<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1999
SECURITIES ACT FILE NO. 33-66262
INVESTMENT COMPANY ACT FILE NO. 811-7896
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1a
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 9 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 10 [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, LLC
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, LLC 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
----------------------
It is proposed that this filing will become effective (check appropriate
box):
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) 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)
[X] on May 3, 1999 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>
PART A
ITEM NO. PROSPECTUS HEADING
- ------- -----------------
<S> <C>
1. Front and Back Cover Pages Front Cover; Back Cover
2. Risk/Return Summary: Investments, Risks, and Risk/Return Summary and Fund Expenses
Performance
3. Risk/Return Summary: Fee Table Risk/Return Summary and Fund Expenses
4. Investment Objectives, Principal Investment Investment Objectives, Policies and Risks
Strategies and Related Risks
5. Management's Discussion of Fund Performance Risk/Return Summary and Fund Expenses
6. Management, Organization, and Capital Structure Fund Management
7. Shareholder Information Shareholder Information; Owner's Manual
8. Distribution Arrangements Fund Management
9. Financial Highlights Information Financial Highlights
<CAPTION>
PART B CAPTION IN STATEMENT
ITEM NO. OF ADDITIONAL INFORMATION
- ------- -----------------------
<S> <C>
10. Cover Page and Table of Contents Cover Page
11. Fund History Investment Strategies and Risks; Shares of
Beneficial Interest; Description of Shares,
Voting Rights and Liabilities
12. Description of the Fund and Its Investments Cover Page; Investment Strategies & Risks;
and Risks Investment Restrictions
13. Management of the Fund Directors and Officers; The Adviser
14. Control Persons and Principal Directors and Officers; Description of Shares,
Holders of Securities Voting Rights and Liabilities
15. Investment Advisory and Other Directors and Officers; The Adviser;
Services The Distributor; The Distribution Plans
16. Brokerage Allocation and Other Portfolio Transactions and Brokerage
Practices
17. Capital Stock and Other Description of Shares. Voting Rights
Securities and Liabilities
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
18. Purchase, Redemption and Pricing Purchase and Redemption of Shares; Exchange
of Securities Being Offered Privilege
19. Taxation of the Fund Dividends, Distribution and Taxes
20. Underwriters Not applicable
21. Calculations of Performance Data Determination of Net Asset Value
22. Financial Statements Financial Statements
</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.
- --------------------------------------------------------------------------------
- ------------ ------------
AAA CLASS PROSPECTUS
- ------------ ------------
MAY 1, 1999
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
THE GABELLI GLOBAL OPPORTUNITY FUND
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
- -------------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
- -------------------------------------
THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED THE
SHARES DESCRIBED IN THIS PROSPECTUS
OR DETERMINED WHETHER THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
================================================================================
<PAGE> 5
TABLE OF CONTENTS
CAREFULLY REVIEW THIS RISK/RETURN SUMMARY AND FUND EXPENSES
IMPORTANT SECTION, 3-6
WHICH SUMMARIZES THE FUNDS'
INVESTMENTS, RISKS, PAST
PERFORMANCE, AND FEES.
================================================================================
REVIEW THIS SECTION INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
FOR INFORMATION ON 7-13
INVESTMENT STRATEGIES
AND THEIR RISKS.
================================================================================
REVIEW THIS SECTION FOR FUND MANAGEMENT
DETAILS ON THE PEOPLE AND
ORGANIZATIONS WHO OVERSEE THE 13 THE INVESTMENT ADVISER
FUNDS.
13 THE PORTFOLIO MANAGERS
14 THE DISTRIBUTOR
================================================================================
REVIEW THIS SECTION AND THE SHAREHOLDER INFORMATION
ACCOMPANYING OWNER'S
MANUAL FOR DETAILS ON HOW 15 PRICING OF FUND SHARES
SHARES ARE VALUED, HOW TO
PURCHASE, SELL AND EXCHANGE 15 PURCHASING, SELLING AND EXCHANGING SHARES
SHARES, RELATED CHARGES
AND PAYMENTS OF DIVIDENDS 15 DISTRIBUTION ARRANGEMENTS
AND DISTRIBUTIONS.
16 DIVIDENDS, DISTRIBUTIONS AND TAXES
16 OTHER SHAREHOLDER SERVICES
================================================================================
FINANCIAL HIGHLIGHTS
17-19
================================================================================
BACK COVER
20 WHERE TO LEARN MORE ABOUT THIS FUND
<PAGE> 6
RISK/RETURN SUMMARY AND FUND EXPENSES
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY OF THE: GLOBAL TELECOMMUNICATIONS FUND
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
GLOBAL OPPORTUNITY FUND
INVESTMENT OBJECTIVE The Funds primarily seek to provide
investors with appreciation of capital.
Current income is a secondary objective
of the Funds.
PRINCIPAL INVESTMENT STRATEGY The Funds invest primarily in common
stocks and other securities of foreign
and domestic issuers. The Global
Telecommunications Fund will concentrate
its holdings in telecommunications
companies. The Global Couch Potato Fund
will concentrate its holdings in the
entertainment and media and publishing
industries.
RISK/RETURN SUMMARY OF THE: GLOBAL CONVERTIBLE SECURITIES FUND
INVESTMENT OBJECTIVE The Fund seeks to provide investors with
a high level of total return through a
combination of current income and
appreciation of capital.
PRINCIPAL INVESTMENT STRATEGY The Fund invests primarily in the
convertible securities of foreign and
domestic companies.
PRINCIPAL INVESTMENT RISKS GLOBAL TELECOMMUNICATIONS FUND
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
GLOBAL OPPORTUNITY FUND
GLOBAL CONVERTIBLE SECURITIES FUND
Because the value of the Fund's
investments will fluctuate with market
conditions, so will the value of your
investment in the Fund. You could lose
money on your investment in the Funds,
or the Funds could underperform other
investments. Some of the Funds' holdings
may underperform their other holdings.
As the Funds are 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, each Fund may
experience greater fluctuation in net
asset value than funds which invest in a
broad range of issuers. Because the
Global Convertible Securities Fund may
invest without limit in securities that
are not considered in investment grade,
there is a greater risk of loss of
investment.
WHO MAY WANT TO INVEST? Consider investing in the Funds if you:
[ ] ARE SEEKING A LONG-TERM GOAL SUCH AS
RETIREMENT
[ ] ARE LOOKING TO ADD A GROWTH
COMPONENT TO YOUR PORTFOLIO
[ ] ARE WILLING TO ACCEPT HIGHER RISKS
OF INVESTING IN THE STOCK MARKET IN
[ ] EXCHANGE FOR POTENTIALLY HIGHER LONG
TERM RETURNS
[ ] ARE LOOKING TO DIVERSIFY YOUR
INVESTMENTS OUTSIDE THE UNITED
STATES
This Fund will not be appropriate for
anyone:
[ ] SEEKING MONTHLY INCOME
[ ] PURSUING A SHORT-TERM GOAL OR
INVESTING EMERGENCY RESERVES
[ ] SEEKING SAFETY OF PRINCIPAL
3
<PAGE> 7
RISK/RETURN SUMMARY (CONTINUED)
- -------------------
These charts show the Funds' annual returns and provides some indication of the
risks of investing in the Funds by showing how their performance has varied from
year to year. The tables that follow compare the Funds' performance over time to
that of their relevant broad-based indices. The Lipper Telecommunications Fund
Average, the Lipper Global Fund Average and the Lipper Convertible Securities
Fund Average represent indices of performance of returns of ____________ mutual
funds, respectively, as tracked by Lipper Analytical Services, Inc. The Salomon
Smith Barney Global Telecommunications Index is a widely recognized, unmanaged
index composed of ____________; the S&P Index is a similar such index composed
of U.S. common stocks; and the UBS Global Convertible Index is composed of
__________. Of course, past performance does not indicate how the Funds will
perform in the future. Both the charts below and the tables on the following
page assume reinvestment of dividends and distributions. The Global Opportunity
Fund has less than one full calendar year of operations, therefore total return
information is not meaningful.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
GLOBAL TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C>
3.70% 16.20% 9.00% 31.90% 34.80%
</TABLE>
Best quarter: 4th Qtr 1998 23.96%
Worst quarter: 3rd Qtr 1998 (10.73)%
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
<TABLE>
<CAPTION>
1995 1996 1997 1998
<S> <C> <C> <C>
17.90% 12.50% 41.70% 28.90%
</TABLE>
Best quarter: 4th Qtr 1998 21.36%
Worst quarter: 3rd Qtr 1998 (12.77)%
GLOBAL CONVERTIBLE SECURITIES FUND
<TABLE>
<CAPTION>
1995 1996 1997 1998
<S> <C> <C> <C>
12.60% 5.50% 2.80% 8.60%
</TABLE>
Best quarter: 4th Qtr 1998 12.23%
Worst quarter: 3rd Qtr 1998 (12.26)%
4
<PAGE> 8
RISK/RETURN SUMMARY (CONTINUED)
- -------------------
AVERAGE ANNUAL TOTAL RETURNS (for the periods ending December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Since Inception
of Fund
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
GABELLI GLOBAL
TELECOMMUNICATIONS FUND 11/1/93 24.6% 16.7% 16.8%
- ---------------------------------------------------------------------------------------------------------
LIPPER TELECOMMUNICATIONS FUND
AVERAGE _____% _____% _____%
- ---------------------------------------------------------------------------------------------------------
SALOMON SMITH BARNEY GLOBAL
TELECOMMUNICATIONS INDEX
_____% _____% _____%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Inception Date Past Year Since Inception
of Fund
-----------------------------------------------------------------------
<S> <C> <C> <C>
GABELLI GLOBAL INTERACTIVE
COUCH POTATO(R) FUND 2/7/94 27.1% 20.4%
- ---------------------------------------------------------------------------------------------------------
LIPPER GLOBAL FUND AVERAGE 14.5% 11.9%
- ---------------------------------------------------------------------------------------------------------
S&P 500 INDEX 28.7% _____%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Inception Date Past Year Since Inception
of Fund
-----------------------------------------------------------------------
<S> <C> <C> <C>
GABELLI GLOBAL CONVERTIBLE
SECURITIES FUND 2/3/94 5.6% 6.1%
- ---------------------------------------------------------------------------------------------------------
LIPPER CONVERTIBLE SECURITIES
FUND AVERAGE 4.47% 10.5%
- ---------------------------------------------------------------------------------------------------------
UBS GLOBAL CONVERTIBLE INDEX _____% _____%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 9
FUND EXPENSES
- -------------
FEES AND EXPENSES
- -----------------
As an investor in the Funds, you will pay the following fees and expenses when
you buy and hold shares. Annual Fund operating expenses are paid out of Fund
assets, and are reflected in the share price.
<TABLE>
<CAPTION>
TELECOM- INTERACTIVE OPPORTUNITY CONVERTIBLE
MUNICATIONS COUCH
POTATO(R)
<S> <C> <C> <C> <C>
Shareholder fees None None None None
(fees paid directly from
your investment)
- --------------------------------------------------------------------------------------
Annual Fund operating expenses
(expenses that are deducted
from Fund assets)
- --------------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------------
Distribution (12b-1) fees .25% .25% .25% .25%
- --------------------------------------------------------------------------------------
Other expenses .30% .39% 2.19% 1.55%
- --------------------------------------------------------------------------------------
Total annual Fund operating 1.55% 1.64% 3.44% 2.80%
expenses
- --------------------------------------------------------------------------------------
Fee waivers & expense N/A N/A 2.44% N/A
reimbursements1
- --------------------------------------------------------------------------------------
Net expenses 1.55% 1.64% 1.00% 2.80%
- --------------------------------------------------------------------------------------
</TABLE>
EXPENSE EXAMPLE
Use the example below to compare fees and expenses with those of other funds. It
illustrates the amount of fees and expenses you would pay, assuming the
following:
- $10,000 investment
- 5% annual return
- redemption at the end of each
period
- no changes in the Funds'
operating expenses
Because this example is hypothetical and for comparison only, your actual costs
may be higher or lower.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
GLOBAL $158 $490 $845 $1,845
- -------
TELECOMMUNICATIONS
- ------------------
FUND
- ----
- --------------------------------------------------------------------------------
GLOBAL INTERACTIVE 167 517 892 1,944
- ----
COUCH POTATO(R) FUND
- --------------------
- --------------------------------------------------------------------------------
GLOBAL OPPORTUNITY FUND 102 318 N/A N/A
- -----------------------
- --------------------------------------------------------------------------------
GLOBAL CONVERTIBLE 283 868 1,479 3,128
- -------------------
SECURITIES FUND
- ---------------
- --------------------------------------------------------------------------------
</TABLE>
- ----------
1 The Adviser has agreed, until further notice, to voluntarily waive its
investment advisory fees and reimburse expenses to the extent necessary to
maintain total annual Fund operating expenses at 1.00% for the Global
Opportunity Fund.
6
<PAGE> 10
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
================================================================================
GLOBAL TELECOMMUNICATIONS FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Telecommunications Fund primarily seeks to provide investors with
appreciation of capital. Current income is a secondary objective of the Fund.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
Under normal market conditions, the Global Telecommunications Fund will invest
at least 65% of its total assets in the telecommunications industry.
The communications companies in which the Global Telecommunications Fund may
invest are engaged in the following products or 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.
Although not principal investments, the Global Telecommunications 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. The Global
Telecommunications 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. The preceding investments and
investment strategies are subject to the Global Telecommunications Fund's policy
of investing at least 65% of its total assets in particular securities.
Global Telecommunications Fund may also lend securities to dealers or others and
invest the collateral in accordance with the Fund's investment objective and
policies. The Fund may borrow from banks for temporary or emergency purposes or
to satisfy redemptions requests in amounts not in excess of 15% of the Fund's
total assets, with such borrowing not to exceed 5% of the Fund's total assets
for purposes other than satisfying redemption requests.
7
<PAGE> 11
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- -------------------------------------------
Global Telecommunications Fund will not purchase securities when borrowings
exceed 5%. More information about investments and strategies is provided in the
Statement of Additional Information.
SPECIFIC RISK FACTORS
- ---------------------
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.
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Interactive Couch Potato(R) Fund primarily seeks to provide investors
with appreciation of capital. Current income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
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
8
<PAGE> 12
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- -------------------------------------------
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;
electronic commerce and internet services; 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.
Although not principal investments, the Global Interactive Couch Potato(R) 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. The Global
Interactive Couch Potato(R) 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. The preceding investments and
investment strategies are subject to the Global Interactive Couch Potato(R)
Fund's policy of investing at least 65% of its total assets in particular
securities.
Global Interactive Couch Potato(R) Fund may also lend securities to dealers or
others and invest the collateral in accordance with the Fund's investment
objective and policies. The Fund may borrow from banks for temporary or
emergency purposes or to satisfy redemptions requests in amounts not in excess
of 15% of the Fund's total assets, with such borrowing not to exceed 5% of the
Fund's total assets for purposes other than satisfying redemption requests. The
Fund will not purchase securities when borrowings exceed 5%. More information
about investments and strategies is provided in the Statement of Additional
Information.
RISK FACTORS
- ------------
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 of technological developments
throughout the industry.
9
<PAGE> 13
RISK FACTORS (CONTINUED)
- ------------------------
The Federal Communications Commission imposes various types of ownership
restrictions 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.
Government actions around the world, specifically in the area of pre-marketing
clearance of products and prices, can be arbitrary and unpredictable. Changes in
world currency values are also unpredictable and can have a significant
short-term impact on revenues, profits and share valuations.
Certain of the companies in which the Global Interactive Couch Potato(R) Fund
invests may allocate greater than usual financial resources to research and
product development. The securities of such companies may experience
above-average price movements associated with the perceived prospects of success
of the research and development programs. In addition, companies in which the
Global Interactive Couch Potato(R) Fund invests may be adversely affected by
lack of commercial acceptance of a new product or process or by technological
change and obsolescence.
GLOBAL OPPORTUNITY FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Opportunity Fund primarily seeks to provide investors with capital
appreciation. Current income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
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.
Although not principal investments, the Global Opportunity 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. The Global Opportunity 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
10
<PAGE> 14
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- -------------------------------
and options and repurchase agreements, and foreign currency transactions. The
preceding investments and investment strategies are subject to the Global
Opportunity Fund's policy of investing at least 65% of its total assets in
particular securities.
The Global Opportunity Fund may also lend securities to dealers or others and
invest the collateral in accordance with the Fund's investment objective and
policies. The Fund may borrow from banks for temporary or emergency purposes or
to satisfy redemptions requests in amounts not in excess of 15% of the Fund's
total assets, with such borrowing not to exceed 5% of the Fund's total assets
for purposes other than satisfying redemption requests. The Fund will not
purchase securities when borrowings exceed 5%. More information about
investments and strategies is provided in the Statement of Additional
Information.
GLOBAL CONVERTIBLE SECURITIES FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Convertible Securities Fund primarily seeks to provide investors with
a high level of total return through a combination of current income and
appreciation of capital.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
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 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 Global Convertible Securities Fund may also lend securities to dealers or
others and invest the collateral in accordance with the Fund's investment
objective and policies. The Fund may borrow from banks for temporary or
emergency purposes or to satisfy redemptions requests in amounts not in excess
of 15% of the Fund 's total assets, with such borrowing not to exceed 5% of the
Fund 's total assets for purposes other than satisfying redemption requests. The
Fund will not purchase securities when borrowings exceed 5%.
11
<PAGE> 15
RISK FACTORS
- ------------
The securities in which the Global Convertible Securities Fund is investing in
are below investment grade and may involve major risk exposures such as
increased sensitivity to interest rate and economic changes and limited
liquidity.
The characteristics of convertible securities make them appropriate investments
for investors who seek a high level of total return with the addition of 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.
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 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 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 Securities Fund's net asset value.
GENERAL RISK FACTORS
- --------------------
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. Portfolio turnover generally involves some expense to the
Funds, including brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestment in other securities.
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, investors perceptions of the issuer
and market liquidity. Preferred stock has preference over common stock in
liquidation (and generally dividends as well) but is subordinated to the
liabilities of the issue in all other respects.
12
<PAGE> 16
GENERAL RISK FACTORS (CONTINUED)
- --------------------
YEAR 2000 Like other funds and business organizations around the world, the
Funds could be adversely affected if the computer systems used by the Adviser,
the Funds' other service providers and companies in which the Funds invests do
not properly process and calculate date-related information for the year 2000
and beyond. The Funds have been informed that the Adviser and the Funds' other
service providers are taking steps to minimize the risk associated with the Year
2000 problem, including inventorying of software systems, determining inventory
items that may not function properly after December 31, 1999, reprogramming or
replacing such systems and retesting for Year 2000 readiness and obtaining
assurances from their vendors and suppliers in the same manner. Non-compliant
Year 2000 systems upon which the Funds are dependent may result in errors and
account maintenance failures. The Funds have no reason to believe that (1) the
Year 2000 plans of the Funds' key service providers for services critical to the
Funds' operations will not be completed by December 31, 1999, and (2) the costs
currently associated with the implementation of their plans will have material
adverse impact on the business, operations or financial condition of the Funds
or its service providers.
Since the ultimate costs or consequences of incomplete or untimely resolution of
the Year 2000 problem are unknown to the Funds at this time, there may be costs
or consequences having a material adverse impact on the Funds' key service
providers, your account records and/or the operations or investments of the
Funds. The Funds and the Adviser will continue to monitor developments relating
to this issue, including the development of contingency plans for providing
back-up computer services in the event of a systems failure.
FUND MANAGEMENT
================================================================================
THE INVESTMENT ADVISER
Gabelli Funds, LLC (the "Adviser"), One Corporate Center, Rye, NY 10580 is a
limited liability company organized in 1998 after a reorganization of the
predecessor, Gabelli Funds, Inc., which was formed in 1980. As of December 31,
1998, Gabelli Funds, LLC and its affiliates manage more than $16.3 billion in
assets. Through its portfolio management team, Gabelli Funds, LLC makes the
day-to-day investment decisions and continuously reviews, supervises and
administers the Fund's investment programs.
For these advisory services, the Adviser earned a fee of 1.00% of average net
assets of each Fund during the fiscal year ended December 31, 1998. Any portion
of the total fees received by the Adviser may be used by the Adviser to provide
shareholder and administrative services.
THE PORTFOLIO MANAGERS
Mr. Mario J. Gabelli, President, is the team manager 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.
13
<PAGE> 17
PORTFOLIO MANGERS (CONTINUED)
- -----------------
Mr. Marc J. Gabelli is also primarily responsible for the day-to-day management
of the Global Interactive Couch Potato(R) Fund. Mr. Gabelli is a Portfolio
Manager of the Adviser, and has been an analyst with Gabelli Funds, Inc., the
former Adviser since 1993.
Messrs. Marc Gabelli and Caesar Bryan are primarily responsible for the
day-to-day management of the Global Opportunity Fund. 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 Gabelli Asset Management, Inc. since May 1994. Mr. Bryan
served as Senior Vice President and Portfolio Manager of Lexington Management
Corporation from 1986 until May 1994.
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 former adviser as a portfolio manager in 1993.
THE DISTRIBUTOR
Gabelli & Company, Inc. is the Funds' distributor. Its address is One Corporate
Center, Rye, NY 10580.
The Statement of Additional Information has more detailed information about the
Adviser and other service providers.
14
<PAGE> 18
SHAREHOLDER INFORMATION
================================================================================
PRICING OF FUND SHARES
- ----------------------
HOW NAV IS CALCULATED
The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:
NAV =
TOTAL ASSETS - LIABILITIES
--------------------------
Number of Shares
Outstanding
You can find the Fund's NAV daily in the Wall Street Journal and other
newspapers or by calling 1-800-GABELLI (800-422-3554).
The Funds' net asset value, or NAV, is determined and its shares are priced at
the close of regular trading on the New York Stock Exchange, normally at 4:00
p.m., eastern time, on days the New York Stock Exchange is open. Your order for
purchase, sale or exchange of shares is priced at the next NAV calculated after
your order is received by the Funds. This is what is known as the offering
price.
Fund securities are valued as of the close of trading on the primary exchange on
which they trade. The Funds' securities are generally valued at current market
prices. If market quotations are not available, prices will be based on the
average of the latest bid and asked quotations, or the latest bid price if asked
prices are not available for such securities prior to the valuation time. Debt
securities with remaining maturities of 60 days or less will be valued at
amortized cost, which the Board of Directors believes represents fair value.
Some Funds' securities may be listed on foreign exchanges that are open on days
(such as U.S. holidays) when the Funds do not compute their NAV. This could
cause the value of the Funds' portfolio investments to be affected on days when
you cannot buy or sell shares.
PURCHASING, SELLING AND EXCHANGING SHARES
- -----------------------------------------
Information about purchasing, selling and exchanging your shares is contained in
a separate document called the Owner's Manual. If you have not received it,
please contact your broker or financial consultant or the Funds at the number
listed on the back page of this Prospectus. The Owner's Manual is considered an
integral part of this Prospectus.
DISTRIBUTION ARRANGEMENTS
- -------------------------
The Funds have adopted distribution plans pursuant to Rule 12b-1 under the 1940
Act which authorizes payments by the Funds of .25% of the average daily net
assets of the Funds to compensate the Distributor and other dealers and
investment representatives for services and expenses relating to the sale and
distribution of the Funds' shares. Rule 12b-1 fees are paid from the Funds'
assets on an ongoing basis, and increase the cost of your investment.
15
<PAGE> 19
DIVIDENDS, DISTRIBUTION AND TAXES
- ---------------------------------
Any income the Funds receive in the form of interest or dividends is paid out,
less expenses, to its shareholders. The Funds declare and pay dividends from net
investment income and capital gains, if any, on an annual basis.
Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.
The Funds expect that dividends will primarily consist of net investment income
and, if any, long-term and short-term capital gains. Distributions from net
investment income and short-term capital gains are taxable as ordinary income.
Such distributions are taken into account for tax purposes in the year in which
they are declared, even if they appear on your account statement the following
year. Long-term capital gain distributions are taxable at long-term capital gain
tax rates. Exchanges of the Funds' shares for shares of another fund will be
treated as a sale of shares, and any gain on the transaction may be subject to
federal income tax.
You will be notified in January each year about the federal tax status of
distributions made by the Funds. Depending on your residence for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes.
--------------------------------------------------------------------------
TAX IDENTIFICATION NUMBER
The Funds are required to withhold 31% of taxable dividends, capital gains
distributions and redemptions proceeds paid to shareholders who have not
provided the Funds with their Taxpayer Identification Number in compliance
with IRS rules. To avoid this, make sure you provide your correct Tax
Identification Number (Social Security Number for most investors) on your
account application.
--------------------------------------------------------------------------
Foreign shareholders may be subject to special withholding requirements. Consult
your tax adviser about the federal, state and local tax consequences in your
particular circumstances.
OTHER SHAREHOLDER SERVICES
- --------------------------
As a shareholder of the Funds, you can take advantage of other service
privileges which are described in the Owner's Manual:
- Telephone Investment and Redemption Plan
- Automatic Investment Plan
- Systematic Withdrawal Plan
- Retirement Plans
16
<PAGE> 20
FINANCIAL HIGHLIGHTS
================================================================================
The financial highlights tables are intended to help you understand the Funds'
financial performance for the past 5 years or since inception of the Fund, if
less than 5 years. Certain information reflects financial results for a single
Fund share. The total returns in the tables represent the rate that you would
have earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions).
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period $13.32 $11.28 $11.12 $9.73 $10.20
----------- ----------- ----------- ----------- -----------
Net investment income 0.01 0.00(a) 0.05 0.06 0.07
Net realized and unrealized gain
(loss) on investments 4.60 3.59 0.95 1.51 (0.44)
----------- ----------- ----------- ----------- -----------
Total from investment operations 4.61 3.59 1.00 1.57 (0.37)
----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.01) -- (0.05) (0.06) (0.07)
Net realized gain on investments (1.30) (1.55) (0.79) (0.12) (0.03)
----------- ----------- ----------- ----------- -----------
Total distributions (1.31) (1.55) (0.84) (0.18) (0.10)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $16.62 $13.32 $11.28 $11.12 $9.73
=========== =========== =========== =========== ===========
Total return (a) 38.8% 31.9% 9.0% 16.2% (3.7)%
=========== =========== =========== =========== ===========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $170,063 $117,872 $108,544 $122,845 $137,731
Ratio of net investment income to
average net assets 0.08% 0.01% 0.34% 0.53% 0.74%
Ratio of operating expenses to
average net assets(b) 1.60% 1.78% 1.72% 1.75% 1.80%
Portfolio turnover rate 20% 9% 7% 24% 14%
</TABLE>
- --------------
(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.
