Street Bank & Trust Company.
15. If this Agreement is executed by an applicant and the applicant's
non-working spouse, each shall be deemed a separate Depositor and this Agreement
shall establish a separate Custodial Account for each. The Application and
Adoption Agreement is part of this Custodial Agreement.
16. This Agreement may be amended by the Custodian or Gabelli Funds, Inc. or
Gabelli Advisers LLC at any time and from time to time (including retroactive
amendments) by written notice to the Depositor, provided that all such
amendments shall be in compliance with the provisions of the Code and the
regulations promulgated thereunder.
ARTICLE IX
1. All contributions to the Custodial Account made by or on behalf of the
Depositor shall be invested in accordance with proper instructions received from
time to time from the Depositor and shall be applied to purchase full and
fractional shares ("Fund Shares") of any mutual fund managed by Gabelli Funds,
Inc. or Gabelli Advisers LLC and chosen by you in writing (hereinafter referred
to as the Fund or the Mutual Fund) with respect to which State Street Bank and
Trust Co. is the transfer agent. Custodian may perform any of its administrative
duties through other persons designated by Custodian from time to time, except
that Mutual Fund shares or other investments must be registered as stated in
paragraph 3 of this Article IX; and Custodian may delegate all such duties to a
subsidiary which is partially owned by the Custodian's parent company; but no
such delegation or future change therein shall be considered as an amendment to
this Agreement.
2. Except in the case of a rollover contribution or a contribution to a
Simplified Employee Pension Plan referred to in Article I, the Depositor shall
not for any taxable year of the Depositor contribute to the Custodial Account an
amount in excess of the lesser of 100% of his compensation or $2,000, and the
Depositor shall be fully and solely responsible for all taxes, interest and
penalties which might accrue or be assessed by reason of any excess deposit, and
interest, if any, earned thereon. Any contributions made by or on behalf of the
Depositor in respect of a taxable year of the Depositor shall be made by or on
behalf of the Depositor to the Custodian for a deposit in the Custodial Account
within the time period for claiming a Federal income tax deduction for such
contributions for such taxable year. Contributions must be made no later than
the due date for filing the Depositor's tax return for the tax year (excluding
extensions) or by such other date as from time to time provided by law. If a
contribution is intended to be a rollover contribution referred to in Article I,
the Depositor certifies that the source of the contribution qualifies the
contribution as such, that no portion thereof consists of any amount considered
to have been previously contributed by the Depositor as an employee (other than
"deductible employee contributions" as defined in section 72(o)(5) of the Code),
that the contribution is being made to the Custodial Account no later than 60
days after receipt by the Depositor of the distribution giving rise to the
rollover contribution, and that no previous rollover contribution has been made
by the Depositor to or from another individual retirement account or individual
retirement annuity within one (1) year of the date of the rollover contribution
and that the rollover is in all respects permitted by law. It shall be the sole
responsibility of the Depositor to determine the amount of the contributions to
be made hereunder. The Depositor shall execute such forms as the Custodian may
require in connection with any contribution hereunder.
3. Fund Shares held in the Custodial Account shall be registered in the name
of the Custodian or its nominee. The Depositor shall be the beneficial owner of
all mutual fund shares held in the Custodial Account. All dividends and capital
gains distributions received on Fund Shares held in the Depositor's account
shall, unless received in additional shares, be reinvested in shares of the Fund
paying such dividends and distributions which Fund Shares shall be credited to
such account. If any distributions of the Fund may be received at the election
of the Depositor in additional shares or in cash or other property, the
Custodian shall elect to receive additional shares.
4. The Custodian shall forward to the Depositor any notices, prospectuses,
financial statements, proxies and proxy soliciting material relating to any such
shares. The Custodian shall not vote any such shares except in accordance with
the written instructions of the Depositor.
<PAGE> 21
ARTICLE X
The Custodian shall, from time to time, subject to the provisions of Article IV
and V, make distributions out of the Custodial Account to the Depositor, in such
manner and amounts as may be specified in written instructions of the Depositor.
All such instructions shall be deemed to constitute a certification by the
Depositor that the distribution so directed is one that the Depositor is
permitted to receive. Notwithstanding the foregoing, upon the Depositor's death
the distribution rules set forth in Article IV will not apply if the Depositor's
spouse is the beneficiary and he or she elects to treat the account as his or
her own IRA. In such case the spouse will be deemed to be the Depositor under
this Agreement. A declaration of the Depositor's intention as to the disposition
of an amount distributed pursuant to Article V hereof shall be in writing and
given to the Custodian. The Custodian shall have no liability with respect to
any contribution to the Custodial Account, any investment of assets in the
Custodial Account or any distribution therefrom pursuant to instructions
received from the Depositor or for any consequences to the Depositor arising
from such contributions, investments or distributions including, but not limited
to, excise and other taxes and penalties which might accrue or be assessed by
reason thereof, nor shall the Custodian be under any duty to make any inquiry or
investigation with respect thereto.
ARTICLE XI
If the Depositor is disabled (as defined in section 72(m) of the Code), the
balance in the Custodial Account, or any portion thereof, may be distributed to
him/her as soon as practicable after the Custodian receives a written notice of
the Depositor's disability and a written request for distribution. The Custodian
may require such proof of disability as it deems necessary prior to the time
that amounts are distributed to the Depositor on account of such disability.
ARTICLE XII
The Depositor may designate and redesignate his/her beneficiary or beneficiaries
on a form satisfactory to the Custodian and provided by the Fund for such
purpose. To be effective, such designation must be received by the Custodian
prior to the death of the Depositor. Such beneficiary or beneficiaries shall be
entitled to the balance in the Custodial Account of the Depositor as provided in
Paragraph 2 of Article IV. Unless otherwise provided in the designation of
beneficiary form, amounts payable by reason of Depositor's death will be paid to
only the primary beneficiary or beneficiaries who survive the Depositor in equal
shares, or, if no primary beneficiary or beneficiaries survive the Depositor, to
the contingent beneficiary or beneficiaries who survive the Depositor in equal
shares. If some but not all primary or contingent beneficiaries, as applicable,
do not survive the Depositor, any amounts that such nonsurviving beneficiaries
shall have been entitled to receive hereunder shall be divided among the
surviving primary or contingent beneficiaries, as applicable, in proportion to
the relative interests of the surviving primary or contingent beneficiaries. If
no designation of beneficiary is in effect at the time of the Depositor's death
or if no designated beneficiary survives the Depositor, the balance in the
Custodial Account of the Depositor shall be paid to the legal representative of
the estate of the Depositor.
ARTICLE XIII
The Depositor acknowledges he/she has read the information distributed to
him/her by the Custodian and agrees to assume full responsibility for all
decisions as to deposits and withdrawals. The Depositor indemnifies the
Custodian and saves it free and harmless from any and all claims arising out of
any adverse consequences experienced by the Depositor as a result of his/her own
decision, including but not limited to excise taxes and penalties. Any taxes
which may be imposed upon the Custodial Account or the income thereof, but not
excise taxes imposed upon the Depositor, may, in the discretion of the
Custodian, be deducted from and charged against the Custodial Account.
ARTICLE XIV
If, within 180 days after the mailing by the Custodian to the Depositor of a
Fund transaction advice and/or Fund statement with respect to his/her account,
the Depositor has not given the Custodian written notice of any exception or
obligation thereto, such transaction advice and/or statement shall be deemed to
have been approved in its entirety. In such case, or upon written approval of
the Depositor, the Custodian shall be released, relieved and discharged with
respect to all matters and statements set forth therein as though the report had
been settled by judgment or decree of a court of competent jurisdiction.
ARTICLE XV
The Custodian shall have no duties whatsoever except such duties as it
specifically agrees to in writing, and no implied covenants or obligations shall
be read into the Agreement against the Custodian. The Custodian shall not be
liable under this Agreement, except for its own bad faith, gross negligence or
willful misconduct. In performing its duties under this Agreement, the Custodian
may hire agents experts, and attorneys and delegate discretionary powers to, and
rely upon
<PAGE> 22
information by such agents, experts, and attorneys.
ARTICLE XVI
No interest, right, or claim in or any part of the Custodial Account or any
payment therefrom shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind and the Custodian shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute,
or anticipate the same, except as required by law.
ARTICLE XVII
Except for any excise taxes required by the Code to be paid by the Depositor,
any income tax or other taxes of any kind whatsoever that may be levied or
assessed upon or in respect to the Custodial Account shall be paid from the
assets of the Custodial Account. Any transfer taxes incurred in connection with
the investment and reinvestment of the assets of the Custodial Account, all
other administrative expenses incurred by the Custodian in the performance of
its duties, including fees for legal services rendered to the Custodian, shall
be paid from the assets of the Custodial Account.
The Custodian shall be entitled to receive and may charge against the
Depositor's Custodial Account such reasonable compensation for its services in
accordance with its fee schedule as from time to time in effect, and shall also
be entitled to reimbursement of its expenses as Custodian under this Agreement.
The Custodian will notify the Depositor in writing of any change in its fee
schedule.
ARTICLE XVIII
The Depositor hereby delegates to the Custodian and to the Fund the power to
amend this Agreement from time to time as it deems appropriate, and hereby
consents to all such amendments, provided, however, that all such amendments are
in compliance with the provisions of the Code and the regulations promulgated
thereunder. No amendment by the Custodian or the Fund shall cause or permit any
part of the assets of the Custodial Account to be diverted to purposes other
than for the exclusive benefit of the Depositor or his beneficiaries. All such
amendments shall be effective as of the date specified in a written notice of
amendment which will be sent to the Depositor.
