Exhibit No. 4(a)
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of March 1, 2000, between XXXXXXXX XXXXXXXX SECURITIES
TRUST, a Delaware business trust ("Trust"), and XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended ("1934
Act"), and as an investment adviser under the Investment Advisers Act of 1940,
as amended,
WHEREAS the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company, and
currently has two distinct series of shares of beneficial interest, which
correspond to distinct portfolios and have been designated as PaineWebber
Enhanced S&P 500 Fund and PaineWebber Enhanced Nasdaq-100 Fund; and
WHEREAS the Trust desires to retain Xxxxxxxx Xxxxxxxx as investment adviser
and administrator to furnish certain administrative, investment advisory and
portfolio management services to the Trust with respect to PaineWebber Enhanced
S&P 500 Fund and PaineWebber Enhanced Nasdaq-100 Fund and any other Series as to
which this Contract may hereafter be made applicable (each a ?Series?), and
Xxxxxxxx Xxxxxxxx is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints Xxxxxxxx Xxxxxxxx as investment
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adviser and administrator of the Trust and each Series for the period and on the
terms set forth in this Contract. Xxxxxxxx Xxxxxxxx accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties as Investment Adviser.
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(a) Subject to the supervision of the Trust's Board of Trustees ("Board"),
Xxxxxxxx Xxxxxxxx will provide a continuous investment program for a Series,
including investment research and management with respect to all securities and
investments and cash equivalents in the Series. Xxxxxxxx Xxxxxxxx will determine
from time to time what securities and other investments will be purchased,
retained or sold by the Series. Xxxxxxxx Xxxxxxxx may delegate to a sub-adviser,
in whole or in part, Xxxxxxxx Xxxxxxxx' duty to provide a continuous investment
management program with respect to any Series, including the provision of
investment management services with respect to a portion of the Series' assets,
in accordance with paragraph 5 of this Agreement.
(b) Xxxxxxxx Xxxxxxxx agrees that in placing orders with brokers, it will
attempt to obtain the best net result in terms of price and execution; provided
that, on behalf of any Series, Xxxxxxxx Xxxxxxxx may, in its discretion, use
brokers who provide the Series with research, analysis, advice and similar
services to execute portfolio transactions on behalf of the Series, and Xxxxxxxx
Xxxxxxxx may pay to those brokers in return for brokerage and research services
a higher commission than may be charged by other brokers, subject to Xxxxxxxx
Xxxxxxxx'
determining in good faith that such commission is reasonable in terms either of
the particular transaction or of the overall responsibility of Xxxxxxxx Xxxxxxxx
to such Series and its other clients and that the total commissions paid by such
Series will be reasonable in relation to the benefits to the Series over the
long term. In no instance will portfolio securities be purchased from or sold to
Xxxxxxxx Xxxxxxxx, or any affiliated person thereof, except in accordance with
the federal securities laws and the rules and regulations thereunder, or any
applicable exemptive orders. Whenever Xxxxxxxx Xxxxxxxx simultaneously places
orders to purchase or sell the same security on behalf of a Series and one or
more other accounts advised by Xxxxxxxx Xxxxxxxx, such orders will be allocated
as to price and amount among all such accounts in a manner believed to be
equitable to each account. The Trust recognizes that in some cases this
procedure may adversely affect the results obtained for the Series.
(c) Xxxxxxxx Xxxxxxxx will oversee the maintenance of all books and
records with respect to the securities transactions of each Series, and will
furnish the Board with such periodic and special reports as the Board reasonably
may request. In compliance with the requirements of Rule 31a-3 under the 1940
Act, Xxxxxxxx Xxxxxxxx hereby agrees that all records which it maintains for the
Trust are the property of the Trust, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Trust and which are required to be maintained by Rule 31a-l under the 1940
Act and further agrees to surrender promptly to the Trust any records which it
maintains for the Trust upon request by the Trust.
