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Form 485BPOS AB DISCOVERY GROWTH FUND

October 28, 2020 1:48 PM EDT

 

Exhibit (d)

 

MANAGEMENT AGREEMENT
between
AB DISCOVERY GROWTH FUND, INC.
and
ALLIANCEBERNSTEIN L.P.

MANAGEMENT AGREEMENT, made this 13th day of November, 2019 between AB DISCOVERY GROWTH FUND, INC., a Maryland corporation (hereinafter called the “Investment Corporation”), and ALLIANCEBERNSTEIN L.P., a Delaware corporation (hereinafter called the “Manager”).

WHEREAS, the Investment Corporation has been organized for the purpose of investing its funds in chemical, government and other permitted securities and desires to avail itself of the experience, sources of information, advice, assistance and facilities available to the Manager and to have the Manager perform for it various management, statistical, accounting and clerical services; and the Manager is willing to furnish such advice, facilities and services on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed as follows:

1.       The Investment Corporation hereby employs the Manager to manage the investment and reinvestment of the assets of the Investment Corporation and to administer its affairs, subject to the overall supervision of the Board of Directors of the Investment Corporation for the period and on the terms as set forth herein. The Manager hereby accepts such employment and agrees during such period, at its expense, to render the services and to assume the obligations as set forth herein for the compensation provided herein.

2.       The Manager will recommend from time to time to the Board of Directors or a committee thereof a general investment program and, subject to the overall supervision of the Board of Directors of the Investment Corporation, will manage the investment and reinvestment of the assets of the Investment Corporation. Such general investment program and the implementation thereof will be in accordance with the policies and restrictions set forth in the Investment Corporation’s Registration Statement under the Investment Company Act of 1940 and its Prospectus which is part of such Registration Statement under the Securities Act of 1933, and such other policies as may from time to time be adopted by the Board of Directors.

3.       The Manager will administer the Investment Corporation’s corporate affairs, subject to the overall supervision of the Board of Directors of the Investment Corporation and, in connection therewith, shall furnish the Investment Corporation with an office, and with ordinary clerical and bookkeeping services at such office, and shall authorize and permit any of its directors, officers and employees who may be elected as directors or officers of the Investment Corporation, to serve in the capacities in which they are elected. All services to be furnished by the Manager under this Agreement may be furnished through the medium of any such directors, officers or employees of the Manager.

 

 

In connection with the administration of the corporate affairs of the Investment Corporation, the Manager will bear all of the following expenses:

(i)       the salaries and expenses of all personnel, except the fees and expenses of directors who are not affiliated persons of the manager, and

(ii)       all expenses incurred by the Manager or by the Investment Corporation in connection with the management of the investment and reinvestment of the assets of the Investment Corporation and in the ordinary course of the administration of the corporate affairs of the Investment Corporation, other than those specifically assumed by the Investment Corporation herein.

Except as otherwise expressly provided above, the Investment Corporation assumes and will pay expenses of the Investment Corporation, including without limitation:

(a)       the fees and expenses of directors who are not affiliated persons of the Manager,

(b)       the fees and expenses of the custodian which relate to (i) the custodial function and the record- keeping connection therewith, (ii) the providing of records to the Manager useful to the Manager in connection with the Manager’s obligation to maintain the required accounting records of the Investment Corporation, (iii) the pricing of the shares of the Investment Corporation, and (iv) for mail orders, the cashiering function in connection with the issuance and redemption of the Investment Corporation’s securities,

(c)       the fees and expenses of the Investment Corporation’s transfer agent or shareholder servicing agent, which may be the custodian, which relate to (i) maintenance of each shareholder account, including all transactions in that account from regular corporate transactions or in accordance with various investment or withdrawal plans provided by the Investment corporation, (ii) providing information with respect to dealers, if any, who participated in the sale of Investment Corporation shares, and (iii) providing information necessary in computing the amount available for a shareholder’s privilege to purchase other funds managed by the Manager or any affiliated persons of the Manager,

(d)       the cost of personnel, who may be employees of the Manager or its affiliates, rendering to the Investment Company such clerical, accounting and other services as the Investment Company may from time to time request of the Manager; provided, that all time devoted to the investment or reinvestment of the portfolio assets of the Investment Company shall be for the account of the Manager,

(e)       the charges and expenses of auditors,

 

 

(f)       brokers’ commissions and any issue or transfer taxes chargeable to the Investment Corporation in connection with its securities transactions,

(g)       all taxes and corporate fees payable by the Investment Corporation to federal, state or other governmental agencies,

