As filed with the Securities and Exchange Commission on August 7, 1995
Securities Act File No. 33-60407
Investment Company Act File No. 811-8476
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-2
|X| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|X| Pre-Effective Amendment No. 1
|_| Post-Effective Amendment No. ____
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|X| REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
|X| Amendment No. 2
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THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
(Exact name of registrant as specified in its charter)
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One Corporate Center
Rye, New York 10580
(Address of principal executive offices)
(914) 921-5070
(Registrant's telephone number, including area code)
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Bruce N. Alpert
The Gabelli Global Multimedia Trust Inc.
One Corporate Center
Rye New York 10580
(Name and address of agent for service)
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With copies to:
Daniel Schloendorn, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
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Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. |X|
It is proposed that the filing will become effective when declared
effective pursuant to Section 8(c). |_|
This Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is ______________. |_|
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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
================================================================================
Maximum Amount of
Title of Securities Aggregate Registration
Being Registered Offering Price* Fee**
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Shares of Common Stock,
par value $.001 per share.......... $20,442,601 $7,049.22
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* Calculated pursuant to Rule 457(c) when the Securities Act of 1933, as
amended. Based on the average of the high and low sales price reported on
the New York Stock Exchange on June 15, 1995.
** Previously paid.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
Form N-2
Cross-Reference Sheet
Parts A and B of Prospectus
<TABLE>
<CAPTION>
Item No. Caption Location in Prospectus
-------- ------- ----------------------
<S> <C>
1. Outside Front Cover.............................................. Front Cover Page
2. Inside Front and Outside Back Cover Page......................... Front Cover Page
3. Fee Table and Synopsis........................................... Prospectus Summary; Fee Table
4. Financial Highlights............................................. Financial Highlights
5. Plan of Distribution............................................. Not Applicable
6. Selling Stockholders............................................. Not Applicable
7. Use of Proceeds.................................................. Use of Proceeds
8. General Description of the Registrant............................ Front Cover Page; Prospectus
Summary; The Fund; Investment
Objectives and Policies; Risk Factors
and Special Considerations; Common
Stock
9. Management....................................................... Management of the Fund; Portfolio
Transactions; Custodians and
Transfer, Dividend Disbursing Agent
and Registrar
10. Capital Stock, Long-Term Debt and Other Securities............... The Offer; Common Stock; Dividends
and Distributions; Automatic
Dividend Reinvestment and
Voluntary Cash Purchase Plan;
Taxation
11. Defaults and Arrears on Senior Securities........................ Not Applicable
12. Legal Proceedings................................................ Not Applicable
13. Table of Contents of the Statement of Additional Information..... Table of Contents of the Statement of
Additional Information
Location in Statement of
Item No. Caption Additional Information
-------- ------- ------------------------
14. Cover Page....................................................... Front Cover Page
15. Table of Contents................................................ Front Cover Page
16. General Information and History.................................. Not Applicable
17. Investment Objectives and Policies............................... Investment Objectives and Policies;
Investment Restrictions
18. Management....................................................... Management of the Fund
19. Control Persons and Principal Holders of Securities.............. Beneficial Owner
20. Investment Advisory and Other Services........................... Management of the Fund
21. Brokerage Allocation and Other Practices ........................ Portfolio Transactions
22. Tax Status....................................................... Taxation
23. 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>
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The Gabelli Global
Multimedia Trust, Inc.
2,869,137 Shares
of Common Stock
Issuable Upon Exercise of Rights
to Subscribe to Such Shares
----------
PROSPECTUS
----------
----------
August_______, 1995
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registation statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion Dated August 7, 1995
PROSPECTUS
8,607,411 Rights for 2,869,137 Shares
The Gabelli Global Multimedia Trust Inc.
Common Stock
----------
The Gabelli Global Multimedia Trust Inc. (the "Fund") is issuing to its
stockholders of record ("Record Date Stockholders") as of the close of business
on ____________, 1995 rights ("Rights") entitling the holders thereof to
subscribe for an aggregate of 2,869,137 shares (the "Shares") of the Fund's
Common Stock (the "Offer") at the rate of one share of Common Stock for each
three Rights held and entitling such Record Date Stockholder to subscribe,
subject to certain limitations and subject to allotment, for any Shares not
acquired by exercise of primary subscription Rights. The Rights are transferable
and have been admitted for trading on the New York Stock Exchange. See "The
Offer." THE SUBSCRIPTION PRICE PER SHARE (the "Subscription Price") WILL BE
$________.
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON _________, 1995
unless extended as described herein (the "Expiration Date"). Shareholder
inquiries should be directed to the Subscription Agent, State Street Bank and
Trust Company, at (800) 336-6983 or (617) 328-5000 Ex. 6406.
The Fund is a closed-end non-diversified management investment company. Its
primary investment objective is long-term growth of capital, primarily through
investing in common stock and other securities of foreign and domestic companies
in the telecommunications, media, publishing and entertainment industries.
Income is a secondary objective of the Fund. No assurances can be given that the
Fund's objectives will be achieved. For a discussion of certain risk factors and
special considerations with respect to owning shares of the Fund, see "Risk
Factors and Special Considerations." The address of the Fund is One Corporate
Center, Rye, New York 10580 and its telephone number is (914) 921-5070.
The Fund announced the Offer prior to the commencement of trading on the
New York Stock Exchange on June 20, 1995. The net asset value per share of
Common Stock at the close of business on June 19, 1995 and _________, 1995 was
$7.95 and $_________, respectively, and the last reported sale price of a share
of the Fund's Common Stock on such Exchange on those dates was $7.375 and
$_________, respectively. The Fund's Common Stock trades under the symbol "GGT"
on the New York Stock Exchange.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY SECURITIES
OR REGULATORY AUTHORITY IN CANADA NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY SECURITIES OR
REGULATORY AUTHORITY IN CANADA PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
Subscription Price Sales Load Proceeds to Funds (1)
--------------------------------------------------------------------------------
Per Share.............. $______ None $______
--------------------------------------------------------------------------------
Total ................. $______ None $______
================================================================================
(1) Before deduction of expenses incurred by the Fund, estimated at $601,000.
----------
Because the Subscription Price per share is likely to be less than the net
asset value per share, the Offer is likely to result in a substantial dilution
of the aggregate net asset value of the shares owned by stockholders who do not
fully exercise their Rights. In addition, as a result of the terms of the Offer,
stockholders who do not fully exercise their Rights should expect that they
will, upon the completion of the Offer, own a smaller proportional interest in
the Fund than would otherwise be the case. Gabelli Funds, Inc., the Fund's
investment adviser, may purchase through the primary subscription and the
over-subscription privilege Shares with an aggregate Subscription Price of up to
$___ million. Mr. Mario J. Gabelli may also purchase additional Shares in such
manner. See "The Offer -- Terms of the Offer."
----------
This Prospectus sets forth concisely certain information about the Fund that
investors should know before investing and it should be read and retained for
future reference. A Statement of Additional Information dated August __,1995
(the "SAI") containing additional information about the Fund has been filed with
the Securities and Exchange Commission and is incorporated by reference in its
entirety into this Prospectus.
----------
A copy of the SAI, the table of contents of which appears on page ____ of this
Prospectus, may be obtained without charge by contacting the Fund at (800)
GABELLI ((800) 422-3554) or (914) 921-5070.
The SAI will be sent within two business days of receipt of such request by the
Fund.
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August __, 1995
<PAGE>
--------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information included elsewhere in this Prospectus.
Terms of the Offer
The Gabelli Global Multimedia Trust Inc. (the "Fund") is issuing to
stockholders of record ("Record Date Stockholders") as of the close of business
on _________, 1995 (the "Record Date") rights ("Rights") to subscribe for an
aggregate of 2,869,137 shares of Common Stock (sometimes referred to herein as
the "Shares") of the Fund. Each such stockholder is being issued one Right for
each full share of Common Stock owned on the Record Date. The Rights entitle the
holder to acquire at the Subscription Price (as hereinafter defined) one Share
for each three Rights held. Rights may be exercised at any time during the
period (the "Subscription Period"), which commences on ________, 1995 and ends
at 5:00 p.m., New York time on _____, 1995, unless extended by the Fund to a
date not later than _____, 1995 (the "Expiration Date"). The right to acquire
during the Subscription Period at the Subscription Price one additional Share
for each three Rights held is hereinafter referred to as the "Primary
Subscription."
In addition, any Record Date Stockholder who fully exercises all Rights
initially issued to him (other than those Rights which cannot be exercised
because they represent the right to acquire less than one Share) is entitled to
subscribe for Shares which were not otherwise subscribed for by others on
Primary Subscription (the Over-Subscription Privilege"). For purposes of
determining the number of Shares a Record Date Stockholder may acquire pursuant
to the Offer, broker-dealers whose shares are held of record by Cede & Co., Inc.
("Cede"), nominee for The Depository Trust Company, or by any other depository
or nominee will be deemed to be the holders of the Rights that are issued to
Cede or such other depository or nominee on their behalf. Shares acquired
pursuant to the Over-Subscription Privilege are subject to allotment, which is
more fully discussed under "The Offer--Over-Subscription Privilege."
The subscription price per share (the "Subscription Price") will be
$_______. Rights will be evidenced by subscription certificates ("Subscription
Certificates") and may be exercised by completing a Subscription Certificate and
delivering it, together with payment, either by means of a notice of guaranteed
delivery or a check, to State Street Bank and Trust Company, Boston,
Massachusetts (the "Subscription Agent"). Rights holders will have no right to
rescind a purchase after the Subscription Agent has received payment. See "The
Offer -- Method of Exercise of Rights" and "The Offer -- Payment for Shares."
Shares issued pursuant to an exercise of Rights will be listed on the New York
Stock Exchange, Inc. (hereinafter referred to as the "New York Stock Exchange"
or the "Exchange").
The Rights are transferable until the Expiration Date and have been
admitted for trading on the Exchange. Although no assurance can be given that a
market for the Rights will develop, trading in the Rights on the Exchange will
begin three Business Days prior to the Record Date and may be conducted until
the close of trading on the last Exchange trading day prior to the Expiration
Date. The value of the Rights, if any, will be reflected by the market price.
Rights may be sold by individual holders or may be submitted to the Subscription
Agent for sale. Any Rights submitted to the Subscription Agent for sale must be
received by the Subscription Agent on or before _________, 1995, one Business
Day (as defined below) prior to the Expiration Date, due to normal settlement
procedures. Trading of the Rights on the Exchange will be conducted on a when
issued basis until and including the date on which the Subscription Certificates
are mailed to Record Date Stockholders and thereafter will be conducted on a
regular way basis until and including the last Exchange trading day prior to the
Expiration Date. The Common Stock will begin trading ex-Rights two Business Days
prior to the Record Date. If the Subscription Agent receives Rights for sale in
a timely manner, it will use its best efforts to sell the Rights on the New York
Stock Exchange. The Subscription Agent will also attempt to sell any Rights a
Rights holder is unable to exercise because such Rights represent the right to
subscribe for less than one Share. Any commissions will be paid by the selling
Rights holders. Neither the Fund nor the Subscription Agent will be responsible
if Rights cannot be sold and neither has guaranteed any minimum sales price for
the Right. For purposes of this Prospectus, a "Business Day" shall mean any day
on which trading is conducted on the Exchange.
--------------------------------------------------------------------------------
2
<PAGE>
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================================================================================
Stockholders are urged to obtain a recent trading price for the Rights on the
New York Stock Exchange from their broker, bank, financial advisor or the
financial press.
================================================================================
================================================================================
Stockholders' inquiries should be directed to:
State Street Bank and Trust Company
(800) 336-6983 or (617) 328-5000 Ex. 6406.
================================================================================
Important Dates to Remember
Event Date
----- ----
Record Date.................................... ______, 1995
Subscription Period............................ ______ through ______, 1995*
Expiration of the Offer........................ ______, 1995*
Payment for Guarantees of Delivery Due......... ______, 1995*
Confirmation to Participants................... ______, 1995*
----------
* Unless the Offer is extended to a date not later than _____, 1995.
Information Regarding the Fund
The Fund has been engaged in business as a closed-end non-diversified
management investment company since November 15, 1994. The Fund's primary
investment objective is long-term growth of capital, primarily through
investment in a portfolio of common stock and other securities of foreign and
domestic companies involved in the telecommunications, media, publishing and
entertainment industries. Income is a secondary objective of the Fund. No
assurance can be given that the Fund's investment objectives will be achieved.
See "Investment Objectives and Policies." The Fund's outstanding common stock,
par value $.001 per share (the "Common Stock"), is listed and traded on the
Exchange. The average weekly trading volume of the Common Stock on the Exchange
during the period from November 15, 1994 (commencement of the Fund's operations)
through December 31, 1994 was 8,141 shares. As of July 31, 1995, the net assets
of the Fund were approximately $70.9 million.
Information Regarding the Investment Adviser
Gabelli Funds, Inc. (the "Investment Adviser") has served as the investment
adviser to the Fund since its inception. The Investment Adviser also provides
certain administrative services to the Fund. Mr. Mario J. Gabelli, the Chairman
of the Board, President, Chief Executive Officer, Chief Investment Officer and
majority stockholder of the Investment Adviser, has been engaged in the business
of providing investment advisory and portfolio management services for over 15
years and is currently affiliated with investment advisers which, as of July 31,
1995, managed total assets of approximately $9.0 billion. The Fund pays the
Investment Adviser a monthly fee at the annual rate of 1.00% of the Fund's
average weekly net assets. The investment advisory fee is higher than comparable
fees paid by most other investment companies. See "Management of the Fund --
Investment Adviser." Since the Investment Adviser's fees are based on the net
assets of the Fund, the Investment Adviser will benefit from the Offer. In
addition, one Director who is an "interested person" of the Fund could benefit
indirectly from the Offer because of his interests in the Investment Adviser.
See "The Offer-Purpose of the Offer."
Risk Factors and Special Considerations
The following summarizes certain matters that should be considered, among
others, in connection with the Offer.
Dilution ................... An immediate dilution of the aggregate net asset
value of the shares owned by stockholders who do
not fully exercise their Rights is likely to be
experienced as a result of the Offer because the
Subscription Price is likely to be less than the
then net asset value per share, and the number of
shares outstanding after the Offer is likely to
increase in greater percentage than the increase
--------------------------------------------------------------------------------
3
<PAGE>
--------------------------------------------------------------------------------
in the size of the Fund's assets. In addition, as
a result of the terms of the Offer, stockholders
who do not fully exercise their Rights should
expect that they will, at the completion of the
Offer, own a smaller proportional interest in the
Fund than would otherwise be the case. Although it
is not possible to state precisely the amount of
such a decrease in value, because it is not known
at this time what the net asset value per share
will be at the Expiration Date, such dilution
could be substantial. For example, assuming that
all Rights are exercised and that the Subscription
Price of $ is % below the Fund's then -- net asset
value per share, the Fund's net asset value per
share would be reduced by approximately $ per
share. -----
Discount From
Net Asset Value .......... Shares of closed-end investment companies
frequently trade at a discount from net asset
value. This characteristic of shares of a
closed-end fund is a risk separate and distinct
from the risk that the Fund's net asset value will
decrease. The risk of purchasing shares of a
closed-end fund that might trade at a discount is
more pronounced for investors who wish to sell
their shares in a relatively short period of time
because for those investors, realization of a gain
or loss on their investments is likely to be more
dependent upon the existence of a premium or
discount than upon portfolio performance. Since
inception, the Fund's shares have generally traded
in the New York Stock Exchange at a discount to
net asset value. See "Common Stock."
Repurchase and
Charter Provisions ....... The Fund's stockholders will be free to dispose of
their Shares on the New York Stock Exchange or
other markets on which the Shares may trade, but,
as a closed-end fund, the Fund's stockholders do
not have the right to redeem their Shares. The
Fund is authorized to repurchase its shares on the
open market when the shares are trading at a
discount of 10% or more from net asset value. In
addition, certain provisions of the Fund's
Articles of Incorporation and By-Laws may be
regarded as "anti-takeover" provisions. These
provisions consist of a system in which only one
of three classes of Directors is elected each year
and the requirement that the affirmative vote of
the holders of 662/3% of the outstanding shares of
the Fund is necessary to authorize the conversion
of the Fund from a closed-end to an open-end
investment company or generally to authorize
certain business transactions with the beneficial
owner of more than 5% of the outstanding shares of
the Fund. The overall effect of these provisions
is to render more difficult the accomplishment of
a merger or the assumption of control by a
principal stockholder. These provisions may have
the effect of depriving stockholders of an
opportunity to sell their shares at a premium
above the prevailing market price. See "Common
Stock-Certain Provisions of the Articles of
Incorporation and By-Laws."
Non-Diversified Status ..... As a non-diversified investment company under the
Investment Company Act of 1940, as amended (the
"1940 Act"), the Fund is not limited in the
proportion of its assets that may be invested in
securities of a single issuer, and, accordingly,
an investment in the Fund may, under certain
circumstances, present greater risk to an investor
than an investment in a diversified company. See
"Risk Factors and Special Considerations--
Non-Diversified Status."
Industry Risks ............. The Fund invests a significant portion of its
assets in companies in the telecommunications,
media, publishing and entertainment industries
and, as a result, the value of the Fund's shares
will be more susceptible to factors affecting
those particular types of companies, including
government regulation, greater price volatility
for the overall market, rapid obsolescence of
--------------------------------------------------------------------------------
4
<PAGE>
--------------------------------------------------------------------------------
products and services, intense competition and
strong market reactions to technological
developments. See "Risk Factors and Special
Considerations--Industry Risks."
Smaller Companies .......... The Fund invests in smaller companies which may
benefit from the development of new products and
services. These smaller companies may present
greater opportunities for capital appreciation,
and may also involve greater investment risk than
large, established issuers. See "Risk Factors and
Special Considerations-- Smaller Companies."
Foreign Securities ......... There is no limitation on the amount of foreign
securities in which the Fund may invest. Investing
in securities of foreign companies and foreign
governments, which generally are denominated in
foreign currencies, may involve certain risk and
opportunity considerations not typically
associated with investing in domestic companies
and could cause the Fund to be affected favorably
or unfavorably by changes in currency exchange
rates and revaluation of currencies. See "Risk
Factors and Special Considerations-- Foreign
Securities."
Dependence on Key Personnel . The Investment Adviser is dependent upon the
expertise of Mr. Mario J. Gabelli in providing
advisory services with respect to the Fund's
investments. There is no contract of employment
between the Investment Adviser and Mr. Gabelli. If
the Investment Adviser were to lose the services
of Mr. Gabelli, its ability to service the Fund
could be adversely affected. There can be no
assurance that a suitable replacement could be
found for Mr. Gabelli in the event of his death,
resignation, retirement or inability to act on
behalf of the Investment Adviser.
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5
<PAGE>
FEE TABLE
The following table sets forth certain fees and expenses of the Fund.
Shareholder Transaction Expenses
Sales Load (as a percentage of offering price)..................... 0%
Automatic Dividend Reinvestment and Cash Purchase Plan Fees*....... $0.75
Annual Expenses (as a percentage of net assets)
Management Fees.................................................... 1.0%
Other Expense...................................................... .74%
Total Annual Expenses ............................................. 1.74%
----------
* A fee of $0.75 is charged with respect to each purchase by a participant in
the Fund's Automatic Dividend Reinvestment and Voluntary Cash Purchase Plan (the
"Plan"). A fee of $2.50 is charged in connection with the sale of shares that
are held in book-entry form, such as shares held by a stockholder through the
Plan.
Example 1 Year 3 Years
-------- ------ -------
You would pay the following
expenses on a $1,000
investment assuming a 5%
annual return........................................ $18 $56
The purpose of the foregoing table and example is to assist Rights holders
in understanding the various costs and expenses that an investor in the Fund
bears, directly or indirectly, but should not be considered a representation of
past or future expenses or rate of return. The actual expenses of the Fund may
be greater or less than those shown. The figures provided under "Other Expenses"
are based upon estimated amounts for the current fiscal year. For more complete
descriptions of certain of the Fund's cost and expenses, see "Management of the
Fund" in the Prospectus and the SAI.
6
<PAGE>
FINANCIAL HIGHLIGHTS
The table below sets forth selected financial data for a share of Common
Stock outstanding throughout the period presented. The per share operating
performance and ratios for the period ended December 31, 1994 has been audited
by Price Waterhouse LLP, the Fund's independent accountants, as stated in their
report which is incorporated by reference into the SAI. The following
information should be read in conjunction with the Financial Statements and
Notes thereto, which are incorporated by reference into the SAI.
Per Share Operating Performance
For a Fund Share Outstanding Throughout the Period
Period Ended
12/31/94
------------
Operating Performance:
Net Asset Value, Beginning of Period........................ $7.50(1)
-----
Net Investment Income..................................... 0.03
Net Realized and Unrealized Gain on Securities............ 0.03
-----
Total from Investment Operations............................ 0.06
-----
Distributions to Stockholders from:
Net Investment Income..................................... (0.03)
Distributions in Excess of Net Investment Income
and Net Realized Gains.................................. (0.01)
Paid-in-Capital........................................... (0.01)
-----
Total Distributions ........................................ 0.05
-----
Net Asset Value, End of Period.............................. $7.51
=====
Market Value, End of Period................................. $7.375
======
Total Investment Return..................................... (7.91)%(2)
=====
Net Asset Value Total Return................................ 0.80%(3)
=====
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands).................... $64,606
Ratio of Operating Expenses to Average Net Assets........... 1.74%(4)
Ratio of Net Investment Income to Average Net Assets........ 3.15%(4)
Portfolio Turnover Rate..................................... 0%
----------
(1) Represents net asset value per share on November 15, 1994.
(2) Based on market value per share at date of issuance of $8.0625, adjusted for
reinvestment of all dividends.
(3) Based on net asset value per share, adjusted for reinvestment of all
distributions .
(4) Annualized.
7
<PAGE>
THE OFFER
Terms of the Offer
The Fund is issuing to Record Date Stockholders Rights to subscribe for the
Shares. Each Record Date Stockholder is being issued one transferable Right for
each share of Common Stock owned on the Record Date. The Rights entitle the
holder to acquire at the Subscription Price one Share for each three Rights
held. No Rights will be issued for fractional shares. Rights may be exercised at
any time during the Subscription Period, which commences on , 1995 and ends at
5:00 p.m., New York time, on _______, 1995, unless extended by the Fund to a
date not later than _________, 1995, 5:00 p.m., New York time. See "Expiration
of the Offer."
In addition, any Record Date Stockholder who fully exercises all Rights
initially issued to him (other than those Rights which cannot be exercised
because they represent the right to acquire less than one Share) is entitled to
subscribe for Shares which were not otherwise subscribed for by others on
Primary Subscription. For purposes of determining the maximum number of Shares a
Record Date Stockholder may acquire pursuant to the Offer, broker-dealers whose
shares are held of record by Cede or by any other depository or nominee will be
deemed to be the holders of the Rights that are issued to Cede or such other
depository or nominee on their behalf. Shares acquired pursuant to the
Over-Subscription Privilege are subject to allotment, which is more fully
discussed below under "Over-Subscription Privilege."
The Investment Adviser, as a Record Date Stockholder, has advised the Fund
that its board of directors has authorized it to purchase through the Primary
Subscription and the Over-Subscription Privilege underlying Shares with an
aggregate Subscription Price of up to $__ million to the extent such Shares
become available to it in accordance with the Primary Subscription and the
allotment provisions of the Over-Subscription Privilege. In addition, Mario J.
Gabelli individually, as a Record Date Stockholder, may also purchase Shares
through the Primary Subscription and the Over-Subscription Privilege. Such
over-subscriptions by the Investment Adviser and Mr. Gabelli may
disproportionately increase their already existing ownership resulting in a
higher percentage ownership of outstanding shares of the Fund. Any Shares so
acquired by the Investment Adviser or Mr. Gabelli, as "affiliates" of the Fund
as that term is defined under the Securities Act of 1933, as amended (the
"Securities Act"), may only be sold in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration statement under the
Securities Act. In general, under Rule 144, as currently in effect, an
"affiliate" of the Fund is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of 1% of the then outstanding
shares of Common Stock or the average weekly reported trading volume of the
Common Stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also subject to certain restrictions on the manner of sale, to
notice requirements and to the availability of current public information about
the Fund. In addition, any profit resulting from the sale of Shares so acquired,
if such Shares are held for a period of less than six months, will be returned
to the Fund.
Rights will be evidenced by Subscription Certificates. The number of Rights
issued to each holder will be stated on the Subscription Certificates delivered
to such holder. The method by which Rights may be exercised and Shares paid for
is set forth below in "Method of Exercise of Rights" and "Payment for Shares." A
Rights holder will have no right to rescind a purchase after the Subscription
Agent has received payment. See "Payment for Shares" below. Shares issued
pursuant to an exercise of Rights will be listed on the New York Stock Exchange.
The Rights are transferable until the Expiration Date and have been
admitted for trading on the New York Stock Exchange. Assuming a market exists
for the Rights, the Rights may be purchased and sold through usual brokerage
channels and sold through the Subscription Agent. Although no assurance can be
given that a market for the Rights will develop, trading in the Rights on the
Exchange will begin three Business Days before the Record Date and may be
conducted until the close of trading on the last Exchange trading day prior to
the Expiration Date. Trading of the Rights on the Exchange will be conducted on
a when issued basis until and including the date on which the Subscription
Certificates are mailed to Record Date Stockholders and thereafter will be
conducted on a regular way basis until and including the last Exchange trading
day prior to the Expiration Date. The method by which Rights may be transferred
is set forth below in "Method of Transferring Rights." The underlying Shares
will also be admitted for trading on the New York Stock Exchange and will begin
trading Ex-Rights two Business Days prior to the Record Date. Since fractional
Shares will not be issued, Rights holders who receive, or who are left with,
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fewer than three Rights will be unable to exercise such Rights and will not be
entitled to receive any cash in lieu of such fractional Shares. However, the
Subscription Agent will automatically attempt to sell the number of Rights which
a Rights holder is unable to exercise for such reason after return of a
completed and fully exercised Subscription Certificate, and will remit the
proceeds of any such sale net of commissions to the Rights holder.
Purpose of the Offer
The Board of Directors of the Fund has determined that it would be in the
best interests of the Fund and the stockholders to increase the assets of the
Fund available for investment thereby permitting the Fund to be in a better
position to more fully take advantage of investment opportunities that may
arise. The Offer seeks to reward existing stockholders by giving them the right
to purchase additional shares at a price that may be below market and/or net
asset value without incurring any commission charge. The distribution to
stockholders of transferable Rights which themselves may have intrinsic value
will also afford non-subscribing stockholders the potential of receiving a cash
payment upon sale of such Rights, receipt of which may be viewed as compensation
for the possible dilution of their interests in the Fund.
The Fund's Investment Adviser and Furman Selz Incorporated, its
sub-administrator (the "Sub-Administrator"), will benefit from the Offer because
the Investment Adviser's fee and the Sub-Administrator's fee are based on the
average net assets of the Fund. See "Management of the Fund." It is not possible
to state precisely the amount of additional compensation the Investment Adviser
or Sub-Administrator will receive as a result of the Offer because the proceeds
of the Offer will be invested in additional portfolio securities which will
fluctuate in value. However, assuming all Rights are exercised and that the Fund
receives the maximum proceeds of the Offer, the annual compensation to be
received by the Investment Adviser and the Sub-Administrator would be increased
by approximately $_______ and $______, respectively. Two of the Fund's Directors
who voted to authorize the Offer are "interested persons" of the Investment
Adviser within the meaning of the 1940 Act. One of these Directors, Mario J.
Gabelli, could benefit indirectly from the Offer because of his interest in the
Investment Adviser. The other seven Directors are not "interested persons" of
the Fund. See "Management of the Fund" in the SAI. While it was cognizant of the
possible participation of the Investment Adviser and Mr. Gabelli in the Offer as
stockholders, the Fund's Board of Directors nevertheless concluded that the
Offer was in the best interest of stockholders, since all stockholders of the
Fund are treated equally under the terms of the Offer.
The Fund may, in the future and at its discretion, choose to make
additional rights offerings from time to time for a number of shares and on
terms which may or may not be similar to the Offer. Any such future rights
offering will be made in accordance with the 1940 Act. Under the laws of
Maryland, the state in which the Fund is incorporated, the Board of Directors is
authorized to approve rights offerings without obtaining stockholder approval.
The staff of the Securities and Exchange Commission (the "Commission") has
interpreted the 1940 Act as not requiring stockholder approval of a rights
offering at a price below the then current net asset value so long as certain
conditions are met, including a good faith determination by the fund's board of
directors that such offering would result in a net benefit to existing
stockholders.
Over-Subscription Privilege
If all of the Rights initially issued are not exercised, any Shares for
which subscriptions have not been received will be offered, by means of the
Over-Subscription Privilege, to Record Date Stockholders who have exercised all
the Rights initially issued to them and who wish to acquire more than the number
of Shares for which the Rights issued to them are exercisable. Record Date
Stockholders who exercise all the Rights initially issued to them will have the
opportunity to indicate on the Subscription Certificate how many Shares they are
willing to acquire pursuant to the Over-Subscription Privilege. If sufficient
Shares remain after the Primary Subscriptions have been exercised, all
over-subscriptions will be honored in full. If sufficient Shares are not
available to honor all over-subscriptions, the available Shares will be
allocated among those who over-subscribe based on the number of Rights
originally issued to them by the Fund. The percentage of remaining Shares each
over-subscribing stockholder may acquire will be rounded down to result in
delivery of whole Shares. The allocation process may involve a series of
allocations in order to assure that the total number of Shares available for
over-subscriptions is distributed on a pro rata basis.
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The method by which Shares will be distributed and allocated pursuant to
the Over-Subscription Privilege is as follows. Shares will be available for
purchase pursuant to the Over-Subscription Privilege only to the extent that the
maximum number of Shares is not subscribed for through the exercise of the
Primary Subscription by the Expiration Date. If the Shares so available ("Excess
Shares") are not sufficient to satisfy all subscriptions pursuant to the
Over-Subscription Privilege, the Excess Shares will be allocated pro rata
(subject to the elimination of fractional Shares) among those holders of Rights
exercising the Over-Subscription privilege, in proportion, not to the number of
Shares requested pursuant to the Over-Subscription Privilege, but to the number
of shares held on the Record Date; provided, however, that if such pro rata
allocation results in any holder being allocated a greater number of Excess
Shares than such holder subscribed for pursuant to the exercise of such holder's
Over-Subscription Privilege, then such holder will be allocated only such number
of Excess Shares as such holder subscribed for and the remaining Excess Shares
will be allocated among all other holders exercising Over-Subscription
Privileges. The formula to be used in allocating the Excess Shares is as
follows:
Holder's Record Date Position
-------------------------------
Total Record Date Position X Excess Shares
of all Over-Subscribers Remaining
The Fund will not offer or sell any Shares which are not subscribed for
under the Primary Subscription or the Over-Subscription Privilege.
The Subscription Price
The Subscription Price for the Shares to be issued pursuant to the Rights
will be $____.
The Fund announced the Offer prior to the commencement of trading on the
New York Stock Exchange on June 19, 1995. The net asset value per share of
Common Stock at the close of business on June 19, 1995 and _______, 1995 was
$7.95 and $________, respectively. The last reported sale price of a share
of the Fund's Common Stock on the Exchange on those dates was $7.375 and
$_____, respectively, representing a 7.23% discount and a ____%
[premium/discount], respectively, in relation to the net asset value per share
of Common Stock at the close of business on such dates.
Sales by Subscription Agent
Holders of Rights who do not wish to exercise any or all of their Rights
may instruct the Subscription Agent to sell any unexercised Rights. The
Subscription Certificates representing the Rights to be sold by the Subscription
Agent must be received on or before ____, 1995. Upon the timely receipt of
appropriate instructions to sell Rights, the Subscription Agent will use its
best efforts to complete the sale and will remit the proceeds of sale, net of
commissions, to the holders. If the Rights can be sold, sales of such Rights
will be deemed to have been effected at the weighted average price received by
the Subscription Agent on the day such Rights are sold. The selling Rights
holder will pay all brokerage commissions incurred by the Subscription Agent.
Such sales may be effected by the Subscription Agent through Gabelli & Company,
Inc., a registered broker-dealer and an indirect majority-owned subsidiary of
the Investment Adviser, for up to $.03 per Right, provided that, if the
Subscription Agent is able to negotiate a lower brokerage commission with an
independent broker, the Subscription Agent will execute these sales through the
broker. Gabelli & Company, Inc. may also act on behalf of its clients to
purchase Rights in the open market and be compensated therefor. In addition,
upon return of a completed and fully exercised Subscription Certificate, the
Subscription Agent will automatically attempt to sell any Rights a Rights holder
is unable to exercise because such Rights will represent the right to subscribe
for less than one Share. The Subscription Agent will also attempt to sell all
Rights which remain unclaimed as a result of Subscription Certificates being
returned by the postal authorities as undeliverable as of the fourth Business
Day prior to the Expiration Date. Such sales will be made net of commissions on
behalf of the nonclaiming stockholders. Proceeds from those sales will be held
by State Street Bank and Trust Company, in its capacity as the Fund's transfer
agent, for the account of such nonclaiming stockholder until such proceeds are
either claimed or escheat. There can be no assurance that the Subscription Agent
will be able to complete the sale of any such Rights and neither the Fund nor
the Subscription Agent has guaranteed any minimum sales price for the Rights.
