ADVISORY AGREEMENT
ALLIANCE CAPITAL RESERVES
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 one class 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 Statement of Additional Information constituting a part 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
Declaration of Trust, By-Laws, Registration Statements 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.
(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 banks or
other companies whose securities are included in our Portfolios,
the banking or other industries in which they engage, or the
conditions prevailing in the money market or 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 in each
of our Portfolios, you will bear in mind the policies set from
time to time by our Trustees as well as the limitations imposed
by our Declaration of Trust and in our Registration Statements
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 Trustees to serve as our officers. You or
your affiliates will also provide persons, who may be our
officers, to render such clerical, accounting, administrative 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 or to the promotion of the sale of our shares 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
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your affiliates (other than us) shall furnish us without charge
with such administrative and 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 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 shall be responsible for
the portion of the net expenses of all our Portfolios (except
taxes, brokerage, interest, and extraordinary expenses) incurred
by us during each of our fiscal years or portion thereof that
this agreement is in effect between us which portion shall be the
excess of the aggregate of such expenses over one per cent (1%)
of our net assets computed on a daily average basis for such
fiscal year (reduced pro rata 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 trustees who are not
your affiliated persons; (d) legal and auditing expenses; (e)
clerical, accounting, administrative, 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 shareholder reports; (h) expenses and fees
related to registration and filing with the Securities and
Exchange Commission and with state regulatory authorities; and
(i) such promotional expenses as may be contemplated by an
effective plan pursuant to Rule 12b-1 under the Investment
Company Act of 1940; 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. In consideration of the foregoing we will pay you a fee
for each Portfolio at the annual rate of: .50 of 1% of the first
$1.25 billion of that Portfolio's average daily net assets; .49
of 1% of the next $.25 billion of such assets; .48 of 1% of the
next $.25 billion of such assets; .47 of 1% of the next $.25
billion of such assets; .46 of 1% of the next $1 billion of such
assets, and; .45 of 1% of such average daily net assets in excess
of $3 billion. 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.
6. This agreement shall become effective on the date hereof
and shall remain in effect until June 30, 1993 and thereafter for
successive twelve-month periods (computed from each July 1), with
respect to each 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 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,
officers, or any of the Directors of Alliance Capital Management
Corporation, general partner, or employees who may also be a
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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 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 general partners or
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, shareholders, employees or agents
individually but are binding only upon the assets and property of
our Trust.
If the foregoing is in accordance with your understanding,
you will kindly so indicate by signing and returning to us the
enclosed copy hereof.
Very truly yours,
ALLIANCE CAPITAL RESERVES
By /s/ Xxxxx X. Xxxxxx
___________________________
Xxxxx X. Xxxxxx
President
Accepted: As of July 22, 1992
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT CORPORATION,
general partner
By /s/ Xxxx X. Xxxxxx
___________________________
Xxxx X. Xxxxxx
Executive Vice President
& Chief Financial Officer
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00250122.AH0
