INVESTMENT ADVISORY AGREEMENT
March 1, 1994
Gabelli Funds, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxx, Xxx Xxxx 00000-0000
Dear Sirs:
The Gabelli Value Fund Inc., a Maryland corporation (the "Fund"), confirms
its agreement with Gabelli Funds, Inc. (the "Adviser") as set forth below.
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the investment
objective, policies and limitations specified in its Articles of Incorporation
dated July 20, 1989, as amended from time to time (the "Articles"), its By-laws,
as amended from time to time, in the prospectus (the "Prospectus") and the
statement of additional information (the "Statement") filed with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended
(the "1940 Act"), and the Securities Act of 1933, as amended, as part of the
Fund's Registration Statement on Form N-1A, as amended from time to time, and in
the manner and to the extent as may from time to time be approved in the manner
set forth in the Articles. Copies of the Fund's Prospectus, Statement, Articles
and By-laws have been or will be submitted to the Adviser. The Fund desires to
employ and hereby appoints the Adviser to act as its investment adviser and to
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 2(b) below. The Adviser accepts
the appointment and agrees to furnish the services for the compensation set
forth below. Nothing contained herein shall be construed to restrict the Fund'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.
2. Services
(a) Investment Advice. Subject to the overall supervision and
direction of the Board of Directors of the Fund, the Adviser shall have general
responsibility for the investment and management of the Fund's assets, subject
to and in accordance with the Fund's investment objective, policies and
restrictions as stated in the Prospectus, Statement, Articles and By-Laws. In
discharging its responsibility, the Adviser shall determine and monitor the
investments of the Fund. In addition, the Adviser shall have full authority to
implement its determinations by selecting and placing individual transactions on
behalf of the Fund.
(b) Administration. The specific services to be provided or
arranged for by the Adviser for the Fund are (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 or dividend disbursing agent; (ii) transmitting
purchase and redemption orders for Fund 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 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 Fund'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 Fund'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.
3. Brokerage
The Adviser shall employ securities brokers that, in its
judgment, will implement 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 mean prompt, efficient and reliable execution
at the most favorable price obtainable. In making this determination, the
Adviser shall take into consideration a number of factors including, but not
limited to, the breadth of the market in the security interest, the price of the
security interest, the financial condition and execution capability of the
broker or dealer and the reasonableness of any commission for the specific
transaction and on a continuing basis. Under such conditions as may be specified
by the Fund'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 an
affiliate of the Adviser; (b) pay commissions to brokers other than the
Adviser's affiliates that 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 the Adviser's duties hereunder and
for the investment management of other advisory accounts over which the Adviser
or the Adviser's affiliates exercise investment discretion; and (c) consider
sales by brokers (other than an affiliate of the Adviser) of shares of the Fund
and any other mutual fund for which the Adviser or its affiliates act as
investment adviser, as a factor in the Adviser's selection of brokers for Fund
portfolio transactions.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of developments
materially affecting the Fund's portfolio and, in addition to providing the Fund
with whatever statistical or other information the Fund may reasonably request
with respect to its investments, the Adviser will, on its own initiative,
furnish the Fund from time to time with whatever information the Adviser
believes its appropriate for this purpose.
5. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraph 2 above. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Adviser against any liability to the Fund or to holders of the Fund's shares
("Shareholders") to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Adviser's reckless disregard of
its obligations and duties under this Agreement.
6. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Adviser a fee at the annual rate of 1.00% of
the Fund's average daily net assets. This fee shall be computed daily and shall
be payable on the first business day of each month for services performed the
preceding month. Upon any termination of this Agreement before the end of a
month, the fee for such part of that month shall be prorated according to the
proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to the Adviser, the value of the Fund's net assets
shall be computed at the times and in the manner specified in the Fund's
Prospectus and/or the Statement.
7. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Fund will bear certain
other expenses to be incurred in its operation, including: (a) payment of the
fees payable to the Adviser under paragraph 6 hereof; (b) organization expenses;
(c) brokerage fees and commissions; (d) taxes; (e) interest charges on
borrowings; (f) the costs of liability insurance or fidelity bond coverage for
the Fund's officers and employees, and directors' and officers' errors and
omissions insurance coverage; (g) legal, auditing and accounting fees and
expenses; (h) charges of the Fund's Custodian and Transfer and Dividend
Disbursing Agent; (i) the Fund's pro rata portion of dues, fees and charges of
any trade association of which the Fund is a member; (j) the expenses of
printing, preparing, distributing and mailing proxies, stock certificates and
all reports required by the Securities and Exchange Commission and State
securities administrations, including the Fund's prospectuses, statements of
additional information, and notices to shareholders; (k) filing fees for the
registration or qualification of the Fund and its shares under federal or state
securities laws; (l) the fees and expenses involved in registering and
maintaining registration of the Fund's shares with the Securities and Exchange
Commission and State securities administrations; (m) the expenses of holding
shareholder meetings; (n) the compensation, including fees, of any of the Fund's
unaffiliated directors, officers or employees; (o) 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
portfolios; (p) expenses of personnel performing shareholder servicing
functions; and (q) litigation and other extraordinary or non-recurring expenses
and other expenses properly payable by the Fund.
8. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund
(including fees pursuant to this Agreement, but excluding interest, taxes,
brokerage, distribution fees paid pursuant to the Fund's plan of distribution
and, if permitted by state securities commissions, extraordinary expenses)
exceed the most restrictive expense limitation imposed by the securities law of
any state having jurisdiction over the Fund, the Adviser will reimburse the Fund
for the amount of such excess up to the amount of fees accrued for such fiscal
year hereunder. Such expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
9. Service to Other Companies or Accounts
The Fund understands that the Adviser and its affiliates may
act as investment adviser to fiduciary and other managed accounts and to one or
more other investment companies, and the Fund has no objection to their so
acting, provided that whenever the Fund and one or more other clients advised by
the Adviser and its affiliates have available funds for investment, investments
suitable and appropriate for each will be allocated in a manner believed by the
Adviser to be equitable to each client. The Fund recognizes that in some cases
this procedure may adversely affect whether a particular security is available
to the Fund, the size of the position obtainable for the Fund or the price at
which that position may be obtained or disposed. In addition, the Fund
understands that the persons employed by the Adviser to assist in the
performance of the Adviser's duties under this Agreement will not devote their
full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of the Adviser or any affiliate of the
Adviser to engage in and devote time and attention to other businesses or to
render services of any kind or nature.
10. Term of Agreement
This Agreement shall become effective on the date hereof,
shall continue in effect for two years and thereafter shall continue for
successive annual periods, provided such continuance is specifically approved at
least annually by (i) the Fund's Directors or (ii) a vote of a "majority" (as
defined in the 0000 Xxx) of the Fund's outstanding voting securities (as defined
in the 1940 Act), provided that in either event the continuance is also approved
by a majority of the Directors who are not "interested persons" (as defined in
the 0000 Xxx) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable, without penalty, on 60 days' written notice, by the Fund's Directors
or by vote of holders of a majority of the Fund's outstanding voting securities,
or upon 60 days' written notice, by the Adviser. This Agreement will also
terminate automatically in the event of its assignment (as defined in the 1940
Act).
11. Use of the Word "Gabelli"
It is understood and agreed that the word "Gabelli" is the
Adviser's property for copyright and other purposes. The Fund 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 Fund further agrees that, in the event that the
Adviser shall cease to act as an investment adviser to the Fund, the Fund shall
promptly take all necessary and appropriate action to change its name to one
that does not include the word "Gabelli"; provided, however, that the Fund may
continue to use such name if the Adviser consents in writing to such use.
12. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York giving effect to the conflict
of law rules thereof.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
THE GABELLI VALUE FUND INC.
By: XXXXX XXXXXX
AGREED TO AND ACCEPTED:
GABELLI FUNDS, INC.
By: ILLEGIBLE