All such Rights will be sold at the market price, if any, on the New York Stock
Exchange.
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Method of Transferring Rights
The Rights evidenced by a single Subscription Certificate may be
transferred in whole by endorsing the Subscription Certificate for transfer in
accordance with the accompanying instructions. A portion of the Rights evidenced
by a single Subscription Certificate (but not fractional Rights) may be
transferred by delivering to the Subscription Agent a Subscription Certificate
properly endorsed for transfer, with instructions to register such portion of
the Rights evidenced thereby in the name of the transferee (and to issue a new
Subscription Certificate to the transferee evidencing such transferred Rights).
In such event, a new Subscription Certificate evidencing the balance of the
Rights will be issued to the Rights holder or, if the Rights holder so
instructs, to an additional transferee.
Holders wishing to transfer all or a portion of their Rights (but not
fractional Rights) should allow at least three Business Days prior to the
Expiration Date for (i) the transfer instructions to be received and processed
by the Subscription Agent, (ii) a new Subscription Certificate to be issued and
transmitted to the transferee or transferees with respect to transferred Rights,
and to the transferor with respect to retained rights, if any, and (iii) the
Rights evidenced by such new Subscription Certificates to be exercised or sold
by the recipients thereof. Neither the Fund nor the Subscription Agent shall
have any liability to a transferee or transferor of Rights if Subscription
Certificates are not received in time for exercise or sale prior to the
Expiration Date.
Except for the fees charged by the Subscription Agent (which will be paid
by the Fund as described below), all commissions, fees and other expenses
(including brokerage commissions and transfer taxes) incurred in connection with
the purchase, sale or exercise of Rights will be for the account of the
transferor of the Rights, and none of such commissions, fees or expenses will be
paid by the Fund or the Subscription Agent.
The Fund anticipates that the Rights will be eligible for transfer through,
and that the exercise of the Primary Subscription (but not the Over-Subscription
Privilege) may be effected through, the facilities of The Depository Trust
Company ("DTC"; Rights exercised through DTC are referred to as "DTC Exercised
Rights"). The holder of a DTC Exercised Right may exercise the Over-Subscription
Privilege in respect of such DTC Exercised Right by properly executing and
delivering to the Subscription Agent, at or prior to 5:00 p.m., New York time,
on the Expiration Date, a DTC Participant Over-Subscription Form, together with
payment of the Subscription Price for the number of Shares for which the
Over-Subscription Privilege is to be exercised. Copies of the DTC Participant
Over-Subscription Form may be obtained from the Subscription Agent.
Expiration of the Offer
The Offer will expire at 5:00 p.m., New York time, on ___, 1995, unless
extended by the Fund to a date not later than ______, 1995, 5:00 p.m., New York
time (the "Expiration Date"). Rights will expire on the Expiration Date and
thereafter may not be exercised.
Subscription Agent
The Subscription Agent is State Street Bank and Trust Company, P.O. Box
8200, Boston, Massachusetts 02266-8200. The Subscription Agent will receive from
the Fund an amount estimated to be $240,000, comprised of the fee for its
services and the reimbursement for certain expenses related to the Offer. The
Subscription Agent is also the Fund's dividend disbursing agent, transfer agent
and registrar. Inquiries by all holders of Rights should be directed to P.O. Box
8200, Boston, Massachusetts 02266-8200 (telephone (800) 336-6983 or (617)
328-5000 Ex. 6406); holders may also consult their brokers or nominees.
Method of Exercise of Rights
Rights may be exercised by filling in and signing the reverse side of the
Subscription Certificate and mailing it on the envelope provided, or otherwise
delivering the completed and signed Subscription Certificate to the Subscription
Agent, together with payment for the Shares as described below under "Payment
for Shares." Rights may also be exercised through a Rights holder's broker, who
may charge such Rights holder a servicing fee in connection with such exercise.
Fractional Shares will not be issued, and Rights holders who receive, or who are
left with, fewer than three Rights will not be able to exercise such Rights. The
Subscription Agent will automatically attempt to sell the number of Rights which
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<PAGE>
a Rights holder is unable to exercise for this reason after return of a
completed and fully exercised Subscription Certificate and will remit the
proceeds of such sale net of commissions to the Rights holder.
Completed Subscription Certificates must be received by the Subscription
Agent prior to 5:00 p.m., New York time, on the Expiration Date (unless payment
is effected by means of a notice of guaranteed delivery as described below under
"Payment for Shares"). The Subscription Certificate and payment should be
delivered to STATE STREET BANK AND TRUST COMPANY, Attention: Corporate Stock
Transfer at the following address:
If By Mail: P.O. Box 9061
Boston, Massachusetts 02205-8686
If By Hand: 225 Franklin Street or 61 Broadway
Concourse Level Concourse Level
Boston, Massachusetts 02110 New York, New York 10006
If By Overnight Courier: c/o Boston Financial Data Services, Inc.,
Corporate Stock Transfer Department
Two Heritage Drive--4th Floor
North Quincy, Massachusetts 02171
Payment of Shares
Holders of Rights who acquire Shares on Primary Subscription or pursuant to
the Over-Subscription Privilege may choose between the following methods of
payment:
(1) A subscription will be accepted by the Subscription Agent if,
prior to 5:00 p.m., New York time, on the Expiration Date, the Subscription
Agent has received a notice of guaranteed delivery by telegram or otherwise
from a bank, a trust company, or a New York Stock Exchange member,
guaranteeing delivery of (i) payment of the full Subscription Price for the
Shares subscribed for on Primary Subscription and any additional Shares
subscribed for pursuant to the Over-Subscription Privilege and (ii) a
properly completed and executed Subscription Certificate. The Subscription
Agent will not honor a notice of guaranteed delivery if a properly
completed and executed Subscription Certificate and full payment is not
received by the Subscription Agent by the close of business on the fifth
Business Day after the Expiration Date. The notice of guaranteed delivery
may be delivered to the Subscription Agent in the same manner as
Subscription Certificates at the addresses set forth above, or may be
transmitted to the Subscription Agent by facsimile transmission (telecopy
number (617) 774-4519; telephone number to confirm receipt (617) 774-4511).
(2) Alternatively, a holder of Rights can send the Subscription Certificate
together with payment in the form of a check for the Shares subscribed for on
Primary Subscription and additional Shares subscribed for pursuant to the
Over-Subscription Privilege to the Subscription Agent based on the Subscription
Price of $________ per Share. To be accepted, such payment, together with the
executed Subscription Certificate, must be received by the Subscription Agent at
the addresses noted above prior to 5:00 p.m., New York time, on the Expiration
Date. The Subscription Agent will deposit all stock purchase checks received by
it prior to the final due date into a segregated interest-bearing account
pending proration and distribution of Shares. The Subscription Agent will not
accept cash as a means of payment for Shares. EXCEPT AS OTHERWISE SET FORTH
BELOW, A PAYMENT PURSUANT TO THIS METHOD MUST BE IN UNITED STATES DOLLARS BY
MONEY ORDER OR CHECK DRAWN ON A BANK LOCATED IN THE CONTINENTAL UNITED STATES,
MUST BE PAYABLE TO THE GABELLI GLOBAL MULTIMEDIA TRUST INC., AND MUST ACCOMPANY
AN EXECUTED SUBSCRIPTION CERTIFICATE TO BE ACCEPTED. If the aggregate
Subscription Price paid by a Record Date Stockholder is insufficient to purchase
the number of shares of Common Stock that the holder indicates are being
subscribed for, or if a Record Date Stockholder does not specify the number of
shares of Common Stock to be purchased, then the Record Date Stockholder will be
deemed to have exercised first, the Primary Subscription Rights (if not already
fully exercised) and second, the Over-Subscription Privilege to the full extent
of the payment tendered. If the aggregate Subscription Price paid by a Record
Date Stockholder exceeds the amount necessary to purchase the number of shares
of Common Stock for which the Record Date Stockholder has indicated an intention
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<PAGE>
to subscribe, then the Record Date Stockholder will be deemed to have
exercised first, the Primary Subscription Rights (if not already fully
subscribed) and second, the Over-Subscription Privilege to the full extent
of the excess payment tendered.
Within ten Business Days following the Expiration Date (the "Confirmation
Date"), a confirmation will be sent by the Subscription Agent to each holder of
Rights (or, if the Fund's shares are held by Cede or any other depository or
nominee, to Cede or such other depository or nominee), showing (i) the number of
Shares acquired pursuant to the Primary Subscription, (ii) the number of Shares,
if any, acquired pursuant to the Over-Subscription Privilege, (iii) the per
Share and total purchase price for the Shares and (iv) any excess to be refunded
by the Fund to such holder as a result of payment for Shares pursuant to the
Over-Subscription Privilege which the holder is not acquiring. Any payment
required from a holder of Rights must be received by the Subscription Agent on
the Expiration Date, or if the Rights holder has elected to make payment by
means of a notice of guaranteed delivery, on the fifth Business Day after the
Expiration Date. Any excess payment to be refunded by the Fund to a holder of
Rights, or to be paid to a holder of Rights as a result of sales of Rights on
his behalf by the Subscription Agent or exercises by Record Date Stockholders of
their Over-Subscription Privileges, and all interest accrued on such holder's
excess payment will be mailed by the Subscription Agent to such holder within
fifteen Business Days after the Expiration Date. Interest on such excess payment
will accrue through the date that is one Business Day prior to the mail date of
the reimbursement check. All payments by a holder of Rights must be in United
States dollars by money order or check drawn on a bank located in the
continental United States of America and payable to The Gabelli Global
Multimedia Trust Inc. except that holders of Rights who are residents of the
province of Ontario may make payment in U.S. dollars by money order or check
drawn on a bank located in the province of Ontario.
Whichever of the two methods described above is used, issuance and delivery
of certificates for the Shares purchased are subject to collection of checks and
actual payment pursuant to any notice of guaranteed delivery.
A Rights holder will have no right to rescind a purchase after the
Subscription Agent has received payment either by means of a notice of
guaranteed delivery or a check.
If a holder of Rights who acquires Shares pursuant to the Primary
Subscription or the Over-Subscription Privilege does not make payment of any
amounts due, the Fund reserves the right to take any or all of the following
actions: (i) find other purchasers for such subscribed-for and unpaid-for
Shares; (ii) apply any payment actually received by it toward the purchase of
the greatest whole number of Shares which could be acquired by such holder upon
exercise of the Primary Subscription or the Over-Subscription Privilege; (iii)
sell all or a portion of the Shares purchased by the holder, in the open market,
and apply the proceeds to the amounts owed; and (iv) exercise any and all other
rights or remedies to which it may be entitled, including, without limitation,
the right to set off against payments actually received by it with respect to
such subscribed Shares and to enforce the relevant guaranty of payment.
Holders who hold shares of Common Stock for the account of others, such as
brokers, trustees or depositaries for securities, should notify the respective
beneficial owners of such shares as soon as possible to ascertain such
beneficial owners' intentions and to obtain instructions with respect to the
Rights. If the beneficial owner so instructs, the record holder of such Rights
should complete Subscription Certificates and submit them to the Subscription
Agent with the proper payment. In addition, beneficial owners of Common Stock or
Rights held through such a holder should contact the holder and request the
holder to effect transactions in accordance with the beneficial owner's
instructions.
The instructions accompanying the Subscription Certificates should be read
carefully and followed in detail. DO NOT SEND SUBSCRIPTION CERTIFICATES TO THE
FUND.
THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE
SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE ELECTION AND RISK OF
THE RIGHTS HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT SUCH CERTIFICATES
AND PAYMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE DELIVERY TO
THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE. BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE
AT LEAST FIVE BUSINESS DAYS TO CLEAR, YOU ARE STRONGLY URGED TO PAY, OR ARRANGE
FOR PAYMENT, BY MEANS OF A CERTIFIED OR CASHIER'S CHECK OR MONEY ORDER.
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<PAGE>
All questions concerning the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by the Fund, whose determinations will
be final and binding. The Fund in its sole discretion may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
time as it may determine, or reject the purported exercise of any Right.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as the Fund determines
in its sole discretion. Neither the Fund nor the Subscription Agent will be
under any duty to give notification of any defect or irregularity in connection
with the submission of Subscription Certificates or incur any liability for
failure to give such notification.
Delivery of Stock Certificates
Certificates representing Shares purchased pursuant to the Primary
Subscription will be delivered to subscribers as soon as practicable after the
corresponding Rights have been validly exercised and full payment for such
Shares has been received and cleared. Certificates representing Shares purchased
pursuant to the Over-Subscription Privilege will be delivered to subscribers as
soon as practicable after the Expiration Date and after all allocations have
been effected. Participants in the Fund's Automatic Dividend Reinvestment and
Voluntary Cash Purchase Plan (the "Plan") will be issued Rights for the shares
held in their accounts in the Plan. Participants wishing to exercise such Rights
must exercise such Rights in accordance with the procedures set forth above in
"Method of Exercise of Rights" and "Payment for Shares." Such Rights will not be
exercised automatically by the Plan. Plan participants exercising their Rights
will receive their Primary and Over-Subscription Shares via an uncertificated
credit to their existing account. To request a stock certificate, participants
in the Plan should check the appropriate box on the Subscription Certificate.
Such Shares will remain subject to the same investment option as previously
selected by the Plan participant.
Foreign Restrictions
Subscriptions Certificates will only be mailed to Record Date Stockholders
whose addresses are within the United States and the Provinces of Quebec and
Ontario, Canada (other than an APO or FPO address). Record Date Stockholders
whose addresses are outside the United States and the Provinces of Quebec and
Ontario, Canada or who have an APO or FPO address and who wish to subscribe to
the Offer either partially or in full should contact the Subscription Agent,
State Street Bank and Trust Company, by written instruction or recorded
telephone conversation no later than three Business Days prior to the Expiration
Date. If the Subscription Agent has received no instruction by such date, the
Subscription Agent will attempt to sell all Rights and remit the net proceeds,
if any, to such stockholders. If the Rights can be sold, sales of such Rights
will be deemed to have been effected at the weighted average price received by
the Subscription Agent on the day such Rights are sold, less any applicable
brokerage commissions, taxes and other expenses.
Under the securities laws of the Province of Quebec, investors residing in
Quebec may, subject to compliance with all applicable regulatory requirement,
transfer either the Rights or the Shares to be acquired upon the exercise of
such Rights to other subscribers of the Offer, to persons with whom they are
related or to persons residing outside of Quebec in a transaction effected on an
organized market.
Under the securities laws of the Province of Ontario, investors residing in
Ontario may, subject to compliance with all applicable regulatory requirement,
transfer either the Rights or the Shares to be acquired upon the exercise of
such Rights through a dealer registered in Ontario that effects the transaction
through the facilities of the New York Stock Exchange.
Federal Income Tax Consequences
For federal income tax purposes, neither the receipt nor the exercise of
the Rights by Record Date Stockholders will result in taxable income to holders
of the Common Stock, and no loss will be realized if the Rights expire without
exercise.
With respect to Rights issued to Record Date Stockholders that are
subsequently exercised, if the fair market value of the Rights on the date of
distribution is 15 percent or a greater percentage of the fair market value of
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<PAGE>
the Common Stock, the adjusted basis in the Rights exercised is determined by
allocating the adjusted basis in the Common Stock with respect to which the
distribution is made between such Rights and such Common Stock in proportion to
their fair market value on the date of distribution. In these circumstances, the
adjusted basis in the newly acquired Shares is the Subscription Price plus the
adjusted basis in the Rights exercised. If the fair market value of the Rights
on the date of distribution is less than 15 percent of the fair market value of
the Common Stock on that date, in the absence of an election to apply the
General Rule, the adjusted basis in the Rights exercised is zero, and the
adjusted basis in the newly acquired Common Stock is the Subscription Price. The
election should be made in the form of a statement attached to the taxpayer's
return for the year in which the Rights were received and must be made with
respect to all Rights received in this distribution. The election, once made, is
irrevocable with respect to these Rights.
With respect to Rights which are purchased, the basis in the Rights is
their cost, and the basis of the newly acquired Shares issued upon exercise of
such Rights is the Subscription Price for the newly acquired Shares plus the
basis in the Rights exercised. If any purchased Rights expire without exercise,
the Rights holder will recognize a short-term loss.
If Rights are sold, the gain or loss will be the difference between their
adjusted basis and their sale price. The gain or loss recognized upon the sale
of the Rights will be capital gain or loss if the Rights were held as a capital
asset at the time of sale and will be long-term capital gain or loss if the
Rights are deemed to have been held at the time of sale for more than one year.
The holding period for the Rights which are sold includes the holding period of
the Common Stock in respect of which the Rights were distributed.
The holding period for a Share acquired upon exercise of a Right begins
with the date of exercise. The gain or loss recognized upon a sale of that Share
will be capital gain or loss if the Share was held as a capital asset at the
time of sale and will be long-term capital gain or loss if it was held at the
time of sale for more than one year.
The foregoing is a general summary of the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code") and United States
Treasury regulations presently in effect, and does not cover state or local
taxes. The Code and such regulations are subject to change by legislative or
administrative action. Stockholders are advised to consult their own tax
advisors with respect to the particular tax consequences to them with respect to
exercise or transfer of Rights.
Employee Plan Considerations
Stockholders that are employee benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (including
corporate savings and 401(k) plans), Keogh Plans of self-employed individuals
and Individual Retirement Accounts (collectively, "Benefit Plans") should be
aware that additional contributions of cash in order to exercise Rights would be
treated as Benefit Plan contributions and, when taken together with
contributions previously made, may subject a Benefit Plan to excise taxes for
excess or nondeductible contributions. In the case of Benefit Plans qualified
under Section 401(a) of the Code, additional cash contributions could cause the
maximum contribution limitations of Section 415 of the Code or other
qualification rules to be violated. Benefit Plans contemplating making
additional cash contributions to exercise Rights should consult with their
counsel prior to making such contributions.
Benefit Plans and other tax exempt entities, including governmental plans,
should also be aware that if they borrow in order to finance their exercise of
Rights, they may become subject to the tax on unrelated business taxable income
("UBTI") under Section 511 of the Code. If any portion of an Individual
Retirement Account ("IRA") is used as security for a loan, the portion so used
is also treated as distributed to the IRA depositor.
ERISA contains prudence and diversification requirements and ERISA and the
Code contain prohibited transaction rules that may impact the exercise of
Rights. Among the prohibited transaction exemptions issued by the Department of
Labor that may exempt a Benefit Plan's exercise of Rights are Prohibited
Transaction Exemption 84-24 (governing purchases of shares in investment
companies) and Prohibited Transaction Exemption 75-1 (covering shares of
securities).
Due to the complexity of these rules and the penalties for noncompliance,
Benefit Plans should consult with their counsel regarding the consequences of
their exercise of Rights under ERISA and the Code.
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Risk Factors and Special Considerations
An immediate dilution of the aggregate net asset value of the shares owned
by stockholders who do not fully exercise their Rights is likely to be
experienced as a result of the Offer because the Subscription Price is likely to
be less than the then net asset value per share, and the number of shares
outstanding after the Offer is likely to increase in greater percentage than the
increase in the size of the Fund's assets. In addition, as a result of the terms
of the Offer, stockholders who do not fully exercise their Rights should expect
that they will, at the completion of the Offer, own a smaller proportional
interest in the Fund than would otherwise be the case. Although it is not
possible to state precisely the amount of such a decrease in value, because it
is not known at this time what the net asset value per share will be at the
Expiration Date, such dilution could be substantial. For example, assuming that
all Rights are exercised and that the Subscription Price of $____ is ___% below
the Fund's then net asset value per share, the Fund's net asset value per share
would be reduced by approximately $___ per share.
THE FUND
The Fund, incorporated in Maryland on March 31, 1994, is a non-diversified,
closed-end management investment company registered under the 1940 Act. The
Fund's Common Stock is traded on the New York Stock Exchange under the symbol
"GGT."
The Fund had no operations prior to November 15, 1994, other than the sale
of 10,000 shares of Common Stock for $100,000 to The Gabelli Equity Trust Inc.
On November 15, 1994, The Gabelli Equity Trust Inc. contributed $64,382,764 in
exchange for 8,587,702 shares of the Fund and immediately thereafter distributed
to its stockholders all the shares it held of the Fund. The Fund's investment
operations commenced on November 15, 1994.
The Fund's primary investment objective is long-term growth of capital. The
Fund seeks to achieve its objective by investing primarily in common stock and
other securities of foreign and domestic companies involved in the
telecommunications, media, publishing and entertainment industries. Income is
the secondary investment objective of the Fund. Under normal market conditions,
the Fund will invest at least 65% of its total assets in common stock and other
securities of companies in the telecommunications, media, publishing and
entertainment industries.
USE OF PROCEEDS
The net proceeds of the Offer, assuming all Shares offered hereby are sold,
are estimated to be approximately $_____, after deducting expenses payable by
the Fund estimated at approximately $601,000. The Investment Adviser anticipates
that investment of such proceeds, in accordance with the Fund's investment
objectives and policies, will be invested promptly as investment opportunities
are identified, depending on market conditions and the availability of
appropriate securities, but in no event will such investment take longer than
six months. Pending such investment in accordance with the Fund's investment
objectives and policies, the proceeds will be held in obligations of the United
States Government, its agencies or instrumentalities ("U.S. Government
Securities") and other short-term money market instruments.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Investors should consider the following special considerations associated
with an exercise of Rights and an additional investment in the Fund.
Industry Risks
The Fund invests a significant portion of its assets in particular types of
companies, and, as a result, the value of the Fund's shares is more susceptible
to factors affecting those particular types of companies, including governmental
regulation, a greater price volatility than the overall market, rapid
obsolescence of products and services, intense competition and strong market
reactions to technological developments.
Various types of ownership restrictions are imposed by the Federal
Communications Commission ("FCC") on investments 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.
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For example, the FCC's broadcast multiple ownership rules, which apply to
the radio and television industries, provide that investment advisers are deemed
to have an "attributable" interest whenever the adviser has the right to
determine how more than five percent of the issued and outstanding voting stock
of a broadcast licensee may be voted. These same broadcast rules prohibit the
holding of an attributable interest, on a nationwide basis, in more than twenty
AM radio broadcast stations, twenty FM radio broadcast stations or twelve
television stations. Similar types of restrictions apply to the mass media and
common carrier industries.
The attributable interest that results from the role of the Investment
Adviser and its principals in connection with other funds, managed accounts and
companies may limit the investments of the Fund.
Pending legislation regarding the telecommunications industry proposes to
liberalize, among other things, existing national ownership limits and
cross-ownership rules.
Smaller Companies
While the Fund intends to focus on the securities of established suppliers
of accepted products and services, the Fund may invest in smaller companies
which may benefit from the development of new products and services. These
smaller companies may present greater opportunities for capital appreciation,
and may also involve greater investment risk than large, established issuers.
For example, smaller companies may have limited product lines, market or
financial resources, and their securities may trade less frequently and in lower
volume than the securities of larger, more established companies. As a result,
the prices of the securities of such smaller companies may fluctuate to a
greater degree than the price of securities of other issuers.
Long-Term Objective
The Fund is intended for investors seeking long-term capital growth. The
Fund is not meant to provide a vehicle for those who wish to play short-term
swings in the stock market. An investment in shares of the Fund should not be
considered a complete investment program. Each stockholder should take into
account the stockholder's investment objectives as well as the stockholders'
other investments when considering whether or not to participate in the Offer.
Non-Diversified Status
The Fund is classified as a "non-diversified" investment company under the
1940 Act, which means the Fund is not limited by the 1940 Act in the proportion
of its assets that may be invested in the securities of a single issuer.
However, the Fund has in the past conducted and intends to conduct its
operations so as to qualify as a "regulated investment company" for purposes of
the Code, which will relieve it of any liability for federal income tax to the
extent its earnings are distributed to stockholders. See "Taxation." To so
qualify, among other requirements, the Fund will limit its investments so that,
at the close of each quarter of the taxable year, (i) not more than 25% of the
market value of its total assets will be invested in the securities of a single
issuer, and (ii) at least 50% of the market value of its assets is represented
by cash, securities of other regulated investment companies, U.S. Government
Securities and other securities, with such other securities limited, in respect
of any one issuer, to an amount not greater than 5% of its assets and not
greater than 10% of the outstanding voting securities of such issuer. The
investments of the Fund in U.S. Government Securities are not subject to these
limitations. Because the Fund, as a non-diversified investment company, may
invest in the securities of individual issuers to a greater degree than a
diversified investment company, an investment in the Fund may, under certain
circumstances, present greater risk to an investor than an investment in a
diversified company.
Lower Rated Securities
The Fund may invest up to 10% of its total assets in fixed-income
securities rated in the lower rating categories of recognized statistical rating
agencies, such as securities rated "CCC" or lower by Standard & Poor's
Corporation or "Caa" or lower by Moody's Investors Service, Inc., or non-rated
securities of comparable quality. These debt securities are predominantly
speculative and involve major risk exposure to adverse conditions and are often
referred to in the financial press as "junk bonds."
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The Fund may invest in securities of issuers in default. The Fund will
invest in securities of issuers in default only when the Investment Adviser
believes that such issuers will honor their obligations or emerge from
bankruptcy protection and the value of these securities will appreciate. By
investing in securities of issuers in default, the Fund bears the risk that
these issuers will not continue to honor their obligations or emerge from
bankruptcy protection or that the value of these securities will not appreciate.
For a further description of lower rated securities and the risks
associated therewith, see "Investment Objectives and Policies -- Investment
Practices" in the SAI. For a description of the ratings categories of certain
recognized statistical ratings agencies, see Appendix A.
Temporary Investments
During temporary defensive periods the Fund may invest in U.S. Government
Securities and in money market mutual funds not affiliated with the Investment
Adviser that invest in those securities. Certain U.S. Government Securities,
such as the Government National Mortgage Association, are supported by the "full
faith and credit" of the U.S. Government; others, such as those of the
Export-Import Bank of the U.S., are supported by the right of the issuer to
borrow from the U.S. Treasury; others, such as those of the Federal National
Mortgage Association, are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; and still others, such as those
of the Student Loan Marketing Association, are supported only by the credit of
the issuing instrumentality. No assurance can be given that the U.S. Government
would provide financial support to U.S. Government-sponsored instrumentalities
if it is not obligated to do so by law. For a further description of such
investments, see "Investment Objectives and Policies -- Investment Practices" in
the SAI.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with banks,
registered broker-dealers and government securities dealers approved by the
Board of Directors. The Fund bears a risk of loss in the event that the other
party to a repurchase agreement defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period in which it seeks to assert these
rights. For a further description of such transactions, see "Investment
Objectives and Policies -- Certain Practices -- Repurchase Agreements."
Foreign Securities
There is no limitation on the amount of foreign securities in which the
Fund may invest. Investing in securities of foreign companies and foreign
governments, which generally are denominated in foreign currencies, may involve
certain risk and opportunity considerations not typically associated with
investing in domestic companies and could cause the Fund to be affected
favorably or unfavorably by changes in currency exchange rates, revaluations of
currencies and the restrictions on, and costs associated with, the exchange of
currencies. In addition, less information may be available about foreign
companies and foreign governments than about domestic companies and foreign
companies and foreign governments generally are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to domestic companies.
Foreign securities and their markets may not be as liquid as U.S. securities and
their markets. Securities of some foreign companies may involve greater market
risk than securities of U.S. companies. Investment in foreign securities may
result in higher expenses than investing in domestic securities because of the
payment of fixed brokerage commissions on foreign exchanges, which generally are
higher than commissions on U.S. exchanges, and the imposition of transfer taxes
or transaction charges associated with foreign exchanges. Investment in foreign
securities may also be subject to local economic or political risks, including
instability of some foreign governments, the possibility of currency blockage or
the imposition of withholding taxes on dividend or interest payments, and the
potential for expropriation, nationalization or confiscatory taxation and
limitations on the use or removal of funds or other assets. There may also be
greater difficulty in respect of the Fund's ability to protect and enforce its
rights in certain foreign countries. For a further description of the Fund's
investments in foreign securities, see "Investment Objectives and Policies --
Certain Practices -- Foreign Securities."
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Futures Transactions
The Fund may enter into certain futures contracts or options on futures
contracts. Futures and options on futures entail certain risks, including but
not limited to the following: no assurance that futures contracts or options on
futures can be offset at favorable prices, possible reduction of the yield of
the Fund 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 fluctuations, imperfect correlation between the contracts
and the securities being hedged, losses from investing in futures transactions
that are potentially unlimited and the segregation requirements for such
transactions. For a further description, see "Investment Objectives and Policies
-- Investment Practices" in the SAI.
Forward Currency Transactions
The Fund may for hedging purposes enter into forward currency contracts.
The use of forward currency contracts may involve certain risks, including the
failure of the counter party to perform its obligations under the contract, and
that such use may not serve as a complete hedge because of an imperfect
correlation between movements in the prices of the contracts and the prices of
the currencies hedged or used for cover. The Fund will only enter into forward
currency contracts with parties which it believes to be creditworthy
institutions. For a further description of such investments, see "Investment
Objectives and Polices -- Investment Practices" in the SAI.
Market Value and Net Asset Value
Shares of closed-end investment companies frequently trade at a discount
from net asset value. This characteristic of shares of a closed-end fund is a
risk separate and distinct from the risk that the Fund's net asset value will
decrease. The risk of purchasing shares of a closed-end fund that might trade at
a discount is more pronounced for investors who wish to sell their shares in a
relatively short period of time because for those investors, realization of a
gain or loss on their investments is likely to be more dependent upon the
existence of a premium or discount than upon portfolio performance. Although the
Fund's shares have at times traded in the market above net asset value, since
the commencement of the Fund's operations the Fund's shares have generally
traded in the market at a discount to net asset value. The Fund's shares are not
subject to redemption. Investors desiring liquidity may, subject to applicable
securities laws, trade their shares in the Fund on any exchange where such
shares are then trading at current market value, which may differ from the then
current net asset value. For information concerning the trading history of the
Fund's shares, see "Common Stock."
Dependence on Key Personnel
The Investment Adviser is dependent upon the expertise of Mr. Mario J.
Gabelli in providing advisory services with respect to the Fund's investments.
There is no contract of employment between the Investment Adviser and Mr.
Gabelli. If the Investment Adviser were to lose the services of Mr. Gabelli, its
ability to service the Fund could be adversely affected. There can be no
assurance that a suitable replacement could be found for Mr. Gabelli in the
event of his death, resignation, retirement or inability to act on behalf of the
Investment Adviser.
INVESTMENT OBJECTIVES AND POLICIES
Investment Objectives
The Fund's primary investment objective is long-term growth of capital by
investing primarily in the common stock and other securities of foreign and
domestic companies involved in the telecommunications, media, publishing and
entertainment industries. Income is the secondary investment objective. The
investment objectives of long-term growth of capital and income are fundamental
policies of the Fund. The Fund's policy of concentration in companies in the
communications industries is also a fundamental policy of the Fund. These
fundamental policies and the investment limitations described in the SAI under
the caption "Investment Restrictions" cannot be changed without the approval of
the holders of a majority of the Fund's outstanding voting securities. As used
herein, a "majority of the Fund's outstanding voting securities" means the
lesser of (i) 67% of the shares of the Fund's Common Stock represented at a
meeting at which more than 50% of the outstanding shares of the Fund's Common
Stock are represented, whether in person or by proxy, or (ii) more than 50% of
the outstanding shares of Common Stock. No assurance can be given that the
Fund's investment objectives will be achieved.
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Under normal market conditions, the Fund will invest at least 65% of its
total assets in common stock and other securities of companies in the
telecommunications, media, publishing and entertainment industries. Such
multimedia businesses are often involved 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.
The telecommunications companies in which the 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 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 prerecorded music, feature-length motion
pictures, made-for-TV movies, television series, documentaries, animation, game
shows, sports programming and news programs; live events such as professional
sporting events or concerts, theatrical exhibitions, television and radio
broadcasting via VHF, UHF, satellite and microwave transmission, cable
television systems and programming broadcast and cable networks, wireless cable
television and other emerging distribution technologies, home video, interactive
and multimedia programming including home shopping and multiplayer games;
publishing, including newspapers, magazines and books, advertising agencies and
niche advertising mediums such as in-store or direct mail, emerging technologies
combining television, telephone and computer systems, computer hardware and
software, and equipment used in the creation and distribution of entertainment
programming such as that required in the provision of broadcast, cable or
telecommunications services.
Under normal circumstances the Fund will invest in securities of issuers
located in at least three countries, which may include the United States.
