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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
UBS PRIVATE INVESTOR FUNDS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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UBS PRIVATE INVESTOR FUNDS, INC.
UBS Bond Fund
UBS High Yield Bond Fund
UBS Value Equity Fund (formerly UBS U.S. Equity Fund)
UBS Large Cap Growth Fund
UBS Small Cap Fund
UBS International Equity Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 15, 1998
A Special Meeting of shareholders of UBS Private Investor Funds, Inc. (the
"Corporation") will be held at the offices of UBS A.G., 1345 Avenue of the
Americas, ___ Floor, New York, New York on October 15, 1998 at 10:00 a.m. Each
series of the Corporation (each a "Fund," and collectively, the "Funds")
operates as a feeder fund in a master-feeder fund arrangement with a
corresponding master fund portfolio (each a "Portfolio," and collectively, the
"Portfolios") of UBS Investor Portfolios Trust, a registered investment company
organized under the laws of the State of New York (the "Trust"). As feeder
funds, the Funds seek to achieve their respective investment objectives by
investing all of their investable assets in a corresponding Portfolio of the
Trust with the same investment objectives and policies. Pursuant to the
requirements of the Investment Company Act of 1940, as amended (the "1940 Act")
applicable to master-feeder arrangements, each Fund's voting rights with respect
to the Portfolio shares that it holds must be passed through to the Fund's own
shareholders.
The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and more fully described under the
corresponding proposals in the accompanying proxy statement, and such other
matters as may properly come before the meeting or any adjournments thereof:
PROPOSAL I: To approve or disapprove a new investment advisory
(All Funds) agreement between the Trust and UBS A.G. ("New
UBS").
PROPOSAL II: The following item is to be voted on ONLY by
shareholders of the High Yield Bond Fund, the Large Cap
Growth Fund and the Small Cap Fund:
To approve or disapprove a new sub-investment advisory
agreement between the relevant Portfolio and UBS
Brinson Inc. ("UBS Brinson") (formerly, UBS Asset
Management (New York) Inc. ("UBSAM-NY")).
The following item is to be voted on ONLY by shareholders of
the International Equity Fund:
To approve or disapprove a new sub-investment advisory
agreement between the Portfolio and Phillips & Drew
International Investment Limited ("P&DII") (formerly,
UBS International Investment London Limited
("UBSII")).
PROPOSAL III: To elect four Directors/Trustees to hold office
(All Funds) until their respective successors have been duly
elected and qualified or until their earlier
resignation or removal.
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The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
THE NEW INVESTMENT ADVISORY AGREEMENTS WITH NEW UBS, UBS BRINSON AND P&DII
(COLLECTIVELY, THE "NEW ADVISERS"), AS APPLICABLE, ARE MATERIALLY AND
SUBSTANTIVELY IDENTICAL TO THE PRIOR INVESTMENT ADVISORY AGREEMENTS PURSUANT TO
WHICH SERVICES WERE PROVIDED TO THE FUNDS. AS MORE FULLY DISCUSSED IN THE
ACCOMPANYING PROXY STATEMENT, APPROVAL OF THE NEW INVESTMENT ADVISORY
AGREEMENTS, WHICH PROVIDE FOR THE SAME SERVICES TO BE PROVIDED AT THE SAME FEES
BY THE NEW ADVISERS, AND THE ELECTION OF DIRECTORS/TRUSTEES WERE GENERALLY
OCCASIONED BY THE MERGER OF UNION BANK OF SWITZERLAND AND SWISS BANK CORPORATION
FORMING NEW UBS.
The close of business on September 8, 1998 has been fixed as the record
date for the determination of the shareholders of each Fund entitled to notice
of, and to vote at, the Special Meeting. You are cordially invited to attend the
Special Meeting.
This notice and related proxy material are first being mailed to
shareholders on or about September 14, 1998. This proxy is being solicited on
behalf of the Board of Directors of each Fund.
By Order of the Board of Directors,
Susan C. Mosher, Secretary
Boston, MA
September 14, 1998
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WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED VOTER INSTRUCTION CARD AND MAIL IT PROMPTLY
IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR
SHARES. NO POSTAGE NEED BE AFFIXED IF THE VOTER INSTRUCTION CARD
IS MAILED IN THE UNITED STATES.
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UBS PRIVATE INVESTOR FUNDS, INC.
UBS Bond Fund
UBS High Yield Bond Fund
UBS Value Equity Fund (formerly UBS U.S. Equity Fund)
UBS Large Cap Growth Fund
UBS Small Cap Fund
UBS International Equity Fund
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 15, 1998
This proxy statement ("Proxy Statement") is being furnished in connection
with the solicitation of proxies by the Board of Directors of UBS Private
Investor Funds, Inc. (the "Corporation") with respect to the following series
thereof: UBS Bond Fund (the "Bond Fund"), UBS High Yield Bond Fund (the "High
Yield Bond Fund"), UBS Value Equity Fund (formerly UBS U.S. Equity Fund; the
"Value Equity Fund"), UBS Large Cap Growth Fund (the "Large Cap Growth Fund"),
UBS Small Cap Fund (the "Small Cap Fund") and UBS International Equity Fund (the
"International Equity Fund") (each a "Fund," and collectively, the "Funds") for
use at the special meeting of the Corporation to be held at the offices of UBS
A.G., 1345 Avenue of the Americas, ___ Floor, New York, New York on October 15,
1998 at 10:00 a.m. (the "Special Meeting") and at any adjournments thereof. This
Proxy Statement and accompanying Proxy is expected to be mailed to shareholders
on or about September 14, 1998.
In this Proxy Statement, for simplicity, actions are described as being
taken by a Fund, which is a series of the Corporation, although all actions are
actually taken by the Corporation on behalf of the applicable series or Fund.
Some actions described as with respect to a Fund are actually actions to be
taken by UBS Investor Portfolios Trust, a registered investment company
organized under the laws of the State of New York (the "Trust"), on behalf of
the Trust's portfolios (the "Portfolios"), as applicable, in which a Fund
invests all of its assets and on which the relevant Fund votes as a shareholder.
Further, actions described as being taken by the shareholders of the Corporation
with respect to its Board of Directors will also be taken by the shareholders of
the Trust with respect to its Board of Trustees. Your vote and the vote of other
shareholders of the relevant Fund determines how the Fund will vote with respect
to itself and the corresponding Portfolio of the Trust. See "Background."
The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and described more fully under the
corresponding proposals discussed herein, and such other matters as may properly
come before the meeting or any adjournments thereof:
PROPOSAL I: To approve or disapprove a new investment advisory
(All Funds) agreement between the Trust and UBS A.G. ("New UBS").
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PROPOSAL II: The following item is to be voted on ONLY by
shareholders of the High Yield Bond Fund, the Large Cap
Growth Fund and the Small Cap Fund:
To approve or disapprove a new sub-investment advisory
agreement between the relevant Portfolio and UBS
Brinson Inc. ("UBS Brinson") (formerly, UBS Asset
Management (New York) Inc. ("UBSAM-NY")).
The following item is to be voted on ONLY by shareholders of
the International Equity Fund:
To approve or disapprove a new sub-investment advisory
agreement between the Portfolio and Phillips & Drew
International Investment Limited (P&DII) (formerly,
UBS International Investment London Limited
("UBSII")).
PROPOSAL III: To elect four Directors/Trustees to hold office
(All Funds) until their respective successors have been duly
elected and qualified or until their earlier
resignation or removal.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
Specifically, each Fund is to consider the approval of new investment
advisory agreements with New UBS, UBS Brinson and/or P&DII (collectively, the
"New Advisers") as indicated in the table below:
<TABLE>
<CAPTION>
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New Investment Advisory Agreement with
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New UBS UBS Brinson P&DII
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<S> <C> <C> <C>
Bond Fund |X|
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High Yield Bond Fund |X| |X|
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Value Equity Fund |X|
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Large Cap Growth Fund |X| |X|
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Small Cap Fund |X| |X|
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International Equity Fund |X| |X|
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</TABLE>
The shareholders of the Corporation and the Trust are also to consider the
election as Directors of the Funds and Trustees of the Portfolios Peter
Lawson-Johnston, Dr. HansPeter Lochmeier, Dr. Frank K. Reilly and Timothy M.
Spicer, CPA. All Director/Trustee Nominees currently serve on the Board of
the Corporation and the Trust (collectively, the "Boards"). As further
described below, Dr. Lochmeier is an "interested person" within the meaning
of Section 2(a)(19) of the 1940 Act, and the election of Directors/Trustees,
including Dr. Reilly, is designed to ensure compliance by the Corporation and
the Trust with Section 15(f) of the Investment
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Company Act of 1940, as amended (the "1940 Act"), following the Merger and the
approval of the New Advisory Agreements.
A Notice of the Special Meeting of shareholders and a proxy card or cards
(the "Proxy") accompany this Proxy Statement. Proxy solicitations will be made
primarily by mail, but solicitations may also be made by telephone, telegraph or
in person by officers or agents of the Funds. All costs of solicitation,
including (a) printing and mailing of this Proxy Statement and accompanying
material, (b) the reimbursement of brokerage firms and others for their expenses
in forwarding solicitation material to the beneficial owners of the Funds'
shares, and (c) supplementary solicitations to submit Proxies, will be borne by
New UBS.
