Registration Statement by an Open-End Investment Company (Business Combination) with Automatic Effectiveness — Form N-14
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Document/Exhibit Description Pages Size
1: N-14AE Registration Statement by an Open-End Investment 99± 411K
Company (Business Combination) with Automatic
Effectiveness
7: COVER ¶ Comment-Response or Cover Letter to the SEC 1 1K
3: EX-14 Code of Ethics 1 6K
4: EX-14 Code of Ethics 1 5K
6: EX-99.14 OTH CONSENT Power of Attorney 9 19K
5: EX-99.2 BYLAWS Miscellaneous Exhibit 20± 92K
2: EX-11 Statement re: Computation of Earnings Per Share 2± 10K
‘N-14AE’ — Registration Statement by an Open-End Investment Company (Business Combination) with Automatic Effectiveness
Document Table of Contents
As filed with the Securities and Exchange
Commission on August 10, 2006
Registration No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [__]
Post-Effective Amendment No. [__]
AllianceBernstein Large Cap Growth Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code:
(800) 221-5672
MARK R. MANLEY
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Copies of Communications to:
Patricia A. Poglinco
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
Title of Securities Being Registered:
Class A, Class K, Class I and Advisor Class.
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.
It is proposed that this filing will become effective on September 11, 2006
pursuant to Rule 488 under the Securities Act of 1933.
No filing fee is required because an indefinite number of shares has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended.
[LOGO]
ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC. - ALLIANCEBERNSTEIN
PREMIER GROWTH INSTITUTIONAL FUND
1345 Avenue of the Americas
New York, New York 10105
Toll Free (800)221-5672
Dear Shareholders:
The Board of Directors (the "Directors") of AllianceBernstein Institutional
Funds, Inc. ("AIF") is pleased to invite the shareholders of AllianceBernstein
Premier Growth Institutional Fund ("PGIF"), a series of AIF, to a Special
Meeting of Shareholders of PGIF (the "Meeting") to be held on Tuesday, November
7, 2006. At this Meeting, we are asking shareholders of PGIF to approve the
acquisition of the assets and liabilities of PGIF by AllianceBernstein Large Cap
Growth Fund, Inc. ("LCGF"). (LCGF and PGIF are each a "Fund" and collectively,
the "Funds.")
The proposed acquisition is described in more detail in the attached
combined Prospectus/Proxy Statement.
LCGF is the larger counterpart of PGIF with the same core investment
strategies and similar investment policies. We anticipate that the proposed
acquisition will result in benefits to the shareholders of PGIF as is discussed
more fully in the Prospectus/Proxy Statement.
The Directors of PGIF have given careful consideration to the proposed
acquisition and have concluded that the acquisition is in the best interests of
the Fund and its shareholders. The Directors unanimously recommend that you vote
"for" the proposed acquisition of PGIF by LCGF.
If the acquisition of PGIF by LCGF is approved by shareholders of PGIF,
shareholders of Class I and Class II, if any, of PGIF who are in retirement and
deferred compensation plans (the "Plans") will receive Class I and Class K
shares of LCGF, respectively, having an aggregate net asset value ("NAV") equal
to the aggregate NAV of the shareholder's shares in PGIF. Shareholders of Class
I and Class II of PGIF who are not in the Plans will receive Advisor Class and
Class A shares of LCGF, respectively, having an aggregate NAV equal to the
aggregate NAV of the shareholder's shares in PGIF. PGIF would then cease
operations. Shareholders of PGIF will not be assessed any sales charges or other
fees in connection with the proposed acquisition.
We welcome your attendance at the November 7, 2006 Meeting. If you are
unable to attend, we encourage you to vote promptly by proxy. The Altman Group,
Inc. (the "Proxy Solicitor"), a proxy solicitation firm, has been selected to
assist in the proxy solicitation process. If we have not received your proxy as
the date of the Meeting approaches, you may receive a telephone call from the
Proxy Solicitor to remind you to vote by proxy. No matter how many shares you
own, your vote is important.
Sincerely,
Marc O. Mayer
President
September [__], 2006
AllianceBernstein Premier Growth Institutional Fund
1345 Avenue of the Americas, New York, New York 10105
NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS
SCHEDULED FOR NOVEMBER 7, 2006
To the shareholders of AllianceBernstein Premier Growth Institutional Fund
("PGIF"), a series of AllianceBernstein Institutional Funds, Inc. ("AIF"), a
Maryland corporation:
Notice is hereby given that a Special Meeting of the Shareholders (the
"Meeting") of PGIF will be held at 1345 Avenue of the Americas, 41st Floor, New
York, New York 10105 on Tuesday, November 7, 2006 at 2:00 p.m., Eastern Time, to
consider and vote on the following Proposal, which is more fully described in
the accompanying Prospectus/Proxy Statement dated September [__], 2006:
1. To approve an Agreement and Plan of Acquisition and Liquidation (the
"Acquisition Plan") among AIF, on behalf of PGIF, AllianceBernstein
Large Cap Growth Fund, Inc. ("LCGF") and AllianceBernstein L.P.,
providing for the acquisition by LCGF of all of the assets and
assumption of all of the liabilities of PGIF in exchange for shares of
LCGF. A vote in favor of this proposal by the shareholders of PGIF
also will constitute a vote in favor of termination of its
registration under the Investment Company Act of 1940.
2. To transact any other business as may properly come before the Meeting
and any adjournments thereof.
Any shareholder of record of PGIF at the close of business on September 1,
2006 (the "Record Date") is entitled to notice of, and to vote at, the Meeting
or any adjournment thereof. Proxies are being solicited on behalf of the Board
of the Fund. Each shareholder who does not expect to attend the Meeting in
person is requested to complete, date, sign and promptly return the enclosed
Proxy Card, or to submit voting instructions by telephone at [_________] or
through the Internet as described on the enclosed Proxy Card.
By Order of the Board of Directors,
Marc O. Mayer
President
New York, New York
September [__], 2006
YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the enclosed Proxy Card, sign
and date it, and return it in the envelope provided, which needs no postage if
mailed in the United States. You may by telephone or through the Internet
authorize a proxy to vote your shares. To do so, please follow the instructions
on the enclosed Proxy Card. Your vote is very important no matter how many
shares you own. In order to save any additional costs of further proxy
solicitation and to allow the Meeting to be held as scheduled, please complete,
date, sign and return your Proxy Card promptly.
AllianceBernstein(R) and the AB Logo are registered trademarks and service marks
used by permission of the owner AllianceBernstein L.P.
PROSPECTUS/PROXY STATEMENT
Acquisition of the Assets and Assumption of the Liabilities of
ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC. - ALLIANCEBERNSTEIN
PREMIER GROWTH INSTITUTIONAL FUND
By, and in Exchange for Shares of,
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND, INC.
September [__], 2006
TABLE OF CONTENTS
Questions and Answers.........................................................
Proposal - Approval of an Agreement and Plan of Acquisition
and Liquidation among LCGF, PGIF and the Adviser...................
Summary.......................................................................
Comparison of the Fees..................................................
Comparison of Investment Advisory Fees..................................
Comparison of Investment Objectives and Policies........................
Principal Risks.........................................................
Federal Income Tax Consequences.........................................
Comparison of Distribution and Purchase Procedures......................
Comparison of Business Structures.......................................
Information about the Proposed Transaction....................................
Introduction............................................................
Description of the Acquisition Plan.....................................
Reasons for the Acquisition.............................................
Description of Securities to be Issued..................................
Dividend and Other Distributions........................................
Surrender of PGIF Stock Certificates....................................
Federal Income Tax Consequences.........................................
Capitalization Information..............................................
Information about the Funds...................................................
Management of the Funds.................................................
Advisory Agreement and Fees.............................................
Distributor.............................................................
Other Service Providers.................................................
Voting Information............................................................
Legal Matters.................................................................
Experts.......................................................................
Financial Highlights..........................................................
Appendix A - Fee Table........................................................
Appendix B - Comparison of Investment Objectives and Policies.................
Appendix C - Description of Principal Risks of the Funds......................
Appendix D - Other Information................................................
Appendix E - Form of Agreement and Plan of Acquisition and
Liquidation among AllianceBernstein Large Cap
Growth Fund, Inc., AllianceBernstein Premier Growth
Institutional Fund, Inc. and AllianceBernstein L.P...............
Appendix F - Fund Performance.................................................
Appendix G - Capitalization...................................................
Appendix H - Share Ownership Information......................................
Appendix I - Certain Information Applicable to Class A, Clas K,
Class I and Advisor Class Shares of LCGF........................
Appendix J - Legal Proceedings................................................
Appendix K - Financial Highlights.............................................
QUESTIONS AND ANSWERS
The following questions and answers provide an overview of key features of the
proposed acquisition and of the information contained in this Prospectus/Proxy
Statement. Please review the full Prospectus/Proxy Statement prior to casting
your vote.
1. What is this document and why did we send this document to you?
This is a combined Prospectus/Proxy Statement that provides you with information
about the proposed acquisition (the "Acquisition") of the assets and liabilities
of AllianceBernstein Premier Growth Institutional Fund ("PGIF"), a series of
AllianceBernstein Institutional Funds, Inc. ("AIF"), by AllianceBernstein Large
Cap Growth Fund, Inc. ("LCGF"). (LCGF and PGIF are each a "Fund" and
collectively, the "Funds.") This document also solicits votes of the
shareholders of PGIF on the Acquisition by requesting that PGIF shareholders
approve an Agreement and Plan of Acquisition and Liquidation dated as of August
4, 2006, among LCGF, PGIF and AllianceBernstein L.P. (the "Adviser") (the
"Acquisition Plan").
On August 3, 2006, the Directors of AIF and LCGF approved and declared
advisable the Acquisition of PGIF by LCGF and directed that the Acquisition be
submitted to the shareholders for approval at a Special Meeting of Shareholders
to be held on November 7, 2006 (the "Meeting"). Shareholders of PGIF are
receiving this Prospectus/Proxy Statement because they own shares of PGIF. Each
shareholder of record of PGIF as of the close of business on the record date has
the right under applicable legal and regulatory requirements to vote on the
Acquisition. The Acquisition will not occur unless it is approved by PGIF
shareholders. This Prospectus/Proxy Statement contains the information
shareholders of PGIF should know before voting on the proposed Acquisition of
PGIF by LCGF.
Shareholders may contact a Fund at [1-800-221-5672] or write to a Fund at 1345
Avenue of the Americas, New York, NY 10105.
2. Who is eligible to vote on the Acquisition?
Shareholders of record at the close of business on September 1, 2006 (the
"Record Date") are entitled to notice of and to vote at the Meeting or any
adjournment of the Meeting. If you owned PGIF's shares on the Record Date, you
have the right to vote even if you later sold your shares.
Each share is entitled to one vote. Shares represented by properly executed
proxies, unless revoked before or at the Meeting, will be voted according to
shareholders' instructions. If you sign and return a Proxy Card but do not fill
in a vote, your shares will be voted "FOR" the Acquisition. If any other
business properly comes before the Meeting, your shares will be voted at the
discretion of the persons named as proxies.
3. How will the Acquisition work?
The Acquisition Plan provides for (i) the transfer of all the assets of PGIF to
LCGF, (ii) the assumption by LCGF of all the liabilities of PGIF and the
subsequent redemption of shares of PGIF, (iii) the issuance to PGIF's
shareholders of shares of LCGF, equal in aggregate net asset value ("NAV") to
the NAV of their former PGIF shares and (iv) the termination of PGIF.
Both of PGIF and LCGF are open-end funds with different classes of shares. As a
shareholder of PGIF, you will receive shares of a class of LCGF corresponding to
the class of shares you now own as follows:
For shareholders of PGIF who are in retirement and deferred compensation
plans (the "Plans"):
- Class I shareholders of PGIF will become shareholders of LCGF holding
Class I shares having the same aggregate NAV as the shares of PGIF
held before the Acquisition; and
- Class II shareholders of PGIF, if any, will become shareholders of
LCGF holding Class K shares having the same aggregate NAV as the
shares of PGIF held before the Acquisition.
For shareholders of PGIF who are in not in the Plans:
- Class I shareholders of PGIF will become shareholders of LCGF holding
Advisor Class shares having the same aggregate NAV as the shares of
PGIF held before the Acquisition; and
- Class II shareholders of PGIF will become shareholders of LCGF holding
Class A shares having the same aggregate NAV as the shares of PGIF
held before the Acquisition.
Shareholders of PGIF will not be assessed any sales charges or other fees in
connection with the proposed Acquisition. The Acquisition will not occur unless
it is approved by the shareholders of PGIF.
4. Why is the Acquisition being proposed?
Based on the recommendation of the Adviser, the Board of Directors of AIF (the
"Board") concluded that participation by PGIF in the proposed Acquisition is in
the best interests of PGIF and its shareholders. The Board also concluded that
the proposed Acquisition would not dilute shareholders' economic interests. In
reaching this conclusion, the Board considered, among other things, the closely
similar investment objectives and investment policies of the Funds, expense
benefits for shareholders of PGIF expected to result from the Acquisition, the
costs of the Acquisition, and the tax-free nature of the Acquisition.
5. When will the Acquisition take place?
If the shareholders of PGIF approve the Acquisition by LCGF on November 7, 2006,
then the Acquisition is expected to take place late in the last quarter of this
year or early in 2007.
6. Where may I find additional information regarding the Funds?
Additional information about the Funds is available in the Statement of
Additional Information ("SAI") dated August 9, 2006 that has been filed with the
Securities and Exchange Commission ("SEC") in connection with this
Prospectus/Proxy Statement. The SAI and each Fund's Annual Report to
Shareholders, which contain audited financial statements for PGIF's and LCGF's
fiscal year, are incorporated by reference into this Prospectus/Proxy Statement.
In addition, the Semi-Annual Report for LCGF and PGIF for the six months ended
January 31, 2006 and April 30, 2006, respectively, and the Prospectus for LCGF
and PGIF dated November 1, 2005 (as amended December 30, 2005) and March 1,
2006, respectively, are also incorporated by reference into this
Prospectus/Proxy Statement. To request a copy of any of these documents, please
call AllianceBernstein Investments, Inc. at (800)227-4618.
All of this information is in documents filed with the SEC. You may view or
obtain these documents from the SEC:
In Person: at the SEC's Public Reference Room in Washington, DC
By Phone: 1-202-551-8090 (for information on the operations of
the Public Reference Room only)
By Mail: Public Reference Section, Securities and Exchange
Commission, Washington, DC 20549-0102 (duplicating fee
required)
By Electronic Mail: publicinfo@sec.gov (duplicating fee required)
On the Internet: www.sec.gov
Additional copies of the annual reports, as well as the SAI, for a Fund are
available upon request without charge by writing to the address or calling the
telephone number listed below.
By Mail: AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
By Phone: For Information: 1-800-221-5672
For Literature: 1-800-227-4618
Other Important Things to Note:
o You may lose money by investing in the Funds.
o The SEC has not approved or disapproved these securities or passed
upon the adequacy of this Prospectus/Proxy Statement. Any
representation to the contrary is a criminal offense.
PROPOSAL
APPROVAL OF AN AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION
AMONG LCGF, PGIF AND THE ADVISER
On August 3, 2006, the Board of Directors of AIF declared advisable and
voted to approve the Acquisition Plan and the Acquisition, subject to the
approval of the shareholders of PGIF. The Acquisition will involve the transfer
by PGIF of all of its assets to LCGF and the assumption by LCGF of all of the
liabilities of PGIF in exchange for shares of LCGF having a value in the
aggregate equal to the net assets of PGIF. Following the transfer of assets,
shares of LCGF will be distributed to shareholders of PGIF. After the transfer
of shares, PGIF will be terminated.
Each PGIF shareholder will receive the number of full and fractional shares
of LCGF having an aggregate NAV that, on the effective date of the Acquisition,
is equal to the aggregate NAV of the shareholder's shares of PGIF. Shareholders
of PGIF will recognize no gain or loss. If approved by the shareholders of PGIF,
the Acquisition is expected to occur late in the last quarter of this year or
early in 2007.
The Acquisition requires shareholder approval. The shareholders of PGIF
must approve the Acquisition of the assets and liabilities of PGIF by LCGF.
Approval of the Acquisition requires the affirmative vote of a "majority of the
outstanding voting securities" of PGIF, as defined in the 1940 Act. Under the
1940 Act, a vote of a majority of the outstanding voting securities of a Fund
means the vote of the lesser of: (i) 67% or more of the outstanding shares of
the Fund present at the Meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (ii) more than 50% of
the outstanding shares of the Fund, whichever is less.
A quorum for the transaction of business by the shareholders of PGIF at the
Meeting will consist of the presence in person or by proxy of the holders of
one-third of the shares of PGIF entitled to vote at the Meeting.
The Board of Directors of AIF concluded that participation by the Fund in
the proposed Acquisition is in the best interests of the Fund and its
shareholders. The Board of Directors also concluded that the proposed
Acquisition would not dilute shareholders' economic interests. In reaching this
conclusion, the Board of Directors considered, among other things, the similar
investment strategies of the Funds, expense benefits for shareholders expected
to result from the Acquisition, the cost thereof, and the tax-free nature of the
acquisition by LCGF of the assets and liabilities of PGIF. For a more complete
discussion of the factors considered by the Board of Directors in approving the
Acquisition, see "Reasons for the Acquisition" in Information About the Proposed
Transaction.
SUMMARY
The following summary highlights differences between LCGF and PGIF. This
summary is not complete and does not contain all of the information that you
should consider before voting on the Acquisition. For more complete information,
please read this entire document. Note that certain information is presented as
of January 31, 2006. At the August 1-3, 2006 Regular Board Meetings referred to
below, the Adviser represented to the Board that, if the information was
updated, it would not differ in any material respect.
Comparison of the Fees
The expenses of the PGIF shares are currently subject to the waivers that
cap the expenses of Class I shares at .90% and Class II shares at 1.20%. As
shown below, for PGIF Class I shares, the expense ratio of the combined Fund
would be .88%, which is essentially the same as the waived expense ratio of
..90%. The Adviser does not intend to continue the waiver if the Acquisition is
not approved. Therefore, the Acquisition would in effect result in a significant
reduction in expenses for the combined Fund from the current, actual operating
expense ratio of each Class of shares of PGIF before waiver except PGIF Class II
retail shares, for which the reduction is modest, approximately 0.04%. The
following table illustrates the expected reduction in expenses, before waiver,
for PGIF Class I shares, which is the largest class (approximately 90% of PGIF's
assets).
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------
Total Annual
Net Assets Expense Ratio Total Annual
(as of June 30, After Waiver Expense Ratio
2006) (as of January 31, 2006) Before Waiver
---------------------------------------------------------------------------------------------
PGIF - Class I Shares $ 75.9 million .90% 1.26%
---------------------------------------------------------------------------------------------
Combined Fund - Class I Shares $ 88.6 million .88%
---------------------------------------------------------------------------------------------
As the table indicates, the before waiver expenses of the PGIF Class I shares
would be reduced by 0.38%. The Fee Table, attached hereto as Appendix A,
describes the fees and expense of each Fund as of January 31, 2006 and includes
pro forma expenses for the combined Fund assuming that the Acquisition is
approved by shareholders of PGIF.
Comparison of Investment Advisory Fees
The advisory fee rate schedule for each of PGIF and LCGF are identical, but
LCGF's effective advisory fee rate is lower than that of PGIF because of its
much larger size. The effective advisory fee rates for the Funds, as of January
31, 2006, are as follows:
---------------------------------------------------------------------------
Effective Projected
Advisory Fee Rates Reduction
---------------------------------------------------------------------------
PGIF .75% .03%
---------------------------------------------------------------------------
LCGF .72% --
---------------------------------------------------------------------------
Combined Fund .72% --
---------------------------------------------------------------------------
The advisory fee rates expected after the Acquisition would be slightly lower
for PGIF, but the same for LCGF.
Comparison of Investment Objectives and Policies
The investment objectives and strategies of the Funds are substantially the
same. LCGF is a fund of significantly larger size and scale that employs the
same investment strategy as PGIF. The following table shows the investment
objective and principal investment strategies of each Fund:
--------------------------------------------------------------------------------
Investment Objective Principal Investment Strategies
--------------------------------------------------------------------------------
LCGF LCGF's investment objective is Under normal circumstances, LCGF will
long-term growth of capital. invest at least 80% of its net assets in
common stocks of large-capitalization
companies.
--------------------------------------------------------------------------------
PGIF PGIF's investment objective is PGIF normally invests at least 80% of
long-term growth of capital by its total assets in the equity
investing predominantly in securities of U.S. companies. Unlike
equity securities of a limited most equity funds, the Fund focuses on a
number of large-carefully relatively small number of intensively
selected, high-quality U.S. researched companies.
companies that are judged
likely to achieve superior
earnings growth.
--------------------------------------------------------------------------------
Each Fund invests primarily in the equity securities of a limited number of
large, intensively researched, high-quality U.S. companies that are judged
likely to achieve superior earnings growth. Furthermore, the Funds are subject
to similar investment policies with few differences in their investment styles.
For example, PGIF may invest up to 20% of its total assets in equity securities
of non-U.S. companies whereas LCGF normally does not invest in equity securities
of non-U.S. companies.
Because the Funds pursue similar investment objectives, have largely
similar investment strategies and the same portfolio management team and hold
substantially similar securities, the proposed Acquisition will not result in
significant portfolio turnover or transaction expenses due to the disposal of
securities that are incompatible with the investment objective and strategies of
LCGF. A more detailed comparison of the investment strategies and policies of
the Funds is provided in Appendix B. You can find additional information on the
Funds in the SAI.
Principal Risks
Each Fund is subject to market risk, management risk and focused portfolio risk.
In addition, PGIF is subject to foreign risk and currency risk because of its
investments in non-U.S. securities. A description of each of these risks is
provided in Appendix C.
Federal Income Tax Consequences
No gain or loss will be recognized by PGIF or its shareholders as a result
of the Acquisition. The aggregate tax basis of the shares of LCGF received by a
shareholder of PGIF (including any fractional shares to which the shareholder
may be entitled) will be the same as the aggregate tax basis of the
shareholder's shares of PGIF. The holding period of the shares of LCGF received
by a shareholder of PGIF (including any fractional share to which the
shareholder may be entitled) will include the holding period of the shares of
PGIF held by the shareholder, provided that such shares are held as capital
assets by the shareholder of PGIF at the time of the Acquisition. The holding
period and tax basis of each asset of PGIF in the hands of LCGF as a result of
the Acquisition will be the same as the holding period and tax basis of each
such asset in the hands of PGIF prior to the Acquisition. Provided that PGIF
shares surrendered constitute capital assets in the hands of the shareholder,
such gain or loss realized by the shareholder will be capital gain or loss upon
disposition of the shares. This tax information is based on the advice of Seward
& Kissel LLP, counsel to each of the Funds. It is a condition to the closing of
the Acquisition that such advice be confirmed in a written opinion of counsel.
An opinion of counsel is not binding on the Internal Revenue Service. Additional
tax considerations are discussed under the section on "Federal Income Tax
Consequences" in Information About the Proposed Transaction.
Comparison of Distribution and Purchase Procedures
The purchase procedures of the Funds are the same except that the Funds
issue different, although comparable, classes of shares. The shares of PGIF are
intended to be offered to financial intermediaries, primarily retirement and
other qualified plans. Class I and Class II shares of PGIF may be purchased
through a broker or financial adviser at NAV, without any initial or contingent
sales charges. The initial investment minimum requirement is $2,000,000.
