1
DISTRIBUTION AGREEMENT
FOR
THE GABELLI EQUITY INCOME FUND
DISTRIBUTION AGREEMENT, dated November 13, 1991 between Gabelli Equity
Series Funds, Inc., a Maryland corporation (the "Company"), on behalf of its
series The Gabelli Equity Income Fund (the "Fund"), and Gabelli & Company, Inc.,
a New York corporation (the "Distributor"). The Company is registered as an
investment company under the Investment Company Act of 1940 (the "1940 Act"),
and an indefinite number of shares (the "Shares") of the Fund, par value $.001
per share (the "Shares"), have been registered under the Securities Act of 1933
(the "1933 Act") to be offered for sale to the public in a continuous public
offering in accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Fund included in
the Company's Registration Statement on Form N-lA as such documents may be
amended from time to time.
In this connection, the Company desires that the Distributor act as its
exclusive sales agent and distributor for the sale and distribution of Shares.
The Distributor has advised the Company that it is willing to act in such
capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive sales agent
and distributor for the sale and distribution of Shares pursuant to the
aforesaid continuous public offering of Shares, and the Company further agrees
from and after the commencement of such continuous public offering that it will
not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 0000 Xxx.
2. The Distributor hereby accepts such appointment and agrees to use
its best efforts to sell such Shares, provided, however, that when requested by
the
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Fund at any time for any reason the Distributor will suspend such efforts. The
Company may also withdraw the offering of Shares at any time when required by
the provisions of any statute, order, rule or regulation of any governmental
body having jurisdiction. It is understood that the Distributor does not
undertake to sell all or any specific portion of the Shares.
3. The Distributor represents that it is a member in good standing of
the National Association of Dealers, Inc. and agrees that it will use all
reasonable efforts to maintain such status and to abide by the Rules of Fair
Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Company by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Company's agent and subject to its
approval. The Company reserves the right to reject any order in whole or in
part. The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Company, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares on
behalf of the Company or otherwise act as the Company's agent for any purpose.
The Distributor shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such other materials
as the Company shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and may be sold
either through persons with whom it has selling agreements in a form approved by
the Company's Board of Directors or directly to prospective purchasers. To
facilitate sales, the Company will furnish the Distributor with the net asset
value of its Shares promptly after each calculation thereof.
5. The Company has delivered to the Distributor a copy of the current
Prospectus for the Fund. It
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agrees that it will use its best efforts to continue the effectiveness of its
Registration Statement filed under the 1933 Act and the 1940 Act. The Company
further agrees to prepare and file any amendments to its Registration Statement
as may be necessary and any supplemental data in order to comply with such Acts.
The Company will furnish the Distributor at the Distributor's expense with a
reasonable number of copies of the Prospectus and any amended Prospectus for use
in connection with the sale of Shares.
6. At the Distributor's request, the Company will take such steps at
its own expense as may be necessary and feasible to qualify Shares for sale in
states, territories or dependencies of the United States of America and in the
District of Columbia in accordance with the laws thereof, and to renew or extend
any such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
(a) It will furnish to the Company any pertinent information
required to be inserted with respect to the Distributor as exclusive
sales agent and distributor within the purview of Federal and state
securities laws in any reports or registrations required to be filed
with any government authority;
(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus filed
under the Securities Act of 1933, as in effect from time to time;
(c) It will not use or distribute or authorize the use or
distribution of any statements other than those contained in the
Fund's then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Company; and
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(d) Subject to paragraph 9 below, the Distributor will bear
the costs and expenses of printing and distributing any copies of any
prospectuses and annual and interim reports of the Fund (after such
items have been prepared and set in type) which are used in connection
with the offering of Shares, and the costs and expenses of preparing,
printing and distributing any other literature used by the Distributor
or furnished by the Distributor for use in connection with the offering
of the Shares and the costs and expenses incurred by the Distributor in
advertising, promoting and selling Shares of the Fund to the public.
8. The Company will pay its legal and auditing expenses and the cost of
composition of any prospectuses of annual or interim reports of the Fund.