(h)       the allocated portion of the fees of any trade association of which the Investment Corporation may be a member,

(i)       the cost of stock certificates representing shares of the Investment Corporation,

(j)       the fees and expenses involved in registering and maintaining registrations of the Investment Corporation and of its shares with the Securities and Exchange Commission and with State regulatory authorities,

(k)       all expenses of shareholders’ and directors’ meetings and of preparing and printing reports to shareholders in the amount necessary for distribution to the shareholders, and

(l)       the charges and expenses of legal counsel for the Investment Corporation in connection with legal matters relating to the Investment Corporation, including without limitation, legal services rendered in connection with the Investment Corporation’s corporate existence, corporate and financial structure and relations with its shareholders, and registration and qualifications of securities under federal law, and litigation.

4.       With respect to the Investment Corporation’s portfolio securities, the Manager shall purchase such securities from or through and sell such securities to or through such persons, brokers or dealers as it shall deem appropriate. In placing orders for such purchases and sales which are being placed with brokers and dealers in accordance with a policy of seeking “best execution” of such orders, it is recognized that the Manager may give consideration to the relationships of the Manager or its parent with brokers or dealers and to research, statistical and other services furnished by brokers or dealers to the Manager or its parent for their use. No security transactions shall be executed through any broker-dealer affiliated with the Manager without the specific approval of a majority of the directors of the Investment Corporation who are not affiliated persons of the Manager.

Notwithstanding the above paragraph, it is understood that it is desirable for the Manager to have access to supplemental research and security and economic analysis provided by brokers and of use to the Investment Corporation, even though such access may require the allocation of brokerage business to brokers who execute brokerage transactions at higher rates to the Investment Corporation than may be available from other brokers who are providing only execution service. Similarly it is important to the Investment Corporation for the Manager to have good business relationships with broker-dealers who, in the Manager’s judgement, are important block traders, or have special knowledge of potential buyers and sellers of substantial blocks of, or who are important dealers in, securities which the Investment Corporation may

 


wish to buy or sell. Therefore, the Manager is authorized to place orders for the purchase and sale of the Investment Corporation’s securities with such brokers, subject to the review by the Board of Directors from time to time with respect to the extent and continuation of this policy. It is understood that the services provided by such brokers may also be useful to the Manager or its parent in connection with service to other clients.

The Board of Directors may authorize the payment by the Investment Corporation of additional compensation to others for consulting services, supplemental research and security and economic analysis. Such authorization may be on the Board’s own initiative or based on recommendations by the Manager. The Board may also determine to the extent permitted by generally accepted accounting principles that such payment may be charged to principal or income of the Investment Corporation as they deem appropriate depending on the purpose of such charges and the extent to which such services replace brokerage information which was previously paid for by brokerage commissions.

5.       No director, officer or employee of the Investment Corporation shall receive from the Investment Corporation any salary or other compensation as such director, officer or employee while he is at the same time a director, officer or employee of the Manager. This paragraph shall not apply to consultants and other persons who are not regular members of the Manager’s staff.

6.       In consideration of the foregoing the Investment Corporation will pay the Manager a monthly fee at an annualized rate of .75% of the first $500 million of the Investment Company’s average daily net assets, .65% of the excess over $500 million of such net assets up to $1 billion and .55% of the excess over $1 billion of such net assets. Such fee shall be payable in arrears on the last day of each calendar month for services performed hereunder during such month. If this agreement terminates prior to the end of a month, such fee shall be prorated according to the proportion which such portion of the month bears to the full month.

7.       The Manager assumes no responsibility under this Agreement other than to render the services called for hereunder in good faith and shall not be responsible for any action of the Board of Director of the Investment Corporation in following or declining to follow any advice or recommendations of the Manager.

8. (a) Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Manager who may also be a director, officer or employee of the Investment Corporation to engage in any other business or to devote his time and attention in part to the management or other aspects of any business, whether of a similar nature or a dissimilar nature, nor to limit or restrict the right of the Manager to engage in any other business or to render services of any kind to any other 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.       As used in this Agreement, the terms “security”, “chemical security”, “government security”, other “permitted security” and “net assets”, defined in Article Eighth of the Articles of Incorporation of the Investment Corporation, shall have the meanings ascribed to

 

them herein, and the terms “assignment” and “majority of the outstanding voting securities” shall have the meanings given to them by Section 2(a)(4) and 2(a)(42), respectively, of the Investment Company Act of 1940.