(b) The Fund incurred interest expense for 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%.
17
<PAGE> 21
THE GABELLI GLOBAL INTERACTIVE COUCH(R) POTATO FUND
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996 1995 1994+
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period $14.28 $11.75 $11.72 $10.25 $10.00
---------- ---------- ---------- ---------- ----------
Net investment income (loss) 0.11 (0.07) (0.09) (0.01) (0.01)
Net realized and unrealized gain on
investments 3.98 4.97 1.56 1.84 0.26
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.09 4.90 1.47 1.83 0.25
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.11) --- --- --- ---
In excess of net investment income --- --- --- --- ---
Net realized gain on investments (1.23) (2.37) (1.44) (0.36) ---
In excess of net realized gain on
investments (0.04) --- --- --- ---
Total distributions (1.38) (2.37) (1.44) (0.36) ---
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $16.99 $14.28 $11.75 $11.72 $10.25
========== ========== ========== ========== ==========
Total return ++ 28.9% 41.7% 12.5% 17.9% 2.5%
========== ========== ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $73,063 $40,558 $37,779 $31,439 $24,831
Ratio of net investment income
(loss) to average net assets 0.66% (0.61)% (0.70)% (0.07)% (0.13)%(a)
Ratio of operating expenses to
average net assets(b) 1.66% 1.78% 2.06% 2.47% 2.47%
Portfolio turnover rate 105% 68% 47% 33% 14%
</TABLE>
- --------------
+ From commencement of operations on February 7, 1994.
++ 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.
(a) Annualized.
(b) The Fund incurred interest expense for the years ended December 31,
1998 and 1997. If interest expense had not been incurred, the ratios of
operating expenses to average net assets would have been 1.63% and
1.64%, respectively.
18
<PAGE> 22
THE GABELLI GLOBAL OPPORTUNITY FUND
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
GABELLI
GLOBAL
OPPORTUNITY GABELLI GLOBAL
FUND CONVERTIBLE SECURITIES FUND
- ----------------------------------------------------------------------------------------------------------------------------
1998+ 1998 1997 1996 1995 1994++
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning $10.00 $9.39 $10.18 $10.79 $9.93 $10.00
--------- --------- --------- ---------- ---------- ----------
of period
Net investment income (loss) 0.08 (0.12) 0.11 0.43 0.39 0.16
Net realized and unrealized
gain on investments 0.90 1.01 0.17 0.16 0.86 (0.07)
--------- --------- --------- ---------- ---------- ----------
Total from investment 0.98 0.89 0.28 0.59 1.25 0.09
--------- --------- --------- ---------- ---------- ----------
operations
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.08) --- (0.14) (0.43) (0.39) (0.16)
Net realized gain on (0.29) (0.15) (0.90) (0.77) --- ---
investments
In excess of net investment (0.06) (0.01) --- --- --- ---
income
In excess of net realized
gain on investments --- --- (0.03) --- --- ---
Total distributions (0.43) (0.16) (1.07) (1.20) (0.39) (0.16)
--------- --------- --------- ---------- ---------- ----------
NET ASSET VALUE, END OF $10.55 $10.12 $9.39 $10.18 $10.79 $9.93
--------- ========= ========= ========== ========== ==========
PERIOD
Total return +++ 10.1% 8.6% 2.8% 5.5% 12.6% 0.9%
========= ========= ========= ========== ========== ==========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period $5,866 $7,326 $9,375 $13,527 $15,742 $15,574
(in 000's)
Ratio of net investment
income (loss) to average 1.72%(a) (1.00)% 1.17% 2.00% 2.90% 2.80%(a)
net assets
Ratio of operating expenses
to average net assets (b) 1.00%(a) 2.63% 2.48% 2.35% 2.41% 2.49%
Portfolio turnover rate 127% 89% 100% 126% 152% 329%
</TABLE>
- --------------
+ From commencement of operations on May 11, 1998.
++ From commencement of operations on February 3, 1994.
+++ 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.
(a) Annualized.
(b) The Convertible Securities Fund incurred interest expense for 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
2.46%. In addition, the ratio does not include a reduction of expenses
for custodian fee credits.
Including such credits, the ratio would have been 2.47%.
19
<PAGE> 23
FOR MORE INFORMATION:
For more information about the Funds, the following documents are available free
upon request:
OWNER'S MANUAL:
Information about purchasing, selling and exchanging shares of the Funds are
included in a separate document entitled "Owner's Manual." The Owner's Manual is
an integral part of the Prospectus. If you have not received it, please contact
the Funds at the number listed below.
ANNUAL/SEMI-ANNUAL REPORTS:
The Funds' semi-annual and audited annual reports to shareholders contain
detailed information on the Funds' investments. In the annual reports, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Funds, including its
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
- --------------------------------------------------------------------------------
YOU CAN GET FREE COPIES OF REPORTS AND SAI, PROSPECTUSES OF OTHER FUNDS IN THE
GABELLI FAMILY, OR REQUEST OTHER INFORMATION AND DISCUSS YOUR QUESTIONS ABOUT
THE FUND BY CONTACTING:
GABELLI GLOBAL SERIES FUNDS, INC.
ONE CORPORATE CENTER
RYE, NY 10580
TELEPHONE: 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
- --------------------------------------------------------------------------------
You can review the Funds' reports and SAIs at the Public Reference Room of the
Securities and Exchange Commission. You can get text-only copies:
- For a fee, by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-6009 or calling
1-800-SEC-0330.
- Free from the Commission's Website at http://www.sec.gov.
-----------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
-----------------------------------
(Investment Company Act file no. 811-07896)
================================================================================
20
<PAGE> 24
THE GABELLI FAMILY
OF FUNDS
- --------------------------------------------------------------------------------
- --------------
OWNER'S MANUAL
AAA CLASS -
NO-LOAD CLASS
- -------------
GABELLI GLOBAL SERIES FUNDS, INC.
GABELLI GOLD FUND, INC.
GABELLI INTERNATIONAL GROWTH FUND, INC.
GABELLI ABC FUND
GABELLI ASSET FUND
GABELLI GROWTH FUND
MAY 1, 1999
INFORMATION CONTAINED IN THE OWNER'S MANUAL IS INCORPORATED BY REFERENCE INTO,
AND IS LEGALLY CONSIDERED PART OF, THE PROSPECTUSES FOR THE GABELLI FAMILY OF
FUNDS. THE OWNER'S MANUAL MUST BE PRECEDED OR ACCOMPANIED BY A GABELLI FUNDS
PROSPECTUS.
- --------------------------------------------------------------------------------
<PAGE> 25
OWNER'S MANUAL
TABLE OF CONTENTS
PURCHASING SHARES
- --------------------------------------------------------------------------------
3 Instructions for Opening or Adding to an Account
4 Telephone Investment Plan
4 Automatic Investment Plan
4 Retirement Plans
4 Minimum Investments
5 Dividends and Distributions
SELLING SHARES
- --------------------------------------------------------------------------------
5 Instructions for Selling Shares
5 By Bank Wire or Check via Telephone
5 By Bank Wire or Check via Mail
6 General Policies on Selling Shares
6 Signature Guarantees
6 Verifying Telephone Redemptions
6 Redemptions Within 15 Days of Investment
6 Refusal of Redemption Request
6 Closing of Small Accounts
6 Undeliverable Distribution Checks
EXCHANGING SHARES
- --------------------------------------------------------------------------------
7 Instructions for Exchanging Shares
PRICING OF FUND SHARES
- --------------------------------------------------------------------------------
7 How NAV is Calculated
2
<PAGE> 26
PURCHASING SHARES
- -----------------
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT
PURCHASES THROUGH BROKERS/DEALERS:
If purchasing through your financial advisor or brokerage account, simply tell
your advisor or broker that you wish to purchase shares of the Funds and he or
she will take care of the necessary documentation. You should state specifically
which class of shares you are buying. For all other purchases directly with the
Fund, follow the instructions below.
PURCHASES DIRECTLY FROM THE FUND:
All investments made by regular mail or personal delivery, whether initial or
subsequent, should be sent to:
BY REGULAR MAIL BY OVERNIGHT DELIVERY
--------------- ---------------------
The Gabelli Funds The Gabelli Funds
PO Box 8308 c/o BFDS
Boston, MA 02266-8308 66 Brooks Dr.
Braintree, MA 02184
For Initial Investment:
1. Carefully read and complete the application.
2. Make check, bank draft or money order payable to "[name of Fund]."
3. Mail or deliver application and payment to the address above.
For Subsequent Investments:
1. Make check, bank draft or money order payable to "[name of Fund]."
2. Provide the exact name and number of your account.
3. Mail or deliver payment to the address above.
BY WIRE TRANSFER
For Initial Investment:
Call 1-800-GABELLI (1-800-422-3554) to obtain a new account number. Promptly
mail the completed application to the address shown above for regular mail, and
For Initial and Subsequent Investments:
Instruct your bank to wire transfer your investment to:
STATE STREET BANK AND TRUST COMPANY
ABA #011-0000-28 REF DDA# 9904-6187
ATTN: SHAREHOLDER SERVICES
RE: [FUND NAME]
A/C#___________________________
YOUR NAME ______________________
225 FRANKLIN STREET, BOSTON, MA 02110
NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.
----------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
----------------------------------
3
<PAGE> 27
PURCHASING SHARES (CONTINUED)
- -----------------
- --------------------------------------------------------------------------------
You can add to your account by using the convenient options described below. The
Fund reserves the right to change or eliminate these privileges at any time upon
60 days notice to shareholders.
- --------------------------------------------------------------------------------
TELEPHONE INVESTMENT PLAN
You may purchase additional shares of the Funds by telephone as long as your
bank is a member of the Automated Clearing House (ACH) system. You must also
have a completed, approved Investment Plan application on file with the Fund's
Transfer Agent.
There is a minimum of $100 for each telephone investment. To initiate an ACH
purchase, please call 1-800-GABELLI (1-800-422-3554) or 1-800-872-5365.
AUTOMATIC INVESTMENT PLAN
You can make automatic monthly investments in the Funds. Details about this plan
can be obtained from the Distributor on a separate application by calling
1-800-GABELLI (800-422-3554).
RETIREMENT PLANS
You can invest in various types of retirement plans through the Fund. Details
about these plans can be obtained from the Distributor on a separate application
by calling 1-800-GABELLI (800-422-3554).
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS
You may purchase Funds through the Distributor or participating organizations,
which may charge additional fees and may require higher or lower minimum
investments or impose other limitations on buying and selling shares.
<TABLE>
<CAPTION>
MINIMUM
INITIAL MINIMUM
ACCOUNT TYPE INVESTMENT SUBSEQUENT
<S> <C> <C>
Regular (non-retirement) $ 1,000 $ 0
Retirement (IRA)
Traditional IRA $ 1,000 $ 0
Roth IRA $ 1,000 $ 0
Spousal IRA $ 250 $ 0
Education IRA $ 250 $ 0
Automatic Investment Plan $ 0 $ 100
Telephone Investment Plan $ 100 $ 100
</TABLE>
All purchases must be in U.S. dollars. A fee will be charged for any checks that
do not clear. Third-party checks are not accepted. Your purchase of shares will
be effective on the same business day if the Fund's transfer agent receives your
order by 4:00 p.m. (12 noon for a money market fund), and receives your form of
payment by 4:00 p.m., eastern time. Otherwise, your purchase will be effective
on the next business day. (See "Pricing of Fund Shares.") Shares are held on
account for you unless you specify in writing that you would like to receive a
stock certificate (certificates are not available for money market funds). We
can only issue a certificate for whole shares.
The Distributor may reject a purchase order if it considers it in the best
interest of the Fund and its shareholders. A Fund may waive its minimum purchase
requirement.
4
<PAGE> 28
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested unless you
request otherwise.
SELLING SHARES
- --------------
As a mutual fund shareholder, you are technically selling shares when you
request a withdrawal in cash. This is also known as redeeming shares.
- --------------------------------------------------------------------------------
WITHDRAWING MONEY FROM YOUR INVESTMENT
You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received by the Fund, its transfer agent, or your
investment representative. See section on "General Policies on Selling Shares"
below.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN
You can receive automatic payments from your account on a monthly, quarterly or
annual basis. You can obtain details from the Distributor.
- --------------------------------------------------------------------------------
INSTRUCTIONS FOR SELLING SHARES
The Fund accepts telephone requests for redemptions of unissued shares.
BY BANK WIRE OR CHECK VIA TELEPHONE
1. Call 1-800-GABELLI (1-800-422-3554) with your account number, the amount of
the redemption and instructions as to how you wish to receive your funds.
2. If you are unable to reach the Fund by telephone, you may telecopy your
redemption request to the Fund at 914-921-____.
NOTE: If you call by 4:00 p.m., eastern time, your payment will normally be
wired to your bank on the following business day. (For Money Market Funds: If
you call before 12:00 noon, eastern time, your payment will be wired to your
bank on that day.) If you call after that time, your payment will be wired to
your bank on the next business day. If you request your wire redemption by
telephone, it must be at least $1,000. Your bank may charge a fee for incoming
wires.
BY BANK WIRE OR CHECK VIA MAIL
Submit a redemption request to the Fund. Redemption requests may be made by
letter to the Transfer Agent. You must specify the name of the Fund, the dollar
amount or number of shares you wish to redeem and the account number. You must
sign the letter in exactly the same way the account is registered, and if there
is more than one owner of shares, all must sign. A signature guarantee is
required for most requests.
5
<PAGE> 29
SELLING SHARES (CONTINUED)
- --------------
GENERAL POLICIES ON SELLING SHARES
SIGNATURE GUARANTEES
Signature guarantees are required on redemption requests for the following:
- The check is not being mailed to the address on your account
- The check is not being made payable to the owner of the account
- The redemption proceeds are being transferred to another person's
Fund account.
A signature guarantee can be obtained from most banks and securities dealers.
Notarized signatures are not considered a signature guarantee.
VERIFYING TELEPHONE REDEMPTIONS
The Fund makes every effort to ensure that telephone redemptions are only made
by authorized shareholders. All telephone calls are recorded for your protection
and you will be asked for information to verify your identity. If appropriate
precautions have not been taken, the Fund may be liable for losses due to
unauthorized transactions.
REDEMPTIONS WITHIN 15 DAYS OF INVESTMENT
When you have made an investment by check or through the automatic investment
plan, your redemption proceeds will not be mailed until the Transfer Agent is
satisfied that the check has cleared (which may require up to 15 days). You can
avoid this delay by purchasing shares with a certified check or federal funds
wire.
REDEMPTION IN KIND
The Fund reserves the right to make a redemption in kind - payment in portfolio
securities rather than cash - for certain large redemption amounts that could
hurt fund operations.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.
CLOSING OF SMALL ACCOUNTS
If your account (other than an IRA) falls below $500, the Fund may ask you to
increase your balance. If it is still below $500 after 30 days, the Fund may
close your account and send you the proceeds at the current NAV.
UNDELIVERABLE DISTRIBUTION CHECKS
If distribution checks (1) are returned and marked as "undeliverable" or (2)
remain uncashed for six months, your account will be changed automatically so
that all future distributions are reinvested in your account. Checks that remain
uncashed for six months will be canceled and the money reinvested in the Fund at
the then current net asset value.
----------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
----------------------------------
6
<PAGE> 30
EXCHANGING SHARES
- -----------------
You can exchange your shares in one Fund for shares of the same class of another
Fund managed by Gabelli Funds, LLC, or its affiliates, usually without paying
additional sales charges (see "Notes" below).
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one Fund to another are taxable transactions.
INSTRUCTIONS FOR EXCHANGING SHARES
- --------------------------------------------------------------------------------
Exchanges may be made by sending a written request to The Gabelli Funds,
PO Box 8308, Boston, MA 02266-8308 or by calling 1-800-GABELLI
(1-800-422-3554).
Please provide the following information:
- Your name and telephone number
- The exact name on your account and account number
- Taxpayer identification number (usually your Social Security number)
- Dollar value or number of shares to be exchanged
- The names of the Funds from/into which the exchange is to be made
See "Selling Shares" for important information about telephone transactions.
NOTES ON EXCHANGES
- - When exchanging from a Fund that has no sales charge or a lower sales charge
to a Fund with a higher sales charge, you will pay the difference.
- - The registration and tax identification numbers of the two accounts must be
identical.
- - This exchange privilege may be changed or eliminated at any time upon a 60-day
notice to shareholders.
- - Be sure to read the prospectus carefully of any Fund into which you wish to
exchange shares.
PRICING OF FUND SHARES
- ----------------------
HOW NAV IS CALCULATED
The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:
---------------------------
NAV =
TOTAL ASSETS - LIABILITIES
Number of Shares
Outstanding
----------------------------
You can find the Fund's NAV daily in the Wall Street Journal and other
newspapers, or by calling 1-800-GABELLI (800-422-3554).
A Fund's net asset value, or NAV, is determined and its shares are priced at the
close of regular trading on the New York Stock Exchange, normally at 4:00 p.m.,
eastern time, on days the New York Stock Exchange is open. Your order for
purchase, sale or exchange of shares is priced at the next NAV calculated after
your order is received by the Fund. This is what is known as the offering price.
Fund securities are valued as of the close of trading on the primary exchange on
which they trade. Fund securities are generally valued at current market prices.
If market quotations are not available, prices will be based on the average of
the latest bid and asked quotations for such securities prior to the valuation
time, or the latest bid price if asked prices are not available. Debt securities
with remaining maturities of 60 days or less will be valued at amortized cost,
which the Board of Directors believes represents fair value.
Some Fund securities may be listed on foreign exchanges that are open on days
(such as U.S. holidays) when a Fund does not compute its NAV. This could cause
the value of a Fund's portfolio investments to be affected on days when you
cannot buy or sell shares.
7
<PAGE> 31
GABELLI GLOBAL SERIES
FUNDS, INC.
===============================================================================
----------
PROSPECTUS
----------
A CLASS
B CLASS
C CLASS
MAY 1, 1999
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
THE GABELLI GLOBAL OPPORTUNITY FUND
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
- ------------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
- ------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS
NOT APPROVED THE SHARES DESCRIBED IN THIS
PROSPECTUS OR DETERMINED WHETHER THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
===============================================================================
<PAGE> 32
===============================================================================
TABLE OF CONTENTS
CAREFULLY REVIEW THIS RISK/RETURN SUMMARY AND FUND EXPENSES
IMPORTANT SECTION, WHICH
SUMMARIZES THE FUNDS' 3-10
INVESTMENTS, RISKS, PAST
PERFORMANCE, AND FEES.
===============================================================================
REVIEW THIS SECTION FOR INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
INFORMATION ON INVESTMENT
STRATEGIES AND THEIR RISKS. 10-16
===============================================================================
REVIEW THIS SECTION FOR FUND MANAGEMENT
DETAILS ON THE PEOPLE AND
ORGANIZATIONS WHO OVERSEE 16 THE INVESTMENT ADVISER
THE FUNDS. 17 THE PORTFOLIO MANAGERS
17 THE DISTRIBUTOR
===============================================================================
REVIEW THIS SECTION AND THE SHAREHOLDER INFORMATION
ACCOMPANYING OWNER'S
MANUAL FOR DETAILS ON HOW 18 PRICING OF FUND SHARES
SHARES ARE VALUED, HOW TO 18 PURCHASING, SELLING AND EXCHANGING SHARES
PURCHASE, SELL AND 19 DISTRIBUTION ARRANGEMENTS/SALES CHARGES
EXCHANGE SHARES, RELATED 22 DIVIDENDS, DISTRIBUTIONS AND TAXES
CHARGES AND PAYMENTS OF 23 OTHER SHAREHOLDER SERVICES
DIVIDENDS AND DISTRIBUTIONS.
===============================================================================
FINANCIAL HIGHLIGHTS
23
===============================================================================
BACK COVER
24 WHERE TO LEARN MORE ABOUT THIS FUND
===============================================================================
2
<PAGE> 33
RISK/RETURN SUMMARY AND FUND EXPENSES
===============================================================================
RISK/RETURN SUMMARY OF THE: GLOBAL TELECOMMUNICATIONS FUND
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
GLOBAL OPPORTUNITY FUND
INVESTMENT OBJECTIVE The Funds primarily seek to provide
investors with appreciation of capital.
Current income is a secondary objective of
the Funds.
PRINCIPAL INVESTMENT STRATEGY The Funds invest primarily in common stocks
and other securities of foreign and domestic
issuers. The Global Telecommunications Fund
will concentrate its holdings in
telecommunications companies. The Global
Couch Potato Fund will concentrate its
holdings in the entertainment and media and
publishing industries.
RISK/RETURN SUMMARY OF THE: GLOBAL CONVERTIBLE SECURITIES FUND
INVESTMENT OBJECTIVE The Fund seeks to provide investors with a
high level of total return through a
combination of current income and
appreciation of capital.
PRINCIPAL INVESTMENT STRATEGY The Fund invests primarily in the
convertible securities of foreign and
domestic companies.
PRINCIPAL INVESTMENT RISKS GLOBAL TELECOMMUNICATIONS FUND
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
GLOBAL OPPORTUNITY FUND
GLOBAL CONVERTIBLE SECURITIES FUND
Because the value of the Fund's
investments will fluctuate with market
conditions, so will the value of your
investment in the Fund. You could lose
money on your investment in the Funds,
or the Funds could underperform other
investments. Some of the Funds'
holdings may underperform their other
holdings. As the Funds are
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, each Fund may
experience greater fluctuation in net
asset value than funds which invest in
a broad range of issuers. Because the
Global Convertible Securities Fund may
invest without limit in securities that
are not considered in investment grade,
there is a greater risk of loss of
investment.
WHO MAY WANT TO INVEST? Consider investing in the Funds if you:
[ ] ARE SEEKING A LONG-TERM GOAL SUCH AS
RETIREMENT
[ ] ARE LOOKING TO ADD A GROWTH COMPONENT
TO YOUR PORTFOLIO
[ ] ARE WILLING TO ACCEPT HIGHER RISKS OF
INVESTING IN THE STOCK MARKET
[ ] IN EXCHANGE FOR POTENTIALLY HIGHER LONG
TERM RETURNS
[ ] ARE LOOKING TO DIVERSIFY YOUR
INVESTMENTS OUTSIDE THE UNITED STATES
This Fund will not be appropriate for
anyone:
[ ] SEEKING MONTHLY INCOME
[ ] PURSUING A SHORT-TERM GOAL OR INVESTING
EMERGENCY RESERVES
[ ] SEEKING SAFETY OF PRINCIPAL
3
<PAGE> 34
RISK/RETURN SUMMARY (CONTINUED)
These charts show the Funds' annual returns and provides some indication of the
risks of investing in the Funds by showing how their performance has varied from
year to year. The Class A, B, and C shares are new classes of the Funds, for
which performance is not yet available. The Class AAA shares for the Funds are
offered in a separate prospectus. The returns for Class A, B and C shares will
differ from Class AAA returns shown in the bar charts because of differences in
expenses and sales charges of each class. The tables that follow compare the
Funds' performance over time to that of their relevant broad-based indices. The
Lipper Telecommunications Fund Average, the Lipper Global Fund Average and the
Lipper Convertible Securities Fund Average represent indices of performance of
returns of ____________ mutual funds, respectively, as tracked by Lipper
Analytical Services, Inc. The Salomon Smith Barney Global Telecommunications
Index is a widely recognized, unmanaged index composed of ____________; the S&P
Index is a similar such index composed of U.S. common stocks; and the UBS Global
Convertible Index is composed of __________. Of course, past performance does
not indicate how the Funds will perform in the future. Both the charts below and
the tables on the following page assume reinvestment of dividends and
distributions.
The Global Opportunity Fund has less than one full calendar year of operations,
therefore total return information is not meaningful.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
GLOBAL TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
Percentage 3.70% 16.20% 9.00% 31.90% 34.80%
</TABLE>
Best quarter: 4th Qtr 1998 23.96%
Worst quarter: 3rd Qtr 1998 (10.73)%
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
<TABLE>
<CAPTION>
1995 1996 1997 1998
<S> <C> <C> <C> <C>
Percentage 17.90% 12.50% 41.70% 28.90%
</TABLE>
Best quarter: 4th Qtr 1998 21.36%
Worst quarter: 3rd Qtr 1998 (12.77)%
GLOBAL CONVERTIBLE SECURITIES FUND
<TABLE>
<CAPTION>
1995 1996 1997 1998
<S> <C> <C> <C> <C>
Percentage 12.60% 5.50% 2.80% 8.60%
</TABLE>
Best quarter: 4th Qtr 1998 12.23%
Worst quarter: 3rd Qtr 1998 (12.26)%
4
<PAGE> 35
RISK/RETURN SUMMARY (continued)
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods ending December 31, 1998)
GLOBAL TELECOMMUNICATIONS FUND SINCE INCEPTION
INCEPTION DATE PAST YEAR PAST 5 YEARS OF FUND
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
A Class 5/1/99 N/A N/A N/A
-------------------------------------------------- ----------------- ----------------- -----------------
B Class 5/1/99 N/A N/A N/A
--------------------------------- ----------------- ----------------- ----------------- -----------------
C Class 5/1/99 N/A N/A N/A
--------------------------------- ----------------- ----------------- ----------------- -----------------
AAA Class 11/1/93 24.6% 16.7% 16.8%
--------------------------------- ----------------- ----------------- ----------------- -----------------
Lipper Telecommunications Fund
Average _____% _____% _____%
--------------------------------- ----------------- ----------------- ----------------- -----------------
Salomon Smith Barney Global
Telecommunications Index _____% _____% _____%
</TABLE>
<TABLE>
<CAPTION>
GLOBAL INTERACTIVE COUCH POTATO SINCE INCEPTION
FUND INCEPTION DATE PAST YEAR OF FUND
----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
A Class 5/1/99 N/A N/A
--------------------------------- ----------------------- ----------------------- -----------------------
B Class 5/1/99 N/A N/A
--------------------------------- ----------------------- ----------------------- -----------------------
C Class 5/1/99 N/A N/A
--------------------------------- ----------------------- ----------------------- -----------------------
AAA Class 2/7/94 27.1% 20.4%
--------------------------------- ----------------------- ----------------------- -----------------------
Lipper Global Fund Average 14.5% 11.9%
--------------------------------- ----------------------- ----------------------- -----------------------
S&P 500 Index 28.7% _____%
--------------------------------- ----------------------- ----------------------- -----------------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL CONVERTIBLE SINCE INCEPTION
SECURITIES FUND INCEPTION DATE PAST YEAR OF FUND
----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
A Class 5/1/99 N/A N/A
--------------------------------- ----------------------- ----------------------- -----------------------
B Class 5/1/99 N/A N/A
--------------------------------- ----------------------- ----------------------- -----------------------
C Class 5/1/99 N/A N/A
--------------------------------- ----------------------- ----------------------- -----------------------
AAA Class 2/3/94 5.6% 6.1%
--------------------------------- ----------------------- ----------------------- -----------------------
Lipper Convertible Securities
Fund Average 4.5% 10.5%
--------------------------------- ----------------------- ----------------------- -----------------------
UBS Global Convertible Index _____% _____%
--------------------------------- ----------------------- ----------------------- -----------------------
</TABLE>
5
<PAGE> 36
FUND EXPENSES
FEES AND EXPENSES
As an investor in the Funds, you will pay the following fees and expenses when
you buy and hold shares. Annual Fund operating expenses are paid out of Fund
assets, and are reflected in the share price.
