INVESTMENT ADVISORY AGREEMENT
AGREEMENT executed as of May 1, 1997, between THE XXXXXX
RIVER TRUST, a Massachusetts business trust (the "Trust"), on behalf of its
portfolio series listed on Schedule 1 hereto (each, a "Portfolio" and
collectively, the "Portfolios"), and ALLIANCE CAPITAL MANAGEMENT L.P. (the
"Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of the Trust, the
Adviser will, at its expense, furnish continuously an investment program for
each Portfolio, will make investment decisions on behalf of each Portfolio and
will, subject to the provisions of paragraph (c), place all orders for the
purchase and sale of each Portfolio's portfolio securities. Subject always to
the control of the Trustees of the Trust, the Adviser will also manage,
supervise and conduct the other affairs and business of the Trust and the
Portfolios and matters incidental thereto. In the performance of its duties,
the Adviser will comply with the provisions of the Agreement and Declaration
of Trust and By-laws of the Trust and each Portfolio's stated investment
objectives, policies and restrictions and will use its best efforts to
safeguard and promote the welfare of the Trust and the Portfolios and to
comply with other policies which the Trustees may from time to time determine.
(b) The Adviser, at its expense, will furnish all necessary office
space and equipment, bookkeeping and clerical services (but not accounting
services) required for it to perform its duties hereunder and will pay all
salaries, fees and expenses of officers and Trustees of the Trust who are
affiliated with the Adviser.
(c) In the selection of brokers, dealers, or futures commissions
merchants (collectively, "brokers") and the placing of orders for the purchase
and sale of portfolio investments for each Portfolio, the Adviser shall seek
to obtain the most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. In using its best efforts to obtain
for each Portfolio the most favorable price and execution available, the
Adviser, bearing in mind each Portfolio's best interest at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation, experience and
financial stability of the broker involved and the quality of service rendered
by the broker in other transactions. Subject to such policies as the Trustees
may determine, the Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused any Portfolio to pay a broker that provides brokerage and
research services to the Adviser an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker would have charged for effecting that transaction, if the Adviser
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker, viewed in terms of either that particular transaction or the Adviser's
overall responsibilities with respect to such Portfolio and to other clients
of the Adviser as to which the Adviser exercises investment discretion.
(d) Subject to the provisions of the Agreement and Declaration of
Trust of the Trust and the Investment Company Act of 1940, the Adviser, at its
expense, may select and Agreement with one or more investment advisers (the
"Sub-Adviser") for any Portfolio to perform some or all of the services for
which it is responsible pursuant to paragraph (a) of this Section 1 (and any
related facilities or services for which it is responsible under paragraph (b)
of this Section 1). The Adviser will compensate any Sub-Adviser of such
Portfolio for its services to such Portfolio. The Adviser may terminate the
services of any Sub-Adviser at any time in its sole discretion, and shall at
such time assume the responsibilities of such Sub- Adviser unless and until a
successor Sub-Adviser is selected.
(e) The Adviser shall not be obligated to pay any expenses of or for
the Trust or any Portfolio not expressly assumed by the Adviser pursuant to
this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Adviser, and in any person controlling,
controlled by or under common control with the Adviser, and that the Adviser
and any person controlling, controlled by or under common control with the
Adviser may have an interest in the Trust or in any Portfolio. It is also
understood that the Adviser and persons controlling, controlled by or under
common control with the Adviser have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE ADVISER
The Trust, on behalf of the Portfolios, will pay to the Adviser as
compensation for the Adviser's services rendered, for the facilities furnished
and for the expenses borne by the Adviser pursuant to Section 1, a fee
computed and paid monthly at the annual rates applicable
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to the average daily net asset value of each Portfolio set forth on Schedule 1
hereto. Such fee computed with respect to the net asset value of a Portfolio
shall be paid from the assets of such Portfolio. Such average daily net asset
value of each Portfolio shall be determined by taking an average of all of the
determinations of such net asset value during such month at the close of
business on each business day during such month while this Agreement is in
effect. Such fee shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of any Portfolio for any fiscal year (not
including any distribution expenses paid by such Portfolio pursuant to any
distribution plan) should exceed the expense limitation on investment company
expenses enforced by any statute or regulatory authority of any jurisdiction
in which shares of such Portfolio are qualified for offer and sale, the
compensation due the Adviser for such fiscal year shall be reduced by the
amount of such excess by a reduction or refund thereof. In the event that the
expenses of any Portfolio exceed any expense limitation which the Adviser may,
by written notice to the Trust, voluntarily declare to be effective with
respect to such Portfolio, subject to such terms and conditions as the Adviser
may prescribe in such notice, the compensation due the Adviser shall be
reduced, and, if necessary, the Adviser shall bear the expenses of such
Portfolio to the extent required by such expense limitation.
