As filed with the Securities and Exchange Commission on March 9, 2000
Registration Nos. 33-79994 and 811-08560
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
--
Pre-Effective Amendment No.
Post-Effective Amendment No. 8 X
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 10 X
GABELLI INTERNATIONAL GROWTH FUND, INC.
(Exact Name of Registrant as Specified in Charter)
One Corporate Center, Rye, New York 10580-1434
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 1- 800-422-3554
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center,
Rye, New York 10580-1434
(Name and Address of Agent for Service)
Copies to:
James E. McKee, Esq. Daniel Schloendorn, Esq.
Gabelli International Growth Fund, Inc. Willkie Farr & Gallagher
One Corporate Center 787 Seventh Avenue
Rye, New York 10580-1434 New York, New York 10019
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b); or
X on March 9, 2000 pursuant to paragraph (b); or
60 days after filing pursuant to paragraph (a)(1); or on
[____] pursuant to paragraph (a)(1); or 75 days after filing
pursuant to paragraph (a)(2); or on [____] pursuant to
paragraph (a)(2) of Rule 485
If appropriate, check the following box: This post-effective amendment
designates a new effective date for a previously filed post-effective amendment.
Gabelli
International
Growth
Fund,
Inc.
Class AAA Shares
PROSPECTUS
March 9, 2000
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
<PAGE>
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC. TABLE OF CONTENTS
Investment and Performance Summary
- -------------------------------------------------------------------------------
3 - 5
Investment and Risk Information
- -------------------------------------------------------------------------------
5 - 6
Management of the Fund
- -------------------------------------------------------------------------------
6 - 7
- -------------------------------------------------------------------------------
7 Purchase of Shares
8 Redemption of Shares
9 Exchange of Shares
10 Pricing of Fund Shares
10 Dividends and Distributions
10 Tax Information
Financial Highlights
- -------------------------------------------------------------------------------
11
<PAGE>
<PAGE>
INVESTMENT AND PERFORMANCE SUMMARY
Investment Objective:
Gabelli International Growth Fund, Inc. (the "Fund") seeks to provide
investors with long-term capital appreciation. The production of any current
income is incidental. Capital is the amount of money you invest in the Fund.
Capital appreciation is an increase in the value of your investment.
Principal Investment Strategies:
The Fund invests primarily in equity securities of foreign issuers located in
at least three countries outside the United States which are likely to have
rapid growth in revenues and earnings and potential for above-average capital
appreciation. Equity securities include common and preferred stocks, securities
convertible into common stocks and securities like rights and warrants that have
common stock characteristics. The Fund seeks to invest in companies that have
the potential to grow faster than other companies in their respective equity
markets and are priced at attractive valuation levels.
Principal Risks:
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. Stocks are subject to market, economic and business
risks that cause their prices to fluctuate. When you sell Fund shares, they may
be worth less than what you paid for them. Consequently, you can lose money by
investing in the Fund. Foreign securities are subject to currency, information
and political risks. The Fund is also subject to the risk that the judgment of
the Fund's investment adviser, Gabelli Funds, LLC (the "Adviser"), about the
above-average growth potential of particular stocks is incorrect.
Who May Want To Invest:
The Fund's AAA Shares offered herein are offered only to investors who
acquire them directly through Gabelli & Company, Inc., the Fund's distributor
(the "Distributor"), or through a select number of financial intermediaries with
whom the Distributor has entered into selling agreements specifically
authorizing them to offer Class AAA Shares.
The Fund may appeal to you if:
(BULLET) you are seeking a long-term investor
(BULLET) you seek growth of capital
(BULLET) you seek to diversify domestic investments with investments
in foreign securities
You may not want to invest in the Fund if:
(BULLET) you are seeking a high level of current income
(BULLET) you are conservative in your investment approach
(BULLET) you seek stability of principal more than potential growth of
capital
An Investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
<PAGE>
Performance:
The bar chart and table shown below provide an indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year (since 1996), and by showing how the Fund's average annual returns for one
year and the life of the Fund compare to those of a broad-based securities
market index. As with all mutual funds, the Fund's past performance does not
predict how the Fund will perform in the future. Both the chart and the table
assume reinvestment of dividends and distributions.
GABELLI INTERNATIONAL GROWTH FUND, INC.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
"1996" 22.2
"1997" 7.3
"1998" 17.4
"1999" 52.4
During the period shown in the bar chart, the highest return for a quarter
was 36.92% (quarter ended December 31, 1999) and the lowest return for a quarter
was (16.15)% (quarter ended September 30, 1998).
<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual Total Returns Since June 30,
(for the periods ended December 31, 1999) Past One Year 1995*
- ------------------------------------------------------------------- -------------- -------------
The Gabelli International Growth Fund, Inc.
Class AAA Shares 52.4% 23.4%
Morgan Stanley EAFE Index** 27.3% 11.8%
Lipper International Fund Average*** 40.9% 17.1%
- ------------------------
* From June 30, 1995, the that date the Fund commenced investment operations.
** The Morgan Stanley EAFE Index ("MS EAFE Index") is a widely recognized
unmanaged index composed of common stocks from Europe, Australia, Asia and the
Far East. The performance of the Index does not include expenses or fees. ***
The Lipper International Fund Average ("LIFA") represents the average
performance of international equity mutual funds as tracked by Lipper.
</TABLE>
Fees And Expenses of the Fund:
This table describes the fees and expenses that you may pay if you buy and hold
Class AAA Shares of the Fund.
Annual Fund Operating Expenses:
(expenses that are deducted from Fund assets)
Management Fees 1.00%
Distribution (Rule 12b-1) Expenses 0.25%
Other Expenses 0.65%
-------
Total Annual Fund Operating Expenses 1.90%
-------
-------
Expense Example:
This example is intended to help you compare the cost of investing in Class AAA
Shares of the Fund with the cost of investing in other mutual funds. The example
assumes (1) you invest $10,000 in the Fund for the time periods shown, (2) you
redeem your shares at the end of those periods, except as noted, (3) your
investment has a 5% return each year and (4) the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
- -------- -------- -------- --------
$193 $597 $1,026 $2,222
</TABLE>
INVESTMENT AND RISK INFORMATION
The Fund seeks long-term capital appreciation. To achieve its investment
objective, the Fund invests primarily in the equity securities of foreign
issuers.
Under normal circumstances, the Fund will invest at least 65% of its total
assets in the equity securities of companies located in at least three countries
outside the U.S. which the Adviser believes are likely to have rapid growth in
revenues and earnings and potential for above-average capital appreciation.
In selecting investments for the Fund, the Adviser considers a number of
factors, including:
(BULLET) a company's potential to grow faster than other companies in its
respective equity market
(BULLET) valuation levels
(BULLET) the political stability and economic outlook of countries and regions
(BULLET) the prudent allocation among countries and regions to reduce
volatility in the Fund's portfolio
The Fund intends to diversify its investments across different countries, but
the percentage of Fund assets invested in particular countries or regions will
change from time to time based on the Adviser's judgment. The Fund intends to
invest in the securities of companies located in developed countries and, to a
lesser extent, those located in emerging markets.
The Fund may also use the following investment technique:
(BULLET) Defensive Investments. When adverse market or economic conditions
occurs, the Fund may temporarily invest up to all or a portion of its assets in
defensive investments. Such investments include fixed income securities or money
market instruments. When following a defensive strategy, the Fund will be less
likely to achieve its investment goal.
<PAGE>
Investing in the Fund involves the following risks:
(BULLET) Equity Risk. The principal risk of investing in the Fund is
equity risk. Equity risk is the risk that the price of securities held by the
Fund will change due to general market and economic conditions, perceptions
regarding the industries in which the companies issuing the securities
participate and the issuer company's particular circumstances.
(BULLET) Fund And Management Risk. The Fund invests in growth stocks
and the Fund's price may decline if the market favors other types of stocks. If
the Adviser is incorrect in its assessment of the growth prospects of the
securities it holds, then the value of the Fund's shares may decline.
(BULLET) Foreign Securities Risk. A fund that invests outside the U.S.
carries additional risks that include:
(BULLET) Currency Risk. Fluctuations in exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by
foreign-currency denominated investments and may widen any losses. The Fund may,
but is not required to, seek to reduce currency risk by hedging part or all of
its exposure to various foreign currencies.
(BULLET) Information Risk. Key information about an issuer, security or
market may be inaccurate or unavailable.
(BULLET) Political Risk. Foreign governments may expropriate assets, impose
capital or currency controls, impose punitive taxes or nationalize a company or
industry. Any of these actions could have a severe effect on security prices and
impair the Fund's ability to bring its capital or income back to the U.S. Other
political risks include economic policy changes, social and political
instability, military action and war.
(BULLET) Access Risk. The risk that some countries may restrict the Fund's
access to investments or offer terms that are less advantageous than those for
local investors. This could limit the attractive investment opportunities
available to the Fund.
MANAGEMENT OF THE FUND
The Adviser. Gabelli Funds, LLC, with principal offices located at One
Corporate Center, Rye, New York 10580-1434, serves as investment adviser to the
Fund. The Adviser makes investment decisions for the Fund and continuously
reviews and administers the Fund's investment program under the supervision of
the Fund's Board of Directors. The Adviser also manages several other open-end
and closed-end investment companies in the Gabelli family of funds. The Adviser
is a New York limited liability company organized in 1999 as successor to
Gabelli Group Capital Partners, Inc. (formerly named Gabelli Funds, Inc.), a New
York corporation organized in 1980. The Adviser is a wholly-owned subsidiary of
Gabelli Asset Management Inc. ("GAMI"), a publicly held company listed on the
New York Stock Exchange ("NYSE").
As compensation for its services and the related expenses borne by the
Adviser, for the fiscal year ended December 31, 1999, the Fund paid the Adviser
a fee equal to 1.00% of the value of the Fund's average daily net assets.
The Portfolio Manager. Mr. Caesar M.P. Bryan is primarily responsible for the
day-to-day management of the Fund. Mr. Bryan has been a Senior Vice President
and Portfolio Manager with GAMCO Investors, Inc., a wholly-owned subsidiary of
GAMI, and Portfolio Manager of the Gabelli Gold Fund, Inc. since May 1994. Mr.
Bryan served as Senior Vice President of Lexington Management Corporation from
1986 until May 1994.
Rule 12b-1 Plan. The Fund has adopted a plan under Rule 12b-1 (the "Plan")
which authorizes payments by the Fund on an annual basis of 0.25% of the Fund's
average daily net assets attributable to Class AAA Shares to finance
distribution of the Fund's Class AAA Shares. The Fund may make pay ments under
the Plan for the purpose of financing any activity primarily intended to result
in the sales of Class AAA Shares of the Fund. To the extent any activity is one
that the Fund may finance without a distribution plan, the Fund may also make
payments to compensate such activity outside of the Plan and not be subject to
its limitations. Because payments under the Plan are paid out of the Fund's
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. Due
to the payment of 12b-1 fees, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales change.
PURCHASE OF SHARES
You can purchase the Fund's shares on any day the NYSE is open for trading (a
"Business Day"). You may purchase shares through the Distributor, directly from
the Fund through the Fund's transfer agent or through registered broker-dealers
that have entered into selling agreements with the Distributor.
(BULLET) By Mail or In Person. You may open an account by mailing a
completed subscription order form with a check or money order payable to
"Gabelli International Growth Fund, Inc." to:
By Mail By Personal Delivery
-------------------- --------------------------
The Gabelli Funds The Gabelli Funds
P.O. Box 8308 c/o BFDS
Boston, MA 02266-8308 66 Brooks Drive
Braintree, MA 02184
You can obtain a subscription order form by calling 1-800-GABELLI
(1-800-422-3554). Checks made payable to a third party and endorsed by the
depositor are not acceptable. For additional investments, send a check to the
above address with a note stating your exact name and account number, and the
name of the Fund and class of shares you wish to purchase.
(BULLET) By Bank Wire. To open an account using the bank wire transfer
system, first telephone the Fund at 1-800-GABELLI (1-800-422-3554) to obtain a
new account number. Then instruct a Federal Reserve System member bank to wire
funds to:
State Street Bank and Trust Company
[ABA #011-0000-28 REF DDA #99046187]
Re: The Gabelli ___________ Fund
Account #__________
Account of [Registered Owners]
225 Franklin Street, Boston, MA 02110
If you are making an initial purchase, you should also complete and mail
a subscription order form to the address shown under "By Mail." Note that banks
may charge fees for wiring funds, although State Street Bank and Trust Company
("State Street") will not charge you for receiving wire transfers.
Share Price. The Fund sells its Class AAA Shares at the net asset value next
determined after the Fund receives your completed subscription order form and
your payment. See "Pricing of Fund Shares" for a description of the calculation
of net asset value. Minimum Investments. Your minimum initial investment must be
at least $1,000. See "Retirement Plans" and "Automatic Investment Plan"
regarding minimum investment amounts applicable to such plans. There is no
minimum for subsequent investments. Broker-dealers may have different minimum
investment requirements.
<PAGE>
Retirement Plans. The Fund has available a form of IRA and a "Roth" IRA for
investment in Fund shares that may be obtained from the Distributor by calling
1-800-GABELLI (1-800-422-3554). Self-employed investors may purchase shares of
the Fund through tax-deductible contributions to existing retirement plans for
self-employed persons, known as "Keogh" or "H.R.-10" plans. The Fund does not
currently act as a sponsor to such plans. Fund shares may also be a suitable
investment for other types of qualified pension or profit-sharing plans which
are employer sponsored, including deferred compensation or salary reduction
plans known as "401(k) Plans." The minimum initial investment in all such
retirement plans is $250. There is no minimum subsequent investment requirement
for retirement plans.
Automatic Investment Plan. The Fund offers an automatic monthly investment plan.
There is no minimum monthly investment for accounts establishing an automatic
investment plan. Call the Distributor at 1-800-GABELLI (1-800-422-3554) for more
details about the plan.
Telephone or Internet Investment Plan. You may purchase additional shares of the
Fund by telephone and/or over the Internet if your bank is a member of the
Automated Clearing House ("ACH") system. You must also have a completed,
approved Investment Plan application on file with the Fund's Transfer Agent.
There is a minimum of $100 for each telephone or Internet investment. To
initiate an ACH Purchase, please call 1-800-GABELLI (1-800-422-3554) or
1-800-872-5365 or visit our website @ www.gabelli.com.
General. State Street will not issue share certificates unless requested by you.
The Fund reserves the right to (i) reject any purchase order if, in the opinion
of the Fund's management, it is in the Fund's best interest to do so, (ii)
suspend the offering of shares for any period of time and (iii) waive the Fund's
minimum purchase requirement.
REDEMPTION OF SHARES
You can redeem shares of the Fund on any Business Day without a redemption fee.
The Fund may temporarily stop redeeming its shares when the NYSE is closed or
trading on the NYSE is restricted, when an emergency exists and the Fund cannot
sell its shares or accurately determine the value of its assets, or if the
Securities and Exchange Commission ("SEC") orders the Fund to suspend
redemptions.
The Fund redeems its shares at the net asset value next determined after the
Fund receives your redemption request. See "Pricing of Fund Shares" for a
description of the calculation of net asset value.
You may redeem shares through the Distributor or directly from the Fund through
the Fund's transfer agent.
(BULLET) By Letter. You may mail a letter requesting redemption of shares
to: The Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. Your letter should
state the name of the Fund and the share class, the dollar amount or number of
shares you wish to redeem and your account number. You must sign the letter in
exactly the same way the account is registered and if there is more than one
owner of shares, all must sign. A signature guarantee is required for each
signature on your redemption letter. You can obtain a signature guarantee from
financial institutions such as commercial banks, brokers, dealers and savings
associations. A notary public cannot provide a signature guarantee.
(BULLET) By Telephone or the Internet. You may redeem your shares in an
account directly registered with State Street by calling either 1-800-GABELLI
(1-800-422-3554) or 1-800-872-5365 (617-328-5000 from outside the United States)
or visiting our website at www.gabelli.com, subject to a $25,000 limitation. You
may not redeem shares held through an IRA by telephone or the Internet. If State
Street properly acts on telephone or Internet instructions and follows
reasonable procedures to protect against unauthorized transactions, neither
State Street nor the Fund will be responsible for any losses due to telephone or
Internet transactions. You may be responsible for any fraudulent telephone or
Internet order as long as State Street or the Fund takes reasonable measures to
verify the order. You may request that redemption proceeds be mailed to you by
check (if your address has not changed in the prior 30 days), forwarded to you
by bank wire or invested in another mutual fund advised by the Adviser (see
"Exchange of Shares").
1. Telephone or Internet Redemption By Check. The Fund will make checks
payable to the name in which the account is registered and normally will mail
the check to the address of record within seven days.
2. Telephone or Internet Redemption By Bank Wire. The Fund accepts
telephone or Internet requests for wire redemption in amounts of at least
$1,000. The Fund will send a wire to either a bank designated on your
subscription order form or on a subsequent letter with a guaranteed signature.
The proceeds are normally wired on the next Business Day.
Automatic Cash Withdrawal Plan. You may automatically redeem shares on a
monthly, quarterly or annual basis [if you have at least $10,000 in your account
and if your account is directly registered with State Street.] Call
1-800-GABELLI (1-800-422-3554) for more information about this plan.
Involuntary Redemption. The Fund may redeem all shares in your account (other
than an IRA account) if its value falls below $1,000 as a result of redemptions
(but not as a result of a decline in net asset value). You will be notified in
writing if the Fund initiates such action and allowed 30 days to increase the
value of your account to at least $1,000.
Redemption Proceeds. A redemption request received by a Fund will be effected at
the net asset value next determined after a Fund receives the request. If you
request redemption proceeds by check, the Fund will normally mail the check to
you within seven days after receipt of your redemption request. If you purchased
your Fund shares by check or through the Automatic Investment Plan, you may not
receive proceeds from your redemption until the check clears, which may take up
to as many as 15 days following purchase. While the Fund will delay the
processing of the redemption until the check clears, your shares will be valued
at the next determined net asset value after receipt of your redemption
request.
EXCHANGE OF SHARES
You can exchange shares of the Fund you hold for shares of the same class of
another fund managed by the Adviser or its affiliates based on their relative
net asset values. To obtain a list of the funds whose shares you may acquire
through an exchange call 1-800-GABELLI (1-800-422-3554). You may also exchange
your shares for shares of a money market fund managed by the Adviser or its
affiliates.
In effecting an exchange:
(BULLET) you must meet the minimum investment requirements for the fund
whose shares you purchase through exchange
(BULLET) if you are exchanging to a fund with a higher sales charge, you
must pay the difference at the time of exchange
(BULLET) you may realize a taxable gain or loss
(BULLET) you should read the prospectus of the fund whose shares you are
purchasing through exchange [(call 1-800-GABELLI (1-800-422-3554) to obtain the
prospectus)] You may exchange shares through the Distributor, directly through
the Fund's transfer agent or through a registered broker-dealer.
(BULLET) Exchange by Telephone. You may give exchange instructions by
telephone by calling 1-800-GABELLI (1-800-422-3554). You may not exchange shares
by telephone if you hold share certificates.
(BULLET) Exchange by Mail. You may send a written request for exchanges to:
The Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. Your letter should
state your name, your account number, the dollar amount or number of shares you
wish to exchange, the name and class of the fund whose shares you wish to
exchange, and the name of the fund whose shares you wish to acquire.
(BULLET) Exchange through the Internet. You may also give exchange
instructions via the Internet at www.gabelli.com. You may not exchange shares
through the Internet if you hold share certificates. We may modify or terminate
the exchange privilege at any time. You will be given notice 60 days prior to
any material change in the exchange privilege.
PRICING OF FUND SHARES
The Fund's net asset value per share of the Class AAA Shares is calculated on
each Business Day. The NYSE is open Monday through Friday, but currently is
scheduled to be closed on New Year's Day, Dr. Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent
Monday when a holiday falls on a Saturday or Sunday, respectively.
The Fund's net asset value per share of the Class AAA shares is determined
as of the close of regular trading of the NYSE, normally 4:00 p.m., Eastern
Time. Net asset value is computed by dividing the value of the Fund's net assets
(i.e. the value of its securities and other assets less its liabilities,
including expenses payable or accrued but excluding capital stock and surplus)
by the total number of its shares outstanding at the time the determination is
made. The Fund uses market quotations in valuing its portfolio securities.
Short-term investments that mature in 60 days or less are valued at amortized
cost, which the Directors of the Fund believe represent fair value.
If the Fund has portfolio securities that are primarily listed on foreign
exchanges that trade on weekends or other days when the fund does not price
shares, the net asset value of the Fund's Shares may change on days when
shareholders will not be able to purchase or redeem the Fund's Shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends of net investment income and capital gains, if any, will be paid
annually. You may have dividends or capital gains distributions that are
declared by the Fund automatically reinvested at net asset value in additional
shares of the Fund. You will make an election to receive dividends and
distributions in cash or Fund shares at the time you purchase your shares. You
may change this election by notifying the Fund in writing at any time prior to
the record date for a particular dividend or distribution. There are no sales or
other charges in connection with the reinvestment of dividends and capital gain
distributions. There is no fixed dividend rate, and there can be no assurance
that the Fund will pay any dividends or realize any capital gains.
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net investment
income and net realized capital gains. Capital gains may be taxed at different
rates depending on the length of time the Fund holds the asset giving rise to
such gains. Dividends out of net investment income and distributions of net
realized short-term capital gains (i.e. gains from assets held by the Fund for
one year or less) are taxable to you as ordinary income. Distributions of net
long-term capital gains are taxable to you at long-term capital gain rates. The
Fund's distributions, whether you receive them in cash or reinvest them in
additional shares of the Fund, generally will be subject to federal, state or
local taxes. An exchange of the Fund's shares for shares of another fund will be
treated for tax purposes as a sale of the Fund's shares; and any gain you
realize on such a transaction generally will be taxable.
Foreign shareholders generally will be subject to a federal withholding tax.
This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of your investment
in the Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance for the past five fiscal years of the Fund. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund's Class AAA Shares. This information has been audited by
Ernst & Young LLP, independent auditors, whose report along with the Fund's
financial statements and related notes are included in the annual report, which
is available upon request.
GABELLI INTERNATIONAL GROWTH FUND, INC.
Per share amounts for the Fund's Class AAA Shares outstanding throughout each
fiscal year ended December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995+
------------------------ ------------ ------------ ------------
Operating performance:
Net asset value, beginning of period $ 15.63 $ 14.40 $ 13.42 $ 10.98 $10.00
------------------------ ------------ ------------ ------------
Net investment loss (0.09) (0.02) (0.13) (0.15)(a) (0.03)(a)
Net realized and unrealized
gain/(loss)on investments 8.25 2.51 1.11 2.59 1.01
------------------------ ------------ ------------ ------------
Total from investment operations 8.16 2.49 0.98 2.44 0.98
------------------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income (0.10) (0.03) -- -- --
Net realized gain on investments (0.87) (1.23) -- -- --
------------------------ ------------ ------------ ------------
Total distributions (0.97) (1.26) -- -- --
------------------------ ------------ ------------ ------------
Net asset value, end of period $ 22.82 $ 15.63 $ 14.40 $ 13.42 $10.98
------------------------ ------------ ------------ ------------
------------------------ ------------ ------------ ------------
Total return++ 52.4% 17.4% 7.3% 22.2% 9.8%
------------------------ ------------ ------------ ------------
------------------------ ------------ ------------ ------------
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) $48,883 $26,791 $18,133 $12,815 $2,096
Ratio of net investment loss to
average net assets(c) (0.62)% (0.14)% (0.82)% (1.21)% (1.19)%(b)
Ratio of operating expenses to
average net assets(c) 1.90% 1.98% 2.46% 2.72% 2.75%(b)
Portfolio turnover rate 74% 52% 63% 55% 30%
- ----------------
+ From commencement of operations on June 30, 1995.
++ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less than
one year is not annualized.
(a) Based on average month-end shares outstanding.
(b) Annualized.
(c) The Fund incurred interest expense for the years ended December 31, 1999,
1998 and 1997. If interest expense had not been incurred, the ratios of
operating expenses to average net assets would have been 1.88%, 1.96% and 2.44%,
respectively. During the periods ended December 31, 1996 and 1995, the Adviser
voluntarily reimbursed certain expenses. Before reimbursement, the ratios of
operating expenses and net investment loss to average net assets would have been
3.62% and (2.12%) for 1996 and 8.10% and (6.54%) for 1995 (annualized),
respectively.
</TABLE>
Gabelli International
Growth Fund, Inc.
For More Information:
For more information about the Fund, the following documents are available free
upon request:
Annual/Semi-annual Reports:
The Fund's semi-annual and annual reports to shareholders contain additional
information on the Fund's investments. In the Fund's annual report, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
Statement of Additional Information (SAI):
The SAI provides more detailed information about the Fund, including its
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
You can review the Fund's reports and SAI at the Public Reference Room of the
Securities and Exchange Commission. Information on the operation of the Public
Reference Room may be obtained by calling the Commission at 1-202-942-8090. You
can get text-only copies:
o For a fee, by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102 [or by calling 1-202-942-8090], or by
electronic request at the following email address: [email protected].
o Free from the Commission's Website at http://www.sec.gov.
You can get free copies of these documents and prospectuses of other funds in
the Gabelli family, or request other information and discuss your questions
about the Fund by contacting:
Gabelli International Growth Fund, Inc.
One Corporate Center
Rye, NY 10580
Telephone: 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
(Investment Company Act file no. 811-08560)
<PAGE>
Gabelli International Growth Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling 1-800-GABELLI after 6:00 p.m.)
Questions?
Call 1-800-GABELLI
or your investment representative.
<PAGE>
Gabelli
International
Growth
Fund,
Inc.
Class A, B, C Shares
PROSPECTUS
March 9, 2000
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
<PAGE>
Gabelli International Growth Fund, Inc. Table of Contents
Investment and Performance Summary
- -------------------------------------------------------------------------------
3 - 5
Investment and Risk Information
- -------------------------------------------------------------------------------
6 - 7
Management of the Fund
- -------------------------------------------------------------------------------
7
- -------------------------------------------------------------------------------
7 Classes of Shares
12 Purchase of Shares
13 Redemption of Shares
14 Exchange of Shares
14 Pricing of Fund Shares
15 Dividends and Distributions
15 Tax Information
Financial Highlights
- -------------------------------------------------------------------------------
15
<PAGE>
INVESTMENT AND PERFORMANCE SUMMARY
Investment Objective:
Gabelli International Growth Fund, Inc. (the "Fund") seeks to provide investors
with long-term capital appreciation. The production of any current income is
incidental. Capital is the amount of money you invest in the Fund. Capital
appreciation is an increase in the value of your investment.
