Exhibit No. 4(a)
INTERIM INVESTMENT MANAGEMENT AND
ADMINISTRATION CONTRACT
Contract made as of October 10, 2000, between PAINEWEBBER SECURITIES
TRUST, a Massachusetts business trust ("Trust"), and XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation registered as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act"), and as a broker-dealer under the Securities Exchange Act of
1934, as amended ("1934 Act");
WHEREAS the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
is authorized to offer for public sale distinct series of shares of beneficial
interest; and
WHEREAS the Trust desires and intends to have one or more investment
advisers ("Sub-Advisers") provide investment advisory and portfolio management
services with respect to the series of shares of beneficial interest of the
Trust designated as PaineWebber Small Cap Fund and PaineWebber Strategic Income
Fund (each a "Series"); and
WHEREAS the Trust desires to retain Xxxxxxxx Xxxxxxxx as investment
manager and administrator to furnish certain administrative and portfolio
management services to the Trust with respect to the Series, and Xxxxxxxx
Xxxxxxxx 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 Xxxxxxxx Xxxxxxxx as
investment manager and administrator of the Trust and each Series for the period
and on the terms set forth in this Contract. Xxxxxxxx Xxxxxxxx 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 Trust's Board of
Trustees ("Board"), Xxxxxxxx Xxxxxxxx will provide to the Trust investment
management evaluation services principally by performing initial reviews of
prospective Sub-Advisers for each Series and supervising and monitoring
performance of the Sub-Advisers thereafter. Xxxxxxxx Xxxxxxxx agrees to report
to the Trust the results of its evaluation, supervision and monitoring functions
and to keep certain books and records of the Trust in connection therewith.
Xxxxxxxx Xxxxxxxx further agrees to communicate performance expectations and
evaluations to the Sub-Advisers, and to recommend to the Trust whether
agreements with Sub-Advisers should be renewed, modified or terminated.
(b) Xxxxxxxx Xxxxxxxx is responsible for informing the Sub-Advisers of
the investment objective(s), policies and restrictions of the Series for which
the Sub-Adviser is responsible, for informing or ascertaining that it is aware
of other legal and regulatory responsibilities applicable to the Sub-Adviser
with respect to the Series for which the Sub-Adviser is responsible, and for
monitoring the Sub-Advisers' discharge of their duties; but Xxxxxxxx Xxxxxxxx is
not responsible
for the specific actions (or inactions) of a Sub-Adviser in the performance of
the duties assigned to it.
(c) With respect to each Sub-Adviser for a Series, Xxxxxxxx Xxxxxxxx
shall enter into an agreement ("Sub-Advisory Agreement") with the Sub-Adviser in
substantially the form previously approved by the Board.
(d) Xxxxxxxx Xxxxxxxx shall be responsible for the fees payable to and
shall pay the Sub-Adviser of a Series the fee as specified in the Sub-Advisory
Agreement relating thereto.
3. Duties as Administrator. Xxxxxxxx Xxxxxxxx will administer the
affairs of the Trust and Series subject to the oversight and direction of the
Board and the following understandings:
(a) Xxxxxxxx Xxxxxxxx will supervise all aspects of the operations of
the Trust and the 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
responsibility for and control of the conduct of the affairs of the Trust and
the Series.
(b) Xxxxxxxx Xxxxxxxx will provide the Trust and the 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
Series.
(c) Xxxxxxxx Xxxxxxxx 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
shareholders of the Series and the Securities and Exchange Commission and other
appropriate federal or state regulatory authorities.
(d) Xxxxxxxx Xxxxxxxx will provide the Trust and the 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) Xxxxxxxx Xxxxxxxx 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 Xxxxxxxx Xxxxxxxx.
4. Further Duties. In all matters relating to the performance of this
Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Declaration of
Trust, By-Laws and the currently effective registration statement of the Trust
and any amendments or supplements thereto ("Registration Statement") 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 Xxxxxxxx Xxxxxxxx
hereunder are not to be deemed exclusive and Xxxxxxxx Xxxxxxxx shall be free to
furnish similar services to
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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 Xxxxxxxx Xxxxxxxx, 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.