10.       This Agreement shall terminate automatically in the event of its assignment.

11.       This Agreement may be terminated at any time, without the payment of any penalty, (a) by the Board of Directors of the Investment Corporation or by vote of a majority of the outstanding voting securities of the Investment Corporation by written notice given not less than 60 days’ prior to the termination date addressed to the Manager at its principal place of business and (b) by the Manager by 60 days’ prior written notice addressed to the Investment Corporation at its principal place of business.

12.       This Management Agreement shall become effective on the date hereof and shall remain in effect for a term of one year from the date hereof, and shall continue in effect thereafter so long as its continuance is specifically approved at least annually by the Board or by majority vote of the holders of outstanding voting securities, and, in either case, by a majority of the Board who are not parties to this agreement or interested persons, as defined in the Act, of any such party provided further, however, that if the continuation of this agreement is not approved, the Manager 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 the outstanding voting securities, or by a vote of a majority of the Board on 60 days’ written notice to the Manager, or by the Manager on 60 days’ written notice to the Investment Corporation.

 

 

Agreement to be executed by their officers hereunto duly authorized.

      AB DISCOVERY GROWTH FUND, INC.
         
      /s/ Nancy E. Hay
      Nancy E. Hay
      Assistant Secretary
         
         
      ALLIANCEBERNSTEIN L.P.
         
      By AllianceBernstein Corporation, General Partner
       
      /s/ Emilie D. Wrapp
     

Emilie D. Wrapp

Senior Vice President and

      Assistant General Counsel

 

 

Exhibit (e)(1)

DISTRIBUTION SERVICES AGREEMENT

AGREEMENT made as of November 13, 2019 between AB DISCOVERY GROWTH FUND, INC., a Maryland corporation (the “Fund”), and ALLIANCEBERNSTEIN INVESTMENTS, INC., a Delaware corporation (the “Underwriter”).

WITNESSETH:

WHEREAS, the Fund is registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as a diversified, open-end investment company and it is in the interest of the Fund to offer its shares for sale continuously;

WHEREAS, the Underwriter is a securities firm engaged in the business of selling shares of investment companies either directly to purchasers or through other securities dealers; and

WHEREAS, the Fund and the Underwriter wish to enter into an agreement with each other with respect to the continuous offering of the Fund’s shares in order to promote the growth of the Fund and facilitate the distribution of its shares;

NOW, THEREFORE, the parties agree as follows:

SECTION 1. Appointment of the Underwriter. The Fund hereby appoints the Underwriter as the principal underwriter and distributor of the Fund to sell to the public shares of its Class A Common Stock (the “Class A shares”), Class C Common Stock (the “Class C shares”), Advisor Class Common Stock (the “Advisor Class shares”), Class R Common Stock (the “Class R shares”), Class K Common Stock (the “Class K shares”), Class I Common Stock (the “Class I shares”) and Class Z Common Stock (the “Class Z shares”) and shares of such other class or classes as the Fund and the Underwriter shall from time to time mutually agree in writing shall become subject to this Agreement (the “New shares”), (collectively with the shares listed above, the “shares”) and hereby agrees during the term of this Agreement to sell shares to the Underwriter upon the terms and conditions set forth herein.

SECTION 2. Exclusive Nature of Duties. The Underwriter shall be the exclusive representative of the Fund to act as principal underwriter and distributor except that the rights given under this Agreement to the Underwriter shall not apply to shares issued in connection with (a) the merger or consolidation of any other investment company with the Fund, (b) the Fund’s acquisition by purchase or otherwise of all or substantially all of the assets or stock of any other investment company or (c) the reinvestment in shares by the Fund’s stockholders of dividends or other distributions.

SECTION 3. Purchase of Shares from the Fund.

(a)       The Underwriter shall have the right to buy from the Fund the shares needed to fill unconditional orders for shares of the Fund placed with the Underwriter by investors or securities dealers, depository institutions or other financial intermediaries acting as agent for their customers. The price which the Underwriter shall pay for the shares so purchased from the Fund shall be the net asset value, determined as set forth in Section 3(d) hereof, used in determining the public offering price on which such orders are based.

(b)       The shares are to be resold by the Underwriter to investors at a public offering price, as set forth in Section 3(c) hereof, or to securities dealers, depository institutions

 
 

 

or other financial intermediaries acting as agent for their customers having agreements with the Underwriter upon the terms and conditions set forth in Section 8 hereof.