Principal Investment Strategies:
The Fund invests primarily in equity securities of foreign issuers located in at
least three countries outside the United States which are likely to have rapid
growth in revenues and earnings and potential for above-average capital
appreciation. Equity securities include common and preferred stocks, securities
convertible into common stocks and securities like rights and warrants that have
common stock characteristics. The Fund seeks to invest in companies that have
the potential to grow faster than other companies in their respective equity
markets and are priced at attractive valuation levels.
Principal Risks:
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. Stocks are subject to market, economic and business
risks that cause their prices to fluctuate. When you sell Fund shares, they may
be worth less than what you paid for them. Consequently, you can lose money by
investing in the Fund. Foreign securities are subject to currency, information
and political risks. The Fund is also subject to the risk that the judgment of
the Fund's investment adviser, Gabelli Funds, LLC (the "Adviser"), about the
above-average growth potential of particular stocks is incorrect.
Who May Want to Invest:
The Fund may appeal to you if:
(BULLET) you are a long-term investor
(BULLET) you seek growth of capital
(BULLET) you seek to diversify domestic investments with investments in
foreign securities
You may not want to invest in the Fund if:
(BULLET) you are seeking a high level of current income
(BULLET) you are conservative in your investment approach
(BULLET) you seek stability of principal more than potential growth of
capital
An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
<PAGE>
Performance:
The bar chart and table shown below provide an indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year (since 1996), and by showing how the Fund's average annual returns for one
year and the life of the Fund compare to those of a broad-based securities
market index. As with all mutual funds, the Fund's past performance does not
predict how the Fund will perform in the future. Both the chart and the table
assume reinvestment of dividends and distributions.
GABELLI INTERNATIONAL GROWTH FUND, INC.*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRPAHIC
1996 1997 1998 1999
22.2% 7.3% 17.4% 52.4%
- ------------------------
* The bar chart above shows the total returns for Class AAA Shares (not
including sales load). The Class A, Class B and Class C Shares are new classes
of the Fund for which performance is not yet available. The Class AAA Shares of
the Fund are offered in a separate prospectus. The returns for the Class A,
Class B and Class C Shares will be substantially similar to those of the Class
AAA Shares shown in the chart above because all shares of the Fund are invested
in the same portfolio of securities. The annual returns of the different classes
of shares will differ only to the extent that the expenses of the classes
differ.
Class A, B and C Share sales loads are not reflected in the above chart. If
sales loads were reflected, the Fund's returns would be less than those shown.
During the period shown in the bar chart, the highest return for a quarter was
36.92% (quarter ended December 31, 1999) and the lowest return for a quarter was
(16.15)% (quarter ended September 30, 1998).
Average Annual
Total Returns Since June 30,
(for the periods ended December 31, 1999) Past One Year 1995*
- --------------------------------------------- ------------- ---------
Gabelli International Growth Fund, Inc.
Class AAA Shares 52.42% 23.35%
Morgan Stanley EAFE Index** 27.30% 11.84%
Lipper International Fund Average*** 40.86% 17.14%
- ------------------------
* From June 30, 1995, the date that the Fund commenced investment operations.
** The Morgan Stanley EAFE Index ("MS EAFE Index") is a widely recognized
unmanaged index composed of common stocks from Europe, Australia, Asia and the
Far East. The performance of the Index does not include expenses or fees.
***The Lipper International Fund Average ("LIFA") represents the average
performance of international equity mutual funds as tracked by Lipper, Inc.
<PAGE>
Fees and Expenses of the Fund:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class A Class B Class C
Shares Shares Shares
--------- --------- ---------
Shareholder Fees
(fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases
(as a percentage of offering price) 5.75%(1) None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption price(4)) None(2) 5.00%(3) 1.00%(3)
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets):
Management Fees 1.00% 1.00% 1.00%
Distribution and Service (Rule 12b-1) Expenses 0.25% 1.00% 1.00%
Other Expenses 0.65% 0.65% 0.65%
--------- --------- ---------
Total Annual Operating Expenses 1.90% 2.65% 2.65%
--------- --------- ---------
--------- --------- ---------
- ------------------------
(1) The sales charge declines as the amount invested increases.
(2) If no sales charge was paid at the time of purchase as part of an
investment that is greater than $2,000,000, shares redeemed within 24
months of such purchase may be subject to a deferred sales charge of 1.00%.
(3) The Fund imposes a sales charge upon redemption of Class B Shares if you
sell your shares within seventy-two months after purchase. A maximum sales
charge of 1.00% applies to redemptions of Class C Shares within twenty-four
months after purchase. The sales charge declines the longer the investment
remains in the Fund.
(4) "Redemption price" equals the net asset value at the time of investment or
redemption, whichever is lower.
</TABLE>
Expense Example:
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes (1) you
invest $10,000 in the Fund for the time periods shown, (2) you redeem your
shares at the end of those periods, except as noted, (3) your investment has a
5% return each year and (4) the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
--------- ---------- ---------- -----------
Class A Shares $757 $1,138 $1,542 $2,669
Class B Shares
- assuming redemption $768 $1,123 $1,605 $2,802
- assuming no redemption $268 $823 $1,405 $2,802
Class C Shares
- assuming redemption $368 $823 $1,405 $2,983
- assuming no redemption $268 $823 $1,405 $2,983
</TABLE>
<PAGE>
INVESTMENT AND RISK INFORMATION
The Fund seeks long-term capital appreciation. To achieve its investment
objective, the Fund invests primarily in the equity securities of foreign
issuers.
Under normal circumstances, the Fund will invest at least 65% of
its total assets in the equity securities of companies located in at least three
countries outside the U.S. which the Adviser believes are likely to have rapid
growth in revenues and earnings and potential for above-average capital
appreciation.
In selecting investments for the Fund, the Adviser considers a
number of factors, including:
(BULLET) a company's potential to grow faster than other companies in its
respective equity market
(BULLET) valuation levels
(BULLET) the political stability and economic outlook of countries
and regions
(BULLET) the prudent allocation among countries and regions to reduce
volatility in the Fund's portfolio
The Fund intends to diversify its investments across different countries, but
the percentage of Fund assets invested in particular countries or regions will
change from time to time based on the Adviser's judgment. The Fund intends to
invest in the securities of companies located in developed countries and, to a
lesser extent, those located in emerging markets.
The Fund may also use the following investment technique:
(BULLET) Defensive Investments. When adverse market or economic conditions
occur, the Fund may temporarily invest all or a portion of its assets in
defensive investments. Such investments include fixed income securities or money
market instruments. When following a defensive strategy, the Fund will be less
likely to achieve its investment goal.
Investing in the Fund involves the following risks:
(BULLET) Equity Risk. The principal risk of
investing in the Fund is equity risk. Equity risk is the risk that the prices of
the securities held by the Fund will change due to general market and economic
conditions, perceptions regarding the industries in which the companies issuing
the securities participate and the issuer company's particular
circumstances.
(BULLET) Fund And Management Risk. The Fund invests in
growth stocks and the Fund's price may decline if the market favors other types
of stocks. If the Adviser is incorrect in its assessment of the growth prospects
of the securities it holds, then the value of the Fund's shares may decline.
(BULLET) Foreign Securities Risk. A fund that invests outside the U.S.
carries additional risks that include:
(BULLET) Currency Risk. Fluctuations in exchange rates between the
U.S. dollar and foreign currencies may negatively affect an investment.
Adverse changes in exchange rates may erode or reverse any gains produced
by foreign-currency denominated investments and may widen any losses. The
Fund may, but is not required to, seek to reduce currency risk by hedging
part or all of its exposure to various foreign currencies.
(BULLET) Information Risk. Key information about an issuer, security or
market may be inaccurate or unavailable.
6
<PAGE>
(BULLET) Political Risk. Foreign governments may expropriate assets,
impose capital or currency controls, impose punitive taxes or nationalize
a company or industry. Any of these actions could have a severe effect on
security prices and impair the Fund's ability to bring its capital or
income back to the U.S. Other political risks include economic policy
changes, social and political instability, military action and war.
(BULLET) Access Risk. The risk that some countries may restrict the
Fund's access to investments or offer terms that are less advantageous
than those for local investors. This could limit the attractive investment
opportunities available to the Fund.
MANAGEMENT OF THE FUND
The Adviser. Gabelli Funds, LLC, with principal offices located at One
Corporate Center, Rye, New York 10580-1434, serves as investment adviser to the
Fund. The Adviser makes investment decisions for the Fund and continuously
reviews and administers the Fund's investment program under the supervision of
the Fund's Board of Directors. The Adviser also manages several other open-end
and closed-end investment companies in the Gabelli family of funds. The Adviser
is a New York limited liability company organized in 1999 as successor to
Gabelli Group Capital Partners, Inc. (formerly named Gabelli Funds, Inc.), a New
York corporation organized in 1980. The Adviser is a wholly-owned subsidiary of
Gabelli Asset Management Inc. ("GAMI"), a publicly held company listed on the
New York Stock Exchange ("NYSE").
As compensation for its services and
the related expenses borne by the Adviser, for the fiscal year ended December
31, 1999, the Fund paid the Adviser a fee equal to 1.00% of the value of the
Fund's average daily net assets.
The Portfolio Manager. Mr. Caesar M.P. Bryan is primarily responsible
for the day-to-day management of the Fund. Mr. Bryan has been a Senior Vice
President and Portfolio Manager with GAMCO Investors, Inc., a wholly-owned
subsidiary of GAMI, and Portfolio Manager of the Gabelli Gold Fund, Inc. since
May 1994. Mr. Bryan served as Senior Vice President of Lexington Management
Corporation from 1986 until May 1994.
CLASSES OF SHARES
Three classes of the Fund's shares are offered in this prospectus - Class A
Shares, Class B Shares and Class C Shares. The table below summarizes the
differences among the classes of shares.
(BULLET) A "front-end sales load," or sales charge, is a
one-time fee charged at the time of purchase of
shares.
(BULLET) A "contingent deferred sales charge" ("CDSC") is a one-time
fee charged at the time of redemption.
(BULLET) A "Rule 12b-1 fee" is a recurring annual fee for
distributing shares and servicing shareholder accounts
based on the Fund's average daily net assets attributable to the
particular class of shares.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -----------------------------------------------
Class A Shares Class B Shares Class C Shares
- -----------------------------------------------
Front-End Sales Load? Yes. The percentage No. No.
declines as the amount
invested increases.
Contingent Deferred Sales Charge? Yes, for shares redeemed Yes, for shares Yes, for shares redeemed
within twenty-four months redeemed within within twenty-four months
after purchase as part seventy-two after purchase.
of an investment greater months after
than $2 million if no purchase.
front-end sales charge Declines over
was paid at the time.
time of purchase.
Rule 12b-1 Fee 0.25% 1.00% 1.00%
Convertible to Another Class? No. Yes, automatically No.
converts to Class
A Shares approx-
imately nintety-
six months after
purchase.
Fund Expense Levels Lower annual expenses than Higher annual Higher annual expenses
Class B or Class C Shares expenses than than Class A Shares.
Class A Shares.
</TABLE>
<PAGE>
In selecting a class of shares in which to invest, you should consider
(BULLET) the length of time you plan to hold the shares
(BULLET) the amount of sales charge and Rule 12b-1 fees, recognizing that
your share of 12b-1 fees as a percentage of your investment increases if the
Fund's assets increase in value and decreases if the Fund's assets decrease in
value
(BULLET) whether you qualify for a reduction or waiver of the Class A sales
charge
(BULLET) that Class B Shares convert to Class A Shares approximately
ninety-six months after purchase
<PAGE>
If you...
(BULLET) do not qualify for a reduced or waived front-end sales load and intend
to hold your shares for only a few years
(BULLET) do not qualify for a reduced or waived front-end sales load and intend
to hold your shares for several years
(BULLET) do not qualify for a reduced or waived front-end sales load and intend
to hold your shares indefinitely
<PAGE>
then you should consider...
purchasing Class C Shares instead of either Class A Shares or Class B Shares
purchasing Class B Shares instead of either Class A Shares or Class C Shares
purchasing Class A Shares
- -------------------------------------------------
Sales Charge -- Class A Shares. The sales charge is imposed on Class A Shares at
the time of purchase in accordance with the following schedule:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Sales Charge Sales Charge Reallowance
as % of the as % of to
Amount of Investment Offering Price* Amount Invested Broker-Dealers
- ----------------------------- -------------------- --------------------------------------------
Under $50,000 5.75% 6.10% 5.00%
$50,000 but under $100,000 4.50% 4.71% 3.75%
$100,000 but under $250,000 3.50% 3.62% 2.75%
$250,000 but under $500,000 2.50% 2.56% 2.00%
$500,000 but under $1 million 2.00% 2.04% 1.75%
$1 million but under $2 million 1.00% 1.01% 1.00%
$2 million but under $3 million 0.00%** 0.00% 1.00%
$3 million or more 0.00%** 0.00% 0.50%
- ------------------------
* Includes front-end sales load
** Subject to a 1.00% CDSC for two years after purchase
</TABLE>
Sales Charge Reductions and Waivers -- Class A Shares:
Reduced sales charges are available to (1) investors who are eligible to combine
their purchases of Class A Shares to receive volume discounts and (2) investors
who sign a Letter of Intent agreeing to make purchases over time. Certain types
of investors are eligible for sales charge waivers.
1. Volume Discounts. Investors eligible to receive volume discounts are
individuals and their immediate families, tax-qualified employee benefit plans
and a trustee or other fiduciary purchasing shares for a single trust estate or
single fiduciary account even though more than one beneficiary is involved. You
also may combine the value of Class A Shares you already hold in the Fund and
other funds advised by the Adviser or its affiliates along with the value of the
Class A Shares being purchased to qualify for a reduced sales charge. For
example, if you own Class A Shares of the Fund that have an aggregate value of
$100,000, and make an additional investment in Class A Shares of the Fund of
$4,000, the sales charge applicable to the additional investment would be 3.50%,
rather than the 5.75% normally charged on a $4,000 purchase. If you want more
information on volume discounts, call your broker.
<PAGE>
2. Letter of Intent. If you initially invest at least $1,000 in Class A Shares
of the Fund and submit a Letter of Intent to the Distributor, you may make
purchases of Class A Shares of the Fund during a 13-month period at the reduced
sales charge rates applicable to the aggregate amount of the intended purchases
stated in the Letter. The Letter may apply to purchases made up to 90 days
before the date of the Letter. You will have to pay sales charges at the higher
rate if you fail to honor your Letter of Intent.
For more information on the Letter of Intent, call your broker.
3. Investors Eligible for Sales Charge Waivers. Class A Shares of the Fund may
be offered without a sales charge to: (1) any other investment company in
connection with the combination of such company with the Fund by merger,
acquisition of assets or otherwise; (2) shareholders who have redeemed shares in
the Fund and who wish to reinvest in the Fund, provided the reinvestment is made
within 30 days of the redemption; (3) tax-exempt organizations enumerated in
Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code") and private,
charitable foundations that in each case make lump-sum purchases of $100,000 or
more; (4) qualified employee benefit plans established pursuant to Section 457
of the Code that have established omnibus accounts with the Fund; (5) qualified
employee benefit plans having more than one hundred eligible employees and a
minimum of $1 million in plan assets invested in the Fund (plan sponsors are
encouraged to notify the Fund's distributor when they first satisfy these
requirements); (6) any unit investment trusts registered under the Investment
Company Act of 1940 (the "1940 Act") which have shares of the Fund as a
principal investment; (7) financial institutions purchasing Class A Shares of
the Fund for clients participating in a fee based asset allocation program or
wrap fee program which has been approved by Gabelli & Company, Inc., the Fund's
distributor (the "Distributor"); and (8) registered investment advisers or
financial planners who place trades for their own accounts or the accounts of
their clients and who charge a management, consulting or other fee for their
services; and clients of such investment advisers or financial planners who
place trades for their own accounts if the accounts are linked to the master
account of such investment adviser or financial planner on the books and records
of a broker or agent.
Investors who qualify under any of the categories
described above should contact their brokerage firm.
Contingent Deferred
Sales Charges. You will pay a CDSC when you redeem:
(BULLET) Class A Shares within approximately twenty-four months of buying
them as part of an investment greater than $2 million if no front-end sales
charge was paid at the time of purchase
(BULLET) Class B Shares within approximately seventy-two months of buying
them
(BULLET) Class C Shares within approximately twenty-four months of
buying them
The CDSC payable upon redemption of Class A Shares and Class C Shares in the
circumstances described above is 1.00%. The CDSC schedule for Class B Shares is
set forth below. The CDSC is based on the net asset value at the time of your
investment or the net asset value at the time of redemption, whichever is
lower.
<PAGE>
Class B Shares
Years Since Purchase CDSC
----------------------------- ---------------------
First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh and thereafter 0.00%
The Distributor pays sales commissions of up to 4.00% of the purchase price of
Class B Shares of the Fund to brokers at the time of sale that initiate and are
responsible for purchases of such Class B Shares of the Fund.
ou will not pay a CDSC to the extent that the value of the redeemed shares
represents reinvestment of dividends or capital gains distributions or capital
appreciation of shares redeemed. When you redeem shares, we will assume that you
are redeeming first shares representing reinvestment of dividends and capital
gains distributions, then any appreciation on shares redeemed, and then
remaining shares held by you for the longest period of time. We will calculate
the holding period of shares acquired through an exchange of shares of another
fund from the date you acquired the original shares of the other fund. The time
you hold shares in a money market fund advised by the Adviser or its affiliates,
however, will not count for purposes of calculating the applicable CDSC.
We will
waive the CDSC payable upon redemptions of shares for:
(BULLET) redemptions and distributions from retirement plans made after the
death or disability of a shareholder
(BULLET) minimum required distributions made from an IRA or other \
retirement plan account after you reach age 591/2
(BULLET) involuntary redemptions made by the Fund
(BULLET)a distribution from a tax-deferred retirement plan after your
retirement
(BULLET) returns of excess contributions to retirement plans following the
shareholder's death or disability
Conversion Feature -- Class B Shares:
(BULLET) Class B Shares automatically convert to Class A Shares of the Fund
on the first business day of the ninety-seventh month following the month in
which you acquired such shares.
(BULLET) After conversion, your shares will be subject to the lower Rule
12b-1 fees charged on Class A Shares, which will increase your investment return
compared to the Class B Shares.
(BULLET) You will not pay any sales charge or fees when your shares
convert, nor will the transaction be subject to any tax.
(BULLET) If you exchange Class B Shares of one fund for Class B Shares
of another fund, your holding period will be calculated from the time
of your original purchase of Class B Shares. If you exchange shares
into a Gabelli money market fund, however, your holding period will be
suspended.
(BULLET) The dollar value of Class A Shares you receive will equal the
dollar value of the Class B Shares converted.
<PAGE>
The Board of Directors may suspend the automatic conversion of Class B Shares to
Class A Shares for legal reasons or due to the exercise of its fiduciary duty.
If the Board determines that such suspension is likely to continue for a
substantial period of time, it will create another class of shares into which
Class B Shares are convertible.
Rule 12b-1 Plan. The Fund has adopted a
plan under Rule 12b-1 (the "Plan") for each of its classes of shares. Under the
Plan, the Fund may use its assets to finance activities relating to the sale of
its shares and the provision of certain shareholder services. For the classes
covered by this Prospectus, the Rule 12b-1 fees vary by class as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class A Class B Class C
--------- --------- ---------
Service Fees 0.25% 0.25% 0.25%
Distribution Fees None 0.75% 0.75%
</TABLE>
These are annual rates based on the value of each of these Classes' average
daily net assets. Because the Rule 12b-1 fees are higher for Class B and Class C
Shares than for Class A Shares, Class B and Class C Shares will have higher
annual expenses. Because Rule 12b-1 fees are paid out of the Fund's assets on an
on-going basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
PURCHASE OF SHARES
You can purchase the Fund's shares on any day the NYSE is open for trading (a
"Business Day"). You may purchase shares directly through registered
broker-dealers or other financial intermediaries that have entered into selling
agreements with the Fund's Distributor.
The broker-dealer or other financial
intermediary will transmit a purchase order and payment to State Street Bank and
Trust Company ("State Street") on your behalf. Broker-dealers or other financial
intermediaries may send confirmations of your transactions and periodic
statements showing your investments in the Fund.
Share Price. The Fund sells its
shares at the net asset value next determined after the Fund receives your
completed subscription order form and your payment, subject to a sales charge in
the case of Class A Shares. See "Pricing of Fund Shares" for a description of
the calculation of net asset value as described under "Classes of Shares - Sales
Charge - Class A Shares.
" Minimum Investments. Your minimum initial investment
must be at least $1,000. See "Retirement Plans" and "Automatic Investment Plan"
regarding minimum investment amounts applicable to such plans. There is no
minimum for subsequent investments. Broker-dealers may have different minimum
investment requirements.
Retirement Plans. The Fund has available a form of IRA,
"Roth" IRA and Education IRA for investment in Fund shares that may be obtained
from the Distributor by calling 1-800-GABELLI (1-800-422-3554). Self-employed
investors may purchase shares of the Fund through tax-deductible contributions
to existing retirement plans for self-employed persons, known as "Keogh" or
"H.R.-10" plans. The Fund does not currently act as a sponsor to such plans.
Fund shares may also be a suitable investment for other types of qualified
pension or profit-sharing plans which are employer sponsored, including deferred
compensation or salary reduction plans known as "401(k) Plans." The minimum
initial investment in all such retirement plans is $250. There is no minimum
subsequent investment requirement for retirement plans.
<PAGE>
Automatic Investment Plan. The Fund offers an automatic monthly investment plan.
There is no initial minimum investment for accounts establishing an automatic
investment plan. Call the Distributor at 1-800-GABELLI (1-800-422-3554) for more
details about the plan.
General. State Street will not issue share certificates
unless requested by you. The Fund reserves the right to (i) reject any purchase
order if, in the opinion of the Fund's management, it is in the Fund's best
interest to do so, (ii) suspend the offering of shares for any period of time
and (iii) waive the Fund's minimum purchase requirement.
REDEMPTION OF SHARES
You can redeem shares of the Fund on any Business Day without a redemption fee.
The Fund may temporarily stop redeeming its shares when the NYSE is closed or
trading on the NYSE is restricted, when an emergency exists and the Fund cannot
sell its shares or accurately determine the value of its assets, or if the
Securities and Exchange Commission ("SEC") orders the Fund to suspend
redemptions.
The Fund redeems its shares at the net asset value next determined
after the Fund receives your redemption request, subject in some cases to a
CDSC, as described under "Classes of Shares - Contingent Deferred Sales
Charges." See "Pricing of Fund Shares" for a description of the calculation of
net asset value.
You may redeem shares through a broker-dealer or other
financial intermediary that has entered into a selling agreement with the
Distributor. The broker-dealer or financial intermediary will transmit a
redemption order to State Street on your behalf. The redemption request will be
effected at the net asset value next determined (less any applicable CDSC) after
State Street receives the request. If you hold share certificates, you must
present the certificates endorsed for transfer. A broker-dealer may charge you
fees for effecting redemptions for you.
In the event that you wish to redeem
shares and you are unable to contact your broker-dealer or other financial
intermediary, you may redeem shares by mail. You may mail a letter requesting
redemption of shares to: The Gabelli Funds, P.O. Box 8308, Boston, MA
02266-8308. Your letter should state the name of the Fund and the share class,
the dollar amount or number of shares you wish to redeem and your account
number. If there is more than one owner of shares, all must sign. A signature
guarantee is required for each signature on your redemption letter. You can
obtain a signature guarantee from financial institutions such as commercial
banks, brokers, dealers and savings associations. A notary public cannot provide
a signature guarantee.
Involuntary Redemption. The Fund may redeem all shares in
your account (other than an IRA account) if its value falls below $1,000 as a
result of redemptions (but not as a result of a decline in net asset value). You
will be notified in writing if the Fund initiates such action and allowed 30
days to increase the value of your account to at least $1,000.
Redemption Proceeds. A redemption request received by a Fund will be
effected at the net asset value next determined after a Fund receives the
request. If you request redemption proceeds by check, the Fund will
normally mail the check to you within seven days after receipt of your
redemption request. If you purchased
your Fund shares by check or through the Automatic Investment Plan, you may not
receive proceeds from your redemption until the check clears, which may take up
to as many as 15 days following purchase. While the Fund will delay the
processing of the redemption until the check clears, your shares will be valued
at the next determined net asset value after receipt of your redemption
request.
<PAGE>
EXCHANGE OF SHARES
You can exchange shares of the Fund you hold for shares of the same class of
another fund managed by the Adviser or its affiliates based on their relative
net asset values. To obtain a list of the funds whose shares you may acquire
through an exchange, call your broker. Class B and Class C Shares will continue
to age from the date of the original purchase of such shares and will assume the
CDSC rate such shares had at the time of exchange. You may also exchange your
shares for shares of a money market fund managed by the Adviser or its
affiliates, without imposition of any CDSC at the time of exchange. Upon
subsequent redemption from such money market funds or the Fund (after
re-exchange into the Fund), such shares will be subject to the CDSC calculated
by excluding the time such shares were held in a money market fund. In effecting
an exchange:
(BULLET) you must meet the minimum investment requirements for the
fund whose shares you purchase through exchange (BULLET) if you
are exchanging into a fund with a higher sales charge, you must
pay the difference at the time of exchange
(BULLET) you may realize a taxable gain or loss
(BULLET) you should read the prospectus of the fund whose shares
you are purchasing through exchange (call your broker to obtain the prospectus)
(BULLET) you should be aware that brokers may charge a fee
for handling an exchange for you
You may exchange shares by telephone, by mail, over the Internet or through a
registered broker-dealer or other financial intermediary
(BULLET) Exchange by Telephone. You may give exchange instructions by
telephone by calling 1-800-GABELLI (1-800-422-3554). You may not exchange shares
by telephone if you hold share certificates
(BULLET) Exchange by Mail. You may send a written request for exchanges to:
The Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. Your letter should
state your name, your account number, the dollar amount or number of shares you
wish to exchange, the name and class of the fund whose shares you wish to
exchange, and the name of the fund whose shares you wish to acquire
(BULLET) Exchange through the Internet. You may also give exchange
instructions via the Internet at www.gabelli.com. You may not exchange shares
through the Internet if you hold share certificates. We may modify or terminate
the exchange privilege at any time. You will be given notice 60 days prior to
any material change in the exchange privilege.