ARTICLE XIX
1. The Fund at any time may remove the Custodian upon thirty days' written
notice to that effect delivered to the Custodian, which notice shall also
designate a successor custodian. The successor custodian shall satisfy the
requirements of section 408(h) of the Code, in that it shall be a bank (as
defined in section 408(h) of the Code) or other person who demonstrates, to the
satisfaction of the Secretary of the Treasury or his delegate, that the manner
in which such person will hold the assets of the Custodial Account will be
consistent with the requirements of section 408(h) of the Code. Upon receipt by
the Custodian of written acceptance of such appointment of the successor
custodian, the removal of the Custodian shall be effective, and the Custodian
shall within thirty days of the effective date of the successor custodian's
appointment, transfer and deliver to such successor custodian the assets of the
Custodial Account and such records pertaining thereto as may be requested in
writing by the successor custodian. The Custodian may, however, reserve such
assets of the Custodial Account as it may deem advisable for the payment of all
its fees, compensation, costs and expenses and for the payment of all other
liabilities which are a charge on or against the assets of the Custodial Account
or on or against the Custodian, and where necessary for this purpose may
liquidate reserved Fund Shares. Any balance of such reserve remaining after the
payment of all such items shall be paid over to the successor custodian.
2. The Custodian may resign at any time as custodian under this Agreement
without liability, cost or expense of any kind upon thirty days' written notice
to that effect delivered to the Depositor and the Fund. Upon receiving such
notice of resignation, the Depositor or the Fund shall forthwith appoint a
successor custodian which satisfies the requirements of section 408(h) of the
Code. Upon receipt by the Custodian of written acceptance by the successor
custodian of such appointment, the custodian is authorized to act in the same
manner as provided for in paragraph 1 of this Article as regards the transfer of
assets to the successor custodian and the payments of the items referred to
therein. In the event the Depositor or the Fund fail to appoint a successor
custodian which has accepted its appointment within thirty days after receipt of
the Custodian's notice of resignation, or removal, the Custodian shall terminate
the Account and distribute the balance thereof to the Depositor. provided that
the custodian may retain a reserve as set forth in this Article and shall follow
the procedures set forth therein with respect to such reserve.
3. The Depositor may terminate the Custodial Account at any time, by
delivering to the custodian a signed notice of termination. Upon such
termination, and subject to a reservation of assets in the same manner as
provided for in paragraph 1 of this Article, any and all assets remaining in the
Custodial Account as of the date of termination shall be distributed to
<PAGE> 23
the Depositor, in cash, or in kind as directed by the Depositor. This Agreement
shall terminate upon the complete distribution of all of the assets of the
Custodial Account.
The Custodian, upon written direction of the Depositor and after submission to
the Custodian of such documents as it may reasonably require, including a
written acceptance by the new trustee or custodian, shall transfer the assets
held under the Agreement (reduced by any amounts referred to in Article XVII and
subject to the custodian's right to retain a reserve in accordance with the
provisions of paragraph 1 hereof, to the Trustee or Custodian under any
individual retirement account or under any Plan qualified under Section 401(a)
of the Code. The giving of such instructions by the Depositor shall constitute a
certification to the Custodian that such Individual Retirement Account, or
qualified plan, is a plan qualified under the appropriate provisions of the
Code.
ARTICLE XX
The provisions of this Agreement shall apply to any successor custodian from the
effective date of its appointment as such with the same force and effect as if
such successor was the initial custodian hereunder.
ARTICLE XXI
1. If, because of an erroneous assumption as to compensation, or for any
other reason a contribution which is an excess contribution within the meaning
of section 408(d)(4) is made on behalf of the Depositor for any year, adjustment
of such excess contribution shall be made by the distribution in cash or in kind
to the Depositor, upon written notice to the Custodian from the Depositor which
states the amount of such excess contribution, or the full amount of such excess
and any net income attributable thereto.
2. The Custodian shall have no liability with respect to any contribution to
the Custodial Account, any investment of the assets in the Custodial Account, or
any distribution therefrom pursuant to instructions received from the Depositor
or in accordance with this Agreement, or for any consequences to the Depositor
arising from such contributions, investments or distributions including, but not
limited to, excise and other tax penalties which might accrue or be assessed by
reason thereof, nor shall the Custodian be under any duty to make any inquiry or
investigation with respect thereto. The Depositor indemnifies the Custodian and
saves it free and harmless from any and all claims, liability, cost, and expense
(including reasonable attorney's fees) arising out of any adverse consequences
experienced by the Depositor as a result of Depositor's decisions including, but
not limited to, excise taxes and penalties.
3. The Custodian shall not be responsible for the purpose or propriety of any
distribution made pursuant hereto. The Custodian may conclusively rely upon, be
entitled to assume the truth of, and be protected in acting upon any written
statement, order, direction, notice, instruction or other written instrument of
or received from the Depositor in connection with this Agreement and believed by
the Custodian to be genuine and to have been properly executed, and shall, so
long as it acts in good faith, have no liability in taking or omitting to take
any action based thereon. The Custodian shall be under no duty of inquiry with
respect to any such writing, but in its discretion may request any tax waivers,
proof of signatures, or other evidence which it reasonably deems necessary for
its protection. The Depositor and the successors of the Depositor, as
appropriate. including any executor or administrator of the Depositor shall, to
the extent permitted by law, indemnify against and save harmless the Custodian
and its successors and assigns from any and all claims, actions or liabilities
of the Custodian to the Depositor or the successors of the Depositor whatsoever
(including all reasonable expenses incurred in defending against any of the
foregoing) which may arise in connection herewith, except such as may arise from
the Custodian's own bad faith, gross negligence or willful misconduct. The
Custodian shall not be under any duty to take any action other than as herein
specified with respect hereto, unless the Depositor shall furnish it with
instruction in proper form and such instructions shall have been specifically
agreed to by the Custodian, or to defend or engage in any suit with respect
hereto unless it shall have first agreed in writing to do so and shall have been
fully indemnified to its satisfaction.
ARTICLE XXII
The Depositor shall be fully and solely responsible for all taxes and penalties
which might accrue or be assessed for having failed to make the annual minimum
withdrawal commencing no later than April 1st following the calendar year in
which he/she attains the age of seventy and one-half (70-1/2) or for any year
thereafter.
ARTICLE XXIII
The Custodian and the Depositor hereby waive and agree to waive the right to
trial by jury in an action or proceeding instituted in respect to the Custodial
Account. The Depositor further agrees that the venue of any litigation between
the Depository and the Custodian with respect to the Custodial Account shall be
in the Commonwealth of Massachusetts. This Agreement and the Custodial Account
created hereby shall be subject to the applicable laws, rules and regulations,
as the same may from time to time be amended by the Federal government and the
Commonwealth of Massachusetts and the agencies and instrumentalities thereof and
shall be governed by and construed, administered and enforced according to the
laws of the Commonwealth of Massachusetts. All contributions to the Custodial
Account
<PAGE> 24
shall be deemed to take place in the Commonwealth of Massachusetts.
ARTICLE XXIV
Any notice herein required or permitted to be given to the Custodian or the Fund
shall be deemed to have been given if mailed to and actually received by the
Custodian or the Fund at 1) Gabelli Funds c/o State Street Bank and Trust Co.,
P.O. Box 8308, Boston, MA 02266-8308 or 2) by registered or certified mail at
The Gabelli Funds, the BFDS Building, Seventh Floor, Two Heritage Drive, Quincy,
MA, 02171 or other such address as the Custodian shall provide the Depositor
from time to time. Any notice herein required or permitted to be given to the
Depositor shall be deemed to have been given when mailed to the Depositor at the
Depositor's last address of record provided to the Custodian.
ARTICLE XXV
Words in the masculine include the feminine, the singular includes the plural,
and vice versa, unless qualified by the context.
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF the Depositor has evidenced his/her acceptance of this
Agreement by signing the Individual Retirement Account Application and Adoption
Agreement for the designated Fund(s), and the Custodian, to evidence acceptance
of this Agreement, has signed the Agreement as written below
CUSTODIAN:
STATE STREET BANK & TRUST COMPANY
By /s/
------------------------------------------------------------------------------
Authorized Signature
(Section references are to the Internal Revenue Code unless otherwise noted)
- --------------------------------------------------------------------------------
PURPOSE OF FORM
This model custodial account may be used by an individual who wishes to adopt an
individual retirement account under section 408(a). When fully executed by the
Depositor and the Custodian not later than the time prescribed by law for filing
the Federal income tax return for the Depositor's tax year (including any
extensions thereof), a Depositor will have an individual retirement account
(IRA) custodial account which meets the requirements of section 408(a). This
account must be created in the United States for the exclusive benefit of the
Depositor or his/her beneficiaries.
Individuals may rely on regulations from the Tax Reform Act of 1986 to the
extent specified in those regulations. Do not file form 5305-A with the IRS.
Instead, keep it for your records. For more information, obtain a copy of the
required disclosure statement from your custodian or obtain PUBLICATION 590,
Individual Retirement Arrangements (IRAs).
DEFINITIONS CUSTODIAN--The Custodian must be a bank or savings and loan
association, as defined in section 408(n), or other person who has the approval
of the Internal Revenue Service to act as custodian.
DEPOSITOR--The Depositor is the person who establishes the custodial account.
IRA FOR NON-WORKING SPOUSE--Contributions to an IRA custodial account for a
non-working spouse must be made to a separate IRA custodial account established
by the non-working spouse.
This form may be used to establish the IRA custodial account for the non-working
spouse.
An employee's social security number will serve as the identification number of
his or her individual retirement account. An employer identification number is
only required for each participant-directed individual retirement account. An
employer identification number is required for a common fund created for
individual retirement accounts.
SPECIFIC INSTRUCTIONS
ARTICLE IV--Distributions made under this Article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 701/2 to ensure that the
requirements of section 408(a)(6) have been met.
ARTICLE VIII--This Article and any that follow it may incorporate additional
provisions that are agreed upon by the Depositor and Custodian to complete the
agreement. These may include, for example: definitions, investment powers,
voting rights, exculpatory provisions, amendment and termination, removal of
Custodian, custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc.
For further information please refer to the prospectus for the fund(s) you have
selected for investment. o
<PAGE> 25
PART 2: PROVISIONS APPLICABLE
TO ROTH IRAS
The following provisions of Articles I to VII are in the form promulgated by the
Internal Revenue Service in Form 5305-RA for use in establishing a Roth
Individual Retirement Custodial Account.
ARTICLE I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then, except
in the case of a rollover contribution described in section 408A(e), the
Custodian will accept only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the Depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no contributions
other than IRA Conversion Contributions made during the same tax year will be
accepted.