(c)       The public offering price of the shares, i.e., the price per share at which the Underwriter or selected dealers or selected agents (each as defined in Section 8(a) below) may sell shares to the public, shall be the public offering price determined in accordance with the then current Prospectus and Statement of Additional Information of the Fund (the “Prospectus” and “Statement of Additional Information,” respectively) under the Securities Act of 1933, as amended (the “Securities Act”), relating to such shares, but not to exceed the net asset value at which the Underwriter is to purchase such shares, plus, in the case of the Class A shares, a sales charge not to exceed 8.5% of the public offering price of the Class A shares, subject to reductions for volume purchases. Class A shares may be sold without a sales charge to (i) certain officers, directors and full-time employees of the Fund, the Underwriter and Alliance Capital Management L.P. (the Fund’s manager), (ii) certain tax-qualified employee benefit plans, (iii) certain tax-exempt charitable, educational, religious or other organizations and (iv) certain other purchasers, in each case upon the terms and conditions set forth in the Prospectus. If the public offering price does not equal an even cent, the public offering price may be adjusted to the nearest cent. All payments to the Fund hereunder shall be made in the manner set forth in Section 3(f) hereof.

(d)       The net asset value of shares of the Fund shall be determined by the Fund, or any agent of the Fund, as of the close of regular trading on the New York Stock Exchange on each business day on which said Exchange is open, in accordance with the method set forth in the Prospectus and Statement of Additional Information and guidelines established by the Directors of the Fund.

(e)       The Fund reserves the right to suspend the offering of its shares at any time in the absolute discretion of its Board of Directors.

(f)       The Fund, or any agent of the Fund designated in writing to the Underwriter by the Fund, shall be promptly advised by the Underwriter of all purchase orders for shares received by the Underwriter. Any order may be rejected by the Fund; provided, however, that the Fund will not arbitrarily or without reasonable cause refuse to accept or confirm orders for the purchase of shares. The Fund (or its agent) will confirm orders upon their receipt, will make appropriate book entries and upon receipt by the Fund (or its agent) of payment therefor, will deliver deposit receipts or certificates for such shares pursuant to the instructions of the Underwriter. Payment shall be made to the Fund in New York Clearing House funds. The Underwriter agrees to cause such payment and such instructions to be delivered promptly to the Fund (or its agent).

SECTION 4. Repurchase or Redemption of Shares by the Fund.

(a)       Any of the outstanding shares may be tendered for redemption at any time, and the Fund agrees to redeem or repurchase the shares so tendered in accordance with its obligations as set forth in its Articles of Incorporation and in accordance with the applicable provisions set forth in the Prospectus and Statement of Additional Information. The price to be paid to redeem or repurchase the shares shall be equal to the net asset value calculated in accordance with the provisions of Section 3(d) hereof, less any applicable sales charge. All payments by the Fund hereunder shall be made in the manner set forth below. The redemption or repurchase by the Fund of any of the Class A shares purchased by or through the Underwriter will not affect the initial sales charge secured by the Underwriter or any selected dealer or compensation paid to any selected agent (unless such selected dealer or selected agent has otherwise agreed with the Underwriter), in the course of the original sale, regardless of the length

 
 

 

of the time period between the purchase by an investor and his tendering for redemption or repurchase.

The Fund (or its agent) shall pay the total amount of the redemption price and, except as may be otherwise required by the Rules of Fair Practice of the Financial Industry Regulatory Authority (“FINRA”) and any interpretations thereof (“FINRA rules and interpretations”), the deferred sales charges, if any, as defined in the above paragraph, pursuant to the instructions of the Underwriter in New York Clearing House funds on or before the seventh business day subsequent to its having received the notice of redemption in proper form.

(b)       Redemption of shares or payment may be suspended at times when the New York Stock Exchange is closed, when trading thereon is closed, when trading thereon is restricted, when an emergency exists as a result of which disposal by the Fund or securities owned by it is not reasonably practicable or it is not reasonably practicable for the Fund fairly to determine the value of its net assets, or during any other period when the Securities and Exchange Commission, by order, so permits.

SECTION 5. Plan of Distribution.

(a)       It is understood that Sections 5, 12, and 16 hereof together constitute a plan of distribution (the “Plan”) within the meaning of Rule 12b-1 adopted by the Securities and Exchange Commission under the Investment Company Act (“Rule 12b-1”).

