ADVISORY AGREEMENT
FIDUCIARY MANAGEMENT ASSOCIATES
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992
Alliance Capital Management
L.P. 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We herewith confirm our agreement with you as
follows:
1. We are an open-end, diversified management
investment company registered under the Investment Company
Act of 1940 (the "Act"). We are currently authorized to
issue three classes of shares and our Trustees are
authorized to reclassify and issue any unissued shares to
any number of additional classes or series (Portfolios) each
having its own investment objective, policies and
restrictions, all as more fully described in the Prospectus
and the Statement of Additional Information constituting
parts of the Registration Statement filed on our behalf
under the Securities Act of 1933 and the Act. We are engaged
in the business of investing and reinvesting our assets in
securities of the type and in accordance with the
limitations specified in our Agreement and Declaration of
Trust, By-Laws, Registration Statement filed with the
Securities and Exchange Commission under the Securities Act
of 1933 and the Act, and any representations made in our
Prospectus and Statement of Additional Information, all in
such manner and to such extent as may from time to time be
authorized by our Trustees. We enclose copies of the
documents listed above and will from time to time furnish
you with any amendments thereof.
2. (a) We hereby employ you to manage the
investment and reinvestment of the assets in each of our
Portfolios as above specified, and, without limiting the
generality of the foregoing, to provide management and other
services specified below.
(b) You will make decisions with respect to all
purchases and sales of securities in each of our Portfolios.
To carry out such decisions, you are hereby authorized, as
our agent and attorney-in-fact, for our account and at our
risk and in our name, to place orders for the investment and
reinvestment of our assets. In all purchases, sales and
other transactions in securities in each of our Portfolios
you are authorized to exercise full discretion and act for
us in the same manner and with the same force and effect as
we might or could do with respect to such purchases, sales
or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct
of such purchases, sales or other transactions.
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(c) You will report to our Trustees at each
meeting thereof all changes in each Portfolio since the
prior report, and will also keep us in touch with important
developments affecting any Portfolio and on your own
initiative will furnish us from time to time with such
information as you may believe appropriate for this purpose,
whether concerning the individual companies whose securities
are included in our Portfolios, the industries in which they
invest, or the condition's prevailing in the economy
generally.
You will also furnish us with such statistical and
analytical information with respect to securities in each of
our Portfolios as you may believe appropriate or as we
reasonably may request. In making such purchases and sales
of securities, you will bear in mind the policies set from
time to time by our Trustees as well as the limitations
imposed by our Agreement and Declaration of Trust and in
our Registration Statement under the Act and the Securities
Act of 1933, the limitations in the Act and of the Internal
Revenue Code in respect of regulated investment companies
and the investment objective, policies and restrictions of
each of our Portfolios.
(d) It is understood that you will from time to
time employ or associate with yourselves such persons as you
believe to be particularly fitted to assist you in the
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execution of your duties hereunder, the cost of performance
of such duties to be borne and paid by you. No obligation
may be incurred on our behalf in any such respect. During
the continuance of this agreement at our request you will
provide to us persons satisfactory to our Trustees to serve
as our officers. You or your affiliates will also provide
persons, who may be our officers, to render such clerical,
accounting and other services to us as, we may from time to
time request of you. Such personnel may be employees of you
or your affiliates. We will pay to you or your affiliates
the cost of such personnel for rendering such services to us
at such rates as shall from time to time be agreed upon
between us, provided that all time devoted to the investment
or reinvestment of securities in each of our Portfolios
shall be for your account. Nothing contained herein shall be
construed to restrict our right to hire our own employees or
to contract for services to be performed by third parties.
Furthermore, you or your affiliates (other than us) shall
furnish us without charge with such,management supervision
and assistance and such office facilities as you may believe
appropriate or as we may reasonably request subject to the
requirements of any regulatory authority to which you may be
subject. You or your affiliates (other than us) shall also
be responsible for the payment of any expenses incurred in
promoting the sale of our shares (other than the portion of
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the promotional expenses to be borne by us in accordance
with an effective plan pursuant to Rule 12b-1 under the Act
and the costs of printing our prospectuses and other reports
to shareholders and fees related to registration with the
Securities and Exchange commission and with state regulatory
authorities).
3. It is further agreed that you will pay us on
the first business day of October in each year the amount,
if any, by which the net expenses of each Portfolio (except
interest, taxes, brokerage, distribution service fees paid
in accordance with an effective plan pursuant to Rule 12b-1
under the Act and extraordinary expenses, all to the extent
permitted by applicable state law and regulation)
(collectively "Excludable Expenses") incurred by us exceeded
for the prior fiscal year the limits applicable to such
Portfolio under the laws or regulations of any state in
which our shares are qualified for sale. We hereby confirm
that, subject to the foregoing, we shall be responsible and
hereby assume the obligation for payment of all our other
expenses, including: (a) payment of the fee payable to you
under paragraph 5 hereof; (b) custody, transfer and dividend
disbursing expenses; (c) fees of trustees who are not your
affiliated persons; (d) legal and auditing expenses; (e)
clerical, accounting and other office costs; (f) the cost of
personnel providing services to us, as provided in
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subparagraph (d) of paragraph 2 above; (g) costs of printing
our prospectuses and shareholder reports; (h) cost of
maintenance of our existence as a trust; (i) interest
charges, taxes, brokerage fees and commissions; (j) costs of
stationery and supplies; (k) expenses and fees related to
registration and filing with the Securities and Exchange
Commission and with state regulatory authorities; and (1)
such promotional expenses as may be contemplated by an
effective plan pursuant to Rule 12b-1 under the Act
provided, however, that our payment of such promotional
expenses shall be in the amounts, and in accordance with the
procedures, set forth in such plan.
