INVESTMENT ADVISORY AGREEMENT
Exh.d.2.
THIS
AGREEMENT is made and entered
into on this [___] day of [___], 2007, by and between KEELEY FUNDS,
INC., a Maryland corporation (the “Corporation”), and KEELEY
ASSET MANAGEMENT CORP., an Illinois corporation (the
“Adviser”).
1. ENGAGEMENT
OF THE ADVISER. The Adviser shall manage the investment and
reinvestment of the assets of the series of the Fund designated as Keeley
Small-Mid Cap Value Fund (the “Fund”), subject to the supervision of the board
of directors of the Corporation, for the period and on the terms set forth
in
this Agreement. The Adviser shall give due consideration to the investment
policies and restrictions and the other statements concerning the Fund in the
Corporation’s articles of incorporation, bylaws, and to the provisions of any
applicable law. The Adviser shall be deemed for all purposes to be an
independent contractor and not an agent of the Corporation, and unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Corporation in any way.
The
Adviser is authorized to make the
decisions to buy and sell securities of the Corporation, to place the
Corporation's portfolio transactions with securities broker-dealers, and to
negotiate the terms of such transactions, including brokerage commissions on
brokerage transactions, on behalf of the Corporation. The Adviser is authorized
to exercise discretion within the Corporation's policy concerning allocation
of
its portfolio brokerage, including allocation to brokers who provide research
and other services to the Corporation, and to Keeley Investment Corp., as
permitted by law, and in each case in so doing shall not be required to make
any
reduction in its investment advisory fees.
2. EXPENSES
TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its own
expense, office space to the Corporation and all necessary office facilities,
equipment and personnel for managing the assets of the Corporation. The Adviser
shall also assume and pay all other expenses incurred by it in connection with
managing the assets of the Corporation.
3. EXPENSES
TO BE PAID BY THE CORPORATION. The Corporation shall pay all charges of
depositories, custodians and other agencies for the safekeeping and servicing
of
its cash, securities and other property and of its transfer agents, registrars
and its dividend disbursing and redemption agents, if any; all payments to
the
Administrator; all charges of legal counsel and of independent auditors; dues;
organizational expenses of the Corporation; all expenses in determination of
price computations, placement of securities orders and related bookkeeping;
all
compensation of directors other than those affiliated with the Adviser and
all
expenses incurred in connection with their services to the Corporation; all
12b-1 plan expenses; all expenses of publication of notices and reports to
its
stockholders; all expenses of proxy solicitations of the Corporation or its
board of directors; all taxes and corporate fees payable to federal, state
or
other governmental agencies, domestic or foreign; all stamp or other transfer
taxes; all expenses of printing and mailing certificates for shares of the
Corporation; and all expenses of bond and insurance coverage required by law
or
deemed advisable by the Corporation's board of directors. In addition to the
payment of expenses, the Corporation shall also pay all brokers’ commissions and
other charges relative to the purchase and sale of portfolio securities, and
all
other expenses not paid by the Administrator.
4. COMPENSATION
OF THE ADVISER. For the services to be rendered and the charges and
expenses to be assumed and to be paid by the Adviser hereunder, the Corporation
shall pay to the Adviser a fee at the following annual rate:
[-
1.00% of the first $$350,000,000
of net asset value of the Fund;
-
0.90% of the second $350,000,000 of
net asset value of the Fund;
-
0.80% of net assets in excess of
$700,000,000 of net asset value of the Fund.]
The
fee
shall be calculated daily and paid monthly or before the 15th day immediately
following each month.
5. SERVICES
OF THE ADVISER NOT EXCLUSIVE. The services of the Adviser to the
Corporation hereunder are not to be deemed exclusive, and the Adviser shall
be
free to render similar services to others so long as its services under this
Agreement are not impaired by such other activities.
6. SERVICES
OTHER THAN AS THE ADVISER. Within the limits permitted by law the
Adviser may receive compensation from the Corporation for services performed
by
it for the Corporation which are not within the scope of the duties of the
Adviser under this Agreement.
7. LIMITATION
OF LIABILITY OF THE ADVISER. The Adviser shall not be liable to the
Corporation or its stockholders for any loss suffered by the Corporation or
its
stockholders from or as a consequence of any act or omission of the Adviser,
or
of any of the directors, officers, employees or agents of the Adviser, in
connection with or pursuant to this Agreement, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or by reason of reckless disregard by the Adviser
of
its obligations and duties under this Agreement.
8. DURATION,
RENEWAL AND TERMINATION. This Agreement shall continue in effect
until two years from the date of its execution, and thereafter from year to
year
only so long as such continuance is specifically approved at least annually
by
the board of directors of the Adviser and by either the board of directors
of
the Corporation (including a majority of those directors who are not parties
to
this Agreement or “interested persons” of any such party) or by vote of the
holders of a “majority of the outstanding shares of the Fund” (which term as
used throughout this Agreement shall be construed in accordance with the
definition of “vote of a majority of the outstanding voting securities of a
company” in section 2(a)(42) of the Investment Company Act of 1940). This
Agreement may be terminated by action of a majority of the directors of the
Corporation or by the holders of a majority of the outstanding shares of the
Fund upon sixty (60) days written notice to the Adviser.
9. AMENDMENT.
This Agreement may not be amended without the affirmative vote of a majority
of
the directors of the Corporation and of the holders of a majority of the
outstanding shares of the Fund, except to the extent that any such amendment
is
permitted under the Investment Company Act of 1940 and the rules and regulations
of the Securities and Exchange Commission thereunder.
By:
XXXX
X. XXXXXX, XX.
______________________
Xxxx
X.
Xxxxxx, Xx., President
KEELEY
ASSET MANAGEMENT CORP.
By:
XXXX
X. XXXXXX, XX.
_______________________
Xxxx
X.
Xxxxxx, Xx., President
