Exhibit 99 (4) (h)
SUB-ADVISORY AGREEMENT
Agreement made as of June 30, 2006 between UBS Global Asset Management
(Americas) Inc. ("UBS Global Americas"), a Delaware corporation, and
Institutional Capital LLC ("Sub-Adviser"), a Delaware 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 (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 UBS PACE Large Co Value Equity
Investments ("Portfolio"); and
(2) UBS Global Americas desires to allocate the portfolio investments of the
Portfolio between Segments, and to retain the Sub-Adviser to furnish certain
investment advisory services with respect to one segment ("Segment") of the
investments of the Portfolio; and
(3) The Sub-Adviser is willing 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 one Segment of the Portfolio's
investments 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 with respect to its Segment of the Portfolio's
investments, including investment research and discretionary management to all
securities and investments and cash equivalents in the Portfolio allocated by
UBS Global Americas to the Sub-Adviser's Segment of the Portfolio's investments.
The Sub-Adviser will determine from time to time what investments will be
purchased, retained or sold by the Portfolio in its Segment of the Portfolio's
investments. The Sub-Adviser will be responsible for placing purchase and sell
orders for investments and for other related transactions with respect its
Segment of the Portfolio. The Sub-Adviser will be
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responsible for voting proxies of issuers of securities held by the
Sub-Adviser's Segment of the Portfolio. 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 Portfolio's Prospectus and
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, in placing orders with brokers, it will attempt
to 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 who
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 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 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 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. UBS Global Americas recognizes that in some cases
this procedure may adversely affect the results obtained for the Portfolio.
(d) 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, and will furnish the Board and UBS Global Americas with 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
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that all records which it maintains for the Portfolio 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 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.
(e) 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 Sub-Adviser's Segment of the Portfolio's
investments and make available to the Board and UBS Global Americas any
economic, statistical and investment services that the Sub-Adviser normally
makes available to its institutional or other customers.
(f) 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 Sub-Adviser's Segment of the Portfolio and will use
its reasonable efforts to arrange for the provision of a price(s) from a
party(ies) 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 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. 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.).
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, computed daily and payable monthly, at an annual rate of
0.30% of the Portfolio's average daily net assets allocated
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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. Under this fee agreement, the Sub-Adviser will
receive fees based on the value of portfolio assets under its management as
these assets have been allocated to it by UBS Global Americas.
(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) 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, but the Sub-Adviser is under no
obligation to do so.
(d) 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 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 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 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.
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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 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, the president or a
vice-president 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 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 shall provide notice to UBS Global Americas within a
reasonable time after being informed or learning of the death or withdrawal of
any if its partners, upon the admission of any new partners or upon any other
change in its membership.
(e) 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, 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.
(f) 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, UBS Global Americas or any of their respective
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affiliates in offering, marketing or other promotional materials without the
express written consent of UBS Global Americas.
8. REPRESENTATION OF UBS GLOBAL AMERICAS. UBS Global Americas represents that
(i) the Trust was duly organized as a Delaware business trust under the laws of
Delaware, (ii) the appointment of the Sub-Adviser has been duly authorized and
(iii) the Trust has acted and will continue to act in conformity with the 1940
Act and other applicable laws.
9. 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.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the consummation of the
anticipated transaction involving a change in control of the Sub-Advisor
resulting in the automatic termination of the prior agreement between the
parties hereto, 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,
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 those trustees of the Trust who are not
parties to this Agreement 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 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 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,
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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 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.
11. 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
those trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, 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).
12. GOVERNING LAW. This Agreement shall be construed in accordance with the 1940
Act and the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of Delaware conflict with the applicable provisions of the 1940 Act,
the latter shall control.
13. 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.
14. 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
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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 Xxxxxx X. Xxxxxx, 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.
UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC.
00 Xxxx 00xx Xxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxx X. Xxxxxx
Title: Director & Associate Title: Executive Director & Senior
General Counsel Associate General Counsel
INSTITUTIONAL CAPITAL LLC
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx: Xxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President Title: Executive Vice President
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