ARTICLE IA
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single Depositor, the
$2,000 annual contribution is phased out between AGI of $95,000 and $110,000;
for a married Depositor who files jointly, between AGI of $150,000 and $160,000;
and for a married Depositor who files separately, between $0 and $10,000. In
case of a conversion, the Custodian will not accept IRA Conversion Contributions
in a tax year if the Depositor's AGI for that tax year exceeds $100,000 or if
the Depositor is married and files a separate return. Adjusted gross income is
defined in section 408A(c)(3) and does not include IRA Conversion Contributions.
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by section 408(m)(3),
which provides an exception for certain gold, silver, and platinum coins, coins
issued under the laws of any state, and certain bullion.
ARTICLE IV
1. If the Depositor dies before his or her entire interest is distributed to
him or her and the Depositor's surviving spouse is not the sole beneficiary, the
entire remaining interest will, at the election of the Depositor or, if the
Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth anniversary
of the Depositor's death, or
(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of the
Depositor's death.
If distributions do not begin by the date described in (b), distribution
method (a) will apply.
2. In the case of distribution method 1(b) above, to determine the minimum
annual payment for each year, divide the Depositor's entire interest in the
trust as of the close of business on December 31 of the preceding year by the
life expectancy of the designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the Depositor's spouse is the sole beneficiary on the Depositor's date
of death, such spouse will then be treated as the Depositor.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under sections 408(i) and
408A(d)(3)(E), and Regulations section 1.408-5 and 1.408-6, and under guidance
published by the Internal Revenue Service.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor as prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this
<PAGE> 26
sentence will be controlling. Any additional articles that are not consistent
with section 408A, the related regulations, and other published guidance will be
invalid.
PART 3: PROVISIONS APPLICABLE TO BOTH REGULAR IRAS AND ROTH IRAS
ARTICLE VII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance. Other
amendments may be made with the consent of the persons whose signatures appear
below.
ARTICLE VIII
1. As used in this Article VIII the following terms have the following
meanings:
"Account" or "Custodial Account" means the Roth Individual Retirement Account
established using the terms of this Agreement and the Adoption Agreement signed
by the Depositor.
"Custodian" means State Street Bank and Trust Company.
"Fund" means registered investment company which is advised, sponsored, or
distributed by sponsor; provided, however, that such a mutual fund or registered
investment company must be legally offered for sale in the state of the
Depositor's residence.
"Distributor" means the entity which has a contract with the Fund(s) to serve
as distributor of the shares of such Fund(s).
In any case where there is no Distributor, the duties assigned hereunder to
the Distributor may be performed by the Fund(s) or by an entity that has a
contract to perform management or investment advisory services for the Fund(s).
"Service Company" means any entity employed by the Custodian or the
Distributor, including the transfer agent for the Fund(s), to perform various
administrative duties of either the Custodian or the Distributor.
In any case where there is no Service Company, the duties assigned hereunder
to the Service Company will be performed by the Distributor (if any) or by an
entity specified in the second preceding paragraph.
"Sponsor" means [insert fund management company or other fund entity that is
making Fund(s) available under this Agreement and has the power to appoint a
successor custodian].
2. The Depositor may revoke the Custodial Account established hereunder by
mailing or delivering a written notice of revocation to the Custodian within
seven days after the Depositor receives the Disclosure Statement related to the
Custodial Account. Mailed notice is treated as given to the Custodian on date of
the postmark (or on the date of Post Office certification or registration in the
case of notice sent by certified or registered mail). Upon timely revocation,
the Depositor's initial contribution will be returned, without adjustment for
administrative expenses, commissions or sales charges, fluctuations in market
value or other changes.
The Depositor may certify in the Adoption Agreement that the Depositor
received the Disclosure Statement related to the Custodial Account at least
seven days before the Depositor signed the Adoption Agreement to establish the
Custodial Account, and the Custodian may rely on such certification.
3. All contributions to the Custodial Account shall be invested and
reinvested in full and fractional shares of one or more Funds. Such investments
shall be made in such proportions and/or in such amounts as Depositor from time
to time in the Adoption Agreement or by other written notice to the Service
Company (in such form as may be acceptable to the Service Company) may direct.
The Service Company shall be responsible for promptly transmitting all
investment directions by the Depositor for the purchase or sale of shares of one
or more Funds hereunder to the Funds' transfer agent for execution. However, if
investment directions with respect to the investment of any contribution
hereunder are not received from the Depositor as required or, if received, are
unclear or incomplete in the opinion of the Service Company, the contribution
will be returned to the Depositor, or will be held uninvested (or invested in a
money market fund if available) pending clarification or completion by the
Depositor, in either case without liability for interest or for loss of income
or appreciation. If any other directions or other orders by the Depositor with
respect to the sale or purchase of shares of one or more Funds for the Custodial
Account are unclear or incomplete in the opinion of the Service Company, the
Service Company will refrain from carrying out such investment directions or
from executing any such sale or purchase, without liability for loss of income
or for appreciation or depreciation of any asset, pending receipt of
clarification or completion from the Depositor.
All investment directions by Depositor will be subject to any minimum initial
or additional investment or minimum balance rules applicable to a Fund as
described in its prospectus.
<PAGE> 27
All dividends and capital gains or other distributions received on the shares
of any Fund held in the Depositor's Account shall be (unless received in
additional shares) reinvested in full and fractional shares of such Fund (or of
any other Fund offered by the Sponsor, if so directed).
4. Subject to the minimum initial or additional investment, minimum balance
and other exchange rules applicable to a Fund, the Depositor may at any time
direct the Service Company to exchange all or a specified portion of the shares
of a Fund in the Depositor's Account for shares and fractional shares of one or
more other Funds. The Depositor shall give such directions by written notice
acceptable to the Service Company, and the Service Company will process such
directions as soon as practicable after receipt thereof (subject to the second
paragraph of Section 3 of this Article VIII.
5. Any purchase or redemption of shares of a Fund for or from the Depositor's
Account will be effected at the public offering price or net asset value of such
Fund (as described in the then effective prospectus for such Fund) next
established after the Service Company has transmitted the Depositor's investment
directions to the transfer agent for the Fund(s).
Any purchase, exchange, transfer or redemption of shares of a Fund for or
from the Depositor's account will be subject to any applicable sales, redemption
or other charge as described in the then effective prospectus for such Fund.
6. The Service Company shall maintain adequate records of all purchases or
sales of shares of one or more Funds for the Depositor's Custodial Account. Any
account maintained in connection herewith shall be in the name of the Custodian
for the benefit of the Depositor. All assets of the Custodial Account shall be
registered in the name of the Custodian or of a suitable nominee. The books and
records of the Custodian shall show that all such investments are part of the
Custodial Account.
The Custodian shall maintain or cause to be maintained adequate records
reflecting transactions of the Custodial Account. In the discretion of the
Custodian, records maintained by the Service Company with respect to the Account
hereunder will be deemed to satisfy the Custodian's recordkeeping
responsibilities therefor. The Service Company agrees to furnish the Custodian
with any information the Custodian requires to carry out the Custodian's
recordkeeping responsibilities.
7. Neither the Custodian nor any other party providing services to the
Custodial Account will have any responsibility for rendering advice with respect
to the investment and reinvestment of Depositor's Custodial Account, nor shall
such parties be liable for any loss or diminution in value which results from
Depositor's exercise of investment control over his Custodial Account. Depositor
shall have and exercise exclusive responsibility for and control over the
investment of the assets of his Custodial Account, and neither Custodian nor any
other such party shall have any duty to question his directions in that regard
or to advise him regarding the purchase, retention or sale of shares of one or
more Funds for the Custodial Account.
8. The Depositor may in writing appoint an investment advisor with respect to
the Custodial Account on a form acceptable to the Custodian and the Service
Company. The investment advisor's appointment will be in effect until written
notice to the contrary is received by the Custodian and the Service Company.
While an investment advisor's appointment is in effect, the investment advisor
may issue investment directions or may issue orders for the sale or purchase of
shares of one or more Funds to the Service Company, and the Service Company will
be fully protected in carrying out such investment directions or orders to the
same extent as if they had been given by the Depositor.
The Depositor's appointment of any investment advisor will also be deemed to
be instructions to the Custodian and the Service Company to pay such investment
advisor's fees to the investment advisor from the Custodial Account hereunder
without additional authorization by the Depositor or the Custodian.
9. Distribution of the assets of the Custodial Account shall be made at such
time and in such form as Depositor (or the Beneficiary if Depositor is deceased)
shall elect by written order to the Custodian. Depositor acknowledges that any
distribution of a taxable amount from the Custodial Account (except for
distribution on account of Depositor's disability or death, return of an "excess
contribution" referred to in Code Section 4973(f), or a "rollover" from this
Custodial Account) made earlier than age 592 may subject Depositor to an
"additional tax on early distributions" under Code Section 72(t) unless an
exception to such additional tax is applicable. For that purpose, Depositor will
be considered disabled if Depositor can prove, as provided in Code Section
72(m)(7), that Depositor is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or
<PAGE> 28
be of long-continued and indefinite duration. It is the responsibility of the
Depositor (or the Beneficiary) by appropriate distribution instructions to the
Custodian to insure that any applicable distribution requirements of Code
Section 401(a)(9) and Article IV above are met. If the Depositor (or
Beneficiary) does not direct the Custodian to make distributions from the
Custodial Account by the time that such distributions are required to commence
in accordance with such distribution requirements, the Custodian (and Service
Company) shall assume that the Depositor (or Beneficiary) is meeting the minimum
distribution requirements from another individual retirement arrangement
maintained by the Depositor (or Beneficiary) and the Custodian and Service
Company shall be fully protected in so doing. If the Depositor's surviving
spouse is the Beneficiary, the Depositor or such spouse may elect to comply with
the distribution requirements in Article IV using the recalculation of life
expectancy method, or may elect that the life expectancy of the Depositor's
surviving spouse will not be recalculated; any such election may be in such form
as the Depositor (or surviving spouse) provides (including the calculation of
minimum distribution amounts in accordance with a method that does not provide
for recalculation of the life expectancy of the surviving spouse and
instructions for withdrawals to the Custodian in accordance with such method).