(d) Xxxxxxxx Xxxxxxxx will oversee the computation of the net asset value
and the net income of each Series as described in the currently effective
registration statement of the Trust under the Securities Act of 1933, as
amended, and the 1940 Act and any supplements thereto ("Registration Statement)
or as more frequently requested by the Board.
(e) The Trust hereby authorizes Xxxxxxxx Xxxxxxxx and any entity or person
associated with Xxxxxxxx Xxxxxxxx which is a member of a national securities
exchange to effect any transaction on such exchange for the account of any
Series, which transaction is permitted by Section 11(a) of the 1934 Act and the
rules thereunder, and the Trust hereby consents to the retention of compensation
by Xxxxxxxx Xxxxxxxx or any person or entity associated with Xxxxxxxx Xxxxxxxx
for such transaction.
3. Duties as Administrator. Xxxxxxxx Xxxxxxxx will administer the
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affairs of the Trust and each Series subject to the supervision of the Board and
the following understandings:
(a) Xxxxxxxx Xxxxxxxx will supervise all aspects of the operations of the
Trust and each Series, including oversight of transfer agency, custodial and
accounting services, except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the Board of its
responsibility for and control of the conduct of the affairs of the Trust and
each Series.
(b) Xxxxxxxx Xxxxxxxx will provide the Trust and each Series with such
corporate, administrative and clerical personnel (including officers of the
Trust) and services as are reasonably deemed necessary or advisable by the
Board, including the maintenance of certain books and records of the Trust and
each Series.
(c) Xxxxxxxx Xxxxxxxx will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Trust's
Registration Statement, proxy
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material, tax returns and required reports to each Series' shareholders and the
Securities and Exchange Commission and other appropriate federal or state
regulatory authorities.
(d) Xxxxxxxx Xxxxxxxx will provide the Trust and each Series with, or
obtain for it, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery supplies and
similar items.
(e) Xxxxxxxx Xxxxxxxx will provide the Board on a regular basis with
economic and investment analyses and reports and make available to the Board
upon request any economic, statistical and investment services normally
available to institutional or other customers of Xxxxxxxx Xxxxxxxx.
4. Further Duties. In all matters relating to the performance of this
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Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Trust Instrument,
By-Laws, and Registration Statement of the Trust and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. Delegation of Xxxxxxxx Xxxxxxxx' Duties as Investment Adviser and
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Administrator. With respect to any or all Series, Xxxxxxxx Xxxxxxxx may enter
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into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
one or more sub-advisers or sub-administrators in which Xxxxxxxx Xxxxxxxx
delegates to such sub-advisers or sub-administrators any or all of its duties
specified in Paragraphs 2 and 3 of this Contract, provided that each Sub-
Advisory or Sub-Administration Contract imposes on the sub-adviser or sub-
administrator bound thereby all the corresponding duties and conditions to which
Xxxxxxxx Xxxxxxxx is subject by Paragraphs 2 and 3 of this Contract and all the
duties and conditions of paragraph 4 of this Contract, and further provided that
each Sub-Advisory or Sub-Administration Contract meets all requirements of the
1940 Act and rules thereunder. Furthermore, to the extent consistent with the
regulations and orders of the Securities and Exchange Commission, the
appointment and engagement of any sub-advisor and delegation to it of duties
hereunder by Xxxxxxxx Xxxxxxxx shall be subject only to the approval of the
Board of Trustees of the Trust.
6. Services Not Exclusive. The services furnished by Xxxxxxxx Xxxxxxxx
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hereunder are not to be deemed exclusive and Xxxxxxxx Xxxxxxxx shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby or unless otherwise agreed to by the parties hereunder
in writing. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Xxxxxxxx Xxxxxxxx, who may also be a Trustee,
officer or employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
7. Expenses.
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(a) During the term of this Contract, each Series will bear all expenses,
not specifically assumed by Xxxxxxxx Xxxxxxxx, incurred in its operations and
the offering of its shares.