The Annual Report of the Corporation containing audited financial
statements with respect to each Fund for the fiscal year ended December 31, 1997
(each a "Report") have previously been furnished to the shareholders. An
additional copy of each Report will be furnished without charge upon request by
writing to the Corporation at 200 Clarendon Street, Boston, MA 02116 or by
calling 1-888-UBS-FUND (888-827-3863).
If the enclosed Proxy is properly executed and returned in time to be
voted at the Special Meeting, the shares represented thereby will be voted in
accordance with the instructions marked on the Proxy. If no instructions are
marked on the Proxy with respect to a specific proposal, the Proxy will be voted
"FOR" the approval of such proposal and in accordance with the judgment of the
persons appointed as proxies upon any other matter that may properly come before
the Special Meeting. Any shareholder giving a Proxy has the right to attend the
Special Meeting to vote his/her shares in person (thereby revoking any prior
Proxy) and also the right to revoke the Proxy at any time by written notice
received by the applicable Fund prior to the time it is voted.
In the event that a quorum is present at the Special Meeting but
sufficient votes to approve a proposal are not received, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of Proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Special
Meeting in person or by Proxy. If a quorum is present, the persons named as
proxies will vote those Proxies that they are entitled to vote "FOR" any
proposal in favor of an adjournment and will vote those Proxies required to be
voted "AGAINST" any such proposal against any adjournment. A shareholder vote
may be taken on one or more of the proposals in the Proxy Statement prior to any
adjournment if sufficient votes have been received and it is otherwise
appropriate. A quorum of shareholders is constituted by the presence in person
or by proxy of the holders of one-third of the outstanding shares of a Fund
entitled to vote at the Special Meeting. For purposes of determining the
presence of a quorum for transacting business at the Special Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present but which have not been voted.
Shareholders of record at the close of business on September 8, 1998 (the
"Record Date") are entitled to notice of, and to vote at, the Special Meeting.
As of the Record Date, the following number of shares of each Fund were issued
and outstanding:
Bond Fund ...................................... __________ shares
High Yield Bond Fund ........................... __________ shares
Value Equity Fund .............................. __________ shares
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Large Cap Growth Fund .......................... __________ shares
Small Cap Fund ................................. __________ shares
International Equity Fund ...................... __________ shares
This Proxy Statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate statement for each Fund and, because shareholders may own shares of
more than one Fund, to avoid burdening shareholders with more than one proxy
statement. Shares of a Fund are entitled to one vote each at the Special Meeting
and fractional shares are entitled to proportionate shares of one vote. To the
extent information relating to common ownership is available to the Funds, a
shareholder that owns of record shares in two or more of the Funds will receive
a package containing a Proxy Statement and Proxies for the Funds in which such
shareholder is a record owner. If the information relating to common ownership
is not available to the Funds, a shareholder that beneficially owns shares in
two or more Funds may receive two or more packages each containing a Proxy
Statement and a Proxy for each Fund in which such shareholder is a beneficial
owner. If a proposal is approved by shareholders of one Fund and disapproved by
shareholders of other Funds, the proposal will be implemented for the Fund that
approved the proposal and will not be implemented for any Fund that did not
approve the proposal. Therefore, it is essential that shareholders complete,
date, sign and return each enclosed Proxy.
In order that your shares may be represented, you are requested to:
indicate your instructions on the Proxy (or Proxies);
date and sign the Proxy (or Proxies);
mail the Proxy (or Proxies) promptly in the enclosed envelope; and
allow sufficient time for the Proxy (or Proxies) to be received before
the close of business on October 13, 1998.
[BENEFICIAL OWNERSHIP OF SHARES OF THE FUNDS]
The following table sets forth information as of September 8, 1998
regarding the beneficial ownership of the Funds' shares by (i) the only persons
known by each Fund to beneficially own more than five percent of the outstanding
shares of such Fund, (ii) the Directors and Director Nominee of the
Corporation,(1) (iii) the executive officers of each Fund and (iv) the Directors
and executive officers of each Fund as a group. The number of shares
beneficially owned by each Director, Director Nominee or executive officer is
determined under rules of the Securities and Exchange Commission (the
"Commission"), and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which the individual has the sole or shared voting power or
investment power and also any shares which the individual has the right to
acquire within 60 days of September 8, 1998 through the exercise of any stock
option or other right. Unless otherwise indicated, each person has sole
investment and voting power (or shares such power with his or her spouse) with
respect to the shares set forth in the following table. The inclusion herein of
any shares deemed beneficially owned does not constitute an admission of
beneficial ownership of such shares.
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(1) References to the "Directors" and "Director Nominee" of the Corporation
also include the Trustees and Trustee Nominee of the Trust unless the
context clearly suggests otherwise.
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<TABLE>
<CAPTION>
SHARES % OF SHARES
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OWNED OWNED
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<S> <C> <C>
</TABLE>
[As of the record date, there is no beneficial owner of more than 5% of the
shares of any Fund. Collectively, the officers and directors of each Fund own
less than 1% of such Fund's outstanding shares.]
BACKGROUND
MASTER-FEEDER STRUCTURE. Shareholders of the Funds are being asked to
approve new investment advisory agreements between the New Advisers and the
Trust on behalf of the Trust's Portfolios, as applicable, and to elect a new
Board of Directors/Trustees of the Corporation and the Trust. Each Fund of the
Corporation operates as a feeder fund in a master-feeder fund arrangement with
the Trust and its Portfolios, which serve as master funds. As feeder funds, the
Funds seek to achieve their respective investment objectives by investing all of
their investable assets in a corresponding Portfolio of the Trust with the same
investment objectives and policies. The Portfolios invest directly in portfolio
securities and have previously entered into investment advisory agreements with
the New Advisers (or in the case of New UBS and UBS Brinson, its predecessor
entity) for the management of the Portfolios' assets. Each Trustee of the
Portfolios is also a Director of the Corporation. Pursuant to the requirements
of the 1940 Act applicable to master-feeder arrangements, each Fund's voting
rights with respect to the Portfolio shares that it holds must be passed through
to the Fund's own shareholders. Other feeder funds of the Portfolios, including
those not subject to U.S. securities laws, will also vote in accordance with
their respective charters and/or other applicable requirements with respect to
the approval of the investment advisory and sub-investment advisory agreements
and the election of Trustees of the Trust.
THE PORTFOLIOS. Each of the UBS Bond Portfolio (the "Bond Portfolio"), UBS
High Yield Bond Portfolio (the "High Yield Bond Portfolio"), UBS Value Equity
Portfolio (the "Value Equity Portfolio"), UBS Large Cap Growth Portfolio (the
"Large Cap Growth Portfolio"), UBS Small Cap Portfolio (the "Small Cap
Portfolio") and UBS International Equity Portfolio (the "International Equity
Portfolio") is a series of the Trust. New UBS, a universal bank organized under
the laws of and having its principal executive offices in, Switzerland, [through
the asset management department of its New York Branch Office, located at 1345
Avenue of the Americas, New York, New York 10105 ("UBS-NY Branch"),] serves as
the investment adviser of the Portfolios. UBS Brinson, located at the same
address as UBS-NY Branch, serves as the sub-investment adviser to the High Yield
Bond Portfolio, the Large Cap Growth Portfolio and the Small Cap Portfolio.
P&DII, located at Triton Court, 14 Finsbury Square, London EC2A 1PD, United
Kingdom, serves as the sub-investment adviser to the International Equity
Portfolio. UBS Brinson and P&DII are subsidiaries of UBS. First Fund
Distributors, Inc., located at 4455 E. Camelback Road, Suite 261E, Phoenix, AZ
85018, serves as the Portfolios' principal underwriter, and IBT Trust &
Custodial Services (Ireland) LTMD, located at Deloitte & Touche House, 29
Earlsfort Terrace, Dublin 2, Ireland ("IBT Ireland"), serves as the Portfolios'
administrator. For the fiscal year ended December 31, 1997, the Portfolios did
not pay any commissions to "affiliated brokers" (as defined in Schedule 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")).
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PROPOSALS I AND II
APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS
BETWEEN EACH OF THE PORTFOLIOS AND THE NEW ADVISERS
THE NEW INVESTMENT ADVISORY AGREEMENTS WITH THE NEW ADVISERS, AS
APPLICABLE, ARE MATERIALLY AND SUBSTANTIVELY IDENTICAL TO THE PRIOR INVESTMENT
ADVISORY AGREEMENTS PURSUANT TO WHICH SERVICES WERE PROVIDED TO THE FUNDS. AS
MORE FULLY DISCUSSED BELOW, APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENTS,
WHICH PROVIDE FOR THE SAME SERVICES TO BE PROVIDED AT THE SAME FEES, AND THE
ELECTION OF DIRECTORS/TRUSTEES WERE GENERALLY OCCASIONED BY THE MERGER OF UNION
BANK OF SWITZERLAND AND SWISS BANK CORPORATION.
THE PRIOR ADVISORY AGREEMENTS. Prior to June 29, 1998, UBS-NY Branch,
UBSAM-NY and UBSII (collectively, the "Prior Advisers") served as investment
adviser or sub-adviser, as the case may be, to each of the Portfolios as
described above pursuant to separate investment advisory agreements with the
Portfolios (collectively, the "Prior Advisory Agreements"). The Prior Advisory
Agreements were initially approved by the applicable Portfolio's Board,
including a majority of the directors who are not "interested persons" of the
Portfolio (as defined under the 1940 Act) (the "Independent Directors"), on the
following dates: the Bond Portfolio, Value Equity Portfolio and International
Equity Portfolio each executed Prior Advisory Agreements with UBS-NY Branch on
April 1, 1996; the High Yield Bond Portfolio, Large Cap Growth Portfolio and
Small Cap Portfolio each executed Prior Advisory Agreements with UBS-NY Branch
and UBSAM-NY on September 30, 1997; and the International Equity Portfolio
executed a Prior Advisory Agreement with UBSII on April 1, 1996.