9. The Company will pay the Distributor for costs and expenses incurred
by the Distributor in connection with distribution of Shares by the Distributor
in accordance with the terms of a Plan of Distribution (the "Plan") adopted by
the Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may be in effect
from time to time; provided, however, that no payments shall be due or paid to
the Distributor hereunder unless and until this Agreement shall have been
approved by Director Approval and Disinterested Director Approval (as such terms
are defined in such Plan). The Company reserves the right to modify or terminate
such Plan at any time as specified in the Plan and Rule 12b-1, and this Section
9 shall thereupon be modified or terminated to the same extent without further
action of the parties. The persons authorized to direct the payment of funds
pursuant to this Agreement and the Plan shall provide to the Company's Board of
Directors, and the Directors shall review, at least quarterly a written report
of the amounts so paid and the purposes for which such expenditures were made.
10. The Company agrees to indemnify, defend and hold the Distributor,
its officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from any and all liabilities and expenses,
including costs of investigation or defense (including reasonable counsel fees)
incurred by such indemnitee in connection with the de-
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fense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Company
expressly for use in any such Prospectus; provided, however, that (1) no
indemnitee shall be indemnified hereunder against any liability to the Company
or the shareholders of the Fund or any expense of such indemnitee 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 its action was in the
best interest of the Company or arising by reason of such indemnitee's willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations under this Agreement
("disabling conduct"), or (2) as to any matter disposed of by settlement or a
compromise payment by such indemnitee, no indemnification shall be provided
unless there has been a determination that such settlement or compromise is in
the best interests of the Company 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 Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the Company, its
Directors, officers, employees and agents and any person who controls the
Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investiga-
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tion or defense (including reasonable counsel fees) incurred by such indemnitee,
but only to the extent that such liability or expense shall arise out of or be
based upon any untrue or alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor of the Company expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading or arising by reason of disabling conduct
by such indemnitee or any person selling Shares pursuant to an agreement with
the Distributor.
The Company shall make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be sought
hereunder if the Company 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 Company unless it is subsequently
determined that he is entitled to such indemnification and if the directors of
the Company 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 his undertaking, (B) the
Company shall be insured against losses arising by reason of any lawful
advances, or (C) a majority of a quorum of directors of the Company who are
neither "interested persons" of the Company (as defined in Section 2(a) (19) 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.
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 Company, or
(ii) if such a quorum is not obtainable or even, if
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obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective on the date first set forth
above and shall remain in effect for up to two years from such date (one year in
the case of Section 9) and thereafter from year to year provided such
continuance is specifically approved at least annually prior to each anniversary
of such date by (a) Director Approval or by vote at a meeting of shareholders of
the Fund of the lesser of (i) 67 per cent of the Shares present or represented
by proxy and (ii) 50 per cent of the outstanding Shares and (b) by Disinterested
Director Approval.
12. This Agreement may be terminated (a) by the Distributor at any time
without penalty by giving sixty (60) days' written notice to the Company which
notice may be waived by the Company; or (b) by the Company at any time without
penalty upon sixty (60) days' written notice to the Distributor (which notice
may be waived by the Distributor); provided, however, that any such termination
by the Company shall be directed or approved in the same manner as required for
continuance of this Agreement by Section 11(a) (or, in the case of termination
of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in writing
signed by each of the parties hereto and approved in the same manner as provided
for continuance of this Agreement in Section 11(a) (or, in the case of amendment
of Section 9, by Section 11(b)). Any such amendment or change shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, but this Agreement shall not be assigned by either party and shall
automatically terminate upon assignment (as such term is defined in the 1940 Act
and the rules thereunder).
14. This Agreement shall be construed in accordance with the laws of
the State of New York applicable to agreements to be performed entirely therein
and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made invalid or
unenforceable by a court deci-
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sion, statute, rule or otherwise, the remainder of this Agreement shall not be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
GABELLI EQUITY SERIES FUNDS, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name:
Title:
GABELLI & COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
OF
THE GABELLI EQUITY INCOME FUND
The Gabelli Equity Income Fund (the "Fund") is engaged in business as a
separate series of Gabelli Equity Series Funds, Inc. (the "Company"), which is
an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Fund intends to employ Gabelli
& Company, Inc. and/or others as the principal underwriter and distributor (the
"Distributor") of the shares of the Fund pursuant to a written distribution
agreement. The Fund has adopted a plan of distribution pursuant to Rule 12b-1
under the Act to assist in the distribution of shares of the Fund.
