Document/Exhibit Description Pages Size
1: 485APOS Post-Effective Amendment 154± 568K
9: EX-99 Miscellaneous Exhibit 7 36K
2: EX-99.A Exhibit 99A-3 2 13K
3: EX-99.B Miscellaneous Exhibit 13± 50K
4: EX-99.E Exhibit 99E-2 3± 14K
5: EX-99.H Exhibit 99H-3 2± 9K
6: EX-99.I Exhibit 99I-2 2± 10K
7: EX-99.J Miscellaneous Exhibit 1 6K
8: EX-99.N Miscellaneous Exhibit 6± 24K
As filed with the Securities and Exchange
Commission on June 23, 2004
File Nos. 333-85164
811-21064
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 2 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 4 X
AllianceBernstein Global Research Growth Fund, Inc.
1345 Avenue of the Americas, New York, New York 10105
(800) 221-5672
MARK R. MANLEY
Alliance Capital Management 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
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ X ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
This Post-Effective Amendment No. 2 relates solely to the
registration of Class R shares of the Registrant. No information
contained in the Registrant's Registration Statement relating to
the Class A, Class B, Class C or Advisor Class shares is amended
or superseded hereby.
AllianceBernstein(SM)
Investment Research and Management
AllianceBernstein Global Research Growth Fund
PROSPECTUS
_________, 2004
AllianceBernstein Global Research Growth Fund is an open-end
management investment company that offers investors the
opportunity for long-term growth of capital through investments
in a global portfolio of equity securities of companies in
various market sectors chosen for their growth potential.
The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal
offense.
Investment Products Offered
>> Are Not FDIC Insured
>> May Lose Value
>> Are Not Bank Guaranteed
TABLE OF CONTENTS
Page
RISK/RETURN SUMMARY
FEES AND EXPENSES OF THE FUND
SALES CHARGE REDUCTION PROGRAMS
PURCHASE AND SALE OF SHARES
How the Fund Values its Shares
How to Buy Shares
General
How to Exchange Shares
How to Sell Shares
DISTRIBUTION ARRANGEMENTS
GLOSSARY
DESCRIPTION OF THE FUND
Investment Objective, Principal Policies and Risk
Considerations
Description of Additional Investment Practices
Additional Risk Considerations
MANAGEMENT OF THE FUND
DIVIDENDS, DISTRIBUTIONS AND TAXES
GENERAL INFORMATION
FINANCIAL HIGHLIGHTS
The Fund's investment adviser is Alliance Capital
Management L.P., a global investment manager providing
diversified services to institutions and individuals through a
broad line of investments including more than 100 mutual funds.
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RISK/RETURN SUMMARY
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The following is a summary of certain key information about
AllianceBernstein Global Research Growth Fund. This Summary
describes the Fund's objective, principal investment strategies,
principal risks and fees. This Summary includes a short
discussion of some of the principal risks of investing in the
Fund.
A more detailed description of the Fund, including the risks
associated with investing in the Fund, can be found further back
in this Prospectus. Please be sure to read this additional
information BEFORE you invest. The Fund may at times use certain
types of investment derivatives such as options, futures and
forwards. The use of these techniques involves special risks that
are discussed in this Prospectus.
Other important things for you to note:
o You may lose money by investing in the Fund.
o An investment in the Fund is not a deposit in a
bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other
government agency.
Objective:
The Fund's investment objective is to seek long-term growth
of capital.
Principal Investment Strategies:
The Fund invests primarily in a global portfolio of equity
securities of companies within various market sectors selected by
Alliance for their growth potential. Examples of the types of
market sectors into which Alliance may invest the Fund's assets
include, but are not limited to, communications and information
technology, health care, financial services, infrastructure,
energy and natural resources, and consumer growth. Alliance's
Associate Directors of Global Growth Research, in consultation
with the Director of Global Growth Research, are responsible for
determining the market sectors into which the Fund's assets are
invested and the percentage allocation into each sector. Alliance
allocates the Fund's investments among the selected market
sectors based on its assessment of both current and forecasted
economic and investment conditions. A senior industry analyst for
each sector is responsible for stock selection within that
sector. Within each sector, stock selection emphasizes investment
in companies representing the industry analyst groups' top picks
for their respective sectors. The Fund invests, under normal
circumstances, in the equity securities of companies based in at
least three countries (and normally substantially more), one of
which may be the United States. The Fund also invests in
securities of companies in emerging markets.
Principal Risks:
Among the principal risks of investing in the Fund are
market risk, foreign risk, currency risk and industry/sector
risk.
Performance Table and Bar Chart
The table and bar chart provide an indication of the
historical risk of an investment in the Fund by showing:
o how the Fund's average annual returns, before and after
taxes, for one year and since inception compared to
those of a broad based securities market index; and
o changes in the Fund's performance from year to year
since inception.
The Fund's past performance before and after taxes, of
course, does not necessarily indicate how it will perform in the
future.
This information is for the Fund's Class A shares, which,
although not offered in this Prospectus, have returns that are
substantially similar to the Fund's Class R shares because the
classes invest in the same portfolio of securities. The returns
of the Class A shares and Class R shares will differ because the
Class A shares have a lower expense ratio than the Class R
shares. In addition, the returns will differ because the Class A
shares have an initial sales charge while the Class R shares are
not subject to any sales charges. The returns of the Class A
shares are for the period prior to the Fund's commencement of a
public offering of its shares on February 2, 2004 and may not be
representative of future performance of the Fund after
commencement of the public offering.
Performance Table
Average Annual Total Returns*
(For the periods ended December 31, 2003)
------------------------------------------------------------------------------
1 Year** Since
Inception**
------------------------------------------------------------------------------
Class A*** Return Before Taxes 28.60% 20.61%
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Return After Taxes on 26.72% 19.38%
Distributions
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Return After Taxes on
Distributions and Sale of Fund 19.24% 17.08%
Shares
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MSCI World Index (reflects no deduction for
fees, expenses, or taxes) 33.76% 19.41%
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* Average annual total returns reflect imposition of the
maximum front-end sales charges.
** Inception Date is 7/22/02 for Class A shares.
*** After-tax Returns:
- Are estimates, which are 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.
Bar Chart
The annual returns in the bar chart do not reflect sales loads.
If sales loads were reflected, returns would be less than those
shown. Through June 30, 2004, the year-to-date unannualized
return for Class A shares was ____%.
n/a n/a n/a n/a n/a n/a n/a n/a n/a 34.28%
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1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Calendar Year End
You should consider an investment in the Fund as a long-term
investment. The Fund's returns will fluctuate over long and short
periods. For example, during the period shown in the bar chart,
the Fund's:
Best quarter was up 14.86%, 2nd quarter, 2003; and
Worst quarter was down -1.98%, 3rd quarter, 2003.
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FEES AND EXPENSES OF THE FUND
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This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Class R Shares*
---------------
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of None
offering price)
Maximum Deferred Sales Charge (Load)
(as a percentage of original
purchase price or redemption None
proceeds, whichever is lower)
Exchange Fee None
--------
* Class R shares are only offered to certain group retirement
plans. See "Purchase and Sales of Shares" in this
Prospectus.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets) and Examples
The Examples are to help you compare the cost of investing
in the Fund with the cost of investing in other funds. They
assume that you invest $10,000 in the 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 the Fund's operating expenses stay the same and
that all dividends and distributions are reinvested. Although
your actual costs may be higher or lower, based on these
assumptions your costs as reflected in the Examples would be:
Operating Expenses Examples
------------------ --------
Management fees 1.00% After 1 Year $173
Distribution and/or service (12b-1) fees 0.50% After 3 Years(d) $3,623
Other expenses(a) 17.89% After 5 Years(d) $6,152
Total Fund operating expenses(b) 19.39% After 10 Years(d) $9,900
Waivers and/or expense reimbursement(c) 17.69%
Net expenses 1.70%
--------
(a) Based on estimated expenses.
(b) Effective January 1, 2004, Alliance waived a portion of its
advisory fee, which reduces the Fund's advisory fee to
0.75%. This fee reduction is expected to continue for a
period of at least five years.
(c) Reflects Alliance'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 and may be extended by Alliance for
additional one-year terms. Certain fees waived or expenses
borne by Alliance through August 31, 2003 may be reimbursed
by the Fund until August 31, 2005. No reimbursement payment
will be made that would cause the Fund's total annualized
operating expenses to exceed 1.70% for Class R shares, or
cause the total reimbursement payments to exceed the Fund's
total initial organizational and offering expenses.
(d) These examples assume that Alliance's agreement to waive
advisory fees and/or reimburse Fund expenses is not extended
beyond its current period.
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SALES CHARGE REDUCTION PROGRAMS
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AllianceBernstein Mutual Funds offer several ways for
investors to reduce or eliminate sales charges. A brief summary
of some of these Sales Charge Reduction, or "breakpoint",
programs is outlined below. More details about these programs are
contained in the Fund's Statement of Additional Information
("SAI") or on our website at www.Alliancecapital.com.
o Breakpoints
The AllianceBernstein Mutual Funds offer investors the
benefit of discounts on the sales charges that apply to
purchases of Class A shares in certain circumstances. These
discounts, which are also known as Breakpoints can reduce
or, in some cases, eliminate the sales charges that would
otherwise apply to your Class A investment. Mutual funds are
not required to offer breakpoints and different mutual fund
groups may offer different types of breakpoints.
o Breakpoints Offered by the AllianceBernstein Mutual Funds
The AllianceBernstein Mutual Funds offer the following
breakpoint privileges:
Quantity Discounts - Under this type of breakpoint, larger
investments are charged lower sales charges. For very large
investments, the entire sales charge may be waived. A
shareholder investing more than $100,000 in Class A shares
of an AllianceBernstein Mutual Fund is eligible for a
reduced sales charge. Front-end sales charges are eliminated
completely for purchases over $1 million, although a 1%,
1-year contingent deferred sales charge ("CDSC") may apply.
The sales charge schedule of Class A share Quantity
Discounts is as follows:
Less than $100,000 4.25%
$100,000 but less than $250,000 3.25%
$250,000 but less than $500,000 2.25%
$500,000 but less than $1 million 1.75%
$1 million and above 0.00*
--------
* Class A shares redeemed within one year are subject to a
CDSC equal to 1% of the lesser of the initial cost of the
shares being redeemed or their net asset value at the time
of redemption. No sales charge is assessed on increases in
net asset value above the initial purchase price.
Rights of Accumulation - Shareholders can combine the value
of a new investment in a fund with the value of existing
investments in a fund to determine if the new investment is
eligible for a Quantity Discount. The AllianceBernstein
Mutual Funds use the current net asset value of your
existing investments when combining them with your new
investment. Shareholders may also aggregate the value of all
of their investments in all of their AllianceBernstein
Mutual Funds for purposes of Rights of Accumulation.
Combined Purchase Privileges - Shareholders may include the
value of accounts held by their spouse and children under
the age of 21 for purposes of reaching Quantity Discounts or
Rights of Accumulation. These privileges apply even if your
related accounts are opened using different brokers or
brokerage firms, so it is important to let your broker(s)
know about all your accounts that may be combined for these
privileges.
Letter of Intent - Some investors may not immediately invest
a sufficient amount to reach a Quantity Discount, but may
plan to make one or more additional investments over a
period of time that, in the end, would be sufficient for a
Quantity Discount. For these situations, the
AllianceBernstein Mutual Funds offer a Letter of Intent.
With a Letter of Intent, the investor expresses his/her
intention, in writing, to invest a certain amount over a
specified period of time. The Fund will then apply to each
of the investor's periodic investments the Quantity Discount
that would apply to the total amount stated in the Letter of
Intent. However, if an investor fails to invest the total
amount stated in the Letter of Intent, the Fund can
retroactively collect the sales charges (by redeeming shares
in the investor's account at their current net asset value)
that should have applied given the amount that the investor
actually did invest.
o Other Sales Charge Waivers:
The AllianceBernstein Mutual Funds offer other ways for
qualifying shareholders to obtain reduced sales charges.
More details about these sales charge reduction programs are
contained in the Fund's SAI. These programs apply to certain
types of investors, for example certain retirement plans.
Other programs include a dividend reinvestment program,
exchange privilege program and the reinstatement privilege.
The AllianceBernstein Mutual Funds also offer certain
opportunities to waive otherwise applicable CDSC, which are
described in the Fund's SAI.
For more information, please refer to the Fund's SAI, call
your financial advisor or visit our website at
www.Alliancecapital.com.
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PURCHASE AND SALE OF SHARES
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How the Fund Values its Shares
The Fund's net asset value or NAV is calculated at the next
close of regular trading on the Exchange (ordinarily, 4:00 p.m.,
Eastern time), only on days when the Exchange is open for
business. To calculate NAV, the Fund's assets are valued and
totaled, liabilities are subtracted, and the balance, called net
assets, is divided by the number of shares outstanding. The Fund
values its securities at their current market value determined on
the basis of market quotations, or, if such quotations are not
readily available, such other methods as the Fund's directors
believe accurately reflect fair market value. Because the Fund
may invest in securities that are primarily listed on foreign
exchanges that trade on weekends or other days when the Fund does
not price its shares, the NAV for the Fund may change on days
when shareholders will not be able to purchase or redeem the
Fund's shares.
Your order for a purchase, sale, or exchange of shares is
priced at the next NAV calculated after your order is received in
proper form by the Fund.
How to Buy Shares
Class R shares are available 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 ("group retirement plans") that have
plan assets of $1 million to $10 million and have plan level or
omnibus accounts held on the books of the Fund. Class R shares
are not available to retail non-retirement accounts, traditional
and ROTH IRAs, Coverdell Education Savings Accounts, SEPs,
SAR-SEPs, SIMPLE IRAs, individual 403 (b) plans and
AllianceBernstein sponsored retirements products.
General
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 the account. Required information includes
name, date of birth, permanent residential address and social
security/taxpayer identification 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 as it deems appropriate,
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.
The Fund is required to withhold 28% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders
who have not provided the Fund with their certified taxpayer
identification number. To avoid this, you must provide your
correct Tax Identification Number (Social Security Number for
most investors) on your Subscription Application.
Right To Restrict, Reject or Cancel Purchase and Exchange
Orders. The AllianceBernstein Mutual Funds reserve 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.
Policy Regarding Excessive or Short Duration Trading.
Purchases and exchanges of shares of the AllianceBernstein Mutual
Funds should be made for investment purposes only. The
AllianceBernstein Mutual Funds, as a matter of policy, seek to
prevent patterns of excessive purchases and sales or exchanges of
fund shares. Such practices are commonly referred to as "market
timing" or "short duration trading." The AllianceBernstein Mutual
Funds will seek to prevent such practices to the extent they are
detected by the procedures described below, subject to
AllianceBernstein Mutual Funds' ability to monitor purchase, sale
and exchange activity, as described under "Limitations on Ability
to Detect and Curtail Excessive Trading Practices." The
AllianceBernstein Mutual Funds, Alliance, ABIRM and Alliance
Global Investor Services, Inc. ("AGIS") each reserve 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 AllianceBernstein
Mutual Funds, through their agents, ABIRM and AGIS, maintain
surveillance procedures with respect to purchase, sale and
exchange activity in fund shares. This surveillance process
involves scrutinizing transactions in fund shares that
exceed certain monetary thresholds or numerical limits
within a specified period of time. Trading activity
identified by either, or a combination, of these factors, or
as a result of any other information actually available at
the time, will be evaluated to determine whether such
activity might constitute excessive or short duration
trading activity. Generally speaking, when a fund
shareholder makes more than two exchange transactions in
amounts of $25,000 or more involving an AllianceBernstein
Mutual Fund during any 90-day period, these transactions
will be identified by these surveillance procedures.
Additionally, each purchase of fund shares in excess of
$25,000 followed by a sale within certain periods of time
will be similarly identified. For purposes of these
transaction surveillance procedures, AllianceBernstein
Mutual Funds, ABIRM and AGIS may consider trading activity
in multiple accounts under common ownership, control or
influence. These monetary thresholds, numerical surveillance
limits or surveillance procedures generally may be modified
from time to time, including, for example, in respect of
accounts held by certain retirement plans to conform to plan
exchange limits or U.S. Department of Labor regulations, as
well as for certain automated or pre-established exchange,
asset allocation or dollar cost averaging programs or
omnibus account arrangements.
o Account Blocking Procedures. When a particular transaction
or pattern of transactions identified by the transaction
surveillance procedures described above is determined by the
AllianceBernstein Mutual Funds, ABIRM or AGIS, in their sole
discretion, to be excessive or short duration trading in
nature, the relevant fund account(s) will be immediately
"blocked" with respect to any future purchase or exchange
activity. However, sales of fund shares back to a fund will
continue to be permitted in accordance with the terms of the
relevant AllianceBernstein Mutual 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, may be suspended for such
account. AllianceBernstein Mutual Fund accounts that are so
blocked 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 AllianceBernstein Mutual Funds, ABIRM or
AGIS that the account holder did not or will not in the
future engage in excessive or short duration trading.
Limitations on Ability to Detect and Curtail Excessive
Trading Practices. Shareholders seeking to engage in excessive or
short duration trading practices may deploy a variety of
strategies to avoid detection and, despite the efforts of the
AllianceBernstein Mutual Funds, ABIRM and AGIS to detect
excessive or short duration trading in fund shares, there is no
guarantee that the AllianceBernstein Mutual Funds, ABIRM and AGIS
will be able to identify these shareholders or curtail their
trading practices. For example, omnibus account arrangements are
common forms of holding shares of a fund, particularly among
certain brokers, dealers and other financial intermediaries,
including retirement plans and variable insurance products.
Entities utilizing such omnibus account arrangements may not
identify customers' trading activity in shares of a fund on an
individual basis. Consequently, the AllianceBernstein Mutual
Funds, ABIRM and AGIS may not be able to detect excessive or
short duration trading in fund shares attributable to a
particular investor who effects purchase and/or exchange activity
in fund shares through a broker, dealer or other financial
intermediary acting in an omnibus capacity. Also, there may exist
multiple tiers of these entities, each utilizing an omnibus
account arrangement, which may further compound the difficulty to
the AllianceBernstein Mutual Funds, ABIRM and AGIS of detecting
excessive or short duration trading activity in fund shares. It
is common for a substantial portion of AllianceBernstein Mutual
Fund shares to be held through such omnibus account arrangements.
In seeking to prevent excessive or short duration trading in
shares of AllianceBernstein Mutual Funds, including the
maintenance of any transaction surveillance or account blocking
procedures, the AllianceBernstein Mutual Funds, ABIRM and AGIS
consider the information actually available to them at the time.
Risks Associated with Excessive or Short Duration Trading
Generally. While the AllianceBernstein Mutual Funds, ABIRM and
AGIS will try to prevent market timing by utilizing the
procedures described above, these procedures may not be
successful in identifying or stopping excessive or short duration
trading in all circumstances. Excessive purchases and sales or
exchanges of shares of AllianceBernstein Mutual Funds may
adversely affect fund performance and the interests of long-term
investors. Volatility resulting from excessive purchases and
sales or exchanges of fund shares, especially involving large
dollar amounts, may disrupt efficient portfolio management. In
particular, a fund may have difficulty implementing long-term
investment strategies if it is unable to anticipate what portion
of its assets it should retain in cash to provide liquidity to
its shareholders. Also, excessive purchases and sales or
exchanges of fund shares may force a fund to maintain a
disadvantageously large cash position to accommodate short
duration trading activity. Further, excessive purchases and sales
or exchanges of a fund's shares may force a fund to sell
portfolio securities at inopportune times to raise cash to
accommodate short duration trading activity. In addition, the
AllianceBernstein Mutual Funds may incur increased expenses if
one or more shareholders engage in excessive purchase and sale or
exchange activity. For example, a fund that is forced to
liquidate investments due to short duration trading activity may
incur increased brokerage and tax costs without attaining any
investment advantage. Similarly, a fund may bear increased
administrative costs as a result of the asset level and
investment volatility that accompanies patterns of short duration
trading activity.
The AllianceBernstein Mutual Funds that invest in foreign
securities may be particularly susceptible to short duration
trading strategies. This is because time zone differences among
international stock markets can allow a shareholder engaging in a
short duration strategy to exploit fund share prices that are
based on closing prices of foreign securities established some
time before the fund calculates its own share price. In addition,
a shareholder engaging in a short duration strategy may target an
AllianceBernstein Mutual Fund that does not invest primarily in
foreign securities. For example, a fund that invests in certain
fixed-income securities such as high yield bonds or certain asset
backed securities may also constitute an effective vehicle for a
shareholder's short duration trading strategy. Money market funds
and closed-end funds generally are not effective vehicles for
short duration trading activity, and therefore the risks relating
to short duration trading activity are correspondingly lower for
AllianceBernstein Mutual Funds of these types.
Risks Resulting from Imposition of Account Blocks in
Response to Excessive or Short Duration Trading Activity. A
shareholder identified as having engaged in excessive or short
duration trading activity and prevented from purchasing or
exchanging AllianceBernstein Mutual Fund shares and who does not
wish to redeem his or her shares effectively may be "locked" into
an investment in an AllianceBernstein Mutual 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 an account "blocked"
due to patterns of excessive purchases and sales or exchanges may
be forced to sell fund shares, which could be costly if, for
example, these shares decline in value before sale, are subject
to a CDSC, the shareholder recently paid a front-end sales charge
or the sale results in adverse tax consequences to the
shareholder. To avoid this risk, shareholders should carefully
monitor the nature and frequency of their purchases, sales and
exchanges of fund shares.
How to Exchange Shares
To the extent that other AllianceBernstein Mutual Funds
offer Class R shares, you may exchange your Fund shares for Class
R shares of such other AllianceBernstein Mutual Funds. Exchanges
of shares are made at the next determined NAV, without sales or
service charges. You may request an exchange by mail or
telephone. You must call by 4:00 p.m., Eastern time, to receive
that day's NAV. The Fund may modify, restrict, or terminate the
exchange service on 60 days' written notice.
How to Sell Shares
You may "redeem" your shares (i.e., sell your shares to the
Fund) on any day the Exchange is open through your financial
intermediary. Your sales price will be the next-determined NAV
after the Fund receives your sales request in proper form.
Normally, proceeds will be sent to you within seven 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 broker or financial representative must receive your
sales request by 4:00 p.m., Eastern time, and submit it to the
Fund by 5:00 p.m., Eastern time, for you to receive that day's
NAV. Your broker or financial representative is responsible for
submitting all necessary documentation to the Fund and may charge
you for this service.
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DISTRIBUTION ARRANGEMENTS
-----------------------------------------------------------------
The Fund offers Class R shares through this Prospectus.
Class R shares are available only to certain group retirement
plans that have plan assets of $1 million to $10 million. Class R
shares are not subject to any initial or contingent deferred
sales charges. The Fund's other share classes are offered through
a separate prospectus.
Asset-based Sales Charges or Distribution and/or Service
(Rule 12b-1) Fees. The Fund has adopted a plan 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 the Class R shares. The amount of this fee for the Class R
shares is 0.50% of the aggregate average daily net assets of the
Class. Because these fees are paid out of the Fund's assets on an
ongoing basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of
sales fees. All or a portion of these fees may be paid to your
financial representative.
Special Distribution Arrangement for Group Retirement Plans
and Employee Benefit Plans. The Fund offers special 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 that are different from those
described in this Prospectus. The Fund is not responsible for,
and has no control over, the decision of any plan sponsor or
fiduciary to impose such differing requirements.
Other. A transaction, service, administrative or other
similar fee may be charged by your broker-dealer, agent,
financial intermediary, or other financial representative with
respect to the purchase, sale, or exchange of Class R shares made
through such financial representative.
Financial intermediaries, including your financial
intermediary, receive a variety of payments from the Fund,
Alliance and ABIRM. ABIRM may, from time to time, pay additional
cash or other incentives to financial intermediaries in
connection with the sale of shares of the Fund and may also
defray certain expenses of intermediaries incurred in connection
with seminars and other educational efforts subject to ABIRM's
policies and procedures governing payments for such seminars.
Such cash or other incentives may include sharing expenses with
financial intermediaries that distribute the Fund for costs
incurred in conducting training and educational meetings about
the Fund for the employees of financial intermediaries. In
addition, ABIRM may share expenses with financial intermediaries
that distribute the Fund for costs incurred in hosting client
seminars where the Fund is discussed.
Alliance may also make cash payments from time to time from
its own resources to financial intermediaries in connection with
the sale of shares of the Fund. Such payments, which are
sometimes referred to as revenue sharing, may be associated with
the status of the Fund on a financial intermediary's preferred
list of funds or otherwise associated with the financial
intermediary's marketing and other support activities, such as
client education meetings relating to the Fund.
In addition, financial intermediaries that have omnibus
accounts and similar arrangements with the AllianceBernstein
Mutual Funds may be paid by the Fund for providing related
sub-transfer agency and other services. Such expenses paid by the
Fund are included in "Other Expenses" under "Fees and Expenses of
the Fund - Annual Fund Operating Expenses." Although the Fund may
use brokers 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.
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GLOSSARY
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This Prospectus uses the following terms.
TYPES OF SECURITIES
Depositary Receipts include American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs"), Global
Depositary Receipts ("GDRs") and other types of depositary
receipts.
Equity Securities include (i) common stocks, partnership
interests, business trust shares and other equity or ownership
interests in business enterprises and (ii) securities convertible
into, and rights and warrants to subscribe for the purchase of,
such stocks, shares and interests.
Rule 144A Securities are securities that may be resold under Rule
144A of the Securities Act.
RATING AGENCIES AND INDEXES
Fitch is Fitch Ratings.
Moody's is Moody's Investors Service, Inc.
S&P is Standard & Poor's Ratings Services.
OTHER
1940 Act is the Investment Company Act of 1940, as amended.
Code is the Internal Revenue Code of 1986, as amended.
Commission is the Securities and Exchange Commission.
Exchange is the New York Stock Exchange.
Securities Act is the Securities Act of 1933, as amended.
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DESCRIPTION OF THE FUND
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This section of the Prospectus provides a more complete
description of the Fund's investment objective, principal
investment policies and risks. Of course, there can be no
assurance that the Fund will achieve its investment objective.
Please note that:
o Additional discussion of the Fund's investments,
including the risks of the investments, can be found in
the discussion under Description of Additional
Investment Practices following this section.
o The description of the Fund's principal risks may
include risks discussed in the Risk/Return Summary
above. Additional information about risks of investing
in the Fund can be found in the discussion under
Additional Risk Considerations.
o Additional descriptions of the Fund's strategies,
investments and risks may be found in the Fund's SAI.
o Alliance publishes full portfolio holdings for most
AllianceBernstein Mutual Funds monthly on
www.alliancebernstein.com.
o The Fund's investment objective is fundamental and
cannot be changed without a shareholder vote and,
except as noted, its investment policies are not
fundamental and thus can be changed without a
shareholder vote. Where an investment policy or
restriction has a percentage limitation, such
limitation is applied at the time of investment.
Changes in the market value of securities in the Fund's
portfolio after they are purchased by the Fund will not
cause the Fund to be in violation of such limitation.
Investment Objective, Principal Policies and Risk Considerations
Investment Objective:
The Fund's investment objective is to seek long-term growth
of capital.
Principal Investment Policies and Risks:
The Fund invests primarily in a global portfolio of equity
securities of companies within various market sectors selected by
Alliance for their growth potential. Examples of the types of
market sectors into which Alliance may invest the Fund's assets
include, but are not limited to, communications and information
technology, health care, financial services, infrastructure,
energy and natural resources, and consumer growth. Alliance
allocates the Fund's investments among the selected market
sectors based on its assessment of both current and forecasted
economic and investment conditions. As these conditions change,
Alliance may vary the percentage allocation to each sector.
Alliance may, on occasion, change the market sectors into which
the Fund's assets will be invested as a sector's growth potential
matures and new trends for growth emerge.
Alliance's Associate Directors of Global Growth Research, in
consultation with the Director of Global Growth Research, are
responsible for determining the market sectors into which the
Fund's assets are invested and the percentage allocation into
each sector. Alliance believes that the ability to allocate
assets among the industry sectors allows the Fund to pursue the
most attractive investment trends before companies within a
market sector become overpriced and to re-apportion investments
as conditions warrant. Through this process, Alliance seeks to
take advantage of the relative attractiveness of different market
sectors as growth trends mature and new trends emerge.
Stock selection within each market sector is the
responsibility of a senior industry analyst for that sector.
Alliance's internal research staff includes both full-time
economists as well as industry/sector oriented company equity
analysts in the US and abroad. Within each sector, stock
selection emphasizes investment in companies representing the
industry analyst groups' top picks for their respective sectors.
