Exhibit 77Q(1)(e)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated May 1, 2015, between The
Gabelli Capital Series Funds, Inc., on behalf of Gabelli Capital
Asset Fund (the "Corporation" and the "Fund", respectively), a
Maryland corporation, and Gabelli Funds, LLC (the "Adviser"), a
New York limited liability company (the "Agreement").
In consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and
between the parties hereto as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to
act as investment adviser to the Corporation and the Fund with
respect to the investment of the assets of the Corporation
allocated to the Fund and to supervise and arrange the purchase
and sale of assets held in the investment portfolios of the Fund.
The Adviser may delegate any or all of its responsibilities to
one or more sub-advisers or administrators, subject to the
approval of the Board of Directors of the Corporation. Such
delegation shall not relieve the Adviser of its duties and
responsibilities hereunder.
2. Duties and obligations of
the Adviser with respect to
investments of assets of the
Fund
(a) Subject to the succeeding provisions of this
paragraph and subject to the direction and control of the
Corporation's Board of Directors, the Adviser shall (i) act as
investment adviser for and supervise and manage the investment
and reinvestment of the Fund's assets and in connection therewith
have complete discretion in purchasing and selling securities and
other assets for the Fund and in voting, exercising consents and
exercising all other rights appertaining to such securities and
other assets on behalf of the Fund; (ii) arrange for the
purchase and sale of securities and other assets held in the
investment portfolio of the Fund and (iii) oversee the
administration of all aspects of the Fund's business and affairs
and provide, or arrange for others whom it believes to be
competent to provide, certain services as specified in
subparagraph (b) below. Nothing contained herein shall be
construed to restrict the Corporation's right to hire its own
employees or to contract for administrative services to be
performed by third parties, including but not limited to, the
calculation of the net asset value of the Fund's shares.
(b) In addition to the investment management
services provided in paragraph
(a) above, the Adviser shall provide, or arrange for the
provision of, the following additional services for the Fund: (i)
maintaining the Fund's books and records, such as journals,
ledger accounts and other records in accordance with applicable
laws and regulations to the extent not maintained by the
Fund's custodian , transfer agent and dividend
disbursing agent; (ii) transmitting purchase and redemption
orders for the Fund's shares to the extent not transmitted by the
Fund's distributor or others who purchase and redeem shares;
(iii) initiating all money transfers to the Fund's custodian and
from the Fund's custodian for the payment of the Fund's expenses,
investments, dividends and share redemptions; (iv) reconciling
account information and balances among the Fund's custodian,
transfer agent, distributor, dividend disbursing agent and the
Adviser; (v) providing the Fund, upon request, with such office
space and facilities, utilities and office equipment as are
adequate for the Fund's needs; (vi) preparing, but not paying
for, all reports by the Corporation, on behalf of the Fund, to
its shareholders and all reports and filings required to maintain
the registration and qualification of the Fund's shares under
federal and state law including periodic updating of the
Corporation's registration statement and Prospectus (including
its Statement of Additional Information); (vii) supervising the
calculation of the net asset value of the Fund's shares; and
(viii) preparing notices and agendas for meetings of the Fund's
shareholders and the Corporation 's Board of Directors as well as
minutes of such meetings in all matters required by applicable
law to be acted upon by the Board of Directors.
(c) In the performance of its duties under this
Agreement, the Adviser shall at all times use all reasonable
efforts to conform to, and act in accordance with, any
requirements imposed by (i) the provisions of the Investment
Company Act of 1940, as amended (the "Act"), and of any rules or
regulations in force thereunder; (ii) any other applicable
provision of law;
(iii) the Articles of Incorporation and By-Laws of the
Corporation, as such documents are amended from time to time;
(iv) the investment objective, policies and restrictions
applicable to the Fund as set forth in the Corporation's
Registration Statement on Form N- I A and (v) any policies and
determinations of the Board of Directors of the Corporation with
respect to the Fund.