PRICING OF FUND SHARES
The Fund's net asset value is calculated separately for each class of shares on
each Business Day. The NYSE is open Monday through Friday, but currently is
scheduled to be closed on New Year's Day, Dr. Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and on the preceding Friday or subsequent
Monday when a holiday falls on a Saturday or Sunday, respectively.
<PAGE>
The Fund's net asset value is calculated separately for each class of shares.
The net asset value is determined as of the close of regular trading on the
NYSE, normally 4:00 p.m., Eastern Time. Net asset value is computed by dividing
the value of the Fund's net assets (i.e. the value of its securities and other
assets less its liabilities, including expenses payable or accrued but excluding
capital stock and surplus) by the total number of its shares outstanding at the
time the determination is made. The Fund uses market quotations in valuing its
portfolio securities. Short-term investments that mature in 60 days or less are
valued at amortized cost, which the Directors of the Fund believe represent fair
value. The price of Fund shares for purchases and redemptions will be based upon
the next calculation of net asset value after the purchase or redemption order
is placed.
If the Fund has portfolio securities that are primarily listed on
foreign exchanges that trade on weekends or other days when the Fund does not
price shares, the net asset value of the Fund's shares may change on days when
shareholders will not be able to purchase or redeem the Fund's shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends of net investment income and capital gains, if any, will be paid
annually. You may have dividends or capital gains distributions that are
declared by the Fund automatically reinvested at net asset value in additional
shares of the Fund. You will make an election to receive dividends and
distributions in cash or Fund shares at the time you purchase your shares. You
may change this election by notifying the Fund in writing at any time prior to
the record date for a particular dividend or distribution. There are no sales or
other charges in connection with the reinvestment of dividends and capital gain
distributions. There is no fixed dividend rate, and there can be no assurance
that the Fund will pay any dividends or realize any capital gains. Dividends and
distributions may differ for different classes of shares.
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net investment
income and net realized capital gains. Capital gains may be taxed at different
rates depending on the length of time the Fund holds the asset giving rise to
such gains. Dividends out of net investment income and distributions of net
realized short-term capital gains (i.e. gains from assets held by the Fund for
one year or less) are taxable to you as ordinary income. Distributions of net
long-term capital gains are taxable to you at long-term capital gain rates. The
Fund's distributions, whether you receive them in cash or reinvest them in
additional shares of the Fund, generally will be subject to federal, state or
local taxes. An exchange of the Fund's shares for shares of another fund will be
treated for tax purposes as a sale of the Fund's shares; and any gain you
realize on such a transaction generally will be taxable.
Foreign shareholders generally will be subject to a federal withholding tax.
This summary of tax consequences is intended for general information only. You
should consult a tax adviser concerning the tax consequences of your investment
in the Fund.
FINANCIAL HIGHLIGHTS
The Class A, Class B and Class C Shares of the Fund have not previously been
offered and therefore do not have a previous financial history.
<PAGE>
Gabelli International Growth Fund, Inc.
Class A, B, C Shares
=====================================
For More Information:
For more information about the Fund, the following documents are available free
upon request: Annual/Semi-annual Reports:
The Fund's semi-annual and annual reports to shareholders contain additional
information on the Fund's investments. In the Fund's annual report, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
Statement of Additional Information (SAI):
The SAI provides more detailed
information about the Fund, including its operations and investment policies. It
is incorporated by reference, and is legally considered a part of this
prospectus.
You can review the Fund's reports and SAI at the Public
Reference Room of the Securities and Exchange Commission. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-202-942-8090. You can get text-only copies:
(BULLET) For a fee, by
writing the Commission's Public Reference Section, Washington, D.C. 20549-0102
or by calling 1-202-942-8090, or by electronic request at the following email
address: [email protected].
(BULLET) Free from the Commission's Website at http://www.sec.gov.
(Investment Company Act file no. 811-08560)
- -----------------------------------------------------------
<PAGE>
Gabelli International Growth Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 p.m.)
Questions?
Call 1-800-GABELLI
or your investment representative.
<PAGE>
Gabelli International Growth Fund, Inc.
STATEMENT OF ADDITIONAL INFORMATION
March 9, 2000
This Statement of Additional Information ("SAI"), which is not a prospectus,
describes the Gabelli International Growth Fund, Inc. (the "Fund"), a Maryland
corporation. The SAI should be read in conjunction with the Fund's Prospectuses
for Class A Shares, Class B Shares and Class C Shares and Class AAA Shares, each
dated March 9, 2000. For a free copy of the Prospectuses, please contact the
Fund at the address, telephone number or Internet Web site printed below.
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
http://www.gabelli.com
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Page
General Information.......................................................................... 2
Investment Strategies and Risks.............................................................. 2
Investment Restrictions...................................................................... 9
Directors and Officers....................................................................... 10
Control Persons and Principal Shareholders................................................... 12
Investment Advisory and Other Services....................................................... 13
Distribution Plans........................................................................... 16
Portfolio Transactions and Brokerage......................................................... 17
Retirement Plans............................................................................. 18
Redemption of Shares......................................................................... 18
Determination of Net Asset Value............................................................. 19
Dividends, Distributions and Taxes........................................................... 19
Investment Performance Information........................................................... 22
Description of Shares, Voting Rights and Liabilities......................................... 23
Financial Statements......................................................................... 23
Appendix A...................................................................................A-1
</TABLE>
<PAGE>
GENERAL INFORMATION
The Fund is diversified, open-end, management investment company organized under
the laws of the State of Maryland on May 25, 1994. The Fund commenced operations
on June 30, 1995.
The Fund's Prospectuses discuss the investment objective of the Fund and the
principal strategies to be employed to achieve that objective. This SAI contains
supplemental information concerning certain types of securities and other
instruments in which the Fund may invest, additional strategies that the Fund
may utilize and certain risks associated with such investments and strategies.
INVESTMENT STRATEGIES AND RISKS
Investments
Subject to the Fund's policy of investing at least 65% of its total assets in
the equity securities of foreign companies, the Fund may invest in any of the
securities described below.
Equity Securities
Because the Fund in seeking to achieve its investment objective may invest in
the common stocks of both foreign and domestic issuers, an investment in the
Fund should be made with an understanding of the risks inherent in any
investment in common stocks, including the risk that the financial condition of
the issuers of the Fund's portfolio securities may become impaired or that the
general condition of the stock market may worsen (both of which may contribute
directly to a decrease in the value of the securities and thus in the value of
the Fund's shares). Additional risks include risks associated with the right to
receive payments from the issuer which is generally inferior to the rights of
creditors of, or holders of debt obligations or preferred stock issued by, the
issuer. The Fund does not expect to invest in excess of 5% of its assets in
securities of unseasoned issuers (companies that have operated less than three
years), which, due to their short operating history, may have less information
available and may not be as liquid as other securities.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities, which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither a fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors, including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Fund's portfolio thus may be expected to fluctuate.
Preferred stocks are usually entitled to rights on liquidation which are
senior to those of common stocks. For these reasons, preferred stocks generally
entail less risk than common stocks. Such securities may pay cumulative
dividends. Because the dividend rate and liquidation or redemption value is
usually pre-established, such securities tend to have less possibility of
capital appreciation.
Some of the securities in the Fund may be in the form of depository receipts.
Depository receipts usually represent common stock or other equity securities of
non-U.S. issuers deposited with a custodian in a depository. The underlying
securities are usually withdrawable at any time by surrendering the depository
receipt. Depository receipts are usually denominated in U.S. dollars and
dividends and other payments from the issuer are converted by the custodian into
U.S. dollars before payment to receipt holders. In other respects depository
receipts for foreign securities have the same characteristics as the underlying
securities. Depository receipts that are not sponsored by the issuer may be less
liquid and there may be less readily available public information about the
issuer.
Sovereign Debt Securities
The Fund may invest in securities issued or guaranteed by any country and
denominated in any currency. The Fund expects to invest in the securities of
companies located in developed countries, and to a lesser extent, those located
in emerging markets. Developed markets include Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg,
the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, the United
Kingdom and the United States. An emerging country is any country which is
generally considered to be an emerging or developing country by the
International Bank for Reconstruction and Development (more commonly referred to
as the World Bank) and the International Finance Corporation, as well as
countries that are classified by the United Nations or otherwise regarded by its
authorities as emerging or developing, at the time of the Fund's investment. The
obligations of governmental entities have various kinds of government support
and include obligations issued or guaranteed by governmental entities with
taxing power. These obligations may or may not be supported by the full faith
and credit of a government. Debt securities issued or guaranteed by foreign
governmental entities have credit characteristics similar to those of domestic
debt securities but include additional risks. These additional risks include
those resulting from devaluation of currencies, future adverse political and
economic developments and other foreign governmental laws. The Fund may have
limited legal recourse in the event of default. Also, the Fund may have
difficulty disposing of certain sovereign debt obligations because there may be
a limited trading market for such securities.
The Fund may also purchase securities issued by quasi-governmental or
supranational agencies such as the Asian Development Bank, the International
Bank for Reconstruction and Development, the Export-Import Bank and the European
Investment Bank. The governmental members, or "stockholders," usually make
initial capital contributions to the supranational entity and in many cases are
committed to make additional capital contributions if the supranational entity
is unable to repay its borrowings. The Fund will not invest more than 25% of its
assets in the securities of such supranational entities.
Nonconvertible Fixed Income Securities
The category of fixed income securities which are not convertible or
exchangeable for common stock includes preferred stocks, bonds, debentures,
notes and money market instruments such as commercial paper and bankers
acceptances. There is no minimum credit rating for these securities in which the
Fund may invest. Accordingly, the Fund could invest in securities in default,
although the Fund will not invest more than 5% of its assets in such securities.
Up to 25% of the Fund's total assets may be invested in lower-quality debt
securities, although the Fund currently does not expect to invest more than 5%
of its assets in such securities. The market values of lower-quality fixed
income securities tend to be less sensitive to changes in prevailing interest
rates than higher-quality securities but more sensitive to individual corporate
developments than higher-quality securities. Such lower-quality securities also
tend to be more sensitive to economic conditions than are higher-quality
securities. Accordingly, these lower-quality securities are considered
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation and will
generally involve more credit risk than securities in the higher-quality
categories. Even securities rated Baa or BBB by Moody's Investors Service, Inc.
("Moody's") and Standard and Poor's Ratings Services ("S&P"), respectively,
which ratings are considered investment grade, possess some speculative
characteristics, and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than is the case with higher-grade bonds. See "Appendix - Description
of Ratings." There are risks involved in applying credit ratings as a method of
evaluating high yield obligations in that credit ratings evaluate the safety of
principal and interest payments, not market value risk. In addition, credit
rating agencies may not change credit ratings on a timely basis to reflect
changes in economic or company conditions that affect a security's market value.
The Fund will rely on the judgment, analysis and experience of its adviser,
Gabelli Funds, LLC (the "Adviser"), in evaluating the creditworthiness of an
issuer. In this evaluation, the Adviser will take into consideration, among
other things, the issuer's financial resources and ability to cover its interest
and fixed charges, factors relating to the issuer's industry and its sensitivity
to economic conditions and trends, its operating history, the quality of the
issuer's management and regulatory matters.
The risk of loss due to default by the issuer is significantly greater for the
holders of lower quality securities because such securities are generally
unsecured and are often subordinated to other obligations of the issuer. During
an economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of lower quality securities may experience financial stress
and may not have sufficient revenues to meet their interest payment obligations.
An issuer's ability to service its debt obligations may also be adversely
affected by specific corporate developments, its inability to meet specific
projected business forecasts, or the unavailability of additional financing.
Factors adversely affecting the market value of high yield and other fixed
income securities will adversely affect the Fund's net asset value. In addition,
the Fund may incur additional expenses to the extent that it is required to seek
recovery upon a default in the payment of principal of or interest on its
portfolio holdings. At times, adverse publicity regarding lower-quality
securities has depressed prices for such securities to some extent.
From time to time, proposals have been discussed regarding new legislation
designed to limit the use of certain high yield debt securities by issuers in
connection with leveraged buy-outs, mergers and acquisitions, or to limit the
deductibility of interest payments on such securities. Such proposals, if
enacted into law, could reduce the market for such debt securities generally,
could negatively affect the financial condition of issuers of high yield
securities by removing or reducing a source of future financing, and could
negatively affect the value of specific high yield issues and the high yield
market in general. For example, under a provision of the Internal Revenue Code
(the "Code") enacted in 1989, a corporate issuer may be limited from deducting
all of the original issue discount on high-yield discount obligations (i.e.,
certain types of debt securities issued at a significant discount to their face
amount). The likelihood of passage of any additional legislation or the effect
thereof is uncertain.
The secondary trading market for lower-quality fixed income securities is
generally not as liquid as the secondary market for higher-quality securities
and is very thin for some securities. The relative lack of an active secondary
market may have an adverse impact on market price and the Fund's ability to
dispose of particular issues when necessary to meet liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The relative lack of an active secondary market
for certain securities may also make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing its portfolio. Market
quotations are generally available on many high yield issues only from a limited
number of dealers and may not necessarily represent firm bids of such dealers or
prices for actual sales. During such times, the responsibility of the Board of
Directors to value the securities becomes more difficult and judgment plays a
greater role in valuation because there is less reliable, objective data
available.
Convertible Securities
The Fund may invest up to 25% of its total assets in convertible securities
rated, at the time of investment, less than BBB by S&P or Baa by Moody's or
unrated but of equivalent credit quality in the judgment of the Adviser,
although the Fund currently does not expect to invest in excess of 5% of its
assets in such securities.
Some of the convertible securities in the Fund's portfolio may be "Pay-in-Kind"
securities. During a designated period from original issuance, the issuer or
such a security may pay dividends or interest to the holder by issuing
additional fully paid and nonassessable shares or units of the same or another
specified security. While no securities investment is completely without risk,
investments in convertible securities generally entail less risk than common
stock, although the extent to which such risk is reduced depends in large
measure upon the degree to which the convertible security sells above its value
as a fixed-income security.
<PAGE>
Securities Subject To Reorganization
The Fund may invest in securities for which a tender or exchange offer has been
made or announced and in securities of companies for which a merger,
consolidation, liquidation or reorganization proposal has been announced if, in
the judgment of the Adviser, there is a reasonable prospect of capital
appreciation significantly greater than the brokerage and other transaction
expenses involved.
In general, securities which are the subject of such an offer or proposal sell
at a premium to their historic market price immediately prior to the
announcement of the offer or may also discount what the stated or appraised
value of the security would be if the contemplated transaction were approved or
consummated. Such investments may be advantageous when the discount
significantly overstates the risk of the contingencies involved; significantly
undervalues the securities, assets or cash to be received by shareholders of the
prospective portfolio company as a result of the contemplated transaction; or
fails adequately to recognize the possibility that the offer or proposal may be
replaced or superseded by an offer or proposal of greater value. The evaluation
of such contingencies requires unusually broad knowledge and experience on the
part of the Adviser, which must appraise not only the value of the issuer and
its component businesses as well as the assets or securities to be received as a
result of the contemplated transaction but also the financial resources and
business motivation of the offeror and the dynamics and business climate when
the offer or proposal is in process. Since such investments are ordinarily
short-term in nature, they will tend to increase the turnover ratio of the Fund,
thereby increasing its brokerage and other transaction expenses. The Adviser
intends to select investments of the type described which, in its view, have a
reasonable prospect of capital appreciation which is significant in relation to
both risk involved and the potential of available alternate investments.
Options
The Fund may purchase or sell options on individual securities as well as on
indices of securities as a means of achieving additional return or of hedging
the value of its portfolio.
A call option is a contract that gives the holder of the option the right, in
return for a premium paid, to buy from the seller the security underlying the
option at a specified exercise price at any time during the term of the option
or, in some cases, only at the end of the term of the option. The seller of the
call option has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price. A put option is a
contract that gives the holder of the option the right in return for a premium
to sell to the seller the underlying security at a specified price. The seller
of the put option, on the other hand, has the obligation to buy the underlying
security upon exercise at the exercise price. The Fund's transactions in options
may be subject to specific segregation requirements. See "Hedging Transactions"
below.
If the Fund has sold an option, it may terminate its obligation by effecting a
closing purchase transaction. This is accomplished by purchasing an option of
the same series as the option previously sold. There can be no assurance that a
closing purchase transaction can be effected when the Fund so desires.
The purchaser of an option risks a total loss of the premium paid for the option
if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
foregoes any capital appreciation in excess of the exercise price in the case of
a call option, and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Fund the credit risk that
the counterparty will fail to honor its obligations. The Fund will not purchase
options if, as a result, the aggregate cost of all outstanding options exceeds
5% of the Fund's assets. To the extent that puts, straddles and similar
investment strategies involve instruments regulated by the Commodity Futures
Trading Commission, other than for hedging purposes, the aggregate initial
margin and premiums required to establish such positions will not exceed 5% of
the Fund's total assets after taking into account unrealized profits and
unrealized losses on any such contracts it has entered into.
<PAGE>
Warrants and Rights
The Fund may invest up to 5% of its total assets in warrants or rights (other
than those acquired in units or attached to other securities) which entitle the
holder to buy equity securities at a specific price for or at the end of a
specific period of time.
Investing in rights and warrants can provide a greater potential for profit or
loss than an equivalent investment in the underlying security, and, thus, can be
a speculative investment. The value of a right or warrant may decline because of
a decline in the value of the underlying security, the passage of time, changes
in interest rates or in the dividend or other policies of the company whose
equity underlies the warrant or a change in the perception as to the future
price of the underlying security, or any combination thereof. Rights and
warrants generally pay no dividends and confer no voting or other rights other
than to purchase the underlying security.
Investments in Investment Companies
The Fund may invest up to 10% of its total assets (5% per issuer) in securities
issued by other unaffiliated investment companies, although the Fund may not
acquire more than 3% of the voting securities of any investment company.
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 such
transactions, instruments are bought with payment and delivery taking place in
the future in order to secure what is considered to be an advantageous yield or
price at the time of the transaction. 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 the Fund 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.
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
securities in an aggregate amount at least equal to the amount of its
outstanding forward commitments. When the Fund engages in when-issued, delayed
delivery or forward commitment transactions, it relies on the other party to
consummate the trade. Failure of the other party to do so may result in the Fund
incurring a loss or missing an opportunity to obtain a price considered to be
advantageous.
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 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 liquid 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, and 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.
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 5% of the value of its assets
or the Fund's aggregate short sales of a particular class of securities exceeds
5% 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.
Restricted and Illiquid Securities
The Fund may invest up to a total of 15% of its net assets in securities the
markets for which are illiquid, including repurchase agreements with more than
seven days to maturity. Within this 15% limitation, the Fund may invest up to 5%
of its net assets in the securities of unseasoned issuers. Illiquid securities
include securities the disposition of which is subject to substantial legal or
contractual restrictions. The sale of illiquid securities often requires more
time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not
subject to restrictions on resale. Unseasoned issuers are companies (including
predecessors) that have operated less than three years. The continued liquidity
of such securities is not as well assured as that of publicly traded securities,
and accordingly the Board of Directors will monitor their liquidity. The Board
will review pertinent factors such as trading activity, reliability of price
information and trading patterns of comparable securities in determining whether
to treat any such security as liquid for purposes of the foregoing 15% test. To
the extent the Board treats such securities as liquid, temporary impairments to
trading patterns of such securities may adversely affect the Fund's liquidity.
To the extent it can do so consistent with the foregoing limitations, the Fund
may invest in non-publicly traded securities, including securities that are not
registered under the Securities Act of 1933, as amended, but that can be offered
and sold to qualified institutional buyers under Rule 144A under that Act. The
Board of Directors has adopted guidelines and delegated to the Adviser, subject
to the supervision of the Board of Directors, the daily function of determining
and monitoring the liquidity of Rule 144A securities. Rule 144A securities may
become illiquid if qualified institutional buyers are not interested in
acquiring the securities.
Repurchase Agreements
The Fund may invest in repurchase agreements, which are agreements pursuant to
which securities are acquired by the Fund from a third party with the
understanding that they will be repurchased by the seller at a fixed price on an
agreed date. These agreements may be made with respect to any of the portfolio
securities in which the Fund is authorized to invest. Repurchase agreements may
be characterized as loans secured by the underlying securities. The Fund may
enter into repurchase agreements with (i) member banks of the Federal Reserve
System having total assets in excess of $500 million and (ii) securities
dealers, provided that such banks or dealers meet the creditworthiness standards
established by the Fund's Adviser ("Qualified Institutions"). The Adviser will
monitor the continued creditworthiness of Qualified Institutions. The resale
price reflects the purchase price plus an agreed upon market rate of interest
which is unrelated to the coupon rate or date of maturity of the purchased
security. The collateral is marked to market daily. Such agreements permit the
Fund to keep all its assets earning interest while retaining "overnight"
flexibility in pursuit of investment of a longer-term nature. The following
information supplements that in the Prospectus.
The use of repurchase agreements involves certain risks. For example, if the
seller of securities under a repurchase agreement defaults on its obligation to
repurchase the underlying securities, as a result of its bankruptcy or
otherwise, the Fund will seek to dispose of such securities, which action could
involve costs or delays. If the seller becomes insolvent and subject to
liquidation or reorganization under applicable bankruptcy or other laws, the
Fund's ability to dispose of the underlying securities may be restricted.
Finally, it is possible that the Fund may not be able to substantiate its
interest in the underlying securities. To minimize this risk, the securities
underlying the repurchase agreement will be held by the Fund's custodian at all
times in an amount at least equal to the repurchase price, including accrued
interest. If the seller fails to repurchase the securities, the Fund may suffer
a loss to the extent proceeds from the sale of the underlying securities are
less than the repurchase price. The Fund will not enter into repurchase
agreements of a duration of more than seven days if, taken together with all
other illiquid securities in the Fund's portfolio, more than 15% of its net
assets would be so invested.
Loans of Portfolio Securities
To increase income, the Fund may lend its portfolio securities to securities
broker-dealers or financial institutions if (1) the loan is collateralized in
accordance with applicable regulatory requirements including collateralization
continuously at no less than 100% by marking to market daily, (2) the loan is
subject to termination by the Fund at any time, (3) the Fund receives reasonable
interest or fee payments on the loan, (4) the Fund is able to exercise all
voting rights with respect to the loaned securities and (5) the loan will not
cause the value of all loaned securities to exceed 33 1/3% of the value of the
Fund's assets.
If the borrower fails to maintain the requisite amount of collateral, the loan
automatically terminates and the Fund could use the collateral to replace the
securities while holding the borrower liable for any excess of replacement cost
over the value of the collateral. As with any extension of credit, there are
risks of delay in recovery and in some cases even loss of rights in collateral
should the borrower of the securities fail financially.
Borrowing
The Fund may not borrow money except for (1) short-term credits from banks as
may be necessary for the clearance of portfolio transactions, and (2) borrowings
from banks for temporary or emergency purposes, including the meeting of
redemption requests, which would otherwise require the untimely disposition of
its portfolio securities. Borrowing may not, in the aggregate, exceed 15% of the
Fund's total assets after giving effect to the borrowing, and borrowing for
purposes other than meeting redemptions may not exceed 5% of the Fund's assets
after giving effect to the borrowing. The Fund will not make additional
investments when borrowings exceed 5% of assets. The Fund may mortgage, pledge
or hypothecate assets to secure such borrowings.
Hedging Transactions
Futures and Forward Contracts. The Fund may enter into futures and forward
contracts only for certain bona fide hedging and risk management purposes. The
Fund may enter into futures and forward contracts for the purchase or sale of
debt securities, debt instruments, or indices of prices thereof, stock index
futures, other financial indices, and U.S. Government Securities.
A "sale" of a futures contract (or a "short" futures position) means the
assumption of a contractual obligation to deliver the securities underlying the
contract at a specified price at a specified future time. A "purchase" of a
futures contract (or a "long" futures position) means the assumption of a
contractual obligation to acquire the securities underlying the contract at a
specified price at a specified future time.
Certain futures contracts are settled on a net cash payment basis rather than by
the sale and delivery of the securities underlying the futures contracts. U.S.
futures contracts have been designed by exchanges that have been designated as
"contract markets" by the Commodity Futures Trading Commission, an agency of the
U.S. Government, and must be executed through a futures commission merchant
(i.e., a brokerage firm) which is a member of the relevant contract market.
Futures contracts trade on these contract markets and the exchange's affiliated
clearing organization guarantees performance of the contracts as between the
clearing members of the exchange.
These contracts entail certain risks, including but not limited to the
following: no assurance that futures contracts transactions can be offset at
favorable prices, possible reduction of the Fund's yield due to the use of
hedging, possible reduction in value of both the securities hedged and the
hedging instrument, possible lack of liquidity due to daily limits on price
fluctuation, imperfect correlation between the contracts and the securities
being hedged, and potential losses in excess of the amount invested in the
futures contracts themselves.
Currency Transactions. The Fund may enter into various currency transactions,
including forward foreign currency contracts, currency swaps, foreign currency
or currency index futures contracts and put and call options on such contracts
or on currencies. A forward foreign currency contract involves an obligation to
purchase or sell a specific currency for a set price at a future date. A
currency swap is an arrangement whereby each party exchanges one currency for
another on a particular day and agrees to reverse the exchange on a later date
at a specific exchange rate. Forward foreign currency contracts and currency
swaps are established in the interbank market conducted directly between
currency traders (usually large commercial banks or other financial
institutions) on behalf of their customers. Futures contracts are similar to
forward contracts except that they are traded on an organized exchange and the
obligations thereunder may be offset by taking an equal but opposite position to
the original contract, with profit or loss determined by the relative prices
between the opening and offsetting positions. The Fund expects to enter into
these currency contracts and swaps in primarily the following circumstances: to
"lock in" the U.S. dollar equivalent price of a security the Fund is
contemplating to buy or sell that is denominated in a non-U.S. currency; or to
protect against a decline against the U.S. dollar of the currency of a
particular country to which the Fund's portfolio has exposure. The Fund
anticipates seeking to achieve the same economic result by utilizing from time
to time for such hedging a currency different from the one of the given
portfolio security as long as, in the view of the Adviser, such currency is
essentially correlated to the currency of the relevant portfolio security based
on historic and expected exchange rate patterns.
