For period ending May 31, 2006 Exhibit 77Q1
File number 811-8765
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
Contract made as of April 1, 2006 between MANAGED HIGH YIELD PLUS
FUND INC., a Maryland corporation (Fund), 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 Fund is registered under the Investment Company Act of
1940, as amended (1940 Act), as a closed-end, diversified management
investment company, and has registered shares of its common stock (Shares)
for sale to the public under the Securities Act of 1933, as amended (1933 Act);
and WHEREAS, the Fund desires to retain UBS Global Americas as investment
manager and administrator to furnish certain administrative and portfolio
management services to the Fund, and UBS Global Americas 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 UBS Global Americas as investment
manager and administrator of the Fund for the period and on the terms set
forth in this Contract. 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; Appointment of Sub-Advisers
(a) Subject to the oversight and direction of the Funds Board of Directors
(Board), UBS Global Americas will provide to the Fund investment management
evaluation services principally by performing initial reviews of prospective
Sub-Advisers for the Fund and overseeing and monitoring performance of the
Sub-Advisers thereafter. UBS Global Americas agrees to report to the Fund the
results of its evaluation, oversight and monitoring functions and to keep books
and records of the Fund in connection therewith. Upon the request of the Board,
UBS Global Americas will provide portfolio management services with respect to
any portion of the Funds assets for which no Sub-Adviser is responsible. UBS
Global Americas further agrees to communicate performance expectations and
evaluations to the Sub-Advisers, and to recommend to the Fund whether a
greements with the 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 Fund, for informing
or ascertaining that it is aware of other legal and regulatory responsibilities
applicable to the Sub-Advisers with respect to the Fund, and for monitoring the
Sub-Advisers discharge of their duties; but UBS Global Americas is not
responsible for the specific actions (or inactions) of any Sub-Adviser
in the performance of the duties assigned to it.
(c) With respect to each Sub-Adviser for the Fund, UBS Global Americas
shall enter into a contract (Sub-Advisory Agreement) with the
Sub-Adviser in substantially the form previously approved by the
Board and shall seek approval of the Board or the Funds
shareholders in a manner consistent with the 1940 Act, the rules
thereunder or any applicable exemptive order.
(d) UBS Global Americas shall be responsible for the fees payable to
and shall pay the Sub-Advisers of the Fund the fee as specified in
the Sub-Advisory Agreement relating thereto.
(e) In the event that the Board shall request that UBS Global Americas provide
portfolio management services to the Fund, UBS Global Americas shall comply
with this paragraph 2(e). 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; provided that UBS Global Americas may, in its discretion,
use brokers who provide the Fund with research, analysis, advice and similar
services to execute portfolio transactions on behalf of the Fund, and
UBS Global Americas may pay to those brokers in return for brokerage
and research services a higher commission than may be charged by other
brokers, subject to UBS Global Americas determining in good faith that such
commission is reasonable in terms either of the particular transaction or of
the overall responsibility of UBS Global Americas to the Fund and its
other clients and that the total commissions paid by the Fund will
be reasonable in relation to the benefits to the Fund over the
long term. 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 with respect to the assets of the Fund
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 the Fund 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 over time to each account.
The Fund recognizes that in some cases this procedure may adversely affect
the results obtained for the Fund. In providing any portfolio management
services, UBS Global Americas will oversee the maintenance of all books and
records with respect to the securities transactions of the Fund, 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 that it maintains for the Fund are the property of the Fund,
agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records that it maintains for the Fund
and that are required to be maintained by Rule 31a-l under the 1940 Act and
further agrees to surrender promptly to the Fund any records that it maintains
for the Fund upon request by the Fund. In providing any portfolio management
services, UBS Global Americas will oversee the computation of the net asset
value and the net income of the Fund as described in the currently effective
registration statement of the Fund under the 1940 Act and any amendments or
supplements thereto (Registration Statement) or as more frequently requested
by the Board. The Fund hereby authorizes UBS Global Americas and any entity
or persons associated with UBS Global Americas which is a member of a national
securities exchange to effect any transaction on such exchange for the account
of the Fund, which transaction is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Fund hereby
consents to the retention of compensation by UBS Global Americas or any
entity or persons associated with UBS Global Americas for such
transactions.
3. Duties as Administrator. UBS Global Americas will administer the
affairs of the Fund subject to the oversight and direction of the
Board and the following understandings:
(a) UBS Global Americas will supervise all aspects of the operations
of the Fund, 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 any of
its responsibilities with respect to the conduct of the affairs of the Fund.
(b) UBS Global Americas will provide the Fund 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 books and records of the Fund in connection
with the administration of the Fund.
(c) UBS Global Americas will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Funds Registration Statement, proxy material, tax returns and required
reports to the Funds shareholders and the Securities and Exchange
Commission (Commission) and other appropriate federal or state regulatory
authorities.
