Investment Advisory Agreement
This
Agreement is made by and between Madison Investment Advisors, Inc. (d/b/a
Madison Mosaic, LLC), a Wisconsin Corporation, Madison Mosaic, LLC, a Wisconsin
limited liability company having its principal place of business in Madison,
Wisconsin (the foregoing entities referred to collectively as the "Advisor"),
and Madison Mosaic Income Trust, a Massachusetts business trust created pursuant
to a Declaration of Trust filed with the Clerk of the City of Boston,
Massachusetts (the "Trust").
The
parties hereto, intending so to be legally bound, agree with each other as
follows:
1. Appointment and
Acceptance. The Trust hereby appoints the Advisor to manage the
investment of its assets and to administer its affairs; and the Advisor hereby
accepts such appointment. The Advisor shall employ its best efforts to supervise
the investment management of the Trust.
2. Discretion of the
Advisor. In the performance of its duties hereunder the Advisor shall
have full authority to act as it deems advisable, except that it shall be bound
by the terms of the Declaration of Trust and By-Laws of the Trust, and by any
written direction given by the Trustees of the Trust not inconsistent with this
Agreement; and it shall be guided by the investment policies of the Trust from
time to time duly in effect. Subject only to the foregoing, the Advisor shall
have full authority to purchase and sell securities for the Trust; the Advisor
may determine the persons with whom such securities transactions are to be made
and the terms thereof.
3. Other Activities of the
Advisor. The Advisor and any of its affiliates shall be free to engage in
any other lawful activity, including the rendering to others of services similar
to those rendered to the Trust hereunder; and the Advisor or any interested
person thereof shall be free to invest in the Trust as a shareholder, to become
an officer or Trustee of the Trust if properly elected, or to enter into any
other relationship with the Trust approved by the Trustees and in accordance
with law.
The
Advisor agrees that it will not deal with itself or with any affiliated person
or promoter or principal underwriter of the Trust (or any affiliated person of
the foregoing) acting as a principal, in effecting securities transactions for
the account of the Trust. It is further agreed that in effecting any such
transaction with such a person acting as a broker or agent, compensation to such
person shall be permitted, provided that the transaction is in the ordinary
course of such person's business and the amount of such compensation does not
exceed one percent of the purchase or sale price of the securities
involved.
If the
Advisor or any affiliate thereof provides any other goods or services which
otherwise would be paid for by the Trust pursuant to this Agreement, then the
Trust shall pay the Advisor or such affiliate the cost reasonably allocated by
the Advisor or affiliate to such goods or services.
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4. Investment by
Advisor. The Advisor shall not take, and shall not permit any of its
shareholders, officers, directors or employees to take long or short positions
in the shares of the Trust, except for the purchase of shares of the Trust for
investment purposes at the same price as that available to the public at the
time of purchase, or in connection with the original capitalization of the
Trust. In connection with purchases or sales of portfolio securities for the
account of the Trust, neither the Advisor nor any officer, director or employee
of the Advisor shall act as a principal or receive any commission
therefor.
5. Expenses of the
Trust. The Trust shall pay all of its expenses not expressly assumed by
the Advisor herein. Without limitation, the expenses of the Trust, assumed by
the Trust hereby, shall include the following:
a.
Expenses related to the continued existence of the Trust.
b. Fees
and expenses of the Trustees (except those affiliated with the Advisor), the
officers and the administrative employees of the Trust.
c. Fees
paid to the Advisor hereunder.
d. Fees
and expenses of preparing, printing and distributing official filings, reports,
prospectuses and documents required pursuant to applicable state and Federal
securities law and expenses of reports to shareholders.
e. Fees
and expenses of custodians, transfer agents, dividend disbursing agents,
shareholder servicing agents, registrars, and similar agents.
f.
Expenses related to the issuance, registration, repurchase, exchange and
redemption of shares and certificates representing shares.
g.
Auditing, accounting, legal, insurance, portfolio administration, association
membership, printing, postage, and other administrative expenses.
h.
Expenses relating to qualification or licensing of the Trust, shares in the
Trust, or officers, employees and agents of the Trust under applicable state and
Federal securities law.
i.
Expenses related to shareholder meetings and proxy solicitations and
materials.
j.
Interest expense, taxes and franchise fees, and all brokerage commissions and
other costs related to purchase and sales of portfolio securities.
In
addition, the Trust shall assume all losses and liabilities incurred in the
administration to the Trust and of its investment portfolio; and it shall pay
such non-recurring expenses as may arise through litigation, administrative
proceedings, claims against the Trust, the indemnification of Trustees,
officers, employees, shareholders and agents, or otherwise.
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6. Compensation to the
Advisor. For its services hereunder, the Trust shall pay to the advisor a
management fee equal to four-tenths (4/10) percent per annum of the average
daily net assets of the Government and Intermediate Income (to be known as Core
Bond effective May 1, 2008) portfolios of the Trust and equal to three-tenths
(3/10) percent per annum of the average daily net assets of the Institutional
Bond Fund. As of this date, such management fee shall be payable hereunder with
respect to the portfolios comprising the following series of shares: The
Government Fund Shares, the Intermediate Income Fund Shares (to be known as Core
Bond Fund shares effective May 1, 2008) and the Institutional Bond Fund Shares.
Such fees shall be payable monthly as of the last day of the month and shall be
the sum of the daily fees calculated as one-three hundred sixty-fifth (1/365),
except in leap years one-three hundred sixty-sixth (1/366), of the annual fee
based upon each portfolio's assets calculated for the day. The Trust
shall pay no fees with respect to the Corporate Income Shares (COINS) series of
shares.