The Adviser may choose to use such instruments on behalf of the Fund depending
upon market conditions prevailing and the perceived investment needs of the
Fund. The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become relatively broad and deep as compared to the markets for similar
instruments which are established in the interbank market. In accordance with
the current position of the staff of the Securities and Exchange Commission (the
"SEC"), the Fund will treat swap transactions as illiquid for purposes of the
Fund's policy regarding illiquid securities. Futures contracts, interest rate
swaps, and options on securities, indices and futures contracts and certain
currency contracts sold by the Fund are generally subject to segregation and
coverage requirements with the result that, if the Fund does not hold the
security or futures contract underlying the instrument, the Fund will be
required to segregate on an ongoing basis with its custodian, cash, U.S.
government securities, or other liquid securities in an amount at least equal to
the Fund's obligations with respect to such instruments. Such amounts fluctuate
as the obligations increase or decrease. The segregation requirement can result
in the Fund maintaining securities positions it would otherwise liquidate or
segregating assets at a time when it might be disadvantageous to do so.
The Fund expects that its investments in these currency transactions and the
futures and forward contracts described above will be less than 5% of its net
assets.
Portfolio Turnover
The investment policies of the Fund may lead to frequent changes in investments,
particularly in periods of rapidly fluctuating interest or currency exchange
rates. The portfolio turnover may be higher than that of other investment
companies. While it is impossible to predict with certainty the portfolio
turnover, the Adviser expects that the annual turnover rate of the Fund will not
exceed 75%. Portfolio turnover generally involves some expense to the Fund,
including brokerage commissions or dealer mark-ups and other transaction costs
on the sale of securities and reinvestment in other securities. The portfolio
turnover rate is computed by dividing the lesser of the amount of the securities
purchased or securities sold by the average monthly value of securities owned
during the year (excluding securities whose maturities at acquisition were one
year or less).
INVESTMENT RESTRICTIONS
The Fund's investment objective and the following investment restrictions are
fundamental and cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities (defined in the Act as the
lesser of (a) more than 50% of the outstanding shares or (b) 67% or more of the
shares represented at a meeting at which more than 50% of the outstanding shares
are represented). All other investment policies or practices are considered by
the Fund not to be fundamental and accordingly may be changed without
stockholder approval. If a percentage restriction on investment or use of assets
set forth below is adhered to at the time a transaction is effected, later
changes in percentage resulting from changing market values or total assets of
the Fund will not be considered a deviation from policy. The Fund may not:
(1) invest more than 25% of the value of its total assets in any particular
industry (this restriction does not apply to obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities);
(2) issue senior securities, except that the Fund may borrow money from a bank,
including on margin if margin securities are owned, in an amount up to 33
1/3% of its total assets (including the amount of such enumerated senior
securities issued but excluding any liabilities and indebtedness not
constituting senior securities) and except that the Fund may borrow up to
an additional 5% of its total assets for temporary purposes; or pledge its
assets other than to secure such issuances or in connection with hedging
transactions, short sales, when-issued and forward commitment transactions
and similar investment strategies;
(3) make loans of money or property to any person, except through loans of
portfolio securities, the purchase of fixed income securities or the
acquisition of securities subject to repurchase agreements;
(4) underwrite the securities of other issuers, except to the extent that in
connection with the disposition of portfolio securities or the sale of its
own shares the Fund may be deemed to be an underwriter;
(5) invest for the purpose of exercising control over management of any company;
(6) purchase real estate or interests therein, including limited partnerships
that invest primarily in real estate equity interests, other than publicly
traded real estate investment trusts and publicly traded master limited
partnership interests; or
(7) purchase or sell commodities or commodity contracts except for certain bona
fide hedging, yield enhancement and risk management purposes or invest in
any oil, gas or mineral leases.
In addition, as a diversified investment company, the Fund is subject to the
following limitations as to 75% of its total assets: (a) the Fund may not invest
more than 5% of its total assets in the securities of any one issuer, except
obligations of the U.S. Government and its agencies and instrumentalities, and
(b) the Fund may not own more than 10% of the outstanding voting securities of
any one issuer.
DIRECTORS AND OFFICERS
Under Maryland law, the Fund's Board of Directors is responsible for
establishing the Fund's policies and for overseeing the management of the Fund.
The Board also elects the Fund's officers, who conduct the daily business of the
Fund. The Directors and executive officers of the Fund, their ages and their
principal occupations for the past five years and their affiliations, if any,
with the Adviser or the Sub-Administrator, are shown below. Directors deemed to
be "interested persons" of the Fund for purposes of the 1940 Act are indicated
by an asterisk.
<TABLE>
<CAPTION>
<S> <C>
<PAGE>
- -------------------------------------------- ---------------------------------------------------------------
Name, Address, Age and Position(s) with the Principal Occupations During Last Five Years; Affiliations
Fund with the Adviser
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Mario J. Gabelli* Chairman of the Board and President of the Fund, Chief
President, Director and Chief Investment Executive Officer and Chief Investment Officer of Gabelli
Officer Asset Management Inc., (Since 1999) and of Gabelli Funds, LLC
Age: 57 (the "Adviser"). Director or Trustee and officer of various
other investment companies advised by the Adviser. Chairman
of the Board and Chief Executive Officer of Lynch Corporation, a
(diversified manufacturing company); and Lynch Interactive
Corporation (a communications services company).
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Cesar M.P. Bryan Senior Vice President of and Portfolio manager with GAMCO
President and Portfolio Manager Investors, Inc., wholly owned subsidiary of the Adviser,
Age: 44 since May 1994 and President of Gabelli Gold Fund, Inc.;
Co-Portfolio Manager of Gabelli Global Opportunity Fund; Formerly
Senior Vice President and Portfolio Manager of Lexington
Management Corporation (until May 1994).
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Anthony J. Colavita President and Attorney at Law in the law firm of Anthony J.
Director Colavita, P.C. since 1961; Director or Trustee of various
Age: 64 other mutual funds advised by the Adviser and its affiliates.
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Karl Otto Pohl* Member of the Shareholder Committee of Sal Oppenheim Jr. &
Director Cie (private investment bank); Director of Gabelli Asset
Age: 70 Management Inc. (investment management), Zurich Allied
(insurance), and TrizecHahn Corp. (real estate); Former
President of the Deutsche Bundesbank and Chairman of its
Central Bank Council from 1980 through 1991; and Director or
Trustee of all other mutual funds advised by the Adviser and its
affiliates.
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Werner Roeder, M.D. Medical Director, Lawrence Hospital and practicing private
Director physician. Director of various other Gabelli Funds.
Age: 59
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Anthonie C. van Ekris Managing Director of Balmac International, Ltd.; Director of
Director Spinnaker Industries, Inc. and Stahel Mardmeyer A.Z.; and
Age: 65 Director or Trustee of various other mutual funds advised by
the Adviser and its affiliate.
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
Bruce N. Alpert Executive Vice President and Chief Operating Officer of the
Vice President and Treasurer Adviser since 1988; Director and President of Gabelli
Age: 48 Advisers, Inc.; and an officer of all funds managed by the
Adviser or its affiliates.
- ---------------------------------------------- ---------------------------------------------------------------
- ---------------------------------------------- ---------------------------------------------------------------
James E. McKee Vice President and General Counsel of Gabelli Asset
Secretary Management, Inc. and GAMCO Investors, Inc. since 1993;
Age: 36 Secretary of all mutual funds managed by the Adviser or its
affiliates; U.S. SEC, New York (Branch Chief, 1992-1993,
Staff Attorney, 1989-1992).
- ---------------------------------------------- ---------------------------------------------------------------
</TABLE>
The Corporation, its investment adviser and principal underwriter have adopted a
code of ethics (the "Code of Ethics") under Rule 17j-1 of the 1940 Act. The Code
of Ethics permits personnel, subject to the Code of Ethics and their provisions,
to invest in securities, including securities that may be purchased or held by
the Corporation.
The Fund pays each Director who is not an employee of the Adviser or an
affiliated company an annual fee of $250 and $250 for each meeting of the Board
of Directors attended by the Director, and reimburses Directors for certain
travel and other out-of-pocket expenses incurred by them in connection with
attending such meetings. Directors and officers of the Fund who are employed by
the Adviser or an affiliated company receive no compensation or expense
reimbursement from the Fund.
The following table sets forth certain information regarding the
compensation of the Fund's directors and officers. No executive officer or
person affiliated with the Fund received compensation from the Fund for the
calendar year ended December 31, 1999 in excess of $60,000.
Compensation Table
<TABLE>
<CAPTION>
<S> <C> <C>
Total Compensation
from the Fund
Aggregate Compensation and Fund Complex
Name of Person, Position from the Fund Paid to Directors*
Mario J. Gabelli, Chariman of the Board $ 0 $ 0
Anthony J. Colavita, Director $ 2,250 $ 95,375
Karl Otto Pohl, Director $ 500 $ 25,250
Werner J. Roeder, M.D., Director $ 2,250 $ 32,734
Anthony C. van Ekris, Director $ 2,000 $ 59,750
* Represents the total compensation paid to such persons during the calendar
year ended December 31, 1999. The parenthetical number represents the
number of investment companies (including the Fund) from which such person
received compensation that are considered part of the same fund complex as
the Fund because they have common or affiliated investment advisers.
</TABLE>
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
- -------------------------------------------------------------------------------
As of March 1, 2000, the following persons owned of record or
beneficially 5% or more of the Fund's outstanding shares:
- -------------------------------------------------------------------------------
NAME AND ADDRESS OF HOLDER OF RECORD PERCENTAGE OF FUND
Charles Schwab & Co., Inc. 8.86%
Special Custody Acct.
FBO BEN OF CUSTS
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
C/O W Frewin-Cable Systems 7.23%
Wexford Clearing Services Corp.
Charles Dolan
One Media Cross Ways
Woodbury, NY 11797-2062
* Beneficial ownership is disclaimed.
Beneficial ownership of shares representing 25% or more of the outstanding
shares of each class of the Fund may be deemed to have control, as that
term is defined in the 1940 Act.
As of February 28, 2000, as a group, the Directors and officers of the Fund
owned less than 1% of the outstanding shares of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
The Investment Adviser
The Adviser is a New York limited liability company which also serves as an
investment adviser to 15 other open-end investment companies, and 4 closed-end
investment companies with aggregate assets in excess of $10.6 billion as of
December 31, 1999. The Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended. Mr. Mario J. Gabelli may be deemed
a "controlling person" of the Adviser on the basis of his controlling interest
of the ultimate parent company of the Adviser. The Adviser has several
affiliates that provide investment advisory services: GAMCO Investors, Inc.
("GAMCO"), a wholly-owned subsidiary of the Adviser, acts as investment adviser
for individuals, pension trusts, profit-sharing trusts and endowments, and had
assets under management of approximately $9.4 billion under its management as of
December 31, 1999; Gabelli Advisers, Inc. acts as investment adviser to the
Gabelli Westwood Funds with assets under management of approximately $390
million as of December 31, 1999; Gabelli Securities, Inc. acts as investment
adviser to certain alternative investments products, consisting primarily of
risk arbitrage and merchant banking limited partnerships and offshore companies,
with assets under management of approximately $230 million as of December 31,
1999; and Gabelli Fixed Income LLC acts as investment adviser for the three
portfolios of The Treasurer's Fund and separate accounts having assets under
management of approximately $1.4 billion as of December 31, 1999.
Affiliates of the Adviser may, in the ordinary course of their business, acquire
for their own account or for the accounts of their advisory clients, significant
(and possibly controlling) positions in the securities of companies that may
also be suitable for investment by the Fund. The securities in which the Fund
might invest may thereby be limited to some extent. For instance, many companies
in the past several years have adopted so-called "poison pill" or other
defensive measures designed to discourage or prevent the completion of
non-negotiated offers for control of the company. Such defensive measures may
have the effect of limiting the shares of the company which might otherwise be
acquired by the Fund if the affiliates of the Adviser or their advisory accounts
have or acquire a significant position in the same securities. However, the
Adviser does not believe that the investment activities of its affiliates will
have a material adverse effect upon the Fund in seeking to achieve its
investment objectives. Securities purchased or sold pursuant to contemporaneous
orders entered on behalf of the investment company accounts of the Adviser or
the advisory accounts managed by its affiliates for their unaffiliated clients
are allocated pursuant to principles believed to be fair and not disadvantageous
to any such accounts. In addition, all such orders are accorded priority of
execution over orders entered on behalf of accounts in which the Adviser or its
affiliates have a substantial pecuniary interest. The Adviser may on occasion
give advice or take action with respect to other clients that differ from the
actions taken with respect to the Fund. The Fund may invest in the securities of
companies which are investment management clients of GAMCO. In addition,
portfolio companies or their officers or directors may be minority shareholders
of the Adviser or its affiliates.
Pursuant to an Investment Advisory Contract (the "Contract"), which was
initially approved by the Fund's sole shareholder on June 28, 1995, and last
approved by the Board of Directors on May 19, 1999, the Adviser furnishes a
continuous investment program for the Fund's portfolio, makes the day-to-day
investment decisions for the Fund, arranges the portfolio transactions of the
Fund and generally manages the Fund's investments in accordance with the stated
policies of the Fund, subject to the general supervision of the Board of
Trustees of the Fund. For the services it provides, the Adviser is paid an
annual fee based on the value of the Fund's average daily net assets of 1.00%.
Under the Contract, the Adviser also (i) provides the Fund with the services of
persons competent to perform such supervisory, administrative, and clerical
functions as are necessary to provide effective administration of the Fund,
including maintaining certain books and records and overseeing the activities of
the Fund's Custodian and Transfer Agent; (ii) oversees the performance of
administrative and professional services to the Fund by others, including the
Fund's Sub-Administrator, Custodian, Transfer Agent and Dividend Disbursing
Agent, as well as accounting, auditing and other services performed for the
Fund; (iii) provides the Fund with adequate office space and facilities; (iv)
prepares, but does not pay for, the periodic updating of the Fund's registration
statement, Prospectus and Additional Statement, including the printing of such
documents for the purpose of filings with the SEC and state securities
administrators, the Fund's tax returns, and reports to the Fund's shareholders
and the SEC; (v) calculates the net asset value of shares in the Fund; (vi)
prepares, but does not pay for, all filings under the securities or "Blue Sky"
laws of such states or countries as are designated by the Distributor, which may
be required to register or qualify, or continue the registration or
qualification, of the Fund and/or its shares under such laws; and (vii) prepares
notices and agendas for meetings of the Fund's Board of Trustees and minutes of
such meetings in all matters required by the Act to be acted upon by the Board.
The Contract provides that absent willful misfeasance, bad faith, gross
negligence or reckless disregard of its duty, the Adviser and its employees,
officers, directors and controlling persons are not liable to the Fund or any of
its investors for any act or omission by the Adviser or for any error of
judgment or for losses sustained by the Fund. However, the Contract provides
that the Fund is not waiving any rights it may have with respect to any
violation of law which cannot be waived. The Contract also provides
indemnification for the Adviser and each of these persons for any conduct for
which they are not liable to the Fund. The Contract in no way restricts the
Adviser from acting as adviser to others. The Fund has agreed by the terms of
the Contract that the word "Gabelli" in its name is derived from the name of the
Adviser which in turn is derived from the name of Mario J. Gabelli; that such
name is the property of the Adviser for copyright and/or other purposes; and
that, therefore, such name may freely be used by the Adviser for other
investment companies, entities or products. The Fund has further agreed that in
the event that for any reason, the Adviser ceases to be its investment adviser,
the Fund will, unless the Adviser otherwise consents in writing, promptly take
all steps necessary to change its name to one which does not include "Gabelli."
By its terms, the Contract will remain in effect for a period of two years and
thereafter from year to year, provided each such annual continuance is
specifically approved by the Fund's Board of Trustees or by a "majority" (as
defined in the 1940 Act) vote of its shareholders and, in either case, by a
majority vote of the Trustees who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called specifically for
the purpose of voting on the Contract. The Contract is terminable without
penalty by the Fund on sixty days' written notice when authorized either by
majority vote of its outstanding voting shares or by a vote of a majority of its
Board of Trustees, or by the Adviser on sixty days' written notice, and will
automatically terminate in the event of its "assignment" as defined by the 1940
Act.
As compensation for its services and the related expenses borne by the Adviser,
the Fund pays the adviser a fee, computed daily and payable monthly, equal, on a
annual basis, to 1.00% of the Fund's average daily net assets, payable out of
the Fund's net assets. For the fiscal years ended December 31, 1999, 1998, and
1997, the Fund incurred in investment advisory fees $318,448, $276,379 and
$193,382, respectively.
The Sub-Administrator
The Adviser has entered into a Sub-Administration Agreement (the
"Sub-Administration Agreement") with PFPC Inc. (formerly known as First Data
Investor Services Group, Inc.) (the "Sub-Administrator"), a majority-owned
subsidiary of PNC Bank Corp., which is located at 101 Federal Street, Boston,
Massachusetts 02110. Under the Sub-Administration Agreement, the
Sub-Administrator (a) assists in supervising all aspects of the Fund's
operations except those performed by the Adviser under its advisory agreement
with the Fund; (b) supplies the Fund with office facilities (which may be in the
Sub-Administrator's own offices), statistical and research data, data processing
services, clerical, accounting and bookkeeping services, including, but not
limited to, the calculation of the net asset value of shares in the Fund,
internal auditing and legal services, internal executive and administrative
services, and stationery and office supplies; (c) prepares and distributes
materials for all Fund Board of Trustees' Meetings including the mailing of all
Board materials and collates the same materials into the Board books and assists
in the drafting of minutes of the Board Meetings; (d) prepares reports to Fund
shareholders, tax returns and reports to and filings with the SEC and state
"Blue Sky" authorities; (e) calculates the Fund's net asset value per share,
provides any equipment or services necessary for the purpose of pricing shares
or valuing the Fund's investment portfolio and, when requested, calculates the
amounts permitted for the payment of distribution expenses under any
distribution plan adopted by the Fund; (f) provides compliance testing of all
Fund activities against applicable requirements of the 1940 Act and the rules
thereunder, the Code, and the Fund's investment restrictions; (g) furnishes to
the Adviser such statistical and other factual information and information
regarding economic factors and trends as the Adviser from time to time may
require; and (h) generally provides all administrative services that may be
required for the ongoing operation of the Fund in a manner consistent with the
requirements of the 1940 Act.
For the services it provides, the Adviser pays the Sub-Administrator an annual
fee based on the value of the aggregate average daily net assets of all funds
under its administration managed by the Adviser as follows: up to $10 billion -
.0275%; over $10 billion to $15 billion - .0125%; over $15 billion - .01%. The
Sub-Administrator's fee is paid by the Adviser and will result in no additional
expenses to the Fund.
Counsel
Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York 10019, serves
as the Fund's legal counsel.
Independent Auditors
Ernst & Young LLP, independent auditors, have been selected to audit the Fund's
annual financial statements, and is located at 787 Seventh Ave., New York, New
York 10019.
Custodian, Transfer Agent and Dividend Disbursing Agent
State Street, 225 Franklin Street, Boston, MA 02110 is the Custodian for the
Fund's cash and securities. Boston Financial Data Services, Inc. ("BFDS"), an
affiliate of State Street located at the BFDS Building, Two Heritage Drive,
Quincy, Massachusetts 02171, performs the services of transfer agent and
dividend disbursing agent for the Fund. Neither BFDS nor State Street assists in
or is responsible for investment decisions involving assets of the Fund.
Distributor
To implement the Fund's 12b-1 Plan, the Fund has entered into a Distribution
Agreement with Gabelli & Company, Inc. (the "Distributor"), a New York
corporation which is an indirect majority owned subsidiary of GAMI, having
principal offices located at One Corporate Center, Rye, New York 10580-1434. The
Distributor acts as agent of the Fund for the continuous offering of its shares
on a best efforts basis.
DISTRIBUTION PLANS
Pursuant to separate distribution and service plans (the Class A Plan, the Class
B Plan, the Class C Plan and the Class AAA Plan, collectively, the Plans)
adopted by the Fund pursuant to Rule 12b-1 under the Act and the Distribution
Agreement, the Distributor incurs the expenses of distributing the Fund's Class
A, Class B, Class C and Class AAA shares. In addition, the Distributor receives
the proceeds of contingent deferred sales charges paid by investors upon certain
redemptions of Class B and Class C shares.
The Class A, Class B, Class C and Class AAA Plans continue in effect from year
to year, provided that each such continuance is approved at least annually by a
vote of the Board of Directors, including a majority vote of the Directors who
are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Class A, Class B, Class C or Class
AAA Plans (the Independent Directors), cast in person at a meeting called for
the purpose of voting on such continuance. The Plans may each be terminated at
any time, without penalty, by the vote of a majority of the Independent
Directors, or by the vote of the holders of a majority of the outstanding shares
of the applicable class of the Fund on not more than 30 days' written notice to
any other party to the Plans. The Plans may not be amended to increase
materially the amounts to be spent for the services described therein without
approval by the shareholders of the applicable class (by both Class A and Class
B shareholders, voting separately, in the case of material amendments to the
Class A Plan), and all material amendments are required to be approved by the
Board of Directors in the manner described above. Each Plan will automatically
terminate in the event of its assignment. The Fund will not be contractually
obligated to pay expenses incurred under any Plan if it is terminated or not
continued.
Pursuant to each Plan, the Board of Directors will review at least quarterly a
written report of the distribution expenses incurred on behalf of each class of
shares of the Fund by the Distributor. The report includes an itemization of the
distribution expenses and the purposes of such expenditures. In addition, as
long as the Plans remain in effect, the selection and nomination of Independent
Directors shall be committed to the Independent Directors.
Pursuant to the Distribution Agreement, the Fund has agreed to indemnify the
Distributor to the extent permitted by applicable law against certain
liabilities under the federal securities laws.
Pursuant to rules of the NASD, the Distributor is required to limit aggregate
initial sales charges, deferred sales charges and asset-based sales charges to
6.25% of total gross sales of each class of shares. Interest charges on
unreimbursed distribution expenses equal to the prime rate plus one percent per
annum may be added to the 6.25% limitation. Additional shares resulting from the
reinvestment of dividends and distributions are not included in the calculation
of the 6.25% limitation. The annual asset-based sales charge on shares of the
Fund may not exceed .75 of 1% per class. The 6.25% limitation applies to each
class of the Fund rather than on a per shareholder basis. If aggregate sales
charges were to exceed 6.25% of total gross sales of any class, all sales
charges on shares of the class would be suspended.
During the fiscal year ended December 31, 1999, the Distributor incurred
distribution expenses under the Distribution Plan for Class AAA of $85,600. Of
this amount $6,900 was spent on advertising, $27,600 was spent on printing,
postage and stationery, $14,500 on overhead support expenses, $24,600 on
salaries of personnel of the Distributor and $12,000 to third party brokers.
Pursuant to the Distribution Plan, the Fund paid the Distributor $54,900, or
.25% of its average daily net assets. The Plan compensates the Distributor
regardless of its expenses.
Shares of the Fund may also be purchased through shareholder agents that are
not affiliated with the Fund or the Distributor. There is no sales or service
charge imposed by the Fund other than as described in the Class A, B, C Shares
Prospectus under the "Classes of Shares" section, but agents who do not receive
distribution payments or sales charges may impose a charge to the investor for
their services. Such fees may vary among agents, and such agents may impose
higher initial or subsequent investment requirements than those established by
the Fund. Services provided by broker-dealers may include allowing the investor
to establish a margin account and to borrow on the value of the Fund's shares in
that account. It is the responsibility of the shareholder's agent to establish
procedures which would assure that upon receipt of an order to purchase shares
of the Fund the order will be transmitted so that it will be received by the
Distributor before the time when the price applicable to the buy order expires.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Under the Investment Advisory Contract, the Adviser is authorized on behalf of
the Fund to employ brokers to effect the purchase or sale of portfolio
securities with the objective of obtaining prompt, efficient and reliable
execution and clearance of such transactions at the most favorable price
obtainable ("best execution") at reasonable expense. Transactions in securities
other than those for which a securities exchange is the principal market are
generally done through a principal market maker. However, such transactions may
be effected through a brokerage firm and a commission paid whenever it appears
that the broker can obtain a more favorable overall price. In general, there may
be no stated commission in the case of securities traded on the over-the-counter
markets, but the prices of those securities may include undisclosed commissions
or markups. Options transactions will usually be effected through a broker and a
commission will be charged. The Fund also expects that securities will be
purchased at times in underwritten offerings where the price includes a fixed
amount of compensation, generally referred to as the underwriter's concession or
discount.
The Adviser currently serves as Adviser to a number of investment company
clients and may in the future act as adviser to others. Affiliates of the
Adviser act as investment adviser to numerous private accounts and adviser to
other investment companies. It is the practice of the Adviser and its affiliates
to cause purchase and sale transactions to be allocated among the Fund and
others whose assets they manage in such manner as it deems equitable. In making
such allocations among the Fund and other client accounts, the main factors
considered are the respective investment objectives, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and the
opinions of the persons responsible for managing the portfolios of the Fund and
other client accounts.
The policy of the Fund regarding purchases and sales of securities and options
for its portfolio is that primary consideration will be given to obtaining the
most favorable prices and efficient execution of transactions. In seeking to
implement the Fund's policies, the Adviser effects transactions with those
brokers and dealers who the Adviser believes provide the most favorable prices
and are capable of providing efficient executions. If the Adviser believes such
price and execution are obtainable from more than one broker or dealer, it may
give consideration to placing portfolio transactions with those brokers and
dealers who also furnish research and other services to the Fund or the Adviser
of the type described in Section 28(e) of the Exchange Act of 1934. In doing so,
the Fund may also pay higher commission rates than the lowest available when the
Adviser believes it is reasonable to do so in light of the value of the
brokerage and research services provided by the broker effecting the
transaction. Such services may include, but are not limited to, any one or more
of the following: information as to the availability of securities for purchase
or sale: statistical or factual information or opinions pertaining to
investment; wire services; and appraisals or evaluations of portfolio
securities.
