Exhibit (4)(a)
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of ____________ 2000, between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SECURITIES TRUST, a Delaware business trust ("Trust"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ASSET MANAGEMENT INC. ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"), a Delaware corporation registered
as a broker-dealer under the Securities Exchange Act of 1934, as amended ("1934
Act"), and 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
currently has two distinct series of shares of beneficial interest, which
correspond to distinct portfolios, which have been designated as PaineWebber
Enhanced S&P 500 Fund and PaineWebber Enhanced Nasdaq-100 Fund; and
WHEREAS the Trust desires to retain ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as investment
adviser and administrator to furnish certain administrative, investment advisory
and portfolio management services to the Trust with respect to PaineWebber
Enhanced S&P 500 Fund and PaineWebber Enhanced Nasdaq-100 Fund and any
other Series as to which this Contract may hereafter be made applicable (each a
"Series"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as
investment adviser and administrator of the Trust and each Series for the period
and on the terms set forth in this Contract. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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"), ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide a continuous investment program for a
Series, including investment research and management with respect to all
securities and investments and cash equivalents in the Series. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
will determine from time to time what securities and other investments will be
purchased, retained or sold by the Series. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may delegate to a
sub-adviser, in whole or in part, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇' duty to provide a
continuous investment management program with respect to any Series, including
the provision of investment management services with respect to a portion of the
Series' assets, in accordance with paragraph 5 of this Agreement.
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 any Series, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may, in its
discretion, use brokers who provide the Series with research, analysis, advice
and similar services to execute portfolio transactions on behalf of the Series,
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may pay to those brokers in return for brokerage and
research services a higher commission than may be charged by other brokers,
subject to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇' determining in good faith that such commission is
reasonable in terms either of the particular transaction or of the overall
responsibility of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to such Series and its other clients and
that the total commissions 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder, or any applicable exemptive orders. Whenever
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ simultaneously places orders to purchase or sell the same
security on behalf of a Series and one or more other accounts advised by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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-l 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) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and any entity or
person associated with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 1934 Act
and the rules thereunder, and the Trust hereby consents to the retention of
compensation by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any person or entity associated with
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for such transaction.
3. Duties as Administrator. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will administer the
affairs of the Trust and each Series subject to the supervision of the Board and
the following understandings:
(a) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will supervise all aspects of the operations of
the Trust and each Series, 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 its
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responsibility for and control of the conduct of the affairs of the Trust and
each Series.
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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.
(e) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will act in conformity with the Trust Instrument,
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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇' DUTIES AS INVESTMENT ADVISER AND
ADMINISTRATOR. With respect to any or all Series, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may enter
into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
one or more sub-advisers or sub-administrators in which ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
delegates to such sub-advisers or sub-administrators 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 corresponding duties and conditions to
which ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is subject by Paragraphs 2 and 3 of this Contract and
all the duties and conditions of paragraph 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. Furthermore, to the extent
consistent with the regulations and orders of the Securities and Exchange
Commission, the appointment and engagement of any sub-advisor and delegation to
it of duties hereunder by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be subject only to the
approval of the Board of Trustees of the Trust.
6. SERVICES NOT EXCLUSIVE. The services furnished by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
hereunder are not to be deemed exclusive and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby or unless otherwise agreed to by the parties hereunder
in writing. Nothing in this Contract shall limit or restrict the right of any
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director, officer or employee of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under this
Contract; (iii) expenses of organizing the Trust and the Series; (iv) filing
fees and expenses relating to the registrations and qualification of the Series'
shares and the Trust under federal and/or state securities laws and maintaining
such registration and qualifications; (v) fees and salaries payable to the
Trust's Trustees and officers who are not interested persons of the Trust or
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; (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 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) cost 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; (xix) costs of mailing, stationery and communications
equipment; (xx) expenses incident to any dividend, withdrawal or redemption
options; (xxi) charges and expenses of any outside pricing service used to value
portfolio securities; and (xxii) interest on borrowings of the Trust.
(c) The Trust or a Series may pay directly any expenses incurred by it
in its normal operations and, if any such payment is consented to by ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and acknowledged as otherwise payable by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to
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this Contract, the Series may reduce the fee payable to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
pursuant to Paragraph 8 thereof by such amount. To the extent that such
deductions exceed the fee payable to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of any expenses of
the Trust or a Series that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is not required by this Contract to
pay or assume shall not obligate ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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, with respect to PaineWebber Enhanced S&P 500 Fund, the Trust will pay
to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a fee, computed daily and paid monthly, at an annual rate
of 0.40% of average daily net assets of such Series.
(b) For the services provided and the expenses assumed pursuant to this
Contract, with respect to PaineWebber Enhanced Nasdaq-100 Fund, the Trust will
pay to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a fee, computed daily and paid monthly, at an annual
rate of 0.75% of average daily net assets of such Series.
(c) For the services provided and the expenses assumed pursuant to this
Contract with respect to any other Series hereafter established, the Trust will
pay to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. All such Fee Agreements shall
provide that they are subject to all terms and conditions of this Contract.
(d) The fee shall be computed daily and paid monthly to ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ on or before the first business day of the next succeeding calendar
month.
(e) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective day 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
its delegates, including any Sub-Adviser or Sub-Administrator to any Series or
the Trust, shall be liable for any error of judgment or mistake of law or for
any loss suffered by any Series, the Trust 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
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its obligations and duties under this Contract. Any person, even though also an
officer, director, employee, or agent of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ even though
paid by it.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE
TRUST. No Trustee, shareholder, officer, employee or agent of any Series shall
be liable for any obligations of any Series or the Trust under this Contract,
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 any Trustee, shareholder, officer,
employee or agent.
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 in effect for two years from the above written date. Thereafter, if not
terminated, 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ at any time, without the payment of any 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.
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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. 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.
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," "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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSET
MANAGEMENT INC.
Attest: By
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SECURITIES TRUST
Attest: By
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