The shares of LCGF are intended to be offered to a broad range of
investors. The comparable classes of shares into which PGIF shares will be
exchanged, as described above, are Class A, Class K, Class I, and Advisor Class
shares. Class A, Class K and Class I shares of LCGF are available at NAV,
without an initial sales charge, to 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit-sharing and money purchase pension plans, defined benefit
plans, and non-qualified deferred compensation plans where plan level or omnibus
accounts are held on the books of the Fund ("group retirement plans"), as
follows: Class A shares are designed for group retirement plans with assets in
excess of $10,000,000. Class A shares are also available at NAV to the
AllianceBernstein Link, AllianceBernstein Individual 401(k) and
AllianceBernstein SIMPLEIRA plans with at least $250,000 in plan assets or 100
employees. Class K shares are designed for group retirement plans with at least
$1,000,000 in plan assets. Class I shares of LCGF are designed for group
retirement plans with at least $10,000,000 in plan assets and are available to
certain investment advisory clients of, and certain other persons associated
with, the Adviser and its affiliates. Advisor Class shares of LCGF may be
purchased through a financial adviser at NAV.
PGIF Class II shares and LCGF Class A shares have a .30% distribution (Rule
12b-1) fee. LCGF Class K shares into which PGIF Class II retirement shares, if
any, will be exchanged have a slightly lower distribution fee of .25%. The
shares of both Funds may be exchanged for comparable classes of shares of other
AllianceBernstein mutual funds. More information on distribution and purchase
procedures of LCGF is provided in Appendix L.
Comparison of Business Structures
Each Fund is organized as a Maryland corporation and is governed by its
Charter, By-Laws and Maryland law. Generally, there are no significant
differences between PGIF and LCGF in terms of their respective corporate
organizational structure. For more information on the comparison of the business
structure of the Funds, see Appendix D.
INFORMATION ABOUT THE PROPOSED TRANSACTION
Introduction
This Prospectus/Proxy Statement is provided to you to solicit your proxy
for exercise at the Meeting to approve the acquisition of the assets and
assumption of the liabilities of PGIF by LCGF and the subsequent termination of
PGIF. The Meeting will be held at 1345 Avenue of the Americas, 41st Floor, New
York, New York 10105 at 2:00 p.m., Eastern Time, on November 7, 2006. This
Prospectus/Proxy Statement, the accompanying Notice of the Special Meeting of
Shareholders and the enclosed Proxy Card are being mailed to shareholders of
PGIF on or about September 20, 2006.
Description of the Acquisition Plan
As provided in the Acquisition Plan, LCGF will acquire all the assets and
assume all the liabilities of PGIF at the effective time of the Acquisition (the
"Effective Time"). In return, LCGF will issue, and PGIF will distribute to its
shareholders, a number of full and fractional shares of LCGF, determined by
dividing the net value of all the assets of PGIF by the NAV of one share of
LCGF. For this purpose, the Acquisition Plan provides the times for and methods
of determining the net value of the assets of each Fund. The Acquisition Plan
provides that shareholders of PGIF will be credited with shares of LCGF
corresponding to the aggregate NAV of PGIF's shares that the shareholder holds
of record at the Effective Time.
Following the distribution of LCGF shares, PGIF will redeem its outstanding
shares, wind up its affairs and terminate as soon as is reasonably possible
after the Acquisition. In the event the Acquisition does not receive the
required shareholder approval, PGIF will continue its operations and its
Directors will consider what future action, if any, is appropriate.
The projected expenses of the Acquisition, largely those for legal,
accounting, printing and proxy solicitation expenses, are estimated to total
approximately $132,500 and will be borne by the Adviser.
The Acquisition is expected to occur late in the last quarter of this year
or early in 2007. The Acquisition is conditioned upon approval of the
Acquisition Plan by the shareholders of PGIF and PGIF satisfying the terms of
the Acquisition Plan. Under applicable legal and regulatory requirements, none
of PGIF's shareholders will be entitled to exercise objecting shareholders'
appraisal rights, i.e., to demand the fair value of their shares in connection
with the Acquisition. Therefore, shareholders will be bound by the terms of the
Acquisition under the Acquisition Plan. However, any shareholder of PGIF may
redeem shares of common stock prior to the Acquisition.
Completion of the Acquisition is subject to certain conditions set forth in
the Acquisition Plan, some of which may be waived by a party to the Acquisition
Plan. The Acquisition Plan may be amended in any mutually agreed manner, except
that no amendment may be made subsequent to the Meeting that materially alters
the obligations of either party. The parties to the Acquisition Plan may
terminate the Acquisition Plan by mutual consent and either party has the right
to terminate the Acquisition Plan under certain circumstances. Among other
circumstances, either party may at any time terminate the Acquisition Plan
unilaterally upon a determination by the party's Board of Directors that
proceeding with the Acquisition Plan is not in the best interest of its
shareholders.
A copy of a form of the Acquisition Plan for the Acquisition is attached as
Appendix E.
Reasons for the Acquisition
At the Regular Meeting of the Board of Directors of AIF held on August 1-3,
2006, the Adviser recommended that the Board of Directors approve and recommend
to the Fund's shareholders for their approval the proposed Acquisition Plan and
Acquisition. The Directors considered the factors discussed below from the point
of view of the interests of the Fund and its shareholders. After careful
consideration, the Board of Directors (including all Directors who are not
"interested persons" of the Fund, the Adviser or its affiliates) determined that
the Acquisition would be in the best interests of PGIF's shareholders and that
the interests of existing shareholders of the Fund would not be diluted as a
result of the Acquisition. The Directors have unanimously approved the
Acquisition Plan and Acquisition and recommended that the shareholders of PGIF
vote in favor of the Acquisition by approving the Acquisition Plan.
The Adviser presented the following reasons relative to the Acquisition:
o PGIF is an open-end fund originally created in January 1998 to serve
the institutional/retirement market. The Fund has share class pricing
and total expense ratio caps aligned with pricing conventions in those
markets. In the last year, the Adviser has developed, and the Board
has approved, a new suite of share classes (R, K and I) within LCGF
with essentially the same pricing and expense features and levels.
Thus, there is no longer a need to have a stand alone "Institutional
Fund" to access this investment strategy with the pricing demanded by
those segments of the market. In addition, after interest in large cap
growth stocks dwindled after the "bubble" burst in 2000, PGIF's assets
under management declined, through both declines in the market value
of its securities and client redemptions, to average net assets of $82
million as of January 31, 2006, making it expensive and inefficient
from a total expense ratio perspective.
At the meeting, the Directors (with the advice and assistance of
independent counsel) also considered, among other things.
o potential shareholder benefits including (i) the fact that while the
capped expenses of PGIF's Class I and II shares are generally the same
or lower than the comparable Class of LCGF into which PGIF shares
would be exchanged, due to the waiver of expenses by the Adviser, the
expense ratios of the Class I and II shares without waiver are higher
than for all comparable LCGF's share Classes and that the Adviser does
not intend to continue to waive expenses if the Acquisition is not
approved and (ii) the ability of PGIF's shareholders to continue to be
able to utilize a portion of PGIF's sizable tax loss carryforwards
($197 million or $27.03 per share as of January 31, 2006) after the
Acquisition as shareholders of its larger counterpart, LCGF, which
itself has very substantial capital loss carryforwards, that would
expire if the Fund were liquidated, which is an alternative considered
by the Adviser in light of the Fund's small size and limited market
appeal;
o the current asset levels of PGIF and the combined pro forma asset
levels of LCGF ;
o the historical performance results of the Funds; and
o the investment objectives and principal investment strategies and
portfolio management personnel of PGIF and LCGF.
The Directors also considered, among other things:
o the historical and pro forma tax attributes of PGIF, including that
PGIF has net realized capital gains and unrealized appreciation, and
substantial capital loss carryforwards as a percentage of net assets,
and that LCGF has sizeable capital loss carryforwards;
o the form of the Acquisition Plan and the terms and conditions of the
Acquisition;
o whether the Acquisition would result in the dilution of shareholders'
interests;
o the portfolio management personnel of the parties to the Acquisition
and the continuity of portfolio management associated with the
Acquisition;
o the number of shareholder accounts and average account sizes of the
Funds;
o the effect of the Acquisition on the advisory fees of the Funds;
o the Adviser's plan to discontinue its fee waiver for PGIF if the
Acquisition is not approved by the shareholders of PGIF;
o changes in service providers that would result from the Acquisition;
o the fact that realignment of the investment holdings of LCGF after
consummation of the Acquisition is not anticipated;
o the benefits of the Acquisition to persons other than PGIF and its
shareholders, including the Adviser;
o the fact that LCGF will assume all the liabilities of PGIF;
o the expected federal income tax consequences of the Acquisition;
o whether the Acquisition would be preferable to acquisition by
potential acquirors other than LCGF, including funds that are not
sponsored by the Adviser;
o the costs of the Acquisition will be borne by the Adviser in view of
the particular benefits of the Acquisition to the Adviser; and
o the fact that the Adviser has agreed to indemnify LCGF for a
three-year period against any undisclosed or other liability of PGIF
and to reimburse LCGF for any costs in connection with investigating
any such liability.
Also on August 3, 2006, the Board of Directors of LCGF (comprised of the
same persons as the Board of AIF) approved the proposed Acquisition Plan. No
vote of shareholders of LCGF is required in connection with the Acquisition.
Description of Securities to be Issued
Under the Acquisition Plan, LCGF will issue additional shares of common
stock of its Class A, Advisor Class, Class K and Class I for distribution to
PGIF. Under its Charter and By-Laws, LCGF may issue up to 3,000,000,000 shares
of common stock, par value $.001 per share, for each of these Classes.
When the acquisition of PGIF by LCGF is consummated, shareholders of Class
I and Class II of PGIF in the Plans, if any, will receive Class I and Class K
shares of LCGF, respectively, having an aggregate net asset value equal to the
aggregate net asset value of the shareholder's shares in PGIF. Shareholders of
Class I and Class II of PGIF who are not in the Plans will receive Advisor Class
and Class A shares of LCGF, respectively, having an aggregate net asset value
equal to the aggregate net asset value of the shareholder's shares in PGIF.
Each share of LCGF represents an equal proportionate interest with other
shares of LCGF. Each share has equal earnings, assets and voting privileges and
is entitled to dividends and other distributions out of the income earned and
gain realized on the assets belonging to LCGF as authorized by the Board of
Directors. Shares of LCGF entitle their holders to one vote per full share and
fractional votes for fractional shares held. Shares of LCGF received by PGIF in
the Acquisition will be issued at NAV without a sales charge, fully paid and
non-assessable.
Dividends and Other Distributions
On or before the Closing Date, as defined in the Acquisition Plan, PGIF
will, if necessary, declare and pay as a distribution substantially all its
undistributed net investment income, net short-term capital gain, net long-term
capital gain and net gains from foreign currency transactions as applicable to
maintain its treatment as a regulated investment companies.
Surrender of PGIF Stock Certificates
After the Acquisition Plan's Effective Time, each holder of a certificate
(or certificates) formerly representing shares of PGIF will not receive, upon
surrender of the certificate, a certificate representing the number of LCGF
shares distributable as a result of the Acquisition since LCGF will not issue
certificates representing LCGF shares in connection with the Acquisition.
Ownership of LCGF's shares will be shown on the books of LCGF's transfer agent.
Promptly after the Acquisition Plan's Effective Time, AllianceBernstein Investor
Services, Inc. ("ABIS") will mail to PGIF's certificate holders, instructions
and a letter of transmittal for use in surrendering the certificate. Please do
not send share certificates at this time. Although the certificates will be
deemed for all purposes to evidence ownership of the equivalent number of LCGF
shares, no dividends will be paid to holders of certificates of PGIF until the
holder surrenders the certificates in accordance with the instructions and
letter of transmittal. Any dividends on LCGF shares payable after the Effective
Time will be paid to the certificate holder, without interest, when that holder
surrenders PGIF share certificate for exchange.
Federal Income Tax Consequences
Subject to certain stated assumptions contained therein, PGIF will receive
an opinion of Seward & Kissel LLP, its counsel, substantially to the following
effect: (i) the Acquisition will constitute a "reorganization" within the
meaning of section 368(a) of the Code and that PGIF and LCGF will each be "a
party to a reorganization" within the meaning of section 368(b) of the Code;
(ii) a shareholder of PGIF will recognize no gain or loss on the exchange of the
shareholder's shares of PGIF solely for shares of LCGF; (iii) neither PGIF nor
LCGF will recognize any gain or loss upon the transfer of all of the assets of
PGIF to LCGF in exchange for shares of LCGF and the assumption by LCGF of the
liabilities of PGIF pursuant to the Acquisition Plan or upon the distribution of
shares of LCGF to shareholders of PGIF in exchange for their respective shares
of PGIF; (iv) the holding period and tax basis of the assets of PGIF acquired by
LCGF will be the same as the holding period and tax basis that PGIF had in such
assets immediately prior to the Acquisition; (v) the aggregate tax basis of
shares of LCGF received in connection with the Acquisition by each shareholder
of PGIF (including any fractional share to which the shareholder may be
entitled) will be the same as the aggregate tax basis of the shares of PGIF
surrendered in exchange therefore; (vi) the holding period of shares of LCGF
received in connection with the Acquisition by each shareholder of PGIF
(including any fractional share to which the shareholder may be entitled) will
include the holding period of the shares of PGIF surrendered in exchange
therefore, provided that such PGIF shares constitute capital assets in the hands
of the shareholder as of the Closing Date; and (vii) LCGF will succeed to the
capital loss carryovers of PGIF, if any, under section 381 of the Code, but the
use by LCGF of any such capital loss carryovers (and of capital loss carryovers
of LCGF) may be subject to limitation under section 383 of the Code. This
opinion of counsel will not be binding on the Internal Revenue Service or a
court and there is no assurance that the Internal Revenue Service or a court
will not take a view contrary to those expressed in the opinion.
The per share amount of capital loss carryforwards of LCGF before the
Acquisition, as of January 31, 2006, was $47.46 per share (a total of
approximately $8.7 billion or more than 200% of net assets) and, after giving
effect to the Acquisition as if it occurred on such date, the amount of capital
loss carryforwards available in the combined Fund would increase by a slight
amount to $47.50. Shareholders of PGIF would benefit significantly from the
substantial capital loss carryforwards that will be available in the combined
Fund.
Shareholders of PGIF are encouraged to consult their tax advisers regarding
the effect, if any, of the Acquisition in light of their individual
circumstances. Because the foregoing only relates to the federal income tax
consequences of the Acquisition, those shareholders also should consult their
tax advisers as to state and local tax consequences, if any, of the Acquisition.
Capitalization Information
For information on the existing and pro forma capitalization of the Funds,
see Appendix G.
INFORMATION ABOUT THE FUNDS
AIF and LCGF are each an open-end management investment company registered
under the 1940 Act and organized as a Maryland corporation in 1998 and 1992,
respectively.
Management of the Funds
The Board of Directors of each Fund directs the management of the business
and affairs of the Funds. Each Board of Directors approves all significant
agreements between the respective Fund and persons or companies furnishing
services to it, including a Fund's agreements with the Adviser and the Fund's
administrator, custodian and transfer and dividend disbursing agent. The
day-to-day operations of a Fund are delegated to its officers and the Fund's
Adviser, subject to the Fund's investment objective and policies and to general
supervision by the Fund's Board of Directors. Subsequent to the consummation of
the Acquisition, the directors and officers of LCGF will continue to serve as
the directors and officers of the combined Fund. Messrs. Syed J. Hasnain, David
P. Handke, Jr., Michael J. Reilly, James G. Reilly and P. Scott Wallace, the
senior members of the Adviser's U.S. Large Cap Growth Investment Team, are
primarily responsible for day-to-day management of PGIF's and LCGF's portfolios.
Messrs. Syed J. Hasnain, David P. Handke, Jr., Michael J. Reilly and P. Scott
Wallace are Senior Vice Presidents of the Adviser with which they have been
associated since prior to 2001. Mr. James G. Reilly is an Executive Vice
President of the Adviser with which he has been associated since prior to 2001.
Subsequent to the consummation of the Acquisition, Messrs. Syed J. Hasnain,
David P. Handke, Jr., Michael J. Reilly, James G. Reilly and P. Scott Wallace
will continue to be primarily responsible for day-to-day management of the
combined Fund. The SAI provides additional information about the portfolio
managers' compensation, other accounts managed by the portfolio managers, and
the portfolio managers' ownership of securities in the Fund.
Advisory Agreement and Fees
Each Fund's investment adviser is AllianceBernstein L.P., 1345 Avenue of
the Americas, New York, New York 10105. The Adviser is a leading international
investment adviser managing client accounts with assets as of March 31, 2006
totaling more than $618 billion (of which more than $79 billion represented the
assets of investment companies). As of March 31, 2006, the Adviser managed
retirement assets for many of the largest public and private employee benefit
plans (including 41 of the nation's FORTUNE 100 companies), for public employee
retirement funds in 37 states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide. The 43 registered
investment companies managed by the Adviser, comprising 120 separate investment
portfolios, currently have approximately 3.9 million shareholder accounts. The
Adviser also serves as administrator for each Fund.
Under each Fund's advisory agreement with the Adviser (the "Advisory
Agreement"), the Adviser provides office space, investment advisory services,
and order placement facilities for the Fund and pays all compensation of
directors and officers of the Fund who are affiliated persons of the Adviser.
The advisory fee rate schedule for each of PGIF and LCGF are identical, but
LCGF's effective advisory fee rate is lower than that of PGIF because of its
much larger size. Under the Advisory Agreement of PGIF and LCGF, each Fund pays
the Adviser an advisory fee at an annual rate of .75% as of January 31, 2006 and
..72% as of January 31, 2006, respectively, of its average weekly net assets.
Such fee is accrued daily and paid monthly.
The Advisory Agreements by their terms continue in effect from year to year
if such continuance is specifically approved, at least annually, by a majority
vote of the directors of a Fund who neither are interested persons of the Fund
nor have any direct or indirect financial interest in the Advisory Agreement,
cast in person at a meeting called for the purpose of voting on such approval. A
discussion regarding the basis for the Board of Directors approving the
investment advisory contracts of PGIF and LCGF is available in each Fund's
Annual Report to Shareholders for fiscal years ended October 31, 2005, and July
31, 2005, respectively.
The Adviser is the subject of certain legal proceedings instituted by the
Securities and Exchange Commission and the Office of the New York Attorney
General. A discussion of those proceedings is presented in Appendix J.
Distributor
AllianceBernstein Investments, Inc. ("ABI" or the "Distributor"), a
wholly-owned subsidiary of the Adviser, serves as the distributor of PGIF's and
LCGF's shares. Under a Distribution Services Agreement, PGIF and LCGF pay
distribution and service fees to the Distributor at an annual rate of up to .30%
of PGIF's average daily net assets attributable to its Class II shares, .30% of
LCGF's average daily net assets attributable to its Class A shares and .25% of
LCGF's average daily net assets attributable to its Class K shares. The
Distribution Agreement provides that the Distributor will use such payments in
their entirety for distribution assistance and promotional activities.
Other Service Providers
The Funds will have the same service providers after the Acquisition with
one exception. ABIS, an affiliate of the Adviser, provides shareholder services
for the Funds. The Funds compensate ABIS for these services. State Street Bank &
Trust Company, 225 Franklin Street, Boston, MA 02116, serves as custodian for
the Funds. ABIS, P.O. Box 786003, San Antonio, TX 78278, serves as transfer
agent for the Funds. After the Acquisition, State Street Bank & Trust Company
and ABIS will serve, respectively, as custodian and transfer agent for the
combined Fund. Ernst & Young LLP serves as the independent registered public
accounting firm of PGIF. KPMG LLP serves as the independent registered public
accounting firm of LCGF and will continue to serve in that capacity for the
combined Fund after the Acquisition.
VOTING INFORMATION
The Board of Directors of PGIF has fixed the close of business on
September 1, 2006 as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Meeting and at any adjournments
thereof. Appendix H to this Prospectus/Proxy Statement lists the total number of
shares outstanding as of that date for each class of PGIF entitled to vote at
the Meeting. It also identifies holders of more than five percent of any class
of shares of each Fund, and contains information about the executive officers
and Directors of the Funds and their shareholdings in the Funds.
Those shareholders who hold shares directly and not through a broker or
nominee (that is, a shareholder of record) may authorize their proxies to cast
their votes by completing a Proxy Card and returning it by mail in the enclosed
postage-paid envelope as well as either telephoning toll free
1-800-[___]-[____]. Shares held for a shareholder through a broker or nominee
(who is the shareholder of record for those shares) should be voted by following
the instructions provided to the shareholder by the broker or nominee. The
telephone and Internet voting instructions to be followed by a shareholder of
record, including use of the Control Number on the shareholder's Proxy Card, are
designed to verify shareholder identities, to allow shareholders to give voting
instructions and to confirm that shareholder instructions have been recorded
properly. Shareholders who authorize proxies by telephone or through the
Internet should not also return a Proxy Card. Shareholders who authorize proxies
through the Internet should be aware that they are responsible for any
applicable telecommunication and access charges. A shareholder of record may
revoke that shareholder's proxy at any time prior to exercise thereof by giving
written notice to the Secretary of the Fund at 1345 Avenue of the Americas, New
York, New York 10105, by authorizing a later-dated proxy (either by signing and
mailing another Proxy Card or, by telephone or through the Internet as indicated
above), or by personally attending and voting at the Meeting.
Properly executed proxies may be returned with instructions to abstain from
voting or to withhold authority to vote (an "abstention") or represent a broker
"non-vote" (which is a proxy from a broker or nominee indicating that the broker
or nominee has not received instructions from the beneficial owner or other
person entitled to vote shares on a particular matter with respect to which the
broker or nominee does not have the discretionary power to vote).
Approval of the Acquisition requires the affirmative vote of a "majority of
the outstanding voting securities" of PGIF, as defined in the 1940 Act. Under
the 1940 Act, a vote of a majority of the outstanding voting securities of a
Fund means the vote of the lesser of: (i) 67% or more of the outstanding shares
of the Fund present at the Meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (ii) more than 50% of
the outstanding shares of the Fund, whichever is less.
Abstentions and broker non-votes will be considered present for purposes of
determining the existence of a quorum for the transaction of business but will
have the effect of a vote against the Proposal. If any proposal, other than the
Proposal to be voted on by the shareholders of the Fund, properly comes before
the Meeting, the shares represented by proxies will be voted on all such
proposals in the discretion of the person or persons voting the proxies. The
Fund has not received notice of, and are not otherwise aware of, any other
matter to be presented at the Meeting.
A quorum for the transaction of business by the shareholders of PGIF at the
Meeting will consist of the presence in person or by proxy of the holders of
one-third of the shares of PGIF entitled to vote at the Meeting. In the event
that a quorum is not represented at the Meeting or, even if a quorum is so
present, in the event that sufficient votes in favor of the position recommended
by the Board of Directors on the Proposal are not timely received, the persons
named as proxies may propose and vote for one or more adjournments of the
Meeting with no other notice than announcement at the Meeting, up to 120 days
after the Record Date, in order to permit further solicitation of proxies.
Shares represented by proxies indicating a vote against the Proposal will be
voted against adjournment.
PGIF has engaged The Altman Group, Inc. (the "Proxy Solicitor"), 60 East
42nd Street, Suite 405, New York, New York 10165, to assist in soliciting
proxies for the Meeting. The Proxy Solicitor will receive a fee of $1,500 for
its solicitation services, plus reimbursement of out-of-pocket expenses.
LEGAL MATTERS
The validity of the shares offered here by will be passed upon for PGIF by
Seward & Kissel LLP. Seward & Kissel LLP will rely upon the opinion of Venable
LLP for certain matters relating to Maryland law.
EXPERTS
The audited financial statements and financial highlights in the
Prospectus/Proxy Statement and the SAI have been included in reliance on the
reports of PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York
10017, the independent registered public accounting firm for LCGF as of the end
of the Fund's last fiscal year, and Ernst & Young LLP, 5 Times Square, New York,
New York, 10036, the independent registered public accounting firm for PGIF,
given on their authority as experts in auditing and accounting.
FINANCIAL HIGHLIGHTS
Financial highlights information for the Funds is available at Appendix K.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE
ACQUISITION OF THE ASSETS AND LIABILITIES OF ALLIANCEBERNSTEIN PREMIER
GROWTH INSTITUTIONAL FUND BY ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND, INC.