The following table lists the most recent dates on which the Prior
Advisory Agreements were approved by the applicable Funds' Directors and
shareholders.
<TABLE>
<CAPTION>
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UBS-NY Branch UBSAM-NY UBSII
Directors Shareholders Directors Shareholders Directors Shareholders
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<S> <C> <C> <C> <C> <C> <C>
Bond Fund 5/12/98 2/10/96 N/A N/A
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High Yield Bond 5/12/98 12/22/97 5/12/98 12/22/97 N/A
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Value Equity Fund 5/12/98 2/10/96 N/A N/A
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Large Cap Growth Fund 5/12/98 12/29/97 5/12/98 12/29/97 N/A
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Small Cap Fund 5/12/98 12/22/97 5/12/98 12/22/97 N/A
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International Equity Fund 5/12/98 2/10/96 5/12/98 2/10/96
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</TABLE>
For the fiscal year ended December 31, 1997, the Bond Portfolio, the High
Yield Bond Portfolio and the Value Equity Portfolio paid UBS-NY Branch $121,237,
$85,805 and $251,890, respectively (after fee waivers and expense
reimbursements), for services rendered pursuant to the Prior Advisory
Agreements. Payments to the sub-investment advisers were made by UBS-NY Branch,
not by the Funds. The Large Cap Growth Portfolio, the Small Cap Portfolio and
the International Equity Portfolio did not make any payments pursuant to the
Prior Advisory Agreements as all fees were waived by the Prior Advisers, as
applicable.
THE MERGER. On June 29, 1998, pursuant to a Merger Agreement dated
December 5/6, 1997, by and among Union Bank of Switzerland ("UBS") and Swiss
Bank Corporation ("SBC"), each a universal bank organized under the laws of
Switzerland, UBS and SBC merged into UBS A.G., a newly created entity organized
under Swiss Law and in a related-transaction, UBSAM-NY and SBC
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Brinson Inc. merged into UBS Brinson, a New York Corporation. Although UBSII
changed its name to "Phillips & Drew International Investment Limited" on
July 6, 1998, the corporate structure of UBSII was unaffected by the Merger.
However, due to the changes in UBS and UBSAM-NY pursuant to the Merger, the
Prior Advisory Agreements of UBS-NY Branch and UBSAM-NY may be deemed to have
been assigned and terminated according to their respective terms and the 1940
Act. Because the Prior Advisory Agreement (a sub-advisory agreement) of UBSII
with the International Equity Portfolio terminates by its terms in the event the
related UBS-NY Branch advisory agreement terminates, the Merger may also be
deemed to result in the termination of this agreement.
IMPACT OF THE MERGER ON THE PRIOR ADVISORY AGREEMENTS. Section 15(a) of
the 1940 Act provides, in pertinent part, that "[i]t shall be unlawful for any
person to serve or act as investment adviser of a registered investment company,
except pursuant to a written contract, which contract, whether with such
registered company or with an investment adviser of such registered company, has
been approved by the vote of a majority of the outstanding voting securities of
such registered company . . . ." Section 15(a)(4) of the 1940 Act further
requires that such written contract provide for automatic termination in the
event of its assignment. Section 2(a)(4) of the 1940 Act defines "assignment" to
include any direct or indirect transfer of a contract by the assignor.
Pursuant to the Merger, certain changes in the portfolio management
personnel and more specifically their supervisory reporting lines and/or the
investment approach at UBS-NY Branch and UBS Brinson are anticipated. As such,
the Merger, while not believed by the Trust or the Prior Advisers to result in a
transfer of a controlling block of UBS under Section 2(a)(4) of the 1940 Act, is
expected to result in certain changes in portfolio management personnel,
structure and process which may result in a "direct or indirect transfer," and
thus an "assignment" of their Prior Advisory Agreements within the meaning of
that section of the 1940 Act, terminating the Prior Advisory Agreements of
UBS-NY Branch and UBSAM-NY according to their respective terms and the 1940 Act,
and terminating the Prior Advisory Agreement of UBSII with the International
Equity Portfolio in accordance with its terms, each as of June 29, 1998.
On June 16, 1998, the Trust and the Prior Advisers were granted an
exemptive order (the "Exemptive Order") by the Commission pursuant to which new
investment advisory agreements between each of the Portfolios and the New
Advisers, as applicable (the "New Advisory Agreements"), were permitted to go
into effect without shareholder approval beginning on June 29, 1998 and
continuing, for a period of up to 150 days, through the date on which each of
the New Advisory Agreements are approved or disapproved by the respective
shareholders of each Portfolio. Under the terms of the Exemptive Order, the New
Advisers were allowed to receive advisory fees pursuant to the New Advisory
Agreements, provided that such fees would be held in escrow pending shareholder
approval of the New Advisory Agreements. In accordance with the Exemptive Order,
the advisory fees paid by the Portfolios to the New Advisers, as applicable,
under the New Advisory Agreements have been held in escrow and the Portfolios
expect to continue to deposit such fees in escrow until approval of the New
Advisory Agreements by the respective shareholders of the Portfolios has been
obtained. As of August 31, 1998, the amount in escrow totaled $____________.
The Funds, as shareholders of the Portfolios, are not being asked to
approve or disapprove the Merger; rather, they are being asked under these
proposals to approve and continue the New Advisory Agreements for the
Portfolios. OTHER THAN IDENTIFICATION OF THE NEW ADVISERS, AND THE EXECUTION AND
TERMINATION DATES OF THE AGREEMENTS, THE NEW ADVISORY AGREEMENTS, WHICH HAVE
BEEN IN EFFECT SINCE JUNE 29, 1998, ARE IDENTICAL IN FORM AND TERMS TO THE PRIOR
ADVISORY AGREEMENTS. The advisory fee rate charged to the Portfolios under the
Prior Advisory Agreements have continued to apply under the
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New Advisory Agreements. In addition, the Portfolios can expect to continue
to receive the same level of services under the New Advisory Agreements as they
received under the Prior Advisory Agreements. [The New Advisers do not
anticipate any material changes, nor have there been any material changes, in
the personnel who currently provide services to the Portfolios under the New
Advisory Agreements as compared to the personnel who provided investment
advisory services under the Prior Advisory Agreements. The New Advisers have
represented to the Board of the Trust that they will present to the Board any
and all changes in senior management personnel affecting the management of a
Portfolio.]
THE NEW ADVISORY AGREEMENTS
Each of the New Advisory Agreements, the forms of which are attached to
this Proxy Statement as Exhibits A, B and C, became effective as of June 29,
1998, the date of the consummation of the Merger. If shareholders approve the
New Advisory Agreements, each of the agreements will remain in effect for an
initial term of two years from its effective date, and may be renewed annually
thereafter by specific approval of the respective Board or shareholders of the
applicable Portfolios. All of the terms and provisions of the New Advisory
Agreements, other than their effective date, termination date and identification
of the New Adviser, are the same as those of the Prior Advisory Agreements.
Under the terms of the New Advisory Agreements, as under the Prior
Advisory Agreements, the New Advisers, as applicable, agree to furnish the
Portfolios with investment advisory services in connection with a continuous
investment program for the Portfolios, which is to be managed in accordance with
the investment objective, investment policies and restrictions of the Portfolios
as set forth in the Prospectus and Statement of Additional Information and in
accordance with the by-laws of the respective Portfolios. Subject to the
supervision and control of the Portfolios' Boards, each New Adviser agrees, in
its discretion, (a) to act in strict conformity with the Portfolios' Articles of
Incorporation and by-laws, the 1940 Act and the Investment Advisers Act of 1940,
as amended (the "Advisers Act"), (b) manage the assets of the Portfolios in
accordance with the Portfolios' investment objectives and policies as stated in
its Prospectus and Statement of Additional Information as from time to time in
effect, (c) make general investment decisions for the Portfolios, including
decisions concerning (i) the specific types of securities to be held by the
Portfolios and the proportion of the Portfolios' assets that should be allocated
to such investments during particular market cycles and (ii) the specific
issuers whose securities will be purchased or sold by the Portfolios, and (d)
supply administrative, clerical and professional support and general assistance
in all aspects of the Portfolios' operations. In providing these services, the
New Advisers, as applicable, will supervise the Portfolios' investments
generally and conduct a continual program of evaluation of its assets. Under the
New Advisory Agreements, as under the Prior Advisory Agreements, the New
Advisers, as applicable, will obtain and evaluate pertinent information
materially affecting the Portfolios and furnish the Portfolios with information
regarding such developments as necessary.