Research services furnished by brokers or dealers through which the Fund
effect securities transactions are used by the Adviser and its advisory
affiliates in carrying out their responsibilities with respect to all of their
accounts over which they exercise investment discretion. Such investment
information may be useful only to one or more of such other accounts. The
purpose of this sharing of research information is to avoid duplicative charges
for research provided by brokers and dealers. Neither the Fund nor the Adviser
has any agreement or legally binding understanding with any broker or dealer
regarding any specific amount of brokerage commissions which will be paid in
recognition of such services. However, in determining the amount of portfolio
commissions directed to such brokers or dealers, the Adviser does consider the
level of services provided. Based on such determinations, the Adviser has
allocated brokerage commissions of $0 on portfolio transactions in the principal
amount of $0 during 1999 to various broker-dealers that have provided research
services to the Adviser.
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli & Company, Inc. ("Gabelli"), a broker-dealer member of
the National Association of Securities Dealers, Inc. and an affiliate of the
Adviser, when it appears that, as an introducing broker or otherwise, Gabelli
can obtain a price and execution which is at least as favorable as that
obtainable by other qualified brokers. The Adviser may also consider sales of
shares of the Fund and any other registered investment companies managed by the
Adviser and its affiliates by brokers and dealers other than the Distributor as
a factor in its selection of brokers and dealers to execute portfolio
transactions for the Fund. The Fund paid the following brokerage commissions for
the year ended December 31, 1999 as indicated:
TOTAL BROKERAGE BROKERAGE COMMISSIONS
PERIOD COMMISSIONS PAID PAID TO GABELLI
1997 $ 99,463 $ 0
1998 $ 104,828 $ 300
1999 $ 133,853 $ 170
For the fiscal year ended December 31, 1999 0.13% of aggregate brokerage
commissions paid by the Fund were paid to Gabelli & Company, Inc., or 0.73% of
the Fund's aggregate dollar amount of transactions involving the payment of
commissions.
As required by Rule 17e-1 under the Act, the Board of Directors has adopted
procedures which provide that the commissions paid to Gabelli on stock exchange
transactions may not exceed that which would have been charged by another
qualified broker or member firm able to effect the same or a comparable
transaction at an equally favorable price. Rule 17e-1 and the procedures contain
requirements that the Board, including its independent Directors, conduct
periodic compliance reviews of such brokerage allocations and review such
schedule at least annually for its continuing compliance with the foregoing
standard. The Adviser and Gabelli are also required to furnish reports and
maintain records in connection with such reviews.
To obtain the best execution of portfolio trades on the New York Stock Exchange
("NYSE"), Gabelli controls and monitors the execution of such transactions on
the floor of the NYSE through independent "floor brokers" or through the
Designated Order Turnaround ("DOT") System of the NYSE. Such transactions are
then cleared, confirmed to the Fund for the account of Gabelli, and settled
directly with the Custodian of the Fund by a clearing house member firm which
remits the commission less its clearing charges to Gabelli. Gabelli may also
effect Fund portfolio transactions in the same manner and pursuant to the same
arrangements on other national securities exchanges which adopt direct access
rules similar to those of the NYSE.
REDEMPTION OF SHARES
Cancellation of purchase orders for Fund shares (as, for example, when checks
submitted to purchase shares are returned unpaid) cause a loss to be incurred
when the net asset value of the Fund shares on the date of cancellation is less
than on the original date of purchase. The investor is responsible for such
loss, and the Fund may reimburse shares from any account registered in that
shareholder's name, or by seeking other redress. If the Fund is unable to
recover any loss to itself, it is the position of the SEC that the Distributor
will be immediately obligated to make the Fund whole.
Other Investors
No minimum initial investment is required for officers, directors or full-time
employees of the Fund, other investment companies managed by the Adviser, the
Adviser, the Sub-Administrator, the Distributor or their affiliates, including
members of the "immediate family" of such individuals and retirement plans and
trusts for their benefit. The term "immediate family" refers to spouses,
children and grandchildren (adopted or natural), parents, grandparents,
siblings, a spouse's siblings, sibling's spouse and a sibling's children.
DETERMINATION OF NET ASSET VALUE
Net asset value is calculated separately for each class of the Fund. The net
asset value of Class B Shares and Class C Shares of the Fund will generally be
lower than the net asset value of Class A Shares or Class AAA Shares as a result
of the larger distribution-related fee to which Class B Shares and Class C
Shares are subject. It is expected, however, that the net asset value per share
of each class will tend to converge immediately after the recording of
dividends, if any, which will differ by approximately the amount of the
distribution and/or service fee expense accrual differential among the classes.
For purposes of determining the Fund's net asset value per share, readily
marketable portfolio securities listed on a market subject to governmental
regulation on which trades are reported contemporaneously are valued, except as
indicated below, at the last sale price reflected at the close of the regular
trading session of the principal market for such security on the business day as
of which such value is being determined. If there has been no sale on such day,
the securities are valued at the average of the closing bid and asked prices on
the principal market for such security on such day. If no asked prices are
quoted on such day, then the security is valued at the closing bid price on the
principal market for such security on such day. If no bid or asked prices are
quoted on such day, then the security is valued by such method as the Board of
Directors shall determine in good faith to reflect its fair market value.
All other readily marketable securities are valued at the latest average of
the bid and asked price obtained from a dealer maintaining an active market in
such security.
Debt instruments having 60 days or less remaining until maturity are stated
at amortized cost. Debt instruments having a greater remaining maturity will be
valued at the latest bid price obtainable from a dealer which maintains an
active market in the security until the maturity of the instrument is 60 days or
less when it will be valued as if purchased at the valuation established as of
the 61st day of its maturity. Listed debt securities which are actively traded
on a securities exchange may also be valued at the last sale price in lieu of
the quoted bid price of a dealer. All other investment assets, including
restricted and not readily marketable securities, are valued under procedures
established by and under the general supervision and responsibility of the
Fund's Board of Directors designed to reflect in good faith the fair value of
such securities.
DIVIDENDS, DISTRIBUTIONS AND TAXES
General
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. If it so qualified, the Fund
will not be subject to Federal income tax on its net investment income and net
short-term capital gain, if any, realized during any fiscal year to the extent
that it distributes such income and capital gains to its shareholders.
The Fund will determine either to distribute, or to retain for reinvestment, all
or part of any net long-term capital gain. If any such gains are retained, the
Fund will be subject to a tax of 35% of such amount. In that event, the Fund
expects to designate the retained amount as undistributed capital gain in a
notice to its shareholders, each of whom (1) will be required to include in
income for tax purposes as long-term capital gain its share of undistributed
amount, (2) will be entitled to credit its proportionate share of the tax paid
by the Fund against its Federal income tax liability and to claim refunds to the
extent the credit exceeds such liability, and (3) will increase its basis in its
shares of the Fund by an amount equal to 65% of the amount of undistributed
capital gain included in such shareholder's gross income.
A distribution will be treated as paid during the calendar year if it is paid
during the calendar year or declared by the Fund in October, November or
December of the year, payable to shareholders of record on a date during such
month and paid by the Fund during January of the following year. Any such
distributions paid during January of the following year will be deemed to be
received on December 31 of the year the distributions are declared, rather than
when the distributions are received.
Under the Code, amounts not distributed on a timely basis in accordance with a
calendar year distribution requirement are subject to a 4% excise tax. To avoid
the tax, the Fund must distribute during each calendar year, an amount equal to
at least the sum of (1) 98% of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, (2) 98% of its capital gains in
excess of its capital losses for the twelve-month period ending on October 31 of
the calendar year, (unless an election is made by a fund with a November or
December year-end to use the Fund's fiscal year) and (3) all ordinary income and
net capital gains for previous years that were not previously distributed.
Gains or losses on the sales of securities by the Fund will be long-term capital
gains or losses if the securities have been held by the Fund for more than
twelve months. Gains or losses on the sale of securities held for twelve months
or less will be short-term capital gains or losses.
Certain options, futures contracts and options on futures contracts are "section
1256 contracts". Any gains or losses on section 1256 contracts are generally
considered 60% long-term and 40% short-term capital gains or losses ("60/40").
Also, section 1256 contracts held by the Fund at the end of each taxable year
are "marked-to-market" with the result that unrealized gains or losses are
treated as though they were realized and the resulting gain or loss is treated
as 60/40 gain or loss.
Hedging transactions undertaken by the Fund may result in "straddles" for
U.S. Federal income tax purposes. The straddle rules may affect the character of
gains (or losses) realized by the Fund. In addition, losses realized by the Fund
on positions that are part of a straddle may be deferred under the straddle
rules, rather than being taken into account in calculating the taxable income
for the taxable year in which such losses are realized. Further, the Fund may be
required to capitalize, rather than deduct currently, any interest expense on
indebtedness incurred or continued to purchase or carry any positions that are
part of a straddle. The Fund may make one or more of the elections available
under the Code which are applicable to straddles. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected straddle positions will be determined under rules that
vary according to the election(s) made. The rules applicable under certain of
the elections accelerate the recognition of gains or losses from the affected
straddle positions. Because application of the straddle rules may affect the
character of gains or losses, defer losses and/ or accelerate the recognition of
gains or losses from the affected straddle positions, and require the
capitalization of interest expense, the amount which must be distributed to
shareholders, and which will be taxed to shareholders as ordinary income or
long-term capital gain, may be increased or decreased substantially as compared
to a fund that did not engage in such hedging transactions.
The diversification requirements applicable to the Fund's assets may limit
the extent to which the Fund will be able to engage in transactions in options,
futures contracts and options on futures contracts.
Distributions
Distributions of investment company taxable income (which includes taxable
interest income and the excess of net short-term capital gains over long-term
capital losses) are taxable to a U.S. shareholder as ordinary income, whether
paid in cash or in additional Fund shares. Dividends paid by a Fund will qualify
for the 70% deduction for dividends received by corporations to the extent the
Fund's income consists of qualified dividends received from U.S. corporations.
Distributions of net capital gain (which consist of the excess of long-term
capital gains over net short-term capital losses), if any, are taxable as
long-term capital gain, whether paid in cash or in shares, and are not eligible
for the dividends received deduction. Shareholders receiving distributions in
the form of newly issued shares will have a basis in such shares of the Fund
equal to the fair market value of such shares on the distribution date. If the
net asset value of shares is reduced below a shareholder's cost as a result of a
distribution by the Fund, such distribution may be taxable even though it
represents a return of invested capital. The price of shares purchased at any
time may reflect the amount of a forthcoming distribution. Those purchasing
shares just prior to a distribution will receive a distribution which will be
taxable to them, even though the distribution represents in part a return of
invested capital.
Sales of Shares
Upon a sale or exchange of shares, a shareholder will realize a taxable gain or
loss depending upon the basis in the shares. Such gain or loss will be
long-term, or short-term, generally depending upon the shareholder's holding
period for the shares. Non-corporate shareholders are subject to tax at a
maximum rate of 20% on capital gains resulting from the disposition of shares
held for more than 12 months (10% if the taxpayer is, and would be after
accounting for such gains, subject to the 15% tax bracket for ordinary income).
Any loss realized on a sale or exchange will be disallowed to the extent the
shares disposed of are replaced within a 61-day period beginning 30 days before
and ending 30 days after the date the shares are disposed of. In such case, the
basis of the shares acquired will be adjusted to reflect the disallowed loss.
Any loss realized by a shareholder on the sale of Fund shares held by the
shareholder for six months or less will be treated for tax purposes as a
long-term capital loss to the extent of any distributions of net capital gain
received by the shareholder with respect to such shares.
If a shareholder (i) incurs a sales load charge in acquiring shares in a
Fund and, by reason of incurring such charge or acquiring the shares, acquires
the right to acquire shares of one or more regulated investment companies
without the payment of a load charge or with the payment of a reduced load
charge (a "reinvestment right") and (ii) disposes of the Fund shares before the
91st day after the date on which the shares were acquired and subsequently
acquires shares in the Fund or in another regulated investment company whereby
the otherwise applicable load charge is reduced by reason of the reinvestment
right, then the original load charge will not be taken into account for the
purposes of determining the shareholder's gain or loss on the disposition (to
the extent the original load charge does not exceed the reduction in the
subsequent load charge). To the extent such charge is not taken into account in
determining the amount of gain or loss, the charge will be treated as incurred
in connection with the subsequently acquired shares and will have a
corresponding effect on the shareholder's basis in such shares.
Backup Withholding
The Fund may be required to withhold Federal income tax at a rate of 31% on
all taxable distributions payable to shareholders who fail to provide their
correct taxpayer identification number or to make required certifications, or
who have been notified by the Internal Revenue Service that they are subject to
backup withholding. Backup withholding is not an additional tax. Any amounts
withheld may be credited against the shareholder's Federal income tax liability.
Foreign Withholding Taxes
Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine the rate of foreign tax in
advance since the amount of the Fund's assets to be invested in various
countries is not known. Because the Fund will not have more than 50% of its
total assets invested in securities of foreign governments or corporations, the
Fund will not be entitled to "pass-through" to shareholders the amount of
foreign taxes paid by the Fund.
Fund Matters
The Fund reserves the right to create and issue a number of portfolios, in
which case the shares of each portfolio would participate equally in the
earnings, dividends, and assets of the particular portfolio and would vote
separately to approve management agreements or changes in investment policies,
but shares of all portfolios would vote together in the election or selection of
Directors, principal underwriters and auditors and, generally, on any proposed
amendment to the Fund's Articles of Incorporation.
Upon liquidation of the Fund or any portfolio, shareholders of the affected
portfolio would be entitled to share pro rata in the net assets of their
respective portfolio available for distribution to such shareholders.
<PAGE>
INVESTMENT PERFORMANCE INFORMATION
Performance Information
The Fund may furnish data about its investment performance in advertisements,
sales literature and reports to shareholders. "Total return" represents the
annual percentage change in value of $1,000 invested at the maximum public
offering price for the one, five and ten year periods (if applicable) and the
life of the Fund through the most recent calendar quarter, assuming reinvestment
of all dividends and distributions. Quotations of "yield" will be based on the
investment income per share earned during a particular 30 day period, less
expenses accrued during the period, with the remainder being divided by the
maximum offering price per share on the last day of the period. Each Fund may
also furnish total return and yield calculations for other periods based on
investments at various sales charge levels or net asset values.
Quotations of yield will be based on the investment income per share earned
during a particular 30 day period, less expenses accrued during the period ("net
investment income") and will be computed by dividing net investment income by
the maximum offering price per share on the last day of the period, according to
the following formula:
YIELD = 2[(a-b + 1) 6 - 1] cd
where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of any reimbursements), c = the average daily number of
shares outstanding during the period that were entitled to receive dividends,
and d = the maximum offering price per share on the last day of the period.
Quotations of total return will reflect only the performance of a hypothetical
investment in the Fund during the particular time period shown. The Fund's total
return and current yield may vary from time to time depending on market
conditions, the compositions of the its portfolio and operating expenses. These
factors and possible differences in the methods used in calculating yield should
be considered when comparing a Fund's current yield to yields published for
other investment companies and other investment vehicles. Total return and yield
should also be considered relative to change in the value of the Fund's shares
and the risks associated with the Fund's investment objectives and policies. At
any time in the future, total returns and yield may be higher or lower than past
total returns and yields and there can be no assurance that any historical
return or yield will continue.
From time to time evaluations of performance are made by independent sources
that may be used in advertisements concerning the Fund. These sources include:
Lipper Analytical Services, Weisenberger Investment Company Service, Barron's,
Business Week, Financial World, Forbes, Fortune, Money, Personal Investor,
Sylvia Porter's Personal Finance, Bank Rate Monitor, Morningstar and The Wall
Street Journal.
In connection with communicating its yield or total return to current or
prospective shareholders, the Fund may also compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indexes which may assume reinvestment of dividends but generally
do not reflect deductions for administrative and management costs.
Quotations of the Fund's total return will represent the average annual
compounded rate of return of a hypothetical investment in the Fund over periods
of 1, 5, and 10 years (up to the life of the Fund), and are calculated pursuant
to the following formula:
P(1+T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV = the redeemable value at the end
of the period of a $1,000 payment made at the beginning of the period). Total
return figures will reflect the deduction of Fund expenses (net of certain
expenses reimbursed by the Adviser) on an annual basis, and will assume that all
dividends and distributions are reinvested and will deduct the maximum sales
charge, if any is imposed.
For the year ended December 31, 1999, the Fund's total return for Class AAA
shares was 52.4%. The average annual total return since its inception on June
30, 1995 is 23.35%.
As of December 31, 1999, the Fund had not commenced offering Class A, Class B
and Class C Shares to the public.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
Description of Shares, Voting Rights and Liabilities
The Fund is an open-end management investment company that was organized as a
Maryland corporation on May 25, 1994. Its authorized capital stock consists of
one billion shares of stock having a par value of one tenth of one cent ($.001)
per share. The Fund is not required, and does not intend, to hold regular annual
shareholder meetings, but may hold special meetings for consideration of
proposals requiring shareholder approval, such as changing fundamental policies,
or upon the written request of 10% of the Fund's shares. The Fund's Board of
Directors is authorized to divide the unissued shares into separate portfolios
of stock, each portfolio representing a separate, additional portfolio.
There are no conversion or preemptive rights in connection with any shares of
the Fund, except that the series B shares may convert into series A shares as
described in the prospectus.. All shares, when issued in accordance with the
terms of the offering, will be fully paid and nonassessable. Shares will be
redeemed at net asset value, at the option of the shareholder.
The Fund sends semi-annual and audited annual reports to all shareholders which
include lists of portfolio securities and the Fund's financial statements, which
shall be audited annually. Unless it is clear that a shareholder is a nominee
for the account of an unrelated person or a shareholder otherwise specifically
requests in writing, the Fund may send a single copy of semi-annual, annual and
other reports to shareholders to all accounts at the same address and all
accounts of any person at that address.
The shares of the Fund have noncumulative voting rights which means that the
holders of more than 50% of the shares can elect 100% of the directors if the
holders choose to do so, and, in that event, the holders of the remaining shares
will not be able to elect any person or persons to the Board of Directors.
Unless specifically requested by an investor who is a shareholder of record, the
Fund does not issue certificates evidencing Fund shares.
Shareholder Approval
Other than elections of Directors, which is by plurality, any matter for which
shareholder approval is required by the Act requires the affirmative vote of at
least a "majority" (as defined by the Act) of the outstanding voting securities
of the Fund at a meeting called for the purpose of considering such approval. A
majority of the Fund's outstanding securities is the lesser of (1) 67% of the
shares represented at a meeting at which more than 50% of the outstanding shares
are present in person or by proxy or (2) more than 50% of the outstanding
shares.
Information for Shareholders
All shareholder inquiries regarding administrative procedures including the
purchase and redemption of shares should be directed to the Distributor, Gabelli
& Company, Inc., One Corporate Center, Rye, New York 10580-1434. For assistance,
call 1-800-GABELLI (1-800-422-3554) or through the internet at
http://www.gabelli.com.
FINANCIAL STATEMENTS
The Fund's Financial Statements for the year ended December 31, 1999, including
the Report of Ernst & Young LLP, independent auditors, is incorporated herein by
reference to the Fund's Annual Report. The Fund's Annual Report is available
upon request and without charge. Ernst & Young LLP provides audit services, tax
return preparation and assistance and consultation in connection with certain
SEC filings.
<PAGE>
APPENDIX A
Description of Moody's Investors Service, Inc.'s ("Moody's") Corporate Bond
Ratings
AAA: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues. Aa: Bonds which are rated Aa are
judged to be of high quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which made the long term risks appear
somewhat larger than in Aaa securities. A: Bonds which are rated A possess many
favorable investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future. Baa: Bonds which are rated Baa are considered
as medium grade obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well. Ba: Bonds which are rated Ba are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class. B: Bonds which are
rated B generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small. Caa: Bonds which are rated Caa are of
poor standing. Such issues may be in default or there may be present elements of
danger with respect to principal or interest. Ca: Bonds which are rated Ca
represent obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings. C: Bonds which are rated C
are the lowest rated class of bonds and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's may apply numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Description of Standard & Poor's Corporation's ("S&P's") Corporate Debt Ratings
AAA: Debt rated AAA has the highest rating assigned by S&P's. Capacity to pay
interest and repay principal is extremely strong. AA: Debt rated AA has a very
strong capacity to pay interest and repay principal and differs from the highest
rated issues only in small degree. A: Debt rated A has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. BBB: Debt rated BBB is regarded as having adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than for debt in higher rated categories. BB, B, CCC,
CC, C: Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and C the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions. CI: The rating CI
is reserved for income bonds on which no interest is being paid. D: Debt rated D
is in payment default. The D rating category is used when interest payments or
principal payments are not made on the date due even if the applicable grace
period has not expired, unless S&P's believes that such payments will be made
during such grace period. The D rating also will be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Description of Moody's Preferred Stock Ratings
aaa: An issue which is rated aaa is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks. aa: An issue which
is rated aa is considered a high-grade preferred stock. This rating indicates
that there is reasonable assurance that earnings and asset protection will
remain relatively well maintained in the foreseeable future. a: An issue which
is rated a is considered to be an upper medium grade preferred stock. While
risks are judged to be somewhat greater than in the aaa and aa classifications,
earnings and asset protection are, nevertheless expected to be maintained at
adequate levels. baa: An issue which is rated baa is considered to be medium
grade, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time. ba: An issue which is rated ba is considered to have speculative
elements and its future cannot be considered well assured. Earnings and asset
protection may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class. b: An
issue which is rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small. caa: An issue which is rated
caa is likely to be in arrears on dividend payments. This rating designation
does not purport to indicate the future status of payment. ca: An issue which is
rated ca is speculative in a high degree and is likely to be in arrears on
dividends with little likelihood of eventual payment. c: This is the lowest
rated class of preferred or preference stock. Issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's may apply numerical modifiers 1, 2 and 3 in each rating
classification from "aa" through "b" in its preferred stock rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Description of S&P's Preferred Stock Ratings
AAA: This is the highest rating that may be assigned by S&P's to a preferred
stock issue and indicates an extremely strong capacity to pay the preferred
stock obligations. AA: A preferred stock issue rated AA also qualifies as a
high-quality fixed income security. The capacity to pay preferred stock
obligations is very strong, although not as overwhelming as for issues rated
AAA. A: An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effect of changes in circumstances and economic conditions. BBB: An issue rated
BBB is regarded as backed by an adequate capacity to pay the preferred stock
obligations. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to make payments for a preferred stock in this category than
for issues in the A category. BB, B, CCC: Preferred stock rated BB, B, and CCC
are regarded, on balance, as predominantly speculative with respect to the
issuer's capacity to pay preferred stock obligations. BB indicates the lowest
degree of speculation and CCC the highest degree of speculation. While such
issues will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
CC: The rating CC is reserved for a preferred stock in arrears on dividends or
sinking fund payments but that is currently paying. C: A preferred stock rated C
is a non-paying issue. D: A preferred stock rated D is a non-paying issue with
the issuer in default on debt instruments.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
PART C: OTHER INFORMATION
Item 23. Exhibits
(a) Articles of Incorporation of the Registrant are incorporated
by reference to Post-Effective Amendment No. 5 to the
Registration Statement as filed with the SEC via EDGAR on
April 30, 1998.
Articles Supplementary to the Articles of Incorporation is
filed herewith.
(b) Registrant's By-laws are incorporated by reference to
Post-Effective Amendment No. 5 to the Registration Statement
as filed with the SEC via EDGAR on April 30, 1998.
(c) Not applicable.
(d) Investment Advisory Agreement with Gabelli Funds, Inc. is
incorporated by reference to Post-Effective Amendment No. 5
to the Registration Statement as filed with the SEC via
EDGAR on April 30, 1998.
(e) Distribution Agreement is incorporated by reference to
Post-Effective Amendment No. 5 to the Registration Statement
as filed with the SEC via EDGAR on April 30, 1998.
(f) Not applicable.
(g) Custody Agreement is incorporated by reference to
Post-Effective Amendment No. 5 to the Registration Statement
as filed with the SEC on April 30, 1998.
(h) Form of Transfer Agency Agreement is incorporated by reference
to Post-Effective Amendment No. 5 to the Registration
Statement as filed with the SEC on April 30, 1998.
(i) Opinion and Consent of Willkie Farr & Gallagher is filed
herewith.
Opinion of Venable, Baetjer and Howard is filed herewith.
(j) Consent of Independent Accountants is filed herewith.
Powers of Attorney of the Directors are incorporated by
reference to Pre-Effective Amendment No. 2 to the Registration
Statement as filed with the SEC via EDGAR on June 28, 1995.
(k) Not applicable.
(l) Subscription Agreement with initial shareholder is
incorporated by reference to Pre-Effective Amendment No. 2 to
the Registration Statement as filed with the SEC via EDGAR on
June 28, 1995.
(m) Amended and Restated Plan of Distribution pursuant to Rule
12b-1 relating to Class AAA Series Shares is filed herewith.
Plan of Distribution pursuant to Rule 12b-1 relating to
Class A Series Shares is filed herewith.
Plan of Distribution pursuant to Rule 12b-1 relating to
Class B Series Shares is filed herewith.
Plan of Distribution pursuant to Rule 12b-1 relating to
Class C Series Shares is filed herewith.
(n) Not applicable.
(o) Amended and Restated Rule 18f-3 Multi-Class Plan is filed
herewith.
(p) Code of Ethics of the Registrant is filed herewith.
Item 24. Persons Controlled by or Under Common Control with Registrant
None
Item 25. Indemnification
Under Article VIII of the registrant's Articles of
Incorporation and Article V, Section 1 of the registrant's
By-Laws, any past or present director or officer of registrant
is indemnified to the fullest extent permitted by law against
liability and all expenses reasonably incurred in connection
with any action, suit or proceeding to which the registrant
may be a party or otherwise involved by reason of being or
having been a director or officer of registrant. These
provisions do not authorize indemnification when it is
determined, in the manner specified in the Articles of
Incorporation and By-Laws, that such director or officer would
otherwise be liable to registrant or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his duties. In addition, the Articles of
Incorporation provide that to the fullest extent permitted by
Maryland General Corporation Law, as amended from time to
time, no director or officer of the Fund shall be personally
liable to the Fund or its stockholders for money damages,
except to the extent such exemption from liability or
limitation thereof is not permitted by the Investment Company
Act of 1940, as amended from time to time. Under Article V,
Section 2, of the registrant's By-Laws, expenses may be paid
by registrant in advance of the final disposition of any
action, suit or proceeding upon receipt of an undertaking by
such director or officer to repay such expenses to registrant
in the event that it is ultimately determined that
indemnification of the advanced expenses is not authorized
under the By-Laws.
