Exhibit 99.4(z)
FORM OF SUB-ADVISORY AGREEMENT
Agreement made as of April 1, 2006 between UBS GLOBAL ASSET
MANAGEMENT (AMERICAS) INC. ("UBS Global AM"), a Delaware corporation, and
WELLINGTON MANAGEMENT COMPANY, LLP("Sub-Adviser"), a Massachusetts limited
liability partnership (the "Agreement").
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated April 1,
2006 ("Management Agreement"), with UBS PACE Select Advisors Trust (formerly
known as Managed Accounts Services Portfolio Trust ("Trust")), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to UBS PACE Alternative Strategies
Investments ("Portfolio").
(2) UBS GLOBAL Americas is authorized to retain one or more sub-advisers
to furnish certain advisory services to UBS GLOBAL Americas and the Portfolio.
(3) UBS Global AM desires to retain the Sub-Adviser to furnish certain
investment advisory services to UBS Global AM and the Portfolio or a designated
portion of the assets ("Segment") of the Portfolio; and
(4) The Sub-Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, UBS Global AM and the Sub-Adviser agree as follows:
1. APPOINTMENT. UBS Global AM hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Portfolio or Segment for the period
and on the terms set forth in this Agreement. 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 (the "Board") and review by UBS Global AM, and any written guidelines
adopted by the Board or UBS Global AM, the Sub-Adviser will provide a continuous
investment program for the Portfolio or Segment, including investment research
and discretionary management with respect to all securities and investments and
cash equivalents in the Portfolio or Segment. The Sub-Adviser will determine
from time to time what investments will be purchased, retained or sold by the
Portfolio or Segment. The Sub-Adviser will be responsible for placing purchase
and sell orders for investments and for other related transactions for the
Portfolio or Segment. The Sub-Adviser understands that the Portfolio's assets
need to be managed so as to permit the Portfolio 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 Agreement in accordance with the Portfolio's 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 it will not consult with any other
sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio concerning any
transaction by the Portfolio or Segment in securities or other assets, including
(i) the purchase by the Portfolio or Segment of a security issued by the Other
Sub-Adviser, or an affiliate of the Other Sub-Adviser, to the Trust or Portfolio
except as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its affiliate, is
the principal underwriter.
(c) The Sub-Adviser agrees that it will be responsible for voting proxies
of issuers of securities held by the Portfolio or Segment. The Sub-Adviser
further agrees that it will adopt written proxy voting procedures that shall
comply with the requirements of the 1940 Act and the Investment Advisers Act of
1940, as amended ("Advisers Act"), and that shall be acceptable to the Board.
The Sub-Adviser further agrees that it will provide the Board on or before
August 1st of each year, or more frequently as the Board may reasonably request,
with a written report of the proxies voted during the most recent 12-month
period ending June 30, or such other period as the Board may designate, in a
format that shall comply with the 1940 Act and that shall be acceptable to the
Board.
(d) The Sub-Adviser agrees that, in placing orders with brokers, it will
seek to obtain the most favorable execution and best available price under the
circumstances; provided that, on behalf of the Portfolio or Segment, 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 Portfolio 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
determination 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 Portfolio or Segment and its other clients and that the total
commissions paid by the Portfolio or Segment will be reasonable in relation to
the benefits to the Portfolio or Segment over the long term. In no instance will
portfolio securities be purchased from or sold to UBS Global AM 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 Portfolio 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 Portfolio or Segment 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.
UBS Global AM recognizes that in some cases this procedure may adversely affect
the results obtained for the Portfolio or Segment.
Subject to the Sub-Adviser's obligations to seek best execution, UBS
Global AM agrees that the Sub-Adviser, in its sole discretion, may place
transactions on behalf of the Portfolio and the Trust with any broker-dealer
deemed to be an affiliate of the Sub-Adviser (the "Affiliated Broker-Dealers")
so long as such transactions are effected in conformity with the requirements
(including any applicable exemptions and administrative interpretations set
forth in Part II of the Sub-Adviser's Form ADV Registration Statement on file
with the Securities and
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Exchange Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934. In all such dealings, the Affiliated Broker-Dealers shall
be authorized and entitled to retain any commissions, remuneration or profits
which may be made in such transactions and shall not be liable to account for
the same to UBS Global AM, the Portfolio or the Trust.
