Exhibit (k)(iii)
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of
November [ ], 2003, between Citigroup Global Markets Inc. ("Citigroup") and
Gabelli Funds, LLC ("Gabelli").
WHEREAS, The Gabelli Dividend & Income Trust (including any successor
by merger or otherwise, the "Fund") is a non-diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and its common shares are registered under
the Securities Act of 1933, as amended; and
WHEREAS, Gabelli is the investment manager and the administrator of
the Fund;
WHEREAS, Citigroup is acting as a managing underwriter in an offering
of the Fund's common shares;
WHEREAS, Gabelli desires to provide additional compensation to
Citigroup for acting as lead underwriter in an offering of the Fund's common
shares; and
WHEREAS, Gabelli desires to retain Citigroup to provide after-market
support services designed to maintain the visibility of the Fund on an ongoing
basis, and Citigroup is willing to render such services;
NOW, THEREFORE, in consideration of the mutual terms and conditions
set forth below, the parties hereto agree as follows:
1.
(a) In exchange for the payment by Gabelli of the additional
compensation described herein, Citigroup agrees, for the period
and on the terms and conditions set forth herein, to provide the
following services at the reasonable request of Gabelli:
(1) after-market support services designed to maintain the
visibility of the Fund on an ongoing basis.
(2) relevant information, studies or reports regarding
general trends in the closed-end investment company and
asset management industries, if reasonably obtainable,
and consult with representatives of Gabelli in connection
therewith; and
(3) information to and consult with Gabelli with respect to
applicable strategies designed to address market value
discounts, if any.
(b) At the request of Gabelli, Citigroup shall limit or cease any
action or service provided hereunder to the extent and for the
time period requested by Gabelli; provided, however, that
pending termination of this Agreement as provided for in Section
6 hereof, any such limitation or cessation shall not relieve
Gabelli of its payment obligations pursuant to Section 2 hereof.
(c) Citigroup will promptly notify Gabelli if it learns of any
material inaccuracy or misstatement in, or material omission
from, any written information, as of the date such information
was published, provided by Citigroup to Gabelli in connection
with the performance of services by Citigroup under this
Agreement.
2. Gabelli shall pay Citigroup a fee computed daily and payable quarterly
in arrears commencing December 1, 2004 (a) at a rate of 15% of
Gabelli's investment management fees from the Fund for such quarter in
respect of the Fund's assets attributable to the common shares sold by
Citigroup in this offering and (b) a proportionate amount (based on
the portion of the assets of the Fund attributable to the Offering
with respect to which Citigroup is entitled to receive a fee under
clause (a) of this Section 2) of Gabelli investment management fees
for any such quarter in respect of any outstanding (i) common shares
issued pursuant to any rights offering by the Fund that closes on or
before the third anniversary of the Offering and (ii) any preferred
shares issued by the Fund, for a term as described in Section 6
hereof; provided that the total amount of the fee hereunder, shall not
exceed [ ]% of the total price to the public of the Fund's common
shares offered by the prospectus dated November [ ], 2003 (including
all Initial Securities and Option Securities as such terms are
described in the Purchase Agreement, dated November [ ], 2003, by and
among the Fund, Gabelli and each of the Underwriters named therein
(the "Purchase Agreement"). The sum total of this fee, any fees
payable to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and
Claymore Securities, Inc., plus the amount of the expense
reimbursement of $.0067 per common share payable by the Fund to the
underwriters pursuant to the Purchase Agreement shall not exceed 4.5%
of the total price of the Fund's common shares offered by the
Prospectus. All quarterly fees payable hereunder shall be paid to
Citigroup within 15 days following the end of each calendar quarter.
3. Gabelli shall be permitted to discharge all or a portion of its
payment obligations hereunder upon prepayment in full or in part of
the remaining balance due of the maximum additional commission amount
described in Section 2 above.
4. Gabelli acknowledges that the services of Citigroup provided for
hereunder do not include any advice as to the value of securities or
regarding the advisability of purchasing or selling any securities for
the Fund's portfolio. No provision of this Agreement shall be
considered as creating, nor shall any provision create, any obligation
on the part of Citigroup, and Citigroup is not hereby agreeing, to:
(i) furnish any advice or make any recommendations regarding the
purchase or sale of portfolio securities or (ii) render any opinions,
valuations or recommendations of any kind or to perform any such
similar services in connection with providing the services described
in Section 1 hereof.
5. Nothing herein shall be construed as prohibiting Citigroup or its
affiliates from providing similar or other services to any other
clients (including other registered investment companies or other
investment managers), so long as Citigroup's services to Gabelli are
not impaired thereby.