(b)       Except as may be required by FINRA rules and interpretations, the Fund will pay to the Underwriter each month a distribution services fee that will not exceed, on an annualized basis, the rates listed in Appendix A, Section A.1. The distribution services fee will be used in its entirety by the Underwriter to make payments (i) to compensate broker-dealers or other persons for providing distribution assistance, (ii) to otherwise promote the sale of shares of the Fund, including payment for the preparation, printing and distribution of prospectuses and sales literature or other promotional activities, and (iii) to compensate broker-dealers, depository institutions and other financial intermediaries for providing administrative, accounting and other services with respect to the Fund’s shareholders. A portion of the distribution services fee that will not exceed, on an annualized basis, the rates listed in Appendix A, Section A.2., will constitute a service fee that will be used by the Underwriter for personal service and/or the maintenance of shareholder accounts within the meaning of FINRA rules and interpretations.

(c)       AllianceBernstein L.P., the Fund’s manager (the “Manager”), may, as long as the Plan is in effect, from time to time make similar payments to the Underwriter for distribution services performed by the Underwriter and for distribution assistance provided by broker-dealers or other persons and to broker-dealers, depository institutions and other financial intermediaries for providing administrative, accounting and other services with respect to Fund shareholders as described in Section 5(b) above. These payments may be made by the Manager from its own resources, which may include the management fee it receives from the Fund. The Manager may in its sole discretion increase or decrease the amount of distribution assistance payments it makes to the Underwriter.

(d)       Payments to broker-dealers, depository institutions and other financial intermediaries for the purposes set forth in Section 5(b) are subject to the terms and conditions of the written agreements between the Underwriter and each broker-dealer, depository institution or other financial intermediary. Such agreements will be in a form satisfactory to the Board of Directors of the Fund.

 
 

 

(e)       The Treasurer of the Fund will prepare and furnish to the Fund’s Directors, and the Directors will review, at least quarterly, a written report complying with the requirements of Rule 12b-1 setting forth all amounts expended hereunder and the purposes for which such expenditures were made.

(f)       The Fund is not obligated to pay any distribution expenses in excess of the distribution services fee described above in Section 5(b) hereof. Any expenses of distribution of the Fund’s Class A shares accrued by the Underwriter in one fiscal year of the Fund may not be paid from distribution services fees received from the Fund in respect of Class A shares in another fiscal year. Any expenses of distribution of the Fund’s Class C shares, Class R shares and Class K shares accrued by the Underwriter in one fiscal year of the Fund may be carried forward and paid from distribution services fees received from the Fund in respect of such class of shares in another fiscal year. No portion of the distribution services fees received from the Fund in respect of Class A shares may be used to pay any interest expense, carrying charges or other financing costs or allocation of overhead of the Underwriter. The distribution services fees received from the Fund in respect of Class C shares, Class R shares and Class K shares may be used to pay interest expenses, carrying charges and other financing costs or allocation of overhead of the Underwriter to the extent permitted by Securities and Exchange Commission rules, regulations or Securities and Exchange Commission staff no-action or interpretative positions in effect from time to time. In the event this Agreement is terminated by either party or is not continued with respect to a class of shares as provided in Section 12 below: (i) no distribution services fees (other than current amounts accrued but not yet paid) will be owed by the Fund to the Underwriter with respect to that class, and (ii) the Fund will not be obligated to pay the Underwriter for any amounts expended hereunder not previously reimbursed by the Fund from distribution services fees in respect of shares of such class or recovered through deferred sales charges. The distribution services fee of a particular class may not be used to subsidize the sale of shares of any other class.

(g)       The Fund acknowledges and agrees that payments by the Fund pursuant to Section 5(b) hereof may be used to pay certain expenses otherwise payable by the Underwriter pursuant to the terms of Section 9 hereof.

(h)       Neither the Manager nor the Underwriter is obligated hereunder to execute agreements with qualifying broker-dealers, depository institutions or other financial intermediaries and any termination of an agreement with a particular financial intermediary under the Plan will have no effect on similar agreements between the Manager or the Underwriter and other participating broker-dealers, depository institutions or other financial intermediaries pursuant to the Plan.

SECTION 6. Duties of the Fund.

(a)       Subject to Sections 9(b) and 10 hereof, the Fund shall furnish to the Underwriter copies of all information, financial statements and other papers that the Underwriter may reasonably request for use in connection with the distribution of shares of the Fund, and this shall include one certified copy, upon request by the Underwriter, of all financial statements prepared for the Fund by independent public accountants. The Fund shall make available to the Underwriter such number of copies of the Prospectus as the Underwriter shall reasonably request.

(b)       The Fund will cooperate with the Underwriter in qualifying and maintaining the qualification of an appropriate number of its shares for sale under the securities laws of such states as the Underwriter may request. As provided in Section 9(c) hereof, the expense of qualification and maintenance of qualification shall be borne by the Underwriter.

