SUB-ADVISORY AGREEMENT
Exhibit 99(d)(24)
This Sub-Advisory Agreement (the "Agreement") is entered into as of December 15, 2014 (the "Effective Date"), by and between AllianceBernstein L.P. ("Advisor"), and Morningstar Associates, LLC ("Sub-Advisor").
WHEREAS, Advisor is an investment advisor registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and has been retained by AllianceBernstein Cap Fund, Inc. (the "Company") to provide investment advisory services with respect to certain assets of the following eleven (11) series of the Company registered under the Investment Company Act of 1940, as amended (the "1940 Act"):
AllianceBernstein Multi-Manager Select Retirement Allocation Fund
AllianceBernstein Multi-Manager Select 2010 Fund
AllianceBernstein Multi-Manager Select 2015 Fund
AllianceBernstein Multi-Manager Select 2020 Fund
AllianceBernstein Multi-Manager Select 2025 Fund
AllianceBernstein Multi-Manager Select 2030 Fund
AllianceBernstein Multi-Manager Select 2035 Fund
AllianceBernstein Multi-Manager Select 2040 Fund
AllianceBernstein Multi-Manager Select 2045 Fund
AllianceBernstein Multi-Manager Select 2050 Fund
AllianceBernstein Multi-Manager Select 2055 Fund
(individually a "Fund," and collectively the "Funds"); and
WHEREAS, Sub-Advisor also is an investment advisor registered under the Advisers Act; and
WHEREAS, Advisor desires to retain Sub-Advisor to furnish it with portfolio management services in connection with Advisor's investment advisory activities on behalf of the Funds, and Sub-Advisor is willing to furnish such services to Advisor and the Funds.
NOW THEREFORE, in consideration of the terms and conditions hereinafter set forth, it is agreed as follows:
1. Employment of Sub-Advisor. In accordance with and subject to the Investment Advisory Contract between the Company and Advisor, attached hereto as Exhibit A (the "Advisory Agreement"), Advisor hereby appoints Sub-Advisor to manage the investment and reinvestment of that portion of the assets of the Funds allocated to it by Advisor (the "Fund Assets"), in conformity with the Funds' currently effective Registration Statement, prospectus and Statement of Additional Information and subject to the control and direction of Advisor and the Company, for the period and on the terms hereinafter set forth. Sub-Advisor hereby accepts such employment and agrees during such period to render the services and to perform the duties called for by this Agreement for the compensation herein provided. Sub-Advisor shall for all purposes herein be deemed an independent contractor and shall, except as expressly provided or authorized (whether herein or otherwise), have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company or the Funds.
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2. Duties of Advisor. Advisor will provide the following services and undertake the following duties:
a. Asset-Allocation Policy. Among other responsibilities to the Funds, Advisor will determine the asset allocation policy that is to be used by the Funds and will communicate this asset allocation policy to Sub-Advisor. Advisor will also provide Sub-Advisor with the universe of available investments from which Sub-Advisor is to select investments in performing its portfolio management activities.
b. Trade Execution. Upon receipt of Sub-Advisor's allocations for the underlying positions for the Funds, Advisor will place orders for the execution of all portfolio transactions in accordance with the policies with respect thereto set forth in the Fund's registration statements under the 1940 Act and the Securities Act of 1933 (the "1933 Act"); as such registration statements may be in effect from time to time.
