EXHIBIT INDEX
EXHIBIT A:
Attachment to item 77C:
Submission of matters to a vote of Security holders.
EXHIBIT B:
Attachment to item 77Q1(e):
Investment Advisory Agreement
EXHIBIT C:
Attachment to item 77Q1(e):
Investment Advisory Agreement
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EXHIBIT A:
EXHIBIT TO ITEM 77C
A Special Meeting of Shareholders of Xxxxxxxx Funds, Inc. (the
"Company") was held on April 27, and May 9, 2000. The following
proposals were submitted for a vote of the shareholders:
1. To consider and vote on a new investment advisory agreement
between the Company, on behalf of Xxxxxxxx Partners Strategy Fund (the
"Strategy Fund"), and Gabelli Funds, LLC.:
With respect to the proposal relating to the approval of a new
investment advisory agreement between the Company, on behalf of the
Strategy Fund, and Gabelli Funds, LLC., the following votes and
percentages were recorded:
FOR AGAINST ABSTAIN
4,170, 250 122,966 164,972
2. To consider and vote on a new investment advisory agreement
between the Company, on behalf of Xxxxxxxx Partners Capital Value Fund
(the "Capital Value Fund"), and Gabelli Funds, LLC.:
With respect to the proposal relating to the approval of a new
investment advisory agreement between the Company, on behalf of the
Capital Value Fund, and Gabelli Funds, LLC., the following votes and
percentages were recorded:
FOR AGAINST ABSTAIN
9,262,367 146,860 164,812
3. To elect eight Directors of the Company:
With respect to the proposal relating to the election of eight
directors of the Company, the following votes and percentages were
recorded:
FOR WITHHOLDING
AUTHORITY
X. Xxxxx Xxxxxxxx 19,739,114 655,774
Xxxxxxx X. Xxxxxxxx 19,714,505 680,383
Xxxxxxx X. Xxxxxxx 19,741,480 653,408
Xxxxxxx X. Xxxxxx 19,733,285 661,602
Xxxxxxx X. Xxxxxxxxx 19,699,479 695,409
Xxxxxx X. Xxxxxx 19,720,191 675,441
Xxxxxx X. Xxxxx 19,723,000 671,888
Xxxxx X. Van der Xx 19,730,551 664,337
4. To ratify the selection of Ernst & Young LLP as auditors of the
Company for the fiscal year ending April 30, 2000:
With respect to the proposal relating to the ratification of the
selection of Xxxxx & Young LLP as auditors of the Company for the
fiscal year ending April 30, 2000, the following votes and percentages
were recorded:
FOR AGAINST ABSTAIN
19,831,785 222,547 341,300
EXHIBIT B:
EXHIBIT TO ITEM 77Q1(e)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of May 22, 2000,
between Gabelli Xxxxxxxx Funds, Inc., a Maryland corporation (the
"Company"), on behalf of the Gabelli Xxxxxxxx Capital Value Fund
(the "Fund") and Gabelli Funds, LLC (the "Adviser"), a New York
limited liability company.
In consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and
between the parties hereto as follows:
1. In General
(a) The Company is an open-end investment company which, as
of the date hereof, consists of two series: the Gabelli Xxxxxxxx
Strategy Fund and the Fund.
(b) 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. The Adviser may delegate any or all of its
responsibilities to one or more sub-advisers or administrators,
subject to the approval of the Board of Directors of the Company.
Such delegation shall not relieve the Adviser of its duties and
responsibilities hereunder.