CONTINGENT DEFERRED SALES CHARGE
Some Fund share classes impose a back end sales charge if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). As an investor in the Funds, you will pay the
following fees and expenses when you buy and hold shares. Annual Fund operating
expenses are paid out of Fund assets, and are reflected in the share price.
<TABLE>
<CAPTION>
GLOBAL TELECOMMUNICATIONS FUND
Shareholder fees A SHARES B SHARES C SHARES
<S> <C> <C> <C>
(fees paid directly from your investment)
Maximum sales charge on purchases
5.75%(1) None None
Maximum deferred sales charge
None 5.00%(2) 1.00%(2)
Redemption fees
None None None
Exchange fees3
None None None
========================================== =========== =========== ===========
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)
========================================== =========== =========== ===========
Management fees 1.00% 1.00% 1.00%
========================================== =========== =========== ===========
Distribution (12b-1) fees .25% 1.00% 1.00%
========================================== =========== =========== ===========
Other expenses .30% .30% .30%
========================================== =========== =========== ===========
Total annual Fund operating expenses 1.55% 2.30% 2.30%
========================================== =========== =========== ===========
</TABLE>
EXPENSE EXAMPLE
Use the example shown here to compare fees and expenses with those of other
funds. It illustrates the amount of fees and expenses you would pay, assuming
the following:
- $10,000 investment
- 5% annual return
- redemption at the end of each period (except as noted)
- no changes in the Funds' operating expenses
<TABLE>
<CAPTION>
GABELLI GLOBAL
TELECOMMUNICATIONS FUND 1 Year 3 Years
<S> <C> <C>
CLASS A SHARES $724 $1,036
CLASS B SHARES
Assuming Redemption 733 1,018
Assuming no Redemption 233 718
CLASS C SHARES
Assuming Redemption 333 718
Assuming no Redemption 233 718
</TABLE>
Because this example is hypothetical and for comparison only, your actual costs
may be higher or lower.
- -------------------------------
1 Lower sales charges are available depending upon the amount invested.
2 A CDSC on Class B shares declines over seven years starting with year one
from: 5%, 4%, 3%, 3%, 2%, 1%, 0%. After seven years, Class B shares are
converted to Class A shares, which have a lower 12b-1 fee. A CDSC of 1% applies
to redemptions of Class C shares within the first twenty-four months.
3 Exchanges may be made only to the same class of other funds.
6
<PAGE> 37
FUND EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
GLOBAL INTERACTIVE COUCH
FEES AND EXPENSES POTATO(R) FUND
SHAREHOLDER FEES A SHARES B SHARES C SHARES
<S> <C> <C> <C> <C>
As an investor in the Funds, you will (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
pay the following fees and expenses
when you buy and hold shares. Annual Maximum sales charge on purchases
Fund operating expenses are paid out 5.75%(3) None None
of Fund assets, and are reflected in Maximum deferred sales charge
the share price. None 5.00%(4) 1.00%(2)
Redemption fees
CONTINGENT DEFERRED SALES CHARGE None None None
Some Fund share classes impose a back Exchange fees(3)
end sales charge if you sell your None None None
shares before a certain period of
time has elapsed. This is called a
Contingent Deferred Sales Charge
("CDSC").
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)
------------------------------------------ ----------- ----------- -----------
Management fees 1.00% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
Distribution (12b-1) fees .25% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
Other expenses .39% .39% .39%
------------------------------------------ ----------- ----------- -----------
Total annual Fund operating expenses 1.64% 2.39% 2.39%
------------------------------------------ ----------- ----------- -----------
<CAPTION>
<S> <C> <C> <C>
EXPENSE EXAMPLE
Use the example shown here to GABELLI GLOBAL INTERACTIVE COUCH(R) POTATO 1 Year 3 Years
compare fees and expenses with FUND
those of other funds. It
illustrates the amount of fees and CLASS A SHARES $732 $1,063
expenses you would pay, assuming
the following:
- $10,000 investment
- 5% annual return
- redemption at the end of each
period (except as noted)
- no changes in the Funds'
operating expenses
CLASS B SHARES
Assuming Redemption 742 1,045
Assuming no Redemption 242 745
CLASS C SHARES
Assuming Redemption 342 745
Assuming no Redemption 242 745
</TABLE>
Because this example is hypothetical and for comparison only, your actual costs
may be higher or lower.
- -----------------------------------
1 Lower sales charges are available depending upon the amount invested.
2 A CDSC on Class B shares declines over seven years starting with year
one from: 5%, 4%, 3%, 3%, 2%, 1%, 0%. After seven years, Class B shares
are converted to Class A shares, which have a lower 12b-1 fee. A CDSC
of 1% applies to redemptions of Class C shares within the first
twenty-four months.
3 Exchanges may be made only to the same class of other funds.
7
<PAGE> 38
FUND EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
GLOBAL OPPORTUNITY FUND
FEES AND EXPENSES
SHAREHOLDER FEES A SHARES B SHARES C SHARES
<S> <C> <C> <C> <C>
As an investor in the Funds, you will (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
pay the following fees and expenses
when you buy and hold shares. Annual Maximum sales charge on purchases
Fund operating expenses are paid out 5.75%(1) None None
of Fund assets, and are reflected in Maximum deferred sales charge
the share price. None 5.00%(2) 1.00%(2)
Redemption fees
CONTINGENT DEFERRED SALES CHARGE None None None
Some Fund share classes impose a back Exchange fees(3)
end sales charge if you sell your None None None
shares before a certain period of
time has elapsed. This is called a
Contingent Deferred Sales Charge
("CDSC").
------------------------------------------- ---------- ----------- -----------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND ASSETS)
------------------------------------------- ---------- ----------- -----------
Management fees 1.00% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
Distribution (12b-1) fees .25% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
Other expenses 2.19% 2.19% 2.19%
------------------------------------------ ----------- ----------- -----------
Total annual Fund operating expenses 3.44% 4.19% 4.19%
------------------------------------------ ----------- ----------- -----------
Fee waivers & expense reimbursements4 2.44% 3.19% 3.19%
------------------------------------------ ----------- ----------- -----------
Net expenses 1.00% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
EXPENSE EXAMPLE
Use the example shown here to GABELLI GLOBAL OPPORTUNITY FUND 1 Year 3 Years
<S> <C> <C> <C>
compare fees and expenses with
those of other funds. It
illustrates the amount of fees and CLASS A SHARES $597 $802
expenses you would pay, assuming
the following:
- $10,000 investment CLASS B SHARES
- 5% annual return Assuming Redemption 602 618
- redemption at the end of each Assuming no Redemption 102 318
period (except as noted)
- no changes in the Funds' CLASS C SHARES
operating expenses Assuming Redemption 202 318
Assuming no Redemption 102 318
</TABLE>
Because this example is hypothetical and for comparison only, your actual costs
may be higher or lower.
- -----------------------------------
1 Lower sales charges are available depending upon the amount invested.
2 A CDSC on Class B shares declines over seven years starting with year
one from: 5%, 4%, 3%, 3%, 2%, 1%, 0%. After seven years, Class B shares
are converted to Class A shares, which have a lower 12b-1 fee. A CDSC
of 1% applies to redemptions of Class C shares within the first
twenty-four months.
3 Exchanges may be made only to the same class of other funds.
4 The Adviser has agreed, until further notice, to voluntarily waive its
investment advisory fees and reimburse expenses to the extent necessary to
maintain total annual fund operating expenses at 1.00% for the Global
Opportunity Fund.
8
<PAGE> 39
FUND EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
FEES AND EXPENSES GLOBAL CONVERTIBLE SECURITIES FUND
SHAREHOLDER FEES A SHARES B SHARES C SHARES
<S> <C> <C> <C> <C>
As an investor in the Funds, you will (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
pay the following fees and expenses
when you buy and hold shares. Annual Maximum sales charge on purchases
Fund operating expenses are paid out 5.75%(1) None None
of Fund assets, and are reflected in Maximum deferred sales charge
the share price. None 5.00%(2) 1.00%(2)
Redemption fees
CONTINGENT DEFERRED SALES CHARGE None None None
Some Fund share classes impose a back Exchange fees(3)
end sales charge if you sell your None None None
shares before a certain period of
time has elapsed. This is called a
Contingent Deferred Sales Charge
("CDSC").
------------------------------------------ ----------- ----------- -----------
Annual Fund operating expenses
(expenses that are deducted from Fund
assets)
------------------------------------------ ----------- ----------- -----------
Management fees 1.00% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
Distribution (12b-1) fees .25% 1.00% 1.00%
------------------------------------------ ----------- ----------- -----------
Other expenses 1.55% 1.55% 1.55%
------------------------------------------ ----------- ----------- -----------
Total annual Fund operating expenses 2.80% 3.55% 3.55%
------------------------------------------ ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
EXPENSE EXAMPLE
Use the example shown here to GABELLI GLOBAL CONVERTIBLE SECURITIES 1 Year 3 Years
<S> <C> <C> <C>
compare fees and expenses with FUND
those of other funds. It
illustrates the amount of fees and CLASS A SHARES $842 $1,393
expenses you would pay, assuming
the following:
- $10,000 investment CLASS B SHARES
- 5% annual return Assuming Redemption 858 1,388
- redemption at the end of each Assuming no Redemption 358 1,088
period (except as noted)
- no changes in the Funds' CLASS C SHARES
operating expenses Assuming Redemption 458 1,088
Assuming no Redemption 358 1,088
</TABLE>
Because this example is hypothetical and for comparison only, your actual costs
may be higher or lower.
- -----------------------------------
1 Lower sales charges are available depending upon the amount invested.
2 A CDSC on Class B shares declines over seven years starting with year
one from: 5%, 4%, 3%, 3%, 2%, 1%, 0%. After seven years, Class B shares
are converted to Class A shares, which have a lower 12b-1 fee. A CDSC
of 1% applies to redemptions of Class C shares within the first
twenty-four months.
3 Exchanges may be made only to the same class of other funds.
9
<PAGE> 40
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
===============================================================================
GLOBAL TELECOMMUNICATIONS FUND
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Telecommunications Fund primarily seeks to provide investors with
appreciation of capital. Current income is a secondary objective of the Fund.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
Under normal market conditions, the Global Telecommunications Fund will invest
at least 65% of its total assets in the telecommunications industry.
The communications companies in which the Global Telecommunications Fund may
invest are engaged in the following products or 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.
Although not principal investments, the Global Telecommunications 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. The Global
Telecommunications 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. The preceding investments and
investment strategies are subject to the Global Telecommunications Fund's policy
of investing at least 65% of its total assets in particular securities.
Global Telecommunications Fund may also lend securities to dealers or others and
invest the collateral in accordance with the Global Telecommunications Fund's
investment objective and policies. Global Telecommunications Fund may borrow
from banks for temporary or emergency purposes or to satisfy redemptions
requests in amounts not in excess of 15% of Global Telecommunications Fund's
total assets, with such borrowing not to exceed 5% of each Global
10
<PAGE> 41
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- -------------------------------
Telecommunications Fund's total assets for purposes other than satisfying
redemption requests.
Global Telecommunications Fund will not purchase securities when borrowings
exceed 5%. More information about investments and strategies is provided in the
Statement of Additional Information.
SPECIFIC RISK FACTORS
- ---------------------
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.
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Interactive Couch Potato(R) Fund primarily seeks to provide investors
with appreciation of capital. Current income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
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.
11
<PAGE> 42
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- ------------------------------
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; electronic commerce and internet
services; 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.
Although not principal investments, the Global Interactive Couch Potato(R) 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. The Global
Interactive Couch Potato(R) 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. The preceding investments and
investment strategies are subject to the Global Interactive Couch Potato(R)
Fund's policy of investing at least 65% of its total assets in particular
securities.
Global Interactive Couch Potato(R) Fund may also lend securities to dealers or
others and invest the collateral in accordance with the Global Interactive Couch
Potato(R) Fund's investment objective and policies. Global Interactive Couch
Potato(R) Fund may borrow from banks for temporary or emergency purposes or to
satisfy redemptions requests in amounts not in excess of 15% of Global
Interactive Couch Potato(R) Fund's total assets, with such borrowing not to
exceed 5% of each Global Interactive Couch Potato(R) Fund's total assets for
purposes other than satisfying redemption requests. Global Interactive Couch
Potato(R) Fund will not purchase securities when borrowings exceed 5%.More
information about investments and strategies is provided in the Statement of
Additional Information.
SPECIFIC RISK FACTORS
- ---------------------
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
12
<PAGE> 43
RISK FACTORS (CONTINUED)
- ------------
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 of
technological developments throughout the industry.
The Federal Communications Commission imposes various types of ownership
restrictions 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.
Government actions around the world, specifically in the area of pre-marketing
clearance of products and prices, can be arbitrary and unpredictable. Changes in
world currency values are also unpredictable and can have a significant
short-term impact on revenues, profits and share valuations.
Certain of the companies in which the Global Interactive Couch Potato(R) Fund
invests may allocate greater than usual financial resources to research and
product development. The securities of such companies may experience
above-average price movements associated with the perceived prospects of success
of the research and development programs. In addition, companies in which the
Global Interactive Couch Potato(R) Fund invests may be adversely affected by
lack of commercial acceptance of a new product or process or by technological
change and obsolescence.
GLOBAL OPPORTUNITY FUND
- ------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The Global Opportunity Fund primarily seeks to provide investors with capital
appreciation. Current income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
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.
Although not principal investments, the Global Opportunity 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,
13
<PAGE> 44
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- -------------------------------
governments or agencies or instrumentalities of governments or supranational
agencies. The Global Opportunity 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. The preceding
investments and investment strategies are subject to the Global Opportunity
Fund's policy of investing at least 65% of its total assets in particular
securities.
Global Opportunity Fund may also lend securities to dealers or others and invest
the collateral in accordance with the Global Opportunity Fund's investment
objective and policies. Global Opportunity Fund may borrow from banks for
temporary or emergency purposes or to satisfy redemptions requests in amounts
not in excess of 15% of Global Opportunity Fund's total assets, with such
borrowing not to exceed 5% of each Global Opportunity Fund's total assets for
purposes other than satisfying redemption requests. Global Opportunity Fund will
not purchase securities when borrowings exceed 5%.More information about
investments and strategies is provided in the Statement of Additional
Information.
GLOBAL CONVERTIBLE SECURITIES FUND
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- -----------------------------------
The Global Convertible Securities Fund primarily seeks to provide investors with
a high level of total return through a combination of current income and
appreciation of capital.
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
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 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.
Global Convertible Securities Fund may also lend securities to dealers or others
and invest the collateral in accordance with the Global Convertible Securities
Fund 's investment objective and policies. Global Convertible Securities Fund
may borrow from banks for temporary or
14
<PAGE> 45
PRINCIPAL INVESTMENT STRATEGIES (CONTINUED)
- -------------------------------
emergency purposes or to satisfy redemptions requests in amounts not in excess
of 15% of Global Convertible Securities Fund 's total assets, with such
borrowing not to exceed 5% of each Global Convertible Securities Fund 's total
assets for purposes other than satisfying redemption requests. Global
Convertible Securities Fund will not purchase securities when borrowings exceed
5%.
SPECIFIC RISK FACTORS
- ---------------------
The securities in which the Global Convertible Securities Fund is investing in
are below investment grade and may involve major risk exposures such as
increased sensitivity to interest rate and economic changes and limited
liquidity.
The characteristics of convertible securities make them appropriate investments
for investors who seek a high level of total return with the addition of 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.
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 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 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 Securities Fund's net asset value.
GENERAL RISK FACTORS
- --------------------
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. Portfolio turnover generally involves some expense to the
Funds, including brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestment in other securities.
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
15
<PAGE> 46
GENERAL RISK FACTORS (CONTINUED)
- --------------------
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, investors
perceptions of the issuer and market liquidity. Preferred stock has preference
over common stock in liquidation (and generally dividends as well) but is
subordinated to the liabilities of the issue in all other respects.
YEAR 2000 Like other funds and business organizations around the world, the
Funds could be adversely affected if the computer systems used by the Adviser,
the Funds' other service providers and companies in which the Funds invests do
not properly process and calculate date-related information for the year 2000
and beyond. The Funds have been informed that the Adviser and the Funds' other
service providers are taking steps to minimize the risk associated with the Year
2000 problem, including inventorying of software systems, determining inventory
items that may not function properly after December 31, 1999, reprogramming or
replacing such systems and retesting for Year 2000 readiness and obtaining
assurances from their vendors and suppliers in the same manner. Non-compliant
Year 2000 systems upon which the Funds are dependent may result in errors and
account maintenance failures. The Funds have no reason to believe that (1) the
Year 2000 plans of the Funds' key service providers for services critical to the
Funds' operations will not be completed by December 31, 1999, and (2) the costs
currently associated with the implementation of their plans will have material
adverse impact on the business, operations or financial condition of the Funds
or its service providers.
Since the ultimate costs or consequences of incomplete or untimely resolution of
the Year 2000 problem are unknown to the Funds at this time, there may be costs
or consequences having a material adverse impact on the Funds' key service
providers, your account records and/or the operations or investments of the
Funds. The Funds and the Adviser will continue to monitor developments relating
to this issue, including the development of contingency plans for providing
back-up computer services in the event of a systems failure.
FUND MANAGEMENT
===============================================================================
THE INVESTMENT ADVISER
Gabelli Funds, LLC (the "Adviser"), One Corporate Center, Rye, NY 10580 is a
limited liability company organized in 1998 after a reorganization of the
predecessor, Gabelli Funds, Inc., which was formed in 1980. As of December 31,
1998, Gabelli Funds, LLC and its affiliates manage more than $16.3 billion in
assets. Through its portfolio management team, Gabelli Funds, LLC makes the
day-to-day investment decisions and continuously reviews, supervises and
administers the Fund's investment programs.
For these advisory services, the Adviser earns a fee of 1.00% of average net
assets. Any portion of the total fees received by the Adviser may be used by the
Adviser to provide shareholder and administrative services.
16
<PAGE> 47
THE PORTFOLIO MANAGERS
Mr. Mario J. Gabelli, President, is the team manager 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.
Mr. Marc J. Gabelli is also primarily responsible for the day-to-day management
of the Global Interactive Couch Potato(R) Fund. Mr. Gabelli is a Portfolio
Manager of the Adviser, and has been an analyst with Gabelli Funds, Inc., the
former Adviser since 1993.
Messrs. Marc Gabelli and Caesar Bryan are primarily responsible for the
day-to-day management of the Global Opportunity Fund. 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 Gabelli Asset Management, Inc. since May 1994. Mr. Bryan
served as Senior Vice President and Portfolio Manager of Lexington Management
Corporation from 1986 until May 1994.
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 former adviser as a portfolio manager in 1993.
THE DISTRIBUTOR
Gabelli & Company, Inc. is the Funds' distributor. Its address is One Corporate
Center, Rye, NY 10580.
The Statement of Additional Information has more detailed information about the
Adviser and other service providers.
17
<PAGE> 48
SHAREHOLDER INFORMATION
===============================================================================
PRICING OF FUND SHARES
HOW NAV IS CALCULATED
The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:
NAV =
TOTAL ASSETS - LIABILITIES
Number of Shares
Outstanding
You can find the Fund's NAV daily in the Wall Street Journal and other
newspapers or by calling 1-800-GABELLI (800-422-3554).
The Funds' net asset value, or NAV, is determined and its shares are priced at
the close of regular trading on the New York Stock Exchange, normally at 4:00
p.m., eastern time, on days the New York Stock Exchange is open. Your order for
purchase, sale or exchange of shares is priced at the next NAV calculated after
your order is accepted by the Fund less any applicable sales charges as noted in
the section on "Distribution Arrangements/Sales Charges." This is what is known
as the offering price.
Fund securities are valued as of the close of trading on the primary exchange on
which they trade. Fund securities are generally valued at current market prices.
If market quotations are not available, prices will be based on the average of
the latest bid and asked quotations for such securities prior to the valuation
time, or the latest bid prices if asked prices are not available. Debt
securities with remaining maturities of 60 days or less will be valued at
amortized cost, which the Board of Directors believes represents fair value.
Some Fund securities may be listed on foreign exchanges that are open on days
(such as U.S. holidays) when the Funds do not compute their NAV. This could
cause the value of the Funds' portfolio investments to be affected on days when
you cannot buy or sell shares.
PURCHASING, SELLING AND EXCHANGING SHARES
- -----------------------------------------
Information about purchasing, selling and exchanging your shares is contained in
a separate document called the Owner's Manual. If you have not received it,
please contact your broker or financial consultant or the Fund at the number
listed on the back page of this Prospectus. The Owner's Manual is considered an
integral part of this Prospectus.
-----------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
-----------------------------------
18
<PAGE> 49
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
TYPES OF CHARGES
This section describes the sales charges and fees you will pay as an investor in
different share classes offered by the Funds and ways to qualify for reduced
sales charges.
<TABLE>
<CAPTION>
TYPES OF CHARGES CLASS A CLASS B CLASS C
- ------------------ ------------------------------ ------------------------------- ------------------------------
<S> <C> <C> <C>
Sales Charge Front-end sales charge; No front-end sales No front-end sales
(Load) reduced sales charges charge. A contingent charge, but 1% CDSC may
available. deferred sales charge be imposed on shares
(CDSC) may be imposed on redeemed within
shares redeemed within twenty-four months of
seventy-two months after purchase; unlike Class
purchase; shares B, Class C shares will
automatically convert to never convert to Class A
Class A Shares after shares.
eighty-four months.
- ------------------ ------------------------------ ------------------------------- ------------------------------
Distribution Subject to annual Subject to annual Subject to annual
and Service distribution and distribution and distribution and
(12b-1) Fee shareholder servicing shareholder servicing shareholder servicing
fees of up to .25% of fees of up to 1.00% of fees of up to 1.00% of
the Fund's total assets. the Fund's assets. the Fund's assets.
- ------------------ ------------------------------ ------------------------------- ------------------------------
Fund Expenses Lower annual expenses Higher annual expenses Higher annual expenses
then Class B or C than Class A shares. than Class A or B
shares. Shares. Class C shares
are similar to Class B
shares, except that the
contingent deferred
sales charge is imposed
only on shares redeemed
within twenty-four
months of purchase,
there is no maximum
investment and Class C
shares do not convert
to Class A shares.
- ------------------ ------------------------------ ------------------------------- ------------------------------
</TABLE>
CALCULATION OF SALES CHARGES
CLASS A SHARES
Class A shares are sold at their public offering price. This price includes the
initial sales charge. Therefore, part of the money you invest will be used to
pay the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions and on purchases greater than $1 million.
19
<PAGE> 50
CALCULATION OF SALES CHARGES (CONTINUED)
The current sales charge rates are as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A % OF SALES CHARGE AS A % OF DEALER CONCESSION AS A
YOUR INVESTMENT OFFERING PRICE(1) YOUR INVESTMENT % OF OFFERING PRICE
------------------------------ ------------------------- ------------------------- ------------------------
<S> <C> <C> <C> <C>
Up to $49,999 5.75% 6.10% 5.00%
------------------------------ ------------------------- ------------------------- ------------------------
$50,000 up to $99,999 4.50% 4.71% 4.00%
------------------------------ ------------------------- ------------------------- ------------------------
$100,000 up to $249,999 3.00% 3.63% 2.50%
------------------------------ ------------------------- ------------------------- ------------------------
$250,000 up to $499,999 2.50% 2.56% 2.00%
------------------------------ ------------------------- ------------------------- ------------------------
$500,000 up to $999,999 2.00% 2.04% 1.50%
------------------------------ ------------------------- ------------------------- ------------------------
$1,000,000 and above(2) None None 1.00%
------------------------------ ------------------------- ------------------------- ------------------------
</TABLE>
CLASS B AND CLASS C SHARES
Class B and Class C shares are offered at NAV, without any up-front sales
charge. Therefore, all the money you invest is used to purchase Fund shares.
However, if you sell your Class B shares of the Fund before the seventh
anniversary of purchase, you will have to pay a contingent deferred sales charge
at the time of redemption. If you sell your Class C shares before the second
anniversary of purchase, you will pay a 1% CDSC at the time of redemption. The
CDSC will be based upon the lower of the NAV at the time of purchase or the NAV
at the time of redemption according to the schedule below. There is no CDSC on
reinvested dividends or distributions.
<TABLE>
<CAPTION>
CLASS B SHARES
- -------------------------------------------------------------------------------------
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
- -------------------------------------------------------------------------------------
<S> <C>
First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh and thereafter None
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES
- -------------------------------------------------------------------------------------
CDSC AS A % OF DOLLAR
MONTHS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
- -------------------------------------------------------------------------------------
<S> <C>
Less than 24 months 1.00%
More than 24 months None
- -------------------------------------------------------------------------------------
</TABLE>
1 The Distributor reserves the right to pay the entire sales charge to
dealers. If that occurs the dealer may be considered an "underwriter"
under federal securities laws.
