Exhibit No. 5(a)
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of April 21, 1988, between PAINEWEBBER SERIES TRUST, a
Massachusetts business trust ("Trust"), and XXXXXXXX XXXXXXXX ASSET MANAGEMENT
INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended ("1934 Act"), and as an
investment adviser under the Investment Advisers Act of 1940, as amended.
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 ("Series"), each corresponding to a distinct portfolio; and
WHEREAS the Trust desires to retain Xxxxxxxx Xxxxxxxx as investment adviser
and administrator to furnish certain administrative, investment advisory and
portfolio management services to the Trust and each Series as now exists and as
hereafter may be established, 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 Trust hereby appoints Xxxxxxxx Xxxxxxxx as investment
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adviser and administrator of the Trust 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.
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(a) Subject to the supervision of the Trust's Board of Trustees ("Board"),
Xxxxxxxx Xxxxxxxx will provide a continuous investment program for each Series,
including investment research and management with respect to all securities and
investments and cash equivalents in each Series. Xxxxxxxx Xxxxxxxx will
determine from time to time what securities and other investments will be
purchased, retained or sold by each Series.
(b) Xxxxxxxx Xxxxxxxx agrees that in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution; provided that, on behalf
of any Series, Xxxxxxxx Xxxxxxxx may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide the Series with
research, analysis, advice and similar services, and Xxxxxxxx Xxxxxxxx may pay
to those brokers and dealers, in return for research and analysis, a higher
compensation or spread than may be charged by other brokers and dealers, subject
to Xxxxxxxx Xxxxxxxx' determining in good faith that such commission or spread
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 or spreads paid by such Series will be reasonable in
relation to the benefits to the Series over the long term. In no instance will
portfolio securities be purchased from or sold to Xxxxxxxx Xxxxxxxx, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder. 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 Trust 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 1940 Act,
Xxxxxxxx Xxxxxxxx hereby agrees that all records which it maintains for the
Trust 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) 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 Trust under the Securities Act of 1933, as
amended, and 1940 Act and any supplements thereto ("Registration Statement") or
as more frequently requested by the Board.
(e) The Trust 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 Rule
11a2-2(T) thereunder, and the Trust hereby consents to the
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retention of compensation by Xxxxxxxx Xxxxxxxx or person or entity associated
with Xxxxxxxx Xxxxxxxx for such transactions in accordance with Rule 11a2-
2(T)(a)(2)(iv).
3. Duties as Administrator. Xxxxxxxx Xxxxxxxx will administer the affairs
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of the Trust 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
Trust and each Series, including the oversight of transfer agency, custodial and
accounting services, except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the Board of its
responsibility for and control of the conduct of the affairs of the Trust and
each Series.
(b) Xxxxxxxx Xxxxxxxx will provide the Trust and each Series 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 Series.
(c) Xxxxxxxx Xxxxxxxx will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Trust'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 Trust 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
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Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Declaration of
Trust, By-Laws and Registration Statement of the Trust and with the instructions
and directions of the Board and will comply with the requirements of the 1940
Act, the rules thereunder, and all other applicable federal and state laws and
regulations.
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5. Delegation of Xxxxxxxx Xxxxxxxx' Duties as Investment Adviser and
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Administrator. With respect to any or all Series, Xxxxxxxx Xxxxxxxx may enter
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into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
a sub-adviser or sub-administrator in which Xxxxxxxx Xxxxxxxx delegates to such
sub-adviser or sub-administrator any or all its duties specified in Paragraph 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
duties and conditions to which Xxxxxxxx Xxxxxxxx is subject by Paragraph 2, 3
and 4 of this Contract, and further provided that each Sub-Advisory or Sub-
Administration Contract meets all requirements of the 1940 Act and rules
thereunder.
6. Services Not Exclusive. The services furnished by Xxxxxxxx Xxxxxxxx
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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. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Xxxxxxxx Xxxxxxxx, 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.
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(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 Trust and the Series; (iv) filing
fees and expenses relating to the registration and qualification of the Series'
shares and the Trust under federal and/or state securities laws and maintaining
such registrations and qualifications; (v) fees and salaries payable to the
Trust's Trustees who are not interested persons of the Trust or Xxxxxxxx
Xxxxxxxx; (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
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liability of or claim for damages or other relief asserted against the Trust or
Series 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, 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 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 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 Trust to
its Trustees and officers; and (xix) costs of mailing, stationery and
communications equipment.
