Exhibit No. 4(f)
SUB-ADVISORY AGREEMENT
Agreement made as of ___________________, 2001 between XXXXXXX
ADVISORS, INC. ("Xxxxxxx Advisors," formerly known as Xxxxxxxx Xxxxxxxx Asset
Management Inc.), a Delaware corporation, and XXXXXXXX MELLON ASSET MANAGEMENT
COMPANY LLC ("Sub-Adviser"), a limited liability company (the "Agreement").
RECITALS
(1) Xxxxxxx Advisors has entered into a Management Agreement dated
June 15, 1995 ("Management Agreement") with PaineWebber 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 PACE MUNICIPAL
FIXED INCOME INVESTMENTS ("Portfolio");
(2) Xxxxxxx Advisors entered into a Sub-Advisory Agreement dated as
of October 10, 2000 (the "Old Sub-Advisory Agreement") with Xxxxxxxx, Ayer &
Wood, Inc. ("Xxxxxxxx") with respect to the Portfolio, pursuant to which
Xxxxxxxx agreed to furnish certain investment advisory services;
(3) Effective __________________, 2001, Xxxxxxxx merged into the
Sub-Adviser, a direct wholly owned subsidiary of Mellon Financial Corporation,
and as a result of this transaction, the Old Sub-Advisory Agreement between
Xxxxxxx Advisors and Xxxxxxxx automatically terminated; and
(4) Xxxxxxx Advisors and the Sub-Adviser wish to enter into a new
Sub-Advisory Agreement embodying substantially the same terms and provisions as
the Old Sub-Advisory Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, Xxxxxxx Advisors and the Sub-Adviser agree as
follows:
1. APPOINTMENT. Xxxxxxx Advisors hereby appoints the Sub-Adviser
as an investment sub-adviser with respect to the Portfolio 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 Xxxxxxx Advisors, and any written
guidelines adopted by the Board or Xxxxxxx Advisors, the Sub-Adviser will
provide a continuous investment program for all or a designated
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portion of the assets ("Segment") of the Portfolio, including investment
research and discretionary management with respect to all securities and
investments and cash equivalents in the Portfolio or Segment. The Sub-Adviser
may from time to time seek research assistance and may rely upon resources
available to it through its affiliated companies to the extent such actions
would not constitute an "assignment" for purposes of the 1940 Act but in no case
shall such assistance and/or reliance relieve the Sub-Adviser of any of its
obligations hereunder, nor shall the Portfolio or Segment or Xxxxxxx Advisors be
responsible for any additional fees or expenses hereunder as a result. 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 will be
responsible for voting proxies of issuers of securities held by 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, in placing orders with brokers, it
will obtain the best net result in terms of price and execution; provided that,
on behalf of the Portfolio, 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, 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 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 over the long term. In no instance will portfolio
securities be purchased from or sold to Xxxxxxx Advisors 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 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. Xxxxxxx Advisors recognizes that in some
cases this procedure may adversely affect the results obtained for the Portfolio
or Segment.
(c) The Sub-Adviser will maintain all books and records required to
be maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions by the Sub-Adviser on behalf of the
Portfolio or Segment, and will furnish the Board and Xxxxxxx Advisors with such
periodic and special reports as the Board or Xxxxxxx Advisors 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 are the property of the Trust, agrees
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to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
records that it maintains for the Portfolio 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 upon
request by the Trust.
(d) At such times as shall be reasonably requested by the Board or
Xxxxxxx Advisors, the Sub-Adviser will provide the Board and Xxxxxxx Advisors
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 Xxxxxxx Advisors any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or other
customers.
(e) In accordance with procedures adopted by the Board, as amended
from time to time, the Sub-Adviser is responsible for assisting in the fair
valuation of all portfolio securities in the 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.
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 Xxxxxxx Advisors; and will
comply with the requirements of the 1940 Act, and the Investment Advisers Act of
1940, as amended ("Advisers Act"), and the rules under each, the Code, and all
other federal and state laws and regulations applicable to the Trust and the
Portfolio. Xxxxxxx Advisors 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 Xxxxxxx Advisors, and any amendments or
supplements to any of these materials as soon as practicable after such
materials become available; and further agrees to identify to the Sub-Adviser in
writing any broker-dealers that are affiliated with Xxxxxxx Advisors (other than
UBS PaineWebber Inc. and Xxxxxxx Advisors itself).
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 Xxxxxxx Advisors.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, Xxxxxxx Advisors, not the Portfolio,
will pay to the Sub-Adviser a fee, computed daily and payable monthly, at an
annual rate of 0.20% of the average daily net assets up to and including $60
million and 0.15% of the average daily net assets in excess of $60 million 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.
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(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.
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 Xxxxxxx Advisors 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 series 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, the Trust's custodian, administrator, distributor or any
broker-dealer selected with due care by the Sub-Adviser to effect transactions
for the Portfolio.
In particular, in the event the Sub-Adviser shall manage only a
portion of the Portfolio's investments, 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 Xxxxxxx Advisors 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.
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(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 Xxxxxxx
Advisors and the Board with a copy of such code of ethics, together with
evidence of its adoption. Within fifteen days of the end of the last calendar
quarter of each year that this Agreement is in effect, the president or a
vice-president of the Sub-Adviser shall certify to Xxxxxxx Advisors 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 Xxxxxxx Advisors, the
Sub-Adviser shall permit Xxxxxxx Advisors, its employees or its agents to
examine the reports required to be made by the Sub-Adviser pursuant to Rule
17j-1 and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided Xxxxxxx Advisors 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 Xxxxxxx Advisors
at least annually.
(d) The Sub-Adviser will notify Xxxxxxx Advisors 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) The Sub-Adviser agrees that neither it, nor any of its
affiliates, will in any way refer directly or indirectly to its relationship
with the Trust, the Portfolio, Xxxxxxx Advisors or any of their respective
affiliates in offering, marketing or other promotional materials without the
express written consent of Xxxxxxx Advisors.
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 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 Xxxxxxx Advisors has authority to enter
into this Agreement pursuant to exemptive relief from the SEC without a vote of
the Portfolio's outstanding voting securities.
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(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 60
days' written notice to the Sub-Adviser. This Agreement may also be terminated,
without the payment of any penalty, by Xxxxxxx Advisors: (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
Xxxxxxx Advisors, 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 Xxxxxxx Advisors.
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
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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 Xxxxxxx Advisors 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
Xxxxxxx Advisors will be sent to the attention of the General Counsel. All
notices provided to the Sub-Adviser will be sent to the attention of the
Compliance Officer.
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.
XXXXXXX ADVISORS, INC.
00 Xxxx 00xx Xxxxxx
Xxxxxx: Xxx Xxxx, Xxx Xxxx 00000-0000
By: By:
---------------------------- ----------------------------
Name: Xxxxx X. Xxxxxx Name: Xxx X. Doberman
Title: Director Title: Executive Director
XXXXXXXX MELLON ASSET
MANAGEMENT COMPANY LLC
Attest: Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: By:
---------------------------- ----------------------------
Name: Name:
Title: Title:
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