The Fund normally invests in the equity securities of
companies located in at least three countries (and normally
substantially more), one of which may be the United States.
Alliance will adjust the exposure of the Fund to particular
national economies based on its perception of the most favorable
markets and issuers. The percentage of the assets of the
portfolio invested in securities of companies in a particular
country or denominated in a particular currency will vary in
accordance with Alliance's assessment of the appreciation
potential of such securities and the strength of that currency.
The Fund's market capitalization allocation, like its country
allocation, is a by-product of the stock selection process.
Alliance expects that normally the Fund's portfolio will tend to
emphasize investments in larger capitalization companies,
although it may invest in smaller or medium capitalization
companies from time to time. The Fund also may invest in
securities of companies in emerging markets.
In addition to purchasing directly securities of corporate
issuers in various securities markets, the Fund may invest in
depositary receipts, including ADRs, EDRs or other securities
representing securities of companies based in countries other
than the United States. Transactions in these securities may not
necessarily be settled in the same currency as transactions in
the securities which they represent. Generally, ADRs, in
registered form, are designed for use in the U.S. securities
markets and EDRs, in bearer form, are designed for use in
European securities markets. As a matter of fundamental policy,
the Fund may not invest 25% or more of its total assets in the
same industry. As a matter of fundamental policy, the Fund may
not make loans to other persons except that the Fund may lend its
portfolio securities in accordance with its investment policies
in amounts up to 33 1/3% of its total assets taken at market
value.
The Fund also may:
o purchase and sell futures contracts and options on
futures contracts;
o purchase and sell options;
o purchase and write put and call options on foreign
currencies and enter into forward foreign currency
exchange contracts for hedging purposes;
o purchase and sell exchange-traded index options and
stock index futures contracts; and
o invest up to 10% of its net assets in illiquid
securities.
Risk Considerations
Among the principal risks of investing in the Fund are:
o Market Risk This is the risk that the value of the
Fund's investments will fluctuate as the stock or bond
markets fluctuate and that prices overall will decline
over short- or long-term periods.
o Foreign Risk This is the risk of investments in issuers
located in foreign countries. The Fund's investments in
foreign securities may experience rapid and extreme
changes in value because the securities markets of many
foreign countries are relatively small, with a limited
number of companies representing a small number of
industries. To the extent the Fund invests in companies
in emerging markets, the Fund may have more risk
because these securities may be more volatile and less
liquid than securities in more developed countries.
Additionally, foreign securities issuers are usually
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. Also,
nationalization, expropriation or confiscatory
taxation, currency blockage, and political changes or
diplomatic developments could adversely affect the
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. In the event of nationalization,
expropriation or other confiscation, the Fund could
lose its entire investment in that country.
o Currency Risk This is the risk that fluctuations in the
exchange rates between the U.S. Dollar and currencies
may negatively affect the value of the Fund's
investments.
o Industry/Sector Risk This is the risk of investments in
a particular industry or industry sector. Market or
economic factors affecting that industry or group of
related industries could have a major effect on the
value of the Fund's investments.
o Capitalization Risk This is the risk of investments in
small- to mid-capitalization companies. Investments in
mid-cap companies may be more volatile than investments
in large cap companies. Investments in small-cap
companies tend to be more volatile than investments in
large-cap or mid-cap companies. The Fund's investments
in smaller capitalization stocks have additional risks
because these companies often have limited product
lines, markets, or financial resources.
o Allocation Risk The Fund has the risk that the
allocation of its investments among industry sectors
may have a more significant effect on the Fund's net
asset value when one of these sectors is performing
more poorly than the others.
o Management Risk The Fund is subject to management risk
because it is an actively managed investment portfolio.
Alliance will apply its investment techniques and risk
analyses in making investment decisions for the Fund,
but there is no guarantee that its decisions will
produce the intended results.
Description of Additional Investment Practices
This section describes the investment practices of the Fund
and risks associated with these practices.
Derivatives. The Fund may use derivatives to achieve its
investment objectives. Derivatives are financial contracts whose
value depends on, or is derived from, the value of an underlying
asset, reference rate or index. These assets, rates, and indices
may include bonds, stocks, mortgages, commodities, interest
rates, currency exchange rates, bond indices, and stock indices.
Derivatives can be used to earn income or protect against risk,
or both. For example, one party with unwanted risk may agree to
pass that risk to another party who is willing to accept the
risk, the second party being motivated, for example, by the
desire either to earn income in the form of a fee or premium from
the first party, or to reduce its own unwanted risk by attempting
to pass all or part of that risk to the first party.
Derivatives can be used by investors such as the Fund to
earn income and enhance returns, to hedge or adjust the risk
profile of a portfolio, and either to replace more traditional
direct investments or to obtain exposure to otherwise
inaccessible markets. The Fund may use derivatives for one or
more of these purposes. The use of derivatives may have greater
risk if they are used for other than hedging purposes.
Derivatives are a valuable tool, which, when used properly, can
provide significant benefits to Fund shareholders. The Fund may
take a significant position in those derivatives that are within
its investment policies if, in Alliance's judgment, this
represents the most effective response to current or anticipated
market conditions. Alliance's use of derivatives is subject to
continuous risk assessment and control from the standpoint of the
Fund's investment objectives and policies.
Derivatives may be (i) standardized, exchange-traded
contracts or (ii) customized, privately negotiated contracts.
Exchange-traded derivatives tend to be more liquid and subject to
less credit risk than those that are privately negotiated.
There are four principal types of derivative instruments -
options, futures, forwards, and swaps - from which virtually any
type of derivative transaction can be created.
o Options - An option, which may be standardized and
exchange-traded, or customized and privately negotiated, is
an agreement that, for a premium payment or fee, gives the
option holder (the buyer) the right but not the obligation
to buy or sell the underlying asset (or settle for cash an
amount based on an underlying asset, rate or index) at a
specified price (the exercise price) during a period of time
or on a specified date. A call option entitles the holder to
purchase, and a put option entitles the holder to sell, the
underlying asset (or settle for cash an amount based on an
underlying asset, rate or index). Likewise, when an option
is exercised the writer of the option is obligated to sell
(in the case of a call option) or to purchase (in the case
of a put option) the underlying asset (or settle for cash an
amount based on an underlying asset, rate or index).
o Futures - A futures contract is an agreement that obligates
the buyer to buy and the seller to sell a specified quantity
of an underlying asset (or settle for cash the value of a
contract based on an underlying asset, rate or index) at a
specific price on the contract maturity date. Futures
contracts are standardized, exchange-traded instruments and
are fungible (i.e., considered to be perfect substitutes for
each other). This fungibility allows futures contracts to be
readily offset or cancelled through the acquisition of equal
but opposite positions, which is the primary method in which
futures contracts are liquidated. A cash-settled futures
contract does not require physical delivery of the
underlying asset but instead is settled for cash equal to
the difference between the values of the contract on the
date it is entered into and its maturity date.
o Forwards - A forward contract is an obligation by one party
to buy, and the other party to sell, a specific quantity of
an underlying commodity or other tangible asset for an
agreed upon price at a future date. Forward contracts are
customized, privately negotiated agreements designed to
satisfy the objectives of each party. A forward contract
usually results in the delivery of the underlying asset upon
maturity of the contract in return for the agreed upon
payment.
o Swaps - A swap is a customized, privately negotiated
agreement that obligates two parties to exchange a series of
cash flows at specified intervals (payment dates) based upon
or calculated by reference to changes in specified prices or
rates (interest rates in the case of interest rate swaps,
currency exchange rates in the case of currency swaps) for a
specified amount of an underlying asset (the "notional"
principal amount). The payment flows are netted against each
other, with the difference being paid by one party to the
other. Except for currency swaps, the notional principal
amount is used solely to calculate the payment streams but
is not exchanged. With respect to currency swaps, actual
principal amounts of currencies may be exchanged by the
counterparties at the initiation, and again upon the
termination, of the transaction. Swap transactions also
include credit default swaps in which one party pays a
periodic fee, typically expressed in basis points on a
notional amount, in return for a contingent payment, by the
counterparty following a credit event in a specific debt
obligation or obligations. A credit event is typically a
default and the contingent payment may be a cash settlement
or by physical delivery of the reference obligation in
return for payment of its face amount.
The swap market has grown substantially in recent years,
with a large number of banks and investment banking firms
acting as principals and as agents utilizing standard swap
documentation. As a result, the swap market has become well
established and relatively liquid. The Fund will not enter
into swap transactions unless the unsecured senior debt or
the claims-paying ability of the other party is rated in the
highest rating category of at least one nationally
recognized statistical rating organization.
While the judicious use of derivatives by highly-experienced
investment managers such as Alliance can be quite beneficial,
derivatives involve risks different from, and, in certain cases,
greater than, the risks presented by more traditional
investments. The following is a general discussion of important
risk factors and issues relating to the use of derivatives that
investors should understand before investing in the Fund.
Derivatives Used by the Fund. The following describes specific
derivatives that the Fund may use.
Forward Foreign Currency Exchange Contracts. The Fund may
purchase or sell forward foreign currency exchange contracts to
minimize the risk of adverse changes in the relationship between
the U.S. Dollar and other currencies. A forward foreign currency
exchange contract is an obligation to purchase or sell a specific
currency for an agreed price at a future date, and is
individually negotiated and privately traded.
The Fund may enter into a forward foreign currency exchange
contract, for example, when it enters into a contract for the
purchase or sale of a security denominated in a foreign currency
in order to "lock in" the U.S. Dollar price of the security
("transaction hedge"). The Fund will not engage in transaction
hedges with respect to the currency of a particular country to an
extent greater than the aggregate amount of the Fund's
transactions in that currency. When the Fund believes that a
foreign currency may suffer a substantial decline against the
U.S. Dollar, it may enter into a forward sale contract to sell an
amount of that foreign currency approximating the value of some
or all of the Fund's portfolio securities denominated in such
foreign currency, or when the Fund believes that the U.S. Dollar
may suffer a substantial decline against a foreign currency, it
may enter into a forward purchase contract to buy that foreign
currency for a fixed dollar amount ("position hedge"). The Fund
will not position hedge with respect to a particular currency to
an extent greater than the aggregate market value (at the time of
making such sale) of the securities held in its portfolio
denominated or quoted in that currency. Instead of entering into
a position hedge, the Fund may, in the alternative, enter into a
forward foreign currency exchange contract to sell a different
foreign currency for a fixed U.S. Dollar amount where the Fund
believes that the U.S. Dollar value of the currency to be sold
pursuant to the forward foreign currency exchange contract will
fall whenever there is a decline in the U.S. Dollar value of the
currency in which portfolio securities of the Fund are
denominated ("cross-hedge"). Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than
if it had not entered into such forward foreign currency exchange
contracts.
Hedging against a decline in the value of a currency does
not eliminate fluctuations in the prices of portfolio securities
or prevent losses if the prices of such securities decline. These
transactions also preclude the opportunity for gain if the value
of the hedged currency should rise. Moreover, it may not be
possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to
sell the currency at a price above the devaluation level it
anticipates. The Fund's investments in forward foreign currency
exchange contracts will be limited to hedging involving either
specific transactions or portfolio positions.
Futures Contracts and Options on Futures Contracts. A "sale"
of a futures contract means the acquisition of a contractual
obligation to deliver the securities or foreign currencies or
other commodity called for by the contract at a specified price
on a specified date. A "purchase" of a futures contract means the
incurring of an obligation to acquire the securities, foreign
currencies or other commodity called for by the contract at a
specified price on a specified date. The purchaser of a futures
contract on an index agrees to take or make delivery of an amount
of cash equal to the difference between a specified dollar
multiple of the value of the index on the expiration date of the
contract ("current contract value") and the price at which the
contract was originally struck. No physical delivery of the
securities underlying the index is made.
Options on futures contracts are options that call for the
delivery of futures contracts upon exercise. Options on futures
contracts written or purchased by the Fund will be traded on U.S.
or foreign exchanges and will be used only for hedging purposes.
The Fund will not enter into any futures contracts or
options on futures contracts 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. 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. The Fund may 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.
Options on Currencies. As in the case of other kinds of
options, the writing of an option on a currency constitutes only
a partial hedge, up to the amount of the premium received, and
the Fund could be required to purchase or sell foreign currencies
at disadvantageous exchange rates and incur losses. The purchase
of an option on a currency may constitute an effective hedge
against fluctuations in exchange rates although, in the event of
rate movements adverse to a Fund's position, the Fund may forfeit
the entire amount of the premium plus related transaction costs.
See the Fund's SAI for further discussion of the use, risks, and
costs of options on currencies.
Options on Securities. An option gives the purchaser of the
option, upon payment of a premium, the right to deliver to (in
the case of a put) or receive from (in the case of a call) the
writer a specified amount of a security on or before a fixed date
at a predetermined price. A call option written by the Fund is
"covered" if the Fund owns the underlying security, has an
absolute and immediate right to acquire that security upon
conversion or exchange of another security it holds, or holds a
call option on the underlying security with an exercise price
equal to or less than that of the call option it has written.
Although the Fund may purchase put and call options,
including exchange-traded put and call options, it does not
currently intend to write put options. The Fund will not purchase
or sell any options on securities if, immediately after
acquisition, the aggregate acquisition prices of all options held
by the Fund (in terms of premiums paid) would be greater than 15%
of the Fund's net assets. See the SAI for further discussion on
writing options.
A call option is for cross-hedging purposes if the Fund does
not own the underlying security, and the position is designed to
provide a hedge against a decline in value in another security
that the Fund owns or has the right to acquire. The Fund would
write a call option for cross-hedging purposes, instead of
writing a covered call option, when the premium to be received
from the cross-hedge transaction would exceed that which would be
received from writing a covered call option, while at the same
time achieving the desired hedge.
In purchasing an option, the Fund would be in a position to
realize a gain if, during the option period, the price of the
underlying security increased (in the case of a call) or
decreased (in the case of a put) by an amount in excess of the
premium paid; otherwise the Fund would experience a loss equal to
the premium paid for the option.
If an option written by the Fund were exercised, the Fund
would be obligated to purchase (in the case of a put) or sell (in
the case of a call) the underlying security at the exercise
price. The risk involved in writing an option is that, if the
option were exercised, the underlying security would then be
purchased or sold by the Fund at a disadvantageous price.
Entering into a closing transaction (i.e., by disposing of the
option prior to its exercise) could reduce these risks. The Fund
retains the premium received from writing a put or call option
whether or not the option is exercised. The writing of covered
call options could result in increases in the Fund's portfolio
turnover rate, especially during periods when market prices of
the underlying securities appreciate.
Options purchased or written by the Fund in negotiated
transactions are illiquid and it may not be possible for the Fund
to effect a closing transaction at an advantageous time. The
aggregate acquisition cost of all options on securities and such
options on interest rate futures and other financial instruments
purchased by the Fund for purposes other than hedging may not
exceed 15% of the Fund's assets.
Depositary Receipts. Depositary receipts may not necessarily
be denominated in the same currency as the underlying securities
into which they may be converted. In addition, the issuers of the
stock of unsponsored depositary receipts are not obligated to
disclose material information in the United States and,
therefore, there may not be a correlation between such
information and the market value of the depositary receipts. ADRs
are depositary receipts typically issued by a U.S. bank or trust
company that evidence ownership of underlying securities issued
by a foreign corporation. GDRs and other types of depositary
receipts are typically issued by foreign banks or trust companies
and evidence ownership of underlying securities issued by either
a foreign or an U.S. company. Generally, depositary receipts in
registered form are designed for use in the U.S. securities
markets, and depositary receipts in bearer form are designed for
use in foreign securities markets. For purposes of determining
the country of issuance, investments in depositary receipts of
either type are deemed to be investments in the underlying
securities.
Illiquid Securities. The Fund will limit its investments in
illiquid securities to no more than 10% of its net assets.
Illiquid securities generally include (i) direct placements or
other securities that are subject to legal or contractual
restrictions on resale or for which there is no readily available
market (e.g., when trading in the security is suspended or, in
the case of unlisted securities, when market makers do not exist
or will not entertain bids or offers), including many
individually negotiated currency swaps and any assets used to
cover currency swaps and most privately negotiated investments in
state enterprises that have not yet conducted an initial equity
offering, (ii) over-the-counter options and assets used to cover
over-the-counter options, and (iii) repurchase agreements not
terminable within seven days.
Because of the absence of a trading market for illiquid
securities, the Fund may not be able to realize its full value
upon sale. Alliance will monitor the liquidity of the Fund's
investments in illiquid securities. Rule 144A securities
generally will not be treated as "illiquid" for purposes of this
limit on investments if they meet liquidity guidelines
established by the Board of Directors.
The Fund may not be able to readily sell securities for
which there is no ready market. Such securities are unlike
securities that are traded in the open market and can be expected
to be sold immediately if the market is adequate. The sale price
of illiquid securities may be lower or higher than Alliance's
most recent estimate of their fair value. Generally, less public
information is available about the issuers of such securities
than about companies whose securities are traded on an exchange.
To the extent that these securities are foreign securities, there
is no law in many of the countries in which the Fund may invest
similar to the Securities Act requiring an issuer to register the
sale of securities with a governmental agency or imposing legal
restrictions on resales of securities, either as to the length of
time the securities may be held or the manner of resale. However,
there may be contractual restrictions on resales of non-publicly
traded foreign securities.
Loans of Portfolio Securities. A principal risk in lending
portfolio securities, as with other collateralized extensions of
credit, consists of the possible loss of rights in the collateral
should the borrower fail financially. In addition, the Fund will
be exposed to the risk that the sale of any collateral realized
upon the borrower's default will not yield proceeds sufficient to
replace the loaned securities. In determining whether to lend
securities to a particular borrower, Alliance will consider all
relevant facts and circumstances, including the creditworthiness
of the borrower. While securities are on loan, the borrower will
pay the Fund any income from the securities. The Fund may invest
any cash collateral in portfolio securities and earn additional
income or receive an agreed-upon amount of income from a borrower
that has delivered equivalent collateral. Any such investment of
cash collateral will be subject to the Fund's investment risks.
Each Fund will have the right to regain record ownership of
loaned securities or equivalent securities in order to exercise
ownership rights such as voting rights, subscription rights and
rights to dividends, interest, or distributions. The Fund may pay
reasonable finders', administrative, and custodial fees in
connection with a loan.
Portfolio Turnover. The Fund is actively managed and, in
some cases in response to market conditions, the Fund's portfolio
turnover may exceed 100%. A higher rate of portfolio turnover
increases brokerage and other expenses, which must be borne by
the Fund and its shareholders. High portfolio turnover also may
result in the realization of substantial net short-term capital
gains, which, when distributed, are taxable to shareholders.
Temporary Defensive Position. For temporary defensive
purposes to attempt to respond to adverse market, economic,
political or other conditions, the Fund may reduce its position
in equity securities and invest, without limit, in certain types
of short-term, liquid, high grade or high quality debt securities
and in lower-rated securities and convertible securities. These
securities may include U.S. Government securities, qualifying
bank deposits, money market instruments, prime commercial paper
and other types of debt securities including notes and bonds.
Such securities also may include foreign-currency denominated
securities of the type mentioned above issued by foreign
governmental entities, companies, and supranational
organizations. While the Fund invests for temporary defensive
purposes, it may not meet its investment objective.
Future Developments. The Fund may take advantage of other
investment practices that are not currently contemplated for use
by the Fund, or are not available but may yet be developed, to
the extent such investment practices are consistent with the
Fund's investment objective and legally permissible for the Fund.
Such investment practices, if they arise, may involve risks that
exceed those involved in the activities described above.
General. The successful use of the investment practices
described above draws upon Alliance's special skills and
experience and usually depends on Alliance's ability to forecast
price movements, interest rates, or currency exchange rate
movements correctly. Should interest rates, prices, or exchange
rates move unexpectedly, the Fund may not achieve the anticipated
benefits of the transactions or may realize losses and thus be in
a worse position than if such strategies had not been used.
Unlike many exchange-traded futures contracts and options on
futures contracts, there are no daily price fluctuation limits
for certain options and forward contracts, and adverse market
movements could therefore continue to an unlimited extent over a
period of time. In addition, the correlation between movements in
the prices of futures contracts, options and forward contracts
and movements in the prices of the securities and currencies
hedged or used for cover will not be perfect and could produce
unanticipated losses.
The Fund's ability to dispose of its position in futures
contracts, options, and forward contracts depends on the
availability of liquid markets in such instruments. Markets in
options and futures with respect to a number of types of
securities and currencies are relatively new and still
developing, and there is no public market for forward contracts.
It is impossible to predict the amount of trading interest that
may exist in various types of futures contracts, options, and
forward contracts. If a secondary market does not exist for an
option purchased or written by the Fund, it might not be possible
to effect a closing transaction in the option (i.e., dispose of
the option), with the result that (i) an option purchased by the
Fund would have to be exercised in order for the Fund to realize
any profit and (ii) the Fund may not be able to sell currencies
or portfolio securities covering an option written by the Fund
until the option expires or it delivers the underlying security,
futures contract or currency upon exercise. Therefore, no
assurance can be given that the Fund will be able to utilize
these instruments effectively. In addition, the Fund's ability to
engage in options and futures transactions may be limited by tax
considerations and the use of certain hedging techniques may
adversely impact the characterization of income to the Fund for
U.S. federal income tax purposes.
Additional Risk Considerations
Investment in the Fund involves the special risk
considerations described below.
Currency Considerations. The Fund may receive a portion of
its revenues in foreign currencies. Therefore, the dollar
equivalent of its net assets, distributions, and income will be
adversely affected by reductions in the value of certain foreign
currencies relative to the U.S. Dollar. If the value of the
foreign currencies in which the Fund receives its income falls
relative to the U.S. Dollar between receipt of the income and the
making of Fund distributions, the Fund may be required to
liquidate securities in order to make distributions if it has
insufficient cash in U.S. Dollars to meet distribution
requirements that the Fund must satisfy to qualify as a regulated
investment company for federal income tax purposes. Similarly, if
an exchange rate declines between the time the Fund incurs
expenses in U.S. Dollars and the time cash expenses are paid, the
amount of the currency required to be converted into U.S. Dollars
in order to pay expenses in U.S. Dollars could be greater than
the equivalent amount of such expenses in the currency at the
time they were incurred. In light of these risks, the Fund may
engage in currency hedging transactions, as described above,
which involve certain special risks.
Foreign Securities. The securities markets of many foreign
countries are relatively small, with the majority of market
capitalization and trading volume concentrated in a limited
number of companies representing a small number of industries.
Consequently, the Fund's portfolio may experience greater price
volatility and significantly lower liquidity than a portfolio
invested solely in equity securities of U.S. companies. These
risks are heightened for emerging market countries because there
may be more economic, political and social instability. These
markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading
significant blocks of securities, than is usual in the United
States. Securities settlements may in some instances be subject
to delays and related administrative uncertainties.
Certain foreign countries require governmental approval
prior to investments by foreign persons or limit investment by
foreign persons to only a specified percentage of an issuer's
outstanding securities or a specific class of securities that may
have less advantageous terms (including price) than securities of
the company available for purchase by nationals. These
restrictions or controls may at times limit or preclude
investment in certain securities and may increase the costs and
expenses of the Fund. In addition, the repatriation of investment
income, capital, or the proceeds of sales of securities from
certain countries is controlled under regulations, including in
some cases the need for certain advance government notification
or authority. If a deterioration occurs in a country's balance of
payments, the country could impose temporary restrictions on
foreign capital remittances.
The Fund also could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for
repatriation, as well as by the application of other restrictions
on investment. Investing in local markets may require the Fund to
adopt special procedures that may involve additional costs to the
Fund. These factors may affect the liquidity of the Fund's
investments in any country and Alliance will monitor the effect
of any such factor or factors on the Fund's investments.
Furthermore, transaction costs including brokerage commissions
for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the United States.
Issuers of securities in foreign jurisdictions are generally
not subject to the same degree of regulation as are U.S. issuers
with respect to such matters as insider trading rules,
restrictions on market manipulation, shareholder proxy
requirements, and timely disclosure of information. The
reporting, accounting and auditing standards of foreign countries
may differ, in some cases significantly, from U.S. standards in
important respects and less information may be available to
investors in foreign securities than to investors in U.S.
securities. Substantially less information is publicly available
about certain non-U.S. issuers than is available about U.S.
issuers.
The economies of individual foreign countries may differ
favorably or unfavorably from the U.S. economy in such respects
as growth of gross domestic product or gross national product,
rate of inflation, capital reinvestment, resource
self-sufficiency, and balance of payments position.
Nationalization, expropriation or confiscatory taxation, currency
blockage, political changes, government regulation, political or
social instability, revolutions, wars or diplomatic developments
could affect adversely the economy of a foreign country,
particularly emerging market countries, and the Fund's
investments. In the event of expropriation, nationalization or
other confiscation, the Fund could lose its entire investment in
the country involved. In addition, laws in foreign countries
governing business organizations, bankruptcy and insolvency may
provide less protection to security holders such as the Fund than
that provided by U.S. laws.
U.S. and Foreign Taxes. The Fund's investment in foreign
securities may be subject to taxes withheld at the source on
dividend or interest payments. Foreign taxes paid by the Fund may
be creditable or deductible by U.S. shareholders for U.S. income
tax purposes. No assurance can be given that applicable tax laws
and interpretations will not change in the future. Moreover,
non-U.S. investors may not be able to credit or deduct such
foreign taxes.
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MANAGEMENT OF THE FUND
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Investment Adviser
The Fund's investment adviser is Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, NY 10105. Alliance
is a leading international investment adviser managing client
accounts with assets as of March 31, 2004 totaling approximately
$484 billion (of which approximately $170 billion represented
assets of investment companies). As of March 31, 2004, Alliance
managed retirement assets for many of the largest public and
private employee benefit plans (including 39 of the nation's
FORTUNE 100 companies), for public employee retirement funds in
38 states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide. The 52
registered investment companies managed by Alliance, comprising
128 separate investment portfolios, currently have more than 7.0
million shareholder accounts.
Alliance provides investment advisory services and order
placement facilities for the Fund. For these services, the Fund
pays Alliance a fee as a percentage of average daily net assets
at an annualized rate of 1.00% of the first $5 billion in average
daily net assets, 0.95% of the excess over $5 billion up to $7.5
billion in average daily net assets, 0.90% of the excess over
$7.5 billion up to $10 billion in average daily net assets and
0.85% of the excess over $10 billion in average daily net assets.
This fee is currently subject to a fee waiver, which reduces the
fee for Alliance's services as a percentage of average daily net
assets to an annualized rate of 0.75% of the first $2.5 billion
in average daily net assets, 0.65% of the excess over $2.5
billion up to $5 billion in average daily net assets and 0.60% of
the excess over $5 billion in average daily net assets. The fee
is accrued daily and paid monthly. Also see "Annual Fund
Operating Expenses" above for a description of expense waivers.
Alliance may act as an investment adviser to other persons,
firms or corporations, including investment companies, hedge
funds, pension funds and other institutional investors. Alliance
may receive management fees, including performance fees that may
be higher or lower than the advisory fees it receives from the
Fund. Certain other clients of Alliance may have investment
objectives and policies similar to those of the Fund. Alliance
may, from time to time, make recommendations which result in the
purchase or sale of a particular security by its other clients
simultaneously with the Fund. If transactions on behalf of more
than one client during the same period increase the demand for
securities being purchased or the supply of securities being
sold, there may be an adverse effect on price or quantity. It is
the policy of Alliance to allocate advisory recommendations and
the placing of orders in a manner which is deemed equitable by
Alliance to the accounts involved, including the Fund. When two
or more of the clients of Alliance (including the Fund) are
purchasing or selling the same security on a given day from the
same broker-dealer, such transactions may be averaged as to
price.
Performance of a Similarly Managed Portfolio. In addition to
its support in managing the Fund's assets, the global growth
research team currently has ultimate responsibility over
investment decisions of ACM Global Investments-Global Growth
Trends Portfolio, a mutual investment fund organized under the
laws of the Grand Duchy of Luxembourg of which Alliance is the
investment adviser and which is available to non-U.S. investors
(the "Historical Portfolio"). The Historical Portfolio has
substantially the same investment objective and policies and has
been managed in accordance with substantially similar investment
strategies and techniques as those contemplated for the Fund. The
Historical Portfolio is not subject to the same types of expenses
as the Fund. In addition, it is not subject to the same
diversification requirements, tax restrictions and other
investment limitations imposed on the Fund by the U.S. laws and
regulations applicable to U.S. mutual funds. The performance
results of the Historical Portfolio could have been negatively
affected if it had been regulated as a U.S. mutual fund.
Set forth below is performance data provided by Alliance
relating to the Historical Portfolio for the period since its
inception. As of December 31, 2003, the assets in the Historical
Portfolio totaled approximately $2 billion.