 
 

 

(c)       Subject to Sections 9(b) and 10 hereof, the Fund will furnish, in reasonable quantities upon request by the Underwriter, copies of annual and interim reports of the Fund.

SECTION 7. Duties of the Underwriter.

(a)       The Underwriter shall devote reasonable time and effort to effect sales of shares of the Fund, but shall not be obligated to sell any specific number of shares. The services of the Underwriter to the Fund hereunder are not to be deemed exclusive and nothing in this Agreement shall prevent the Underwriter from entering into like arrangements with other investment companies so long as the performance of its obligations hereunder is not impaired thereby.

(b)       In selling the shares of the Fund, the Underwriter shall use its best efforts in all material respects duly to conform with the requirements of all federal and state laws relating to the sale of such securities. Neither the Underwriter, any selected dealer, any selected agent nor any other person is authorized by the Fund to give any information or to make any representations, other than those contained in the Fund’s Registration Statement, as amended from time to time, under the Securities Act and the Investment Company Act (the “Registration Statement”) or the Prospectus and Statement of Additional Information or any sales literature specifically approved in writing by the Fund.

(c)       The Underwriter shall adopt and follow procedures, as approved by the officers of the Fund, for the confirmation of sales to investors and selected dealers, the collection of amounts payable by investors and selected dealers on such sales, and the cancellation of unsettled transactions, as may be necessary to comply with the requirements of FINRA, as such requirements may from time to time exist.

SECTION 8. Selected Dealer and Agent Agreements.

(a)       The Underwriter shall have the right to enter into selected dealer agreements with securities dealers of its choice (“selected dealers”) and selected agent agreements with depository institutions and other financial intermediaries of its choice (“selected agents”) for the sale of shares and fix therein the portion of the sales charge that may be allocated to the selected dealers and selected agents; provided, that the Fund shall approve the forms of agreements with selected dealers and selected agents and the selected dealer and selected agent compensation set forth therein and shall evidence such approval by filing said forms and amendments thereto as exhibits to its then currently effective Registration Statement. Shares sold to selected dealers or through selected agents shall be for resale by such selected dealers and selected agents only at the public offering price set forth in the Prospectus and Statement of Additional Information. The form of agreement with selected dealers and selected agents to be used in the continuous offering of the shares of the Fund shall be substantially in the form attached hereto.

(b)       Within the United States, the Underwriter shall offer and sell shares only to such selected dealers as are members in good standing of FINRA.

SECTION 9. Payment of Expenses.

(a)       The Fund shall bear all costs and expenses of the Fund, including fees and disbursements of its counsel and auditors, in connection with the preparation and filing of its Registration Statement and Prospectus and Statement of Additional Information, and all amendments and supplements thereto, and preparing and mailing annual and interim reports and

 
 

 

proxy materials to stockholders (including but not limited to the expense of setting in type any such registration statements, prospectuses, annual or interim reports or proxy materials).

(b)       After the prospectuses and annual and interim reports have been prepared and set in type, the Underwriter shall bear the costs and expenses of printing and distributing any copies thereof which are to be used in connection with the offering of shares to selected dealers, selected agents or investors. The Underwriter shall bear the costs and expenses of other literature used by the Underwriter or furnished by it for use by selected dealers or selected agents in connection with the offering of shares for sale to the public and any expenses of advertising in connection with such offering.

(c)       The Underwriter shall bear the costs of expenses of qualification of shares for sale (except expenses of any action by the Fund relating to its Articles of Incorporation or other matters in which the Fund has a direct concern) in such states of the United States or other jurisdictions as shall be selected by the Fund and the Underwriter pursuant to Section 6(c) hereof and the cost and expenses payable to each such state for continuing qualification therein.

SECTION 10. Responsibility. The Fund and the Underwriter recognize and agree that, subject to the overall supervision of the Board of Directors of the Fund, the preparation of registration statements, prospectuses, annual and interim reports and proxy materials of the Fund is the responsibility of the Manager, an affiliated person of the Underwriter, under its Management Agreement with the Fund. Accordingly, the Fund and its directors, officers and employees shall have no responsibility hereunder to the Underwriter with respect to the accuracy, completeness or fairness of any such registration statement, prospectus, annual or interim report or proxy material. Nothing herein contained, however, shall be deemed a condition, stipulation or provision binding any persons to waive compliance with any provision of the Federal securities laws, or of the rules and regulations of the Securities and Exchange Commission, or to relieve any person from any liability arising under the Federal securities laws.

SECTION 11. Notification by the Fund.

