Exhibit No. 4
INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of August 4, 1988, between PAINEWEBBER MASTER SERIES,
INC., a Maryland corporation ("Corporation"), 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 Corporation is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
intends to offer for public sale distinct series of shares of common stock
("Series"), each corresponding to a distinct portfolio; and
WHEREAS the Corporation desires to retain ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as investment
adviser and administrator to furnish certain administrative, investment advisory
and portfolio management services to the Corporation and each Series as now
exists and as hereafter may be established, 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 Corporation hereby appoints ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as
investment adviser and administrator of the Corporation 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 Corporation's Board of Directors
("Board"), ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide a continuous investment program for
each Series, including investment research and management with respect to all
securities and investments and cash equivalents in each Series. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ will determine from time to time what securities and other investments
will be purchased, retained or sold by each Series.
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agrees that in placing orders with brokers and
dealers, 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, purchase and sell portfolio securities to and from brokers and
dealers who provide the Series with research, analysis, advice and similar
services, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may pay to those brokers and dealers, in return
for research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇' determining in good
faith that such commission or spread 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 or spreads 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. 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 Corporation 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
Corporation are the property of the Corporation, agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records which it
maintains for the Corporation and which are required to be maintained by Rule
31a-1 under the 1940 Act, and further agrees to surrender promptly to the
Corporation any records which it maintains for the Corporation upon request by
the Corporation.
(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 Corporation under the Securities Act of 1933, as
amended, and 1940 Act and any supplements thereto ("Registration Statement") or
as more frequently requested by the Board.
(e) The Corporation 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 Rule 11a2-2(T) thereunder, and the Corporation hereby consents to the
retention of compensation by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or person or entity associated
with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
3. DUTIES AS ADMINISTRATOR. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will administer the
affairs of the Corporation and each Series subject to the supervision of the
Board and the following understandings:
(a) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will supervise all aspects of the operations of the
Corporation and each Series, including the 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
Corporation and each Series.
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide the Corporation and each Series with
such corporate, administrative and clerical personnel (including officers of the
Corporation) and services as are reasonably deemed necessary or advisable by the
Board, including the maintenance of certain books and records of the Corporation
and each Series.
(c) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Corporation's Registration Statement, proxy
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material, tax returns and required reports to each Series' shareholders and the
Securities and Exchange Commission.
(d) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide the Corporation 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 Articles of
Incorporation, By-Laws and Registration Statement of the Corporation 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
a sub-adviser or a sub-administrator in which ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ delegates to
such sub-adviser or sub-administrator any or all its duties specified in
Paragraph 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is
subject by Paragraph 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, who may also be
a Director, officer or employee of the Corporation, 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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under this Contract; (iii) expenses of organizing the Corporation and the
Series; (iv) filing fees and expenses relating to the registration and
qualification of the Series' shares and the Corporation under federal and/or
state securities laws and maintaining such registrations and qualifications; (v)
fees and salaries payable to the Corporation's Directors who are not interested
persons of the Corporation or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; (vi) all expenses incurred in
connection with the Directors' 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 Corporation or Series for
violation of any law; (x) legal, accounting and auditing expenses, including
legal fees of special counsel for those Directors of the Corporation who are not
interested persons of the Corporation; (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 Corporation is a party and the
expenses the Corporation may incur as a result of its legal obligation to
provide indemnification to its officers, Directors, agents and shareholders)
incurred by the Corporation or Series; (xvi) fees, voluntary assessments and
other expenses incurred in connection with membership in investment company
organizations; (xvii) costs 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
Corporation to its Directors and officers; and (xix) costs of mailing,
stationery and communications equipment.
(c) The Corporation or a Series may pay directly any expense incurred by
it in its normal operations and, if any such payment is consented to by ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and acknowledged as otherwise payable by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to
this Contract, the Series may reduce the fee payable to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
pursuant to Paragraph 8 hereof 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 Corporation received by the officers of the Corporation
and by those Directors who are interested persons of the Corporation.
(e) The payment or assumption by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of any expense of the
Corporation 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 Corporation or a Series on any subsequent
occasion.
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8. COMPENSATION.
(a) For the services provided and the expenses assumed pursuant to this
Contract with respect to the Series identified below, the Corporation will pay
to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a fee, computed daily and paid monthly from the assets of
the appropriate Series, in accordance with the following:
(i) PaineWebber Master Income Fund:
Up to $500 million of average daily net assets. . . . . . . .625%
In excess of $500 million up to $1.0 billion. . . . . . . . .600
In excess of $1.0 billion up to $2.0 billion. . . . . . . . .550
In excess of $2.0 billion up to $4.0 billion. . . . . . . . .500
Over $4.0 billion. . . . . . . . . . . . . . . . . . . . . . .450
(ii) PaineWebber Master Growth Fund:
Up to $500 million of average daily net assets. . . . . . . .750%
In excess of $500 million up to $1.0 billion. . . . . . . . .725
In excess of $1.0 billion up to $1.5 billion. . . . . . . . .700
In excess of $1.5 billion up to $2.0 billion. . . . . . . . .675
Over $2.0 billion. . . . . . . . . . . . . . . . . . . . .. .650
(iii) PaineWebber Master Money Fund:
All average daily net assets. . . . . . . . . . . . . . . . .500%
(iv) PaineWebber Asset Allocation Fund:
Up to $500 million of average daily net assets. . . . . . . .750%
In excess of $500 million up to $1.0 billion. . . . . . . . .725
In excess of $1.0 billion up to $1.5 billion. . . . . . . . .700
In excess of $1.5 billion up to $2.0 billion. . . . . . . . .675
Over $2.0 billion. . . . . . . . . . . . . . . . . . . . . . .650
(b) For the services provided and the expenses assumed pursuant to this
Contract with respect to any Series hereafter established, the Corporation 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
Corporation 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.
(c) The fee shall be computed daily and paid monthly to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
on or before the last business day of the next succeeding calendar month.
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(d) 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.
9. LIMITATION OF LIABILITY OF ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by any Series or the Corporation in connection with the matters to
which this 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.
Any person, even though also an officer, partner, employee, or agent of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, who may be or become an officer, Director, employee or agent of the
Corporation shall be deemed, when rendering services to any Series or the
Corporation or acting with respect to any business of such Series or the
Corporation, to be rendering such service to or acting solely for the Series or
the Corporation and not as an officer, partner, employee, or agent or one under
the control or direction of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 Directors
of the Corporation 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 Directors of the
Corporation 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 Corporation. 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.
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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 any
given Series shall be effective until approved by vote of a majority of such
Series' outstanding voting securities.
12. GOVERNING LAW. This Contract shall be construed in accordance with
the laws of the State of Delaware 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.
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," "interested person,"
"assignment," "broker," "dealer," "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.
Attest: PAINEWEBBER MASTER SERIES, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
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Attest: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSET
MANAGEMENT INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/
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