Notwithstanding paragraph 2 of Article IV, unless an election to have life
expectancies recalculated annually is made by the time distributions are
required to begin, life expectancies shall not be recalculated. Neither the
Custodian nor any other party providing services to the Custodial Account
assumes any responsibility for the tax treatment of any distribution from the
Custodial Account; such responsibility rests solely with the person ordering the
distribution.
10. The Custodian assumes (and shall have) no responsibility to make any
distribution except upon the written order of Depositor (or Beneficiary if
Depositor is deceased) containing such information as the Custodian may
reasonably request. Also, before making any distribution or honoring any
assignment of the Custodial Account, Custodian shall be furnished with any and
all applications, certificates, tax waivers, signature guarantees and other
documents (including proof of any legal representative's authority) deemed
necessary or advisable by Custodian, but Custodian shall not be responsible for
complying with any order or instruction which appears on its face to be genuine,
or for refusing to comply if not satisfied it is genuine, and Custodian has no
duty of further inquiry. Any distributions from the Account may be mailed,
first-class postage prepaid, to the last known address of the person who is to
receive such distribution, as shown on the Custodian's records, and such
distribution shall to the extent thereof completely discharge the Custodian's
liability for such payment.
11. (a) The term "Beneficiary" means the person or persons designated as
such by the "designating person" (as defined below) on a form acceptable to the
Custodian for use in connection with the Custodial Account, signed by the
designating person, and filed with the Custodian. The form may name
individuals, trusts, estates, or other entities as either primary or contingent
beneficiaries. However, if the designation does not effectively dispose of the
entire Custodial Account as of the time distribution is to commence, the term
"Beneficiary" shall then mean the designating person's estate with respect to
the assets of the Custodial Account not disposed of by the designation form.
The form last accepted by the Custodian before such distribution is to
commence, provided it was received by the Custodian (or deposited in the U.S.
Mail or with a reputable delivery service) during the designating person's
lifetime, shall be controlling and, whether or not fully dispositive of the
Custodial Account, thereupon shall revoke all such forms previously filed by
that person. The term "designating person" means Depositor during his/her
lifetime; after Depositor's death, it also means Depositor's spouse, but only
if the spouse elects to treat the Custodial Account as the spouse's own
Custodial Account in accordance with applicable provisions of the Code.
(b) When and after distributions from the Custodial Account to Depositor's
Beneficiary commence, all rights and obligations assigned to Depositor
hereunder shall inure to, and be enjoyed and exercised by, Beneficiary instead
of Depositor.
12. (a) The Depositor agrees to provide information to the Custodian at
such time and in such manner as may be necessary for the Custodian to prepare
any reports required under Section 408(i) or Section 408A(d)(3)(E) of the Code
and the regulations thereunder or otherwise.
(b) The Custodian or the Service Company will submit reports to the
Internal Revenue Service and the Depositor at such time and manner and
containing such information as is prescribed by the Internal Revenue Service.
(c) The Depositor, Custodian and Service Company shall furnish to each
other such information relevant to the Custodial Account as may be required
under the Code
<PAGE> 29
and any regulations issued or forms adopted by the Treasury Department
thereunder or as may otherwise be necessary for the administration of the
Custodial Account.
(d) The Depositor shall file any reports to the Internal Revenue Service
which are required of him by law (including Form 5329), and neither the
Custodian nor Service Company shall have any duty to advise Depositor
concerning or monitor Depositor's compliance with such requirement.
13. (a) Depositor retains the right to amend this Custodial Account
document in any respect at any time, effective on a stated date which shall be
at least 60 days after giving written notice of the amendment (including its
exact terms) to Custodian by registered or certified mail, unless Custodian
waives notice as to such amendment. If the Custodian does not wish to continue
serving as such under this Custodial Account document as so amended, it may
resign in accordance with Section 17 below.
(b) Depositor delegates to the Custodian the Depositor's right so to amend,
provided (i) the Custodian does not change the investments available under this
Custodial Agreement, and (ii) the Custodian amends in the same manner all
agreements comparable to this one, having the same Custodian, permitting
comparable investments, and under which such power has been delegated to it;
this includes the power to amend retroactively if necessary or appropriate in
the opinion of the Custodian in order to conform this Custodial Account to
pertinent provisions of the Code and other laws or successor provisions of law,
or to obtain a governmental ruling that such requirements are met, to adopt a
prototype or master form of agreement in substitution for this Agreement, or as
otherwise may be advisable in the opinion of the Custodian. Such an amendment
by the Custodian shall be communicated in writing to Depositor, and Depositor
shall be deemed to have consented thereto unless, within 30 days after such
communication to Depositor is mailed, Depositor either (i) gives Custodian a
written order for a complete distribution or transfer of the Custodial Account,
or (ii) removes the Custodian and appoints a successor under Section 17 below.
Pending the adoption of any amendment necessary or desirable to conform
this Custodial Account document to the requirements of any amendment to any
applicable provision of the Internal Revenue Code or regulations or rulings
thereunder, the Custodian and the Service Company may operate the Depositor's
Custodial Account in accordance with such requirements to the extent that the
Custodian and/or the Service Company deem necessary to preserve the tax
benefits of the Account.
(c) Notwithstanding the provisions of subsections (a) and (b) above, no
amendment shall increase the responsibilities or duties of Custodian without
its prior written consent.
(d) This Section 13 shall not be construed to restrict the Custodian's
right to substitute fee schedules in the manner provided by Section 16 below,
and no such substitution shall be deemed to be an amendment of this Agreement.
14. (a) Custodian shall terminate the Custodial Account if this Agreement
is terminated or if, within 30 days (or such longer time as Custodian may
agree) after resignation or removal of Custodian under Section 17, Depositor or
Sponsor as the case may be, has not appointed a successor which has accepted
such appointment. Termination of the Custodial Account shall be effected by
distributing all assets thereof in a single payment in cash or in kind to
Depositor, subject to Custodian's right to reserve funds as provided in Section
17.
(b) Upon termination of the Custodial Account, this Custodial Account
document shall have no further force and effect (except for Sections 15(f) and
17(b) and (c) hereof which shall survive the termination of the Custodial
Account and this document), and Custodian shall be relieved from all further
liability hereunder or with respect to the Custodial Account and all assets
thereof so distributed.
15. (a) In its discretion, the Custodian may appoint one or more
contractors or service providers to carry out any of its functions and may
compensate them from the Custodial Account for expenses attendant to those
functions. In the event of such appointment, all rights and privileges of the
Custodian under this Agreement shall pass through to such contractors or
service providers who shall be entitled to enforce them as if a named party.
(b) The Service Company shall be responsible for receiving all
instructions, notices, forms and remittances from Depositor and for dealing
with or forwarding the same to the transfer agent for the Fund(s).
(c) The parties do not intend to confer any fiduciary duties on Custodian
or Service Company (or any other party providing services to the Custodial
Account), and none shall be implied. Neither shall be liable (or assumes any
responsibility) for the collection of contributions, the proper amount, time or
tax treatment of any contribution to the Custodial Account or the propriety of
any contributions under this Agreement, or the purpose, time, amount (including
any minimum distribution
<PAGE> 30
amounts), tax treatment or propriety of any distribution hereunder, which
matters are the sole responsibility of Depositor and Depositor's Beneficiary.
(d) Not later than 60 days after the close of each calendar year (or after
the Custodian's resignation or removal), the Custodian or Service Company shall
file with Depositor a written report or reports reflecting the transactions
effected by it during such period and the assets of the Custodial Account at
its close. Upon the expiration of 60 days after such a report is sent to
Depositor (or Beneficiary), the Custodian or Service Company shall be forever
released and discharged from all liability and accountability to anyone with
respect to transactions shown in or reflected by such report except with
respect to any such acts or transactions as to which Depositor shall have filed
written objections with the Custodian or Service Company within such 60 day
period.
(e) The Service Company shall deliver, or cause to be delivered, to
Depositor all notices, prospectuses, financial statements and other reports to
shareholders, proxies and proxy soliciting materials relating to the shares of
the Funds(s) credited to the Custodial Account. No shares shall be voted, and
no other action shall be taken pursuant to such documents, except upon receipt
of adequate written instructions from Depositor.
(f) Depositor shall always fully indemnify Service Company, Distributor,
the Fund(s), Sponsor and Custodian and save them harmless from any and all
liability whatsoever which may arise either (i) in connection with this
Agreement and the matters which it contemplates, except that which arises
directly out of the Service Company's, Distributor's, Fund's, Sponsor's or
Custodian's bad faith, gross negligence or willful misconduct, (ii) with
respect to making or failing to make any distribution, other than for failure
to make distribution in accordance with an order therefor which is in full
compliance with Section 10, or (iii) actions taken or omitted in good faith by
such parties. Neither Service Company nor Custodian shall be obligated or
expected to commence or defend any legal action or proceeding in connection
with this Agreement or such matters unless agreed upon by that party and
Depositor, and unless fully indemnified for so doing to that party's
satisfaction.
(g) The Custodian and Service Company shall each be responsible solely for
performance of those duties expressly assigned to it in this Agreement, and
neither assumes any responsibility as to duties assigned to anyone else
hereunder or by operation of law.
(h) The Custodian and Service Company may each conclusively rely upon and
shall be protected in acting upon any written order from Depositor or
Beneficiary, or any investment advisor appointed under Section 8, or any other
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed, and so long as it acts in
good faith, in taking or omitting to take any other action in reliance thereon.
In addition, Custodian will carry out the requirements of any apparently valid
court order relating to the Custodial Account and will incur no liability or
responsibility for so doing.
16. (a) The Custodian, in consideration of its services under this
Agreement, shall receive the fees specified on the applicable fee schedule. The
fee schedule originally applicable shall be the one specified in the Adoption
Agreement or the Disclosure Statement, as applicable. The Custodian may
substitute a different fee schedule at any time upon 30 days' written notice to
Depositor. The Custodian shall also receive reasonable fees for any services
not contemplated by any applicable fee schedule and either deemed by it to be
necessary or desirable or requested by Depositor.