Investing in securities of foreign issuers, which generally are denominated in
foreign currencies, may involve certain risk and opportunity considerations not
typically associated with investing in domestic companies and could cause the
Fund to be affected favorably or unfavorably by changes in currency exchange
rates and revaluations of currencies. For a further discussion of the risks
associated with investing in foreign securities and a description of other risks
inherent in the Fund's investment objectives and policies, see "Risk Factors and
Special Considerations."
The Investment Adviser believes that at the present time investment by the
Fund in the securities of companies located throughout the world presents great
potential for accomplishing the Fund's investment objectives. While the
Investment Adviser expects that a substantial portion of assets may be invested
in the securities of domestic companies, a significant portion of the Fund's
portfolio may also be comprised of the securities of issuers headquartered
outside the United States.
Investment Methodology of the Fund
In selecting securities for the Fund, the Investment Adviser normally will
consider the following factors, among others: (1) the Investment Adviser's own
evaluations of the private market value, cash flow, earnings per share and other
fundamental aspects of the underlying assets and business of the company; (2)
the potential for capital appreciation of the securities; (3) the interest or
dividend income generated by the securities; (4) the prices of the securities
relative to other comparable securities; (5) whether the securities are entitled
to the benefits of call protection or other protective covenants; (6) the
existence of any anti-dilution protections or guarantees of the security; and
(7) the diversification of the portfolio of the Fund as to issuers. The
Investment Adviser's investment philosophy with respect to equity securities
seeks to identify assets that are selling in the public market at a discount to
their private market value, which the Investment Adviser defines as the value
informed purchasers are willing to pay to acquire assets with similar
characteristics. The Investment Adviser also normally evaluates the issuers'
free cash flow and long-term earnings trends. Finally, the Investment Adviser
looks for a catalyst -- something in the company's industry or indigenous to the
company or country itself that will surface additional value.
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Certain Practices
Foreign Securities. There is no limitation on the amount of foreign
securities in which the Fund may invest. Among the foreign securities in which
the Fund may invest are those issued by companies located in developing
countries, which are countries in the initial stages of their industrialization
cycles. Investing in the equity and debt markets of developing countries
involves exposure to economic structures that are generally less diverse and
less mature, and to political systems that can be expected to have less
stability, than those of developed countries. The markets of developing
countries historically have been more volatile than the markets of the more
mature economies of developed countries, but often have provided higher rates of
return to investors. The Fund may also invest in debt securities of foreign
governments.
Temporary Investments. Although under normal market conditions at least 65%
of the Fund's assets will consist of common stock and other securities of
foreign and domestic companies involved in the telecommunications, media,
publishing and entertainment industries, when a temporary defensive posture is
believed by the Investment Adviser to be warranted ("temporary defensive
periods"), the Fund may without limitation hold cash or invest its assets in
money market instruments and repurchase agreements in respect of those
instruments. The Fund may also invest up to 10% of the market value of its total
assets during temporary defensive periods in shares of money market mutual funds
that invest primarily in U.S. Government Securities and repurchase agreements in
respect of those securities. For a further description of such transactions, see
"Investment Objectives and Policies -- Investment Practices" in the SAI.
Repurchase Agreements. The Fund may engage in repurchase agreement
transactions involving money market instruments with banks, registered
broker-dealers and government securities dealers approved by the Board of
Directors. The Fund will not enter into repurchase agreements with the
Investment Adviser or any of its affiliates. Under the terms of a typical
repurchase agreement, the Fund would acquire an underlying debt obligation for a
relatively short period (usually not more than one week) subject to an
obligation of the seller to repurchase, and the Fund to resell, the obligation
at an agreed price and time, thereby determining the yield during its holding
period. Thus, repurchase agreements may be seen to be loans by the Fund
collateralized by the underlying debt obligation. This arrangement results in a
fixed rate of return that is not subject to market fluctuations during the
holding period. The value of the underlying securities will be at least equal at
all times to the total amount of the repurchase obligation, including interest.
The Fund bears a risk of loss in the event that the other party to a repurchase
agreement defaults on its obligations and the Fund is delayed in or prevented
from exercising its rights to dispose of the collateral securities, including
the risk of a possible decline in the value of the underlying securities during
the period in which it seeks to assert these rights. The Investment Adviser,
acting under the supervision of the Fund's Board of Directors, reviews the
creditworthiness of those banks and dealers with which the Fund enters into
repurchase agreements to evaluate these risks and monitors on an ongoing basis
the value of the securities subject to repurchase agreements to ensure that the
value is maintained at the required level.
Other Investments. The Fund is permitted to invest in special situations,
options and futures contracts, engage in forward currency transactions and enter
into forward commitments for the purchase or sale of securities, including on a
"when issued" or "delayed delivery" basis, and the Fund may make short sales of
securities. See the SAI for a discussion of these investments and techniques and
the risks associated with them.
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MANAGEMENT OF THE FUND
Directors and Officers
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors, and the day to day operations of the Fund are
conducted through or under the direction of the officers of the Fund. Although
the Fund is a Maryland corporation, Karl Otto Pohl, one of its Directors, is a
resident of Germany, and substantially all of his assets are located outside of
the United States. Mr. Pohl has not authorized an agent for service of process
in the United States. Consequently, it may be difficult for investors to effect
service of process upon him within the United States or to enforce, in United
States courts, judgments against him obtained in such courts predicated on the
civil liability provisions of the United States securities laws. In addition,
there is doubt as to the enforceability in German courts of liabilities
predicated solely upon the United States securities laws, whether or not such
liabilities are based upon judgments of courts in the United States. For certain
information regarding the Directors and officers of the Fund, see "Management of
the Fund" in the SAI.
Investment Adviser
Gabelli Funds, Inc., a New York corporation, with offices at One Corporate
Center, Rye, New York 10580-1434, is investment adviser to the Fund. The
Investment Adviser was organized in 1980 and as of July 31, 1995, is a
registered investment adviser to fourteen management companies with aggregate
net assets of $4.0 billion. GAMCO Investors, Inc., a wholly owned subsidiary of
the Investment Adviser, acts as investment adviser for individuals, pension
trusts, profit sharing trusts and endowments, having aggregate assets in excess
of $4.90 billion under its management as of July 31, 1995. Mr. Mario J. Gabelli
may be deemed a "controlling person" of the Investment Adviser and each of its
subsidiaries on the basis of his ownership of stock of the Investment Adviser.
The Investment Adviser has sole investment discretion for the Fund with
respect to the Fund's portfolio under the supervision of the Fund's Board of
Directors and in accordance with the Fund's stated policies. The Investment
Adviser will select investments for the Fund and will place purchase and sale
orders on behalf of the Fund. For its services, the Investment Adviser is paid a
fee computed daily and paid monthly at an annual rate of 1.00% of the average
weekly net assets of the Fund. For additional information regarding the
Investment Adviser, see "Management of the Fund -- Investment Advisory and
Administrative Arrangements" in the SAI.
Portfolio Management
Mario J. Gabelli, who is Chairman of the Board, Chief Executive Officer and
Chief Investment Officer of the Investment Adviser, has managed the Fund's
assets since its inception. For a more detailed description of Mr. Gabelli's
business experience during the past five years, see "Management of the Fund --
Directors and Officers" in the SAI.
Sub-Administrator
The Investment Adviser has certain administrative responsibilities to the
Fund under its advisory agreement with the Fund. The Investment Adviser has
retained Furman Selz Incorporated as Sub-Administrator to provide certain
administrative services necessary for the Fund's operations but which do not
concern the investment advisory and portfolio management services provided by
the Investment Adviser. These services include the preparation and distribution
of materials for meetings of the Fund's Board of Directors, compliance testing
of the Fund's activities and assistance in the preparation of proxy statements,
reports to stockholders and other documentation. For such services and the
related expenses borne by the Sub-Administrator, the Investment Adviser pays the
Sub-Administrator a monthly fee at the annual rate of .10% of the average daily
net assets of the Fund (with a minimum annual fee of $40,000 and subject to
reduction to (i) .075% if the total aggregate assets managed by the Investment
Adviser and administered by the Sub-Administrator exceed $350 million and (ii)
.06% if such assets exceed $600 million) which, together with the services to be
rendered, is subject to negotiation between the parties. Both parties retain the
right unilaterally to terminate the arrangement on 60 days' written notice. The
Sub-Administrator has its principal office at 230 Park Avenue, New York, New
York 10169.
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Payment of Expenses
For purposes of the calculation of the fees payable to the Investment
Adviser by the Fund, average weekly net assets of the Fund are determined at the
end of each month on the basis of its average net assets for each week during
the month. The assets for each weekly period are determined by averaging the net
assets at the end of a week with the net assets at the end of the prior week.
The Investment Adviser will be obligated to pay expenses associated with
providing the services contemplated by the Advisory Agreement including
compensation of and office space for its officers and employees connected with
investment and economic research, trading and investment management and
administration of the Fund, as well as the fees of all Directors of the Fund who
are affiliated with the Investment Adviser or any of its affiliates. The Fund
pays all other expenses incurred in its operation including, among other things,
expenses for legal and independent accountants' services, costs of printing
proxies, stock certificates and shareholder reports, charges of the custodian,
any subcustodian and transfer and dividend paying agent, expenses in connection
with the Plan, Commission fees, fees and expenses of unaffiliated Directors,
accounting and pricing costs, membership fees in trade associations, fidelity
bond coverage for its officers and employees, Directors' and officers' errors
and omission insurance coverage, interest, brokerage costs, taxes, stock
exchange listing fees and expenses, expenses of qualifying its shares for sale
in various states, litigation and other extraordinary or non-recurring expenses,
and other expenses properly payable by the Fund.
PORTFOLIO TRANSACTIONS
Principal transactions are not entered into with affiliates of the Fund.
However, Gabelli & Company, Inc., an affiliate of the Investment Adviser, may
execute transactions in the over-the-counter markets on an agency basis and
receive a stated commission therefrom. For a more detailed discussion of the
Fund's brokerage allocation practice, see the SAI under "Portfolio
Transactions."
DIVIDENDS AND DISTRIBUTIONS; AUTOMATIC DIVIDEND
REINVESTMENT AND VOLUNTARY CASH PURCHASE PLAN
The Fund distributes substantially all of its annual net investment income
and capital gains to stockholders at year end. The dividend policy of the Fund
may be modified from time to time by the Board of Directors. As a regulated
investment company under the Code, the Fund will not be subjected to U.S.
federal income tax on its investment company taxable income that it distributes
to stockholders, provided that at least 90% of its taxable income for the
taxable year is distributed to its stockholders.
Under the Automatic Dividend Reinvestment and Voluntary Cash Purchase Plan
adopted by the Fund, a stockholder whose Common Stock is registered in his own
name will have all distributions reinvested automatically by State Street Bank
and Trust Company ("State Street"), which is agent under the Plan, unless the
stockholder elects to receive cash and has so instructed State Street either in
writing at the address set forth below or by telephone at (800) 336-6983.
Distributions with respect to shares registered in the name of a broker-dealer
or other nominee (that is, in "street name") will be reinvested by the broker or
nominee in additional shares under the Plan, unless the service is not provided
by the broker or nominee or the stockholder elects to receive distributions in
cash. Under the Plan, whenever the market price of the Common Stock is equal to
or exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividend or capital
gains distribution, participants in such plan are issued shares of Common Stock,
valued at the greater of (i) the net asset value as most recently determined or
(ii) 95% of the then current market price of the Common Stock. If the net asset
value of the Common Stock at the time of valuation exceeds the market price of
the Common Stock, participants will receive shares from the Fund, valued at
market price. If the Fund should declare a dividend or capital gains
distribution payable only in cash, State Street will, as agent for the
participants, buy Fund shares in the open market, on the New York Stock Exchange
or elsewhere, for the participants' accounts, except that State Street will
endeavor to terminate purchases in the open market and cause the Fund to issue
shares at net asset value if, following the commencement of such purchases, the
market value of the Common Stock exceeds net asset value.
Participants in the Plan have the option of making additional cash payments
to State Street, semi-annually, for investment in the shares as applicable. Such
payments may be made in any amount from $250 to $3,000.
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There is no charge to participants for reinvesting dividends or capital
gains distributions payable in either stock or cash. State Street's fees for
handling the reinvestment of such dividends and capital gains distributions are
paid by the Fund. There are no brokerage charges with respect to shares issued
directly by the Fund, as a result of dividends or capital gains distributions
payable in stock or in cash. However, each participant bears a pro rata share of
brokerage commissions incurred with respect to State Street's open market
purchases in connection with the reinvestment of dividends or capital gains
distributions.
With respect to purchases from voluntary cash payments, State Street will
charge $0.75 for each such purchase for a participant, plus a pro rata share of
the brokerage commissions. A fee of $2.50 is charged in connection with the sale
of shares that are held in book-entry form, such as shares of Common Stock held
by a stockholder through the Plan. Commissions may also be charged on such
transactions.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income tax which may be payable on such dividends or
distributions.
All correspondence concerning the Plan should be directed to State Street
at P.O. Box 8200, Boston, Massachusetts 02266-8200. For a further description of
the Plan, see "Automatic Dividend Reinvestment and Voluntary Cash Purchase Plan"
in the SAI.
TAXATION
Taxation
The Fund has qualified, and intends to continue to qualify, each year as a
"regulated investment company" under the Code. Accordingly, the Fund will not be
liable for federal income taxes to the extent its taxable net investment income
and net realized capital gain, if any, are distributed to stockholders, provided
that at least 90% of its investment company taxable income (i.e., 90% of the
taxable income minus the excess, if any, of its net realized long-term capital
gain over its net realized short-term capital loss (including any capital loss
carryovers) plus or minus certain other adjustments as specified in section 852
of the Code) for the taxable year is distributed to stockholders. The Fund will
be subject to tax at regular corporate rates on any income or gains that it does
not distribute. Furthermore, the Fund is subject to a 4% nondeductible federal
excise tax on certain undistributed amounts of ordinary income and capital
gains. The Fund intends to make such distributions as are necessary to avoid the
application of this excise tax.
The Fund reserves the right, but does not currently intend, to retain for
reinvestment net long-term gains in excess of net short-term capital losses and
the Fund will be subject to a corporate tax (currently at a rate of 35%) on the
retained amount, if any. The Fund would designate such retained amounts as
undistributed capital gains. As a result, such amounts would be taxed to
stockholders as long-term capital gains and stockholders would be able to claim
their proportionate shares of the federal income taxes paid by the Fund on such
gains as a credit against their own federal income tax liabilities, and would be
entitled to increase the adjusted tax basis of their shares of the Fund by 65%
of their undistributed capital gains and their tax credit. Qualified pension and
profit sharing funds, certain trusts and other organizations or persons not
subject to federal income tax on capital gains and certain non-resident alien
individuals and foreign corporations would be entitled to a refund of their pro
rata share of such taxes paid by the Fund upon filing appropriate returns or
claims for refund with the proper tax authorities. Failure by such entities and
their sponsors or responsible fiduciaries to properly account for such refund
could result in adverse federal income tax consequences.
The Fund sends its written statements and notices to its respective
stockholders regarding the tax status of all dividends and distributions made
during each calendar year.
Dividend and capital gain distributions may also be subject to state and
local taxes. Stockholders are urged to consult their attorneys or tax advisors
regarding specific questions as to federal, state or local taxes. Non-U.S.
stockholders are urged to consult their own tax advisors concerning the
applicability of the United States withholding tax. For a more detailed
discussion of tax matters affecting the Fund and its stockholders, see
"Taxation" in the SAI.
24
<PAGE>
COMMON STOCK
The Fund, which was incorporated under the laws of the State of Maryland on
March 31, 1994, is authorized to issue 200,000,000 shares of Common Stock, par
value $.001 per share. Each share has equal voting, dividend, distribution and
liquidation rights. The shares outstanding are fully paid and non-assessable.
Shares of the Common Stock are not redeemable and have no preemptive, conversion
or cumulative voting rights.
Set forth below is information with respect to the Fund Common Stock as of
August 1, 1995.
Amount Held by Fund for
Amount Authorized Its Own Account Amount Outstanding
----------------- ------------------------ ------------------
200,000,000 shares 0 shares 8,607,411 shares
The Fund's shares are listed and traded on the New York Stock Exchange
under the symbol "GGT." The average weekly trading volume of the Common Stock on
the New York Stock Exchange for the period from November 15, 1994 (commencement
of the Fund's operations) through December 31, 1994 was 8,141 shares. The
following table sets forth for the quarters indicated the high and low closing
prices on the New York Stock Exchange per share of the Common Stock and the net
asset value and the premium or discount from net asset value at which the Common
Stock was trading, expressed as a percentage of net asset value, at each of the
high and low closing prices provided.
Premium or Discount
Market Price(1) Net Asset Value(2) As % of NAV
---------------- ------------------ -------------------
Quarter Ended High Low High Low High Low
------------- ---- --- ---- --- ---- ---
12/31/94* ........ $8.125 $ 7.00 $7.50 $7.48 8.33% -6.54%
03/31/95 ......... $8.125 $6.875 $7.50 $7.68 8.33% -10.37%
06/30/95 ......... $7.625 $ 7.00 $7.95 $7.89 -4.09% -11.28%
09/30/95** ....... $7.875 $7.375 $8.24 $8.11 -4.43% -9.06%
----------
(1) As reported on the New York Stock Exchange.
(2) Based on the Fund's computations.
* The Fund commenced operations on November 15, 1994.
** Through August 1, 1995.
Repurchase of Shares
The Fund is a closed-end, management investment company and as such its
stockholders do not, and will not, have the right to redeem its shares. The
Fund, however, may repurchase its shares from time to time as and when it deems
such a repurchase advisable. Such repurchases may be made when the Fund's shares
are trading at a discount of 10% or more (or such other percentage as the Board
of Directors of the Fund may determine from time to time) from the net asset
value of the shares. Pursuant to the 1940 Act, the Fund may repurchase its
shares on a securities exchange (provided that the Fund has informed its
stockholders within the preceding six months of its intention to repurchase such
shares) or as otherwise permitted in accordance with Rule 23c-1 under the 1940
Act. Under that Rule, certain conditions must be met regarding, among other
things, distribution of net income for the preceding fiscal year, identity of
the seller, price paid, brokerage commissions, prior notice to stockholders of
an intention to purchase shares and purchasing in a manner and on a basis which
does not discriminate unfairly against the other stockholders through their
interest in the Fund.
The Fund may incur debt, in an amount not exceeding 10% of its total
assets, to finance share repurchase transactions. See "Investment Restrictions"
in the SAI. Any gain in the value of the investments of the Fund during the term
of the borrowing that exceeds the interest paid on the amount borrowed would
cause the net asset value of its shares to increase more rapidly than in the
absence of borrowing. Conversely, any decline in the value of the investments of
the Fund would cause the net asset value of its shares to decrease more rapidly
than in the absence of borrowing. Borrowing money thus creates an opportunity
for greater capital gain but at the same time increases exposure to capital
risk.
25
<PAGE>
When the Fund repurchases its shares for a price below their net asset
value, the net asset value of those shares that remain outstanding will be
enhanced, but this does not necessarily mean that the market price of those
outstanding shares will be affected, either positively or negatively. Further,
interest on borrowings to finance share repurchase transactions will reduce the
net income of the Fund.
The Fund does not currently have an established tender offer program or
established schedule for considering tender offers. No assurance can be given
that the Board of Directors of the Fund will decide to undertake any such tender
offers in the future, or, if undertaken, that they will reduce any market
discount.
Although the Fund's shares have at times traded in the market above net
asset value, since the commencement of the Fund's operations, the Fund's shares
have generally traded in the market at a discount to net asset value.
For the net asset value per share and the reported sales price of a share
of the Fund's Common Stock on the New York Stock Exchange as of a recent date,
see "The Offer -- Subscription Price."
Certain Provisions of the Articles of Incorporation and Bylaws
The Fund presently has provisions in its Articles of Incorporation and
By-Laws (together, in each case, its "Governing Documents") which could have the
effect of limiting, in each case, (i) the ability of other entities or persons
to acquire control of the Fund, (ii) the Fund's freedom to engage in certain
transactions, or (iii) the ability of the Fund's Directors or stockholders to
amend the Governing Documents or effectuate changes in the Fund's management.
These provisions of the Governing Documents of the Fund may be regarded as
"anti-takeover" provisions. The Board of Directors of the Fund is divided into
three classes, each having a term of no more than three years. Each year the
term of one class of Directors will expire. Accordingly, only those Directors in
one class may be changed in any one year, and it would require two years to
change a majority of the Board of Directors. Such system of electing Directors
may have the effect of maintaining the continuity of management and, thus, make
it more difficult for the stockholders of the Fund to change the majority of
Directors. See "Management of the Fund" in the SAI. A Director of the Fund may
be removed with or without cause by a vote of a majority of the votes entitled
to be cast for the election of Directors of the Fund. In addition, the
affirmative vote of the holders of 66 2/3% of its outstanding shares is required
to authorize the conversion of the Fund from a closed-end to an open-end
investment company or generally to authorize any of the following transactions:
(i) merger or consolidation of the Fund with or into any other
corporation;
(ii) issuance of any securities of the Fund to any person or entity for
cash;
(iii) sale, lease or exchange of all or any substantial part of the assets
of the Fund to any entity or person (except assets having an
aggregate fair market value of less than $1,000,000); or
(iv) sale, lease or exchange to the Fund, in exchange for securities of
the Fund, of any assets of any entity or person (except assets having
an aggregate fair market value of less than $1,000,000);
if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of more than 5% of the outstanding shares of
the Fund. However, such vote would not be required when, under certain
conditions, the Board of Directors approves the transaction. Reference is made
to the Governing Documents of the Fund, on file with the Commission; for the
full text of these provisions, see "Further Information."
The provisions of the Governing Documents described above could have the
effect of depriving the owners of shares in the Fund of opportunities to sell
their shares at a premium over prevailing market prices, by discouraging a third
party from seeking to obtain control of the Fund in a tender offer or similar
transaction. The overall effect of these provisions is to render more difficult
the accomplishment of a merger or the assumption of control by a principal
stockholder. The Board of Directors has determined that the foregoing voting
requirements, which are generally greater than the minimum requirements under
Maryland law and the 1940 Act, are in the best interests of the stockholders
generally.
26
<PAGE>
CUSTODIAN AND TRANSFER, DIVIDEND DISBURSING AGENT AND REGISTRAR
State Street, located at 225 Franklin Street, Boston, Massachusetts 02110,
serves as the custodian of the Fund's assets pursuant to a custody agreement.
Under the custody agreement, State Street holds the Fund's assets in compliance
with the 1940 Act. For its custody services, State Street will receive a monthly
fee based upon the average weekly value of the total assets of the Fund, plus
certain charges for securities transactions.
State Street also serves as the Fund's dividend disbursing agent, as agent
under the Fund's Plan and as transfer agent and registrar for shares of the
Fund.
LEGAL MATTERS
With respect to matters of United States law, the validity of the shares
offered hereby will be passed on for the Fund by Willkie Farr & Gallagher, New
York, New York. Willkie Farr & Gallagher also serves as counsel to the
Investment Adviser. Counsel for the Fund will rely, as to matters of Maryland
law, on Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
EXPERTS
The financial statements of the Fund as of December 31, 1994 have been
incorporated by reference into the SAI in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of that firm as
experts in accounting and auditing. Price Waterhouse LLP is located at 1177
Avenue of the Americas, New York, New York 10036.
FURTHER INFORMATION
The Fund is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports, proxy statements
and other information with the Commission. Such reports, proxy statements and
other information filed by the Fund can be inspected and copied at public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New York, New York
10048; and 500 West Madison Street, Chicago, Illinois 60661. The Fund's Common
Stock is listed on the New York Stock Exchange. Reports, proxy statements and
other information concerning the Fund can be inspected and copied at the Library
of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form N-2
(together with the SAI and all the exhibits and the appendix thereto, the
"Registration Statement") filed by the Fund with the Commission under the
Securities Act and the 1940 Act. This Prospectus and the SAI do not contain all
of the information set forth in the Registration Statement. Reference is hereby
made to the Registration Statement and related exhibits for further information
with respect to the Fund and the Shares offered hereby. Statements contained
herein concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the Commission.
27
<PAGE>
TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION
Page
----
Investment Objectives and Policies ........................................ 1
Investment Restrictions ................................................... 6
Management of the Fund .................................................... 7
Portfolio Transactions .................................................... 11
Automatic Dividend Reinvestment and Voluntary Cash Purchase Plan .......... 12
Taxation .................................................................. 13
Net Asset Value ........................................................... 15
Beneficial Owner .......................................................... 16
Financial Statements ...................................................... 16
28
<PAGE>
APPENDIX A
CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.
Aaa Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edge." Interest payments are protected by a large or
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risk
appear somewhat larger than in Aaa Securities.
A Bonds that are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa Bonds that are rated Baa are considered as medium-grade obligations
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba Bonds that are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.Moody's applies numerical modifiers (1, 2, and 3) with
respect to the bonds rated "Aa" through "B." The modifier 1 indicates
that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the company ranks in the lower end of its
generic rating category.
Caa Bonds that are rated Caa are of poor standing. These issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca Bonds that are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C Bonds that are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
STANDARD & POOR'S RATINGS GROUP
AAA This is the highest rating assigned by S&P to a debt obligation and
indicates an extremely strong capacity to pay interest and repay
principal.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from AAA issues only in small degree.
A Principal and interest payments on bonds in this category are regarded
as safe. Debt rated A has a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
A-1
<PAGE>
BBB This is the lowest investment grade. Debt rated BBB has an adequate
capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity
to pay interest and repay principal for debt in this category than in
higher rated categories.
SPECULATIVE GRADE
Debt rated BB, CCC, CC and C are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation, and C the highest degree of
speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major exposures to adverse conditions. Debt rated C1 is reserved for
income bonds on which no interest is being paid and debt rated D is in
payment default.
In July 1994, S&P initiated an "r" symbol to its ratings. The "r"
symbol is attached to derivatives, hybrids and certain other
obligations that S&P believes may experience high variability in
expected returns due to non-credit risks created by the terms of the
obligations.
"AA" to "CCC" may be modified by the addition of a plus or minus sign to show
relative standing within the major categories.
"NR" indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
A-2
<PAGE>
================================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus. If
given or made, such information or representation must not be relied upon as
having been authorized by the Fund or the Fund's investment advisers. This
Prospectus does not constitute an offerto sell or the solicitation of an offer
to buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or the solicitation of an
offer to buy shares of Common Stock by anyone in any jurisdiction in which such
offer or solicitation would be unlawful. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create an
implication that there has been no change in the facts as set forth in the
Prospectus or in the affairs of the Fund since the date hereof.
----------
TABLE OF CONTENTS
Page
----
Prospectus Summary ................................................... 2
Fee Table ............................................................ 6
Financial Highlights ................................................. 7
The Offer ............................................................ 8
The Fund ............................................................. 16
Use of Proceeds ...................................................... 16
Risk Factors and Special Considerations .............................. 16
Investment Objectives and Policies ................................... 19
Managementof the Fund ................................................ 22
Portfolio Transactions ............................................... 23
Dividends and Distributions;
Automatic Dividend Reinvestment and
Voluntary Cash Purchase Plan ....................................... 23
Taxation ............................................................. 24
Common Stock ......................................................... 25
Custodian and Transfer,
Dividend Disbursing Agent and Registrar ............................ 27
Legal Matters ........................................................ 27
Experts .............................................................. 27
Further Information .................................................. 27
Table of Contents of Statement of
Additional Information ............................................. 28
Appendix A ........................................................... A-1
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registation statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion Dated August 7, 1995
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
----------
STATEMENT OF ADDITIONAL INFORMATION
The Gabelli Global Multimedia Trust Inc. (the "Fund") is a
non-diversified, closed-end management investment company that seeks long-term
growth of capital by investing primarily in common stock and other securities of
foreign and domestic companies involved in the telecommunications, media,
publishing and entertainment industries. Income is a secondary investment
objective. It is the policy of the Fund, under normal market conditions, to
invest at least 65% of its total assets in common stock and other securities of
companies in the telecommunications, media, publishing and entertainment
industries.
This Statement of Additional Information ("SAI") is not a prospectus, but
should be read in conjunction with the Prospectus for the Fund dated August __,
1995 (the "Prospectus"). This SAI does not include all information that a
prospective investor should consider before purchasing shares of the Fund, and
investors should obtain and read the Prospectus prior to purchasing shares. A
copy of the Prospectus may be obtained without charge, by calling the Fund at
(800) GABELLI ((800)-422-3554) or (914) 921-5070. This SAI incorporates by
reference the entire Prospectus.
----------
TABLE OF CONTENTS
Page
----
Investment Objectives and Policies ....................................... 1
Investment Restrictions .................................................. 6
Management of the Fund ................................................... 7
Portfolio Transactions ................................................... 11
Automatic Dividend Reinvestment and Voluntary Cash Purchase Plan ......... 12
Taxation ................................................................. 13
Net Asset Value .......................................................... 15
Beneficial Owner ......................................................... 16
Financial Statements ..................................................... 16
----------
The Prospectus and this SAI omit certain of the information contained in
the registration statement filed with the Securities and Exchange Commission,
Washington, D.C. The registration statement may be obtained from the Securities
and Exchange Commission upon payment of the fee prescribed, or inspected at the
Securities and Exchange Commission's office at no charge.
----------
This Statement of Additional Information is dated August , 1995.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Investment Objectives
The Fund's primary investment objective is long-term growth of capital.
Income is a secondary objective. Under normal market conditions, the Fund will
invest at least 65% of its total assets in common stock and other securities of
companies in the telecommunications, media, publishing and entertainment
industries. See "Investment Objectives and Policies" in the Prospectus.
Investment Practices
Special Situations. Subject to the Fund's policy of investing at least 65%
of its total assets in companies involved in the telecommunications, media,
publishing and entertainment industries, the Fund from time to time may invest
in companies that are determined by Gabelli Funds, Inc. (the "Investment
Adviser") to possess "special situation" characteristics. In general, a special
situation company is a company whose securities are expected to increase in
value solely by reason of a development particularly or uniquely applicable to
the company. Developments that may create special situations include, among
others, a liquidation, reorganization, recapitalization or merger, material
litigation, technological breakthrough or new management or management policies.
The principal risk associated with investments in special situation companies is
that the anticipated development thought to create the special situation may not
occur and the investment therefore may not appreciate in value or may decline in
value.
Temporary Investments. Although under normal market conditions at least
65% of the Fund's assets will consist of common stock and other securities of
foreign and domestic companies involved in the telecommunications, media,
publishing and entertainment industries, when a temporary defensive posture is
believed by the Investment Adviser to be warranted ("temporary defensive
periods"), the Fund may hold without limitation cash or invest its assets in
money market instruments and repurchase agreements in respect of those
instruments. The money market instruments in which the Fund may invest are
obligations of the United States government, its agencies or instrumentalities
("U.S. Government Securities"); commercial paper rated A-1 or higher by Standard
& Poor's Corporation ("S&P") or Prime-1 by Moody's Investors Service, Inc.
("Moody's"); and certificates of deposit and bankers' acceptances issued by
domestic branches of U.S. banks that are members of the Federal Deposit
Insurance Corporation. For a description of such ratings, see Appendix A to the
Prospectus. The Fund may also invest up to 10% of the market value of its total
assets during temporary defensive periods in shares of money market mutual funds
that invest primarily in U.S. Government Securities and repurchase agreements in
respect of those securities. Money market mutual funds are investment companies
and the investments by the Fund in those companies are subject to certain other
limitations. See "Investment Restrictions." As a stockholder in a mutual fund,
the Fund will bear its ratable share of the fund's expenses, including
management fees, and will remain subject to payment of the fees to the
Investment Adviser with respect to assets so invested.
Lower Rated Securities. The Fund may invest up to 10% of its total assets
in fixed-income securities rated in the lower rating categories of recognized
statistical rating agencies, such as securities rated "CCC" or lower by S&P or
"Caa" or lower by Moody's, or non-rated securities of comparable quality. These
debt securities are predominantly speculative and involve major risk exposure to
adverse conditions and are often referred to in the financial press as "junk
bonds."
Generally, such lower rated securities and unrated securities of
comparable quality offer a higher current yield than is offered by higher rated
securities, but also (i) will likely have some quality and protective
characteristics that, in the judgment of the rating organizations, are
outweighed by large uncertainties or major risk exposures to adverse conditions
and (ii) are predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
The market values of certain of these securities also tend to be more sensitive
to individual corporate developments and changes in economic conditions than
higher quality bonds. In addition, such lower rated securities and comparable
unrated securities generally present a higher degree of credit risk. The risk of
loss due to default by these issuers is significantly greater because such lower
rated securities and unrated securities of comparable quality generally are
unsecured and frequently are subordinated to the prior payment of senior
indebtedness. In light of these risks, the Investment Adviser, in evaluating the
creditworthiness of an issue, whether rated or unrated, will take various
factors into consideration, which may include, as applicable, the issuer's
financial resources, its sensitivity to economic conditions and trends, the
<PAGE>
operating history of and the community support for the facility financed by the
issue, the ability of the issuer's management and regulatory matters.