The Board of Directors (the "Board") of the Company having determined
that it would be desirable to amend the current plan of distribution in certain
respects and to restate such amended plan in its entirety and that a plan of
distribution containing the terms set forth herein is reasonably likely to
benefit the Fund and its shareholders, the Fund hereby amends and restates its
plan of distribution (the "Plan") pursuant to Rule 12b-1 under the Act to read
in its entirety as follows:
1. In consideration of the services to be provided, and the expenses to
be incurred, by the Distributor pursuant to the distribution agreement, the
Company will pay to the Distributor as distribution payments (the "Payments") in
connection with the distribution of shares of the Fund an aggregate amount at a
rate of 0.25% per year of the average daily net assets of the Fund. 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 Company's
obligation hereunder shall be limited to the assets of the Fund and shall not
constitute an obligation of the Company except out of such assets and shall not
constitute an obligation of any shareholder of the Fund or other series of the
Company.
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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
shares of the Fund. 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 shares of the Fund: advertising the Fund or the Fund's
investment advisor'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 shares
of the Fund, 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 Fund, 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 Company is hereby authorized and directed to enter into
appropriate written agreements with
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the Distributor and each other person to whom the Company 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 Directors
("Disinterested Director Approval") who are not interested persons of the
Company and have no direct or indirect financial interest in the operation of
the Plan or any such agreement, 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 Company may pay for on behalf of the Fund 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 Company
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
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outstanding voting securities of the Fund. 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 outstanding voting securities of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund 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 directors
who are not interested persons of the Fund and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, 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 outstanding voting securities of the
Fund.
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 outstanding voting securities" of the Fund shall mean the
vote, at the annual or a special meeting of the security holders of the Fund
duly called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy or, if less, (b) more than 50% of
the outstanding voting securities of the Fund.
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DISTRIBUTION AGREEMENT
FOR
THE GABELLI SMALL CAP GROWTH FUND
DISTRIBUTION AGREEMENT, dated September 9, 1991 between Gabelli Equity
Series Funds, Inc., a Maryland corporation (the "Company"), on behalf of its
series The Gabelli Small Cap Growth Fund (the "Fund"), and Gabelli & Company,
Inc., a New York corporation (the "Distributor"). The Company is registered as
an investment company under the Investment Company Act of 1940 (the "1940 Act"),
and an indefinite number of shares (the "Shares") of the Fund, par value $.001
per share (the "Shares"), have been registered under the Securities Act of 1933
(the "1933 Act") to be offered for sale to the public in a continuous public
offering in accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Fund included in
the Company's Registration Statement on Form N-1A as such documents may be
amended from time to time.
In this connection, the Company desires that the Distributor act as its
exclusive sales agent and distributor for the sale and distribution of Shares.
The Distributor has advised the Company that it is willing to act in such
capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive sales agent
and distributor for the sale and distribution of Shares pursuant to the
aforesaid continuous public offering of Shares, and the Company further agrees
from and after the commencement of such continuous public offering that it will
not, without the Distributor's consent, sell or agree to sell any Shares
otherwise than through the Distributor, except the Company may issue Shares in
connection with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 0000 Xxx.
2. The Distributor hereby accepts such appointment and agrees to use
its best efforts to sell such Shares, provided, however, that when requested by
the
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Fund at any time for any reason the Distributor will suspend such efforts. The
Company may also withdraw the offering of Shares at any time when required by
the provisions of any statute, order, rule or regulation of any governmental
body having jurisdiction. It is understood that the Distributor does not
undertake to sell all or any specific portion of the Shares.
3. The Distributor represents that it is a member in good standing of
the National Association of Dealers, Inc. and agrees that it will use all
reasonable efforts to maintain such status and to abide by the Rules of Fair
Practice, the Constitution and the Bylaws of the National Association of
Securities Dealers, Inc., and all other rules and regulations that are now or
may become applicable to its performance hereunder. The Distributor will
undertake and discharge its obligations hereunder as an independent contractor
and it shall have no authority or power to obligate or bind the Company by its
actions, conduct or contracts except that it is authorized to accept orders for
the purchase or repurchase of Shares as the Company's agent and subject to its
approval. The Company reserves the right to reject any order in whole or in
part. The Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements approved
by the Company, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares on
behalf of the Company or otherwise act as the Company's agent for any purpose.
The Distributor shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such other materials
as the Company shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and may be sold
either through persons with whom it has selling agreements in a form approved by
the Company's Board of Directors or directly to prospective purchasers. To
facilitate sales, the Company will furnish the Distributor with the net asset
value of its Shares promptly after each calculation thereof.