APPENDIX A
FEE TABLE
The purpose of the tables below is to assist an investor in understanding
the various costs and expenses that a shareholder bears directly and indirectly
from an investment in the Funds. The tables allow you to compare the sales
charges, expenses of each Fund and estimates for the combined Fund in its first
year following the Acquisition. The information presented for the classes of
shares of LCGF only includes the classes of shares that will be exchanged for
corresponding classes of LCGF, not all classes of LCGF shares.
Shareholder Fees
(fees paid directly from your investment)
PGIF
----
--------------------------------------------------------------
Class I Class II
--------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering
price) None None
--------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase
price or redemption price, whichever
is lower) None None
--------------------------------------------------------------
Redemption Fee (as a percentage of
amount redeemed, if applicable) None None
--------------------------------------------------------------
LCGF
----
--------------------------------------------------------------------------------
Advisor
Class A Class Class K Class I
--------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed 4.25%(a) None None None
on Purchases (as a percentage of
offering price)
--------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase
price or redemption price, whichever
is lower) None None None None
--------------------------------------------------------------------------------
Redemption Fee (as a percentage of
amount redeemed, if applicable) None None None None
--------------------------------------------------------------------------------
(a) Class A sales charges may be reduced or eliminated in certain
circumstances, typically for large purchases and for certain group
retirement plans. In some cases, however, a 1%, 1-year contingent deferred
sales charge ("CDSC") may apply. CDSCs for Class A shares may also be
subject to waiver in certain circumstances.
Combined Fund
-------------
--------------------------------------------------------------------------------
Advisor
Class A Class Class K Class I
--------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed
on Purchases (as a percentage of
offering price) 4.25%(a) None None None
--------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase
price or redemption price, whichever
is lower) None None None None
--------------------------------------------------------------------------------
Redemption Fee (as a percentage of
amount redeemed, if applicable) None None None None
--------------------------------------------------------------------------------
(a) Class A sales charges may be reduced or eliminated in certain
circumstances, typically for large purchases and for certain group
retirement plans. In some cases, however, a 1%, 1-year contingent deferred
sales charge ("CDSC") may apply. CDSCs for Class A shares may also be
subject to waiver in certain circumstances. Class A shares of LCGF received
by PGIF in connection with the Acquisition of PGIF will not be assessed any
sales charges or other fees, such as CDSCs.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
PGIF
----
---------------------------------------------------------------
Class I Class II
---------------------------------------------------------------
Management Fees .75% .75%
---------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None .30%
---------------------------------------------------------------
Other Expenses(a) .51% .51%
---------------------------------------------------------------
Total Fund Operating Expenses 1.26% 1.56%
---------------------------------------------------------------
Waiver and/or Expense Reimbursement(b) (.36)% (.36)%
---------------------------------------------------------------
Net Expenses .90% 1.20%
---------------------------------------------------------------
(a) Based on estimated expenses.
(b) Reflects the Adviser's contractual waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Fund's operating expenses. This
waiver extends through the Fund's current fiscal year (October 31, 2006).
Although the Adviser may extend its fee waiver for additional one-year
terms, the Adviser does not plan to continue its fee waiver for PGIF if the
Acquisition is not approved.
LCGF
----
--------------------------------------------------------------------------------
Advisor
Class A Class Class K Class I
--------------------------------------------------------------------------------
Management Fees .72% .72% .72% .72%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees .30% None .25% None
--------------------------------------------------------------------------------
Other Expenses(a) .51% .51% .24% .16%
--------------------------------------------------------------------------------
Net Expenses 1.53% 1.23% 1.21% .88%
--------------------------------------------------------------------------------
(a) Based on estimated expenses.
Combined Fund
-------------
--------------------------------------------------------------------------------
Advisor
Class A Class Class K Class I
--------------------------------------------------------------------------------
Management Fees .72% .72% .72% .72%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees .30% None .25% None
--------------------------------------------------------------------------------
Other Expenses(a) .50% .50% .24% .16%
--------------------------------------------------------------------------------
Net Expenses 1.52% 1.22% 1.21% .88%
--------------------------------------------------------------------------------
(a) Based on estimated expenses.
EXAMPLE
The Examples are to help you compare the cost of investing in each Fund
with the cost of investing in the combined Fund on a pro forma combined basis.
They assume that you invest $10,000 in a Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. They also assume
that your investment has a 5% return each year, that a Fund's operating expenses
stay the same and that all dividends and distributions are reinvested.
PGIF
----
----------------------------------------
Class I Class II
----------------------------------------
After 1 Year $ 92 $ 122
----------------------------------------
After 3 Years $ 364 $ 457
----------------------------------------
After 5 Years $ 657 $ 816
----------------------------------------
After 10 Years $1,491 $1,826
----------------------------------------
LCGF
----
---------------------------------------------------------
Advisor
Class A Class Class K Class I
---------------------------------------------------------
After 1 Year $ 574 $ 125 $ 123 $ 90
---------------------------------------------------------
After 3 Years $ 888 $ 390 $ 384 $ 281
---------------------------------------------------------
After 5 Years $1,224 $ 676 $ 665 $ 488
---------------------------------------------------------
After 10 Years $2,171 $1,489 $1,466 $1,084
---------------------------------------------------------
Combined Fund
-------------
---------------------------------------------------------
Class A Advisor
Class A Class Class K Class I
---------------------------------------------------------
After 1 Year $ 573 $ 124 $ 123 $ 90
---------------------------------------------------------
After 3 Years $ 885 $ 387 $ 384 $ 281
---------------------------------------------------------
After 5 Years $1,219 $ 670 $ 665 $ 488
---------------------------------------------------------
After 10 Years $2,160 $1,477 $1,466 $1,084
---------------------------------------------------------
The projected post-Acquisition pro forma Annual Fund Operating Expenses and
Examples presented above are based upon numerous material assumptions, including
that (1) the current contractual agreements will remain in place and (2) certain
fixed costs involved in operating PGIF are eliminated. Although these
projections represent good faith estimates, there can be no assurance that any
particular level of expenses or expense savings will be achieved, because
expenses depend on a variety of factors, including the future level of fund
assets, many of which are beyond the control of LCGF and the Adviser.
APPENDIX B
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
--------------------------------------------------------------------------------
Investment Objectives
--------------------------------------------------------------------------------
PGIF LCGF
--------------------------------------------------------------------------------
Investment The Fund's investment The Fund's investment
Objective objective is long-term growth objective is long-term growth
of capital by investing of capital.
predominantly in equity
securities of a limited number
of large, carefully selected,
high-quality U.S. companies
that are judged likely to
achieve superior earnings
growth. (F)
--------------------------------------------------------------------------------
Investment Policies(1)
--------------------------------------------------------------------------------
Status The Fund is diversified. (F) The Fund is diversified. (F)
The Fund may not, with respect
to 75% of its assets, (i) have
more than 5% of its assets
invested in any one issuer and
(ii) own more than 10% of the
outstanding voting securities
of any one issuer. (F)
--------------------------------------------------------------------------------
Investment The Fund normally invests at Under normal circumstances,
Policies least 80% of its total assets the Fund will invest at least
in the equity securities of 80% of its net assets in
U.S. companies. (F) common stocks of
large-capitalization
companies.
--------------------------------------------------------------------------------
Portfolio Normally, the Fund invests in
Companies about 40-60 companies, with
the 25 most highly regarded of
these companies usually
constituting approximately 70%
of the Fund's net assets.
--------------------------------------------------------------------------------
Convertible The Fund may invest up to 20%
Securities of its net assets in
convertible securities.
--------------------------------------------------------------------------------
Non-U.S. The Fund may invest up to 20%
Companies of its total assets in equity
securities of non-U.S.
companies.
--------------------------------------------------------------------------------
Rights and The Fund may invest up to 5% The Fund may invest in rights
Warrants of its net assets in rights or and warrants.
warrants.
--------------------------------------------------------------------------------
Concentration The Fund may not invest 25% or The Fund may not concentrate
more of the value of its total investments in an industry, as
assets in the same industry concentration may be defined
except that this restriction under the 1940 Act or the
does not apply to securities rules and regulations
issued or guaranteed by the thereunder (as such statute,
U.S. Government its agencies rules or regulations may be
and instrumentalities. (F) amended from time to time) or
by guidance regarding,
interpretations of, or
exemptive orders under, the
1940 Act or the rules or
regulations thereunder
published by appropriate
regulatory authorities. (F)
--------------------------------------------------------------------------------
Senior The Fund may not issue senior The Fund may not issue any
Securities securities (except to the senior security (as that term
and Borrowing extent that securities lending is defined in the 1940 Act) or
may be considered senior borrow money, except to the
securities) or borrow money, extent permitted by the 1940
except for temporary or Act or the rules and
emergency purposes in an regulations thereunder (as
amount not exceeding 5% of the such statute, rules or
value of its total assets at regulations may be amended
the time the borrowing is from time to time) or by
made. (F) guidance regarding, or
interpretations of, or
exemptive orders under, the
1940 Act or the rules or
regulations thereunder
published by appropriate
regulatory authorities.
For the purposes of this
restriction, collateral
arrangements, including for
example, with respect to
options, futures contracts and
options on futures contracts
and collateral arrangements
with respect to initial and
variation margin, are not
deemed to be the issuance of a
senior security. (F)
--------------------------------------------------------------------------------
Options and The Fund may not write put The Fund may purchase and sell
Futures options. (F) exchange-traded index option
and stock index futures
The Fund may write covered contracts.
exchange-traded call options
on its securities of up to 15% The Fund may write
of its total assets, and exchange-traded call options
purchase and sell on its securities and purchase
exchange-traded call and put and sell exchange-traded call
options on common stocks and put options on common
written by others of up to, stocks written by others.
for all options, 10% of its
total assets.
The Fund will not purchase
puts, calls, straddles,
spreads and any combination
thereof if by reason thereof
the value of its aggregate
investment in such classes of
securities will exceed 5% of
its total assets.
The Fund will not engage in
options transactions if the
aggregate premiums paid on all
options which are held by the
Fund at any time exceed 20% of
the Fund's total net assets.
The Fund will not write a call
option if, as a result, the
aggregate of the Fund's
portfolio securities subject
to outstanding call options
(valued at the lower of the
option prices or market values
of such securities) would
exceed 15% of the Fund's total
assets.
The aggregate cost of all
outstanding options purchased
and held by the Fund,
including options on market
indices as described below,
will at no time exceed 10% of
the Fund's total assets.
--------------------------------------------------------------------------------
Investments The Fund may not purchase the The Fund may invest in the
in Other securities of any other securities of other investment
Investment investment company or companies, including
Companies investment trust, except when exchange-traded funds, to the
such purchase is part of a extent permitted under the
merger, consolidation or 1940 Act or the rules and
acquisition of assets. (F) regulations thereunder (as
such statute, rules or
regulations may be amended
from time to time) or by
guidance regarding,
interpretations of, or
exemptive orders under, the
1940 Act or the rules or
regulations thereunder
published by appropriate
regulatory authorities. (F)
--------------------------------------------------------------------------------
Real Estate The Fund may not purchase or The Fund may not purchase or
sell real estate except that sell real estate except that
it may purchase and sell it may dispose of real estate
securities of companies which acquired as a result of the
deal in real estate or ownership of securities or
interests therein. (F) other instruments. This
restriction does not prohibit
The Fund will not invest in the Fund from investing in
real estate partnerships. securities or other
instruments backed by real
estate or in securities of
companies engaged in the real
estate business. (F)
--------------------------------------------------------------------------------
Commodities The Fund may not purchase or The Fund may not purchase or
sell commodities or commodity sell commodities regulated by
contracts (other than stock the Commodity Futures Trading
index futures contracts). (F) Commission under the Commodity
Exchange Act or commodities
The Fund will not enter into contracts except for futures
any futures contracts or contracts and options on
options on futures contracts futures contracts. (F)
if immediately thereafter the
market values of the
outstanding futures contracts
of the Fund and the currencies
and futures contracts subject
to outstanding options written
by the Fund would exceed 50%
of its total assets. In
addition, the Fund may not
purchase or sell a stock index
future if immediately
thereafter more than 30% of
its total assets would be
hedged by stock index futures
and may not purchase or sell a
stock index futures if,
immediately thereafter, the
sum of the amount of margin
deposits on the Fund's
existing futures positions
would exceed 5% of the market
value of the Fund's total
assets.
The Fund will not purchase or
sell a stock index future if,
immediately thereafter, the
sum of the amount of margin
deposits on the Fund's
existing futures positions
would exceed 5% of the market
value of the Fund's total
assets.
--------------------------------------------------------------------------------
Pledging, The Fund may not pledge,
Mortgaging, mortgage, hypothecate or
and otherwise encumber any of its
Hypothecation assets except in connection
with the writing of call
options and except to secure
permitted borrowings. (F)
--------------------------------------------------------------------------------
Investments The Fund may not invest in the
in Unseasoned securities of any issuer which
Companies has a record of less than
three years of continuous
operation (including the
operation of any predecessor)
if as a result more than 10%
of the value of the total
assets of the Fund would be
invested in the securities of
such issuer or issuers. (F)
The Fund will not purchase the
securities of any company that
has a record of less than
three years of continuous
operation (including that of
predecessors) if such purchase
at the time thereof would
cause more than 5% of its
total assets, taken at current
value, to be invested in the
securities of such companies.
--------------------------------------------------------------------------------
Loans The Fund may not make loans to The Fund may not make loans
other persons, except that the except through (i) the
Fund may lend its portfolio purchase of debt obligations
securities in accordance with in accordance with its
applicable laws. The investment objectives and
acquisition of investment policies; (ii) the lending of
securities or other investment Fund securities; (iii) the use
instruments shall not be of repurchase agreements; or
deemed the making of a loan. (iv) the making of loans to
(F) affiliated funds as permitted
under the 1940 Act, the rules
and regulations thereunder (as
such statutes, rule or
regulations may be amended
from time to time), or by
guidance regarding, and
interpretations of, or
exemptive orders under, the
1940 Act. (F)
--------------------------------------------------------------------------------
Joint and The Fund may not participate
Several on a joint or joint and
Trading several basis in any
securities trading account.
(F)
--------------------------------------------------------------------------------
Investment to The Fund may not invest in
Exercise companies for the purpose of
Control exercising control. (F)
--------------------------------------------------------------------------------
Oil, Gas and The Fund may not invest in
Minerals interests in oil, gas or other
mineral exploration or
development programs except
that it may purchase and sell
securities of companies that
deal in oil, gas or other
mineral exploration or
development programs. (F)
The Fund will not invest in
mineral leases.
--------------------------------------------------------------------------------
Short Sales The Fund will not make short
sales of securities. (F)
--------------------------------------------------------------------------------
Margin The Fund may not purchase
securities on margin except
for such short-term credits as
may be necessary for the
clearance of transactions. (F)
--------------------------------------------------------------------------------
Underwriting The Fund may not act as an The Fund may not act as an
of Securities underwriter of securities underwriter of securities,
except that the Fund may except that a Fund may acquire
acquire restricted securities restricted securities under
or securities in private circumstances in which, if
placements under circumstances such securities were sold, the
in which, if such securities Fund might be deemed to be an
were sold, the Fund might be underwriter for purposes of
deemed to be an underwriter the Securities Act of 1933, as
within the meaning of the amended (the "Securities
Securities Act. (F) Act"). (F)
--------------------------------------------------------------------------------
Lending of The Fund may make loans of The Fund may lend Fund
Securities portfolio securities up to securities to the extent
33-1/3% of its total assets permitted under the 1940 Act
(including collateral for any or the rules and regulations
security loaned). thereunder (as such statute,
rules or regulations may be
amended from time to time) or
by guidance regarding,
interpretations of, or
exemptive orders under, the
1940 Act.
--------------------------------------------------------------------------------
Adviser The Fund will not purchase or
Affiliate retain the securities of any
Securities issuer if each of the Fund's
officers, directors or
investment adviser who owns
beneficially more than
one-half of one percent of the
securities of such issuer
together own beneficially more
than five percent of the
securities of such issuer.
--------------------------------------------------------------------------------
Illiquid The Fund will not purchase The Fund will limit its
Securities illiquid securities if investment in illiquid
immediately after such securities to no more than 15%
investment more than 15% of of net assets or such other
the Fund's net assets (taken amount permitted by guidance
at market value) would be so regarding the 1940 Act.
invested.
--------------------------------------------------------------------------------
----------
(1) Policies with the notation "F" are fundamental policies.
APPENDIX C
DESCRIPTION OF PRINCIPAL RISKS OF THE FUNDS
Among the principal risks of investing in a Fund are market risk, foreign
(non-U.S.) risk, currency risk, focused portfolio risk and management risk. Each
of these risks is more fully described below. Each Fund could become subject to
additional risks because the types of investments made by each Fund can change
over time.
--------------------------------------------------------------------------------
Market Risk This is the risk that the value of a Fund's investments will
fluctuate as the stock or bond markets fluctuate and that prices
overall will decline over shorter- or longer-term periods.
--------------------------------------------------------------------------------
Foreign A Fund's investments in non-U.S. securities may experience more
(Non-U.S.) rapid and extreme changes in value than investments in
Risk securities of U.S. companies. The securities markets of many
foreign countries are relatively small, with a limited number of
companies representing a small number of securities. Foreign
companies usually are not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting, and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes, or diplomatic developments could adversely
affect a Fund's investments in a foreign country. These risks
are heightened for emerging market countries because there may
be more economic, political and social instability, and
investments in companies in emerging markets may have more risk
because these securities may be more volatile and less liquid.
To the extent a Fund invests in a particular country or
geographic region, the Fund may have more significant risk due
to market changes or other factors affecting that country or
region, including political instability and unpredictable
economic conditions.
--------------------------------------------------------------------------------
Currency Risk This is the risk that fluctuations in the exchange rates between
the U.S. Dollar and foreign (non-U.S.) currencies may negatively
affect the value of a Fund's investments or reduce the returns
of a Fund.
--------------------------------------------------------------------------------
Focused Funds that invest in a limited number of companies may have more
Portfolio risk because changes in the value of a single security may have
Risk a more significant effect, either negative or positive on the
Portfolio's net asset value.
--------------------------------------------------------------------------------
Management Each Fund is subject to management risk because it is an
Risk actively managed investment portfolio. The Adviser will apply
its investment techniques and risk analyses in making investment
decisions for each Fund, but there can be no guarantee that its
decisions will produce the desired results.
--------------------------------------------------------------------------------
APPENDIX D
OTHER INFORMATION
The following information provides only a summary of the key features of
the organizational structure and governing documents of the Funds. Each Fund is
organized as a Maryland corporation. The Bylaw provisions that govern PGIF and
LCGF are substantially similar. Accordingly, except otherwise noted below, there
are no significant differences between PGIF and LCGF in terms of their
respective corporate organizational structures.
General
Each Fund has procedures available to its respective shareholders for
calling shareholders' meetings for the removal of directors. Under Maryland law
and the Funds' Charters, a director may be removed, either with or without
cause, at a meeting duly called and at which a quorum is present by the
affirmative vote of the majority of the votes entitled to be cast. In addition,
special meetings of shareholders for any other purpose shall be called by a
Fund's Secretary upon the written request of shareholders entitled to cast not
less than a majority of all the votes entitled to be cast at the meeting.
For each Fund, the presence in person or by proxy of the holders of
one-third of the shares entitled to be cast constitutes a quorum at any meeting
of shareholders of the Fund. When a quorum is present at any meeting, the
affirmative vote of a majority of the votes (or with respect to the election of
directors, a plurality of votes) cast shall decide any question brought before
such meeting, except as otherwise required by law.
Shares of Common Stock of the Funds
The Funds' shares have no preemptive rights. Each share has equal voting,
dividend, distribution and liquidation rights. Shareholders are entitled to one
vote per share. All voting rights for the election of directors are
non-cumulative, which means that the holders of more than 50% of the shares of
common stock of a Fund can elect 100% of the directors then nominated for
election if they choose to do so and, in such event, the holders of the
remaining shares of common stock will not be able to elect any directors. The
Funds are organized as Maryland corporations and thus their shareholders have
the same rights due to them under state law. The Funds are not required to, and
does not, hold annual meetings of shareholders and have no current intention to
hold such meetings, except as required by the 1940 Act. Under the 1940 Act, PGIF
and LCGF are required to hold a shareholder meeting if, among other reasons, the
number of Directors elected by shareholders is less than a majority of the total
number of Directors, or if the Fund seeks to change its fundamental investment
policies.
Dividends and Distributions
PGIF and LCGF have the same dividends and distributions policies. While
each of PGIF and LCGF intends to distribute to its shareholders substantially
all of each fiscal year's net income and net realized capital gains, if any, the
amount and time of any dividend or distribution will depend on the realization
by the Fund of income and capital gains from investments. There is no fixed
dividend rate and there can be no assurance that the Fund will pay any dividends
or realize any capital gains. The final determination of the amount of the
Fund's return of capital distributions for the period will be made after the end
of each calendar year.
Each of PGIF's and LCGF's income dividends and capital gains distributions,
if any, declared by the Fund on its outstanding shares will, at the election of
each shareholder, be paid in cash or in additional shares. If paid in additional
shares, the shares will have an aggregate net asset value as of the close of
business on the declaration date of the dividend or distribution equal to the
cash amount of the dividend or distribution. A shareholder may make an election
to receive dividends and distributions in cash or in shares at the time of
purchase of shares. The shareholder's election can be changed at any time prior
to a record date for a dividend. There is no sales or other charge in connection
with the reinvestment of dividends or capital gains distributions.
Liability of Directors and Officers
Each of the Funds indemnifies its officers and directors, as applicable, to
the full extent permitted by law. This indemnification does not protect any such
person against any liability to a Fund or any shareholder thereof to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
satisfaction of such person's office.
APPENDIX E
FORM OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION AMONG
ALLIANCEBERNSTEIN PREMIER GROWTH INSTITUTIONAL FUND, A
SERIES OF ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC.,
ALLIANCEBERNSTEIN L.P. AND
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND, INC.
AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION
RELATING TO THE ACQUISITION OF THE ASSETS AND
LIABILITIES OF
ALLIANCEBERNSTEIN PREMIER GROWTH INSTITUTIONAL FUND,
A SERIES OF ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC.
As of
August 4, 2006
This Agreement and Plan of Acquisition and Liquidation (the "Acquisition
Plan") is made as of this 4th day of August, 2006, by and among
AllianceBernstein Large Cap Growth Fund Inc. ("LCGF"), a Maryland corporation,
AllianceBernstein Premier Growth Institutional Fund (the "Acquired Fund"), a
series of AllianceBernstein Institutional Funds, Inc., a Maryland corporation,
and AllianceBernstein L.P. (the "Adviser").