The performance data is for the Historical Portfolio's Class
AX shares and net of all fees charged to the Historical
Portfolio. The data has not been adjusted to reflect any fees
that are payable by the Fund, which may be higher than the fees
imposed on the Historical Portfolio. The performance data also
has not been adjusted for taxes, if any, payable by the
shareholders of the Historical Portfolio.
As reflected below, the Historical Portfolio has over time
performed favorably when compared with the performance of the
MSCI World Index. The unmanaged Morgan Stanley Capital
International (MSCI) World Index is a market
capitalization-weighted index and it does not reflect fees and
expenses; it measures the performance of stock markets in 23
countries.
The following performance data is provided solely to
illustrate the past performance of the global growth research
team in managing the Historical Portfolio. Investors should not
rely on the following performance data of the Historical
Portfolio as an indication of future performance of the Fund. The
investment performance for the periods presented may not be
indicative of future rates of return. Other methods of computing
investment performance may produce different results, and the
results for different periods may vary.
Schedule of Investment Performance - Historical Portfolio*
Historical Portfolio MSCI World Index Total
Total Return** Return***
-------------------- ----------------------
Year Ended December 31:
2003 32.95% 33.76%
2002 (18.69)% (19.54)%
2001 (14.44)% (16.52)%
2000 (0.13)% (12.92)%
1999 44.57% 25.34%
1998 26.15% 24.80%
1997 8.67% 16.23%
1996 14.43% 14.00%
1995 42.85% 21.32%
1994 5.43% 5.58%
1993 19.47% 23.13%
1992 9.34% (4.66)%
Cumulative total return
for the period October 25,
1991 (inception of the
Historical Portfolio) to
December 31, 2003 341.40% 150.23%
--------
* Total return is for the Historical Portfolio's Class AX
shares. Total return is a measure of investment performance
that is based upon the change in value of an investment from
the beginning to the end of a specified period and assumes
reinvestment of all dividends and other distributions. The
basis of preparation of this data is described in the
preceding discussion.
** Net of all fees charged on the Class AX shares.
*** Since Inception cumulative Index returns are from October
31, 1991.
The average annual total returns presented below are based
upon the cumulative total return as of December 31, 2003 and, for
more than one year, assume a steady compounded rate of return and
are not year-by-year results, which fluctuated over the periods
as shown.
Average Annual Total Returns
Historical Portfolio+ MSCI World Index
--------------------- ----------------
One Year 32.95% 33.76%
Three Years (2.57)% (3.51)%
Five Years 5.96% (0.39)%
Ten Years 12.18% 7.58%
Since October 25, 1991
(inception of the Historical Portfolio) 12.96% 7.83%++
--------
+ Historical Portfolio returns are of the Class AX shares and
are net of all fees.
++ Since inception average annual total returns are from
October 31, 1991.
Legal Proceedings. As has been previously reported in the
press, the Staff of the Commission and the Office of the New York
Attorney General ("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 Alliance
provide information to them. Alliance has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, Alliance confirmed that it had reached
terms with the Commission 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 Commission is reflected in an Order of the
Commission ("Order"). The agreement with the NYAG is subject to
final, definitive documentation. Among the key provisions of
these agreements are the following:
(i) Alliance 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 Order. According to the Order, the Reimbursement
Fund is to be paid, in order of priority, to fund
investors based on (a) their aliquot share of losses
suffered by the fund due to market timing, and (b) a
proportionate share of advisory fees paid by such fund
during the period of such market timing;
(ii) Alliance agreed to reduce the advisory fees it receives
from some of the AllianceBernstein long-term, open-end
retail funds, commencing January 1, 2004, for a period
of at least five years. The determination of which
funds will have their fees reduced and to what degree
is subject to the terms of the definitive agreement
with the NYAG; and
(iii) Alliance agreed to implement changes to its governance
and compliance procedures. Additionally, the Order
contemplates that Alliance's registered investment
company clients, including the Fund, will introduce
governance and compliance changes.
Effective January 1, 2004, Alliance began waiving a portion
of the advisory fee it receives for managing the Fund. Please see
"Fees and Expenses of the Fund" and "Management of the Fund" for
a description of the reduced fee. The amount of the fee waiver
may increase or decrease as a result of a final, definitive
agreement with the NYAG.
A special committee of Alliance's Board of Directors,
comprised of the members of Alliance's Audit Committee and the
other independent member of the Board, is continuing to direct
and oversee an internal investigation and a comprehensive review
of the facts and circumstances relevant to the Commission'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 putative class action complaint
entitled Hindo et al. v. AllianceBernstein Growth & Income Fund
et al. (the "Hindo Complaint") was filed against Alliance;
Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the
AllianceBernstein Mutual Funds; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain
other defendants not affiliated with Alliance. 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 Mutual Funds. The Hindo Complaint alleges
that certain of the Alliance Capital 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 Mutual Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Sections 206
and 215 of the Investment Advisers Act of 1940. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of
their contracts with Alliance, including recovery of all fees
paid to Alliance pursuant to such contracts.
Since October 2, 2003, approximately 40 additional lawsuits
making factual allegations similar to those in the Hindo
Complaint were filed against Alliance and certain other
defendants, some of which name the Fund as defendant. All of
these lawsuits seek an unspecified amount of damages.
As a result of the matters described above, investors in the
AllianceBernstein Mutual Funds may choose to redeem their
investments. 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.
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DIVIDENDS, DISTRIBUTIONS AND TAXES
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The 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 of the same class of shares of the Fund. If paid in
additional shares, the shares will have an aggregate NAV 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. You may make an election to receive dividends and
distributions in cash or in shares at the time you purchase
shares. Your 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. Cash dividends may be paid in check, or at your
election, electronically via the ACH network.
If you receive an income dividend or capital gains
distribution in cash you may, within 120 days following the date
of its payment, reinvest the dividend or distribution in
additional shares of the Fund without charge by returning to
Alliance, with appropriate instructions, the check representing
the dividend or distribution. Thereafter, unless you otherwise
specify, you will be deemed to have elected to reinvest all
subsequent dividends and distributions in shares of the Fund.
While it is the intention of the Fund to distribute to its
shareholders substantially all of each fiscal year's net income
and net realized capital gains, if any, the amount and timing 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 a Fund's return of capital
distributions for the period will be made after the end of each
calendar year.
For federal income tax purposes, the Fund's dividend
distributions of net income (or short-term taxable gains) will be
taxable to you as ordinary income. Distributions of long-term
capital gains generally will be taxable to you as long-term
capital gains. The Fund's distributions also may be subject to
certain state and local taxes. Dividends and distributions are
taxable whether you receive them in cash or shares, or reinvest a
cash distribution in additional shares.
Under the provisions of recently enacted tax legislation,
the maximum long-term capital gains rate has been reduced from
20% to 15%, and some or all of the distributions from a mutual
fund may be treated as "qualified dividend income," taxable to
individuals at the reduced maximum rate of 15% (5% for
individuals in lower tax brackets), provided that both the Fund
and the individual satisfy certain holding period and other
requirements. A distribution from the Fund is treated as
qualified dividend income to the extent that it is comprised of
dividend income received by the Fund from taxable domestic
corporations and certain qualified foreign corporations, and
provided that the Fund meets certain holding period and other
requirements with respect to the security paying the dividend. In
addition, the individual must meet certain holding period
requirements with respect to the shares of the Fund in order to
take advantage of the 15% tax rate. To the extent distributions
from the Fund are attributable to other sources, such as taxable
interest, most distributions from real estate investment trusts,
or short-term capital gains, the dividends will not be eligible
for the lower rates. The Fund will notify you as to how much of
its distributions, if any, would qualify for the reduced tax
rate, assuming that you also satisfy the holding period
requirements.
Investment income received by the Fund from sources within
foreign countries may be subject to foreign income taxes withheld
at the source. To the extent that the Fund is liable for foreign
income taxes withheld at the source, the Fund intends, if
possible, to operate so as to meet the requirements of the Code
to "pass-through" to the Fund's shareholders credits for foreign
income taxes paid (or to permit shareholders to claim a deduction
for such foreign taxes), but there can be no assurance that the
Fund will be able to do so. Furthermore, a shareholder's ability
to claim a foreign tax credit or deduction for foreign taxes paid
by the Fund may be subject to certain limitations imposed by the
Code, as a result of which a shareholder may not be permitted to
claim a credit or deduction for all or a portion of the amount of
such taxes.
Under certain circumstances, if the Fund realizes losses
(e.g., from fluctuations in currency exchange rates) after paying
a dividend, all or a portion of the dividend may subsequently be
characterized as a return of capital. Returns of capital are
generally nontaxable, but will reduce a shareholder's basis in
shares of the Fund. If that basis is reduced to zero (which could
happen if the shareholder does not reinvest distributions and
returns of capital are significant), any further returns of
capital will be taxable as capital gains.
If you buy shares just before the Fund deducts a
distribution from its NAV, you will pay the full price for the
shares and then receive a portion of the price back as a taxable
distribution.
For tax purposes, an exchange is treated as a sale of Fund
shares. The sale or exchange of Fund shares is a taxable
transaction for federal income tax purposes.
Each year shortly after December 31, the Fund will send its
shareholders tax information stating the amount and type of all
its distributions for the year. Consult your tax adviser about
the federal, state, and local tax consequences in your particular
circumstances.
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GENERAL INFORMATION
-----------------------------------------------------------------
Under unusual circumstances, the Fund may suspend
redemptions or postpone payment for up to seven days or longer,
as permitted by federal securities law. The Fund reserves the
right to close an account that through redemption has remained
below $200 for 90 days. Shareholders will receive 60 days'
written notice to increase the account value before the account
is closed.
During drastic economic or market developments, you might
have difficulty in reaching AGIS by telephone, in which event you
should issue written instructions to AGIS. AGIS is not
responsible for the authenticity of telephone requests to
purchase, sell, or exchange shares. AGIS will employ reasonable
procedures to verify that telephone requests are genuine, and
could be liable for losses resulting from unauthorized
transactions if it failed to do so. Dealers and agents may charge
a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without
notice.
Shareholder Services. AGIS offers a variety of shareholder
services. For more information about these services or your
account, call AGIS's toll-free number, 800-221-5672. Some
services are described in the Subscription Application. You also
may request a shareholder's manual explaining all available
services by calling 800-227-4618.
Householding. Many shareholders of the AllianceBernstein
Mutual Funds have family members living in the same home who also
own shares of the same Funds. In order to reduce the amount of
duplicative mail that is sent to homes with more than one Fund
account and to reduce expenses of the Fund, all AllianceBernstein
Mutual Funds will, until notified otherwise, send only one copy
of each prospectus, shareholder report and proxy statement to
each household address. This process, known as "householding",
does not apply to account statements, confirmations, or personal
tax information. If you do not wish to participate in
householding, or wish to discontinue householding at any time,
call AGIS at 800-221-5672. We will resume separate mailings for
your account within 30 days of your request.
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FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
Financial Highlights are not provided because Class R shares
had not commenced operations prior to the date of this
Prospectus.
For more information about the Fund, the following documents are
available upon request:
o Annual/Semi-Annual Reports to Shareholders
The Fund's annual and semi-annual reports to shareholders
contain additional information on the Fund's investments. In the
annual report, you will find a discussion of the market
conditions and investment strategies that significantly affected
the Fund's performance during its last fiscal period.
o Statement of Additional Information (SAI)
The Fund has an SAI, which contains more detailed
information about the Fund, including its operations and
investment policies. The Fund's SAI is incorporated by reference
into (and is legally part of) this Prospectus.
You may request a free copy of the current
annual/semi-annual report or SAI, or make shareholder inquiries
of the Fund, by contacting your broker or other financial
intermediary, or by contacting Alliance:
By Mail: c/o Alliance Global Investor Services
P.O. Box 786003
San Antonio, TX 78278-6003
By Phone: For Information: (800) 221-5672
For Literature: (800) 227-4618
Or you may view or obtain these documents from the Commission:
o Call the Commission at 1-202-942-8090 for information on the
operation of the Public Reference Room.
o Reports and other information about the Fund are available
on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov.
o Copies of the information may be obtained, after paying a
duplicating fee, by electronic request at
publicinfo@sec.gov, or by writing the Commission's Public
Reference Section, Washington, DC 20549-0102.
You also may find more information about Alliance and the Fund on
the Internet at: www.Alliancecapital.com.
-----------------------------------------------------------------
Privacy Notice
Alliance Capital Management L.P., the AllianceBernstein Family of
Funds and AllianceBernstein Investment Research and Management,
Inc. (collectively, "Alliance" or "we") understand the importance
of maintaining the confidentiality of our customers' nonpublic
personal information. In order to provide financial products and
services to our customers efficiently and accurately, we may
collect nonpublic personal information about our customers from
the following sources: (1) information we receive from account
documentation, including applications or other forms (which may
include information such as a customer's name, address, social
security number, assets and income) and (2) information about our
customers' transactions with us, our affiliates and others
(including information such as a customer's account balances and
account activity).
It is our policy not to disclose nonpublic personal information
about our customers (or former customers) except to our
affiliates, or to others as permitted or required by law. From
time to time, Alliance may disclose nonpublic personal
information that we collect about our customers (or former
customers), as described above, to non-affiliated third party
providers, including those that perform processing or servicing
functions and those that provide marketing services for us or on
our behalf pursuant to a joint marketing agreement that requires
the third party provider to adhere to Alliance's privacy policy.
We have policies and procedures to safeguard nonpublic personal
information about our customers (or former customers) which
include: (1) restricting access to such nonpublic personal
information and (2) maintaining physical, electronic and
procedural safeguards that comply with federal standards to
safeguard such nonpublic personal information.
-----------------------------------------------------------------
SEC File No: 811-21064
[LOGO] ALLIANCEBERNSTEIN GLOBAL
RESEARCH GROWTH FUND, INC.
-----------------------------------------------------------------
c/o Alliance Global Investor Services, Inc.
P.O. Box 786003, San Antonio, Texas 78278-6003
Toll Free: (800) 221-5672
For Literature: Toll Free (800) 221-4618
-----------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
October 1, 2003
(as amended ________, 2004)
-----------------------------------------------------------------
This Statement of Additional Information ("SAI") is not
a prospectus but supplements and should be read in conjunction
with the current Prospectus, dated February 2, 2004, of
AllianceBernstein Global Research Growth Fund, Inc. (formerly
known as AllianceBernstein Global Growth Trends Fund, Inc.) (the
"Fund") that offers the Class A, Class B, Class C, and Advisor
Class shares of the Fund (the "Prospectus") and the current
Prospectus, dated _______, 2004 that offers Class R shares of the
Fund (the "Class R Prospectus" and together with the Prospectus,
the "Prospectuses"). Financial statements for the period ended
June 30, 2003 are included in the annual report to shareholders
and are incorporated into this SAI by reference. Copies of the
Prospectuses and annual report may be obtained by contacting
Alliance Global Investor Services, Inc. ("AGIS") at the address
or the "For Literature" telephone number shown above.
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE FUND.......................................
MANAGEMENT OF THE FUND........................................
EXPENSES OF THE FUND..........................................
PURCHASE OF SHARES............................................
REDEMPTION AND REPURCHASE OF SHARES...........................
SHAREHOLDER SERVICES..........................................
NET ASSET VALUE...............................................
DIVIDENDS, DISTRIBUTIONS AND TAXES............................
PORTFOLIO TRANSACTIONS........................................
GENERAL INFORMATION...........................................
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM..........................
APPENDIX A: FUTURES CONTRACTS, OPTIONS ON FUTURES
CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES................A-1
APPENDIX B: STATEMENT OF POLICIES AND PROCEDURES FOR VOTING
PROXIES....................................................B-1
--------
SM: This service mark is used under license from the owner.
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DESCRIPTION OF THE FUND
-----------------------------------------------------------------
The Fund is a diversified, open-end investment company.
The Fund was incorporated under the laws of the State of Maryland
on March 22, 2002. The Fund's investment objective is
"fundamental" and cannot be changed without a shareholder vote.
Except as otherwise indicated, the investment policies of the
Fund are not "fundamental policies" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), and
may, therefore, be changed by the Board of Directors without a
shareholder vote. However, the Fund will not change its
investment policies without contemporaneous notice to its
shareholders. There is no guarantee that the Fund will achieve
its investment objective.
Special Investment Considerations. Investing in
securities issued by foreign corporations involves considerations
and possible risks not typically associated with investing in
obligations issued by U.S. corporations. The values of foreign
investments are affected by changes in currency rates or exchange
control regulations, application of foreign tax laws, including
withholding taxes, changes in governmental administration or
economic or monetary policy (in this country or abroad) or
changed circumstances in dealings between nations. Costs are
incurred in connection with conversions between various
currencies. In addition, foreign brokerage commissions are
generally higher than in the United States, and foreign
securities markets may be less liquid, more volatile and less
subject to governmental supervision than in the United States.
Investments in foreign countries could be affected by other
factors not present in the United States, including
expropriation, confiscatory taxation, lack of uniform accounting
and auditing standards and potential difficulties in enforcing
contractual obligations and could be subject to extended
settlement periods.
Additional Investment Policies and Practices
--------------------------------------------
The following investment policies and restrictions
supplement those set forth above and in the Prospectus.
Options. In seeking to attain long-term growth of
capital, the Fund may supplement customary investment practices
by writing and purchasing call options listed on one or more U.S.
or foreign securities exchanges and purchasing put options,
including listed put options and put options on market indexes. A
put option gives the buyer of such option, upon payment of a
premium, the right to deliver a specified number of shares of a
stock to the writer of the option on or before a fixed date, at a
predetermined price. A call option gives the purchaser of the
option, upon payment of a premium, the right to call upon the
writer to deliver a specified number of shares of a specified
stock on or before a fixed date, at a predetermined price,
usually the market price at the time the contract is negotiated.
Prior to the expiration of the option, the seller (the "writer")
of the option has an obligation to sell the underlying security
to the holder of the option at the exercise price regardless of
the market price of the security at the time the option is
exercised. The premium received by the Fund is recorded as a
liability and is subsequently adjusted to the current market
value of the option written. Premiums received from writing
options which expire unexercised are treated by the Fund on the
expiration date as realized capital gains. The difference between
the premium and the amount paid upon executing a closing purchase
transaction, including brokerage commissions, is also treated as
a gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a loss. If a call option is
exercised, the premium is added to the proceeds from the sale in
determining whether the Fund has realized a gain or loss.
Writing and purchasing options are highly specialized
activities and entail greater than ordinary investment risks. The
Fund will not write a call option unless the Fund at all times
during the option period owns either (a) the optioned securities,
or securities convertible into or carrying rights to acquire the
optioned securities, or (b) an offsetting call option on the same
securities.
The Fund will not write put options unless adequate
liquid assets are set aside until the expiration of the put
option to cover the aggregate exercise price of the securities to
be acquired by the Fund pursuant to the put option. The Fund will
only write call options if such writing does not result in a
short position. The Fund will maintain the underlying securities
until the expiration date of the call option granted by the Fund.
However, the Fund may dispose of the underlying securities in
declining markets as long as the market is sufficiently liquid to
enable the Fund to cover its position at any time and the
aggregate of the exercise prices payable under the call options
written are not greater than 25% of the Fund's net assets. The
Fund will not purchase or sell any option, unless the option is
quoted on a stock exchange or dealt in on a regulated market, and
provided that immediately after its acquisition, the aggregate of
the acquisition prices of all options held by the Fund (in terms
of premiums paid) is not greater than 15% of the Fund's net
assets.
In the event the option is exercised, the Fund will be
obligated to sell stocks below the current market price. The
Fund's potential for gain is limited to the difference between
the exercise price plus the premium less the cost of the
security. Alternatively, the option's position could be closed
out by purchasing a like option. It is possible that the Fund
might be unable to execute such a closing purchase transaction.
If the price of a security declines below the amount to be
received from the exercise price less the amount of the call
premium received and if the option could not be closed, the Fund
would hold a security which might otherwise have been sold to
protect against depreciation. In addition, the Fund's portfolio
turnover may increase to the extent that the market price of the
underlying securities covered by call options written by the Fund
increases and the Fund has not entered into a closing purchase
transaction.
If an option purchased by the Fund expires without
being exercised, its premium would be lost by the Fund.
Options on Market Indexes. Options on securities
indexes are similar to options on a security except that, rather
than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder
the right to receive, upon exercise of the option, an amount of
cash if the closing level of the chosen index is greater than (in
the case of a call) or less than (in the case of a put) the
exercise price of the option.
Through the purchase of listed index options, the Fund
could achieve many of the same objectives as through the use of
options on individual securities. Price movements in the Fund's
portfolio securities probably will not correlate perfectly with
movements in the level of the index and, therefore, the Fund
would bear a risk of loss on index options purchased by it if
favorable price movements of the hedged portfolio securities do
not equal or exceed losses on the options or if adverse price
movements of the hedged portfolio securities are greater than
gains realized from the options.
The Fund may sell call options on securities indexes or
purchase put options on securities indexes to hedge the risk of
fluctuations of its portfolio securities. The value of the
underlying securities included in the relevant securities index
options shall not exceed, together with outstanding commitments
in financial futures contracts entered into for the same purpose,
the aggregate value of the portion of the Fund's assets to be
hedged. For purposes of the efficient management of its portfolio
securities, the Fund may purchase call options on securities
indexes to facilitate changes in the allocation of the Fund's
assets between markets or in a significant market sector advance
(or in anticipation of one), provided that the value of the
underlying securities included in the relevant securities index
options is covered by uncommitted cash reserves, short dated debt
securities and instruments or securities to be disposed of at
predetermined prices.
The Fund may deal only in options on securities indexes
that are listed on a stock exchange or dealt in on a regulated
market. However, the Fund may purchase or sell OTC options on
financial instruments, if such transactions are more advantageous
to the Fund or if quoted options having the required features are
not available, provided that such transactions are made with
highly rated counterparties specializing in these types of
transactions. Further, the aggregate acquisition cost (in terms
of premiums paid) of all options on securities and such options
on interest rate futures and other financial instruments
purchased by the Fund for purposes other than hedging, shall not
exceed 15% of the Fund's net assets.
Currency Hedging Techniques. The Fund may engage in
various portfolio strategies to hedge its portfolio against
currency risks. These strategies include the use of forward
foreign currency transactions, currency options and futures and
options on such futures. The Fund may enter into such
transactions only in connection with hedging strategies. While
the Fund's use of hedging strategies is intended to reduce the
risk of declines in the net asset value of Fund shares, there can
be no assurance that the Fund's hedging transactions will be
effective. Unanticipated changes in currency prices may result in
poorer overall performance for the Fund than if it had not
entered into such hedging transactions. Furthermore, the Fund
will only engage in hedging activities from time to time and may
not necessarily be engaging in hedging activities when movements
in the currency exchange rates occur.
Although certain risks are involved in forward, futures
and options transactions, Alliance Capital Management L.P., the
Fund's investment adviser (the "Adviser" or "Alliance") believes
that, because the Fund will only engage in these transactions for
hedging purposes, the forward, futures and options portfolio
strategies of the Fund will not subject the Fund to those
additional risks associated with the speculative use of futures
transactions.
Forward Foreign Currency Exchange Contracts. The Fund
may purchase or sell forward foreign currency exchange contracts
("forward contracts") to attempt to minimize the risk to the Fund
from adverse changes in the relationship between the U.S. Dollar
and other currencies. Generally, the foreign exchange
transactions of the Fund will be conducted on a spot, i.e., cash,
basis at the spot rate for purchasing or selling currency
prevailing in the foreign exchange market. Under normal market
conditions, this rate differs from the prevailing exchange rate
in an amount generally less than one-tenth of one percent due to
the costs of converting from one currency to another. However,
the Fund has authority to deal in forward foreign exchange
between currencies of the different countries in whose securities
it will invest as a hedge against possible variations in the
foreign exchange rates between these currencies. A forward
contract is an obligation to purchase or sell a specific currency
for an agreed price at a future date (up to one year) which is
individually negotiated and privately traded by currency traders
and their customers. The Fund's dealings in forward contracts
will be limited to hedging involving either specific transactions
or portfolio positions. Transaction hedging is the purchase or
sale of forward contracts with respect to specific receivables or
payables of the Fund accruing in connection with the purchase and
sale of its portfolio securities or the payment of dividends and
distributions by the Fund. Position hedging is the sale of
forward contracts with respect to portfolio security positions
denominated or quoted in such foreign currency. Forward contracts
reduce the potential gain from a positive change in the
relationship between U.S. Dollar and other currencies.
Hedging against a decline in the value of a currency
does not eliminate fluctuations in the prices of portfolio
securities denominated in such currency or prevent losses if the
prices of such securities decline. Such transactions also
preclude the opportunity for gain if the value of the hedge
currency should rise. Moreover, it may not be possible for the
Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the
currency at a price above the devaluation level it anticipates.
The cost to the Fund of engaging in foreign currency transactions
varies with such factors as the currency involved, the length of
the contract period and the market conditions then prevailing.
Since transactions in foreign currency exchange are usually
conducted on a principal basis, no fees or commissions are
involved.
Forward Contracts must be either quoted on a stock
exchange or dealt in or on a regulated market. However, the Fund
may enter into Forward Contracts with highly rated financial
institutions.
Foreign Currency Options, Foreign Currency Futures and
Options on Foreign Currency Futures. The Fund is also authorized
to purchase or sell listed or unlisted foreign currency options,
foreign currency futures and related options on foreign currency
futures as a short or long hedge against possible variations in
foreign exchange rates. Such transactions may be effected with
respect to hedges on non-U.S. Dollar denominated securities owned
by the Fund, sold by the Fund but not yet delivered, or committed
or anticipated to be purchased by the Fund. As an illustration,
the Fund may use such techniques to hedge the stated value in
U.S. Dollars of an investment in a pound sterling denominated
security. In such circumstances, for example, the Fund may
purchase a foreign currency put option enabling it to sell a
specified amount of pounds for dollars at a specified price by a
future date. To the extent the hedge is successful, a loss in the
value of the pound relative to the dollar will tend to be offset
by an increase in the value of the put option. To offset, in
whole or in part, the cost of acquiring such a put option, the
Fund may also sell a call option which, if exercised, requires it
to sell a specified amount of pounds for dollars at a specified
price by a future date (a technique called a "straddle"). By
selling such call option in this illustration, the Fund gives up
the unlimited opportunity to profit from increases in the
relative value of the pound to the dollar. All options written by
the Fund must be "covered," and must remain "covered" as long as
the Fund is obligated as a writer. For example, where the Fund
sells a call option on a futures or forward contract, it may
cover either by entering into a long position in the same
contract at a price no higher than the strike price of the call
option or by owning the instruments or currency underlying the
futures or forward contracts. The Fund could also cover this
position by holding a separate call option permitting it to
purchase the same futures or forward contract at a price no
higher than the strike price of the call option sold by the Fund.
A put option written by the Fund may be "covered" if the Fund
maintains liquid assets with a value equal to the exercise price
in a segregated account with its custodian, or else owns a put on
the same contract as the put written where the exercise price of
the put held is equal or greater than the exercise price of the
put written.
Certain differences exist between these foreign
currency hedging instruments. Foreign currency options provide
the holder thereof the right to buy or sell a currency at a fixed
price on a future date. Listed options are third-party contracts
(i.e., performance of the parties' obligations is guaranteed by
an exchange or clearing corporation) which are issued by a
clearing corporation, traded on an exchange and have standardized
strike prices and expiration dates. Unlisted options are
two-party contracts and have negotiated strike prices and
expiration dates. A futures contract on a foreign currency is an
agreement between two parties to buy or sell a specified amount
of a currency for a set price on a future date. Certain futures
contracts and options on futures contracts are traded on boards
of trade or futures exchanges. The Fund may enter into such
transactions only in connection with hedging strategies against
variations on exchange rates.
Contracts on currencies must either be quoted on a
stock exchange or dealt in or on a regulated market except that
the Fund may enter into currency forward contracts or swap
arrangements with highly rated financial institutions.
The Fund will segregate in a segregated account with
its custodian bank liquid assets having a market value
substantially representing any subsequent decrease in the market
value of such hedged security, less any initial or variation
margin held in the account of its broker.
Currency Swaps. The Fund may enter into currency swaps
for hedging purposes. Currency swaps involve the exchange by the
Fund with another party of a series of payments in specified
currencies. Since currency swaps are individually negotiated, the
Fund expects to achieve an acceptable degree of correlation
between its portfolio investments and its currency swaps
positions. A currency swap may involve the delivery at the end of
the exchange period of a substantial amount of one designated
currency in exchange for the other designated currency.