The Fund agrees to advise the Underwriter immediately:

(a)       of any request by the Securities and Exchange Commission for amendments to the Fund’s Registration Statement, Prospectus or Statement of Additional Information or for additional information,

(b)       in the event of the issuance by the Securities and Exchange Commission of any stop order suspending the effectiveness of the Fund’s Registration Statement, Prospectus or Statement of Additional Information or the initiation of any proceeding for that purpose,

(c)       of the happening of any material event which makes untrue any statement made in the Fund’s Registration Statement, Prospectus or Statement of Additional Information or which requires the making of a change in any one thereof in order to make the statements therein not misleading, and

(d)       of all action of the Securities and Exchange Commission with respect to any amendments to the Fund’s Registration Statement, Prospectus or Statement of Additional Information which may from time to time be filed with the Securities and Exchange Commission under the Securities Act.

 
 

 

SECTION 12. Term of Agreement.

(a)       This Agreement shall become effective on the date hereof and shall continue in effect for a term of one year, and continue in effect thereafter with respect to each class; provided, however, that such continuance is specifically approved at least annually by the Directors of the Fund or by vote of the holders of a majority of the outstanding voting securities (as defined in the Investment Company Act) of that class, and, in either case, by a majority of the Fund’s Directors who are not parties to this Agreement or interested persons, as defined in the Investment Company Act, of any such party (other than as directors of the Fund) and who have no direct or indirect financial interest in the operation of the Plan or any agreement related thereto; provided further, however, that if the continuation of this Agreement is not approved as to a class or a Portfolio, the Underwriter may continue to render to such class or Portfolio the services described herein in the manner and to the extent permitted by the Act and the rules and regulations thereunder. Upon effectiveness of this Agreement, it shall supersede all previous agreements between the parties hereto covering the subject matter hereof. This Agreement may be terminated (i) by the Fund with respect to any class or Portfolio at any time, without the payment of any penalty, by the vote of a majority of the outstanding voting securities (as so defined) of such class or Portfolio, or by a vote of a majority of the Fund’s Directors who are not interested persons, as defined in the Investment Company Act, of the Fund (other than as directors of the Fund) and have no direct or indirect financial interest in the operation of the Plan or any agreement related thereto, in any such event on sixty days’ written notice to the Underwriter; provided, however, that no such notice shall be required if such termination is stated by the Fund to relate only to Sections 5 and 16 hereof (in which event Sections 5 and 16 shall be deemed to have been severed herefrom and all other provisions of this Agreement shall continue in full force and effect), or (ii) by the Underwriter, on sixty days’ written notice to the Fund.

(b)       This Agreement may be amended at any time with the approval of the Directors of the Fund; provided, that (i) any material amendments of the terms hereof will become effective only upon approval as provided in the first proviso of the first sentence of Section 12(a) hereof, and (ii) any amendment to increase materially the amount to be expended for distribution services fees pursuant to Section 5(b) hereof will be effective only upon the additional approval by a vote of a majority of the outstanding voting securities of the Fund as defined in the Investment Company Act of the class or Portfolio affected.

SECTION 13. No Assignment. This Agreement may not be transferred, assigned, sold or in any manner hypothecated or pledged by either party hereto and this Agreement shall terminate automatically in the event of any such transfer, assignment, sale, hypothecation or pledge. 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.

SECTION 14. Notices. Any notice required or permitted to be given hereunder by either party to the other shall be deemed sufficiently given if sent by registered mail, postage prepaid, addressed by the party giving such notice to the other party at the last address furnished by such other party to the party given notice, and unless and until changed pursuant to the foregoing provisions hereof addressed to the Fund or the Underwriter.

SECTION 15. Governing Law. The provisions of this Agreement shall be, to the extent applicable, construed and interpreted in accordance with the laws of the State of New York.

 
 

 

SECTION 16. Non-interested Directors of the Fund. While the Agreement is in effect, the selection and nomination of the Directors who are not “interested persons” of the Fund (as defined in the Investment Company Act) will be committed to the discretion of such disinterested Directors.

 
 

 

APPENDIX A

SECTION A.1. Distribution Services Fees

·.30% of the aggregate average daily net assets of the Fund attributable to the Class A shares
·1.00% of the aggregate average daily net assets of the Fund attributable to the Class C shares
·.50% of the aggregate average daily net assets of the Fund attributable to Class R shares
·.25% of the aggregate average daily net assets of the Fund attributable to Class K shares

SECTION A.2. Service Fees

·.25% of the aggregate average daily net assets of the Fund attributable to the Class A shares,
·.25% of the aggregate average daily net assets of the Fund attributable to the Class C shares,
·.25% of the aggregate average daily net assets of the Fund attributable to Class R shares
·.25% of the aggregate average daily net assets of the Fund attributable to Class K shares.
 
