INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of ____________, 1997 between XXXXXXXX XXXXXXXX
PORTFOLIOS, a Delaware business trust ("Trust"), and XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC. ("Xxxxxxxx Xxxxxxxx"), 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 three distinct series of shares of beneficial interest ("Series"),
which correspond to distinct portfolios and which have been designated as the
Xxxxxxxx Xxxxxxxx Growth Portfolio, Xxxxxxxx Xxxxxxxx Moderate Portfolio and
Xxxxxxxx Xxxxxxxx Conservative Portfolio; and
WHEREAS, the Trust and each Series has been organized for the purpose
of investing its assets in registered open-end management investment companies
or series thereof that are Underlying PaineWebber Funds and such other
additional investments as may be permitted under the 1940 Act. (As used in this
Contract, the term "Underlying PaineWebber Funds" shall mean investment
companies that hold themselves out to investors as related companies for
purposes of investment and investor services and for which Xxxxxxxx Xxxxxxxx,
PaineWebber Incorporated ("PaineWebber") or any entity controlling, controlled
by or under common control with Xxxxxxxx Xxxxxxxx or PaineWebber now or in the
future acts as investment adviser or principal underwriter); and
WHEREAS, the Trust desires to retain Xxxxxxxx Xxxxxxxx as investment
adviser and administrator to furnish certain administrative, investment advisory
and portfolio management services to the Trust and each Series as now exists and
as hereafter may be established for the purpose of investing its assets in
Underlying PaineWebber Funds, 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 adviser 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 ADVISER.
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(a) Subject to the supervision of the Trust's Board of Trustees
("Board"), Xxxxxxxx Xxxxxxxx will provide a continuous investment program for
each Series, including investment research and supervision of the Series'
investments in accordance with the Series' investment objective, policies and
restrictions as stated in the Trust's Registration Statement. (As used in this
Contract, the term "Registration Statement" shall mean the currently effective
registration statement of the Trust, and any supplements thereto, under the
Securities Act of 1933, as amended, and the 1940 Act.). Xxxxxxxx Xxxxxxxx shall
determine from time to time what securities and other investments will be
purchased, retained or sold by each Series. As part of its duties with respect
to each Series:
(i) Xxxxxxxx Xxxxxxxx shall determine the percentage of the Series'
assets invested from time to time in each Underlying PaineWebber
Fund selected by the Board as appropriate for that Series and set
forth in the Registration Statement. The allocation of the Series'
assets among the Underlying PaineWebber Funds shall be made within
investment ranges established by the Board, which designate
minimum and maximum percentages for each the Underlying
PaineWebber Fund. Xxxxxxxx Xxxxxxxx shall allocate investments for
the Series among the Underlying PaineWebber Funds and other
permitted investments based on factors it considers relevant,
including its outlook for the economy, financial markets and the
relative performance of the Underlying PaineWebber Funds.
(ii) Xxxxxxxx Xxxxxxxx will recommend to the Board any changes that
Xxxxxxxx Xxxxxxxx considers necessary or appropriate with respect
to the particular Underlying PaineWebber Funds in which the Series
may invest, the percentage range of assets that the Series may
invest in any one Underlying PaineWebber Fund and the percentage
range of assets that the Series may invest in Underlying
PaineWebber Funds that are equity funds and fixed income funds
(including money market funds).
(b) Xxxxxxxx Xxxxxxxx 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, Xxxxxxxx Xxxxxxxx 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-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.
(c) Xxxxxxxx Xxxxxxxx will oversee the computation of the net asset
value and the net income of each Series as described in the Registration
Statement or as more frequently requested by the Board.
3. DUTIES AS ADMINISTRATOR. Xxxxxxxx Xxxxxxxx will administer the
affairs of the Trust and each Series subject to the supervision of the Board and
the following understandings:
(a) Xxxxxxxx Xxxxxxxx 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
noting 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
each Series.
(b) Xxxxxxxx Xxxxxxxx will provide the Trust and each Series with such
corporate, administrative and clerical personnel (including officers of the
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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) Xxxxxxxx Xxxxxxxx will arrange for the periodic preparation,
updating, filing and dissemination (as applicable) of the Trust's Registration
Statement, proxy materials, tax returns and required reports to each Series'
shareholders and the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.
