AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT, dated May
12, 1992, between The Gabelli Growth Fund (the "Fund"), a Massachusetts business
trust, and Gabelli Funds, Inc. (the "Adviser"), a Delaware Corporation.
In consideration of the mutual promises and agreements herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to amend and restate the advisory agreement
dated February 27, 1987 between the Fund and the Adviser, it is agreed by and
between the parties hereto that the foregoing agreement is hereby amended and
restated in its entirety to read as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act
as investment adviser to the Fund with respect to the investment of the assets
of the Fund and to supervise and arrange the purchase and sale of assets held in
the investment portfolio of the Fund.
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 Fund's Board of Trustees, the Adviser
shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Fund's assets and in connect
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 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.
(b) 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 and 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 Trustees as well as minutes of such meetings in all matters
required by applicable law to be acted upon by the Board of Trustees.
(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 (the "Act"), and of any rules or
regulations in force thereunder; (ii) any other applicable provision
of law; (iii) the provisions or the Declaration of Trust and By-Laws
of the Fund, 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 Fund's Registration Statement on Form N-lA and (v)
any policies and determinations of the Fund's Board of Trustees
(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 trustees fees of
any officers or trustees of the Fund who are affiliated persons (as
defined in the Act) of the Adviser. If in any fiscal year the Fund's
aggregate expenses (excluding interest, taxes, distribution expenses,
brokerage commissions and extraordinary expenses) exceed the most
restrictive expense limitation imposed by the securities laws of any
state in which the shares of the Fund are registered or qualified for
sale, the Adviser will reimburse the Fund for the amount of such
excess up to the amount of fees accrued for such fiscal year
hereunder. The amount of such reimbursement shall be calculated
monthly and an appropriate amount shall be held back or released to
the Adviser each month so that the aggregate amount held back at any
particular time shall equal the net amount of the reimbursement on a
cumulative year-to-date basis. As of the end of the year the final
amount of the total reimbursement shall be calculated and the
appropriate amount released to the Fund or the Adviser or paid to the
Fund by the Adviser. Subject to the foregoing, the Fund shall be
responsible for the payment of all of its other expenses, including
(i) payment of the fees payable to the Adviser under paragraph 4
hereon; (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 trustees' 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 Fund
is a member; (x) the expenses of printing, preparing and mailing
proxies, stock 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 Fund's trustees,
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 Fund; and (xvii)
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, directors, 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 Fund may have which may
not be waived under applicable law.
(f) Nothing in this Agreement shall prevent the Adviser or any director,
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 directors, 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 mean
prompt, efficient and reliable execution at the most favorable price obtainable.
Under such conditions as may be specified by the Fund's Board of Trustees 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 affiliate, Gabelli & Company, Inc.; (b) pay
commissions to brokers other than its affiliate 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; and (c) consider
sales by brokers (other than its affiliate 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 the selection of brokers and dealers for Fund portfolio
transactions.
4. Compensation of the Adviser
(a) Subject to paragraph 2(b), the Fund 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
(other than any amounts payable to the Adviser pursuant to paragraph
4(b)) a fee computed and payable monthly in an amount equal on an
annualized basis to 1.0% 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 prorated 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) The Fund will pay the Adviser separately for any costs and expenses
incurred by the Adviser in connection with distribution of the Fund's
shares in accordance with the terms (including proration or nonpayment
as a result of allocations of payments) of a Plan of Distribution (the
"Plan") adopted for the Fund pursuant to Rule 12b-1 under the Act as
such Plan may be in effect from time to time; provided, however, that
no payments shall be due or paid to the Adviser hereunder unless and
until this Agreement shall have been approved by Trustee Approval and
Disinterested Trustee Approval (as such terms are defined in such
Plan). The Fund reserves the right to modify or terminate such Plan at
any time as specified in the Plan and Rule 12b-1, and this
subparagraph shall thereupon be modified or terminated to the same
extent without further action of the parties. The persons authorized
to direct the payment of the funds pursuant to this Agreement and the
Plan shall provide to the Fund's Board of Trustees, and the Trustees
shall review, at least quarterly a written report of the amount so
paid and the purposes for which such expenditures were made.
(c) For purposes of this Agreement, the net asset of the Fund shall be
calculated pursuant to the procedures adopted by resolutions of the
Trustees of the Fund for calculating the net asset value of the Fund's
shares.
5. Indemnity
(a) The Fund hereby agrees to indemnify the Adviser and each of the
Adviser's directors, officers, employees, and agents (including any
individual who serves at the Adviser's request as director, officer,
partner, trustee or the like of another corporation) and controlling
persons (each 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 he 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 Fund and furthermore, in the case of any criminal
proceeding, so long as he had no reasonable cause to believe that the
conduct was unlawful, provided, however, that (1) no indemnitee shall
be indemnified hereunder against any liability to the Fund or its
shareholders or any expense of such indemnitee arising by reason of
(i) willful misfeasance, (ii) bad faith, (iii) gross negligence or
(iv) reckless disregard of the duties involved in the conduct of his
position (the conduct referred to in such clauses (i) through (iv)
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 Fund and that
such indemnitee appears to have acted in good faith in the reasonable
belief that his action was in the best interest of the Fund 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 Fund.
Notwithstanding the foregoing, the Fund shall not be obligated to
provide any such indemnification to the extent such provision would
waive any right which the Fund cannot lawfully waive.
(b) The Fund shall make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be
sought hereunder if the Fund 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 Fund unless it is subsequently determined that he is
entitled to such indemnification and if the trustees of the Fund
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 Fund shall be insured against losses arising by
reason of any lawful advances, or (C) a majority of a quorum of
trustees of the Fund who are neither "interested persons" of the Fund
(as defined in Section 2(a)(19) of the Act) nor parties to the
proceeding ("Disinterested Non-Party Trustees") 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 Trustees of the Fund, 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 he may be lawfully entitled.
6. Duration and Termination
This Agreement shall become effective upon on 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 may be terminated by the Adviser at any time without penalty
upon giving the Fund sixty days written notice (which notice may be
waived by the Fund) and may be terminated by the Fund 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 Fund shall be directed or approved by the vote of a majority of
the Trustees of the Fund in office at the time or by the vote of the
holders of a "majority of the 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 Trustees of the Fund
who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or any
agreements related to the Plan. 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 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 investment adviser to the Fund with respect to the investment of
assets allocated to the Fund, both the Fund and the Fund shall
promptly take all necessary and appropriate action to change their
names to names which do not include the word "Gabelli"; provided,
however, that the Fund and the Fund may continue to use the word
"Gabelli" if the Adviser consents in writing to such use.
7. Notices
[FN]
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 GROWTH FUND
By: /s/ Xxxxx X. Xxxxxx
Xxxxx Xxxxxx
Title: Vice President & Treasurer
GABELLI FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