In addition, the market value of securities in lower rated categories is
more volatile than that of higher quality securities, and the markets in which
such lower rated or unrated securities are traded are more limited than those in
which higher rated securities are traded. The existence of limited markets may
make it more difficult for the Fund to obtain accurate market quotations for
purposes of valuing its portfolio and calculating its net asset value. Moreover,
the lack of a liquid trading market may restrict the availability of securities
for the Fund to purchase and may also have the effect of limiting the ability of
the Fund to sell securities at their fair value to respond to changes in the
economy or the financial markets.
Lower rated debt obligations also present risks based on payment
expectations. If an issuer calls the obligation for redemption (often a typical
feature of fixed income securities), the Fund may have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
Also, as the principal value of bonds moves inversely with movements in interest
rates, in the event of rising interest rates the value of the securities held by
the Fund may decline proportionately more than a portfolio consisting of higher
rated securities. Investments in zero coupon bonds may be more speculative and
subject to greater fluctuations in value due to changes in interest rates than
bonds that pay interest currently.
The Fund may invest in securities of issuers in default. The Fund will
invest in securities of issuers in default only when the Investment Adviser
believes that such issuers will honor their obligations or emerge from
bankruptcy protection and the value of these securities will appreciate. By
investing in securities of issuers in default, the Fund bears the risk that
these issuers will not continue to honor their obligations or emerge from
bankruptcy protection or that the value of the securities will not appreciate.
In addition to using recognized rating agencies and other sources, the
Investment Adviser also performs its own analysis of issues in seeking
investments that it believes to be underrated (and thus higher-yielding) in
light of the financial condition of the issuer. Its analysis of issuers may
include, among other things, current and anticipated cash flow and borrowing
requirements, value of assets in relation to historical cost, strength of
management, responsiveness to business conditions, credit standing and current
anticipated results of operations. In selecting investments for the Fund, the
Investment Adviser may also consider general business conditions, anticipated
changes in interest rates and the outlook for specific industries.
Subsequent to its purchase by the Fund, an issue of securities may cease
to be rated or its rating may be reduced. In addition, it is possible that
statistical rating agencies might not change their ratings of a particular issue
or reflect subsequent events on a timely basis. None of these events will
require the sale of the securities by the Fund, although the Investment Adviser
will consider these events in determining whether the Fund should continue to
hold the securities.
The market for certain lower rated and comparable unrated securities has
in the past experienced a major economic recession. The recession adversely
affected the value of such securities as well as the ability of certain issuers
of such securities to repay principal and pay interest thereon. The market for
those securities could react in a similar fashion in the event of any future
economic recession.
Options. A call option is a contract that, in return for a premium, gives
the holder of the option the right to buy from the writer of the call option the
security underlying the option at a specified exercise price at any time during
the term of the option. The writer of the call option has the obligation, upon
exercise of the option, to deliver the underlying security upon payment of the
exercise price during the option period. A put option is the reverse of a call
option, giving the holder the right to sell the security to the writer and
obligating the writer to purchase the underlying security from the holder.
A call option is "covered" if the Fund owns the underlying security
covered by the call or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account by its custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is also
covered if the Fund holds a call on the same security as the call written where
the exercise price of the call held is (1) equal to or less than the exercise
price of the call written or (2) greater than the exercise price of the call
written if the difference is maintained by the Fund in cash, U.S. Government
Securities or other high grade short-term obligations in a segregated account
held with its custodian. A put option is "covered" if the Fund maintains cash or
2
<PAGE>
other high grade short-term obligations with a value equal to the exercise price
in a segregated account held with its custodian, or else holds a put on the same
security as the put written where the exercise price of the put held is equal to
or greater than the exercise price of the put written.
If the Fund has written 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 written. However, once it has
been assigned an exercise notice, the Fund will be unable to effect a closing
purchase transaction. Similarly, if the Fund is the holder of an option it may
liquidate its position by effecting a closing sale transaction. This is
accomplished by selling an option of the same series as the option previously
purchased. There can be no assurance that a closing purchase or sale transaction
can be effected when the Fund so desires.
The Fund will realize a profit from a closing transaction if the price of
the transaction is less than the premium received from writing the option or is
more than the premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is more than the
premium received from writing the option or is less than the premium paid to
purchase the option. Since call option prices generally reflect increases in the
price of the underlying security, any loss resulting from the repurchase of a
call option may also be wholly or partially offset by unrealized appreciation of
the underlying security. Other principal factors affecting the market value of a
put or a call option include supply and demand, interest rates, the current
market price and price volatility of the underlying security and the time
remaining until the expiration date. Gains and losses on investments in options
depend, in part, on the ability of the Investment Adviser to predict correctly
the effect of these factors. The use of options cannot serve as a complete hedge
since the price movement of securities underlying the options will not
necessarily follow the price movements of the portfolio securities subject to
the hedge.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Fund will
generally purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option. In such event, it might not be
possible to effect closing transactions in particular options, so that the Fund
would have to exercise its options in order to realize any profit and would
incur brokerage commissions upon the exercise of call options and upon the
subsequent disposition of underlying securities for the exercise of put options.
If the Fund, as a covered call option writer, is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or otherwise covers the position.
In addition to options on securities, the Fund may also purchase and sell
call and put options on securities indexes. A stock index reflects in a single
number the market value of many different stocks. Relative values are assigned
to the stocks included in an index and the index fluctuates with changes in the
market values of the stocks. The options give the holder the right to receive a
cash settlement during the term of the option based on the difference between
the exercise price and the value of the index. By writing a put or call option
on a securities index, the Fund is obligated, in return for the premium
received, to make delivery of this amount. The Fund may offset its position in
stock index options prior to expiration by entering into a closing transaction
on an exchange or it may let the option expire unexercised.
The Fund also may buy or sell put and call options on foreign currencies.
A put option on a foreign currency gives the purchaser of the option the right
to sell a foreign currency at the exercise price until the option expires. A
call option on a foreign currency gives the purchaser of the option the right to
purchase the currency at the exercise price until the option expires. Currency
options traded on U.S. or other exchanges may be subject to position limits
which may limit the ability of the Fund to reduce foreign currency risk using
such options. Over-the-counter options differ from exchange-traded options in
that they are two-party contracts with price and other terms negotiated between
buyer and seller and generally do not have as much market liquidity as
exchange-traded options. Over-the-counter options are illiquid securities.
Use of options on securities indexes entails the risk that trading in the
options may be interrupted if trading in certain securities included in the
index is interrupted. The Fund will not purchase these options unless the
Investment Adviser is satisfied with the development, depth and liquidity of the
market and the Investment Adviser believes the options can be closed out.
Price movements in the portfolio of the Fund may not correlate precisely
with movements in the level of an index and, therefore, the use of options on
indexes cannot serve as a complete hedge and will depend, in part, on the
3
<PAGE>
ability of the Investment Adviser to predict correctly movements in the
direction of the stock market generally or of a particular industry. Because
options on securities indexes require settlement in cash, the Investment Adviser
may be forced to liquidate portfolio securities to meet settlement obligations.
The Fund has qualified, and intends to continue to qualify, as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"). One requirement for such qualification is that the Fund
must derive less than 30% of its gross income from gains from the sale or other
disposition of securities held for less than three months. Therefore, the Fund
may be limited in its ability to engage in options transactions.
Although the Investment Adviser will attempt to take appropriate measures
to minimize the risks relating to the Fund's writing of put and call options,
there can be no assurance that the Fund will succeed in any option-writing
program it undertakes.
Futures Contracts and Options on Futures. The Fund will not enter into
futures contracts or options on futures contracts unless (i) the aggregate
initial margins and premiums do not exceed 5% of the fair market value of its
assets and (ii) the aggregate market value of its outstanding futures contracts
and the market value of the currencies and futures contracts subject to
outstanding options written by the Fund, as the case may be, do not exceed 50%
of the market value of its total assets. It is anticipated that these
investments, if any, will be made by the Fund solely for the purpose of hedging
against changes in the value of its portfolio securities and in the value of
securities it intends to purchase. Such investments will only be made if they
are economically appropriate to the reduction of risks involved in the
management of the Fund. In this regard, the Fund may enter into futures
contracts or options on futures for the purchase or sale of securities indices
or other financial instruments including but not limited to 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 "purchaser" 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 future time. Certain futures contracts, including stock and bond index
futures, are settled on a net cash payment basis rather than by the sale and
delivery of the securities underlying the futures contracts.
No consideration will be paid or received by the Fund upon the purchase or
sale of a futures contract. Initially, the Fund will be required to deposit with
the broker an amount of cash or cash equivalents equal to approximately 1% to
10% of the contract amount (this amount is subject to change by the exchange or
board of trade on which the contract is traded and brokers or members of such
board of trade may charge a higher amount). This amount is known as "initial
margin" and is in the nature of a performance bond or good faith deposit on the
contract. Subsequent payments, known as "variation margin," to and from the
broker will be made daily as the price of the index or security underlying the
futures contract fluctuates. At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an opposite
position, which will operate to terminate its existing position in the contract.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract at a specified
exercise price at any time prior to the expiration of the option. Upon exercise
of an option, the delivery of the futures position by the writer of the option
to the holder of the option will be accompanied by delivery of the accumulated
balance in the writer's futures margin account attributable to that contract,
which represents the amount by which the market price of the futures contract
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option on the futures contract. The potential loss related
to the purchase of an option on futures contracts is limited to the premium paid
for the option (plus transaction costs). Because the value of the option
purchased is fixed at the point of sale, there are no daily cash payments by the
purchaser to reflect changes in the value of the underlying contract; however,
the value of the option does change daily and that change would be reflected in
the net assets of the Fund.
Futures and options on futures entail certain risks, including but not
limited to the following: no assurance that futures contracts or options on
futures can be offset at favorable prices, possible reduction of the yield of
the Fund 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 fluctuations, imperfect correlation between the contracts
and the securities being hedged, losses from investing in futures transactions
that are potentially unlimited and the segregation requirements described below.
4
<PAGE>
In the event the Fund sells a put option or enters into long futures
contracts, under current interpretations of the Investment Company Act of 1940,
as amended (the "1940 Act") an amount of cash, U.S. Government Securities or
other high grade debt securities equal to the market value of the contract must
be deposited and maintained in a segregated account with the custodian of the
Fund to collateralize the positions, thereby ensuring that the use of the
contract is unleveraged. For short positions in futures contracts and sales of
call options, the Fund may establish a segregated account (not with a futures
commission merchant or broker) with cash, U.S. Government Securities or other
high grade debt securities that, when added to amounts deposited with a futures
commission merchant or a broker as margin, equal the market value of the
instruments or currency underlying the futures contracts or call options,
respectively (but are not less than the stock price of the call option or the
market price at which the short positions were established).
Forward Currency Transactions. The Fund may hold currencies to meet
settlement requirements for foreign securities and may engage in currency
exchange transactions to protect against uncertainty in the level of future
exchange rates between a particular foreign currency and the U.S. dollar or
between foreign currencies in which its securities are or may be denominated.
Forward currency contracts are agreements to exchange one currency for another
at a future date. The date (which may be any agreed-upon fixed number of days in
the future), the amount of currency to be exchanged and the price at which the
exchange takes place will be negotiated and fixed for the term of the contract
at the time that the Fund enters into the contract. Forward currency contracts
(1) are traded in a market conducted directly between currency traders
(typically, commercial banks or other financial institutions) and their
customers, (2) generally have no deposit requirements and (3) are typically
consummated without payment of any commissions. The Fund, however, may enter
into forward currency contracts requiring deposits or involving the payment of
commissions. To assure that its forward currency contracts are not used to
achieve investment leverage, the Fund will segregate liquid assets consisting of
cash, U.S. Government Securities or other liquid high grade debt obligations
with its custodian, or a designated sub-custodian, in an amount at all times
equal to or exceeding its commitment with respect to the contracts.
The dealings of the Fund in forward foreign exchange is limited to hedging
involving either specific transactions or portfolio positions. Transaction
hedging is the purchase or sale of one forward foreign currency for another
currency with respect to specific receivables or payables of the Fund accruing
in connection with the purchase and sale of its portfolio securities or its
payment of dividends and distributions. Position hedging is the purchase or sale
of one forward foreign currency for another currency with respect to portfolio
security positions denominated or quoted in the foreign currency to offset the
effect of an anticipated substantial appreciation or depreciation, respectively,
in the value of the currency relative to the U.S. dollar. In this situation, the
Fund also may, for example, enter into a forward contract to sell or purchase a
different foreign currency for a fixed U.S. dollar amount where it is believed
that the U.S. dollar value of the currency to be sold or bought pursuant to the
forward contract will fall or rise, as the case may be, whenever there is a
decline or increase, respectively, in the U.S. dollar value of the currency in
which its portfolio securities are denominated (this practice being referred to
as a "cross-hedge").
In hedging a specific transaction, the Fund may enter into a forward
contract with respect to either the currency in which the transaction is
denominated or another currency deemed appropriate by the Investment Adviser.
The amount the Fund may invest in forward currency contracts is limited to the
amount of its aggregate investments in foreign currencies.
The use of forward currency contracts may involve certain risks, including
the failure of the counterparty to perform its obligations under the contract,
and that such use may not serve as a complete hedge because of an imperfect
correlation between movements in the prices of the contracts and the prices of
the currencies hedged or used for cover. The Fund will only enter into forward
currency contracts with parties which it believes to be creditworthy
institutions.
When Issued, Delayed Delivery Securities and Forward Commitments. The 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 it will only enter into a forward commitment with
the intention of actually acquiring the security, the Fund may sell the security
before the settlement date if it is deemed advisable.
5
<PAGE>
Securities purchased under a forward commitment are subject to market
fluctuation, and no interest (or dividends) accrues to the Fund prior to the
settlement date. The Fund will segregate with its custodian cash or liquid
high-grade debt securities in an aggregate amount at least equal to the amount
of its outstanding forward commitments.
Short Sales. The Fund may make short sales of securities. A short sale is
a transaction in which the Fund sells a security it does not own in anticipation
that the market price of that security will decline. The market value of the
securities sold short of any one issuer will not exceed either 5% of the Fund's
total assets or 5% of such issuer's voting securities. The 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 the Fund's
aggregate short sales of a particular class of securities exceeds 25% of the
outstanding securities of that class. The Fund may also make short sales
"against the box" without respect to such limitations. In this type of short
sale, at the time of the sale, the Fund owns, or has the immediate and
unconditional right to acquire at no additional cost, the identical security.
The Fund expects 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 the Fund makes a short sale, it must borrow the security sold short
and deliver it to the broker-dealer through which it made the short sale in
order to satisfy its obligation to deliver the security upon conclusion of the
sale. The Fund may have to pay a fee to borrow particular securities and is
often obligated to pay over any payments received on such borrowed securities.
The 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 highly liquid debt securities. The Fund will also be
required to deposit similar collateral with its custodian to the extent, if any,
necessary so that the value of both collateral deposits in the aggregate is at
all times equal to the greater of the price at which the security is sold short
or 100% of the current market value of the security sold short. Depending on
arrangements made with the broker-dealer from which it borrowed the security
regarding payment over of any payments received by the Fund on such security,
the Fund may not receive any payments (including interest) on its collateral
deposited with such broker-dealer. If the price of the security sold short
increases between the time of the short sale and the time the Fund replaces the
borrowed security, the Fund will incur a loss; conversely, if the price
declines, the Fund will realize a capital gain. Any gain will be decreased, any
loss increased, by the transaction costs described above. Although the Fund's
gain is limited to the price at which it sold the security short, its potential
loss is theoretically unlimited.
To secure its obligations to deliver the securities sold short, the Fund
will deposit in escrow in a separate account with its custodian, State Street
Bank and Trust Company ("State Street"), an amount at least equal to the
securities sold short or securities convertible into, or exchangeable for, the
securities. The Fund may close out a short position by purchasing and delivering
an equal amount of securities sold short, rather than by delivering securities
already held by the Fund, because the Fund may want to continue to receive
interest and dividend payments on securities in its portfolio that are
convertible into the securities sold short.
INVESTMENT RESTRICTIONS
The Fund operates under the following restrictions that constitute
fundamental policies that cannot be changed without the affirmative vote of the
holders of a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act). All percentage limitations set forth below apply
immediately after a purchase or initial investment and any subsequent change in
any applicable percentage resulting from market fluctuations does not require
elimination of any security from the portfolio. The Fund may not:
1. Invest 25% or more of its total assets, taken at market value at
the time of each investment, in the securities of issuers in any
particular industry other than the telecommunications, media, publishing
and entertainment industries. This restriction does not apply to
investments in U.S. Government Securities.
2. Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization, if
more than 10% of the market value of the total assets of the Fund would be
invested in securities of other investment companies, more than 5% of the
market value of the total assets of the Fund would be invested in the
securities of any one investment company or the Fund would own more than
6
<PAGE>
3% of any other investment company's securities; provided, however, this
restriction shall not apply to securities of any investment company
organized by the Fund that are to be distributed pro rata as a dividend to
its stockholders.
3. Purchase or sell commodities or commodity contracts except that
the Fund may purchase or sell futures contracts and related options
thereon if immediately thereafter (i) no more than 5% of its total assets
are invested in margins and premiums and (ii) the aggregate market value
of its outstanding futures contracts and market value of the currencies
and futures contracts subject to outstanding options written by the Fund
do not exceed 50% of the market value of its total assets. The Fund may
not purchase or sell real estate, provided that the Fund may invest in
securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein.
4. Purchase any securities on margin, except that the Fund may obtain
such short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities.
5. Make loans of money, except by the purchase of a portion of
publicly distributed debt obligations in which the Fund may invest, and
repurchase agreements with respect to those obligations, consistent with
its investment objectives and policies. The Fund reserves the authority to
make loans of its portfolio securities to financial intermediaries in an
aggregate amount not exceeding 20% of its total assets. Any such loans
will only be made upon approval of, and subject to any conditions imposed
by, the Board of Directors of the Fund. Because these loans would at all
times be fully collateralized, the risk of loss in the event of default of
the borrower should be slight.
6. Borrow money, except that the Fund may borrow from banks and other
financial institutions on an unsecured basis, in an amount not exceeding
10% of its total assets, to finance the repurchase of its shares. See
"Common Stock -- Repurchase of Shares" in the Prospectus. The Fund also
may borrow money on a secured basis from banks as a temporary measure for
extraordinary or emergency purposes. Temporary borrowings may not exceed
5% of the value of the total assets of the Fund at the time the loan is
made. The Fund may pledge up to 10% of the lesser of the cost or value of
its total assets to secure temporary borrowings. The Fund will not borrow
for investment purposes. Immediately after any borrowing, the Fund will
maintain asset coverage of not less than 300% with respect to all
borrowings. While the borrowing of the Fund exceeds 5% of its respective
total assets, the Fund will make no further purchases of securities,
although this limitation will not apply to repurchase transactions as
described above.
7. Issue senior securities, as defined in the 1940 Act, or mortgage,
pledge, hypothecate or in any manner transfer, as security for
indebtedness, any securities it owns or holds except as may be necessary
in connection with borrowings mentioned in (6) above, and then such
mortgaging, pledging or hypothecating may not exceed 10% of the total
assets of the Fund taken at the lesser of cost or market value and except
that collateral arrangements with respect to the writing of options or any
other hedging activity shall not be deemed a pledge of assets or the
issuance of a senior security.
8. Underwrite securities of other issuers except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933, as amended,
in selling portfolio securities; provided, however, this restriction shall
not apply to securities of any investment company organized by the Fund
that are to be distributed pro rata as a dividend to its stockholders.
9. Invest more than 15% of its total assets in illiquid securities,
such as repurchase agreements with maturities in excess of seven days, or
securities that at the time of purchase have legal or contractual
restrictions on resale.
MANAGEMENT OF THE FUND
Directors and Officers
Overall responsibility for management and supervision of the Fund rests
with its Board of Directors. The Board of Directors approves all significant
agreements between the Fund and the companies that furnish the Fund with
services, including agreements with the Investment Adviser, the Fund's custodian
and the Fund's transfer agent. The day-to-day operations of the Fund are
delegated to the Investment Adviser.
7
<PAGE>
The names and business addresses of the Directors and principal officers
of the Fund are set forth in the following table, together with their positions
and their principal occupations during the past five years and, in the case of
the Directors, their positions with certain other organizations and companies.
Directors who are "interested persons" of the Fund, as defined by the 1940 Act,
are indicated by an asterisk.
<TABLE>
<CAPTION>
Position with Principal Occupation During
Name and Business Address (Age) the Fund Past Five Years
----------------------------- ----------- -------------------------
<S> <C> <C>
Paul R. Ades (54) Director Partner in the law firm of Murov and Ades.
272 South Wellwood Avenue Director of one other registered investment
P.O. Box 504 company advised by the Investment Adviser.
Lindenhurst, New York 11757
Dr. Thomas E. Bratter (55) Director Director, President and Founder, The John
The John Dewey Academy Dewey Academy (residential college preparatory
Searles Castle therapeutic high school). Director of one other
Main Street registered investment company advised by the
Great Barrington, Investment Adviser.
Massachusetts 01230
Bill Callaghan (51) Director President of Bill Callaghan Associates Ltd., an
225 West 39th Street executive search company. Director of two other
New York, New York 10018 registered investment companies advised by the
Investment Adviser.
Felix J. Christiana (70) Director Retired; formerly Senior Vice President of
45 Pondfield Parkway Dollar Dry Dock Savings Bank. Director/
Mt. Vernon, New York 10552 Trustee of seven other registered investment
companies advised by the Investment Adviser.
James P. Conn (57) Director Managing Director of Financial Security
One Corporate Center Assurance since 1992; President and Chief
Rye, New York 10580-1434 ` Executive Officer of Bay Meadows Operating
Company from 1988 through 1992. Director/
Trustee of three other registered investment
companies advised by the Investment Adviser.
*Mario J. Gabelli (52) Chairman of the Chairman of the Board, Chief Executive Officer
One Corporate Center Board, President and Chief Investment Officer of the Investment
Rye, New York 10580-1434 and Chief Adviser; Chairman of the Board and Chief
Investment Officer Executive Officer of GAMCO Investors Inc.;
Chairman of the Board and Director of Lynch
Corporation; Director and Adviser of Gabelli
International Ltd. Director/Trustee of ten other
registered investment companies advised
by the Investment Adviser.
*Karl Otto Pohl (65) Director Partner of Sal. Oppenheim Jr. & Cie (private
One Corporate Center investment bank); President of the Deutsche
Rye, New York 10580-1434 Bundesbank and Chairman of its Central Bank
Council from 1980 through 1991; Currently
Board Member of Zurich Versicherungs-
Gesellschaft (Insurance); the International
Council for JP Morgan & Co.; Supervisory
Board Member of Royal Dutch; ROBECo/o
Group; and Advisory Director of Unilever N.V.
and Unilever Deutschland; German Governor of
The International Monetary Fund (1980-1991);
Board Member, Bank for International Settle
ments (1980-1991); and Chairman of the
European Economic Community Central Bank
Governors (1990-1991). Director/Trustee of all
other registered investment companies advised
by the Investment Adviser.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupation During
Name and Business Address (Age) the Fund Past Five Years
----------------------------- ----------- -------------------------
<S> <C> <C>
Anthony R. Pustorino (69) Director Certified Public Accountant. Professor of
121 Arleigh Road Accounting, Pace University, since 1965.
Douglaston, New York 11363 Director, President and stockholder of Pustorino,
Puglisi & Co., P.C., certified public accountants,
from 1961 to 1990. Director/Trustee of six other
registered investment companies advised by the
Investment Adviser.
Salvatore J. Zizza (49)` Director President and Chief Executive Officer of The
The Lehigh Group, Inc. Lehigh Group, Inc. (an electrical supply wholesaler).
810 Seventh Avenue, 27th Floor Director/Trustee of four other registered
New York, New York 10019 investment companies advised by the Investment
Adviser.
Bruce N. Alpert (43) Vice President and Vice President and Chief Financial and Adminis-
One Corporate Center Treasurer trative Officer of the investment advisory
Rye, New York 10580-1434 division of the Investment Adviser since
June 1988; Chief Operating Officer, Vice
President and Treasurer of The Gabelli Value
Fund Inc. since September 1989; President and
Treasurer of The Gabelli Asset Fund and The
Gabelli Growth Fund; Vice President and
Treasurer of all other registered investment
companies advised by the Investment Adviser.
J. Hamilton Crawford, Jr. (65) Secretary Senior Vice President and General Counsel of
One Corporate Center the investment advisory division of the Investment
Rye, New York 10580-1434 Adviser; Secretary of the registered
investment companies advised by the Investment
Adviser. Attorney in private practice from
1990-1992; Executive Vice President and
General Counsel of Prudential Mutual Fund
Management, Inc. from 1988-1990.
Marc Diagonale (28) Vice President Client services representative of Gabelli &
One Corporate Center Company, Inc. since March 1993; masters of
Rye, New York 10580-1434 business administration student at New York
University from September 1990 to May 1992;
Vice President of The Gabelli Equity Trust Inc.
</TABLE>
----------
* "Interested person" of the Fund, as defined in the 1940 Act. Mr. Gabelli
is an "interested person" of the Fund as a result of his employment as an
officer of the Fund and the Investment Adviser. Mr. Gabelli is also a registered
representative of an affiliated broker-dealer. Mr. Pohl receives fees from the
Investment Adviser but has no obligation to provide any services to it. Although
this relationship does not appear to require designation of Mr. Pohl as an
"interested person," the Fund is currently making such designation in order to
avoid the possibility that Mr. Pohl's independence would be questioned.
The Board of Directors of the Fund are divided into three classes, with a
class having a term of no more than three years. Each year the term of office of
one class of directors expires. See "Common Stock -- Certain Provisions of the
Articles of Incorporation and By-Laws of the Fund" in the Prospectus.
Remuneration of Directors and Officers
The Fund pays each Director who is not affiliated with the Investment
Adviser or its affiliates a fee of $3,000 per year plus $500 per Directors'
meeting attended, together with each Director's actual out-of-pocket expenses
relating to attendance at such meetings. In addition, if net assets of the Fund
equal or exceed $500 million, each such non-interested Director will receive a
fee of $500 per committee meeting attended and a fee of $500 per annum if the
Director serves as chair of a committee of the Fund's Board of Directors. The
aggregate remuneration paid by the Fund to such Directors during the period from
9
<PAGE>
November 15, 1994 (commencement of the Fund's operations) though December 31,
1994 amounted to $2,043.
Mr. Marc Diagonale, Vice President of the Fund, has performed stockholder
services on behalf of the Fund since it commenced operations. Mr. Diagonale also
performs similar services for The Gabelli Equity Trust Inc. His salary of
$90,000 per annum is borne by both funds, of which $10,000 is paid by the Fund.
The following table shows certain compensation information for the
Directors of the Fund for the current year ending December 31, 1995. None of the
Fund's executive officers and Directors who are also officers or directors of
the Investment Adviser will receive any compensation from the Fund for such
period.
<TABLE>
<CAPTION>
Total Estimated
Compensation From
Estimated Aggregate Pension or Retirement Estimated Annual Fund and Fund
Compensation from Benefits Accrued as Benefits Upon Complex Paid to
Name of Director Fund* Part of Fund Expenses Retirement Directors*+
------------------------------ ------------------- -------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Paul R. Ades .................... $5,000 0 0 $19,000
Dr. Thomas E. Bratter ........... $5,000 0 0 $19,000
Bill Callaghan .................. $5,000 0 0 $33,000
Felix J. Christiana ............. $5,000 0 0 $73,500
James P. Conn ................... $5,000 0 0 $35,000
Karl Otto Pohl .................. $4,500 0 0 $72,250
Anthony R. Pustorino ............ $5,000 0 0 $80,750
Salvatore J. Zizza .............. $5,000 0 0 $40,000
</TABLE>
----------
* Includes future payments estimated to be paid to the Directors during
1995.
+ See "Principal Occupation During Past Five Years" in previous table for the
number of Boards of other registered investment companies advised by the
Investment Adviser on which such Director serves.
Limitation of Officers' and Directors' Liability
The By-Laws of the Fund provide that the Fund will indemnify its Directors
and officers and may indemnify its employees or agents against liabilities and
expenses incurred in connection with litigation in which they may be involved
because of their offices with the Fund, to the fullest extent permitted by law
except that such indemnity shall not protect any such person against any
liability to the Fund or its stockholders 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. In
addition, the Articles of Incorporation of the Fund provide that the Fund's
Directors and officers will not be liable to stockholders for money damages,
except in limited instances. However, nothing in the Articles of Incorporation
or the By-Laws protects or indemnifies a Director, officer, employee or agent of
the Fund against any liability to which such person would otherwise be subject
in the event of such person's active or deliberate dishonesty which is material
to the cause of action or to the extent that the person received an improper
benefit or profit in money, property or services to the extent of such money,
property or services. In addition, indemnification is not permitted for any act
or omission committed in bad faith which is material to the cause of action or,
with respect to any criminal proceeding, if the person had reasonable cause to
believe that the act or omission was unlawful. In addition, indemnification may
not be provided in respect of any proceeding in which the person had been
adjudged to be liable to the Fund.
Investment Advisory and Administrative Arrangements
Gabelli Funds, Inc. acts as the Fund's investment adviser pursuant to an
advisory agreement with the Fund (the "Advisory Agreement"). Under the terms of
the Advisory Agreement, the Investment Adviser manages the portfolio of the Fund
in accordance with its stated investment objectives and policies, makes
investment decisions for the Fund, places orders to purchase and sell securities
on behalf of the Fund and manages its other business and affairs, all subject to
the supervision and direction of the Fund's Board of Directors. In addition,
under the Advisory Agreement, the Investment Adviser oversees the administration
of all aspects of the Fund's business and affairs and provides, or arranges for
others to provide, at the Investment Adviser's expense, certain enumerated
services, including maintaining the Fund's books and records, preparing reports
to the Fund's stockholders and supervising the calculation of the net asset
value of its shares. All expenses of computing the net asset value of the Fund,
including any equipment or services obtained solely for the purpose of pricing
10
<PAGE>
shares or valuing its investment portfolio, will be an expense of the Fund under
its Advisory Agreement. Notwithstanding the foregoing sentence, the Investment
Adviser does not currently intend for the Fund to incur such expenses and,
accordingly, until October 3, 1996 (a period of two years from the date of the
Advisory Agreement), the Investment Adviser will assume any expenses of
computing the Fund's net asset value payable under its Advisory Agreement. The
expenses of computing the net asset value of the Fund are anticipated to be
approximately $50,000 per year.
The Advisory Agreement combines investment advisory and administrative
responsibilities in one agreement. The Investment Adviser has in turn retained
Furman Selz Incorporated to act as sub-administrator to the Fund. See
"Management of the Fund -- Sub-Administrator" in the Prospectus.
For services rendered by the Investment Adviser on behalf of the Fund
under the Advisory Agreement, the Fund pays the Investment Adviser a fee
computed daily and paid monthly at the annual rate of 1.00% of the average
weekly net assets of the Fund. The fees payable under the Advisory Agreement are
higher than the fees payable by most registered investment companies.
The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard for its
obligations and duties thereunder, the Investment Adviser is not liable for any
error or judgment or mistake of law or for any loss suffered by the Fund. As
part of the Advisory Agreement, the Fund has agreed that the name "Gabelli" is
the Investment Adviser's property, and that in the event the Investment Adviser
ceases to act as an investment adviser to the Fund, the Fund will change its
name to one not including the word "Gabelli."
Pursuant to its terms, the Advisory Agreement will remain in effect with
respect to the Fund until October 3, 1996, and from year to year thereafter if
approved annually (i) by the Fund's Board of Directors or by the holders of a
majority of its outstanding voting securities (as defined in the 1940 Act) and
(ii) by a majority of the Directors who are not "interested persons" (as defined
in the 1940 Act) of any party to the Advisory Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. The Advisory
Agreement terminates automatically on its assignment and may be terminated
without penalty on 60 days' written notice at the option of either party thereto
or by the vote of the holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act).
For the period from November 15, 1994 (commencement of the Fund's
operations) to December 31, 1994, the Investment Adviser was paid $83,054 for
advisory and administrative services rendered to the Fund.
Foreign Custodial Arrangements
Rules adopted under the 1940 Act permit the Fund to maintain its foreign
securities in the custody of certain eligible foreign banks and securities
depositories. Pursuant to those rules, any foreign securities in the portfolio
of the Fund may be held by subcustodians approved by the Directors of the Fund
in accordance with the regulations of the Commission.
Selection of any such subcustodians will be made by the Directors of the
Fund following a consideration of a number of factors, including but not limited
to the reliability and financial stability of the institution, the ability of
the institution to perform capably custodial services for the Fund, the
reputation of the institution in its national market, the political and economic
stability of the country or countries in which the subcustodians are located,
and risks of potential nationalization or expropriation of assets of the Fund.
In addition, the 1940 Act requires that certain foreign subcustodians, among
other things, have stockholders' equity in excess of $200 million, have no lien
on the Fund's assets and maintain adequate and accessible records.