3. Advisor Representations
Advisor represents and warrants that:
a. it is registered, and agrees to maintain its registration for the term of this Agreement, as an investment advisor with the Securities and Exchange Commission ("SEC") or applicable state(s) securities authority and is not prohibited by the Advisers Act, the rules thereunder, or otherwise from acting as contemplated by this Agreement;
b. it understands that the performance of its obligations under this Agreement is subject to the securities and other applicable laws of the various jurisdictions in which Advisor has an office or conducts its business. Advisor will comply with all applicable laws and regulations, including SEC and state registration or notice filing obligations, SEC and state-imposed anti-fraud provisions, and all applicable registration requirements for investment adviser representatives;
c. there is no action, suit, proceeding, or matter before or by any court or governmental agency or body, domestic or foreign, now pending, or, to Advisor's knowledge, threatened against Advisor (including any investigation, request for a "Xxxxx" submission, or settlement of an administrative action before the SEC) that might result in any material adverse change in Advisor's financial condition, business, or prospects or might materially and adversely affect Advisor's properties or assets;
d. it will perform its services under this Agreement in accordance with this Agreement, the Advisers Act, and other applicable laws and rules;
e. it will notify Sub-Advisor within five (5) business days of any material change in investment personnel, litigation status of firm/key personnel, enforcement or formal inquiry, or a financial situation which will adversely impact its ability to perform its obligations under this Agreement;
f. it will be responsible for notifying Sub-Advisor promptly upon any additions and/or deletions in the Advisor's platform's investment universe.
g. it, and its officers, directors, employees, associated persons and agents, possess all necessary licenses and registrations to enter into and perform this Agreement;
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h. with respect to its performance of the obligations arising under this Agreement, it complies in all material respects with all applicable laws, rules and regulations, including but not limited to the 1940 Act, the Advisers Act, applicable state laws, and the Internal Revenue Code of 1986, as amended (the "Code");
i. except as provided herein, Sub-Advisor has no responsibility for the organization and operation of each Fund or for ensuring compliance with all applicable laws and/or regulations relating to Advisor and the Funds;
j. it is solely responsible for the monitoring and ongoing due diligence of the parties that Advisor or the Funds contract with, including, but not limited to the custodian, it being understood, however, that Sub-Advisor is responsible for selecting the investments from the universe of available investments provided to Sub-Advisor by Advisor;
k. it has met and will seek to continue to meet in all material respects for so long as this Agreement remains in effect, any federal or state requirements, as necessary to be met in order to maintain the organization and operation of each Fund;
l. it will promptly notify Sub-Advisor of the occurrence of any event that would materially adversely impact the operation of any Fund; and
m. it has received a copy of Sub-Advisor's Form ADV Part 2.
n. it agrees to indemnify Sub-Advisor, its officers, directors, employees, associated persons, agents and control persons, against any damages, losses, penalties, fines, fees or expenses (including reasonable attorneys' fees) resulting from any material breach by Advisor of such representations and warranties.
4. Duties of Sub-Advisor. Sub-Advisor will provide the following services and undertake the following duties:
a. Underlying Fund Selection. Sub-Advisor will select the underlying investment options for the Funds; provided, however, that investments managed by the Advisor shall constitute approximately 33% (and in no event greater than 40%) of the aggregate net asset value of the Funds. Advisor will determine the universe of investments from which Sub-Advisor will choose to construct the investment portfolios of each of the Funds. Sub-Advisor will work with Advisor to understand constraints that may influence the portfolio construction of the Funds. Sub-Advisor employs both quantitative and qualitative analysis to select investment options. Sub-Advisor will make all determinations with respect to the selection of the investments, based upon the universe of available investments as determined by Advisor.
b. Portfolio Construction. Subject to Advisor's asset allocation determinations, Sub-Advisor will have responsibility over the portfolio construction of the Funds. As part of the portfolio construction process, Sub-Advisor will analyze the underlying holdings of the selected investments to ensure adherence to the selected asset allocation (provided by Advisor) while minimizing unnecessary overlap. The Sub-Advisor's selections will be communicated to Advisor for execution and trading. Sub-Advisor will manage the investment of the Fund Assets as outlined herein, subject to and in accordance with the investment objectives, policies and restrictions of the Funds and in conformity with the Funds' currently effective Registration Statement, prospectus and Statement of Additional Information and any directions which Advisor or the Company may give from time to time with respect to the Funds. Upon receipt of the asset allocation policy from Advisor, Sub-Advisor will determine the allocation in the investments of the Fund Assets.