UBS Global AM further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the "Cross Transactions")
on behalf of the Portfolio and the Trust. Cross Transactions are transactions
which may be effected by the Affiliated Broker-Dealers acting for both the
Portfolio or the Trust and the counterparty to the transaction. Cross
Transactions enable the Sub-Adviser to purchase or sell a block of securities
for the Portfolio or the Trust at a set price and possibly avoid an unfavorable
price movement that may be created through entrance into the market with such
purchase or sale order. As such, the Sub-Adviser believes that Cross
Transactions can provide meaningful benefits for the Portfolio and the Trust and
its clients generally. UBS Global AM, the Portfolio and the Trust should be
aware, however, that in a Cross Transaction an Affiliated Broker-Dealer will be
receiving commissions from both sides of the trade and, therefore, there is a
potentially conflicting division of loyalties and responsibilities.
(e) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to Rule 31a-1(b)(2)(ii), (3), (5), (6), (7), (9) and (10)
under the 1940 Act and the rules and regulations promulgated thereunder with
respect to transactions by the Sub-Adviser on behalf of the Portfolio or
Segment, and will furnish the Board and UBS Global AM with such periodic and
special reports as the Board or UBS Global AM reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records which it maintains for the Portfolio
or Segment 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 Portfolio or Segment 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 which it maintains for the Portfolio or Segment upon request by the
Trust.
(f) At such times as shall be reasonably requested by the Board or UBS
Global AM, the Sub-Adviser will provide the Board and UBS Global AM with
economic and investment analyses and reports as well as quarterly reports
setting forth the performance of the Portfolio or Segment and make available to
the Board and UBS Global AM any economic, statistical and investment services
that the Sub-Adviser normally makes available to its other U.S. mutual fund
subadvisory customers.
(g) 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 Portfolio or Segment and will use its
reasonable efforts to arrange for the provision of a price or prices 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.
(h) If the Segment has a claim or potential claim in any bankruptcy
proceeding, class action securities litigation, or other litigation or
proceeding affecting securities held in the Segment, Sub-Adviser will provide
the Portfolio or its custodian with reasonable assistance in support of the
Portfolio's pursuit of such claim while Sub-Adviser manages the assets of the
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Segment. Notwithstanding anything else to the contrary in this Agreement,
Sub-Adviser shall not be required to file claims or take any related actions on
behalf of the Segment in regards to class action settlements related to
securities currently or previously held in the Segment, but will provide all
information reasonably requested by UBS Global AM or the Trust, or their agents
regarding the securities involved.
3. FURTHER DUTIES. In all matters relating to the performance of this
Agreement, the Sub-Adviser will seek to 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 UBS Global AM to the extent that the
foregoing relate to the services provided by the Sub-Adviser to the Portfolio or
Segment; and will comply with the requirements of the 1940 Act, and the Advisers
Act, and the rules under each, the Code, and all other federal and state laws
and regulations applicable to the Trust and the Portfolio to the extent that the
foregoing relate to the services provided by the Sub-Adviser to the Portfolio or
Segment. UBS Global AM 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 UBS Global AM, and any amendments or supplements
to any of these materials as soon as practicable after such materials become
available, provided that UBS Global AM agrees that the Sub-Adviser shall not be
required to act in conformity with any of the foregoing, or amendments thereto,
until UBS Global AM has provided copies of such documents to the Sub-Adviser;
and further agrees to identify to the Sub-Adviser in writing any broker-dealers
that are affiliated with UBS Global AM (other than UBS Financial Services Inc.
and UBS Global AM itself), provided that UBS Global AM agrees that Sub-Adviser
will not be presumed to know such affiliates until such identification has been
provided.
4. EXPENSES. During the term of this Agreement, the Sub-Adviser will bear
all expenses incurred by it in connection with its services under this
Agreement. The Sub-Adviser shall not be responsible for any expenses incurred by
the Trust, the Portfolio or UBS Global AM.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global AM, not the Portfolio, will pay to the
Sub-Adviser a fee, computed daily and payable monthly, at an annual rate of
0.75% up to $200 million and 0.725% on assets in excess of $200 million of the
average daily net assets of the Portfolio or Segment allocated to its management
(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 the assets of the Portfolio 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 Agreement 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 which such period
bears to the full month in that such effectiveness or termination occurs.
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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 Portfolio, the Trust or its
shareholders or by UBS Global AM 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 of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility for any other
portfolio of the Trust, for any portion of the Portfolio not managed by the
Sub-Adviser or for the acts or omissions of any Other Sub-Adviser to the Trust
or Portfolio.