Insofar as indemnification for liability arising under the
Securities Act of 1933 (the "1933 Act") may be permitted to
directors, officers and controlling persons of registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant 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, registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the 1933 Act and will be governed by the final adjudication of
such issue.
Item 26. Business and Other Connections of Investment Adviser
Gabelli Funds, LLC (the "Adviser") is a registered investment
adviser providing investment management and administrative
services to the Registrant. The Adviser also provides similar
services to other mutual funds.
The information required by this Item 26 with respect to any
other business, profession, vocation or employment of a
substantial nature engaged in by directors and officers of the
Adviser during the past two years is incorporated by reference
to Form ADV filed by the Adviser pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-37706).
Item 27. Principal Underwriter
(a) Gabelli & Company, Inc. ("Gabelli & Company") currently acts as distributor
for The Gabelli ABC Fund, The Gabelli Asset Fund, The Gabelli Blue Chip Value
Fund, The Gabelli Capital Asset Fund, The Gabelli Convertible Securities Fund,
Inc., The Gabelli Equity Income Fund, The Gabelli Equity Trust Inc., The Gabelli
Global Convertible Securities Fund, The Gabelli Global Growth Fund, The Gabelli
Global Multimedia Trust Inc., The Gabelli Global Telecommunications Fund,
Gabelli Gold Fund, Inc, The Gabelli Growth Fund, The Gabelli Global Opportunity
Fund, The Gabelli Mathers Fund, The Gabelli Small Cap Growth Fund, The Gabelli
U.S. Treasury Money Market Fund, The Gabelli Utilities Fund, The Gabelli Utility
Trust, The Gabelli Value Fund, Inc. and the Gabelli Westwood Funds.
(b) The information required by this Item 27 with respect to each
director, officer or partner of Gabelli & Company is
incorporated by reference to Schedule A of Form BD filed by
Gabelli & Company pursuant to the Securities Exchange Act of
1934, as amended (SEC File No. 8-21373).
(c) Not applicable.
Item 28. Location of Accounts and Records
All such accounts, books and other documents required by
Section 31(a) of the 1940 Act and Rules 31a-1 through 31a-3
thereunder are maintained at the offices of Gabelli Funds,
LLC, One Corporate Center, Rye, New York 10580-1434, PFPC Inc.
(formerly known as First Data Investor Services Group, Inc.),
101 Federal Street, Boston, Massachusetts 02110, State Street
Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, 02110 and Boston Financial Data Services, Inc.,
Two Heritage Drive, North Quincy, Massachusetts, 02171.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant, GABELLI
INTERNATIONAL GROWTH FUND, INC., certifies that it meets all the requirements
for effectiveness of this Post Effective Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933, as amended, and has
duly caused this Post Effective Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
Rye and State of New York on the 6th day of March, 2000.
GABELLI INTERNATIONAL GROWTH FUND, INC.
By: /s/ Bruce N. Alpert
Bruce N. Alpert
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 8 to its Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
* Chairman of the Board March 6, 2000
- -----------------------------
Mario J. Gabelli
/s/ Caesar M.P. Bryan President March 6, 2000
- -----------------------------
Caesar M.P. Bryan
/s/ Bruce N. Alpert Vice President, Treasurer March 6, 2000
Bruce N. Alpert and Chief Financial Officer
* Director March 6, 2000
- -----------------------------
Anthony J. Colavita
* Director March 6, 2000
- -----------------------------
Karl Otto Pohl
* Director March 6, 2000
- -----------------------------
Werner J. Roeder
* Director March 6, 2000
- -----------------------------
Anthonie C. van Ekris
*By:/s/Bruce N. Alpert
Bruce N. Alpert
Attorney-in-fact
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
(a) Articles Supplementary to the Articles of Incorporation
(i) Opinion and Consent of Willkie Farr & Gallagher
Opinion of Venable, Baetjer and Howard
(j) Consent of Independent Accountants
(m) Amended and Restated Plan of Distribution pursuant to
Rule 12b-1 relating to Class AAA Series Shares
Plan of Distribution pursuant to Rule 12b-1 relating to
Class A Series Shares
Plan of Distribution pursuant to Rule 12b-1 relating to
Class B Series Shares
Plan of Distribution pursuant to Rule 12b-1 relating to
Class C Series Shares
(o) Amended and Restated 18f-3 Multi-Class Plan
(p) Code of Ethics
Exhibit (a)
GABELLI INTERNATIONAL GROWTH FUND, INC.
ARTICLES SUPPLEMENTARY
GABELLI INTERNATIONAL GROWTH FUND, INC., a Maryland corporation
registered as an open-end investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and having its principal office in the State
of Maryland in Baltimore City, Maryland (hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: In accordance with procedures established in the Corporation's
Charter and pursuant to Section 2-208 of Maryland General Corporation Law, the
Board of Directors of the Corporation, by resolution dated February 16, 2000,
duly reclassifies five hundred million (500,000,000) Class AAA Series Shares of
the authorized Common Stock of the Corporation as follows:
Former Classification New Classification Authorized Shares Allocated
Gabelli International Gabelli International Growth 250,000,000
Growth Fund - Fund-
Class AAA Series Shares Class A Series Shares
Gabelli International Growth 125,000,000
Fund -
Class B Series Shares
Gabelli International Growth 125,000,000
Fund -
Class C Series Shares
SECOND: The shares of the Corporation reclassified pursuant to Article
First of these Articles Supplementary have been classified by the Board of
Directors under the authority contained in the Charter of the Corporation.
<PAGE>
THIRD: Immediately prior to the effectiveness of these Articles
Supplementary of the Corporation, the Corporation had authority to issue one
billion (1,000,000,000) shares of Common Stock of the par value of $0.001 per
share and of the aggregate par value of one million dollars ($1,000,000),
classified as follows:
Previous Classification of Shares
Name of Portfolio Class Designation Number of Shares Classified
Gabelli International Class AAA Series Shares 1,000,000,000
Growth Fund
As supplemented hereby, the Corporation's Articles of Incorporation
authorize the issuance of one billion (1,000,000,000) shares of Common Stock of
the par value of $0.001 per share and of the aggregate par value of one million
dollars ($1,000,000), classified as follows:
Current Classification of Shares
Name of Portfolio Class Designation Number of Shares Classified
Gabelli International Class AAA Series Shares 500,000,000
Growth Fund
Gabelli International Class A Series Shares 250,000,000
Growth Fund
Gabelli International Growth Class B Series Shares 125,000,000
Growth Fund
Gabelli International Growth Class C Series Shares 125,000,000
Growth Fund
FOURTH: The preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of each share of each class of the Gabelli International Growth Fund,
Inc. shall be subject to all provisions of the Articles of Incorporation,
relating generally to the Corporation's Common Stock and to the following:
<PAGE>
(a) The following definitions shall apply:
(i) "CDSC Shares" shall mean the Shares of any Class
subject to a contingent deferred sales charge.
(ii) "Class" shall mean one of the separate classes of
Shares of the Fund designated as such by these Articles
Supplementary.
(iii) "Class AAA Series Shares" shall mean the shares of the
Fund as designated as such by these Articles Supplementary.
(iv) "Class A Series Shares" shall mean the Shares of the Fund
designated as such by these Articles Supplementary.
(v) "Class B Series Shares" shall mean the Shares of the Fund
designated as such by these Articles Supplementary.
(vi) "Class C Series Shares" shall mean the Shares of the Fund
designated as such by these Articles Supplementary.
(vii) "Rule 18f-3 Plan" shall mean the plan approved by the
Directors and as amended from time to time, in accordance with
Rule 18f-3 under the Investment Company Act of 1940, as
amended, pursuant to which the Fund may issue multiple classes
of shares with varying front-end sales charges, contingent
deferred sales charges, distribution fees and service fees.
(b) In accordance with Article V(5) of the Articles of Incorporation:
(i) The assets attributable to each Class of Shares and the
liabilities attributable to each Class of Shares shall be
based upon the allocations required by the Rule 18f-3 Plan.
(ii) All dividends and distributions on each Class of Shares
shall be distributed pro rata to the holders of Shares of that
Class in proportion to the number of Shares of that Class held
by such holders at the date and time of record established for
the payment of such dividends or distributions and such
dividends and distributions need not be pro rata with respect
to dividends and distributions paid to Shares of any other
class. Dividends and distributions shall be paid with respect
to Shares of a given Class only out of lawfully available
assets attributable to such Class.
(iii) Each Class B Series Share shall be convertible
automatically, and without any action or choice on the part of
the holder thereof, into Class A Series Shares (or fractions
thereof) pursuant to such terms, conditions and restrictions
as may be established by the Directors and set forth from time
to time in the Prospectus of the Fund with respect to the
Class B Series Shares.
(iv) The number of Class A Series Shares into which each Class
B Series Share shall convert pursuant to the foregoing
paragraph shall equal the number (including for this purpose
fractions of a Share) obtained by dividing the net asset value
per share of the Class B Series Shares for purposes of sales
and redemptions thereof on the date of such conversion (the
"Conversion Date") by the net asset value per share of the
Class A Series Shares for purposes of sales and redemptions
thereof on the Conversion Date.
(v) On the Conversion Date, the Class B Series Shares which
convert into Class A Series Shares will no longer be deemed
outstanding and the rights of the holders thereof (except the
right to receive dividends declared prior to the Conversion
Date but unpaid as of the Conversion Date) will cease.
Certificates representing Class A Series Shares resulting from
conversion may be issued pursuant to such terms and conditions
as may be established from time to time by the Directors.
(vi) Shareholders of a particular Class of the Fund shall not
be entitled to vote on any matter that affects only one or
more other Classes and shall be the only shareholders entitled
to vote on matters submitted to shareholders affecting the
Distribution Fees or Service Fees relative to the Class or
other matters only affecting the Class.
(vii) Shareholders shall have separate voting rights on any
matter submitted to shareholders in which the interest of one
Class differs from the interests of any other Class.
(c) The method of determining the purchase price and the price, terms
and manner of redemption of each Class of Shares shall be established
by the Directors in accordance with the provisions of the Articles of
Incorporation, these Articles and the Rule 18f-3 Plan and shall be set
forth in the prospectus of the Fund with respect to each Class of
Shares, as amended from time to time, under the Securities Act of 1933,
as amended.
IN WITNESS WHEREOF, the Gabelli International Growth Fund, Inc. has
caused these Articles Supplementary to be signed, and witnessed, in its name and
on its behalf by its undersigned officers who acknowledge that these Articles
Supplementary are the act of the Corporation; that to the best of their
knowledge, information, and belief, all matters and facts set forth herein
relating to the authorization and approval of these Articles Supplementary are
true in all material respects; and that this statement is made under the
penalties of perjury.
Date: February 28, 2000
GABELLI INTERNATIONAL GROWTH FUND, INC.
By: /s/Bruce Alpert
Name: Bruce Alpert
Title: Vice President and Treasurer
WITNESS:
By: /s/ James E. McKee
Name: James E. McKee
Title: Secretary
Exhibit (i)
March 8, 2000
Gabelli International Growth Fund, Inc.
One Corporate Center
Rye, New York 10580-1434
Ladies and Gentlemen:
We have acted as counsel to Gabelli International Growth Fund, Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland, in
connection with the issuance of its Class AAA Series Shares, Class A Series
Shares, Class B Series Shares and Class C Series Shares, par value $.001 per
share (each a "Class" and, collectively the "Shares").
We have examined copies of the Articles of Incorporation, as amended and
supplemented to date (the "Charter"), and By-Laws of the Fund, the Fund's
Prospectus and Statement of Additional Information (the "Statement of Additional
Information") included in Amendment No. 8 to its Registration Statement on Form
N-1A, Securities Act File No. 33-79994 and Investment Company Act File No.
811-08560 (the "Registration Statement"), all resolutions adopted by the Fund's
Board of Directors (the "Board") at its meeting held on December 7, 1998 and
February 17, 1999, and other records, documents and papers that we have deemed
necessary for the purpose of this opinion. We have also examined such other
statutes and authorities as we have deemed necessary to form a basis for the
opinion hereinafter expressed.
In our examination of the above material, 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.
Based upon the foregoing, we are of the opinion that:
1. The Fund is duly organized and validly existing as a
corporation in good standing under the laws of the State of
Maryland.
2. The Shares of the Fund to be offered for sale pursuant to the
Registration Statement are, to the extent of the respective
number of Shares of each Class authorized to be issued by the
Fund in its Charter, duly authorized and, when sold, issued
and paid for as contemplated by the Registration Statement,
will have been validly and legally issued and will be fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, to the reference to us in the Statement of Additional
Information and to the filing of this opinion as an exhibit to any application
made by or on behalf of the Fund or any distributor or dealer in connection with
the registration or qualification of the Fund or the Shares under the securities
laws of any state or other jurisdiction.
We are members of the Bar of the State of New York only and do not opine as to
the laws of any jurisdiction other than the laws of the State of New York and
the laws of the United States, and the opinions set forth above are,
accordingly, limited to the laws of those jurisdictions. As to matters involving
the application of the laws of the State of Maryland, we have relied on the
opinion of Messrs. Venable, Baetjer and Howard, LLP.
Very truly yours,
WILLKIE FARR & GALLAGHER
Willkie Farr & Gallagher
Exhibit(i)
March 8, 2000
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
Re: Gabelli International Growth Fund, Inc.
Ladies and Gentlemen:
We have acted as special Maryland counsel for Gabelli International Growth
Fund, Inc., a Maryland corporation (the "Fund"), in connection with the issuance
of its Class AAA Series Shares, Class A Series Shares, Class B Series Shares and
Class C Series Shares, par value $.001 per share (each a "Class" and,
collectively the "Shares").
As special Maryland counsel for the Fund, we have reviewed its Charter and
Bylaws. We have examined the Prospectus and Statement of Additional Information
included in Amendment No. 8 to its Registration Statement on Form N-1A, File
Nos. 33-79994, 811-08560 (the "Registration Statement"), substantially in the
form in which it is to become effective (collectively, the "Prospectus"). We
have further 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 also examined and relied upon such corporate records of the Fund
and other documents and certificates with respect to factual matters as we have
deemed necessary to render the opinion expressed herein. We have assumed,
without independent verification, the genuineness of all signatures on documents
submitted to us for review, the authenticity of all documents submitted to us as
originals, and the conformity with originals of all documents submitted to us as
copies.
Based on such examination, we are of the opinion that:
1. The Fund is duly organized and validly existing as a corporation
in good standing under laws of the State of Maryland.
2. The Shares of the Fund to be offered for sale pursuant to the
Prospectus are, to the extent of the respective number of shares
of each Class authorized to be issued by the Fund in its Charter,
duly authorized and, when sold, issued and paid for as
contemplated by the Prospectus, will have been validly and
legally issued and will be fully paid and nonassessable under the
laws of the State of Maryland.
This letter expresses our opinion with respect to the Maryland General
Corporation Law. It does not extend to the securities or "blue sky" laws of
Maryland, to federal securities laws or to other 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 to
the filing of this opinion as an exhibit to any application made by or on behalf
of the Fund or any distributor or dealer in connection with the registration or
qualification of the Fund or the Shares under the securities laws of any state
or other jurisdiction. This opinion may not be relied upon for any other purpose
or by any other person without our prior written consent.
Very truly yours,
VENABLE, BAETJER AND HOWARD, LLP
Venable, Baetjer and Howard, LLP
Exhibit (j)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights", "Independent Auditors" and "Financial Statements" and to the use of
our report dated February 11, 2000, which is incorporated by reference in this
Registration Statement (Form N-1A No. 33-79994) of Gabelli International Growth
Fund, Inc.
/s/ERNST & YOUNG LLP
New York, New York
March 2, 2000
Exhibit (m)
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
GABELLI INTERNATIONAL GROWTH FUND, INC.
WHEREAS, GABELLI INTERNATIONAL GROWTH FUND, INC., a Maryland
Corporation (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor")
presently serves as the principal distributor of the Shares pursuant to the
distribution agreement between the Fund and Distributor, which distribution
agreement, as amended, has been duly approved by the Board of Directors of the
Fund (the "Board"), in accordance with the requirements of the Act (the
"Distribution
Agreement");
WHEREAS, the Fund has adopted a plan of distribution pursuant
to Rule 12b-1 under the Act to assist in the distribution of Shares (the
"Plan");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class AAA Shares (the "Class AAA Shares"),
pursuant to Rule 18f-3 under the Act that permits the Fund to implement a
multiple distribution system providing investors with the option of purchasing
shares of various classes;
WHEREAS, the Board as a whole, and the Directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to amend the
Plan in certain respects and to restate such amended Plan in its entirety and
that, in the exercise of reasonable business judgment and in light of their
fiduciary duties, that there is a reasonable likelihood that a plan of
distribution containing the terms set forth herein will benefit the Fund and the
shareholders of the Class AAA Shares, and have accordingly approved the Plan by
votes cast in person at a meeting called for the purpose of amending and
restating the Plan; and
WHEREAS, this Plan governs the Class AAA Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class AAA Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby amends and restates the Plan in accordance with Rule 12b-1 under the Act
on the following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor as distribution payments (the "Payments") in
connection with the distribution of Class AAA Shares an aggregate amount at a
rate of 0.25% per year of the average daily net assets of the Class AAA Shares.
Such Payments shall be accrued daily and paid monthly in arrears or shall be
accrued and paid at such other intervals as the Board shall determine. The
Fund's obligation hereunder shall be limited to the assets of the Class AAA
Shares and shall not constitute an obligation of the Fund except out of such
assets and shall not constitute an obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under this Plan will be
used by the Distributor for the purpose of financing or assisting in the
financing of any activity which is primarily intended to result in the sale of
Class AAA Shares. The scope of the foregoing shall be interpreted by the Board,
whose decision shall be conclusive except to the extent it contravenes
established legal authority. Without in any way limiting the discretion of the
Board, the following activities are hereby declared to be primarily intended to
result in the sale of Class AAA Shares: advertising the Class AAA Shares or the
Fund's investment adviser's mutual fund activities; compensating underwriters,
dealers, brokers, banks and other selling entities (including the Distributor
and its affiliates) and sales and marketing personnel of any of them for sales
of Class AAA Shares, whether in a lump sum or on a continuous, periodic,
contingent, deferred or other basis; compensating underwriters, dealers,
brokers, banks and other servicing entities and servicing personnel (including
the Fund's investment adviser and its personnel) of any of them for providing
services to shareholders of the Fund relating to their investment in the Class
AAA Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; and the ordinary or capital expenses, such as equipment,
rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses relating to any activity for which Payment is
authorized by the Board; and the financing of any activity for which Payment is
authorized by the Board; and profit to the Distributor and its affiliates
arising out of their provision of shareholder services. Notwithstanding the
foregoing, this Plan does not require the Distributor or any of its affiliates
to perform any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered by
this Section 2. In addition, Payments made in a particular year shall not be
refundable whether or not such Payments exceed the expenses incurred for that
year pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund intends
to make any Payment, and the Distributor is hereby authorized and directed to
enter into appropriate written agreements with each person to whom the
Distributor intends to make any payments in the nature of a Payment. The
foregoing requirement is not intended to apply to any agreement or arrangement
with respect to which the party to whom Payment is to be made does not have the
purpose set forth in Section 2 above (such as the printer in the case of the
printing of a prospectus or a newspaper in the case of an advertisement) unless
the Board determines that such an agreement or arrangement should be treated as
a "related" agreement for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the Disinterested
Directors ("Disinterested Director Approval"), by vote cast in person at a
meeting called for the purposes of voting on such agreement. All determinations
or authorizations of the Board hereunder shall be made by Board Approval and
Disinterested Director Approval.
5. The officers, investment adviser or Distributor of the Fund, as appropriate,
shall provide to the Board and the Board shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is also an activity
which the Fund may pay for on behalf of the Class AAA Shares without regard to
the existence or terms and conditions of a plan of distribution under Rule 12b-1
of the Act, this Plan shall not be construed to prevent or restrict the Fund
from paying such amounts outside of this Plan and without limitation hereby and
without such payments being included in calculation of Payments subject to the
limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved by a vote of at
least a majority of the Class AAA Shares. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the Class AAA Shares. This Plan may continue in effect for longer than one year
after its approval by a majority of the Class AAA Shares only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote of the Disinterested
Directors, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the Class AAA Shares.
9. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the Class AAA Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class AAA Shares duly called, (a) of 67%
or more of the voting securities present at such meeting, if the holders of more
than 50% of the Class AAA Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
AAA Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
Exhibit (m)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
GABELLI INTERNATIONAL GROWTH FUND, INC.
WHEREAS, GABELLI INTERNATIONAL GROWTH FUND, INC., a Maryland
Corporation (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the distribution
agreement between the Fund and the Distributor, which distribution agreement, as
amended, has been duly approved by the Board of Directors of the Fund (the
"Board"), in accordance with the requirements of the Act (the "Distribution
Agreement");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class A Shares (the "Class A Shares"), pursuant
to Rule 18f-3 under the Act that permits the Fund to implement a multiple
distribution system providing investors with the option of purchasing shares of
various classes;
WHEREAS, the Board as a whole, and the directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to adopt a
plan of distribution for the Class A Shares and that, in the exercise of
reasonable business judgment and in light of their fiduciary duties, that there
is a reasonable likelihood that a plan of distribution containing the terms set
forth herein (the "Plan") will benefit the Fund and the shareholders of the
Class A Shares, and have accordingly approved the Plan by votes cast in person
at a meeting called for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class A Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class A Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor as distribution payments (the "Payments") in
connection with the distribution of Class A Shares an aggregate amount at a rate
of 0.25% per year of the average daily net assets of the Class A Shares. Such
Payments shall be accrued daily and paid monthly in arrears or shall be accrued
and paid at such other intervals as the Board shall determine. The Fund's
obligation hereunder shall be limited to the assets of the Class A Shares and
shall not constitute an obligation of the Fund except out of such assets and
shall not constitute an obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under this Plan will be
used by the Distributor for the purpose of financing or assisting in the
financing of any activity which is primarily intended to result in the sale of
Class A Shares. The scope of the foregoing shall be interpreted by the Board,
whose decision shall be conclusive except to the extent it contravenes
established legal authority. Without in any way limiting the discretion of the
Board, the following activities are hereby declared to be primarily intended to
result in the sale of Class A Shares: advertising the Class A Shares or the
Fund's investment adviser's mutual fund activities; compensating underwriters,
dealers, brokers, banks and other selling entities (including the Distributor
and its affiliates) and sales and marketing personnel of any of them for sales
of Class A Shares, whether in a lump sum or on a continuous, periodic,
contingent, deferred or other basis; compensating underwriters, dealers,
brokers, banks and other servicing entities and servicing personnel (including
the Fund's investment adviser and its personnel) of any of them for providing
services to shareholders of the Fund relating to their investment in the Class A
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; and the ordinary or capital expenses, such as equipment,
rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses relating to any activity for which Payment is
authorized by the Board; and the financing of any activity for which Payment is
authorized by the Board; and profit to the Distributor and its affiliates
arising out of their provision of shareholder services. Notwithstanding the
foregoing, this Plan does not require the Distributor or any of its affiliates
to perform any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered by
this Section 2. In addition, Payments made in a particular year shall not be
refundable whether or not such Payments exceed the expenses incurred for that
year pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund intends
to make any Payment, and the Distributor is hereby authorized and directed to
enter into appropriate written agreements with each person to whom the
Distributor intends to make any payments in the nature of a Payment. The
foregoing requirement is not intended to apply to any agreement or arrangement
with respect to which the party to whom Payment is to be made does not have the
purpose set forth in Section 2 above (such as the printer in the case of the
printing of a prospectus or a newspaper in the case of an advertisement) unless
the Board determines that such an agreement or arrangement should be treated as
a "related" agreement for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the Disinterested
Directors ("Disinterested Director Approval"), by vote cast in person at a
meeting called for the purposes of voting on such agreement. All determinations
or authorizations of the Board hereunder shall be made by Board Approval and
Disinterested Director Approval.
5. The officers, investment adviser or Distributor of the Fund, as appropriate,
shall provide to the Board and the Board shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is also an activity
which the Fund may pay for on behalf of the Class A Shares without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act, this Plan shall not be construed to prevent or restrict the Fund from
paying such amounts outside of this Plan and without limitation hereby and
without such payments being included in calculation of Payments subject to the
limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved by a vote of at
least a majority of the Class A Shares. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the Class A Shares. This Plan may continue in effect for longer than one year
after its approval by a majority of the Class A Shares only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote of the Disinterested
Director, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the Class A Shares.
9. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the Class A Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class A Shares duly called, (a) of 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the Class A Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
A Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
Exhibit (m)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
GABELLI INTERNATIONAL GROWTH FUND, INC.
