ADVISORY AGREEMENT
ALLIANCE INSTITUTIONAL RESERVES, INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992 (as amended
as of June October
19, 200029, 1998)
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 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.
(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 in each of our Portfolios, 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 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
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 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 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 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 accepted 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 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 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 pursuant to
Rule 12b-1 under the Act 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.
5. In consideration of the foregoing we will pay you a fee at the
annual percentage rate of .20 of 1% of the average daily value of the net
assets of each of our Prime, Government, Tax-Free, and Treasury and California
Portfolios, and .45 of 1% of the average daily value of the net assets of our
Trust Portfolio. 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.
6. This agreement shall become effective on the date hereof and shall
remain in effect until December 31, 20011998 and thereafter for successive
twelve-month periods (computed from each January 1) with respect to each
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 directors of the Fund) 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 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, or any of the Directors of Alliance
Capital Management Corporation, general partner, who may also be a 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 the general partners of
your partnership within a reasonable time after such change.
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 made available will remain your property and you 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 Institutional Reserves, Inc.
By___________________________
Xxxxxx X. Xxxxxxxxx
President
Accepted as amended as ofJune 29, 1998 October 19, 2000
ALLIANCE CAPITAL MANAGEMENT L.P.
By Alliance Capital Management Corporation,
general partner
By_________________________________
Xxxx X. Xxxxxx
President & Chief Operating Officer
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