Exhibit 99 (4) (a)
INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT
THIS AGREEMENT made as of April 1, 2006 and amended as of August 1, 2006
between UBS PACE SELECT ADVISORS TRUST, a Delaware statutory trust ("Trust"),
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 ("Advisers Act").
WHEREAS, the Trust 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 beneficial
interest (each a "Portfolio"); and
WHEREAS, the Trust desires to retain UBS Global Americas as investment
manager and administrator to furnish certain administrative, investment advisory
and management services to the Trust and each Portfolio as now exists and as
hereafter may be established, and UBS Global Americas is willing to furnish such
services; and
WHEREAS, the Trust desires and intends to have one or more investment
advisers ("Sub-Advisers") provide investment advisory and portfolio management
services with respect to the Portfolios other than any Portfolios managed by UBS
Global Americas;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints UBS Global Americas as investment
manager and administrator of the Trust and each Portfolio for the period and on
the terms set forth in this Agreement. UBS Global Americas accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER FOR UBS PACE MONEY MARKET INVESTMENTS.
(a) Subject to the supervision of the Trust's Board of Trustees
("Board"), UBS Global Americas will provide a continuous investment program for
UBS PACE Money Market Investments, including investment research and management.
UBS Global Americas will determine from time to time what securities and other
investments will be purchased, retained or sold by UBS PACE Money Market
Investments. UBS Global Americas will be responsible for placing purchase and
sell orders for investments and for other related transactions. UBS Global
Americas will provide services under this Agreement in accordance with UBS PACE
Money Market Investments' investment objective, policies and restrictions as
stated in the Trust's Registration Statement as it applies to UBS PACE Money
Market Investments.
(b) UBS Global Americas agrees that in placing orders with brokers, it
will attempt to obtain the best net result in terms of price and execution. 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. UBS Global Americas may aggregate sales and purchase
orders of the assets of the Portfolio with similar orders being made
simultaneously for other accounts advised by UBS Global Americas or its
affiliates. Whenever UBS Global Americas simultaneously places orders to
purchase or sell the same security on behalf of UBS PACE Money Market
Investments 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 Trust recognizes that in
some cases this procedure may adversely affect the results obtained for UBS PACE
Money Market Investments.
(c) UBS Global Americas will maintain all books and records required
to be maintained by UBS Global Americas pursuant to the 1940 Act and the rules
and regulations promulgated thereunder with respect to transactions on behalf of
UBS PACE Money Market Investments, 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, UBS Global Americas hereby agrees
that all records which it maintains for the Trust and UBS PACE Money Market
Investments 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-1 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) At such times as shall be reasonably requested by the Board, UBS
Global Americas will provide the Board with economic and investment analyses and
reports as well as quarterly reports setting forth the performance of UBS PACE
Money Market Investments and make available to the Board any economic,
statistical and investment services normally available to institutional or other
customers of UBS Global Americas.
(e) In accordance with procedures adopted by the Board, as amended
from time to time, UBS Global Americas is responsible for assisting in the fair
valuation of all portfolio securities and will arrange for the provision of a
price(s) from a party(ies) independent of UBS Global Americas for each portfolio
security for which the custodian does not obtain prices in the ordinary course
of business from an automated pricing service.
3. DUTIES AS INVESTMENT MANAGER TO OTHER PACE PORTFOLIOS; APPOINTMENT OF
SUB-ADVISERS.
(a) Subject to the supervision and direction of the Board, UBS Global
Americas will provide to the Trust investment management evaluation services
principally by performing initial reviews of prospective Sub-Advisers for each
Portfolio other than UBS PACE Money Market Investments and supervising and
monitoring performance of the Sub-Advisers thereafter. UBS Global Americas
agrees to report to the Trust results of its evaluation, supervision and
monitoring functions and to keep certain books and records of the Trust in
connection therewith. UBS Global Americas further agrees to communicate
performance
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expectations and evaluations to the Sub-Advisers, and to recommend to the Trust
whether agreements with Sub-Advisers should be renewed, modified or terminated.
(b) UBS Global Americas is responsible for informing the Sub-Advisers
of the investment objective(s), policies and restrictions of the Portfolio(s)
for which the Sub-Adviser is responsible, for informing or ascertaining that it
is aware of other legal and regulatory responsibilities applicable to the
Sub-Adviser with respect to the Portfolio(s) for which the Sub-Adviser is
responsible, and for monitoring the Sub-Advisers' discharge of their duties; but
UBS Global Americas is not responsible for the specific actions (or inactions)
of a Sub-Adviser in the performance of the duties assigned to it.
(c) With respect to each Portfolio other than UBS PACE Money Market
Investments, UBS Global Americas shall enter into an agreement ("Sub-Advisory
Agreement") with a Sub-Adviser in substantially the form attached hereto as
Exhibit I.
(d) UBS Global Americas shall be responsible for the fees payable to
and shall pay the Sub-Adviser of each Portfolio the fee as specified in the
Sub-Advisory Agreement relating thereto.