WHEREAS, GABELLI INTERNATIONAL GROWTH FUND, INC., a Maryland
Corporation (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor")
presently serves as the principal distributor of the Shares pursuant to the
distribution agreement between the Fund and the Distributor, which distribution
agreement, as amended, has been duly approved by the Board of Directors of the
Fund (the "Board"), in accordance with the requirements of the Act (the
"Distribution Agreement");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class B Shares (the "Class B Shares"), pursuant
to Rule 18f-3 under the Act that permits the Fund to implement a multiple
distribution system providing investors with the option of purchasing shares of
various classes;
WHEREAS, the Board as a whole, and the directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to adopt a
plan of distribution for the Class B Shares and that, in the exercise of
reasonable business judgment and in light of their fiduciary duties, that there
is a reasonable likelihood that a plan of distribution containing the terms set
forth herein (the "Plan") will benefit the Fund and the shareholders of the
Class B Shares, and have accordingly approved the Plan by votes cast in person
at a meeting called for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class B Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class B Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor a distribution fee at the aggregate amount rate of
.75% per year of the average daily net asset value of the Class B Shares and a
service fee at the aggregate amount rate of .25% per year of the average daily
net asset value of the Class B Shares (the "Payments"). Such Payments shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine. The Fund's obligation hereunder
shall be limited to the assets of the Class B Shares and shall not constitute an
obligation of the Fund except out of such assets and shall not constitute an
obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under this Plan will be
used by the Distributor for the purpose of financing or assisting in the
financing of any activity which is primarily intended to result in the sale of
Class B Shares. The scope of the foregoing shall be interpreted by the Board,
whose decision shall be conclusive except to the extent it contravenes
established legal authority. Without in any way limiting the discretion of the
Board, the following activities are hereby declared to be primarily intended to
result in the sale of Class B Shares: advertising the Class B Shares or the
Fund's investment adviser's mutual fund activities; compensating underwriters,
dealers, brokers, banks and other selling entities (including the Distributor
and its affiliates) and sales and marketing personnel of any of them for sales
of Class B Shares, whether in a lump sum or on a continuous, periodic,
contingent, deferred or other basis; compensating underwriters, dealers,
brokers, banks and other servicing entities and servicing personnel (including
the Fund's investment adviser and its personnel) of any of them for providing
services to shareholders of the Fund relating to their investment in the Class B
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; and the ordinary or capital expenses, such as equipment,
rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses relating to any activity for which Payment is
authorized by the Board; and the financing of any activity for which Payment is
authorized by the Board; and profit to the Distributor and its affiliates
arising out of their provision of shareholder services. Notwithstanding the
foregoing, this Plan does not require the Distributor or any of its affiliates
to perform any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered by
this Section 2. In addition, Payments made in a particular year shall not be
refundable whether or not such Payments exceed the expenses incurred for that
year pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund intends
to make any Payment, and the Distributor is hereby authorized and directed to
enter into appropriate written agreements with each person to whom the
Distributor intends to make any payments in the nature of a Payment. The
foregoing requirement is not intended to apply to any agreement or arrangement
with respect to which the party to whom Payment is to be made does not have the
purpose set forth in Section 2 above (such as the printer in the case of the
printing of a prospectus or a newspaper in the case of an advertisement) unless
the Board determines that such an agreement or arrangement should be treated as
a "related" agreement for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the Disinterested
Directors ("Disinterested Director Approval"), by vote cast in person at a
meeting called for the purposes of voting on such agreement. All determinations
or authorizations of the Board hereunder shall be made by Board Approval and
Disinterested Director Approval.
5. The officers, investment adviser or Distributor of the Fund, as appropriate,
shall provide to the Board and the Board shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is also an activity
which the Fund may pay for on behalf of the Class B Shares without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act, this Plan shall not be construed to prevent or restrict the Fund from
paying such amounts outside of this Plan and without limitation hereby and
without such payments being included in calculation of Payments subject to the
limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved by a vote of at
least a majority of the Class B Shares. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the Class B Shares. This Plan may continue in effect for longer than one year
after its approval by a majority of the Class B Shares only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote of the Disinterested
Director, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the Class B Shares.
9. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the Class B Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class B Shares duly called, (a) of 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the Class B Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
B Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
Exhibit (m)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
GABELLI INTERNATIONAL GROWTH FUND, INC.
WHEREAS, GABELLI INTERNATIONAL GROWTH FUND, INC., a Maryland
Corporation (the "Fund"), engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act");
WHEREAS, the Fund has issued and is authorized to issue shares
of Common Stock ("Shares");
WHEREAS, Gabelli & Company, Inc. (the "Distributor") presently
serves as the principal distributor of the Shares pursuant to the distribution
agreement between the Fund and the Distributor, which distribution agreement, as
amended, has been duly approved by the Board of Directors of the Fund (the
"Board"), in accordance with the requirements of the Act (the "Distribution
Agreement");
WHEREAS, the Fund has established and plans to offer shares of
its common stock denominated as Class C Shares (the "Class C Shares"), pursuant
to Rule 18f-3 under the Act that permits the Fund to implement a multiple
distribution system providing investors with the option of purchasing shares of
various classes;
WHEREAS, the Board as a whole, and the directors who are not
interested persons of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Disinterested Directors"), have determined, after
review of all information and consideration of all pertinent facts reasonably
necessary to an informed determination, that it would be desirable to adopt a
plan of distribution for the Class C Shares and that, in the exercise of
reasonable business judgment and in light of their fiduciary duties, that there
is a reasonable likelihood that a plan of distribution containing the terms set
forth herein (the "Plan") will benefit the Fund and the shareholders of the
Class C Shares, and have accordingly approved the Plan by votes cast in person
at a meeting called for the purpose of voting on the Plan; and
WHEREAS, this Plan governs the Class C Shares and does not
relate to any class of shares which may be offered and sold by the Fund other
than the Class C Shares.
NOW, THEREFORE, in consideration of the foregoing, the Fund
hereby adopts the Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. In consideration of the services to be provided, and the expenses to be
incurred, by the Distributor pursuant to the Distribution Agreement, the Fund
will pay to the Distributor a distribution fee at the aggregate amount rate of
.75% per year of the average daily net asset value of the Class C Shares and a
service fee at the aggregate amount rate of .25% per year of the average daily
net asset value of the Class C Shares (the "Payments"). Such Payments shall be
accrued daily and paid monthly in arrears or shall be accrued and paid at such
other intervals as the Board shall determine. The Fund's obligation hereunder
shall be limited to the assets of the Class C Shares and shall not constitute an
obligation of the Fund except out of such assets and shall not constitute an
obligation of any shareholder of the Fund.
2. It is understood that the Payments made by the Fund under this Plan will be
used by the Distributor for the purpose of financing or assisting in the
financing of any activity which is primarily intended to result in the sale of
Class C Shares. The scope of the foregoing shall be interpreted by the Board,
whose decision shall be conclusive except to the extent it contravenes
established legal authority. Without in any way limiting the discretion of the
Board, the following activities are hereby declared to be primarily intended to
result in the sale of Class C Shares: advertising the Class C Shares or the
Fund's investment adviser's mutual fund activities; compensating underwriters,
dealers, brokers, banks and other selling entities (including the Distributor
and its affiliates) and sales and marketing personnel of any of them for sales
of Class C Shares, whether in a lump sum or on a continuous, periodic,
contingent, deferred or other basis; compensating underwriters, dealers,
brokers, banks and other servicing entities and servicing personnel (including
the Fund's investment adviser and its personnel) of any of them for providing
services to shareholders of the Fund relating to their investment in the Class C
Shares, including assistance in connection with inquiries relating to
shareholder accounts; the production and dissemination of prospectuses
(including statements of additional information) of the Fund and the
preparation, production and dissemination of sales, marketing and shareholder
servicing materials; and the ordinary or capital expenses, such as equipment,
rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party
consultancy or similar expenses relating to any activity for which Payment is
authorized by the Board; and the financing of any activity for which Payment is
authorized by the Board; and profit to the Distributor and its affiliates
arising out of their provision of shareholder services. Notwithstanding the
foregoing, this Plan does not require the Distributor or any of its affiliates
to perform any specific type or level of distribution activities or shareholder
services or to incur any specific level of expenses for activities covered by
this Section 2. In addition, Payments made in a particular year shall not be
refundable whether or not such Payments exceed the expenses incurred for that
year pursuant to this Section 2.
3. The Fund is hereby authorized and directed to enter into appropriate written
agreements with the Distributor and each other person to whom the Fund intends
to make any Payment, and the Distributor is hereby authorized and directed to
enter into appropriate written agreements with each person to whom the
Distributor intends to make any payments in the nature of a Payment. The
foregoing requirement is not intended to apply to any agreement or arrangement
with respect to which the party to whom Payment is to be made does not have the
purpose set forth in Section 2 above (such as the printer in the case of the
printing of a prospectus or a newspaper in the case of an advertisement) unless
the Board determines that such an agreement or arrangement should be treated as
a "related" agreement for purposes of Rule 12b-1 under the Act.
4. Each agreement required to be in writing by Section 3 must contain the
provisions required by Rule 12b-1 under the Act and must be approved by a
majority of the Board ("Board Approval") and by a majority of the Disinterested
Directors ("Disinterested Director Approval"), by vote cast in person at a
meeting called for the purposes of voting on such agreement. All determinations
or authorizations of the Board hereunder shall be made by Board Approval and
Disinterested Director Approval.
5. The officers, investment adviser or Distributor of the Fund, as appropriate,
shall provide to the Board and the Board shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such Payments were made.
6. To the extent any activity is covered by Section 2 and is also an activity
which the Fund may pay for on behalf of the Class C Shares without regard to the
existence or terms and conditions of a plan of distribution under Rule 12b-1 of
the Act, this Plan shall not be construed to prevent or restrict the Fund from
paying such amounts outside of this Plan and without limitation hereby and
without such payments being included in calculation of Payments subject to the
limitation set forth in Section 1.
7. This Plan shall not take effect until it has been approved by a vote of at
least a majority of the Class C Shares. This Plan may not be amended in any
material respect without Board Approval and Disinterested Director Approval and
may not be amended to increase the maximum level of Payments permitted hereunder
without such approvals and further approval by a vote of at least a majority of
the Class C Shares. This Plan may continue in effect for longer than one year
after its approval by a majority of the Class C Shares only as long as such
continuance is specifically approved at least annually by Board Approval and by
Disinterested Director Approval.
8. This Plan may be terminated at any time by a vote of the Disinterested
Directors, cast in person at a meeting called for the purposes of voting on such
termination, or by a vote of at least a majority of the Class C Shares.
9. For purposes of this Plan the terms "interested person" and "related
agreement" shall have the meanings ascribed to them in the Act and the rules
adopted by the Securities and Exchange Commission thereunder and the term "vote
of a majority of the Class C Shares" shall mean the vote, at the annual or a
special meeting of the holders of the Class C Shares duly called, (a) of 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the Class C Shares outstanding on the record date for such meeting
are present or represented by proxy or, if less, (b) more than 50% of the Class
C Shares outstanding on the record date for such meeting.
Dated: February 17, 1999
Exhibit (o)
AMENDED AND RESTATED
RULE 18f-3
MULTI-CLASS PLAN
FOR
GABELLI INTERNATIONAL GROWTH FUND, INC.
This Plan is adopted pursuant to Rule 18f-3 under the Act to
provide for the issuance and distribution of multiple classes of shares in
relation to Gabelli International Growth Fund, Inc. (the "Fund"), in accordance
with the terms, procedures and conditions set forth below. A majority of the
Directors of the Fund, including a majority of the Directors who are not
interested persons of the Fund within the meaning of the Act, have found this
Multi-Class Plan, including the expense allocations, to be in the best interest
of the Fund and each Class of Shares constituting the Fund.
A. Definitions. As used herein, the terms set forth below shall
have the meanings ascribed to them below.
1. The Act - the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated
thereunder.
2. CDSC - contingent deferred sales charge.
3. CDSC Period - the period of time following
acquisition during which Shares are assessed a CDSC
upon redemption.
4. Class - a sub-series of Shares of the Fund.
5. Class A Shares - shall have the meaning ascribed in
Section B.1.
6. Class B Shares - shall have the meaning ascribed in
Section B.1.
7. Class C Shares - shall have the meaning ascribed in
Section B.1.
8. Class AAA Shares - shall have the meaning ascribed in
Section B.1.
9. Distribution Expenses - expenses, including allocable
overhead costs, imputed interest, any other expenses
and any element of profit referred to in a Plan of
Distribution and/or board resolutions, incurred in
activities which are primarily intended to result in
the distribution and sale of Shares.
10. Distribution Fee - a fee paid by the Fund in respect
of the assets of a Class of the Fund to the
Distributor pursuant to the Plan of Distribution
relating to the Class.
11. Directors - the directors of the Fund.
12. Distributor - Gabelli & Company, Inc.
13. Fund - Gabelli International Growth Fund, Inc..
14. IRS - Internal Revenue Service
15. NASD - National Association of Securities Dealers,
Inc.
16. Plan of Distribution - any plan adopted under Rule
12b-1 under the Act with respect to payment of a
Distribution Fee.
17. Prospectus - the prospectus, including the statement
of additional information incorporated by reference
therein, covering the Shares of the referenced Class
or Classes of the Fund.
18. SEC - Securities and Exchange Commission
19. Service Fee - a fee paid to financial intermediaries,
including the Distributor and its affiliates, for the
ongoing provision of personal services to
shareholders of a Class and/or the maintenance of
shareholder accounts relating to a Class.
20. Share - a share in the Fund.
B. Classes. Subject to further amendment, the Fund may offer
different Classes of Shares constituting the Fund as follows:
1. Class A Shares. Class A Shares means Gabelli
International Growth Fund, Inc. Class A Stock as
designated by Articles Supplementary adopted by the
Directors. Class A Shares shall be offered at net
asset value plus a front-end sales charge set forth
in the Prospectus from time to time, which may be
reduced or eliminated in any manner not prohibited by
the Act or the NASD as set forth in the Prospectus.
Class A Shares that are not subject to a front-end
sales charge as a result of the foregoing may be
subject to a CDSC for the CDSC Period set forth in
Section D.1. The offering price of Class A Shares
subject to a front-end sales charge shall be computed
in accordance with the Act. Class A Shares shall be
subject to ongoing Distribution Fees or Service Fees
approved from time to time by the Directors and set
forth in the Prospectus.
2. Class B Shares. Class B Shares means Gabelli
International Growth Fund, Inc. Class B Stock as
designated by Articles Supplementary adopted by the
Directors. Class B Shares shall be (1) offered at net
asset value, (2) subject to a CDSC for the CDSC
Period set forth in Section D.1, (3) subject to
ongoing Distribution Fees and Service Fees approved
from time to time by the Directors and set forth in
the Prospectus and (4) converted to Class A Shares on
the first business day of the eighty-fifth calendar
month following the calendar month in which such
Shares were issued. For Class B Shares previously
exchanged for shares of a money market fund the
investment adviser of which is the same as or an
affiliate of the investment adviser of the Fund, the
time period during which such Shares were held in the
money market fund will be excluded.
3. Class C Shares. Class C Shares means Gabelli
International Growth Fund, Inc. Class C Stock as
designated by Articles Supplementary adopted by the
Directors. Class C Shares shall be (1) offered at net
asset value, (2) subject to a CDSC for the CDSC
Period set forth in Section D.1. and (3) subject to
ongoing Distribution Fees and Service Fees approved
from time to time by the Directors and set forth in
the Prospectus.
4. Class AAA Shares. Class AAA Shares means Gabelli
International Growth Fund, Inc. Class AAA Stock as
designated by Articles Supplementary adopted by the
Directors. Class AAA Shares shall be (1) offered at
net asset value, (2) sold without a front end sales
charge or CDSC, (3) offered only to investors
acquiring Shares directly from the Distributor or
from a financial intermediary with whom the
Distributor has entered into an agreement expressly
authorizing the sale by such intermediary of Class
AAA Shares and (4) subject to ongoing Distribution
Fees or Service Fees approved from time to time by
the Directors and set forth in the Prospectus.
C. Rights and Privileges of Classes. Each of the Class A Shares,
Class B Shares, Class C Shares and Class AAA Shares will
represent an interest in the same portfolio of assets and will
have identical voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations,
qualifications, designations and terms and conditions except
as described otherwise in the Articles Supplementary adopted
by the Directors with respect to each of such Classes.
D. CDSC. A CDSC may be imposed upon redemption of Class A Shares,
Class B Shares and Class C Shares that do not incur a front
end sales charge subject to the following conditions:
1. CDSC Period. The CDSC Period for Class A Shares and
Class C Shares shall be twenty-four months plus any
portion of the month during which payment for such
Shares was received. The CDSC Period for Class B
Shares shall be ninety-six months plus any portion
of the month during which payment for such Shares was
received.
2. CDSC Rate. The CDSC rate shall be recommended by the
Distributor and approved by the Directors. If a CDSC
is imposed for a period greater than thirteen months
the CDSC rate must decline during the CDSC Period
such that (a) the CDSC rate is less in the last
twelve months of the CDSC Period than in the first
twelve months (plus any initial partial month) and
(b) in each succeeding twelve months the CDSC rate
shall be less than or equal to the CDSC rate in the
preceding twelve months (plus any initial partial
month).
3. Disclosure and changes. The CDSC rates and CDSC
Period shall be disclosed in the Prospectus and may
be decreased at the discretion of the Distributor but
may not be increased unless approved as set forth in
Section L.
4. Method of calculation. The CDSC shall be assessed on
an amount equal to the lesser of the then current net
asset value or the cost of the Shares being redeemed.
No CDSC shall be imposed on increases in the net
asset value of the Shares being redeemed above the
initial purchase price. No CDSC shall be assessed on
Shares derived from reinvestment of dividends or
capital gains distributions. The order in which Class
B Shares and Class C Shares are to be redeemed when
not all of such Shares would be subject to a CDSC
shall be as determined by the Distributor in
accordance with the provisions of Rule 6c-10 under
the Act.
5. Waiver. The Distributor may in its discretion waive a
CDSC otherwise due upon the redemption of Shares of
any Class under circumstances previously approved by
the Directors and disclosed in the Prospectus and as
allowed under Rule 6c-10 under the Act.
6. Calculation of offering price. The offering price of
Shares of any Class subject to a CDSC shall be
computed in accordance with Rule 22c-1 under the Act
and Section 22(d) of the Act and the rules and
regulations thereunder.
7. Retention by Distributor. The CDSC paid with respect
to Shares of any Class may be retained by the
Distributor to reimburse the Distributor for
commissions paid by it in connection with the sale of
Shares subject to a CDSC and for Distribution
Expenses.
E. Service and Distribution Fees. Class A Shares and Class AAA
Shares shall be subject to ongoing Distribution Fees or
Service Fees not in excess of 0.25% per annum of the average
daily net assets of the relevant Class. Class B Shares and
Class C Shares shall be subject to a Distribution Fee not in
excess of 0.75% per annum of the average daily net assets of
the Class and a Service Fee not in excess of 0.25% of the
average daily net assets of the Class. All other terms and
conditions with respect to Service Fees and Distribution Fees
shall be governed by the plans adopted by the Fund with
respect to such fees and Rule 12b-1 of the Act.
F. Conversion. Shares acquired through the reinvestment of
dividends and capital gain distributions paid on Shares of a
Class subject to conversion shall be treated as if held in a
separate sub-account. Each time any Shares of a Class in a
shareholder's account (other than Shares held in the
sub-account) convert to Class A Shares, a proportionate number
of Shares held in the sub-account shall also convert to Class
A Shares. All conversions shall be effected on the basis of
the relative net asset values of the two Classes without the
imposition of any sales load or other charge. So long as any
Class of Shares converts into Class A Shares, the Distributor
shall waive or reimburse the Fund, or take such other actions
with the approval of the Directors as may be reasonably
necessary to ensure that, the expenses, including payments
authorized under a Plan of Distribution, applicable to the
Class A Shares are not higher than the expenses, including
payments authorized under a Plan of Distribution, applicable
to the Class of Shares that converts into Class A Shares.
Shares acquired through an exchange privilege will convert to
Class A Shares after expiration of the conversion period
applicable to such Shares. The continuation of the conversion
feature is subject to continued compliance with the rules and
regulations of the SEC, the NASD and the IRS.
G. Allocation of Liabilities, Expenses, Income and Gains Among
Classes.
1. Liabilities and Expenses applicable to a particular
Class. Each Class shall pay any Distribution Fee and
Service Fee applicable to that Class. Other expenses
applicable to any of the foregoing Classes such as
incremental transfer agency fees, but not including
advisory or custodial fees or other expenses related
to the management of the Fund's assets, shall be
allocated among such Classes in different amounts in
accordance with the terms of each such Class if they
are actually incurred in different amounts by such
Classes or if such Classes receive services of a
different kind or to a different degree than other
Classes.
2. Income, losses, capital gains and losses, and
liabilities and other expenses applicable to all
Classes. Income, losses, realized and unrealized
capital gains and losses, and any liabilities and
expenses not applicable to any particular Class shall
be allocated to each Class on the basis of the net
asset value of that Class in relation to the net
asset value of the Fund.
3. Determination of nature of items. The Directors shall
determine in their sole discretion whether any
liability, expense, income, gains or loss other than
those listed herein is properly treated as attributed
in whole or in part to a particular Class or all
Classes.
H. Exchange Privilege. Holders of Class A Shares, Class B Shares,
Class C Shares and Class AAA Shares shall have such exchange
privileges as are set forth in the Prospectus for such Class.
Exchange privileges may vary among Classes and among holders
of a Class.
I. Voting Rights of Classes.
1. Shareholders of each Class shall have exclusive
voting rights on any matter submitted to them that
relates solely to that Class, provided that:
a. If any amendment is proposed to the Plan of
Distribution under which Distribution Fees
or Service Fees are paid with respect to
Class A Shares of the Fund that would
increase materially the amount to be borne
by Class A Shares under such Plan of
Distribution, then no Class B Shares shall
convert into Class A Shares of the Fund
until the holders of Class B Shares of the
Fund have also approved the proposed
amendment.
b. If the holders of either the Class B Shares
referred to in subparagraph a. do not
approve the proposed amendment, the
Directors and the Distributor shall take
such action as is necessary to ensure that
the Class voting against the amendment shall
convert into another Class identical in all
material respects to Class A Shares of the
Fund as constituted prior to the amendment.
2. Shareholders of a Class shall have separate voting
rights on any matter submitted to shareholders with
respect to which the interest of one Class differs
from the interests of any other Class, provided that:
a. If the holders of Class A Shares approve any
increase in expenses allocated to the Class
A Shares, then no Class B Shares shall
convert into Class A Shares of the Fund
until the holders of Class B Shares of the
Fund have also approved such expense
increase.
b. If the holders of Class B Shares referred to
in subparagraph a. do not approve such
increase, the Directors and the Distributor
shall take such action as is necessary to
ensure that the Class B Shares shall convert
into another Class identical in all material
respects to Class A Shares of the Fund as
constituted prior to the expense increase.
J. Dividends and Distributions. Dividends and capital gain
distributions paid by the Fund with respect to each Class, to
the extent any such dividends and distributions are paid, will
be calculated in the same manner and at the same time on the
same day and will be, after taking into account any
differentiation in expenses allocable to a particular Class,
in substantially the same proportion on a relative net asset
value basis.
K. Reports to Directors. The Distributor shall provide the
Directors such information as the Directors may from time to
time deem to be reasonably necessary to evaluate this Plan.
L. Amendment. Any material amendment to this Plan shall be
approved by the affirmative vote of a majority (as defined in
the Act) of the Directors of the Fund, including the
affirmative vote of the Directors of the Fund who are not
interested persons of the Fund, except that any amendment that
increases the CDSC rate schedule or CDSC Period must also be
approved by the affirmative vote of a majority of the Shares
of the affected Class. Except as so provided, no amendment to
the Plan shall be required to be approved by the shareholders
of any Class of the Shares constituting the Fund. The
Distributor shall provide the Directors such information as
may be reasonably necessary to evaluate any amendment to this
Plan.
Exhibit (p)
S-1
SECTION S
Code of Ethics
Gabelli Funds, LLC
GAMCO Investors, Inc.
Gabelli & Company, Inc.
Gabelli Advisers, Inc.
Gabelli Fixed Income LLC
Each Registered Investment Company or series thereof (each of which
is considered to be a Company for this purpose) for which any
of the Companies listed above presently or hereafter provides
investment advisory or principal underwriting services, other
than a money market fund or a fund that does not invest in
Securities.
Introduction
This Code of Ethics establishes rules of conduct for persons who are
associated with the companies named above or with the registered investment
companies for which such companies provide investment advisory or principal
underwriter services. The Code governs their personal investment and other
investment-related activities.
The basic rule is very simple: put the client's interests first. The
rest of the rules elaborate this principle. Some of the rules are imposed
specifically by law. For example, the laws that govern investment advisers
specifically prohibit fraudulent activity, making statements that are not true
or that are misleading or omit something that is significant in the context and
engaging in manipulative practices. These are general words, of course, and over
the years the courts, the regulators and investment advisers have interpreted
these words and established codes of conduct for their employees and others who
have access to their investment decisions and trading activities. Indeed, the
rules obligate investment advisers to adopt written rules that are reasonably
designed to prevent the illegal activities described above and must follow
procedures that will enable them to prevent such activities.
This Code is intended to assist the companies in fulfilling their
obligations under the law. The first part lays out who the Code applies to, the
second part deals with personal investment activities, the third part deals with
other sensitive business practices, and subsequent parts deal with reporting and
administrative procedures.
The Code is very important to the companies and their employees.
Violations can not only cause the companies embarrassment, loss of business,
legal restrictions, fines and other punishments but for employees can lead to
demotion, suspension, firing, ejection from the securities business and very
large fines.
I. Applicability
A. The Code applies to each of the following:
1. The Companies named or described at the top of page
one of the Code and all entities that are under
common management with these Companies or otherwise
agree to be subject to the Code ("Affiliates"). A
listing of the Affiliates, which is periodically
updated, is attached as Exhibit A.
2. Any officer, director or employee of any Company,
Affiliate or Fund Client (as defined below) whose job
regularly involves him in the investment process.
This includes the formulation and making of
investment recommendations and decisions, the
purchase and sale of securities for clients and the
utilization of information about investment
recommendations, decisions and trades. Due to the
manner in which the Companies and the Affiliates
conduct their business, every employee should assume
that he is subject to the Code unless the Compliance
Officer specifies otherwise.
3. With respect to all of the Companies, Affiliates and
Fund Clients except Gabelli & Company, Inc., any
natural person who controls any of the Companies,
Affiliates or Fund Clients and who obtains
information regarding the Companies' or the
Affiliates' investment recommendations or decisions.
However, a person whose control arises only as a
result of his official position with such entity is
excluded. Disinterested directors of Fund Clients,
for example, are excluded from coverage under this
item.
4. With respect to all of the Companies and Fund Clients
except Gabelli & Company, Inc., any director,
officer, general partner or person performing a
similar function even if he has no knowledge of and
is not involved in the investment process.
Disinterested directors of Fund Clients and
independent directors of Affiliates are included in
coverage under this item.
5. As an exception, the Code does not apply to any
director, officer or employee of any Fund Client
(such as certain of The Gabelli Westwood Funds) with
respect to which the Companies' services do not
involve the formulation or making of investment
recommendations or decisions or the execution of
portfolio transactions if that person is also a
director, officer or employee of any entity that does
perform such services (such as Westwood Management
Corp.). These individuals are covered by codes of
ethics adopted by such entities.
