INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on the ____ day of ______________,
20__, between STRONG INCOME TRUST, a Delaware Trust (the "Trust"), and STRONG
CAPITAL MANAGEMENT, INC., a Wisconsin corporation (the "Adviser").
WITNESSETH
WHEREAS, the Trust is an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust is authorized to create separate series, each with its
own separate investment portfolio; and
WHEREAS, the Trust desires to retain the Adviser, which is a registered
investment adviser under the Investment Advisers Act of 1940, as amended, to act
as investment adviser for each series of the Trust listed in Schedule A attached
hereto, and to manage each of their assets;
NOW, THEREFORE, the Trust and the Adviser do mutually agree and promise as
follows:
1. EMPLOYMENT. The Trust hereby appoints Adviser as investment adviser for
each series of the Trust listed on Schedule A attached hereto (a "Portfolio" or
collectively, the "Portfolios"), and Adviser accepts such appointment. Subject
to the supervision of the Board of Trustees of the Trust and the terms of this
Agreement, the Adviser shall act as investment adviser for and manage the
investment and reinvestment of the assets of any Portfolio. The Adviser is
hereby authorized to delegate some or all of its services subject to necessary
approval, which includes without limitation, the delegation of its investment
adviser duties hereunder to a subadvisor pursuant to a written agreement (a
"Subadvisory Agreement") under which the subadvisor shall furnish the services
specified therein to the Adviser. The Adviser will continue to have
responsibility for all investment advisory services furnished pursuant to a
Subadvisory Agreement. The Adviser shall discharge the foregoing
responsibilities subject to the control of the Board of Trustees of the Trust
and in compliance with such policies as the Board of Trustees may from time to
time establish, and in compliance with the objectives, policies, and limitations
for each Portfolio set forth in such Portfolio's prospectus(es) and statement of
additional information, as amended from time to time, and applicable laws and
regulations. The Adviser shall (i) provide for use by the Trust, at the
Adviser's expense, office space and all necessary office facilities, equipment
and personnel for servicing the investments of each Portfolio, (ii) pay the
salaries and fees of all officers and trustees of the Trust who are "interested
persons" of the Adviser as such term is defined under the 1940 Act, and (iii)
pay for all clerical services relating to research, statistical and investment
work.
2. ALLOCATION OF PORTFOLIO BROKERAGE. The Adviser is authorized, subject to
the supervision of the Board of Trustees of the Trust, to place orders for the
purchase and sale of securities and to negotiate commissions to be paid on such
transactions. The Adviser is authorized to select the brokers or dealers that
will execute the purchases and sales of securities for the Portfolios and is
directed to use its best efforts to obtain the best net results as described in
the Portfolios' statements of additional information. The Adviser may, on behalf
of each Portfolio, pay brokerage commissions to a broker which provides
brokerage and research services to the Adviser in excess of the amount another
broker would have charged for effecting the transaction, provided (i) the
Adviser determines in good faith that the amount is reasonable in relation to
the value of the brokerage and research services provided by the executing
broker in terms of the particular transaction or in terms of the Adviser's
overall responsibilities with respect to a Portfolio and the accounts as to
which the Adviser exercises investment discretion, (ii) such payment is made in
compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and other applicable state and federal laws, and (iii) in the opinion
of the Adviser, the total commissions paid by a Portfolio will be reasonable in
relation to the benefits to such Portfolio over the long term.
3. EXPENSES. Each Portfolio will pay all its expenses and the Portfolio's
allocable share of the Trust's expenses, other than those expressly stated to be
payable by the Adviser hereunder, which expenses payable by a Portfolio shall
include, without limitation, interest charges, taxes, brokerage commissions and
similar expenses, distribution and shareholder servicing expenses, expenses of
issue, sale, repurchase or redemption of shares, expenses of registering or
qualifying shares for sale, expenses of printing and distributing prospectuses
to existing shareholders, charges of custodians (including sums as custodian and
for keeping books and similar services of the Portfolios), transfer agents
(including the printing and mailing of reports and notices to shareholders),
registrars, auditing and legal services, clerical services related to
recordkeeping and shareholder relations, printing of share certificates, fees
for directors who are not "interested persons" of the Adviser, and other
expenses not expressly assumed by the Adviser under Paragraph 1 above.
