Exhibit No. 4(b)
INTERIM SUB-ADVISORY CONTRACT
Agreement made as of October 10, 2000 ("Contract") between XXXXXXXX
XXXXXXXX ASSET MANAGEMENT INC., a Delaware corporation ("Xxxxxxxx Xxxxxxxx"),
and INSTITUTIONAL CAPITAL CORPORATION, a Delaware corporation ("Sub-Adviser").
RECITALS
(1) Xxxxxxxx Xxxxxxxx has entered into an Interim Investment Management
and Administration Agreement, dated October 10, 2000 ("Management Agreement"),
with PaineWebber America Fund ("Trust"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to the series of the Trust designated as PaineWebber Growth
and Income Fund ("Series");
(2) Xxxxxxxx Xxxxxxxx wishes to retain the Sub-Adviser to furnish
certain investment advisory services to Xxxxxxxx Xxxxxxxx and the Series; and
(3) The Sub-Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, Xxxxxxxx Xxxxxxxx and the Sub-Adviser agree as follows:
1. Appointment. Xxxxxxxx Xxxxxxxx hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Series for the period and on the
terms set forth in this Contract. The Sub-Adviser accepts that appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Trust's Board of
Trustees ("Board") and review by Xxxxxxxx Xxxxxxxx, and any written guidelines
adopted by the Board or Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide a
continuous investment program for all or a designated portion of the assets
("Segment") of the Series, including investment research and discretionary
management with respect to all securities and investments and cash equivalents
in the Series or Segment. The Sub-Adviser will determine from time to time what
investments will be purchased, retained or sold by the Series or Segment. The
Sub-Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Series or Segment. The
Sub-Adviser will be responsible for voting proxies of issuers of securities held
by the Series or Segment. The Sub-Adviser understands that the Series' assets
need to be managed so as to permit it to qualify or to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code, as
amended ("Code"). The Sub-Adviser will provide services under this Contract in
accordance with the Series' investment objective, policies and restrictions as
stated in the Trust's currently effective registration statement under the 1940
Act, and any amendments or supplements thereto ("Registration Statement").
(b) The Sub-Adviser 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 the Series, the Sub-Adviser may, in its discretion,
use brokers that provide the Sub-Adviser with research, analysis,
advice and similar services to execute portfolio transactions on behalf of the
Series or Segment, and the Sub-Adviser may pay to those brokers in return for
brokerage and research services a higher commission than may be charged by other
brokers, subject to the Sub-Adviser's determining in good faith that such
commission is reasonable in terms either of the particular transaction or of the
overall responsibility of the Sub-Adviser to the Series and its other clients
and that the total commissions paid by the Series or Segment 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 the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder. The
Sub-Adviser may aggregate sales and purchase orders with respect to the assets
of the Series or Segment with similar orders being made simultaneously for other
accounts advised by the Sub-Adviser or its affiliates. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on behalf of
the Series and one or more other accounts advised by the Sub-Adviser, the orders
will be allocated as to price and amount among all such accounts in a manner
believed to be equitable over time to each account. Xxxxxxxx Xxxxxxxx recognizes
that in some cases this procedure may adversely affect the results obtained for
the Series or Segment.
(c) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions by the Sub-Adviser on behalf of the
Series or Segment, and will furnish the Board and Xxxxxxxx Xxxxxxxx with such
periodic and special reports as the Board or Xxxxxxxx Xxxxxxxx reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records that it maintains for the Series
are the property of the Trust, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Trust and
that are required to be maintained by Rule 31a-1 under the 1940 Act, and further
agrees to surrender promptly to the Trust any records that it maintains for the
Series upon request by the Trust.
(d) At such times as shall be reasonably requested by the Board or
Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide the Board and Xxxxxxxx Xxxxxxxx
with economic and investment analyses and reports as well as quarterly reports
setting forth the performance of the Series or Segment and make available to the
Board and Xxxxxxxx Xxxxxxxx any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or other
customers.
(e) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair valuation
of all portfolio securities in the Series or Segment and will use its reasonable
efforts to arrange for the provision of a price from one or more parties
independent of the Sub-Adviser for each portfolio security for which the
custodian does not obtain prices in the ordinary course of business from an
automated pricing service.