2. Duties and obligations of the Adviser with respect to
investment of assets of the Fund
(a) Subject to the succeeding provisions of this paragraph
and subject to the direction and control of the Company's Board
of Directors, the Adviser shall (i) act as investment adviser for
and supervise and manage the investment and reinvestment of the
Fund's assets and in connection therewith have complete
discretion in purchasing and selling securities and other assets
for the Fund and in voting, exercising consents and exercising
all other rights appertaining to such securities and other assets
on behalf of the Fund; (ii) arrange for the purchase and sale of
securities and other assets held in the investment portfolio of
the Fund and (iii) oversee the administration of all aspects of
the Fund's business and affairs and provide, or arrange for
others whom it believes to be competent to provide, certain
services as specified in subparagraph (b) below. Nothing
contained herein shall be construed to restrict the 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 the Fund's shares to the extent not transmitted by the
Fund's distributor or others who purchase and redeem shares;
(iii) initiating all money transfers to the Fund's custodian and
from the Fund's custodian for the payment of the Fund's expenses,
investments, dividends and share redemptions; (iv) reconciling
account information and balances among the Fund's custodian,
transfer agent, distributor, dividend disbursing agent and the
Adviser; (v) providing the Fund with such office space and
facilities, utilities, office equipment and personnel 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 Company's registration
statement and the Fund's prospectus (including its statement of
additional information); (vii) arrange for 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 Company's Board of Directors and any committees thereof as
well as minutes of such meetings in all matters required by
applicable law to be acted upon by the Board of Directors.
(c) In the performance of its duties under this Agreement,
the Adviser shall at all times use all reasonable efforts to
conform to, and act in accordance with, any requirements imposed
by (i) the provisions of the Investment Company Act of 1940, as
amended (the "Act") and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and of any rules or regulations in
force thereunder; (ii) any other applicable provision of law;
(iii) the provisions of the Charter, as amended, and By-Laws, as
amended, of the Company, as such documents are amended from time
to time; (iv) the investment objectives, policies and
restrictions applicable to the Fund as set forth in the Company's
Registration Statement on Form N-1A (the "Registration
Statement") and the provisions of the Internal Revenue Code of
1986, as amended, relating to regulated investment companies and
(v) any policies and determinations of the Board of Directors of
the Company relating to the Fund.
(d) The Adviser will provide qualified personnel to fulfill
its duties hereunder and will bear all costs and expenses
(including any overhead and personnel costs) incurred in
connection with its duties hereunder and shall bear the costs of
any salaries or directors fees of any officers or directors of
the Company who are affiliated persons (as defined in the Act) of
the Adviser. Subject to the foregoing, the Company, on behalf of
the Fund, shall be responsible for the payment of all the Fund's
other expenses, including (i) payment of the fees payable to the
Adviser under paragraph 4 hereof; (ii) organizational expenses;
(iii) brokerage fees and commissions; (iv) taxes; (v) interest
charges on borrowings; (vi) the cost of liability insurance or
fidelity bond coverage for the Company's officers and employees,
and directors' and officers' errors and omissions insurance
coverage; (vii) legal, auditing and accounting fees and expenses;
(viii) charges of the Fund's custodian, transfer agent and
dividend disbursing agent; (ix) the Fund's pro rata portion of
dues, fees and charges of any trade association of which the
Company is a member; (x) the expenses of printing, preparing and
mailing proxies, stock certificates and reports, including the
prospectus and statement of additional information, and notices
to shareholders; (xi) filing fees for the registration or
qualification of the Fund as a separate portfolio of an open-end
investment company 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 Company's directors, officers or
employees who are not affiliated persons of the Adviser; (xv) all
expenses of computing the Fund's net asset value per share,
including any equipment or services obtained solely for the
purpose of pricing shares or valuing the Fund's investment
portfolio; (xvi) expenses of personnel performing shareholder
servicing functions and all other distribution expenses payable
by the Fund pursuant to any 12b-1 plan or otherwise legally
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 Company with respect to 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 Company 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 so
long as its services to the Fund are not impaired thereby, 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, provided
that the Adviser shall seek to provide fair and equitable
treatment to the Fund in the selection of portfolio investments
and the allocation of investment opportunities as between the
Fund and other advisory clients of the Adviser.
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 Company's Board of Directors in the interest of its
shareholders and in 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 its selection of
brokers and dealers for the Fund's portfolio transactions.
4. Compensation of the Adviser
(a) Subject to paragraph 2(b), the Company, on behalf of 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 daily and payable monthly in an amount equal on an
annualized basis to 1.00% of the Fund's daily average net assets;
provided, however, that the Adviser agrees that it will waive
such fees during the period prior to the second anniversary of
the date of this Agreement on aggregate net assets of the Fund at
the time this Agreement becomes effective to the extent necessary
to ensure the total expense ratio of the Fund (other than
extraordinary expenses) during such period, is not greater than
the total expense ratio of the Fund (other than extraordinary
expenses) for calendar year 1999. 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 Plans of Distribution (collectively, the "Plan")
adopted by 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 in the manner
required by 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 Directors, and the Directors 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 value of the net
assets of the Fund shall be calculated pursuant to the procedures
adopted by resolutions of the Directors of the Fund for
calculating the net asset value of the Fund's shares.