(d) Xxxxxxxx Xxxxxxxx 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) 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 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 XXXXXXXX XXXXXXXX' DUTIES AS INVESTMENT ADVISER AND
ADMINISTRATOR. With respect to any or all Series, Xxxxxxxx Xxxxxxxx may enter
into one or more contracts ("Sub-Advisory or Sub-Administration Contract") with
a sub-adviser or sub-administrator in which Xxxxxxxx Xxxxxxxx delegates to such
sub-adviser or sub-administrator any or all 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
duties and conditions to which Xxxxxxxx Xxxxxxxx is subject by Paragraphs 2, 3
and 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.
6. 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 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 or dissimilar nature.
7. EXPENSES.
(a) Xxxxxxxx Xxxxxxxx will bear all expenses incurred in the operation
of the Trust and each Series other than the investment advisory and
administration fee payable under this Contract, the fees payable pursuant to
plans adopted by the Trust pursuant to Rule 12b-1 under the 1940 Act and
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extraordinary expenses (such as costs of litigation to which the Trust or a
Series is a party and of indemnifying officers and Trustees of the Trust), which
will be borne by the Trust or Series, as applicable. The expenses to be borne by
Xxxxxxxx Xxxxxxxx include the following: (i) the cost (including brokerage
commissions) of securities purchased or sold by the Series (but not any losses
incurred in connection therewith); (ii) expenses of organizing the Trust and the
Series; (iii) filing fees and expenses relating to the registrations and
qualification of the Series' shares and the Trust under federal and/or
securities laws and maintaining such registration and qualifications; (iv) fees
and salaries payable to the Trust's Trustees and officers; (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) 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; (ix) charges of custodians, transfer agents and
other agents (including any lending agent); (x) costs of preparing share
certificates; (xi) 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; (xii) costs of
mailing prospectuses and supplements thereto, statements of additional
information and supplements thereto, reports and proxy materials to existing
shareholders; (xiii) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xiv) the cost
of mailing and tabulating proxies and costs of meetings of shareholders, the
Board and any committees thereof; (xv) the cost of investment company literature
and other publications provided by the Trust to its Trustees and officers; and
(xvi) costs of mailing, stationery and communications equipment; (xvii) expenses
incident to any dividend, withdrawal or redemption options; (xviii) charges and
expenses of any outside pricing service used to value portfolio securities; and
(xix) interest on borrowings of the Trust or Series.
(b) 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.
8. COMPENSATION.
(a) For the services provided and the expenses assumed pursuant to this
Contract, the Trust will pay to Xxxxxxxx Xxxxxxxx a fee with respect to each
Series at the rate specified below and expressed as an annual percentage of each
Series' average daily net assets, such fee to be computed daily and paid
monthly:
Xxxxxxxx Xxxxxxxx Growth Portfolio 0.35%
Xxxxxxxx Xxxxxxxx Moderate Portfolio 0.35%
Xxxxxxxx Xxxxxxxx Conservative Portfolio 0.35%
(b) For the services provided and the expenses assumed pursuant to this
Contract with respect to any Series hereafter established, the Trust will pay to
Xxxxxxxx Xxxxxxxx from the assets of such Series a fee in an amount to be agreed
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upon in a written fee agreement ("Fee Agreement") executed by the Trust on
behalf of such Series and by Xxxxxxxx Xxxxxxxx. All such Fee Agreements shall
provide that they are subject to all terms and conditions of this Contract.
(c) 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.
(d) 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 XXXXXXXX XXXXXXXX. Xxxxxxxx Xxxxxxxx and
its delegates, including any Sub-Adviser or Sub-Administrator to any Series or
the Trust, shall not 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
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 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 Xxxxxxxx Xxxxxxxx even though
paid by it.
10. 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 Xxxxxxxx Xxxxxxxx or
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
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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.
11. 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 Contract, and
Xxxxxxxx Xxxxxxxx agrees that, in asserting any rights or claims under this
Contract, if 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.
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.
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", "investment adviser", "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.
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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.
Attest: XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
By:
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Attest: XXXXXXXX XXXXXXXX PORTFOLIOS
By:
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