THE ADVISORY FEE RATE CHARGED TO THE PORTFOLIOS UNDER THE APPLICABLE NEW
ADVISORY AGREEMENTS IS THE SAME AS THE ADVISORY FEE RATE CHARGED UNDER THE PRIOR
ADVISORY AGREEMENTS. Under the New Advisory Agreements, New UBS is paid a fee
for its services calculated daily and paid monthly, equal, on annual basis, to
the following:
-8-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FUND RATE
---- ----
<S> <C>
Bond Portfolio .45 of 1.00%
High Yield Bond Portfolio .45 of 1.00%
Value Equity Portfolio .60 of 1.00%
Large Cap Growth Portfolio .60 of 1.00%
Small Cap Portfolio .60 of 1.00%
International Equity Portfolio .85 of 1.00%
</TABLE>
Pursuant to the New Advisory Agreements (sub-advisory agreements) between
UBS-NY Branch and UBS Brinson, UBS-NY Branch will pay UBS Brinson a fee,
calculated daily and paid monthly, equal, on an annual basis, to the following
rates:
<TABLE>
<S> <C>
High Yield Bond 0.25% of the Portfolio's first $25 Portfolio
million average daily net assets, 0.20% of
the Portfolio's next $25 million average daily
net assets and 0.15% of the Portfolio's average
daily net assets in excess of $50 million.
Large Cap Growth Portfolio 0.30% of the Portfolio's first $25 Portfolio
million average daily net assets, 0.25% of the
Portfolio's next $25 million average daily net
assets and 0.20% of the Portfolio's average daily
net assets in excess of $50 million.
Small Cap Portfolio 0.40% of the Portfolio's first $25 million
average daily net assets, 0.325% of the
Portfolio's next $25 million average daily net
assets and 0.25% of the Portfolio's average daily
net assets in excess of $50 million.
</TABLE>
Pursuant to the New Advisory Agreement (a sub-advisory agreement) between
UBS-NY Branch and P&DII, UBS-NY Branch will pay P&DII a fee, calculated daily
and payable monthly, at an annual rate equal to 0.75% of the International
Equity Portfolio's first $20 million of average net assets, 0.50% of the next
$30 million of average net assets, and 0.40% of the Portfolio's average net
assets in excess of $50 million.
UBS-NY BRANCH, AND NOT THE TRUST OR ITS PORTFOLIOS, IS SOLELY
RESPONSIBLE FOR PAYING UBS BRINSON AND P&DII THESE FEES.
Under the New Advisory Agreements, each New Adviser shall exercise its
best judgment in rendering its advisory services. The New Advisers shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Portfolios in connection with the matters to which the New Advisory
Agreements relate, provided that nothing therein shall be deemed to protect or
purport to protect any New Adviser against any liability to the Portfolios or to
its shareholders to which the New Adviser could otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the New Adviser's reckless disregard
of its obligations and duties under the New Advisory Agreements.
If approved, the New Advisory Agreements will remain in effect until June
29, 2000 (unless sooner terminated), and shall remain in effect from year to
year thereafter if approved annually (1) by
-9-
<PAGE>
<PAGE>
the Portfolios' Boards or by the holders of a majority of the Portfolios'
respective outstanding voting securities (i.e., the Funds) and (2) by a majority
of the respective Portfolios' Boards who are not parties to the New Advisory
Agreements, or "interested persons" (as defined in the 1940 Act) of any such
party. Like the Prior Advisory Agreements, the New Advisory Agreements will
terminate upon assignment by any party and are terminable, without penalty, on
60 days' written notice by the Portfolios' Boards or by a "majority" vote of the
shareholders of the Portfolios (as defined in the 1940 Act) or upon 60 days'
written notice by a New Adviser.
The services of a New Adviser are not deemed to be exclusive and nothing
in the New Advisory Agreements prevent it or its affiliates from providing
similar services to other investment companies and other clients (whether or not
their investment objectives and policies are similar to those of the Portfolios)
or from engaging in other activities. In addition, the New Advisers are
obligated to pay expenses associated with providing the services contemplated by
the New Advisory Agreements. The Portfolios bear certain other expenses
including the fees of the Portfolios' Boards. The Portfolios also pay any
extraordinary expenses incurred.
THE NEW ADVISERS
As stated above, UBS and UBSAM-NY are the only advisers undergoing a
change in corporate organization as a result of the Merger. New UBS -- like
UBS-NY Branch -- is a bank and, therefore, not required to register as an
investment adviser under the Advisers Act. New UBS will also continue to be
engaged in (i) a broad range of banking activities through branches and banking
subsidiaries throughout Switzerland, and through branches, agencies,
representative offices and subsidiaries in more than 40 cities outside
Switzerland and in (ii) other banking and bank-related activities typical of the
world's major international banks, including fiduciary, investment advisory and
custodial services, foreign exchange and underwriting in the United States,
Swiss and European capital markets. In addition to providing investment advisory
services to the Portfolios, New UBS also will continue to serve as investment
adviser to approximately 250 funds. As of June 1, 1998, UBS had over $120
billion of assets under management, including $300 million of assets in the
Trust.
[New UBS will continue to conduct the majority of its private banking
business in the United States through its New York branch.] Through New UBS'
asset management department, UBS-NY Branch is the investment adviser to the
Corporation, which has approximately $130 million in aggregate net assets at
June 1, 1998. UBS-NY Branch also will continue to render investment advisory
services to other advisory clients, principally individuals.
The names and titles of the current directors and executive officers of
New UBS are set forth below. Except as indicated, the business address of the
individuals named below is 1345 Avenue of the Americas, New York, New York 10105
and their positions at New UBS constitute their principal occupation.
-10-
<PAGE>
<PAGE>
UBS Brinson, sub-investment adviser to the High Yield Bond Portfolio, the
Large Cap Growth Portfolio and the Small Cap Portfolio, also will continue to
render investment advisory services to non-fund advisory clients, principally
institutions. These accounts had aggregate assets of over $20.8 billion at June
30, 1998. UBS Brinson is a part of the UBS Brinson Division of New UBS. The UBS
Brinson Division is the institutional asset management division of New UBS and
manages assets worldwide with offices in Chicago, Bahrain, Basel, Frankfurt,
Geneva, Hong Kong, London, Melbourne, New Hampshire, New York, Paris, Rio de
Janeiro, Singapore, Sydney, Tokyo and Zurich.
The names and titles of the current directors and executive officers of
UBS Brinson are set forth below. Except as indicated, the business address of
the individuals named below is 1345 Avenue of the Americas, New York, New York
10105 and their positions at UBS Brinson constitute their principal occupation.
<TABLE>
<CAPTION>
NAME TITLE
- ---- -----
<S> <C>
Samuel W. Anderson Director and President
Henry Doorn, Jr. Director and Treasurer
George M. Jamgochian Director and Deputy President
Benjamin F. Lenhardt, Jr. Director
Mark F. Kemper Secretary
Brian E. Pechtold Assistant Treasurer
James M. Kupczyk Assistant Treasurer
Karen de la Vega Assistant Treasurer
</TABLE>
P&DII, sub-investment adviser to the International Equity Portfolio, is a
subsidiary of Phillips & Drew Limited ("Phillips & Drew") and substantially all
of its London personnel are dually employed by Phillips & Drew. P&DII will
continue to render services to other advisory clients. At June 30, 1998, P&DII
advised non-fund advisory client accounts aggregating approximately [$7.8]
billion in assets. Phillips & Drew, which is not a registered adviser, is the
parent company of other asset management subsidiaries located in the United
Kingdom which render advisory services to non-U.S. clients. P&DII's assets under
management at June 30, 1998 were approximately [$7.9] billion.
The names and titles of the current directors and executive officers of
P&DII are set forth below. Except as indicated, the business address of the
individuals named below is Triton Court, 14 Finsbury Square, London EC2A 1PD,
United Kingdom and their positions at P&DII constitute their principal
occupation.
<TABLE>
<CAPTION>
NAME TITLE
- ---- -----
<S> <C>
Paul T. Yates President and Managing Director
Paul Meredith Executive Chairman
</TABLE>
-11-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE
- ---- -----
<S> <C>
Jeffrey Hayes Director
David J. Gold Chief Financial Officer
Gill Clarke Compliance Officer
</TABLE>
SECTION 15(f) OF THE 1940 ACT
Section 15 of the 1940 Act provides that when a change of control of an
investment adviser to an investment company occurs, the investment adviser or
any of its affiliated person may receive an amount or benefit in connection
therewith as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment company as a
result of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. As defined in
the 1940 Act, the term "unfair burden" includes any arrangement during the two
(2) year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any "interested person" (as defined in the
1940 Act) of such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its security holders
(other than fees for bona fide investment advisory or other services), or from
any person in connection with the purchase or sale or other property to, or on
behalf of the investment company (other than fees for bona fide brokerage and
principal underwriting services). The Portfolios' Boards have not been advised
by the New Adviser of any circumstances arising from the Merger that might
result in an unfair burden being imposed on the Portfolios.
The second condition is that, during the three (3) year period immediately
following the Merger, at least 75% of the members of the Portfolios' Boards must
not be "interested persons" of the New Advisers (after the Merger) or the
predecessor investment adviser within the meaning of the 1940 Act.
RECOMMENDATION OF THE BOARDS
Each Trustee of the Trust is also a Director of the Corporation. At a
meeting of the Boards held on May 12, 1998 called for the purpose of, among
other things, voting on approval of the New Advisory Agreements, the Boards,
including the Independent Directors/Trustees, unanimously approved the New
Advisory Agreements. In reaching this conclusion, the Boards obtained from UBS
and SBC such information as they deemed reasonably necessary to approve the New
Advisers as investment advisers to the Portfolios and considered a number of
factors, including, among other things, the continuity of the management of the
Portfolios after the Merger; the nature, scope and quality of services that the
New Advisers would likely provide to the Portfolios; the quality of the
personnel of the New Advisers; the New Advisers' commitment to continue to
provide such services in the future; the maintenance of the identical advisory
fee rate; the materially and substantively identical nature of the Prior
Advisory Agreements and New Advisory Agreements; and the potential impact of the
Merger on the foregoing. Based on the factors discussed above, the Boards
determined that the New Advisory Agreements are fair and reasonable and in the
best interest of the Portfolios and their respective shareholders.