WHEREAS, LCGF and the Acquired Fund are open-end management investment
companies registered with the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that the Acquired Fund transfer all of the
assets attributable to its Class I shares held by stockholders who are in
retirement and deferred compensation plans (the "Plans") in exchange for Class I
shares of equal net asset value of LCGF ("Class I Acquisition Shares"), transfer
all of the assets attributable to its Class I shares held by stockholders who
are not in the Plans ("Non-Plan Stockholders") in exchange for Advisor Class
shares of equal net asset value of LCGF ("Advisor Class Acquisition Shares"),
transfer all of the assets attributable to its Class II shares held by
stockholders who are in the Plans ("Plan Stockholders") in exchange for Class K
shares of equal net asset value of LCGF ("Class K Acquisition Shares"), transfer
all of the assets attributable to its Class II shares held by Non-Plan
Stockholders in exchange for Class A shares of equal net asset value of LCGF
("Class A Acquisition Shares" and together with the Class I Acquisition Shares,
Advisor Class Acquisition Shares and Class K Acquisition Shares, the
"Acquisition Shares") and distribute the Class I Acquisition Shares, the Advisor
Class Acquisition Shares, the Class K Acquisition Shares and the Class A
Acquisition Shares to Plan Stockholders of Class I, Non-Plan Stockholders of
Class I, Plan Stockholders of Class II and Non-Plan Stockholders of Class II,
respectively, of the Acquired Fund (the "Acquisition"); and
WHEREAS, the parties intend that the Acquisition qualify as a
"reorganization" within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and any successor
provisions, and that with respect to the Acquisition, LCGF and the Acquired Fund
will each be a "party to a reorganization" within the meaning of Section 368(b)
of the Code;
Now, therefore, LCGF and the Acquired Fund agree as follows:
1. Definitions
In addition to the terms elsewhere defined herein, each of the following
terms shall have the meaning indicated for that term as follows:
1934 Act......................... Securities Exchange Act of 1934, as amended
1933 Act......................... Securities Act of 1933, as amended.
Assets........................... All assets of any kind and all interests,
rights, privileges and powers of or
attributable to the Acquired Fund or its
shares, as appropriate, whether or not
determinable at the appropriate Effective
Time and wherever located, including,
without limitation, all cash, cash
equivalents, securities, claims (whether
absolute or contingent, known or unknown,
accrued or unaccrued or conditional or
unmatured), contract rights and receivables
(including dividend and interest
receivables) owned by the Acquired Fund or
attributable to its shares and any deferred
or prepaid expense, other than unamortized
organizational expenses, shown as an asset
on the Acquired Fund's books.
Closing Date..................... Shall be on such other date following the
date that stockholders of the Acquired Fund
approve the Acquisition Plan as the parties
may agree.
Effective Time................... 5:00 p.m. Eastern time on the Closing Date,
or such other time as the parties may agree
to in writing.
Financial Statements............. The audited financial statements of the
relevant Fund for its most recently
completed fiscal year and, if applicable,
the unaudited financial statements of that
Fund for its most recently completed
semi-annual period.
Fund............................. LCGF and/or the Acquired Fund, as the case
may be.
Liabilities...................... All liabilities, expenses and obligations of
any kind whatsoever of the Acquired Fund,
whether known or unknown, accrued or
unaccrued, absolute or contingent or
conditional or unmatured, except that
expenses of the Acquisition, if any,
contemplated hereby to be paid by the
Adviser pursuant to Section 24 of this
Acquisition Plan which shall not be
assumed or paid by the LCGF shall not fall
within the definition of Liabilities for
purposes of this Acquisition Plan.
N-14 Registration Statement...... The Registration Statement of LCGF on Form
N-14 under the 1940 Act that will register
the Acquisition Shares to be issued in the
Acquisition and will include the proxy
materials necessary for the stockholders of
the Acquired Fund to approve the
Acquisition.
Valuation Time................... The close of regular session trading on the
NYSE on the Closing Date, when for purposes
of the Acquisition Plan, LCGF determines its
net asset value per Acquisition Share and
the Acquired Fund determines the net value
of the Assets.
NAV.............................. A Fund's net asset value is calculated by
valuing and totaling assets and then
subtracting liabilities and then dividing
the balance by the number of shares that are
outstanding.
2. Regulatory Filings
LCGF shall promptly prepare and file the N-14 Registration Statement with
the SEC, and LCGF and the Acquired Fund also shall make any other required or
appropriate filings with respect to the actions contemplated hereby.
3. Stockholder Action
As soon as practicable after the effective date of the N-14 Registration
Statement, the Acquired Fund shall hold a stockholders meeting to consider and
approve the Acquisition and this Acquisition Plan and such other matters as the
Board of Directors may determine. Such approval by the stockholders of the
Acquired Fund shall, to the extent necessary to permit the consummation of the
transactions contemplated herein without violating any investment objective,
policy or restriction of the Acquired Fund, be deemed to constitute approval by
the stockholders of a temporary amendment of any investment objective, policy or
restriction that would otherwise be inconsistent with or violated upon the
consummation of such transactions solely for the purpose of consummating such
transactions.
4. Transfer of the Acquired Fund's Assets
LCGF and the Acquired Fund shall take the following steps with respect to
the Acquisition, as applicable:
(a) On or prior to the Closing Date, the Acquired Fund shall pay or
provide for the payment of all of the Liabilities, expenses, costs and
charges of or attributable to the Acquired Fund that are known to the
Acquired Fund and that are due and payable prior to or as of the
Closing Date.
(b) Prior to the Effective Time, except to the extent prohibited by Rule
19b-1 under the 1940 Act, the Acquired Fund will declare to Acquired
Fund stockholders of record a dividend or dividends which, together
with all previous such dividends, shall have the effect of
distributing (a) all the excess of (i) Acquired Fund's investment
income excludable from gross income under Section 103(a) of the Code
over (ii) Acquired Fund's deductions disallowed under Sections 265 and
171(a)(2) of the Code, (b) all of Acquired Fund's investment company
taxable income (as defined in Code Section 852), (computed in each
case without regard to any deduction for dividends paid), and (c) all
of Acquired Fund's net realized capital gain (as defined in Code
Section 1222), if any (after reduction for any capital loss
carryover), in each case for both the taxable year ending on October
31, 2006, and the short taxable year beginning on November 1, 2006,
and ending on the Closing Date. Such dividends will be made to ensure
continued qualification of the Acquired Fund as a "regulated
investment company" for tax purposes and to eliminate fund-level tax.
(c) At the Effective Time, pursuant to Articles of Transfer accepted for
record by the State Department of Assessments and Taxation of Maryland
(the "SDAT"), the Acquired Fund shall assign, transfer, deliver and
convey the Assets to LCGF, subject to the Liabilities. LCGF shall then
accept the Assets and assume the Liabilities such that at and after
the Effective Time (i) the Assets at or after the Effective Time shall
become and be assets of LCGF, and (ii) the Liabilities at the
Effective Time shall attach to LCGF, and shall be enforceable against
LCGF to the same extent as if initially incurred by LCGF.
(d) Within a reasonable time prior to the Closing Date, the Acquired Fund
shall provide, if requested, a list of the Assets to LCGF. The
Acquired Fund may sell any asset on such list prior to the Effective
Time. After the Acquired Fund provides such list, the Acquired Fund
will not acquire any additional securities or permit to exist any
encumbrances, rights, restrictions or claims not reflected on such
list, without the approval of LCGF. Within a reasonable time after
receipt of the list and prior to the Closing Date, LCGF will advise
the Acquired Fund in writing of any investments shown on the list that
LCGF has determined to be inconsistent with its investment objective,
policies and restrictions. The Acquired Fund will dispose of any such
securities prior to the Closing Date to the extent practicable and
consistent with applicable legal requirements, including the Acquired
Fund's investment objectives, policies and restrictions. In addition,
if LCGF determines that, as a result of the Acquisition, LCGF would
own an aggregate amount of an investment that would exceed a
percentage limitation applicable to LCGF, LCGF will advise the
Acquired Fund in writing of any such limitation and the Acquired Fund
shall dispose of a sufficient amount of such investment as may be
necessary to avoid the limitation as of the Effective Time, to the
extent practicable and consistent with applicable legal requirements,
including the Acquired Fund's investment objectives, policies and
restrictions.
(e) The Acquired Fund shall assign, transfer, deliver and convey the
Assets to LCGF at the Effective Time on the following basis:
(1) The value of the Assets less the Liabilities of the Acquired Fund
attributable to shares of Class I held by Plan Stockholders,
shares of Class I held by Non-Plan Stockholders, shares of Class
II held by Plan Stockholders and shares of Class II held by
Non-Plan Stockholders, determined as of the Valuation Time, shall
be divided by the then NAV of one Class I, Advisor Class, Class K
or Class A Acquisition Share, as applicable, and, in exchange for
the transfer of the Assets, LCGF shall simultaneously issue and
deliver to the Acquired Fund the number of Class I, Advisor
Class, Class K, and Class A Acquisition Shares so determined,
rounded to the second decimal place or such other decimal place
as the parties may agree to in writing;
(2) The NAV of Class I, Advisor Class, Class K and Class A
Acquisition Shares to be delivered to the Acquired Fund shall be
determined as of the Valuation Time in accordance with LCGF's
then applicable valuation procedures, and the net value of the
Assets to be conveyed to LCGF shall be determined as of the
Valuation Time in accordance with the then applicable valuation
procedures of the Acquired Fund; and
(3) The portfolio securities of the Acquired Fund shall be made
available by the Acquired Fund to State Street Bank & Trust
Company, as custodian for LCGF (the "Custodian"), for examination
no later than five business days preceding the Valuation Time. On
the Closing Date, such portfolio securities and all the Acquired
Fund's cash shall be delivered by the Acquired Fund to the
Custodian for the account of LCGF, such portfolio securities to
be duly endorsed in proper form for transfer in such manner and
condition as to constitute good delivery thereof in accordance
with the custom of brokers or, in the case of portfolio
securities held in the U.S. Treasury Department's book-entry
system or by The Depository Trust Company, Participants Trust
Company or other third party depositories, by transfer to the
account of the Custodian in accordance with Rule 17f-4, Rule
17f-5 or Rule 17f-7, as the case may be, under the 1940 Act and
accompanied by all necessary federal and state stock transfer
stamps or a check for the appropriate purchase price thereof. The
cash delivered shall be in the form of currency or certified or
official bank checks, payable to the order of the Custodian, or
shall be wired to an account pursuant to instructions provided by
LCGF.
(f) Promptly after the Closing Date, the Acquired Fund will deliver to
LCGF a Statement of Assets and Liabilities of the Acquired Fund as of
the Closing Date.
5. Termination of the Acquired Fund, Registration of Acquisition Shares and
Access to Records
The Acquired Fund and LCGF also shall take the following steps, as
applicable:
(a) At or as soon as reasonably practical after the Effective Time, the
Acquired Fund shall terminate by transferring pro rata to its Plan
Stockholders of Class I of record Class I Acquisition Shares received
by the Acquired Fund pursuant to Section 4(e)(1) of this Acquisition
Plan; to its Non-Plan Stockholders of Class I of record, Advisor Class
Acquisition shares received by the Acquired Fund pursuant to Section
4(e)(1) of this Acquisition Plan; to its Plan Stockholders of Class II
of record, Class K Acquisition Shares received by the Acquired Fund
pursuant to Section 4(e)(1) of this Acquisition Plan; and to its
Non-Plan Stockholders of Class II of record, Class A Acquisition
Shares received by the Acquired Fund pursuant to Section 4(e)(1) of
this Acquisition Plan. LCGF shall establish accounts on its share
records and note on such accounts the names of the former Acquired
Fund stockholders and the types and amounts of LCGF shares that former
Acquired Fund Stockholders are due based on their respective holdings
of shares of the Acquired Fund as of the close of business on the
Closing Date. Fractional LCGF shares shall be carried to the second
decimal place. LCGF shall not issue certificates representing LCGF
shares in connection with such exchange. All issued and outstanding
shares in connection with such exchange will be simultaneously
cancelled on the books of the Acquired Fund. Ownership of LCGF's
shares will be shown on the books of LCGF's transfer agent.
Following distribution by the Acquired Fund to its stockholders of all
Acquisition Shares delivered to the Acquired Fund, the Acquired Fund
shall wind up its affairs and shall take all steps as are necessary
and proper to terminate as soon as is reasonably possible after the
Effective Time.
(b) At and after the Closing Date, the Acquired Fund shall provide LCGF
and its transfer agent with immediate access to: (i) all records
containing the names, addresses and taxpayer identification numbers of
all of the Acquired Fund's stockholders and the number and percentage
ownership of the outstanding shares of the Acquired Fund owned by
stockholders as of the Effective Time, and (ii) all original
documentation (including all applicable Internal Revenue Service
forms, certificates, certifications and correspondence) relating to
the Acquired Fund stockholders' taxpayer identification numbers and
their liability for or exemption from back-up withholding. The
Acquired Fund shall preserve and maintain, or shall direct its service
providers to preserve and maintain, records with respect to the
Acquired Fund as required by Section 31 of, and Rules 31a-1 and 31a-2
under, the 1940 Act.
6. Certain Representations and Warranties of the Acquired Fund
The Acquired Fund represents and warrants to LCGF as follows:
(a) The Acquired Fund is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Maryland. The
Acquired Fund is registered with the SEC as an open-end management
investment company under the 1940 Act and is duly registered with the
SEC under the 1940 Act, and such registrations will be in full force
and effect as of the Effective Time.
(b) The Acquired Fund has the power and all necessary federal, state and
local qualifications and authorizations to own all of the Assets, to
carry on its business, to enter into this Acquisition Plan and to
consummate the transactions contemplated herein.
(c) The Board of Directors of the Acquired Fund has duly authorized the
execution and delivery of this Acquisition Plan and the transactions
contemplated herein. Duly authorized officers of the Acquired Fund
have executed and delivered the Acquisition Plan. The Acquisition Plan
represents a valid and binding contract, enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles. The execution and delivery of this
Acquisition Plan does not, and, subject to the approval of
stockholders referred to in Section 3 hereof, the consummation of the
transactions contemplated by this Acquisition Plan will not, violate
the Acquired Fund's Charter, its Bylaws or any material agreement to
which the Acquired Fund is subject. Except for the approval of its
stockholders, the Acquired Fund does not need to take any other action
to authorize its officers to effectuate this Acquisition Plan and the
transactions contemplated herein.
(d) The Acquired Fund has qualified as a regulated investment company
under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code, in
respect of each taxable year since the commencement of its operations
and intends to continue to qualify as a regulated investment company
for its taxable year ending upon its liquidation.
(e) The information pertaining to the Acquired Fund included within the
N-14 Registration Statement when filed with the SEC, when Part A of
the N-14 Registration Statement is distributed to stockholders, at the
time of the stockholder meeting of the Acquired Fund for approval of
the Acquisition and at the Effective Time, insofar as it relates to
the Acquired Fund, shall (i) comply in all material respects with the
applicable provisions of the 1933 Act and the 1940 Act, and the rules
and regulations thereunder and applicable state securities laws, and
(ii) not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements made therein not misleading.
(f) The Acquired Fund has duly authorized and validly issued all of its
issued and outstanding shares of common stock, and all such shares are
fully paid and non-assessable and were offered for sale and sold in
conformity with the registration requirements of all applicable
federal and state securities laws. There are no outstanding options,
warrants or other rights to subscribe for or purchase any of the
shares of the Acquired Fund, nor are there any securities convertible
into shares of the Acquired Fund.
(g) The Acquired Fund shall operate its business in the ordinary course
between the date hereof and the Effective Time. Such ordinary course
of business will include the declaration and payment of customary
dividends and distributions and any other dividends and distributions
referred to in Section 4(b) hereof.
(h) At the Effective Time, the Acquired Fund will have good and marketable
title to the Assets and full right, power and authority to assign,
transfer, deliver and convey the Assets.
(i) The Financial Statements of the Acquired Fund, a copy of which has
been previously delivered to LCGF, fairly present the financial
position of the Acquired Fund as of the Acquired Fund's most recent
fiscal year-end and the results of the Acquired Fund's operations and
changes in the Acquired Fund's net assets for the periods indicated.
(j) To the knowledge of the Acquired Fund, the Acquired Fund has no
liabilities, whether or not determined or determinable, other than the
Liabilities disclosed or provided for in its Financial Statements or
Liabilities incurred in the ordinary course of business subsequent to
the date of the most recent Financial Statement referencing
Liabilities.
(k) To the knowledge of the Acquired Fund, except as has been disclosed in
writing to LCGF, no claims, actions, suits, investigations or
proceedings of any type are pending or threatened against the Acquired
Fund or any of its properties or assets or any person whom the
Acquired Fund may be obligated to indemnify in connection with such
litigation, proceeding or investigation. Subject to the foregoing,
there are no facts that the Acquired Fund has reason to believe are
likely to form the basis for the institution of any such claim,
action, suit, investigation or proceeding against the Acquired Fund.
The Acquired Fund is not a party to nor subject to the provisions of
any order, decree or judgment of any court or governmental body that
adversely affects, or is reasonably likely to adversely affect, its
financial condition, results of operations, or the Assets or its
ability to consummate the transactions contemplated by the Acquisition
Plan.
(l) Except for agreements entered into or granted in the ordinary course
of its business, in each case under which no material default exists,
and this Acquisition Plan, the Acquired Fund is not a party to or
subject to any material contract or other commitments, which if
terminated, may result in material liability to the Acquired Fund or
under which (whether or not terminated) any material payment for
periods subsequent to the Closing Date will be due from the Acquired
Fund.
(m) The Acquired Fund has filed its federal income tax returns, copies of
which have been previously made available to LCGF, for all taxable
years for which such returns are due and has paid all taxes payable
pursuant to such returns. All of the Acquired Fund's tax liabilities
will have been adequately provided for on its books. No such return is
currently under audit and no unpaid assessment has been asserted with
respect to such returns. To the best of the Acquired Fund's knowledge,
it will not have any tax deficiency or liability asserted against it
or question with respect thereto raised, and it will not be under
audit by the Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid. The Acquired Fund
will timely file its federal income tax return for each subsequent
taxable year including its current taxable year.
(n) For federal income tax purposes, the Acquired Fund qualifies as a
"regulated investment company," and the provisions of Sections 851
through 855 of the Code apply to the Acquired Fund for the remainder
of its current taxable year beginning November 1, 2005, and will
continue to apply through the Closing Date.
(o) Since the date of the Financial Statements of the Acquired Fund, there
has been no material adverse change in its financial condition,
results of operations, business, or Assets. For this purpose, negative
investment performance shall not be considered a material adverse
change.
(p) The Acquired Fund's investment operations from inception to the date
hereof have been in compliance in all material respects with the
investment policies and investment restrictions set forth in its
prospectus or prospectuses and statement or statements of additional
information as in effect from time to time, except as previously
disclosed in writing to the LCGF.
(q) The Acquisition Shares to be issued to the Acquired Fund pursuant to
paragraph 4(e)(1) will not be acquired for the purpose of making any
distribution thereof other than to the Acquired Fund Stockholders as
provided in paragraph 4(e)(1).
(r) The Acquired Fund, or its agents, (i) holds a valid Form W-8Ben,
Certificate of Foreign Status of Beneficial Owner for United States
Withholding (or other appropriate series of Form W-8, as the case may
be) or Form W-9, Request for Taxpayer Identification Number and
Certification, for each Acquired Fund stockholder of record, which
Form W-8 or Form W-9 can be associated with reportable payments made
by the Acquired Fund to such stockholder, and/or (ii) has otherwise
timely instituted the appropriate backup withholding procedures with
respect to such stockholder as provided by Section 3406 of the Code
and the regulations thereunder.
7. Certain Representations and Warranties of LCGF
LCGF represents and warrants to the Acquired Fund as follows:
(a) LCGF is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Maryland. LCGF is registered
with the SEC as an open-end management investment company under the
1940 Act and is duly registered with the SEC under the 1940 Act, and
such registrations will be in full force and effect as of the
Effective Time.
(b) LCGF shall operate its business in the ordinary course between the
date hereof and the Effective Time. Such ordinary course of business
will include the declaration and payment of customary dividends and
distributions and any other dividends and distributions referred to in
Section 4(b) hereof.
(c) LCGF has the power and all necessary federal, state and local
qualifications and authorizations to own all of its assets, to carry
on its business, to enter into this Acquisition Plan and to consummate
the transactions contemplated herein.
(d) The Board of Directors of LCGF has duly authorized execution and
delivery of this Acquisition Plan and the transactions contemplated
herein. Duly authorized officers of LCGF have executed and delivered
the Acquisition Plan. The Acquisition Plan represents a valid and
binding contract, enforceable in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency, reorganization, arrangement,
moratorium and other similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles. The
execution and delivery of this Acquisition Plan does not, and the
consummation of the transactions contemplated by this Acquisition Plan
will not violate the Charter of LCGF, its Bylaws or any material
agreement to which LCGF is subject. Except for the approval of its
Board, LCGF does not need to take any other action to authorize its
officers to effectuate the Acquisition Plan and the transactions
contemplated herein.
(e) LCGF has qualified as a regulated investment company under Part I of
Subchapter M of Subtitle A, Chapter 1, of the Code, in respect of each
taxable year since the commencement of its operations and qualifies
and intends to continue to qualify as a regulated investment company
for its current taxable year.
(f) The N-14 Registration Statement, when filed with the SEC, when Part A
of the N-14 Registration Statement is distributed to stockholders, at
the time of the stockholder meeting of the Acquired Fund for approval
of the Acquisition and at the Effective Time, insofar as it relates to
LCGF, shall (i) comply in all material respects with the applicable
provisions of the 1933 Act and the 1940 Act, and the rules and
regulations thereunder and applicable state securities laws and (ii)
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading.
(g) LCGF has duly authorized and validly issued all issued and outstanding
shares of common stock of LCGF, and all such shares are fully paid and
non-assessable and were offered for sale and sold in conformity with
the registration requirements of all applicable federal and state
securities laws. LCGF has duly authorized the Class I, Advisor Class,
Class K and Class A shares of LCGF referred to in Section 4(e) hereof
to be issued and delivered to the Acquired Fund as of the Effective
Time. When issued and delivered, such Class I, Advisor Class, Class K
and Class A shares of LCGF shall be validly issued, fully paid and
non-assessable, and no stockholder of LCGF shall have any preemptive
right of subscription or purchase in respect of any such share. There
are no outstanding options, warrants or other rights to subscribe for
or purchase any Acquisition Shares, nor are there any securities
convertible into Acquisition Shares.
(h) To the knowledge of LCGF, except as has been disclosed in writing to
the Acquired Fund, no claims, actions, suits, investigations or
proceedings of any type are pending or threatened against LCGF or any
of its properties or assets or any person whom LCGF may be obligated
to indemnify in connection with such litigation, proceeding or
investigation. Subject to the foregoing, there are no facts that LCGF
currently has reason to believe are likely to form the basis for the
institution of any such claim, action, suit, investigation or
proceeding against LCGF. LCGF is not a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body that adversely affects, or is reasonably likely to
adversely affect its financial condition, results of operations, its
assets or its ability to consummate the transactions contemplated by
this Acquisition Plan.
(i) Except for agreements entered into or granted in the ordinary course
of its business, in each case under which no material default exists,
LCGF is not a party to or subject to any material contract, debt
instrument, employee benefit plan, lease, franchise, license or permit
of any kind or nature whatsoever.
(j) LCGF has filed its federal income tax returns, copies of which have
been previously made available to the Acquired Fund, for all taxable
years for which such returns are due and has paid all taxes payable
pursuant to such returns. All of LCGF's tax liabilities will have been
adequately provided for on its books. No such return is currently
under audit and no unpaid assessment has been asserted with respect to
such returns. To the best of LCGF's knowledge, it will not have any
tax deficiency or liability asserted against it or question with
respect thereto raised, and it will not be under audit by the Internal
Revenue Service or by any state or local tax authority for taxes in
excess of those already paid. LCGF will timely file its federal income
tax return for each subsequent taxable year including its current
taxable year.
(k) For federal income tax purposes, LCGF qualifies as a "regulated
investment company," and the provisions of Sections 851 through 855 of
the Code apply to LCGF for the remainder of its current taxable year
beginning August 1, 2006, and will continue to apply through the
Closing Date.
(l) The Financial Statements of LCGF, a copy of which has been previously
delivered to the Acquired Fund, fairly present the financial position
of LCGF's most recent fiscal year-end and the results of LCGF's
operations and changes in LCGF's net assets for the period indicated.
(m) Since the date of the Financial Statements of LCGF, there has been no
material adverse change in its financial condition, results of
operations, business or assets. Negative investment performance shall
not be considered a material adverse change.
(n) LCGF's investment operations from inception to the date hereof have
been in compliance in all material respects with the investment
policies and investment restrictions set forth in its prospectus or
prospectuses and statement or statements of additional information as
in effect from time to time, except as previously disclosed in writing
to the Acquired Fund.