(b) Any income, gift, estate and inheritance taxes and other taxes of any
kind whatsoever, including transfer taxes incurred in connection with the
investment or reinvestment of the assets of the Custodial Account, that may be
levied or assessed in respect to such assets, and all other administrative
expenses incurred by the Custodian in the performance of its duties (including
fees for legal services rendered to it in connection with the Custodial
Account) shall be charged to the Custodial Account. If the Custodian is
required to pay any such amount, the Depositor (or Beneficiary) shall promptly
upon notice thereof reimburse the Custodian.
(c) All such fees and taxes and other administrative expenses charged to
the Custodial Account shall be collected either from the amount of any
contribution or distribution to or from the account, or (at the option of the
person entitled to collect such amounts) to the extent possible under the
circumstances by the conversion into cash of sufficient shares of one or more
Funds held in the Custodial Account (without liability for any loss incurred
thereby). Notwithstanding the foregoing, the Custodian or Service Company may
make demand upon the Depositor for payment of the amount of such fees, taxes
and other administrative expenses. Fees which remain outstanding after 60 days
may be subject to a
<PAGE> 31
collection charge.
17. (a) Upon 30 days' prior written notice to the Custodian, Depositor or
Sponsor, as the case may be, may remove it from its office hereunder. Such
notice, to be effective, shall designate a successor custodian and shall be
accompanied by the successor's written acceptance. The Custodian also may at
any time resign upon 30 days' prior written notice to Sponsor, whereupon the
Sponsor shall notify the Depositor (or Beneficiary) and shall appoint a
successor to the Custodian. In connection with its resignation hereunder, the
Custodian may, but is not required to, designate a successor custodian by
written notice to the Sponsor or Depositor (or Beneficiary), and the Sponsor or
Depositor (or Beneficiary) will be deemed to have consented to such successor
unless the Sponsor or Depositor (or Beneficiary) designates a different
successor custodian and provides written notice thereof together with such a
different successor's written acceptance by such date as the Custodian
specifies in its original notice to the Sponsor or Depositor (or Beneficiary)
(provided that the Sponsor or Depositor (or Beneficiary) will have a minimum of
30 days to designate a different successor).
(b) The successor custodian shall be a bank, insured credit union, or other
person satisfactory to the Secretary of the Treasury under Code Section
408(a)(2). Upon receipt by Custodian of written acceptance by its successor of
such successor's appointment, Custodian shall transfer and pay over to such
successor the assets of the Custodial Account and all records (or copies
thereof) of Custodian pertaining thereto, provided that the successor custodian
agrees not to dispose of any such records without the Custodian's consent.
Custodian is authorized, however, to reserve such sum of money or property as
it may deem advisable for payment of all its fees, compensation, costs, and
expenses, or for payment of any other liabilities constituting a charge on or
against the assets of the Custodial Account or on or against the Custodian,
with any balance of such reserve remaining after the payment of all such items
to be paid over to the successor custodian.
(c) Any Custodian shall not be liable for the acts or omissions of its
predecessor or its successor.
18. References herein to the "Internal Revenue
Code" or "Code" and sections thereof shall mean the same as amended from
time to time, including successors to such sections.
19. Except where otherwise specifically required in this Agreement, any
notice from Custodian to any person provided for in this Agreement shall be
effective if sent by first-class mail to such person at that person's last
address on the Custodian's records.
20. Depositor or Depositor's Beneficiary shall not have the right or power to
anticipate any part of the Custodial Account or to sell, assign, transfer,
pledge or hypothecate any part thereof. The Custodial Account shall not be
liable for the debts of Depositor or Depositor's Beneficiary or subject to any
seizure, attachment, execution or other legal process in respect thereof except
to the extent required by law. At no time shall it be possible for any part of
the assets of the Custodial Account to be used for or diverted to purposes
other than for the exclusive benefit of the Depositor or his/her Beneficiary
except to the extent required by law.
21. When accepted by the Custodian, this Agreement is accepted in and shall
be construed and administered in accordance with the laws of the state where
the principal offices of the Custodian are located. Any action involving the
Custodian brought by any other party must be brought in such state.
If in the Adoption Agreement, Depositor designates that the Custodial Account
is a Regular IRA, this Agreement is intended to qualify under Code Section
408(a) as an individual retirement Custodial Account and to entitle Depositor
to the retirement savings deduction under Code Section 219 if available. If in
the Adoption Agreement Depositor designates that the Custodial Account is a
Roth IRA, this Agreement is intended to qualify under Code Section 408A as a
Roth individual retirement Custodial Account and to entitle Depositor to the
tax-free withdrawal of amounts from the Custodial Account to the extent
permitted in such Code section.
If any provision hereof is subject to more than one interpretation or any
term used herein is subject to more than one definition, such ambiguity shall
be resolved in favor of that interpretation or definition which is consistent
with the intent expressed in whichever of the tow preceding sentences is
applicable.
However, the Custodian shall not be responsible for whether or not such
intentions are achieved through use of this Agreement, and Depositor is
referred to Depositor's attorney for any such assurances.
22. Depositor should seek advice from Depositor's attorney regarding the
legal consequences (including but not limited to federal and state tax matters)
of entering into this Agreement, contributing to the Custodial Account, and
ordering Custodian to make distributions from the Account. Depositor
acknowledges
<PAGE> 32
that Custodian and Service Company (and any company associated therewith) are
prohibited by law from rendering such advice.
23. If any provision of any document governing the Custodial Account provides
for notice, instructions or other communication from one party to another in
writing, to the extent provided for in the procedures of the Custodian, Service
Company or another party, any such notice, instructions or other communications
may be given by telephonic, computer, other electronic or other means, and the
requirement for written notice will be deemed satisfied.
24. The legal documents governing the Custodial Account are as follows:
(a) If in the Adoption Agreement the Depositor designated the Custodial
Account as a Regular IRA under Code Section 408(a), the provisions of Part One
and Part Three of this Agreement and the provisions of the Adoption Agreement
are the legal documents governing the Depositor's Custodial Account.
(b) If in the Adoption Agreement the Depositor designated the Custodial
Account as a Roth IRA under Code Section 408A, the provisions of Part Two and
Part Three of this Agreement and the provisions of the Adoption Agreement are
the legal documents governing the Depositor's Custodial Account.
25. Articles I through VII of Part One of this Agreement are in the form
promulgated by the Internal Revenue Service as Form 5305-A. It is anticipated
that, if and when the Internal Revenue Service promulgates changes to Form
5305-A, the custodian will amend this Agreement correspondingly.
Articles I through VIII of Part Two of this Agreement have not been promulgated
or approved by the Internal Revenue Service. It is anticipated that, if and when
the Internal Revenue Service promulgates a model form to establish a Roth IRA
Custodial Account, the Custodian will amend this Agreement to substitute the
provisions of such model Roth IRA Custodial Account form for the provisions of
Part Two of this Agreement, and the Depositor specifically consents to such
amendment in accordance with Section 13(b) hereof.
If, due to change in the applicable tax laws ruling of the Internal Revenue
Service it is established that the use of the Adoption Agreement or this
Agreement do not establish a Regular IRA or a Roth IRA (as the case may be), the
Custodian will furnish the Depositor with replacement documents and the
Depositor will if necessary sign such replacement documents. Depositor
acknowledges and agrees to such procedures and to cooperate with Custodian to
preserve the intended tax treatment of the Account.
26. If the Depositor maintains an Individual Retirement Account under Code
section 408(a), Depositor may convert or transfer such other IRA to a Roth IRA
under Code section 408A using the terms of this Agreement and the Adoption
Agreement by completing and executing the Adoption Agreement and giving suitable
directions to the Custodian and the custodian or trustee of such other IRA.
Alternatively, the Depositor may convert or transfer such other IRA to a Roth
IRA by use of a reply card or by telephonic, computer of electronic means in
accordance with procedures adopted by the Custodian or Service Company intended
to meet the requirements of Code section 408A, and the Depositor will be deemed
to have executed the Adoption Agreement and adopted the provisions of this
Agreement and the Adoption Agreement in accordance with such procedure.
27.The Depositor acknowledges that he or she has received and read the
current prospectus for each Fund in which his or her Account is invested and the
Individual Retirement Account Disclosure Statement related to the Account. The
Depositor represents under penalties of perjury that his or her Social Security
number (or other Taxpayer Identification Number) as stated in the Adoption
Agreement is correct.
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF the Depositor has evidenced his/her acceptance of this
Agreement by signing the Individual Retirement Account Application and Adoption
Agreement for the designated Fund(s), and the Custodian, to evidence acceptance
of this Agreement, has signed the Agreement as written below
CUSTODIAN:
STATE STREET BANK & TRUST COMPANY
By
-----------------------------------------------------------------------------
Authorized Signature
(Section references are to the Internal Revenue Code unless otherwise noted).
- --------------------------------------------------------------------------------
<PAGE> 1
Exhibit 15(a)
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
The Gabelli Global Telecommunications Fund (the "Fund") is
engaged in business as a separate series of Gabelli Global Series Funds, Inc.
(the "Company"), which is an open-end management investment company registered
as such under the Investment Company Act of 1940 (the "Act"). The Fund intends
to employ Gabelli & Company, Inc. and/or others as the principal underwriter and
distributor (the "Distributor") of the shares of the Fund pursuant to a written
distribution agreement. The Fund has adopted a plan of distribution pursuant to
Rule 12b-1 under the Act to assist in the distribution of shares of the Fund.
The Board of Directors (the "Board") of the Company having
determined that it would be desirable to amend the current plan of distribution
in certain respects and to restate such amended plan in its entirety and that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Fund hereby amends and restates
its plan of distribution (the "Plan") pursuant to Rule 12b-1 under the Act to
read in its entirety as follows:
1. In consideration of the services to be provided, and the
expenses to be incurred, by the Distributor pursuant to the distribution
agreement, the Company will pay to the Distributor as distribution payments
(the "Payments") in connection with the distribution of shares of the Fund an
aggregate amount at a rate of 0.25% per year of the average daily net assets of
the Fund. Such Payments shall be accrued daily and paid monthly in arrears or
shall be accrued and paid at such other intervals as the Board shall determine.
The Company's obligation hereunder shall be limited to the assets of the Fund
and shall not constitute an obligation of the Company except out of such assets
and shall not constitute an obligation of any shareholder of the Fund or other
series of the Company.
