ADVISORY AGREEMENT
Alliance All-Market Advantage Fund, Inc.
0000 Xxxxxx Xx Xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
October 28, 1994
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We, the undersigned Alliance All-Market Advantage
Fund, Inc., herewith confirm our agreement with you as
follows:
1. We are a closed-end, non-diversified
management investment company registered under the
Investment Company Act of 1940 (the "Act"). We propose to
engage in the business of investing and reinvesting our
assets in securities ("the portfolio assets") of the type
and in accordance with the limitations specified in our
Articles of Incorporation, Bylaws, 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, all in such manner and to such
extent as may from time to time be authorized by our Board
of 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 portfolio assets 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 the portfolio assets. 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 the portfolio assets. In all purchases,
sales and other transactions in the portfolio assets 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 Board of Directors
at each meeting thereof all changes in the portfolio assets
since the prior report, and will also keep us in touch with
important developments affecting the portfolio assets 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 issuers whose
2
securities are included in our portfolio, 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 the
portfolio assets as you may believe appropriate or as we
reasonably may request. In making such purchases and sales
of the portfolio assets, you will bear in mind the policies
set from time to time by our Board of Directors as well as
the limitations imposed by our Articles of Incorporation and
in our Registration Statement under the Act and the
Securities Act of 1933, and the limitations in the Act and
of the Internal Revenue Code of 1986, as amended, in respect
of regulated investment companies.
(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 us persons satisfactory to our Board of Directors to
serve as our officers. Such personnel may be employees of
you or your affiliates. 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.
3
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.
3. 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) brokerage and commission expenses; (c) federal,
state, local and foreign taxes, including issue and transfer
taxes, incurred by or levied on us; (d) interest charges on
borrowings; (e) our organizational and offering expenses,
whether or not advanced by you; (f) fees and expenses of
registering our shares under the appropriate federal
securities laws and of qualifying our shares under
applicable state securities laws; (g) fees and expenses of
listing and maintaining the listing of our shares on any
securities exchange; (h) expenses of printing and
distributing reports to shareholders; (i) costs of proxy
solicitation; (j) fees, charges and expenses of our
administrator, custodian, our registrar, transfer and
dividend paying agent and our shareholder servicing agent;
(k) compensation of our Directors, officers and employees
4
who do not devote any part of their time to your affairs or
the affairs of your affiliates other than us; (l) legal and
auditing expenses; (m) the cost of stock certificates
representing shares of our common stock; and (n) costs of
stationery and supplies.
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.
5. In consideration of the foregoing we will pay
you a fee comprised of a basic fee (the "Basic Fee") and an
adjustment to the Basic Fee based on the investment
performance of the Fund in relation to the investment record
of the Xxxxxxx 1000 TM Growth Index (the "Index"). Such fee
shall be calculated and payable as described below.
(a) Beginning with the month of November 1995
and for each succeeding month, the Basic Fee shall be a
5
monthly fee equal to 1/12th of 1.5% (1.5% on an annualized
basis) of the average of the net assets of the Fund at the
end of each month included in the applicable performance
period. The performance period for each such month shall be
from November 1994 to the most recent month-end, until this
agreement has been in effect for 36 full calendar months,
when it shall become a rolling 36 month period ending with
the most recent calendar month. The Basic Fee for each such
month shall be increased at the rate of 1/12th of .05% for
each percentage point in excess of two, rounded to the
nearer point (the higher point if exactly one-half a point),
that the investment performance of the Fund for the
performance period then ended exceeds the percentage change
in the investment record of the Index for such performance
period (up to a maximum of eight percentage points). If,
however, the investment performance of the Fund for such
performance period shall be exceeded by the percentage
change in the investment record of the Index for such
performance period, then such Basic Fee shall be decreased
at the rate of 1/12th of .05% for each percentage point in
excess of two, rounded to the nearer point (the higher point
if exactly one-half), that the percentage change in the
investment record of the Index exceeds the investment
performance of the Fund for such performance period (up to a
maximum of eight percentage points). The maximum increase
6
or decrease in the Basic Fee for any month may not exceed
1/12th of .30%; the maximum monthly fee, as adjusted, may
not exceed 1/12th of 1.80%; and the minimum monthly fee, as
adjusted, may not be less than 1/12th of 1.20%.