(b) Expenses borne by each series will include but not be limited to the
following (or each Series' proportionate share of the following): (i) the cost
(including brokerage commissions) of securities purchased or sold by the Series
and any losses incurred in connection therewith; (ii) fees payable to and
expenses incurred on behalf of the Series by Xxxxxxxx Xxxxxxxx under this
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Contract; (iii) expenses of organizing the Trust and the Series; (iv) filing
fees and expenses relating to the registrations and qualification of the Series'
shares and the Trust under federal and/or state securities laws and maintaining
such registration and qualifications; (v) fees and salaries payable to the
Trust's Trustees and officers who are not interested persons of the Trust or
Xxxxxxxx Xxxxxxxx; (vi) all expenses incurred in connection with the Trustees'
services, including travel expenses; (vii) taxes (including any income or
franchise taxes) and governmental fees; (viii) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (ix) any
costs, expenses or losses arising out of a liability of or claim for damages or
other relief asserted against the Trust or Series for violation of any law; (x)
legal, accounting and auditing expenses, including legal fees of special counsel
for those Trustees of the Trust who are not interested persons of the Trust;
(xi) charges of custodians, transfer agents and other agents; (xii) costs of
preparing share certificates; (xiii) expenses of setting in type and printing
prospectuses and supplements thereto, statements of additional information and
supplements thereto, reports and proxy materials for existing shareholders;
(xiv) costs of mailing prospectuses and supplements thereto, statements of
additional information and supplements thereto, reports and proxy materials to
existing shareholders; (xv) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Trust is a party and the expenses the Trust may incur as a result of its legal
obligation to provide indemnification to its officers, Trustees, agents and
shareholders) incurred by the Trust or Series; (xvi) fees, voluntary assessments
and other expenses incurred in connection with membership in investment company
organizations; (xvii) cost of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xviii) the cost
of investment company literature and other publications provided by the Trust to
its Trustees and officers; (xix) costs of mailing, stationery and communications
equipment; (xx) expenses incident to any dividend, withdrawal or redemption
options; (xxi) charges and expenses of any outside pricing service used to value
portfolio securities; (xxii) interest on borrowings of the Trust; and (xxiii)
fees or expenses related to license agreements with respect to securities
indices.
(c) The Trust or a Series may pay directly any expenses incurred by it in
its normal operations and, if any such payment is consented to by Xxxxxxxx
Xxxxxxxx and acknowledged as otherwise payable by Xxxxxxxx Xxxxxxxx pursuant to
this Contract, the Series may reduce the fee payable to Xxxxxxxx Xxxxxxxx
pursuant to Paragraph 8 thereof by such amount. To the extent that such
deductions exceed the fee payable to Xxxxxxxx Xxxxxxxx on any monthly payment
date, such excess shall be carried forward and deducted in the same manner from
the fee payable on succeeding monthly payment dates.
(d) Xxxxxxxx Xxxxxxxx will assume the cost of any compensation for
services provided to the Trust received by the officers of the Trust and by
those Trustees who are interested persons of the Trust.
(e) The payment or assumption by Xxxxxxxx Xxxxxxxx of any expenses of the
Trust or a Series that Xxxxxxxx Xxxxxxxx is not required by this Contract to pay
or assume shall not obligate Xxxxxxxx Xxxxxxxx to pay or assume the same or any
similar expense of the Trust or a Series on any subsequent occasion.
8. Compensation.
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(a) For the services provided and the expenses assumed pursuant to this
Contract, with respect to PaineWebber Enhanced S&P 500 Fund, the Trust will pay
to Xxxxxxxx Xxxxxxxx a
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fee, computed daily and paid monthly, at an annual rate of 0.40% of average
daily net assets of such Series.
(b) For the services provided and the expenses assumed pursuant to this
Contract, with respect to PaineWebber Enhanced Nasdaq-100 Fund, the Trust will
pay to Xxxxxxxx Xxxxxxxx a fee, computed daily and paid monthly, at an annual
rate of 0.75% of average daily net assets of such Series.