2 There is no initial sales charge on purchases of $1 million or more.
However, a contingent deferred sales charge (CDSC) of up to 1.00% of the
purchase price will be charged to the shareholder if shares are redeemed
in the first year after purchase. This charge will be based on the lower
of your cost for the shares or their NAV at the time of redemption. There
will be no CDSC on reinvested dividends and distributions.
20
<PAGE> 51
DISTRIBUTION ARRANGEMENTS/SALES CHARGES (CONTINUED)
- ---------------------------------------
If you sell some but not all of your Class B or Class C shares, certain shares
not subject to the CDSC (i.e., shares purchased with reinvested dividends) will
be redeemed first, followed by shares subject to the lowest CDSC (typically
shares held for the longest time).
CONVERSION FEATURE - CLASS B SHARES
- - Class B shares automatically convert to Class A shares of the Fund on the
first business day of the eighty-fifth calendar month following the
calendar month in which such shares were issued.
- - After conversion, your shares will be subject to the lower distribution
fees charged on Class A shares, which will increase your investment return
compared to the Class B shares.
- - You will not pay any sales charge or fees when your shares convert, nor
will the transaction be subject to any tax.
- - If you exchange shares into a Gabelli money market fund, you holding
period is suspended.
- - The automatic conversion of Class B shares to Class A shares may be
suspended by the Board of Directors at any time it determines such
suspension to be required under applicable law or in the exercise of their
fiduciary duties; provided, however, that if the Board determines that the
suspension is likely to continue for a substantial period of time, the
Board of Directors will seek to create an additional class or additional
classes of shares into which Class B shares are eligible for conversion
under the rules of the Securities and Exchange Commission and other
applicable law.
If you purchased Class B shares of one Fund which you exchanged for Class B
shares of another Fund, your holding period will be calculated from the time of
your original purchase of Class B shares. The dollar value of Class A shares you
receive will equal the dollar value of the Class B shares converted.
DISTRIBUTION (12b-1) FEES
The Funds have adopted distribution plans pursuant to Rule 12b-1 under the 1940
Act which authorizes payments by the Funds to compensate the Distributor and
other dealers and investment representatives for services and expenses relating
to the sale and distribution of the Funds' shares. Rule 12b-1 fees are paid from
the Funds' assets on an ongoing basis, and increase the cost of your investment.
- - The 12b-1 fees vary by share class as follows:
- Class A shares pay a 12b-1 fee of .25% of the average daily net
assets of the Fund.
- Class B and Class C shares pay a 12b-1 fee of 1.00% of the average
daily net assets of the Fund. This will cause expenses for Class B
and Class C shares to be higher and dividends to be lower than for
Class A shares.
- - The higher 12b-1 fee on Class B and Class C shares, together with the
CDSC, help the Distributor sell Class B and Class C shares without an
"up-front" sales charge. In particular, these fees help to defray the
Distributor's costs of advancing brokerage commissions to investment
representatives.
21
<PAGE> 52
DISTRIBUTION (12b-1) FEES (CONTINUED)
- --------------------------
- - The Distributor may use up to .25% of the 12b-1 fee for shareholder
servicing and up to .75% for distribution.
Long-term shareholders may pay indirectly more than the equivalent of the
maximum permitted front-end sales charge due to the recurring nature of 12b-1
distribution fees.
DIVIDENDS, DISTRIBUTION AND TAXES
- ----------------------------------
Any income a Fund receives in the form of interest or dividends is paid out,
less expenses, to its shareholders. The Funds declare and pay dividends from net
investment income and capital gains, if any, on an annual basis.
Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.
The Funds expect that their dividends will primarily consist of net investment
income and, if any, short-term and long-term capital gains. Distributions from
net investment income and short-term capital gains are taxable as ordinary
income. Such distributions are taken into account for tax purposes in the year
in which they are declared, even if they appear on your account statement the
following year. Long-term capital gain distributions are taxable at long-term
capital gain tax rates. The exchange of the Funds' shares for share of another
fund will be treated as a sale, and any gain on the transaction may be subject
to federal income tax.
You will be notified in January each year about the federal tax status of
distributions made by the Funds. Depending on your residence for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes.
- ------------------------------------------------------------------------------
TAX IDENTIFICATION NUMBER
The Funds are required to withhold 31% of taxable dividends, capital gains
distributions and redemptions proceeds paid to shareholders who have not
provided the Funds with their Taxpayer Identification Number in compliance
with IRS rules. To avoid this, make sure you provide your correct Tax
Identification Number (Social Security Number for most investors) on your
account application.
- -------------------------------------------------------------------------------
Foreign shareholders may be subject to special withholding requirements. Consult
your tax adviser about the federal, state and local tax consequences in your
particular circumstances.
22
<PAGE> 53
OTHER SHAREHOLDER SERVICES
- --------------------------
As a shareholder of the Funds, you can take advantage of other service
privileges which are described in the Owner's Manual:
- Telephone Investment and Redemption Plan
- Automatic Investment Plan
- Systematic Withdrawal Plan
- Retirement Plans
FINANCIAL HIGHLIGHTS
==============================================================================
At this time, the Class A Shares, Class B Shares and Class C Shares have not
previously been offered.
23
<PAGE> 54
FOR MORE INFORMATION:
For more information about the Funds, the following documents are available free
upon request:
OWNER'S MANUAL:
Information about purchasing, selling and exchanging shares of the Funds is
included in a separate document entitled "Owner's Manual." The Owner's Manual is
an integral part of the Prospectus. If you have not received it, please contact
the Funds at the number listed below.
ANNUAL/SEMI-ANNUAL REPORTS:
The Funds' semi-annual and audited annual reports to shareholders contain
detailed information on the Funds' investments. In the annual report, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Funds, including their
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
- ------------------------------------------------------------------------------
YOU CAN GET FREE COPIES OF REPORTS AND SAI, PROSPECTUSES OF OTHER FUNDS IN THE
GABELLI FAMILY, OR REQUEST OTHER INFORMATION AND DISCUSS YOUR QUESTIONS ABOUT
THE FUND BY CONTACTING:
GABELLI GLOBAL SERIES FUNDS, INC.
ONE CORPORATE CENTER
RYE, NY 10580
TELEPHONE: 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
- -------------------------------------------------------------------------------
You can review the Funds' reports and SAIs at the Public Reference Room of the
Securities and Exchange Commission. You can get text-only copies:
- For a fee, by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-6009 or calling
1-800-SEC-0330.
- Free from the Commission's Website at http://www.sec.gov.
------------------------------------
QUESTION?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
------------------------------------
(Investment Company Act file no. 811.07896)
24
<PAGE> 55
THE GABELLI FAMILY
OF FUNDS
- --------------------
OWNER'S MANUAL
A CLASS
B CLASS
C CLASS
- --------------------
================================================================================
GABELLI GLOBAL SERIES FUNDS, INC.
GABELLI INTERNATIONAL GROWTH FUND, INC.
GABELLI ASSET FUND
GABELLI GROWTH FUND
MAY 1, 1999
INFORMATION CONTAINED IN THE OWNER'S MANUAL IS INCORPORATED BY REFERENCE INTO,
AND IS LEGALLY CONSIDERED PART OF, THE PROSPECTUSES FOR THE GABELLI FAMILY OF
FUNDS. THE OWNER'S MANUAL MUST BE PRECEDED OR ACCOMPANIED BY A GABELLI FUNDS
PROSPECTUS.
================================================================================
<PAGE> 56
OWNER'S MANUAL
TABLE OF CONTENTS
PURCHASING SHARES
- --------------------------------------------------------------------------------
3 Instructions for Opening or Adding to an Account
4 Telephone Investment Plan
4 Automatic Investment Plan
4 Retirement Plans
4 Minimum Investments
4 Dividends and Distributions
SELLING SHARES
- --------------------------------------------------------------------------------
5 Instructions for Selling Shares
5 By Bank Wire or Check via Telephone
5 By Bank Wire or Check via Mail
6 General Policies on Selling Shares
6 Signature Guarantees
6 Verifying Telephone Redemptions
6 Redemptions Within 15 Days of Investment
6 Refusal of Redemption Request
6 Closing of Small Accounts
6 Undeliverable Distribution Checks
EXCHANGING SHARES
- --------------------------------------------------------------------------------
7 Instructions for Exchanging Shares
PRICING OF FUND SHARES
- --------------------------------------------------------------------------------
7 How NAV is Calculated
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
- --------------------------------------------------------------------------------
8 Types of Charges
9 Calculation of Sales Charge
10 Conversion Feature
10 Sales Charge Reductions
11 Sales Charge Waivers
2
<PAGE> 57
PURCHASING SHARES
- -----------------
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT
PURCHASES THROUGH BROKER/DEALERS:
If purchasing through your financial advisor or brokerage account, simply tell
your advisor or broker that you wish to purchase shares of the Funds and he or
she will take care of the necessary documentation. For all other purchases
directly with the Fund, follow the instructions below.
PURCHASES DIRECTLY FROM THE FUND:
All investments made by regular mail or personal delivery, whether initial or
subsequent, should be sent to:
BY REGULAR MAIL BY OVERNIGHT DELIVERY
--------------- ---------------------
The Gabelli Funds The Gabelli Funds
PO Box 8308 c/o BFDS
Boston, MA 02266-8308 66 Brooks Dr.
Braintree, MA 02184
For Initial Investment:
1. Carefully read and complete the application.
2. Make check, bank draft or money order payable to "[name of Fund]."
3. Mail or deliver application and payment to the address above.
For Subsequent Investments:
1. Make check, bank draft or money order payable to "[name of Fund]."
2. Provide the exact name and number of your account.
3. Mail or deliver payment to the address above.
BY WIRE TRANSFER
For Initial Investment:
Call 1-800-GABELLI (1-800-422-3554) to obtain a new account number. Promptly
mail the completed application to the address shown above for regular mail, and
For Initial and Subsequent Investments:
Instruct your bank to wire transfer your investment to:
STATE STREET BANK AND TRUST COMPANY
ABA #011-0000-28 REF DDA# 9904-6187
ATTN: SHAREHOLDER SERVICES
RE: [FUND NAME]
A/C#___________________________
YOUR NAME ______________________
225 FRANKLIN STREET, BOSTON, MA 02110
NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.
---------------------------------------------
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
QUESTIONS?
---------------------------------------------
3
<PAGE> 58
PURCHASING SHARES (CONTINUED)
- --------------------------------------------------------------------------------
You can add to your account by using the convenient options described below. The
Fund reserves the right to change or eliminate these privileges at any time upon
60 days notice to shareholders.
- --------------------------------------------------------------------------------
TELEPHONE INVESTMENT PLAN
You may purchase additional shares of the Funds by telephone as long as your
bank is a member of the Automated Clearing House (ACH) system. You must also
have a completed, approved Investment Plan application on file with the Fund's
Transfer Agent.
There is a minimum of $100 for each telephone investment. To initiate an ACH
purchase, please call 1-800-GABELLI (1-800-422-3554) or 1-800-872-5365.
- --------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN
You can make automatic monthly investments in the Funds. Details about this plan
can be obtained from the Distributor on a separate application by calling
1-800-GABELLI (800-422-3554).
- --------------------------------------------------------------------------------
RETIREMENT PLANS
You can invest in various types of retirement plans through the Fund. Details
about these plans can be obtained from the Distributor.
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS
You may purchase Funds through the Distributor or participating organizations,
which may charge additional fees and may require higher or lower minimum
investments or impose other limitations on buying and selling shares.
<TABLE>
<CAPTION>
MINIMUM INITIAL MINIMUM
ACCOUNT TYPE INVESTMENT SUBSEQUENT
<S> <C> <C>
Regular (non-retirement) $ 1,000 $ 0
Retirement (IRA)
Traditional IRA $ 1,000 $ 0
Roth IRA $ 1,000 $ 0
Spousal IRA $ 250 $ 0
Education IRA $ 250 $ 0
Automatic Investment Plan $ 0 $ 100
Telephone Investment Plan $ 100 $ 100
-------------------------------- ------------------------- -----------------------
</TABLE>
All purchases must be in U.S. dollars. A fee will be charged for any checks that
do not clear. Third-party checks are not accepted. Your purchase of shares will
be effective on the same business day if the Fund's transfer agent receives your
order by 4:00 p.m. (12 noon for a money market fund), and receives your form of
payment by 4:00 p.m., eastern time. Otherwise, your purchase will be effective
on the next business day. (See "Pricing of Fund Shares.") Shares are held on
account for you unless you specify in writing that you would like to receive a
stock certificate (certificates are not available for money market funds). We
can only issue a certificate for whole shares.
The Distributor may reject a purchase order if it considers it in the best
interest of the Fund and its shareholders. A Fund may waive its minimum purchase
requirement
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested unless you
request otherwise.
4
<PAGE> 59
SELLING SHARES
- --------------
If selling your shares through your financial adviser or broker, ask him or her
for redemption procedures. Your adviser and/or broker may have transaction
minimums and/or transaction times which will affect your redemption. For all
other sales transactions, follow the instructions below.
As a mutual fund shareholder, you are technically selling shares when you
request a withdrawal in cash. This is also known as redeeming shares.
- --------------------------------------------------------------------------------
WITHDRAWING MONEY FROM YOUR INVESTMENT
You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received by the Fund, its transfer agent, or your
investment representative. See section on "General Policies on Selling Shares"
below.
- --------------------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE
When you sell Class B or C shares, you will be charged a fee for any shares that
have not been held for a sufficient length of time. These fees will be deducted
from the money paid to you. See the section on "Distribution Arrangements/Sales
Charges" below for details.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN
You can receive automatic payments from your account on a monthly, quarterly or
annual basis. You can obtain details from the Distributor.
- --------------------------------------------------------------------------------
INSTRUCTIONS FOR SELLING SHARES
The Fund accepts requests for redemptions of unissued shares.
BY BANK WIRE OR CHECK VIA TELEPHONE
1. Call 1-800-GABELLI (1-800-422-3554) with your account number, the amount of
the redemption and instructions as to how you wish to receive your funds.
2. If you are unable to reach the Fund by telephone, you may telecopy your
redemption request to the Fund at 914-921-____.
NOTE: If you call by 4:00 p.m., eastern time, your payment will normally be
wired to your bank on the following business day. (For Money Market Funds: If
you call before 12:00 noon, eastern time, your payment will be wired to your
bank on that day). If you call after that time, your payment will be wired to
your bank on the next business day. If you request your wire redemption by
telephone, it must be at least $1,000. Your bank may charge a fee for incoming
wires.
BY BANK WIRE OR CHECK VIA MAIL
Submit a redemption request to the Fund. Redemption requests may be made by
letter to the Transfer Agent. You must specify the name of the Fund, the dollar
amount or number of shares you wish to redeem and the account number. You must
sign the letter in exactly the same way the account is registered, and if there
is more than one owner of shares, all must sign. A signature guarantee is
required for most requests.
5
<PAGE> 60
SELLING SHARES (CONTINUED)
- --------------
GENERAL POLICIES ON SELLING SHARES
SIGNATURE GUARANTEES
Signature guarantees are required on redemption requests for the following: o
* The check is not being mailed to the address on your account
* The check is not being made payable to the owner of the account
* The redemption proceeds are being transferred to another person's Fund
account.
A signature guarantee can be obtained from most banks and securities dealers.
Notarized signatures are not considered a signature guarantee.
VERIFYING TELEPHONE REDEMPTIONS
The Fund makes every effort to ensure that telephone redemptions are only made
by authorized shareholders. All telephone calls are recorded for your protection
and you will be asked for information to verify your identity. If appropriate
precautions have not been taken, the Fund may be liable for losses due to
unauthorized transactions.
REDEMPTIONS WITHIN 15 DAYS OF INVESTMENT
When you have made an investment by check or through the automatic investment
plan, your redemption proceeds will not be mailed until the Transfer Agent is
satisfied that the check has cleared (which may require up to 15 days). You can
avoid this delay by purchasing shares with a certified check or federal funds
wire.
REDEMPTION IN KIND
The Fund reserves the right to make a redemption in kind - payment in portfolio
securities rather than cash - for certain large redemption amounts that could
hurt fund operations.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.
CLOSING OF SMALL ACCOUNTS
If your account (other than IRA) falls below $500, the Fund may ask you to
increase your balance. If it is still below $500 after 30 days, the Fund may
close your account and send you the proceeds at the current NAV.
UNDELIVERABLE DISTRIBUTION CHECKS
If distribution checks (1) are returned and marked as "undeliverable" or (2)
remain uncashed for six months, your account will be changed automatically so
that all future distributions are reinvested in your account. Checks that remain
uncashed for six months will be canceled and the money reinvested in the Fund at
the then current net asset value.
-----------------------------------
QUESTIONS?
CALL 1-800-GABELLI
OR YOUR INVESTMENT REPRESENTATIVE.
-----------------------------------
6
<PAGE> 61
EXCHANGING SHARES
- -----------------
You can exchange your shares in one Fund for shares of the same class of another
Fund managed by Gabelli Funds, LLC or its affiliates, usually without paying
additional sales charges (see "Notes" below).
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one Fund to another are taxable transactions.
INSTRUCTIONS FOR EXCHANGING SHARES
- --------------------------------------------------------------------------------
Exchanges may be made by sending a written request to The Gabelli Funds, PO Box
8308, Boston, MA 02266-8308 or by calling 1-800-GABELLI (1-800-422-3554).
Please provide the following information:
* Your name and telephone number
* The exact name on your account and account number
* Taxpayer identification number (usually your Social Security number)
* Dollar value or number of shares to be exchanged
* The names of the Funds from/into which the exchange is to be made
See "Selling Shares" for important information about telephone transactions.
NOTES ON EXCHANGES
* There will be no sales charge upon an exchange when exchanging Class B and
Class C shares for Class B and Class C shares, respectively, of any other
fund managed by the Adviser or an affiliate, but a CDSC may be payable upon
redeeming those shares.
* The registration and tax identification numbers of the two accounts must be
identical.
* This Exchange Privilege may be changed or eliminated at any time upon a
60-day notice to shareholders.
* Be sure to read the Prospectus carefully of any Fund into which you wish to
exchange shares.
PRICING OF FUND SHARES
- ----------------------
HOW NAV IS CALCULATED
The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:
NAV =
TOTAL ASSETS - LIABILITIES
Number of Shares
Outstanding
You can find the Fund's NAV daily in the Wall Street Journal and other
newspapers, or by calling 1-800-GABELLI (800-422-3554).
The Fund's net asset value, or NAV, is determined and its shares are priced at
the close of regular trading on the New York Stock Exchange, normally at 4:00
p.m., eastern time, on days the New York Stock Exchange is open. Your order for
purchase, sale or exchange of shares is priced at the next NAV calculated after
your order is received by the Fund less any applicable sales charge as noted in
the section on "Distribution Arrangements/Sales Charges." This is what is known
as the offering price.
Fund securities are valued as of the close of trading on the primary exchange on
which they trade. Fund securities are generally valued at current market prices.
If market quotations are not available, prices will be based on the average of
the latest bid and asked quotations for such securities prior to the valuation
time, or the latest bid price if asked prices are not available. Debt securities
with remaining maturities of 60 days or less will be valued at amortized cost,
which the Board of Directors believes represents fair value.
Some Fund securities may be listed on foreign exchanges that are open on days
(such as U.S. holidays) when a Fund does not compute its NAV. This could cause
the value of a Fund's portfolio investments to be affected on days when you
cannot buy or sell shares.
7
<PAGE> 62
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
- ---------------------------------------
TYPES OF CHARGES
This section describes the sales charges and fees you will pay as an investor in
different share classes offered by the Fund and ways to qualify for reduced
sales charges.
<TABLE>
<CAPTION>
- ------------------ ------------------------------ ------------------------------- ------------------------------
TYPES OF CHARGES CLASS A CLASS B CLASS C
- ------------------ ------------------------------ ------------------------------- ------------------------------
<S> <C> <C> <C>
Sales Charge Front-end sales charge; No front-end sales No front-end sales
(Load) reduced sales charges charge. A contingent charge, but 1% CDSC may
available. deferred sales charge be imposed on shares
(CDSC) may be imposed on redeemed within
shares redeemed within twenty-four months of
seventy-two months after purchase; unlike Class
purchase; shares B, Class C shares will
automatically convert to never convert to Class A
Class A Shares after shares.
eighty-four months.
- ------------------ ------------------------------ ------------------------------- ------------------------------
Distribution Subject to annual Subject to annual Subject to annual
and Service distribution and distribution and distribution and
(12b-1) Fee shareholder servicing shareholder servicing shareholder servicing
fees of up to .25% of fees of up to 1.00% of fees of up to 1.00% of
the Fund's total assets. the Fund's assets. the Fund's assets.
- ------------------ ------------------------------ ------------------------------- ------------------------------
Fund Expenses Lower annual expenses Higher annual expenses Higher annual expenses
then Class B or C than Class A shares. than Class A or B
shares. Shares. Class C shares
are similar to Class B
shares, except that the
contingent deferred sales
charge is imposed only on
shares redeemed within
twenty-four months of
purchase, there is no maximum
investment and Class C shares
do not convert to Class A
shares.
- ------------------ ------------------------------ ------------------------------- ------------------------------
</TABLE>
8
<PAGE> 63
DISTRIBUTION ARRANGEMENTS/SALES CHARGES (CONTINUED)
- ---------------------------------------
CALCULATION OF SALES CHARGES
Class A shares are sold at their public offering price. This price includes the
initial sales charge. Therefore, part of the money you invest will be used to
pay the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions and on purchases greater than $1 million.
The current sales charge rates are as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A % OF SALES CHARGE AS A % OF DEALER CONCESSION AS A
YOUR INVESTMENT OFFERING PRICE(1) YOUR INVESTMENT % OF OFFERING PRICE
------------------------------ ------------------------- ------------------------- ------------------------
<S> <C> <C> <C>
Up to $49,999 5.75% 6.10% 5.00%
------------------------------ ------------------------- ------------------------- ------------------------
$50,000 up to $99,999 4.50% 4.71% 4.00%
------------------------------ ------------------------- ------------------------- ------------------------
$100,000 up to $249,999 3.00% 3.63% 2.50%
------------------------------ ------------------------- ------------------------- ------------------------
$250,000 up to $499,999 2.50% 2.56% 2.00%
------------------------------ ------------------------- ------------------------- ------------------------
$500,000 up to $999,999 2.00% 2.04% 1.50%
------------------------------ ------------------------- ------------------------- ------------------------
$1,000,000 and above(2) None None 1.00%
------------------------------ ------------------------- ------------------------- ------------------------
</TABLE>
Class B and Class C shares are offered at NAV, without any up-front sales
charge. Therefore, all the money you invest is used to purchase Fund shares.
However, if you sell your Class B shares of the Fund before the seventh
anniversary of purchase, you will have to pay a contingent deferred sales charge
at the time of redemption. If you sell your Class C shares before the second
anniversary of purchase, you will pay a 1% CDSC at the time of redemption. The
CDSC will be based upon the lower of the NAV at the time of purchase or the NAV
at the time of redemption according to the schedule below. There is no CDSC on
reinvested dividends or distributions.
CLASS B SHARES
<TABLE>
<CAPTION>
- ------------------------------------------------------ ------------------------------------------------------
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------- -----------------------------------------------------
<S> <C>
First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh and thereafter None
- ------------------------------------------------------- -----------------------------------------------------
</TABLE>
- --------
1 The Distributor reserves the right to pay the entire sales charge to dealers.
If that occurs the dealer may be considered an "underwriter" under federal
securities laws.
2 There is no initial sales charge on purchases of $1 million or more. However,
a contingent deferred sales charge (CDSC) of up to 1.00% of the purchase price
will be charged to the shareholder if shares are redeemed in the first year
after purchase. This charge will be based on the lower of your cost for the
shares or their NAV at the time of redemption. There will be no CDSC on
reinvested dividends and distributions.
9
<PAGE> 64
DISTRIBUTION ARRANGEMENTS/SALES CHARGES (CONTINUED)
- ---------------------------------------
CLASS C SHARES
<TABLE>
- ------------------------------------------------------- ------------------------------------------------------
CDSC AS A % OF DOLLAR
MONTHS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------- ------------------------------------------------------
<S> <C>
Less than 24 months 1.00%
More than 24 months None
- ------------------------------------------------------- ------------------------------------------------------
</TABLE>
If you sell some but not all of your Class B or Class C shares, certain shares
not subject to the CDSC (i.e., shares purchased with reinvested dividends) will
be redeemed first, followed by shares subject to the lowest CDSC (typically
shares held for the longest time).
CONVERSION FEATURE - CLASS B SHARES
* Class B shares automatically convert to Class A shares of the same Fund on
the first business day of the eighty-fifth calendar month following the
calendar month in which the shares were purchased.
* After conversion, your shares will be subject to the lower distribution
fees charged on Class A shares, which will increase your investment return
compared to the Class B shares.
* You will not pay any sales charge or fees when your shares convert, nor
will the transaction be subject to any tax.
* If you purchased Class B shares of one Fund which you exchanged for Class
B shares of another Fund, your holding period will be calculated from the
time of your original purchase of Class B shares. The dollar value of Class
A shares you receive will equal the dollar value of the Class B shares
converted.
* If you exchange shares into a Gabelli money market fund, your holding
period will be suspended. The automatic conversion of Class B shares to
* Class A shares may be suspended by the Board of Directors at
any time it determines such suspension to be required under applicable law
or in the exercise of their fiduciary duties; provided, however, that if
the Board determines that the suspension is likely to continue for a
substantial period of time, the Board of Directors will seek to create an
additional class or additional classes of shares into which Class B shares
are eligible for conversion under the rules of the Securities and Exchange
Commission and other applicable law.
SALES CHARGE REDUCTIONS
Reduced sales charges for Class A shares are available to shareholders with
investments of $50,000 or more. In addition, you may qualify for reduced sales
charges under the following circumstances:
* Letter of Intent. You inform the Fund in writing that you intend to
purchase enough shares over a 13-month period to qualify for a reduced
sales charge. You must include a minimum of 5% of the total amount you
intend to purchase with your letter of intent.