5. The Company has delivered to the Distributor a copy of the current
Prospectus for the Fund. It
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agrees that it will use its best efforts to continue the effectiveness of its
Registration Statement filed under the 1933 Act and the 1940 Act. The Company
further agrees to prepare and file any amendments to its Registration Statement
as may be necessary and any supplemental data in order to comply with such Acts.
The Company will furnish the Distributor at the Distributor's expense with a
reasonable number of copies of the Prospectus and any amended Prospectus for use
in connection with the sale of Shares.
6. At the Distributor's request, the Company will take such steps at
its own expense as may be necessary and feasible to qualify Shares for sale in
states, territories or dependencies of the United States of America and in the
District of Columbia in accordance with the laws thereof, and to renew or extend
any such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory, dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
(a) It will furnish to the Company any pertinent information
required to be inserted with respect to the Distributor as exclusive
sales agent and distributor within the purview of Federal and state
securities laws in any reports or registrations required to be filed
with any government authority;
(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus filed
under the Securities Act of 1933, as in effect from time to time;
(c) It will not use or distribute or authorize the use or
distribution of any statements other than those contained in the Fund's
then current Prospectus or in such supplemental literature or
advertising as may be authorized in writing by the Company; and
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16
(d) Subject to paragraph 9 below, the Distributor will bear the
costs and expenses of printing and distributing any copies of any
prospectuses and annual and interim reports of the Fund (after such
items have been prepared and set in type) which are used in connection
with the offering of Shares, and the costs and expenses of preparing,
printing and distributing any other literature used by the Distributor
or furnished by the Distributor for use in connection with the offering
of the Shares and the costs and expenses incurred by the Distributor in
advertising, promoting and selling Shares of the Fund to the public.
8. The Company will pay its legal and auditing expenses and the cost of
composition of any prospectuses of annual or interim reports of the Fund.
9. The Company will pay the Distributor for costs and expenses incurred
by the Distributor in connection with distribution of Shares by the Distributor
in accordance with the terms of a Plan of Distribution (the "Plan") adopted by
the Fund pursuant to Rule 12b-1 under the 1940 Act as such Plan may be in effect
from time to time; provided, however, that no payments shall be due or paid to
the Distributor hereunder unless and until this Agreement shall have been
approved by Director Approval and Disinterested Director Approval (as such terms
are defined in such Plan). The Company reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule 12b-1, and
this Section 9 shall thereupon be modified or terminated to the same extent
without further action of the parties. The persons authorized to direct the
payment of funds pursuant to this Agreement and the Plan shall provide to the
Company's Board of Directors, and the Directors shall review, at least quarterly
a written report of the amounts so paid and the purposes for which such
expenditures were made.
10. The Company agrees to indemnify, defend and hold the Distributor,
its officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from any and all liabilities and expenses,
including costs of investigation or defense (including reasonable counsel fees)
incurred by such indemnitee in connection with the de-
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17
fense or disposition of any action, suit or other proceeding, whether civil or
criminal, in which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Company expressly for
use in any such Prospectus; provided, however, that (1) no indemnitee shall be
indemnified hereunder against any liability to the Company or the shareholders
of the Fund or any expense of such indemnitee 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 its action was in the best interest of the
Company or arising by reason of such indemnitee's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under this Agreement ("disabling
conduct"), or (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, no indemnification shall be provided unless there
has been a determination that such settlement or compromise is in the best
interests of the Company 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
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide any
such indemnification to the extent such provision would waive any right which
the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the Company, its
Directors, officers, employees and agents and any person who controls the
Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investiga-
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tion or defense (including reasonable counsel fees) incurred by such indemnitee,
but only to the extent that such liability or expense shall arise out of or be
based upon any untrue or alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor of the Company expressly
for use in a Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein or necessary to
make such information not misleading or arising by reason of disabling conduct
by such indemnitee or any person selling Shares pursuant to an agreement with
the Distributor.
The Company shall make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be sought
hereunder if the Company 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 Company unless it is subsequently
determined that he is entitled to such indemnification and if the directors of
the Company 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 his undertaking, (B) the
Company shall be insured against losses arising by reason of any lawful
advances, or (C) a majority of a quorum of directors of the Company who are
neither "interested persons" of the Company (as defined in Section 2(a)(19) 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.