B. Definitions
1. Access Persons. The Companies and the persons described in items (A)2
and (A)3 above other than those excluded by item (A)5 above.
2. Access Person Account. Includes all advisory, brokerage, trust or other
accounts or forms of direct beneficial ownership in which one or more Access
Persons and/or one or more members of an Access Person's immediate family have a
substantial proportionate economic interest. Immediate family includes an Access
Person's spouse and minor children living with the Access Person. A substantial
proportionate economic interest will generally be 10% of the equity in the
account in the case of any single Access Person and 25% of the equity in the
account in the case of all Access Persons in the aggregate, whichever is first
applicable. Investment partnerships and similar indirect means of ownership
other than registered open-end investment companies are also treated as
accounts.
As an exception, accounts in which one or more Access
Persons and/or their immediate family have a
substantial proportionate interest which are
maintained with persons who have no affiliation with
the Companies and with respect to which no Access
Person has, in the judgment of the Compliance Officer
after reviewing the terms and circumstances, any
direct or indirect influence or control over the
investment or portfolio execution process are not
Access Person Accounts.
As a further exception, subject to the provisions of Article II(I)7, bona
fide market making accounts of Gabelli & Company, Inc. are not Access Person
Accounts.
As a further exception, subject to the provisions of
Article II(I)7, bona fide error accounts of the
Companies and the Affiliates are not Access Person
Accounts.
3. Associate Portfolio Managers. Access Persons who are
engaged in securities research and analysis for
designated Clients or are responsible for investment
recommendations for designated Clients but who are
not principally responsible for investment decisions
with respect to any Client accounts.
4. Clients. Investment advisory accounts maintained with
any of the Companies or Affiliates by any person,
other than Access Person Accounts. However, Fund
Clients covered by item (A)(5) above are considered
Client accounts only with respect to employees
specifically identified by the Compliance Officer as
having regular information regarding investment
recommendations or decisions or portfolio
transactions for such Fund Clients.
5. Companies. The companies named or described at the top of
page one of the Code.
6. Compliance Officer. The persons designated as the
compliance officers of the Companies.
7. Covered Persons. The Companies, the Access Persons
and the persons described in item (A)4 above.
8. Fund Clients. Clients that are registered investment
companies or series thereof.
9. Portfolio Managers. Access Persons who are
principally responsible for investment decisions with
respect to any Client accounts.
10. Security. Any financial instrument treated as a
security for investment purposes and any related
instrument such as a futures, forward or swap
contract entered into with respect to one or more
securities, a basket of or an index of securities or
components of securities. However, the term security
does not include securities issued by the Government
of the United States, bankers' acceptances, bank
certificates of deposit, commercial paper and high
quality short-term debt instruments, including
repurchase agreements, or shares of registered
open-end investment companies.
II. Restrictions on Personal Investing Activities
A. Basic Restriction on Investing Activities
If a purchase or sale order is pending or under active
consideration for any Client account by any Company or
Affiliate, neither the same Security nor any related Security
(such as an option, warrant or convertible security) may be
bought or sold for any Access Person Account.
<PAGE>
B. Initial Public Offerings
No Security or related Security may be acquired in an initial
public offering for any Access Person Account.
C. Blackout Period
No Security or related Security may be bought or sold for the
account of any Portfolio Manager or Associate Portfolio
Manager during the period commencing seven (7) days prior to
and ending seven (7) calendar days after the purchase or sale
(or entry of an order for the purchase or sale) of that
Security or any related Security for the account of any Client
with respect to which such person has been designated a
Portfolio Manager or Associate Portfolio Manager, unless the
Client account receives at least as good a price as the
account of the Portfolio Manager or Associate Portfolio
Manager and the Compliance Officer determines under the
circumstances that the Client account has not been adversely
affected (including with respect to the amount of such
Security able to be bought by the Client account) by the
transaction for the account of the Portfolio Manager or
Associate Portfolio Manager.
D. Short-term Trading
No Security or related Security may, within a 60 day period,
be bought and sold or sold and bought at a profit for any
Access Person Account if the Security or related Security was
held at any time during that period in any Client account.
E. Exempt Transactions
Participation on an ongoing basis in an issuer's dividend
reinvestment or stock purchase plan, participation in any
transaction over which no Access Person had any direct or
indirect influence or control and involuntary transactions
(such as mergers, inheritances, gifts, etc.) are exempt from
the restrictions set forth in paragraphs (A) and (C) above
without case by case preclearance under paragraph (G) below.
F. Permitted Exceptions
Purchases and sales of the following Securities for Access
Person Accounts are exempt from the restrictions set forth in
paragraphs A, C and D above if such purchases and sales comply
with the pre-clearance requirements of paragraph (G) below:
1. Non-convertible fixed income Securities rated at least "A";
2. Equity Securities of a class having a market capitalization
in excess of $1 billion;
3. Equity Securities of a class having a market
capitalization in excess of $500 million if the
transaction in question and the aggregate amount of
such Securities and any related Securities purchased
and sold for the Access Person Account in question
during the preceding 60 days does not exceed 100
shares;
4. Municipal Securities; and
5. Securities transactions effected for federal, state
or local income tax purposes that are identified to
the Compliance Officer at the time as being effected
for such purposes.
In addition, the exercise of rights that were received pro
rata with other security holders is exempt if the
pre-clearance procedures are satisfied.
G. Pre-Clearance of Personal Securities Transactions
No Security may be bought or sold for an Access Person Account
unless (i) the Access Person obtains prior approval from the
Compliance Officer or, in the absence of the Compliance
Officer, from the general counsel of Gabelli Asset Management
Inc.; (ii) the approved transaction is completed on the same
day approval is received; and (iii) the Compliance Officer or
the general counsel does not rescind such approval prior to
execution of the transaction (See paragraph I below for
details of the Pre-Clearance Process.)
H. Private Placements
The Compliance Officer will not approve purchases or sale of
Securities that are not publicly traded, unless the Access
Person provides full details of the proposed transaction
(including written certification that the investment
opportunity did not arise by virtue of such person's
activities on behalf of any Client) and the Compliance Officer
concludes, after consultation with one or more of the relevant
Portfolio Managers, that the Companies would have no
foreseeable interest in investing in such Security or any
related Security for the account of any Client.
I. Pre-Clearance Process
1. No Securities may be purchased or sold for any Access
Person Account unless the particular transaction has
been approved in writing by the Compliance Officer
or, in his absence, the general counsel of Gabelli
Asset Management Inc. The Compliance Officer shall
review not less frequently than weekly reports from
the trading desk (or, if applicable, confirmations
from brokers) to assure that all transactions
effected for Access Person Accounts are effected in
compliance with this Code.
2. No Securities may be purchased or sold for any Access
Person Account other than through the trading desk of
Gabelli & Company, Inc., unless express permission is
granted by the Compliance Officer. Such permission
may be granted only on the condition that the third
party broker supply the Compliance Officer, on a
timely basis, duplicate copies of confirmations of
all personal Securities transactions for such Access
Person in the accounts maintained with such third
party broker and copies of periodic statements for
all such accounts.
3. A Trading Approval Form, attached as Exhibit B, must
be completed and submitted to the Compliance Officer
for approval prior to entry of an order.
4. After reviewing the proposed trade, the level of potential investment
interest on behalf of Clients in the Security in question and the Companies'
restricted lists, the Compliance Officer shall approve (or disapprove) a trading
order on behalf of an Access Person as expeditiously as possible. The Compliance
Officer will generally approve transactions described in paragraph (F) above
unless the Security in question or a related security is on the Restricted List
or the Compliance Officer believes for any other reason that the Access Person
Account should not trade in such Security at such time.
5. Once an Access Person's Trading Approval Form is
approved, the form must be forwarded to the trading
desk (or, if a third party broker is permitted, to
the Compliance Officer) for execution on the same
day. If the Access Person's trading order request is
not approved, or is not executed on the same day it
is approved, the clearance lapses although such
trading order request maybe resubmitted at a later
date.
6. In the absence of the Compliance Officer, an Access
Person may submit his or her Trading Approval Form to
the general counsel of Gabelli Asset Management Inc.
Trading approval for the Compliance Officer must be
obtained from the general counsel, and trading
approval for the general counsel must be obtained
from the Compliance Officer. In no case will the
Trading Desk accept an order for an Access Person
Account unless it is accompanied by a signed Trading
Approval Form.
7. The Compliance Officer shall review all Trading Approval Forms, all initial,
quarterly and annual disclosure certifications and the trading activities on
behalf of all Client accounts with a view to ensuring that all Covered Persons
are complying with the spirit as well as the detailed requirements of this Code.
The Compliance Officer will review all transactions in the market making
accounts of Gabelli & Company, Inc. and the error accounts of the Companies and
the Affiliates in order to ensure that such transactions are bona fide market
making or error transactions or are conducted in accordance with the
requirements of this Article II.
III. Other Investment-Related Restrictions
A. Gifts
No Access Person shall accept any gift or other item of more
than $100 in value from any person or entity that does
business with or on behalf of any Client.
B. Service As a Director
No Access Person shall commence service on the Board of
Directors of a publicly traded company or any company in which
any Client account has an interest without prior authorization
from the Compliance Committee based upon a determination that
the Board service would not be inconsistent with the interests
of the Clients. The Compliance Committee shall include the
senior Compliance Officer of Gabelli Asset Management Inc.,
the general counsel of Gabelli Asset Management Inc. and at
least two of the senior executives from among the Companies.
IV. Reports and Additional Compliance Procedures
A. Every Covered Person, except independent directors of
Affiliates of the Companies, must submit a report (a form of
which is appended as Exhibit C) containing the information set
forth in paragraph (B) below with respect to transactions in
any Security in which such Covered Person has or by reason of
such transaction acquires, any direct or indirect beneficial
ownership (as defined in Exhibit D) in the Security, and with
respect to any account established by the Covered Person in
which any Securities were held for the direct or indirect
benefit of the Covered Person; provided, however, that:
1. a Covered Person who is required to make reports only
because he is a director of one of the Fund Clients
and who is a "disinterested" director thereof need
not make a report with respect to any transactions
other than those where he knew or should have known
in the course of his duties as a director that any
Fund Client of which he is a director has made or
makes a purchase or sale of the same or a related
Security within 15 days before or after the purchase
or sale of such Security or related Security by such
director.
2. a Covered Person need not make a report with respect
to any transaction effected for, and Securities held
in, any account over which such person does not have
any direct or indirect influence or control; and
3. a Covered Person will be deemed to have complied with
the requirements of this Article IV insofar as the
Compliance Officer receives in a timely fashion
duplicate monthly or quarterly brokerage statements
or transaction confirmations on which all
transactions required to be reported hereunder are
described.
B. A Covered Person must submit the report required by this
Article to the Compliance Officer no later than 10 days after
the end of the calendar quarter in which the transaction or
account to which the report relates was effected or
established, and the report must contain the date that the
report is submitted.
1. This report must contain the following information with
respect to transactions:
a. The date of the transaction, the title and number of shares and the principal
amount of each Security involved;
b. The nature of the transaction (i.e., purchase, sale or any other type of
acquisition or disposition);
c. The price at which the transaction was effected; and
d. The name of the broker, dealer or bank with
or through whom the transaction was
effected.
2. This report must contain the following information
with respect to accounts established:
a. The name of the broker, dealer or bank with whom the account was
established; and
b. The date the account was established.
C. Any report submitted to comply with the requirements of this
Article IV may contain a statement that the report shall not
be construed as an admission by the person making such report
that he has any direct or indirect beneficial ownership in the
Security to which the report relates. A person need not make
any report under this Article IV with respect to transactions
effected for, and Securities held in, any account over which
the person has no direct or indirect influence or control
D. No later than 10 days after beginning employment with any of
the Companies or Affiliates or otherwise becoming a Covered
Person, each Covered Person (except for a "disinterested"
director of the Fund Client who is required to submit reports
solely by reason of being such a director) must submit a
report containing the following information:
1. The title, number of shares and principal amount of
each Security in which the Covered Person had any
direct or indirect beneficial ownership when the
person became a Covered Person;
2. The name of any broker, dealer or bank with whom the
Covered Person maintained an account in which any
Securities were held for the direct or indirect
benefit of the Covered Person as of the date the
person became a Covered Person; and
3. The date that the report is submitted.
The form of such report is attached as Exhibit E.
E. Annually each Covered Person must certify that he has read and
understood the Code and recognizes that he is subject to such Code. In addition,
annually each Covered Person must certify that he has disclosed or reported all
personal Securities transactions required to be disclosed or reported under the
Code and that he is not subject to any regulatory disability described in the
annual certification form. Furthermore, each Covered Person (except for a
"disinterested" director of the Fund Client who is required to submit reports
solely by reason of being such a director) annually must submit a report
containing the following information (which information must be current as of a
date no more than 30 days before the report is submitted):
1. The title, number of shares and principal amount of each Security in
which the Covered Person had any direct or indirect beneficial ownership;
2. The name of any broker, dealer or bank with whom the
Covered Person maintains an account in which any
Securities are held for the direct or indirect
benefit of the Covered Person; and
3. The date that the report is submitted.
The form of such certification and report is attached as
Exhibit F.
F. At least annually (or quarterly in the case of Items 4 and 5
below), each of the Companies that has a Fund Client or that
provides principal underwriting services for a Fund Client
shall, together with each Fund Client, furnish a written
report to the Board of Directors of the Fund Client that:
1. Describes any issues arising under the Code since the last
report.
2. Certifies that the Companies have developed
procedures concerning Covered Persons' personal
trading activities and reporting requirements
relevant to such Fund Clients that are reasonably
necessary to prevent violations of the Code;
3. Recommends changes, if any, to the Fund Clients' or
the Companies' Codes of Ethics or procedures;
4. Provides a summary of any material or substantive
violations of this Code by Covered Persons with
respect to such Fund Clients which occurred during
the past quarter and the nature of any remedial
action taken; and
5. Describes any material or significant exceptions to
any provisions of this Code of Ethics as determined
under Article VI below.
G. The Compliance Officer shall notify each employee of any of
the Companies or Affiliates as to whether such person is
considered to be an Access Person or Covered Person and shall
notify each other person that is considered to be an Access
Person or Covered Person.
V. Sanctions
Upon discovering that a Covered Person has not complied with the
requirements of this Code, the Board of Directors of the relevant
Company or of the relevant Fund Client, whichever is most appropriate
under the circumstances, may impose on that person whatever sanctions
the Board deems appropriate, including, among other things,
disgorgement of profit, censure, suspension or termination of
employment. Material violations of requirements of this Code by
employees of Covered Persons and any sanctions imposed in connection
therewith shall be reported not less frequently than quarterly to the
Board of Directors of any relevant Company or Fund Client, as
applicable.
VI. Exceptions
The Compliance Committee of the Companies reserves the right to decide,
on a case-by-case basis, exceptions to any provisions under this Code.
Any exceptions made hereunder will be maintained in writing by the
Compliance Committee and presented to the Board of Directors of any
relevant Fund Client at its next scheduled meeting.
VII. Preservation of Documents
This Code, a copy of each report by a Covered Person, any written
report made hereunder by the Companies or the Compliance Officer, lists
of all persons required to make reports, a list of any exceptions, and
the reasons therefor, with respect to Article II.B, and any records
under Article II.G with respect to purchases pursuant to Article II.H
above, shall be preserved with the records of the relevant Company and
any relevant Fund Client for the period required by Rule 17j-1.
VIII. Other Laws, Rules and Statements of Policy
Nothing contained in this Code shall be interpreted as relieving any
Covered Person from acting in accordance with the provision of any
applicable law, rule or regulation or any other statement of policy or
procedure governing the conduct of such person adopted by the
Companies, the Affiliates or the Fund Clients.
IX. Further Information
If any person has any question with regard to the applicability of the
provisions of this Code generally or with regard to any Securities
transaction or transactions, he should consult the Compliance Officer.
<PAGE>
EXHIBIT A
LIST OF AFFILIATES OF THE COMPANIES
ALCE Partners, L.P.
Darien Associates LLC
Gabelli Asset Management Inc.
Gabelli Associates Fund
Gabelli Associates Limited
Gabelli Fixed Income Distributors
Gabelli Fixed Income, Inc.
Gabelli Global Partners, L.P.
Gabelli Global Partners, Ltd.
Gabelli International Gold Fund Limited
Gabelli International Limited
Gabelli International II Limited
Gabelli International Securities Limited
Gabelli Multimedia Partners, L.P.
Gabelli Performance Partnership L.P.
Gabelli Securities, Inc.
Gemini Capital Management Ltd.
GLI, Inc.
Gabelli Group Capital Partners, Inc. and its subsidiaries
Gabelli Global Partners, L.P.
Gabelli Global Partners, Ltd.
Gabelli European Partners, Ltd.
Gabelli Fund, LDC
MJG Associates, Inc.
New Century Capital Partners, L.P.
<PAGE>
EXHIBIT B
PRE-CLEARANCE TRADING APPROVAL FORM
I, ______________________________________ (name), am an Access Person or
authorized officer thereof and seek pre-clearance to engage in the transaction
described below for the benefit of myself or another Access Person:
Acquisition or Disposition (circle one)
Name of Account:
Account Number:
Date of Request:
Security:
Amount or # of Shares:
Broker:
If the transaction involves a Security that is not publicly traded, a
description of proposed transaction, source of investment opportunity and any
potential conflicts of interest:
I hereby certify that, to the best of my knowledge, the transaction described
herein is not prohibited by the Code of Ethics and that the opportunity to
engage in the transaction did not arise by virtue of my activities on behalf of
any Client.
Signature: Print Name:
Approved or Disapproved(Circle One)
Date of Approval:
Signature: Print Name:
If approval is granted, please forward this form to the trading desk (or if a
third party broker is permitted, to the Compliance Officer) for immediate
execution.
<PAGE>
EXHIBIT C
TRANSACTION REPORT
Report submitted by:
Print Name
This transaction report (the "Report") is submitted pursuant to Section IV (B)
of the Code of Ethics of the Companies and supplies information with respect to
transactions in any Security in which you may be deemed to have, or by reason of
such transaction acquire, any direct or indirect beneficial ownership interest,
and with respect to accounts established by you in which any Securities were
held for your direct or indirect benefit, for the period specified below. If you
were not employed by or affiliated with us during this entire period, amend the
dates specified below to cover your period of employment or affiliation.
Unless the context otherwise requires, all terms used in the Report shall have
the same meaning as set forth in the Code of Ethics.
If you have no reportable transactions or new accounts, sign and return this
page only. If you have reportable transactions or new accounts, complete, sign
and return Page 2 and any attachments.
I HAD NO REPORTABLE SECURITIES TRANSACTIONS OR ACCOUNTS ESTABLISHED DURING
THE PERIOD THROUGH . I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS
AND THAT, TO THE BEST OF MY KNOWLEDGE, THE INFORMATION FURNISHED IN THIS REPORT
IS TRUE AND CORRECT.
Signature
Position
Date
Page 2
TRANSACTION REPORT
Report submitted by:
Print Name
The following tables supply the information required by Section IV (B) of the
Code of Ethics for the period specified below. Transactions reported on
brokerage statements or duplicate confirmations actually received by the
Compliance Officer do not have to be listed although it is your responsibility
to make sure that such statements or confirmations are complete and have been
received in a timely fashion.
<TABLE>
<CAPTION>
TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Whether Purchase,
Sale, Short Sale or Name of Broker/Dealer
Securities Other Type of with or through Whom Nature of
(Name Date of Disposition or Quantity of Price per Share the Transaction Ownership of
and Transaction Acquisition Securities or Other Unit was Effected Securities
----------- ----------- ---------- ------------- ------------ ----------
Symbol)
- -------
NEW ACCOUNTS ESTABLISHED
- ---------------------------------------------------------------------------------------------------------------------
Name of Broker, Dealer or Bank Account Number Date Account Established
</TABLE>
* To the extent specified above, I hereby disclaim beneficial ownership of any
securities listed in this Report or brokerage statements or transaction
confirmations provided by me.
I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST
OF MY KNOWLEDGE, THE INFORMATION IN THIS REPORT IS TRUE AND CORRECT FOR THE
PERIOD OF THROUGH .
Signature Date
EXHIBIT D
BENEFICIAL OWNERSHIP
For purposes of the attached Code of Ethics, "beneficial ownership" shall be
interpreted in the same manner as it would be in determining whether a person is
subject to the provisions of Section 16 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, except the determination of direct or
indirect beneficial ownership shall apply to all securities that a Covered
Person has or acquires. The term "beneficial ownership" of securities would
include not only ownership of securities held be a Covered Person for his own
benefit, whether in bearer form or registered in his name or otherwise, but also
ownership of securities held for his benefit by others (regardless of whether or
how they are registered) such as custodians, brokers, executors, administrators,
or trustees (including trusts in which he has only a remainder interest), and
securities held for his account by pledges, securities owned by a partnership in
which he is a member if he may exercise a controlling influence over the
purchase, sale of voting of such securities, and securities owned by any
corporation or similar entry in which he owns securities if the shareholder is a
control-ling shareholder of the entity and has or shares investment control over
the entity's portfolio.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which a Covered Person is a legatee or beneficiary
unless there is a specified legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than a year after the decedent's death.
Securities held in the name of another should be considered as beneficially
owned by a Covered Person where such person enjoys "financial benefits
substantially equivalent to ownership." The Securities and Exchange Commission
has said that, although the final determination of beneficial ownership is a
question to be determined in the light of the facts of the particular case,
generally a person is regarded as the beneficial owner of securities held in the
name of his or her spouse and their minor children. Absent special circumstances
such relationship ordinarily results in such person obtaining financial benefits
substantially equivalent to ownership, e.g., application of the income derived
from such securities to maintain a common home, or to meet expenses that such
person otherwise would meet from other sources, or the ability to exercises a
controlling influence over the purchase, sale or voting of such securities.
A Covered Person also may be regarded as the beneficial owner of securities held
in the name of another person, if by reason of any contract, understanding,
relationship, agreement, or other agreement, he obtains therefrom financial
benefits substantially equivalent to those of ownership.
A Covered Person also is regarded as the beneficial owner of securities held in
the name of a spouse, minor children or other person, even though he does not
obtain therefrom the aforementioned benefits of ownership, if he can vest or
revest title in himself at once or at some future time.
<PAGE>
EXHIBIT E
INITIAL HOLDINGS REPORT
Report submitted by:
Print Name
This initial holdings report (the "Report") is submitted pursuant to Section IV
(D) of the Code of Ethics of the Companies and supplies information with respect
to any Security in which you may be deemed to have any direct or indirect
beneficial ownership interest and any accounts established by you in which any
Securities were held for your direct or indirect benefit, as of the date you
became subject to the Code of Ethics.
Unless the context otherwise requires, all terms used in the Report shall have
the same meaning as set forth in the Code of Ethics.
If you have no reportable Securities or accounts, sign and return this page
only. If you have reportable Securities or accounts, complete, sign and return
Page 2 and any attachments.
I HAVE NO REPORTABLE SECURITIES OR ACCOUNTS AS OF . I CERTIFY THAT I AM FULLY
FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST OF MY KNOWLEDGE, THE
INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
Signature
Position
Date
Page 2
INITIAL HOLDINGS REPORT
Report submitted by:
Print Name
The following tables supply the information required by Section IV (D) of the
Code of Ethics as of the date you became subject to the Code.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SECURITIES HOLDINGS
- -------------------------------------------------------------------------------------------------------------------
Name of Broker/Dealer Where Nature of Ownership of
Securities (Name and Quantity of Securities Securities Are Held Securities
Symbol)
</TABLE>
ACCOUNTS
- ---------------------------------------------- -----------------------------
Name of Broker, Dealer or Bank Account Number
I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST
OF MY KNOWLEDGE, THE INFORMATION IN THIS REPORT IS TRUE AND CORRECT AS OF
__________________________________.
Signature Date
Position
<PAGE>
EXHIBIT F
ANNUAL CERTIFICATION OF CODE OF ETHICS
A. I (a Covered Person) hereby certify that I have read and understood the
Code of Ethics dated February 15, 2000, and recognize that I am subject
to its provisions. In addition, I hereby certify that I have disclosed
or reported all personal Securities transactions required to be
disclosed or reported under the Code of Ethics;
B. Within the last ten years there have been no complaints or disciplinary
actions filed against me by any regulated securities or commodities
exchange, any self-regulatory securities or commodities organization,
any attorney general, or any governmental office or agency regulating
insurance, securities, commodities or financial transactions in the
United States, in any state of the United States, or in any other
country;
C. I have not within the last ten years been convicted of or acknowledged
commission of any felony or misdemeanor arising out of my conduct as an
employee, salesperson, officer, director, insurance agent, broker,
dealer, underwriter, investment manager or investment advisor; and
D. I have not been denied permission or otherwise enjoined by order,
judgment or decree of any court of competent jurisdiction, regulated
securities or commodities exchange, self-regulatory securities or
commodities organization or other federal or state regulatory authority
from acting as an investment advisor, securities or commodities broker
or dealer, commodity pool operator or trading advisor or as an
affiliated person or employee of any investment company, bank,
insurance company or commodity broker, dealer, pool operator or trading
advisor, or from engaging in or continuing any conduct or practice in
connection with any such activity or the purchase or sale of any
security.
E. Unless I am exempt from filing an Annual Holdings Report (as a
"disinterested" director of a Fund Client or an independent director of
an Affiliate), I have attached a completed Annual Holdings Report which
is accurate as of a date no more than 30 days ago.
Print Name:
Signature:
Date:
Page 2
ANNUAL HOLDINGS REPORT
Report submitted by:
Print Name
The following tables supply the information required by Section IV (E) of the
Code of Ethics as of a date no more than 30 days before this report is
submitted. If you have no reportable Securities holdings or accounts, write
"None" in the space provided.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SECURITIES HOLDINGS
- ------------------------------------------------------------------------------------------------------------------------
Name of Broker/Dealer Where Nature of Ownership
Securities (Name and Symbol) Quantity of Securities Securities Are Held of Securities
- ---------------------------- ---------------------- ------------------- -------------
</TABLE>
ACCOUNTS
- -----------------------------------------------------------------------
Name of Broker, Dealer or Bank Account Number
Signature Date
Position