(d) UBS Global Americas will provide the Fund 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 economic, statistical and investment services
normally available to institutional or other customers of UBS Global Americas
4. Further Duties. In all matters relating to the performance of this Contract,
UBS Global Americas will act in conformity with the Articles of
Incorporation, By-Laws and the Registration Statement of the Fund 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,
and all other applicable federal and state laws and regulations.
5. 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
Contract are not impaired thereby. Nothing in this Contract shall limit or
restrict the right of any director, officer or employee of UBS Global Americas,
who may also be a director, 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.
6. Expenses.
(a) During the term of this Contract, the Fund 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 the Fund will include but not be limited to the
following (which shall be in addition to the fees payable to and expenses
incurred on behalf of the Fund by UBS Global Americas under this contract):
(i) the cost (including brokerage commissions) of securities purchased or sold
by the Fund and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Fund by UBS Global
Americas under this Contract;
(iii) organizational and offering expenses of the Fund, whether or not advanced
by UBS Global Americas;
(iv) filing fees and expenses relating to the registration and
qualification of the Funds Shares under the federal and state securities laws;
(v) fees and salaries payable to the Funds directors and officers who are not
interested persons of the Fund or UBS Global Americas;
(vi) all expenses incurred in connection with the directors 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 any 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 for violation of any law;
(x) legal, accounting and auditing expenses, including legal fees of special
counsel for those directors of the Fund who are not interested persons of
the Fund;
(xi) charges of custodians, transfer agents and other agents (including a
ny lending agent);
(xii) costs of preparing share certificates;
(xiii) costs of setting in type, printing and mailing reports and proxy
materials to shareholders;
(xiv) 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, directors and agents) incurred by the Fund;
(xv) fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations;
(xvi) costs of mailing and tabulating proxies and costs of meetings of
shareholders, the Board and any committees thereof;
(xvii) the costs of investment company literature and other publications
provided by the Fund to its directors and officers;
(xviii) costs of mailing, stationery and communications equipment;
(xix) charges and expenses of any outside pricing service used to value
portfolio securities; (xx) interest on borrowings of the Fund;
(xxi) fees and expenses of listing and maintaining any listing of the Funds
Shares on any national securities exchange;
(xxii) expenses incident to any dividend reinvestment plan; and
(xxiii) costs and expenses (including rating agency fees) associated with the
issuance of any preferred stock.
(c) The Fund 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 Contract, the Fund may reduce the fee payable
to UBS Global Americas pursuant
to Paragraph 7 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 Fund received by the officers of the Fund and by
those directors who are interested persons of the Fund.
(e) The payment or assumption by UBS Global Americas of any expenses
of the Fund that UBS Global Americas is not required by this Contract
to pay or assume shall not obligate UBS Global Americas to pay or assume
the same or any similar expense of the Fund on any subsequent occasion.
7. Compensation.
(a) For the services provided and the expenses assumed pursuant to this
Contract, the Fund will pay to UBS Global Americas a fee, computed weekly
and paid monthly, at an annual rate of 0.70% of the Funds average weekly
total assets minus liabilities other than the Funds aggregate indebtedness
constituting leverage.
(b) The fee shall be computed weekly and paid monthly to UBS Global
Americas on or before the first business day of the next succeeding
calendar month.
(c) 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.
8. Limitation of Liability of UBS Global Americas. UBS Global Americas and its
officers, directors, employees and delegates, including any Sub-Adviser or
sub-administrator to the Fund, shall not be liable for any error of judgment
or mistake of law or for any loss suffered by 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 UBS
Global Americas, who may be or become an officer, director, employee
or agent of the Fund, shall be deemed, when rendering services to
the Fund or acting with respect to any business of the Fund, to
be rendering such service to or acting solely for the Fund
and not as an officer, director, employee, or agent or one
under the control or direction of UBS Global Americas even
though paid by it.
9. Duration and Termination.
(a) This Contract shall become effective upon the day and year
first written above, provided that this Contract shall not
take effect unless it has first been approved
(i) by a vote of a majority of those directors of the Fund who
are not parties to this Contract or interested persons of any
such party (Independent Directors), cast in person at a meeting
called for the purpose of voting on such approval and
(ii) by vote of a majority of the Funds outstanding voting securities.
(b) Unless sooner terminated as provided herein, 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 Directors of the Fund, 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 Fund.
(c) Notwithstanding the foregoing, 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 the Fund 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 Fund. Termination of this
Contract shall in no way affect the continued validity of this
Contract. This contract will terminate automatically in the
event of its assignment.
10. 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 shall be effective
until approved by vote of the Independent Directors or a majority of the Funds
outstanding voting securities.
11. 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 1940 Act. 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 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 1940 Act, subject to such
exemption as may be granted by the 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 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 below as of the day and year
first above written.
Attest: /s/ Xxxxxx Xxx
Name: Xxxxxx Xxx
Title: VP & Asst. Secretary
MANAGED HIGH YIELD PLUS FUND INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: VP & Treasurer
Attest: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director and Assoc. Gen. Counsel
UBS GLOBAL ASSET
ANAGEMENT (AMERICAS) INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Executive Director & Xx. Xxxxx. General Counsel