4. DUTIES AS ADMINISTRATOR. UBS Global Americas will administer the affairs
of the Trust and each Portfolio subject to the supervision of the Board and the
following understandings:
(a) UBS Global Americas will supervise all aspects of the operations
of the Trust and each Portfolio, 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 Portfolio.
(b) UBS Global Americas shall provide the Trust and each Portfolio
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 Portfolio.
(c) UBS Global Americas will arrange, but not pay, for the periodic
updating, filing and dissemination (as applicable) of the Trust's Registration
Statement, proxy material, tax returns and required reports to each Portfolio's
shareholders and the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.
(d) UBS Global Americas will provide the Trust and each Portfolio
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
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economic, statistical and investment services normally available to
institutional or other customers of UBS Global Americas.
5. FURTHER DUTIES. In all matters relating to the performance of this
Agreement, UBS Global Americas will act in conformity with the Trust's Trust
Instrument, By-Laws and the currently effective registration statement under the
1940 Act and any amendments or supplements thereto ("Registration Statement")
and with the instructions and directions of the Board, and will comply with the
requirements of the 1940 Act, the Advisers Act, and the rules under each,
Subchapter M of the Internal Revenue Code as applicable to regulated investment
companies, and all other applicable federal and state laws and regulations.
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
Agreement are not impaired thereby. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of UBS Global Americas
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.
(a) During the term of this Agreement, each Portfolio 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 Portfolio will include but will not be
limited to the following (or each Portfolio's proportionate share of the
following): (i) the cost (including brokerage commissions) of securities
purchased or sold by the Portfolio and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Portfolio
by UBS Global Americas under this Agreement; (iii) expenses of organizing the
Trust and each Portfolio; (iv) filing fees and expenses relating to the
registrations and qualification of the Portfolio's 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; (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 the Portfolio
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, statement of
additional information and supplements thereto, reports and proxy materials for
existing shareholders and costs of mailing such materials to existing
shareholders; (xiv) any extraordinary expenses (including fees and disbursements
of counsel, costs of actions, suits or proceedings to which the
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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 the Portfolio; (xv) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xvi) cost of mailing and tabulating proxies
and costs of meetings of shareholders, the Board and any committees thereof;
(xvii) the cost of investment company literature and other publications provided
by the Trust to its Trustees and officers; and (xviii) costs of mailing,
stationery and communications equipment.
(c) The Trust or the Portfolio may pay directly any expenses 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 Agreement, the Portfolio may reduce the fee payable to UBS
Global Americas pursuant to Paragraph 8 thereof 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 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 UBS Global Americas of any expenses
of the Trust or a Portfolio that UBS Global Americas is not required by this
Agreement to pay or assume shall not obligate UBS Global Americas to pay or
assume the same or any similar expense of the Trust or a Portfolio on any
subsequent occasion.
8. COMPENSATION.
(a) For the administrative services provided to each Portfolio, the
Portfolio will pay to UBS Global Americas a fee, computed daily and paid
monthly, at an annual rate of 0.20% of each Portfolio's average daily net
assets.
(b) For investment management services provided pursuant to this
Agreement, each Portfolio of the Trust shall pay to UBS Global Americas a fee,
computed daily and paid monthly on the first business day of the next succeeding
calendar month, at the annual percentage rate of each such Portfolio's average
daily net assets as set forth in Schedule I to this Agreement.
(c) For the services provided and the expenses assumed pursuant to
this Agreement with respect to any Portfolio hereafter established, such
Portfolio will pay to UBS Global Americas from the assets of the Portfolio a fee
in the amount to be agreed upon in a written fee agreement ("Fee Agreement")
executed by the Trust on behalf of the Portfolio and by UBS Global Americas. All
such Fee Agreements shall provide that they are subject to all terms and
conditions of this Agreement.
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(d) The fee shall be computed daily and paid monthly to UBS Global
Americas on the first business day of the next succeeding calendar month.
(e) If this Agreement 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 UBS GLOBAL AMERICAS. UBS Global Americas, its
officers, directors, employees and delegates, including any Sub-Adviser or the
Trust, shall not be liable for any error of judgment or mistake of law or for
any loss suffered by any Portfolio, the Trust or any of its shareholders, in
connection with the matters to which this Agreement 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 or on the part of
its officers, directors, employees or delegates of their obligations and duties
under this Agreement. Any person, even though also an officer, director,
employee, or agent of UBS Global Americas who may be or become an officer,
Trustee, employee or agent of the Trust shall be deemed, when rendering services
to any Portfolio or the Trust or acting with respect to any business of such
Portfolio or the Trust, to be rendering such service to or acting solely for the
Portfolio or the Trust and as an officer, director, employee, or agent or one
under the control or direction of UBS Global Americas even though paid by it.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The Trustees of the Trust and the shareholders of any Portfolio shall not be
liable for any obligations of any Portfolio or the Trust under this Agreement,
and UBS Global Americas agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust in
settlement of such right or claim, and not to such Trustees or shareholders.