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c. Reporting. Sub-Advisor will render regular reports to the Company and to Advisor (or such other advisor or advisors as Advisor shall engage to assist it in the evaluation of the performance and activities of Sub-Advisor). Such reports shall be made in such form and manner and with respect to such matters regarding the Funds and Sub-Advisor as the Company or Advisor shall from time to time request; provided, however, that unless otherwise requested by the Board of Directors of the Company, the individual primarily responsible for management of the Funds' Assets for Sub-Advisor will not be required to attend in person more than four quarterly meetings per year with the Company's board of directors or Advisor.
d. Sub-Advisor shall provide support to Advisor with respect to the marketing of the Funds, including but not limited to: (i) permission to use Sub-Advisor's name as provided in Section 8, (ii) access to the individual(s) responsible for day-to-day management of the Funds for marketing conferences, teleconferences and other activities involving the promotion of the Funds, subject to the reasonable request of Advisor, and (iii) permission to use biographical and historical data of Sub-Advisor and individual manager(s).
e. Sub-Advisor will work with Advisor, in the name of the Funds, to place orders for the execution of all portfolio transactions in accordance with the policies with respect thereto set forth in the Fund's registration statements under the 1940 Act and the 1933 Act, as such registration statements may be in effect from time to time.
f. In the event of any reorganization or other change in Sub-Advisor, its investment principals, supervisors or members of its investment (or comparable) committee, Sub-Advisor shall give Advisor and the Company written notice of such reorganization or change within a reasonable time (but not later than 30 days) after such reorganization or change.
g. Sub-Advisor will bear its expenses of providing services to the Funds pursuant to this Agreement except such expenses as are expressly undertaken by Advisor or the Company.
h. Sub-Advisor will comply with the timing and procedural standards set forth in the service level agreement attached hereto as Exhibit D.
5. Sub-Advisor Representations
Sub-Advisor represents, warrants, and covenants that:
a. it is registered, and agrees to maintain its registration for the term of this Agreement, as an investment advisor with the Securities and Exchange Commission ("SEC") or applicable state(s) securities authority and is not prohibited by the Advisers Act, the rules thereunder, or otherwise from acting as contemplated by this Agreement;
b. there is no action, suit, proceeding, or matter before or by any court or governmental agency or body, domestic or foreign, now pending, or, to Sub-Advisor's knowledge, threatened against Sub-Advisor (including any investigation, request for a "Xxxxx" submission, or settlement of an administrative action before the SEC) that might result in any material adverse change in Sub-Advisor's financial condition, business, or prospects or might materially and adversely affect Sub-Advisor's properties or assets;
c. it will perform its services under this Agreement in accordance with this Agreement, the Advisers Act, and other applicable laws and rules; and
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d. it will notify Advisor within five (5) business days of any material change in investment personnel, litigation status of firm/key personnel, enforcement or formal inquiry, or a financial situation which will adversely impact its ability to perform its obligations under this Agreement.
e. Sub-Advisor agrees to comply with the requirements of the 1940 Act, the Advisers Act, the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Internal Revenue Code of 1986, and the respective rules and regulations thereunder, as applicable, as well as with all other applicable federal and state laws, rules, regulations and case law that relate to the services and relationships described hereunder and to the conduct of its business as a registered investment adviser. In addition, in selecting the Funds' portfolio securities and performing Sub-Advisor's obligations hereunder, Sub-Advisor shall cause the Funds to comply with the requirements communicated by Advisor. Sub-Advisor shall maintain compliance procedures that it reasonably believes are adequate to ensure compliance with the foregoing. No supervisory activity undertaken by Advisor shall limit Sub-Advisor's full responsibility for any of the foregoing.
