Exhibit No. 5(g)
SUB-INVESTMENT ADVISORY CONTRACT
Contract made as of September 1, 1993, between XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation, and XXXXXXXX-
XXXXXXXXX CAPITAL MANAGEMENT, L.P. ("Sub-Adviser"), a California limited
partnership.
WHEREAS, Xxxxxxxx Xxxxxxxx has entered into an Investment Advisory and
Administration Contract dated April 21, 1988 ("Advisory Contract") with
PaineWebber Series Trust (the "Trust"), an open-end investment company
registered under the Investment Company Act of 1940, as amended ("1940 Act");
and
WHEREAS, Xxxxxxxx Xxxxxxxx wishes to retain the Sub-Adviser as sub-adviser
to furnish certain investment advisory services to Xxxxxxxx Xxxxxxxx and the
Aggressive Growth Portfolio series ("Series") of the Trust, and the Sub-Adviser
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. Xxxxxxxx Xxxxxxxx hereby appoints the Sub-Adviser as its
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investment sub-adviser with respect to the Series for the period and on the
terms set forth in this Contract. The Sub-Adviser accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties as Sub-Adviser.
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(a) Subject to the supervision of the Trust's Board of Trustees ("Board")
and Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide a continuous investment
program for the Series, including investment research and management. The Sub-
Adviser will determine from time to time what investments will be purchased,
retained or sold by the Series. The Sub-Adviser will be responsible for placing
purchase and sell orders for investments and for other related transactions. The
Sub-Adviser will be responsible for voting proxies of issuers of securities held
by the Series. The Sub-Adviser will manage the Series' assets so as to permit
the Series (i) to qualify or to continue to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code, as amended ("Code") and
(ii) to comply or continue to comply with the diversification requirements
imposed by Section 817(h) of the Code and the regulations thereunder. The Sub-
Adviser will provide services under this Contract in accordance with the Series'
investment objective, policies and restrictions as stated in the Trust's
Prospectus.
(b) 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 Series, the Sub-Adviser 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 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 determining 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 Series and its other clients
and that the total commissions paid by the 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 the Sub-Adviser, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder. Whenever the Sub-Adviser simultaneously places
orders to purchase or sell the same security on behalf of the Series and one or
more other accounts advised by the Sub-Adviser, such orders will be allocated as
to price and amount among all such accounts in a manner believed to be equitable
to each account. Xxxxxxxx Xxxxxxxx recognizes that in some cases this procedure
may adversely affect the results obtained for the Series.
(c) The Sub-Adviser will maintain all books and records required to be
maintained by the Sub-Adviser pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on behalf of the
Series, and will furnish the Board and Xxxxxxxx Xxxxxxxx with such periodic and
special reports as the Board or Xxxxxxxx Xxxxxxxx reasonably may request. In
compliance with the requirements of Rule 31 a-3 under the 1940 Act, the Sub-
Adviser hereby agrees that all records which it maintains for the Series are the
property of the Trust, agrees to preserve for the periods prescribed by Rule 31
a-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) At such times as shall be reasonably requested by the Board or Xxxxxxxx
Xxxxxxxx, the Sub-Adviser will provide the Board and Xxxxxxxx Xxxxxxxx with
economic and investment analyses and reports and make available to the Board and
Xxxxxxxx Xxxxxxxx any economic, statistical and investment services normally
available to institutional or other customers of the Sub-Adviser.
3. Further Duties. In all matters relating to the performance of this
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Contract, the Sub-Adviser will act in conformity with the Trust's Declaration of
Trust, By-Laws and currently effective registration statement under the 1940 Act
and any amendments or supplements thereto ("Registration Statement") and with
the instructions and directions of the Board and Xxxxxxxx Xxxxxxxx and will
comply with the requirements of the 1940 Act, the Investment Advisers Act of
1940 ("Advisers Act"), the rules thereunder, and all other applicable federal
and state laws and regulations. Xxxxxxxx Xxxxxxxx agrees to provide to the Sub-
Adviser copies of the Trust's Declaration of Trust, By-Laws, Registration
Statement, written instructions and directions of the Board and Xxxxxxxx
Xxxxxxxx, and any amendments or supplements to any of them as soon as
practicable after such materials become available.