5. Indemnity.
(a) The Company, on behalf of 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 with respect to this Agreement 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 (i) no indemnitee shall be
indemnified hereunder against any liability to the Company
(including the Fund) or its shareholders or any expense of such
indemnitee arising by reason of (A) willful misfeasance, (B) bad
faith, (C) gross negligence or (D) reckless disregard of the
duties involved in the conduct of his position (the conduct
referred to in such clauses (A) through (D) being sometimes
referred to herein as "disabling conduct"), (ii) 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
(iii) 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 Directors of the
Company. 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.
(b) The Company, on behalf of 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 Company receives a written affirmation of the indemnitee's
good faith belief that the standard of conduct necessary for
indemnification has been met, a written undertaking to reimburse
the Company if it is subsequently determined that the standard of
conduct has not been met and 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: (i) the indemnitee shall provide a
security in form and amount acceptable to the Company for his
undertaking, (ii) the Company shall be insured against losses
arising by reason of the advances or (iii) 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.
(c) All determinations with respect to indemnification
hereunder shall be made only following (i) 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, (ii) in the absence of such a decision, a
reasonable determination based upon a review of the facts, that
such indemnitee was not liable by reason of disabling conduct, by
(A) a majority vote of a quorum of the Disinterested Non-Party
Directors of the Company, or (B) an 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. Provision of Information to the Company
The Adviser shall keep the Company informed of developments
materially affecting the Fund, and will, on its own initiative,
furnish the Company from time to time with whatever information
the Adviser believes is appropriate for this purpose.
7. Effective Date; Duration; Modification; and Termination
(a) 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.
(b) The modification of any of the nonmaterial terms of this
Agreement may be approved by a vote of the majority of those
Directors of the Company who are not interested persons of any
party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval.
(c) This Agreement may be terminated by the Adviser at any
time without penalty upon giving the Company sixty days written
notice (which notice may be waived by the Company) and may be
terminated by the Company, on behalf of the Fund, at any time
without penalty upon giving the Adviser sixty days written notice
(which notice may be waived by the Adviser), provided that such
termination by the Company shall be directed or approved by the
vote of the Board of Directors of the Company 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
Directors 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.)
8. Name
It is understood and hereby agreed that the word "Gabelli"
is the property of the Adviser for copyright and other purposes.
The Company 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 Company further agrees that, in the
event that the Adviser shall cease to act as investment adviser
to the Fund, the Company (including the Fund) shall as soon as
practicable thereafter take all necessary and appropriate action
to change its name to names which do not include the word
"Gabelli"; provided, however, that the Company (including the
Fund) may continue to use the word "Gabelli" if the Adviser
consents in writing to such use.
9. Notices
Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from
time to time for the receipt of such notice and shall be deemed
to be received on the earlier of the date actually received or on
the fourth day after the postmark if such notice is mailed first
class postage prepaid.
10. 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 and the Advisers 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.
GABELLI XXXXXXXX FUNDS, INC., on behalf of
GABELLI XXXXXXXX CAPITAL VALUE FUND
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
GABELLI FUNDS, LLC
By: /s/ Xxxxx X. XxXxx
Name: Xxxxx X. XxXxx
Title: Secretary
EXHIBIT C:
EXHIBIT TO ITEM 77Q1(e)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of May 22, 2000,
between Gabelli Xxxxxxxx Funds, Inc., a Maryland corporation (the
"Company"), on behalf of the Gabelli Xxxxxxxx Strategy Fund (the
"Fund") and Gabelli Funds, LLC (the "Adviser"), a New York limited
liability company.
In consideration of the mutual promises and agreements herein
contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, it is agreed by and between the
parties hereto as follows:
1. In General
(a) The Company is an open-end investment company which, as of
the date hereof, consists of two series: the Gabelli Xxxxxxxx
Capital Value Fund and the Fund.
(b) 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. The Adviser may delegate any or all of its
responsibilities to one or more sub-advisers or administrators,
subject to the approval of the Board of Directors of the Company.
