For period ending August 31, 2006 Exhibit 77Q1
File number 811-4448
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of April 1, 2006, between UBS MASTER SERIES, INC., a Maryland
corporation (Corporation), and UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
(UBS Global Americas), a Delaware corporation registered as an investment
adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS, the Corporation is registered under the Investment
Company Act of 1940, as amended (1940 Act), as an open end management
investment company, and intends to offer for public sale distinct
series of shares of common stock (Series), each corresponding to a
distinct portfolio; and
WHEREAS, the Corporation desires to retain UBS Global Americas
as investment adviser and administrator to furnish certain
administrative, investment advisory and portfolio management services to
the Corporation and each Series as now exists and as hereafter may be
established, and UBS Global Americas 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 Corporation hereby appoints UBS Global Americas
as investment adviser and administrator of the Corporation and
each Series for the period and on the terms set forth in this
Contract. UBS Global Americas accepts such appointment and
agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Investment Adviser.
(a) Subject to the supervision of the corporations Board of
Directors (Board), UBS Global Americas will provide a
continuous investment program for each Series, including
investment research and management with respect to all
securities and investments and cash equivalents in each Series.
UBS Global Americas will determine from time to time what
securities and other investments will be purchased, retained
or sold by each Series.
(b) UBS Global Americas agrees that, in placing orders with
brokers and dealers, it will attempt to obtain the best net
result in terms of price and execution; provided that, on
behalf of any Series, UBS Global Americas may, in its
discretion, purchase and sell portfolio securities to and from
brokers and dealers who provide the Series with research,
analysis, advice and similar services, and UBS Global Americas
may pay to those brokers and dealers, in return for research and
analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to UBS Global Americas
determining in good faith that such commission or spread is
reasonable in terms either of the particular transaction or of
the overall responsibility of UBS Global Americas to such
Series and its other clients and that the total commissions
or spreads 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 UBS Global Americas, or any affiliated person thereof, except
in accordance with the federal securities laws and the rules
and regulations thereunder. Whenever UBS Global Americas
simultaneously places orders to purchase or sell the same security
on behalf of a Series and one or more other accounts advised by
UBS Global Americas, 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 Corporation recognizes that in
some cases this procedure may adversely affect the results
obtained for the Series.
(c) UBS Global Americas 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 31a3 under the 1940 Act, UBS Global
Americas hereby agrees that all records which it maintains for
the Corporation are the property of the Corporation, agrees to
preserve for the periods prescribed by Rule 31a2 under the 1940
Act any records which it maintains for the Corporation and which
are required to be maintained by Rule 31a1 under the 1940 Act,
and further agrees to surrender promptly to the Corporation any
records which it maintains for the Corporation upon request by
the Corporation.
(d) UBS Global Americas 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 Corporation under the
Securities Act of 1933, as amended, and 1940 Act and any supplements
thereto (Registration Statement) or as more frequently requested by
the Board.
(e) The Corporation hereby authorizes UBS Global Americas and any entity
or person associated with UBS Global Americas 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 Securities Exchange Act of 1934,
as amended and Rule 11a22(T) thereunder, and the Corporation hereby
consents to the retention of compensation by UBS Global Americas or
person or entity associated with UBS Global Americas for such
transactions in accordance with Rule 11a22(T)(a)(2)(iv).
3. Duties as Administrator. UBS Global Americas will administer the
affairs of the Corporation and each Series subject to the supervision
of the Board and the following understandings:
(a) UBS Global Americas will supervise all aspects of the operations
of the Corporation and each Series, including the 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 Corporation
and each Series.
(b) UBS Global Americas will provide the Corporation and each Series
with such corporate, administrative and clerical personnel
(including officers of the Corporation) and services as are
reasonably deemed necessary or advisable by the Board, including
the maintenance of certain books and records of the Corporation
and each Series.
(c) UBS Global Americas will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of
the Corporations Registration Statement, proxy material, tax
returns and required reports to each Series shareholders and the
Securities and Exchange Commission.
(d) UBS Global Americas will provide the Corporation 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) UBS Global Americas 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 UBS Global Americas.
4. Further Duties. In all matters relating to the performance
of this Contract, UBS Global Americas will act in conformity
with the Articles of Incorporation, By Laws and. Registration
Statement of the Corporation 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 UBS Global Americas Duties as Investment Adviser
and Administrator. With respect to any or all Series, UBS
Global Americas may enter into one or more contracts
(SubAdvisory or SubAdministration Contract) with a subadviser
or subadministrator in which UBS Global Americas delegates
to such subadviser or subadministrator any or all its
duties specified in Paragraph 2 and 3 of this Contract,
provided that each SubAdvisory or SubAdministration
Contract imposes on the subadviser or subadministrator
bound thereby all the duties and conditions to which UBS
Global Americas is subject by Paragraph 2, 3 and 4 of
this Contract, and further provided that each SubAdvisory
or SubAdministration Contract meets all requirements of the
1940Act and rules thereunder.
