Exhibit 99 (4) (v)
SUB-ADVISORY AGREEMENT
Agreement made as of April 1, 2006 between UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC. ("UBS Global Americas"), a Delaware corporation, and XXXXXX
XXXXXX INC. ("Sub-Adviser"), a New York corporation (the "Agreement").
RECITALS
(1) UBS Global Americas has entered into a Management Agreement dated April
1, 2006 ("Management Agreement") with UBS PACE Select Advisors Trust ("Trust"),
an open-end management investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"), with respect to UBS PACE
INTERNATIONAL EQUITY INVESTMENTS ("Portfolio");
(2) Sub-Adviser has previously served as a sub-adviser to the Portfolio
pursuant to an agreement with UBS Global Asset Management (US) Inc. dated
October 10, 2000, as amended January 1, 2004, which agreement has been
terminated as of the date hereof pursuant to Section 9(c) of the agreement;
(3) UBS Global Americas is authorized to retain one or more sub-advisers to
furnish certain investment advisory services to UBS Global Americas and the
Portfolio;
(4) UBS Global Americas desires to retain the Sub-Adviser to continue to
furnish certain investment advisory and administrative services to UBS Global
Americas and the Portfolio or a designated portion of the assets of the
Portfolio ("Segment"); and
(5) The Sub-Adviser is willing to continue to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, UBS Global Americas and the Sub-Adviser agree as follows:
1. APPOINTMENT. UBS Global Americas 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 UBS Global Americas, and any written
guidelines adopted by the Board or UBS Global Americas, the Sub-Adviser will
provide a continuous investment program for the Portfolio or Segment, including
investment research and discretionary management with respect to all securities
and investments and cash equivalents in the Portfolio or Segment. 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 understands
that the Portfolio's assets need to be managed so as to permit the Portfolio to
qualify or 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 it will not consult with any other
sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio concerning any
transaction by the Portfolio or Segment in securities or other assets, including
(i) the purchase by the Portfolio or Segment of a security issued by the Other
Sub-Adviser, or an affiliate of the Other Sub-Adviser, to the Trust or Portfolio
except as permitted by the 1940 Act, or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its affiliate, is
the principal underwriter.
(c) The Sub-Adviser agrees that it will be responsible for voting proxies
of issuers of securities held by the Portfolio or Segment. The Sub-Adviser
further agrees that it will adopt written proxy voting procedures that shall
comply with the requirement of the 1940 Act and the Investment Advisers Act of
1940, as amended ("Advisers Act"), and that shall be acceptable to the Board.
The Sub-Adviser further agrees that it will provide the Board on or before
August 1st of each year, or more frequently as the Board may reasonably request,
with a written report of the proxies voted during the most recent 12-month
period ending June 30, or such other period as the Board may designate, in a
format that shall comply with the 1940 Act and that shall be acceptable to the
Board.
(d) 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 or Segment, 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 or
Segment, 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 or Segment 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 or Segment over the long
term. In no instance will portfolio securities be purchased from or sold to UBS
Global Americas 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 or Segment 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 by the Sub-Adviser to be
equitable over time to each account. UBS Global Americas recognizes that in some
cases this procedure may adversely affect the results obtained for the Portfolio
or Segment.
(e) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to Rule 31a-1(b)(2)(ii), (3), (5), (6), (7), (9), and (10)
under 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 UBS Global Americas with
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such periodic and special reports as the Board or UBS Global Americas 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 or Segment are the property of the Trust, agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records that it
maintains for the Portfolio or Segment 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 or Segment upon request
by the Trust.
(f) At such times as shall be reasonably requested by the Board or UBS
Global Americas, the Sub-Adviser will provide the Board and UBS Global Americas
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 UBS Global Americas any economic, statistical and investment
services that the Sub-Adviser normally makes generally available to its
institutional or other customers.
(g) 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 UBS Global Americas; and will comply
with the requirements of the 1940 Act and the 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. UBS Global Americas 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 UBS Global
Americas, 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 UBS Global Americas (other than UBS Financial Services Inc.). The
Sub-Adviser's duty, if any, under this Agreement to act in conformity with any
document, instruction, direction or guideline produced by the Trust or UBS
Global Americas shall not arise until it has been delivered to the Sub-Adviser;
and any changes to any of the foregoing will make due allowance for the time
within which the Sub-Adviser shall have to come into compliance.
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 UBS Global Americas.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, UBS Global Americas, not the Portfolio, will pay to
the Sub-Adviser a fee,
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computed daily and payable monthly, at an annual rate of 0.35% of the average
daily net assets up to and including $150 million, 0.30% of the average daily
net assets above $150 million up to and including $250 million, 0.25% of the
average daily net assets above $250 million up to and including $350 million,
and 0.20% of the average daily net assets above $350 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.
(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 maybe,
shall be pro-rated according to the proportion which such period bears to the
full month in that such effectiveness or termination occurs.
(d) For those periods in which UBS Global Americas has agreed to waive all
or a portion of its management fee, UBS Global Americas may ask the Sub-Adviser
to waive the same proportion of its fees payable hereunder, but the Sub-Adviser
is under no obligation to do so.
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 UBS Global Americas in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Sub-Adviser's 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
portfolio of the Trust, for any portion of the Portfolio not managed by the
Sub-Adviser or for the acts or omissions of any other adviser or sub-adviser to
the Trust or Portfolio.
In particular, in the event the Sub-Adviser shall manage only a Segment of
the Portfolio, 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 (i) 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, or (ii) subsection (i)
above is inapplicable as a result of or pursuant to authority or permission
contained in written instructions or directions produced by the Trust or UBS
Global Americas, including, without limitation, written instructions or
directions that contemplate that the Portfolio as a whole would not be in such
violation or fail to so qualify by virtue of the aggregation of the Segment with
one or more other portions of the Portfolio.
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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 UBS Global Americas 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.
(b) The Sub-Adviser has adopted a written code of ethics and appropriate
procedures complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide UBS Global Americas 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, a
duly-authorized officer of the Sub-Adviser shall certify to UBS Global Americas
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 UBS Global
Americas, the Sub-Adviser shall permit UBS Global Americas, 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 UBS Global Americas 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 UBS Global
Americas at least annually.
(d) The Sub-Adviser will notify UBS Global Americas 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.
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
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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 UBS Global Americas has authority to enter
into this Agreement pursuant to exemptive relief from the SEC without a vote of
the Portfolio's outstanding voting securities.
(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 a 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 30 days'
written notice to the Sub-Adviser. This Agreement may also be terminated,
without the payment of any penalty, by UBS Global Americas: (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 UBS
Global Americas, the Sub-Adviser becomes unable to discharge its duties and
obligations under this Agreement, including circumstances such as the 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 UBS Global Americas.
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
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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 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 UBS Global Americas 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 UBS Global
Americas will be sent to the attention of its General Counsel. All notices
provided to the Sub-Adviser will be sent to the attention of Xxxxx Xxxxxxx,
Director-Client Services.
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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.
UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC.
0 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attest:
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Director Title: Executive Director
XXXXXX XXXXXX INC.
Xxxxxxx Xxxxx
00 Xxxxxx Xxxxxxx
Attest: Xxxxxxxxx, Xxxxxxxx XX0 0XX
By: /s/ Xxxxxx McGlosh By: /s/ Xxxxx Xxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxx McGlosh Name: Xxxxx Xxxxxxx
Title: Solicitor Title: Director
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