Such delegation shall not relieve the Adviser of its duties and
responsibilities hereunder.
2. Duties and obligations of the Adviser with respect to investment
of assets of the Fund
(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and control of the Company's Board of
Directors, the Adviser shall (i) act as investment adviser for and
supervise and manage the investment and reinvestment of the Fund's
assets and in connection therewith have complete discretion in
purchasing and selling securities and other assets for the Fund and
in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the
Fund; (ii) arrange for the purchase and sale of securities and
other assets held in the investment portfolio of the Fund and (iii)
oversee the administration of all aspects of the Fund's business
and affairs and provide, or arrange for others whom it believes to
be competent to provide, certain services as specified in
subparagraph (b) below. Nothing contained herein shall be construed
to restrict the 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 the Fund's shares to the extent not transmitted by the Fund's
distributor or others who purchase and redeem shares; (iii)
initiating all money transfers to the Fund's custodian and from the
Fund's custodian for the payment of the Fund's expenses,
investments, dividends and share redemptions; (iv) reconciling
account information and balances among the Fund's custodian,
transfer agent, distributor, dividend disbursing agent and the
Adviser; (v) providing the Fund with such office space and
facilities, utilities, office equipment and personnel 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 Company's registration statement and the Fund's
prospectus (including its statement of additional information);
(vii) arrange for 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 Company's Board of
Directors and any committees thereof as well as minutes of such
meetings in all matters required by applicable law to be acted upon
by the Board of Directors.
(c) In the performance of its duties under this Agreement, the
Adviser shall at all times use all reasonable efforts to conform
to, and act in accordance with, any requirements imposed by (i) the
provisions of the Investment Company Act of 1940, as amended (the
"Act") and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and of any rules or regulations in force
thereunder; (ii) any other applicable provision of law; (iii) the
provisions of the Charter, as amended, and By-Laws, as amended, of
the Company, as such documents are amended from time to time; (iv)
the investment objectives, policies and restrictions applicable to
the Fund as set forth in the Company's Registration Statement on
Form N-1A (the "Registration Statement") and the provisions of the
Internal Revenue Code of 1986, as amended, relating to regulated
investment companies and (v) any policies and determinations of the
Board of Directors of the Company relating to the Fund.
(d) The Adviser will provide qualified personnel to fulfill
its duties hereunder and will bear all costs and expenses
(including any overhead and personnel costs) incurred in connection
with its duties hereunder and shall bear the costs of any salaries
or directors fees of any officers or directors of the Company who
are affiliated persons (as defined in the Act) of the Adviser.
Subject to the foregoing, the Company, on behalf of the Fund, shall
be responsible for the payment of all the Fund's other expenses,
including (i) payment of the fees payable to the Adviser under
paragraph 4 hereof; (ii) organizational expenses; (iii) brokerage
fees and commissions; (iv) taxes; (v) interest charges on
borrowings; (vi) the cost of liability insurance or fidelity bond
coverage for the Company's officers and employees, and directors'
and officers' errors and omissions insurance coverage; (vii) legal,
auditing and accounting fees and expenses; (viii) charges of the
Fund's custodian, transfer agent and dividend disbursing agent;
(ix) the Fund's pro rata portion of dues, fees and charges of any
trade association of which the Company is a member; (x) the
expenses of printing, preparing and mailing proxies, stock
certificates and reports, including the prospectus and statement of
additional information, and notices to shareholders; (xi) filing
fees for the registration or qualification of the Fund as a
separate portfolio of an open-end investment company 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 Company's directors, officers or
employees who are not affiliated persons of the Adviser; (xv) all
expenses of computing the Fund's net asset value per share,
including any equipment or services obtained solely for the purpose
of pricing shares or valuing the Fund's investment portfolio; (xvi)
expenses of personnel performing shareholder servicing functions
and all other distribution expenses payable by the Fund pursuant to
any 12b-1 plan or otherwise legally 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 Company with respect to 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 Company 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 so long as its services
to the Fund are not impaired thereby, 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, provided that the Adviser shall seek
to provide fair and equitable treatment to the Fund in the
selection of portfolio investments and the allocation of investment
opportunities as between the Fund and other advisory clients of the
Adviser.