 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

      AB DISCOVERY GROWTH FUND, INC.
         
      By: /s/ Stephen J. Laffey
        Name: Stephen J. Laffey
        Title: Assistant Secretary
         
         
      ALLIANCEBERNSTEIN INVESTMENTS, INC.
         
      By: /s/ Eric C. Freed
        Name: Eric C. Freed
        Title: Assistant Secretary

 

Accepted as to

Sections 5, 12 and 16:
November 13, 2019

ALLIANCEBERNSTEIN L.P.  
     
By: /s/ Emilie D. Wrapp  
  Name: Emilie D. Wrapp  
  Title: Senior Vice President, Assistant Secretary
and Assistant General Counsel
 
     
 

Exhibit (i)

  

SEWARD & KISSEL LLP

901 K Street, NW

Suite 800

Washington, DC 20001

 

Telephone: (202) 737-8833

Facsimile: (202) 737-5184

www.sewkis.com

 

  October 28, 2020

 

AB Discovery Growth Fund, Inc.

AB Sustainable Global Thematic Fund, Inc.

AB Sustainable International Thematic Fund, Inc.

AB Large Cap Growth Fund, Inc.

1345 Avenue of the Americas

New York, New York 10105

 

Ladies and Gentlemen:

 

We have acted as counsel for each of the corporations named above (each, a “Company,” and collectively, the “Companies”), in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”), of an indefinite number of shares, par value per share as set forth in each Company’s Charter, of Class A Common Stock, Class C Common Stock, Class R Common Stock, Class K Common Stock, Class I Common Stock, Advisor Class Common Stock and Class Z Common Stock, as applicable (each a “Class” and collectively, the “Shares”), of each Company. Each Company is a Maryland corporation and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. This opinion is rendered to each Company severally, and not to the Companies jointly.

 

As counsel for each Company, we have participated in the preparation of the Post-Effective Amendment to that Company’s Registration Statement on Form N-1A to be filed with the Securities and Exchange Commission (the “Commission”) to become effective on October 30, 2020, pursuant to paragraph (b) of Rule 485 under the Securities Act (as so amended, the “Registration Statement”) in which this letter is included as Exhibit (i). We have examined the Charter and By-laws of that Company and applicable amendments and supplements thereto and have relied upon such corporate records of that Company and such other documents and certificates as to factual matters as we have deemed necessary to render the opinion expressed herein.

 

Based on such examination, we are of the opinion that the Shares of each Company to be offered for sale pursuant to the Registration Statement of that Company are, to the extent of the numbers of Shares of the relevant Classes of each Company authorized to be issued by that Company in its Charter, duly authorized, and, when sold, issued and paid for as contemplated by the Registration Statement, will have been validly issued and will be fully paid and non-assessable under the laws of the State of Maryland.

 

We do not express an opinion with respect to any laws other than the laws of Maryland applicable to the due authorization, valid issuance and non-assessability of shares of common stock of corporations formed pursuant to the provisions of the Maryland General Corporation Law. Accordingly, our opinion does not extend to, among other laws, the federal securities laws or the securities or “blue sky” laws of Maryland or any other jurisdiction. Additionally, we do not express any opinion with respect to any laws, rules, regulations or orders concerning emergencies declared by any governmental authority or the effect thereof on the opinions expressed herein. Members of this firm are admitted to the bars of the State of New York and the District of Columbia.

 

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the reference to our firm under the caption “General Information—Counsel” in Part B thereof.

 

  Very truly yours,
   
  /s/ Seward & Kissel LLP

 

 

Exhibit (j)

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the references to our firm under the captions “Financial Highlights” in the Prospectus and “Shareholder Services - Statements and Reports”, “General Information - Independent Registered Public Accounting Firm” and “Financial Statements and Report of Independent Registered Public Accounting Firm” within the Statement of Additional Information and to the use of our report dated September 25, 2020 with respect to the financial statements of AB Discovery Growth Fund, Inc. for the fiscal year ended July 31, 2020, which is incorporated by reference in this Post-Effective Amendment No. 168 to the Registration Statement (Form N-1A No. 2-10768) of AB Discovery Growth Fund, Inc.

 

/s/ ERNST & YOUNG LLP

 

 

 

New York, New York

October 28, 2020

 

 

 



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