Notwithstanding the foregoing, the Adviser will not bear expenses of the Trust
or any Portfolio, which would result in the Trust's inability to qualify as a
regulated investment company under the provisions of the Internal Revenue Code.
4. AUTHORITY OF ADVISER. The Adviser shall for all purposes herein be
considered an independent contractor and shall not, unless expressly authorized
and empowered by the Trust or any Portfolio, have authority to act for or
represent the Trust or any Portfolio in any way, form or manner. Any authority
granted by the Trust on behalf of itself or any Portfolio to the Adviser shall
be in the form of a resolution or resolutions adopted by the Board of Trustees
of the Trust.
5. COMPENSATION OF ADVISER. For the services to be furnished by the Adviser
hereunder, each Portfolio listed in Schedule A shall pay the Adviser, and the
Adviser agrees to accept as full compensation for all services rendered
hereunder, an Advisory Fee. The Advisory Fee shall be calculated by applying a
daily rate, based on the annual percentage rates as set forth in Schedule B of
the net asset value of the Portfolio determined and payable as of the close of
business on each business day.
6. RIGHTS AND POWERS OF ADVISER. The Adviser's rights and powers with
respect to acting for and on behalf of the Trust or any Portfolio, including the
rights and powers of the Adviser's officers and directors, shall be as follows:
(a) Trustees, officers, agents and shareholders of the Trust are or
may at any time or times be interested in the Adviser as officers,
directors, agents, shareholders or otherwise. Correspondingly, directors,
officers, agents and shareholders of the Adviser are or may at any time or
times be interested in the Trust as directors, officers, agents and as
shareholders or otherwise, but nothing herein shall be deemed to require
the Trust to take any action contrary to its Articles of Incorporation or
any applicable statute or regulation. The Adviser shall, if it so elects,
also have the right to be a shareholder in any Portfolio.
(b) Except for initial investments in a Portfolio, not in excess of
$100,000 in the aggregate for the Trust, the Adviser shall not take any
long or short positions in the shares of the Portfolios and that insofar as
it can control the situation it shall prevent any and all of its officers,
directors, agents or shareholders from taking any long or short position in
the shares of the Portfolios. This prohibition shall not in any way be
considered to prevent the Adviser or an officer, director, agent or
shareholder of the Adviser from purchasing and owning shares of any of the
Portfolios for investment purposes. The Adviser shall notify the Trust of
any sales of shares of any Portfolio made by the Adviser within two months
after purchase by the Adviser of shares of any Portfolio.
(c) The services of the Adviser to each Portfolio and the Trust are
not to be deemed exclusive and Adviser shall be free to render similar
services to others as long as its services for others does not in any way
hinder, preclude or prevent the Adviser from performing its duties and
obligations under this Agreement. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Trust or to any of the Portfolios or to any shareholder
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
7. DURATION AND TERMINATION. The following shall apply with respect to the
duration and termination of this Agreement:
(a) This Agreement shall begin for each Portfolio as of the date this
Agreement is first executed and shall continue in effect for two years.