<PAGE> 2
2. It is understood that the Payments made by the Fund under
this Plan will be used by the Distributor for the purpose of financing or
assisting in the financing of any activity which is primarily intended to
result in the sale of shares of the Fund. The scope of the foregoing shall be
interpreted by the Board, whose decision shall be conclusive except to the
extent it contravenes established legal authority. Without in any way limiting
the discretion of the Board, the following activities are hereby declared to be
primarily intended to result in the sale of shares of the Fund: advertising the
Fund or the Fund's investment advisor's mutual fund activities; compensating
underwriters, dealers, brokers, banks and other selling entities (including the
Distributor and its affiliates) and sales and marketing personnel of any of
them for sales of shares of the Fund, whether in a lump sum or on a continuous,
periodic, contingent, deferred or other basis; compensating underwriters,
dealers, brokers, banks and other servicing entities and servicing personnel
(including the Fund's investment adviser and its personnel) of any of them for
providing services to shareholders of the Fund relating to their investment in
the Fund, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; and the ordinary or capital expenses, such as equipment,
rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses relating to any activity for which Payment is
authorized by the Board; and the financing of any activity for which Payment is
authorized by the Board; and profit to the Distributor and its affiliates
arising out of their provision of shareholder services. Notwithstanding the
fore going, this Plan does not require the Distributor or any of its affiliates
to perform any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered by
this Section 2. In addition, Payments made in a particular year shall not be
refundable whether or not such Payments exceed the expenses incurred for that
year pursuant to this Section 2.
3. The Company is hereby authorized and directed to enter
into appropriate written agreements with
2
<PAGE> 3
the Distributor and each other person to whom the Company intends to make any
Payment, and the Distributor is hereby authorized and directed to enter into
appropriate written agreements with each person to whom the Distributor intends
to make any payments in the nature of a Payment. The foregoing requirement is
not intended to apply to any agreement or arrangement with respect to which the
party to whom Payment is to be made does not have the purpose set forth in
Section 2 above (such as the printer in the case of the printing of a prospectus
or a newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement for
purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must
contain the provisions required by Rule 12b-1 under the Act and must be approved
by a majority of the Board ("Board Approval") and by a majority of the Directors
("Disinterested Director Approval") who are not interested persons of the
Company and have no direct or indirect financial interest in the operation of
the Plan or any such agreement, by vote cast in person at a meeting called for
the purposes of voting on such agreement. All determinations or authorizations
of the Board hereunder shall be made by Board Approval and Disinterested
Director Approval.
5. The officers, investment adviser or Distributor of the
Fund, as appropriate, shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended pursuant to this Plan
and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is
also an activity which the Company may pay for on behalf of the Fund without
regard to the existence or terms and conditions of a plan of distribution under
Rule 12b-1 of the Act, this Plan shall not be construed to prevent or restrict
the Company from paying such amounts outside of this Plan and without limitation
hereby and without such payments being included in calculation of Payments
subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved
by a vote of at least a majority of the
3
<PAGE> 4
outstanding voting securities of the Fund. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the out standing voting securities of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund only
as long as such continuance is specifically approved at least annually by Board
Approval and by Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote of the
directors who are not interested persons of the Fund and have no direct or
indirect financial interest in the operation of the Plan or any agreement
hereunder, cast in person at a meeting called for the purposes of voting on
such termination, or by a vote of at least a majority of the outstanding voting
securities of the Fund.
9. For purposes of this Plan the terms "interested person"
and "related agreement" shall have the meanings ascribed to them in the Act and
the rules adopted by the Securities and Exchange Commission thereunder and the
term "vote of a majority of the outstanding voting securities" of the Fund shall
mean the vote, at the annual or a special meeting of the security holders of the
Fund duly called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy or, if less, (b) more than 50% of
the outstanding voting securities of the Fund.
4
<PAGE> 1
Exhibit 15(b)
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL GROWTH FUND
The Gabelli Global Growth Fund (the "Fund") is engaged in
business as a separate series of Gabelli Global Series Funds, Inc. (the
"Company"), which is an open-end management investment company registered as
such under the Investment Company Act of 1940 (the "Act"). The Fund intends to
employ Gabelli & Company, Inc. and/or others as the principal underwriter and
distributor (the "Distributor") of the shares of the Fund pursuant to a written
distribution agreement. The Fund has adopted a plan of distribution pursuant to
Rule 12b-1 under the Act to assist in the distribution of shares of the Fund.
The Board of Directors (the "Board") of the Company having
determined that it would be desirable to amend the current plan of distribution
in certain respects and to restate such amended plan in its entirety and that a
plan of distribution containing the terms set forth herein is reasonably likely
to benefit the Fund and its shareholders, the Fund hereby amends and restates
its plan of distribution (the "Plan") pursuant to Rule 12b-1 under the Act to
read in its entirety as follows:
1. In consideration of the services to be provided,
and the expenses to be incurred, by the Distributor pursuant to the distribution
agreement, the Company will pay to the Distributor as distribution payments (the
"Payments") in connection with the distribution of shares of the Fund an
aggregate amount at a rate of 0.25% per year of the average daily net assets of
the Fund. Such Payments shall be accrued daily and paid monthly in arrears or
shall be accrued and paid at such other intervals as the Board shall determine.
The Company's obligation hereunder shall be limited to the assets of the Fund
and shall not constitute an obligation of the Company except out of such assets
and shall not constitute an obligation of any shareholder of the Fund or other
series of the Company.
<PAGE> 2
2. It is understood that the Payments made by the
Fund under this Plan will be used by the Distributor for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of shares of the Fund. The scope of the foregoing
shall be interpreted by the Board, whose decision shall be conclusive except to
the extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of shares of the Fund:
advertising the Fund or the Fund's investment advisor's mutual fund activities;
compensating underwriters, dealers, brokers, banks and other selling entities
(including the Distributor and its affiliates) and sales and marketing
personnel of any of them for sales of shares of the Fund, whether in a lump sum
or on a continuous, periodic, contingent, deferred or other basis; compensating
underwriters, dealers, brokers, banks and other servicing entities and servicing
personnel (including the Fund's investment adviser and its personnel) of any of
them for providing services to shareholders of the Fund relating to their
investment in the Fund, including assistance in connection with inquiries
relating to shareholder accounts; the production and dissemination of
prospectuses (including statements of additional information) of the Fund and
the preparation, production and dissemination of sales, marketing and
shareholder servicing materials; and the ordinary or capital expenses, such as
equipment, rent, fixtures, salaries, bonuses, reporting and recordkeeping and
third party consultancy or similar expenses relating to any activity for which
Payment is authorized by the Board; and the financing of any activity for which
Payment is authorized by the Board; and profit to the Distributor and its
affiliates arising out of their provision of shareholder services.
Notwithstanding the foregoing, this Plan does not require the Distributor or
any of its affiliates to perform any specific type or level of distribution
activities or shareholder services or to incur any specific level of expenses
for activities covered by this Section 2. In addition, Payments made in a
particular year shall not be refundable whether or not such Payments exceed the
expenses incurred for that year pursuant to this Section 2.
3. The Company is hereby authorized and directed to
enter into appropriate written agreements with
2
<PAGE> 3
the Distributor and each other person to whom the Company intends to make any
Payment, and the Distributor is hereby authorized and directed to enter into
appropriate written agreements with each person to whom the Distributor intends
to make any payments in the nature of a Payment. The foregoing requirement is
not intended to apply to any agreement or arrangement with respect to which the
party to whom Payment is to be made does not have the purpose set forth in
Section 2 above (such as the printer in the case of the printing of a prospectus
or a newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement for
purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by
Section 3 must contain the provisions required by Rule 12b-1 under the Act and
must be approved by a majority of the Board ("Board Approval") and by a majority
of the Directors ("Disinterested Director Approval") who are not interested
persons of the Company and have no direct or indirect financial interest in the
operation of the Plan or any such agreement, by vote cast in person at a meeting
called for the purposes of voting on such agreement. All determinations or
authorizations of the Board hereunder shall be made by Board Approval and
Disinterested Director Approval.
5. The officers, investment adviser or Distributor of
the Fund, as appropriate, shall provide to the Board and the Board shall review,
at least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2
and is also an activity which the Company may pay for on behalf of the Fund
without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed to
prevent or restrict the Company from paying such amounts outside of this Plan
and without limitation hereby and without such payments being included in
calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been
approved by a vote of at least a majority of the
3
<PAGE> 4
outstanding voting securities of the Fund. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the outstanding voting securities of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund only
as long as such continuance is specifically approved at least annually by Board
Approval and by Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote
of the directors who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Plan or any agreement
hereunder, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the outstanding voting
securities of the Fund.
9. For purposes of this Plan the terms "interested
person" and "related agreement" shall have the meanings ascribed to them in the
Act and the rules adopted by the Securities and Exchange Commission thereunder
and the term "vote of a majority of the outstanding voting securities" of the
Fund shall mean the vote, at the annual or a special meeting of the security
holders of the Fund duly called, (a) of 67% or more of the voting securities
present at such meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by proxy or, if less,
(b) more than 50% of the outstanding voting securities of the Fund.
4
<PAGE> 1
Exhibit 15(c)
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO FUND
The Gabelli Global Interactive Couch Potato Fund (the
"Fund") is engaged in business as a separate series of Gabelli Global Series
Funds, Inc. (the "Company"), which is an open-end management investment company
registered as such under the Investment Company Act of 1940 (the "Act"). The
Fund intends to employ Gabelli & Company, Inc. and/or others as the principal
underwriter and distributor (the "Distributor") of the shares of the Fund
pursuant to a written distribution agreement. The Fund has adopted a plan of
distribution pursuant to Rule 12b-1 under the Act to assist in the distribution
of shares of the Fund.
The Board of Directors (the "Board") of the Company
having determined that it would be desirable to amend the current plan of
distribution in certain respects and to restate such amended plan in its
entirety and that a plan of distribution containing the terms set forth herein
is reasonably likely to benefit the Fund and its shareholders, the Fund hereby
amends and restates its plan of distribution (the "Plan") pursuant to Rule 12b-1
under the Act to read in its entirety as follows:
1. In consideration of the services to be provided,
and the expenses to be incurred, by the Distributor pursuant to the distribution
agreement, the Company will pay to the Distributor as distribution payments
(the "Payments") in connection with the distribution of shares of the Fund an
aggregate amount at a rate of 0.25% per year of the average daily net assets of
the Fund. Such Payments shall be accrued daily and paid monthly in arrears or
shall be accrued and paid at such other intervals as the Board shall determine.