(c) For the services provided and the expenses assumed pursuant to this
Contract with respect to any other Series hereafter established, the Trust will
pay to Xxxxxxxx Xxxxxxxx from the assets of such Series a fee in an amount to be
agreed upon in a written fee agreement ("Fee Agreement") executed by the Trust
on behalf of such Series and by Xxxxxxxx Xxxxxxxx. All such Fee Agreements shall
provide that they are subject to all terms and conditions of this Contract.
(d) The fee shall be computed daily and paid monthly to Xxxxxxxx Xxxxxxxx
on or before the first business day of the next succeeding calendar month.
(e) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective day to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. Limitation of Liability of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx and
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its delegates, including any Sub-Adviser or Sub-Administrator to any Series or
the Trust, shall not be liable for any error of judgment or mistake of law or
for any loss suffered by any Series, the Trust or any of its shareholders, in
connection with the matters to which this Contract relates, except to the extent
that such a loss results from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Contract. Any person, even though also an
officer, director, employee, or agent of Xxxxxxxx Xxxxxxxx, who may be or become
an officer, Trustee, employee or agent of the Trust shall be deemed, when
rendering services to any Series or the Trust or acting with respect to any
business of such Series or the Trust, to be rendering such service to or acting
solely for the Series or the Trust and not as an officer, director, employee, or
agent or one under the control or direction of Xxxxxxxx Xxxxxxxx even though
paid by it.
10. Limitation of Liability of the Trustees and Shareholders of the Trust.
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No Trustee, shareholder, officer, employee or agent of any Series shall be
liable for any obligations of any Series or the Trust under this Contract, and
Xxxxxxxx Xxxxxxxx agrees that, in asserting any rights or claims under this
Contract, it shall look only to the assets and property of the Trust in
settlement of such right or claim, and not to any Trustee, shareholder, officer,
employee or agent.
11. Duration and Termination.
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(a) This Contract shall become effective upon the date hereabove written
provided that, with respect to any Series, this Contract shall not take effect
unless it has first been approved (i) by a vote of a majority of those Trustees
of the Trust who are not parties to this Contract or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Series' outstanding voting
securities.
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(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually (i) by a vote of a majority of those Trustees of the Trust who
are not parties to this Contract or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or with respect to any given Series by vote of a majority of
the outstanding voting securities of such Series.
(c) Notwithstanding the foregoing, with respect to any Series this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the board or by a vote of a majority of the outstanding voting
securities of such Series on sixty days' written notice to Xxxxxxxx Xxxxxxxx or
by Xxxxxxxx Xxxxxxxx at any time, without the payment of any penalty, on sixty
days' written notice to the Trust. Termination of this Contract with respect to
any given Series shall in no way affect the continued validity of this Contract
or the performance thereunder with respect to any other Series. This Contract
will automatically terminate in the event of its assignment.
12. Amendment of this Contract. No provision of this Contract may be
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changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this contract as to any
given Series shall be effective until approved by vote of a majority of such
Series' outstanding voting securities.
13. Governing Law. This Contract shall be construed in accordance with the
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laws of the State of New York, without giving effect to the conflicts of laws
principles thereof, and in accordance with the 1940 Act, provided, however, that
Section 10 above will be construed in accordance with the laws of the State of
Delaware. To the extent that the applicable laws of the State of New York or the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
14. Miscellaneous. The captions in this Contract are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "national
securities exchange," "net assets," "prospectus," "sale," "sell" and "security"
shall have the same meaning as such terms have in the 1940 Act, subject to such
exemption as may be granted by the Securities and Exchange Commission by any
rule, regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this contract is relaxed by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
Attest: /s/ Xxxxxxxx Xxxxxxxx By /s/ Xxxxxxxx Xxxxxxxxx
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Xxxxxxxx Xxxxxxxx Xxxxxxxx Xxxxxxxxx
XXXXXXXX XXXXXXXX SECURITIES TRUST
Attest: /s/ Xxxxxxxx Xxxxxxxx By /s/ Xxxxxx X. X'Xxxxxxx
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Xxxxxxxx Xxxxxxxx Xxxxxx X. X'Xxxxxxx
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