Exhibit (4)
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of April 1, 2006 between UBS SERIES TRUST, a
Massachusetts business trust ("Trust"), 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.
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 UBS Global Americas 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 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 Trust hereby appoints UBS Global Americas as
investment adviser and administrator of the Trust and each Series 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 Adviser.
(a) Subject to the supervision of the Trust's Board of Trustees
("Board"), UBS Global Americas 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. UBS Global
Americas will determine from time to time what securities and other investments
will be purchased, retained or sold by each Series.
(b) UBS Global Americas 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, UBS Global Americas 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 UBS Global Americas may pay to those brokers and dealers, in
return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to UBS Global Americas'
determining in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of UBS
Global Americas 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 UBS Global Americas, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder. Whenever UBS Global Americas simultaneously
places orders to purchase or sell the same security on behalf of a Series 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 to each account.
The Trust recognizes that in some cases this procedure may adversely affect the
results obtained for the Series.
(c) UBS Global Americas 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, UBS Global Americas 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) UBS Global Americas 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 the 1940 Act and any supplements thereto ("Registration Statement")
or as more frequently requested by the Board.
(e) The Trust hereby authorizes UBS Global Americas and any entity or
person 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 any Series, which transaction is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation by UBS Global Americas or such person
or entity associated with UBS Global Americas for such transactions in
accordance with Rule 11a2-2(T)(a)(2)(iv).
3. Duties as Administrator. UBS Global Americas will administer the
affairs of the Trust and each Series subject to the supervision of the Board and
the following understandings:
(a) UBS Global Americas 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) UBS Global Americas 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) UBS Global Americas 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) UBS Global Americas 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.
- 2 -
(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 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.
5. Delegation of UBS Global Americas' Duties as Investment Adviser and
Administrator. With respect to any or all Series, UBS Global Americas may enter
into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
a sub-adviser or sub-administrator in which UBS Global Americas delegates to
such sub-adviser or sub-administrator 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 duties and conditions to which UBS Global Americas is
subject by Paragraphs 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 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 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.
(a) During the term of this Contract, each Series 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 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 UBS Global Americas 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 UBS Global
Americas; (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 liability of or claim for
- 3 -
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, 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 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 Series may pay directly any expense 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 Series may reduce the fee payable to UBS Global Americas
pursuant to Paragraph 8 hereof 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 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 UBS Global Americas of any expense of
the Trust or a Series 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 Trust or a Series on any subsequent occasion.
8. Compensation.
(a) For the services provided and the expenses assumed pursuant to this
Contract, U.S. Allocation Portfolio will pay to UBS Global Americas a fee,
computed daily and payable monthly, at an annual rate of 0.50% 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 UBS Global Americas 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 UBS Global Americas. All such Fee Agreements
shall provide that they are subject to all terms and conditions of this
Contract.
- 4 -
(c) The fee shall be computed daily and paid monthly to UBS Global
Americas 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 UBS Global Americas. UBS Global Americas
shall 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 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, Trustee, employee or agent of the
Trust shall be deemed, when rendering services to any Series or the Trust or
acting with respect to any business of such Series or the Trust, to be rendering
such service to or acting solely for the Series or the Trust 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.
10. Limitation of Liability of the Trusts and Shareholders of the Trust.
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
UBS Global Americas 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.
(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 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 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 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 UBS Global Americas
or by UBS Global Americas at any time, without the payment of any
- 5 -
penalty, on sixty days' written notice to the Trust. 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.
12. 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.
13. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Delaware, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act, provided,
however, that Section 10 above will be construed in accordance with the laws of
the Commonwealth of Massachusetts. To the extent that the applicable laws of
the State of Delaware or the Commonwealth of Massachusetts conflict with the
applicable provisions of the 1940 Act, the latter shall control.
14. 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," "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.
- 6 -
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.
UBS SERIES TRUST
Attest:_____________________________ By:______________________________
Name: Name:
Title: Title:
UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC.
Attest:______________________________ By:______________________________
Name: Name:
Title: Title:
- 7 -