The Company's obligation hereunder shall be limited to the assets of the Fund
and shall not constitute an obligation of the Company except out of such assets
and shall not constitute an obligation of any shareholder of the Fund or other
series of the Company.
<PAGE> 2
2. It is understood that the Payments made by the
Fund under this Plan will be used by the Distributor for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of shares of the Fund. The scope of the foregoing
shall be interpreted by the Board, whose decision shall be conclusive except to
the extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of shares of the Fund:
advertising the Fund or the Fund's investment advisor's mutual fund activities;
compensating underwriters, dealers, brokers, banks and other selling entities
(including the Distributor and its affiliates) and sales and marketing personnel
of any of them for sales of shares of the Fund, whether in a lump sum or on a
continuous, periodic, contingent, deferred or other basis; compensating
underwriters, dealers, brokers, banks and other servicing entities and servicing
personnel (including the Fund's investment adviser and its personnel) of any of
them for providing services to shareholders of the Fund relating to their
investment in the Fund, including assistance in connection with inquiries
relating to shareholder accounts; the production and dissemination of
prospectuses (including statements of additional information) of the Fund and
the preparation, production and dissemination of sales, marketing and
shareholder servicing materials; and the ordinary or capital expenses, such as
equipment, rent, fixtures, salaries, bonuses, reporting and recordkeeping and
third party consultancy or similar expenses relating to any activity for which
Payment is authorized by the Board; and the financing of any activity for which
Payment is authorized by the Board; and profit to the Distributor and its
affiliates arising out of their provision of shareholder services.
Notwithstanding the foregoing, this Plan does not require the Distributor or any
of its affiliates to perform any specific type or level of distribution
activities or shareholder services or to incur any specific level of expenses
for activities covered by this Section 2. In addition, Payments made in a
particular year shall not be refundable whether or not such Payments exceed the
expenses incurred for that year pursuant to this Section 2.
3. The Company is hereby authorized and directed to
enter into appropriate written agreements with
2
<PAGE> 3
the Distributor and each other person to whom the Company intends to make any
Payment, and the Distributor is hereby authorized and directed to enter into
appropriate written agreements with each person to whom the Distributor intends
to make any payments in the nature of a Payment. The foregoing requirement is
not intended to apply to any agreement or arrangement with respect to which the
party to whom Payment is to be made does not have the purpose set forth in
Section 2 above (such as the printer in the case of the printing of a prospectus
or a newspaper in the case of an advertisement) unless the Board determines that
such an agreement or arrangement should be treated as a "related" agreement for
purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by
Section 3 must contain the provisions required by Rule 12b-1 under the Act and
must be approved by a majority of the Board ("Board Approval") and by a majority
of the Directors ("Disinterested Director Approval") who are not interested
persons of the Company and have no direct or indirect financial interest in the
operation of the Plan or any such agreement, by vote cast in person at a meeting
called for the purposes of voting on such agreement. All determinations or
authorizations of the Board hereunder shall be made by Board Approval and
Disinterested Director Approval.
5. The officers, investment adviser or Distributor of
the Fund, as appropriate, shall provide to the Board and the Board shall review,
at least quarterly, a written report of the amounts expended pursuant to this
Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by Section 2
and is also an activity which the Company may pay for on behalf of the Fund
without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed to
prevent or restrict the Company from paying such amounts outside of this Plan
and without limitation hereby and without such payments being included in
calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it has been
approved by a vote of at least a majority of the
3
<PAGE> 4
outstanding voting securities of the Fund. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the outstanding voting securities of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund only
as long as such continuance is specifically approved at least annually by Board
Approval and by Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote
of the directors who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Plan or any agreement
hereunder, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the outstanding voting
securities of the Fund.
9. For purposes of this Plan the terms "interested
person" and "related agreement" shall have the meanings ascribed to them in the
Act and the rules adopted by the Securities and Exchange Commission thereunder
and the term "vote of a majority of the outstanding voting securities" of the
Fund shall mean the vote, at the annual or a special meeting of the security
holders of the Fund duly called, (a) of 67% or more of the voting securities
present at such meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by proxy or, if less,
(b) more than 50% of the outstanding voting securities of the Fund.
4
<PAGE> 1
Exhibit 15(d)
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
The Gabelli Global Convertible Securities Fund (the
"Fund") is engaged in business as a separate series of Gabelli Global Series
Funds, Inc. (the "Company"), which is an open-end management investment company
registered as such under the Investment Company Act of 1940 (the "Act"). The
Fund intends to employ Gabelli & Company, Inc. and/or others as the principal
underwriter and distributor (the "Distributor") of the shares of the Fund
pursuant to a written distribution agreement. The Fund has adopted a plan of
distribution pursuant to Rule 12b-1 under the Act to assist in the distribution
of shares of the Fund.
The Board of Directors (the "Board") of the Company
having determined that it would be desirable to amend the current plan of
distribution in certain respects and to restate such amended plan in its
entirety and that a plan of distribution containing the terms set forth herein
is reasonably likely to benefit the Fund and its shareholders, the Fund hereby
amends and restates its plan of distribution (the "Plan") pursuant to Rule 12b-1
under the Act to read in its entirety as follows:
1. In consideration of the services to be provided,
and the expenses to be incurred, by the Distributor pursuant to the distribution
agreement, the Company will pay to the Distributor as distribution payments (the
"Payments") in connection with the distribution of shares of the Fund an
aggregate amount at a rate of 0.25% per year of the average daily net assets of
the Fund. Such Payments shall be accrued daily and paid monthly in arrears or
shall be accrued and paid at such other intervals as the Board shall determine.
The Company's obligation hereunder shall be limited to the assets of the Fund
and shall not constitute an obligation of the Company except out of such assets
and shall not constitute an obligation of any shareholder of the Fund or other
series of the Company.
<PAGE> 2
2. It is understood that the Payments made by the
Fund under this Plan will be used by the Distributor for the purpose of
financing or assisting in the financing of any activity which is primarily
intended to result in the sale of shares of the Fund. The scope of the foregoing
shall be interpreted by the Board, whose decision shall be conclusive except to
the extent it contravenes established legal authority. Without in any way
limiting the discretion of the Board, the following activities are hereby
declared to be primarily intended to result in the sale of shares of the Fund:
advertising the Fund or the Fund's investment advisor's mutual fund activities;
compensating underwriters, dealers, brokers, banks and other selling entities
(including the Distributor and its affiliates) and sales and marketing personnel
of any of them for sales of shares of the Fund, whether in a lump sum or on a
continuous, periodic, contingent, deferred or other basis; compensating
underwriters, dealers, brokers, banks and other servicing entities and servicing
personnel (including the Fund's investment adviser and its personnel) of any of
them for providing services to shareholders of the Fund relating to their
investment in the Fund, including assistance in connection with inquiries
relating to shareholder accounts; the production and dissemination of
prospectuses (including statements of additional information) of the Fund and
the preparation, production and dissemination of sales, marketing and
shareholder servicing materials; and the ordinary or capital expenses, such as
equipment, rent, fixtures, salaries, bonuses, reporting and recordkeeping and
third party consultancy or similar expenses relating to any activity for which
Payment is authorized by the Board; and the financing of any activity for which
Payment is authorized by the Board; and profit to the Distributor and its
affiliates arising out of their provision of shareholder services.
Notwithstanding the foregoing, this Plan does not require the Distributor or any
of its affiliates to perform any specific type or level of distribution
activities or shareholder services or to incur any specific level of expenses
for activities covered by this Section 2. In addition, Payments made in a
particular year shall not be refundable whether or not such Payments exceed the
expenses incurred for that year pursuant to this Section 2.
3. The Company is hereby authorized and directed to
enter into appropriate written agreements with
2
<PAGE> 3
the Distributor and each other person to whom the Company intends to make any
Payment, and the Distributor is hereby authorized and directed to enter into
appropriate written agreements with each person to whom the Distribu tor intends
to make any payments in the nature of a Payment. The foregoing requirement is
not intended to apply to any agreement or arrangement with respect to which the
party to whom Payment is to be made does not have the purpose set forth in
Section 2 above (such as the printer in the case of the printing of a prospectus
or a newspaper in the case of an advertisement) unless
the Board determines that such an agreement or arrangement should be treated as
a "related" agreement for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing
by Section 3 must contain the provisions required by Rule 12b-1 under the Act
and must be approved by a majority of the Board ("Board Approval") and by a
majority of the Directors ("Disinterested Director Approval") who are not
interested persons of the Company and have no direct or indirect financial
interest in the operation of the Plan or any such agreement, by vote cast in
person at a meet ing called for the purposes of voting on such agreement. All
determinations or authorizations of the Board hereunder shall be made by Board
Approval and Disinterested Director Approval.
5. The officers, investment adviser or
Distributor of the Fund, as appropriate, shall provide to the Board and the
Board shall review, at least quarterly, a written report of the amounts expended
pursuant to this Plan and the purposes for which such Payments were made.
6. To the extent any activity is covered by
Section 2 and is also an activity which the Company may pay for on behalf of the
Fund without regard to the existence or terms and conditions of a plan of
distribution under Rule 12b-1 of the Act, this Plan shall not be construed to
prevent or restrict the Company from paying such amounts outside of this Plan
and without limitation hereby and without such payments being included in
calculation of Payments subject to the limitation set forth in Section 1.
7. This Plan shall not take effect until it
has been approved by a vote of at least a majority of the
3
<PAGE> 4
outstanding voting securities of the Fund. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the out standing voting securities of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund only
as long as such continuance is specifically approved at least annually by Board
Approval and by Disinterested Director Approval.
8. This Plan may be terminated at any time
by a vote of the directors who are not interested persons of the Fund and have
no direct or indirect financial interest in the operation of the Plan or any
agreement hereunder, cast in person at a meeting called for the purposes of
voting on such termination, or by a vote of at least a majority of the
outstanding voting securities of the Fund.