-12-
<PAGE>
<PAGE>
THEREFORE, AFTER CAREFUL CONSIDERATION, THE BOARDS, INCLUDING THE
INDEPENDENT DIRECTORS/TRUSTEES, RECOMMENDS THAT THE RESPECTIVE SHAREHOLDERS OF
THE PORTFOLIOS VOTE "FOR" THE APPROVAL OF THE NEW ADVISORY AGREEMENTS AS SET
FORTH IN THESE PROPOSALS. IF THE NEW ADVISORY AGREEMENTS ARE APPROVED BY THE
SHAREHOLDERS OF THE FUNDS, SUCH APPROVAL WILL RATIFY THE APPROVAL BY THE BOARDS
ON MAY 12, 1998.
PROPOSAL III
ELECTION OF BOARD OF DIRECTORS/TRUSTEES
Four Directors/Trustees, constituting the entire Board of
Directors/Trustees of the Corporation and the Trust, are to be elected at the
Special Meeting to serve until their successors have been duly elected and
qualified or until their earlier resignation or removal. The names and ages of
the nominees, their principal occupations during the past five years and certain
of their other affiliations are given below. Three of the nominees have been
Directors/Trustees of the Corporation and the Trust since their inception; one
nominee, Dr. Frank K. Reilly, was selected by the non-interested members of the
Boards and elected by the full Boards to fill a vacancy resulting from the need
to expand the Boards in order to ensure compliance with Section 15(f) of the
1940 Act. No Director/Trustee of the Corporation and the Trust serves as an
officer of the Funds and the Portfolios, respectively. Each of the nominees has
agreed to serve if elected at the Special Meeting. It is the intention of the
persons designated as proxies in the Proxy, unless otherwise directed therein,
to vote at the Special Meeting for the election of the nominees named below as
the entire Board of Directors/Trustees. If any nominee is unable or unavailable
to serve, the persons named in the Proxies will vote the Proxies for such other
person as the Boards may recommend.
<TABLE>
<CAPTION>
POSITION WITH THE
NAME ADDRESS AND AGE CORPORATION/TRUST PRINCIPAL OCCUPATIONS DURING THE LAST FIVE YEARS
- -------------------- ----------------- ------------------------------------------------
<S> <C> <C>
Peter Director/Trustee UBS Investor Portfolios Trust,
Lawson-Johnston'D' Trustee (February 1996-Present);
1345 Avenue of the Americas Zemex Corporation (mining), Chairman
New York, NY 10105 of the Board and Director
Age: 71 (1990-Present); The McGraw-Hill
Companies, Inc. (publishing),
Director (1990-1997); National
Review, Inc. (publishing), Director
(1990-Present); Guggenheim Brothers
(real estate)--venture capital
partnership), Senior Partner
(1990-Present); Elgerbar Corporation
(holding company), President and Director
(1990-Present); The Solomon R.
Guggenheim Foundation (operates the
Guggenheim Museums in New York and
Bilbao, Spain and the Peggy Guggenheim
Collection in Venice, Italy), President
(1990-1995), Chairman and Trustee
(1995-Present); The Harry Frank
Guggenheim Foundation (charitable
organization), Chairman of the Board and
Director (1990-Present).
Dr. HansPeter Lochmeier* Director/Trustee UBS Investor Portfolios Trust (mutual
1345 Avenue of the Americas [Chairman of fund), Trustee (February
New York, New York 10105 each Board] 1996-Present); Union Bank of
Age: 55 Switzerland (Investment Services
Department), Division Head.
</TABLE>
-13-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH THE
NAME ADDRESS AND AGE CORPORATION/TRUST PRINCIPAL OCCUPATIONS DURING THE LAST FIVE YEARS
- -------------------- ----------------- ------------------------------------------------
<S> <C> <C>
Dr. Frank K. Reilly Director/Trustee University of Notre Dame, Professor
College of Business (1982-Present); Brinson Relationship
Administration Funds, Trustee (September
University of Notre Dame 1994-Present); Director of The
208 Hurley Building Brinson Funds, Inc. (1992-1993);
Notre Dame, IN 46556 Brinson Trust Company, Trustee
Age: 61 (1992-July 1993); Battery Park High
Yield Fund, Director (1996-Present);
Fort Dearborn Income Securities, Inc.,
Director (1993-Present); First
Interstate Bank of Wisconsin, Director
(January 1989-March 1990); Greenwood
Trust Company, Director (1993-Present);
Morgan Stanley Dean Witter Trust, FSB,
Director (1996-Present); and NIBCO, Inc.
(plumbing valve distributor), Director
(1993-Present).
Timothy M. Spicer, CPA'D' Director/Trustee UBS Investor Portfolio Trust, Trustee
1345 Avenue of the Americas (February 1996-Present); San
New York, New York 10105 Francisco Sentry Investment Group (an
Age: 49 investment adviser and venture
capital firm), President and Chief
Operating Officer (1995-Present);
Ensemble Information Systems
(software and electronic information
provider), Co-Founder, Chairman of
the Board and Chief Executive Officer
(1990-Present); Amanda Venture
Investors (AVI) (a venture capital firm),
Managing Partner (1995-Present); CoreLink
Resources (provides mutual fund related
services to small and medium sized banks),
Director (1993-1996); PM Squared (health
care information service company),
Director (1996-Present); Vixel Corporation
(fibre-channel company), Director
(1996-Present); Smith & Hawken (mail
order supplier of gardening tools
and clothing), Director and Chief
Financial Officer (1990-1992); Concord
Holding Corporation (provides distribution
and administrative services to mutual
funds), Director (1989-1995); active in
civic/charitable organizations in the San
Francisco Bay area, including Pacific
Swimming, Big Brothers/Big Sisters and
United Way.
</TABLE>
- ------------------
* "Interested Person" within the meaning of Section 2(a)(19) of the 1940 Act.
'D' Member of the Audit Committee and the Valuation Committee of each Board.
Each Board has established an Audit Committee and a Valuation Committee.
The Audit Committee meets with the Corporation's/Trust's independent accountants
to review the financial statements of the Corporation/Trust, the adequacy of
internal controls and the accounting procedures and policies of the
Corporation/Trust, and reports on such matters to the Board. The Valuation
Committee meets to value the portfolio securities of each Portfolio and
reports on such matters to the Board. The Boards do not have compensation
committees. During 1997, the Boards held five meetings, the Audit Committees
held one meeting and the Valuation Committees held no meetings.
The following table sets forth the compensation received by the
Corporation's/Trust's Directors/Trustees for their services during 1997:
-14-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PENSION OR TOTAL
AGGREGATE RETIREMENT BENEFITS COMPENSATION
COMPENSATION ACCRUED AS PART OF ESTIMATED ANNUAL FROM THE
FROM THE CORPORATION/TRUST BENEFITS UPON COMPLEX** PAID TO
NAME OF PERSON CORPORATION EXPENSES RETIREMENT DIRECTORS/TRUSTEES
-------------- ----------------- ------------------ ----------------- ---------------------
<S> <C> <C> <C> <C>
Mr Lawson-Johnston $11,250 0 0 $23,250
Dr. Lochmeier 0 0 0 0
Mr. Spicer $11,250 0 0 $23,250
</TABLE>
- -----------------
* The noted amounts are for the fiscal year ended December 31, 1997. The
Directors/Trustees are also reimbursed for all reasonable expenses incurred
during the execution of their duties.
** The Complex consists of the Corporation and the Trust.
RECOMMENDATION OF THE BOARDS
Each Trustee of the Trust is also a Director of the Corporation. At a
meeting of the Boards held on September 1, 1998, the Boards, based on a
recommendation of the Directors/Trustees who are not interested persons of the
Corporation and the Trust, unanimously approved the election of the
Director/Trustee Nominees. In reaching this conclusion, the Boards obtained from
the nominees such information as they deemed reasonably necessary to approve the
nominees and considered a number of factors, including, among other things, the
continuity of the management of the Portfolios after the Merger; the nature,
scope and quality of services that the nominees would likely provide to the
Portfolios; the desirability of complying with Section 15(f) of the 1940 Act;
and the potential impact of the Merger on the foregoing. Based on the factors
discussed above, the Boards determined that the election of Directors/Trustees
is in the best interest of the Fund and the Corporation and their respective
shareholders.
THEREFORE, AFTER CAREFUL CONSIDERATION, THE BOARDS, INCLUDING THE
INDEPENDENT DIRECTORS/TRUSTEES, RECOMMENDS THAT THE RESPECTIVE SHAREHOLDERS OF
THE PORTFOLIOS VOTE "FOR" THE ELECTION OF DIRECTORS/TRUSTEES AS SET FORTH IN
THIS PROPOSAL. IF THE DIRECTOR/TRUSTEE NOMINEES ARE APPROVED BY THE SHAREHOLDERS
OF THE FUNDS, SUCH APPROVAL WILL RATIFY THE APPROVAL BY THE BOARDS ON SEPTEMBER
1, 1998.
