Exhibit 5(b)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 22nd day of July, 1992, by and
between Alliance Capital Management L.P., a Delaware limited
partnership having its principal office at 1345 Avenue of the
Americas, New York, New York (the "Investment Adviser"), and
Xxxxxxx & Company International Limited, a corporation having its
principal office at Xxxx 0/00, Xxxxxxx Xxxx, Xxxxxxx, Xxxxxx,
Xxxxxxx (the "Sub-Adviser").
WITNESSETH:
WHEREAS, the Investment Adviser has established a U.S.
registered investment company named Alliance Variable Products
Series Fund, Inc. (the "Fund") and has entered into an investment
advisory agreement (hereinafter called the "Investment Advisory
Agreement"), a copy of which has been furnished to the Sub-
Adviser, pursuant to which the Fund has engaged the Investment
Adviser to manage the investment and reinvestment of its assets;
and
WHEREAS, as permitted under the Investment Advisory
Agreement, the Investment Adviser desires to employ the Sub-
Adviser to provide the investment management and other services
specified below with respect to the assets of the Global Bond
Portfolio of the Fund (the "Portfolio"); and
WHEREAS, the Sub-Adviser is willing to perform such
services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, it is agreed as follows:
10. (a) The Sub-Adviser agrees to develop and supervise
a continuous investment program for the Portfolio. The Sub-
Adviser agrees to make decisions with respect to all purchases
and sales of the Portfolio's portfolio securities and other
investment assets and the placement of such transactions with
issuers, brokers and dealers. The Sub-Adviser's activities under
this Agreement will at all times be subject to the supervision of
the Investment Adviser.
(b) The Sub-Adviser will keep the Investment Adviser in
touch with important developments affecting the Portfolio and
will on its own initiative furnish the Investment Adviser from
time to time with such information as the Sub-Adviser may believe
appropriate for this purpose, whether concerning the individual
companies whose securities are included in the Portfolio, the
industries in which they engage, or the economic, social or
political conditions prevailing in each country in which the
Portfolio maintains investments. The Sub-Adviser will also
furnish the Investment Adviser with such statistical and
analytical information with respect to the Portfolio's portfolio
positions as the Sub-Adviser may believe appropriate or as the
Investment Adviser reasonably may request.
(c) The Sub-Adviser will carry out reviews of the
investment portfolio of the Portfolio whenever the Sub-Adviser
shall deem necessary or the Investment Adviser shall reasonably
require and the Sub-Adviser will obtain for the Investment
Adviser from time to time valuations of such investments held in
the Portfolio as the Investment Adviser may require.
11. In consideration of the services to be performed by
the Sub-Adviser hereunder, the Investment Adviser will pay the
Sub-Adviser a monthly fee at the annual rate of .40 of 1% of the
average daily value of the net assets of the Portfolio. Such fee
shall be accrued by the Investment Adviser daily and shall be
payable in arrears for services performed during each calendar
month within fifteen days following the end of such month. In
the event this Agreement is not in effect during an entire
calendar month, such fee shall be pro-rated accordingly.
12. The Sub-Adviser will bear all of its expenses in
connection with the performance of its services hereunder and
will from time to time at its sole expense employ or associate
with itself such persons as it believes to be particularly fitted
to assist it in the execution of its duties. If in any fiscal
year the net expenses of the Portfolio (except interest, taxes,
brokerage, fees paid in accordance with an effective plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940,
expenditures which are capitalized in accordance with generally
acceptable accounting principles and extraordinary expenses, all
to the extent permitted by applicable state law and regulation)
exceed the limits applicable to the Portfolio under the laws or
regulations of any state in which the Portfolio's shares are
qualified for sale, or in the event the net expenses of the
Portfolio exceed any expense limitation imposed voluntarily by
the Investment Adviser in its sole discretion, the Sub-Adviser
shall reimburse the Investment Adviser for that portion of such
excess which bears the same relation to the total of such excess
as the Sub-Adviser's fee hereunder bears to the total fee paid
for the fiscal year with respect to the Portfolio pursuant to the
Investment Advisory Agreement between the investment adviser and
the Fund (reduced pro rata for any portion of less than a year).