f. Sub-Advisor has adopted a written code of ethics (the "Code of Ethics") that it reasonably believes complies with the requirements under the Advisers Act. Sub-Advisor has policies and procedures in place to monitor compliance by its Access Persons (as defined in Sub-Advisor's Code of Ethics) with Sub-Advisor's Code of Ethics, as in effect from time to time. Upon request, Sub-Advisor shall provide Advisor with (i) a copy of Sub-Advisor's current Code of Ethics, as in effect from time to time, and (ii) a certification that it has adopted procedures reasonably necessary to prevent Access Persons from engaging in any conduct prohibited by Sub-Advisor's Code of Ethics. No less frequently than annually, Sub-Advisor shall furnish a written report, which complies with the requirements of Rule 17j-1, concerning Sub-Advisor's Code of Ethics to the Funds and Advisor. Sub-Advisor shall respond to requests for information from Advisor as to violations of the Code of Ethics by Access Persons (as defined in Rule 17j-1) and the sanctions imposed by Sub-Advisor. Sub-Advisor shall immediately notify Advisor of any material violation of the Code of Ethics, whether or not such violation relates to a security held by any Fund.
g. Sub-Advisor shall notify the Advisor's Chief Compliance Officer and Advisor immediately upon detection of (i) any material failure to manage any Fund in accordance with its investment objectives and policies or any applicable law; or (ii) any material breach of any of the Funds' or Advisor's policies, guidelines or procedures. In addition, as requested Sub-Advisor shall provide information regarding each Fund's compliance with its investment objectives and policies and applicable law, including, but not limited to the 1940 Act, the Code, and the Funds' and Advisor's policies, guidelines or procedures as applicable to Sub-Advisor's obligations under this Agreement. Sub-Advisor acknowledges and agrees that Advisor may, in its discretion, provide such quarterly compliance certifications to the Company. Sub-Advisor agrees to correct any such failure promptly and to take any action that the Company and/or Advisor may reasonably request in connection with any such breach. Upon request, Sub-Advisor shall also provide Advisor with supporting certifications in connection with such certifications of Fund financial statements and disclosure controls pursuant to the Xxxxxxxx-Xxxxx Act. Sub-Advisor will promptly notify Advisor in the event (i) Sub-Advisor is served or otherwise receives 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 Company or the compliance by Sub-Advisor with the federal or state securities laws or (ii) the controlling stockholder of Sub-Advisor changes or an actual change in control resulting in an "assignment" (as defined in the Advisers Act) has occurred or is otherwise proposed to occur.
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h. Sub-Advisor shall maintain books and records as required by applicable regulations.
6. Compensation of Sub-Advisor. As compensation for the services to be rendered and duties undertaken hereunder by the Sub-Advisor, the Advisor will pay to the Sub-Advisor a monthly fee as set forth in Exhibit B (the "Fee Schedule") without regard to any total expense limitation of the Company or the Advisor.
7. Activities of Sub-Advisor. Sub-Advisor will report to the Company (at regular quarterly meetings of the Company's directors and at such other times as the Company shall reasonably request, subject to the limitation on personal attendance at such meetings in Section 4(c) above) such information as the Company shall reasonably request regarding the Funds, the Funds' performance, the services provided by Sub-Advisor and affiliates of Sub-Advisor to the Funds as compared to its other accounts and the plans of, and the capability of, Sub-Advisor with respect to providing future services to the Funds and its other accounts.
Sub-Advisor has supplied to Advisor and the Company copies of its Form ADV Part 2 and will hereafter supply to Advisor, promptly upon the preparation thereof, copies of all amendments or restatements of such document.