* Rights of Accumulation. When the value of shares you already own plus the
amount you intend to invest reaches the amount needed to qualify for
reduced sales charges, your added investment will qualify for the reduced
sales charge.
10
<PAGE> 65
DISTRIBUTION ARRANGEMENTS/SALES CHARGES (CONTINUED)
- ---------------------------------------
Combination Privilege. Combine accounts of multiple Funds or accounts of
immediate family household members (spouse and children under 21) to
achieve reduced sales charges.
SALES CHARGE WAIVERS
CLASS A SHARES
- --------------
The following qualify for waivers of sales charges:
* Reinvestment of distributions from a deferred compensation plan, agency,
trust, or custody account that was maintained by the Adviser, its
affiliates or any NASD member.
* Shares purchased by directors, officers, employees of the Fund, the Adviser
or the Distributor and their affiliates, and members of the immediate
family. 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.
---------------------------------------------------------------------
REINSTATEMENT PRIVILEGE
If you have sold Class A shares and decide to reinvest in the Fund
within a 30 day period, you will not be charged the applicable sales
load on amounts up to the value of the shares you sold. You must
provide a written reinstatement request and payment within 30 days of
the date your instructions to sell were processed.
---------------------------------------------------------------------
CLASS B SHARES
- --------------
The CDSC will be waived under certain circumstances, including the following:
* Distributions from retirement plans if the distributions are made following
the death or disability of shareholders or plan participants.
* Redemptions from accounts other than retirement accounts following the
death or disability of the shareholder.
* Returns of excess contributions to retirement plans following the death or
disability of the shareholder.
* Distributions of less than 5% of the annual account value under a
Systematic Withdrawal Plan.
* Shares issued in a plan of reorganization sponsored by the Adviser, or
shares redeemed involuntarily in a similar situation.
<PAGE> 66
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
MAY 1, 1999
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")
- The Gabelli Global Opportunity Fund (the "Global Opportunity 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 May 1, 1999, 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.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Strategies and Risks................................................... B-02
Directors and Officers............................................................ B-09
Shares of Beneficial Interest..................................................... B-11
The Adviser....................................................................... B-12
The Distributor................................................................... B-14
The Distribution Plans............................................................ B-14
Investment Restrictions........................................................... B-15
Portfolio Transactions and Brokerage.............................................. B-16
Purchase and Redemption of Shares................................................. B-19
Exchange Privilege................................................................ B-22
Dividends, Distributions and Taxes................................................ B-23
Determination of Net Asset Value.................................................. B-25
Investment Performance Information................................................ B-26
Service Providers................................................................. B-27
Description of Shares, Voting Rights and Liabilities.............................. B-28
</TABLE>
B-1
<PAGE> 67
THE FOLLOWING INFORMATION SUPPLEMENTS THAT IN THE PROSPECTUS
INVESTMENT STRATEGIES AND RISKS
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 as 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 can be withdrawn 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.
B-2
<PAGE> 68
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 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
Gabelli Funds, LLC's (the "Adviser") 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 of the Corporation (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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<PAGE> 69
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. (See "Nonconvertible Fixed Income Securities.")
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.
The Fund may invest in securities denominated in a multi-national currency unit.
An illustration of a multi-national currency unit is the European Monetary Unit
(the "EUR"), which is a combination of the economic structures of the member
nations of the European Monetary Union into to a single currency. This union
includes France, Germany, the Netherlands, and other countries. The specific
legacy currencies rates comprising the EUR were fixed on December 31, 1998 to
reflect the relative values of the underlying currencies to the newly created
EUR. Such investments involve credit risks associated with the issuer and
currency risks associated with the currency in which the obligation is
denominated.
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<PAGE> 70
SECURITIES SUBJECT TO REORGANIZATION
Each Fund may invest 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 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 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 the 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 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. A Fund's transactions in options
may be subject to specific segregation requirements. See "Hedging Transactions"
below.
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<PAGE> 71
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 each Fund the credit risk that
the counterparty 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 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. A
Fund may have to pay a fee to borrow particular securities and are often
obligated to pay over any payments received on such borrowed securities.
A Fund's 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 of any amount 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
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<PAGE> 72
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 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 the identical security at no additional cost.
RESTRICTED AND ILLIQUID SECURITIES
Each Fund may invest up to a total of 15% of its net assets in securities that
are subject to legal or contractual restrictions on resale and securities the
markets for which are illiquid. 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 of Directors 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 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 of 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
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<PAGE> 73
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, (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") 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
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<PAGE> 74
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
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 buying or selling which
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.
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 (the "Act") are indicated by an asterisk (*).
<TABLE>
<CAPTION>
Name, Position With Fund and Address Principal Occupations During Last Five Years; Affiliations
With the Adviser or Administrator.
<S> <C>
Mario J. Gabelli * Chairman of the Board, Chief Executive Officer and Chief
President, Director and Chief Investment Investment Officer of Gabelli Asset Management Inc., the
Officer Adviser, and GAMCO Investors, Inc., Chairman of the Board and
One Corporate Center Chief Executive Officer of Lynch Corporation, a diversified
Rye, New York 10580 manufacturing, communications and services company; Director
Age: 56 of East/West Communications, Inc.; officer and/or Director or
Trustee of 12 other Gabelli funds.
</TABLE>
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<PAGE> 75
<TABLE>
<CAPTION>
Name, Position With Fund and Address Principal Occupations During Last Five Years; Affiliations
With the Adviser or Administrator.
<S> <C>
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: 73
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: 62
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: 54
Karl Otto Pohl *+ Member of the Shareholder Committee of Sal Oppenheim Jr. &
Director Cie. (private investment bank); Former President of the
One Corporate Center Deutsche Bundesbank (Germany's Central Bank) and Chairman of
Rye, New York 10580 its Central Bank Council (1980-1991); Currently board member
Age: 66 of Gabelli Asset Management Inc.; Zurich Versicherungs-Gesellshaft
(insurance); the International Council for JP Morgan & Co.;
Trizechtahn Corp.; Director or Trustee of 14 other Gabelli Funds.
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: 58
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
</TABLE>
+ Mr. Pohl is a director of Gabelli Asset Management Inc.
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<PAGE> 76
<TABLE>
<CAPTION>
Name, Position With Fund and Address Principal Occupations During Last Five Years; Affiliations
With the Adviser or Administrator.
<S> <C>
Bruce N. Alpert Executive Vice President, Chief Operating Officer of Gabelli
Vice President and Treasurer Funds, LLC (the "Adviser"); President and Director
of One Corporate Center Gabelli Advisers, Inc.; officer of each mutual fund managed
Rye, New York 10580 by the Adviser or its affiliates.
Age: 47
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 Gabelli Asset
Secretary Management Inc., and of GAMCO Investors, Inc. since 1993;
One Corporate Center Secretary all Funds management by the Adviser or its
Rye, New York 10580 affiliates; Branch Chief with the U.S. Securities and
Age: 35 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 the Corporation who are
employed by the Adviser or an affiliated company receive no compensation or
expense reimbursement for serving as a director of the Corporation. The
following table sets forth certain information regarding the compensation of the
Corporation's directors and officers. Except as disclosed below, no executive
officer or person affiliated with the Corporation received compensation from the
Corporation for the calendar year ended December 31, 1998 in excess of $60,000.
COMPENSATION TABLE
<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>
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 $82,000(13)
Director
John D. Gabelli.................................................... $ 0 $ 0
Director
Karl Otto Pohl..................................................... $ 3,000 $98,466(15)
Director
Werner Roeder, M.D................................................. $ 3,500 $25,500(7)
Director
Anthonie C. van Ekris.............................................. $ 3,500 $57,500(10)
Director
</TABLE>
B-11
<PAGE> 77
* Represents the total compensation paid to such persons during the calendar
year ending December 31, 1998 (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.
B-12
<PAGE> 78
SHARES OF BENEFICIAL INTEREST
(to be updated by amendment)
As of ___________, the Officers and Directors of the Fund as a group owned ____%
of the outstanding shares of the Gabelli Global Convertible Securities Fund.
As of ____________, 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) _____% (1)
Reinvest Account
101 Montgomery Street
</TABLE>
B-13
<PAGE> 79
<TABLE>
<CAPTION>
Percentage of Shares
Fund/Shareholder Outstanding
------------- --------------
<S> <C>
The Gabelli Global Interactive Couch Potato(R) Fund/
National Financial Serv. Corp. _____% (1)
For the Exclusive Benefit of Our Customers
200 Liberty Street
New York, NY 10281-1003
The Gabelli Global Interactive Couch Potato(R) Fund/
Charles Schwab & Co., Inc. (2) _____% (1)
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104-4122
The Gabelli Global Interactive Couch Potato(R) Fund/
FTC & Company _____% (1)
Attn.: Datalynx #035
P.O. Box 173736
Denver, Co 80217-3736
The Gabelli Global Opportunity Fund/
____% (1)
The Gabelli Global Convertible Securities Fund/
National Financial Serv. Corp. _____% (1)
For the Exclusive Benefit of Our Customers
200 Liberty Street
New York, NY 10281-1003
</TABLE>
- ----------
(1) Represents shares owned of record only.
(2) Charles Schwab & Co., Inc. disclaims beneficial ownership.
THE ADVISER
The Adviser is a New York limited liability company 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, and most
recently at a meeting of the Board of Directors held on February 17, 1999, 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.
Under the Investment Advisory Contracts, 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
B-14
<PAGE> 80
provide efficient administration of the Funds, including maintaining certain
books and records and overseeing the activities of the Funds' 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 (the "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 Act to be acted upon by the Board.
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.
For the Adviser's investment advisory services, and for related expenses borne
by the Adviser, each Fund pays the Adviser an annual fee equal to 1.00% of each
Fund's average daily net assets. The fee is payable monthly in arrears. 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
Investment Advisory Contracts provide that the Funds are not waiving any rights
they may have with respect to any violation of law which cannot be waived. The
Investment Advisory 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
Board of Directors, 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
B-15
<PAGE> 81
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
Investment Advisory 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.
Advisory Fees Paid by the Funds
For the Year Ended December 31,
<TABLE>
<CAPTION>
- ------------------------------ -------------------------- -------------------------- --------------------------
1996 1997 1998
---- ---- ----
- ------------------------------ ------------- ------------ ------------- ------------ ------------- ------------
Class AAA Shares Earned Waived Earned Waived Earned Waived
---------------- ------ ------ ------ ------ ------ ------
- ------------------------------ ------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Global Telecommunications $1,195,023 $0 $1,080,470 $0 $1,456,869 $0
Fund
- ------------------------------ ------------- ------------ ------------- ------------ ------------- ------------
Global Interactive Couch $349,604 $0 $324,399 $0 $696,977 $0
Potato(R) Fund
- ------------------------------ ------------- ------------ ------------- ------------ ------------- ------------
Global Convertible $156,876 $0 $111,722 $0 $81,333 $0
Securities Fund
- ------------------------------ ------------- ------------ ------------- ------------ ------------- ------------
Global Opportunity Fund* N/A N/A N/A N/A $27,976 $27,976
- ------------------------------ ------------- ------------ ------------- ------------ ------------- ------------
</TABLE>
* The Adviser has voluntarily agreed to reimburse the Global Opportunity
Fund's Class AAA expenses and/or waive its management fee to maintain
total annual expenses at 1.00% of average net assets until further
notice.
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 the Adviser, 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.
B-16
<PAGE> 82
B-17
<PAGE> 83
DISTRIBUTION PLANS
Pursuant to separate distribution and service plans (the Class A Plan, the Class
B Plan, the Class C Plan and the Class AAA Plan, collectively, the "Plans")
adopted by each of the Funds pursuant to Rule 12b-1 under the Act and the
Distribution Agreement, the Distributor incurs expenses of distributing the
Funds' Class A, Class B, Class C and Class AAA shares. In addition, the
Distributor receives the proceeds of contingent deferred sales charges paid by
investors upon certain redemptions of Class B and Class C shares.
The Plans continue in effect from year to year, provided that each such
continuance is approved at least annually by a vote of the Board of Directors,
including a majority vote of the Directors who are not interested persons of the
Corporation and who have no direct or indirect financial interest in the
operation of the Plans (the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on such continuance. The Plans may each
be terminated at any time, without penalty, by the vote of a majority of the
Independent Directors, or by the vote of the holders of a majority of the
outstanding shares of the applicable class of the Funds on not more than 30
days' written notice to any other party to the Plans. The Plans may not be
amended to increase materially the amounts to be spent for the services
described therein without approval by the shareholders of the applicable class
(by both Class A and Class B shareholders, voting separately, in the case of
material amendments to the Class A Plan), and all material amendments must be
approved by the Board of Directors in the manner described above. Each Plan will
automatically terminate in the event of its assignment. The Funds will not be
contractually obligated to pay expenses incurred under any Plan if it is
terminated or not continued.
Pursuant to each Plan, the Board of Directors will review at least quarterly a
written report of the distribution expenses incurred on behalf of each class of
shares of the Funds by the Distributor. The report includes an itemization of
the distribution expenses and the purposes of such expenditures. In addition, as
long as the Plans remain in effect, the selection and nomination of Independent
Directors shall be committed to the Independent Directors.
Pursuant to the Distribution Agreement, the Corporation has agreed to indemnify
the Distributor to the extent permitted by applicable law against certain
liabilities under the federal securities laws.
Pursuant to rules of the NASD, the Distributor is required to limit aggregate
initial sales charges, deferred sales charges and asset-based sales charges to
6.25% of total gross sales of each class of shares. Interest charges on
unreimbursed distribution expenses equal to the prime rate plus one percent per
annum may be added to the 6.25% limitation. Additional shares resulting from the
reinvestment of dividends and distributions are not included in the calculation
of the 6.25% limitation. The annual asset-based sales charge on shares of the
Funds may not exceed .75 of 1% per class. The 6.25% limitation applies to each
class of the Fund rather than on a per shareholder basis. If aggregate sales
charges were to exceed 6.25% of total gross sales of any class, all sales
charges on shares of the class would be suspended.
During the fiscal year ended December 31, 1998, The Distributor incurred
expenses for the Class AAA of the Gabelli Global Telecommunications Fund under
the Distribution Plan of $223,000. Of this amount $37,200 was spent on printing,
postage and stationery, $50,400 on overhead support expenses, $92,400 on
salaries of personnel of the Distributor and $43,000 on third party brokers.
Pursuant to the Distribution Plan, the Fund paid the Distributor $364,400, or
.25% of its average daily net assets.
During the fiscal year ended December 31, 1998, The Distributor incurred
expenses for the Class AAA of the Gabelli Global Interactive Couch Potato Fund
under the Distribution Plan of $487,100. Of this amount $72,000 was spent on
printing, postage and stationery, $241,100 on overhead support expenses,
$109,600 on salaries of personnel of the Distributor and $64,400
B-18
<PAGE> 84
on third party brokers. Pursuant to the Distribution Plan, the Fund paid the
Distributor $174,300, or .25% of its average daily net assets.
During the fiscal year ended December 31, 1998, The Distributor incurred
expenses for the Class AAA of the Gabelli Global Opportunity Fund under the
Distribution Plan of $59,300. Of this amount $22,400 was spent on printing,
postage and stationery, $15,500 on overhead support expenses, $21,000 on
salaries of personnel of the Distributor and $400 on third party brokers.
Pursuant to the Distribution Plan, the Fund paid the Distributor $7,000, or .25%
of its average daily net assets.
During the fiscal year ended December 31, 1998, The Distributor incurred
expenses for the Class AAA of the Gabelli Global Convertible Securities Fund
under the Distribution Plan of $26,700. Of this amount $7,700 was spent on
printing, postage and stationery, $6,500 on overhead support expenses, $9,700 on
salaries of personnel of the Distributor and $2,800 on third party brokers.
Pursuant to the Distribution Plan, the Fund paid the Distributor $20,300, or
.25% of its average daily net assets.
B-19
<PAGE> 85
B-20
<PAGE> 86
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
B-21
<PAGE> 87
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.
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 a 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 is 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 they deem 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 such 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
B-22
<PAGE> 88
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. Based on such determinations, the
Adviser has allocated brokerage commissions of $_______ on portfolio
transactions in the principal amount of $___________ during 1998, to various
broker-dealers that have provided research services to the Adviser.
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., an affiliate of the Adviser ("Gabelli"), and the percentage of
all transactions involving the payment of commissions to Gabelli.
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
December 31, 1996 December 31, 1997 December 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. $49,410 $61,219
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. $16,320 $7,785
% of aggregate brokerage commissions............... 33.0% 12.7%
% of transactions effected through
Gabelli & Company, Inc......................... 28.0% 20.6%
</TABLE>
B-23
<PAGE> 89
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
December 31, 1996 December 31, 1997 December 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. $67,823 $106,631
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. $8,486 $15,255
% of aggregate brokerage commissions............... 12.5% 14.3%
% of transactions effected through
Gabelli & Company, Inc......................... 12.8% 12.0%
</TABLE>
B-24
<PAGE> 90
THE GABELLI GLOBAL OPPORTUNITY FUND
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
December 31, 1996 December 31, 1997 December 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. N/A N/A
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. N/A N/A
% of aggregate brokerage commissions............... N/A N/A
% of transactions effected through
Gabelli & Company, Inc......................... N/A N/A
</TABLE>
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
December 31, 1996 December 31, 1997 December 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Adviser on behalf of the Fund.................. $21,357 $9,993
Total brokerage commissions paid by the
Fund to Gabelli & Company, Inc................. $50 $0
% of aggregate brokerage commissions............... .23% 0.0%
% of transactions effected through
Gabelli & Company, Inc......................... .04% 0.0%
</TABLE>
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli, a broker-dealer member of the National Association of
Securities Dealers, Inc. 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 Board, 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.
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 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 Exchange.
B-25
<PAGE> 91
PURCHASE AND REDEMPTION OF SHARES
The implementation of the multi-class structure described herein is subject to
approval by the Fund's shareholders of certain technical amendments to the
Corporation's Articles of Incorporation at a Special Meeting of Shareholders
called by the Board of Directors. The Corporation will not offer Class A, Class
B or Class C shares until such approval has been received.
PURCHASE OF SHARES
Shares of Class A, Class B and Class C of the Funds may be purchased at a price
equal to the next determined net asset value per share plus a sales charge
which, at the election of the investor, may be imposed either (i) at the time or
purchase (Class A shares) or (ii) on a deferred basis (Class B or Class C
shares.) Class AAA shares of the Funds are offered exclusively to investors
acquiring shares directly from the Distributor, the Funds or through any
financial intermediary that makes Class AAA shares available.
Each class of shares represents an interest in the same assets of each Fund and
is identical in all respects except that (i) each class is subject to different
sales charges and distribution and/or service fees (except for Class AAA shares,
which are not subject to any sales charges), which will affect performance
differently, (ii) each class has exclusive voting rights with respect to any
matter submitted to shareholders that relates solely to its arrangement and has
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class, (iii) each
class has a different exchange privilege, (iv) only Class B shares have a
conversion feature, and (v) Class AAA shares are offered exclusively to
investors acquiring shares directly from the Distributor or from a financial
intermediary with whom the Distributor has entered into an agreement expressly
authorizing the sale by such intermediary of Class AAA shares.
Under the current distribution arrangement between each Class of shares and the
Distributor, Class A shares are sold at a maximum sales charge of 5.75% and
Class B*, Class C* and Class AAA shares are sold at net asset value.
Class B shares automatically convert to Class A shares of the Fund on the first
business day of the eighty-fifth calendar month following the calendar month in
which such shares were issued.
The automatic conversion of Class B shares to Class A shares may be suspended
by the Board of Directors at any time it determines such suspension to be
required under applicable law or in the exercise of their fiduciary duties;
provided, however, that if the Board determines that the suspension is likely
to continue for a substantial period of time, the Board of Directors will seek
to create an additional class or additional classes of shares into which Class
B shares are eligible for conversion under the rules of the Securities and
Exchange Commission and other applicable law.
If an investor or eligible group of related investors purchases Class A shares
of the Funds concurrently with Class A shares of other Gabelli funds, the
purchases may be combined to take advantage of the reduced sales charges
applicable to larger purchases.
- ----------------
* Class B and Class C shares are subject to a contingent deferred sales charge
on certain redemptions.
B-26
<PAGE> 92
An eligible group of related Fund investors includes any combination of the
following:
* an individual;
* the individual's spouse, their children and their parents;
* the individual's and spouse's Individual Retirement Accounts (IRA);
* any company controlled by the individual (a person, entity or group that
holds 25% or more of the outstanding voting securities of a company will be
deemed to control the company, and a partnership will be deemed to be
controlled by each of its general partners.);
* a trust created by the individual, the beneficiaries of which are the
individual, his or her spouse, parents and/or children;
* a Uniform Gift to Minors Act/Uniform Transfers to Minors Act account
created by the individual or the individual's spouse; and
* one or more employee benefit plans of a company controlled by an
individual.
In addition, an eligible group of related Fund investors may include an employer
(or group of related employers) and one or more retirement or group plans of
such employer or employers (an employer controlling, controlled by or under
common control with another employer is deemed related to that employer.)
The Distributor must be notified at the time of purchase that the investor is
entitled to a reduced sales charge. The reduced sales charge will be granted
subject to confirmation of the investor's holdings.
Rights of Accumulation. Reduced sales charges are also available through rights
of accumulation, by which an investor or an eligible group of related investors,
as described above, may aggregate the value of their existing holdings of shares
of the Funds and shares of other funds managed by the Adviser or an affiliate
(excluding money market funds other than those acquired pursuant to the exchange
privilege) to determine the reduced sales charge. The value of existing holdings
for purposes of determining the reduced sales charges is calculated using the
maximum offering price (net asset value plus maximum sales charge) as of the
previous business day.
Letters of Intent. Reduced sales charges are also available to investors (or an
eligible group of related investors), including retirement and group plans, who
enter into a written letter of intent (a "Letter of Intent") providing for the
purchase, within a thirteen-month period, of shares of the Funds and shares of
other funds managed by the Adviser or an affiliate (an "Investment Letter of
Intent"). Retirement and group plans may also qualify to purchase Class A shares
at net asset value by entering into a Letter of Intent whereby they agree to
enroll, within a thirteen-month period, a specified number of eligible employees
or participants (a "Participant Letter of Intent.").
For purposes of the Investment Letter of Intent, all shares of the Funds and
shares of other Gabelli funds (excluding money market funds other than those
acquired pursuant to the exchange privilege) which were previously purchased and
are still owned are also included in determining the applicable reduction.
A Letter of Intent permits a purchaser, in the case of an Investment Letter of
Intent, to establish a total investment goal to be achieved by any number of
investments over a thirteen-month period and, in case of a Participant Letter of
Intent, to establish a minimum eligible employee or participant enrollment goal
over a thirteen-month period. Each investment made during the period, in the
case of an Investment Letter of Intent, will receive the reduced sales charge
applicable to the amount represented by the goal, as if it were a single
investment. In the case of a Participant Letter of Intent, each investment made
during the period will be made at net asset value. Escrowed Class A shares
totaling 5% of the dollar amount of the Letter of Intent will be held by the
Transfer Agent in the name of the purchaser, except in the case of retirement
B-27
<PAGE> 93
and group plans where the employer or plan sponsor will be responsible for
paying any applicable sales charge. The effective date of an Investment Letter
of Intent (except in the case of retirement and group plans) may be back-dated
up to 90 days, in order that any investments made during this 90-day period,
valued at the purchaser's cost, can be applied to the fulfillment of the Letter
of Intent goal.
The Investment Letter of Intent does not obligate the investor to purchase, nor
the Funds to sell, the indicated amount. Similarly, the Participant Letter of
Intent does not obligate the retirement or group plan to enroll the indicated
number of eligible employees or participants. In the event the Letter of Intent
goal is not achieved within the thirteen-month period, the purchaser (or the
employer or plan sponsor, in case of any retirement or group plan) is required
to pay the difference between the sales charge otherwise applicable to the
purchases actually made during this period and sales charges actually paid. Such
payment may be made directly to the Distributor or, if not paid, the Distributor
will liquidate sufficient escrowed shares to obtain such difference. Investors
electing to purchase Class A shares of the Funds pursuant to a Letter of Intent
should carefully read such Letter of Intent.
The Distributor must be notified at the time of purchase that the investor is
entitled to a reduced sales charge. The reduced sales charge will, in the case
of an Investment Letter of Intent, be granted subject to confirmation of the
number of eligible employees or participants in the retirement or group plan.
Letters of Intent are not available to individual participants in any retirement
or group plans.
Waiver of Contingent Deferred Sales Charge - Class B Shares. The contingent
deferred sales charge is waived under the circumstances described in the Funds'
Prospectuses. In connection with these waivers, the Transfer Agent will require
the shareholder to submit the supporting documentation set forth below.
<TABLE>
<CAPTION>
CATEGORY OF WAIVER REQUIRED DOCUMENTATION
<S> <C>
Death A copy of the shareholder's death certificate or,
in the case of a trust, a copy of the grantor's
death certificate, plus a copy of the trust
agreement identifying the grantor.
Disability - An individual will be considered A copy of the Social Security Administration
disabled if he or she is unable to engage in any award letter or a letter from a physician on the
substantial gainful activity by reason of any physician's letterhead stating that the
medically determinable physical or mental shareholder (or, in the case of a trust, the
impairment which can be expected to result in grantor) is permanently disabled. The letter or to
death be of long-continued and indefinite must also indicate the date of disability.
duration.
Distribution from an IRA or 403 (b) Custodial A copy of the distribution form from the
Account custodial firm indicating (i) the date of
birth of the shareholder and (ii) that the shareholder
is over age 59 1/2 and is taking a normal distribution
- signed by the shareholder.
Distribution from Retirement Plan A letter signed by the plan administrator/trustee
indicating the reason for the distribution.
Excess Contribution A letter from the shareholder (for an IRA) or the
plan administrator/trustee on company letterhead
indicating the amount of the excess and whether
or not taxes have been paid.
</TABLE>
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<PAGE> 94
The Transfer Agent reserves the right to request such additional documents as it
may deem appropriate.
