EXHIBIT NO. 99(g)(1)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made the 6th day of November, 1986, by and between MFS
MUNICIPAL INCOME TRUST, a Massachusetts business trust (the "Fund"), and
MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Fund is engaged in business as a closed-end investment
company registered under the Investment Company Act of 1940;
WHEREAS, the Adviser is willing to provide business management services
to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Adviser. The Adviser shall provide the Fund with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its funds. The Adviser shall act as
Adviser to the Fund and as such shall furnish continuously an investment program
and shall determine from time to time what securities shall be purchased, sold
or exchanged and what portion of the assets of the Fund shall be held
uninvested, subject always to the restrictions of its Declaration of Trust,
dated September 18, 1986 (the "Declaration") and By-Laws (the "By-Laws"), as
each may be amended from time to time, to the provisions of the Investment
Company Act of 1940 (the "Act") and the Rules, Regulations and orders thereunder
and to the Fund's then current registration statement under the Act. The Adviser
shall also make recommendations as to the manner in which voting rights, rights
to consent to corporate action and any other rights pertaining to the Fund's
portfolio securities shall be exercised. Should the Trustees at any time,
however, make any definite determination as to investment policy and notify the
Adviser thereof in writing, the Adviser shall be bound by such determination for
the period, if any, specified in such notices or until similarly notified that
such determination has been revoked. The Adviser shall take, on behalf of the
Fund, all actions which it deems necessary to implement the investment policies
determined as provided above, and in particular to place all orders for the
purchase or sale of portfolio securities for the Fund's account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Fund to give instruc-
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tions to the Custodian of the Fund as to deliveries of securities and payments
of cash for the account of the Fund. In connection with the selection of such
brokers or dealers and the placing of such orders, the Adviser is directed to
seek for the Fund execution at the best available price. Subject to this
requirement of seeking the best available price, securities may be bought from
or sold to broker dealers who have furnished statistical, research and other
information or services to the Adviser or the Fund subject to any applicable
laws, rules or regulations.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its own
expense investment advisory and administrative services, office space, equipment
and clerical personnel for servicing the investments of the Fund and maintaining
its organization and investment advisory facilities and executive and
supervisory personnel for managing the investments and effecting the portfolio
transactions of the Fund. The Adviser shall arrange, if desired by the Fund, for
directors, officers and employees of the Adviser to serve as Trustees, officers
or agents of the Fund if duly elected or appointed to such positions and subject
to their individual consent and to any limitations imposed by law. It is
understood that the Fund will pay all of its own expenses including, without
limitation, compensation of Trustees not affiliated with the Adviser,
governmental fees, interest charges, taxes, membership dues in the Investment
Company Institute allocable to the Fund, fees and expenses of independent
auditors, of legal counsel and of any transfer agent, registrar and dividend
disbursing agent of the Fund, expenses of servicing shareholder accounts,
expenses of preparing, printing and mailing share certificates shareholders'
reports, notices, proxy statements and reports to governmental officers and
commissions, brokerage and other expenses connected with the execution,
recording and settlement of portfolio security transactions, insurance premiums,
fees and expenses of the custodian for all services to the Fund, including
safekeeping of funds and securities and maintaining required books and accounts,
calculation of the net asset value of shares of the Fund, expenses of
shareholder meetings, expenses relating to the repurchase of shares, expenses
relating to the issuance, registration and qualification of shares of the Fund,
and the preparation, printing and mailing of prospectuses for such purposes
(except to the extent that any Distribution Agreement to which the Trust is a
party provides that another party is to pay some or all of such expenses).
3. Compensation of the Adviser. For the services to be rendered and for the
facilities to be provided, the Fund shall pay to the Adviser out of the assets
of the Fund an investment advisory fee computed and paid monthly in an amount
equal to
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the sum of .40% of the average weekly net assets of the Fund and 6.32% of the
gross income (i.e., income other than gains from the sale of securities or gains
received from futures contracts) of the Fund, in each case on an annualized
basis, for its then-current fiscal year.
4. Covenants of the Adviser. The Adviser agrees that it will not deal with
itself, or with the Trustees of the Fund's principal underwriter, if any, as
principals in making purchases or sales of securities or other property for the
account of the Fund, except as permitted by the Investment Company Act of 1940
and the Rules, Regulations or Orders thereunder, will not take a long or short
position in the shares of the Fund except as permitted by the Declaration of
Trust, and will comply with all other provisions of the Declaration of Trust and
By-Laws and the then current Prospectus of the Fund relative to the Adviser and
its directors and officers.
5. Limitation of Liability of the Adviser. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution and management of the
Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder. As used in this ARTICLE 5, the term "Adviser" shall
include directors, officers and employees of the Adviser as well as the
corporation itself.
6. Activities of the Adviser. The services of the Adviser to the Fund are not to
be deemed to be exclusive, the Adviser being free to render investment advisory
and/or other services to others. The Adviser may permit other Fund clients to
use the initials "MFS" in their names. The Fund agrees that if the Adviser shall
for any reason no longer serve as Adviser to the Fund, the Fund will change its
name so as to delete the initials "MFS". It is understood that Trustees,
officers and shareholders of the Fund are or may be or become interested in the
Adviser, as directors, officers, employees, or otherwise and that directors,
officers and employees, or otherwise and that directors, officers and employees
of the Adviser are or may be or become similarly interested in the Fund and that
the Adviser may be or become interested in the Fund and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement shall
become effective on the day and year first above written and shall govern the
relations between the parties hereto thereafter, and shall remain in force until
August 1, 1988 on which date it will terminate unless its continuance after
August 1, 1988 is "specifically approved at least annually" (i) by the vote of a
majority of the Trustees of the Fund who are not "interested persons" of the
Fund or of the Adviser at a meeting specifically called for the purpose of
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voting on such approval, and (ii) by the Trustees of the Fund, or by "vote of a
majority of the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by "vote of a majority of the outstanding voting
securities" of the Fund, or by the Adviser, in each case not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Fund.
The terms "specifically approved at least annually", "vote of a
majority of the outstanding voting securities", "assignment," "affiliated
person," and "interested person," when used in this Agreement, shall have the
respective meanings specified in and shall be construed in a manner consistent
with, the Investment Company Act of 1940 and the Rules and Regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Fund has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Fund, individually,
but bind only the trust estate.
MFS MUNICIPAL INCOME TRUST
By: XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx, Trustee
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: H. XXXXX XXXXXXX, XX.
H. Xxxxx Xxxxxxx, Xx., President
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