PORTFOLIO TRANSACTIONS
Subject to policies established by the Board of Directors of the Fund, the
Investment Adviser is responsible for placing purchase and sale orders and the
allocation of brokerage on behalf of the Fund. Transactions in equity securities
are in most cases effected on U.S. stock exchanges and involve the payment of
negotiated brokerage commissions. In general, there may be no stated commission
in the case of securities traded in over-the-counter markets, but the prices of
those securities may include undisclosed commissions or mark-ups. Principal
transactions are not entered into with affiliates of the Fund. However, Gabelli
& Company, Inc. ("Gabelli & Company") may execute transactions in the
11
<PAGE>
over-the-counter markets on an agency basis and receive a stated commission
therefrom. To the extent consistent with applicable provisions of the 1940 Act
and the rules and exemptions adopted by the Commission thereunder, as well as
other regulatory requirements, the Fund's Board of Directors have determined
that portfolio transactions may be executed through Gabelli & Company and its
broker-dealer affiliates if, in the judgment of the Investment Adviser, the use
of those broker-dealers is likely to result in price and execution at least as
favorable as those of other qualified broker-dealers, and if, in particular
transactions, those broker-dealers charge the Fund a rate consistent with that
charged to comparable unaffiliated customers in similar transactions. The Fund
has no obligation to deal with any broker or group of brokers in executing
transactions in portfolio securities. In executing transactions, the Investment
Adviser seeks to obtain the best price and execution for the Fund, taking into
account such factors as price, size of order, difficulty of execution and
operational facilities of the firm involved and the firm's risk in positioning a
block of securities. While the Investment Adviser generally seeks reasonably
competitive commission rates, the Fund does not necessarily pay the lowest
commission available.
During the period from November 15, 1994 (commencement of the Fund's
operations) through December 31, 1994, the Fund paid $17,027 in brokerage
commissions. During the same period, the Fund paid to Gabelli & Company $2,595
in brokerage commissions, representing 15.2% of the total of all brokerage paid
during such period. Such commissions were paid with respect to 17.2% of the
total dollar value of all transactions involving the payment of brokerage
commissions effected during the period.
Subject to obtaining the best price and execution, brokers who provide
supplemental research, market and statistical information to the Investment
Adviser or its affiliates may receive orders for transactions by the Fund. The
term "research, market and statistical information" includes advice as to the
value of securities, and advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities, and furnishing analyses and reports concerning issues, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts. Information so received will be in addition to and not in lieu of
the services required to be performed by the Investment Adviser under the
Advisory Agreement and the expenses of the Investment Adviser will not
necessarily be reduced as a result of the receipt of such supplemental
information. Such information may be useful to the Investment Adviser and its
affiliates in providing services to clients other than the Fund, and not all
such information is used by the Investment Adviser in connection with the Fund.
Conversely, such information provided to the Investment Adviser and its
affiliates by brokers and dealers through whom other clients of the Investment
Adviser and its affiliates effect securities transactions may be useful to the
Investment Adviser in providing services to the Fund.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the Investment Adviser and its
affiliates, investments of the kind made by the Fund may also be made by those
other accounts. When the same securities are purchased for or sold by the Fund
and any of such other accounts, it is the policy of the Investment Adviser and
its affiliates to allocate such purchases and sales in the manner deemed fair
and equitable to all of the accounts, including the Fund.
Portfolio Turnover
The Fund's portfolio turnover rate for the period from November 15, 1994
(commencement of the Fund's operations) through December 31, 1994 was 0%.
Portfolio turnover rate is calculated by dividing the lesser of the Fund's
annual sales or purchases of portfolio securities by the monthly average value
of securities in its portfolio during the year, excluding portfolio securities
the maturities of which at the time of acquisition were one year or less. The
ability of the Fund to enter into certain short-term transactions will be
limited by the requirement that certain gains on securities may not exceed 30%
of its annual gross income for federal income tax purposes. However, portfolio
turnover will not otherwise be a limiting factor in making investment decisions
for the Fund. A high rate of portfolio turnover involves correspondingly greater
brokerage commission expense than a lower rate, which expense must be borne by
the Fund and its stockholders.
AUTOMATIC DIVIDEND REINVESTMENT AND VOLUNTARY CASH PURCHASE PLAN
Under the Fund's Automatic Dividend Reinvestment and Voluntary Cash
Purchase Plan (the "Plan"), a stockholder whose shares of the Fund's common
stock, par value $.001 per share (the "Common Stock") is registered in his own
name will have all distributions reinvested automatically by State Street, which
is agent under the Plan, unless the stockholder elects to receive cash.
12
<PAGE>
Distributions with respect to shares registered in the name of a broker-dealer
or other nominee (that is, in "street name") will be reinvested by the broker or
nominee in additional shares under the Plan, unless the service is not provided
by the broker or nominee or the stockholder elects to receive distributions in
cash. Investors who own Common Stock registered in street name should consult
their broker-dealers for details regarding reinvestment. All distributions to
investors who do not participate in the Plan will be paid by check mailed
directly to the record holder by State Street as dividend disbursing agent.
Under the Plan, whenever the market price of the Common Stock is equal to
or exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividend or capital
gains distribution, participants in the Plan are issued shares of Common Stock,
valued at the greater of (i) the net asset value as most recently determined or
(ii) 95% of the then current market price of the Common Stock. The valuation
date is the dividend or distribution payment date or, if that date is not a New
York Stock Exchange trading day, the next preceding trading day. If the net
asset value of the Common Stock at the time of valuation exceeds the market
price of the Common Stock, participants will receive shares from the Fund,
valued at market price. If the Fund should declare a dividend or capital gains
distribution payable only in cash, State Street will buy the Common Stock for
such Plan in the open market, on the New York Stock Exchange or elsewhere, for
the participants' accounts, except that State Street will endeavor to terminate
purchases in the open market and cause the Fund to issue shares at net asset
value if, following the commencement of such purchases, the market value of the
Common Stock exceeds net asset value.
Participants in the Plan have the option of making additional cash
payments to State Street, semi-annually, for investment in the shares as
applicable. Such payments may be made in any amount from $250 to $3,000. State
Street will use all funds received from participants to purchase shares of the
Fund in the open market on or about February 15 and August 15 of each year. Any
voluntary cash payments received more than 30 days prior to these dates will be
returned by State Street, and interest will not be paid on any uninvested cash
payments. To avoid unnecessary cash accumulations, and also to allow ample time
for receipt and processing by State Street, it is suggested that participants
send voluntary cash payments to State Street in a manner that ensures that State
Street will receive these payments approximately 10 days before February 15 or
August 15, as the case may be. A participant may without charge withdraw a
voluntary cash payment by written notice, if the notice is received by State
Street at least 48 hours before such payment is to be invested.
State Street maintains all stockholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by stockholders for personal and tax records. Shares in the account of
each Plan participant will be held by State Street in noncertificated form in
the name of the participant. A Plan participant may send its share certificates
to State Street so that the shares represented by such certificates will be held
by State Street in the participant's stockholder account under the Plan.
In the case of stockholders such as banks, brokers or nominees, which hold
shares for others who are the beneficial owners, State Street will administer
the Plan on the basis of the number of shares certified from time to time by the
stockholder as representing the total amount registered in the stockholder's
name and held for the account of beneficial owners who participate in the Plan.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to written notice of the change sent to the Plan members at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by State Street on at least 90 days' written
notice to the Plan participants. All correspondence concerning the Plan should
be directed to State Street at P.O. Box 8200, Boston, Massachusetts 02266-8200.
TAXATION
The following is a summary of certain material United States federal
income tax considerations regarding the purchase, ownership and disposition of
shares in the Fund. Each prospective stockholder is urged to consult his own tax
adviser with respect to the specific federal, state and local tax consequences
of investing in the Fund. The summary is based on the laws in effect on the date
of this SAI, which are subject to change.
The Fund has qualified and intends to continue to qualify and elect to be
treated as a regulated investment company for each taxable year under the Code.
To so qualify, the Fund must, among other things: (a) derive at least 90% of its
13
<PAGE>
gross income in each taxable year from dividends, interest, payments with
respect to securities loans and gains from the sale or other disposition of
stock or securities or foreign currencies, or other income (including, but not
limited to, gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies;
(b) derive less than 30% of its gross income in each taxable year from the sale
or other disposition of (i) stock or securities held for less than three months,
(ii) options, futures or forward contracts (other than options, futures or
forward contracts on foreign currencies) held for less than three months and
(iii) foreign currencies (or options, futures or forward contracts on such
foreign currencies) held for less than three months but only if such currencies
(or options, futures or forward contracts) are not directly related to the
Fund's principal business of investing in stock or securities (or options or
futures with respect to stock or securities); and (c) diversify its holdings so
that, at the end of each quarter of the Fund's taxable year, (i) at least 50% of
the market value of the Fund's assets is represented by cash, securities of
other regulated investment companies, U.S. Government Securities and other
securities, with such other securities limited, in respect of any one issuer, to
an amount not greater than 5% of the Fund's assets and not greater than 10% of
the outstanding voting securities of such issuer and (ii) not more than 25% of
the value of its assets is invested in the securities (other than U.S.
Government Securities or securities of other regulated investment companies) of
any one issuer or any two or more issuers that the Fund controls and are
determined to be engaged in the same or similar trades or businesses or related
trades or businesses. The Fund expects that all of its foreign currency gains
will be directly related to its principal business of investing in stocks and
securities.
Legislation that would repeal the 30% limitation on a regulated
investment company's ability to make short-term investments is currently being
considered by Congress.
As a regulated investment company, the Fund will not be subject to United
States federal income tax on its net investment income (i.e., income other than
its net realized long- and short-term capital gains) and its net realized long-
and short-term capital gains, if any, that it distributes to its stockholders,
provided that an amount equal to at least 90% of its investment company taxable
income (i.e., 90% of its taxable income minus the excess, if any, of its net
realized long-term capital gains over its net realized short-term capital losses
(including any capital loss carryovers), plus or minus certain other adjustments
as specified in section 852 of the Code) for the taxable year is distributed,
but will be subject to tax at regular corporate rates on any income or gains
that it does not distribute. Furthermore, the Fund will be subject to a United
States corporate income tax with respect to such distributed amounts in any year
that it fails to qualify as a regulated investment company or fails to meet this
distribution requirement. Any dividend declared by the Fund in October, November
or December of any calendar year and payable to stockholders of record on a
specified date in such a month shall be deemed to have been received by each
stockholder on December 31 of such calendar year and to have been paid by the
Fund not later than such December 31, provided that such dividend is actually
paid by the Fund during January of the following calendar year.
Dividends paid from net investment income are taxable to stockholders as
ordinary income whether or not reinvested in shares of the Fund. Distributions
by the Fund of the excess, if any, of net long-term capital gains over net
short-term capital losses will be taxable to stockholders as long-term capital
gains regardless of how long stockholders have held shares of the Fund and will
not be eligible for the dividends-received deduction for corporations. As a
general rule, gain or loss on a sale of shares held for more than one year will
be a long-term capital gain or loss, and gain or loss on a sale of shares held
for one year or less will be a short-term capital gain or loss.
If the Fund is the holder of record of any stock on the record date for
any dividends payable with respect to such stock, such dividends are included in
the Fund's gross income not as of the date received but as of the later of (i)
the date such stock became ex-dividend with respect to such dividends (i.e., the
date on which a buyer of the stock would not be entitled to receive the
declared, but unpaid, dividends) or (ii) the date the Fund acquired such stock.
Capital Gain Distributions
If a stockholder receives a distribution taxable as long-term capital gain
with respect to shares of the Fund and such shares are sold within six months of
their acquisition, any loss on the sale will be treated as a long-term capital
loss to the extent of such prior capital gain distributions with respect to such
shares.
The Fund reserves the right, but does not currently intend, to retain for
reinvestment net long-term gains in excess of net short-term capital losses and
the Fund will be subject to a corporate tax (currently at a rate of 35%) on the
14
<PAGE>
retained amount, if any. The Fund would designate such retained amounts as
undistributed capital gains. As a result, such amounts would be taxed to
stockholders as long-term capital gains and stockholders would be able to claim
their proportionate shares of the federal income taxes paid by the Fund on such
gains as a credit against their own federal income tax liabilities, and would be
entitled to increase the adjusted tax basis of their shares of the Fund by 65%
of their undistributed capital gains and their tax credit. Qualified pension and
profit sharing funds, certain trusts and other organizations or persons not
subject to federal income tax on capital gains and certain non-resident alien
individuals and foreign corporations would be entitled to a refund of their pro
rata share of such taxes paid by the Fund upon filing appropriate returns or
claims for refund with the proper tax authorities. Failure by such entities and
their sponsors or responsible fiduciaries to properly account for such refund
could result in adverse federal income tax consequences.
Backup Withholding
If a stockholder fails to furnish a correct taxpayer identification
number, fails to report fully dividend or interest income, or fails to certify
that he has provided a correct taxpayer identification number and that he is not
subject to backup withholding, then the stockholder may be subject to a 31%
backup withholding tax with respect to (i) any taxable dividends and
distributions and (ii) any proceeds of any redemption or exchange of portfolio
shares. An individual's taxpayer identification number is his social security
number. The 31% backup withholding tax is not an additional tax and may be
credited against a taxpayer's regular federal income tax liability.
Dividends received by corporate stockholders from the Fund will generally
qualify for the federal dividends-received deduction for domestic corporate
stockholders to the extent the dividends do not exceed the aggregate amount of
dividends received by the Fund from qualified domestic corporations. If
securities held by the Fund are considered to be "debt-financed" (generally,
acquired with borrowed funds), are held by the Fund for less than 46 days (91
days in the case of certain preferred stock), or are subject to certain forms of
hedges, the portion of the dividends paid by the Fund that corresponds to the
dividends paid with respect to the securities will not be eligible for the
corporate dividends-received deduction.
The Fund sends written statements and notices to its stockholders
regarding the tax status of all dividends and distributions made during each
calendar year.
Dividend and capital gain distributions may also be subject to state and
local taxes. Stockholders are urged to consult their attorneys or tax advisors
regarding specific questions as to federal, state or local taxes. Non-U.S.
stockholders are urged to consult their own tax advisors concerning the
applicability of the United States withholding tax.
Other Tax Consequences
In addition to the federal income tax consequences described above, which
are applicable to an investment in the Fund, there may be other federal, state
or local tax considerations applicable to the circumstances of a particular
investor. The foregoing discussion is based upon the Code, judicial decisions
and administrative regulations, rulings and practices, all of which are subject
to change and which, if changed, may be applied retroactively to the Fund, its
stockholders and/or its assets. No rulings have been sought from the Internal
Revenue Service with respect to any of the tax matters discussed above.
NET ASSET VALUE
The net asset value of the Fund's shares is computed based on the market
value of the securities it holds and determined daily as of the close of regular
trading on the New York Stock Exchange and reported in financial newspapers of
general circulation as of the last day of each week.
Portfolio securities which are traded only on stock exchanges are valued
at the last sale price as of the close of regular trading on the day the
securities are being valued, or lacking any sales, at the mean between closing
bid and asked prices. Securities traded in the over-the-counter market which are
Nasdaq National Market securities are valued at the last sale price as of the
close of regular trading on the day the securities are being valued. Other
over-the-counter securities are valued at the most recent bid prices as obtained
from one or more dealers that make markets in the securities. Portfolio
securities which are traded both in the over-the-counter market and on a stock
exchange are valued according to the broadest and most representative market, as
determined by the Investment Adviser. Securities traded primarily on foreign
15
<PAGE>
exchanges are valued at the closing values of such securities on their
respective exchanges as of the day the securities are being valued. Securities
and assets for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Board of
Directors of the Fund. Short-term investments that mature in 60 days or less are
valued at amortized cost, unless the Board of Directors of the Fund determines
that such valuation does not constitute fair value.
Net asset value per share is calculated by dividing the value of the
securities held plus any cash or other assets minus all liabilities, including
accrued expenses, by the total number of shares outstanding at such time.
BENEFICIAL OWNER
There are no persons known to the Fund who may be deemed beneficial owners
of 5% or more of shares of the Fund's Common Stock because they possessed or
shared voting or investment power with respect to shares of the Fund's Common
Stock. The officers and Directors of the Fund, in the aggregate, own less than
1% of the outstanding shares of the Fund's Common Stock.
FINANCIAL STATEMENTS
The Fund's Annual Report for the period from November 15, 1994
(commencement of the Fund's operations) through December 31, 1994 (the
"Report"), which either accompanies this SAI or has previously been provided to
the person to whom the Prospectus is being sent, is incorporated herein by
reference with respect to all information other than the information set forth
in the Letter to Stockholders included therein. The Fund will furnish, without
charge, a copy of its Report, upon request to the Fund at One Corporate Center,
Rye, New York 10580 or by telephone at (914) 921-5070.
16
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(1) Financial Statements
(i) --Portfolio of Investments as of December 31, 1994*
(ii) --Statement of Assets and Liabilities as of December
31, 1994*
(iii) --Statement of Operations for the period November 15,
1994 through December 31, 1994*
(iv) --Statement of Changes in Net Assets -- November 15,
1994 through December 31, 1994*
(v) --Financial highlights for a share of capital stock
outstanding throughout the period November 15, 1994
through December 31, 1994*
(vi) --Notes to Financial Statements*
(vii) --Report of Independent Accountants*
----------
* Incorporated by reference to the Fund's Annual Report for 1994, filed
on March 1, 1995 (EDGAR Accession No. 000950123-95-000553).
(2) Exhibits
(a) --Articles of Incorporation*
(b) --Amended and Restated By-Laws
(c) --Not applicable
(d) (1) --Specimen certificate for Common Stock, par value
$.001 per share (incorporated by reference to the
Fund's Registration Statement on Form N-2, Exhibit
2(d), filed on July 8, 1994)**
(2) --Form of Subscription Certificate
(3) --Form of Notice of Guaranteed Delivery
(4) --Form of DTC Participant Oversubscription Exercise Form
(5) --Form of Nominee Holder Over-Subscription
Certification
(6) --Form of Subscription, Distribution and Escrow Agency
Agreement
(e) --Automatic Dividend Reinvestment and Voluntary Cash
Purchase Plan (incorporated by reference to the Fund's
Registration Statement on Form N-2, Exhibit 2(e), filed
on July 8, 1994)**
(f) --Not applicable
(g) --Investment Advisory Agreement between the Fund and
Gabelli Funds, Inc.*
(h) --Not applicable
(i) --Not applicable
(j) (1) --Custodial Contract between the Fund and State
Street Bank and Trust Company
(2) --Custodial Fee Schedule between the Fund and State
Street Bank and Trust Company
(k) (1) --Registrar, Transfer Agency and Service Agreement
between the Fund and State Street Bank and Trust
Company
C-1
<PAGE>
(2) --Transfer Agent and Registrar Services Fee Agreement
between the Fund and State Street Bank and Trust
Company
(l) (1) --Opinion and consent of Willkie Farr & Gallagher
(2) --Opinion and consent of Venable, Baetjer and Howard,
LLP
(m) --Not applicable
(n) --Consent of Price Waterhouse LLP
(o) --Not applicable
(p) --Purchase Agreement between the Fund and The Gabelli
Equity Trust Inc.*
(q) --Not applicable
(r) --Financial Data Schedule
----------
* Previously filed on June 20, 1995.
** This Registration Statement was filed under File No. 811-8476.
Item 25. Marketing Arrangements
Not applicable
Item 26. Other Expenses of Issuance
The following table sets forth the estimated expenses to be incurred in
connection with the Offer described in this Registration Statement:
Registration fees .................................................. $ 7,049
--------
New York Stock Exchange listing fee ................................ 30,000
--------
Printing (other than stock certificates) ........................... 50,000
--------
Engraving and printing stock certificates .......................... 2,000
--------
Fees and expenses of qualification under state securities laws
(including fees of counsel) ...................................... 15,000
--------
Auditing fees and expenses ......................................... 6,000
--------
Legal fees and expenses ............................................ 100,000
--------
Subscription Agent's fees and expenses ............................. 240,000
--------
Postage ............................................................ 50,000
--------
Miscellaneous ...................................................... 100,951
--------
Total .............................................................. $601,000
========
Item 27. Persons Controlled by or Under Common Control with Registrant
None.
Item 28. Number of Holders of Securities
Common Stock, par value $.001 per share: 16,856 record holders as of July
31, 1995.
Item 29. Indemnification
The response of this Item is incorporated by reference to the caption
"Common Stock -- Limitation of Officers' and Directors' Liability" set forth in
the Prospectus.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to Directors, officers and
controlling persons of the Fund, pursuant to the foregoing provisions or
C-2
<PAGE>
otherwise, the Fund has been advised that in the opinion of the Securities and
Exchange Commission (the "SEC") 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 Fund
of expenses incurred or paid by a Director, officer or controlling person of the
Fund in the successful defense of any action, suit or proceeding) is asserted by
such Director, officer or controlling person in connection with the securities
being registered, the Fund 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 30. Business and Other Connections of Investment Adviser
Registrant is fulfilling the requirement of this Item 30 to provide a list
of the officers and directors of its investment adviser, together with
information as to any other business, profession, vocation or employment of a
substantial nature engaged in by that entity or those of its officers and
directors during the past two years, by incorporating by reference the
information contained in the Form ADV filed with the SEC pursuant to the
Investment Advisers Act of 1940 by Gabelli Funds, Inc. (SEC File No. 801-26202).
Item 31. Location of Accounts and Records
Gabelli Funds, Inc.
One Corporate Center
Rye, New York 10580
(with respect to its services as Investment Adviser)
State Street Bank and Trust Company
Two Heritage Drive
North Quincy, Massachusetts 02171
(with respect to its services as custodian, transfer agent, dividend
disbursing agent and registrar)
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169
(with respect to its services as Sub-Administrator)
Item 32. Management Services
Not applicable.
Item 33. Undertakings
(a) Registrant undertakes to suspend offering its shares until it amends
its prospectus contained herein if (1) subsequent to the effective date of its
Registration Statement, the net asset value per share declines more than 10
percent from its net asset value per share as of the effective date of this
Registration Statement, or (2) the net asset value per share increases to an
amount greater than its net proceeds as stated in the prospectus contained
herein.
(b) Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of pro-
spectus filed with the Commission pursuant to Rule 424(b)
(S230.424(b) of this chapter) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; or
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
C-3
<PAGE>
(2) that, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(c) Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or ( 4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(d) Registrant hereby undertakes to send by first class mail or other
means designed to ensure equally prompt delivery, within two business days of
receipt of a written or oral request, a Statement of Additional Information.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rye, State of New York, on the 7th day of August,
1995.
THE GABELLI GLOBAL MULTIMEDIA
TRUST INC.
By /s/ BRUCE N. ALPERT
--------------------------------
Bruce N. Alpert
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board,
----------------------------- President and Chief Investment
Mario J. Gabelli Officer
Director
-----------------------------
Paul R. Ades
* Director August 7, 1995
-----------------------------
Thomas E. Bratter
* Director August 7, 1995
-----------------------------
Bill Callaghan
* Director August 7, 1995
-----------------------------
Felix J. Christiana
Director
-----------------------------
James P. Conn
Director
-----------------------------
Karl Otto Pohl
* Director August 7, 1995
-----------------------------
Anthony R. Pustorino
* Director August 7, 1995
-----------------------------
Salvatore J. Zizza
/s/ BRUCE N. ALPERT Treasurer (Principal Financial August 7, 1995
----------------------------- and Accounting Officer)
Bruce N. Alpert
* /s/ BRUCE N. ALPERT
-----------------------------
Bruce N. Alpert
as Attorney-In-Fact
C-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page in
Sequential
Numbering
System
----------
<S> <C>
(b) --Amended and Restated By-Laws
(d) (2) --Form of Subscription Certificate
(3) --Form of Notice of Guaranteed Delivery
(4) --Form of DTC Participant Oversubscription Exercise Form
(5) --Form of Nominee Holder Over-Subscription
Certification
(6) --Form of Subscription, Distribution and Escrow Agency
Agreement
(j) (1) --Custodial Contract between the Fund and State
Street Bank and Trust Company
(2) --Custodial Fee Schedule between the Fund and State
Street Bank and Trust Company
(k) (1) --Registrar, Transfer Agency and Service Agreement
between the Fund and State Street Bank and Trust
Company
(2) --Transfer Agent and Registrar Services Fee Agreement
between the Fund and State Street Bank and Trust
Company
(l) (1) --Opinion and consent of Willkie Farr & Gallagher
(2) --Opinion and consent of Venable, Baetjer and
Howard, LLP
(n) --Consent of Price Waterhouse LLP
(r) --Financial Data Schedule
</TABLE>
C-6
EXHIBIT (b)
AMENDED AND RESTATED
BY-LAWS
OF
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
A Maryland Corporation
ARTICLE I
STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of stockholders of The
Gabelli Global Multimedia Trust Inc. (the "Corporation") shall be held on a date
fixed from time to time by the Board of Directors within the thirty-one (31) day
period ending five (5) months after the end of the Corporation's fiscal year,
except that, pursuant to Section 2-501(b) of the Maryland General Corporation
Law, the Corporation shall not be required to hold an annual meeting of
stockholders for its fiscal year ended December 31, 1994. An annual meeting may
be held at any place in or out of the State of Maryland as may be determined by
the Board of Directors as shall be designated in the notice of the meeting and
at the time specified by the Board of Directors. Any business of the Corporation
may be transacted at an annual meeting without being specifically designated in
the notice unless otherwise provided by statute, the Corporation's Charter or
these By-Laws.
SECTION 2. Special Meetings. Special meetings of the stockholders for any
purpose or purposes, unless otherwise prescribed by statute or by the
Corporation's Charter, may be held at any place within the United States, and
may be called at any time by the Board of Directors or by the President, and
shall be called by the President or Secretary at the request in writing of a
majority of the Board of Directors or at the request in writing of stockholders
entitled to cast at least twenty-five (25) percent of the votes entitled to be
cast at the meeting upon payment by such stockholders to the Corporation of the
reasonably estimated cost of preparing and mailing a notice of the meeting
(which estimated cost shall be provided to such stockholders by the Secretary of
the Corporation). Notwithstanding the foregoing, unless requested by
stockholders entitled to cast a majority of the votes entitled to be cast at the
meeting, a special meeting of the stockholders need not be called at the request
of stockholders to consider any matter that is substantially the same as a
matter voted on at any special meeting of the stockholders held during the
preceding twelve (12) months. A written request shall state the purpose or
purposes of the proposed meeting.
SECTION 3. Notice of Meetings. Written or printed notice of the purpose or
purposes and of the time and place of every meeting of the stockholders shall be
given by the Secretary of the Corporation to each stockholder of record entitled
to vote at the meeting, by placing the notice in the mail at least ten (10)
days, but not more than ninety (90) days, prior to the date designated for the
meeting addressed to each stockholder at his address appearing on the books of
the Corporation or supplied by the stockholder to the Corporation for the
purpose of notice. The notice of any meeting of stockholders may be accompanied
by a form of proxy approved by the Board of Directors in favor of the actions or
persons as the Board of Directors may select. Notice of any meeting of
stockholders shall be deemed waived by any stockholder who attends the meeting
in person or by proxy, or who before or after the meeting submits a signed
waiver of notice that is filed with the records of the meeting.
SECTION 4. Quorum. Except as otherwise provided by statute or by the
Corporation's Charter, the presence in person or by proxy of stockholders of the
Corporation entitled to cast at least a majority of the votes entitled to be
cast shall constitute a quorum at each meeting of the stockholders and all
questions shall be decided by majority vote of the shares so represented in
person or by proxy at the meeting and entitled to vote (except with respect to
the election of directors which shall be decided by a plurality of votes so
represented). In the absence of a quorum, the stockholders present in person or
by proxy at the meeting, by majority vote and without notice other than by
announcement at the meeting, may adjourn the meeting from time to time as
provided in Section 5 of this Article I until a quorum shall attend. The
stockholders present at any duly organized meeting may continue to do business
until adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum. The absence from any meeting in person or by proxy of
holders of the number of shares of stock of the Corporation in excess of a
majority that may be required by the laws of the State of Maryland, the
<PAGE>
Investment Company Act of 1940, as amended, or other applicable statute, the
Corporation's Articles of Incorporation or these By-Laws, for action upon any
given matter shall not prevent action at the meeting on any other matter or
matters that may properly come before the meeting, so long as there are present,
in person or by proxy, holders of the number of shares of stock of the
Corporation required for action upon the other matter or matters.
SECTION 5. Adjournment. Any meeting of the stockholders may be adjourned
from time to time, without notice other than by announcement at the meeting at
which the adjournment is taken. At any adjourned meeting at which a quorum shall
be present any action may be taken that could have been taken at the meeting
originally called. A meeting of the stockholders may not be adjourned to a date
more than one-hundred-twenty (120) days after the original record date.
SECTION 6. Organization. At every meeting of the stockholders, the Chairman
of the Board, or in his absence or inability to act, the President, or in his
absence or inability to act, a Vice President, or in the absence or inability to
act of the Chairman of the Board, the President and all the Vice Presidents, a
chairman chosen by the stockholders, shall act as chairman of the meeting. The
Secretary, or in his absence or inability to act, a person appointed by the
chairman of the meeting, shall act as secretary of the meeting and keep the
minutes of the meeting.
SECTION 7. Order of Business. The order of business at all meetings of the
stockholders shall be as determined by the chairman of the meeting.
SECTION 8. Voting. Except as otherwise provided by statute or the
Corporation's Charter, each holder of record of shares of stock of the
Corporation having voting power shall be entitled at each meeting of the
stockholders to one (1) vote for every share of stock standing in his name on
the records of the Corporation as of the record date determined pursuant to
Section 9 of this Article I.
Each stockholder entitled to vote at any meeting of stockholders may
authorize another person or persons to act for him by a proxy signed by the
stockholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
stockholder executing it, except in those cases in which the proxy states that
it is irrevocable and in which an irrevocable proxy is permitted by law.
SECTION 9. Fixing of Record Date for Determining Stockholders Entitled to
Vote at Meeting. The Board of Directors may set a record date for the purpose of
determining stockholders entitled to vote at any meeting of the stockholders.
The record date for a particular meeting shall be not more than ninety (90) nor
fewer than ten (10) days before the date of the meeting. All persons who were
holders of record of shares as of the record date of a meeting, and no others,
shall be entitled to vote at such meeting and any adjournment thereof.
SECTION 10. Inspectors. The Board of Directors may, in advance of any
meeting of stockholders, appoint one (1) or more inspectors to act at the
meeting or at any adjournment of the meeting. If the inspectors shall not be so
appointed or if any of them shall fail to appear or act, the chairman of the
meeting may appoint inspectors. Each inspector, before entering upon the
discharge of his duties, shall, if required by the chairman of the meeting, take
and sign an oath to execute faithfully the duties of inspector at the meeting
with strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the voting power
of each share, the number of shares represented at the meeting, the existence of
a quorum and the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do those acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the chairman
of the meeting or any stockholder entitled to vote at the meeting, the
inspectors shall make a report in writing of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as inspector of an
election of directors. Inspectors need not be stockholders of the Corporation.
SECTION 11. Consent of Stockholders in Lieu of Meeting. Except as otherwise
provided by statute or the Corporation's Charter, any action required to be
taken at any annual or special meeting of stockholders, or any action that may
be taken at any annual or special meeting of the stockholders, may be taken
without a meeting, without prior notice and without a vote, if the following are
filed with the records of stockholders' meetings: (a) a unanimous written
consent that sets forth the action and is signed by each stockholder entitled to
vote on the matter and (b) a written waiver of any right to dissent signed by
2
<PAGE>
each stockholder entitled to notice of the meeting but not entitled to vote at
the meeting.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers. Except as otherwise provided in the
Corporation's Charter, the business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. All powers of the
Corporation may be exercised by or under authority of the Board of Directors
except as conferred on or reserved to the stockholders by law, by the
Corporation's Charter or by these By-Laws.
SECTION 2. Number, Election and Term of Directors. The number of directors
shall be fixed from time to time by resolution of the Board of Directors adopted
by a majority of the directors then in office; provided, however, that the
number of directors shall in no event be fewer than three (3) nor more than
twelve (12), except that if there are less than three stockholders, the number
of Directors may be less than three but not less than the number of stockholders
or one, if less. The Board of Directors shall be divided into three classes.
Within the limits above specified, the number of directors in each class shall
be determined by resolution of the Board of Directors or by the stockholders at
the annual meeting thereof. The term of office of the first class shall expire
on the date of the first annual meeting of stockholders. The term of office of
the second class shall expire one year thereafter. The term of office of the
third class shall expire two years thereafter. Upon expiration of the term of
office of each class as set forth above, the number of directors in such class,
as determined by the Board of Directors, shall be elected for a term of three
years to succeed the directors whose terms of office expire. The directors shall
be elected at the annual meeting of the stockholders, except as provided in
Section 5 of this Article, and each director elected shall hold office until his
successor shall have been elected and shall have qualified, or until his death,
or until he shall have resigned or have been removed as provided in these
By-Laws, or as otherwise provided by statute or the Corporation's Charter. Any
vacancy created by an increase in directors may be filled in accordance with
Section 5 of this Article II. No reduction in the number of directors shall have
the effect of removing any director from office prior to the expiration of his
term unless the director is specifically removed pursuant to Section 4 of this
Article II at the time of the decrease. A director need not be a stockholder of
the Corporation, a citizen of the United States or a resident of the State of
Maryland.