REDEMPTION OF SHARES
Payment of the redemption price for shares redeemed may be made either in cash
or in portfolio securities (selected at the discretion of the Board of Directors
and taken at their value used in determining the Funds' net asset value per
share as we described under "Net Asset Value"), or partly in cash and partly in
portfolio securities. However, payments will be made wholly in cash unless the
Board of Directors believes that economic conditions exist which would make such
a practice detrimental to the best interest of the Funds. If payment for shares
redeemed is made wholly or partly in portfolio securities, brokerage costs may
be incurred by the investor in converting the securities to cash. The Funds will
not distribute in-kind portfolio securities that are not readily marketable. The
Corporation has filed a formal election with the Commission pursuant to which
the Corporation will only effect a redemption in portfolio securities where the
particular shareholder of record is redeeming more than $250,000 or 1.00% of the
Fund's total net assets, whichever is less, during any 90-day period. In the
opinion of the Corporation's management, however, the amount of a redemption
request would have to be significantly greater than $250,000 before a redemption
wholly or partly in portfolio securities would be made.
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 Commission
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.
EXCHANGE PRIVILEGE
The Funds make available to their shareholders the privilege of exchanging their
shares for shares of certain other funds managed by the Adviser or an affiliate,
including one or more specified money market funds, subject in each case to the
minimum investment requirements of each fund (the "Exchange Privilege"). Shares
of such other Gabelli funds may also be exchanged for shares of the Corporation.
All exchanges are made on the basis of the relative NAV next determined after
receipt of an order in proper form. An exchange will be treated as a redemption
and purchase for tax purposes. Shares may be exchanged for shares of another
fund only if shares of such fund may legally be sold under applicable state
laws. For retirement and group plans having a limited menu of Gabelli funds, the
Exchange Privilege is available for those funds eligible for investment in the
particular program.
CLASS A SHARES
Shareholders of the Funds may exchange their Class A shares for Class A shares
of any other fund managed by the Adviser or an affiliate that offers Class A
shares and for shares of any money market fund managed by the Adviser or an
affiliate on the basis of relative NAV. No fee or sales load will be imposed
upon the exchange. Shareholders of money market funds who acquired such shares
upon exchange of Class A shares may use the Exchange Privilege only to acquire
Class A shares of the Gabelli funds participating in the Exchange Privilege [as
identified by the Distributor from time to time.]
CLASS B AND CLASS C SHARES
Shareholders of the Funds may exchange their Class B and Class C shares for
Class B and Class C shares, respectively, of any other fund managed by the
Adviser or an affiliate that offers
B-29
<PAGE> 95
Class B or Class C shares on the basis of relative NAV. No CDSC will be payable
upon such exchange, but a CDSC may be payable upon the redemption of the Class B
and Class C shares acquired as a result of an exchange. The applicable sales
charge will be that imposed by the fund in which shares were initially purchased
and the purchase date will be deemed to be the first day of the month after the
initial purchase, rather than the date of the exchange.
At any time after acquiring shares of other funds participating in the Class B
or Class C Exchange Privilege, a shareholder may again exchange those shares
(and any reinvested dividends and distributions) for Class B and Class C shares
of the Fund, respectively, without subjecting such shares to any CDSC upon the
exchange. Shares of any fund participating in the Class B or Class C exchange
privilege that were acquired through reinvestment of dividends or distributions
may be exchanged for Class B or Class C shares, respectively, of other funds
without being subject to any CDSC.
CLASS AAA SHARES
Class AAA shares may be exchanged for Class AAA shares of any other funds
managed by the Adviser or an affiliate of the Adviser that offers Class AAA
shares or any other shares not subject to a front-end sales load or contingent
deferred sales charge.
Additional details about the Exchange Privilege and prospectuses for each of the
funds managed by the Adviser or an affiliate are available from the
Corporation's Distributor or Transfer Agent. The Exchange Privilege may be
modified, terminated or suspended on sixty days' notice, and any fund, including
either class, or the Distributor, has the right to reject any exchange
application relating to such fund's shares.
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 Internal Revenue Code of 1986, as amended, 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-30
<PAGE> 96
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.
Each dividend and capital gains distribution, if any, declared by the 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 the
Fund having an aggregate net asset value as of the ex-dividend date of such
dividend or distribution equal to the cash amount of such distribution. An
election to receive dividends and distributions may be changed by notifying the
Fund in writing at any time prior to the record date for a particular dividend
or distribution. There are no sales or other charges in connection with the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no assurance that the Fund will pay any
dividends or realize any capital gains.
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 the 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.
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
B-31
<PAGE> 97
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 or short-term, generally depending upon the shareholder's
holding period for the shares. Any loss realized on a sale or exchange 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
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 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
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<PAGE> 98
Net asset value is calculated separately for each class of the Corporation. The
net asset value of Class B and Class C shares of the Funds will generally be
lower than the net asset value of Class A or Class AAA shares as a result of the
larger distribution-related fee to which Class B and Class C shares are subject.
It is expected, however, that the net asset value per share of each class will
tend to converge immediately after the recording of dividends, if any, which
will differ by approximately the amount of the distribution and/or service fee
expense accrual differential among the classes.
For purposes of determining each of the Fund's net asset value per share,
readily marketable portfolio securities listed on the NYSE are valued, except as
indicated below, at the last sale price reflected at the close of the regular
trading session of the NYSE on the business day as of which such value is being
determined. If there has been no sale on such day, the securities are valued at
the mean of the closing bid and asked prices on such day. If no asked prices are
quoted on such day, then the security is valued at the closing bid price on such
day. If no bid or asked prices are quoted on such day, then the security is
valued by such method as the Board of Directors shall determine in good faith to
reflect its fair market value. Readily marketable securities not listed on the
NYSE but listed on other national securities exchanges or admitted to trading on
the National Association of Securities Dealers Automated Quotations, Inc.
("NASDAQ") National List are valued in like manner.
Readily marketable securities traded in the over-the-counter market, including
listed securities whose primary market is believed by the Adviser to be
over-the-counter but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the
National Quotation Bureau or such other comparable sources as the Board of
Directors deems appropriate to reflect their fair value. 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.
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<PAGE> 99
Portfolio securities traded on more than one national securities exchange or
market are valued according to the broadest and most representative market as
determined by the Adviser. Securities traded primarily on foreign exchanges are
valued at the closing price on such foreign exchange immediately prior to the
close of the NYSE.
United States Government obligations and other debt instruments having sixty
days or less remaining until maturity are stated at amortized cost. 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 Corporation's Board
of Directors designed to reflect in good faith the fair value of such
securities.
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, 1998, the Fund's yield was _____%. With respect to The
Gabelli Global Interactive Couch Potato(R) Fund for the 30-day period ended
December 31, 1998, the Fund's yield was _____ %. With respect to The Gabelli
Global Opportunity Fund for the 30-day period ended December 31, 1998, the
Fund's yield was _____%. With respect to The Gabelli Global Convertible
Securities Fund for the 30-day period ended December 31, 1998, the Fund's yield
was _____%.
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, Financial World, Forbes,
Fortune, Money, Personal Investor, Sylvia Porter's Personal Finance, Bank Rate
Monitor, Morningstar and The Wall Street Journal.
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<PAGE> 100
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 (or for the periods of each Fund's operations), 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, 1998 and average annual returns since inception.
<TABLE>
<CAPTION>
- -------------------------------------------------------- ------------------ ------------------ ------------------
Average Annual
5 Year Average Total Return
1998 Annual Total Since
Total Return Return Inception
- -------------------------------------------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
Global Telecommunications 34.8% 16.7% 16.8%
- -------------------------------------------------------- ------------------ ------------------ ------------------
Global Interactive Couch Potato(R) 28.9% N/A 20.4%
- -------------------------------------------------------- ------------------ ------------------ ------------------
Global Opportunity N/A N/A N/A
- -------------------------------------------------------- ------------------ ------------------ ------------------
Global Convertible Securities 8.6% N/A 6.1%
- -------------------------------------------------------- ------------------ ------------------ ------------------
</TABLE>
SERVICE PROVIDERS
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York
10022, serves as counsel to the Corporation.
Grant Thornton LLP, 7 Hanover Square, New York, New York 10004-2616, have been
appointed independent auditor for the Corporation.
State Street Bank and Trust Company ("State Street") is the Custodian for the
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, performs the shareholder services on behalf of State Street and is
located at the BFDS Building, 2 Heritage Drive, North Quincy, Massachusetts
07171.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Corporation was organized as a Maryland corporation on July 16, 1993. Its
authorized capital stock consists of one billion shares of stock having a par
value of one tenth of one cent ($.001) per share. 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
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<PAGE> 101
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.
There are no conversion or preemptive rights in connection with any shares of
the Fund. 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.
The Corporation sends semi-annual and audited annual reports to all shareholders
which include lists of portfolio securities and the Funds' 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 Fund 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.
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<PAGE> 102
B-37
<PAGE> 103
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment No. 98 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 26th day of February, 1999.
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 February 26, 1999
_____________________________ Executive Officer), and Director
Mario J. Gabelli
* Vice President and Treasurer February 26, 1999
- -----------------------------
Bruce N. Alpert
* Director February 26, 1999
- -----------------------------
Felix J. Christiana
* Director February 26, 1999
- -----------------------------
Anthony J. Colavita
* Director February 26, 1999
- -----------------------------
Anthonie C. van Ekris
* Director February 26, 1999
- -----------------------------
Karl Otto Pohl
* Director February 26, 1999
- -----------------------------
John D. Gabelli
* Director February 26, 1999
- -----------------------------
Werner Roeder, M.D.
</TABLE>
*By: /s/ Bruce N. Alpert
-------------------------
Bruce N. Alpert
Attorney-in-Fact
<PAGE> 104
PART C: OTHER INFORMATION
Item 23. Financial Statements and Exhibits.
(a) Financial Statements: (currently unaudited by independent
auditors)
(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, 1998:
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
(GGICPF)
The Gabelli Global Opportunity Fund (GGOF)
-- Portfolio of Investments, year ended December 31,
1998 (all)*
-- Statement of Assets and Liabilities, year ended
December 31, 1998 (all)*
-- Statements of Changes in Net Assets for the fiscal
years ended December 31, 1998 and December 31, 1997
(all)*
-- Notes to Financial Statements (all)*
-- Financial Highlights for the fiscal years ended
December 31, 1998, 1997, 1996, 1995 and 1994 (GGTF);
for the fiscal years ended December 31, 1998, 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, 1998, 1997, 1996 and 1995 and for the period
February 7, 1994 (Commencement of Operations)
through December 31, 1994 (GGICPF); for the period
May 11, 1998 through December 31, 1998 (GGOF)*
-- Reports of Grant Thornton LLP Independent Auditors
(all)*
(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***
(b) Investment Advisory Agreement with Gabelli Funds,
Inc. ("Gabelli Funds" or the "Adviser") for each
of The Gabelli Global Interactive Couch Potato(R)
Fund***
1
<PAGE> 105
(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.(TO BE FILED BY
AMENDMENT)
(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) Form of Amended and Restated Plan of
Distribution relating to the Class AAA Shares****
(b) Form of Amended and Restated Plan of Distribution
relating to the Class A Shares****
(c) Form of Amended and Restated Plan of Distribution
relating to the Class B Shares****
(d) Form of Amended and Restated Plan of Distribution
relating to the Class C Shares****
(16) N/A
(17) Financial Data Schedule (TO BE FILED BY AMENDMENT)
2
<PAGE> 106
(18) (a) Form of Rule 18f-3 Plan relating to the Gabelli
Global Telecommunications Fund****
(b) Form of Rule 18f-3 Plan relating to the Gabelli
Global Opportunity Fund****
(c) Form of Rule 18f-3 Plan relating to the Gabelli
Global Interactive Couch Potato Fund****
(d) Form of Rule 18f-3 Plan relating to the Gabelli
Global Convertible Securities Fund****
* Previously filed with the Fund's Annual Report for the year ended
December 31, 1998 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.
*** Previously filed as an exhibit to Post-Effective Amendment No. 8 to
Registration Statement No. 33-66262 on April 15, 1998 and incorporated
by reference herein.
**** Filed herewith.
ITEM 24. 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 25. 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 26. 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.
ITEM 27. 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,
3
<PAGE> 107
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 28. 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 29. MANAGEMENT SERVICES.
The Registrant is not a party to any management-related service contract.
ITEM 30. 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.
4
<PAGE> 1
Exhibit 15(a)
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL OPPORTUNITY FUND*
WHEREAS, THE GABELLI GLOBAL OPPORTUNITY FUND (the "Fund") a
series of Gabelli Global Series Funds, Inc,. a Maryland Corporation (the
"Corporation"), engages in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the distribution
agreement between the Fund and Distributor, which distribution agreement, as
amended, has been duly approved by the Board of Directors of the Corporation
(the "Board"), in accordance with the requirements of the Act (the "Distribution
Agreement");
WHEREAS, the Fund has adopted a plan of distribution pursuant
to Rule 12b-1 under the Act to assist in the distribution of Shares (the
"Plan");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class AAA Shares (the "Class AAA Shares"),
pursuant to Rule 18f-3 under the Act that permits the Fund to implement a
multiple distribution system providing investors with the option of purchasing
shares of various classes;
WHEREAS, the Board as a whole, and the Directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the
- --------
* The Amended and Restated Plan of Distribution Pursuant to Rule 12b-1
for each of The Gabelli Global Telecommunications Fund Class AAA
Shares, The Gabelli Global Interactive Couch Potato Fund Class AAA
Shares and The Gabelli Global Convertible Securities Fund Class AAA
Shares is identical to this Plan with the exception of the name of the
Fund.
1
<PAGE> 2
Plan (the "Disinterested Directors"), have determined, after review of all
information and consideration of all pertinent facts reasonably necessary to an
informed determination, that it would be desirable to amend the Plan in certain
respects and to restate such amended Plan in its entirety and that, in the
exercise of reasonable business judgment and in light of their fiduciary duties,
that there is a reasonable likelihood that a plan of distribution containing the
terms set forth herein will benefit the Fund and the shareholders of the Class
AAA Shares, and have accordingly approved the Plan by votes cast in person at a
meeting called for the purpose of amending and restating the Plan; and
WHEREAS, this Plan governs the Class AAA Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class AAA Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby amends and restates the Plan in accordance with Rule 12b-1 under the Act
on the following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor as distribution payments (the "Payments") in
connection with the distribution of Class AAA Shares an aggregate amount at a
rate of 0.25% per year of the average daily net assets of the Class AAA Shares.
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
Fund's obligation hereunder shall be limited to the assets of the Class AAA
Shares and shall not constitute an obligation of the Fund except out of such
assets and shall not constitute an obligation of any shareholder of the Fund.
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
Class AAA Shares. 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 Class AAA Shares: advertising the Class AAA Shares or the
Fund's investment adviser'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 Class AAA Shares, whether in a lump sum or on a contin-
2
<PAGE> 3
uous, 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 Class AAA Shares, 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 Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund 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 Disinterested
Directors ("Disinterested Director Approval"), 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.
3
<PAGE> 4
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 Fund may pay for on behalf of the Class AAA Shares 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 Fund
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 Class AAA Shares. 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 Class AAA Shares. This Plan may continue in effect for longer than one year
after its approval by a majority of the Class AAA Shares 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 Disinterested
Directors, 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 Class AAA Shares.
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 Class AAA Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class AAA Shares duly called, (a) of 67%
or more of the voting securities present at such meeting, if the holders of more
than 50% of the Class AAA Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
AAA Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
4
<PAGE> 1
Exhibit 15(b)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL OPPORTUNITY FUND*
WHEREAS, THE GABELLI GLOBAL OPPORTUNITY FUND (the "Fund") a
series of Gabelli Global Series Funds, Inc,. a Maryland Corporation (the
"Corporation"), engages in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the distribution
agreement between the Fund and the Distributor, which distribution agreement, as
amended, has been duly approved by the Board of Directors of the Corporation
(the "Board"), in accordance with the requirements of the Act (the "Distribution
Agreement");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class A Shares (the "Class A Shares"), pursuant
to Rule 18f-3 under the Act that permits the Fund to implement a multiple
distribution system providing investors with the option of purchasing shares of
various classes;
WHEREAS, the Board as a whole, and the directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to adopt a
plan of distribution for the Class A Shares and that, in the exercise of
reasonable business judgment and in light of their fiduciary duties, that there
is a reasonable likelihood that a plan of distribution containing the terms set
forth herein (the "Plan") will benefit the Fund and the shareholders of the
Class A Shares, and have accordingly approved the Plan by votes cast in person
at a meeting called for the purpose of voting on the Plan; and
- --------
* The Plan of Distribution Pursuant to Rule 12b-1 for each of The Gabelli
Global Telecommunications Fund Class A Shares, The Gabelli Global
Interactive Couch Potato Fund Class A Shares and The Gabelli Global
Convertible Securities Fund Class A Shares is identical to this Plan
with the exception of the name of the Fund.
<PAGE> 2
WHEREAS, this Plan governs the Class A Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class A Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor as distribution payments (the "Payments") in
connection with the distribution of Class A Shares an aggregate amount at a rate
of 0.25% per year of the average daily net assets of the Class A Shares. 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 Fund's
obligation hereunder shall be limited to the assets of the Class A Shares and
shall not constitute an obligation of the Fund except out of such assets and
shall not constitute an obligation of any shareholder of the Fund.
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
Class A Shares. 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 Class A Shares: advertising the Class A Shares or the
Fund's investment adviser'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 Class A Shares, 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 Class A
Shares, 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
<PAGE> 3
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 Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund 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 Disinterested
Directors ("Disinterested Director Approval"), 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 Fund may pay for on behalf of the Class A Shares 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 Fund 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 Class A Shares. 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
<PAGE> 4
further approval by a vote of at least a majority of the Class A Shares. This
Plan may continue in effect for longer than one year after its approval by a
majority of the Class A Shares 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 Disinterested
Director, 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 Class A Shares.
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 Class A Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class A Shares duly called, (a) of 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the Class A Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
A Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
<PAGE> 1
Exhibit 15(c)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL OPPORTUNITY FUND*
WHEREAS, THE GABELLI GLOBAL OPPORTUNITY FUND (the "Fund") a
series of Gabelli Global Series Funds, Inc., a Maryland Corporation (the
"Corporation"), engages in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the distribution
agreement between the Fund and the Distributor, which distribution agreement, as
amended, has been duly approved by the Board of Directors of the Corporation
(the "Board"), in accordance with the requirements of the Act (the "Distribution
Agreement");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class B Shares (the "Class B Shares"), pursuant
to Rule 18f-3 under the Act that permits the Fund to implement a multiple
distribution system providing investors with the option of purchasing shares of
various classes;
WHEREAS, the Board as a whole, and the directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to adopt a
plan of distribution for the Class B Shares and that, in the exercise of
reasonable business judgment and in light of their fiduciary duties, that there
is a reasonable likelihood that a plan of distribution containing the terms set
forth herein (the "Plan") will benefit the Fund and the shareholders of the
Class B Shares, and have accordingly approved the Plan by votes cast in person
at a meeting called for the purpose of voting on the Plan; and
- --------
* The Plan of Distribution Pursuant to Rule 12b-1 for each of The Gabelli
Global Telecommunications Fund Class B Shares, The Gabelli Global
Interactive Couch Potato Fund Class B Shares and The Gabelli Global
Convertible Securities Fund Class B Shares is identical to this Plan
with the exception of the name of the Fund.
<PAGE> 2
WHEREAS, this Plan governs the Class B Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class B Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor a distribution fee at the aggregate amount rate of
.75% per year of the average daily net asset value of the Class B Shares and a
service fee at the aggregate amount rate of .25% per year of the average daily
net asset value of the Class B Shares (the "Payments"). 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 Fund's obligation hereunder
shall be limited to the assets of the Class B Shares and shall not constitute an
obligation of the Fund except out of such assets and shall not constitute an
obligation of any shareholder of the Fund.
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
Class B Shares. 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 Class B Shares: advertising the Class B Shares or the
Fund's investment adviser'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 Class B Shares, 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 Class B
Shares, 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 fi-
<PAGE> 3
nancing 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 Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund 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 Disinterested
Directors ("Disinterested Director Approval"), 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 Fund may pay for on behalf of the Class B Shares 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 Fund 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 Class B Shares. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to
<PAGE> 4
increase the maximum level of Payments permitted hereunder without such
approvals and further approval by a vote of at least a majority of the Class B
Shares. This Plan may continue in effect for longer than one year after its
approval by a majority of the Class B Shares 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 Disinterested
Director, 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 Class B Shares.
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 Class B Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class B Shares duly called, (a) of 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the Class B Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
B Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
<PAGE> 1
Exhibit 15(d)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI GLOBAL OPPORTUNITY FUND*
WHEREAS, THE GABELLI GLOBAL OPPORTUNITY FUND (the "Fund") a
series of Gabelli Global Series Funds, Inc,. a Maryland Corporation (the
"Corporation"), engages in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the distribution
agreement between the Fund and the Distributor, which distribution agreement, as
amended, has been duly approved by the Board of Directors of the Corporation
(the "Board"), in accordance with the requirements of the Act (the "Distribution
Agreement");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class C Shares (the "Class C Shares"), pursuant
to Rule 18f-3 under the Act that permits the Fund to implement a multiple
distribution system providing investors with the option of purchasing shares of
various classes;
WHEREAS, the Board as a whole, and the directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to adopt a
plan of distribution for the Class C Shares and that, in the exercise of
reasonable business judgment and in light of their fiduciary duties, that there
is a reasonable likelihood that a plan of distribution con-
- --------
* The Plan of Distribution Pursuant to Rule 12b-1 for each of The Gabelli
Global Telecommunications Fund Class C Shares, The Gabelli Global
Interactive Couch Potato Fund Class C Shares and The Gabelli Global
Convertible Securities Fund Class C Shares is identical to this Plan
with the exception of the name of the Fund.
<PAGE> 2
taining the terms set forth herein (the "Plan") will benefit the Fund and the
shareholders of the Class C Shares, and have accordingly approved the Plan by
votes cast in person at a meeting called for the purpose of voting on the Plan;
and
WHEREAS, this Plan governs the Class C Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class C Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor a distribution fee at the aggregate amount rate of
.75% per year of the average daily net asset value of the Class C Shares and a
service fee at the aggregate amount rate of .25% per year of the average daily
net asset value of the Class C Shares (the "Payments"). 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 Fund's obligation hereunder
shall be limited to the assets of the Class C Shares and shall not constitute an
obligation of the Fund except out of such assets and shall not constitute an
obligation of any shareholder of the Fund.
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
Class C Shares. 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 Class C Shares: advertising the Class C Shares or the
Fund's investment adviser'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 Class C Shares, 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 Class C
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production
<PAGE> 3
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 Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund 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 Disinterested
Directors ("Disinterested Director Approval"), 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.
<PAGE> 4
6. To the extent any activity is covered by Section 2 and is also an activity
which the Fund may pay for on behalf of the Class C Shares 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 Fund 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 Class C Shares. 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 Class C Shares. This Plan may continue in effect for longer than one year
after its approval by a majority of the Class C Shares 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 Disinterested
Directors, 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 Class C Shares.
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 Class C Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class C Shares duly called, (a) of 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the Class C Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
C Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
<PAGE> 1
Exhibit 18(a)
RULE 18f-3
MULTI-CLASS PLAN
FOR
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
SERIES OF GABELLI GLOBAL SERIES FUNDS, INC.
This Plan is adopted pursuant to Rule 18f-3 under the Act to
provide for the issuance and distribution of multiple classes of shares in
relation to The Gabelli Global Telecommunications Fund, consisting of a separate
class of the capital stock of the Gabelli Global Series Funds, Inc. (the
"Corporation"), in accordance with the terms, procedures and conditions set
forth below. A majority of the Directors of the Corporation, including a
majority of the Directors who are not interested persons of the Corporation
within the meaning of the Act, have found this Multi-Class Plan, including the
expense allocations, to be in the best interest of the Corporation and each
Class of Shares constituting the Fund.
A. DEFINITIONS. As used herein, the terms set forth below shall have the
meanings ascribed to them below.
1. THE ACT - the Investment Company Act of 1940, as amended, and the
rules and regulations promulgated thereunder.
2. CDSC - contingent deferred sales charge.
3. CDSC Period - the period of time following acquisition during
which Shares are assessed a CDSC upon redemption.
4. CLASS - a sub-series of Shares of the Fund.
5. CLASS A SHARES - shall have the meaning ascribed in Section B.1.
6. CLASS B SHARES - shall have the meaning ascribed in Section B.1.
7. CLASS C SHARES - shall have the meaning ascribed in Section B.1.
8. CLASS AAA SHARES - shall have the meaning ascribed in Section
B.1.
9. DISTRIBUTION EXPENSES - expenses, including allocable overhead
costs, imputed interest, any other expenses and any element of
profit referred to in a Plan of Distribution and/or board
resolutions, incurred in activities which are primarily intended
to result in the distribution and sale of Shares.
10. DISTRIBUTION FEE - a fee paid by the Corporation in respect of
the assets of a Class of the Fund to the Distributor pursuant to
the Plan of Distribution relating to the Class.
<PAGE> 2
11. DIRECTORS - the directors of the Corporation.
12. DISTRIBUTOR - Gabelli & Company, Inc.
13. FUND - The Gabelli Global Telecommunications Fund.
14. IRS - Internal Revenue Service
15. NASD - National Association of Securities Dealers, Inc.
16. PLAN OF DISTRIBUTION - any plan adopted under Rule 12b-1 under
the Act with respect to payment of a Distribution Fee.
17. PROSPECTUS - the prospectus, including the statement of
additional information incorporated by reference therein,
covering the Shares of the referenced Class or Classes of the
Fund.
18. SEC - Securities and Exchange Commission
19. SERVICE FEE - a fee paid to financial intermediaries, including
the Distributor and its affiliates, for the ongoing provision of
personal services to shareholders of a Class and/or the
maintenance of shareholder accounts relating to a Class.
20. SHARE - a share in the Fund.
B. CLASSES. Subject to further amendment, the Corporation may offer
different Classes of Shares constituting the Fund as follows:
1. CLASS A SHARES. Class A Shares means The Gabelli Global
Telecommunications Fund Class A Stock as designated by Articles
Supplementary adopted by the Directors. Class A Shares shall be
offered at net asset value plus a front-end sales charge set
forth in the Prospectus from time to time, which may be reduced
or eliminated in any manner not prohibited by the Act or the NASD
as set forth in the Prospectus. Class A Shares that are not
subject to a front-end sales charge as a result of the foregoing
may be subject to a CDSC for the CDSC Period set forth in Section
D.1. The offering price of Class A Shares subject to a front-end
sales charge shall be computed in accordance with the Act. Class
A Shares shall be subject to ongoing Distribution Fees or Service
Fees approved from time to time by the Directors and set forth in
the Prospectus.
