Exhibit (5)(a)
INVESTMENT ADVISORY AGREEMENT
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992,
as amended as of May 1, 1997
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 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 separate classes of
shares and our Directors 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
Articles of Incorporation, 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 Directors. 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. You are permitted to utilize the services of one
or more Sub-Advisers in connection with the management of the
Global Bond Portfolio, subject to your obtaining our prior
approval of any such Sub-Advisory Agreement.
(c) You will report to our Directors 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 engage, or the conditions 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
Directors as well as the limitations imposed by our Articles of
Incorporation and 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
for 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 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 Directors 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
2
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 promotional expenses to be borne by us in accordance
with an effective plan pursuant to Rule 12b-1 under the Act and
costs of printing our prospectuses and other reports to
stockholders and fees related to registration with the Securities
and Exchange Commission and with state regulatory authorities).
3. It is further agreed that you shall be responsible for
the portion of the net expenses of each of our Portfolios (except
interest, taxes, brokerage, fees paid in accordance with an
effective plan pursuant to Rule 12b-1 under the Act, 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) incurred
by us during each of our fiscal years or portion thereof that
this agreement is in effect between us which, as to a Portfolio,
in any such year exceeds the limits applicable to such Portfolio
under the laws or regulations of any state in which our shares
are qualified for sale (reduced pro rate for any portion of less
than a year). 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 directors
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
subparagraph (d) of paragraph 2 above; (g) costs of printing our
prospectuses and stockholder reports; (h) cost of maintenance of
corporate existence; (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 to Rule 12b-1 under the Act
provided, however, that our payment of such promotional expenses
shall be in the amount, 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
3
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.
5. In consideration of the foregoing we will pay you a
monthly fee at an annual rate equal to the Applicable Percentage,
as defined below, of the average daily value of the net assets of
each Portfolio managed by you. Such fee 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. Your reimbursement, if any, of our expenses as provided in
paragraph 3 hereof, shall be estimated and paid to us monthly in
arrears, at the same time as our payment to you for such month.
Payment of the advisory fee will be reduced or postponed, if
necessary, with any adjustments made after the end of the year.
The Applicable Percentage shall be: (i) for our Money Market
Portfolio, .50 of 1% of such Portfolios aggregate net assets;
(ii) for our Premier Growth Portfolio, 1.00% of such Portfolios
aggregate net assets; (iii) for our Growth and Income Portfolio,
.625 of 1% of such Portfolios aggregate net assets; (iv) for our
U.S. Government/High Grade Securities Portfolio, .60 of 1% of
such Portfolios aggregate net assets; (v) for our High-Yield
Portfolio, .75 of 1% of such Portfolios average net assets; (vi)
for our Total Return Portfolio, .625 of 1% of such Portfolios
aggregate net assets; (vii) for our International Portfolio,
1.00% of such Portfolios aggregate net assets; (viii) for our
Short-Term Multi-Market Portfolio, .55 of 1% of such Portfolios
aggregate net assets; (ix) for our Global Bond Portfolio, .65 of
1% of such Portfolios aggregate net assets; (x) for our North
American Government Income Portfolio, .65 of 1% of such
Portfolios aggregate net assets; (xi) for our Utility Income
Portfolio, .75 of 1% of such Portfolios aggregate net assets;
(xii) for our Global Dollar Government Portfolio, .75 of 1% of
such Portfolios aggregate net assets; (xiii) for our Worldwide
Privatization Portfolio, 1.00% of such Portfolios aggregate net
assets; (xiv) for our Growth Portfolio, .75 of 1.00% of such
Portfolios average net assets; (xv) for our Conservative
Investors Portfolio, .75 of 1.00% of such Portfolios average net
assets; (xvi) for our Growth Investors Portfolio, .75 of 1.00% of
such Portfolios average net assets; (xvii) for our Technology
Portfolio, 1.00% of such Portfolios aggregate net assets; (xviii)
for our Quasar Portfolio, 1.00% of such Portfolios aggregate net
assets; (xix) for our Real Estate Investment Portfolio, .90% of
such Portfolios average net assets.
6. This agreement shall become effective on the date hereof
and shall remain in effect with respect to each Portfolio until
4
December 31, 1997* and thereafter for successive twelve-month
periods (computed from each January 1) with respect to each such
Portfolio provided that such continuance is specifically approved
at least annually by our Directors 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
Directors who are not parties to this agreement or interested
persons, as defined in the Act, of any such party (other than as
our directors) 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 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 Directors 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 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,
your general partner, who may also be a Director 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 of a similar or dissimilar nature, or to render
services of any kind to any other corporation, trust, 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.
____________________
* December 31, 1998 with respect to Real Estate Investment
Portfolio.
5
9. If you cease to act as our investment adviser, or in any
event, if you so request in writing, we agree to take all
necessary action to change the name of our corporation to a name
not including the word "Alliance". You may from time to time make
available without charge to us for our use such marks or symbols
owned by you, including marks or symbols containing the name
"Alliance" or any variation thereof, as you may consider
appropriate. Any such marks or symbols so make available will
remain your property and will have the right, upon notice in
writing, to require us to cease the use of such xxxx or symbol at
any time.
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,
Alliance Variable Products
Series Fund,Inc.
By /s/ Xxxx X. Xxxxxx
__________________________
Xxxx X. Xxxxxx
Chairman and President
Accepted:
July 22, 1992, as
amended as of May 1, 1997
Alliance Capital Management L.P.
By Alliance Capital Management Corporation,
its General Partner
By: /s/ Xxxx X. Xxxxxx
____________________________
Xxxx X. Xxxxxx
President and Chief Operating Officer
6
00250292.BD1