3. Further Duties. In all matters relating to the performance of this
Contract, the Sub-Adviser will act in conformity with the Trust's Trust
Instrument, By-Laws and Registration Statement and with the written instructions
and written directions of the Board and Xxxxxxxx Xxxxxxxx; and will comply with
the requirements of the 1940 Act and the Investment Advisers Act of 1940, as
amended ("Advisers Act") and the rules under each, Subchapter M of the Internal
Revenue Code ("Code"), as applicable to regulated investment companies; and all
other federal and
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state laws and regulations applicable to the Trust and the Series. Xxxxxxxx
Xxxxxxxx agrees to provide to the Sub-Adviser copies of the Trust's Trust
Instrument, By-Laws, Registration Statement, written instructions and directions
of the Board and Xxxxxxxx Xxxxxxxx, and any amendments or supplements to any of
these materials as soon as practicable after such materials become available;
and further agrees to identify to the Sub-Adviser in writing any broker-dealers
that are affiliated with Xxxxxxxx Xxxxxxxx (other than PaineWebber Incorporated
and Xxxxxxxx Xxxxxxxx itself).
4. Expenses. During the term of this Contract, the Sub-Adviser will
bear all expenses incurred by it in connection with its services under this
Contract. The Sub-Adviser shall not be responsible for any expenses incurred by
the Trust, the Series or Xxxxxxxx Xxxxxxxx.
5. Compensation.
(a) For the services provided and the expenses assumed by the
Sub-Adviser pursuant to this Contract, Xxxxxxxx Xxxxxxxx, not the Series, will
pay to the Sub-Adviser a sub-advisory fee, computed daily and paid monthly, at
an annual rate of 0.30% of the average daily net assets of the Series or Segment
(computed in the manner specified in the Management Agreement) and will provide
the Sub-Adviser with a schedule showing the manner in which the fee was
computed. If the Sub-Adviser is managing a Segment, its fees will be based on
the value of assets of the Series within the Sub-Adviser's Segment.
(b) The fee shall be accrued daily and payable monthly to the
Sub-Adviser on or before the last business day of the next succeeding calendar
month.
(c) 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 pro-rated according to the proportion that such period
bears to the full month in which such effectiveness or termination occurs.
6. Limitation of Liability.
(a) The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Series, the Trust, its
shareholders or by Xxxxxxxx Xxxxxxxx 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.
(b) In no event will the Sub-Adviser have any responsibilities for any
other series of the Trust, for any portion of the Series' investments not
managed by the Sub-Adviser or for the acts or omissions of any other sub-adviser
to the Trust or Series.
In particular, in the event the Sub-Adviser shall manage only a
portion of the Series' investments, the Sub-Adviser shall have no responsibility
for the Series' being in violation of any applicable law or regulation or
investment policy or restriction applicable to the Series as a whole or for the
Series' failing to qualify as a regulated investment company under the Code, if
the securities and other holdings of the Segment managed by the Sub-Adviser are
such that such Segment would
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not be in such violation or fail to so qualify if such segment were deemed a
separate series of the Trust or a separate "regulated investment company" under
the Code.
Nothing in this section shall be deemed a limitation or waiver of
any obligation or duty that may not by law be limited or waived.
7. Representations of Sub-Adviser. The Sub-Adviser represents, warrants
and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Contract remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Contract; (iii)
has met and will seek to continue to meet for so long as this Contract remains
in effect, any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency necessary to
be met in order to perform the services contemplated by this Contract; (iv) has
the authority to enter into and perform the services contemplated by this
Contract; and (v) will promptly notify Xxxxxxxx Xxxxxxxx of the occurrence of
any event that would disqualify the Sub-Adviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(b) The Sub-Adviser has adopted a written code of ethics and
appropriate procedures complying with the requirements of Rule 17j-1 under the
1940 Act and will provide Xxxxxxxx Xxxxxxxx and the Board with a copy of such
code of ethics, together with evidence of its adoption. Within fifteen days of
the end of the last calendar quarter of each year that this Contract is in
effect, the president or a vice president of the Sub-Adviser shall certify to
Xxxxxxxx Xxxxxxxx that the Sub-Adviser has complied with the requirements of
Rule 17j-1 during the previous year and that there has been no material
violation of the Sub-Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such violation. Upon
the written request of Xxxxxxxx Xxxxxxxx, the Sub-Adviser shall permit Xxxxxxxx
Xxxxxxxx, its employees or its agents to examine the reports required to be made
by the Sub-Adviser pursuant to Rule 17j-1 and all other records relevant to the
Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided Xxxxxxxx Xxxxxxxx with a copy of its
Form ADV, as most recently filed with the Securities and Exchange Commission
("SEC") and promptly will furnish a copy of all amendments to Xxxxxxxx Xxxxxxxx
at least annually.