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 Company, or
(ii) if such a quorum is not obtainable or even, if
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obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective on the date first set forth
above and shall remain in effect for up to two years from such date (one year in
the case of Section 9) and thereafter from year to year provided such
continuance is specifically approved at least annually prior to each anniversary
of such date by (a) Director Approval or by vote at a meeting of shareholders of
the Fund of the lesser of (i) 67 per cent of the Shares present or represented
by proxy and (ii) 50 per cent of the outstanding Shares and (b) by Disinterested
Director Approval.
12. This Agreement may be terminated (a) by the Distributor at any time
without penalty by giving sixty (60) days' written notice to the Company which
notice may be waived by the Company; or (b) by the Company at any time without
penalty upon sixty (60) days' written notice to the Distributor (which notice
may be waived by the Distributor); provided, however, that any such termination
by the Company shall be directed or approved in the same manner as required for
continuance of this Agreement by Section 11(a) (or, in the case of termination
of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in writing
signed by each of the parties hereto and approved in the same manner as provided
for continuance of this Agreement in Section 11(a) (or, in the case of amendment
of Section 9, by Section 11(b)). Any such amendment or change shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, but this Agreement shall not be assigned by either party and shall
automatically terminate upon assignment (as such term is defined in the 1940 Act
and the rules thereunder).
14. This Agreement shall be construed in accordance with the laws of
the State of New York applicable to agreements to be performed entirely therein
and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made invalid or
unenforceable by a court deci-
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20
sion, statute, rule or otherwise, the remainder of this Agreement shall not be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
GABELLI EQUITY SERIES FUNDS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title:
GABELLI & COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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21
AMENDED AND RESTATED
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-l
OF
THE GABELLI SMALL CAP GROWTH FUND
The Gabelli Small Cap Growth Fund (the "Fund") is engaged in business
as a separate series qf Gabelli Equity Series Funds, Inc. (the "Company"), which
is an open-end management investment company registered as such under the
Investment Company Act of 1940 (the "Act"). The Fund intends to employ Gabelli
& Company, Inc. and/or others as the principal underwriter and distributor (the
"Distributor") of the shares of the Fund pursuant to a written distribution
agreement. The Fund has adopted a plan of distribution pursuant to Rule 12b-1
under the Act to assist in the distribution of shares of the Fund.
The Board of Directors (the "Board") of the Company having determined
that it would be desirable to amend the current plan of distribution in certain
respects and to restate such amended plan in its entirety and that a plan of
distribution containing the terms set forth herein is reasonably likely to
benefit the Fund and its shareholders, The Fund hereby amends and restates its
plan of distribution (the "Plan") pursuant to Rule 12b-1 under the Act to read
in its entirety as follows:
1. In consideration of the services to be provided, and the expenses to
be incurred, by the Distributor pursuant to the distribution agreement, the
Company will pay to the Distributor as distribution payments (the "Payments") in
connection with the distribution of shares of the Fund an aggregate amount at a
rate of 0.25% per year of the average daily net assets of the Fund. 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 Company's
obligation hereunder shall be limited to the assets of the Fund and shall not
constitute an obligation of the Company except out of such assets and shall not
constitute an obligation of any shareholder of the Fund or other series of the
Company.
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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
shares of the Fund. 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 shares of the Fund: advertising the Fund or the Fund's
investment advisor'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 shares
of the Fund, 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 Fund, 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 Company is hereby authorized and directed to enter into
appropriate written agreements with
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23
the Distributor and each other person to whom the Company 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 Directors
("Disinterested Director Approval") who are not interested persons of the
Company and have no direct or indirect financial interest in the operation of
the Plan or any such agreement, 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 Company may pay for on behalf of the Fund 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 Company
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
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24
outstanding voting securities of the Fund. 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 outstanding voting securities of the Fund. This Plan may continue in effect
for longer than one year after its approval by the shareholders of the Fund 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 directors
who are not interested persons of the Fund and have no direct or indirect
financial interest in the operation of the Plan or any agreement hereunder, 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 outstanding voting securities of the
Fund.
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 outstanding voting securities" of the Fund shall mean the
vote, at the annual or a special meeting of the security holders of the Fund
duly called, (a) of 67% or more of the voting securities present at such
meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy or, if less, (b) more than 50% of
the outstanding voting securities of the Fund.
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