Investment Advisory Agreement
This Agreement is made by and between Madison Investment
Advisors, Inc. (d.b.a. Bankers Finance Advisors, LLC), a
Wisconsin Corporation, Bankers Finance Advisors, LLC, a
Wisconsin limited liability company having its principal place
of business in Arlington, Virginia (the foregoing entities
referred to collectively as the "Advisor"), and Government
Investors 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.
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.
6. Compensation to the Advisor. For its services
hereunder, the Trust shall pay to the Advisor a management fee
equal to: one-half (1/2) percent per annum of the average daily
net assets of the Trust during each respective month. Such fee
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 net
assets calculated for the day.
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, and extra-ordinary and non-recurring
expenses, which exceed during any fiscal year one and one-half
percent (1-1/2%) of the Trust's daily average net assets up to
$40,000,000 and one percent (1%) of the amount, if any, by which
such assets exceed $40,000,000. 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 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 Adviser 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 "Government Investors 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 "Government Investors Trust" (although its rights to the
initials "GIT" 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.
15. Control of Advisor. Bankers Finance Advisors, LLC is
controlled by Madison Investment Advisors, Inc. a registered
investment advisor located in Madison, Wisconsin. As such, it
is expected that Bankers Finance Advisors, 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.
Madison Investment Advisors, Inc.
By: (signature)
Xxxxxxxxx X. Xxxxx, its Vice President
Bankers Finance Advisors, LLC
By: (signature)
Xxxxx X. Xxxxxxx, Member
By: (signature)
Xxxxxxxxx X. Xxxxx, Madison Investment Advisors, Inc
Member
Government Investors Trust
By: (signature)
Xxxxxx X. Xxxxxx, Trustee
By: (signature)
Xxxxx Xxxxxx, Xx., Trustee
By: (signature)
Xxxxxxx Xxxxxxx, Trustee
By: (signature)
Xxxxx X. Xxxxxxx, Trustee
