Exhibit No. 4(a)
INVESTMENT ADVISORY, ADMINISTRATION AND DISTRIBUTION CONTRACT
Agreement made as of July 23, 1987 between PAINEWEBBER CASHFUND,
INC., a Maryland corporation (the "Fund"), and PAINEWEBBER INCORPORATED
("PaineWebber");
WHEREAS, the Fund is engaged in business as an open-end, diversified
management investment company and is so registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain PaineWebber as investment adviser
and administrator to furnish administrative, investment advisory and portfolio
management services to the Fund and as distributor to provide for the
distribution of the shares of the Fund's capital stock, par value $.001 per
share ("Shares") and PaineWebber 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 Fund hereby appoints PaineWebber as investment
adviser, administrator, and distributor of the Fund for the period and on the
terms set forth in this Contract. PaineWebber accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties as Investment Adviser. Subject to the supervision of the
Fund's board of directors, PaineWebber will provide a continuous investment
program for the Fund's portfolio, including investment research and management
with respect to all securities and investments and cash equivalents in the
portfolio, and will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund. PaineWebber will
provide the services under this Contract in accordance with the Fund's
investment objective, policies and restrictions as stated in the Fund's
current prospectus (the "Prospectus"). PaineWebber further agrees that it:
(a) will conform with all applicable rules and regulations of
the Securities and Exchange Commission (the "SEC");
(b) will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or
dealer. In placing orders with brokers and dealers PaineWebber will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are comparable,
PaineWebber may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Fund with
research, advice and other services. In no instance will portfolio
securities be purchased from or sold to PaineWebber, Xxxxxxxx
Xxxxxxxx Asset Management Inc. ("Xxxxxxxx Xxxxxxxx"), Provident
Institutional Management Corporation ("PIMC") or any affiliated
person thereof except in accordance with the rules
and regulations promulgated by the Securities and Exchange Commission
pursuant to the 1940 Act;
(c) will maintain all books and records with respect to the
Fund's securities transactions, will keep its books of account and
will furnish the Fund's board of directors such periodic and special
reports as the board may request; and
(d) will compute the net asset value and the net income of the
Fund as described in the Prospectus or as more frequently requested
by the Fund;
provided, however, that the functions specified in subparagraphs (b), (c) and
(d) hereof may be performed by Xxxxxxxx Xxxxxxxx, PIMC or another appropriate
party.
3. Duties as Administrator. PaineWebber will assist in administering
the Fund's affairs subject to the supervision of the Fund's board of directors
and the following understandings:
(a) PaineWebber will supervise all aspects of the Fund's
operation except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the
board of directors of the Fund of its responsibility for and control
of the conduct of the Fund's affairs;
(b) In all matters relating to the performance of this Contract,
PaineWebber will act in conformity with the Articles of
Incorporation, By-Laws and the Prospectus and Statement of Additional
Information of the Fund and with the instructions and directions of
the Fund's board of directors and will conform to and comply with the
requirements of the 1940 Act and all other applicable Federal or
Estate laws and regulations;
(c) PaineWebber will provide the Fund with such administrative
and clerical services as are deemed necessary or advisable by the
Fund's board of directors, including the maintenance of certain of
the Fund's corporate books and records;
(d) PaineWebber will arrange, but not pay for, the periodic
updating of prospectuses, statements of additional information and
supplements thereto, proxy material, tax returns and reports to the
Fund's shareholders and the SEC;
(e) PaineWebber will provide the Fund 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;
(f) PaineWebber will provide the board of directors of the Fund
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 PaineWebber;
(g) PaineWebber will hold itself available to receive orders for
the purchase of Shares and will accept or reject such orders on
behalf of the Fund in accordance with the
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Prospectus, and will transmit such orders as are so accepted to the
Fund's transfer agent as promptly as practicable; provided, however,
that PaineWebber is not obligated to sell any certain number of the
Shares; and
(h) PaineWebber will make itself available to receive requests
for redemption from holders of Shares and will transmit such
redemption requests to the transfer agent of the Fund as promptly as
practicable.
4. Duties as Distributor. Except as otherwise provided herein, the
Fund agrees to offer and sell Shares through PaineWebber from time to time
during the term of this Contract (whether authorized but unissued or treasury
shares, in the Fund's sole discretion) at the current offering price as
described in the Prospectus. PaineWebber will act only in its own behalf as
principal in making agreements with selected dealers or others and will offer
and sell the Shares subject to the following understanding. In all matters
relating to the offer and sale of Shares, PaineWebber will act in conformity
with the Articles of Incorporation, By-Laws and the Prospectus and Statement
of Additional Information of the Fund and will conform to and comply with the
requirements of the Securities Act of 1933, the 1940 Act and all other
applicable Federal or state laws and regulations.
5. Services Not Exclusive. The services furnished by PaineWebber
hereunder are not to be deemed exclusive and PaineWebber shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby.
6. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, PaineWebber hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
PaineWebber further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
7. Expenses. During the term of this Contract, the Fund will bear all
expenses, not specifically assumed by PaineWebber, incurred in its operations
and the offering of Shares. That is, the Fund will pay (a) the cost (including
brokerage commissions, if any) of securities purchased or sold by the Fund or
any losses incurred in connection therewith; (b) fees payable to and expenses
incurred on behalf of the Fund by PaineWebber; (c) filing fees and expenses
relating to the registration and qualification of the Fund's Shares under
Federal or state securities laws and maintaining such registrations and
qualifications; (d) fees and salaries payable to the Fund's directors and
officers who are not officers or employees of PaineWebber or interested
persons (as defined in the 0000 Xxx) of any investment adviser or underwriter
of the Fund; (e) taxes (including any income or franchise taxes) and
governmental fees; (f) costs of any liability, uncollectible items of deposit
and other insurance or fidelity bonds; (g) any costs, expenses or losses
arising out of any liability of or claim for damage or other relief asserted
against the Fund for violation of any law; (h) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent
Directors; (i) charges of custodians, transfer agents and other agents; (j)
costs of preparing Share certificates; (k) expenses of setting in type and
printing
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prospectuses, statements of additional information and supplements thereto for
existing shareholders, reports and statements to shareholders and proxy
material; (l) any extraordinary expenses (including fees and disbursements of
counsel) incurred by the Fund; and (m) fees and other expenses incurred in
connection with membership in investment company organizations.
The Fund may pay directly any expense incurred by it in its normal
operations and, if any such payment is consented to by PaineWebber and
acknowledged otherwise payable by PaineWebber pursuant to this Contract, the
Fund may reduce the fee payable to PaineWebber pursuant to paragraph 8 hereof
by such amount. To the extent that such deductions exceed the fee payable to
PaineWebber 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.
In addition, if the expenses borne by the Fund in any fiscal year
exceed the applicable expense limitations imposed by the securities
regulations of any state in which Shares are registered or qualified for sale
to the public, PaineWebber will reimburse the Fund for any excess up to the
amount of the fee payable to it during that fiscal year pursuant to paragraph
8 hereof.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Contract, effective July 23, 1987, the Fund will pay to
PaineWebber a fee, computed daily and paid monthly, at the following annual
rates of the Fund's average net assets:
Fund's Average Fee As %
Net Assets of Fund's Average
In Billions Net Assets
Up to $500 million....................................... .500%
In excess of $500 million up to $1.0 billion............. .425%
In excess of $1.0 billion up to $1.5 billion............. .390%
In excess of $1.5 billion up to $2.0 billion............. .380%
In excess of $2.0 billion up to $2.5 billion............. .350%
In excess of $2.5 billion up to $3.5 billion............. .345%
In excess of $3.5 billion up to $4.0 billion............. .325%
In excess of $4.0 billion up to $4.5 billion............. .315%
In excess of $4.5 billion up to $5.0 billion............. .300%
In excess of $5.0 billion up to $5.5 billion............. .290%
In excess of $5.5 billion................................ .280%
9. Limitation of Liability of PaineWebber. PaineWebber shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Contract relates
(including any loss arising out of the receipt by PaineWebber of inadequate
consideration in connection with an order to purchase shares whether in the
form of
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fraudulent check, draft or wire; a check returned for insufficient funds; or
any other inadequate consideration (hereinafter "Check Loss")), 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; provided, however, that the Fund
shall not be liable for Check Loss resulting from willful misfeasance, bad
faith or negligence on the part of PaineWebber. Any person, even though also
an officer, partner, employee, or agent of PaineWebber, who may be or become
an officer, director, employee or agent of the Fund shall be deemed, when
rendering services to the Fund or acting in any business of the Fund, to be
rendering such services to or acting solely for the Fund and not as an
officer, partner, employee, or agent or one under the control or direction of
PaineWebber even though paid by it.
10. Duration and Termination. This Contract, unless sooner terminated
as provided herein, shall continue in effect for two years from the above
written date. Thereafter, if not terminated, this Contract shall continue
automatically for periods of twelve months each, provided, such continuance is
specifically approved at least annually (a) by a vote of a majority of those
members of the Fund's board of directors 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 (b) by the Fund's board of
directors or by vote of a majority of the outstanding voting securities of the
Fund. Notwithstanding the foregoing, this Contract may be terminated by the
Fund at any time, without the payment of any penalty, by vote of the Fund's
board of directors or by vote of a majority of the outstanding voting
securities of the Fund on 60 days' written notice to PaineWebber or by
PaineWebber at any time, without the payment of any penalty, on 90 days'
written notice to the Fund. This Contract will automatically and immediately
terminate in the event of its assignment. (As used in this Contract, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meaning as such terms have in the 1940 Act.)
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 shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
12. Name of Fund. The Fund may use the name "PaineWebber Cashfund,
Inc." or any name derived from the name "PaineWebber, Xxxxxxx & Xxxxxx
Incorporated" or "PaineWebber Incorporated" only for so long as this Contract
or any extension, renewal or amendment hereof remains in effect, including any
similar agreement with any organization which shall have succeeded to the
business of PaineWebber. At such time as such an agreement shall no longer be
in effect, the Fund will (to the extent that it lawfully can) cease to use
such a name or any other name connected with PaineWebber or any organization
which shall have so succeeded to the business of PaineWebber.
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
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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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PAINEWEBBER CASHFUND, INC.
Attest
/s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxxx X. X'Xxxxxxx
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PAINEWEBBER INCORPORATED
Attest
/s/ (?) By /s/ Xxxxxx X. Xxxxxxxxx
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