8. Use of Names. Neither Advisor nor the Company shall use the name of Sub-Advisor in any prospectus, sales literature or other material relating to Advisor or the Company in any manner not approved in advance by Sub-Advisor; provided, however, that Sub-Advisor hereby approves all uses of its name which merely refer in accurate terms to its appointment hereunder or which are required by the SEC or a state securities commission or otherwise required by applicable law. Sub-Advisor shall not use the name of Advisor or the Company in any material relating to Sub-Advisor in any manner not approved in advance by Advisor or the Company, as the case may be; provided, however, that Advisor and the Company shall each approve all uses of their respective names which merely refer in accurate terms to the appointment of Sub-Advisor hereunder or which are required by the SEC or a state securities commission or otherwise by applicable law; and, provided further, that in no event shall such approval be unreasonably withheld.
9. Liability of Sub-Advisor and Indemnification.
a. The Sub-Advisor will not be liable for any loss sustained by reason of the adoption of any investment policy or the purchase, sale, or retention of any security on the recommendation of the Sub-Advisor, if such recommendation shall have been made and such other individual, firm, or corporation shall have been selected, with due care and in good faith.
b. Sub-Advisor shall indemnify and hold harmless the Company and all affiliated persons thereof (within the meaning of Section 2(a)(3) of the 0000 Xxx) and all controlling persons (as described in Section 15 of the 1933 Act) (collectively, the "Sub-Advisor Indemnitees") against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses) by reason of or arising out of: (a) Sub-Advisor being in material violation of any applicable federal or state law, rule or regulation or any investment policy or restriction set forth in the Funds' Registration Statement or any written guidelines or instruction provided in writing by the Company, (b) Sub-Advisor's willful misfeasance, bad faith or gross negligence generally in the performance of its duties hereunder or its reckless disregard of its obligations and duties under this Agreement, or (c) any breach of any duty or warranty hereunder of the Sub-Advisor or any inaccuracy of any representation of the Sub-Advisor made hereunder.
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c. Advisor shall indemnify and hold harmless Sub-Advisor and its affiliates against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses) by reason of or arising out of (a) Advisor's willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or its reckless disregard of its obligations and duties under this Agreement and (b) any breach of any duty or warranty hereunder of the Advisor or any inaccuracy of any representation of the Advisor made hereunder, provided, however, that nothing herein contained will provide indemnity to the Sub-Advisor for liability resulting from its own willful misfeasance, bad faith, or gross negligence in the performance of its duties or reckless disregard of such duties.
10. Force Majeure. Sub-Advisor shall not be liable for delays or errors occurring by reason of circumstances beyond its control, including but not limited to acts of civil or military authority, national emergencies, work stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or failure of communication or power supply. In the event of circumstances beyond its control, Sub-Advisor shall take all reasonable steps to minimize service interruptions.
11. Approval, Renewal, Termination and Amendment.
a. Approval. This Agreement has been approved by the Company's board of directors, including a majority of the members who are not "interested parties" (as that term is defined in the 0000 Xxx) of the Funds or any investment advisor to a Fund ("Independent Board Member"), by a vote cast in person at a meeting called for the purposes of voting on such approval, and shall become effective as of the date of this Agreement.
b. Renewal and Termination. Unless terminated sooner as provided herein, this Agreement shall continue in respect of each Fund for an initial term of two (2) years from the Effective Date. Thereafter, if not terminated, this Agreement shall continue in respect of each Fund for successive 12-month periods, provided, that such continuance is specifically approved at least annually by (i) the vote of the holders of a majority of the Independent Board Members, cast in person at a person at a meeting called for the purpose of voting on such continuance, and (ii) by the Company or by vote of a majority of the "outstanding voting securities" (as that term is defined in the 1940 Act ) of the Fund; provided, however, that notwithstanding the foregoing, this Agreement may be terminated with respect to the Fund at any time without payment of any penalty, on sixty (60) days written notice to Advisor and/or Sub-Advisor, as appropriate.
c. Survival. In the event of termination of this Agreement, Sections 8, 9, 11, 16, 17 and 18 shall survive such termination of this Agreement.
d. Amendment. This Agreement may be amended at any time by the parties hereto, subject to approval by the Company and, if required by applicable SEC rules and regulations, a vote of the majority of the outstanding voting securities of the Funds affected by such change.