Therefore, the entire principal value of a currency swap is
subject to the risk that the other party to the swap will default
on its contractual delivery obligations. The net amount of the
excess, if any, of the Fund's obligations over its entitlements
with respect to each currency swap will be accrued on a daily
basis and an amount of liquid assets having an aggregate net
asset value at least equal to the accrued excess will be
maintained in a segregated account by the Fund's custodian. The
Fund will not enter into any currency swap unless the credit
quality of the unsecured senior debt or the claims-paying ability
of the other party thereto is rated in the highest rating
category of at least one nationally recognized rating
organization at the time of entering into the transaction. If
there is a default by the other party to such transaction, the
Fund will have contractual remedies pursuant to the agreements
related to the transactions.
Risk Factors in Options, Futures and Currency
Transactions. Utilization of futures transactions involves the
risk of imperfect correlation in movements in the price of
futures contracts and movements in the price of the currencies
which are the subject of the hedge. If the price of the futures
contract moves more or less than the price of the currency, the
Fund will experience a gain or loss which will not be completely
offset by movements in the price of the currencies which are the
subject of the hedge. Unanticipated changes in currency prices
may result in poorer overall performance for the Fund than if it
had not entered into such contract. Transactions in options and
options on futures contracts involve similar risks. The
successful use of such instruments draws upon the Adviser's
special skills with respect to such instruments and usually
depends on the Adviser's ability to forecast currency exchange
rate movements correctly.
Other risks inherent in the use of these forward,
futures and options on futures strategies include: imperfect
correlation between movements in the prices of futures contracts
or options thereon and movements in the exchange rates of the
currencies hedged, the fact that skills and techniques needed to
trade futures contracts and options thereon are different from
those needed to select equity securities, no assurance that a
liquid secondary market will exist for any particular futures
contract or option thereon at any particular time, and the fact
that some futures markets have daily price movements limits.
There are similar risks inherent in the use of options on foreign
currencies.
Prior to exercise or expiration, an exchange-traded
option position written by the Fund can only be terminated by
entering into a closing purchase or sale transaction. This
requires a secondary market on an exchange for call or put
options of the same series. The Fund will enter into an option or
futures transaction on an exchange only if there appears to be a
liquid secondary market for such options or futures. However,
there can be no assurance that a liquid secondary market will
exist for any particular call or put option or futures contract
at any specific time. Thus, it may not be possible for the Fund
to close a particular option or futures position. In the case of
a futures position, in the event of adverse price movements, the
Fund would continue to be required to make daily cash payments of
variation margin. In such situations, if the Fund has
insufficient cash, it may have to sell portfolio securities to
meet daily variation margin requirements at a time when it may be
disadvantageous to do so. In addition, the Fund may be required
to take or make delivery of the currency underlying the currency
futures contracts it holds. The inability to close options and
futures positions also could have an adverse impact on the Fund's
ability to effectively hedge its portfolio. There is also the
risk of loss by the Fund of margin deposits in the event of the
bankruptcy of a broker with whom the Fund has an open position in
the futures contract or related option.
The exchanges on which the Fund intends to conduct
options transactions have generally established "position limits"
which are limitations governing the maximum number of call or put
options on the same underlying currency (whether or not covered)
which may be written by a single investor, whether acting alone
or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written
on one or more accounts or through one or more brokers). "Trading
limits" are imposed on the maximum number of contracts that any
person may trade on a particular trading day. An exchange may
order the liquidation of positions found to be in violation of
these limits and it may impose other sanctions or restrictions.
The Adviser does not believe that these position and trading
limits will have any adverse impact on the portfolio strategies
for hedging the Fund's portfolio. On the other hand, the
protections afforded to exchange participants by position and
trading limits are not available with respect to transactions in
unlisted options.
ADRs and EDRs. In addition to purchasing corporate
securities of non-U.S. issuers in overseas securities markets,
the Fund may invest in American Depository Receipts (ADRs),
European Depository Receipts (EDRs) or other securities
representing securities of companies based in countries other
than the United States. Transactions in these securities may not
necessarily be settled in the same currency as transactions in
the securities into which they represent. Generally, ADRs, in
registered form, are designed for use in the U.S. securities
markets and EDRs, in bearer form, are designed for use in
European securities markets.
Illiquid Securities. The Fund will not invest more than
10% of its net assets in illiquid securities. For this purpose,
illiquid securities are securities restricted as to disposition
under Federal securities laws and include, among others, (a)
direct placements or other securities which are subject to legal
or contractual restrictions on resale or for which there is no
readily available market (e.g., trading in the security is
suspended or, in the case of unlisted securities, market makers
do not exist or will not entertain bids or offers), and (b)
over-the-counter options and assets used to cover
over-the-counter options, and (c) repurchase agreements not
terminable within seven days. Securities that have legal or
contractual restrictions on resale but have a readily available
market are not deemed illiquid for purposes of this limitation.
Securities purchased pursuant to Rule 144A will generally not be
treated as illiquid securities.
Historically, illiquid securities have included
securities subject to contractual or legal restrictions on resale
because they have not been registered under the Securities Act of
1933, as amended (the "Securities Act") and securities which are
otherwise not readily marketable. Securities that have not been
registered under the Securities Act are referred to as private
placements or restricted securities and are purchased directly
from the issuer or in the secondary market. Mutual funds do not
typically hold a significant amount of these restricted or other
illiquid securities because of the potential for delays on resale
and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a
mutual fund might be unable to dispose of restricted or other
illiquid securities promptly or at reasonable prices and might
thereby experience difficulty satisfying redemptions within seven
days. A mutual fund might also have to register such restricted
securities in order to dispose of them, resulting in additional
expense and delay. Adverse market conditions could impede such a
public offering of securities.
A large institutional market has developed for certain
securities that are not registered under the Securities Act,
including foreign securities. Institutional investors depend on
an efficient institutional market in which the unregistered
security can be readily resold or on an issuer's ability to honor
a demand for repayment. The fact that there are contractual or
legal restrictions on resale to the general public or to certain
institutions may not be indicative of the liquidity of such
investments.
Rule 144A under the Securities Act allows a broader
institutional trading market for securities otherwise subject to
restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of
the Securities Act for resales of certain securities to qualified
institutional buyers. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted
securities held by the Fund, however, could affect adversely the
marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at reasonable
prices.
The Adviser, acting under the supervision of the Board
of Directors, will monitor the liquidity of restricted securities
in the Fund's portfolio that are eligible for resale pursuant to
Rule 144A. In reaching liquidity decisions, the Fund's Adviser
will consider, among others, the following factors: (1) the
frequency of trades and quotes for the security; (2) the number
of dealers making quotations to purchase or sell the security;
(3) the number of other potential purchasers of the security; (4)
the number of dealers undertaking to make a market in the
security; (5) the nature of the security (including its
unregistered nature) and the nature of the marketplace for the
security (e.g., the time needed to dispose of the security, the
method of soliciting offers and the mechanics of the transfer);
and (6) any applicable Securities and Exchange Commission (the
"Commission") interpretation or position with respect to such
type of securities.
Stock Index Futures. The Fund may purchase and sell
stock index futures contracts. A stock index assigns relative
values to the common stocks comprising the index. A stock index
futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of liquid
assets equal to a specified dollar amount multiplied by the
difference between the stock index value at the close of the last
trading day of the contract and the price at which the futures
contract is originally struck. No physical delivery of the
underlying stocks in the index is made. The Fund will not
purchase and sell options on stock index futures contracts.
In order to hedge the risk of fluctuation of the value
of its assets, the Fund may have outstanding commitments to sell
stock index futures contracts not exceeding the corresponding
risk of fluctuation of the value of the corresponding portion of
such assets. For the purpose of efficient management of its
portfolio, the Fund may purchase stock index futures contracts.
The Fund will do so mainly to facilitate changes in the
allocation of its assets between markets or in a significant
market sector advance (or in anticipation of one), provided that
sufficient uncommitted cash reserves, short dated debt securities
or instruments owned by the Fund or securities to be disposed of
by the Fund at a predetermined value exist to match the
underlying exposure of both the futures positions and the value
of the underlying securities included in call stock index options
acquired for the same purpose. The Fund may purchase only those
stock index futures that are either listed on a stock exchange or
dealt in on a regulated market.
For more detailed description of stock index futures
contracts, see Appendix A.
General. The successful use of the foregoing investment
practices, which may be used as a hedge against changes in the
values of securities resulting from market conditions, draws upon
the Adviser's special skills and experience with respect to such
instruments and usually depends on the Adviser's ability to
forecast movements of specific securities or stock indices
correctly. Should these securities or indices move in an
unexpected manner, the Fund may not achieve the anticipated
benefits of options and stock index futures contracts or may
realize losses and, thus, be in a worse position than if such
strategies had not been used. In addition, the correlation
between movements in the prices of such instruments and movements
in the price of securities being hedged or used for cover will
not be perfect and could produce unanticipated losses. The Fund's
ability to dispose of its position in options and stock index
futures will depend on the availability of liquid markets in
these instruments. No assurance can be given that the Fund will
be able to close a particular option or stock index futures
position.
Lending of Portfolio Securities. In order to increase
income, the Fund may from time to time lend portfolio securities
to brokers, dealers and financial institutions and receive
collateral in the form of liquid assets or bank letters of
credit. Under the Fund's procedures, collateral for such loans
must be maintained at all times in an amount equal to at least
100% of the market value of the loaned securities (including
interest accrued on the loaned securities) adjusted (marking-to-
market) with the borrower each day the securities are on loan to
provide for price fluctuations. A principal risk in lending
portfolio securities, as with other collateralized extensions of
credit, consists of the possible loss of rights in the collateral
should the borrower fail financially. In addition, the Fund will
be exposed to the risk that the sale of any collateral realized
upon the borrower's default will not yield proceeds sufficient to
replace the loaned securities. The interest accruing on the
loaned securities will be paid to the Fund and the Fund will have
the right, on demand, to call back the loaned securities. The
Fund may pay fees to arrange the loans. The Fund will not lend
portfolio securities in excess of 33 1/3% of the value of its
total assets (including collateral).
While such securities are on loan, the borrower will
pay the Fund any income earned thereon and the Fund may invest
any cash collateral in portfolio securities, thereby earning
additional income, or receive an agreed upon amount of income
from a borrower who has delivered equivalent collateral. Any such
investment of cash collateral will be subject to the Fund's
investment risks. The Fund will not lend its portfolio securities
if such loans are not permitted by the laws or regulations of any
state within which its shares are qualified for sale. Loans will
be subject to termination by the Fund in the normal settlement
time, currently five business days after notice, or by the
borrower on one day's notice. Although voting rights may pass
with the loaned securities, if a material event affecting the
investment is to be voted on, the loan must be terminated and the
securities voted by the Fund. Borrowed or equivalent securities
must be returned when the loan is terminated. Any gain or loss in
the market price of the borrowed securities that occurs during
the term of the loan inures to the Fund and its shareholders. The
Fund may pay reasonable finders', borrowers', administrative, and
custodial fees in connection with a loan. The Board of Directors
will monitor the Fund's lending of portfolio securities.
Futures Contracts and Options on Futures Contracts. The
Fund may enter into contracts for the purchase or sale for future
delivery of foreign currencies, or contracts based on financial
indices, including any index of U.S. Government Securities,
securities issued by foreign government entities, or common
stocks ("futures contracts") and may purchase and write put and
call options to buy or sell futures contracts ("options on
futures contracts"). A "sale" of a futures contract means the
acquisition of a contractual obligation to deliver the securities
or foreign currencies called for by the contract at a specified
price on a specified date. A "purchase" of a futures contract
means the incurring of a contractual obligation to acquire the
securities or foreign currencies called for by the contract at a
specified price on a specified date. The purchaser of a futures
contract on an index agrees to take or make delivery of an amount
of cash equal to the difference between a specified dollar
multiple of the value of the index on the expiration date of the
contract ("current contract value") and the price at which the
contract was originally struck. No physical delivery of the
securities underlying the index is made.
Options on futures contracts written or purchased by
the Fund will be traded on U.S. or foreign exchanges or
over-the-counter. These investment techniques will be used only
to hedge against anticipated future changes in market conditions
and interest or exchange rates which otherwise might either
adversely affect the value of the Fund's portfolio securities or
adversely affect the prices of securities which the Fund intends
to purchase at a later date.
The Fund may sell interest rate futures or write call
options or purchase put options on interest rates for hedging
purposes. Such contracts or options must be denominated in the
currencies in which the assets of the Fund are denominated, or in
currencies that are likely to fluctuate in a similar manner. They
must also be listed on an exchange or dealt in on a regulated
market.
The Fund may enter into interest rate futures purchase
contracts or acquire call options on interest rate futures for
the purpose of efficient portfolio management. The Fund will
enter into these futures and options mainly in order to
facilitate changes in the allocation of its assets between
shorter or longer term markets in a significant market sector
advance (or in anticipation of one), or to give a longer term
exposure to short term investments. Sufficient uncommitted cash
reserves, short dated debt securities or instruments or
securities to be disposed of at predetermined value must exist to
match the underlying exposure of both the futures positions and
the value of the underlying securities included in call options
on interest rate futures acquired for the same purpose.
Options on interest rate futures must either be listed
on an exchange or dealt in on a regulated market, except that the
Fund may purchase or sell OTC options on financial instruments,
if such transactions are more advantageous to the Fund or if
quoted options having the required features are not available,
provided that such transactions must be made with highly rated
counterparties specializing in these types of transactions.
Further, the aggregate acquisition costs (in terms of premiums
paid) of all options on securities and options on interest rate
futures and other financial instruments purchased by the Fund for
purposes other than hedging, shall not exceed 15% of the Fund's
net assets.
The Fund has claimed an exclusion from the definition
of the term "commodity pool operator" under the Commodity
Exchange Act and therefore is not subject to regulation as a pool
operator under that Act.
The successful use of such instruments draws upon the
Adviser's special skills and experience with respect to such
instruments and usually depends on the Adviser's ability to
forecast interest rate and currency exchange rate movements
correctly. Should interest or exchange rates move in an
unexpected manner, the Fund may not achieve the anticipated
benefits of futures contracts or options on futures contracts or
may realize losses and thus will be in a worse position than if
such strategies had not been used. In addition, the correlation
between movements in the price of futures contracts or options on
futures contracts and movements in the price of the securities
and currencies hedged or used for cover will not be perfect and
could produce unanticipated losses. The Fund's custodian will
place liquid assets in a segregated account of the Fund having a
value equal to the aggregate amount of the Fund's commitments
under futures contracts.
For additional information on the use, risks and costs
of futures contracts and options on futures contracts, see
Appendix A.
Interest Rate Transactions. In order to attempt to
protect the value of the Fund's investments from interest rate
fluctuations, the Fund may enter into various hedging
transactions, such as interest rate swaps and the purchase or
sale of interest rate caps and floors. The Fund expects to enter
into these transactions primarily to preserve a return or spread
on a particular investment or portion of its portfolio. The Fund
may also enter into these transactions to protect against any
increase in the price of securities the Fund anticipates
purchasing at a later date. The Fund intends to use these
transactions as a hedge and not as a speculative investment.
Interest rate swaps involve the exchange by the Fund with another
party of their respective commitments to pay or receive interest,
e.g., an exchange of floating rate payments for fixed rate
payments. The purchase of an interest rate cap entitles the
purchaser, to the extent that a specified index exceeds a
predetermined interest rate, to receive payments on a notional
principal amount from the party selling such interest rate cap.
The purchase of an interest rate floor entitles the purchaser, to
the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a notional
principal amount from the party selling such interest rate floor.
The Fund may enter into interest rate swaps, caps and
floors on either an asset-based or liability-based basis
depending on whether it is hedging its assets or its liabilities,
and will only be entered into on a net basis, i.e., the two
payment streams are netted out, with the Fund receiving or
paying, as the case may be, only the net amount of the two
payments. Inasmuch as these hedging transactions are entered into
for good faith hedging purposes, the Adviser and the Fund believe
such obligations do not constitute senior securities and,
accordingly, will not treat them as being subject to its
borrowing restrictions. The net amount of the excess, if any, of
the Fund's obligations over its entitlements with respect to each
interest rate swap will be accrued on a daily basis and an amount
of liquid assets having an aggregate net asset value at least
equal to the accrued excess will be maintained in a segregated
account by the custodian. The Fund will not enter into any
interest rate swap, cap or floor transaction unless the unsecured
senior debt or the claims-paying ability of the other party
thereto is then rated in the highest rating category of at least
one nationally recognized rating organization at the time of
entering into such transaction. If there is a default by the
other party to such a transaction, the Fund will have contractual
remedies pursuant to the agreements related to the transaction.
The swap market has grown substantially in recent years with a
large number of banks and investment banking firms acting both as
principals and agents utilizing standardized swap documentation.
As a result, the swap market has become well established and
provides a degree of liquidity. Caps and floors are more recent
innovations for which documentation is not as standardized and,
accordingly, they are less liquid than swaps.
Certain Fundamental Investment Policies
---------------------------------------
The Fund is also subject to the following restrictions
in implementing its investment policies that cannot be changed
without the approval of the holders of a majority of the Fund's
outstanding voting securities. The approval of a majority of the
Fund's outstanding voting securities means the affirmative vote
of (i) 67% or more of the shares represented at a meeting at
which more than 50% of the outstanding shares are present in
person or by proxy, or (ii) more than 50% of the outstanding
shares, whichever is less.
As a matter of fundamental policy, the Fund may not:
(a) 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;
(b) purchase the securities of any one issuer, other
than the U.S. Government and its agencies or
instrumentalities, if immediately after and as a
result of such purchase (a) the value of the
holdings of the Fund in the securities of such
issuer exceeds 25% of the value of the Fund's
total assets, or (b) the Fund owns more than 25%
of the outstanding securities of any one class of
securities of such issuer;
(c) invest 25% or more of the value of its total
assets in the same industry, except that this
restriction does not apply to securities issued or
guaranteed by the U.S. Government, its agencies
and instrumentalities;
(d) mortgage, pledge or hypothecate or otherwise
encumber its assets, except as may be necessary in
connection with permissible borrowings mentioned
in investment restriction (g) listed below;
(e) purchase the securities of any other investment
company or investment trust, except when such
purchase is part of a merger, consolidation or
acquisition of assets;
(f) purchase securities on margin, but it may obtain
such short-term credits from banks as may be
necessary for the clearance of purchases and sales
of securities;
(g) issue senior securities or borrow money, (except
as permitted by the 1940 Act and the regulations
and interpretations thereunder);
(h) make loans to other persons, except that the Fund
may (i) lend its portfolio securities in
accordance with the Fund's investment policies in
amounts up to 33 1/3% of the total assets of the
Fund taken at market value, (ii) purchase money
market securities and enter into repurchase
agreements, and (iii) acquire publicly distributed
or privately placed debt securities and purchase
debt;
(i) purchase or sell real estate unless acquired as a
result of the ownership of securities or other
instruments; provided that this restriction shall
not prohibit the Fund from investing in securities
or other instruments backed by real estate or in
securities of companies engaged in the real estate
business;
(j) purchase or sell physical commodities unless
acquired as a result of the ownership of
securities or instruments; provided that this
restriction shall not prohibit the Fund from (i)
engaging in permissible options and futures
transactions and forward foreign currency
contracts in accordance with the Fund's investment
policies, or (ii) investing in securities of any
kind; or
(k) act as an underwriter of securities, except that
the Fund may acquire restricted securities or
securities in private placements under
circumstances in which, if such securities were
sold, the Fund might be deemed to be an
underwriter within the meaning of the Securities
Act.
Whenever any investment restriction states a maximum
percentage of the Fund's assets which may be invested in any
security or other asset, it is intended that such maximum
percentage limitation be determined immediately after and as a
result of the Fund's acquisition of such securities or other
assets. Accordingly, any later increase or decrease in percentage
beyond the specified limitation resulting from a change in values
or net assets will not be considered a violation of any such
maximum.
-----------------------------------------------------------------
MANAGEMENT OF THE FUND
-----------------------------------------------------------------
Adviser
-------
Alliance, a Delaware limited partnership with principal
offices at 1345 Avenue of the Americas, New York, New York 10105,
has been retained under an investment advisory agreement (the
"Advisory Agreement") to provide investment advice and, in
general, to conduct the management and investment program of the
Fund under the supervision of the Fund's Board of Directors (see
"Management of the Fund" in the Prospectus).
The Adviser is a leading global investment management
firm supervising client accounts with assets as of March 31, 2004
totaling approximately $484 billion. Alliance provides management
services for many of the largest U.S. public and private employee
benefit plans, endowments, foundations, public employee
retirement funds, banks, insurance companies and high net worth
individuals worldwide. Alliance is also one of the largest mutual
fund sponsors, with a diverse family of globally distributed
mutual fund portfolios. As one of the world's leading global
investment management organizations, Alliance is able to compete
for virtually any portfolio assignment in any developed capital
market in the world.
Alliance is a registered investment adviser under the
Investment Advisers Act of 1940, as amended. As of March 31,
2004, Alliance Capital Management Holding L.P. ("Holding"), a
Delaware limited partnership, owned approximately 31.5% of the
issued and outstanding units of limited partnership interest in
Alliance ("Alliance Units"). Units representing assignments of
beneficial ownership of limited partnership interests in Holding
("Holding Units") trade publicly on the New York Stock Exchange
under the ticker symbol "AC". Alliance Units do not trade
publicly and are subject to significant restrictions on transfer.
Alliance Capital Management Corporation ("ACMC") is the general
partner of both Alliance and Holding. ACMC owns 100,000 general
partnership units in Holding and a 1% general partnership
interest in Alliance. ACMC is an indirect wholly-owned subsidiary
of AXA Financial, Inc. ("AXA Financial"), a Delaware corporation.
As of March 31, 2004, AXA, AXA Financial, The Equitable
Life Assurance Society of the United States ("Equitable") and
certain subsidiaries of Equitable beneficially owned
approximately 57.3% of the issued and outstanding Alliance Units
and approximately 1.8% of the issued and outstanding Holding
Units which, including the general partnership interests in
Alliance and Holding, represent an economic interest of
approximately 58.4% in Alliance. As of March 31, 2004, SCB
Partners Inc., a wholly-owned subsidiary of SCB Inc.,
beneficially owned approximately 9.7% of the issued and
outstanding Alliance Units.
AXA, a French company, is the holding company for an
international group of companies and a worldwide leader in
financial protection and wealth management. AXA operates
primarily in Western Europe, North America and the Asia/Pacific
region and, to a lesser extent, in other regions including the
Middle East, Africa and South America. AXA has five operating
business segments: life and savings, property and casualty
insurance, international insurance (including reinsurance), asset
management and other financial services. AXA Financial is a
wholly-owned subsidiary of AXA. Equitable is an indirect
wholly-owned subsidiary of AXA Financial.
Based on information provided by AXA, as of February 1,
2004, approximately 16.89% of the issued ordinary shares
(representing 27.55% of the voting power) of AXA were owned
directly and indirectly by Finaxa, a French holding company. As
of February 1, 2004, 71.11% of the shares (representing 80.36% of
the voting power) of Finaxa were owned by three French mutual
insurance companies (the "Mutuelles AXA") and 21.32% of the
shares of Finaxa (representing 12.80% of the voting power) were
owned by BNP Paribas, a French bank. As of February 1, 2004, the
Mutuelles AXA owned directly or indirectly through intermediate
holding companies (including Finaxa) approximately 20.17% of the
issued ordinary shares (representing 32.94% of the voting power)
of AXA.
Under the Advisory Agreement, the Adviser furnishes
advice and recommendations with respect to the Fund's portfolio
of securities and investments and provides persons satisfactory
to the Board of Directors to act as officers and employees of the
Fund. Such officers and employees, as well as certain Directors
of the Fund may be employees of the Adviser or its affiliates.
The Adviser is, under the Advisory Agreement,
responsible for certain expenses incurred by the Fund, including,
for example, office facilities and certain administrative
services, and any expenses incurred in promoting the sale of Fund
shares (other than the portion of the promotional expenses borne
by the Fund in accordance with an effective plan pursuant to Rule
12b-1 under the 1940 Act, and the costs of printing Fund
prospectuses and other reports to shareholders and fees related
to registration with the Commission and with state regulatory
authorities).
The Fund has, under the Advisory Agreement, assumed the
obligation for payment of all of its other expenses. As to the
obtaining of services other than those specifically provided to
the Fund by the Adviser, the Fund may employ its own personnel.
For such services, it also may utilize personnel employed by the
Adviser or its affiliates and, in such event, the services will
be provided to the Fund at cost and the payments therefor must be
specifically approved by the Fund's Board of Directors. The Fund
paid to the Adviser, after any waivers and/or reimbursements, a
total of $0 in respect of such services during the fiscal period
of the Fund ended June 30, 2003.
For the services rendered by the Adviser under the
Advisory Agreement, the Fund pays the Adviser at the annual rate
of 1.00% of the Fund's average daily net assets up to $5 billion;
0.95% of the Fund's average daily net assets exceeding $5 billion
up to $7.5 billion; 0.90% of the Fund's average daily net assets
exceeding $7.5 billion up to $10 billion; and 0.85% of the Fund's
average daily net assets exceeding $10 billion. Effective as of
January 1, 2004, the Adviser voluntarily waived a portion of its
advisory fee and this fee reduction is expected to continue for a
period of at least five years. The advisory fee waiver would
reduce the advisory fees to .75% of the first $2.5 billion, .65%
of the excess over $2.5 billion up to $5 billion and .60% of the
excess over $5 billion as a percentage of the Fund's average
daily net assets. The fee is accrued daily and paid monthly. The
Adviser has contractually agreed for the current fiscal year to
waive its fee and bear certain expenses so that total expenses do
not exceed on an annual basis 1.50%, 2.20%, 2.20%, 1.70%, and
1.20% of average daily net assets, respectively, for Class A,
Class B, Class C, Class R and Advisor Class shares. The Fund and
the Adviser have agreed contractually that certain fees waived or
expenses borne by the Adviser through August 31, 2003 may be
reimbursed by the Fund until August 31, 2005. This contractual
agreement remains in effect until August 31, 2005 unless the
Adviser provides written notice 60 days prior to the Fund's
fiscal year end. For the fiscal period ended June 30, 2003, the
Adviser received from the Fund, after any waivers and/or
reimbursements, advisory fees in the amount of $0.
The Advisory Agreement became effective on July 10,
2002. The Advisory Agreement was approved by the unanimous vote,
cast in person, of the Fund's Directors including the Directors
who are not parties to the Advisory Agreement or interested
persons, as defined in the 1940 Act, of any such party at a
meeting called for the purpose and held on July 9, 2002.
The Advisory Agreement continues in effect provided
that such continuance is specifically approved at least annually
by the Fund's Directors or by a majority vote of the holders of
the outstanding voting securities of the Fund and, in either
case, by a majority of the Directors who are not parties to the
Advisory Agreement, or interested persons, as defined in the 1940
Act, of any such party, at a meeting in person called for the
purpose of voting on such matter. Most recently continuance of
the Advisory Agreement for an additional annual term was approved
by vote, cast in person, by the Board of Directors, including a
majority of the Directors who are not "interested persons" as
defined in the 1940 Act, at their Special Meeting held on
November 18, 2003.
The Advisory Agreement is terminable without penalty by
a vote of a majority of the Fund's outstanding voting securities
or by a vote of a majority of the Directors on 60 days' written
notice or by the Adviser on 60 days' written notice, and will
automatically terminate in the event of assignment. The Advisory
Agreement provides that in the absence of willful misfeasance,
bad faith or gross negligence on the part of the Adviser, or of
reckless disregard of its obligations thereunder, the Adviser
shall not be liable for any action or failure to act in
accordance with its duties thereunder and duties under the
Advisory Agreement.