(o) LCGF will use all reasonable efforts to obtain the approvals and
authorizations required by the 1933 Act, the 1940 Act and such other
state securities laws as it may deem appropriate in order to continue
its operations after the Closing Date.
8. Conditions to the Obligations of LCGF and the Acquired Fund
The obligations of LCGF and the Acquired Fund with respect to the
Acquisition shall be subject to the following conditions precedent:
(a) The stockholders of the Acquired Fund shall have approved the
Acquisition in the manner required by the Charter of the Acquired
Fund, its Bylaws and applicable law. If stockholders of the Acquired
Fund fail to approve the Acquisition as required, that failure shall
release the Funds of their obligations under this Acquisition Plan.
(b) LCGF and the Acquired Fund shall have delivered to the other party a
certificate dated as of the Closing Date and executed in its name by
its Secretary or an Assistant Secretary, in a form reasonably
satisfactory to the receiving party, stating that the representations
and warranties of LCGF or the Acquired Fund, as applicable, in this
Acquisition Plan that apply to the Acquisition are true and correct in
all material respects at and as of the Valuation Time.
(c) LCGF and the Acquired Fund shall have performed and complied in all
material respects with each of its representations and warranties
required by this Acquisition Plan to be performed or complied with by
it prior to or at the Valuation Time and the Effective Time.
(d) There has been no material adverse change in the financial condition,
results of operations, business, properties or assets of LCGF or the
Acquired Fund since the date of the most recent Financial Statements.
Negative investment performance shall not be considered a material
adverse change.
(e) LCGF and the Acquired Fund shall have received an opinion of Seward &
Kissel LLP reasonably satisfactory to each of them substantially to
the effect that for federal income tax purposes:
(1) the Acquisition will constitute a "reorganization" within the
meaning of Section 368(a) of the Code and that LCGF and the
Acquired Fund will each be "a party to a reorganization" within
the meaning of Section 368(b) of the Code;
(2) a stockholder of the Acquired Fund will recognize no gain or loss
on the exchange of the stockholder's shares of the Acquired Fund
solely for Acquisition Shares;
(3) neither the Acquired Fund nor LCGF will recognize any gain or
loss upon the transfer of all of the Assets to LCGF in exchange
for Acquisition Shares and the assumption by LCGF of the
Liabilities pursuant to this Acquisition Plan or upon the
distribution of Acquisition Shares to stockholders of the
Acquired Fund in exchange for their respective shares of the
Acquired Fund;
(4) the holding period and tax basis of the Assets acquired by LCGF
will be the same as the holding period and tax basis that the
Acquired Fund had in such Assets immediately prior to the
Acquisition;
(5) the aggregate tax basis of Acquisition Shares received in
connection with the Acquisition by each stockholder of the
Acquired Fund (including any fractional share to which the
stockholder may be entitled) will be the same as the aggregate
tax basis of the shares of the Acquired Fund surrendered in
exchange therefore, and increased by any gain recognized on the
exchange;
(6) the holding period of Acquisition Shares received in connection
with the Acquisition by each stockholder of the Acquired Fund
(including any fractional share to which the stockholder may be
entitled) will include the holding period of the shares of the
Acquired Fund surrendered in exchange therefor, provided that
such Acquired Fund shares constitute capital assets in the hands
of the stockholder as of the Closing Date; and
(7) LCGF will succeed to the capital loss carryovers of the Acquired
Fund, if any, under Section 381 of the Code, but the use by LCGF
of any such capital loss carryovers (and of capital loss
carryovers of LCGF) may be subject to limitation under Section
383 of the Code.
The opinion will be based on certain factual certifications made
by officers of the Funds and will also be based on customary
assumptions and subject to certain qualifications. The opinion is
not a guarantee that the tax consequences of the Acquisition will
be as described above.
Notwithstanding this subparagraph (e), Seward & Kissel LLP will
express no view with respect to the effect of the Acquisition on
any transferred asset as to which any unrealized gain or loss is
required to be recognized at the end of a taxable year (or on the
termination or transfer thereof) under federal income tax
principles. Each Fund shall agree to make and provide additional
representations to Seward & Kissel LLP with respect to the Funds
that are reasonably necessary to enable Seward & Kissel LLP to
deliver the tax opinion. Notwithstanding anything in this
Acquisition Plan to the contrary, neither Fund may waive in any
material respect the conditions set forth under this subparagraph
(e).
(f) The N-14 Registration Statement shall have become effective under the
1933 Act as to the Acquisition Shares, and the SEC shall not have
instituted and, to the knowledge of LCGF, is not contemplating
instituting any stop order suspending the effectiveness of the N-14
Registration Statement.
(g) No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection
with the Acquisition.
(h) The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking to
enjoin consummation of the Acquisition under Section 25(c) of the 1940
Act.
(i) Neither party shall have terminated this Acquisition Plan with respect
to the Acquisition pursuant to Section 13 of this Acquisition Plan.
9. Conditions to the Obligations of the Acquired Fund
The obligations of the Acquired Fund with respect to the Acquisition shall
be subject to the following conditions precedent:
(a) The Acquired Fund shall have received an opinion of Seward & Kissel
LLP, counsel to LCGF, in form and substance reasonably satisfactory to
the Acquired Fund and dated as of the Closing Date, substantially to
the effect that:
(1) LCGF is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Maryland and is an
open-end, management investment company registered under the 1940
Act;
(2) This Acquisition Plan has been duly authorized, executed and
delivered by LCGF and, assuming the N-14 Registration Statement
referred to in Section 2 of this Acquisition Plan does not
contain any material misstatements or omissions and assuming due
authorization, execution and delivery of this Acquisition Plan by
the Acquired Fund, represents a legal, valid and binding
contract, enforceable in accordance with its terms, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance and transfer and similar laws relating to or affecting
creditors' rights generally and court decisions with respect
thereto, and further subject to the application of equitable
principles in any proceeding, whether at law or in equity or with
respect to the enforcement of provisions of the Acquisition Plan
and the effect of judicial decisions which have held that certain
provisions are unenforceable when their enforcement would violate
an implied covenant of good faith and fair dealing or would be
commercially unreasonable or when default under the Acquisition
Plan is not material;
(3) The Class I, Advisor Class, Class K and Class A Acquisition
Shares to be delivered as provided for by this Acquisition Plan
are duly authorized and upon delivery will be validly issued,
fully paid and non-assessable by LCGF;
(4) The execution and delivery of this Acquisition Plan did not, and
the consummation of the Acquisition will not, violate the Charter
of LCGF, its Bylaws or any agreement of LCGF known to such
counsel, after reasonable inquiry; and
(5) To the knowledge of such counsel, no consent, approval,
authorization or order of any federal or state court or
administrative or regulatory agency, other than the acceptance of
record of Articles of Transfer by the SDAT, is required for LCGF
to enter into this Acquisition Plan or carry out its terms,
except those that have been obtained under the 1933 Act, the 1940
Act and the rules and regulations under those Acts or that may be
required under state securities laws or subsequent to the
Effective Time or when the failure to obtain the consent,
approval, authorization or order would not have a material
adverse effect on the operation of LCGF.
In rendering such opinion, Seward & Kissel LLP may (i) rely on the
opinion of Venable LLP as to matters of Maryland law to the extent set
forth in such opinion, (ii) make assumptions regarding the
authenticity, genuineness and/or conformity of documents and copies
thereof without independent verification thereof, (iii) limit such
opinion to applicable federal and state law, (iv) define the word
"knowledge" and related terms to mean the knowledge of attorneys then
with such firm who have devoted substantive attention to matters
directly related to this Acquisition Plan and (v) rely on certificates
of officers or directors of LCGF as to factual matters.
(b) LCGF shall have received a letter from the Adviser with respect to
insurance matters in form and substance satisfactory to the Acquired
Fund.
10. Conditions to the Obligations of LCGF
The obligations of LCGF with respect to the Acquisition shall be subject to
the following conditions precedent:
(a) LCGF shall have received an opinion of Seward & Kissel LLP, counsel to
the Acquired Fund, in form and substance reasonably satisfactory to
LCGF and dated as of the Closing Date, substantially to the effect
that:
(1) The Acquired Fund is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Maryland and is an open-end management investment company
registered under the 1940 Act;
(2) This Acquisition Plan has been duly authorized, executed and
delivered by the Acquired Fund and, assuming the N-14
Registration Statement referred to in Section 2 of this
Acquisition Plan does not contain any material misstatements or
omissions, and assuming due authorization, execution and
delivery of this Acquisition Plan by LCGF, represents a legal,
valid and binding contract, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and transfer and similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and further subject to the
application of equitable principles in any proceeding, whether at
law or in equity or with respect to the enforcement of provisions
of the Acquisition Plan and the effect of judicial decisions
which have held that certain provisions are unenforceable when
their enforcement would violate an implied covenant of good faith
and fair dealing or would be commercially unreasonable or when
default under the Acquisition Plan is not material;
(3) The execution and delivery of this Acquisition Plan did not, and
the consummation of the Acquisition will not, violate the Charter
of the Acquired Fund, its Bylaws or any agreement of the Acquired
Fund known to such counsel, after reasonable inquiry, and no
approval of the Acquisition Plan by the stockholders of LCGF is
required under its Charter, Bylaws or applicable law; and
(4) To the knowledge of such counsel, no consent, approval,
authorization or order of any federal or state court or
administrative or regulatory agency, other than the acceptance of
record of Articles of Transfer by the SDAT, is required for the
Acquired Fund to enter into the Acquisition Plan or carry out its
terms, except those that have been obtained under the 1933 Act,
the 1940 Act and the rules and regulations under those Acts or
that may be required under state securities laws or subsequent to
the Effective Time or when the failure to obtain the consent,
approval, authorization or order would not have a material
adverse effect on the operation of the Acquired Fund.
In rendering such opinion, Seward & Kissel LLP may (i) rely on the
opinion of Venable LLP as to matters of Maryland law, (ii) make
assumptions regarding the authenticity, genuineness and/or conformity
of documents and copies thereof without independent verification
thereof, (iii) limit such opinion to applicable federal and state law,
(iv) define the word "knowledge" and related terms to mean the
knowledge of attorneys then with such firm who have devoted
substantive attention to matters directly related to this Acquisition
Plan and (v) rely on certificates of officers or directors of the
Acquired Fund as to factual matters.
(b) LCGF shall have received a letter from the Adviser agreeing to
indemnify LCGF in respect of certain liabilities of the Acquired Fund
in form and substance satisfactory to LCGF.
11. Closing
(a) The Closing shall be held at the offices of the Funds, 1345 Avenue of
the Americas, New York, New York 10105, or at such other time or place
as the parties may agree.
(b) In the event that at the Valuation Time (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be
restricted, or (b) trading or the reporting of trading on said
Exchange or elsewhere shall be disrupted so that accurate appraisal of
the value of the net assets of the Acquired Fund or the LCGF is
impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed
and reporting shall have been restored; provided that if trading shall
not be fully resumed and reporting restored within three business days
of the Valuation Time, this Acquisition Plan may be terminated by
either the Acquired Fund or LCGF upon the giving of written notice to
the other party.
(c) LCGF will provide to the Acquired Fund evidence satisfactory to the
Acquired Fund that Acquisition Shares issuable pursuant to the
Acquisition have been credited to the Acquired Fund's account on the
books of LCGF. After the Closing Date, the LCGF will provide to the
Acquired Fund evidence satisfactory to the Acquired Fund that such
Shares have been credited pro rata to open accounts in the names of
the Acquired Fund Stockholders.
(d) At the Closing, each party shall deliver to the other such bills of
sale, instruments of assumption of liabilities, checks, assignments,
stock certificates, receipts or other documents as such other party or
its counsel may reasonably request in connection with the transfer of
assets, assumption of liabilities and liquidation contemplated by the
Acquisition Plan.
12. Survival of Representations and Warranties
No representations, warranties or covenants in or pursuant to this
Acquisition Plan (including certificates of officers) hereto shall survive the
completion of the transactions contemplated herein.
13. Termination of Acquisition Plan
A majority of either Fund's Board of Directors may terminate this
Acquisition Plan with respect to that Fund at any time before the applicable
Effective Time if: (i) the Fund's conditions precedent set forth in Sections 8,
9 or 10 as appropriate, are not satisfied; or (ii) the Board of Directors
determines that the consummation of the Acquisition is not in the best interests
of the Fund or its stockholders and gives notice of such termination to the
other party.
14. Governing Law
This Acquisition Plan and the transactions contemplated hereby shall be
governed, construed and enforced in accordance with the laws of the State of New
York, except to the extent preempted by federal law, without regard to conflicts
of law principles.
15. Brokerage Fees
Each party represents and warrants that there are no brokers or finders
entitled to receive any payments in connection with the transactions provided
for in the Acquisition Plan.
16. Amendments
The parties may, by agreement in writing authorized by their respective
Board of Directors, amend this Acquisition Plan at any time before or after the
stockholders of the Acquired Fund approve the Acquisition. However, after
stockholders of the Acquired Fund approve the Acquisition, the parties may not
amend this Acquisition Plan in a manner that materially alters the obligations
of the other party. This Section shall not preclude the parties from changing
the Closing Date or the Effective Time by mutual agreement.
17. Waivers
At any time prior to the Closing Date, either party may by written
instrument signed by it (i) waive the effect of any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the agreements, covenants or conditions made for its
benefit contained herein. Any waiver shall apply only to the particular
inaccuracy or requirement for compliance waived, and not any other or future
inaccuracy or lack of compliance.
18. Indemnification of Directors
LCGF agrees that all rights to indemnification and all limitations of
liability existing in favor of the Acquired Fund's current and former Directors
and officers, acting in their capacities as such, under the Acquired Fund's
Articles of Incorporation and Bylaws as in effect as of the date of this
Acquisition Plan shall survive the Acquisition as obligations of the LCGF and
shall continue in full force and effect, without any amendment thereto, and
shall constitute rights which may be asserted against LCGF, its successors or
assigns.
19. Cooperation and Further Assurances
Each party will cooperate with the other in fulfilling its obligations
under this Acquisition Plan and will provide such information and documentation
as is reasonably requested by the other in carrying out the Acquisition Plan's
terms. Each party will provide such further assurances concerning the
performance of its obligations hereunder and execute all documents for or in
connection with the consummation of the Acquisition as, with respect to such
assurances or documents, the other shall deem necessary or appropriate.
20. Updating of N-14 Registration Statement
If at any time prior to the Effective Time, a party becomes aware of any
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements made not
misleading in the N-14 Registration Statement, the party discovering the item
shall notify the other party and the parties shall cooperate in promptly
preparing, filing and clearing with the SEC and, if appropriate, distributing to
stockholders appropriate disclosure with respect to the item.
21. Limitation on Liabilities
The obligations of the Acquired Fund and LCGF shall not bind any of the
directors, stockholders, nominees, officers, agents, employees or agents of the
Acquired Fund or LCGF personally, but shall bind only the Acquired Fund or LCGF,
as appropriate. The execution and delivery of this Acquisition Plan by an
officer of either party shall not be deemed to have been made by the officer
individually or to impose any liability on the officer personally, but shall
bind only the Acquired Fund or LCGF, as appropriate.
22. Termination of the Acquired Fund
If the parties complete the Acquisition, the Acquired Fund shall terminate
its registration under the 1940 Act, the 1933 Act and will terminate.
23. Notices
Any notice, report, statement, certificate or demand required or permitted
by any provision of the Acquisition Plan shall be in writing and shall be given
in person or by telecopy, certified mail or overnight express courier to:
For the Acquired Fund:
AllianceBernstein Institutional Funds, Inc - AllianceBernstein Premier
Growth Institutional Fund
1345 Avenue of the Americas
New York, New York 10105
Attention: Secretary
For LCGF:
AllianceBernstein Large Cap Growth Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
Attention: Secretary
24. Expenses
The Acquisition expenses shall be paid by the Adviser as of the last date
that the Acquisition by LCGF, as described in the N-14 Registration Statement,
is considered for approval by stockholders of the Acquired Fund, whether or not
the Acquisition contemplated hereby is consummated.
25. General
This Acquisition Plan supersedes all prior agreements between the parties
with respect to the subject matter hereof and may be amended only in writing
signed by both parties. The headings contained in this Acquisition Plan are for
reference only and shall not affect in any way the meaning or interpretation of
this Acquisition Plan. Whenever the context so requires, the use in the
Acquisition Plan of the singular will be deemed to include the plural and vice
versa. Nothing in this Acquisition Plan, expressed or implied, confers upon any
other person any rights or remedies under or by reason of this Acquisition Plan.
Neither party may assign or transfer any right or obligation under this
Acquisition Plan without the written consent of the other party.
In Witness Whereof, the parties hereto have executed this Acquisition Plan
as of the day and year first above written.
AllianceBernstein Institutional Funds, Inc - AllianceBernstein Premier Growth
Institutional Fund
Attest:
____________________________________ By: _______________________________
Name: ______________________ Name: ______________________
Title: _____________________ Title: _____________________
AllianceBernstein Large Cap Growth Fund, Inc.
Attest:
____________________________________ By: _______________________________
Name: ______________________ Name: ______________________
Title: _____________________ Title: _____________________
Accepted and agreed with respect to Section 24 only:
AllianceBernstein L.P.
By: AllianceBernstein Corporation, its General Partner
By: ___________________________
Name: _____________________
Title: ___________________
APPENDIX F
FUND PERFORMANCE
The charts below show the percentage gain or loss in each calendar year for
the ten-year period ended December 31, 2005, for Class I shares of PGIF and
Class A shares of LCGF.
They should give you a general idea of how each Fund's return has varied
from year to year. The charts include the effects of Fund expenses, but not
applicable sales charges. Returns would be lower if any applicable sales charges
were included. The calculations of annual total return assume the reinvestment
of all dividends and capital gain distributions on the reinvestment date.
Performance results included the effect of expense reduction arrangements, if
any. If these arrangements had not been in place, the performance results would
have been lower. As with all mutual funds, past performance is not an indication
of future results. No assurance can be given that LCGF will achieve any
particular level of performance after the Acquisition. Additional discussion of
the manner of calculation of total return is contained in each Fund's respective
Prospectus and SAI.
Calendar Year Total Returns
PGIF
----
[The following table was depicted as a Bar Chart in the printed material.]
Bar Chart
--------------------------------------------------------------------------------
n/a n/a n/a 29.40 -17.60 -22.75 -30.57 23.22 9.04 15.19
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
The annual returns in the bar chart are for the Fund's Class I shares. Through
June 30, 2006, the year-to-date unannualized return for Class I shares was
-7.72%.
Best Quarter was up 31.68%, 4th quarter, 1998; and Worst Quarter was down
-19.23%, 3rd quarter, 2001.
LCGF
----
[The following table was depicted as a Bar Chart in the printed material.]
Bar Chart
--------------------------------------------------------------------------------
24.14 32.67 49.31 28.98 -19.87 -23.92 -32.38 22.71 8.19 14.15
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through June 30, 2006, the year-to-date unannualized return for
Class A shares was -7.93%.
Best Quarter was up 31.05%, 4th quarter, 1998; and Worst Quarter was down
-19.84%, 3rd quarter, 2001.
The following tables list PGIF's and LCGF's average annual total return
before taxes for each class of shares that will be involved in the Acquisition
for the one-year, five-year and since inception periods ending December 31, 2005
for each Fund (including applicable sales charges). These tables are intended to
provide you with some indication of the risks of investing in the Funds. At the
bottom of each table, you can compare the Funds' performance with the
performance of a broad-based market index.
Average Annual Total Returns
[Enlarge/Download Table]
PGIF - PERFORMANCE TABLE
-------------------------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
-------------------------------------------------------------------------------------------------
Since
1 Year 5 Years Inception*
-------------------------------------------------------------------------------------------------
Class I** Return Before Taxes 15.19% -3.66% 3.69%
-------------------------------------------------------------------
Return After Taxes on
Distributions 15.19% -3.66% 3.13%
-------------------------------------------------------------------
Return After Taxes on
Distributions and Sale of
Fund Shares 9.87% -3.07% 2.98%
-------------------------------------------------------------------------------------------------
Class II Return Before Taxes 14.74% -3.97% 3.34%
-------------------------------------------------------------------------------------------------
Russell 1000 Growth Index (reflects no deduction
for fees, expenses, or
taxes) 5.26% -3.58% 2.26%
-------------------------------------------------------------------------------------------------
* Inception Date for both Classes is 1/7/98.
** After-tax returns:
-- Are shown for Class I shares only and will vary for Class II shares
because these Classes have different expense ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an
individual investor's tax situation and are likely to differ from
those shown; and
-- Are not relevant to investors who hold fund shares through
tax-deferred arrangements such as 401(k) plans or individual
retirement accounts.
[Enlarge/Download Table]
LCGF - PERFORMANCE TABLE
-------------------------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
-------------------------------------------------------------------------------------------------
1 Year** 5 Years** 10 Years**
-------------------------------------------------------------------------------------------------
Class A*** Return Before Taxes 9.29% -5.69% 6.61%
-------------------------------------------------------------------
Return After Taxes on
Distributions 9.29% -5.69% 5.85%
-------------------------------------------------------------------
Return After Taxes on
Distributions and Sale of
Fund Shares 6.04% -4.74% 5.58%
-------------------------------------------------------------------------------------------------
Class K 14.59% -4.75% 7.17%
-------------------------------------------------------------------------------------------------
Class I 14.81% -4.52% 7.43%
-------------------------------------------------------------------------------------------------
Advisor Class Return Before Taxes 14.54% -4.58% 7.42%
-------------------------------------------------------------------------------------------------
Russell 1000 Growth Index (reflects no deduction
for fees, expenses, or
taxes) 5.26% -3.58% 6.73%
-------------------------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges.
** Inception Date for Advisor Class is 10/1/96. Inception Date for Class K and
Class I is 3/1/05. Performance information for periods prior to the
inception of Class K, Class I and Advisor Class shares is the performance
of the Fund's Class A shares adjusted to reflect the lower expense ratios
of Class K and Class I and Advisor Class shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Advisor Class
shares because Adviser Class has a different expense ratio;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an
individual investor's tax situation and are likely to differ from
those shown; and
-- Are not relevant to investors who hold fund shares through
tax-deferred arrangements such as 401(k) plans or individual
retirement accounts.
APPENDIX G
CAPITALIZATION
The following table shows on an unaudited basis the capitalization of each
of PGIF and LCGF as of July 31, 2006 and on a pro forma combined basis, giving
effect to the acquisition of the assets and liabilities of PGIF by LCGF at net
asset value as of July 31, 2006.
Pro Forma
Pro Forma Combined
PGIF LCGF Adjustments Fund(1)
--------------------------------------------------------------------------------
Class I Class I Class I
--------------------------------------------------------------------------------
Net Asset
Value $72,147,032 $10,836,725 $82,983,757
--------------------------------------------------------------------------------
Shares
outstanding 7,002,684 579,435 (3,145,014) 4,437,106
--------------------------------------------------------------------------------
Net asset
value per share $10.30 $18.70 $18.70
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Advisor Advisor
Class I Class Class
--------------------------------------------------------------------------------
Net Asset
Value $75,500 $151,814,693 $151,890,193
--------------------------------------------------------------------------------
Shares
outstanding 7,328 7,903,787 (3,397) 7,907,717
--------------------------------------------------------------------------------
Net asset
value per share $10.30 $19.21 $19.21
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class II Class A Class A
--------------------------------------------------------------------------------
Net Asset
Value $2,282,780 $1,094,613,787 $1,096,896,567
--------------------------------------------------------------------------------
Shares
outstanding 228,170 58,977,655 (105,174) 59,100,650
--------------------------------------------------------------------------------
Net asset
value per share $10.00 $18.56 $18.56
--------------------------------------------------------------------------------
(1) Assumes the Acquisition was consummated on July 31, 2006 and is for
information purposes only. No assurance can be given as to how many shares
of LCGF will be received by the shareholders of PGIF on the date the
Acquisition takes place, and the foregoing should not be relied upon to
reflect the number of shares of LCGF that actually will be received on or
after such date.