With respect to each Portfolio added by execution of an Addendum to
Schedule A, the term of this Agreement shall begin on the date of such
execution and, unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect to the date two years after such
execution. Thereafter, in each case, this Agreement shall remain in effect,
for successive periods of one year, subject to the provisions for
termination and all of the other terms and conditions hereof if: (a) such
continuation shall be specifically approved at least annually by (i) either
the Board of Trustees of the Trust or a majority of a Portfolio's
outstanding voting securities, and in either case (ii) a majority of the
Trustees who are not parties to this Agreement or interested persons of any
such party (other than as Trustees of the Trust), cast in person at a
meeting called for that purpose; and (b) Adviser shall not have notified a
Portfolio in writing at least sixty (60) days prior to the anniversary date
of this Agreement in any year thereafter that it does not desire such
continuation with respect to that Portfolio. Prior to voting on the renewal
of this Agreement, the Board of Trustees of the Trust may request and
evaluate, and the Adviser shall furnish, such information as may reasonably
be necessary to enable the Trust's Board of Trustees to evaluate the terms
of this Agreement.
(b) Notwithstanding whatever may be provided herein to the contrary,
this Agreement may be terminated at any time with respect to any Portfolio,
without payment of any penalty, by affirmative vote of a majority of the
Board of Trustees of the Trust, or by vote of a majority of the outstanding
voting securities of that Portfolio, as defined in Section 2(a)(42) of the
1940 Act, or by the Adviser, in each case, upon sixty (60) days' written
notice to the other party and shall terminate automatically in the event of
its assignment.
8. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be approved by the
vote of a majority of the Board of Trustees of the Trust, including a majority
of the Trustees who are not parties to this Agreement or interested persons of
any such party to this Agreement (other than as Trustees of the Trust) cast in
person at a meeting called for that purpose, and, where required by Section
15(a)(2) of the 1940 Act, on behalf of a Portfolio by a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the 0000 Xxx)
of such Portfolio. If such amendment is proposed in order to comply with the
recommendations or requirements of the Securities and Exchange Commission or
state regulatory bodies or other governmental authority, or to obtain any
advantage under state or federal laws, the Trust shall notify the Adviser of the
form of amendment which it deems necessary or advisable and the reasons
therefor, and if the Adviser declines to assent to such amendment, the Trust may
terminate this Agreement forthwith.
9. NOTICE. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid to the other party at the principal place of
business of such party.
10. ASSIGNMENT. This Agreement shall neither be assignable nor subject to
pledge or hypothecation and in the event of assignment, pledge or hypothecation
shall automatically terminate. For purposes of determining whether an
"assignment" has occurred, the definition of "assignment" in Section 2(a)(4) of
the 1940 Act, or any rules or regulations promulgated thereunder, shall control.
11. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
12. USE OF THE ADVISER'S NAME. The Trust shall not use the name of the
Adviser in any prospectus, sales literature or other material relating to the
Portfolios in a manner not approved by the Adviser prior thereto; PROVIDED,
HOWEVER, that the approval of the Adviser shall not be required for any use of
its name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the SEC or any state securities authority or
any other appropriate regulatory, governmental or judicial authority; PROVIDED,
FURTHER, that in no event shall such approval be unreasonably withheld or
delayed.
13. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act which are prepared or maintained by the Adviser on behalf of the Trust
are the property of the Trust and will be surrendered promptly to the Trust on
request.
14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Wisconsin, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the day and year first stated above.
Attest: Strong Capital Management, Inc.
_____________________________________ ____________________________________
[name] [name and title]
Attest: Strong Income Trust
_____________________________________ ____________________________________
[name] [name and title]
SCHEDULE A
The Portfolio(s) of the Trust currently subject to this Agreement are as
follows:
Date of Addition
PORTFOLIO(S) TO THIS AGREEMENT
Attest: Strong Capital Management, Inc.
_____________________________________ ____________________________________
[name] [name and title]
Attest: Strong Income Trust
_____________________________________ ____________________________________
[name] [name and title]
SCHEDULE B
Compensation pursuant to Paragraph 5 of this Agreement shall be calculated
in accordance with the following schedules:
PORTFOLIO(S) ANNUAL FEE
Attest: Strong Capital Management, Inc.
____________________________________ ____________________________________
[name] [name and title]
Attest: Strong Income Trust
____________________________________ ____________________________________
[name] [name and title]