If the Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS
AGREEMENT
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment; and this Agreement shall not be
amended as to any Portfolio unless such amendment is approved at a meeting by
the affirmative vote of a majority of the outstanding shares of such
Portfolio, and by the vote, cast in person at a meeting called for the purpose
of voting on such approval, of a majority of the Trustees of the Trust who are
not interested persons of the Trust or of the Adviser or of any Sub-Adviser of
the Trust. Shareholders of a Portfolio not affected by any such amendment
shall have no right to vote with respect to such amendment.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective upon its execution, and shall
remain in full force and effect as to a particular Portfolio continuously
thereafter (unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) Either party hereto may at any time terminate this Agreement as
to any Portfolio on not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
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(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of such Portfolio,
and (ii) a majority of the Trustees of the Trust who are not interested
persons of the Trust or of the Adviser, by vote cast in person at a meeting
called for the purpose of voting on such approval, do not specifically approve
at least annually the continuance of this Agreement, then this Agreement shall
automatically terminate with respect to such Portfolio at the close of
business on the second anniversary of its execution, or upon the expiration of
one year from the effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this Agreement is
submitted to the shareholders of such Portfolio for their approval and such
shareholders fail to approve such continuance of this Agreement as provided
herein, the Adviser may continue to serve hereunder in a manner consistent
with the Investment Company Act of 1940 and the rules and regulations
thereunder.
Action by the Trust under (a) above may be taken either (i) by vote
of a majority of its Trustees or (ii) by the affirmative vote of a majority of
the outstanding shares of the relevant Portfolio affected.
Termination of this Agreement pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN INFORMATION
The Adviser shall promptly notify the Trust in writing of the
occurrence of any of the following events: (a) the Adviser shall fail to be
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended from time to time, and under the laws of any jurisdiction in which
the Adviser is required to be registered as an investment adviser in order to
perform its obligations under this Agreement, (b) the Adviser shall have been
served or otherwise have notice of any action, suit, proceeding, inquiry or
investigation at law or in equity, before or by any court, public board or
body, involving the affairs of the Trust and (c) there shall be any change in
the "control" (as defined in the Investment Company Act of 1940) of the
Adviser.
7. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a
majority of the outstanding shares" of the Portfolio means the affirmative
vote, at a duly called and held meeting of shareholders of such Portfolio, (a)
of the holders of 67% or more of the shares of such Portfolio present (in
person or by proxy) and entitled to vote at such meeting, if the holders of
more than 50% of the outstanding securities of the Portfolio entitled to vote
at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Portfolio entitled to vote at
such meeting, whichever is less.
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For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules and
regulations thereunder; and the term "brokerage and research services" shall
have the meaning given in the Securities Exchange Act of 1934 and the rules
and regulations thereunder.
8. NONLIABILITY OF ADVISER
In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Adviser, or reckless disregard of its obligations and
duties hereunder, the Adviser shall not be subject to any liability to the
Trust, to any Portfolio, or to any shareholder of any Portfolio, for any act
or omission in the course of, or connected with, rendering services hereunder.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and property of
each of the respective Portfolios.
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IN WITNESS WHEREOF, THE XXXXXX RIVER TRUST and ALLIANCE CAPITAL
MANAGEMENT L.P. have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
THE XXXXXX RIVER TRUST
By: XXXXXX X. XXXXXX, XX.
_______________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Secretary
ALLIANCE CAPITAL MANAGEMENT L.P.
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, GENERAL PARTNER
By: XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Title: President
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SCHEDULE 1
TO
INVESTMENT ADVISORY AGREEMENT
THE XXXXXX RIVER TRUST
FEE SCHEDULE
(AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS)
FIRST NEXT NEXT NEXT
$750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
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INTERNATIONAL PORTFOLIOS
International 0.900% 0.825% 0.800% 0.780% 0.770%
Global 0.675% 0.600% 0.550% 0.530% 0.520%
EQUITY PORTFOLIOS
Aggressive Stock 0.625% 0.575% 0.525% 0.500% 0.475%
Common Stock 0.475% 0.425% 0.375% 0.355% 0.345%*
Growth & Income 0.550% 0.525% 0.500% 0.480% 0.470%
Small Cap Growth 0.900% 0.850% 0.825% 0.800% 0.775%
ASSET ALLOCATION PORTFOLIOS
Growth Investors 0.550% 0.500% 0.450% 0.425% 0.400%
Balanced 0.450% 0.400% 0.350% 0.325% 0.300%
Conservative Investors 0.475% 0.425% 0.375% 0.350% 0.325%
FIXED INCOME PORTFOLIOS
High Yield 0.600% 0.575% 0.550% 0.530% 0.520%
Quality Bond 0.525% 0.500% 0.475% 0.455% 0.445%
Intermediate Government 0.500% 0.475% 0.450% 0.430% 0.420%
Securities
OTHER PORTFOLIOS
Equity Index 0.325% 0.300% 0.275% 0.255% 0.245%
Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
*On assets in excess of $10 billion, the management fee for the Common Stock
Portfolio is reduced to 0.335% of average daily net assets.
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