VOTE REQUIRED
Approval of each Proposal requires the affirmative vote of a "majority" of
the outstanding shares of the applicable Fund as a shareholder of its
corresponding Portfolio. "Majority" (as defined in the 1940 Act) means the
lesser of (a) 67% or more of the shares of the applicable Fund present at the
Special Meeting if the holders of more than 50% of the outstanding shares of the
applicable Fund are present in person or by proxy, or (b) more than 50% of the
outstanding shares of the applicable Fund. Because abstentions and broker
non-votes are not treated as shares voted, any abstentions and broker non-votes
would have no impact on such proposals.
If the New Advisory Agreements are approved by the shareholders, each
agreement will terminate two years after its effective date absent annual
continuance. If a New Advisory Agreement is not approved at the Special Meeting,
the applicable Portfolio will be without an investment adviser or sub-adviser,
as the case may be, and the advisory fees held in escrow will be paid over to
such
-15-
<PAGE>
<PAGE>
Portfolio. In such event, the Portfolio's Board will consider what other action
is appropriate based upon the interests of its shareholders.
If the Director/Trustee Nominees are elected by the shareholders, each
Director/Trustee Nominee will serve until his successor is duly elected and
qualified or until his earlier resignation or removal. If the Director/Trustee
Nominees are not elected, the applicable Fund or Portfolio will be without a
full Board of Directors/Trustees and may not be in compliance with Section
15(f). In such event, the Board(s) will consider what action is appropriate
based upon the interests of its shareholders.
- --------------------------------------------------------------------------------
THE BOARDS, INCLUDING THE INDEPENDENT DIRECTORS/TRUSTEES, RECOMMEND THAT THE
SHAREHOLDERS VOTE "FOR" APPROVAL OF PROPOSALS I, II AND III.
ANY UNMARKED PROXIES WILL BE SO VOTED.
- --------------------------------------------------------------------------------
The Board is not aware of any other matters that will come before the
Special Meeting. Should any other matter properly come before the Special
Meeting, it is the intention of the persons named in the accompanying Proxy to
vote the Proxy in accordance with their judgment on such matters.
* * * *
The Funds do not hold regular shareholders' meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their written proposals to the Secretary of
the respective Fund, as appropriate, at the address set forth on the cover of
this Proxy Statement.
- ------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND
WHO WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
- ------------------------------------------------------------------------
By Order of the Board of Directors,
Susan B. Mosher, Secretary
September 14, 1998
- ------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF EACH FUND HOPES THAT SHAREHOLDERS WILL ATTEND
THE SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY OR VOTING
INSTRUCTION CARD IN THE ACCOMPANYING ENVELOPE. PROMPT
RESPONSE PRIOR TO OCTOBER 13, 1998 WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE SPECIAL
MEETING AND YOUR COOPERATION
WILL BE APPRECIATED.
- ------------------------------------------------------------------------
-16-
<PAGE>
<PAGE>
EXHIBIT A
FORM OF INVESTMENT ADVISORY AGREEMENT
<PAGE>
<PAGE>
FORM OF
INVESTMENT ADVISORY AGREEMENT
Agreement, made this ___ day of ________ 199_, between UBS Investor
Portfolios Trust, a trust organized under the laws of the State of New York (the
"Trust"), on behalf of its series known as UBS ________________ Portfolio (the
"Portfolio"), and UBS A.G., New York Branch (the "Adviser").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Portfolio, a diversified mutual fund, desires to retain
the Adviser to render investment advisory and certain related administrative
services, and the Adviser is willing to render such services;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Portfolio hereby appoints the Adviser to act as investment
adviser to the Portfolio for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. The Adviser may
enter into an agreement (the "Sub-Advisory Agreement") with ___________________
(the "Sub-Adviser") pursuant to which the Sub-Adviser shall furnish to the
Portfolio the investment advisory services specified in such agreement. In such
event, the Adviser will continue to have responsibility for all investment
advisory services furnished pursuant to the Sub-Advisory Agreement.
2. Subject to the general supervision of the Trustees of the Trust and
subject to the terms of the Sub-Advisory Agreement, if any, the Adviser shall
oversee the investment operations of the Portfolio and the composition of the
Portfolio's holdings of securities and other investments, including commodities
and commodities contracts, cash, the purchase, retention and disposition thereof
and agreements relating thereto, in accordance with the Portfolio's investment
objective and policies as stated in the Registration Statement (as defined in
paragraph 3(d) of this Agreement) and in particular in conjunction with the
Sub-Adviser:
(a) the Adviser shall furnish a continuous investment program
for the Portfolio and review from time to time the determination by its
Sub-Adviser of the securities, commodities, commodity contracts and
other investments to be purchased, retained, sold or lent by the
Portfolio, and the portion of the assets to be invested or held
uninvested as cash;
(b) the Adviser shall use the same skill and care in the
overseeing of the Portfolio's investments as it uses in the
administration of other accounts for which it has investment
responsibility as agent;
<PAGE>
<PAGE>
(c) the Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Declaration of Trust, Bylaws and Registration Statement of the Trust
and with the instructions and directions of the Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act
and all other applicable federal and state laws and regulations;
(d) the Adviser shall oversee the performance of the
Sub-Adviser in connection with its responsibility as agent of the
Portfolio to effect portfolio transactions, all as provided in
paragraph 2(d) of the Sub-Advisory Agreement.
(e) the Adviser shall maintain records with respect to the
Portfolio's securities transactions as required by Section 31 of the
1940 Act and the rules and regulations thereunder, to the extent such
records are necessary or appropriate to record the Adviser's
transactions with respect to the Portfolio;
(f) the Adviser shall establish performance standards for the
Portfolio's third-party service providers and oversee and evaluate the
performance of such entities, provide and present quarterly management
reports to the Trustees and supervise the preparation of reports for
Portfolio shareholders, and the Adviser assumes no liabilities or
responsibilities for the performance of the third-party service
providers it is overseeing or any other responsibilities under this
Agreement other than to render the services called for hereunder, on
the terms and conditions provided herein; and
(g) the investment management services of the Adviser to the
Portfolio under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others.
3. The Portfolio has delivered copies of each of the following
documents to the Adviser and will promptly notify and deliver to it all future
amendments and supplements, if any:
(a) Declaration of Trust of the Trust (such Declaration of
Trust, as presently in effect and as amended from time to time, is
herein called the "Declaration of Trust");
(b) Bylaws of the Trust (such Bylaws, as presently in effect
and as amended from time to time, are herein called the "Bylaws");
(c) Certified resolutions of the Trustees of the Trust
authorizing the appointment of the Adviser and approving the form of
this Agreement;
(d) The Trust's Notification of Registration on Form N-8A and
its Registration Statement on Form N-1A (No. 811-7553) each under the
1940 Act (the "Registration Statement"), each as filed with the
Commission on February 28, 1996, and all amendments thereto.
4. The Adviser agrees that all records that it maintains for the
Portfolio pursuant to paragraphs 2(e) and 2(f) of this Agreement are the
property of the Portfolio and it will promptly surrender copies of any of such
records to the Portfolio upon the Portfolio's request.
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<PAGE>
5. During the term of this Agreement the Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement, other
than the cost of securities and investments purchased or sold for the Portfolio
(including taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Portfolio will pay to the Adviser as full compensation therefor a
fee at an annual rate equal to ___% of the Portfolio's average daily net assets.
This fee will be computed daily and payable monthly.
7. The Trust shall not use the name of the Adviser or any of its
affiliates in the registration statement or other material relating to the Trust
and the Portfolio in a manner not approved by the Adviser prior thereto in
writing; provided, however, that the approval of the Adviser shall not be
required for any use of its or any affiliate's name that merely refers in
accurate and factual terms to the Adviser's appointment hereunder or that is
required by the Securities and Exchange Commission or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
8. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Portfolio in connection with the matters
to which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act) or 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
Agreement.
9. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Trust on behalf
of the Portfolio at any time, without the payment of any penalty, by vote of a
majority of all the Trustees of the Trust or by "vote of a majority of the
outstanding voting securities" of the Portfolio (as defined in the 1940 Act and
a rule thereunder) on 60 days' written notice to the Adviser, or by the Adviser
at any time, without the payment of any penalty, on 60 days' written notice to
the Trust. This Agreement will automatically and immediately terminate in the
event of its "assignment" (as defined in the 1940 Act).
10. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Trustees of the Trust from time to time, have no authority to
act for or represent the Portfolio in any way or otherwise be deemed an agent of
the Portfolio.
11. Notices of any kind to be given to the Adviser by the Trust shall
be in writing and shall be duly given if mailed or delivered to the Adviser at
_________________________________________, Attention: General Counsel, with a
copy to __________ at UBS A.G., New York Branch, 1345 Avenue of the Americas,
New York, New York 10105, or at such other address or to such other individual
as shall be specified by the Adviser to the Trust. Notices of any kind to be
given to the Trust by the Adviser shall be in writing and shall be duly given if
mailed or delivered to the Trust c/o IBT Trust Company (Cayman) Ltd. at P.O. Box
501, Cardinal Avenue, George Town, Grand Cayman BWI or at such other address or
to such other individual as shall be specified by the Trust to the Adviser.