The Adviser may act as an investment adviser to other
persons, firms or corporations, including investment companies,
and is investment adviser to the following registered investment
companies: AllianceBernstein All-Asia Investment Fund, Inc.,
AllianceBernstein Americas Government Income Trust, Inc.,
AllianceBernstein Balanced Shares, Inc., AllianceBernstein
Blended Style Series, Inc., AllianceBernstein Bond Fund, Inc.,
AllianceBernstein Capital Reserves, AllianceBernstein Disciplined
Growth Fund, Inc., AllianceBernstein Disciplined Value Fund,
Inc., AllianceBernstein Dynamic Growth Fund, Inc.,
AllianceBernstein Emerging Market Debt Fund, Inc.,
AllianceBernstein Exchange Reserves, AllianceBernstein Global
Small Cap Fund, Inc., AllianceBernstein Global Strategic Income
Trust, Inc., AllianceBernstein Government Reserves,
AllianceBernstein Greater China '97 Fund, Inc., AllianceBernstein
Growth and Income Fund, Inc., AllianceBernstein Health Care Fund,
Inc., AllianceBernstein High Yield Fund, Inc., AllianceBernstein
Institutional Funds, Inc., AllianceBernstein Institutional
Reserves, Inc., AllianceBernstein International Premier Growth
Fund, Inc., AllianceBernstein Mid-Cap Growth Fund, Inc.,
AllianceBernstein Multi-Market Strategy Trust, Inc.,
AllianceBernstein Municipal Income Fund, Inc., AllianceBernstein
Municipal Income Fund II, AllianceBernstein Municipal Trust,
AllianceBernstein New Europe Fund, Inc., AllianceBernstein
Premier Growth Fund, Inc., AllianceBernstein Real Estate
Investment Fund, Inc., AllianceBernstein Select Investor Series,
Inc., AllianceBernstein Small Cap Growth Fund, Inc.,
AllianceBernstein Technology Fund, Inc., AllianceBernstein Trust,
AllianceBernstein Utility Income Fund, Inc., AllianceBernstein
Variable Products Series Fund, Inc., AllianceBernstein Worldwide
Privatization Fund, Inc., The AllianceBernstein Portfolios,
Sanford C. Bernstein Fund, Inc. and Sanford C. Bernstein II,
Inc., all registered open-end investment companies; and to ACM
Government Opportunity Fund, Inc., ACM Income Fund, Inc., ACM
Managed Income Fund, Inc., ACM Managed Dollar Income Fund, Inc.,
ACM Municipal Securities Income Fund, Inc., Alliance All-Market
Advantage Fund, Inc., Alliance California Municipal Income Fund,
Inc., Alliance National Municipal Income Fund, Inc., Alliance New
York Municipal Income Fund, Inc., Alliance World Dollar
Government Fund, Inc., Alliance World Dollar Government Fund II,
Inc. and The Spain Fund, Inc., all registered closed-end
investment companies.
Board of Directors Information
------------------------------
The business and affairs of the Fund are managed under
the direction of the Board of Directors. Certain information
concerning the Fund's Directors is set forth below.
OTHER
PRINCIPAL PORTFOLIOS IN DIRECTOR-
NAME, AGE, AND ADDRESS, OCCUPATION(S) FUND COMPLEX SHIPS
OF DIRECTOR DURING PAST OVERSEEN HELD BY
(YEARS OF SERVICE*) 5 YEARS BY DIRECTOR DIRECTOR
------------------------ ------------- ------------- ---------
INTERESTED DIRECTOR
Marc O. Mayer,** 46, Executive Vice President 68 None
1345 Avenue of the of ACMC since 2001; prior
Americas, thereto, Chief Executive
New York, NY 10105 Officer of Sanford C.
(Elected November 18, Bernstein & Co., LLC
2003.) ("SCB & Co.") and its
predecessor since prior
to 1998.
DISINTERESTED DIRECTORS
Chairman of the Board Investment adviser and an 116 None
William H. Foulk, Jr.,#+ independent consultant.
71, He was formerly Senior
2 Sound View Dr., Manager of Barrett
Suite 100, Associates, Inc., a
Greenwich, CT 06830 (1) registered investment
adviser, with which he had
been associated since
prior to 1999. He was
formerly Deputy
Comptroller and Chief
Investment Officer of the
State of New York and,
prior thereto, Chief
Investment Officer of the
New York Bank for Savings.
Ruth Block,#+ 73, Formerly Executive Vice 96 None
500 S.E. Mizner Blvd., President and Chief
Boca Raton, FL 33432 (1) Insurance Officer of
Equitable; Chairman and
Chief Executive Officer of
Evlico; Director of Avon,
BP (oil and gas), Ecolab
Incorporated (specialty
chemicals), Tandem
Financial Group and
Donaldson, Lufkin &
Jenrette Securities
Corporation; former
Governor at Large,
National Association of
Securities Dealers, Inc.
David H. Dievler,#+ 74, Independent consultant. 100 None
P.O. Box 167, Until December 1994 he was
Spring Lake, NJ 07762 (1) Senior Vice President of
ACMC responsible for
mutual fund
administration. Prior to
joining ACMC in 1984 he
was Chief Financial
Officer of Eberstadt Asset
Management since 1968.
Prior to that, he was a
Senior Manager at Price
Waterhouse & Co. Member of
American Institute of
Certified Public
Accountants since 1953.
John H. Dobkin,#+ 62, Consultant. Formerly 98 None
P.O. Box 12, President of Save Venice,
Annandale, NY 12504 (1) Inc. (preservation
organization) from
2001-2002; Senior Advisor
from June 1999 - June 2000
and President from
December 1989 to May 1999
of Historic Hudson Valley
(historic preservation).
Previously, Director of
the National Academy of
Design and during
1988-1992, Director and
Chairman of the Audit
Committee of ACMC.
Clifford L. Michel,#+ 64, Senior Counsel of the law 97 Placer
15 St. Bernard's Road, firm of Cahill Gordon & Dome,
Gladstone, NJ 07934 (1) Reindel since February Inc.
2001 and a partner of that
firm for more than
twenty-five years prior
thereto. President and
Chief Executive Officer of
Wenonah Development
Company (investments) and
a Director of Placer Dome,
Inc. (mining).
Donald J. Robinson,#+ 69, Senior Counsel to the law 96 None
98 Hell's Peak Road, firm of Orrick, Herrington
Weston, VT 05161 (1) & Sutcliffe LLP since
prior to 1999. Formerly a
senior partner and a
member of the Executive
Committee of that firm. He
was also a member and
Chairman of the Municipal
Securities Rulemaking
Board and a Trustee of the
Museum of the City of New
York.
--------
* There is no stated term of office for the Fund's Directors.
** Mr. Mayer is an "interested person", as defined in the 1940
Act, due to his position as Executive Vice President of
ACMC.
# Member of the Audit Committee.
+ Member of the Nominating Committee.
The Fund's Board of Directors has two standing
committees of the Board -- an Audit Committee and a Nominating
Committee. The members of the Audit and Nominating Committees are
identified above. The function of the Audit Committee is to
assist the Board of Directors in its oversight of the Fund's
financial reporting process. The Audit Committee met once during
the Fund's most recently completed fiscal period. The function of
the Nominating Committee is to nominate persons to fill any
vacancies or newly created positions on the Board of Directors.
The Nominating Committee did not meet during the Fund's most
recently completed fiscal period.
The Nominating Committee has a charter and, pursuant to
the charter, the Nominating Committee will consider candidates
for nomination as a director submitted by a shareholder or group
of shareholders who have owned at least 5% of the Fund's common
stock for at least two years at the time of submission and who
timely provide specified information about the candidates and the
nominating shareholder or group. To be timely for consideration
by the Nominating Committee, the submission, including all
required information, must be submitted in writing to the
attention of the Secretary at the principal executive offices of
the Fund not less than 120 days before the date of the proxy
statement for the previous year's annual meeting of shareholders.
If the Fund did not hold an annual meeting of shareholders in the
previous year, the Fund will make a public notice specifying the
deadline for the submission. The Fund will make the public notice
at least 30 days prior to the deadline for the submission, which
is expected to be approximately 120 days prior to the anticipated
date of the proxy statement for the annual meeting. The Fund may
make the public notice in a shareholder report or other mailing
to shareholders or by other means deemed by the Nominating
Committee or the Board to be reasonably calculated to inform
shareholders.
Shareholders submitting a candidate for consideration
by the Nominating Committee must provide the following
information to the Nominating Committee: (i) a statement in
writing setting forth (A) the name, date of birth, business
address and residence address of the candidate; (B) any position
or business relationship of the candidate, currently or within
the preceding five years, with the shareholder or an associated
person of the shareholder as defined below; (C) the class or
series and number of all shares of the Fund owned of record or
beneficially by the candidate; (D) any other information
regarding the candidate that is required to be disclosed about a
nominee in a proxy statement or other filing required to be made
in connection with the solicitation of proxies for election of
Directors pursuant to Section 20 of the 1940 Act and the rules
and regulations promulgated thereunder; (E) whether the
shareholder believes that the candidate is or will be an
"interested person" of the Fund (as defined in the 1940 Act) and,
if believed not to be an "interested person," information
regarding the candidate that will be sufficient for the Fund to
make such determination; and (F) information as to the
candidate's knowledge of the investment company industry,
experience as a director or senior officer of public companies,
directorships on the boards of other registered investment
companies and educational background; (ii) the written and signed
consent of the candidate to be named as a nominee and to serve as
a Director if elected; (iii) the written and signed agreement of
the candidate to complete a directors' and officers'
questionnaire if elected; (iv) the shareholder's consent to be
named as such by the Fund; (v) the class or series and number of
all shares of the Fund owned beneficially and of record by the
shareholder and any associated person of the shareholder and the
dates on which such shares were acquired, specifying the number
of shares owned beneficially but not of record by each, and
stating the names of each as they appear on the Fund's record
books and the names of any nominee holders for each; and (vi) a
description of all arrangements or understandings between the
shareholder, the candidate and/or any other person or persons
(including their names) pursuant to which the recommendation is
being made by the shareholder. "Associated Person of the
shareholder" means any person who is required to be identified
under clause (vi) of this paragraph and any other person
controlling, controlled by or under common control with, directly
or indirectly, (a) the shareholder or (b) the associated person
of the shareholder.
The Nominating Committee may require the shareholder to
furnish such other information as it may reasonably require or
deem necessary to verify any information furnished pursuant to
the nominating procedures described above or to determine the
qualifications and eligibility of the candidate proposed by the
shareholder to serve on the Board. If the shareholder fails to
provide such other information in writing within seven days of
receipt of written request from the Nominating Committee, the
recommendation of such candidate as a nominee will be deemed not
properly submitted for consideration, and will not be considered,
by the Committee.
The Nominating Committee will consider only one
candidate submitted by such a shareholder or group for nomination
for election at an annual meeting of shareholders. The Nominating
Committee will not consider self-nominated candidates. The
Nominating Committee will consider and evaluate candidates
submitted by shareholders on the basis of the same criteria as
those used to consider and evaluate candidates submitted from
other sources. These criteria include the candidate's relevant
knowledge, experience, and expertise, the candidate's ability to
carry out his or her duties in the best interests of the Fund,
the candidate's ability to qualify as a disinterested Director
and such other criteria as the Nominating Committee determines to
be relevant in light of the existing composition of the Board and
any anticipated vacancies or other factors.
In approving the most recent annual continuance of the
Advisory Agreement, the Directors considered all information they
deemed reasonably necessary to evaluate the terms of the Advisory
Agreement. The principal areas of review by the Directors were
the nature and quality of the services provided by the Adviser
and the reasonableness of the fees charged for those services.
These matters were considered by the disinterested directors
meeting separately from the full Board with experienced counsel
that is independent of the Adviser.
The Directors' evaluation of the quality of the
Adviser's services took into account their knowledge and
experience gained through meetings with and reports of the
Adviser's senior management, portfolio managers and
administrative personnel over the course of the preceding year.
The Fund's performance was compared to its performance benchmark
and to that of competitive funds and other funds with similar
investment objectives. The Directors also considered an expense
limitation agreement for the Fund that sets expense caps on
overall Fund expenses and provides for waiver of fees by the
Adviser or reimbursement of expenses if needed to meet such caps,
the scope and quality of the in-house research capability of the
Adviser and other resources dedicated to performing its services.
The quality of administrative and other services, including the
Adviser's role in coordinating the activities of the Fund's other
service providers, were considered in light of on-going reports
by management as to compliance with investment policies and
applicable laws and regulations and of related reports by
management and the Fund's independent registered public
accounting firm in periodic meetings with the Fund's Audit
Committee.
In reviewing the fees payable under the Advisory
Agreement, the Directors compared the fees and overall expense
levels of the Fund to those of competitive funds and other funds
with similar investment objectives. The information on advisory
fees and expense ratios, as well as performance data, included
both information compiled by the Adviser and information compiled
by an independent data service. The Directors also considered the
fees of the Fund as a percentage of assets at different levels
and possible economies of sale to the Advisers. For these
purposes, the Directors took into account not only the fees paid
by the Fund, but also so-called "fallout benefits" to the
Adviser, such as the engagement of affiliates of the Adviser to
provide distribution, brokerage and transfer agency services to
the Fund, the benefits of research made available to the Adviser
by reason of brokerage commissions generated by the Fund's
securities transactions, and that the Advisory Agreement provides
that the Fund will reimburse the Adviser for the cost of
providing certain administrative services. In evaluating the
Fund's advisory fees, the Directors also took into account the
demands, complexity and quality of the investment management of
the Fund.
The Directors also considered the business reputation
of the Adviser and its financial resources. The Directors
evaluated the procedures and systems adopted by the Adviser that
are designed to fulfill the Adviser's fiduciary duty to the Fund
with respect to possible conflicts of interest, including the
Adviser's code of ethics (regulating the personal trading of its
officers and employees) and the allocation of trades among its
various investment advisory clients. The Directors also
considered information concerning the policies and procedures of
the Adviser with respect to the execution of portfolio
transactions.
No single factor was considered in isolation or to be
determinative to the decision of the Directors to approve
continuance of the Advisory Agreement. Rather, the Directors
concluded in light of a weighing and balancing of all factors
considered that it was in the best interests of the Fund to
continue its Advisory Agreement without modification to its
terms, including the fees charged for services thereunder.
The dollar range of the Fund's securities owned by each
Director and the aggregate dollar range of securities of all of
the registered investment companies to which the Adviser provides
investment advisory services (collectively, the
"AllianceBernstein Fund Complex") owned by each Director are set
forth below.
AGGREGATE DOLLAR
RANGE OF EQUITY
DOLLAR RANGE OF SECURITIES IN THE
EQUITY SECURITIES ALLIANCEBERNSTEIN
IN THE FUND AS OF FUND COMPLEX AS OF
DECEMBER 31, 2002 DECEMBER 31, 2002
----------------- -----------------
Marc O. Mayer* None $50,001-$100,000
Ruth Block None Over $100,000
David H. Dievler None Over $100,000
John H. Dobkin None Over $100,000
William H. Foulk, Jr. None Over $100,000
Clifford L. Michel None Over $100,000
Donald J. Robinson None Over $100,000
--------
* Mr. Mayer was elected to the Board after December 31, 2002.
Officer Information
-------------------
Certain information concerning the Fund's officers is set forth
below.
NAME AND ADDRESS,* POSITION(S) HELD PRINCIPAL OCCUPATION
AND (AGE) WITH FUND DURING PAST 5 YEARS
------------------ ---------------- --------------------
Marc O. Mayer, (46) President See biography above.
Michael R. Baldwin, (45) Senior Vice President Senior Vice President
of ACMC,** with which
he has been
associated since
prior to 1998.
Norman M. Fidel, (58) Senior Vice President Senior Vice President
of ACMC,** with which
he has been
associated since
prior to 1998.
Paul C. Rissman, (47) Senior Vice President Executive Vice
President of ACMC,**
with which he has
been associated since
prior to 1998.
Sandra L. Yeager, (39) Senior Vice President Senior Vice President
of ACMC,** with which
she has been
associated since
prior to 1998.
Thomas J. Bardong, (58) Vice President Senior Vice President
of ACMC,** with which
he has been
associated since
prior to 1998.
Russell Brody, (37) Vice President Vice President of
ACMC,** with which he
has been associated
since April 1998.
Gina M. Griffin, (44) Vice President Senior Vice President
of ACMC,** with which
she has been
associated since
prior to 1998.
Thomas A. Schmitt, (46) Vice President Senior Vice President
of ACMC,** with which
he has been
associated since
prior to 1998.
Jane E. Schneirov, (33) Vice President Vice President of
ACMC,** with which
she has been
associated since
August 1999.
Francis X. Suozzi, (46) Vice President Senior Vice President
of ACMC,** with which
he has been
associated since
prior to 1998.
Janet A. Walsh, (41) Vice President Senior Vice President
of ACMC,** with which
she has been
associated since
prior to 1998.
Mark D. Gersten, (53) Treasurer and Chief Senior Vice President
Financial Officer of AGIS** and Vice
President of
AllianceBernstein
Investment Research
and Management, Inc.
("ABIRM")** with
which he has been
associated since
prior to 1998.
Vincent S. Noto, (39) Controller Vice President of
AGIS,** with which he
has been associated
since prior to 1998.
Mark R. Manley, (41) Secretary Senior Vice President
and Acting General
Counsel of ACMC,**
with which he has
been associated since
prior to 1998.
Andrew L. Gangolf, (49) Assistant Senior Vice President
Secretary and Assistant General
Counsel of ABIRM,**
with which he has
been associated since
prior to 1999.
--------
* The address for each of the Fund's officers is 1345 Avenue
of the Americas, New York, NY 10105.
** ACMC, ABIRM, and AGIS are affiliates of the Fund.
The Fund does not pay any fees to, or reimburse
expenses of, its Directors who are considered "interested
persons" of the Fund. The aggregate compensation paid by the Fund
to each of the Directors during its fiscal period ended June 30,
2003, the aggregate compensation paid to each of the Directors
during calendar year 2002 by the AllianceBernstein Fund Complex
and the total number of registered investment companies (and
separate investment portfolios within those companies) in the
AllianceBernstein Fund Complex with respect to which each of the
Directors serves as a director or trustee, are set forth below.
Neither the Fund nor any other registered investment company in
the AllianceBernstein Fund Complex provides compensation in the
form of pension or retirement benefits to any of its directors or
trustees. Each of the Directors is a director or trustee of one
or more other registered investment companies in the
AllianceBernstein Fund Complex.
Total
Total Number of
Number of Investment
Funds Portfolios
in the Within the
Alliance- Alliance-
Total Bernstein Bernstein
Compensation Fund Complex, Fund Complex,
From the Including the Including the
Alliance- Fund, as to Fund, as to
Bernstein which the which the
Aggregate Fund Complex, Director is Director is
Compensation Including a Director a Director
Name of Director From the Fund the Fund or Trustee or Trustee
---------------- ------------- ------------- ------------ ----------
Marc O. Mayer $0 $0 40 68
Ruth Block $3,184 $192,600 43 96
David H. Dievler $3,184 $246,238 47 100
John H. Dobkin $3,184 $217,888 46 98
William H. Foulk, Jr. $3,184 $241,700 48 116
Clifford L. Michel $2,084 $201,950 44 97
Donald J. Robinson $3,184 $193,100 43 96
As of August 29, 2003, the Directors and officers of
the Fund as a group owned less than 1% of the shares of the Fund.
-----------------------------------------------------------------
EXPENSES OF THE FUND
-----------------------------------------------------------------
Distribution Services Agreement
-------------------------------
The Fund has entered into a Distribution Services
Agreement (the "Agreement") with ABIRM, the Fund's principal
underwriter (the "Principal Underwriter"), to permit the
Principal Underwriter to distribute the Fund's shares and to
permit the Fund to pay distribution services fees to defray
expenses associated with the distribution of its Class A, Class
B, Class C and Class R shares in accordance with a plan of
distribution that is included in the Agreement and has been duly
adopted and approved in accordance with Rule 12b-1 under the 1940
Act (the "Rule 12b-1 Plan").
Distribution services fees are accrued daily and paid
monthly and are charged as expenses of the Fund as accrued. The
distribution services fees attributable to the Class B shares,
Class C shares and Class R shares are designed to permit an
investor to purchase such shares through broker-dealers without
the assessment of an initial sales charge, and at the same time
to permit the Principal Underwriter to compensate broker-dealers
in connection with the sale of such shares. In this regard the
purpose and function of the combined contingent deferred sales
charge ("CDSC") and distribution services fee on the Class B
shares and Class C shares are the same as those of the initial
sales charge and distribution services fee with respect to the
Class A shares in that in each case the sales charge and
distribution services fee provide for the financing of the
distribution of the relevant class of the Fund's shares.
With respect to Class A shares of the Fund,
distribution expenses accrued by ABIRM in one fiscal year may not
be paid from distribution services fees received from the Fund in
subsequent fiscal years. ABIRM's compensation with respect to
Class B, Class C and Class R shares under the Rule 12b-1 Plan is
directly tied to the expenses incurred by ABIRM. Actual
distribution expenses for Class B, Class C and Class R shares for
any given year, however, will probably exceed the distribution
services fee payable under the Rule 12b-1 Plan with respect to
the class involved and, in the case of Class B and Class C shares
payments received from CDSCs. The excess will be carried forward
by ABIRM and reimbursed from distribution services fees payable
under the Rule 12b-1 Plan with respect to the class involved and,
in the case of Class B and Class C shares payments subsequently
received through CDSCs, so long as the Rule 12b-1 Plan is in
effect.
Unreimbursed distribution expenses incurred as of the
end of the Fund's most recently completed fiscal period, and
carried over for reimbursement in future years in respect of the
Class B, and Class C shares of the Fund were, respectively, $0
(0% of the net assets of Class B) and $0 (0% of the net assets of
Class C).
The Rule 12b-1 Plan is in compliance with rules of the
National Association of Securities Dealers, Inc. ("NASD"), which
effectively limit the annual asset-based sales charges and
service fees that a mutual fund may pay on a class of shares to
..75% and .25%, respectively, of the average annual net assets
attributable to that class. The rules also limit the aggregate of
all front-end, deferred and asset-based sales charges imposed
with respect to a class of shares by a mutual fund that also
charges a service fee to 6.25% of cumulative gross sales of
shares of that class, plus interest at the prime rate plus 1% per
annum.
In approving the Rule 12b-1 Plan, the Directors of the
Fund determined that there was a reasonable likelihood that the
Rule 12b-1 Plan would benefit the Fund and its shareholders. The
distribution services fee of a particular class will not be used
to subsidize the provision of distribution services with respect
to any other class.
The Adviser may from time to time and from its own
funds or such other resources as may be permitted by rules of the
Commission make payments for distribution services to the
Principal Underwriter; the latter may in turn pay part or all of
such compensation to brokers or other persons for their
distribution assistance.
The Agreement was initially approved by the Directors
of the Fund at a meeting held on July 9, 2002. The Agreement will
continue in effect provided that such continuance is specifically
approved at least annually by the Directors of the Fund or by
vote of the holders of a majority of the outstanding voting
securities (as defined in the 1940 Act) of that class, and, in
either case, by a majority of the Directors of the Fund who are
not parties to the Agreement or interested persons, as defined in
the 1940 Act, of any such party (other than as directors of the
Fund) and who have no direct or indirect financial interest in
the operation of the Rule 12b-1 Plan or any agreement related
thereto. Most recently, continuance of the Agreement was approved
for an additional annual term by a vote, cast in person, of the
Directors, including a majority of the Directors who are not
"interested persons" as defined in the 1940 Act, at their Special
Meeting held November 18, 2003.
In the event that the Rule 12b-1 Plan is terminated by
either party or not continued with respect to the Class A shares,
Class B shares, Class C shares or Class R shares, (i) no
distribution services fees (other than current amounts accrued
but not yet paid) would be owed by the Fund to the Principal
Underwriter with respect to that class, and (ii) the Fund would
not be obligated to pay the Principal Underwriter for any amounts
expended under the Agreement not previously recovered by the
Principal Underwriter from distribution services fees in respect
of shares of such class or through deferred sales charges.
Transfer Agency Agreement
-------------------------
AGIS, an indirect wholly-owned subsidiary of the
Adviser located at 8000 IH 10 W, 4th Floor, San Antonio, Texas
78230, receives a transfer agency fee per account holder of each
of the Class A shares, Class B shares, Class C shares, Class R
shares and Advisor Class shares of the Fund, plus reimbursement
for out-of-pocket expenses. The transfer agency fee with respect
to the Class B and Class C shares is higher than the transfer
agency fee with respect to the Class A, Class R and Advisor Class
shares, reflecting the additional costs associated with the Class
B and Class C CDSCs. For the fiscal period ended June 30, 2003,
the Fund paid AGIS $0 pursuant to the Transfer Agency Agreement.
Code of Ethics and Proxy Voting Policies and Procedures
-------------------------------------------------------
The Fund, the Adviser and the Principal Underwriter
have each adopted codes of ethics pursuant to Rule 17j-1 of the
1940 Act. These codes of ethics permit personnel subject to the
codes to invest in securities, including securities that may be
purchased or held by the Fund.
The Fund has adopted the Adviser's proxy voting
policies and procedures. The Adviser's proxy voting policies and
procedures are attached as Appendix B.
-----------------------------------------------------------------
PURCHASE OF SHARES
-----------------------------------------------------------------
The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Buy Shares."
General
-------
Shares of the Fund are offered on a continuous basis at
a price equal to their net asset value plus an initial sales
charge at the time of purchase ("Class A shares"), with a CDSC
("Class B shares"), without any initial sales charge and, as long
as the shares are held for one year or more, without any CDSC
("Class C shares"), to group retirement plans eligible to
purchase Class R shares, without any initial sales charge or CDSC
("Class R shares"), or, to investors eligible to purchase Advisor
Class shares, without any initial sales charge or CDSC ("Advisor
Class Shares"), in each case as described below. "Group
retirement plans" are defined as 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 account
are held on the books of the Fund. All of the classes of shares
of the Fund, except the Advisor Class shares, are subject to Rule
12b-1 asset-based sales charges. Shares of the Fund that are
offered subject to a sales charge are offered through (i)
investment dealers that are members of the NASD and have entered
into selected dealer agreements with the Principal Underwriter
("selected dealers"), (ii) depository institutions and other
financial intermediaries, or their affiliates, that have entered
into selected agent agreements with the Principal Underwriter
("selected agents") and (iii) the Principal Underwriter.
Investors may purchase shares of the Fund either
through selected broker-dealers, agents, financial intermediaries
or other financial representatives ("financial intermediaries")
or directly through the Principal Underwriter. A transaction,
service, administrative or other similar fee may be charged by
your financial intermediary with respect to the purchase, sale or
exchange of shares made through the financial intermediary. Such
financial intermediary may also impose requirements with respect
to the purchase, sale or exchange of shares that are different
from, or in addition to, those imposed by the Fund, including
requirements as to classes of shares available through that
financial intermediary and the minimum initial and subsequent
investment amounts. The Fund is not responsible for, and has no
control over, the decision of any financial intermediary, to
impose such differing requirements. Sales personnel of financial
intermediaries distributing the Fund's shares may receive
differing compensation for selling different classes of shares.
In order to open your account, the Fund or your
financial intermediary is required to obtain certain information
from you for identification purposes. This information may
include name, date of birth, permanent residential address and
social security/taxpayer identification number. It will not be
possible to establish your account without this information. If
the Fund or your financial intermediary is unable to verify the
information provided, your account may be closed and other
appropriate action may be taken as permitted by law.
Right to Restrict, Reject or Cancel Purchase and
Exchange Orders. The AllianceBernstein Mutual Funds reserve 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.
Policy Regarding Excessive or Short Duration Trading.
Purchases and exchanges of shares of the AllianceBernstein Mutual
Funds should be made for investment purposes only. The
AllianceBernstein Mutual Funds, as a matter of policy, seek to
prevent patterns of excessive purchases and sales or exchanges of
fund shares. Such practices are commonly referred to as "market
timing" or "short duration trading." The AllianceBernstein Mutual
Funds will seek to prevent such practices to the extent they are
detected by the procedures described below, subject to
AllianceBernstein Mutual Funds' ability to monitor purchase, sale
and exchange activity, as described under "Limitations on Ability
to Detect and Curtail Excessive Trading Practices." The
AllianceBernstein Mutual Funds, the Adviser, ABIRM and AGIS each
reserve 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
AllianceBernstein Mutual Funds, through their agents,
ABIRM and AGIS, maintain surveillance procedures with
respect to purchase, sale and exchange activity in fund
shares. This surveillance process involves scrutinizing
transactions in fund shares that exceed certain
monetary thresholds or numerical limits within a
specified period of time. Trading activity identified
by either, or a combination, of these factors, or as a
result of any other information actually available at
the time, will be evaluated to determine whether such
activity might constitute excessive or short duration
trading activity. Generally speaking, when a fund
shareholder makes more than two exchange transactions
in amounts of $25,000 or more involving an
AllianceBernstein Mutual Fund during any 90-day period,
these transactions will be identified by these
surveillance procedures. Additionally, each purchase of
fund shares in excess of $25,000 followed by a sale
within certain periods of time will be similarly
identified. For purposes of these transaction
surveillance procedures, AllianceBernstein Mutual
Funds, ABIRM and AGIS may consider trading activity in
multiple accounts under common ownership, control or
influence. These monetary thresholds, numerical
surveillance limits or surveillance procedures
generally may be modified from time to time, including,
for example, in respect of accounts held by certain
retirement plans to conform to plan exchange limits or
U.S. Department of Labor regulations, as well as for
certain automated or pre-established exchange, asset
allocation or dollar cost averaging programs or omnibus
account arrangements.
o Account Blocking Procedures. When a particular
transaction or pattern of transactions identified by
the transaction surveillance procedures described above
is determined by the AllianceBernstein Mutual Funds,
ABIRM or AGIS, in their sole discretion, to be
excessive or short duration trading in nature, the
relevant fund account(s) will be immediately "blocked"
with respect to any future purchase or exchange
activity. However, sales of fund shares back to a fund
will continue to be permitted in accordance with the
terms of the relevant AllianceBernstein Mutual 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, may be suspended for such account.
