AMENDED ALLOCATION AGREEMENT
AMENDED
ALLOCATION AGREEMENT
AGREEMENT
by and between MEMBERS Mutual Funds, Ultra Series Fund, Madison Mosaic
Government Money Market, Equity, Income and Tax-Free Trusts and the Madison
Strategic Sector Premium Fund (the “Funds”), management investment companies
registered under the Investment Company Act of 1940, as amended (the “1940
Act”), Madison Mosaic, LLC, Madison Asset Management, LLC, Madison Scottsdale,
LC, Concord Asset Management, LLC, Mosaic Funds Distributor, LLC and Madison
Investment Advisors, Inc. (together, the “Advisor”) (collectively with the
Funds, the “Insureds”).
W I T
N E S S E T H:
WHEREAS,
pursuant to the requirements of Rule 17g-1 under the 1940 Act, the Funds are
required to maintain a fidelity bond against larceny and embezzlement covering
certain of its officers and employees; and
WHEREAS, Rule 17g-1 provides that when
two or more investment companies are managed and/or distributed by the same
person or persons, such investment companies may obtain a joint insured bond
covering themselves and such person or persons and their affiliates;
and
WHEREAS,
the Funds are managed by Madison Investment Advisors, Inc. through its wholly
owned subsidiaries, Madison Mosaic, LLC and Madison Asset Management, LLC;
and
WHEREAS, the Insureds have entered into
a Joint Insured Bond (the “Bond”); and
WHEREAS,
the Insureds desire to provide for: (1) the method by which the amount of
coverage provided under the Bond will be determined from time to time and (2) an
equitable and proportionate allocation of any proceeds received under the Bond
in the event that two or more of the Insureds suffer loss and consequently are
entitled to recover under the Bond;
NOW THEREFORE, it is hereby agreed
among the parties hereto as follows:
1. Amount of Coverage
Maintained The amount of the fidelity coverage under the Bond
shall at all times be at least equal in the amount to the sum of (i) the total
amount of coverage which the Funds would have been required to provide and
maintain individually pursuant to the schedule set forth in paragraph (d) of
Rule 17g-I under the 1940 Act had the Funds not been a named Insured under the
Bond, and (ii) the amount of each bond which each Insured other than the Funds
would have been required to provide and maintain pursuant to federal statutes or
regulations had it not been a named insured under the Bond. The
amount of fidelity coverage under the Bond shall be approved at least annually
by the Boards of Trustees of the Funds, including a majority of those Trustees
who are not “interested persons” of the Funds as defined by Section 2(a)(19) of
the 1940 Act.
2. Allocation of
Recovery In the event an actual pecuniary loss is suffered by
any two or more of the Insureds under circumstances covered by the terms of the
Bond, any recovery under the Bond shall be allocated among such Insureds as
follows:
(a)
If the total amount of coverage provided under the Bond exceeds or is equal to
the amount of the combined total amount of loss suffered by the Insureds
suffering loss, then each such Insured shall be entitled to recover the amount
of its actual loss.
(b) If
the amount of loss suffered by each Insured suffering loss exceeds its minimum
coverage requirements as set forth in Section 1 hereof and the amount of such
Insureds’ combined actual losses exceeds the total amount of coverage provided
under the Bond, then each such Insured shall be entitled to recover (i) its
minimum coverage requirement (ii) to the extent there exists any excess
coverage, the proportion of such excess coverage which its minimum coverage
requirement bears to the amount of the combined minimum coverage requirements of
the Insureds suffering actual loss; provided, however,
that if the actual loss of any of such Insureds is less than the sum of (i) and
(ii) above, then such difference shall be recoverable by the other Insured or
Insureds in proportion to their relative minimum coverage
requirements.
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(c)
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If
(i) the amount of actual loss suffered by any Insured is less than or
equal to its minimum coverage requirement, (ii) the amount of actual loss
of another Insured or the other Insureds exceeds its or their minimum
coverage requirement or requirements, and (iii) the amount of the combined
actual losses of the Insureds exceeds the total amount of coverage
provided under the Bond, then any Insured which has suffered an amount of
actual loss less than or equal to its minimum coverage requirement shall
be entitled to recover its actual loss. If only one other
Insured has suffered actual loss, it shall be entitled to recover the
remainder of the amount of the coverage under the Bond. If more
than one other Insured has suffered actual loss in excess of the remaining
coverage, then they shall allocate such remaining amount of coverage in
accordance with paragraph (b) of this Section
2.
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3. Allocation of
Premium No premium shall be paid under the Bond unless the
Board of Trustees of the Funds, including a majority of those Trustees who are
not “interested persons” of the Funds as defined by Section 2(a)(19) of the 1940
Act, shall approve the portion of the premium to be paid by the
Funds. The premium payable on the Bond shall be allocated between the
Funds and the other Insured as determined by the Boards of Trustees of the
Funds.