SECTION 3. Resignation. A director of the Corporation may resign at any
time by giving written notice of his resignation to the Board of Directors or
the Chairman of the Board or to the President or the Secretary of the
Corporation. Any resignation shall take effect at the time specified in it or,
should the time when it is to become effective not be specified in it,
immediately upon its receipt. Acceptance of a resignation shall not be necessary
to make it effective unless the resignation states otherwise.
SECTION 4. Removal of Directors. Any director of the Corporation may be
removed by the stockholders with or without cause by a vote of a majority of the
votes entitled to be cast for the election of directors.
SECTION 5. Vacancies. Subject to the provisions of the Investment Company
Act of 1940, as amended, any vacancies in the Board of Directors, whether
arising from death, resignation, removal or any other cause except an increase
in the number of directors, shall be filled by a vote of the majority of the
Board of Directors then in office even though that majority is less than a
quorum, provided that no vacancy or vacancies shall be filled by action of the
remaining directors if, after the filling of the vacancy or vacancies, fewer
than two-thirds of the directors then holding office shall have been elected by
the stockholders of the Corporation. A majority of the entire Board holding
office prior to the increase may fill a vacancy that results from an increase in
the number of directors. In the event that at any time a vacancy exists in any
office of a director that may not be filled by the remaining directors, a
special meeting of the stockholders shall be held as promptly as possible and in
any event within sixty (60) days, for the purpose of filling the vacancy or
vacancies. Any director appointed by the Board of Directors to fill a vacancy
shall hold office only until the next annual meeting of stockholders of the
Corporation and until a successor has been elected and qualifies or until his
earlier resignation or removal. Any director elected by the stockholders to fill
a vacancy shall hold office for the balance of the term of the directors whose
death, resignation or removal occasioned the vacancy and until a successor has
been elected and qualifies or until his earlier resignation or removal.
SECTION 6. Place of Meetings. Meetings of the Board may be held at any
place that the Board of Directors may from time to time determine or that is
specified in the notice of the meeting.
3
<PAGE>
SECTION 7. Regular Meetings. Regular meetings of the Board of Directors may
be held without notice at the time and place determined by the Board of
Directors.
SECTION 8. Special Meetings. Special meetings of the Board of Directors may
be called by two (2) or more directors of the Corporation or by the Chairman of
the Board or the President.
SECTION 9. Annual Meeting. The annual meeting of the newly elected and
other directors shall be held as soon as practicable after the meeting of
stockholders at which the newly elected directors were elected. No notice of
such annual meeting shall be necessary if held immediately after the
adjournment, and at the site, of the meeting of stockholders. If not so held,
notice shall be given as hereinafter provided for special meetings of the Board
of Directors.
SECTION 10. Notice of Special Meetings. Notice of each special meeting of
the Board of Directors shall be given by the Secretary as hereinafter provided.
Each notice shall state the time and place of the meeting and shall be delivered
to each director, either personally or by telephone or other standard form of
telecommunication, at least twenty-four (24) hours before the time at which the
meeting is to be held, or by first-class mail, postage prepaid, addressed to the
director at his residence or usual place of business, and mailed at least three
(3) days before the day on which the meeting is to be held.
SECTION 11. Waiver of Notice of Meetings. Notice of any special meeting
need not be given to any director who shall, either before or after the meeting,
sign a written waiver of notice that is filed with the records of the meeting or
who shall attend the meeting.
SECTION 12. Quorum and Voting. One-third, but not fewer than two (2) of the
members of the entire Board of Directors shall be present in person at any
meeting of the Board so as to constitute a quorum for the transaction of
business at the meeting, and except as otherwise expressly required by statute,
the Corporation's Charter, these By-Laws, the Investment Company Act of 1940, as
amended, or any other applicable statute, the act of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board. In the absence of a quorum at any meeting of the Board, a majority of the
directors present may adjourn the meeting to another time and place until a
quorum shall be present. Notice of the time and place of any adjourned meeting
shall be given to the directors who were not present at the time of the
adjournment and, unless the time and place were announced at the meeting at
which the adjournment was taken, to the other directors. At any adjourned
meeting at which a quorum is present, any business may be transacted that might
have been transacted at the meeting as originally called.
SECTION 13. Organization. The Board of Directors may designate a Chairman
of the Board, who shall preside at each meeting of the Board. In the absence or
inability of the Chairman of the Board to act, the President, or, in his absence
or inability to act, another director chosen by a majority of the directors
present, shall act as chairman of the meeting and preside at the meeting. The
Secretary (or, in his absence or inability to act, any person appointed by the
chairman) shall act as secretary of the meeting and keep the minutes of the
meeting.
SECTION 14. Committees. The Board of Directors may designate one (1) or
more committees of the Board of Directors, each consisting of two (2) or more
directors. To the extent provided in the resolution, and permitted by law, the
committee or committees shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation. Any
committee or committees shall have the name or names determined from time to
time by resolution adopted by the Board of Directors. Each committee shall keep
regular minutes of its meetings and provide those minutes to the Board of
Directors when required. The members of a committee present at any meeting,
whether or not they constitute a quorum, may appoint a director to act in the
place of an absent member.
SECTION 15. Written Consent of Directors in Lieu of a Meeting. Subject to
the provisions of the Investment Company Act of 1940, as amended, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee of the Board may be taken without a meeting if all members of the
Board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of the Board
or committee.
SECTION 16. Telephone Conference. Members of the Board of Directors or any
committee of the Board may participate in any Board or committee meeting by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at the
meeting.
4
<PAGE>
SECTION 17. Compensation. Each director shall be entitled to receive
compensation, if any, as may from time to time be fixed by the Board of
Directors, including a fee for each meeting of the Board or any committee
thereof, regular or special, he attends. Directors may also be reimbursed by the
Corporation for all reasonable expenses incurred in traveling to and from the
place of a Board or committee meeting.
ARTICLE III
OFFICERS, AGENTS AND EMPLOYEES
SECTION 1. Number and Qualifications. The officers of the Corporation shall
be a President, a Secretary and a Treasurer, each of whom shall be elected by
the Board of Directors. The Board of Directors may elect or appoint one (1) or
more Vice Presidents and may also appoint any other officers, agents and
employees it deems necessary or proper. Any two (2) or more offices may be held
by the same person, except the office of President, but no officer shall
execute, acknowledge or verify in more than one (1) capacity any instrument
required by law to be executed, acknowledged or verified in more than one
capacity. Officers shall be elected by the Board of Directors each year at its
first meeting held after the annual meeting of stockholders, each to hold office
until the meeting of the Board following the next annual meeting of the
stockholders and until his successor shall have been duly elected and shall have
qualified, or until his death, or until he shall have resigned or have been
removed, as provided in these By-Laws. The Board of Directors may from time to
time elect such officers (including one or more Assistant Vice Presidents, one
or more Assistant Treasurers and one or more Assistant Secretaries) and may
appoint, or delegate to the President the power to appoint, such agents as may
be necessary or desirable for the business of the Corporation. Such other
officers and agents shall have such duties and shall hold their offices for such
terms as may be prescribed by the Board or by the appointing authority.
SECTION 2. Resignations. Any officer of the Corporation may resign at any
time by giving written notice of his resignation to the Board of Directors, the
Chairman of the Board, the President or the Secretary. Any resignation shall
take effect at the time specified therein or, if the time when it shall become
effective is not specified therein, immediately upon its receipt. The acceptance
of a resignation shall not be necessary to make it effective unless otherwise
stated in the resignation.
SECTION 3. Removal of Officer, Agent or Employee. Any officer, agent or
employee of the Corporation may be removed by the Board of Directors with or
without cause at any time, and the Board may delegate the power of removal as to
agents and employees not elected or appointed by the Board of Directors. Removal
shall be without prejudice to the person's contract rights, if any, but the
appointment of any person as an officer, agent or employee of the Corporation
shall not of itself create contract rights.
SECTION 4. Vacancies. A vacancy in any office, whether arising from death,
resignation, removal or any other cause, may be filled for the unexpired portion
of the term of the office that shall be vacant, in the manner prescribed in
these By-Laws for the regular election or appointment to the office.
SECTION 5. Compensation. The compensation of the officers of the
Corporation shall be fixed by the Board of Directors, but this power may be
delegated to any officer with respect to other officers under his control.
SECTION 6. Bonds or Other Security. If required by the Board, any officer,
agent or employee of the Corporation shall give a bond or other security for the
faithful performance of his duties, in an amount and with any surety or sureties
as the Board may require.
SECTION 7. President. The President shall be the chief executive officer of
the Corporation. In the absence or inability of the Chairman of the Board (or if
there is none) to act, the President shall preside at all meetings of the
stockholders and of the Board of Directors. The President shall have, subject to
the control of the Board of Directors, general charge of the business and
affairs of the Corporation, and may employ and discharge employees and agents of
the Corporation, except those elected or appointed by the Board, and he may
delegate these powers.
SECTION 8. Vice President. Each Vice President shall have the powers and
perform the duties that the Board of Directors or the President may from time to
time prescribe.
SECTION 9. Treasurer. Subject to the provisions of any contract that may be
entered into with any custodian pursuant to authority granted by the Board of
Directors, the Treasurer shall have charge of all receipts and disbursements of
the Corporation and shall have or provide for the custody of the Corporation's
funds and securities; he shall have the full authority to receive and give
5
<PAGE>
receipts for all money due and payable to the Corporation, and to endorse
checks, drafts, and warrants, in its name and on its behalf and to give full
discharge for the same; he shall deposit all funds of the Corporation, except
those that may be required for current use, in such banks or other places of
deposit as the Board of Directors may from time to time designate; and, in
general, he shall perform all duties incident to the office of Treasurer and
such other duties as may from time to time be assigned to him by the Board of
Directors or the President.
SECTION 10. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for
the purpose, the minutes of all meetings of the Board of Directors,
the committees of the Board and the stockholders;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the Corporation
and affix and attest the seal to all stock certificates of the
Corporation (unless the seal of the Corporation on such Certificates
shall be a facsimile, as hereinafter provided) and affix and attest
the seal to all other documents to be executed on behalf of the
Corporation under its seal;
(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are
properly kept and filed; and
(e) in general, perform all the duties incident to the office of
Secretary and such other duties as from time to time may be assigned
to him by the Board of Directors or the President.
SECTION 11. Delegation of Duties. In case of the absence of any officer of
the Corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board may confer for the time being the powers or duties; or any
of them, of such officer upon any other officer or upon any director.
ARTICLE IV
STOCK
SECTION 1. Stock Certificates. Unless otherwise provided by the Board of
Directors and permitted by law, each holder of stock of the Corporation shall be
entitled upon specific written request to such person as may be designated by
the Corporation to have a certificate or certificates, in a form approved by the
Board, representing the number of shares of stock of the Corporation owned by
him; provided, however, that certificates for fractional shares will not be
delivered in any case. The certificates representing shares of stock shall be
signed by or in the name of the Corporation by the Chairman of the Board, the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer and sealed with the seal of the
Corporation. Any or all of the signatures or the seal on the certificate may be
facsimiles. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before the certificate is
issued, it may be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar was still in office at the date of issue.
SECTION 2. Stock Ledger. There shall be maintained a stock ledger
containing the name and address of each stockholder and the number of shares of
stock of each class the shareholder holds. The stock ledger may be in written
form or any other form which can be converted within a reasonable time into
written form for visual inspection. The original or a duplicate of the stock
ledger shall be kept at the principal office of the Corporation or at any other
office or agency specified by the Board of Directors.
SECTION 3. Transfers of Shares. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only by the
registered holder of the shares, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary or with a transfer
agent or transfer clerk, and on surrender of the certificate or certificates, if
issued, for the shares properly endorsed or accompanied by a duly executed stock
transfer power and the payment of all taxes thereon. Except as otherwise
provided by law, the Corporation shall be entitled to recognize the exclusive
right of a person in whose name any share or shares stand on the record of
stockholders as the owner of the share or shares for all purposes, including,
without limitation, the rights to receive dividends or other distributions and
6
<PAGE>
to vote as the owner, and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or shares on the part
of any other person.
SECTION 4. Regulations. The Board of Directors may authorize the issuance
of uncertificated securities if permitted by law. If stock certificates are
issued, the Board of Directors may make any additional rules and regulations,
not inconsistent with these By-Laws, as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of stock of the
Corporation. The Board may appoint, or authorize any officer or officers to
appoint, one or more transfer agents or one or more transfer clerks and one or
more registrars and may require all certificates for shares of stock to bear the
signature or signatures of any of them.
SECTION 5. Lost, Destroyed or Mutilated Certificates. The holder of any
certificate representing shares of stock of the Corporation shall immediately
notify the Corporation of its loss, destruction or mutilation and the
Corporation may issue a new certificate of stock in the place of any certificate
issued by it that has been alleged to have been lost or destroyed or that shall
have been mutilated. The Board may, in its discretion, require the owner (or his
legal representative) of a lost, destroyed or mutilated certificate: to give to
the Corporation a bond in a sum, limited or unlimited, and in a form and with
any surety or sureties, as the Board in its absolute discretion shall determine,
to indemnify the Corporation against any claim that may be made against it on
account of the alleged loss or destruction of any such certificate, or issuance
of a new certificate. Anything herein to the contrary notwithstanding, the Board
of Directors, in its absolute discretion, may refuse to issue any such new
certificate, except pursuant to legal proceedings under the laws of the State of
Maryland.
SECTION 6. Fixing of Record Date for Dividends, Distributions, etc. The
Board may fix, in advance, a date not more than ninety (90) days preceding the
date fixed for the payment of any dividend or the making of any distribution or
the allotment of rights to subscribe for securities of the Corporation, or for
the delivery of evidences of rights or evidences of interests arising out of any
change, conversion or exchange of common stock or other securities, as the
record date for the determination of the stockholders entitled to receive any
such dividend, distribution, allotment, rights or interests, and in such case
only the stockholders of record at the time so fixed shall be entitled to
receive such dividend, distribution, allotment rights or interests.
SECTION 7. Information to Stockholders and Others. Any stockholder of the
Corporation or his agent may inspect and copy during the Corporation's usual
business hours the Corporation's By-Laws, minutes of the proceedings of its
stockholders, annual statements of its affairs and voting trust agreements on
file at its principal office.
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification of Directors and Officers. Any person who was or
is a party or is threatened to be made a party in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is a current or former
director or officer of the Corporation, or is or was serving while a director or
officer of the Corporation at the request of the Corporation as a director,
officer, partner, trustee, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, enterprise or employee benefit plan, shall be
indemnified by the Corporation against judgments, penalties, fines, excise
taxes, settlements and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such action, suit or proceeding to
the full extent permissible under the Maryland General Corporation Law, the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, as those statutes are now or hereafter in force, except that such
indemnity shall not protect any such person against any liability to the
Corporation or any stockholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office
("disabling conduct").
SECTION 2. Advances. Any current or former director or officer of the
Corporation claiming indemnification within the scope of this Article V shall be
entitled to advances from the Corporation for payment of the reasonable expenses
incurred by him in connection with proceedings to which he is a party in the
manner and to the full extent permissible under the Maryland General Corporation
Law, the Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended, as those statutes are now or hereafter in force; provided,
however, that the person seeking indemnification shall provide to the
Corporation a written affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the Corporation has been met and a
written undertaking to repay any such advance, if it should ultimately be
7
<PAGE>
determined that the standard of conduct has not been met, and provided further
that at least one of the following additional conditions is met: (a) the person
seeking indemnification shall provide a security in form and amount acceptable
to the Corporation for his undertaking; (b) the Corporation is insured against
losses arising by reason of the advance; or (c) a majority of a quorum of
directors of the Corporation who are neither "interested persons" as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended, nor parties
to the proceeding ("disinterested non-party directors"), or independent legal
counsel, in a written opinion, shall determine, based on a review of facts
readily available to the Corporation at the time the advance is proposed to be
made, that there is reason to believe that the person seeking indemnification
will ultimately be found to be entitled to indemnification.
SECTION 3. Procedure. At the request of any current or former director or
officer, or any employee or agent whom the Corporation proposes to indemnify,
the Board of Directors shall determine, or cause to be determined, in a manner
consistent with the Maryland General Corporation Law, the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, as those
statutes are now or hereafter in force, whether the standards required by this
Article V have been met; provided, however, that indemnification shall be made
only following: (a) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (b) in the absence of such a decision,
a reasonable determination, based upon a review of the facts, that the person to
be indemnified was not liable by reason of disabling conduct, by (i) the vote of
a majority of a quorum of disinterested non-party directors or (ii) an
independent legal counsel in a written opinion.
SECTION 4. Indemnification of Employees and Agents. Employees and agents
who are not officers or directors of the Corporation may be indemnified, and
reasonable expenses may be advanced to such employees or agents, in accordance
with the procedures set forth in this Article V to the extent permissible under
the Maryland General Corporation Law, the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, as those statutes are now or
hereafter in force, and to such further extent, consistent with the foregoing,
as may be provided by action of the Board of Directors or by contract.
SECTION 5. Other Rights. The indemnification provided by this Article V
shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking such indemnification may be
entitled under any insurance or other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action by a director or officer
of the Corporation in his official capacity and as to action by such person in
another capacity while holding such office or position, and shall continue as to
a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person.
SECTION 6. Insurance. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or who, while a director, officer,
employee or agent of the Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, enterprise
or employee benefit plan, against any liability asserted against and incurred by
him in any such capacity, or arising out of his status as such, provided that no
insurance may be obtained by the Corporation for liabilities against which it
would not have the power to indemnify him under this Article V or applicable
law.
ARTICLE VI
SEAL
The seal of the Corporation shall be circular in form and shall bear the
name of the Corporation, the year of its incorporation, the words "Corporate
Seal" and "Maryland" and any emblem or device approved by the Board of
Directors. The seal may be used by causing it or a facsimile to be impressed or
affixed or in any other manner reproduced, or by placing the word "(seal)"
adjacent to the signatures of the authorized officer of the Corporation.
8
<PAGE>
ARTICLE VII
FISCAL YEAR
SECTION 1. Fiscal Year. The Corporation's fiscal year shall be fixed by the
Board of Directors.
SECTION 2. Accountant.
(a) The Corporation shall employ an independent public accountant or a firm
of independent public accountants of national reputation as its Accountant to
examine the accounts of the Corporation and to sign and certify financial
statements filed by the Corporation. The Accountant's certificates and reports
shall be addressed both to the Board of Directors and to the stockholders. The
employment of the Accountant shall be conditioned upon the right of the
Corporation to terminate the employment forthwith without any penalty by vote of
a majority of the outstanding voting securities at any stockholders' meeting
called for that purpose.
(b) A majority of the members of the Board of Directors who are not
"interested persons" (as such term is defined in the Investment Company Act of
1940, as amended) of the Corporation shall select the Accountant at any meeting
held within 30 days before or after the beginning of the fiscal year of the
Corporation or before the annual stockholders' meeting in that year. Such
selection shall be submitted for ratification or rejection at the next
succeeding annual stockholders' meeting. If such meeting shall reject such
selection, the Accountant shall be selected by majority vote of the
Corporation's outstanding voting securities, either at the meeting at which the
rejection occurred or at a subsequent meeting of stockholders called for that
purpose.
(c) Any vacancy occurring between annual meetings, due to the resignation
of the Accountant, may be filled by the vote of a majority of the members of the
Board of Directors who are not "interested persons" of the Corporation, as that
term is defined in the Investment Company Act of 1940, as amended, at a meeting
called for the purpose of voting on such action.
ARTICLE VIII
CUSTODY OF SECURITIES
SECTION 1. Employment of a Custodian. The Corporation shall place and at
all times maintain in the custody of a Custodian (including any sub-custodian
for the Custodian) all funds, securities and similar investments owned by the
Corporation. The Custodian (and any sub-custodian) shall be an institution
conforming to the requirements of Section 17(f) of the Investment Company Act of
1940, as amended, and the rules of the Securities and Exchange Commission
thereunder. The Custodian shall be appointed from time to time by the Board of
Directors, which shall fix its remuneration.
SECTION 2. Termination of Custodian Agreement. Upon termination of the
Custodian Agreement or inability of the Custodian to continue to serve, the
Board of Directors shall promptly appoint a successor Custodian, but in the
event that no successor Custodian can be found who has the required
qualifications and is willing to serve, the Board of Directors shall call as
promptly as possible a special meeting of the stockholders to determine whether
the Corporation shall function without a Custodian or shall be liquidated. If so
directed by vote of the holders of a majority of the outstanding shares of stock
entitled to vote of the Corporation, the Custodian shall deliver and pay over
all property of the Corporation held by it as specified in such vote.
ARTICLE IX
AMENDMENTS
These By-Laws may be amended or repealed by the affirmative vote of a
majority of the Board of Directors at any regular or special meeting of the
Board of Directors, subject to the requirements of the Investment Company Act of
1940, as amended.
Dated: February 22, 1995
9
EXHIBIT (d)(2)
VOID IF NOT RECEIVED BY THE SUBSCRIPTION AGENT BEFORE 5:00 P.M.
NEW YORK TIME ON THE EXPIRATION DATE
Control No. ________ Maximum Primary Subscription share available __________
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SUBSCRIPTION RIGHTS FOR COMMON STOCK
Dear Shareholder:
IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST COMPLETE BOTH SIDES OF THE TEAR
OFF CARD.
As the registered owner of the Subscription Certificate below, you are
entitled to subscribe for the number of shares of Common Stock, $.001 per share
of The Gabelli Global Multimedia Trust Inc. (the "Fund"), shown above pursuant
to the Primary Subscription right and upon the terms and conditions and at the
Subscription Price for each share of Common Stock specified in the Prospectus
relating thereto. The Rights represented hereby include the Over-Subscription
Privilege for Rights holders, as described in the Prospectus. Under the
Privilege, any number of additional shares may be purchased by a Rights holder
if such shares are available and the holders' Primary Subscription rights have
been fully exercised to the extent possible.
Registered owners who are participants in The Gabelli Global Multimedia
Trust Inc. Automatic Dividend Reinvestment and Voluntary Cash Purchase Plan will
receive their primary and oversubscription shares via an uncertificated share
credit to their existing accounts. To request a stock certificate, participants
in the plan must check Box D on the reverse side of the Subscription Certificate
below. Registered owners who are not participants in the plan will be
automatically issued stock certificates. Stock certificates for primary share
subscriptions will be delivered as soon as practicable after receipt of the
required completed Subscription Certificate and after full payment has been
received and cleared. Stock certificates for oversubscriptions and confirmation
statements reflecting uncertificated share credits for dividend reinvestment
accounts will be delivered as soon as practicable after the Expiration Date and
after all allocations have been effected.
THE SUBSCRIPTION RIGHT IS TRANSFERABLE
Payment must be in United States dollars. Only money orders or checks drawn
on a bank located in the continental United States and made payable to The
Gabelli Global Multimedia Trust Inc. will be accepted. Please reference your
rights card control number on your check, money order, or notice of guaranteed
delivery.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
VOID IF NOT RECEIVED BY THE SUBSCRIPTION AGENT BEFORE 5:00 P.M.
NEW YORK TIME ON THE EXPIRATION DATE
Control No. _____ Rights Represented by this Subscription Certificate _________
CUSIP No. 36239Q 11 7 Account No. _________
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SUBSCRIPTION RIGHTS FOR COMMON STOCK
(Complete appropriate section on reverse side of this form)
The registered owner of this Subscription Certificate, named below, or
assigns, is entitled to the number of Rights to subscribe for the Common Stock,
$.001 par value, of The Gabelli Global Multimedia Trust Inc. (the "Fund") shown
above, in the ratio of one Share of Common Stock for each three Rights, pursuant
to the Primary Subscription right and upon the terms and conditions and at the
price for each share of Common Stock specified in the Prospectus relating
thereto. The Rights represented hereby include the Over-Subscription Privilege
for Record Date Stockholders only, as described in the Prospectus. Under this
Privilege, any number of additional shares may be purchased by a Record Date
Stockholder if such shares are available and the owner's Primary Subscription
rights have been fully exercised to the extent possible and the pro rata
allocation requirements have been satisfied. Stock certificates for the shares
subscribed for pursuant to the Primary Subscription right will be delivered as
soon as practicable after receipt of the required completed Subscription
Certificate and after full payment has been received and cleared. Stock
certificates for the shares subscribed for pursuant to the Over-Subscription
Privilege will be delivered as soon as practicable after the Expiration Date and
after all allocations have been effected. Registered owners who are participants
in The Gabelli Global Multimedia Trust Inc. Automatic Dividend Reinvestment and
Voluntary Cash Purchase Plan will receive their primary and oversubscription
shares via an uncertificated share credit to their existing accounts. To request
a stock certificate, participants in the plan should check Box D on the reverse
side of this form. Any refund in connection with an over-subscription will be
delivered as soon as practicable after the Expiration Date and after all
allocations have been effected. The Subscription Certificate may be transferred
in the same manner and with the same effect as in the case of a negotiable
instrument payable to specific persons, by duly completing and signing the
assignment on the reverse side hereof. To subscribe pursuant to the Primary
Subscription right or the Over-Subscription Privilege, three Rights and the
Subscription Price are required for each share of Common Stock. Payment of the
$_____ per share must accompany the Subscription Certificate. See reverse side
of forms.
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
By: _____________________
STATE STREET BANK AND TRUST COMPANY
By: _____________________
<PAGE>
To subscribe for your primary shares please complete line "A" on the card below.
Example:
100 shares = 100 rights 100 rights divided by 3 = (33.333) primary shares
The maximum number of primary subscription shares would be 33 as fractional
shares will be dropped.
A. 33 x $ ________ = $ ________
---------------
(No. of shares)
If the number of rights which you have been issued is not evenly divisible by 3
or if you are not subscribing for your full primary subscription, check box "E"
below and we will attempt to sell any remaining unexercised rights.
To subscribe for any over-subscription shares please complete line "B" below.
Please Note: only record date holders who have exercised their primary
subscription in full may apply for over-subscription shares.
Payment of Shares: Full payment for both the primary and over-subscription
shares or a notice of guaranteed delivery must accompany this subscription.
Please reference your rights card control number on your check, money order or
notice of guaranteed delivery.
If the aggregate Subscription Price paid by a Record Date Stockholder is
insufficient to purchase the number of shares of Common Stock that the holder
indicates are being subscribed for, or if a Record Date Stockholder does not
specify the number of shares of Common Stock to be purchased, then the Record
Date Stockholder will be deemed to have exercised first, the Primary
Subscription right (if not already fully exercised) and second, the
Oversubscription Privilege to purchase shares of Common Stock to the full extent
of the payment tendered. If the aggregate Subscription Price paid by a Record
Date Stockholder exceeds the amount necessary to purchase the number of shares
of Common Stock for which the Record Date Stockholder has indicated an intention
to subscribe, then the Record Date Stockholder will be deemed to have exercised
first, the Primary Subscription right (if not already fully exercised) and
second, the Oversubscription Privilege to the full extent of th e excess payment
tendered.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Expiration Date __________, 1995 (unless extended)
To: State Street Bank and Trust Company
Attention: CST--Corporate Reorganization Department
By Mail:
P.O. Box 9061
Boston, MA 02205-8686
By Overnight Courier:
c/o Boston Financial Data Services, Inc.
Corporate Reorganization Department
Two Heritage Drive
North Quincy, MA 02171
--------------------------------------------------------------------------------
PLEASE FILL IN ALL APPLICABLE INFORMATION
--------------------------------------------------------------------------------
By Facsimile:
(617) 774-4519
With the original Subscription Certificate to be sent by mail, hand or overnight
courier. Confirm facsimile by telephone to (617) 774-4511
By Hand:
225 Franklin Street 61 Broadway
Concourse Level or Concourse Level
Boston, MA 02110 New York, NY 10006
A. Primary Subscription_____________ x $__.00 = $__________(1)
(3 rights = 1 share)(No. of Shares) (Purchase Price)
B. Over-Subscription Privilege___________ x $__.00 = $__________(2)
(Shares) (Purchase Price)
C. Amount of Check Enclosed = $__________
(or amount in notice of guaranteed delivery)
D. IF YOU CURRENTLY PARTICIPATE IN THE FUND'S AUTOMATIC DIVIDEND REINVESTMENT
AND CASH PURCHASE PLAN AND WISH TO RECEIVE A CERTIFICATE, CHECK HERE |_|
E. Sell any remaining Rights
F. Sell all of my Rights
(1)If you fully exercise your Rights, the Subscription Agent will automatically
attempt to sell any Rights to purchase fractional Shares.
(2)The Over-Subscription Privilege can be exercised only by a Record Date
Stockholder, as described in the Prospectus, and only if the Rights initially
issued to him are exercised to the fullest extent possible.
--------------------------------------------------------------------------------
SECTION 1. TO SUBSCRIBE: I hereby irrevocably subscribe for the face amount of
Common Stock indicated as the total of A and B hereon upon the terms and
conditions specified in the Prospectus relating thereto, receipt of which is
acknowledged. I hereby agree that if I fail to pay for the shares of Common
Stock for which I have subscribed, the Fund may exercise any of the remedies set
forth in the Prospectus.
TO SELL: If I have checked either the box on line E or on line F, I
authorize the sale of Rights by the Subscription Agent according to the
procedures described in the Prospectus.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Signature(s) of Subscriber(s)
--------------------------------------------------------------------------------
Address for delivery of Shares if other than shown on front
If permanent change of address, check here |_|
Please give your telephone number: ( ) ________________________
SECTION 2. TO TRANSFER RIGHTS (except pursuant to E or F above): For value
received. __________ of the Rights represented by the Subscription Certificate
are assigned to:
--------------------------------------------------------------------------------
(Print Full Name of Assignee)
--------------------------------------------------------------------------------
(Print Full Address)
--------------------------------------------------------------------------------
Signature(s) of Assignor(s)
IMPORTANT: The Signature(s) must correspond in every particular, without
alteration, with the name(s) as printed on your Subscription
Certificate.
Your signature must be guaranteed by:
a) a commercial bank or trust company or
b) a member firm of a domestic stock exchange or
c) a savings bank or credit union.
Signature ______________________________________________________________________
(Name of Bank or Firm)
Guaranteed
By _____________________________________________________________________________
(Signature of Officer and Title)
EXHIBIT (d)(3)
NOTICE OF GUARANTEED DELIVERY
For Shares of Common Stock of
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
Subscribed for under Primary Subscription
and the Over-Subscription Privilege
As set forth in the Prospectus, this form or one substantially equivalent hereto
may be used as a means of effecting subscription and payment for all shares of
the Fund's Common Stock (the "Shares") subscribed for under the Primary
Subscription and the Over-Subscription Privilege. Such form may be delivered by
hand or sent by facsimile transmission, overnight courier or first class mail to
the Subscription Agent.
The Subscription Agent is:
--------------------------
STATE STREET BANK AND TRUST COMPANY
Attention: CST--Corporate Reorganization Department
By Mail: By Facsimile:
-------- -------------
P.O. Box 9061 (617) 774-4519
Boston, MA 02205-8686
Confirm by telephone to:
------------------------
(617) 774-4511
By Overnight Courier: By Hand:
-------------------- ---------
c/o Boston Financial Data Services, Inc. 225 Franklin Street
Corporate Reorganization Department Concourse Level
Two Heritage Drive Boston, MA 02110
North Quincy, MA 02171 or
61 Broadway
Concourse Level
New York, NY 10006
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A
TELECOPY FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A
VALID DELIVERY
The New York Stock Exchange member firm or bank or trust company which completes
this form must communicate this guarantee and the number of Shares subscribed
for in connection with this guarantee (separately disclosed as to the Primary
Subscription and the Over-Subscription Privilege) to the Subscription Agent and
must deliver this Notice of Guaranteed Delivery of Payment, guaranteeing
delivery of (a) payment in full for all subscribed Shares and (b) a properly
completed and signed copy of the Subscription Certificate (which certificate and
full payment must then be delivered no later than the close of business of the
fifth business day after the Expiration Date, unless extended) to the
Subscription Agent prior to 5:00 pm, New York Time, on the Expiration Date,
unless extended. Failure to do so will result in a forfeiture of the Rights.
GUARANTEE
The undersigned, a member firm of the New York Stock Exchange or a bank or trust
company having an office or correspondent in the United States, guarantees
delivery to the Subscription Agent by no later than 5:00 pm, New York Time, on
__________, 1995 (unless extended as described in the Prospectus) of (a) a
properly completed and executed Subscription Certificate, and (b) payment of the
full Subscription Price for Shares subscribed for on Primary Subscription and
for any additional Shares subscribed for pursuant to the Over-Subscription
Privilege, as subscription for such Shares is indicated herein or in the
Subscription Certificate.