With
respect to any portfolio of the Trust subsequently authorized by the Trustees,
the management fee provided herein may be revised upward or downward by mutual
agreement between the parties at the time the additional portfolio is
authorized, provided such revision is approved by the Trustees, including the
vote of a majority of those Trustees who are not interested persons of the
Trust, cast in person at a meeting called for that purpose. The Advisor shall
have the right to waive any portion of its management fee during any period, and
it may permanently reduce the amount of the fee under such terms as it may
determine by written notice thereof to the Trust. The Advisor shall have the
right to share its management fee with others or make payments out of its
management fee to others, as it solely determines.
7. Limitation of Expenses of
the Trust. In addition to investment management expenses related to the
Trust, the Advisor shall pay the fees and expenses of any Trustees and officers
of the Trust affiliated with the Advisor, all promotional expenses of the Trust
to the extent not paid for by the Trust pursuant to a Plan of Distribution, the
rent expense of the Trust's principal executive office premises, and the
expenses of formation of the Trust.
The
Advisor shall further reimburse the Trust for all of its expenses, excluding
securities transaction commissions and expenses, taxes, interest, share
distribution expenses, and extra-ordinary and non-recurring expenses, which
exceed during any fiscal year the applicable expense limitation in any State or
other jurisdiction in which the Trust, during the fiscal year, becomes subject
to regulation by qualification or sale of its shares. Any such required
reimbursement shall be made within a reasonable period following the close of
the fiscal year to which it relates; and the Advisor may elect to pay all or a
portion of any such reimbursement it anticipates will be required at any time or
from time to time during the fiscal year to which the reimbursement
relates.
8. Limitation of Advisor's
Liability. The Advisor shall not be liable for any loss incurred in
connection with its duties hereunder, nor for any action taken, suffered or
omitted and believed by it to be advisable or within the scope of its authority
or discretion, except for
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acts or
omissions involving willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties assumed by it under this Agreement.
9. Limitation of Trust's
Liability. The Advisor acknowledges that it has received notice of and
accepts the limitations upon the Trust's liability set forth in its Declaration
of Trust. The Advisor agrees that the Trust's obligations hereunder in any case
shall be limited to the Trust and to its assets and that the Advisor shall not
seek satisfaction of any such obligation from the shareholders of the Trust nor
from any Trustee, officer, employee or agent of the Trust.
10. Term of Agreement.
This Agreement shall continue in effect for two years from the date of its
execution; and it shall continue in force thereafter (but subject to the
termination provisions below), provided that it is specifically approved at
least annually by the Trustees of the Trust or by a majority vote of the
outstanding securities of each series and class of the Trust's shares with
respect to which it is to continue in effect, and in either case by the vote of
a majority of the Trustees who are not interested persons of the Trust, cast in
person at a meeting called for that purpose.
11. Termination by
Notice. Notwithstanding any provision of this Agreement, it may be
terminated at any time, without penalty, by the Trustees of the Trust or, with
respect to any series or class of the Trust's shares, by the vote of a majority
of the outstanding voting securities of such series or class, or by the Advisor,
upon sixty days written notice to the other party.
12. Termination Upon
Assignment. This Agreement may not be assigned by the Advisor and shall
automatically terminate immediately upon any assignment. Nothing herein shall
prevent the Advisor from employing any other persons or agents, including
Madison Investment Advisors, Inc., at its own expense, to assist it in the
performance of its duties hereunder.
13. Name of the Trust. In
consideration of its formation of the Trust and the related expenses, the
Advisor has retained the rights to the name "Mosaic Income Trust" (and any
similar name), which rights the Trust hereby acknowledges. The Trust, however,
shall have the exclusive right to the use of the name "Mosaic Income Trust"
(although its rights to the "Mosaic" portion of such name shall be
non-exclusive) so long as this contract shall remain in force, except that the
Advisor may withdraw such rights from the Trust at any time, effective
immediately or at a time specified, upon written notice to the Trust. In the
event of such notice, the Trust agrees that it will cause the question of
continuation of this Agreement to be put to a vote of the shareholders of the
Trust as soon as practicable after such notice has been given.
14. Use of Terms. The
terms "affiliated person", "interested person", "assignment", "broker", and
"majority of the outstanding voting securities" as used herein, shall have the
same meanings as in the Investment Company Act of 1940 and any applicable
regulations thereunder.
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15. Control of Advisor.
Madison Mosaic, LLC is controlled by Madison Investment Advisors, Inc. a
registered investment advisor located in Madison, Wisconsin. As such, it is
expected that Madison Mosaic, LLC and Madison Investment Advisors, Inc. will
work closely together in the management of the portfolios including but not
limited to portfolio management, research, securities trading, and other
investment management responsibilities.
In witness whereof, the
parties have caused this Agreement to be signed on their behalf by their
respective officers duly authorized and their respective seals to be affixed
hereto, this 31 day of July, 1996 [conformed April 1, 2008 to reflect matters
affected by the passage of time].
Madison
Investment Advisors, Inc.
By:
/s/
Xxxxx
Xxxxxxx, its President
Madison
Mosaic, LLC
By:
/s/
Xxxxxxxxx
Xxxxx, its President
By:
/s/
Xxxxx
Xxxxxx, Xx., Trustee
By:
/s/
Xxxxxxx
Xxxxxxx, Trustee
By:
/s/
Xxxxx
Xxxxxxx, Trustee