<PAGE> 3
2. CLASS B SHARES. Class B Shares means The Gabelli Global
Telecommunications Fund Class B Stock as designated by Articles
Supplementary adopted by the Directors. Class B Shares shall be
(1) offered at net asset value, (2) subject to a CDSC for the
CDSC Period set forth in Section D.1, (3) subject to ongoing
Distribution Fees and Service Fees approved from time to time by
the Directors and set forth in the Prospectus and (4) converted
to Class A Shares on the first business day of the eighty-fifth
calendar month following the calendar month in which such Shares
were issued. For Class B Shares previously exchanged for shares
of a money market fund the investment adviser of which is the
same as or an affiliate of the investment adviser of the Fund,
the time period during which such Shares were held in the money
market fund will be excluded.
3. CLASS C SHARES. Class C Shares means The Gabelli Global
Telecommunications Fund Class C Stock as designated by Articles
Supplementary adopted by the Directors. Class C Shares shall be
(1) offered at net asset value, (2) subject to a CDSC for the
CDSC Period set forth in Section D.1. and (3) subject to ongoing
Distribution Fees and Service Fees approved from time to time by
the Directors and set forth in the Prospectus.
4. CLASS AAA SHARES. Class AAA Shares means The Gabelli Global
Telecommunications Fund Class AAA Stock as designated by Articles
Supplementary adopted by the Directors. Class AAA Shares shall be
(1) offered at net asset value, (2) sold without a front end
sales charge or CDSC, (3) offered only to investors acquiring
Shares directly from the Distributor or from a financial
intermediary with whom the Distributor has entered into an
agreement expressly authorizing the sale by such intermediary of
Class AAA Shares and (4) subject to ongoing Distribution Fees or
Service Fees approved from time to time by the Directors and set
forth in the Prospectus.
C. RIGHTS AND PRIVILEGES OF CLASSES. Each of the Class A Shares, Class B
Shares, Class C Shares and Class AAA Shares will represent an interest
in the same portfolio of assets and will have identical voting,
dividend, liquidation and other rights, preferences, powers,
restrictions, limitations, qualifications, designations and terms and
conditions except as described otherwise in the Articles Supplementary
adopted by the Directors with respect to each of such Classes.
D. CDSC. A CDSC may be imposed upon redemption of Class A Shares, Class B
Shares and Class C Shares that do not incur a front end sales charge
subject to the following conditions:
1. CDSC PERIOD. The CDSC Period for Class A Shares and Class C
Shares shall be twenty-four months plus any portion of the month
during which payment for such Shares was received. The CDSC
Period for Class B Shares shall be eighty-four months plus any
portion of the month during which payment for such Shares was
received.
<PAGE> 4
2. CDSC RATE. The CDSC rate shall be recommended by the Distributor
and approved by the Directors. If a CDSC is imposed for a period
greater than thirteen months the CDSC rate must decline during
the CDSC Period such that (a) the CDSC rate is less in the last
twelve months of the CDSC Period than in the first twelve months
(plus any initial partial month) and (b) in each succeeding
twelve months the CDSC rate shall be less than or equal to the
CDSC rate in the preceding twelve months (plus any initial
partial month).
3. DISCLOSURE AND CHANGES. The CDSC rates and CDSC Period shall be
disclosed in the Prospectus and may be decreased at the
discretion of the Distributor but may not be increased unless
approved as set forth in Section L.
4. METHOD OF CALCULATION. The CDSC shall be assessed on an amount
equal to the lesser of the then current net asset value or the
cost of the Shares being redeemed. No CDSC shall be imposed on
increases in the net asset value of the Shares being redeemed
above the initial purchase price. No CDSC shall be assessed on
Shares derived from reinvestment of dividends or capital gains
distributions. The order in which Class B Shares and Class C
Shares are to be redeemed when not all of such Shares would be
subject to a CDSC shall be as determined by the Distributor in
accordance with the provisions of Rule 6c-10 under the Act.
5. WAIVER. The Distributor may in its discretion waive a CDSC
otherwise due upon the redemption of Shares of any Class under
circumstances previously approved by the Directors and disclosed
in the Prospectus and as allowed under Rule 6c-10 under the Act.
6. CALCULATION OF OFFERING PRICE. The offering price of Shares of
any Class subject to a CDSC shall be computed in accordance with
Rule 22c-1 under the Act and Section 22(d) of the Act and the
rules and regulations thereunder.
7. RETENTION BY DISTRIBUTOR. The CDSC paid with respect to Shares of
any Class may be retained by the Distributor to reimburse the
Distributor for commissions paid by it in connection with the
sale of Shares subject to a CDSC and for Distribution Expenses.
E. SERVICE AND DISTRIBUTION FEES. Class A Shares and Class AAA Shares
shall be subject to ongoing Distribution Fees or Service Fees not in
excess of 0.25% per annum of the average daily net assets of the
relevant Class. Class B Shares and Class C Shares shall be subject to
a Distribution Fee not in excess of 0.75% per annum of the average
daily net assets of the Class and a Service Fee not in excess of 0.25%
of the average daily net assets of the Class. All other terms and
conditions with respect to Service Fees and Distribution Fees shall be
governed by the plans adopted by the Fund with respect to such fees
and Rule 12b-1 of the Act.
<PAGE> 5
F. CONVERSION. Shares acquired through the reinvestment of dividends
and capital gain distributions paid on Shares of a Class subject
to conversion shall be treated as if held in a separate
sub-account. Each time any Shares of a Class in a shareholder's
account (other than Shares held in the sub-account) convert to
Class A Shares, a proportionate number of Shares held in the
sub-account shall also convert to Class A Shares. All conversions
shall be effected on the basis of the relative net asset values
of the two Classes without the imposition of any sales load or
other charge. So long as any Class of Shares converts into Class
A Shares, the Distributor shall waive or reimburse the Fund, or
take such other actions with the approval of the Directors as may
be reasonably necessary to ensure that, the expenses, including
payments authorized under a Plan of Distribution, applicable to
the Class A Shares are not higher than the expenses, including
payments authorized under a Plan of Distribution, applicable to
the Class of Shares that converts into Class A Shares. Shares
acquired through an exchange privilege will convert to Class A
Shares after expiration of the conversion period applicable to
such Shares. The continuation of the conversion feature is
subject to continued compliance with the rules and regulations of
the SEC, the NASD and the IRS.
G. ALLOCATION OF LIABILITIES, EXPENSES, INCOME AND GAINS AMONG
CLASSES.
1. LIABILITIES AND EXPENSES APPLICABLE TO A PARTICULAR CLASS.
Each Class shall pay any Distribution Fee and Service Fee
applicable to that Class. Other expenses applicable to any
of the foregoing Classes such as incremental transfer agency
fees, but not including advisory or custodial fees or other
expenses related to the management of the Fund's assets,
shall be allocated among such Classes in different amounts
in accordance with the terms of each such Class if they are
actually incurred in different amounts by such Classes or if
such Classes receive services of a different kind or to a
different degree than other Classes.
2. INCOME, LOSSES, CAPITAL GAINS AND LOSSES, AND LIABILITIES
AND OTHER EXPENSES APPLICABLE TO ALL CLASSES. Income,
losses, realized and unrealized capital gains and losses,
and any liabilities and expenses not applicable to any
particular Class shall be allocated to each Class on the
basis of the net asset value of that Class in relation to
the net asset value of the Fund.
3. DETERMINATION OF NATURE OF ITEMS. The Directors shall
determine in their sole discretion whether any liability,
expense, income, gains or loss other than those listed
herein is properly treated as attributed in whole or in part
to a particular Class or all Classes.
H. EXCHANGE PRIVILEGE. Holders of Class A Shares, Class B Shares,
Class C Shares and Class AAA Shares shall have such exchange
privileges as are set forth in the Prospectus for such Class.
Exchange privileges may vary among Classes and among holders of a
Class.
<PAGE> 6
I. VOTING RIGHTS OF CLASSES.
1. Shareholders of each Class shall have exclusive voting
rights on any matter submitted to them that relates solely
to that Class, provided that:
a. If any amendment is proposed to the Plan of
Distribution under which Distribution Fees or Service
Fees are paid with respect to Class A Shares of the
Fund that would increase materially the amount to be
borne by Class A Shares under such Plan of
Distribution, then no Class B Shares shall convert into
Class A Shares of the Fund until the holders of Class B
Shares of the Fund have also approved the proposed
amendment.
b. If the holders of either the Class B Shares referred to
in subparagraph a. do not approve the proposed
amendment, the Directors and the Distributor shall take
such action as is necessary to ensure that the Class
voting against the amendment shall convert into another
Class identical in all material respects to Class A
Shares of the Fund as constituted prior to the
amendment.
2. Shareholders of a Class shall have separate voting rights on
any matter submitted to shareholders with respect to which
the interest of one Class differs from the interests of any
other Class, provided that:
a. If the holders of Class A Shares approve any increase
in expenses allocated to the Class A Shares, then no
Class B Shares shall convert into Class A Shares of the
Fund until the holders of Class B Shares of the Fund
have also approved such expense increase.
b. If the holders of Class B Shares referred to in
subparagraph a. do not approve such increase, the
Directors and the Distributor shall take such action as
is necessary to ensure that the Class B Shares shall
convert into another Class identical in all material
respects to Class A Shares of the Fund as constituted
prior to the expense increase.
J. DIVIDENDS AND DISTRIBUTIONS. Dividends and capital gain distributions
paid by the Fund with respect to each Class, to the extent any such
dividends and distributions are paid, will be calculated in the same
manner and at the same time on the same day and will be, after taking
into account any differentiation in expenses allocable to a particular
Class, in substantially the same proportion on a relative net asset
value basis.
K. REPORTS TO DIRECTORS. The Distributor shall provide the Directors such
information as the Directors may from time to time deem to be
reasonably necessary to evaluate this Plan.
<PAGE> 7
L. AMENDMENT. Any material amendment to this Plan shall be approved by
the affirmative vote of a majority (as defined in the Act) of the
Directors of the Fund, including the affirmative vote of the Directors
of the Fund who are not interested persons of the Fund, except that
any amendment that increases the CDSC rate schedule or CDSC Period
must also be approved by the affirmative vote of a majority of the
Shares of the affected Class. Except as so provided, no amendment to
the Plan shall be required to be approved by the shareholders of any
Class of the Shares constituting the Fund. The Distributor shall
provide the Directors such information as may be reasonably necessary
to evaluate any amendment to this Plan.
<PAGE> 1
Exhibit 18(b)
RULE 18f-3
MULTI-CLASS PLAN
FOR
THE GABELLI GLOBAL OPPORTUNITY FUND
SERIES OF GABELLI GLOBAL SERIES FUNDS, INC.
This Plan is adopted pursuant to Rule 18f-3 under the Act to
provide for the issuance and distribution of multiple classes of shares in
relation to The Gabelli Global Opportunity Fund, consisting of a separate class
of the capital stock of the Gabelli Global Series Funds, Inc. (the
"Corporation"), in accordance with the terms, procedures and conditions set
forth below. A majority of the Directors of the Corporation, including a
majority of the Directors who are not interested persons of the Corporation
within the meaning of the Act, have found this Multi-Class Plan, including the
expense allocations, to be in the best interest of the Corporation and each
Class of Shares constituting the Fund.
A. DEFINITIONS. As used herein, the terms set forth below shall
have the meanings ascribed to them below.
1. THE ACT - the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated
thereunder.
2. CDSC - contingent deferred sales charge.
3. CDSC PERIOD - the period of time following acquisition
during which Shares are assessed a CDSC upon redemption.
4. CLASS - a sub-series of Shares of the Fund.
5. CLASS A SHARES - shall have the meaning ascribed in
Section B.1.
6. CLASS B SHARES - shall have the meaning ascribed in
Section B.1.
7. CLASS C SHARES - shall have the meaning ascribed in
Section B.1.
8. CLASS AAA SHARES - shall have the meaning ascribed in
Section B.1.
9. DISTRIBUTION EXPENSES - expenses, including allocable
overhead costs, imputed interest, any other expenses and
any element of profit referred to in a Plan of
Distribution and/or board resolutions, incurred in
activities which are primarily intended to result in the
distribution and sale of Shares.
10. DISTRIBUTION FEE - a fee paid by the Corporation in
respect of the assets of a Class of the Fund to the
Distributor pursuant to the Plan of Distribution
relating to the Class.
<PAGE> 2
11. DIRECTORS - the directors of the Corporation.
12. DISTRIBUTOR - Gabelli & Company, Inc.
13. FUND - The Gabelli Global Opportunity Fund.
14. IRS - Internal Revenue Service
15. NASD - National Association of Securities Dealers, Inc.
16. PLAN OF DISTRIBUTION - any plan adopted under Rule 12b-1
under the Act with respect to payment of a Distribution
Fee.
17. PROSPECTUS - the prospectus, including the statement of
additional information incorporated by reference
therein, covering the Shares of the referenced Class or
Classes of the Fund.
18. SEC - Securities and Exchange Commission
19. SERVICE FEE - a fee paid to financial intermediaries,
including the Distributor and its affiliates, for the
ongoing provision of personal services to shareholders
of a Class and/or the maintenance of shareholder
accounts relating to a Class.
20. SHARE - a share in the Fund.
B. CLASSES. Subject to further amendment, the Corporation may
offer different Classes of Shares constituting the Fund as
follows:
1. CLASS A SHARES. Class A Shares means The Gabelli Global
Opportunity Fund Class A Stock as designated by Articles
Supplementary adopted by the Directors. Class A Shares
shall be offered at net asset value plus a front-end
sales charge set forth in the Prospectus from time to
time, which may be reduced or eliminated in any manner
not prohibited by the Act or the NASD as set forth in
the Prospectus. Class A Shares that are not subject to a
front-end sales charge as a result of the foregoing may
be subject to a CDSC for the CDSC Period set forth in
Section D.1. The offering price of Class A Shares
subject to a front-end sales charge shall be computed in
accordance with the Act. Class A Shares shall be subject
to ongoing Distribution Fees or Service Fees approved
from time to time by the Directors and set forth in the
Prospectus.
2. CLASS B SHARES. Class B Shares means The Gabelli Global
Opportunity Fund Class B Stock as designated by Articles
Supplementary adopted by the Directors. Class B Shares
shall be (1) offered at net asset value, (2) subject to
a CDSC for the CDSC Period set forth in Section D.1, (3)
subject to on-
<PAGE> 3
going Distribution Fees and Service Fees approved from time to
time by the Directors and set forth in the Prospectus and (4)
converted to Class A Shares on the first business day of the
eighty-fifth calendar month following the calendar month in
which such Shares were issued. For Class B Shares previously
exchanged for shares of a money market fund the investment
adviser of which is the same as or an affiliate of the
investment adviser of the Fund, the time period during which
such Shares were held in the money market fund will be
excluded.
3. CLASS C SHARES. Class C Shares means The Gabelli Global
Opportunity Fund Class C Stock as designated by Articles
Supplementary adopted by the Directors. Class C Shares shall
be (1) offered at net asset value, (2) subject to a CDSC for
the CDSC Period set forth in Section D.1. and (3) subject to
ongoing Distribution Fees and Service Fees approved from time
to time by the Directors and set forth in the Prospectus.
4. CLASS AAA SHARES. Class AAA Shares means The Gabelli Global
Opportunity Fund Class AAA Stock as designated by Articles
Supplementary adopted by the Directors. Class AAA Shares shall
be (1) offered at net asset value, (2) sold without a front
end sales charge or CDSC, (3) offered only to investors
acquiring Shares directly from the Distributor or from a
financial intermediary with whom the Distributor has entered
into an agreement expressly authorizing the sale by such
intermediary of Class AAA Shares and (4) subject to ongoing
Distribution Fees or Service Fees approved from time to time
by the Directors and set forth in the Prospectus.
C. RIGHTS AND PRIVILEGES OF CLASSES. Each of the Class A Shares, Class
B Shares, Class C Shares and Class AAA Shares will represent an
interest in the same portfolio of assets and will have identical
voting, dividend, liquidation and other rights, preferences, powers,
restrictions, limitations, qualifications, designations and terms
and conditions except as described otherwise in the Articles
Supplementary adopted by the Directors with respect to each of such
Classes.
D. CDSC. A CDSC may be imposed upon redemption of Class A Shares, Class
B Shares and Class C Shares that do not incur a front end sales
charge subject to the following conditions:
1. CDSC PERIOD. The CDSC Period for Class A Shares and Class C
Shares shall be twenty-four months plus any portion of the
month during which payment for such Shares was received. The
CDSC Period for Class B Shares shall be eighty-four months
plus any portion of the month during which payment for such
Shares was received.
2. CDSC RATE. The CDSC rate shall be recommended by the
Distributor and approved by the Directors. If a CDSC is
imposed for a period greater than thirteen months the CDSC
rate must decline during the CDSC Period such that (a) the
CDSC rate is less in the last twelve months of the CDSC Period
<PAGE> 4
than in the first twelve months (plus any initial partial
month) and (b) in each succeeding twelve months the CDSC rate
shall be less than or equal to the CDSC rate in the preceding
twelve months (plus any initial partial month).
3. DISCLOSURE AND CHANGES. The CDSC rates and CDSC Period shall
be disclosed in the Prospectus and may be decreased at the
discretion of the Distributor but may not be increased unless
approved as set forth in Section L.
4. METHOD OF CALCULATION. The CDSC shall be assessed on an amount
equal to the lesser of the then current net asset value or the
cost of the Shares being redeemed. No CDSC shall be imposed on
increases in the net asset value of the Shares being redeemed
above the initial purchase price. No CDSC shall be assessed on
Shares derived from reinvestment of dividends or capital gains
distributions. The order in which Class B Shares and Class C
Shares are to be redeemed when not all of such Shares would be
subject to a CDSC shall be as determined by the Distributor in
accordance with the provisions of Rule 6c-10 under the Act.
5. WAIVER. The Distributor may in its discretion waive a CDSC
otherwise due upon the redemption of Shares of any Class under
circumstances previously approved by the Directors and
disclosed in the Prospectus and as allowed under Rule 6c-10
under the Act.
6. CALCULATION OF OFFERING PRICE. The offering price of Shares of
any Class subject to a CDSC shall be computed in accordance
with Rule 22c-1 under the Act and Section 22(d) of the Act and
the rules and regulations thereunder.
7. RETENTION BY DISTRIBUTOR. The CDSC paid with respect to Shares
of any Class may be retained by the Distributor to reimburse
the Distributor for commissions paid by it in connection with
the sale of Shares subject to a CDSC and for Distribution
Expenses.
E. SERVICE AND DISTRIBUTION FEES. Class A Shares and Class AAA Shares shall
be subject to ongoing Distribution Fees or Service Fees not in excess of
0.25% per annum of the average daily net assets of the relevant Class.
Class B Shares and Class C Shares shall be subject to a Distribution Fee
not in excess of 0.75% per annum of the average daily net assets of the
Class and a Service Fee not in excess of 0.25% of the average daily net
assets of the Class. All other terms and conditions with respect to
Service Fees and Distribution Fees shall be governed by the plans adopted
by the Fund with respect to such fees and Rule 12b-1 of the Act.
F. CONVERSION. Shares acquired through the reinvestment of dividends and
capital gain distributions paid on Shares of a Class subject to conversion
shall be treated as if held in a separate sub-account. Each time any
Shares of a Class in a shareholder's account (other than Shares held in
the sub-account) convert to Class A
<PAGE> 5
Shares, a proportionate number of Shares held in the sub-account shall
also convert to Class A Shares. All conversions shall be effected on the
basis of the relative net asset values of the two Classes without the
imposition of any sales load or other charge. So long as any Class of
Shares converts into Class A Shares, the Distributor shall waive or
reimburse the Fund, or take such other actions with the approval of the
Directors as may be reasonably necessary to ensure that, the expenses,
including payments authorized under a Plan of Distribution, applicable to
the Class A Shares are not higher than the expenses, including payments
authorized under a Plan of Distribution, applicable to the Class of Shares
that converts into Class A Shares. Shares acquired through an exchange
privilege will convert to Class A Shares after expiration of the
conversion period applicable to such Shares. The continuation of the
conversion feature is subject to continued compliance with the rules and
regulations of the SEC, the NASD and the IRS.
G. ALLOCATION OF LIABILITIES, EXPENSES, INCOME AND GAINS AMONG CLASSES.
1. LIABILITIES AND EXPENSES APPLICABLE TO A PARTICULAR CLASS. Each
Class shall pay any Distribution Fee and Service Fee applicable to
that Class. Other expenses applicable to any of the foregoing
Classes such as incremental transfer agency fees, but not including
advisory or custodial fees or other expenses related to the
management of the Fund's assets, shall be allocated among such
Classes in different amounts in accordance with the terms of each
such Class if they are actually incurred in different amounts by
such Classes or if such Classes receive services of a different kind
or to a different degree than other Classes.
2. INCOME, LOSSES, CAPITAL GAINS AND LOSSES, AND LIABILITIES AND OTHER
EXPENSES APPLICABLE TO ALL CLASSES. Income, losses, realized and
unrealized capital gains and losses, and any liabilities and
expenses not applicable to any particular Class shall be allocated
to each Class on the basis of the net asset value of that Class in
relation to the net asset value of the Fund.
3. DETERMINATION OF NATURE OF ITEMS. The Directors shall determine in
their sole discretion whether any liability, expense, income, gains
or loss other than those listed herein is properly treated as
attributed in whole or in part to a particular Class or all Classes.
H. EXCHANGE PRIVILEGE. Holders of Class A Shares, Class B Shares, Class C
Shares and Class AAA Shares shall have such exchange privileges as are set
forth in the Prospectus for such Class. Exchange privileges may vary among
Classes and among holders of a Class.
I. VOTING RIGHTS OF CLASSES.
1. Shareholders of each Class shall have exclusive voting rights on any
matter submitted to them that relates solely to that Class, provided
that:
<PAGE> 6
a. If any amendment is proposed to the Plan of
Distribution under which Distribution Fees or Service
Fees are paid with respect to Class A Shares of the
Fund that would increase materially the amount to be
borne by Class A Shares under such Plan of
Distribution, then no Class B Shares shall convert
into Class A Shares of the Fund until the holders of
Class B Shares of the Fund have also approved the
proposed amendment.
b. If the holders of either the Class B Shares referred
to in subparagraph a. do not approve the proposed
amendment, the Directors and the Distributor shall
take such action as is necessary to ensure that the
Class voting against the amendment shall convert into
another Class identical in all material respects to
Class A Shares of the Fund as constituted prior to
the amendment.
2. Shareholders of a Class shall have separate voting rights
on any matter submitted to shareholders with respect to
which the interest of one Class differs from the interests
of any other Class, provided that:
a. If the holders of Class A Shares approve any increase
in expenses allocated to the Class A Shares, then no
Class B Shares shall convert into Class A Shares of
the Fund until the holders of Class B Shares of the
Fund have also approved such expense increase.
b. If the holders of Class B Shares referred to in
subparagraph a. do not approve such increase, the
Directors and the Distributor shall take such action
as is necessary to ensure that the Class B Shares
shall convert into another Class identical in all
material respects to Class A Shares of the Fund as
constituted prior to the expense increase.
J. DIVIDENDS AND DISTRIBUTIONS. Dividends and capital gain
distributions paid by the Fund with respect to each Class, to
the extent any such dividends and distributions are paid, will
be calculated in the same manner and at the same time on the
same day and will be, after taking into account any
differentiation in expenses allocable to a particular Class, in
substantially the same proportion on a relative net asset value
basis.
K. REPORTS TO DIRECTORS. The Distributor shall provide the
Directors such information as the Directors may from time to
time deem to be reasonably necessary to evaluate this Plan.
<PAGE> 7
L. AMENDMENT. Any material amendment to this Plan shall be approved by
the affirmative vote of a majority (as defined in the Act) of the
Directors of the Fund, including the affirmative vote of the
Directors of the Fund who are not interested persons of the Fund,
except that any amendment that increases the CDSC rate schedule or
CDSC Period must also be approved by the affirmative vote of a
majority of the Shares of the affected Class. Except as so provided,
no amendment to the Plan shall be required to be approved by the
shareholders of any Class of the Shares constituting the Fund. The
Distributor shall provide the Directors such information as may be
reasonably necessary to evaluate any amendment to this Plan.
<PAGE> 1
Exhibit 18(c)
RULE 18f-3
MULTI-CLASS PLAN
FOR
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
SERIES OF GABELLI GLOBAL SERIES FUNDS, INC.
This Plan is adopted pursuant to Rule 18f-3 under the Act to
provide for the issuance and distribution of multiple classes of shares in
relation to The Gabelli Global Convertible Securities Fund, consisting of a
separate class of the capital stock of the Gabelli Global Series Funds, Inc.
(the "Corporation"), in accordance with the terms, procedures and conditions set
forth below. A majority of the Directors of the Corporation, including a
majority of the Directors who are not interested persons of the Corporation
within the meaning of the Act, have found this Multi-Class Plan, including the
expense allocations, to be in the best interest of the Corporation and each
Class of Shares constituting the Fund.
A. DEFINITIONS. As used herein, the terms set forth below shall have
the meanings ascribed to them below.
1. THE ACT - the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder.
2. CDSC - contingent deferred sales charge.
3. CDSC PERIOD - the period of time following acquisition during
which Shares are assessed a CDSC upon redemption.
4. CLASS - a sub-series of Shares of the Fund.
5. CLASS A SHARES - shall have the meaning ascribed in Section
B.1.
6. CLASS B SHARES - shall have the meaning ascribed in Section
B.1.
7. CLASS C SHARES - shall have the meaning ascribed in Section
B.1.
8. CLASS AAA SHARES - shall have the meaning ascribed in Section
B.1.
9. DISTRIBUTION EXPENSES - expenses, including allocable overhead
costs, imputed interest, any other expenses and any element of
profit referred to in a Plan of Distribution and/or board
resolutions, incurred in activities which are primarily
intended to result in the distribution and sale of Shares.