(d) The Adviser will seek to provide qualified
personnel to fulfill its duties hereunder and will bear all costs
and expenses (including any overhead and personnel costs)
incurred in connection with its duties hereunder and shall bear
the costs of any salaries or directors fees of any officers or
Directors of the Corporation who are affiliated persons (as
defined in the Act) of the Adviser. The Corporation shall be
responsible for the payment of all the Fund's other expenses,
including (i) payment of the fees payable to the Adviser under
paragraph 4 hereof; (ii) organizational expenses; (iii) brokerage
fees and commissions; (iv) taxes; (v) interest charges on
borrowings; (vi) the cost of liability insurance or fidelity bond
coverage for the Fund officers and employees, and Directors' and
officers' errors and omissions insurance coverage; (vii) legal,
auditing, and accounting fees and expenses; (viii) charges of the
Fund's custodian, transfer agent and dividend disbursing agent;
(ix) the Fund's pro-rata portion of dues, fees and charges of any
trade association of which the Corporation is a member; (x) the
expenses of printing, preparing and mailing proxies, share
certificates and reports, including the Fund's prospectuses and
statements of additional information, and notices to
shareholders; (xi) filing fees for the registration or
qualification of the Fund and its shares under federal or state
securities laws; (xii) the fees and expenses involved in
registering and maintaining registration of the Fund's shares
with the Securities and Exchange Commission; (xiii) the expenses
of holding shareholder meetings; (xiv) the compensation,
including fees, of any of the Corporation's Directors, officers
or employees who are not affiliated persons of the Adviser; (xv)
all expenses of computing the Fund's net asset value per share,
including any equipment or services obtained solely for the
purpose of pricing shares or valuing the Fund's
investment portfolio; (xvi) expenses of personnel performing
shareholder servicing functions and all other distribution
expenses payable by the Corporation; (xvii) if approved by the
Board of Directors, compensation and expenses of the Fund's chief
compliance officer and expenses associated with the Fund's
compliance program; and (xviii) litigation and other
extraordinary or non-recurring expenses and other expenses
properly payable by the Fund.
(e) The Adviser shall give the Fund the benefit of
its best judgment and effort in rendering services hereunder,
but neither the Adviser nor any of its officers, trustees,
employees, agents or controlling persons shall be liable for any
act or omission or for any loss sustained by the Fund in
connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason
of its reckless disregard of its obligations and duties under
this Agreement; provided, however, that the foregoing shall not
constitute a waiver of any rights which the Corporation may have
which may not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the
Adviser or any trustee, officer, employee or other affiliate
thereof from acting as investment adviser for any other
person, firm or corporation, or from engaging in any other lawful
activity, and shall not in any way limit or restrict the Adviser
or any of its trustees, officers, employees or agents from
buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may be
acting.
3. Portfolio Transactions
In the course of the Adviser's execution of portfolio
transactions for the Fund, it is agreed that the Adviser shall
employ securities brokers and dealers which, in its judgment,
will be able to satisfy the policy of the Fund to seek the best
execution of its portfolio transactions at reasonable expenses.
For purposes of this agreement, "best execution" shall be
interpreted in accordance with applicable law as it pertains to
the management of registered investment companies by registered
investment advisers. Under such conditions as may be specified by
the Corporation's Board of Directors in the interest of its
shareholders and to ensure compliance with applicable law and
regulations, the Adviser may (a) place orders for the purchase or
sale of the Fund's portfolio securities with its affiliates,
including Gabelli & Company, Inc.; (b) pay commissions to brokers
other than its affiliates which are higher than might be
charged by another qualified broker to obtain brokerage and/or
research services considered by the Adviser to be useful or
desirable in the performance of its duties hereunder and for the
investment management of other advisory accounts over which it or
its affiliates exercise investment discretion in accordance
with Section 28(e) of the Securities Exchange Act of
1934; and (c) consider sales by brokers (other than its
affiliated distributor) of shares of the Fund and any other
mutual fund for which it or its affiliates act as investment
adviser, as a factor in its selection of brokers and dealers
for the Fund's portfolio transactions.
4. Compensation of the Adviser
(a) Subject to paragraph 2(b), the Corporation agrees
to pay to the Adviser out of the Fund's assets and the Adviser
agrees to accept as full compensation for all services rendered
by or through the Adviser a fee computed daily and payable
monthly in an amount equal on an annualized basis to 0.75% of the
Fund's daily average net asset value. For any period less than a
month during which this Agreement is in effect, the fee shall be
pro-rated according to the proportion which such period bears to
a full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the net assets of
the Fund shall be calculated pursuant to the procedures adopted
by resolutions of the Directors of the Corporation for
calculating the net asset value of the Fund's shares.