AllianceBernstein Mutual Fund accounts that are so
blocked 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 AllianceBernstein Mutual
Funds, ABIRM or AGIS that the account holder did not or
will not in the future engage in excessive or short
duration trading.
Limitations on Ability to Detect and Curtail Excessive
Trading Practices. Shareholders seeking to engage in excessive or
short duration trading practices may deploy a variety of
strategies to avoid detection and, despite the efforts of the
AllianceBernstein Mutual Funds, ABIRM and AGIS to detect
excessive or short duration trading in fund shares, there is no
guarantee that the AllianceBernstein Mutual Funds, ABIRM and AGIS
will be able to identify these shareholders or curtail their
trading practices. For example, omnibus account arrangements are
common forms of holding shares of a fund, particularly among
certain brokers, dealers and other financial intermediaries,
including retirement plans and variable insurance products.
Entities utilizing such omnibus account arrangements may not
identify customers' trading activity in shares of a fund on an
individual basis. Consequently, the AllianceBernstein Mutual
Funds, ABIRM and AGIS may not be able to detect excessive or
short duration trading in fund shares attributable to a
particular investor who effects purchase and/or exchange activity
in fund shares through a broker, dealer or other financial
intermediary acting in an omnibus capacity. Also, there may exist
multiple tiers of these entities, each utilizing an omnibus
account arrangement, which may further compound the difficulty to
the AllianceBernstein Mutual Funds, ABIRM and AGIS of detecting
excessive or short duration trading activity in fund shares. It
is common for a substantial portion of AllianceBernstein Mutual
Fund shares to be held through such omnibus account arrangements.
In seeking to prevent excessive or short duration trading in
shares of AllianceBernstein Mutual Funds, including the
maintenance of any transaction surveillance or account blocking
procedures, the AllianceBernstein Mutual Funds, ABIRM and AGIS
consider the information actually available to them at the time.
Risks Associated with Excessive or Short Duration
Trading Generally. While the AllianceBernstein Mutual Funds,
ABIRM and AGIS will try to prevent market timing by utilizing the
procedures described above, these procedures may not be
successful in identifying or stopping excessive or short duration
trading in all circumstances. Excessive purchases and sales or
exchanges of shares of AllianceBernstein Mutual Funds may
adversely affect fund performance and the interests of long-term
investors. Volatility resulting from excessive purchases and
sales or exchanges of fund shares, especially involving large
dollar amounts, may disrupt efficient portfolio management. In
particular, a fund may have difficulty implementing long-term
investment strategies if it is unable to anticipate what portion
of its assets it should retain in cash to provide liquidity to
its shareholders. Also, excessive purchases and sales or
exchanges of fund shares may force a fund to maintain a
disadvantageously large cash position to accommodate short
duration trading activity. Further, excessive purchases and sales
or exchanges of a fund's shares may force a fund to sell
portfolio securities at inopportune times to raise cash to
accommodate short duration trading activity.
In addition, the AllianceBernstein Mutual Funds may
incur increased expenses if one or more shareholders engage in
excessive purchase and sale or exchange activity. For example, a
fund that is forced to liquidate investments due to short
duration trading activity may incur increased brokerage and tax
costs without attaining any investment advantage. Similarly, a
fund may bear increased administrative costs as a result of the
asset level and investment volatility that accompanies patterns
of short duration trading activity.
The AllianceBernstein Mutual Funds that invest in
foreign securities may be particularly susceptible to short
duration trading strategies. This is because time zone
differences among international stock markets can allow a
shareholder engaging in a short duration strategy to exploit fund
share prices that are based on closing prices of foreign
securities established some time before the fund calculates its
own share price. In addition, a shareholder engaging in a short
duration strategy may target an AllianceBernstein Mutual Fund
that does not invest primarily in foreign securities. For
example, a fund that invests in certain fixed-income securities
such as high yield bonds or certain asset backed securities may
also constitute an effective vehicle for a shareholder's short
duration trading strategy. Money market funds and closed-end
funds generally are not effective vehicles for short duration
trading activity, and therefore the risks relating to short
duration trading activity are correspondingly lower for
AllianceBernstein Mutual Funds of these types.
Risks Resulting from Imposition of Account Blocks in
Response to Excessive or Short Duration Trading Activity. A
shareholder identified as having engaged in excessive or short
duration trading activity and prevented from purchasing or
exchanging AllianceBernstein Mutual Fund shares and who does not
wish to redeem his or her shares effectively may be "locked" into
an investment in an AllianceBernstein Mutual 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 an account "blocked"
due to patterns of excessive purchases and sales or exchanges may
be forced to sell fund shares, which could be costly if, for
example, these shares decline in value before sale, are subject
to a CDSC, the shareholder recently paid a front-end sales charge
or the sale results in adverse tax consequences to the
shareholder. To avoid this risk, shareholders should carefully
monitor the nature and frequency of their purchases, sales and
exchanges of fund 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. If the Fund suspends the sale of
its shares, shareholders will not be able to acquire its shares,
including through an exchange.
The public offering price of shares of the Fund is
their net asset value, plus, in the case of Class A shares, a
sales charge. On each Fund business day on which a purchase or
redemption order is received by the Fund and trading in the types
of securities in which the Fund invests might materially affect
the value of Fund shares, the per share net asset value is
computed as of the next close of regular trading on the Exchange
(currently 4:00 p.m. Eastern time) by dividing the value of the
Fund's total assets, less its liabilities, by the total number of
its shares then outstanding. A Fund business day is any day on
which the Exchange is open for trading.
The respective per share net asset values of the
various classes of shares of the Fund are expected to be
substantially the same. However, the per share net asset values
of the Class B, Class C and Class R shares will generally be
slightly lower than the per share net asset values of the Class A
and Advisor Class shares as a result of the differential daily
expense accruals of the higher distribution and, in some cases,
transfer agency fees applicable with respect to those classes of
shares.
The Fund will accept unconditional orders for its
shares to be executed at the public offering price equal to their
net asset value next determined (plus applicable Class A sales
charges), as described below. Orders received by the Principal
Underwriter prior to the close of regular trading on the Exchange
on each day the Exchange is open for trading are priced at the
net asset value computed as of the close of regular trading on
the Exchange on that day (plus applicable Class A sales charges).
In the case of orders for purchase of shares placed through
financial intermediaries, the applicable public offering price
will be the net asset value as so determined, but only if the
financial intermediary receives the order prior to the close of
regular trading on the Exchange. The financial intermediary is
responsible for transmitting such orders by a prescribed time to
the Fund or its transfer agent. If the financial intermediary
fails to do so, the investor will not receive that day's net
asset value. If the financial intermediary receives the order
after the close of regular trading on the Exchange, the price
received by the investor will be based on the net asset value
determined as of the close of regular trading on the Exchange on
the next day it is open for trading.
Following the initial purchase of Fund shares, a
shareholder may place orders to purchase additional shares by
telephone if the shareholder has completed the appropriate
portion of the Subscription Application or an "Autobuy"
application obtained by calling the "For Literature" telephone
number shown on the cover of this SAI. Except with respect to
certain omnibus accounts, telephone purchase orders may not
exceed $500,000. Payment for shares purchased by telephone can be
made only by electronic funds transfer from a bank account
maintained by the shareholder at a bank that is a member of the
National Automated Clearing House Association ("NACHA").
Telephone purchase requests must be received before 3:00 p.m.
Eastern time on a Fund business day to receive that day's public
offering price. Telephone purchase requests received after 3:00
p.m. Eastern time are automatically placed the following Fund
business day, and the applicable public offering price will be
the public offering price determined as of the close of business
on such following business day.
Full and fractional shares are credited to a
shareholder's account in the amount of his or her subscription.
As a convenience, and to avoid unnecessary expense to the Fund,
stock certificates representing shares of the Fund are not issued
except upon written request to the Fund by the shareholder or his
or her authorized financial intermediary. This facilitates later
redemption and relieves the shareholder of the responsibility for
and inconvenience of lost or stolen certificates. No certificates
are issued for fractional shares, although such shares remain in
the shareholder's account on the books of the Fund.
Each class of shares of the Fund represents an interest
in the same portfolio of investments of the Fund, has the same
rights and is identical in all respects, except that (i) Class A
shares bear the expense of the initial sales charge (or CDSC,
when applicable) and Class B and Class C shares bear the expense
of the CDSC, (ii) Class B shares, Class C shares and Class R
shares each bear the expense of a higher distribution services
fee than that borne by Class A shares, and Advisor Class shares
do not bear such a fee, (iii) Class B shares and Class C shares
bear higher transfer agency costs than those borne by Class A,
Class R and Advisor Class shares, (iv) Class B and Advisor Class
shares are subject to a conversion feature, and will convert to
Class A shares under certain circumstances, and (v) each of Class
A, Class B, Class C and Class R shares has exclusive voting
rights with respect to provisions of the Rule 12b-1 Plan pursuant
to which its distribution services fee is paid and other matters
for which separate class voting is appropriate under applicable
law, provided that, if the Fund submits to a vote of the Class A
shareholders, an amendment to the Rule 12b-1 Plan that would
materially increase the amount to be paid thereunder with respect
to the Class A shares, then such amendment will also be submitted
to the Class B and Advisor Class shareholders, because the Class
B and Advisor Class shares convert to class A shares under
certain circumstances, and the Class A, Class B and Advisor Class
shareholders will vote separately by class. Each class has
different exchange privileges and certain different shareholder
service options available.
The Directors of the Fund have determined that
currently no conflict of interest exists between or among the
classes of shares of the Fund. On an ongoing basis, the Directors
of the Fund, pursuant to their fiduciary duties under the 1940
Act and state law, will seek to ensure that no such conflict
arises.
Alternative Purchase Arrangements
---------------------------------
Classes A, B and C Shares. Class A, Class B and Class C
shares have the following alternative purchase arrangements:
Class A shares are generally offered with an initial sales
charge, Class B shares are generally offered with a CDSC and
Class C shares are sold to investors choosing the asset-based
sales charge alternative. Special purchase arrangements are
available for group retirement plans. See "Alternative Purchase
Arrangements -- Group Retirement Plans," below. These alternative
purchase arrangements permit an investor to choose the method of
purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold the
shares and other circumstances. Investors should consider
whether, during the anticipated life of their investment in the
Fund, the accumulated distribution services fee and CDSC on Class
B shares prior to conversion, or the accumulated distribution
services fee and CDSC on Class C shares, would be less than the
initial sales charge and accumulated distribution services fee on
Class A shares purchased at the same time, and to what extent
such differential would be offset by the higher return of Class A
shares. Class A shares will normally be more beneficial than
Class B shares to the investor who qualifies for reduced initial
sales charges on Class A shares, as described below. In this
regard, the Principal Underwriter will reject any order (except
orders from certain group retirement plans) for more than
$250,000 for Class B shares (see "Alternative Purchase
Arrangements - Group Retirement Plans"). Class C shares will
normally not be suitable for the investor who qualifies to
purchase Class A shares at net asset value. For this reason, the
Principal Underwriter will reject any order for more than
$1,000,000 for Class C shares.
Class A shares are subject to a lower distribution
services fee and, accordingly, pay correspondingly higher
dividends per share than Class B shares or Class C shares.
However, because initial sales charges are deducted at the time
of purchase, most investors purchasing Class A shares would not
have all their funds invested initially and, therefore, would
initially own fewer shares. Investors not qualifying for reduced
initial sales charges who expect to maintain their investment for
an extended period of time might consider purchasing Class A
shares because the accumulated continuing distribution charges on
Class B shares or Class C shares may exceed the initial sales
charge on Class A shares during the life of the investment.
Again, however, such investors must weigh this consideration
against the fact that, because of such initial sales charges, not
all their funds will be invested initially.
Other investors might determine, however, that it would
be more advantageous to purchase Class B shares or Class C shares
in order to have all their funds invested initially, although
remaining subject to higher continuing distribution charges and
being subject to a CDSC for a four-year and one-year period,
respectively. For example, based on current fees and expenses, an
investor subject to the 4.25% initial sales charge on Class A
shares would have to hold his or her investment approximately
seven years for the Class C distribution services fee to exceed
the initial sales charge plus the accumulated distribution
services fee of Class A shares. In this example, an investor
intending to maintain his or her investment for a longer period
might consider purchasing Class A shares. This example does not
take into account the time value of money, which further reduces
the impact of the Class C distribution services fees on the
investment, fluctuations in net asset value or the effect of
different performance assumptions.
Those investors who prefer to have all of their funds
invested initially but may not wish to retain Fund shares for the
four-year period during which Class B shares are subject to a
CDSC may find it more advantageous to purchase Class C shares.
Class A Shares
--------------
The public offering price of Class A shares is the net
asset value plus a sales charge, as set forth below.
Sales Charge
------------
Discount or
Commission
As % of to Dealers
As % of the or Agents
Net Public of up to % of
Amount of Amount Offering Offering
Purchase Invested Price Price
-------- -------- -------- -------------
Less than
$100,000 ........... 4.44% 4.25% 4.00%
$100,000 but
less than
$250,000 ........... 3.36 3.25 3.00
$250,000 but
less than
$500,000 ........... 2.30 2.25 2.00
$500,000 but
less than
$1,000,000* ........ 1.78 1.75 1.50
--------
* There is no initial sales charge on transactions of
$1,000,000 or more.
All or a portion of the initial sales charge may be
paid to your financial representative. With respect to purchases
of $1,000,000 or more, Class A shares redeemed within one year of
purchase will be subject to a CDSC equal to 1% of the lesser of
the cost of the shares being redeemed or their net asset value at
the time of redemption. Accordingly, no sales charge will be
imposed on increases in net asset value above the initial
purchase price. In addition, no charge will be assessed on shares
derived from reinvestment of dividends or capital gains
distributions. The CDSC on Class A shares will be waived on
certain redemptions, as described below under "Class C Shares."
In determining the CDSC applicable to a redemption of Class A
shares, it will be assumed that the redemption is, first, of any
shares that are not subject to a CDSC (for example, because an
initial sales charge was paid with respect to the shares, or they
have been held beyond the period during which the charge applies
or were acquired upon the reinvestment of dividends or
distributions) and, second, of shares held longest during the
time they are subject to the sales charge. Proceeds from the CDSC
on Class A shares are paid to the Principal Underwriter and are
used by the Principal Underwriter to defray the expenses of the
Principal Underwriter related to providing distribution-related
services to the Fund in connection with the sales of Class A
shares, such as the payment of compensation to selected dealers
or agents for selling Class A shares. With respect to purchases
of $1,000,000 or more made through selected dealers or agents,
the Adviser may, pursuant to the Distribution Services Agreement
described above, pay such dealers or agents from its own
resources a fee of up to 1% of the amount invested to compensate
such dealers or agents for their distribution assistance in
connection with such purchases.
No initial sales charge is imposed on Class A shares
issued (i) pursuant to the automatic reinvestment of income
dividends or capital gains distributions, (ii) in exchange for
Class A shares of other "AllianceBernstein Mutual Funds" (as that
term is defined under "Combined Purchase Privilege" below),
except that an initial sales charge will be imposed on Class A
shares issued in exchange for Class A shares of AllianceBernstein
Exchange Reserves that were purchased for cash without the
payment of an initial sales charge and without being subject to a
CDSC, or (iii) upon the automatic conversion of Class B shares or
Advisor Class shares as described below under "Class B Shares --
Conversion Feature" and "--Conversion of Advisor Class Shares to
Class A Shares." The Fund receives the entire net asset value of
its Class A shares sold to investors. The Principal Underwriter's
commission is the sales charge shown above less any applicable
discount or commission "reallowed" to selected dealers and
agents. The Principal Underwriter will reallow discounts to
selected dealers and agents in the amounts indicated in the table
above. In this regard, the Principal Underwriter may elect to
reallow the entire sales charge to selected dealers and agents
for all sales with respect to which orders are placed with the
Principal Underwriter. A selected dealer who receives reallowance
in excess of 90% of such a sales charge may be deemed to be an
"underwriter" under the Securities Act.
In addition to the circumstances described above,
certain types of investors may be entitled to pay no initial
sales charge in certain circumstances described below.
Class A Shares - Sales at Net Asset Value. The Fund may
sell its Class A shares at net asset value (i.e., without any
initial sales charge) to certain categories of investors
including:
(i) investment management clients of the Adviser or
its affiliates;
(ii) officers and present or former Directors of the
Fund or other investment companies managed by the
Adviser, officers, directors and present or
retired full-time employees and former employees
(for subsequent investment in accounts established
during the course of their employment) of the
Adviser, the Principal Underwriter, AGIS and their
affiliates; officers, directors and present and
full-time employees of selected dealers or agents;
or the spouse, of any such person; or any trust,
individual retirement account or retirement plan
account for the benefit of any such person;
(iii) the Adviser, Principal Underwriter, AGIS and
their affiliates; certain employee benefit plans
for employees of the Adviser, the Principal
Underwriter, AGIS and their affiliates;
(iv) persons participating in a fee-based program,
sponsored and maintained by a registered
broker-dealer or other financial intermediary and
approved by the Principal Underwriter, pursuant to
which such persons pay an asset-based fee to such
broker-dealer or financial intermediary, or its
affiliate or agent, for service in the nature of
investment advisory or administrative services;
and
(v) certain retirement plan accounts as described
under "Alternative Purchase Arrangements-Group
Retirement Plans."
Class B Shares
--------------
Investors may purchase Class B shares at the public
offering price equal to the net asset value per share of the
Class B shares on the date of purchase without the imposition of
a sales charge at the time of purchase. The Class B shares are
sold without an initial sales charge so that the Fund will
receive the full amount of the investor's purchase payment.
Proceeds from the CDSC on the Class B shares are paid
to the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sale of the Class B shares, such as the
payment of compensation to selected dealers and agents for
selling Class B shares. The combination of the CDSC and the
distribution services fee enables the Fund to sell the Class B
shares without a sales charge being deducted at the time of
purchase. The higher distribution services fee incurred by Class
B shares will cause such shares to have a higher expense ratio
and to pay lower dividends than those related to Class A shares.
Contingent Deferred Sales Charge. Class B shares that
are redeemed within four years of purchase will be subject to a
CDSC at the rates set forth below charged as a percentage of the
dollar amount subject thereto. The charge will be assessed on an
amount equal to the lesser of the cost of the shares being
redeemed or their net asset value at the time of redemption.
Accordingly, no sales charge will be imposed on increases in net
asset value above the initial purchase price. In addition, no
charge will be assessed on shares derived from reinvestment of
dividends or capital gains distributions.
To illustrate, assume that an investor purchased 10,000
Class B shares at $10 per share (at a cost of $100,000) and in
the second year after purchase, the net asset value per share is
$12 and, during such time, the investor has acquired 1,000
additional Class B shares upon dividend reinvestment. If at such
time the investor makes his or her first redemption of 5,000
Class B shares (proceeds of $60,000), 1,000 Class B shares will
not be subject to the charge because of dividend reinvestment.
With respect to the remaining 4,000 Class B shares, the charge is
applied only to the original cost of $10 per share and not to the
increase in net asset value of $2 per share. Therefore, $40,000
of the $60,000 redemption proceeds will be charged at a rate of
3.0% (the applicable rate in the second year after purchase as
set forth below).
The amount of the CDSC, if any, will vary depending on
the number of years from the time of payment for the purchase of
Class B shares until the time of redemption of such shares.
Year Contingent Deferred Sales Charge as a
Since Purchase % of Dollar Amount Subject to Charge
-------------- ------------------------------------
First 4.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth and Thereafter None
In determining the CDSC applicable to a redemption of
Class B shares, it will be assumed that the redemption is, first,
of any shares that were acquired upon the reinvestment of
dividends or distributions) and, second, of shares held longest
during the time they are subject to the sales charge. When shares
acquired in an exchange are redeemed, the applicable CDSC and
conversion schedules will be the schedules that applied at the
time of the purchase of shares of the corresponding class of the
AllianceBernstein Mutual Fund originally purchased by the
shareholder.
The CDSC is waived on redemptions of shares (i)
following the death or disability, as defined in the Internal
Revenue Code of 1986, as amended (the "Code"), of a shareholder,
(ii) to the extent that the redemption represents a minimum
required distribution from an individual retirement account or
other retirement plan to a shareholder that has attained the age
of 70-1/2, (iii) that had been purchased by present or former
Directors of the Fund, by the relative of any such person, by any
trust, individual retirement account or retirement plan account
for the benefit of any such person or relative, or by the estate
of any such person or relative, (iv) pursuant to, and in
accordance with, a systematic withdrawal plan (see "Sales Charge
Reduction Programs-Systematic Withdrawal Plan" below), (v) sold
through programs offered by financial intermediaries and approved
by ABIRM, where such programs offer only shares that are not
subject to a CDSC, where the financial intermediary establishes a
single omnibus account for the Fund, and where no advance
commission is paid to any financial intermediary in connection
with the purchase of such shares, or (vi) to the extent that the
redemption is necessary to meet a plan participant's or
beneficiary's request for a distribution or loan from a group
retirement plan.
Conversion Feature. Eight years after the end of the
calendar month in which the shareholder's purchase order was
accepted, Class B shares will automatically convert to Class A
shares and will no longer be subject to a higher distribution
services fee. Such conversion will occur on the basis of the
relative net asset values of the two classes, without the
imposition of any sales load, fee or other charge. The purpose of
the conversion feature is to reduce the distribution services fee
paid by holders of Class B shares that have been outstanding long
enough for the Principal Underwriter to have been compensated for
distribution expenses incurred in the sale of such shares.
For purposes of conversion to Class A, Class B shares
purchased through the reinvestment of dividends and distributions
paid in respect of Class B shares in a shareholder's account will
be considered to be held in a separate sub-account. Each time any
Class B shares in the shareholder's account (other than those in
the sub-account) convert to Class A, an equal pro-rata portion of
the Class B shares in the sub-account will also convert to Class
A.
The conversion of Class B shares to Class A shares is
subject to the continuing availability of an opinion of counsel
to the effect that the conversion of Class B shares to Class A
shares does not constitute a taxable event under federal income
tax law. The conversion of Class B shares to Class A shares may
be suspended if such an opinion is no longer available at the
time such conversion is to occur. In that event, no further
conversions of Class B shares would occur, and shares might
continue to be subject to the higher distribution services fee
for an indefinite period which may extend beyond the period
ending eight years after the end of the calendar month in which
the shareholder's purchase order was accepted.
Class C Shares
--------------
Investors may purchase Class C shares at the public
offering price equal to the net asset value per share of the
Class C shares on the date of purchase without the imposition of
a sales charge either at the time of purchase or, as long as the
shares are held for one year or more, upon redemption. Class C
shares are sold without an initial sales charge so that the Fund
will receive the full amount of the investor's purchase payment
and, as long as the shares are held for one year or more, without
a CDSC so that the investor will receive as proceeds upon
redemption the entire net asset value of his or her Class C
shares. The Class C distribution services fee enables the Fund to
sell Class C shares without either an initial sales charge or
CDSC, as long as the shares are held for one year or more. Class
C shares do not convert to any other class of shares of the Fund
and incur higher distribution services fees than Class A shares,
and will thus have a higher expense ratio and pay correspondingly
lower dividends than Class A shares.
Class C shares that are redeemed within one year of
purchase will be subject to a CDSC of 1%, charged as a percentage
of the dollar amount subject thereto. The charge will be assessed
on an amount equal to the lesser of the cost of the shares being
redeemed or their net asset value at the time of redemption.
Accordingly, no sales charge will be imposed on increases in net
asset value above the initial purchase price. In addition, no
charge will be assessed on shares derived from reinvestment of
dividends or capital gains distributions. In determining the CDSC
applicable to a redemption of Class C shares, it will be assumed
that the redemption is, first, of any shares that are not subject
to a CDSC (for example, because the shares have been held beyond
the period during which the charge applies or were acquired upon
the reinvestment of dividends or distributions) and, second, of
shares held longest during the time they are subject to the sales
charge.
Proceeds from the CDSC are paid to the Principal
Underwriter and are used by the Principal Underwriter to defray
the expenses of the Principal Underwriter related to providing
distribution-related services to the Fund in connection with the
sale of the Class C shares, such as the payment of compensation
to selected dealers and agents for selling Class C shares. The
combination of the CDSC and the distribution services fee enables
the Fund to sell the Class C shares without a sales charge being
deducted at the time of purchase. The higher distribution
services fee incurred by Class C shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares.
The CDSC is waived on redemptions of shares (i)
following the death or disability, as defined in the Code, of a
shareholder, (ii) to the extent that the redemption represents a
minimum required distribution from an individual retirement
account or other retirement plan to a shareholder that has
attained the age of 70-1/2, (iii) that had been purchased by
present or former Directors of the Fund, by the relative of any
such person, by any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative, or by the estate of any such person or relative, (iv)
pursuant to, and in accordance with, a systematic withdrawal plan
(see "Sales Charge Reduction Programs - Systematic Withdrawal
Plan" below), (v) sold through programs offered by financial
intermediaries and approved by ABIRM where such programs offer
only shares which are not subject to a CDSC where the financial
intermediary establishes a single omnibus account for the Fund
and where no advance commission is paid to any financial
intermediary in connection with the purchase of such shares, or
(vi) to the extent that the redemption is necessary to meet a
plan participant's or beneficiary's request for a distribution or
loan from a group retirement plan or to accommodate a plan
participant's or beneficiary's direction to reallocate his or her
plan account among other investment alternatives available under
a group retirement plan.
Class R Shares
--------------
Class R shares are offered only to group retirement
plans that have plan assets of $1 million to $10 million and have
plan level or omnibus accounts held on the books of the Fund.
Class R shares are not available to retail non-retirement
accounts, traditional or Roth IRAs, Coverdell Education Savings
Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual 403(b) plans
and to AllianceBernstein sponsored retirement products. Class R
shares incur a .50% distribution services fee and thus have a
higher expense ratio than Class A shares and pay correspondingly
lower dividends than Class A shares.
Advisor Class Shares
--------------------
Advisor Class shares of the Fund may be purchased and
held solely (i) through accounts established under fee-based
programs, sponsored and maintained by registered broker-dealers
or other financial intermediaries and approved by the Principal
Underwriter, (ii) through self-directed defined contribution
employee benefit plans (e.g., 401(k) plans) that have at least
$10 million in assets and are purchased directly by the plan
without the involvement of a financial intermediary, (iii) by the
categories of investors described in clauses (i) through (iv)
under "--Sales at Net Asset Value" (other than officers,
directors and present and full-time employees of selected dealers
or agents, or relatives of such person, or any trust, individual
retirement account or retirement plan account for the benefit of
such relative, none of whom is eligible on the basis solely of
such status to purchase and hold Advisor Class shares), or (iv)
by directors and present or retired full-time employees of CB
Richard Ellis, Inc. Generally, a fee-based program must charge an
asset-based or other similar fee and must invest at least
$250,000 in Advisor Class shares of the Fund in order to be
approved by the Principal Underwriter for investment in Advisor
Class shares. A transaction fee may be charged by your financial
intermediary with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial intermediary.
Advisor Class shares do not incur any distribution services fees,
and will thus have a lower expense ratio and pay correspondingly
higher dividends than Class A, Class B, Class C, or Class R
shares.
Conversion of Advisor Class Shares to Class A Shares
----------------------------------------------------
Advisor Class shares may be held solely through the
fee-based program accounts, employee benefit plans, qualified
state tuition programs and registered investment advisory or
other financial intermediary relationships described above under
"Purchase of Shares--Advisor Class Shares," and by investment
advisory clients of, and certain other persons associated with
the Adviser and its affiliates or the Fund. If (i) a holder of
Advisor Class shares ceases to participate in the fee-based
program or plan, or to be associated with the investment adviser
or financial intermediary, in each case, that satisfies the
requirements to purchase shares set forth under "Purchase of
Shares--Advisor Class Shares" or (ii) the holder is otherwise no
longer eligible to purchase Advisor Class shares as described in
the Prospectus and this SAI (each, a "Conversion Event"), then
all Advisor Class shares held by the shareholder will convert
automatically to Class A shares of the Fund during the calendar
month following the month in which the Fund is informed of the
occurrence of the Conversion Event. The Fund will provide the
shareholder with at least 30 days' notice of the conversion. The
failure of a shareholder or a fee-based program to satisfy the
minimum investment requirements to purchase Advisor Class shares
will not constitute a Conversion Event. The conversion would
occur on the basis of the relative net asset values of the two
classes and without the imposition of any sales load, fee or
other charge. Class A shares currently bear a .30% distribution
services fee. Advisor Class shares do not have any distribution
services fee. As a result, Class A shares have a higher expense
ratio and may pay correspondingly lower dividends and have a
lower net asset value than Advisor Class shares.