4. Amendment This
Agreement may not be amended or modified in any manner except by a written
agreement executed by the parties.
5. Filing with the
Commission A copy of this Agreement and any amendment thereto
shall be filed with the Securities and Exchange Commission within 10 days after
the execution thereof to the extent required by Regulation 270.17g-1(g) under
the 1940 Act.
6. Applicable
Law This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
Wisconsin.
7. Limitation of Liability of
Trustees and Shareholders A copy of the organizational
documents each of the Funds is on file with the Secretary of State of the state
of such Funds’ organization, and it is hereby agreed that this Agreement is
executed on behalf of the Trustees of the Funds as Trustees and not individually
and that the obligations of this Agreement are not binding upon any of the
Trustees, officers and shareholders of the Funds individually but are binding
only upon the assets and property of the Funds.
IN WITNESS WHEREOF, each of the parties
has caused this Agreement, as amended, to be first executed in its name and
behalf by its duly authorized representatives effective as of July 1, 2009 to
coincide with the Bond expiring December 15, 2009 (as amended effective as of
the date of this Agreement). This Agreement (as amended) may be renewed annually
by vote of the Trustees of the Funds. This Agreement represents an
amendment and restatement of an existing Allocation Agreement executed by the
Madison Mosaic Government Money Market, Income, Equity and Tax-Free Trusts which
was renewed in 1997, 1998, 1999, 2000, 2001, 2003, 2003 and 2004, amended in
Spring 2005 to include the Madison Strategic Sector Premium Fund, and renewed in
2005, 2006 (amended to reflect the addition of the word “Madison” to “Mosaic”),
2007 and 2008, the date set forth above (amended and restated to include MEMBERS
Mutual Funds and Ultra Series Fund) and October 21, 2009.
RESOLUTION
OF THE BOARDS OF TRUSTEES OF MADISON MOSAIC
GOVERNMENT
MONEY MARKET, MADISON MOSAIC INCOME TRUST,
MADISON
MOSAIC EQUITY TRUST, MADISON MOSAIC TAX-FREE TRUST,
MEMBERS
MUTUAL FUNDS, ULTRA SERIES FUND AND
October
21, 2009
WHEREAS, the Trustees of
Madison Mosaic Government Money Market, Income, Equity and Tax-Free Trusts,
MEMBERS Mutual Funds, Ultra Series Fund and Madison Strategic Sector Premium
Fund (each a “Trust” and collectively the "Trusts") are required to maintain a
certain fidelity bond pursuant to Section 17(g) of the Investment Company Act of
1940, as amended; and
WHEREAS, the Trustees must
consider the form and amount of such fidelity bond annually;
RESOLVED that the fidelity
bond written by ICI Mutual Insurance Company (the "Bond") in the aggregate
amount of $6,000,000 covering, among others, officers and employees of the
Trust, in accordance with the requirements of Rule 17g-1 promulgated by the
Securities and Exchange Commission under Section 17(g) of the Investment Company
Act of 1940, as amended, is reasonable in form and amount, after having given
due consideration to, among other things, the value of the aggregate assets of
the Trust to which any person covered under the Bond may have access, the type
and terms of the arrangements made for the custody and safekeeping of assets of
the Trust's portfolio, the nature of the securities in the portfolio, the number
of other parties named as insured parties under the Bond and the nature of the
business activities of the other parties;
FURTHER RESOLVED, that the
premium to be paid by the Trust under the Bond be, and hereby is, approved by
vote of a majority of the Trustees (all Trustees voting) and separately by a
majority of the "non-interested" Trustees, after having given due consideration
to, among other things, the number of other parties insured under the Bond, the
nature of business activities of those other parties, the amount of the Bond and
the extent to which the share of the premium allocated to the Trust under the
Bond is less than the premium the Trust would have had to pay had it maintained
a single insured bond;
FURTHER RESOLVED, that the
Bond be and hereby is approved by vote of a majority of the Trustees (all
Trustees voting) and separately by a majority of the "non-interested"
trustees;
FURTHER RESOLVED, that the
Allocation Agreement in the form submitted at this meeting is hereby approved
and renewed for another year;
FURTHER RESOLVED, that the
appropriate officers of the Trust be, and they hereby are, authorized and
directed to prepare, execute, and file such amendments and supplements to the
aforesaid Agreement, and to take such other action as may be necessary or
appropriate in order to conform to the provisions of the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder; and
FURTHER RESOLVED, that the
Secretary of the Trust shall file a copy of such documents with and give such
notice to the Securities and Exchange Commission as is required under paragraph
(g) of Rule 17g-1 promulgated by the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended.