APPENDIX H
SHARE OWNERSHIP INFORMATION
Shares Outstanding
As of January 1, 2006 each Fund had the following number of shares of
common stock outstanding.
--------------------------------------------------------------------------------
Class Number of Outstanding
Shares of
Fund Common Stock
--------------------------------------------------------------------------------
PGIF I 7,015,329
--------------------------------------------------------------------------------
II 283,903
--------------------------------------------------------------------------------
LCGF A 70,036,279
--------------------------------------------------------------------------------
Advisor 7,623,938
--------------------------------------------------------------------------------
K 3,199
--------------------------------------------------------------------------------
I 119,701
--------------------------------------------------------------------------------
Ownership of Shares
As of July 20, 2006, the directors and officers of each Fund as a group
beneficially owned less than 1% of the outstanding shares of common stock of
that Fund and, to the knowledge of each Fund, the following persons owned,
either of record or beneficially, 5% or more of the outstanding shares of the
Fund.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------
Number of Percentage of
Outstanding Shares Outstanding Shares
Fund and Class Name and Address of Shareholder of Class Owned of Class Owned
------------------------------------------------------------------------------------------
PGIF
------------------------------------------------------------------------------------------
Class I PIMS/Prudential Retirement 1,892,498.365 27.01%
300 International PKWY STE 270
Heathrow, FL 32746
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Trust for Profit Sharing PL 3,562,794.086 50.85%
1345 Avenue of Americas
New York, NY 10105
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Investors Bank & Trust Co 736,703.762 10.51%
4 Manhattanville Road
Purchase, NY 10577
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
LCGF
------------------------------------------------------------------------------------------
Class A Pershing LLC 3,793,661.394 6.40%
P.O. Box 2052
Jersey City, NJ 07303
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
MLPF&S For Sole Benefit of Its 6,932,813.423 11.70%
Customers
4800 Deer Lake Drive East,
2nd Floor
Jacksonville, FL 32246
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Advisor Class Merrill Lynch 610,528.604 7.73%
4800 Deer Lake Drive East
2nd Floor
Jacksonville, FL 32246
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Citigroup Global Markets 685,223.563 8.68%
333 West 34th Street - 3rd
Floor
New York, NY 10001
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Collegebound Fund 1,700,908.988 21.53%
500 Plaza Drive
Secaucus, NJ 07094
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Class K Dunkirk Printing Pressmen & 57,415.766 67.55%
Assistants Union Local
Pension Plan
100 Winners Circle
Brentwood, TN 37027
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 17,216.818 20.25%
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Class I Union Bank of CA Trust Nominee 60,465.862 10.58%
J. D'Addario & Company MPP
Employees Pension Plan
P.O. Box 85484
San Diego California 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 114,423.230 20.02%
Associated Radiologist PA
401K PSP
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 89,537.601 15.67%
Muskegon Surgical Associates PC
401 K Retirement Plan
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 29,984.668 5.25%
Worldwide Dreams Deferred Comp
PL
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 96,031.226 16.80%
George Little Mfmt LLC
401K PSP
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Nominee FBO 40,056.810 7.01%
Southeast Radiology LTD PSP
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 75,159.058 13.15%
Group Pension Plan for
Employees Of Rosenn Jenkins &
Greenwald LLP
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee 44,643.320 7.81%
FBO WEBCOR Builders
401 K PSP
P.O. Box 85484
San Diego, CA 92186
------------------------------------------------------------------------------------------
The following table shows the percentage of combined Fund's shares to be
owned by the above listed shareholders, if the Acquisition had been consummated
as of July 20, 2006.
[Enlarge/Download Table]
-------------------------------------------------------------------------------------------
Percentage of
Outstanding Shares
Combined of Combined Fund
Fund and Class Name and Address of Shareholder Fund Class Class Owned
-------------------------------------------------------------------------------------------
PGIF
-------------------------------------------------------------------------------------------
Class I PIMS/Prudential Retirement Class I 47.56%
300 International PKWY STE 270
Heathrow, FL 32746
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Trust for Profit Sharing PL Class I 89.54%
1345 Avenue of Americas
New York, NY 10105
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Investors Bank & Trust Co Advisor Class 8.32%
4 Manhattanville Road
Purchase, NY 10577
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
LCGF
-------------------------------------------------------------------------------------------
Class A Pershing LLC Class A 6.39%
P.O. Box 2052
Jersey City, NJ 07303
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
MLPF&S For Sole Benefit of Its Class A 11.68%
Customers
4800 Deer Lake Drive East,
2nd Floor
Jacksonville, FL 32246
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Advisor Class Merrill Lynch Advisor Class 7.32%
4800 Deer Lake Drive East
2nd Floor
Jacksonville, FL 32246
-------------------------------------------------------------------------------------------
Citigroup Global Markets Advisor Class 8.22%
333 West 34th Street - 3rd
Floor
New York, NY 10001
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Collegebound Fund Advisor Class 20.39%
500 Plaza Drive
Secaucus, NJ 07094
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Class K Dunkirk Printing Pressmen & Class K 67.55%
Assistants Union Local
Pension Plan
100 Winners Circle
Brentwood, TN 37027
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class K 20.25%
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Class I Union Bank of CA Trust Nominee Class I 1.52%
J. D'Addario & Company MPP
Employees Pension Plan
P.O. Box 85484
San Diego California 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class I 2.88%
Associated Radiologist PA
401K PSP
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class I 2.25%
Muskegon Surgical Associates PC
401 K Retirement Plan
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class I 0.75%
Worldwide Dreams Deferred Comp PL
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class I 2.41%
George Little Mfmt LLC
401K PSP
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Nominee FBO Class I 1.01%
Southeast Radiology LTD PSP
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class I 1.89%
Group Pension Plan for
Employees
Of Rosenn Jenkins & Greenwald LLP
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Union Bank of CA Trust Nominee Class I 1.12%
FBO WEBCOR Builders
401 K PSP
P.O. Box 85484
San Diego, CA 92186
-------------------------------------------------------------------------------------------
APPENDIX I
CERTAIN INFORMATION APPLICABLE TO CLASS A, CLASS K, CLASS I AND
ADVISOR CLASS SHARES OF LCGF
How to Buy Shares
Class A, Class K and Class I Shares
-----------------------------------
Class A, Class K and Class I shares are available at net asset value, or
NAV, without an initial sales charge, to 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit-sharing and money purchase pension
plans, defined benefit plans, and non-qualified deferred compensation plans
where plan level or omnibus accounts are held on the books of the Fund ("group
retirement plans"), as follows: Class A shares are designed for group retirement
plans with assets in excess of $10,000,000. Class A shares are also available at
NAV to the AllianceBernstein Link, AllianceBernstein Individual 401(k) and
AllianceBernstein SIMPLEIRA plans with at least $250,000 in plan assets or 100
employees. Class K shares are designed for group retirement plans with at least
$1,000,000 in plan assets.
Class I shares are designed for group retirement plans with at least
$10,000,000 in plan assets and are available to certain investment advisory
clients of, and certain other persons associated with, the Adviser and its
affiliates.
Class A, Class K and Class I shares are also available to
AllianceBernstein-sponsored group retirement plans. Class K and Class I shares
generally are not available to retail non-retirement accounts, traditional and
ROTH IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs,
and individual 403(b) plans.
Advisor Class Shares
--------------------
You may purchase Advisor Class shares through your financial advisor at
NAV. Advisor Class shares may be purchased and held solely:
o through accounts established under a fee-based program, sponsored and
maintained by a registered broker-dealer or other financial
intermediary and approved by the Fund's principal underwriter;
o through a defined contribution employee benefit plan (e.g., a 401(k)
plan) that has at least $10,000,000 in assets and that purchases
shares directly without the involvement of a financial intermediary;
and
o by investment advisory clients of, and certain other persons
associated with, the Adviser and its affiliates or the Fund.
The Fund's SAI has more detailed information about who may purchase and
hold Advisor Class shares.
Required Information
--------------------
The Fund is required by law to obtain, verify and record certain personal
information from you or persons on your behalf in order to establish an account.
Required information includes name, date of birth, permanent residential address
and taxpayer identification number (for most investors, your social security
number). The Fund may also ask to see other identifying documents. If you do not
provide the information, the Fund will not be able to open your account. If the
Fund is unable to verify your identity, or that of another person(s) authorized
to act on your behalf, or if the Fund believes it has identified potentially
criminal activity, the Fund reserves the right to take action it deems
appropriate or as required by law, which may include closing your account. If
you are not a U.S. citizen or Resident Alien, your account must be affiliated
with a NASD member firm.
General
-------
The Fund may refuse any order to purchase shares. The Fund reserves the
right to suspend the sale of its shares to the public in response to conditions
in the securities markets or for other reasons.
The Different Share Class Expenses
This section describes the different expenses of investing in each class
and explains factors to consider when choosing a class of shares. The expenses
can include distribution and/or service fees (12b-1 fees) or CDSCs. Please see
below for a discussion of how CDSCs are calculated.
----------------------------------------------------------------
What is a Rule 12b-1 Fee?
A Rule 12b-1 fee is a fee deducted from the Fund's assets that is used to
pay for personal service, maintenance of shareholder accounts and
distribution costs, such as advertising and compensation of financial
intermediaries. The amount of each share class's 12b-1 fee, if any, is
disclosed below and in the Fund's fee table near the front of its
Prospectus.
----------------------------------------------------------------
Asset-Based Sales Charges or Distribution and/or Service (Rule 12b-1) Fees
--------------------------------------------------------------------------
The Fund has adopted plans under Commission Rule 12b-1 that allows the Fund
to pay asset-based sales charges or distribution and/or service fees for the
distribution and sale of its shares. The amount of these fees for each class of
the Fund's shares involved in the Acquisition is:
Distribution and/or Service
(Rule 12b-1) Fee (as a
Percentage of Aggregate
Average Daily Net Assets)
---------------------------
Class A .30%*
Class K .25%
Class I None
Advisor Class None
----------
* The maximum fee allowed under the Rule 12b-1 Plan for the Class A shares of
LCGF is .50% of the aggregate average daily net assets. The Directors of
LCGF currently limit the payments to .30%.
Because these fees are paid out of the Fund's assets on an on-going basis,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales fees. Class K and Class I shares have a
lower or no Rule 12b-1 fee. Therefore, Class K and Class I shares have a lower
expense ratio and may have a higher NAV (and returns) than Class A shares. All
or some of these fees may be paid to financial intermediaries, including your
financial advisor's firm.
Class A Shares
--------------
Class A shares do not have an initial sales charge. Class A shares may be
subject to a CDSC of up to 1%. When a non-AllianceBernstein-sponsored group
retirement plan terminates a Fund as an investment option, all investments in
Class A shares of that Fund through the plan are subject to a 1%, 1-year CDSC
upon redemption. In addition, when a group retirement plan ceases to participate
in an AllianceBernstein-sponsored group retirement plan program, investments in
the Fund's Class A shares through the plan are subject to a 1%, 1-year CDSC upon
redemption. The CDSC is applied to the lesser of NAV at the time of redemption
of shares or the original cost of shares being redeemed.
Class K and Class I Shares
--------------------------
Class K and Class I shares do not have an initial sales charge or CDSC.
Advisor Class Shares -- Fee-Based Program Alternative
-----------------------------------------------------
You may purchase Advisor Class shares through your financial advisor.
Advisor Class shares are not subject to any initial or contingent sales charges.
However, when you purchase Advisor Class shares through your financial advisor,
your financial advisor may charge a fee. Advisor Class shares are not available
to everyone. See "How to Buy Shares" above.
Distribution Arrangements for Group Retirement Plans
The Fund offers distribution arrangements for group retirement plans.
However, plan sponsors, plan fiduciaries and other financial intermediaries may
establish requirements for group retirement plans as to the purchase, sale or
exchange of shares of the Fund, including maximum and minimum initial investment
requirements that are different from those described in the Fund's Prospectus
and SAI. Therefore, plan sponsors or fiduciaries may not impose the same share
class parameters as set forth in the Fund's Prospectus and SAI. Group retirement
plans also may not offer all classes of shares of the Fund. The Fund is not
responsible for, and has no control over, the decision of any plan sponsor or
fiduciary to impose such differing requirements.
Payments to Financial Intermediaries
Financial intermediaries market and sell shares of the Fund. These
financial intermediaries may receive compensation for selling shares of the
Fund. This compensation is paid from various sources, including any CDSC and/or
Rule 12b-1 fee that you may pay.
----------------------------------------------------------------
What is a Financial Intermediary?
A financial intermediary is a firm that receives compensation for selling
shares of the Fund offered in this Prospectus and/or provides services to
the Fund's shareholders. Financial intermediaries may include, among
others, your broker, your financial planner or advisor, banks, pension plan
consultants and insurance companies. Financial intermediaries employ
financial advisors who deal with you and other investors on an individual
basis.
----------------------------------------------------------------
In the case of Class A shares, the Fund's principal underwriter, ABI, may
pay financial intermediaries a fee of up to 1%. Additionally, up to 100% of the
Rule 12b-1 fees applicable to Class A shares each year may be paid to financial
intermediaries, including your financial intermediary, that sell Class A shares.
In the case of Class K shares, up to 100% of the Rule 12b-1 fee applicable
to Class K shares each year may be paid to financial intermediaries, including
your financial intermediary, that sell Class K shares. Your financial
intermediary receives compensation from the Fund, ABI and/or the Adviser in
several ways from various sources, which include some or all of the following:
- 12b-1 fees
- additional distribution support
- defrayal of costs for educational seminars and training
- payments related to providing shareholder record-keeping and/or
transfer
- agency services
In the case of Advisor Class shares, your financial advisor may charge
ongoing fees or transactional fees.
Other Payments for Distribution Services and Educational Support
----------------------------------------------------------------
In addition to the Rule 12b-1 fees described above, ABI, at its expense,
currently provides additional payments to firms that sell shares of the
AllianceBernstein Mutual Funds. Although the individual components may be higher
and the total amount of payments made to each qualifying firm in any given year
may vary, the total amount paid to a financial intermediary in connection with
the sale of shares of the AllianceBernstein Mutual Funds will generally not
exceed the sum of (a) 0.25% of the current year's fund sales by that firm and
(b) 0.10% of average daily net assets attributable to that firm over the year.
These sums include payments to reimburse directly or indirectly the costs
incurred by these firms in connection with educational seminars and training
efforts about the AllianceBernstein Mutual Funds. The costs and expenses
associated with these efforts may include travel, lodging, entertainment and
meals. For 2005, ABI's additional payments to these firms for distribution
services and educational support related to the AllianceBernstein Mutual Funds
is expected to be approximately 0.04% of the average monthly assets of the
AllianceBernstein Mutual Funds, or approximately $17,500,000. In 2004, ABI paid
approximately 0.04% of the average monthly assets of the AllianceBernstein
Mutual Funds or approximately $16,000,000, for distribution services and
educational support related to the AllianceBernstein Mutual Funds. A number of
factors are considered in determining the additional payments, including each
firm's AllianceBernstein Mutual Fund sales, assets and redemption rates, and the
willingness and ability of the firm to allow ABI to provide information for
educational and marketing purposes. ABI's goal is to make the financial
intermediaries who interact with current and prospective investors and
shareholders more knowledgeable about the AllianceBernstein Mutual Funds so that
they can provide suitable information and advice about the Funds.
The Fund and ABI also make payments for recordkeeping and other transfer
agency services to financial intermediaries that sell AllianceBernstein Mutual
Fund shares. These expenses paid by the Fund are included in "Other Expenses"
under "Fees and Expenses of the Funds--Annual Fund Operating Expenses" in the
Fund's Prospectus.
If one mutual fund sponsor makes greater distribution assistance payments
than another, a financial intermediary may have an incentive to recommend one
fund complex over another. Similarly, if a financial intermediary receives more
distribution assistance for one share class versus another, the financial
intermediary may have an incentive to recommend that class.
As of the date of the Fund's most recent Prospectus, ABI anticipates that
the firms that will receive additional payments for distribution services and/or
educational support include:
A.G. Edwards
AIG Advisor Group
American Express Financial Advisors
AXA Advisors
Banc of America
Bank One Securities Corp.
Charles Schwab
Chase Investment Services
Citigroup Global Markets
Commonwealth Financial
IFMG Securities
ING Advisors Network
Legg Mason
Lincoln Financial Advisors
Linsco Private Ledger
Merrill Lynch
Morgan Stanley
Mutual Service Corporation
National Financial
NPH Holdings
PFS Investments
Piper Jaffray
Raymond James
RBC Dain Rauscher
Securities America
SunTrust Bank
UBS Financial
Uvest Financial Services
Wachovia Securities
Wells Fargo
Although the Fund may use brokers or other financial intermediaries who
sell shares of the Fund to effect portfolio transactions, the Fund does not
consider the sale of AllianceBernstein Mutual Fund shares as a factor when
selecting brokers to effect portfolio transactions.
How to Exchange Shares
You may exchange your Fund shares for shares of the same class of other
AllianceBernstein Mutual Funds (including AllianceBernstein Exchange Reserves, a
money market fund managed by the Adviser). Exchanges of shares are made at the
next-determined NAV, without sales or service charges. You may request an
exchange through your financial intermediary. In order to receive a day's NAV,
your financial intermediary must receive and confirm your telephone exchange
request by 4:00 p.m., Eastern Time, on that day. The Fund may modify, restrict,
or terminate the exchange privilege on 60 days' written notice.
How to Sell or Redeem Shares
You may "redeem" your shares (i.e., sell your shares to the Fund) on any
day the New York Stock Exchange is open. Your sale price will be the
next-determined NAV, less any applicable CDSC, after the Fund receives your
redemption request in proper form. Normally, redemption proceeds are sent to you
within 7 days. If you recently purchased your shares by check or electronic
funds transfer, your redemption payment may be delayed until the Fund is
reasonably satisfied that the check or electronic funds transfer has been
collected (which may take up to 15 days). Your financial intermediary must
receive your sales request by 4:00 p.m., Eastern Time, and submit it to the Fund
by a pre-arranged time for you to receive the next-determined NAV, less any
applicable CDSC. Your financial intermediary is responsible for submitting all
necessary documentation to the Fund and may charge you a fee for this service.
Frequent Purchases and Redemptions of Fund Shares
The Fund's Board of Directors has adopted policies and procedures designed
to detect and deter frequent purchases and redemptions of Fund shares or
excessive or short-term trading that may disadvantage long-term Fund
shareholders. These policies are described below. The Fund reserves the right to
restrict, reject or cancel, without any prior notice, any purchase or exchange
order for any reason, including any purchase or exchange order accepted by any
shareholder's financial intermediary.
Risks Associated With Excessive Or Short-term Trading Generally
---------------------------------------------------------------
While the Fund will try to prevent market timing by utilizing the
procedures described below, these procedures may not be successful in
identifying or stopping excessive or short-term trading in all circumstances. By
realizing profits through short-term trading, shareholders that engage in rapid
purchases and sales or exchanges of the Fund's shares dilute the value of shares
held by long-term shareholders. Volatility resulting from excessive purchases
and sales or exchanges of Fund shares, especially involving large dollar
amounts, may disrupt efficient portfolio management. In particular, the Fund may
have difficulty implementing its long-term investment strategies if it is forced
to maintain a higher level of its assets in cash to accommodate significant
short-term trading activity. Excessive purchases and sales or exchanges of the
Fund's shares may force the Fund to sell portfolio securities at inopportune
times to raise cash to accommodate short-term trading activity. In addition, the
Fund may incur increased expenses if one or more shareholders engage in
excessive or short-term trading. For example, a Fund may be forced to liquidate
investments as a result of short-term trading and incur increased brokerage
costs and realization of taxable capital gains without attaining any investment
advantage. Similarly, the Fund may bear increased administrative costs due to
asset level and investment volatility that accompanies patterns of short-term
trading activity. All of these factors may adversely affect Fund performance.
A Fund that invests significantly in foreign securities may be particularly
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a Fund
calculates its NAV at 4:00 p.m. Eastern Time, which gives rise to the
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international
stock markets can allow a shareholder engaging in a short-term trading strategy
to exploit differences in Fund share prices that are based on closing prices of
foreign securities established some time before the Fund calculates its own
share price (referred to as "time zone arbitrage"). The Fund has procedures,
referred to as fair value pricing, designed to adjust closing market prices of
foreign securities to reflect what is believed to be the fair value of those
securities at the time the Fund calculates its NAV. While there is no assurance,
the Fund expects that the use of fair value pricing, in addition to the
short-term trading policies discussed below, will significantly reduce a
shareholder's ability to engage in time zone arbitrage to the detriment of other
Fund shareholders.
A shareholder engaging in a short-term trading strategy may also target a
Fund that does not invest primarily in foreign securities. Any Fund that invests
in securities that are, among other things, thinly traded, traded infrequently,
or relatively illiquid has the risk that the current market price for the
securities may not accurately reflect current market values. A shareholder may
seek to engage in short-term trading to take advantage of these pricing
differences (referred to as "price arbitrage"). Funds that may be adversely
affected by price arbitrage include, in particular, those Funds that
significantly invest in small cap securities, technology and other specific
industry sector securities, and in certain fixed-income securities, such as high
yield bonds, asset-backed securities, or municipal bonds.
Policy Regarding Short-term Trading
-----------------------------------
Purchases and exchanges of shares of the Fund should be made for investment
purposes only. The Fund seeks to prevent patterns of excessive purchases and
sales or exchanges of Fund shares. The Fund will seek to prevent such practices
to the extent they are detected by the procedures described below. The Fund
reserves the right to modify this policy, including any surveillance or account
blocking procedures established from time to time to effectuate this policy, at
any time without notice.
o Transaction Surveillance Procedures. The Fund, through its agents,
ABI and ABIS, maintains surveillance procedures to detect excessive or
short-term trading in Fund shares. This surveillance process involves several
factors, which include scrutinizing transactions in Fund shares that exceed
certain monetary thresholds or numerical limits within a specified period of
time. Generally, more than two exchanges of Fund shares during any 90-day period
or purchases of shares followed by a sale within 90 days will be identified by
these surveillance procedures. For purposes of these transaction surveillance
procedures, the Fund may consider trading activity in multiple accounts under
common ownership, control, or influence. Trading activity identified by either,
or a combination, of these factors, or as a result of any other information
available at the time, will be evaluated to determine whether such activity
might constitute excessive or short-term trading. These surveillance procedures
may be modified from time to time, as necessary or appropriate to improve the
detection of excessive or short-term trading or to address specific
circumstances, such as for certain retirement plans, to conform to plan exchange
limits or U.S. Department of Labor regulations, or for certain automated or
pre-established exchange, asset allocation or dollar cost averaging programs, or
omnibus account arrangements.
o Account Blocking Procedures. If the Fund determines, in its sole
discretion, that a particular transaction or pattern of transactions identified
by the transaction surveillance procedures described above is excessive or
short-term trading in nature, the relevant Fund account(s) will be immediately
"blocked" and no future purchase or exchange activity will be permitted.
However, sales of Fund shares back to the Fund or redemptions will continue to
be permitted in accordance with the terms of the Fund's current Prospectus. In
the event an account is blocked, certain account-related privileges, such as the
ability to place purchase, sale and exchange orders over the internet or by
phone, may also be suspended. A blocked account will generally remain blocked
unless and until the account holder or the associated broker, dealer or other
financial intermediary provides evidence or assurance acceptable to the Fund
that the account holder did not or will not in the future engage in excessive or
short-term trading.
o Applications of Surveillance Procedures and Restrictions to Omnibus
Accounts. Omnibus account arrangements are common forms of holding shares of the
Fund, particularly among certain brokers, dealers, and other financial
intermediaries, including sponsors of retirement plans and variable insurance
products. The Fund seeks to apply its surveillance procedures to these omnibus
account arrangements. If an intermediary does not have the capabilities, or
declines, to provide individual account level detail to the Fund, the Fund will
monitor turnover of assets to purchases and redemptions of the omnibus account.