(b) For the period from November 1, 1994
through October 31, 1995, you will receive a minimum fee
(the "Minimum Fee"), payable monthly, equal to 1.20%,
annualized, of the average of the net assets of the Fund at
the end of each month in such annual period. The
performance period relating to such annual period will be
from November 1, 1994 through October 31, 1995. The fee
receivable by you for such annual period may be increased to
1.80% from the Minimum Fee. The increase, if any, will be
equal to the difference between (i) the Basic fee as
adjusted for such annual period in accordance with the
preceding paragraph and (ii) the Minimum Fee. The maximum
increase in the Minimum Fee for such annual period may not
exceed .60%, with the rate of any increase being applied on
an annualized basis. You will not receive any fee for any
period prior to November 1, 1994.
(c) The investment performance of the Fund for
any period, expressed as a percentage of the Fund's net
asset value per share at the beginning of such period, shall
mean and be the sum of: (i) the change in the Fund's net
asset value per share during such period; (ii) the value of
7
the Fund's cash distributions per share accumulated to the
end of such period; and (iii) the value of capital gains
taxes per share paid or payable on undistributed realized
long-term capital gains accumulated to the end of such
period. For this purpose, the value of distributions per
share of realized capital gains, of dividends per share paid
from investment income and of capital gains taxes per share
paid or payable on undistributed realized long-term capital
gains shall be treated as reinvested in shares of the Fund
at the net asset value per share in effect at the close of
business on the record date for the payment of such
distributions and dividends and the date on which provision
is made for such taxes, after giving effect to such
distribution, dividends and taxes. Notwithstanding any
provisions of this subparagraph (c) or of the other
subparagraphs of Paragraph 5 hereof to the contrary, the
investment performance of the Fund for any period shall not
include, and there shall be excluded from the change in the
Fund's net asset value per share during such period and the
value of the Fund's cash distributions per share accumulated
to the end of such period shall be adjusted for, any
increase or decrease in the investment performance of the
Fund for such period computed as set forth in the preceding
two sentences and resulting from the Fund's issuance, sale
or repurchase of any shares of Common Stock of the Fund.
8
(d) The investment record of the Index for any
period, expressed as a percentage of the Index level at the
beginning of such period, shall mean and be the sum of
(i) the change in the level of the Index during such period;
and (ii) the value, computed consistently with the Index, of
cash distributions made by companies whose securities
comprise the Index accumulated to the end of such period.
For this purpose, cash distributions on the securities which
comprise the Index shall be treated as reinvested in the
Index at the end of each calendar month following the
payment of the dividend.
(e) Any calculation of the investment performance
of the Fund and the investment record of the Index shall be
in accordance with any then applicable rules of the
Securities and Exchange Commission.
(f) In the event of any termination of this
agreement, the fee provided for in this Paragraph 5 shall be
calculated on the basis of a period ending on the last day
on which this agreement is in effect, subject to a pro rata
adjustment based on the number of days elapsed in the
current period as a percentage of the total number of days
in such period.
6. This agreement shall become effective on the
date on which our pending Registration Statement on Form N-2
relating to our shares becomes effective and shall continue
9
in effect until September 30, 1996 and may be continued for
successive twelve-month periods (computed from each
October 1) provided that such continuance is specifically
approved at least annually by our Board of Directors or by
majority vote of the holders of our outstanding voting
securities (as defined in the Act), and in either case, by a
majority of our Board of Directors who are not interested
persons, as defined in the Act, of any party to this
agreement (other than as Directors of our corporation),
provided further, however, that if the continuation of this
agreement is not approved, you may continue to render 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
at any time, without the payment of any penalty, by vote of
a majority of our outstanding voting securities (as so
defined), or by a vote of our Board of Directors on 60 days
written notice to you, or by you on 60 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
10
or pledge by you. The term "transfer", "assignment" and
"sale" as used in this paragraph shall have the meanings
ascribed hereto 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 officers or directors of Alliance
Capital Management Corporation, your general partner, who
may also be a Director, 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 service of any kind to any other trust,
corporation, firm, individual or association.
(b) You will notify us of any change in the
general partner of your partnership within a reasonable time
after such change.
9. This agreement shall be construed in
accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being
inconsistent with the Act.
11
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 ALL-MARKET ADVANTAGE
FUND, INC.
By /s/ Xxxxx X. Xxxxxxx
__________________________
Name:
Title:
Agreed to and accepted
as of the date first set forth above.
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
By /s/ Xxxx X. Xxxxxx
_______________________________
Name:
Title:
12
00250205.AD3