5. Indemnity
(a) The Corporation hereby agrees to indemnify the
Adviser and the Adviser's trustees, officers, employees, and
agents (including any individual who serves at the Adviser's
request as trustee, officer, partner, trustee or the like of
another corporation) and controlling persons of them (the such
person being an "indemnitee") against any liabilities and
expenses, including amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees (all as
provided in accordance with applicable corporate law) reasonably
incurred by such indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or
investigative body in which he may be or may have been involved
as a party or otherwise or with which he may be or may have been
threatened, while acting in any capacity set forth above in this
paragraph or thereafter by reason of his having acted in any such
capacity, except with respect to any matter as to which such
indemnitee shall have been adjudicated not to have acted in good
faith in the reasonable belief that his action was in the best
interest of the Corporation and furthermore, in the case of any
criminal proceeding, so long as he has no reasonable cause to
believe that the conduct was unlawful, provided, however, that
(I) no indemnitee shall be indemnified hereunder against any
liability to the Corporation or its shareholders or any expense
of such indemnitee arising by reason of (i) willful misfeasance,
(ii) bad faith, (iii) gross negligence, (iv) reckless disregard
of the duties involved in the conduct of such indemnitee's
position (the conduct referred to in such clauses (i) through
\v) being sometimes referred to herein as "disabling conduct"),
(2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any
other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best
interests of the Corporation and that such indemnitee appears to
have acted in good faith in the reasonable belief that its action
was in the best interest of the Corporation and did not involve
disabling conduct by such indemnitee and (3) with respect to any
action, suit or other proceeding voluntarily prosecuted by any
indemnitee as plaintiff, indemnification shall be mandatory only
if the prosecution of such action, suit or other proceeding by
such indemnitee was authorized by a majority of the full Board of
the Corporation. Notwithstanding the foregoing, the Corporation
shall not be obligated to provide any such indemnification to the
extent such provision would waive any right which the Corporation
cannot lawfully waive.
(b) The Corporation shall make advance payments in
connection with the expenses of defending any action with respect
to which indemnification might be sought hereunder if the
Corporation receives a written affirmation of the indemnitee's
good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to
reimburse the Corporation unless it is subsequently determined
that such indemnitee is entitled to such indemnification and if
the Directors of the Corporation determine that the facts then
known to them would not preclude indemnification. In addition,
at least one of the following conditions must be met: (A) the
indemnitee shall provide a security for such indemnitee's
undertaking, (B) the Corporation shall be insured against losses
arising by reason of any lawful advances, or (C) a majority of a
quorum of Directors of the Corporation who are not "interested
persons" of the Corporation (as defined in Section 2(a)(l 9) of
the Act) nor parties to the proceeding ("Disinterested Non-Party
Directors") or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available
facts (as opposed to a full trial-type inquiry), that there is
reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
(c) All determinations with respect to
indemnification hereunder shall be made (1) by a final
decision on the merits by a court or other body before whom the
proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a
decision, by (i) a majority vote of a quorum of the Disinterested
Non-Party Directors of the Corporation, or (ii) if such a quorum
is not obtainable or even, if obtainable, if a majority vote of
such quorum so directs, independent legal counsel in a written
opinion.
The rights accruing to any indemnitee under these
provisions shall not exclude any other right to which such
indemnitee may be lawfully entitled.
6. Duration and Termination
This Agreement shall become effective upon the date hereof
and shall continue in effect for a period of two years and
thereafter from year to year, but only so long as such
continuation is specifically approved at least annually in
accordance with the requirements of the Act.
This Agreement replaces and supersedes any prior investment
advisory agreement between the parties.
This Agreement may be terminated by the Adviser at any time
without penalty upon giving the Corporation sixty days' written
notice (which notice may be waived by the Corporation) and may be
terminated by the Corporation at any time without penalty upon
giving the Adviser sixty days' notice (which notice may be waived
by the Adviser), provided that such termination by the
Corporation shall be directed or approved by the vote of a
majority of the Directors of the Corporation in office at the
time or by vote of the holders of a "majority of voting
securities" (as defined in the Act) of the Fund at the time
outstanding and entitled to vote or, with respect to paragraph 4
(b), by a majority of the Directors of the Corporation who are
not "interested persons" of the Corporation. This Agreement shall
terminate automatically in the event of its assignment (as
"assignment" is defined in the Act and the rules thereunder).
It is understood and hereby agreed that the word "Gabelli"
is the property of the Adviser for copyright and other purposes.
The Corporation further agrees that the word "Gabelli" in its
name is derived from the name of Xxxxx X. Xxxxxxx and such name
may freely be used by the Adviser for other investment companies,
entities or products. The Corporation further agrees that, in the
event that the Adviser shall cease to act as investment adviser
to the Fund, the Fund shall promptly take all necessary and
appropriate action to change its name to names which do not
include the word "Gabelli"; provided, however, that the Fund may
continue to use the word "Gabelli" if the Adviser consents in
writing to such use.
7. Notices
Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from
time to time for the receipt of such notice and shall be deemed
to be received on the earlier of the date actually received or on
the fourth day after the postmark if such notice is mailed first
class postage prepaid.
8. Governing Law
This Agreement shall be construed in accordance with the
laws of the State of New York for contracts to be performed
entirely therein and in accordance with the applicable provisions
of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized
officers, all as of the day and the year first above written.
THE GABELLI CAPITAL SERIES FUNDS, INC.,
ON BEHALF OF GABELLI CAPITAL ASSET FUND
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President
GABELLI FUNDS, LLC
By: /s/ Xxxxxx X. Mango
Xxxxxx X. Mango
Secretary