9. For purposes of this Plan the terms
"interested person" and "related agreement" shall have the meanings ascribed to
them in the Act and the rules adopted by the Securities and Exchange Commission
thereunder and the term "vote of a majority of the outstanding voting
securities" of the Fund shall mean the vote, at the annual or a special meeting
of the security holders of the Fund duly called, (a) of 67% or more of the
voting securities present at such meeting, if the holders of more than 50% of
the outstanding voting securities of the Fund are present or represented by
proxy or, if less, (b) more than 50% of the outstanding voting securities of the
Fund.
4
<PAGE> 1
THE GABELLI GLOBAL SERIES FUNDS, INC.
EXHIBIT 16
TOTAL RETURN
DATE AS OF: 12/31/97
================================================================================
GLOBAL TELECOMMUNICATIONS FUND
AVERAGE ANNUAL RETURN
T = ((ERV/P) (1/N)) - 1
WHERE: T = TOTAL RETURN
ERV = REDEEMABLE VALUE AT THE END OF THE PERIOD OF A
HYPOTHETICAL $1,000 INVESTMENT MADE AT THE
BEGINNING OF THE PERIOD.
P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000.
N = NUMBER OF YEARS
EXAMPLE:
SINCE INCEPTION: ( 11/01/93 TO 12/31/97 ):
(( 1,658.0/1,000) (1/( 1521 /365))-1) = 12.90%
1 YEAR ( 12/TO/96 12/31/97 ):
(( 1,319./1,000) (1/( 365 /365))-1) = 31.90%
AGGREGATE ANNUAL RETURNS
T = ((ERV/P) (1/N)) - 1
WHERE: T = TOTAL RETURN
ERV = REDEEMABLE VALUE AT THE END OF THE PERIOD OF A
HYPOTHETICAL $1,000 INVESTMENT MADE AT THE
BEGINNING OF THE PERIOD.
P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000.
N = NUMBER OF YEARS
EXAMPLE:
SINCE INCEPTION: ( 11/01/93 TO 12/31/97 ):
(( 1,658.0/1,000) -1= 65.70%
1 YEAR ( 12/TO/96 12/31/97 ):
(( 1,320.0/1,000) -1= 31.90%
<PAGE> 2
THE GABELLI GLOBAL SERIES FUNDS, INC.
EXHIBIT 16
TOTAL RETURN
DATE AS OF: 12/31/97
================================================================================
================================================================================
GLOBAL CONVERTIBLE SECURITIES FUND
AVERAGE ANNUAL RETURN
T = ((ERV/P) (1/N)) - 1
WHERE: T = TOTAL RETURN
ERV = REDEEMABLE VALUE AT THE END OF THE PERIOD OF A
HYPOTHETICAL $1,000 INVESTMENT MADE AT THE
BEGINNING OF THE PERIOD.
P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000.
N = NUMBER OF YEARS
EXAMPLE:
SINCE INCEPTION: ( 02/03/94 TO 12/31/97 ):
(( 1,232.8/1,000) (1/( 1427 /365))-1) = 5.50%
1 YEAR ( 12/31/96 TO 12/31/97 ):
(( 1,028.0/1,000) (1/( 365 /365))-1) = 2.80%
AGGREGATE ANNUAL RETURNS
T = ((ERV/P) (1/N)) - 1
WHERE: T = TOTAL RETURN
ERV = REDEEMABLE VALUE AT THE END OF THE PERIOD OF A
HYPOTHETICAL $1,000 INVESTMENT MADE AT THE
BEGINNING OF THE PERIOD.
P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000.
N = NUMBER OF YEARS
EXAMPLE:
SINCE INCEPTION: ( 02/03/94 TO 12/31/97 ):
(( 1,233.0/1,000) -1= 23.20%
1 YEAR ( 12/31/96 TO 12/31/97 ):
(( 1,029.0/1,000) -1= 2.80%
<PAGE> 3
THE GABELLI GLOBAL SERIES FUNDS, INC.
EXHIBIT 16
TOTAL RETURN
DATE AS OF: 12/31/97
================================================================================
================================================================================
GLOBAL INTERACTIVE COUCH POTATO FUND
AVERAGE ANNUAL RETURN
T = ((ERV/P) (1/N)) - 1
WHERE: T = TOTAL RETURN
ERV = REDEEMABLE VALUE AT THE END OF THE PERIOD OF A
HYPOTHETICAL $1,000 INVESTMENT MADE AT THE
BEGINNING OF THE PERIOD.
P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000.
N = NUMBER OF YEARS
EXAMPLE:
SINCE INCEPTION: ( 02/07/94 TO 12/31/97 ):
(( 1,925.5/1,000) (1/( 1423 /365))-1) = 18.30%
1 YEAR ( 12/31/96 TO 12/31/97 ):
(( 1,417.0/1,000) (1/( 365 /365))-1) = 41.70%
AGGREGATE ANNUAL RETURNS
T = ((ERV/P) (1/N)) - 1
WHERE: T = TOTAL RETURN
ERV = REDEEMABLE VALUE AT THE END OF THE PERIOD OF A
HYPOTHETICAL $1,000 INVESTMENT MADE AT THE
BEGINNING OF THE PERIOD.
P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000.
N = NUMBER OF YEARS
EXAMPLE:
SINCE INCEPTION: ( 02/07/94 TO 12/31/97 ):
(( 1,927.0/1,000) -1= 92.60%
1 YEAR ( 12/31/96 T0 12/):/97 ):
(( 1,418.0/1,000) -1= 41.70%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000909504
<NAME> GABELLI GLOBAL SERIES FUNDS, INC.
<SERIES>
<NUMBER> 011
<NAME> THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 85,101,396
<INVESTMENTS-AT-VALUE> 118,141,222
<RECEIVABLES> 331,627
<ASSETS-OTHER> 148,476
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 118,621,325
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 749,702
<TOTAL-LIABILITIES> 749,702
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 85,856,841
<SHARES-COMMON-STOCK> 8,850,438
<SHARES-COMMON-PRIOR> 9,623,798
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 69
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 18,565
<ACCUM-APPREC-OR-DEPREC> 33,033,416
<NET-ASSETS> 117,871,623
<DIVIDEND-INCOME> 1,699,903
<INTEREST-INCOME> 219,069
<OTHER-INCOME> 0
<EXPENSES-NET> 1,905,689
<NET-INVESTMENT-INCOME> 13,283
<REALIZED-GAINS-CURRENT> 12,291,080
<APPREC-INCREASE-CURRENT> 17,429,948
<NET-CHANGE-FROM-OPS> 29,734,311
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 12,322,997
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,019,543
<NUMBER-OF-SHARES-REDEEMED> 3,688,802
<SHARES-REINVESTED> 895,899
<NET-CHANGE-IN-ASSETS> 9,327,964
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 13,635
<OVERDIST-NET-GAINS-PRIOR> 473,487
<GROSS-ADVISORY-FEES> 1,080,470
<INTEREST-EXPENSE> 21,293
<GROSS-EXPENSE> 1,905,689
<AVERAGE-NET-ASSETS> 108,100,472
<PER-SHARE-NAV-BEGIN> 11.28
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 3.59
<PER-SHARE-DIVIDEND> 1.55
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.32
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000909504
<NAME> GABELLI GLOBAL SERIES FUNDS, INC.
<SERIES>
<NUMBER> 021
<NAME> THE GAMBELLI GLOBAL CONVERTIBLE SECURITIES FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 9,694,748
<INVESTMENTS-AT-VALUE> 9,328,215
<RECEIVABLES> 100,160
<ASSETS-OTHER> 75,801
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,504,176
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 129,514
<TOTAL-LIABILITIES> 129,514
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,724,522
<SHARES-COMMON-STOCK> 998,148
<SHARES-COMMON-PRIOR> 1,328,923
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 22,980
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (326,880)
<NET-ASSETS> 9,374,662
<DIVIDEND-INCOME> 143,801
<INTEREST-INCOME> 263,798
<OTHER-INCOME> 0
<EXPENSES-NET> 277,229
<NET-INVESTMENT-INCOME> 130,370
<REALIZED-GAINS-CURRENT> 815,188
<APPREC-INCREASE-CURRENT> (554,352)
<NET-CHANGE-FROM-OPS> 391,206
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 125,474
<DISTRIBUTIONS-OF-GAINS> 815,188
<DISTRIBUTIONS-OTHER> 27,877
<NUMBER-OF-SHARES-SOLD> 139,305
<NUMBER-OF-SHARES-REDEEMED> 573,319
<SHARES-REINVESTED> 103,239
<NET-CHANGE-IN-ASSETS> (4,152,018)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 117,768
<OVERDISTRIB-NII-PRIOR> 235,385
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,722
<INTEREST-EXPENSE> 1,951
<GROSS-EXPENSE> 277,229
<AVERAGE-NET-ASSETS> 11,170,878
<PER-SHARE-NAV-BEGIN> 10.18
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> .14
<PER-SHARE-DISTRIBUTIONS> .93
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.39
<EXPENSE-RATIO> 2.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000909504
<NAME> GABELLI GLOBAL SERIES FUNDS, INC.
<SERIES>
<NUMBER> 031
<NAME> THE GLOBAL INTERACTIVE COUCH POTATO FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 28,971,392
<INVESTMENTS-AT-VALUE> 39,994,572
<RECEIVABLES> 3,159,220
<ASSETS-OTHER> 116,941
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 43,270,733
<PAYABLE-FOR-SECURITIES> 1,983,364
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 729,704
<TOTAL-LIABILITIES> 2,713,068
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,641,208
<SHARES-COMMON-STOCK> 2,839,932
<SHARES-COMMON-PRIOR> 2,704,471
<ACCUMULATED-NII-CURRENT> 5,621
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 14,062
<ACCUM-APPREC-OR-DEPREC> 10,924,898
<NET-ASSETS> 40,557,665
<DIVIDEND-INCOME> 64,508
<INTEREST-INCOME> 315,624
<OTHER-INCOME> 0
<EXPENSES-NET> 578,651
<NET-INVESTMENT-INCOME> (198,519)
<REALIZED-GAINS-CURRENT> 6,026,722
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</TABLE>