10. DISTRIBUTION FEE - a fee paid by the Corporation in respect of
the assets of a Class of the Fund to the Distributor pursuant
to the Plan of Distribution relating to the Class.
<PAGE> 2
11. DIRECTORS - the directors of the Corporation.
12. DISTRIBUTOR - Gabelli & Company, Inc.
13. FUND - The Gabelli Global Convertible Securities Fund.
14. IRS - Internal Revenue Service
15. NASD - National Association of Securities Dealers, Inc.
16. PLAN OF DISTRIBUTION - any plan adopted under Rule 12b-1 under
the Act with respect to payment of a Distribution Fee.
17. PROSPECTUS - the prospectus, including the statement of
additional information incorporated by reference therein,
covering the Shares of the referenced Class or Classes of the
Fund.
18. SEC - Securities and Exchange Commission
19. SERVICE FEE - a fee paid to financial intermediaries,
including the Distributor and its affiliates, for the ongoing
provision of personal services to shareholders of a Class
and/or the maintenance of shareholder accounts relating to a
Class.
20. SHARE - a share in the Fund.
B. CLASSES. Subject to further amendment, the Corporation may offer different
Classes of Shares constituting the Fund as follows:
1. CLASS A SHARES. Class A Shares means The Gabelli Global Convertible
Securities Fund Class A Stock as designated by Articles
Supplementary adopted by the Directors. Class A Shares shall be
offered at net asset value plus a front-end sales charge set forth
in the Prospectus from time to time, which may be reduced or
eliminated in any manner not prohibited by the Act or the NASD as
set forth in the Prospectus. Class A Shares that are not subject to
a front-end sales charge as a result of the foregoing may be subject
to a CDSC for the CDSC Period set forth in Section D.1. The offering
price of Class A Shares subject to a front-end sales charge shall be
computed in accordance with the Act. Class A Shares shall be subject
to ongoing Distribution Fees or Service Fees approved from time to
time by the Directors and set forth in the Prospectus.
2. CLASS B SHARES. Class B Shares means The Gabelli Global Convertible
Securities Fund Class B Stock as designated by Articles
Supplementary adopted by the Directors. Class B Shares shall be (1)
offered at net asset value, (2) subject to a CDSC for the CDSC
Period set forth in Section D.1,
<PAGE> 3
(3) subject to ongoing Distribution Fees and Service Fees approved
from time to time by the Directors and set forth in the Prospectus
and (4) converted to Class A Shares on the first business day of the
eighty-fifth calendar month following the calendar month in which
such Shares were issued. For Class B Shares previously exchanged for
shares of a money market fund the investment adviser of which is the
same as or an affiliate of the investment adviser of the Fund, the
time period during which such Shares were held in the money market
fund will be excluded.
3. CLASS C SHARES. Class C Shares means The Gabelli Global Convertible
Securities Fund Class C Stock as designated by Articles
Supplementary adopted by the Directors. Class C Shares shall be (1)
offered at net asset value, (2) subject to a CDSC for the CDSC
Period set forth in Section D.1. and (3) subject to ongoing
Distribution Fees and Service Fees approved from time to time by the
Directors and set forth in the Prospectus.
4. CLASS AAA SHARES. Class AAA Shares means The Gabelli Global
Convertible Securities Fund Class AAA Stock as designated by
Articles Supplementary adopted by the Directors. Class AAA Shares
shall be (1) offered at net asset value, (2) sold without a front
end sales charge or CDSC, (3) offered only to investors acquiring
Shares directly from the Distributor or from a financial
intermediary with whom the Distributor has entered into an agreement
expressly authorizing the sale by such intermediary of Class AAA
Shares and (4) subject to ongoing Distribution Fees or Service Fees
approved from time to time by the Directors and set forth in the
Prospectus.
C. RIGHTS AND PRIVILEGES OF CLASSES. Each of the Class A Shares, Class B
Shares, Class C Shares and Class AAA Shares will represent an interest in
the same portfolio of assets and will have identical voting, dividend,
liquidation and other rights, preferences, powers, restrictions,
limitations, qualifications, designations and terms and conditions except
as described otherwise in the Articles Supplementary adopted by the
Directors with respect to each of such Classes.
D. CDSC. A CDSC may be imposed upon redemption of Class A Shares, Class B
Shares and Class C Shares that do not incur a front end sales charge
subject to the following conditions:
1. CDSC PERIOD. The CDSC Period for Class A Shares and Class C Shares
shall be twenty-four months plus any portion of the month during
which payment for such Shares was received. The CDSC Period for
Class B Shares shall be eighty-four months plus any portion of the
month during which payment for such Shares was received.
2. CDSC RATE. The CDSC rate shall be recommended by the Distributor and
approved by the Directors. If a CDSC is imposed for a period greater
than thirteen months the CDSC rate must decline during the CDSC
Period such that (a) the CDSC rate is less in the last twelve months
of the CDSC Period
<PAGE> 4
than in the first twelve months (plus any initial partial month) and
(b) in each succeeding twelve months the CDSC rate shall be less
than or equal to the CDSC rate in the preceding twelve months (plus
any initial partial month).
3. DISCLOSURE AND CHANGES. The CDSC rates and CDSC Period shall be
disclosed in the Prospectus and may be decreased at the discretion
of the Distributor but may not be increased unless approved as set
forth in Section L.
4. METHOD OF CALCULATION. The CDSC shall be assessed on an amount equal
to the lesser of the then current net asset value or the cost of the
Shares being redeemed. No CDSC shall be imposed on increases in the
net asset value of the Shares being redeemed above the initial
purchase price. No CDSC shall be assessed on Shares derived from
reinvestment of dividends or capital gains distributions. The order
in which Class B Shares and Class C Shares are to be redeemed when
not all of such Shares would be subject to a CDSC shall be as
determined by the Distributor in accordance with the provisions of
Rule 6c-10 under the Act.
5. WAIVER. The Distributor may in its discretion waive a CDSC otherwise
due upon the redemption of Shares of any Class under circumstances
previously approved by the Directors and disclosed in the Prospectus
and as allowed under Rule 6c-10 under the Act.
6. CALCULATION OF OFFERING PRICE. The offering price of Shares of any
Class subject to a CDSC shall be computed in accordance with Rule
22c-1 under the Act and Section 22(d) of the Act and the rules and
regulations thereunder.
7. RETENTION BY DISTRIBUTOR. The CDSC paid with respect to Shares of
any Class may be retained by the Distributor to reimburse the
Distributor for commissions paid by it in connection with the sale
of Shares subject to a CDSC and for Distribution Expenses.
E. SERVICE AND DISTRIBUTION FEES. Class A Shares and Class AAA Shares shall
be subject to ongoing Distribution Fees or Service Fees not in excess of
0.25% per annum of the average daily net assets of the relevant Class.
Class B Shares and Class C Shares shall be subject to a Distribution Fee
not in excess of 0.75% per annum of the average daily net assets of the
Class and a Service Fee not in excess of 0.25% of the average daily net
assets of the Class. All other terms and conditions with respect to
Service Fees and Distribution Fees shall be governed by the plans adopted
by the Fund with respect to such fees and Rule 12b-1 of the Act.
F. CONVERSION. Shares acquired through the reinvestment of dividends and
capital gain distributions paid on Shares of a Class subject to conversion
shall be treated as if held in a separate sub-account. Each time any
Shares of a Class in a shareholder's account (other than Shares held in
the sub-account) convert to Class A
<PAGE> 5
Shares, a proportionate number of Shares held in the sub-account shall
also convert to Class A Shares. All conversions shall be effected on the
basis of the relative net asset values of the two Classes without the
imposition of any sales load or other charge. So long as any Class of
Shares converts into Class A Shares, the Distributor shall waive or
reimburse the Fund, or take such other actions with the approval of the
Directors as may be reasonably necessary to ensure that, the expenses,
including payments authorized under a Plan of Distribution, applicable to
the Class A Shares are not higher than the expenses, including payments
authorized under a Plan of Distribution, applicable to the Class of Shares
that converts into Class A Shares. Shares acquired through an exchange
privilege will convert to Class A Shares after expiration of the
conversion period applicable to such Shares. The continuation of the
conversion feature is subject to continued compliance with the rules and
regulations of the SEC, the NASD and the IRS.
G. ALLOCATION OF LIABILITIES, EXPENSES, INCOME AND GAINS AMONG CLASSES.
1. LIABILITIES AND EXPENSES APPLICABLE TO A PARTICULAR CLASS. Each
Class shall pay any Distribution Fee and Service Fee applicable to
that Class. Other expenses applicable to any of the foregoing
Classes such as incremental transfer agency fees, but not including
advisory or custodial fees or other expenses related to the
management of the Fund's assets, shall be allocated among such
Classes in different amounts in accordance with the terms of each
such Class if they are actually incurred in different amounts by
such Classes or if such Classes receive services of a different kind
or to a different degree than other Classes.
2. INCOME, LOSSES, CAPITAL GAINS AND LOSSES, AND LIABILITIES AND OTHER
EXPENSES APPLICABLE TO ALL CLASSES. Income, losses, realized and
unrealized capital gains and losses, and any liabilities and
expenses not applicable to any particular Class shall be allocated
to each Class on the basis of the net asset value of that Class in
relation to the net asset value of the Fund.
3. DETERMINATION OF NATURE OF ITEMS. The Directors shall determine in
their sole discretion whether any liability, expense, income, gains
or loss other than those listed herein is properly treated as
attributed in whole or in part to a particular Class or all Classes.
H. EXCHANGE PRIVILEGE. Holders of Class A Shares, Class B Shares, Class C
Shares and Class AAA Shares shall have such exchange privileges as are set
forth in the Prospectus for such Class. Exchange privileges may vary among
Classes and among holders of a Class.
I. VOTING RIGHTS OF CLASSES.
1. Shareholders of each Class shall have exclusive voting rights on any
matter submitted to them that relates solely to that Class, provided
that:
<PAGE> 6
a. If any amendment is proposed to the Plan of
Distribution under which Distribution Fees or Service
Fees are paid with respect to Class A Shares of the
Fund that would increase materially the amount to be
borne by Class A Shares under such Plan of
Distribution, then no Class B Shares shall convert
into Class A Shares of the Fund until the holders of
Class B Shares of the Fund have also approved the
proposed amendment.
b. If the holders of either the Class B Shares referred
to in subparagraph a. do not approve the proposed
amendment, the Directors and the Distributor shall
take such action as is necessary to ensure that the
Class voting against the amendment shall convert into
another Class identical in all material respects to
Class A Shares of the Fund as constituted prior to
the amendment.
2. Shareholders of a Class shall have separate voting rights
on any matter submitted to shareholders with respect to
which the interest of one Class differs from the interests
of any other Class, provided that:
a. If the holders of Class A Shares approve any increase
in expenses allocated to the Class A Shares, then no
Class B Shares shall convert into Class A Shares of
the Fund until the holders of Class B Shares of the
Fund have also approved such expense increase.
b. If the holders of Class B Shares referred to in
subparagraph a. do not approve such increase, the
Directors and the Distributor shall take such action
as is necessary to ensure that the Class B Shares
shall convert into another Class identical in all
material respects to Class A Shares of the Fund as
constituted prior to the expense increase.
J. DIVIDENDS AND DISTRIBUTIONS. Dividends and capital gain
distributions paid by the Fund with respect to each Class, to
the extent any such dividends and distributions are paid, will
be calculated in the same manner and at the same time on the
same day and will be, after taking into account any
differentiation in expenses allocable to a particular Class, in
substantially the same proportion on a relative net asset value
basis.
K. REPORTS TO DIRECTORS. The Distributor shall provide the
Directors such information as the Directors may from time to
time deem to be reasonably necessary to evaluate this Plan.
<PAGE> 7
L. AMENDMENT. Any material amendment to this Plan shall be approved by
the affirmative vote of a majority (as defined in the Act) of the
Directors of the Fund, including the affirmative vote of the
Directors of the Fund who are not interested persons of the Fund,
except that any amendment that increases the CDSC rate schedule or
CDSC Period must also be approved by the affirmative vote of a
majority of the Shares of the affected Class. Except as so provided,
no amendment to the Plan shall be required to be approved by the
shareholders of any Class of the Shares constituting the Fund. The
Distributor shall provide the Directors such information as may be
reasonably necessary to evaluate any amendment to this Plan.
<PAGE> 1
Exhibit 18(d)
RULE 18f-3
MULTI-CLASS PLAN
FOR
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
SERIES OF GABELLI GLOBAL SERIES FUNDS, INC.
This Plan is adopted pursuant to Rule 18f-3 under the Act to
provide for the issuance and distribution of multiple classes of shares in
relation to The Gabelli Global Convertible Securities Fund, consisting of a
separate class of the capital stock of the Gabelli Global Series Funds, Inc.
(the "Corporation"), in accordance with the terms, procedures and conditions set
forth below. A majority of the Directors of the Corporation, including a
majority of the Directors who are not interested persons of the Corporation
within the meaning of the Act, have found this Multi-Class Plan, including the
expense allocations, to be in the best interest of the Corporation and each
Class of Shares constituting the Fund.
A. DEFINITIONS. As used herein, the terms set forth below shall
have the meanings ascribed to them below.
1. THE ACT - the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated
thereunder.
2. CDSC - contingent deferred sales charge.
3. CDSC PERIOD - the period of time following acquisition
during which Shares are assessed a CDSC upon redemption.
4. CLASS - a sub-series of Shares of the Fund.
5. CLASS A SHARES - shall have the meaning ascribed in
Section B.1.
6. CLASS B SHARES - shall have the meaning ascribed in
Section B.1.
7. CLASS C SHARES - shall have the meaning ascribed in
Section B.1.
8. CLASS AAA SHARES - shall have the meaning ascribed in
Section B.1.
9. DISTRIBUTION EXPENSES - expenses, including allocable
overhead costs, imputed interest, any other expenses and
any element of profit referred to in a Plan of
Distribution and/or board resolutions, incurred in
activities which are primarily intended to result in the
distribution and sale of Shares.
10. DISTRIBUTION FEE - a fee paid by the Corporation in
respect of the assets of a Class of the Fund to the
Distributor pursuant to the Plan of Distribution
relating to the Class.
<PAGE> 2
11. DIRECTORS - the directors of the Corporation.
12. DISTRIBUTOR - Gabelli & Company, Inc.
13. FUND - The Gabelli Global Convertible Securities Fund.
14. IRS - Internal Revenue Service
15. NASD - National Association of Securities Dealers, Inc.
16. PLAN OF DISTRIBUTION - any plan adopted under Rule 12b-1
under the Act with respect to payment of a Distribution
Fee.
17. PROSPECTUS - the prospectus, including the statement of
additional information incorporated by reference
therein, covering the Shares of the referenced Class or
Classes of the Fund.
18. SEC - Securities and Exchange Commission
19. SERVICE FEE - a fee paid to financial intermediaries,
including the Distributor and its affiliates, for the
ongoing provision of personal services to shareholders
of a Class and/or the maintenance of shareholder
accounts relating to a Class.
20. SHARE - a share in the Fund.
B. CLASSES. Subject to further amendment, the Corporation may
offer different Classes of Shares constituting the Fund as
follows:
1. CLASS A SHARES. Class A Shares means The Gabelli Global
Convertible Securities Fund Class A Stock as designated
by Articles Supplementary adopted by the Directors.
Class A Shares shall be offered at net asset value plus
a front-end sales charge set forth in the Prospectus
from time to time, which may be reduced or eliminated in
any manner not prohibited by the Act or the NASD as set
forth in the Prospectus. Class A Shares that are not
subject to a front-end sales charge as a result of the
foregoing may be subject to a CDSC for the CDSC Period
set forth in Section D.1. The offering price of Class A
Shares subject to a front-end sales charge shall be
computed in accordance with the Act. Class A Shares
shall be subject to ongoing Distribution Fees or Service
Fees approved from time to time by the Directors and set
forth in the Prospectus.
2. CLASS B SHARES. Class B Shares means The Gabelli Global
Convertible Securities Fund Class B Stock as designated
by Articles Supplementary adopted by the Directors.
Class B Shares shall be (1) offered at net asset value,
(2) subject to a CDSC for the CDSC Period set forth in
Section D.1,
<PAGE> 3
(3) subject to ongoing Distribution Fees and Service
Fees approved from time to time by the Directors and set
forth in the Prospectus and (4) converted to Class A
Shares on the first business day of the eighty-fifth
calendar month following the calendar month in which
such Shares were issued. For Class B Shares previously
exchanged for shares of a money market fund the
investment adviser of which is the same as or an
affiliate of the investment adviser of the Fund, the
time period during which such Shares were held in the
money market fund will be excluded.
3. CLASS C SHARES. Class C Shares means The Gabelli Global
Convertible Securities Fund Class C Stock as designated
by Articles Supplementary adopted by the Directors.
Class C Shares shall be (1) offered at net asset value,
(2) subject to a CDSC for the CDSC Period set forth in
Section D.1. and (3) subject to ongoing Distribution
Fees and Service Fees approved from time to time by the
Directors and set forth in the Prospectus.
4. CLASS AAA SHARES. Class AAA Shares means The Gabelli
Global Convertible Securities Fund Class AAA Stock as
designated by Articles Supplementary adopted by the
Directors. Class AAA Shares shall be (1) offered at net
asset value, (2) sold without a front end sales charge
or CDSC, (3) offered only to investors acquiring Shares
directly from the Distributor or from a financial
intermediary with whom the Distributor has entered into
an agreement expressly authorizing the sale by such
intermediary of Class AAA Shares and (4) subject to
ongoing Distribution Fees or Service Fees approved from
time to time by the Directors and set forth in the
Prospectus.
C. RIGHTS AND PRIVILEGES OF CLASSES. Each of the Class A Shares,
Class B Shares, Class C Shares and Class AAA Shares will
represent an interest in the same portfolio of assets and will
have identical voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations,
qualifications, designations and terms and conditions except
as described otherwise in the Articles Supplementary adopted
by the Directors with respect to each of such Classes.
D. CDSC. A CDSC may be imposed upon redemption of Class A Shares,
Class B Shares and Class C Shares that do not incur a front
end sales charge subject to the following conditions:
1. CDSC PERIOD. The CDSC Period for Class A Shares and
Class C Shares shall be twenty-four months plus any
portion of the month during which payment for such
Shares was received. The CDSC Period for Class B Shares
shall be eighty-four months plus any portion of the
month during which payment for such Shares was received.
2. CDSC RATE. The CDSC rate shall be recommended by the
Distributor and approved by the Directors. If a CDSC is
imposed for a period greater than thirteen months the
CDSC rate must decline during the CDSC Period such that
(a) the CDSC rate is less in the last twelve months of
the CDSC Period
<PAGE> 4
than in the first twelve months (plus any initial
partial month) and (b) in each succeeding twelve months
the CDSC rate shall be less than or equal to the CDSC
rate in the preceding twelve months (plus any initial
partial month).
3. DISCLOSURE AND CHANGES. The CDSC rates and CDSC Period
shall be disclosed in the Prospectus and may be
decreased at the discretion of the Distributor but may
not be increased unless approved as set forth in Section
L.
4. METHOD OF CALCULATION. The CDSC shall be assessed on an
amount equal to the lesser of the then current net asset
value or the cost of the Shares being redeemed. No CDSC
shall be imposed on increases in the net asset value of
the Shares being redeemed above the initial purchase
price. No CDSC shall be assessed on Shares derived from
reinvestment of dividends or capital gains
distributions. The order in which Class B Shares and
Class C Shares are to be redeemed when not all of such
Shares would be subject to a CDSC shall be as determined
by the Distributor in accordance with the provisions of
Rule 6c-10 under the Act.
5. WAIVER. The Distributor may in its discretion waive a
CDSC otherwise due upon the redemption of Shares of any
Class under circumstances previously approved by the
Directors and disclosed in the Prospectus and as allowed
under Rule 6c-10 under the Act.
6. CALCULATION OF OFFERING PRICE. The offering price of
Shares of any Class subject to a CDSC shall be computed
in accordance with Rule 22c-1 under the Act and Section
22(d) of the Act and the rules and regulations
thereunder.
7. RETENTION BY DISTRIBUTOR. The CDSC paid with respect to
Shares of any Class may be retained by the Distributor
to reimburse the Distributor for commissions paid by it
in connection with the sale of Shares subject to a CDSC
and for Distribution Expenses.
E. SERVICE AND DISTRIBUTION FEES. Class A Shares and Class AAA
Shares shall be subject to ongoing Distribution Fees or
Service Fees not in excess of 0.25% per annum of the average
daily net assets of the relevant Class. Class B Shares and
Class C Shares shall be subject to a Distribution Fee not in
excess of 0.75% per annum of the average daily net assets of
the Class and a Service Fee not in excess of 0.25% of the
average daily net assets of the Class. All other terms and
conditions with respect to Service Fees and Distribution Fees
shall be governed by the plans adopted by the Fund with
respect to such fees and Rule 12b-1 of the Act.
F. CONVERSION. Shares acquired through the reinvestment of
dividends and capital gain distributions paid on Shares of a
Class subject to conversion shall be treated as if held in a
separate sub-account. Each time any Shares of a Class in a
shareholder's account (other than Shares held in the
sub-account) convert to Class A
<PAGE> 5
Shares, a proportionate number of Shares held in the
sub-account shall also convert to Class A Shares. All
conversions shall be effected on the basis of the
relative net asset values of the two Classes without the
imposition of any sales load or other charge. So long as
any Class of Shares converts into Class A Shares, the
Distributor shall waive or reimburse the Fund, or take
such other actions with the approval of the Directors as
may be reasonably necessary to ensure that, the
expenses, including payments authorized under a Plan of
Distribution, applicable to the Class A Shares are not
higher than the expenses, including payments authorized
under a Plan of Distribution, applicable to the Class of
Shares that converts into Class A Shares. Shares
acquired through an exchange privilege will convert to
Class A Shares after expiration of the conversion period
applicable to such Shares. The continuation of the
conversion feature is subject to continued compliance
with the rules and regulations of the SEC, the NASD and
the IRS.
G. ALLOCATION OF LIABILITIES, EXPENSES, INCOME AND GAINS AMONG
CLASSES.
1. LIABILITIES AND EXPENSES APPLICABLE TO A PARTICULAR
CLASS. Each Class shall pay any Distribution Fee and
Service Fee applicable to that Class. Other expenses
applicable to any of the foregoing Classes such as
incremental transfer agency fees, but not including
advisory or custodial fees or other expenses related to
the management of the Fund's assets, shall be allocated
among such Classes in different amounts in accordance
with the terms of each such Class if they are actually
incurred in different amounts by such Classes or if such
Classes receive services of a different kind or to a
different degree than other Classes.
2. INCOME, LOSSES, CAPITAL GAINS AND LOSSES, AND
LIABILITIES AND OTHER EXPENSES APPLICABLE TO ALL
CLASSES. Income, losses, realized and unrealized capital
gains and losses, and any liabilities and expenses not
applicable to any particular Class shall be allocated to
each Class on the basis of the net asset value of that
Class in relation to the net asset value of the Fund.
3. DETERMINATION OF NATURE OF ITEMS. The Directors shall
determine in their sole discretion whether any
liability, expense, income, gains or loss other than
those listed herein is properly treated as attributed in
whole or in part to a particular Class or all Classes.
H. EXCHANGE PRIVILEGE. Holders of Class A Shares, Class B Shares,
Class C Shares and Class AAA Shares shall have such exchange
privileges as are set forth in the Prospectus for such Class.
Exchange privileges may vary among Classes and among holders
of a Class.
I. VOTING RIGHTS OF CLASSES.
1. Shareholders of each Class shall have exclusive voting
rights on any matter submitted to them that relates
solely to that Class, provided that:
<PAGE> 6
a. If any amendment is proposed to the Plan of
Distribution under which Distribution Fees or Service
Fees are paid with respect to Class A Shares of the
Fund that would increase materially the amount to be
borne by Class A Shares under such Plan of
Distribution, then no Class B Shares shall convert
into Class A Shares of the Fund until the holders of
Class B Shares of the Fund have also approved the
proposed amendment.
b. If the holders of either the Class B Shares referred
to in subparagraph a. do not approve the proposed
amendment, the Directors and the Distributor shall
take such action as is necessary to ensure that the
Class voting against the amendment shall convert into
another Class identical in all material respects to
Class A Shares of the Fund as constituted prior to
the amendment.
2. Shareholders of a Class shall have separate voting rights
on any matter submitted to shareholders with respect to
which the interest of one Class differs from the interests
of any other Class, provided that:
a. If the holders of Class A Shares approve any increase
in expenses allocated to the Class A Shares, then no
Class B Shares shall convert into Class A Shares of
the Fund until the holders of Class B Shares of the
Fund have also approved such expense increase.
b. If the holders of Class B Shares referred to in
subparagraph a. do not approve such increase, the
Directors and the Distributor shall take such action
as is necessary to ensure that the Class B Shares
shall convert into another Class identical in all
material respects to Class A Shares of the Fund as
constituted prior to the expense increase.
J. DIVIDENDS AND DISTRIBUTIONS. Dividends and capital gain
distributions paid by the Fund with respect to each Class, to
the extent any such dividends and distributions are paid, will
be calculated in the same manner and at the same time on the
same day and will be, after taking into account any
differentiation in expenses allocable to a particular Class, in
substantially the same proportion on a relative net asset value
basis.
K. REPORTS TO DIRECTORS. The Distributor shall provide the
Directors such information as the Directors may from time to
time deem to be reasonably necessary to evaluate this Plan.
<PAGE> 7
L. AMENDMENT. Any material amendment to this Plan shall be approved by
the affirmative vote of a majority (as defined in the Act) of the
Directors of the Fund, including the affirmative vote of the
Directors of the Fund who are not interested persons of the Fund,
except that any amendment that increases the CDSC rate schedule or
CDSC Period must also be approved by the affirmative vote of a
majority of the Shares of the affected Class. Except as so provided,
no amendment to the Plan shall be required to be approved by the
shareholders of any Class of the Shares constituting the Fund. The
Distributor shall provide the Directors such information as may be
reasonably necessary to evaluate any amendment to this Plan.