If excessive turnover, defined as annualized purchases and redemptions exceeding
50% of assets is detected, the Fund will notify the intermediary and request
that the intermediary review individual account transactions for excessive or
short-term trading activity and confirm to the Fund that appropriate action has
been taken to curtail the activity, which may include applying blocks to
accounts to prohibit future purchases and exchanges of Fund shares. For certain
retirement plan accounts, the Fund may request that the retirement plan or other
intermediary revoke the relevant participant's privilege to effect transactions
in Fund shares via the internet or telephone, in which case the relevant
participant must submit future transaction orders via the U.S. Postal Service
(i.e., regular mail). The Fund will continue to monitor the turnover
attributable to an intermediary's omnibus account arrangement and may consider
whether to terminate the relationship if the intermediary does not demonstrate
that appropriate action has been taken.
Risks to Shareholders Resulting From Imposition of Account Blocks in Response to
Excessive Short-term Trading Activity
--------------------------------------------------------------------------------
A shareholder identified as having engaged in excessive or short-term
trading activity whose account is "blocked" and who may not otherwise wish to
redeem his or her shares effectively may be "locked" into an investment in the
Fund that the shareholder did not intend to hold on a long-term basis or that
may not be appropriate for the shareholder's risk profile. To rectify this
situation, a shareholder with a "blocked" account may be forced to redeem Fund
shares, which could be costly if, for example, these shares have declined in
value, the shares are subject to a CDSC, or the sale results in adverse tax
consequences to the shareholder. To avoid this risk, a shareholder should
carefully monitor the purchases, sales, and exchanges of Fund shares and avoid
frequent trading in Fund shares.
Limitations on Ability to Detect and Curtail Excessive Trading Practices
------------------------------------------------------------------------
Shareholders seeking to engage in excessive short-term trading activities
may deploy a variety of strategies to avoid detection and, despite the efforts
of the Fund and its agents to detect excessive or short duration trading in Fund
shares, there is no guarantee that the Fund will be able to identify these
shareholders or curtail their trading practices. In particular, the Fund may not
be able to detect excessive or short-term trading in Fund shares attributable to
a particular investor who effects purchase and/or exchange activity in Fund
shares through omnibus accounts. Also, multiple tiers of these entities may
exist, each utilizing an omnibus account arrangement, which may further compound
the difficulty of detecting excessive or short duration trading activity in Fund
shares.
How the Fund Values Its Shares
The Fund's NAV is calculated at the close of regular trading on the NYSE
(ordinarily, 4:00 p.m., Eastern Time), only on days when the NYSE is open for
business. To calculate NAV, a Fund's assets are valued and totaled, liabilities
are subtracted, and the balance, called net assets, is divided by the number of
shares outstanding. If the Fund invests in securities that are primarily traded
on foreign exchanges that trade on weekends or other days when the Fund does not
price its shares, the NAV of the Fund's shares may change on days when
shareholders will not be able to purchase or redeem their shares in the Fund.
The Fund values its securities at their current market value determined on
the basis of market quotations or, if market quotations are not readily
available or are unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors. When a Fund uses fair value pricing, it may take into account any
factors it deems appropriate. The Fund may determine fair value based upon
developments related to a specific security, current valuations of foreign stock
indices (as reflected in U.S. futures markets) and/or U.S. sector or broader
stock market indices. The prices of securities used by the Fund to calculate its
NAV may differ from quoted or published prices for the same securities. Fair
value pricing involves subjective judgments and it is possible that the fair
value determined for a security is materially different than the value that
could be realized upon the sale of that security.
The Fund expects to use fair value pricing for securities primarily traded
on U.S. exchanges only under very limited circumstances, such as the early
closing of the exchange on which a security is traded or suspension of trading
in the security. The Fund may use fair value pricing more frequently for
securities primarily traded in non-U.S. markets because, among other things,
most foreign markets close well before the Fund values its securities at 4:00
p.m., Eastern Time. The earlier close of these foreign markets gives rise to the
possibility that significant events, including broad market moves, may have
occurred in the interim. For example, the Fund believes that foreign security
values may be affected by events that occur after the close of foreign
securities markets. To account for this, the Fund may frequently value many of
their foreign equity securities using fair value prices based on third party
vendor modeling tools to the extent available.
Subject to the Board's oversight, the Fund's Board has delegated
responsibility for valuing the Fund's assets to the Adviser. The Adviser has
established a Valuation Committee, which operates under the policies and
procedures approved by the Board, to value the Fund's assets on behalf of the
Fund. The Valuation Committee values Fund assets as described above.
Your order for purchase, sale, or exchange of shares is priced at the
next-determined NAV after your order is received in proper form by the Fund.
APPENDIX J
LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and
Exchange Commission ("SEC") and the NYAG have been investigating practices in
the mutual fund industry identified as "market timing" and "late trading" of
mutual fund shares. Certain other regulatory authorities have also been
conducting investigations into these practices within the industry and have
requested that the Adviser provide information to them. The Adviser has been
cooperating and will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with
the SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the
adverse effects of market timing attributable to market timing
relationships described in the SEC Order. According to the SEC Order,
the Reimbursement Fund is to be paid, in order of priority, to fund
investors based on (i) their aliquot share of losses suffered by the
fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until
December 31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients,
including the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of the
Adviser's Board, directed and oversaw an internal investigation and a
comprehensive review of the facts and circumstances relevant to the SEC's and
the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a purported class action complaint entitled Hindo, et
al.v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was
filed against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Funds. The Hindo Complaint alleges
that certain of the Alliance defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in "late
trading" and "market timing" of AllianceBernstein Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the
Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an
unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts.
Since October 2, 2003, 43 additional lawsuits making factual allegations
generally similar to those in the Hindo Complaint were filed in various federal
and state courts against the Adviser and certain other defendants. The
plaintiffs in such lawsuits have asserted a variety of theories for recovery
including, but not limited to, violations of the Securities Act, the Exchange
Act, the Advisers Act, the Investment Company Act, the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), certain state securities laws
and common law. All state court actions against the Adviser either were
voluntarily dismissed or removed to federal court. On February 20, 2004, the
Judicial Panel on Multidistrict Litigation transferred all actions to the United
States District Court for the District of Maryland (the "Mutual Fund MDL").
On September 29, 2004, plaintiffs filed consolidated amended complaints
with respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Alliance Holding; and
claims brought under ERISA by participants in the Profit Sharing Plan for
Employees of the Adviser. All four complaints include substantially identical
factual allegations, which appear to be based in large part on the SEC Order and
the NYAG Order. The claims in the mutual fund derivative consolidated amended
complaint are generally based on the theory that all fund advisory agreements,
distribution agreements and 12b-1 plans between the Adviser and the
AllianceBernstein Funds should be invalidated, regardless of whether market
timing occurred in each individual fund, because each was approved by fund
trustees on the basis of materially misleading information with respect to the
level of market timing permitted in funds managed by the Adviser. The claims
asserted in the other three consolidated amended complaints are similar to those
that the respective plaintiffs asserted in their previous federal lawsuits. All
of these lawsuits seek an unspecified amount of damages.
On April 21, 2006, the Adviser and attorneys for the plaintiffs in the
mutual fund shareholder claims, mutual fund derivative claims, and ERISA claims
entered into a confidential memorandum of understanding ("MOU") containing their
agreement to settle these claims. The agreement will be documented by a
stipulation of settlement and will be submitted for court approval at a later
date.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from
the Office of the Attorney General of the State of West Virginia and (ii) a
request for information from West Virginia's Office of the State Auditor,
Securities Commission (the "West Virginia Securities Commissioner") (together,
the "Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State
of West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Holding, and various other defendants not
affiliated with the Adviser. The WVAG Complaint was filed in the Circuit Court
of Marshall County, West Virginia by the Attorney General of the State of West
Virginia. The WVAG Complaint makes factual allegations generally similar to
those in the Hindo Complaint. On October 19, 2005, the WVAG Complaint was
transferred to the Mutual Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West
Virginia Securities Commissioner signed a Summary Order to Cease and Desist, and
Notice of Right to Hearing addressed to the Adviser and Alliance Holding. The
Summary Order claims that the Adviser and Alliance Holding violated the West
Virginia Uniform Securities Act, and makes factual allegations generally similar
to those in the Commission Order and the NYAG Order. On January 26, 2006, the
Adviser, Alliance Holding, and various unaffiliated defendants filed a Petition
for Writ of Prohibition and Order Suspending Proceedings in West Virginia state
court seeking to vacate the Summary Order and for other relief. On April 12,
2006, respondents' petition was denied. On May 4, 2006, respondents appealed the
court's determination.
On June 22, 2004, a purported class action complaint entitled Aucoin, et
al. v. Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed
against the Adviser, Alliance Holding, Alliance Capital Management Corporation,
AXA Financial, Inc., AllianceBernstein Investment Research & Management, Inc.,
certain current and former directors of the AllianceBernstein Mutual Funds, and
unnamed Doe defendants. The Aucoin Complaint names certain of the
AllianceBernstein mutual funds as nominal defendants. The Aucoin Complaint was
filed in the United States District Court for the Southern District of New York
by alleged shareholders of an AllianceBernstein mutual fund. The Aucoin
Complaint alleges, among other things, (i) that certain of the defendants
improperly authorized the payment of excessive commissions and other fees from
fund assets to broker-dealers in exchange for preferential marketing services,
(ii) that certain of the defendants misrepresented and omitted from registration
statements and other reports material facts concerning such payments, and (iii)
that certain defendants caused such conduct as control persons of other
defendants. The Aucoin Complaint asserts claims for violation of Sections 34(b),
36(b) and 48(a) of the Investment Company Act, Sections 206 and 215 of the
Advisers Act, breach of common law fiduciary duties, and aiding and abetting
breaches of common law fiduciary duties. Plaintiffs seek an unspecified amount
of compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to such
contracts, an accounting of all fund-related fees, commissions and soft dollar
payments, and restitution of all unlawfully or discriminatorily obtained fees
and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the Funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiffs' claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. On May 31, 2006 the District Court
denied plaintiffs' motion for leave to file an amended complaint.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the AllianceBernstein
Mutual Funds' shares or other adverse consequences to the AllianceBernstein
Mutual Funds. This may require the AllianceBernstein Mutual Funds to sell
investments held by those funds to provide for sufficient liquidity and could
also have an adverse effect on the investment performance of the
AllianceBernstein Mutual Funds. However, the Adviser believes that these matters
are not likely to have a material adverse effect on its ability to perform
advisory services relating to the AllianceBernstein Mutual Funds.
On August 7, 2006, the Mutual Fund MDL signed an Order staying the actions
(including discovery) against the Alliance defendants pending settlement.
APPENDIX K
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single share of each Fund. The total returns in the table represent the rate
that an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). Except as otherwise
indicated, this information has been audited by PricewaterhouseCoopers LLP, the
independent registered public accounting firm for LCGF as of the end of the
Fund's last fiscal year and by Ernst & Young LLP, the independent registered
public accounting firm for PGIF, whose reports, along with each Fund's financial
statements, are included in each Fund's annual report and available upon
request.
[Enlarge/Download Table]
LCGF
----
Class A
-------
Six Months
Ended Year Ended December 1, Year Ended
January 31, July 31, 2002 November 30,
2006 ------------------------------ to July 31, -----------------------------
(unaudited) 2005 2004 2003(a) 2002 2001
------------- ------------- ------------- ------------- ------------- -------------
Net asset value, beginning of period $ 19.15 $ 16.28 $ 15.58 $ 15.07 $ 20.24 $ 29.51
------------- ------------- ------------- ------------- ------------- -------------
Income From Investment Operations
Net investment loss(b) ............. (.14) (.14)(c) (.15)(c)(d) (.10) (.19) (.19)
Net realized and unrealized gain
(loss) on investment transactions 2.62 3.01 .85 .61 (4.98) (6.43)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net asset
value from operations ............ 2.48 2.87 .70 .51 (5.17) (6.62)
------------- ------------- ------------- ------------- ------------- -------------
Less: Distributions
Distributions from net realized gain
on investment transactions ....... -0- -0- -0- -0- -0- (2.38)
Distributions in excess of net
realized gain on investment
transactions ..................... -0- -0- -0- -0- -0- (.27)
------------- ------------- ------------- ------------- ------------- -------------
Total distributions ................ -0- -0- -0- -0- -0- (2.65)
------------- ------------- ------------- ------------- ------------- -------------
Net asset value, end of period ..... $ 21.63 $ 19.15 $ 16.28 $ 15.58 $ 15.07 $ 20.24
============= ============= ============= ============= ============= =============
Total Return
Total investment return based on net
asset value(e) ................... 12.95% 17.63% 4.49% 3.38% (25.54)% (24.90)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) ......................... $ 1,515,170 $ 1,348,678 $ 1,550,292 $ 1,757,243 $ 2,098,623 $ 3,556,040
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements ........ 1.73%(f)(g) 1.50% 1.58% 1.89%(g) 1.73% 1.53%
Expenses, before
waivers/reimbursements ........ 1.73%(f)(g) 1.53% 1.76% 1.89%(g) 1.73% 1.53%
Net investment loss ............. (1.20)%(f)(g) (.82)%(c) (.90)%(c)(d) (1.08)%(g) (1.09)% (.83)%
Portfolio turnover rate ............ 34% 56% 61% 60% 93% 135%
See footnotes on page 75.
[Enlarge/Download Table]
Advisor Class
-------------
Six Months
Ended Year Ended December 1, Year Ended
January 31, July 31, 2002 November 30,
2006 ------------------------------ to July 31, -----------------------------
(unaudited) 2005 2004 2003(a) 2002 2001
------------- ------------- ------------- ------------- ------------- -------------
Net asset value, beginning of period $ 19.76 $ 16.74 $ 15.97 $ 15.42 $ 20.65 $ 29.99
------------- ------------- ------------- ------------- ------------- -------------
Income From Investment Operations
Net investment loss(b) ............. (.08) (.09)(c) (.10)(c)(d) (.08) (.14) (.14)
Net realized and unrealized gain
(loss) on investment transactions 2.68 3.11 .87 .63 (5.09) (6.55)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net asset
value from operations ............ 2.60 3.02 .77 .55 (5.23) (6.69)
------------- ------------- ------------- ------------- ------------- -------------
Less: Distributions
Distributions from net realized gain
on investment transactions ....... -0- -0- -0- -0- -0- (2.38)
Distributions in excess of net
realized gain on investment
transactions ..................... -0- -0- -0- -0- -0- (.27)
------------- ------------- ------------- ------------- ------------- -------------
Total distributions ................ -0- -0- -0- -0- -0- (2.65)
------------- ------------- ------------- ------------- ------------- -------------
Net asset value, end of period ..... $ 22.36 $ 19.76 $ 16.74 $ 15.97 $ 15.42 $ 20.65
============= ============= ============= ============= ============= =============
Total Return
Total investment return based on net
asset value(e) ................... 13.16% 18.04% 4.82% 3.57% (25.33)% (24.72)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) ......................... $ 170,446 $ 1,040,894 $ 761,895 $ 793,162 $ 590,508 $ 510,603
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements ........ 1.37%(f)(g) 1.20% 1.28% 1.60%(g) 1.45% 1.25%
Expenses, before
waivers/reimbursements ........ 1.37%(f)(g) 1.23% 1.46% 1.60%(g) 1.45% 1.25%
Net investment loss ............. (.93)%(f)(g) (.53)%(c) (.60)%(c)(d) (.78)%(g) (.79)% (.59)%
Portfolio turnover rate ............ 34% 56% 61% 60% 93% 135%
See footnotes on page 75.
Class K
-------
Six Months Ended March 1,
January 31, 2006 2005(h) to
(unaudited) July 31, 2005
---------------- -------------
Net asset value, beginning of period ............. $19.19 $17.63
------ ------
Income From Investment Operations
Net investment loss(b) ........................... (.10) (.04)
Net realized and unrealized gain on
investment transactions ........................ 2.63 1.60
------ ------
Net increase in net asset value from
operations ..................................... 2.53 1.56
------ ------
Net asset value, end of period ................... $21.72 $19.19
====== ======
Total Return
Total investment return based on net
asset value(e) ................................. 13.18% 8.85%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ........ $ 69 $ 11
Ratio to average net assets of:
Expenses (g) ................................... 1.42%(f) 1.03%
Net investment loss(g) ......................... (.86)%(f) (.48)%
Portfolio turnover rate .......................... 34% 56%
See footnotes on page 75.
Class I
-------
Six Months Ended March 1,
January 31, 2006 2005(h) to
(unaudited) July 31, 2005
---------------- -------------
Net asset value, beginning of period ............ $ 19.20 $ 17.63
--------- ---------
Income From Investment Operations
Net investment loss(b) .......................... (.07) (.02)
Net realized and unrealized gain on
investment transactions ....................... 2.63 1.59
--------- ---------
Net increase in net asset value from
operations .................................... 2.56 1.57
--------- ---------
Net asset value, end of period .................. $ 21.76 $ 19.20
========= =========
Total Return
Total investment return based on net
asset value(e) ................................ 13.33% 8.90%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ....... $ 2,605 $ 11
Ratio to average net assets of:
Expenses (g) .................................. 1.09%(f) .83%
Net investment loss(g) ........................ (.53)%(f) (.27)%
Portfolio turnover rate ......................... 34% 56%
----------
(a) The Fund changed its fiscal year end from November 30 to July 31.
(b) Based on average shares outstanding.
(c) Net of fees and expenses waived/reimbursed by the Adviser.
(d) Net of fees and expenses waived/reimbursed by the Transfer Agent.
(e) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total return does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption
of Fund shares. Total investment return calculated for a period of less
than one year is not annualized.
(f) The ratio includes expenses attributable to estimated costs of proxy
solicitation.
(g) Annualized.
(h) Commencement of distributions.
[Enlarge/Download Table]
PGIF
----
Class I
-------
Six Months
Ended
April 30, Year Ended October 31,
2006 -------------------------------------------------------------------
(unaudited) 2005 2004 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 10.86 $ 9.21 $ 8.95 $ 7.92 $ 9.87 $ 17.06
----------- ----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net investment loss(b) ............. (.01) (.02) (.03) (.01) (.02) (.02)
Net realized and unrealized gain
(loss) on investment transactions .68 1.67 .29 1.04 (1.93) (5.94)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset
value from operations ............ .67 1.65 .26 1.03 (1.95) (5.96)
----------- ----------- ----------- ----------- ----------- -----------
Less: Distributions
Distributions from net realized gain
on investment transactions ....... -0- -0- -0- -0- -0- (1.12)
Distributions in excess of net
realized gain on investment
transactions ..................... -0- -0- -0- -0- -0- (.11)
----------- ----------- ----------- ----------- ----------- -----------
Total distributions ................ -0- -0- -0- -0- -0- (1.23)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period ..... $ 11.53 $ 10.86 $ 9.21 $ 8.95 $ 7.92 $ 9.87
=========== =========== =========== =========== =========== ===========
Total Return
Total investment return based on net
asset value(e) ................... 6.17% 17.92% 2.91% 13.01% (19.76)% (37.36)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) ......................... $ 84,176 $ 72,240 $ 57,912 $ 74,042 $ 67,380 $ 178,157
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements ........ .90%(e)(f) .90% .90% .90% .90% .90%
Expenses, before
waivers/reimbursements ........ 1.25%(e)(f) 1.38% 1.49% 1.54% 1.32% 1.16%
Net investment loss ............. (.24)%(e)(f) (.25)% (.30)% (.08)% (.23)% (.20)%
Portfolio turnover rate ............ 51% 73% 74% 91% 96% 156%
See footnotes on page 77.
[Enlarge/Download Table]
Class II
--------
Six Months
Ended
April 30, Year Ended October 31,
2006 -------------------------------------------------------------------
(unaudited) 2005 2004 2003 2002 2001
----------- ---------- ---------- ---------- ---------- -----------
Net asset value, beginning of period $ 10.57 $ 8.99 $ 8.76 $ 7.78 $ 9.73 $ 16.88
---------- ---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net investment loss(b) ............. (.03) (.05) (.05) (.03) (.05) (.06)
Net realized and unrealized gain
(loss) on investment transactions .67 1.63 .28 1.01 (1.90) (5.86)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset
value from operations ............ .64 1.58 .23 .98 (1.95) (5.92)
---------- ---------- ---------- ---------- ---------- ----------
Less: Distributions
Distributions from net realized gain
on investment transactions ....... -0- -0- -0- -0- -0- (1.12)
Distributions in excess of net
realized gain on investment
transactions ..................... -0- -0- -0- -0- -0- (.11)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions ................ -0- -0- -0- -0- -0- (1.23)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period ..... $ 11.21 $ 10.57 $ 8.99 $ 8.76 $ 7.78 $ 9.73
========== ========== ========== ========== ========== ==========
Total Return
Total investment return based on net
asset value(e) ................... 6.05% 17.58% 2.63% 12.60% (20.04)% (37.54)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) ......................... $ 2,702 $ 3,212 $ 3,988 $ 20,574 $ 20,672 $ 28,152
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements ........ 1.20%(e)(f) 1.20% 1.20% 1.20% 1.20% 1.20%
Expenses, before
waivers/reimbursements ........ 1.53%(e)(f) 1.68% 1.72% 1.80% 1.60% 1.49%
Net investment loss ............. (.55)%(e)(f) (.53)% (.61)% (.39)% (.52)% (.52)%
Portfolio turnover rate ............ 51% 73% 74% 91% 96% 156%
----------
(a) Based on average shares outstanding.
(b) Net of expenses waived by the Adviser.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales change or
contingent deferred sales change is not reflected on the calculation of the
total investment return. Total investment return does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) 000's omitted.
(e) Annualized
(f) The ratio includes expenses attributable to estimated costs of proxy
solicitation.
SK 00250 0209 689953v4
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND, INC.
1345 Avenue of the Americas
New York, New York
Toll Free (800) 221-5672
================================================================================
STATEMENT OF ADDITIONAL INFORMATION
August 9, 2006
This Statement of Additional Information (the "SAI") relates to the
proposed acquisition (the "Acquisition") of all of the assets and liabilities of
AllianceBernstein Premier Growth Institutional Fund ("PGIF"), a series of
AllianceBernstein Institutional Funds, Inc., by AllianceBernstein Large Cap
Growth Fund, Inc. ("LCGF").
This SAI contains information which may be of interest to shareholders but
which is not included in the Prospectus/Proxy Statement dated September [__],
2006 (the "Prospectus/Proxy Statement") of LCGF which relates to the
Acquisition. As described in the Prospectus/Proxy Statement, the Acquisition
would involve the transfer of all the assets of PGIF in exchange for shares of
LCGF and the assumption by LCGF of all the liabilities of PGIF. PGIF would
distribute the LCGF shares it receives to its shareholders in complete
liquidation of PGIF. LCGF will be the survivor for accounting purposes.
This SAI is not a prospectus and should be read in conjunction with the
Prospectus/Proxy Statement. The Prospectus/Proxy Statement has been filed with
the Securities and Exchange Commission and is available upon request and without
charge by writing to PGIF at 1345 Avenue of the Americas, New York, New York
10105, or by calling 1-800-221-5672.
================================================================================
TABLE OF CONTENTS
Page
ADDITIONAL INFORMATION ABOUT LCGF AND PGIF
FINANCIAL STATEMENTS
Additional Information About LCGF and PGIF
Further information about LCGF and PGIF is contained in their Statements of
Additional Information dated November 1, 2005, as amended December 30, 2005, and
March 1, 2006, respectively, which are available upon request and without charge
by writing to PGIF at 1345 Avenue of the Americas, New York, New York 10105, or
by calling 1-800-221-5672.