12. The Trustees have authorized the execution of this Agreement in
their capacity as Trustees and not individually, and the Adviser agrees that
neither the shareholders nor the Trustees nor any officer,
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<PAGE>
employee, representative or agent of the Trust shall be personally liable upon,
or shall resort be had to their private property for the satisfaction of,
obligations given, executed or delivered on behalf of or by the Portfolio and
that the Trust shall look solely to the property of the Portfolio for the
satisfaction of any claim hereunder.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the ____ day of
_____________ 199_.
UBS INVESTOR PORTFOLIOS TRUST
on behalf of
UBS __________________ PORTFOLIO
By: _____________________________
UBS A.G.,
NEW YORK BRANCH
By: _____________________________
By: _____________________________
4
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<PAGE>
EXHIBIT B
FORM OF UBS BRINSON SUB-INVESTMENT ADVISORY AGREEMENT
<PAGE>
<PAGE>
FORM OF
SUB-INVESTMENT ADVISORY AGREEMENT
Agreement made as of ______________, 199_ by and between UBS A.G., New
York Branch (the "Adviser") and UBS Brinson Inc. (hereinafter called the
"Sub-Adviser").
W I T N E S S E T H:
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated ________, 199_ (the "Advisory Agreement") with UBS Investor Portfolios
Trust, an open-end management investment company registered under the Investment
Company Act of 1940 (the "1940 Act") and organized as a trust under the laws of
the State of New York (the "Trust") on behalf of one of its diversified mutual
fund series, UBS ____________ Portfolio (the "Portfolio"), pursuant to which the
Adviser will act as investment adviser to the Portfolio;
WHEREAS, the Advisory Agreement contemplates that the Adviser may
retain the Sub-Adviser to provide certain investment advisory services to the
Portfolio in connection with the management of the Portfolio, and the
Sub-Adviser is willing to render such investment advisory services; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940.
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Adviser hereby appoints the Sub-Adviser to act as sub-adviser to
the Portfolio for the period and on the terms set forth in this Agreement. The
Sub-Adviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. Subject to the general supervision of the Trustees of the Trust and
the Adviser, the Sub-Adviser shall manage the investment operations of the
Portfolio and the composition of the Portfolio's holdings of securities and
other investments, including commodities and commodities contracts, cash, the
purchase, retention and disposition thereof and agreements relating thereto, in
accordance with the Portfolio's investment objective and policies as stated in
the Registration Statement (as defined in paragraph 3(d) of this Agreement) and
subject to the following understandings:
(a) the Sub-Adviser shall furnish a continuous investment
program for the Portfolio and determine from time to time the
securities, commodities, commodity contracts and other investments to
be purchased, retained, sold or lent by the Portfolio, and the portion
of the assets to be invested or held uninvested as cash;
(b) the Sub-Adviser shall use the same skill and care in the
management of the Portfolio's investments as it uses in the
administration of other accounts for which it has investment
responsibility as agent;
<PAGE>
<PAGE>
(c) the Sub-Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Declaration of Trust, Bylaws and Registration Statement of the Trust
and with the instructions and directions of the Trustees of the Trust
and the Adviser and will conform to and comply with the requirements of
the 1940 Act and all other applicable laws and regulations;
(d) the Sub-Adviser shall determine the securities to be
purchased, sold or lent by the Portfolio and as agent for the Portfolio
will effect portfolio transactions pursuant to its determinations
either directly with the issuer or with any broker and/or dealer in
such securities, commodities or commodities contracts; in placing
orders, the Sub-Adviser will select the brokers and/or dealers as it
shall deem appropriate in conformity with the policy with respect to
brokerage as set forth in the Registration Statement; and the
Sub-Adviser shall also determine whether or not the Portfolio shall
enter into repurchase or reverse repurchase agreements;
On occasions when the Sub-Adviser deems the purchase or sale of
a security, commodity or commodity contract to be in the best interest
of the Portfolio as well as other customers of the Sub-Adviser and to
the extent permitted by applicable law, the Sub-Adviser may, but shall
not be obligated to, aggregate the securities to be so sold or
purchased in order to obtain best execution, including lower brokerage
commissions, if applicable. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers
to be the most equitable and consistent with its fiduciary obligations
to the Portfolio;
The Sub-Adviser may execute the Portfolio's brokerage (but not
principal) transactions through an affiliate, provided that such
transactions are effected in accordance with Rule 17e-1 under the 1940
Act and the Trust's procedures adopted thereunder as such may be
amended from time to time;
(e) the Sub-Adviser shall maintain books and records with
respect to the Portfolio's securities transactions in accordance with
Rule 204-2 under the Investment Advisers Act of 1940 and shall render
to the Trust's Trustees such periodic and special reports as the
Trustees may reasonably request; and
(f) the investment advisory services of the Sub-Adviser to the
Portfolio under this Agreement are not to be deemed exclusive, and the
Sub-Adviser shall be free to render similar services to others.
3. The Adviser has delivered copies of each of the following documents
to the Sub-Adviser and will promptly notify and deliver to it all future
amendments and supplements, if any:
(a) Declaration of Trust of the Trust (such Declaration of
Trust, as presently in effect and as amended from time to time, is
herein called the "Declaration of Trust");
(b) Bylaws of the Trust (such Bylaws, as presently in effect
and as amended from time to time, are herein called the "Bylaws");
2
<PAGE>
<PAGE>
(c) Certified resolutions of the Trustees of the Trust
authorizing the appointment of the Sub-Adviser and approving the form
of this Agreement;
(d) The Trust's Notification of Registration on Form N-8A and
its Registration Statement on Form N-1A (No. 811-7553) each under the
1940 Act (the "Registration Statement"), each as filed with the
Commission on February 28, 1996, and all amendments thereto.
4. The Sub-Adviser shall keep the Portfolio's books and records
required to be maintained by it pursuant to paragraphs 2(e) of this Agreement.
The Sub-Adviser agrees that all records that it maintains for the Portfolio are
the property of the Portfolio and it will promptly surrender any of such records
to the Portfolio upon the Portfolio's request.
5. During the term of this Agreement the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement,
other than the cost of securities and investments purchased or sold for the
Portfolio (including taxes and brokerage commissions, if any).
6. The Adviser shall continue to have responsibility for all services
to be provided to the Portfolio pursuant to the Advisory Agreement and shall
oversee and review the Sub-Adviser's performance of its duties under this
Agreement.
7. For the services provided and the expenses borne pursuant to this
Agreement, the Adviser will pay to the Sub-Adviser as full compensation therefor
a fee at an annual rate equal to ______% of the Portfolio's first $_____ million
of average daily net assets, plus _______% of the next $___ million of average
daily net assets, plus ___% of the Portfolio's average daily net assets in
excess of $___ million. This fee will be computed daily and payable monthly.
8. The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Adviser or the Portfolio in
connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or 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 Agreement.
9. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Adviser or by
the Trust on behalf of the Portfolio at any time, without the payment of any
penalty, on 60 days' written notice to the Sub-Adviser. Termination by the Trust
shall be effected by vote of a majority of all the Trustees of the Trust or by
"vote of a majority of the outstanding voting securities" of the Portfolio (as
defined in the 1940 Act and a rule thereunder). The Sub-Adviser may also
terminate this Agreement at any time, without the payment of any penalty, on 60
days' written notice to the Adviser and to the Trust. This Agreement will
automatically and immediately terminate in the event of its "assignment" (as
defined in the 1940 Act) or upon termination of the Advisory Agreement.
10. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Trustees of the Trust and the
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<PAGE>
Adviser from time to time, have no authority to act for or represent the
Portfolio in any way or otherwise be deemed an agent of the Portfolio.
11. Notices of any kind to be given hereunder shall be in writing and
shall be duly given if mailed or delivered as follows: (a) to the Adviser at ___
_____________________________________, Attention: General Counsel, with a copy
to _____________ at UBS A.G., New York Branch, 1345 Avenue of the Americas, New
York, New York 10105; (b) to the Sub-Adviser at _______________, Attention:
President; (c) to the Trust, c/o IBT Trust Company (Cayman) Ltd., P.O. Box 501,
Cardinal Avenue, George Town, Grand Cayman BWI; or (d) at such other address or
to such other individual as any of the foregoing shall designate by notice to
the others.
12. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
13. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the ___ day of
____________, 199_.
UBS A.G.,
NEW YORK BRANCH
By: _____________________________
By: _____________________________
[SUB-ADVISER]
By: _____________________________
4
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<PAGE>
EXHIBIT C
FORM OF P&DII SUB-INVESTMENT ADVISORY AGREEMENT
<PAGE>
<PAGE>
UBS INTERNATIONAL EQUITY PORTFOLIO
SUB-INVESTMENT ADVISORY AGREEMENT
Agreement made as of ___________, 199_ by and between UBS A.G., New York
Branch (the "Adviser") and Phillips & Drew International Investment Limited, a
private limited company organized under the laws of England (hereinafter called
the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated __________, 199_ (the "Advisory Agreement") with UBS Investor Portfolios
Trust, an open-end management investment company registered under the Investment
Company Act of 1940 (the "1940 Act") and organized as a trust under the laws of
the State of New York (the "Trust") on behalf of one of its diversified mutual
fund series, UBS International Equity Portfolio (the "Portfolio"), pursuant to
which the Adviser will act as investment adviser to the Portfolio;
WHEREAS, the Advisory Agreement contemplates that the Adviser may retain
the Sub-Adviser to provide certain investment advisory services to the Portfolio
in connection with the management of the Portfolio, and the Sub-Adviser is
willing to render such investment advisory services; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940 and is regulated in the United Kingdom in
the conduct of its investment advisory business by Investment Management
Regulatory Organization ("IMRO").