4. Services Not Exclusive. The services furnished by the Sub-Adviser
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hereunder are not to be deemed exclusive, and except as the Sub-Adviser may
otherwise agree in writing, the
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Sub-Adviser 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 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.
5. Expenses. During the term of this Contract, the Sub-Adviser will bear
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all expenses incurred by it in connection with its services under this Contract.
6. Compensation.
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(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Contract, Xxxxxxxx Xxxxxxxx will pay to the Sub-Adviser a fee,
computed daily and payable monthly, at an annual rate of 0.50% of the Series'
average daily net assets (computed in the manner specified in the Advisory
Contract).
(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 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.
7. Limitation of Liability. The Sub-Adviser shall not be liable for any
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error of judgment or mistake of law or for any loss suffered by the Series, the
Trust or its shareholders or by Xxxxxxxx Xxxxxxxx in connection with the matters
to which 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.
8. Representations of Sub-Adviser. The Sub-Adviser represents, warrants
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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 Contract
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Contract; (iii) has met, and
will continue to meet for so long as this Contract 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 Contract; (iv) has the authority to
enter into and perform the services contemplated by this Contract; and (v) will
immediately notify Xxxxxxxx Xxxxxxxx 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.
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(b) The Sub-Adviser shall notify Xxxxxxxx Xxxxxxxx of any change in the
membership of the Sub-Adviser within a reasonable time after such change.
(c) The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 1 7j-1 under the 1940 Act and will provide Xxxxxxxx
Xxxxxxxx with a copy of such code of ethics, together with evidence of its
adoption. Within 45 days after the end of the last calendar quarter of each year
that this Contract is in effect, the president or a vice-president of the Sub-
Adviser shall certify to Xxxxxxxx Xxxxxxxx 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 Xxxxxxxx Xxxxxxxx, the Sub-Adviser shall
permit Xxxxxxxx Xxxxxxxx, its employees or its agents to examine the reports
required to be made to the Sub-Adviser by Rule 1 7j-1 (c)(1) and all other
records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided Xxxxxxxx Xxxxxxxx with a copy of its Form
ADV as most recently filed with the Securities and Exchange Commission ("SEC")
and will, promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to Xxxxxxxx Xxxxxxxx.
9. Duration and Termination.
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(a) This Contract shall become effective upon the date first above written,
provided that 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 the Series' outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from its effective 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 by vote of a majority of the outstanding voting securities
of the Series
(c) Notwithstanding the foregoing, 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 60 days' written
notice to the Sub-Adviser. This Contract may also be terminated by Xxxxxxxx
Xxxxxxxx: (i) on 120 days' written notice to the Sub-Adviser, without the
payment of any penalty; (ii) upon material breach by the Sub-Adviser of any of
the representations and warranties set forth in Paragraph 8 of this Contract, if
such breach shall not have been cured within a 20 day period after notice of
such breach; or (iii) if the Sub-Adviser becomes unable to discharge its duties
and obligations under this Contract. The Sub-
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Adviser may terminate this Contract at any time, without the payment of any
penalty, on 120 days' written notice to Xxxxxxxx Xxxxxxxx. This Contract will
terminate automatically in the event of its assignment or upon termination of
the Advisory Contract.
10. Amendment of this Contract. No provision of this Contract may be
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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 shall be
effective until approved by vote of a majority of the Series' outstanding voting
securities.
11. Governing Law. This Contract shall be construed in accordance with the
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laws of the State of Delaware without giving effect to the conflicts of laws
principles thereof and 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.
12. Miscellaneous. The captions in this Contract are included for
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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," "net assets,"
"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 SEC by any
rule, regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract 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.
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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.
Attest: XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
/s/ Xxxxx Xxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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Name: Xxxxxx X. X'Xxxxxxx
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Title: First Vice President
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XXXXXXXX-XXXXXXXXX
CAPITAL MANAGEMENT, L.P.
Attest:
/s/ Xxxxx By: /s/ E. Xxxxx Xxxxx, Jr.
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Name: E. Xxxxx Xxxxx, Jr.
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Title: General Counsel
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