6. The term of this Agreement shall commence upon the date referred to
above and shall terminate at the earlier of the time that (i) Gabelli
ceases to act as the investment manager to the Fund pursuant to the
Investment Advisory Agreement (as such term is defined in the
Purchase Agreement) or other subsequent advisory agreement or (ii)
the maximum additional commission amount described in Section 2 is
reached.
7. Gabelli will furnish Citigroup with such information as Citigroup
believes appropriate to its assignment hereunder (all such information
so furnished being the "Information"). Gabelli recognizes and confirms
that Citigroup (a) will use and rely primarily on the Information and
on information available from generally recognized public sources in
performing the services contemplated by this Agreement without having
independently verified the same and (b) does not assume responsibility
for the accuracy or completeness of the Information and such other
information. To the best of Gabelli's knowledge, the Information to be
furnished by Gabelli when delivered, will be true and correct in all
material respects and will not contain any material misstatement of
fact or omit to state any material fact necessary to make the
statements contained therein not misleading. Gabelli will promptly
notify Citigroup if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information delivered
to Citigroup.
8. Gabelli agrees that Citigroup shall have no liability to Gabelli or
the Fund for any act or omission to act by Citigroup in the course of
its performance under this Agreement, in the absence of gross
negligence or willful misconduct on the part of Citigroup. Gabelli
agrees to the indemnification and other agreement set forth in the
Indemnification Agreement attached hereto, the provisions of which
are incorporated herein by reference and shall survive the
termination, expiration or supersession of this Agreement.
9. This Agreement and any claim, counterclaim or dispute of any kind or
nature whatsoever arising out of or in any way relating to this
Agreement ("Claim") shall be governed by and construed in accordance
with the laws of the State of New York.
10. No Claim may be commenced, prosecuted or continued in any court other
than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the
Southern District of New York, which courts shall have exclusive
jurisdiction over the adjudication of such matters, and Gabelli and
Citigroup consent to the jurisdiction of such courts and personal
service with respect thereto. Each of Citigroup and Gabelli waives all
right to trial by jury in any proceeding (whether based upon contract,
tort or otherwise) in any way arising out of or relating to this
Agreement. Gabelli agrees that a final judgment in any proceeding or
counterclaim brought in any such court shall be conclusive and binding
upon Gabelli and may be enforced in any other courts to the
jurisdiction of which Gabelli is or may be subject, by suit upon such
judgment.
11. This Agreement may not be assigned by either party without the prior
written consent of the other party.
12. This Agreement (including the attached Indemnification Agreement)
embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect or
any other provision of this Agreement, which will remain in full force
and effect. This Agreement may not be amended or otherwise modified or
waived except by an instrument in writing signed by both Citigroup and
Gabelli.
13. All notices required or permitted to be sent under this Agreement
shall be sent, if to Gabelli:
c/o Gabelli Asset Management
Xxx Xxxxxxxxx Xxxxxx
Xxx, Xxx Xxxx 00000-0000
Attention: [ ]
or if to Citigroup:
Citigroup Global Markets Inc.
Attention: [ ]
or such other name or address as may be given in writing to the other
parties. Any notice shall be deemed to be given or received on the
third day after deposit in the US mail with certified postage prepaid
or when actually received, whether by hand, express delivery service
or facsimile transmission, whichever is earlier.
14. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Additional Compensation Agreement as of the date first above written.
GABELLI FUNDS, LLC CITIGROUP Global Markets Inc.
By: _____________________________ By: _____________________________
Name: Name:
Title: Title:
CITIGROUP GLOBAL MARKETS INC. INDEMNIFICATION AGREEMENT
November [ ], 2003
Citigroup Global Markets Inc.
New York, New York
Ladies and Gentlemen:
In connection with the engagement of Citigroup Global Markets Inc.
