INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this 7th day of April, 2005, 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 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.
KEELEY FUNDS, INC.
By: /s/ XXXX X. XXXXXX, XX.
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Xxxx X. Xxxxxx, Xx., President
KEELEY ASSET MANAGEMENT CORP.
By: /s/ XXXX X. XXXXXX, XX.
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Xxxx X. Xxxxxx, Xx., President