(d) The Sub-Adviser will notify Xxxxxxxx Xxxxxxxx of any change of
control of the Sub-Adviser, including any change of its general partners or 25%
shareholders or 25% limited partners, as applicable, and any changes in the key
personnel who are either the portfolio manager(s) of the Series or senior
management of the Sub-Adviser, in each case prior to, or promptly after, such
change.
(e) The Sub-Adviser agrees that neither it, nor any of its affiliates,
will in any way refer directly or indirectly to its relationship with the
Series, the Trust, Xxxxxxxx Xxxxxxxx or any of their respective affiliates in
offering, marketing or other promotional materials without the prior express
written consent of Xxxxxxxx Xxxxxxxx.
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8. Representation of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx represents
that (i) the Trust was duly organized as a Massachusetts business trust under
the laws of Massachusetts, (ii) the appointment of the Sub-Adviser has been duly
authorized and (iii) the Trust has acted and will continue to act in conformity
with the 1940 Act and other applicable laws.
9. Services Not Exclusive. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive and the Sub-Adviser 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
trustee, director, officer or employee of the Sub-Adviser, 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.
10. Duration and Termination.
(a) This Contract shall become effective upon the day and year first
written above, provided that this Contract has been approved for the Series 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 ("Independent Trustees") cast
at a meeting called for the purpose of voting on such approval and in which the
Trustees may participate by any means of communication that allow all Trustees
participating to hear each other simultaneously during the meeting.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for a period of 150 days after the day and year first above
written.
(c) Notwithstanding the foregoing, with respect to the 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 the Series on ten days' written notice to the Sub-Adviser and may
be terminated by the Sub-Adviser at any time, without the payment of any
penalty, on sixty days' written notice to Xxxxxxxx Xxxxxxxx. The Contract may
also be terminated, without payment of penalty, by Xxxxxxxx Xxxxxxxx (i) upon
material breach by the Sub-Adviser of any of the representations and warranties
get forth in Paragraph 7 of this Contract, if such breach shall not have been
cured within a 20 day period after notice of such breach or (ii) if, in the
reasonable judgment of Xxxxxxxx Xxxxxxxx, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Contract, including
circumstances such as financial insolvency of the Sub-Adviser or other
circumstances that could adversely affect the Series.
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 whom enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Contract as to the
Series shall be effective until approved by vote of the Independent Trustees or
a majority of the Series' outstanding voting securities.
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12. Governing Law. This Contract shall be construed in accordance with
the 1940 Act and the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of New York 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," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "net assets,"
"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 SEC by any
rule, regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. This Contract may be signed in counterpart.
14. Notices. Any notice herein required is to be in writing and is
deemed to have been given to the Sub-Adviser or Xxxxxxxx Xxxxxxxx upon receipt
of the same at their respective addresses set forth below. All written notices
required or permitted to be given under this Contract will be delivered by
personal service, by postage mail -- return receipt requested or by facsimile
machine or a similar means of same day delivery which provides evidence of
receipt (with a confirming copy by mail as set forth herein). All notices
provided to Xxxxxxxx Xxxxxxxx will be sent to the attention of Xxxxxx X.
X'Xxxxxxx, Deputy General Counsel. All notices provided to the Sub-Adviser will
be sent to the attention of Xxxxxx X. Xxxxxx, Senior Vice President.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and year first
above written.
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
00 Xxxx 00xx Xxxxxx
Xxxxxx: Xxx Xxxx, Xxx Xxxx 00000-0000
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
------------------- -----------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. X'Xxxxxxx
Title: First Vice President Title: Deputy General Counsel
INSTITUTIONAL CAPITAL CORPORATION
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxx
------------------- --------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxx X. Xxxxxx
Title: Title: Senior Vice President
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