11. DURATION AND TERMINATION.
(a) As to any Portfolio, this Agreement shall become effective upon
the date the Portfolio commences investment operations provided that, with
respect to any Portfolio, this Agreement 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 Agreement 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 Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue automatically for successive annual periods of twelve months each,
provided that such continuance is specifically approved at least annually (i) by
vote of a majority of those Trustees of the Trust who are not parties to this
Agreement 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 Portfolio, by vote of a majority of the outstanding
voting securities of such Portfolio.
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(c) Notwithstanding the foregoing, with respect to any Portfolio this
Agreement 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 Portfolio on sixty days' written notice to UBS Global Americas
and may be terminated by UBS Global Americas at any time, without the payment of
any penalty, on sixty days' written notice to the Trust. Termination of this
Agreement with respect to any given Portfolio shall in no way affect the
continued validity of this Agreement or performance thereunder with respect to
any other Portfolio. This Agreement will automatically terminate in the event of
its assignment.
12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement 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 Agreement as to any
given Portfolio shall be effective until approved by vote of a majority of such
Portfolio's outstanding voting securities.
13. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Delaware, without giving effect to the conflicts of laws
principles thereof. 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.
14. MISCELLANEOUS. The captions in this Agreement 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 Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, 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 Agreement 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 below as of the day and year first above
written.
UBS PACE SELECT ADVISORS TRUST
Attest: /s/ Xxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------- ----------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Director Title: Executive Director
UBS GLOBAL ASSET MANAGEMENT (AMERICAS)
INC.
Attest: /s/ Xxxx Xxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------- ----------------------------------
Name: Xxxx Xxxx Name: Xxxxx X. Xxxxxx
Title: General Counsel Title: Managing Director & C.I.O.
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Schedule I
ADVISORY FEE
UBS PACE Money Market
Investments 0.15%
UBS PACE Government ASSETS UNDER MANAGEMENT FEE
Securities Fixed Income $0 - $250 million 0.50%
Investments
On the next $250 million - $500 million 0.45%
On the next $500 million - $750 million 0.425%
On the next $750 million - $1 billion 0.40%
Above $1 billion 0.375%
UBS PACE Intermediate ASSETS UNDER MANAGEMENT FEE
Fixed Income Investments $0 - $250 million 0.40%
On the next $250 million - $500 million 0.35%
On the next $500 million - $750 million 0.325%
On the next $750 million - $1 billion 0.30%
Above $1 billion 0.275%
UBS PACE Strategic Fixed ASSETS UNDER MANAGEMENT FEE
Income Investments $0 - $250 million 0.50%
On the next $250 million - $500 million 0.45%
On the next $500 million - $750 million 0.425%
On the next $750 million - $1 billion 0.40%
Above $1 billion 0.375%
UBS PACE Municipal Fixed ASSETS UNDER MANAGEMENT FEE
Income Investments $0 - $250 million 0.40%
On the next $250 million - $500 million 0.35%
On the next $500 million - $750 million 0.325%
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On the next $750 million - $1 billion 0.30%
Above $1 billion 0.275%
UBS PACE Global Fixed ASSETS UNDER MANAGEMENT FEE
Income Investments $0 - $500 million 0.60%
On the next $500 million - $1 billion 0.575%
Above $ 1 billion 0.55%
UBS PACE Large Co Value 0.60%
Equity Investments
UBS PACE Large Co Growth ASSETS UNDER MANAGEMENT FEE
Equity Investments $0 - $500 million 0.60%
On the next $500 million - $1 billion 0.575%
On the next $1 billion - $2 billion 0.55%
Above $ 2 billion 0.525%
UBS PACE Small/Medium ASSETS UNDER MANAGEMENT FEE
Co Value Equity Investments $0 - $750 million 0.60%
Above $750 million 0.575%
UBS PACE Small/Medium ASSETS UNDER MANAGEMENT FEE
Co Growth Equity $0 - $750 million 0.60%
Investments
Above $750 million 0.575%
UBS PACE International ASSETS UNDER MANAGEMENT FEE
Equity Investments $0 - $500 million 0.70%
On the next $500 million - $1 billion 0.675%
On the next $1 billion -- $2 billion 0.65%
Above $2 billion 0.625%
UBS PACE International ASSETS UNDER MANAGEMENT FEE
Emerging Markets Equity $0 - $500 million 0.90%
Investments
On the next $500 million - $1 billion 0.875%
On the next $1 billion - $2 billion 0.85%
Above $ 2 billion 0.825%
10
UBS PACE High Yield ASSETS UNDER MANAGEMENT FEE
Investments $0 - $500 million 0.60%
On the next $500 million - $1 billion 0.55%
On the next $1 billion - $1.5 billion 0.525%
On the next $1.5 billion - $2 billion 0.500%
Above $2 billion 0.475%
UBS PACE Alternative ASSETS UNDER MANAGEMENT FEE
Strategies Investments $0 - $500 million 1.200%
On the next $500 million - $1 billion 1.150%
On the next $1 billion - $1.5 billion 1.100%
On the next $1.5 billion - $2 billion 1.075%
Above $2 billion 1.050%
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