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
Company's Board of Directors in the interest of its shareholders
and in 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 its selection
of brokers and dealers for the Fund's portfolio transactions.
4. Compensation of the Adviser
(a) Subject to paragraph 2(b), the Company, on behalf of 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 daily and
payable monthly in an amount equal on an annualized basis to 0.85%
of the Fund's daily average net assets; provided, however, that the
Adviser agrees that it will waive such fees during the period prior
to the second anniversary of the date of this Agreement on
aggregate net assets of the Fund at the time this Agreement becomes
effective to the extent necessary to ensure the total expense ratio
of the Fund (other than extraordinary expenses) during such period,
is not greater than the total expense ratio of the Fund (other than
extraordinary expenses) for calendar year 1999. 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 Plans of
Distribution (collectively, the "Plan") adopted by 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 in the manner required by 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 Directors, and the
Directors 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 value of the net
assets of the Fund shall be calculated pursuant to the procedures
adopted by resolutions of the Directors of the Fund for calculating
the net asset value of the Fund's shares.
5. Indemnity.
(a) The Company, on behalf of 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 with
respect to this Agreement 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 (i) no indemnitee
shall be indemnified hereunder against any liability to the Company
(including the Fund) or its shareholders or any expense of such
indemnitee arising by reason of (A) willful misfeasance, (B) bad
faith, (C) gross negligence or (D) reckless disregard of the duties
involved in the conduct of his position (the conduct referred to in
such clauses (A) through (D) being sometimes referred to herein as
"disabling conduct"), (ii) 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 (iii) 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
Directors of the Company. 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.
(b) The Company, on behalf of 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 Company receives a written affirmation of the indemnitee's good
faith belief that the standard of conduct necessary for
indemnification has been met, a written undertaking to reimburse
the Company if it is subsequently determined that the standard of
conduct has not been met and 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: (i) the indemnitee shall provide a security
in form and amount acceptable to the Company for his undertaking,
(ii) the Company shall be insured against losses arising by reason
of the advances or (iii) 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.
(c) All determinations with respect to indemnification
hereunder shall be made only following (i) 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, (ii) in the absence of such a decision, a reasonable
determination based upon a review of the facts, that such
indemnitee was not liable by reason of disabling conduct, by (A) a
majority vote of a quorum of the Disinterested Non-Party Directors
of the Company, or (B) an 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. Provision of Information to the Company
The Adviser shall keep the Company informed of developments
materially affecting the Fund, and will, on its own initiative,
furnish the Company from time to time with whatever information the
Adviser believes is appropriate for this purpose.
7. Effective Date; Duration; Modification; and Termination
(a) 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.
(b) The modification of any of the nonmaterial terms of this
Agreement may be approved by a vote of the majority of those
Directors of the Company who are not interested persons of any
party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval.
(c) This Agreement may be terminated by the Adviser at any
time without penalty upon giving the Company sixty days written
notice (which notice may be waived by the Company) and may be
terminated by the Company, on behalf of the Fund, at any time
without penalty upon giving the Adviser sixty days written notice
(which notice may be waived by the Adviser), provided that such
termination by the Company shall be directed or approved by the
vote of the Board of Directors of the Company 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 Directors 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.)
8. Name
It is understood and hereby agreed that the word "Gabelli" is
the property of the Adviser for copyright and other purposes. The
Company 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 Company further agrees that, in the event that the
Adviser shall cease to act as investment adviser to the Fund, the
Company (including the Fund) shall as soon as practicable
thereafter take all necessary and appropriate action to change its
name to names which do not include the word "Gabelli"; provided,
however, that the Company (including the Fund) may continue to use
the word "Gabelli" if the Adviser consents in writing to such use.
9. Notices
Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from
time to time for the receipt of such notice and shall be deemed to
be received on the earlier of the date actually received or on the
fourth day after the postmark if such notice is mailed first class
postage prepaid.
10. 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
and the Advisers 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.
GABELLI XXXXXXXX FUNDS, INC., on behalf of
GABELLI XXXXXXXX STRATEGY FUND
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
GABELLI FUNDS, LLC
By: /s/ Xxxxx X. XxXxx
Name: Xxxxx X. XxXxx
Title: Secretary