The conversion of Advisor Class shares to Class A
shares is subject to the continuing availability of an opinion of
counsel to the effect that the conversion of Advisor Class shares
to Class A shares does not constitute a taxable event under
federal income tax law. The conversion of Advisor Class shares to
Class A shares may be suspended if such an opinion is no longer
available at the time such conversion is to occur. In that event,
the Advisor Class shareholder would be required to redeem his
Advisor Class shares, which would constitute a taxable event
under federal income tax law.
Alternative Purchase Arrangements - Group Retirement Plans
----------------------------------------------------------
The Fund offers special distribution arrangements for
group retirement plans. However, plan sponsors, plan fiduciaries
and other financial intermediaries may establish requirements 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 this SAI. Group
retirement plans also may not offer all classes of shares of the
Fund. In order to enable participants investing through group
retirement plans to purchase shares of the Fund, the maximum and
minimum investment amounts may be different for shares purchased
through group retirement plans from those described herein. In
addition, the Class A, Class B and Class C CDSC may be waived for
investments made through certain group retirement plans.
Therefore, plan sponsors or fiduciaries may not adhere to these
share class eligibility standards as set forth in the Prospectus
and this SAI. The Fund is not responsible for, and has no control
over, the decision of any plan sponsor or fiduciary to impose
such differing requirements.
Class A Shares. Class A shares are available at net
asset value to all AllianceBernstein sponsored group retirement
plans, regardless of size, and to the AllianceBernstein Link,
AllianceBernstein Individual 401(k) and AllianceBernstein Simple
IRA plans with at least $250,000 in plan assets or 100 or more
employees. If the plan terminates the Fund as an investment
option within one year, then all plan purchases of Class A shares
will be subject to a 1%, 1-year CDSC on redemption. Class A
shares are also available at net asset value to group retirement
plans with plan assets of $10 million or more. The 1%, 1-year
CDSC also generally applies. However, the 1%, 1-year CDSC may be
waived if the financial intermediary agrees to waive all
commissions or other compensation paid in connection with the
sale of such shares (typically up to a 1% advance payment for
sales of Class A shares at net asset value) other than the
service fee paid pursuant to the Fund's Rule 12b-1 Plan.
Class B Shares. Class B shares are generally not
available for purchase by group retirement plans. However, Class
B shares may continue to be purchased by group retirement plans
that have already selected Class B shares as an investment
alternative under their plan prior to September 2, 2003.
Class C Shares. Class C shares are available to
AllianceBernstein Link, AllianceBernstein Individual 401(k) and
AllianceBernstein Simple IRA plans with less than $250,000 in
plan assets and less than 100 employees. Class C shares are also
available to group retirement plans with plan assets of less than
$1 million.
Class R Shares. Class R shares are available to certain
group retirement plans with plan assets of $1 million to $10
million. Such plans are not eligible to purchase Class A shares.
Class R shares are not subject to front-end sales charge or CDSC,
but are subject to a .50% distribution fee.
Choosing a Class of Shares for Group Retirement Plans.
As noted, plan sponsors, plan fiduciaries and other financial
intermediaries may establish requirements 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 this SAI. Plan fiduciaries should consider how
these requirements differ from the Fund's share class eligibility
criteria before determining whether to invest. For example, the
Fund makes its Class A shares available at net asset value to
group retirement plans with plan assets of $10 million or more.
In addition, under certain circumstances described above, the 1%,
1-year CDSC may be waived. Because Class A shares have lower Rule
12b-1 distribution fees than Class R shares, plans eligible for
Class A shares with no CDSC should purchase Class A shares. The
plan sponsor or fiduciary of plans purchasing shares through a
financial intermediary that is not willing to waive advance
commission payments (and therefore not eligible for the waiver of
the 1%, 1-year CDSC) should weigh the lower distribution fee and
the 1%, 1-year CDSC of Class A shares against the higher
distribution fee and absence of a CDSC on Class R shares
available from the Fund. In addition, as described above, while
Class B shares are generally not available to group retirement
plans, Class B shares are available for continuing contributions
from plans that have already selected Class B shares as an
investment option under their plans prior to September 2, 2003.
Plan fiduciaries should weigh the fact that Class B shares will
convert to Class A shares after a period of time against the fact
that Class A and Class R shares have lower expenses, and
therefore higher returns, than Class B shares, before determining
which class to make available to its plan participants.
Sales Charge Reduction Programs
-------------------------------
The AllianceBernstein Mutual Funds offer shareholders
various programs through which shareholders may obtain reduced
sales charges or reductions in CDSC through participation in such
programs. In order for shareholders to take advantage of the
reductions available through the combined purchase privilege,
rights of accumulation and letters of intent, the Fund must be
notified by the shareholder or his or her financial intermediary
that they qualify for such a reduction. If the Fund is not
notified that that a shareholder is eligible for these
reductions, the Fund will be unable to ensure that the reduction
is applied to the shareholder's account.
Combined Purchase Privilege. Shareholders may qualify
for the sales charge reductions by combining purchases of shares
of the Fund into a single "purchase." By combining such
purchases, shareholders may be able to take advantage of the
quantity discounts described under "Alternative Purchase
Arrangements - Class A Shares." A "purchase" means a single or
concurrent purchase by (i) an individual, his or her spouse and
their children under the age of 21 years purchasing shares of the
Fund for his, her or their own account(s); (ii) a single purchase
by a trustee or other fiduciary purchasing shares for a single
trust, estate or single fiduciary account although more than one
beneficiary is involved; or (iii) a single purchase for the
employee benefit plans of a single employer. The term "purchase"
also includes purchases by any "company," as the term is defined
in the 1940 Act, but does not include purchases by any such
company that has not been in existence for at least six months or
that has no purpose other than the purchase of shares of the Fund
or shares of other registered investment companies at a discount.
The term "purchase" does not include purchases by any group of
individuals whose sole organizational nexus is that the
participants therein are credit card holders of a company, policy
holders of an insurance company, customers of either a bank or
broker-dealer or clients of an investment adviser.
Currently, the AllianceBernstein Mutual Funds include:
AllianceBernstein All-Asia Investment Fund, Inc.
AllianceBernstein Americas Government Income Trust, Inc.
AllianceBernstein Balanced Shares, Inc.
AllianceBernstein Blended Style Series, Inc.
-U.S. Large Cap Portfolio
AllianceBernstein Bond Fund, Inc.
-AllianceBernstein Corporate Bond Portfolio
-AllianceBernstein Quality Bond Portfolio
-AllianceBernstein U.S. Government Portfolio
AllianceBernstein Disciplined Value Fund, Inc.
AllianceBernstein Emerging Market Debt Fund, Inc.
AllianceBernstein Exchange Reserves
AllianceBernstein Global Research Growth Fund, Inc.
AllianceBernstein Global Small Cap Fund, Inc.
AllianceBernstein Global Strategic Income Trust, Inc.
AllianceBernstein Greater China '97 Fund, Inc.
AllianceBernstein Growth and Income Fund, Inc.
AllianceBernstein Health Care Fund, Inc.
AllianceBernstein High Yield Fund, Inc.
AllianceBernstein International Premier Growth Fund, Inc.
AllianceBernstein Mid-Cap Growth Fund, Inc.
AllianceBernstein Multi-Market Strategy Trust, Inc.
AllianceBernstein Municipal Income Fund, Inc.
-California Portfolio
-Insured California Portfolio
-Insured National Portfolio
-National Portfolio
-New York Portfolio
AllianceBernstein Municipal Income Fund II
-Arizona Portfolio
-Florida Portfolio
-Massachusetts Portfolio
-Michigan Portfolio
-Minnesota Portfolio
-New Jersey Portfolio
-Ohio Portfolio
-Pennsylvania Portfolio
-Virginia Portfolio
AllianceBernstein New Europe Fund, Inc.
AllianceBernstein Premier Growth Fund, Inc.
AllianceBernstein Real Estate Investment Fund, Inc.
AllianceBernstein Select Investor Series, Inc.
-Biotechnology Portfolio
-Premier Portfolio
-Technology Portfolio
AllianceBernstein Small Cap Growth Fund, Inc.
AllianceBernstein Technology Fund, Inc.
AllianceBernstein Trust
-AllianceBernstein Global Value Fund
-AllianceBernstein International Value Fund
-AllianceBernstein Small Cap Value Fund
-AllianceBernstein Value Fund
AllianceBernstein Utility Income Fund, Inc.
AllianceBernstein Worldwide Privatization Fund, Inc.
The AllianceBernstein Portfolios
-AllianceBernstein Balanced Wealth Strategy
-AllianceBernstein Growth Fund
-AllianceBernstein Tax-Managed Balanced Wealth Strategy
-AllianceBernstein Tax-Managed Wealth Appreciation Strategy
-AllianceBernstein Tax-Managed Wealth Preservation Strategy
-AllianceBernstein Wealth Appreciation Strategy
-AllianceBernstein Wealth Preservation Strategy
Sanford C. Bernstein Fund, Inc.
-Intermediate Diversified Municipal Portfolio
-Intermediate California Municipal Portfolio
-Intermediate New York Municipal Portfolio
-International Portfolio
-Short Duration Portfolio
-Tax-Managed International Portfolio
Prospectuses for the AllianceBernstein Mutual Funds may
be obtained without charge by contacting AGIS at the address or
the "For Literature" telephone number shown on the front cover of
this SAI.
Cumulative Quantity Discount (Right of Accumulation).
An investor's purchase of additional Class A shares of the Fund
may be combined with the value of the shareholder's existing
accounts, thereby enabling the shareholder to take advantage of
the quantity discounts described under "Alternative Purchase
Arrangements - Class A Shares". In such cases, the applicable
sales charge on the newly purchased shares will be based on the
total of:
(i) the investor's current purchase;
(ii) the net asset value (at the close of business on
the previous day) of (a) all shares of the Fund
held by the investor and (b) all shares of any
other AllianceBernstein Mutual Fund held by the
investor; and
(iii) the net asset value of all shares described in
paragraph (ii) owned by another shareholder
eligible to combine his or her purchase with that
of the investor into a single "purchase" (see
above).
For example, if an investor owned shares of an
AllianceBernstein Mutual Fund worth $200,000 at their then
current net asset value and, subsequently, purchased Class A
shares of the Fund worth an additional $100,000, the sales charge
for the $100,000 purchase would be the 2.25% rate applicable to a
single $300,000 purchase of shares of the Fund, rather than the
3.25% rate.
Statement of Intention. Class A investors may also
obtain the quantity discounts described under "Alternative
Purchase Arrangements - Class A Shares" by means of a written
Statement of Intention, which expresses the investor's intention
to invest not less than $100,000 within a period of 13 months in
shares of any AllianceBernstein Mutual Fund. Each purchase of
shares under a Statement of Intention will be made at the public
offering price or prices applicable at the time of such purchase
to a single transaction of the dollar amount indicated in the
Statement of Intention. At the investor's option, a Statement of
Intention may include purchases of shares of the Fund or any
other AllianceBernstein Mutual Fund made not more than 90 days
prior to the date that the investor signs a Statement of
Intention, in which case the 13-month period during which the
Statement of Intention is in effect will begin on the date of
that earliest purchase to be included. However, sales charges
will not be reduced for purchases made prior to the date the
Statement of Intention is signed.
Investors qualifying for the Combined Purchase
Privilege described above may purchase shares of the
AllianceBernstein Mutual Funds under a single Statement of
Intention. For example, if at the time an investor signs a
Statement of Intention to invest at least $100,000 in Class A
shares of the Fund, the investor and the investor's spouse each
purchase shares of the Fund worth $20,000 (for a total of
$40,000), it will only be necessary to invest a total of $60,000
during the following 13 months in shares of the Fund or any other
AllianceBernstein Mutual Fund, to qualify for the 3.25% sales
charge on the total amount being invested (the sales charge
applicable to an investment of $100,000).
The Statement of Intention is not a binding obligation
upon the investor to purchase the full amount indicated. The
minimum initial investment under a Statement of Intention is 5%
of such amount. Shares purchased with the first 5% of such amount
will be held in escrow (while remaining registered in the name of
the investor) to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount
indicated is not purchased, and such escrowed shares will be
involuntarily redeemed at their then net asset value to pay the
additional sales charge, if necessary. Dividends on escrowed
shares, whether paid in cash or reinvested in additional Fund
shares, are not subject to escrow. When the full amount indicated
has been purchased, the escrow will be released.
Investors wishing to enter into a Statement of
Intention in conjunction with their initial investment in Class A
shares of the Fund can obtain a form of Statement of Intention by
contacting AGIS at the address or telephone numbers shown on the
cover of this SAI.
Reinstatement Privilege. A shareholder who has redeemed
any or all of his or her Class A or Class B shares of the Fund
may reinvest all or any portion of the proceeds from that
redemption in Class A shares of the Fund at net asset value
without any sales charge, provided that (i) such reinvestment is
made within 120 calendar days after the redemption or repurchase
date, and (ii) for Class B shares, a CDSC has been paid and the
Principal Underwriter has approved, at its discretion, the
reinstatement of such shares. Shares are sold to a reinvesting
shareholder at the net asset value next determined as described
above. A reinstatement pursuant to this privilege will not cancel
the redemption or repurchase transaction; therefore, any gain or
loss so realized will be recognized for federal income tax
purposes except that no loss will be recognized to the extent
that the proceeds are reinvested in shares of the Fund within 30
calendar days after the redemption or repurchase transaction.
Investors may exercise the reinstatement privilege by written
request sent to the Fund at the address shown on the cover of
this SAI.
Dividend Reinvestment Program. Shareholders may elect
to have all income and capital gains distributions from their
account paid to them in the form of additional shares of the same
class of the Fund pursuant to the Fund's Dividend Reinvestment
Program. No initial sales charge or CDSC will be imposed on
shares issued pursuant to the Dividend Reinvestment Program.
Shares issued under this program 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
distribution. Investors wishing to participate in the Dividend
Reinvestment Program should complete the appropriate section of
the Subscription Application. Current shareholders should contact
AGIS to participate in the Dividend Reinvestment Program.
In certain circumstances where a shareholder has
elected to receive dividends and/or capital gain distributions in
cash but the account has been determined to be lost due to mail
being returned to us by the Postal Service as undeliverable, such
shareholder's distributions option will automatically be placed
within the Dividend Reinvestment Program for future
distributions. No interest will accrue on amounts represented by
uncashed distribution checks.
Dividend Direction Plan. A shareholder who already
maintains accounts in more than one AllianceBernstein Mutual Fund
may direct that income dividends and/or capital gains paid by one
AllianceBernstein Mutual Fund be automatically reinvested, in any
amount, without the payment of any sales or service charges, in
shares of the same class of the other AllianceBernstein Mutual
Fund(s). Further information can be obtained by contacting AGIS
at the address or the "For Literature" telephone number shown on
the cover of this SAI. Investors wishing to establish a dividend
direction plan in connection with their initial investment should
complete the appropriate section of the Subscription Application.
Current shareholders should contact AGIS to establish a dividend
direction plan.
Systematic Withdrawal Plan
--------------------------
General. Any shareholder who owns or purchases shares
of the Fund having a current net asset value of at least $4,000
(for quarterly or less frequent payments), $5,000 (for bi-monthly
payments) or $10,000 (for monthly payments) may establish a
systematic withdrawal plan under which the shareholder will
periodically receive a payment in a stated amount of not less
than $50 on a selected date. Systematic withdrawal plan
participants must elect to have their dividends and distributions
from the Fund automatically reinvested in additional shares of
the Fund.
Shares of the Fund owned by a participant in the Fund's
systematic withdrawal plan will be redeemed as necessary to meet
withdrawal payments and such payments will be subject to any
taxes applicable to redemptions and, except as discussed below
with respect to Class B and Class C shares, any applicable CDSC.
Shares acquired with reinvested dividends and distributions will
be liquidated first to provide such withdrawal payments and
thereafter other shares will be liquidated to the extent
necessary, and depending upon the amount withdrawn, the
investor's principal may be depleted. A systematic withdrawal
plan may be terminated at any time by the shareholder or the
Fund.
Withdrawal payments will not automatically end when a
shareholder's account reaches a certain minimum level. Therefore,
redemptions of shares under the plan may reduce or even liquidate
a shareholder's account and may subject the shareholder to the
Fund's involuntary redemption provisions. See "Redemption and
Repurchase of Shares -- General." Purchases of additional shares
concurrently with withdrawals are undesirable because of sales
charges applicable when purchases are made. While an occasional
lump-sum investment may be made by a holder of Class A shares who
is maintaining a systematic withdrawal plan, such investment
should normally be an amount equivalent to three times the annual
withdrawal or $5,000, whichever is less.
Payments under a systematic withdrawal plan may be made
by check or electronically via the Automated Clearing House
("ACH") network. Investors wishing to establish a systematic
withdrawal plan in conjunction with their initial investment in
shares of the Fund should complete the appropriate portion of the
Subscription Application, while current Fund shareholders
desiring to do so can obtain an application form by contacting
AGIS at the address or the "For Literature" telephone number
shown on the cover of this SAI.
CDSC Waiver for Class B Shares and Class C Shares.
Under the systematic withdrawal plan, up to 1% monthly, 2%
bi-monthly or 3% quarterly of the value at the time of redemption
of the Class B or Class C shares in a shareholder's account may
be redeemed free of any CDSC.
Class B shares that are not subject to a CDSC (such as
shares acquired with reinvested dividends or distributions) will
be redeemed first and will count toward the foregoing
limitations. Remaining Class B shares that are held the longest
will be redeemed next. Redemptions of Class B shares in excess of
the foregoing limitations will be subject to any otherwise
applicable CDSC.
With respect to Class C shares, shares held the longest
will be redeemed first and will count toward the foregoing
limitations. Redemptions in excess of those limitations will be
subject to any otherwise applicable CDSC.
-----------------------------------------------------------------
REDEMPTION AND REPURCHASE OF SHARES
-----------------------------------------------------------------
The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Sell Shares." If you are an Advisor Class
shareholder through an account established under a fee-based
program your fee-based program may impose requirements with
respect to the purchase, sale or exchange of Advisor Class shares
of the Fund that are different from those described herein. A
transaction fee may be charged by your financial intermediary
with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial intermediary. The Fund has
authorized one or more brokers to receive on its behalf purchase
and redemption orders. Such brokers are authorized to designate
other intermediaries to receive purchase and redemption orders on
the Fund's behalf. In such cases, orders will receive the net
asset value next computed after such order is properly received
by the authorized broker or designee and accepted by the Fund.
Redemption
----------
Subject only to the limitations described below, the
Fund's Charter requires that the Fund redeem the shares tendered
to it, as described below, at a redemption price equal to their
net asset value as next computed following the receipt of shares
tendered for redemption in proper form. Except for any CDSC which
may be applicable to Class A, Class B or Class C shares, there is
no redemption charge. Payment of the redemption price will be
made within seven days after the Fund's receipt of such tender
for redemption. If a shareholder is in doubt about what documents
are required by his or her fee-based program or employee benefit
plan, the shareholder should contact his or her financial
intermediary.
The right of redemption may not be suspended or the
date of payment upon redemption postponed for more than seven
days after shares are tendered for redemption, except for any
period during which the Exchange is closed (other than customary
weekend and holiday closings) or during which the Commission
determines that trading thereon is restricted, or for any period
during which an emergency (as determined by the Commission)
exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or as a result of which
it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or for such other periods as the
Commission may by order permit for the protection of security
holders of the Fund.
Payment of the redemption price normally will be made
in cash. No interest will accrue on uncashed redemption checks.
The value of a shareholder's shares on redemption or repurchase
may be more or less than the cost of such shares to the
shareholder, depending upon the market value of the Fund's
portfolio securities at the time of such redemption or
repurchase. Redemption proceeds on Class A, Class B and Class C
shares will reflect the deduction of the CDSC, if any. Payment
received by a shareholder upon redemption or repurchase of his
shares, assuming the shares constitute capital assets in his
hands, will result in long-term or short-term capital gains (or
loss) depending upon the shareholder's holding period and basis
in respect of the shares redeemed.
To redeem shares of the Fund for which no share
certificates have been issued, the registered owner or owners
should forward a letter to the Fund containing a request for
redemption. The signature or signatures on the letter must be
Medallion Signature Guaranteed.
To redeem shares of the Fund represented by stock
certificates, the investor should forward the appropriate stock
certificate or certificates, endorsed in blank or with blank
stock powers attached, to the Fund with the request that the
shares represented thereby, or a specified portion thereof, be
redeemed. The stock assignment form on the reverse side of each
stock certificate surrendered to the Fund for redemption must be
signed by the registered owner or owners exactly as the
registered name appears on the face of the certificate or,
alternatively, a stock power signed in the same manner may be
attached to the stock certificate or certificates or, where
tender is made by mail, separately mailed to the Fund. The
signature or signatures on the assignment form must be guaranteed
in the manner described above.
Telephone Redemption By Electronic Funds Transfer. Each
Fund shareholder is entitled to request redemption by electronic
funds transfer (of shares for which no stock certificates have
been issued) by telephone at (800) 221-5672 if the shareholder
has completed the appropriate portion of the Subscription
Application or, if an existing shareholder has not completed this
portion, by an "Autosell" application obtained from AGIS. A
telephone redemption request by electronic funds transfer may not
exceed $100,000 (except for certain omnibus accounts) and must be
made by 4:00 p.m. Eastern time on a Fund business day as defined
above. Proceeds of telephone redemptions will be sent by
electronic funds transfer to a shareholder's designated bank
account at a bank selected by the shareholder that is a member of
the NACHA.
Telephone Redemption By Check. Each Fund shareholder is
eligible to request redemption by check of Fund shares for which
no stock certificates have been issued by telephone at (800)
221-5672 before 4:00 p.m. Eastern time on a Fund business day in
an amount not exceeding $50,000. Proceeds of such redemptions are
remitted by check to the shareholder's address of record. A
shareholder otherwise eligible for telephone redemption by check
may cancel the privilege by written instruction to AGIS, or by
checking the appropriate box on the Subscription Application.
Telephone Redemptions - General. During periods of
drastic economic, market, or other developments, such as the
terrorist attacks on September 11, 2001, it is possible that
shareholders would have difficulty in reaching AGIS by telephone
(although no such difficulty was apparent at any time in
connection with the attacks). If a shareholder were to experience
such difficulty, the shareholder should issue written
instructions to AGIS at the address shown on the cover of this
SAI. The Fund reserves the right to suspend or terminate its
telephone redemption service at any time without notice.
Telephone redemption is not available with respect to shares (i)
for which certificates have been issued, (ii) held in nominee or
"street name" accounts, (iii) held by a shareholder who has
changed his or her address of record within the preceding 30
calendar days or (iv) held in any retirement plan account.
Neither the Fund, the Adviser, the Principal Underwriter nor AGIS
will be responsible for the authenticity of telephone requests
for redemptions that the Fund reasonably believes to be genuine.
The Fund will employ reasonable procedures in order to verify
that telephone requests for redemptions are genuine, including,
among others, recording such telephone instructions and causing
written confirmations of the resulting transactions to be sent to
shareholders. If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Financial intermediaries may
charge a commission for handling telephone requests for
redemptions.
Repurchase
----------
The Fund may repurchase shares through the Principal
Underwriter or financial intermediaries. The repurchase price
will be the net asset value next determined after the Principal
Underwriter receives the request (less the CDSC, if any, with
respect to the Class A, Class B and Class C shares), except that
requests placed through financial intermediaries before the close
of regular trading on the Exchange on any day will be executed at
the net asset value determined as of such close of regular
trading on that day if received by the Principal Underwriter
prior to its close of business on that day (normally 5:00 p.m.
Eastern time). The financial intermediary is responsible for
transmitting the request to the Principal Underwriter by 5:00
p.m. Eastern time (certain financial intermediaries may enter
into operating agreements permitting them to transmit purchase
information that was received prior to the close of business to
the Principal Underwriter after 5:00 p.m. Eastern time and
receive that day's net asset value). If the financial
intermediary fails to do so, the shareholder's right to receive
that day's closing price must be settled between the shareholder
and that financial intermediary. A shareholder may offer shares
of the Fund to the Principal Underwriter either directly or
through a financial intermediary. Neither the Fund nor the
Principal Underwriter charges a fee or commission in connection
with the repurchase of shares (except for the CDSC, if any, with
respect to Class A, Class B and Class C shares). Normally, if
shares of the Fund are offered through a financial intermediary,
the repurchase is settled by the shareholder as an ordinary
transaction with or through the financial intermediary, who may
charge the shareholder for this service. The repurchase of shares
of the Fund as described above is a voluntary service of the Fund
and the Fund may suspend or terminate this practice at any time.
General
-------
The Fund reserves the right to close out an account
that through redemption has remained below $200 for at least 90
days. Shareholders will receive 60 days' written notice to
increase the account value before the account is closed. No CDSC
will be deducted from the proceeds of this redemption. In the
case of a redemption or repurchase of shares of the Fund recently
purchased by check, redemption proceeds will not be made
available until the Fund is reasonably assured that the check has
cleared, normally up to 15 calendar days following the purchase
date.
-----------------------------------------------------------------
SHAREHOLDER SERVICES
-----------------------------------------------------------------
The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares." The shareholder services set forth below are applicable
to all classes of shares unless otherwise indicated. If you are
an Advisor Class shareholder through an account established under
a fee-based program or a shareholder in a group retirement plan,
your fee-based program or retirement plan may impose requirements
with respect to the purchase, sale or exchange of shares of the
Fund that are different from those described herein.
Automatic Investment Program
----------------------------
Investors may purchase shares of the Fund through an
automatic investment program utilizing "Electronic Funds
Transfer" drawn on the investor's own bank account. Under such a
program, pre-authorized monthly drafts for a fixed amount (at
least $25) are used to purchase shares through the selected
dealer or selected agent designated by the investor at the public
offering price next determined after the Principal Underwriter
receives the proceeds from the investor's bank. In electronic
form, drafts can be made on or about a date each month selected
by the shareholder. Investors wishing to establish an automatic
investment program in connection with their initial investment
should complete the appropriate portion of the Subscription
Application. Current shareholders should contact AGIS at the
address or telephone numbers shown on the cover of this SAI to
establish an automatic investment program.
Exchange Privilege
------------------
You may exchange your investment in the Fund for shares
of the same class of other AllianceBernstein Mutual Funds
(including AllianceBernstein Exchange Reserves, a money market
fund managed by the Adviser) if the other AllianceBernstein
Mutual Fund in which you wish to invest offers shares of the same
class. In addition, (i) present officers and full-time employees
of the Adviser, (ii) present Directors or Trustees of any
AllianceBernstein Mutual Fund and (iii) certain employee benefit
plans for employees of the Adviser, the Principal Underwriter,
AGIS and their affiliates may, on a tax-free basis, exchange
Class A shares of the Fund for Advisor Class shares of the Fund.
Exchanges of shares are made at the net asset value next
determined and without sales or service charges. Exchanges may be
made by telephone or written request. Telephone exchange requests
must be received by AGIS by 4:00 p.m. Eastern time on a Fund
business day in order to receive that day's net asset value.
Shares will continue to age without regard to exchanges
for purpose of determining the CDSC, if any, upon redemption and,
in the case of Class B shares, for the purpose of conversion to
Class A shares. After an exchange, your Class B shares will
automatically convert to Class A shares in accordance with the
conversion schedule applicable to the Class B shares of the
AllianceBernstein Mutual Fund you originally purchased for cash
("original shares"). When redemption occurs, the CDSC applicable
to the original shares is applied.
Please read carefully the prospectus of the
AllianceBernstein Mutual Fund into which you are exchanging
before submitting the request. Call AGIS at (800) 221-5672 to
exchange uncertificated shares. Except with respect to exchanges
of Class A shares of the Fund for Advisor Class shares of the
Fund, exchanges of shares as described above in this section are
taxable transactions for federal income tax purposes. The
exchange service may be modified, restricted or terminated on 60
days' written notice.