("Citigroup") to advise and assist the undersigned (together with its
affiliates and subsidiaries, referred to as the "Company") with the matters
set forth in the Agreement dated November [ ], 2003 between the Company and
Citigroup (the "Agreement"), in the event that Citigroup becomes involved in
any capacity in any claim, suit, action, proceeding, investigation or inquiry
(including, without limitation, any shareholder or derivative action or
arbitration proceeding) (collectively, a "Proceeding") in connection with any
matter in any way relating to or referred to in the Agreement or arising out
of the matters contemplated by the Agreement, the Company agrees to indemnify,
defend and hold Citigroup harmless to the fullest extent permitted by law,
from and against any losses, claims, damages, liabilities and expenses in
connection with any matter in any way relating to or referred to in the
Agreement or arising out of the matters contemplated by the Agreement, except
to the extent that it shall be determined by a court of competent jurisdiction
in a judgment that has become final in that it is no longer subject to appeal
or other review, that such losses, claims, damages, liabilities and expenses
resulted from the gross negligence or willful misconduct of Citigroup. In
addition, in the event that Citigroup becomes involved in any capacity in any
Proceeding in connection with any matter in any way relating to or referred to
in the Agreement or arising out of the matters contemplated by the Agreement,
the Company will reimburse Citigroup for its legal and other expenses
(including the cost of any investigation and preparation) as such expenses are
incurred by Citigroup in connection therewith. If such indemnification were
not to be available for any reason, the Company agrees to contribute to the
losses, claims, damages, liabilities and expenses involved (i) in the
proportion appropriate to reflect the relative benefits received or sought to
be received by the Company and its stockholders and affiliates and other
constituencies, on the one hand, and Citigroup, on the other hand, in the
matters contemplated by the Agreement or (ii) if (but only if and to the
extent) the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of the
Company and its stockholders and affiliates and other constituencies, on the
one hand, and the party entitled to contribution, on the other hand, as well
as any other relevant equitable considerations. The Company agrees that for
the purposes of this paragraph the relative benefits received, or sought to be
received, by the Company and its stockholders and affiliates, on the one hand,
and the party entitled to contribution, on the other hand, of a transaction as
contemplated shall be deemed to be in the same proportion that the total value
received or paid or contemplated to be received or paid by the Company or its
stockholders or affiliates and other constituencies, as the case may be, as a
result of or in connection with the transaction (whether or not consummated)
for which Citigroup has been retained to perform financial services bears to
the fees paid to Citigroup under the Agreement; provided that in no event
shall the Company contribute less than the amount necessary to assure that
Citigroup is not liable for losses, claims, damages, liabilities and expenses
in excess of the amount of fees actually received by Citigroup pursuant to the
Agreement. Relative fault shall be determined by reference to, among other
things, whether any alleged untrue statement or omission or any other alleged
conduct relates to information provided by the Company or other conduct by the
Company (or its employees or other agents), on the one hand, or by Citigroup,
on the other hand. The Company will not settle any Proceeding in respect of
which indemnity may be sought hereunder, whether or not Citigroup is an actual
or potential party to such Proceeding, without Citigroup's prior written
consent unless the settlement does not include a statement as to an admission
of fault, culpability or a failure to act by or on behalf of Citigroup. For
purposes of this Indemnification Agreement, Citigroup shall include Citigroup
& Co., Citigroup, any of its affiliates, each other person, if any,
controlling Citigroup or any of its affiliates, their respective officers,
current and former directors, employees and agents, and the successors and
assigns of all of the foregoing persons. The foregoing indemnity and
contribution agreement shall be in addition to any rights that any indemnified
party may have at common law or otherwise.
The Company agrees that neither Citigroup nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability
to the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either Citigroup's engagement
under the Agreement or any matter referred to in the Agreement, including,
without limitation, related services and activities prior to the date of the
Agreement, except to the extent that it shall be determined by a court of
competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review that any losses, claims, damages,
liabilities or expenses incurred by the Company resulted from the gross
negligence or willful misconduct of Citigroup in performing the services that
are the subject of the Agreement.
This INDEMNIFICATION Agreement and any claim, counterclaim or dispute
of any kind or nature whatsoever arising out of or in any way relating to this
Agreement ("Claim"), DIRECTLY OR INDIRECTLY, shall be governed by and
construed in accordance with the laws of the State of New York. Except as set
forth below, no Claim may be commenced, prosecuted or continued in any court
other than the courts of the State of New York located in the City and County
of New York or in the United States District Court for the Southern District
of New York, which courts shall have exclusive jurisdiction over the
adjudication of such matters, and the Company and Citigroup consent to the
jurisdiction of such courts and personal service with respect thereto. The
Company hereby consents to personal jurisdiction, service and venue in any
court in which any claim arising out of or in any way relating to this
agreement is brought by anY third party against Citigroup or any indemnified
party. Each of Citigroup and the Company waives all right to trial by jury in
any proceeding or claim (whether based upon contract, tort or otherwise)
arising out of or in any way relating to this Agreement. The Company agrees
that a final judgment in any proceeding or claim arising out of or in any way
relating to this agreement brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
The foregoing Indemnification Agreement shall remain in full force
and effect notwithstanding any termination of Citigroup's engagement. This
Indemnification Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and
the same agreement.
Very truly yours,
GABELLI FUNDS, LLC
By: ______________________
Name:
Title:
Accepted and agreed to as of the date first above written:
Citigroup Global Markets Inc.
By ______________________
Name:
Title:
