Exhibit No. 4(a)
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of February 8, 2001, between PAINEWEBBER FINANCIAL
SERVICES GROWTH FUND INC., a Maryland corporation ("Fund"), and XXXXXXXX
XXXXXXXX ASSET MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and as a broker-dealer under the Securities Exchange Act of 1934, as
amended ("1934 Act"),
WHEREAS the Fund is registered under the Investment Company Act of
1940, as amended ("Investment Company Act"), as an open-end management
investment company, and currently has a single series of shares of common stock,
which corresponds to a distinct portfolio and is known as PaineWebber Financial
Services Growth Fund; and
WHEREAS the Fund desires to retain Xxxxxxxx Xxxxxxxx as investment
adviser and administrator to furnish certain administrative, investment advisory
and portfolio management services to the Fund with respect to PaineWebber
Financial Services Growth 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 Fund hereby appoints Xxxxxxxx Xxxxxxxx as
investment adviser and administrator of the Fund 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.
(a) Subject to the supervision of the Fund's Board of Directors
("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 Fund 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
Investment Company Act, Xxxxxxxx Xxxxxxxx hereby agrees that all records which
it maintains for the Fund are the property of the Fund, agrees to preserve for
the periods prescribed by Rule 31a-2 under the Investment Company Act any
records which it maintains for the Fund and which are required to be maintained
by Rule 31a-l under the Investment Company Act and further agrees to surrender
promptly to the Fund any records which it maintains for the Fund upon request by
the Fund.
(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 Fund under the Securities Act of 1933, as amended,
and the Investment Company Act and any supplements thereto ("Registration
Statement") or as more frequently requested by the Board.
(e) The Fund 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 Fund 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
affairs of the Fund 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 Fund 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 Fund and
each Series.
(b) Xxxxxxxx Xxxxxxxx will provide the Fund and each Series with such
corporate, administrative and clerical personnel (including officers of the
Fund) and services as are reasonably deemed necessary or advisable by the Board,
including the maintenance of certain books and records of the Fund and each
Series.
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(c) Xxxxxxxx Xxxxxxxx will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Fund's
Registration Statement, proxy 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 Fund 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
Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Articles of
Incorporation, By-Laws, and Registration Statement of the Fund and with the
instructions and directions of the Board and will comply with the requirements
of the Investment Company Act, the rules thereunder, and all other applicable
federal and state laws and regulations.
5. Delegation of Xxxxxxxx Xxxxxxxx' Duties as Investment Adviser and
Administrator. With respect to any or all Series, Xxxxxxxx Xxxxxxxx may enter
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 Investment Company 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 Fund's Board.
6. Services Not Exclusive. The services furnished by Xxxxxxxx Xxxxxxxx
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 director
("Board member"), officer or employee of the Fund, 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.
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7. Expenses.
(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
Contract; (iii) expenses of organizing the Fund and the Series; (iv) filing fees
and expenses relating to the registrations and qualification of the Series'
shares and the Fund under federal and/or state securities laws and maintaining
such registration and qualifications; (v) fees and salaries payable to the
Fund's Board members and officers who are not interested persons of the Fund or
Xxxxxxxx Xxxxxxxx; (vi) all expenses incurred in connection with the Board
members' 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 Fund or Series for violation of any law; (x)
legal, accounting and auditing expenses, including legal fees of special counsel
for those Board members of the Fund who are not interested persons of the Fund;
(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
Fund is a party and the expenses the Fund may incur as a result of its legal
obligation to provide indemnification to its officers, Board members, agents and
shareholders) incurred by the Fund 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 Fund to
its Board members 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 Fund;
and (xxiii) fees or expenses related to license agreements with respect to
securities indices.
(c) The Fund 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.
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(d) Xxxxxxxx Xxxxxxxx will assume the cost of any compensation for
services provided to the Fund received by the officers of the Fund and by those
Board members who are interested persons of the Fund.
(e) The payment or assumption by Xxxxxxxx Xxxxxxxx of any expenses of
the Fund 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 Fund 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 PaineWebber Financial Services Growth Fund, the Fund
will pay to Xxxxxxxx Xxxxxxxx a fee, computed daily and paid monthly, at an
annual rate of 0.70% of average daily net assets of such Series.
(b) For the services provided and the expenses assumed pursuant to this
Contract with respect to any other Series hereafter established, the Fund 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 Fund 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.
(c) 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.
(d) 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
its delegates, including any Sub-Adviser or Sub-Administrator to any Series or
the Fund, shall not be liable for any error of judgment or mistake of law or for
any loss suffered by any Series, the Fund 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, Board member, employee or agent of the Fund shall be deemed, when
rendering services to any Series or the Fund or acting with respect to any
business of such Series or the Fund, to be rendering such service to or acting
solely for the Series or the Fund 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. 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
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approved (i) by a vote of a majority of those Board members of the Fund who are
not parties to this Contract or interested persons of any such party
("Independent Board Members") 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 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 the Independent Board Members of
the Fund, 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 Fund. 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 New York, without giving effect to the conflicts of
laws principles thereof, and in accordance with the Investment Company Act,
provided, however, that to the extent that the applicable laws of the State of
New York conflict with the applicable provisions of the Investment Company 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," "national
securities exchange," "net assets," "prospectus," "sale," "sell" and "security"
shall have the same meaning as such terms have in the Investment Company 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 Investment Company Act reflected in any provision of this contract is
relaxed by a rule, regulation or order of the Securities and
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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 as of the day and year first above
written.
PAINEWEBBER FINANCIAL SERVICES
GROWTH FUND INC.
Attest:
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
By: /s/ Xxxxxxxx Xxxxxxxx Name: Xxxxx X. Xxxxxx
------------------------------ Title: Vice President and Assistant
Name: Secretary
Title:
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
Attest:
By: /s/ Xxxxxx X. X'Xxxxxxx
----------------------------------
By: /s/ Xxxxxxxx Xxxxxxxx Name: Xxxxxx X. X'Xxxxxxx
------------------------------ Title: Senior Vice President
Name:
Title:
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