4. We shall expect of you, and you will give us
the benefit of, your best judgment and efforts in rendering
these services to us, and we agree as an inducement to your
undertaking these services that you shall not be liable
hereunder 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, you against any liability to us or to our security
holders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
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5. (a) In consideration of the foregoing we shall
pay you a fee which, with respect to our Growth Portfolio
and South Africa-Free International Portfolio, will be
payable for the preceding quarter on the first business day
of October, January, April and July, in an amount equal to
the Applicable Percentage, as specified below, of the value
of the net assets of each such Portfolio at the close of
business on the last business day immediately preceding such
payment date; provided, however, that for the portion of any
quarter if this agreement becomes effective after the
beginning of such quarter or terminates prior to the end of
such quarter, such compensation shall be prorated according
to the proportion which such portion of a quarter bears to a
full quarter. The Applicable Percentage shall be (i) for our
Growth Portfolio, .1875 of 1% and (ii) for our South Africa-
Free International Portfolio, .1750 of 1%.
(b) With respect to our Short-Term Global Income
Portfolio, Short Duration Mortgage Portfolio and Short
Duration Government Portfolio, such fee shall be at an
annual rate equal to .45 of 1% of the average daily value of
the net assets of each such Portfolio. Such payments shall
be accrued by us daily and shall be payable in arrears on
the last day of each calendar month for services performed
hereunder during such month.
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(c) Your reimbursement, if any, of our expenses
pursuant to paragraph 3 hereof will be annualized on a daily
(monthly in the case of the Growth Portfolio and South
Africa-Free Portfolio) basis. Payment of the advisory fee
pursuant to paragraph 5 will be reduced or postponed, if
necessary, with any adjustment made after the end of the
year.
6. This agreement shall become effective on the
date hereof and shall remain in effect until September 30,
1992 and thereafter for successive twelve-month periods
(computed from each October 1) with respect to each such
Portfolio, provided that such continuance is specifically
approved at least annually by our Trustees or by majority
vote of the holders of the outstanding voting securities (as
defined in the Act) of such Portfolio, and, in either case,
by a majority of our Trustees who are not parties to this
agreement or interested persons, as defined in the Act, of
any such party (other than as trustees of our Trust);
provided further, however, that if the continuation of this
agreement is not approved as to a Portfolio, you may
continue to render to such Portfolio the services described
herein in the manner and to the extent permitted by the Act
and the rules and regulations thereunder. Upon the
effectiveness of this agreement, it shall supersede all
previous agreements between us covering the subject matter
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hereof. This agreement may be terminated with respect to any
Portfolio at any time, without the payment of any penalty,
by vote of a majority of the outstanding voting securities
(as so defined) of such Portfolio, or by a vote of a
majority of our Trustees on sixty days' written notice to
you, or by you with respect to any Portfolio on sixty days'
written notice to us.
7. This agreement may not be transferred,
assigned, sold or in any manner hypothecated or pledged by
you and this agreement shall terminate automatically in the
event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and
"sale" as used in this paragraph shall have the meanings
ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
8. (a) Except to the extent necessary to perform
your obligations hereunder, nothing herein shall be deemed
to limit or restrict your right, or the right of any of your
employees or any of the Directors of Alliance Capital
Management Corporation, general partner, who may also be a
trustee, officer or employee of ours, or persons otherwise
affiliated with us (within the meaning of the Act) to engage
in any other business or to devote time and attention to the
management or other aspects of any other business, whether
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of a similar or dissimilar nature, or to render services of
any kind to any other trust, corporation, firm, individual
or association.
(b) You will notify us of any change in the
general partners of your partnership within a reasonable
time after such change.
9. Notice is hereby given that this agreement is
entered into on our behalf by an officer of our Trust in his
capacity as an officer and not individually and that the
obligations of, or arising out of, this agreement are not
binding upon any of our Trustees, officers, employees or
agents individually but are binding only upon the assets and
property of our Trust.
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If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
FIDUCIARY MANAGEMENT ASSOCIATES
/s/ Xxxx X. Xxxxxx
By_________________________
Xxxx X. Xxxxxx
Executive Vice President
Accepted: As of July 22, 1992
Alliance Capital Management L.P.
By Alliance Capital Management Corporation,
its general partner
/s/ Xxxx X. Xxxxxx
By________________________
Xxxx X. Xxxxxx
Executive Vice President
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00250061.AI2