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Adviser hereby appoints the Sub-Adviser to act as sub-adviser to
the Portfolio for the period and on the terms set forth in this Agreement. The
Sub-Adviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. Subject to the general supervision of the Trustees of the Trust and
the Adviser, the Sub-Adviser shall manage the investment operations of the
Portfolio and the composition of the Portfolio's holdings of securities and
other investments, including commodities and commodities contracts, cash, the
purchase, retention and disposition thereof and agreements relating thereto, in
accordance with the Portfolio's investment objective and policies as stated in
the Registration Statement (as defined in paragraph 3(d) of this Agreement) and
subject to the following understandings:
<PAGE>
<PAGE>
a. the Sub-Adviser shall furnish a continuous investment program
for the Portfolio and determine from time to time the securities,
commodities, commodity contracts and other investments to be purchased,
retained, sold or lent by the Portfolio, and the portion of the assets
to be invested or held uninvested as cash;
b. the Sub-Adviser shall use the same skill and care in the
management of the Portfolio's investments as it uses in the
administration of other accounts for which it has investment
responsibility as agent;
c. the Sub-Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Declaration of Trust, Bylaws and Registration Statement of the Trust and
with the instructions and directions of the Trustees of the Trust and
the Adviser and will conform to and comply with the requirements of the
1940 Act and all other applicable laws and regulations;
d. the Sub-Adviser shall determine the securities to be
purchased, sold or lent by the Portfolio and as agent for the Portfolio
will effect portfolio transactions pursuant to its determinations either
directly with the issuer or with any broker and/or dealer in such
securities, commodities or commodities contracts; in placing orders, the
Sub-Adviser will select the brokers and/or dealers as it shall deem
appropriate in conformity with the policy with respect to brokerage as
set forth in the Registration Statement; and the Sub-Adviser shall also
determine whether or not the Portfolio shall enter into repurchase or
reverse repurchase agreements;
On occasions when the Sub-Adviser deems the purchase or sale of a
security, commodity or commodity contract to be in the best interest of
the Portfolio as well as other customers of the Sub-Adviser and to the
extent permitted by applicable law, the Sub-Adviser may, but shall not
be obligated to, aggregate the securities to be so sold or purchased in
order to obtain best execution, including lower brokerage commissions,
if applicable. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the
Portfolio;
The Sub-Adviser may execute the Portfolio's brokerage (but not
principal) transactions through an affiliate, provided that such
transactions are effected in accordance with Rule 17e-1 under the 1940
Act and the Trust's procedures adopted thereunder as such may be amended
from time to time;
e. the Sub-Adviser shall maintain books and records with respect
to the Portfolio's securities transactions in accordance with Rule 204-2
under the
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<PAGE>
Investment Advisers Act of 1940 and shall render to the Trust's
Trustees such periodic and special reports as the Trustees may
reasonably request; and
f. the investment advisory services of the Sub-Adviser to the
Portfolio under this Agreement are not to be deemed exclusive, and the
Sub-Adviser shall be free to render similar services to others.
3. The Adviser has delivered copies of each of the following documents
to the Sub-Adviser and will promptly notify and deliver to it all future
amendments and supplements, if any:
a. Declaration of Trust of the Trust (such Declaration of Trust,
as presently in effect and as amended from time to time, is herein
called the "Declaration of Trust");
b. Bylaws of the Trust (such Bylaws, as presently in effect and
as amended from time to time, are herein called the "Bylaws");
c. Certified resolutions of the Trustees of the Trust authorizing
the appointment of the Sub-Adviser and approving the form of this
Agreement;
d. The Trust's Notification of Registration on Form N-8A and its
Registration Statement on Form N-1A (No. 811-7553) each under the 1940
Act (the "Registration Statement"), each as filed with the Commission on
February 28, 1996, and all amendments thereto.
4. The Sub-Adviser shall keep the Portfolio's books and records required
to be maintained by it pursuant to paragraphs 2(e) of this Agreement. The
Sub-Adviser agrees that all records that it maintains for the Portfolio are the
property of the Portfolio and it will promptly surrender any of such records to
the Portfolio upon the Portfolio's request.
5. During the term of this Agreement the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement,
other than the cost of securities and investments purchased or sold for the
Portfolio (including taxes and brokerage commissions, if any).
6. The Adviser shall continue to have responsibility for all services to
be provided to the Portfolio pursuant to the Advisory Agreement and shall
oversee and review the Sub-Adviser's performance of its duties under this
Agreement.
7. For the services provided and the expenses borne pursuant to this
Agreement, the Adviser will pay to the Sub-Adviser as full compensation therefor
a fee at an annual rate equal to 0.75% of the Portfolio's first $20 million of
average daily net assets, plus 0.50% of the next $30 million of average daily
net assets, plus 0.40% of the Portfolio's average daily net assets in excess of
$50 million. This fee will be computed daily and payable monthly.
3
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<PAGE>
8. The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Adviser or the Portfolio in
connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or 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 Agreement.
9. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Adviser or by
the Trust on behalf of the Portfolio at any time, without the payment of any
penalty, on 60 days' written notice to the Sub-Adviser. Termination by the Trust
shall be effected by vote of a majority of all the Trustees of the Trust or by
"vote of a majority of the outstanding voting securities" of the Portfolio (as
defined in the 1940 Act and a rule thereunder). The Sub-Adviser may also
terminate this Agreement at any time, without the payment of any penalty, on 60
days' written notice to the Adviser and to the Trust. This Agreement will
automatically and immediately terminate in the event of its "assignment" (as
defined in the 1940 Act) or upon termination of the Advisory Agreement.
10. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Trustees of the Trust and the Adviser from time to time, have
no authority to act for or represent the Portfolio in any way or otherwise be
deemed an agent of the Portfolio.
11. Notices of any kind to be given hereunder shall be in writing and
shall be duly given if mailed or delivered as follows: (a) to the Adviser at
____________________, Attention: General Counsel, with a copy to _______________
at UBS A.G., New York Branch, 1345 Avenue of the Americas, New York, New York
10105; (b) to the Sub-Adviser at Triton Court, 14 Finsbury Square, London,
England EC2A 1 PD, Attention: President; (c) to the Trust, c/o Signature
Financial Group (Cayman) Limited at P.O. Box 268, Elizabethan Square, George
Town, Grand Cayman BWI; or (d) at such other address or to such other individual
as any of the foregoing shall designate by notice to the others.
12. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
13. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the ____ day of ______ 199_.
UBS A.G.,
NEW YORK BRANCH
By: _____________________________
By: _____________________________
PHILLIPS & DREW INTERNATIONAL
INVESTMENT LONDON LIMITED
By: _____________________________
5
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<PAGE>
APPENDIX 1
[Use Different Colors for Each Fund]
FORM OF PROXY CARD
UBS PRIVATE INVESTOR FUNDS, INC.
_____________ Fund
1345 Avenue of the Americas
New York, New York 10105
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
10:00 a.m., Eastern time, on October 15, 1998
The undersigned hereby appoints __________, Paul J. Jasinski and Susan C.
Mosher, and each of them, with full power of substitution, as proxies of the
undersigned to vote all shares of stock which the undersigned is entitled in any
capacity to vote at the above-stated special meeting, and at any and all
adjournments or postponements thereof (the "Special Meeting"), on the matters
set forth on this Proxy Card, and, in their discretion, upon all matters
incident to the conduct of the Special Meeting and upon such other matters as
may properly be brought before the Special Meeting. This proxy revokes all prior
proxies given by the undersigned.
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED. IF NO
INSTRUCTIONS ARE INDICATED ON A PROPERLY EXECUTED PROXY, SUCH PROXY WILL BE
VOTED FOR APPROVAL OF PROPOSALS I, II AND III. ALL ABSTAIN VOTES WILL BE COUNTED
ONLY IN DETERMINING THE EXISTENCE OF A QUORUM AT THE SPECIAL MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE ________ FUND
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS I, II AND III.
Please mark boxes in blue or black ink.
I. Approval of New Investment Advisory Agreement with New UBS
FOR [ ] AGAINST [ ] ABSTAIN [ ]
II. Approval of New Sub-Investment Advisory Agreement with __________
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- -------------------------------------------------------------------------------
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE>
III. Election of Messrs. Spicer and Lawson-Johnston and
Drs. Lochmeier and Reilly as Directors/Trustees of the Corporation
and the Trust FOR [ ] AGAINST [ ] ABSTAIN [ ]
Instruction: To withhold the authority to vote for my individual
nominee(s), strike a line through the nominee's name in the list
above.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
Receipt of the Notice and the Proxy Statement, dated September 14, 1998 (the
"Proxy Statement"), is hereby acknowledged.
---------------------------------------
(TITLE OR AUTHORITY)
---------------------------------------
(SIGNATURE)
---------------------------------------
(SIGNATURE)
Dated: _______________________, 1998
(JOINT OWNERS SHOULD EACH SIGN.
PLEASE SIGN EXACTLY AS YOUR NAME(S)
APPEARS ON THIS CARD. WHEN SIGNING AS
ATTORNEY, TRUSTEE, EXECUTOR,
ADMINISTRATOR, GUARDIAN OR CORPORATE
OFFICER, PLEASE GIVE YOUR FULL TITLE
BELOW.)
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as................................ 'D'
<PAGE>