(continued on other side)
<PAGE>
Broker Assigned Control #_______________
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
<TABLE>
<S> <C> <C> <C> <C>
1. Primary Number of Rights Number of Primary Shares Payment to be made
Subscription to be exercised requested for which you in connection with
are guaranteeing delivery Primary Shares
of Rights and Payment
__________ Rights __________ Shares $__________
(Rights / by 3)
2. Over-Subscription Number of Over-Subscription Payment to be made in
Shares requested for which connection with Over-
you are guaranteeing payment Subscription Shares
__________ Shares $__________
3. Totals Total Number of
Rights to be Delivered
__________ Rights $__________
Total payment
Method of delivery (circle one)
A. Through DTC
B. Direct to State Street Bank and Trust Company, as Subscription Agent. Please reference below the
registration of the Rights to be delivered.
-------------------------------------------
-------------------------------------------
-------------------------------------------
Please sign a unique control number for each guarantee submitted. This number needs to be referenced on any direct delivery of
Rights or any delivery through DTC. In addition, please note that if you are guaranteeing for Over-Subscription Privilege Shares and
are a DTC participant, you must also execute and forward to State Street Bank and Trust Company a DTC Participant Over-Subscription
Exercise Form.
----------------------------------------------------------- -----------------------------------------------------------
Name of Firm Authorized Signature
----------------------------------------------------------- -----------------------------------------------------------
DTC Participant Number Title
----------------------------------------------------------- -----------------------------------------------------------
Address Name (Please Type or Print)
----------------------------------------------------------- -----------------------------------------------------------
Zip Code Phone Number
----------------------------------------------------------- -----------------------------------------------------------
Contact Name Date
</TABLE>
EXHIBIT (d)(4)
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
RIGHTS OFFERING
DTC PARTICIPANT OVERSUBSCRIPTION EXERCISE FORM
THIS FORM IS TO BE USED ONLY BY DEPOSITORY TRUST COMPANY PARTICIPANTS TO
EXERCISE THE OVERSUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO
WHICH THE PRIMARY SUBSCRIPTION WAS EXERCISED AND DELIVERED THROUGH THE
FACILITIES OF THE DEPOSITORY TRUST COMPANY. ALL OTHER EXERCISES OF
OVERSUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF THE SUBSCRIPTION
CERTIFICATES.
----------
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY'S
PROSPECTUS DATED _______________, 1995 (THE "PROSPECTUS") AND ARE INCORPORATED
HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM
THE COMPANY AND THE SUBSCRIPTION AGENT.
----------
VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT BY 5:00 PM, NEW YORK CITY TIME,
ON _______________, 1995, UNLESS THE OFFER IS EXTENDED, (THE "EXPIRATION DATE").
----------
1. The undersigned hereby certifies to the Company and the Subscription Agent
that it is a participant in The Depository Trust Company ("DTC") and that it has
either (i) fully exercised its Rights under the Primary Subscription and
delivered such exercised Rights to the Subscription Agent by means of transfer
to the DTC account of the Subscription Agent or (ii) delivered to the
Subscription Agent a Notice of Guaranteed Delivery in respect of the exercise of
the Rights under the Primary Subscription and will deliver the Rights called for
in such Notice of Guaranteed Delivery to the Subscription Agent by means of
transfer to such DTC account of the Subscription Agent.
2. The undersigned hereby exercises the Oversubscription Privilege to purchase,
to the extent available, __________ shares of Common Stock and certifies to the
Company and the Subscription Agent that such Oversubscription Privilege is being
exercised for the account or accounts of persons (which may include the
undersigned) on whose behalf all Primary Subscription Rights have been
exercised.
3. The undersigned understands that payment of the Subscription Price of
$________ per share for each share of Common Stock subscribed for pursuant to
the Oversubscription Privilege must be received by the Subscription Agent at or
before 5:00 pm New York City time, on the Expiration Date and represents that
such payment, in the aggregate amount of $_______________, either (check
appropriate box):
|_| has been or is being delivered to the Subscription Agent pursuant to
the Notice of Guaranteed Delivery referred to above
or
|_| is being delivered to the Subscription Agent herewith
or
|_| has been delivered separately to the Subscription Agent;
(continued on other side)
<PAGE>
and, in the case of funds not delivered pursuant to a Notice of
Guaranteed Delivery, is or was delivered in the manner set forth below
(check appropriate box and complete information relating thereto):
|_| uncertified check
|_| certified check
|_| bank draft
---------------------------------------------------
Primary Subscription Confirmation Number
---------------------------------------------------
DTC Participant Number
---------------------------------------------------
Name of DTC Participant
For allocation purposes, the total number of record date shares owned by the
persons on whose behalf this over-subscription is being exercised were
________________________.
Registration into which shares, interest and/or refund checks should be issued.
Name:
----------------------------------------------
----------------------------------------------
Address:
-------------------------------------------
-------------------------------------------
-------------------------------------------
Certified TIN:
-------------------------------------
By:
------------------------------------------------
Name:
Title:
Contact Name:
--------------------------------------
Phone Number:
--------------------------------------
Dated: , 1995
EXHIBIT (d)(5)
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
RIGHTS OFFERING
NOMINEE HOLDER OVER-SUBSCRIPTION CERTIFICATION
PLEASE COMPLETE ALL APPLICABLE INFORMATION
<TABLE>
<CAPTION>
By Express Mail or Overnight Courier: By Mail: By Hand:
<S> <C> <C>
State Street Bank and Trust Company P.O. Box 9061 State Street Bank and Trust Company
c/o Boston Financial Data Services, Inc. Boston, MA 02205-8686 225 Franklin St. 61 Broadway
Corporate Reorganization Department Concourse Level or Concourse Level
Two Heritage Drive Boston, Massachusetts 02110 New York, NY 10006
North Quincy, Massachusetts 02171
</TABLE>
THIS FORM IS TO BE USED ONLY BY NOMINEE HOLDERS TO EXERCISE THE
OVER-SUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO WHICH THE
PRIMARY SUBSCRIPTION PRIVILEGE WAS EXERCISED IN FULL AND DELIVERED THROUGH THE
FACILITIES OF A COMMON DEPOSITORY. ALL OTHER EXERCISES OF OVER-SUBSCRIPTION
PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF THE SUBSCRIPTION CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE FUND'S
PROSPECTUS DATED _______________ (THE "PROSPECTUS") AND ARE INCORPORATED HEREIN
BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE
SUBSCRIPTION AGENT.
VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL OR WITH
A PROPERLY COMPLETED NOTICE OF GUARANTEED DELIVERY BEFORE 5:00 P.M., NEW YORK
CITY TIME, ON _______________ (THE "EXPIRATION DATE"), UNLESS EXTENDED BY THE
FUND.
1. The undersigned hereby certifies to the Subscription Agent that it is a
participant in _______________ [Name of Depository] (the "Depository") and that
it has either (i) exercised the Primary Subscription in respect of the Rights
and delivered such exercised Rights to the Subscription Agent by means of
transfer to the Depository Account of the Fund or (ii) delivered to the
Subscription Agent a Notice of Guaranteed Delivery in respect of the exercise of
the Primary Subscription Privilege and will deliver the Rights called for in
such Notice of Guaranteed Delivery to the Subscription Agent by means of
transfer to such Depository Account of the Fund.
2. The undersigned hereby exercises the Over-Subscription Privilege to
purchase, to the extent available, __________ shares of Common Stock and
certifies to the Subscription Agent that such Over-Subscription Privilege is
being exercised for the account or accounts of persons (which may include the
undersigned) on whose behalf all Primary Subscription Rights have been
exercised.*
3. The undersigned understands that payment of the Subscription Price of
$________ per share for each share of Common Stock subscribed for pursuant to
the Over-Subscription Privilege must be received by the Subscription Agent
before 5:00 p.m., New York City time, on the Expiration Date, unless a Notice of
Guaranteed Delivery is used, in which case, payment in full must be received by
the Subscription Agent no later than the close of business on the fifth business
day after the Expiration Date and represents that such payment, in the aggregate
amount of $_______________, either
<PAGE>
(check appropriate box)
|_| has been or is being delivered to the Subscription Agent pursuant to the
Notice of Guaranteed Delivery referred to above
or
|_| is being delivered to the Subscription Agent herewith
or
|_| has been delivered separately to the Subscription Agent; and, in the case of
funds not delivered pursuant to a Notice of Guaranteed Delivery, is or was
delivered in the manner set forth below (check appropriate box and complete
information relating thereto):
|_| uncertified check
|_| certified check
|_| bank draft
------------------------------------------ -----------------------------------
Primary Subscription Confirmation Number Name of Nominee Holder
------------------------------------------ -----------------------------------
Depository Participant Number Address
Contact Name: ____________________________ -----------------------------------
City State Zip Code
Phone Number: ____________________________
By: _______________________________
Name: _____________________________
Dated: , 1995 Title: ____________________________
* PLEASE ATTACH A BENEFICIAL OWNER LISTING CONTAINING THE RECORD DATE POSITION
OF RIGHTS OWNED, THE NUMBER OF PRIMARY SHARES SUBSCRIBED AND THE NUMBER OF OVER-
SUBSCRIPTION SHARES, IF APPLICABLE, REQUESTED BY EACH SUCH OWNER.
EXHIBIT (d)(6)
STATE STREET BANK AND TRUST COMPANY
SUBSCRIPTION DISTRIBUTION AND ESCROW AGENCY AGREEMENT
This Subscription, Distribution and Escrow Agency Agreement (the
"Agreement") is made as of August ___, 1995 between The Gabelli Global
Multimedia Trust Inc. (the "Company") a Maryland Corporation, and State Street
Bank and Trust Company, a national banking association, as subscription,
distribution and escrow agent (the "Agent").
WHEREAS, the Company proposes to make a subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Company (the "Subscription Certificates") to shareholders of record
("Record Date Shareholders") of its Common Stock, par value $.001 per share (the
"Common Stock") as of a record date specified by the Company (the "Record
Date"), pursuant to which each Record Date Shareholder will have certain rights
(the "Rights") to subscribe to shares of the Company's Common Stock, as
described in and upon such terms as are set forth in the prospectus (the
"Prospectus") included in the Form N-2 Registration Statement filed by the
Company with the Securities and Exchange Commission on June 20, 1995, as amended
by any amendment filed with respect thereto (the "Registration Statement");
WHEREAS, the Company wishes the Agent to perform certain acts on behalf of
the Company and the Agent is willing to so act, in connection with the
distribution of the Subscription Certificates and the issuance and exercise of
the Rights to subscribe therein set forth, all upon the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements set forth herein, the parties agree as follows:
1. Pursuant to resolutions of its Board of Directors, the Company hereby
appoints and authorizes the Agent to act on its behalf in accordance with the
provisions hereof, and the Agent hereby accepts such appointment and agrees to
so act.
2. (a) Each Subscription Certificate shall evidence the Rights of the
Record Date Shareholder therein named to purchase Common Stock upon the terms
and conditions therein and herein set forth.
(b) Upon the written advice of the Company signed by its Chairman,
President, a Vice President, its Secretary or an Assistant Secretary, as to the
Record Date, the Agent shall, from a list of the Company's Record Date
Shareholders to be prepared by the Agent in its capacity as the Company's
Transfer Agent, prepare and record Subscription Certificates in the names of the
Record Date Shareholders, setting forth the number of Rights to subscribe to the
Company's Common Stock calculated on the basis of 1 right for each share of
Common Stock recorded on the Company's books in the name of each such Record
Date Shareholder as of the Record Date. Each Subscription Certificate shall be
dated as of the Record Date and shall be executed manually or by facsimiles
signature of a duly authorized officer of the Company. Upon the written advice,
signed as aforesaid, as to the effective date of the Registration Statement, the
Agent shall as promptly as practicable countersign and deliver the Subscription
Certificates, together with a copy of the Prospectus, to all Record Date
Shareholders. No Subscription Certificate shall be valid for any purpose unless
so executed. Should any officer whose signature has been placed upon any
Subscription Certificate cease to hold such office at any time thereafter, such
event shall have no effect on the validity of such Subscription Certificate.
3. (a) Each Subscription Certificate shall be irrevocable and fully
transferable. The Agent shall in its capacity as the Company's Transfer Agent
maintain a register of Subscription Certificates and the holders of record
thereof (each of whom shall be deemed a "Record Date Shareholder" hereunder for
purposes of determining the rights of holders of Subscription Certificates).
Each Subscription Certificate shall, subject to the provisions thereof, entitle
the Record Date Shareholder in whose name it is recorded to the following:
(1) The right (the "Basic Subscription Right") to purchase a
number of shares of Common Stock equal to one share of Common Stock for
every three Basic Subscription Rights; provided, however, that no
fractional shares of Common Stock shall be issued; and
(2) The right (the "Oversubscription Right" and together with the
Basic Subscription Right, the "Subscription Rights") to purchase from
the Company additional shares of Common Stock, subject to the
availability of such shares and to allotment of such shares as may be
available among Record Date Shareholders who exercise Oversubscription
<PAGE>
Rights on the basis specified in the Prospectus; provided, however,
that a Record Date Shareholder who has not exercised his Basic
Subscription Rights with respect to the full number of shares that such
Record Date Shareholder is entitled to purchase by virtue of his Basic
Subscription Rights as of the Expiration Date, if any, shall not be
entitled to any Oversubscription Rights.
(b) A Record Date Shareholder may exercise his Subscription Rights by
delivery to the Agent at its corporate offices specified in the Prospectus of
(i) the Subscription Certificate with respect thereto, duly executed by such
Record Date Shareholder in accordance with and as provided by the terms and
conditions of the Subscription Certificate, together with (ii) the purchase
price for each share of Common Stock subscribed for by exercise of such
Subscription Rights, in United States dollars by money order or check drawn on a
bank located in the continental United States, in each case payable to the order
of the Company.
(c) Rights may be exercised at any time after the date of issuance of
the Subscription Certificates with respect thereto but no later than 5:00 P.M.
Eastern Daylight Time on such date as the Company shall designate to the Agent
in writing (the "Expiration Date"). For the purpose of determining the time of
the exercise of any Subscription Rights, delivery of any material to the Agent
shall be deemed to occur when such materials are received at the corporate
offices of the Agent specified in the Prospectus.
(d) Not withstanding the provisions of Section 3(b) and 3(c) regarding
delivery of an executed Subscription Certificate to the Agent prior to 5:00 P.M.
Eastern Daylight Time on the Expiration Date, if prior to such time the Agent
receives notice of guaranteed delivery by telegram or otherwise from a bank,
trust company or a New York Stock Exchange member guaranteeing delivery of (i)
full payment for shares of Common Stock purchased and subscribed for by virtue
of a Record Date Shareholder's Subscription Rights, and (ii) a properly
completed and executed Record Date Shareholder's Subscription Certificate, then
such exercise of Subscription Rights shall be regarded as timely, subject,
however, to receipt of the duly executed Subscription Certificate and full
payment for the Common Stock by the Agent within five business days after the
Expiration Date.
(e) Within ten business days following the Expiration Date (the
"Confirmation Date"), the Agent shall send a confirmation to each Record Date
Shareholder (or, if shares of Common Stock on the Record Date are held by Cede &
Co. Inc. or any other depository or nominee, to Cede & Co., Inc. or such other
depository or nominee), showing (i) the number of shares of Common Stock
acquired pursuant to the Basic Subscription Rights, (ii) the number of shares of
Common Stock, if any, acquired pursuant to the Oversubscription Rights, (iii)
the per share and total purchase price for the shares of Common Stock acquired
pursuant to the exercise of Subscription Rights, (iv) any amount payable to the
shareholder pursuant to Section 9, and (v) any excess to be refunded by the
Company to such shareholder. Any excess payment to be refunded by the Company to
a Record Date Shareholder, shall be mailed by the Agent to the shareholder
within fifteen business days after the Expiration Date, as provided in Section 6
below.
4. If, after allocation of shares of Common Stock to persons exercising
Basic Subscription Rights, there remain unexercised rights, then the Agent shall
allot the shares issuable upon exercise of such unexercised Basic Subscription
Rights (the "Remaining Shares") to persons exercising Oversubscription Rights,
in the amounts of such oversubscriptions. If the number of shares for which
Oversubscription Rights have been exercised is greater than the Remaining
Shares, the Agent shall allot the Remaining Shares to the persons exercising
Oversubscription Rights pro rata based solely on the number of Basic
Subscription Rights exercised by each of them. The Agent shall advise the
Company immediately upon the completion of the allocation set forth above as to
the total number of shares of Common Stock subscribed and distributable.
5. (a) The Agent, will deliver (i) stock certificates representing those
shares of Common Stock purchased pursuant to exercise of Basic Subscription
Rights as soon as practicable after the corresponding rights have been validly
exercised and full payment for such shares has been received and cleared; (ii)
stock certificates representing those shares purchased pursuant to the exercise
of Oversubscription Rights as soon as practicable after the Expiration Date and
after all allocations have been effected; (iii) in the case of each Record Date
Shareholder whose rights were sold pursuant to Section 9, within fifteen
business days after the Expiration Date, proceeds of such sale (provided,
however, that proceeds of sales on behalf of Record Date Shareholders whose
Subscription Certificates are undeliverable shall be held by the Agent until
they are either claimed or escheated); (iv) in the case of each Record Date
Shareholder who subscribed, pursuant to the exercise of Oversubscription Rights,
for a greater number of shares than was allotted to such Record Date Shareholder
under Section 4, within fifteen business days after the Expiration Date, a
refund (and interest on such) in the amount of the difference between the
purchase price delivered for the shares subscribed for pursuant to the exercise
2
<PAGE>
of such Oversubscription Rights and the purchase price of the shares so allotted
under Section 4 (an "Excess Payment"); (v) in the case of Record Date
Shareholders who are participants in the Company's dividend reinvestment plan,
within fifteen business days after the Expiration Date, account statements
reflecting a credit of uncertificated shares for their primary and
oversubscription shares unless such shareholders have elected to receive
certificates.
6. (a) All proceeds received by the Agent from Record Date Shareholders in
respect of the exercise of rights shall be held by the Agent, on behalf of the
Company, in a segregated, interest-bearing escrow account (the "Escrow Account")
pending disbursement in the manner described in Section 6 (b) below.
(b) The Agent shall deliver all proceeds received in respect of the
exercise of the Rights (including interest earned thereon) to the Company as
promptly as practicable, but in no event later than fifteen business days after
the Confirmation Date. Proceeds held in respect of Excess Payments (including
interest earned thereon) shall be refunded to Record Date Shareholders entitled
to such a refund within fifteen business days after the Expiration Date.
7. The Agent shall promptly advise the Company as to the date of delivery
of Common Stock hereunder and shall supply the Company with a certified list of
the Record Date Shareholders.
8. The Agent shall account promptly to the Company with respect to
Subscription Rights exercised and concurrently account for all monies received
and returned by the Agent with respect to the purchase of shares of Common Stock
upon the exercise of Subscription Rights.
9. The Agent shall use its best efforts to sell on the New York Stock
Exchange on the terms set forth in the Prospectus, (i) all Basic Subscription
Rights submitted to it for sale by Record Date Shareholders in accordance with
the Prospectus, provided such Basic Subscription Rights are received by the
Agent at least one day prior to the Expiration Date, (ii) all Basic Subscription
Rights of Record Date Shareholders whose Subscription Certificates remain
unclaimed as a result of being returned by postal authorities as undeliverable
as of one business day prior to the Expiration Date, and (iii) all rights a
Record Date Shareholder is unable to exercise because such rights represent the
right to subscribe for less than one share. Such sales will be made through a
broker or brokers selected by the Agent, and the Agent shall deliver the
proceeds of such sales to the Record Date Shareholder net of commissions charged
by such broker or brokers.
10. In the event the Agent does not receive, within five business days
after the Expiration Date, any amount due from the Record Date Shareholder as
specified in Section 3(b) or (d), then it shall take such action with respect to
such Record Date Shareholder's Subscription Rights as may be instructed in
writing by the Company, including without limitation (i) applying any payment
actually received by it toward the purchase of the greatest whole number of
shares of Common Stock which could be acquired with such payment, (ii)
allocating the shares subject to such Subscription Rights to one or more other
Record Date Shareholders, and (iii) selling all or a portion of the shares of
Common Stock deliverable upon exercise of such Subscription Rights on the open
market, and applying the proceeds thereof to the amount owed.
11. No Subscription Certificate shall entitle a Record Date Shareholder to
vote or receive dividends or be deemed the holder of shares of Common Stock for
any purpose, nor shall anything contained in any Subscription Certificate be
construed to confer upon any Record Date Shareholder any of the rights of a
shareholder of the Company or any right to vote, give or withhold consent to any
action by the Company (whether upon any recapitalization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings of other action affecting shareholders, or receive
dividends or otherwise, until the Subscription Rights evidenced thereby shall
have been exercised and the shares of Common Stock purchasable upon the exercise
thereof shall have become deliverable as provided in this Agreement and in the
Prospectus.
12. If any Subscription Certificate is lost, stolen, mutilated, or
destroyed, the Agent may, on such terms which will indemnify the Company as the
Agent may in its discretion impose (which shall, in the case of a Subscription
Certificate include the surrender thereof), issue a new Subscription Certificate
of like denomination in substitution for the Subscription Certificate so lost,
stolen or mutilated or destroyed.
13. (a) The Company covenants that all shares of Common Stock issued upon
exercise of Subscription Rights pursuant to the terms set forth in the
Subscription Certificates will be validly issued, fully paid, nonassessable and
free of preemptive rights.
3
<PAGE>
(b) The Company shall furnish to the Agent, upon request, an opinion of
counsel reasonably satisfactory to the Agent to the effect that a registration
statement under the Securities Act of 1933, as amended (the "Act"), is then in
effect with respect to its shares of Common Stock issuable upon exercise of the
Subscription Rights set forth in the Subscription Certificates. Upon written
advice to the Agent that the Securities and Exchange Commission shall have
issued or threatened to have issued any order preventing or suspending the use
of the Prospectus, or if for any reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Act, the Agent shall cease
acting hereunder until receipt of written instructions from the Company and such
assurances as it may reasonably request that it may comply with such instruction
without violations of the Act.
14. (a) Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Agent, shall be
the successor to the Agent hereunder without the execution or filing of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Agent. In case at the time such successor to the
Agent shall succeed to the agency created by this Agreement, any of the
Subscription Certificates shall have been countersigned but not delivered, any
such successor to the Agent may adopt the countersignature of the original Agent
and deliver such Subscription Certificates so countersigned, and in case at that
time any of the Subscription Certificates shall not have been countersigned, any
successor to the Agent may countersign such Subscription Certificates either in
the name of the predecessor Agent or in the name of the successor Agent, and in
all such cases such Subscription Certificates shall have the full force provided
in the Subscription Certificates and in this Agreement.
(b) In case at any time the name of the Agent shall be changed and at
such time any of the Subscription Certificates shall have been countersigned but
not delivered, the Agent may adopt the countersignature under its prior name and
deliver Subscription Certificates so countersigned, and in case at that time any
of the Subscription Certificates shall not have been countersigned, the Agent
may countersign such Subscription Certificates either in its prior name or in
its changed name, and in all such cases such Subscription Certificates shall
have the full force provided in the Subscription Certificates and in this
Agreement.
15. The Company agrees to pay to the Agent as compensation for all services
rendered by it hereunder and also its reasonable expenses and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder the amounts set forth in
the fee schedule attached as Exhibit A hereto.
16. The Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions:
(a) Whenever in the performance of its duties under this Agreement the
Agent shall deem it necessary or desirable that any fact or matter be proved or
established, prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof is herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board or the President or a Vice
President or the Secretary or an Assistant Secretary or the Treasurer of the
Company delivered to the Agent, and such certificate shall be full authorization
to the Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(b) The Agent shall not be responsible for and the Company shall
indemnify and hold the Agent harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to all actions of the Agent or its agents or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct.
(c) The Agent shall be liable hereunder only for its own negligence or
willful misconduct.
(d) Nothing herein shall preclude the Agent from acting in any other
capacity for the Company or for any other legal entity.
(e) The Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any officer of the
Company and to apply to any such officer of the Company for advice or
instructions in connection with its duties, and shall be indemnified and not be
liable for any action reasonably taken or suffered by it in good faith in
accordance with instructions of any officer.
4
<PAGE>
(f) The Agent shall be indemnified and shall incur no liability for or
in respect of any action taken, suffered, or omitted by it in reliance upon any
Subscription Certificate or certificate for Common Stock, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
that it reasonably believes to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
(g) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement of for any
consequential damages arising out of any act or failure to act hereunder.
17. The Agent may, without the consent or concurrence of the Record Date
Shareholders in whose names Subscription Certificates are registered, by
supplemental agreement or otherwise, concur with the Company in making any
changes or corrections in a Subscription Certificate that it shall have been
advised by counsel (who may be counsel for the Company) is appropriate to cure
any ambiguity or to correct any defective or inconsistent provision or clerical
omission or mistake or manifest error therein or herein contained, and which
shall not be inconsistent with the provisions of the Subscription Certificate
except insofar as any such change may confer additional rights upon the Record
Date Shareholders.
18. Assignment
a. Except as provided in Section c below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
b. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
c. The Agent may, without further consent on the part of the Company,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS"), which is duly registered as a
transfer agent pursuant to Section 17(c)(1) of the Securities Exchange Act of
1934 or (ii) the current third party vendor utilized by BFDS; provided, however,
that the Agent shall be as fully responsible to the Company for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
19. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
20. The validity, interpretation and performance of this Agreement shall be
governed by the law of the Commonwealth of Massachusetts.
21. This Agreement may be executed in counterparts, each of which will be
an original and all of which taken together will constitute one and the same
Agreement.
STATE STREET BANK AND TRUST COMPANY THE GABELLI GLOBAL MULTMEDIA TRUST INC.
By: ______________________________ By: ____________________________________
Vice President Vice President
Dated: Dated:
5
EXHIBIT (j)(1)
CUSTODIAN CONTRACT
Between
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
1. Employment of Custodian and Property to be Held by It................................................... 1
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States...................................................................... 2
2.1 Holding Securities............................................................................. 2
2.2 Delivery of Securities......................................................................... 3
2.3 Registration of Securities..................................................................... 6
2.4 Bank Accounts.................................................................................. 7
2.5 Availability of Federal Funds.................................................................. 8
2.6 Collection of Income........................................................................... 8
2.7 Payment of Fund Monies......................................................................... 9
2.8 Liability for Payment in Advance of Receipt of Securities Purchased............................ 11
2.9 Appointment of Agents.......................................................................... 11
2.10 Deposit of Securities in Securities Systems.................................................... 12
2.10A Fund Assets Held in the Custodian's Direct Paper System........................................ 14
2.11 Segregated Account............................................................................. 15
2.12 Ownership Certificates for Tax Purposes........................................................ 17
2.13 Proxies........................................................................................ 17
2.14 Communications Relating to Fund Portfolio Securities........................................... 17
2.15 Reports to Fund by Independent Public Accountants.............................................. 18
3. Duties of the Custodian with Respect to Property of the Fund Held Outside of the United States.......... 19
3.1 Appointment of Foreign Sub-Custodians.......................................................... 19
3.2 Assets to be Held.............................................................................. 19
3.3 Foreign Securities Depositories................................................................ 20
3.4 Agreements with Foreign Banking Institutions................................................... 20
3.5 Access of Independent Accountants of the Fund.................................................. 21
3.6 Reports by Custodian........................................................................... 21
3.7 Transactions in Foreign Custody Account........................................................ 22
3.8 Liability of Foreign Sub-Custodians............................................................ 22
3.9 Liability of Custodian......................................................................... 23
3.10 Reimbursement for Advances..................................................................... 24
3.11 Monitoring Responsibilities.................................................................... 25
3.12 Branches of U.S. Banks......................................................................... 25
4. Proper Instructions..................................................................................... 26
5. Actions Permitted without Express Authority............................................................. 27
6. Evidence of Authority................................................................................... 27
7. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income....................................................................... 28
8. Records................................................................................................. 28
9. Opinion of Fund's Independent Accountant................................................................ 29
10. Compensation of Custodian............................................................................... 29
11. Responsibility of Custodian............................................................................. 29
12. Effective Period, Termination and Amendment............................................................. 31
13. Successor Custodian..................................................................................... 33
14. Interpretive and Additional Provisions.................................................................. 34
15. Massachusetts Law to Apply.............................................................................. 35
16. Prior Contracts......................................................................................... 35
17. Shareholder Communications Election..................................................................... 35
</TABLE>
<PAGE>
CUSTODIAN CONTRACT
This Contract between The Gabelli Global Multimedia Trust Inc., a
corporation organized and existing under the laws of Maryland, having its
principal place of business at One Corporate Center, Rye, New York 10580-1434,
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets,
including securities it desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund agrees to deliver to the Custodian all securities and
cash owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for such new or
treasury shares of capital stock, $.001 par value, ("Shares") of the Fund as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 4),
the Custodian shall from time to time employ one or more sub-custodians located
in the United States, but only in accordance with an applicable vote by the
Board of Directors of the Fund, and provided that the Custodian shall have no
more or less responsibility or liability to the Fund on account of any actions
or omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian. The Custodian may employ as sub-custodians for the Fund's
securities and other assets the foreign banking institutions and foreign
securities depositories designated in Schedule "A" hereto but only in accordance
with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property, to be held by
it in the United States, including all domestic securities owned by the
Fund, other than securities which are maintained pursuant to Section 2.10
in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper Account") only upon receipt
of Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided that,
in any such case, the cash or other consideration is to be delivered
to the Custodian;
<PAGE>
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence representing
the same aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided that
in any such case, the Custodian shall have no responsibility or
liability for any loss arising from the delivery of such securities
prior to receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such case,
the new securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities made
by the Fund, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund, which may be in
the form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be credited to
the Custodian's account in the book-entry system authorized by the
U.S. Department of the Treasury, the Custodian will not be held liable
or responsible for the delivery of securities owned by the Fund prior
to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only against
receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, and a Futures Commission
Merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Fund;
14) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of
the Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund, unless
the Fund has authorized in writing the appointment of a nominee to be used
in common with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name of any agent
appointed pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted by
the Custodian on behalf of the Fund under the terms of this Contract shall
be in "street name" or other good delivery form. If, however, the Fund
directs the Custodian to maintain securities in "street name", the
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<PAGE>
Custodian shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best efforts basis
only of relevant corporate actions including, without limitation, pendency
of calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of the Fund,
subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts, subject
to the provisions hereof, all cash received by it from or for the account
of the Fund, other than cash maintained by the Fund in a bank account
established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940. Funds held by the Custodian for the Fund may be
deposited by it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that every such
bank or trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust company and
the funds to be deposited with each such bank or trust company shall be
approved by vote of a majority of the Board of Directors of the Fund. Such
funds shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in the
amount of checks received in payment for Shares of the Fund which are
deposited into the Fund's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and other payments
with respect to United States registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and
other payments with respect to United States bearer securities if, on the
date of payment by the issuer, such securities are held by the Custodian or
its agent thereof and shall credit such income, as collected, to the Fund's
custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder.
Income due the Fund on United States securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection therewith,
other than to provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Fund is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the Fund
but only (a) against the delivery of such securities or evidence of
title to such options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is qualified under
the Investment Company Act of 1940, as amended, to act as a custodian
and has been designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with the conditions set
forth in Section 2.10 hereof; (c) in the case of a purchase involving
the Direct Paper System, in accordance with the conditions set forth
in Section 2.10A; (d) in the case of repurchase agreements entered
into between the Fund and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing purchase
by the Fund of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Fund or (e) for transfer to a time deposit account
of the Fund in any bank, whether domestic or foreign; such transfer
may be effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions from the
Fund as defined in Article 4;
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<PAGE>
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2 hereof;
3) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for the
account of the Fund: interest, taxes, management, accounting, transfer
agent and legal fees, and operating expenses of the Fund whether or
not such expenses are to be in whole or part capitalized or treated as
deferred expenses;
4) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
5) For payment of the amount of dividends received in respect of
securities sold short;
6) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Directors or of the Executive Committee of the Fund
signed by an officer of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment, setting
forth the purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons to
whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this Contract, in any
and every case where payment for purchase of domestic securities for the
account of the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from
the Fund to so pay in advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if the securities had
been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of 1940,
as amended, to act as a custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder.
2.10 Deposit of Securities in Securities Systems. The Custodian may
deposit and/or maintain domestic securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S. Department
of the Treasury and certain federal agencies, collectively referred to
herein as "Securities System" in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and regulations, if any,
and subject to the following provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which
shall not include any assets of the Custodian other than assets held
as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to domestic
securities of the Fund which are maintained in a Securities System
shall identify by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased for
the account of the Fund upon (i) receipt of advice from the Securities
System that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Fund. The Custodian
shall transfer domestic securities sold for the account of the Fund
upon (i) receipt of advice from the Securities System that payment for
such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all
advices from the Securities System of transfers of domestic securities
for the account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the Fund at its request.