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13. The Investment Adviser and the Sub-adviser will
jointly form an investment committee, comprised of an equal
number of representatives of the Investment Adviser and the Sub-
Adviser, to exchange opinions on the portfolio's basic investment
policy, including the balance between investments in various
geographic areas and of various maturities as well as anticipated
currency relationships. Such investment committee shall meet at
least semi-annually.
14. The Sub-Adviser agrees that it will be in full
compliance with any provisions of the Investment Company Act of
1940 and the investment advisers act of 1940 applicable to it and
its directors, officers or employees, and to interested persons
with respect to it.
15. The Sub-Adviser's services to the investment adviser
are not to be deemed exclusive, and the Sub-Adviser is free to
render similar services to others.
16. Nothing herein shall be construed as constituting
the Sub-Adviser an agent of the Investment Adviser or of the
Fund.
17. The Investment Adviser agrees that the Sub-adviser
may rely on information reasonably believed by it to be accurate
and reliable. The Investment Adviser further agrees that, except
as may otherwise be provided by the Investment Company Act of
1940, neither the Sub-Adviser nor its officers, directors,
employees or agents shall be subject to any liability for any
mistake of judgment or in any event whatsoever, except for lack
of good faith, provided that nothing herein shall be deemed to
protect, or purport to protect, the Sub-Adviser against any
liability to the Investment Adviser, the Fund or the Fund's
securityholders to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of its reckless
disregard of its obligations and duties hereunder.
18. This agreement shall become effective on the date
hereof and shall continue in effect until December 31, 1992 and
thereafter for successive twelve month periods (computed from
each January 1) provided that such continuance is specifically
approved at least annually by the affirmative vote of (i) a
majority of the members of the Fund's Board of Directors who are
not interested persons of the Fund, the Sub-Adviser or the
Investment Adviser, cast in person at a meeting called for the
purpose of voting on such approval and (ii) a majority of the
Fund's Directors or the holders of a majority of the outstanding
voting securities of the portfolio. This agreement may
nevertheless be terminated at any time, without penalty, by the
Investment Adviser or by the Fund's Board of Directors or by vote
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of holders of a majority of the outstanding voting securities of
the portfolio, upon sixty (60) days' written notice delivered or
sent by registered mail, postage prepaid, to the Sub-Adviser, at
its address given above or at any other address of which the Sub-
Adviser shall have notified the investment adviser in writing, or
by the Sub-Adviser upon sixty (60) days' written notice to the
Investment Adviser and to the Portfolio, and shall automatically
be terminated in the event of its assignment or of the assignment
of the investment advisory agreement. Any such notice shall be
deemed given when received by the addressee.
19. This Agreement may not be transferred, assigned,
sold or in any manner hypothecated or pledged by either party
hereto, and this Agreement shall terminate automatically in the
event of any such transfer, assignment, sale, hypothecation or
pledge. It may be amended by mutual agreement, but only after
authorization of such amendment by the affirmative vote of
(i) the holders of a majority of the outstanding voting
securities of the portfolio and (ii) a majority of the members of
the fund's board of directors who are not interested persons of
the fund, the Sub-Adviser or the Investment Adviser, cast in
person at a meeting called for the purpose of voting on such
approval.
20. This Agreement shall be construed in accordance with
the laws of the state of New York, provided, however, that
nothing herein shall be construed as being inconsistent with the
Investment Company act of 1940. As used herein the terms
"interested person", "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth
in the Investment Company act of 1940.
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IN WITNESS WHEREOF, this Agreement has been entered into
the day and year first above written.
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, General Partner
By /s/ Xxxx X. Xxxxxx
--------------------------------
Title: Executive Vice President
Xxxxxxx & Company International Limited
By /s/ I.P. Xxxxxx
--------------------------------
Title: Director
Approved:
Alliance Variable Products Series Fund, Inc.
/s/ Xxxxx X. Xxxxxxx
-------------------------------
Title: Chairman
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00250292.BH7