6. Expenses.
(a) During the term of this Contract, each Series will bear all
expenses, not specifically assumed by Xxxxxxxx Xxxxxxxx, 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 the 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 Xxxxxxxx Xxxxxxxx under this
Contract; (iii) 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; (iv) fees
and salaries payable to the Trust's Trustees and officers who are not interested
persons of the Trust or Xxxxxxxx Xxxxxxxx; (v) all expenses incurred in
connection with the Trustees' services, including travel expenses; (vi) taxes
(including any income or franchise taxes) and governmental fees; (vii) costs of
any liability, uncollectible items of deposit and other insurance and fidelity
bonds; (viii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Trust or the Series for
violation of any law; (ix) 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; (x) charges of custodians, transfer agents and
other agents; (xi) costs of preparing share certificates; (xii) 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; (xiii) costs of mailing prospectuses and supplements
thereto, statements of additional information and supplements thereto, reports
and proxy materials to existing shareholders; (xiv) 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 the Series; (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 cost of investment company literature and other
publications provided by the Trust to its Trustees and officers; (xviii) costs
of mailing, stationery and communications equipment; (xix) expenses incident to
any dividend, withdrawal or redemption options; (xx) charges and expenses of any
outside pricing service used to value portfolio securities; (xxi) interest on
borrowings of the Trust; and (xxii) fees or expenses related to license
agreements with respect to securities indices.
(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 Xxxxxxxx
Xxxxxxxx and acknowledged as otherwise payable by Xxxxxxxx Xxxxxxxx pursuant to
this Contract, a Series may reduce the fee
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payable to Xxxxxxxx Xxxxxxxx pursuant to Paragraph 7 thereof by such amount. To
the extent that such deductions exceed the fee payable to Xxxxxxxx Xxxxxxxx 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) Xxxxxxxx Xxxxxxxx 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 Xxxxxxxx Xxxxxxxx of any expenses of
the Trust or a Series that Xxxxxxxx Xxxxxxxx is not required by this Contract to
pay or assume shall not obligate Xxxxxxxx Xxxxxxxx to pay or assume the same or
any similar expense of the Trust or a Series on any subsequent occasion.
7. Compensation.
(a) For the services provided and the expenses assumed pursuant to this
Contract, with respect to the Series, the Trust will pay to Xxxxxxxx Xxxxxxxx a
fee, computed daily and paid monthly, at an annual rate as set forth below,
expressed as a percentage of average daily net assets of the applicable Series:
PaineWebber Small Cap Fund.............................. 1.00%
PaineWebber Strategic Income Fund....................... 0.75%
(b) The fee shall be computed daily and paid monthly to Xxxxxxxx
Xxxxxxxx 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 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.
8. Limitation of Liability of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx and
its officers, directors, employees and delegates, including any Sub-Adviser to a
Series, shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust, the Series 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 Xxxxxxxx Xxxxxxxx, who may be or become
an officer, Trustee, employee or agent of the Trust shall be deemed, when
rendering services to a Series or the Trust or acting with respect to any
business of the 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 Xxxxxxxx Xxxxxxxx even though
paid by it.
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9. Limitation of Liability of the Trustees 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 Agreement and
Xxxxxxxx Xxxxxxxx agrees that, in asserting any rights or claims under this
Agreement, 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.
10. Duration and Termination.
(a) This Contract shall become effective for each Series upon the day
and year first written above, provided that this Contract has been approved for
the Series 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 at a
meeting called for the purpose of voting on such approval and in which the
Trustees may participate by any means of communication that allows all Trustees
participating to hear each other simultaneously during the meeting.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for the Series for a period of 150 days after the day and
year first above written.
(c) Notwithstanding the foregoing, with respect to a 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 the Series on ten days' written notice to Xxxxxxxx Xxxxxxxx and
may be terminated by Xxxxxxxx Xxxxxxxx at any time, without the payment of any
penalty, on sixty days' written notice to the Trust. Termination of this
Contract with respect to a Series shall in no way affect the continued validity
of this Contract or the performance thereunder with respect to any other Series.
11. 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 a
Series shall be effective until approved by vote of the Independent Trustees or
a majority of the Series' outstanding voting securities.
12. 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, provided, however,
that section 9 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 New York or the Commonwealth of Massachusetts conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. 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"
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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.
PAINEWEBBER SECURITIES TRUST
Attest: /s/ Xxxxxxxx Xxxxxxxx By /s/ Xxxxxx X. X'Xxxxxxx
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Assistant Secretary Name: Xxxxxx X. X'Xxxxxxx
Title: Vice President and Secretary
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
Attest: /s/ Xxxxx X. Xxxxxx By /s/ Xxx X. Doberman
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First Vice President and Name: Xxx X. Doberman
Associate General Counsel Title: Senior Vice President and
General Counsel
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