Upon request, the Custodian shall furnish the Fund confirmation of
each transfer to or from the account of the Fund in the form of a
written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund.
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding domestic
securities deposited in the Securities System;
4
<PAGE>
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 12 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the Securities System or any other
person which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Fund has not been made whole
for any such loss or damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by the Fund in the
Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Fund which are maintained in the Direct Paper System shall identify by
book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to the
account of the Fund. The Custodian shall transfer securities sold for
the account of the Fund upon the making of an entry on the records of
the Custodian to reflect such transfer and receipt of payment for the
account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of a written
advice or notice, of Direct Paper on the next business day following
such transfer and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transaction in the Securities
System for the account of the Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may reasonably
request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an
account by the Custodian pursuant to Section 2.10 hereof, (i) in accordance
with the provisions of any agreement among the Fund, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD
(or any futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for purposes
of segregating cash or government securities in connection with options
purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by Investment Company
Act Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account
and declaring such purposes to be proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of the Fund held by it and in
connection with transfers of such securities.
5
<PAGE>
2.13 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than
in the name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Fund such proxies, all proxy soliciting materials
and all notices relating to such securities.
2.14 Communications Relating to Fund Portfolio Securities. Subject to
the provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund all written information (including, without limitation, pendency of
calls and maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts purchased or sold
by the Fund) received by the Custodian from issuers of the domestic
securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic
securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Fund desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.15 Reports to Fund by Independent Public Accountants. The Custodian
shall provide the Fund, at such times as the Fund may reasonably require,
with reports by independent public accountants on the accounting system,
internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including domestic
securities deposited and/or maintained in a Securities System, relating to
the services provided by the Custodian under this Contract; such reports
shall be of sufficient scope and in sufficient detail, as may reasonably be
required by the Fund, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if there are no
such inadequacies, the reports shall so state.
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes
and instructs the Custodian to employ as sub-custodians for the Fund's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories designated
on Schedule A hereto ("foreign sub-custodians"). Upon receipt of "Proper
Instructions", as defined in Section 4 of this Contract, together with a
certified resolution of the Fund's Board of Directors, the Custodian and
the Fund may agree to amend Schedule A hereto from time to time to
designate additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper Instructions,
the Fund may instruct the Custodian to cease the employment of any one or
more such sub-custodians for maintaining custody of the Fund's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the foreign sub-custodians to:
(a) "foreign securities", as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash equivalents
in such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Fund's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the foreign
securities of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the Fund shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as sub-custodians
pursuant to the terms hereof. Where possible, such arrangements shall
include entry into agreements containing the provisions set forth in
Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement with
a foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the Fund's assets will not
be subject to any right, charge, security interest, lien or claim of any
kind in favor of the foreign banking institution or its creditors or agent,
except a claim of payment for their safe custody or administration; (b)
beneficial ownership of the Fund's assets will be freely transferable
without the payment of money or value other than for custody or
administration; (c) adequate records will be maintained identifying the
assets as belonging to the Fund; (d) officers of or auditors employed by,
or other representatives of the Custodian, including to the extent
permitted under applicable law the independent public accountants for the
Fund, will be given access to the books and records of the foreign banking
6
<PAGE>
institution relating to its actions under its agreement with the Custodian;
and (e) assets of the Fund held by the foreign sub-custodian will be
subject only to the instructions of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the performance
of such foreign banking institution under its agreement with the Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Fund held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Fund's securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on
behalf of the Fund indicating, as to securities acquired for the Fund, the
identity of the entity having physical possession of such securities.
3.7 Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section
3.7, the provision of Sections 2.2 and 2.7 of this Contract shall
apply, mutatis mutandis to the foreign securities of the Fund held
outside the United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the
account of the Fund and delivery of securities maintained for the
account of the Fund may be effected in accordance with the customary
established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser or
dealer.
(c) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such entity's nominee
to the same extent as set forth in Section 2.3 of this Contract, and
the Fund agrees to hold any such nominee harmless from any liability
as a holder of record of such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care in
the performance of its duties and to indemnify, and hold harmless, the
Custodian and each Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.9 Liability of Custodian. The Custodian shall be liable for the acts
or omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S.
bank as contemplated by paragraph 3.12 hereof, the Custodian shall not be
liable for any loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions, or acts of war
or terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this paragraph
3.9, in delegating custody duties to State Street London Ltd., the
Custodian shall not be relieved of any responsibility to the Fund for any
loss due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection,
civil strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of State Street London Ltd. not caused by
political risk) due to Acts of God, nuclear incident or other losses under
circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
7
<PAGE>
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or sale
of foreign exchange or of contracts for foreign exchange, or in the event
that the Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall
be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain reimbursement.
3.11 Monitoring Responsibilities. The Custodian shall furnish annually
to the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be similar
in kind and scope to that furnished to the Fund in connection with the
initial approval of this Contract. In addition, the Custodian will promptly
inform the Fund in the event that the Custodian learns of a material
adverse change in the financial condition of a foreign sub-custodian or any
material loss of the assets of the Fund or in the case of any foreign
sub-custodian not the subject of an exemptive order from the Securities and
Exchange Commission is notified by such foreign sub-custodian that there
appears to be a substantial likelihood that its shareholders' equity will
decline below $200 million (U.S. dollars or the equivalent thereof) or that
its shareholders' equity has declined below $200 million (in each case
computed in accordance with generally accepted U.S. accounting principles).
3.12 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the
provisions hereof shall not apply where the custody of the Fund assets
are maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of
1940 meeting the qualification set forth in Section 26(a) of said Act.
The appointment of any such branch as a sub-custodian shall be
governed by paragraph 1 of this Contract.
(b) Cash held for the Fund in the United Kingdom shall be
maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to
the direction of the Custodian, State Street London Ltd. or both.
4. Proper Instructions
Proper Instructions as used herein means a writing signed or initialled by
one or more person or persons as the Board of Directors shall have from time to
time authorized. Each such writing shall set forth the specific transaction or
type of transaction involved, including a specific statement of the purpose for
which such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
Upon receipt of a certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Directors
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any three-party
agreement which requires a segregated asset account in accordance with Section
2.11.
5. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to the
Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as otherwise
directed by the Board of Directors of the Fund.
8
<PAGE>
6. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
7. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate weekly the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent weekly of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the weekly income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective prospectus.
8. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by the Fund and
held by the Custodian and shall, when requested to do so by the Fund and for
such compensation as shall be agreed upon between the Fund and the Custodian,
include certificate numbers in such tabulations.
9. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-2, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
10. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund and
the Custodian.
11. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties, including any
futures commission merchant acting pursuant to the terms of a three-party
futures or options agreement. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this Contract, but shall be
kept indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence. It shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for the Fund) on
all matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
9
<PAGE>
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States and, regardless of whether assets are maintained in
the custody of a foreign banking institution, a foreign securities depository or
a branch of a U.S. bank as contemplated by paragraph 3.9 hereof, the Custodian
shall not be liable for any loss, damage, cost, expense, liability or claim
resulting from, or caused by, the direction of or authorization by the Fund to
maintain custody or any securities or cash of the Fund in a foreign country
including, but not limited to, losses resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of the Fund assets to
the extent necessary to obtain reimbursement.
12. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; provided, however that the
Custodian shall not act under Section 2.10 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Directors of the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Directors has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not act under
Section 2.10A hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors has approved the
initial use of the Direct Paper System and the receipt of an annual certificate
of the Secretary or an Assistant Secretary that the Board of Directors has
reviewed the use by the Fund of the Direct Paper System; provided further,
however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Articles of Incorporation, and further provided, that the Fund may at any
time by action of its Board of Directors (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
13. Successor Custodian
If a successor custodian shall be appointed by the Board of Directors of
the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
10
<PAGE>
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
14. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Articles of Incorporation of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
15. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
16. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
17. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [ ] The Custodian is not authorized to release the Fund's name, address,
and share positions.
11
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the third day of October, 1994 .
ATTEST THE GABELLI GLOBAL MULTMEDIA TRUST INC.
/s/ Hamilton Crawford /s/ Bruce Alpert
____________________________________ By: _________________________
Secretary
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ David Hufnagle /s/ Ronald Logue
____________________________________ By: _________________________
Executive Vice President
12
EXHIBIT (j)(2)
STATE STREET BANK AND TRUST COMPANY
Custodian Fee Schedule
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
--------------------------------------------------------------------------------
I. Domestic Custody--Maintain custody of fund assets. Settle portfolio
purchases and sales. Report buy and sell fails. Determine and collect
portfolio income. Make cash disbursements and report cash transactions.
Monitor corporate actions. Report portfolio positions. The custody fee
shown below is an annual charge, billed and payable monthly, based on
average monthly net assets.
Average Monthly
Net Assets Annual Fees
-------------- -----------
First $20 Million 1/30 of 1%
Next $80 Million 1/60 of 1%
Excess 1/100 of 1%
Minimum Monthly Charge $1,000
(waived for a 12 month period from commencement of operations).
II. Domestic Portfolio Trades--For each line item processed
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $12.00
New York Physical Settlements $25.00
Maturity Collections $ 8.00
All other trades $16.00
III. International Custody--Maintain custody of fund assets. Settle portfolio
purchases and sales. Report buy and sell fails. Determine and collect
portfolio income. Make cash disbursements and report cash transactions in
local and base currency. Withhold foreign taxes. File foreign tax reclaims.
Monitor corporate actions. Report portfolio positions.
<TABLE>
<CAPTION>
A. Country Grouping
Group A Group B Group C Group D Group E
-------- -------- ------- ------- --------
<S> <C> <C> <C> <C>
Austria Australia Denmark Indonesia Argentina
Canada Belgium Finland Malaysia Bangladesh
Euroclear Hong Kong France Philippines Brazil
Germany Netherlands Ireland Portugal Chile
Japan New Zealand Italy South Korea China
S. Africa Singapore Luxembourg Spain Colombia
Switzerland Mexico Sri Lanka Cypress
Norway Sweden Greece
Thailand Taiwan Hungary
U.K. India
Israel
Pakistan
Peru
Turkey
Uruguay
Venezuela
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
B. Transaction Charges
Group A Group B Group C Group D Group E
-------- -------- ------- ------- --------
<S> <C> <C> <C> <C>
$25 $50 $60 $70 $150
</TABLE>
<TABLE>
<CAPTION>
C. Holding Charges in Basis Points *(Annual Fee)
Group A Group B Group C Group D Group E
-------- -------- ------- ------- --------
<S> <C> <C> <C> <C>
5.0 6.0 10.0 25.0 40.0
</TABLE>
<TABLE>
<CAPTION>
IV. Options
<S> <C>
Option charge for each option written or closing contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
</TABLE>
<TABLE>
<CAPTION>
V. Interest Rate Futures
<S> <C>
Transactions--no security movement $ 8.00
</TABLE>
<TABLE>
<CAPTION>
VI. Principal Reduction Payments
<S> <C>
Per Paydown $10.00
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
VII. Dividend Charges--(For items held at the Request of Traders
over record date in street form) $50.00
</TABLE>
VIII. Special Services
Fees for activities of a non-recurring nature such as fund consolidations
or reorganizations, extraordinary security shipments and the preparation of
special reports will be subject to negotiation. Fees for automated pricing,
yield calculation and other special items will be negotiated separately.
IX. Out-of-Pocket Expenses
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but are
not limited to the following:
Telephone
Wire Charges ($5.25 per wire in and $5.00 out)
Postage and Insurance
Courier Service
Duplicating
Legal Fees
Supplies Related to Fund Records
Rush Transfer--$8.00 Each
Transfer Fees
Sub-custodian Charges
Price Waterhouse Audit Letter
Federal Reserve Fee for Return Check items over $2,500--$4.25
GNMA Transfer--$15 each
PTC Deposit/Withdrawal for same day turnarounds--$50.00
2
<PAGE>
X. Payment
The above fees will be charged against the fund's custodian checking
account five (5) days after the invoice is mailed to the fund's offices.
THE GABELLI GLOBAL MULTIMEDIA TRUST INC. STATE STREET BANK AND TRUST CO.
/s/ Bruce Alpert /s/ Charles R. Whittemore Jr.
By: ____________________________________ By: _______________________________
Treasurer Vice President
Title: _________________________________ Title: ____________________________
10/18/94 10/13/94
Date: __________________________________ Date: ____________________________
3
EXHIBIT (k)(1)
REGISTRAR,
TRANSFER AGENCY AND SERVICE AGREEMENT
Between
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
----
Article 1 Terms of Appointment; Duties of the Bank..................... 1
Article 2 Fees and Expenses............................................ 2
Article 3 Representations and Warranties of the Bank................... 2
Article 4 Representations and Warranties of the Fund................... 2
Article 5 Data Access and Proprietary Information...................... 2
Article 6 Indemnification.............................................. 3
Article 7 Standard of Care............................................. 4
Article 8 Covenants of the Fund and the Bank........................... 4
Article 9 Termination of Agreement..................................... 4
Article 10 Assignment................................................... 5
Article 11 Amendment.................................................... 5
Article 12 Massachusetts Law to Apply................................... 5
Article 13 Force Majeure................................................ 5
Article 14 Consequential Damages........................................ 5
Article 15 Merger of Agreement.......................................... 5
<PAGE>
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the third day of October, 1994, by and between THE
GABELLI GLOBAL MULTIMEDIA TRUST INC., a Maryland corporation, having its
principal office and place of business at One Corporate Center, Rye, New York
10580-1434 (the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company having its principal office and place of business at
225 Franklin Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Fund desires to appoint the Bank as its registrar, transfer
agent, dividend disbursing agent, custodian of certain retirement plans and
agent in connection with certain other activities and the Bank desires to accept
such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of the Bank
1.01 Subject to the terms and conditions set forth in this Agreement, the
Fund hereby employs and appoints the Bank to act as, and the Bank agrees to act
as registrar, transfer agent for the Fund's authorized and issued shares of its
common stock, $.001 par value ("Shares"), dividend disbursing agent, custodian
of certain retirement plans and agent in connection with any dividend
reinvestment plan as set out in the Registration Statement of the Fund on Form
N-2, as amended from time to time.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and the Bank, the Bank shall:
(i) Issue and record the appropriate number of Shares as
authorized and hold such Shares in the appropriate Shareholder
account;
(ii) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate documentation;
(iii) Execute transactions directly with broker-dealers
authorized by the Fund who shall thereby be deemed to be acting on
behalf of the Fund;
(iv) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(v) Act as agent for shareholders of the Fund ("Shareholders")
pursuant to the dividend reinvestment and cash purchase plan as
amended from time to time in accordance with the terms of the
agreement to be entered into between the Shareholders and the Bank in
substantially the form attached as Exhibit A hereto;
(vi) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt by the
Bank of indemnification satisfactory to the Bank and protecting the
Bank and the Fund, and the Bank as its option, may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof and without such indemnity.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall: (i) perform
all of the customary services of a registrar, transfer agent, dividend
disbursing agent, custodian of certain retirement plans and agent of the
dividend reinvestment and cash purchase plan as described in Article 1
consistent with those requirements in effect as at the date of this
Agreement. The detailed definition, frequency, limitations and associated
costs (if any) set out in the attached fee schedule, include but not
limited to: maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing proxies, and mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and non-resident alien
accounts where applicable, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to dividends
and distributions by federal authorities for all registered Shareholders.
(c) The Bank shall provide additional services on behalf of the Fund
(i.e., escheatment services) which may be agreed upon in writing between
the Fund and the Bank.
1
<PAGE>
Article 2 Fees and Expenses
2.01 For the performance by the Bank pursuant to this Agreement, the Fund
agrees to pay the Bank an annual maintenance fee as set out in the initial fee
agreement attached hereto. Such fees and out-of-pocket expenses and advances
identified under Section 2.02 below may be changed from time to time subject to
mutual written agreement between the Fund and the Bank.
2.02 In addition to the fee paid under Section 2.01 above, the Fund agrees
to reimburse the Bank for out-of-pocket expenses, including but not limited to
confirmation production, postage, forms, telephone, microfilm, microfiche,
tabulating proxies, records storage, or advances incurred by the Bank for the
items set out in the fee schedule attached hereto. In addition, any other
expenses incurred by the Bank at the request or with the consent of the Fund,
will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within five
days following the receipt of the respective billing notice. Postage and the
cost of materials for mailing of dividends, proxies, Fund reports and other
mailings to all Shareholder accounts shall be advanced to the Bank by the Fund
at least seven (7) days prior to the mailing date of such materials.
Article 3 Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth of
Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.01 It is a corporation duly organized and existing and in good standing
under the laws of Maryland.
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is a closed-end, non-diversified investment company registered
under the Investment Company Act of 1940, as amended.
4.05 To the extent required by federal securities laws a registration
statement under the Securities Act of 1933, as amended, is currently effective
and appropriate state securities law filings have been made with respect to all
Shares of the Fund being offered for sale; information to the contrary will
result in immediate notification to the Bank.
4.06 It shall make all required filings under federal and state securities
laws.
Article 5 Data Access and Proprietary Information
5.01 The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Fund by the Bank as part of the Fund's ability to
access certain Fund-related data ("Customer Data") maintained by the Bank on
data bases under the control and ownership of the Bank or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to the Bank or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Fund agrees to treat all Proprietary
Information as proprietary to the Bank and further agrees that it shall not
2
<PAGE>
divulge any Proprietary Information to any person or organization except as may
be provided hereunder. Without limiting the foregoing, the Fund agrees for
itself and its employees and agents:
(a) to access Customer Data solely from locations as may be designated
in writing by the Bank and solely in accordance with the Bank's applicable
user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of
the Proprietary Information, and if such access is inadvertently obtained,
to inform in a timely manner of such fact and dispose of such information
in accordance with the Bank's instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility or other
location, except with the prior written consent of the Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in Proprietary
Information at common law, under federal copyright law and under other
federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Article 5. The obligations of this Article shall
survive any earlier termination of this Agreement.
5.02 If the Fund notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely manner to
correct such failure. Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for the contents of
such data and the Fund agrees to make no claim against the Bank arising out of
the contents of such third-party data, including, but not limited to, the
accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS
AVAILABLE BASIS. THE BANK EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE
EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.03 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information (such transactions constituting a "COEFI"), then in such
event the Bank shall be entitled to rely on the validity and authenticity of
such instruction without undertaking any further inquiry as long as such
instruction is undertaken in conformity with security procedures established by
the Bank from time to time.
Article 6 Indemnification
6.01 The Bank shall not be responsible for, and the Fund shall indemnify
and hold the Bank harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of the Bank or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or willful misconduct which
arise out of the breach of any representation or warranty of the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or subcontractors of
information, records, documents or services which (i) are received by the Bank
or its agents or subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of the Fund
including but not limited to any previous transfer agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.
3
<PAGE>
6.02 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. The Bank,
its agents and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund, reasonably believed
to be genuine and to have been signed by the proper person or persons, or upon
any instruction, information, data, records or documents provided the Bank or
its agents or subcontractors by telephone, in person, machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. The Bank, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar.
6.03 In order that the indemnification provisions contained in this Article
6 shall apply, upon the assertion of a claim for which the Fund may be required
to indemnify the Bank, the Bank shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments
concerning such claim. The Fund shall have the option to participate with the
Bank in the defense of such claim or to defend against said claim in its own
name or in the name of the Bank. The Bank shall in no case confess any claim or
make any compromise in any case in which the Fund may be required to indemnify
the Bank except with the Fund's prior written consent.
Article 7 Standard of Care
7.01 The Bank shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct of that of its employees.
Article 8 Covenants of the Fund and the Bank
8.01 The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Board of Directors of
the Fund authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund
and all amendments thereto.
8.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
8.03 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
8.04 The Bank and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In cases of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
Article 9 Termination of Agreement
9.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
4
<PAGE>
9.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Bank reserves the right to charge for any other
reasonable expenses associated with such termination and/or a charge equivalent
to the average of three (3) month's fees.
Article 10 Assignment
10.01 Except as provided in Section 10.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
10.03 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act of
1934, as amended ("Section 17A(c)(1)"), (ii) a BFDS subsidiary duly registered
as a transfer agent pursuant to Section 17A(c)(1) or (iii) a BFDS affiliate;
provided, however, that the Bank shall be as fully responsible to the Fund for
the acts and omissions of any subcontractor as it is for its own acts and
omissions.
Article 11 Amendment
11.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors of the Fund.
Article 12 Massachusetts Law to Apply
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 13 Force Majeure
13.01 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
Article 14 Consequential Damages
14.01 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
Article 15 Merger of Agreement
15.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
ATTEST THE GABELLI GLOBAL MULTMEDIA TRUST INC.
/s/ Hamilton Crawford /s/ Bruce Alpert
____________________________________ By: _________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ David Hufnagle /s/ Ronald Logue
____________________________________ By: _________________________
Executive Vice President
5
EXHIBIT (k)(2)
STATE STREET BANK AND TRUST COMPANY
TRANSFER AGENT and REGISTRAR SERVICES
CLOSED-END FUND FEE AGREEMENT
for
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ONGOING TRANSFER AGENT FEES
$6.50 per shareholder account per annum for open accounts and $5.00 per
closed shareholder account per annum. Includes the issuance and registration of
the first 1,500 credit certificates in a calendar year, but excludes the
issuance of the initial shares being distributed by the Gabelli Equity Trust.
Excess credits beyond 1,500 to be billed at $1.25 each within a calendar year.
For each dividend reinvestment per participant $.75
For each optional cash infusion $.75
ACCOUNT MAINTENANCE SERVICES
* Establishing new accounts
* Preparation and mailing of W-9 solicitation to new accounts
without T.I.N.'s
* Address changes
* Processing T.I.N. changes
* Processing routine and non-routine transfers of ownership
* Issuance of credit certificates (see limits)
* Posting debit and credit transactions
* Providing a daily transfer journal of ownership changes
* Responding to written shareholder communications
* Responding to shareholder telephone inquiries; toll-free number
* Placing and releasing stop transfers
* Replacing lost certificates
* Registration of credit certificates (see limits)
DIVIDEND DISBURSEMENT SERVICES
* Generate and mail twelve dividend checks per annum with one enclosure
* Replace lost dividend checks
* Processing of backup withholding and remittance
* Processing of non-resident alien withholding and remittance.
* Preparation and filing of Federal Tax Forms 1099 and 1042
* Preparation and filing of State Tax information as directed
DIVIDEND REINVESTMENT SERVICES PROVIDED
* Processing optional cash investments and acknowledging same
* The reinvestment of dividend proceeds for participants
* Participant withdrawal or sell requests
* Preparation, mailing and filing of Federal Tax Form 1099B for sales
* Preparation and mailing of reinvestment statements
ANNUAL MEETING SERVICES
* Coordination of mailing of proxies, proxy statement, annual report
and business reply envelope (all out-of-pocket expenses, including
printing of proxy cards, postage, and envelope costs will be billed
as incurred)
* Providing one set of labels of banks, brokers and nominees for broker
search
* Providing an Annual Meeting Record Date list
* Tabulation of returned proxies
* Daily reporting of tabulation results
* Interface support during solicitation effort
* Providing one Inspector of Election at Annual Meeting (out-of-pocket
travel expenses billed at cost as incurred)
* Providing an Annual Meeting Final Voted list
ADDRESSING AND MAILING SERVICES
* Preparation for the mailing of three (3) quarterly reports
INFORMATIONAL SERVICES PROVIDED
* One complete statistical report annually
- Shareholders by state
- Shareholders by classification code
- Shareholders by share grouping
* Geographical Analysis monthly
TERMS OF FEE AGREEMENT
* Minimum $1,000. per month
MISCELLANEOUS
* All out-of-pocket expenses such as postage, stationery, etc. will be
billed as incurred.
ADDITIONAL SERVICES
* Services over and above this Fee Schedule will be invoiced in
accordance with our current Schedule of Services or priced by
appraisal.
STATE STREET BANK AND TRUST COMPANY
STOCK TRANSFER AGENT FEE AGREEMENT
FOR
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
FEE AGREEMENT EFFECTIVE DATE: 10/7/94
REQUIRED SIGNATURES:
/s/ Charles V. Rossi /s/ 12/4/94
State Street Bank and Trust Company Date
Name: Charles V. Rossi
Title: Vice President
/s/ Bruce Alpert /s/ 12/1/94
The Gabelli Global Multimedia Trust Inc. Date
Name: Bruce Alpert
Title: Treasurer
<PAGE>
STATE STREET BANK AND TRUST COMPANY
TRANSFER AGENT AND SPIN-OFF RELATED SERVICES
FEE AGREEMENT DATED 10/13/94
FOR
THE GABELLI MULTIMEDIA TRUST, INC.
Creation of a new issue, The Gabelli Global Multimedia Trust, Inc. ("Media
Trust") that will be a duplicate of the existing open accounts on The Gabelli
Equity Trust, Inc. ("Equity Trust") issue.
Production of a spin-off of shares from the "Equity Trust" to the "Media
Trust" at a rate of one share for every ten.
FEES:
-----
$1.50 Per Cash Account Processed
$ .50 Per Dividend Reinvestment Account Processed
SERVICES:
---------
Cash Accounts
-------------
1. Issue certificates representing new shares of The Gabelli Multimedia
Trust, Inc.
2. Issue cash-in-lieu of fractional share checks and complete year-end
1099B reporting.
3. Match mail checks and certificates to shareholders.
Dividend Reinvestment Accounts
------------------------------
1. Credit full and fractional shares of The Gabelli Multimedia Trust,
Inc. to bookentry positions.
2. Generate, enclose and mail confirmation statements to shareholders.
STATE STREET BANK AND TRUST COMPANY GABELLI MULTIMEDIA TRUST, INC.
Date: October 25, 1994 Date: 10/18/94
------------------------------- ---------------------------------
Name: /s/ Charles V. Rossi Name: /s/ Bruce N. Alpert
------------------------------ ---------------------------------
Title: Vice President Title: Treasurer
Exhibit (l)(1)
[Letterhead of Willkie Farr & Gallagher}
August 7, 1995
The Gabelli Global Multimedia Trust Inc.
One Corporate Center
Rye, New York 10580
Ladies and Gentlemen:
We have acted as counsel to The Gabelli Global Multimedia Trust Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland, in
connection with the issuance of up to 2,869,137 shares (the "Shares") of its
common stock, par value $.001 per share (the "Common Stock"), pursuant to the
exercise of rights (the "Rights") to purchase Common Stock to be distributed to
the shareholders of the Fund (the "Offer") in accordance with the Fund's
Registration Statement on Form N-2 (File Nos. 33-60407 and 811-8476) under the
Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended (the "Registration Statement").
We have examined copies of the Articles of Incorporation and By-Laws of the
Fund, as amended, the Registration Statement, resolutions adopted by the Fund's
Board of Directors and other records and documents that we have deemed necessary
for the purpose of this opinion. We have also examined such other documents,
papers, statutes and authorities as we have deemed necessary to form a basis for
the opinion hereinafter expressed. We have assumed that the Fund has no
"Principal Shareholder" as defined in Article VIII of the Fund's Articles of
Incorporation and have relied upon a certificate of the Assistant Secretary of
the Fund to the effect that the Fund has no knowledge of any such Principal
Shareholder.
In our examination, we have assumed the genuineness of all signatures and the
conformity to original documents of all copies submitted to us. As to various
questions of fact material to our opinion, we have relied upon statements and
certificates of officers and representatives of the Fund and others.
As to matters governed by the laws of
<PAGE>
The Gabelli Global Multimedia Trust Inc.
August 7, 1995
Page 2
Maryland, we have relied upon the opinion of Messrs. Venable, Baetjer and
Howard, LLP that is attached to this opinion.
Based upon the foregoing, we are of the opinion that when the purchase price for
the Shares has been determined by the duly appointed Pricing Committee of the
Board of Directors as authorized by the Board of Directors, the Shares to be
issued upon exercise of the Rights will have been duly authorized and that when
the Shares have thereafter been sold, issued and paid for as contemplated by the
Registration Statement, the Shares will have been validly and legally issued and
will be fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus included as part of the Registration Statement.
Very truly yours,
/s/ Willkie Farr & Gallagher
Exhibit (l)(2)
[Letterhead of Venable, Baetjer And Howard, LLP]
August 7, 1995
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Re: The Gabelli Global Multimedia Trust Inc.
----------------------------------------
Ladies and Gentlemen:
We have acted as special Maryland counsel for The Gabelli Global
Multimedia Trust Inc., a Maryland corporation (the "Fund"), in connection with
the issuance of up to 2,869,137 shares (the "Shares") of its common stock, $.001
par value per share (the "Common Stock") pursuant to the exercise of rights (the
"Rights") to purchase Common Stock to be distributed to the Fund's stockholders
in accordance with the Fund's Registration Statement on Form N-2 (File No.
33-60407) (the "Registration Statement").
As Maryland counsel for the Fund, we are familiar with its Charter
and Bylaws. We have examined the Registration Statement for the Shares,
substantially in the form in which it is to become effective, and the form of
subscription certificate for exercise of the Rights. We have examined and relied
upon a certificate of the Maryland State Department of Assessments and Taxation
to the effect that the Fund is duly incorporated and existing under the laws of
the State of Maryland and is in good standing and duly authorized to transact
business in the State of Maryland. We have further examined and relied upon a
certificate of the Assistant Secretary of the Fund with respect to the Fund's
Charter and Bylaws and certain action taken by its Board of Directors, among
other matters addressed in the certificate. We have examined and relied upon
such corporate records of the Fund and other documents and certificates as to
factual matters as we have deemed necessary to render the opinion expressed
herein.
We have assumed that the Fund has no "Principal Shareholder" as
defined in Article VIII of the Fund's Charter and have relied upon a certificate
of the Assistant Secretary of the Fund to the effect that the Fund has no
knowledge of any such Principal Shareholder. We have also assumed, without
independent verification, the authenticity of all documents submitted to us as
originals, the conformity with originals of all documents submitted to us as
copies, and the genuineness of all signatures.
<PAGE>
Willkie Farr & Gallagher
August 7, 1995
Page 2
Based on such examination, we are of the opinion and so advise you
that when the purchase price for the Shares has been determined by the duly
appointed Pricing Committee of the Board of Directors as authorized by the Board
of Directors, the Shares of Common Stock to be issued upon exercise of the
Rights will have been duly authorized and that when the Shares have thereafter
been sold, issued and paid for as contemplated by the Registration Statement,
the Shares will have been validly and legally issued and will be fully paid and
nonassessable.
This letter expresses our opinion with respect to the Maryland
General Corporation Law governing matters such as the authorization and issuance
of stock. It does not extend to the securities laws or "Blue Sky" laws of
Maryland, to federal securities laws, or to other federal or state laws.
You may rely upon our foregoing opinion in rendering your opinion
to the Fund that is to be filed as an exhibit to the Registration Statement. We
consent to the filing of this opinion as an exhibit to the Registration
Statement and the reference to us under the caption "Legal Matters" in the
Prospectus. We do not thereby admit that we are "experts" as that term is used
in the Securities Act of l933 and the regulations thereunder.
Very truly yours,
/s/ VENABLE, BAETJER AND HOWARD, LLP
EXHIBIT (n)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting part of this registration
statement on Form N-2 (the "Registration Statement") of our report dated
February 9, 1995, relating to the financial statements and financial highlights
appearing in the December 31, 1994 Annual Report of Shareholders of the Gabelli
Global Multimedia Trust Inc., which is also incorporated by reference into the
Registration Statement. We also consent to the references to us under the
headings "Financial Highlights" and "Experts" in the prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
August 3, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of December 31, 1994 and is qualified in its entirety by
reference to such financial statements
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> NOV-15-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 67,848
<INVESTMENTS-AT-VALUE> 68,046
<RECEIVABLES> 10
<ASSETS-OTHER> 452
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 68,508
<PAYABLE-FOR-SECURITIES> 3,449
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 453
<TOTAL-LIABILITIES> 3,902
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 64,512
<SHARES-COMMON-STOCK> 8,607
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 31
<ACCUM-APPREC-OR-DEPREC> 198
<NET-ASSETS> 64,606
<DIVIDEND-INCOME> 13
<INTEREST-INCOME> 394
<OTHER-INCOME> 0
<EXPENSES-NET> 145
<NET-INVESTMENT-INCOME> 262
<REALIZED-GAINS-CURRENT> 21
<APPREC-INCREASE-CURRENT> 198
<NET-CHANGE-FROM-OPS> 481
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 335
<DISTRIBUTIONS-OF-GAINS> 52
<DISTRIBUTIONS-OTHER> 43
<NUMBER-OF-SHARES-SOLD> 8,597
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 8,607
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 73
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 83
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 145
<AVERAGE-NET-ASSETS> 64,498
<PER-SHARE-NAV-BEGIN> 7.50
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .03
<PER-SHARE-DIVIDEND> .03
<PER-SHARE-DISTRIBUTIONS> .01
<RETURNS-OF-CAPITAL> .01
<PER-SHARE-NAV-END> 7.51
<EXPENSE-RATIO> .017
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