6. Services Not Exclusive. The services furnished by UBS
Global Americas hereunder are not to be deemed exclusive
and UBS Global Americas shall be free to furnish similar
services to others so long as its services under this
Contract are not impaired thereby Nothing in this Contract
shall limit or restrict the right of any director, officer
or employee of UBS Global Americas, who may also be a
Director, officer or employee of the Corporation, 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.
(a) During the term of this Contract, each Series will bear
all expenses not specifically assumed by UBS Global
Americas 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 UBS Global Americas under this
Contract; (iii) expenses of organizing the Corporation
and the Series; (iv) filing fees and expenses relating
to the registration and qualification of the Series
shares and the Corporation under federal and/or state
securities laws and maintaining such registrations and
qualifications; (v) fees and salaries payable to the
Corporations Directors who are not interested persons of
the Corporation or UBS Global Americas; (vi) all expenses
incurred in connection with the Directors 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) and costs, expenses
or losses arising out of a liability of or claim for damages
or other relief asserted against the Corporation or Series for
violation of any law; (x) legal, accounting and auditing
expenses, including legal fees of special counsel for those
Directors of the Corporation who are not interested persons
of the Corporation; (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 Corporation is a party and the expenses the Corporation
may incur as a result of its legal obligation to provide
indemnification to its officers, Directors, agents and
shareholders) incurred by the Corporation or Series; (xvi)
fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations;
(xvii) costs 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 Corporation to its Directors
and officers; and (xix) costs of mailing, stationery and
communications equipment.
(c) The Corporation or a Series may pay directly any expense
incurred by it in its normal operations, and, if any such
payment is consented to by UBS Global Americas and
acknowledged as otherwise payable by UBS Global
Americas pursuant to this Contract, the Series may reduce
the fee payable to UBS Global Americas pursuant to
Paragraph 8 hereof by such amount. To the extent that such
deductions exceed the fee payable to UBS Global Americas 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) UBS Global Americas will assume the cost of any
compensation for services provided to the Corporation
received by the officers of the Corporation and by those
Directors who are interested persons of the Corporation.
(e) The payment or assumption by UBS Global Americas of any
expense of the Corporation or a Series that UBS Global
Americas is not required by this Contract to pay or assume
shall not obligate UBS Global Americas to pay or assume
the same or any similar expense of the Corporation or a
Series on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed
pursuant to this Contract, with respect to the Series
identified below, the Corporation will pay to UBS Global
Americas a fee, computed daily and paid monthly from the
assets of the Series, in accordance with the following:
(i) UBS Money Market Fund:
All average daily net assets 0.50%
(b) For the services provided and the expenses assumed
pursuant to this Contract with respect to any Series
hereafter established, the Corporation will pay to UBS
Global Americas 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 Corporation on behalf
of such Series and by UBS Global Americas. All such
Fee Agreements shall provide that they are subject to
all terms and conditions of this Contract.
(c) The fee shall be computed daily and paid monthly to
UBS Global Americas on or before the last business day
of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before
the end of any month, the fee for the period from the
effective date 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 UBS Global Americas.
UBS Global Americas shall not be liable for any error
of judgment or mistake of law or for any loss suffered
by any Series or the Corporation in connection with the
matters to which this Contract relates, except a loss
resulting 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, partner, employee, or agent of UBS Global
Americas who may be or become an officer, Director,
employee or agent of the Corporation shall be deemed,
when rendering services to any Series or the Corporation
or acting with respect to any business of such Series
or the Corporation, to be rendering such service to or
acting solely for the Series or the Corporation and
not as an officer, partner, employee, or agent or one
under the control or direction of UBS Global Americas
even though paid by it.
10. Duration and Termination.
(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 Directors of the Corporation 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.
(b) Unless sooner terminated as provided herein, 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 Directors of the
Corporation 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 UBS Global Americas or by UBS Global
Americas at any time, without the payment of any penalty,
on sixty days written notice to the Corporation.
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.
11. Amendment of this Contract. No provision of this
Contract may be 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.
12. Governing Law. This Contract shall be construed in
accordance with the laws of the State of Delaware and the
1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions
of the 1940 Act, the latter shall control.
13. Miscellaneous. The captions in this Contract are included
for 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,interested person,assignment,broker,dealer,
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.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below
as of the day and year first above written.
Attest: /s/ Xxxxxx Xxx
Name: Xxxxxx Xxx
Title: Vice President and Assistant Secretary
UBS
MASTER SERIES, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President and Treasurer
Attest: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director and Associate General Counsel
UBS GLOBAL
ASSET MANAGEMENT (AMERICAS) INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director and Senior Assistant General Counsel