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12. Marketing Materials, Trademarks and Related Matters.
a. Marketing Materials. Sub-Advisor will assist Advisor in Advisor's development and construction of marketing materials for the Funds ("Marketing Materials"). Advisor will be responsible for any and all content, production, shipping and other like charges relating to such Marketing Materials. All Marketing Materials that refer to the Sub-Advisor will appropriately reflect the nature and role of Sub-Advisor's performance of Sub-Advisor's obligations under this Agreement. Advisor agrees to provide Sub-Advisor with any new Marketing Materials that either contain Sub-Advisor's logo or reference Sub-Advisor. Advisor will allow Sub-Advisor to review and approve such Marketing Materials. Sub-Advisor agrees to complete its review of such Marketing Materials within five (5) business days. Marketing Materials that have previously been reviewed and approved by Sub-Advisor are not required to be submitted unless content impacting or relating to Sub-Advisor has changed.
b. Trademarks. Subject to (i) and (ii) below. Advisor may utilize the following trademarks of Sub-Advisor in association with the Funds:
Morningstar®
i. Use of Trademarks. To the extent not permitted by Section 8 hereof, each party must obtain the other party's permission prior any use of its name, logo, trademarks, or data. Sub-Advisor and Advisor will submit such materials to the other for their review prior to any printing or dissemination.
ii. Notices and Disclaimers. The following or a substantially similar statement shall be included with Marketing Materials that reference Sub-Advisor or the Funds:
Morningstar Associates, LLC is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar Associates is acting as a sub-advisor to AllianceBernstein L.P. with regard to the AllianceBernstein Multi-Manager Select Retirement Portfolios. Morningstar Associates is not affiliated with AllianceBernstein or its affiliates. The Morningstar name and logo are the property of Morningstar, Inc.
Sub-Advisor reserves the right to modify the above disclaimer text or add additional text to the required disclaimer text as it deems appropriate based on its review of Marketing Materials.
13. Limited Exclusivity. Commencing with the Effective Date of this Agreement and for a period of two (2) years; Sub-Advisor will not engage with the asset managers listed in Exhibit C (the "Exclusivity List") as a sub-advisor for a series of actively managed, multi-manager target date mutual funds. This does not prohibit the asset managers from being included as underlying funds in third party U.S. registered multi-manager offerings where Sub-Advisor acts as a sub-advisor or consultant or for Sub-Advisor to act as consultant or advisor to multi-manager custom target date solutions.
14. Disclosure Materials of Underlying Holdings. Advisor shall be solely and exclusively responsible, where applicable, for the delivery in a timely fashion to any shareholder, prospective shareholder or other person any prospectus, semi-annual report, and any other shareholder communication or materials.
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15. Proxies and Legal Proceedings. Sub-Advisor will not be responsible for voting of proxies solicited by, or with respect to, the issuers of any securities held in any Fund. Advisor understands and acknowledges that Sub-Advisor will not render any advice or take any action on behalf of any Fund with respect to securities presently or formerly held in any Fund, or the issuers thereof, which become the subject of any legal proceedings including bankruptcies and class actions suits.
16. Severability. If any provision of this Agreement shall become or shall be found to be invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
17. Notice. Any notices under this Agreement shall be in writing addressed and delivered personally (or by telecopy) or mailed postage-paid, to the other party at such address as such other party may designate in accordance with this paragraph for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Company and that of Advisor for this purpose shall be 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 and that the address of Sub-Advisor shall be 00 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000.
18. Miscellaneous. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Illinois and Sub-Advisor consents to the jurisdiction of courts, both state or federal, in Illinois, with respect to any dispute under this Agreement.. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. The parties acknowledge that the Company and the Funds are third party beneficiaries of this Agreement. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, all as of the day and year first above written.
ALLIANCEBERNSTEIN L.P.
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