Financial Statements
The financial statements and Report of Independent Registered Public
Accounting Firm contained in the Annual Report for the twelve months ended July
31, 2005, of LCGF, which report contains historical financial information
regarding LCGF, has been filed with the Securities and Exchange Commission and
is incorporated herein by reference.
The financial statements and Report of Independent Registered Public
Accounting Firm contained in the Annual Report for the twelve months ended
October 31, 2005, of PGIF, which report contains historical financial
information regarding PGIF, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference.
SK 00250 0209 690731
PART C
OTHER INFORMATION
ITEM 15. Indemnification
It is the Registrant's policy to indemnify its directors and
officers, employees and other agents to the maximum extent
permitted by Section 2-418 of the General Corporation Law of the
State of Maryland and as set forth in Article EIGHTH of
Registrant's Articles of Incorporation, filed as Exhibit (a)
Article IX of the Registrant's Amended and Restated By-Laws filed
as Exhibit (b) and Section 10 of the Distribution Services
Agreement filed as Exhibit (e)(1) all filed in response to item
23 of the Registrant's Registration Statement filed on Form N-1A
(File Nos. 33-49530 and 811-6730) all as set forth below. The
liability of the Registrant's directors and officers is dealt
with in Article EIGHTH of Registrant's Articles of Incorporation,
, as set forth below. The Adviser's liability for any loss
suffered by the Registrant or its shareholders is set forth in
Section 4 of the Advisory Agreement filed as Exhibit (d) in
response to Item 23 of the Registration Statement filed on Form
N-1A, (File Nos. 33-49530 and 811-6730), as set forth below.
Section 2-418 of the Maryland General Corporation Law reads as follows:
"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.--
(a) In this section the following words have the meaning
indicated.
(1) "Director" means any person who is or was a director of
a corporation and any person who, while a director of a
corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger,
consolidation, or other transaction in which the
predecessor's existence ceased upon consummation of the
transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office
of director in the corporation; and
(ii) When used with respect to a person other than a
director as contemplated in subsection (j), the
elective or appointive office in the corporation
held by the officer, or the employment or agency
relationship undertaken by the employee or agent
in behalf of the corporation.
(iii) "Official capacity" does not include service for
any other foreign or domestic corporation or any
partnership, joint venture, trust, other
enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened
to be made a named defendant or respondent in a
proceeding.
(6) "Proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative, or investigative.
(b) (1) A corporation may indemnify any director made a party
to any proceeding by reason of service in that capacity
unless it is established that:
(i) The act or omission of the director was material
to the matter giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate
dishonesty; or
(ii) The director actually received an improper
personal benefit in money, property, or services;
or
(iii) In the case of any criminal proceeding, the
director had reasonable cause to believe that the
act or omission was unlawful.
(2) (i) Indemnification may be against judgments,
penalties, fines, settlements, and reasonable
expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the
right of the corporation, indemnification may not
be made in respect of any proceeding in which the
director shall have been adjudged to be liable to
the corporation.
(3) (i) The termination of any proceeding by judgment,
order or settlement does not create a presumption
that the director did not meet the requisite
standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction,
or a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to
judgment, creates a rebuttable presumption that
the director did not meet that standard of
conduct.
(4) A corporation may not indemnify a director or advance
expenses under this section for a proceeding brought by
that director against the corporation, except:
(i) For a proceeding brought to enforce
indemnification under this section; or
(ii) If the charter or bylaws of the corporation, a
resolution of the board of directors of the
corporation, or an agreement approved by the board
of directors of the corporation to which the
corporation is a party expressly provide
otherwise.
(c) A director may not be indemnified under subsection (b) of
this section in respect of any proceeding charging improper
personal benefit to the director, whether or not involving
action in the director's official capacity, in which the
director was adjudged to be liable on the basis that
personal benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or
otherwise, in the defense of any proceeding referred to
in subsection (b) of this section shall be indemnified
against reasonable expenses incurred by the director in
connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of
a director and such notice as the court shall require,
may order indemnification in the following
circumstances:
(i) If it determines a director is entitled to
reimbursement under paragraph (1) of this
subsection, the court shall order indemnification,
in which case the director shall be entitled to
recover the expenses of securing such
reimbursement; or
(ii) If it determines that the director is fairly and
reasonably entitled to indemnification in view of
all the relevant circumstances, whether or not the
director has met the standards of conduct set
forth in subsection (b) of this section or has
been adjudged liable under the circumstances
described in subsection (c) of this section, the
court may order such indemnification as the court
shall deem proper. However, indemnification with
respect to any proceeding by or in the right of
the corporation or in which liability shall have
been adjudged in the circumstances described in
subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same
court in which the proceeding involving the director's
liability took place.
(e) (1) Indemnification under subsection (b) of this section
may not be made by the corporation unless authorized
for a specific proceeding after a determination has
been made that indemnification of the director is
permissible in the circumstances because the director
has met the standard of conduct set forth in subsection
(b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a
quorum consisting of directors not, at the time,
parties to the proceeding, or, if such a quorum
cannot be obtained, then by a majority vote of a
committee of the board consisting solely of two or
more directors not, at the time, parties to such
proceeding and who were duly designated to act in
the matter by a majority vote of the full board in
which the designated directors who are parties may
participate;
(ii) By special legal counsel selected by the board or
a committee of the board by vote as set forth in
subparagraph (i) of this paragraph, or, if the
requisite quorum of the full board cannot be
obtained therefor and the committee cannot be
established, by a majority vote of the full board
in which directors who are parties may
participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and determination as
to reasonableness of expenses shall be made in the same
manner as the determination that indemnification is
permissible. However, if the determination that
indemnification is permissible is made by special legal
counsel, authorization of indemnification and
determination as to reasonableness of expenses shall be
made in the manner specified in subparagraph (ii) of
paragraph (2) of this subsection for selection of such
counsel.
(4) Shares held by directors who are parties to the
proceeding may not be voted on the subject matter under
this subsection.
(f) (1) Reasonable expenses incurred by a director who is a
party to a proceeding may be paid or reimbursed by the
corporation in advance of the final disposition of the
proceeding, upon receipt by the corporation of:
(i) A written affirmation by the director of the
director's good faith belief that the standard of
conduct necessary for indemnification by the
corporation as authorized in this section has been
met; and
(ii) A written undertaking by or on behalf of the
director to repay the amount if it shall
ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of
paragraph (1) of this subsection shall be an unlimited
general obligation of the director but need not be
secured and may be accepted without reference to
financial ability to make the repayment.
(3) Payments under this subsection shall be made as
provided by the charter, bylaws, or contract or as
specified in subsection (e) of this section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of
any other rights, by indemnification or otherwise, to which
a director may be entitled under the charter, the bylaws, a
resolution of stockholders or directors, an agreement or
otherwise, both as to action in an official capacity and as
to action in another capacity while holding such office.
(h) This section does not limit the corporation's power to pay
or reimburse expenses incurred by a director in connection
with an appearance as a witness in a proceeding at a time
when the director has not been made a named defendant or
respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a
director to serve an employee benefit plan where the
performance of the director's duties to the corporation
also imposes duties on, or otherwise involves services
by, the director to the plan or participants or
beneficiaries of the plan:
(2) Excise taxes assessed on a director with respect to an
employee benefit plan pursuant to applicable law shall
be deemed fines; and
(3) Action taken or omitted by the director with respect to
an employee benefit plan in the performance of the
director's duties for a purpose reasonably believed by
the director to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for
a purpose which is not opposed to the best interests of
the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as
and to the extent provided in subsection (d) of this
section for a director and shall be entitled, to the
same extent as a director, to seek indemnification
pursuant to the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an
officer, employee, or agent of the corporation to the
same extent that it may indemnify directors under this
section; and
(3) A corporation, in addition, may indemnify and advance
expenses to an officer, employee, or agent who is not a
director to such further extent, consistent with law,
as may be provided by its charter, bylaws, general or
specific action of its board of directors or contract.
(k) (1) A corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or who, while a
director, officer, employee, or agent of the
corporation, is or was serving at the request, of the
corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any
liability asserted against and incurred by such person
in any such capacity or arising out of such person's
position, whether or not the corporation would have the
power to indemnify against liability under the
provisions of this section.
(2) A corporation may provide similar protection, including
a trust fund, letter of credit, or surety bond, not
inconsistent with this section.
(3) The insurance or similar protection may be provided by
a subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a
director in accordance with this section, if arising out of
a proceeding by or in the right of the corporation, shall be
reported in writing to the stockholders with the notice of
the next stockholders' meeting or prior to the meeting."
Article EIGHTH of the Registrant's Articles of Incorporation reads as follows:
"(1) To the full extent that limitations on the liability of directors
and officers are permitted by the Maryland General Corporation Law, no director
or officer of the Corporation shall have any liability to the Corporation or its
stockholders for damages. This limitation on liability applies to events
occurring at the time a person serves as a director or officer of the
Corporation whether or not such person is a director or officer at the time of
any proceeding in which liability is asserted.
"(2) The Corporation shall indemnify and advance expenses to its
currently acting and its former directors to the full extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The Corporation shall indemnify and advance expenses to its officers to the
same extent as its directors and to such further extent as is consistent with
law. The Board of Directors may by By-Law, resolution or agreement make further
provisions for indemnification of directors, officers, employees and agents to
the full extent permitted by the Maryland General Corporation Law.
"(3) No provision of this Article shall be effective to protect or
purport to protect any director or officer of the Corporation against any
liability to the Corporation or its stockholders to which he would otherwise be
subject by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
"(4) References to the Maryland General Corporation Law in this
Article are to that law as from time to time amended. No amendment to the
Charter of the Corporation shall affect any right of any person under this
Article based on any event, omission or proceeding prior to the amendment."
Article IX of the Registrant's Amended and Restated By-Laws reads as follows:
To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made or threatened to be made a party to the proceeding
by reason of his or her service in any such capacity or (b) any individual who,
while a director or officer of the Corporation and at the request of the
Corporation, serves or has served as a director, officer, partner or trustee of
another corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or other enterprise and who is made or threatened
to be made a party to the proceeding by reason of his or her service in any such
capacity. The Corporation may, with the approval of its Board of Directors or
any duly authorized committee thereof, provide such indemnification and advance
for expenses to a person who served a predecessor of the Corporation in any of
the capacities described in (a) or (b) above and to any employee or agent of the
Corporation or a predecessor of the Corporation. The termination of any claim,
action, suit or other proceeding involving any person, by judgment, settlement
(whether with or without court approval) or conviction or upon a plea of guilty
or nolo contendere, or its equivalent, shall not create a presumption that such
person did not meet the standards of conduct required for indemnification or
payment of expenses to be required or permitted under Maryland law, these Bylaws
or the Charter. Any indemnification or advance of expenses made pursuant to this
Article shall be subject to applicable requirements of the 1940 Act. The
indemnification and payment of expenses provided in these Bylaws shall not be
deemed exclusive of or limit in any way other rights to which any person seeking
indemnification or payment of expenses may be or may become entitled under any
bylaw, regulation, insurance, agreement or otherwise.
Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the Bylaws or Charter inconsistent with this
Article, shall apply to or affect in any respect the applicability of the
preceding paragraph with respect to any act or failure to act which occurred
prior to such amendment, repeal or adoption.
The Advisory Agreement between the Registrant and AllianceBernstein
L.P. provides that AllianceBernstein L.P. will not be liable under such
agreements for any mistake of judgment or in any event whatsoever except for
lack of good faith and that nothing therein shall be deemed to protect
AllianceBernstein L.P. against any liability to the Registrant or its security
holders to which it would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties thereunder, or by
reason of reckless disregard of its duties and obligations thereunder.
The Distribution Services Agreement between the Registrant and
AllianceBernstein Investments, Inc. (formerly known as Alliance Fund
Distributors, Inc.) ("ABI") provides that the Registrant will indemnify, defend
and hold ABI and any person who controls it within the meaning of Section 15 of
the Securities Act of 1933, as amended (the "Securities Act"), free and harmless
from and against any and all claims, demands, liabilities and expenses which ABI
or any controlling person may incur arising out of or based upon any alleged
untrue statement of a material fact contained in the Registrant's Registration
Statement, Prospectus or Statement of Additional Information or arising out of,
or based upon any alleged omission to state a material fact required to be
stated in any one of the foregoing or necessary to make the statements in any
one of the foregoing not misleading.
The foregoing summaries are qualified by the entire text of
Registrant's Articles of Incorporation and Amended and Restated By-Laws, the
Advisory Agreement between Registrant and AllianceBernstein L.P. and the
Distribution Services Agreement between Registrant and ABI which are filed as
Exhibits (a), (b), (d) and (e), respectively, in response to Item 23 of the
Registrant's Registration Statement filed on Form N-1A (File Nos. 33-49530 and
811-6730) and each of which are incorporated by reference herein.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
In accordance with Release No. IC-11330 (September 2, 1980), the
Registrant will indemnify its directors, officers, investment manager and
principal underwriters only if (1) a final decision on the merits was issued by
the court or other body before whom the proceeding was brought that the person
to be indemnified (the "indemnitee") was not liable by reason or willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the facts, that the indemnitee was
not liable by reason of disabling conduct, by (a) the vote of a majority of a
quorum of the directors who are neither "interested persons" of the Registrant
as defined in section 2(a)(19) of the Investment Company Act of 1940 nor parties
to the proceeding ("disinterested, non-party directors"), or (b) an independent
legal counsel in a written opinion. The Registrant will advance attorneys fees
or other expenses incurred by its directors, officers, investment adviser or
principal underwriters in defending a proceeding, upon the undertaking by or on
behalf of the indemnitee to repay the advance unless it is ultimately determined
that he is entitled to indemnification and, as a condition to the advance, (1)
the indemnitee shall provide a security for his undertaking, (2) the Registrant
shall be insured against losses arising by reason of any lawful advances, or (3)
a majority of a quorum of disinterested, non-party directors of the Registrant,
or an independent legal counsel in a written opinion, shall determine, based on
a review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
The Registrant participates in a Joint directors and officers
liability insurance policy issued by the ICI Mutual Insurance Company. Coverage
under this policy has been extended to directors, trustees and officers of the
investment companies managed by AllianceBernstein L.P. Under this policy,
outside trustees and directors would be covered up to the limits specified for
any claim against them for acts committed in their capacities as trustee or
director. A pro rata share of the premium for this coverage is charged to each
investment company and to the Adviser.
ITEM 16. Exhibits
--------
(1) (a) Articles of Incorporation of Registrant - Incorporated by
reference to Exhibit 1(a) to Post-Effective Amendment No. 14 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on January 30, 1998.
(b) Articles of Amendment to Articles of Incorporation of the
Registrant dated July 31, 1992 and filed August 3, 1992 -
Incorporated by reference to Exhibit 1(b) to Post-Effective
Amendment No. 14 of Registrant's Registration Statement on Form
N-1A (File Nos. 33-49530 and 811-6730) filed with the Securities
and Exchange Commission on January 30, 1998.
(c) Certificate of Correction of Articles of Amendment dated
September 22, 1992 and filed September 24, 1992 - Incorporated by
reference to Exhibit 1(c) to Post-Effective Amendment No. 15 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on October 30, 1998.
(d) Articles Supplementary to Articles of Incorporation of Registrant
dated April 29, 1993 and filed April 30, 1993 - Incorporated by
reference to Exhibit 1(d) to Post-Effective Amendment No. 15 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on October 30, 1998.
(e) Articles Supplementary to Articles of Incorporation of Registrant
dated September 30, 1996 and filed October 1, 1996 - Incorporated
by reference to Exhibit 1 to Post-Effective Amendment No. 11 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on January 30, 1998.
(f) Articles of Amendment to Articles of Incorporation dated March
19, 2003 and filed March 20, 2003 - Incorporated by reference to
Exhibit (a)(6) to Post-Effective Amendment No. 28 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-49530 and
811-6730) filed with the Securities and Exchange Commission on
August 7, 2003.
(g) Articles Supplementary to Articles of Incorporation dated July
31, 2003 and filed August 1, 2003 - Incorporated by reference to
Exhibit (a)(7) to Post-Effective Amendment No. 28 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-49530 and
811-6730) filed with the Securities and Exchange Commission on
August 7, 2003.
(h) Articles of Amendment to Articles of Incorporation dated October
19, 2004 and filed December 8, 2004 - Incorporated by reference
to Exhibit (a)(8) to Post-Effective Amendment No. 32 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on February 28, 2005.
(i) Articles Supplementary to the Articles of Incorporation dated
February 17, 2005 and filed February 22, 2005 - Incorporated by
reference to Exhibit (a)(8) to Post-Effective Amendment No. 32 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on February 28, 2005.
(2) Amended and Restated By-Laws of the Registrant - Filed herewith.
(3) Not applicable.
(4) Form of Agreement and Plan of Acquisition and Liquidation of
AllianceBernstein Premier Growth Fund - Constitutes Appendix E to Part
A hereof.
(5) Not applicable.
(6) (a) Advisory Agreement between the Registrant and AllianceBernstein
L.P. - Incorporated by reference to Exhibit 5 to Post-Effective
Amendment No. 14 of Registrant's Registration Statement on Form
N-1A (File Nos. 33-49530 and 811-6730) filed with the Securities
and Exchange Commission on January 30, 1998.
(b) Form of Amended and Restated Advisory Agreement - Incorporated by
reference to Exhibit (d)(2) to Post Effective Amendment No. 31 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on November 1, 2004.
(7) (a) Distribution Services Agreement between the Registrant and
AllianceBernstein Investments, Inc. (formerly known as Alliance
Fund Distributors, Inc.) - Incorporated by reference to Exhibit
6(a) to Post-Effective Amendment No. 14 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-49530 and
811-6730) filed with the Securities and Exchange Commission on
January 30, 1998.
(b) Amendment to the Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc. (formerly
known as Alliance Fund Distributors, Inc.) dated July 16, 1996 -
Incorporated by reference to Exhibit 6 to Post-Effective
Amendment No. 11 of Registrant's Registration Statement on Form
N-1A (File Nos. 33-49530 and 811-6730) filed with the Securities
and Exchange Commission on February 3, 1997.
(c) Amendment to the Distribution Services Agreement dated November
3, 2003 between the Registrant and AllianceBernstein Investments,
Inc. (formerly known as Alliance Fund Distributors, Inc.) -
Incorporated by reference to Exhibit (e)(3) to Post Effective
Amendment No. 31 of Registrant's Registration Statement on Form
N-1A (File Nos. 33-49530 and 811-6730) filed with the Securities
and Exchange Commission on November 1, 2004.
(d) Form of Amendment to the Distribution Services Agreement between
the Registrant and AllianceBernstein Investments, Inc. (formerly
known as Alliance Fund Distributors, Inc.) - Incorporated by
reference to Exhibit (e)(4) to Post-Effective Amendment No. 32 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on February 28, 2005.
(e) Form of Selected Dealer Agreement between AllianceBernstein
Investments, Inc. (formerly known as Alliance Fund Distributors,
Inc.) and selected dealers offering shares of Registrant -
Incorporated by reference to Exhibit (e)(3) to Post-Effective
Amendment No. 34 of the Registration Statement on Form N-1A of
AllianceBernstein Municipal Income Fund, Inc. (File Nos. 33-7812
and 811-04791) filed with the Securities and Exchange Commission
on January 28, 2005.
(f) Form of Selected Agent Agreement between AllianceBernstein
Investments, Inc. (formerly known as Alliance Fund Distributors,
Inc.) and selected agents making available shares of Registrant
Incorporated by reference to Exhibit (e)(4) to Post-Effective
Amendment No. 34 of the Registration Statement on Form N-1A of
AllianceBernstein Municipal Income Fund, Inc. (File Nos. 33-7812
and 811-04791) filed with the Securities and Exchange Commission
on January 28, 2005.
(8) Not applicable.
(9) Custodian Contract between the Registrant and State Street Bank and
Trust Company - Incorporated by reference to Exhibit 8 to
Post-Effective Amendment No. 14 of Registrant's Registration Statement
on Form N-1A (File Nos. 33-49530 and 811-6730) filed with the
Securities and Exchange Commission on January 30, 1998.
(10) (a) Rule 12b-1 Plan - See Exhibit (7)(1) hereto.
(b) Form of Amended and Restated Rule 18f-3 Plan - Incorporated by
reference to Exhibit (n) to Post-Effective Amendment No. 32 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on February 28, 2005.
(11) Opinion and Consent of Seward & Kissel LLP regarding the legality of
the securities - Filed herewith.
(12) Form of Opinion of Seward & Kissel LLP as to Tax Matters - To be filed
by amendment.
(13) (a) Transfer Agency Agreement between the Registrant and
AllianceBernstein Global Investor Services, Inc. - Incorporated
by reference to Exhibit 9 to Post-Effective Amendment No. 14 of
Registrant's Registration Statement on Form N-1A (File Nos.
33-49530 and 811-6730) filed with the Securities and Exchange
Commission on January 30, 1998.
(b) Code of Ethics for the Fund - Incorporated by reference to
Exhibit (p)(1) to Post-Effective Amendment No. 74 of the
Registration Statement on Form N-1A of AllianceBernstein Bond
Fund, Inc. (File Nos. 2-48227 and 811-2383), filed with the
Securities and Exchange Commission on October 6, 2000, which is
substantially identical in all material respects except as to the
party which is the Registrant.
(c) Code of Ethics for AllianceBernstein L.P. and AllianceBernstein
Investments, Inc. (formerly known as Alliance Fund Distributors,
Inc.) - Incorporated by reference to Exhibit (p)(2) to
Post-Effective Amendment No. 34 of the Registration Statement on
Form N-1A of AllianceBernstein Municipal Income Fund, Inc. (File
Nos. 33-7812 and 811-04791), filed with the Securities and
Exchange Commission on January 28, 2005.
(14) Consents of Independent Registered Public Accounting Firms,
PricewaterhouseCoopers LLP and Ernst & Young LLP - Filed herewith.
(15) Not applicable.
(16) Powers of Attorney for: Ruth Block, David H. Dievler, John H. Dobkin,
Michael J. Downey, William H. Foulk, Jr., D. James Guzy, Nancy P.
Jacklin, Marc O. Mayer and Marshall C. Turner, Jr. - Filed herewith.
(17) Not applicable.
ITEM 17. Undertakings
(1) The undersigned registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
a part of this registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act 17 CFR 230.145(c), the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of the applicable
form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
(3) The undersigned registrant undertakes to file a post-effective
amendment to this registration statement upon the closing of the
Acquisition described in this registration statement that contains an
opinion of counsel supporting the tax matters discussed in this
registration statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement on Form N-14
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, on the 9th day of August, 2006.
ALLIANCEBERNSTEIN LARGE CAP GROWTH
FUND, INC.
By: Marc O. Mayer*
------------------
Marc O. Mayer
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
1. Principal Executive Officer:
Marc O. Mayer* President and Chief August 9, 2006
Executive Officer
2. Principal Financial and
Accounting Officer:
/s/ Joseph J. Mantineo Treasurer and August 9, 2006
---------------------- Chief Financial Officer
Joseph J. Mantineo
3. All Directors
-------------
Ruth Block*
David H. Dievler*
John H. Dobkin*
Michael J. Downey*
William H. Foulk, Jr.*
D. James Guzy*
Nancy P. Jacklin*
Marc O. Mayer*
Marshall C. Turner, Jr.*
*By:/s/ Andrew L. Gangolf August 9, 2006
-----------------
Andrew L. Gangolf
(Attorney-in-fact)
Index to Exhibits
-----------------
Exhibit No. Description of Exhibits
----------- -----------------------
(2) Amended and Restated Bylaws
(11) Opinion and Consent of Seward & Kissel LLP
(14) Consents of Independent Registered Public Accounting Firms
(16) Powers of Attorney
SK 00250 0209 691965 v2
Dates Referenced Herein and Documents Incorporated by Reference
6 Subsequent Filings that Reference this Filing
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