In particular, in the event the Sub-Adviser shall manage only a Segment of
the Portfolio, the Sub-Adviser shall have no responsibility for the Portfolio's
being in violation of any applicable law or regulation or investment policy or
restriction applicable to the Portfolio as a whole or for the Portfolio's
failing to qualify as a regulated investment company under the Code, if the
securities and other holdings of the Segment of the Portfolio managed by the
Sub-Adviser are such that such Segment would 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 Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met, and
will seek to continue to meet for so long as this Agreement 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 Agreement; (iv) has
the authority to enter into and perform the services contemplated by this
Agreement; and (v) will promptly notify UBS Global AM 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 complying with
the requirements of Rule 17j-1 under the 1940 Act and will provide UBS Global AM
and the Board with a copy of such code of ethics, together with evidence of its
adoption. Within forty-five days of the end of the last calendar quarter of each
year that this Agreement is in effect, a duly authorized officer of the
Sub-Adviser shall certify to UBS Global AM 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 UBS Global AM, the Sub-Adviser shall
permit UBS Global AM, its employees or its agents to examine the reports
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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 UBS Global AM 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 UBS Global AM at least
annually.
(d) The Sub-Adviser will notify UBS Global AM 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 Portfolio or senior
management of the Sub-Adviser, in each case prior to or promptly after such
change.
(e) UBS Global AM and the Sub-Adviser agree that neither of them nor any
of their affiliates, will in any way refer directly or indirectly to their
relationship with one another or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent of
the other, which consent will be promptly provided and not unreasonably
withheld.
8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive, and except as the Sub-Adviser may
otherwise agree in writing, the Sub-Adviser 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
partner, 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.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the date first above
written, provided that 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
("Independent Trustees"), cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities, unless UBS Global AM has authority to enter into
this Agreement pursuant to exemptive relief from the SEC without a vote of the
Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from its effective date. Thereafter, if not
terminated, this Agreement 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 the Independent Trustees, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting securities
of the Portfolio.
(c) Notwithstanding the foregoing, 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 30 days'
written notice to the Sub-Adviser. This
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Agreement may also be terminated, without the payment of any penalty, by UBS
Global AM: (i) upon 120 days' written notice to the Sub-Adviser; (ii) upon
material breach by the Sub-Adviser of any of the representations, warranties and
agreements set forth in Paragraph 7 of this Agreement; or (iii) immediately if,
in the reasonable judgment of UBS Global AM, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Agreement, including
circumstances such as financial insolvency of the Sub-Adviser or other
circumstances that could adversely affect the Portfolio. The Sub-Adviser may
terminate this Agreement at any time, without the payment of any penalty, on 120
days' written notice to UBS Global AM. This Agreement will terminate
automatically in the event of its assignment or upon termination of the
Management Agreement, as it relates to this Portfolio.
10. 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 whom enforcement of the change, waiver,
discharge or termination is sought. To the extent required by applicable law, no
amendment of this Agreement shall be effective until approved (i) by a vote of a
majority of the Independent Trustees, and (ii) if the terms of this Agreement
shall have changed, by a vote of a majority of the Portfolio's outstanding
voting securities (except in the case of (ii), pursuant to the terms and
conditions of the SEC order permitting it to modify the Agreement without such
vote).
11. GOVERNING LAW. This Agreement 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.
12. 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," "net assets," "sale," "sell" and "security" shall have the same
meanings 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
Agreement 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 Agreement may be
signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing and is deemed
to have been given to the Sub-Adviser or UBS Global AM upon receipt of the same
at their respective addresses set forth below. All written notices required or
permitted to be given under this Agreement will be delivered by personal
service, by postage mail return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided to UBS Global
AM will be sent to the attention of: General Counsel, UBS Global Asset
Management (Americas) Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000-0000 (fax:
000-000-0000). All notices provided to the Sub-Adviser will be sent to the
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attention of: Xxxxxxx Xxxxx, Vice President, Mutual Fund Group, Wellington
Management Company, LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000 (fax: 000-000-0000)
with a copy to the Legal Services Department at the same address.
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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.
UBS GLOBAL ASSET
MANAGEMENT (AMERICAS) INC.
00 Xxxx 00xx Xxxxxx
Xxxxxx: Xxx Xxxx, Xxx Xxxx 00000-0000
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
WELLINGTON CAPITAL MANAGEMENT
COMPANY, LLP
00 Xxxxx Xxxxxx
Xxxxxx: Xxxxxx, XX 00000
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
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