(c) The Trust or a Series may pay directly any expense 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 hereof 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.
(d) Xxxxxxxx Xxxxxxxx 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 Xxxxxxxx Xxxxxxxx of any expense of the
Trust 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 Trust or a Series on any subsequent occasion.
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8. Compensation.
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(a) For the services provided and the expenses assumed pursuant to this
Contract, the Money Market Portfolio will pay to Xxxxxxxx Xxxxxxxx a fee,
computed daily and paid monthly, at an annual rate of .50% of that Series'
average daily net assets; the Growth and Income Portfolio will pay to Xxxxxxxx
Xxxxxxxx a fee, computed daily and paid monthly, at an annual rate of .70% of
that Series' average daily net assets; the Global Growth Portfolio will pay to
Xxxxxxxx Xxxxxxxx a fee, computed daily and paid monthly, at an annual rate of
.75% of that Series' average daily net assets; the Growth Portfolio will pay to
Xxxxxxxx Xxxxxxxx a fee, computed daily and paid monthly, at an annual rate of
.75% of that Series' average daily net assets; the corporate Bond Portfolio will
pay to Xxxxxxxx Xxxxxxxx a fee, computed daily and paid monthly at an annual
rate of .50% of that Series' average daily net assets; the High Yield Bond
Portfolio will pay to Xxxxxxxx Xxxxxxxx a fee, computed daily and paid monthly,
at an annual rate of .50% of that Series' average daily net assets; the Asset
Allocation Portfolio will pay to Xxxxxxxx Xxxxxxxx a fee, computed daily and
paid monthly, at an annual rate of .75% of that Series' average daily net
assets; and the Global Income Portfolio will pay to Xxxxxxxx Xxxxxxxx a fee,
computed daily and paid monthly, at an annual rate of .75% of that Series'
average daily net assets.
(b) For the services provided and the expenses assumed pursuant to this
Contract with respect to any Series hereafter established, the Trust 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 Trust 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 Xxxxxxxx Xxxxxxxx on
or before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. Limitation of Liability of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx shall
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not be liable for any error of judgment or mistake of law or for any loss
suffered by any Series or the Trust 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
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reckless disregard by it of its obligations and duties under this Contract. Any
person, even though also an officer, partner, employee, or agent of Xxxxxxxx
Xxxxxxxx, who may be or become an officer, Trustee, employee or agent of the
Trust shall be deemed, when rendering services to any Series or the Trust, to be
rendering such service to or acting solely for the Series or the Trust and not
as an officer, partner, employee, or agent or one under the control or direction
of Xxxxxxxx Xxxxxxxx even though paid by it.
10. Limitation of Liability of Trustees and Shareholders of the Trust.
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The Trustees of the Trust and the shareholders of any Series shall not be liable
for any obligations of any Series or the Trust under this Contract, and Xxxxxxxx
Xxxxxxxx agrees that, in asserting any rights or claims under this Contract, 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.
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(a) This Contract shall become effective upon the date hereabove written
provided that, with respect to any Series, this Contract shall not take effect
unless it has first been approved (i) by a vote of a majority of those Trustees
of the Trust who are not parties to this Contract or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Series' outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue 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 those Trustees of
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by the board or with respect to any given
Series by vote of a majority of the outstanding voting securities of such
Series.
(c) Notwithstanding the foregoing, with respect to any Series this Contract
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of
such Series on sixty days' written notice to Xxxxxxxx Xxxxxxxx or by Xxxxxxxx
Xxxxxxxx at any time, without the payment of any penalty, on sixty days' written
notice to the Trust. Termination of this Contract with respect to any given
Series shall in no way effect the continued validity of this Contract or the
performance
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thereunder with respect to any other Series. This Contract will automatically
terminate in the event of its assignment.
12. Amendment to this Contract. No provision of this Contract may be
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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.
13. Governing Law. This Contract shall be construed in accordance with
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the laws of the State of Delaware and the 1940 Act, provided, however, that
Section 10 above will be construed in accordance with the laws of the
Commonwealth of Massachusetts.
14. Miscellaneous. The captions in this Contract are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "assignment," "broker," "dealer,"
"investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is relaxed by a rule, regulation or order of the Securities and
Exchange Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
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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.
Attest: PAINEWEBBER SERIES TRUST
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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Attest: XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
/s/ Xxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
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