All exchanges are subject to the minimum investment
requirements and any other applicable terms set forth in the
prospectus for the AllianceBernstein Mutual Fund whose shares are
being acquired. An exchange is effected through the redemption of
the shares tendered for exchange and the purchase of shares being
acquired at their respective net asset values as next determined
following receipt by the AllianceBernstein Mutual Fund whose
shares are being exchanged of (i) proper instructions and all
necessary supporting documents as described in such fund's
prospectus or (ii) a telephone request for such exchange in
accordance with the procedures set forth in the following
paragraph. Exchanges involving the redemption of shares recently
purchased by check will be permitted only after the
AllianceBernstein Mutual Fund whose shares have been tendered for
exchange is reasonably assured that the check has cleared,
normally up to 15 calendar days following the purchase date.
Exchanges of shares of AllianceBernstein Mutual Funds will
generally result in the realization of a capital gain or loss for
federal income tax purposes.
Each Fund shareholder and the shareholder's financial
intermediary are authorized to make telephone requests for
exchanges unless AGIS receives written instruction to the
contrary from the shareholder, or the shareholder declines the
privilege by checking the appropriate box on the Subscription
Application. Such telephone requests cannot be accepted with
respect to shares then represented by stock certificates. Shares
acquired pursuant to a telephone request for exchange will be
held under the same account registration as the shares redeemed
through such exchange.
Eligible shareholders desiring to make an exchange
should telephone AGIS with their account number and other details
of the exchange, at (800) 221-5672 before 4:00 p.m., Eastern
time, on a Fund business day as defined above. Telephone requests
for exchange received before 4:00 p.m. Eastern time on a Fund
business day will be processed as of the close of business on
that day. During periods of drastic economic, market, or other
developments, such as the terrorist attacks on September 11,
2001, it is possible that shareholders would have difficulty in
reaching AGIS by telephone (although no such difficulty was
apparent at any time in connection with the attacks). If a
shareholder were to experience such difficulty, the shareholder
should issue written instructions to AGIS at the address shown on
the cover of this SAI.
A shareholder may elect to initiate a monthly "Auto
Exchange" whereby a specified dollar amount's worth of his or her
Fund shares (minimum $25) is automatically exchanged for shares
of another AllianceBernstein Mutual Fund. Auto Exchange
transactions normally occur on the 12th day of each month, or the
Fund business day prior thereto.
None of the AllianceBernstein Mutual Funds, the
Adviser, the Principal Underwriter or AGIS will be responsible
for the authenticity of telephone requests for exchanges that the
Fund reasonably believes to be genuine. The Fund will employ
reasonable procedures in order to verify that telephone requests
for exchanges are genuine, including, among others, recording
such telephone instructions and causing written confirmations of
the resulting transactions to be sent to shareholders. If the
Fund did not employ such procedures, it could be liable for
losses arising from unauthorized or fraudulent telephone
instructions. Financial intermediaries may charge a commission
for handling telephone requests for exchanges.
The exchange privilege is available only in states
where shares of the AllianceBernstein Mutual Fund being acquired
may be legally sold. Each AllianceBernstein Mutual Fund reserves
the right, at any time on 60 days' written notice to its
shareholders, to modify, restrict or terminate the exchange
privilege.
Statements and Reports
----------------------
Each shareholder of the Fund receives semi-annual and
annual reports which include a portfolio of investments,
financial statements and, in the case of the annual report, the
report of the Fund's independent registered public accounting
firm, PricewaterhouseCoopers LLP, as well as a confirmation of
each purchase and redemption. By contacting his or her broker or
AGIS, a shareholder can arrange for copies of his or her account
statements to be sent to another person.
-----------------------------------------------------------------
NET ASSET VALUE
-----------------------------------------------------------------
The per share net asset value is computed at the next
close of regular trading on the Exchange (ordinarily 4:00 p.m.
Eastern time) following receipt of a purchase or redemption order
by the Fund on each Fund business day on which such an order is
received and on such other days as the Board of Directors deems
appropriate or necessary in order to comply with Rule 22c-1 under
the 1940 Act. The Fund's per share net asset value is calculated
by dividing the value of the Fund's total assets, less its
liabilities, by the total number of its shares then outstanding.
A Fund business day is any weekday on which the Exchange is open
for trading.
In accordance with applicable rules under the 1940 Act
and the Fund's pricing policies and procedures adopted by the
Board of Directors (the "Pricing Policies"), portfolio securities
are valued at current market value or at fair value. The Board of
Directors has delegated to the Adviser, subject to the Board's
continuing oversight, certain of its duties with respect to the
Pricing Policies.
With respect to securities for which market quotations
are readily available, the market value of a security will be
determined as follows:
(a) securities listed on the Exchange or on a foreign
securities exchange are valued at the last sale price reflected
on the consolidated tape at the close of the Exchange or foreign
securities exchange on the business day as of which such value is
being determined. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked
prices on such day. If no bid or asked prices are quoted on such
day, then the security is valued in good faith at fair value by,
or in accordance with procedures established by, the Board of
Directors;
(b) securities not listed on the Exchange or on a
foreign securities exchange but listed on other national
securities exchanges are valued in accordance with paragraph (a)
above, and securities traded on The Nasdaq Stock Market, Inc.
("NASDAQ") are valued in accordance with the NASDAQ Official
Closing Price;
(c) securities traded on the Exchange or on a foreign
securities exchange and on one or more other national or foreign
securities exchanges, and securities not traded on the Exchange
but traded on one or more other national or foreign securities
exchanges, are valued in accordance with paragraph (a) above by
reference to the principal exchange on which the securities are
traded;
(d) listed put or call options purchased by the Fund
are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid
prices on that day;
(e) open futures contracts and options thereon will be
valued using the closing settlement price or, in the absence of
such a price, the most recent quoted bid price. If there are no
quotations available for the day of valuations, the last
available closing settlement price will be used;
(f) securities traded in the over-the-counter market,
including securities listed on a national securities exchange
whose primary market is believed to be over-the-counter (but
excluding securities traded on NASDAQ) are valued at the mean of
the current bid and asked prices as reported by the National
Quotation Bureau or other comparable sources;
(g) U.S. Government securities and other debt
instruments having 60 days or less remaining until maturity are
valued at amortized cost if their original maturity was 60 days
or less, or by amortizing their fair value as of the 61st day
prior to maturity if their original term to maturity exceeded 60
days (unless in either case it is determined, in accordance with
procedures established by the Board of Directors, that this
method does not represent fair value);
(h) fixed-income securities may be valued on the basis
of prices provided by a pricing service when such prices are
believed to reflect the fair market value of such securities. The
prices provided by a pricing service take into account many
factors, including institutional size, trading in similar groups
of securities and any developments related to specific
securities. For securities where the Adviser has determined that
an appropriate pricing service does not exist, such securities
may be valued on the basis of a quoted bid price or spread from a
major broker-dealer in such security;
(i) mortgage-backed and asset-backed securities may be
valued at prices obtained from a bond pricing service or at a
price obtained from one or more of the major broker-dealers in
such securities when such prices are believed to reflect the fair
market value of such securities. In cases where broker-dealer
quotes are obtained, the Adviser may establish procedures whereby
changes in market yields or spreads are used to adjust, on a
daily basis, a recently obtained quoted bid price on a security;
(j) OTC and other derivatives are valued on the basis
of a quoted bid price or spread from a major broker-dealer in
such security; and
(k) all other securities will be valued in accordance
with readily available market quotations as determined in
accordance with procedures established by the Board of Directors.
With respect to securities for which market quotations
are not readily available, the security will be valued at fair
value in accordance with policies and procedures adopted by the
Board of Directors.
Trading in securities on Far Eastern and European
securities exchanges and over-the-counter markets is normally
completed well before the close of business of each Fund business
day. In addition, trading in foreign markets may not take place
on all Fund business days. Furthermore, trading may take place in
various foreign markets on days that are not Fund business days.
The Fund's calculation of the net asset value per share,
therefore, does not always take place contemporaneously with the
most recent determination of the prices of portfolio securities
in these markets. Events affecting the values of these portfolio
securities that occur between the time their prices are
determined in accordance with the above procedures and the close
of the Exchange will not be reflected in the Fund's calculation
of net asset value unless it is believed that these prices do not
reflect current market value, in which case the securities will
be valued in good faith by, or in accordance with procedures
established by, the Board of Directors at fair value.
The Fund may suspend the determination of its net asset
value (and the offering and sale of shares), subject to the rules
of the Commission and other governmental rules and regulations,
at a time when: (1) the Exchange is closed, other than customary
weekend and holiday closings, (2) an emergency exists as a result
of which it is not reasonably practicable for the Fund to dispose
of securities owned by it or to determine fairly the value of its
net assets, or (3) for the protection of shareholders, the
Commission by order permits a suspension of the right of
redemption or a postponement of the date of payment on
redemption.
For purposes of determining the Fund's net asset value
per share, all assets and liabilities initially expressed in a
foreign currency will be converted into U.S. Dollars at the mean
of the current bid and asked prices of such currency against the
U.S. Dollar last quoted by a major bank that is a regular
participant in the relevant foreign exchange market or on the
basis of a pricing service that takes into account the quotes
provided by a number of such major banks. If such quotations are
not available as of the close of the Exchange, the rate of
exchange will be determined in good faith by, or under the
direction of, the Board of Directors.
The assets attributable to the Class A shares, Class B
shares, Class C shares, Class R shares and Advisor Class shares
will be invested together in a single portfolio. The net asset
value of each class will be determined separately by subtracting
the liabilities allocated to that class from the assets belonging
to that class in conformance with the provisions of a plan
adopted by the Fund in accordance with Rule 18f-3 under the 1940
Act.
-----------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
-----------------------------------------------------------------
Until the Directors of the Fund otherwise determine,
each income dividend and capital gains distribution, if any,
declared by the Fund on its outstanding shares will, at the
election of each shareholder, be paid in cash or reinvested in
additional full or fractional shares of the Fund. Election to
receive dividends and distributions in cash or full or fractional
shares is made at the time the shares are initially purchased and
may be changed at any time prior to the record date for a
particular dividend or distribution. Cash dividends can be paid
by check or, if the shareholder so elects, electronically via the
ACH network. There is no sales or other charge in connection with
the reinvestment of dividends and capital gains distributions.
Dividends paid by the Fund, if any, with respect to Class A,
Class B, Class C, Class R and Advisor Class shares will be
calculated in the same manner at the same time on the same day
and will be in the same amount, except that the higher
distribution services applicable to Class B and C shares, and any
incremental transfer agency costs relating to Class B and Class C
shares, will be borne exclusively by the class to which they
relate.
United States Federal Income Taxation of Dividends and Distributions
--------------------------------------------------------------------
General
-------
The Fund intends to qualify to be taxed as a regulated
investment company under the Code for each taxable year.
Qualification as a regulated investment company under the Code
requires, among other things, that (a) at least 90% of the Fund's
annual gross income, without offset for losses from the sale or
other disposition of securities, be derived from interest,
payments with respect to securities loans, dividends, gains from
the sale or other disposition of securities or options thereon
and certain other qualifying income; and (b) the Fund diversify
its holdings so that, at the end of each quarter of the taxable
year, (i) at least 50% of the market value of the Fund's assets
is represented by cash, government securities and other
securities limited in respect of any one issuer to an amount not
greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of
the value of its assets is invested in the securities of any one
issuer (other than government securities).
The information set forth in the Prospectus and the
following discussion relate solely to the significant United
States federal income taxes on dividends and distributions by the
Fund and assumes that the Fund qualifies to be taxed as a
regulated investment company. An investor should consult his or
her own tax counsel with respect to the specific tax consequences
of being a shareholder of the Fund, including the effect and
applicability of federal, state and local tax laws to his or her
own particular situation and the possible effects of changes
therein.
It is the present policy of the Fund to distribute to
shareholders all net investment income quarterly and to
distribute net realized capital gains, if any, annually. The
amount of any such distributions must necessarily depend upon the
realization by the Fund of income and capital gains from
investments.
If the Fund qualifies as a regulated investment company
for any taxable year and makes timely distributions to the Fund's
shareholders of 90% or more of its net investment income for that
year (calculated without regard to its net capital gain, i.e.,
the excess of its net long-term capital gain over its net
short-term capital loss) it will not be subject to federal income
tax on the portion of its taxable income for the year (including
any net capital gain) that it distributes to its shareholders.
The Fund will also avoid the nondeductible 4% federal excise tax
that would otherwise apply to certain undistributed income for a
given calendar year if it makes timely distributions to its
shareholders which meet certain minimum distribution
requirements. For this purpose, income or gain retained by the
Fund which is subject to corporate income tax will be considered
to have been distributed by year-end. In addition, dividends
declared in October, November or December payable to shareholders
of record as of a specified date during such month and paid in
the following January will be treated as having been paid by the
Fund and received by shareholders in December.
Dividends of the Fund's net ordinary income and
distributions of any net realized short-term capital gain are
taxable to shareholders as ordinary income. In the case of
corporate shareholders, a portion of the Fund's dividends may be
eligible for the dividends-received deduction. The amount
eligible for the deduction is limited to the amount of qualifying
dividends received by the Fund. A corporation's
dividends-received deduction generally will be disallowed unless
the corporation holds shares in the Fund at least 46 days during
the 90-day period beginning 45 days before the date on which the
corporation becomes entitled to receive the dividend.
Furthermore, the dividends-received deduction will be disallowed
to the extent a corporation's investment in shares of the Fund is
financed with indebtedness.
Under the provisions of recently enacted tax
legislation, the maximum long term capital gain rate has been
reduced from 20% to 15%, and some or all of the distributions
from a mutual fund may be treated as "qualified dividend income,"
taxable to individuals at the reduced maximum rate of 15% (5% for
individuals in lower tax brackets), provided that both the Fund
and the individual satisfy certain holding period and other
requirements. A distribution from the Fund is treated as
qualified dividend income to the extent that it is comprised of
dividend income received by the Fund from taxable domestic
corporations and certain qualified foreign corporations, and
provided that the Fund meets certain holding period and other
requirements with respect to the security paying the dividend. In
addition, the individual must meet certain holding period
requirements with respect to the shares of the Fund in order to
take advantage of the 15% tax rate. To the extent distributions
from the Fund are attributable to other sources, such as taxable
interest or short-term capital gains, the dividends will not be
eligible for the lower rates. The Fund will notify you as to how
much of the Fund's distributions, if any, would qualify for the
reduced tax rate, assuming that you also satisfy the holding
period requirements.
Distributions of net capital gain (i.e., the excess of
net long-term capital gain over net short-term capital loss) are
taxable as long-term capital gain, regardless of how long a
shareholder has held shares in the Fund. Any dividend or
distribution received by a shareholder on shares of the Fund will
have the effect of reducing the net asset value of such shares by
the amount of such dividend or distribution. Furthermore, a
dividend or distribution made shortly after the purchase of such
shares by a shareholder, although in effect a return of capital
to that particular shareholder, would be taxable to him or her as
described above. Dividends are taxable in the manner discussed
regardless of whether they are paid to the shareholder in cash or
are reinvested in additional shares of the Fund. If a shareholder
has held shares in the Fund for six months or less and during
that period has received a distribution of net capital gain, any
loss recognized by the shareholder on the sale of those shares
during the six-month period will be treated as a long-term
capital loss to the extent of the distribution. In determining
the holding period of such shares for this purpose, any period
during which a shareholder's risk of loss is offset by means of
options, short sales or similar transactions is not counted.
Any loss realized by a shareholder on a sale or
exchange of shares of the Fund will be disallowed to the extent
the shares disposed of are replaced within a period of 61 days
beginning 30 days before and ending 30 days after the shares are
sold or exchanged. For this purpose, acquisitions pursuant to the
Dividend Reinvestment Plan would constitute a replacement if made
within the period. If disallowed, the loss will be reflected in
an upward adjustment to the basis of the shares acquired.
A dividend or capital gains distribution with respect
to shares of the Fund held by a tax-deferred or qualified plan,
such as an individual retirement account, 403(b)(7) retirement
plan or corporate pension or profit-sharing plan, generally will
not be taxable to the plan. Distributions from such plans will be
taxable to individual participants under applicable tax rules
without regard to the character of the income earned by the
qualified plan.
The Fund may be required to withhold federal income tax
at the rate of 28% of all distributions payable to shareholders
who fail to provide the Fund with their correct taxpayer
identification numbers or to make required certifications, or who
have been notified by the Internal Revenue Service that they are
subject to backup withholding. Corporate shareholders and certain
other shareholders specified in the Code are exempt from such
backup withholding. Backup withholding is not an additional tax;
any amounts so withheld may be credited against a shareholder's
federal income tax liability or refunded.
United States Federal Income Taxation of the Fund
-------------------------------------------------
The following discussion relates to certain significant
United States federal income tax consequences to the Fund with
respect to the determination of its "investment company taxable
income" each year. This discussion assumes that the Fund will be
taxed as a regulated investment company for each of its taxable
years.
Options, Futures Contracts and Warrants. Regulated
futures contracts and certain listed options are considered
"section 1256 contracts" for federal income tax purposes. Section
1256 contracts held by the Fund at the end of each taxable year
will be "marked to market" and treated for federal income tax
purposes as though sold for fair market value on the last
business day of such taxable year. Gain or loss realized by the
Fund on section 1256 contracts generally will be considered 60%
long-term and 40% short-term capital gain or loss. The Fund can
elect to exempt its section 1256 contracts that are part of a
"mixed straddle" (as described below) from the application of
section 1256.
With respect to put and call equity options, gain or
loss realized by the Fund upon the lapse or sale of such options
held by the Fund will be either long-term or short-term capital
gain or loss depending upon the Fund's holding period with
respect to such option. However, gain or loss realized upon the
lapse or closing out of such options that are written by the Fund
will be treated as short-term capital gain or loss. In general,
if the Fund exercises an option, or if an option that the Fund
has written is exercised, gain or loss on the option will not be
separately recognized but the premium received or paid will be
included in the calculation of gain or loss upon disposition of
the property underlying the option. Warrants that are invested in
by the Fund will generally be treated in the same manner for
federal income tax purposes as options held by the Fund.
Tax Straddles. Any option, futures contract or other
position entered into or held by the Fund in conjunction with any
other position held by the Fund may constitute a "straddle" for
federal income tax purposes. A straddle of which at least one,
but not all, the positions are section 1256 contracts may
constitute a "mixed straddle." In general, straddles are subject
to certain rules that may affect the character and timing of the
Fund's gains and losses with respect to straddle positions by
requiring, among other things, that (i) loss realized on
disposition of one position of a straddle not be recognized to
the extent that the Fund has unrealized gains with respect to the
other position in such straddle; (ii) the Fund's holding period
in straddle positions be suspended while the straddle exists
(possibly resulting in gain being treated as short-term capital
gain rather than long-term capital gain); (iii) losses recognized
with respect to certain straddle positions which are part of a
mixed straddle and which are non-section 1256 positions be
treated as 60% long-term and 40% short-term capital loss; (iv)
losses recognized with respect to certain straddle positions
which would otherwise constitute short-term capital losses be
treated as long-term capital losses; and (v) the deduction of
interest and carrying charges attributable to certain straddle
positions may be deferred. Various elections are available to the
Fund which may mitigate the effects of the straddle rules,
particularly with respect to mixed straddles. In general, the
straddle rules described above do not apply to any straddles held
by the Fund all of the offsetting positions of which consist of
section 1256 contracts.
Taxation of Foreign Stockholders
--------------------------------
The foregoing discussion relates only to United States
federal income tax law as it affects shareholders who are United
States citizens or residents or United States corporations. The
effects of federal income tax law on shareholders who are
non-resident alien individuals or foreign corporations may be
substantially different. Foreign investors should therefore
consult their counsel for further information as to the United
States tax consequences of receipt of income from the Fund.
-----------------------------------------------------------------
PORTFOLIO TRANSACTIONS
-----------------------------------------------------------------
Subject to the general supervision of the Board of
Directors of the Fund, the Adviser is responsible for the
investment decisions and the placement of orders for portfolio
transactions for the Fund. The Adviser determines the broker to
be used in each specific transaction with the objective of
negotiating a combination of the most favorable commission and
the best price obtainable on each transaction (generally defined
as "best execution"). When consistent with the objective of
obtaining best execution, brokerage may be directed to persons or
firms supplying investment information to the Adviser. There may
be occasions where the transaction cost charged by a broker may
be greater than that which another broker may charge if the Fund
determines in good faith that the amount of such transaction cost
is reasonable in relation to the value of the brokerage, research
and statistical services provided by the executing broker.
Neither the Fund nor the Adviser has entered into
agreements or understandings with any brokers regarding the
placement of securities transactions because of research services
they provide. To the extent that such persons or firms supply
investment information to the Adviser for use in rendering
investment advice to the Fund, such information may be supplied
at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the
Fund. While it is impossible to place an actual dollar value on
such investment information, its receipt by the Adviser probably
does not reduce the overall expenses of the Adviser to any
material extent.
The investment information provided to the Adviser is
of the type described in Section 28(e)(3) of the Securities
Exchange Act of 1934 and is designed to augment the Adviser's own
internal research and investment strategy capabilities. Research
services furnished by brokers through which the Fund effects
securities transactions are used by the Adviser in carrying out
its investment responsibilities with respect to all its client
accounts.
The extent to which commissions that will be charged by
broker-dealers selected by the Fund may reflect an element of
value for research cannot presently be determined. To the extent
that research services of value are provided by broker-dealers
with or through whom the Fund places portfolio transactions, the
Adviser may be relieved of expenses which it might otherwise
bear. Research services furnished by broker-dealers could be
useful and of value to the Adviser in servicing its other clients
as well as the Fund; but, on the other hand, certain research
services obtained by the Adviser as a result of the placement of
portfolio brokerage of other clients could be useful and of value
to it in serving the Fund. The Fund does not consider sales of
shares of the Fund or other investment companies managed by the
Adviser as a factor in the selection of brokers to execute
portfolio transactions for the Fund.
The Fund may deal in some instances in securities that
are not listed on a national stock exchange but are traded in the
over-the-counter market. The Fund may also purchase listed
securities through the third market, i.e., from a dealer which is
not a member of the exchange on which a security is listed. Where
transactions are executed in the over-the-counter market or third
market, the Fund will seek to deal with the primary market
makers; but when necessary in order to obtain the best price and
execution, it will utilize the services of others. In all cases,
the Fund will attempt to negotiate best execution.
The Fund may from time to time place orders for the
purchase or sale of securities (including listed call options)
with SCB & Co., an affiliate of the Adviser. In such instances,
the placement of orders with such brokers would be consistent
with the Fund's objective of obtaining best execution and would
not be dependent upon the fact that SCB & Co. is an affiliate of
the Adviser. With respect to orders placed with SCB & Co. for
execution on a national securities exchange, commissions received
must conform to Section 17(e)(2)(A) of the 1940 Act and Rule
17e-1 thereunder, which permit an affiliated person of a
registered investment company (such as the Fund), or any
affiliated person of such person, to receive a brokerage
commission from such registered investment company provided that
such commission is reasonable and fair compared to the
commissions received by other brokers in connection with
comparable transactions involving similar securities during a
comparable period of time.
-----------------------------------------------------------------
GENERAL INFORMATION
-----------------------------------------------------------------
The Fund was originally organized as a Maryland
corporation under the name "Alliance Global Growth Trends Fund,
Inc." The name of the Fund was changed to "AllianceBernstein
Global Growth Trends Fund, Inc." on March 31, 2003, and to
"AllianceBernstein Global Research Growth Fund, Inc." on December
11, 2003.
Capitalization
--------------
The authorized capital stock of the Fund consists of
6,000,000,000 shares of Class A Common Stock, 6,000,000,000
shares of Class B Common Stock, 6,000,000,000 shares of Class C
Common Stock, 6,000,000,000 shares of Class R Common Stock and
6,000,000,000 shares of Advisor Class Common Stock, each having
$.001 par value. All shares of the Fund, when issued, are fully
paid and non-assessable. The Directors are authorized to
reclassify and issue any unissued shares to any number of
additional series and classes without shareholder approval.
Accordingly, the Directors in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class or series would be governed by the 1940
Act and the law of the State of Maryland. If shares of another
series were issued in connection with the creation of a second
portfolio, each share of either portfolio would normally be
entitled to one vote for all purposes. Generally, shares of both
portfolios would vote as a single series on matters, such as the
election of Directors, that affected both portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio would
vote as a separate series.
It is anticipated that annual shareholder meetings will
not be held; shareholder meetings will be held only when required
by federal or state law.
A shareholder will be entitled to share pro rata with
other holders of the same class of shares all dividends and
distributions arising from the Fund's assets and, upon redeeming
shares, will receive the then current net asset value of the Fund
represented by the redeemed shares less any applicable CDSC. The
Fund is empowered to establish, without shareholder approval,
additional portfolios, which may have different investment
objectives and policies than those of the Fund, and additional
classes of shares within the Fund. If an additional portfolio or
class were established in the Fund, each share of the portfolio
or class would normally be entitled to one vote for all purposes.
Generally, shares of each portfolio and class would vote together
as a single class on matters, such as the election of Directors,
that affect each portfolio and class in substantially the same
manner. Each class of shares of the Fund has the same rights and
is identical in all respects, except that each of Class A, Class
B, Class C and Class R shares of the Fund bears its own
distribution expenses and Class B shares and Advisor Class shares
convert to Class A shares under certain circumstances. Each class
of shares of the Fund votes separately with respect to the Fund's
Rule 12b-1 distribution plan and other matters for which separate
class voting is appropriate under applicable law. Shares are
freely transferable, are entitled to dividends as determined by
the Directors and, in liquidation of the Fund, are entitled to
receive the net assets of the Fund.
At the close of business on August 29, 2003 there were
100 Class A shares, 100 Class B shares, 100 Class C shares and
199,700 Advisor Class shares of common stock of the Fund
outstanding. To the knowledge of the Fund, the following persons
owned of record or beneficially, 5% or more of a class of the
outstanding shares of the Fund as of August 29, 2003:
No. of
Shares
Name and Address of Class % of Class
---------------- -------- ----------
Class A
-------
Alliance Capital Management L.P.
Attn: Gerry Friscia, Controller
One North Lexington Ave.
White Plains, NY 10601-1712 100 100.00%
Class B
-------
Alliance Capital Management L.P.
Attn: Gerry Friscia, Controller
One North Lexington Ave.
White Plains, NY 10601-1712 100 100.00%
Class C
-------
Alliance Capital Management L.P.
Attn: Gerry Friscia, Controller
One North Lexington Ave.
White Plains, NY 10601-1712 100 100.00%
Advisor Class
-------------
Alliance Capital Management L.P.
Attn: Gerry Friscia, Controller
One North Lexington Ave.
White Plains, NY 10601-1712 199,700 100.00%
Custodian
---------
The Bank of New York, One Wall Street, New York, NY
10286 ("BNY") will act as the Fund's custodian for the assets of
the Fund but plays no part in deciding the purchase or sale of
portfolio securities. Subject to the supervision of the Fund's
Directors, BNY may enter into sub-custodial agreements for the
holding of the Fund's foreign securities.
Principal Underwriter
---------------------
ABIRM, an indirect wholly-owned subsidiary of the
Adviser, located at 1345 Avenue of the Americas, New York, New
York 10105, is the principal underwriter of shares of the Fund.
Under the Distribution Services Agreement, the Fund has agreed to
indemnify the Principal Underwriter, in the absence of its
willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations thereunder, against certain civil
liabilities, including liabilities under the Securities Act.
Counsel
-------
Legal matters in connection with the issuance of the
shares of Common Stock offered hereby are passed upon by Seward &
Kissel LLP, New York, New York.
Independent Registered Public Accounting Firm
---------------------------------------------
PricewaterhouseCoopers LLP, 1177 Avenue of the
Americas, New York, New York 10036, serves as independent
registered public accounting firm for the Fund.
Additional Information
----------------------
Any shareholder inquiries may be directed to the
shareholder's financial intermediary or to AGIS at the address or
telephone numbers shown on the front cover of this SAI. This SAI
does not contain all the information set forth in the
Registration Statement filed by the Fund with the Commission.
Copies of the Registration Statement may be obtained at a
reasonable charge from the Commission or may be examined, without
charge, at the offices of the Commission in Washington, D.C.
-----------------------------------------------------------------
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-----------------------------------------------------------------
The financial statements of the Fund for the period
ended June 30, 2003 and the report of PricewaterhouseCoopers LLP,
independent registered public accounting firm, are incorporated
herein by reference to the Fund's annual report. The annual
report was filed on Form N-CSR with the Commission on September
9, 2003. It is available without charge upon request by calling
AGIS at (800) 227-4618.
-----------------------------------------------------------------
APPENDIX A: FUTURES CONTRACTS AND OPTIONS ON
FUTURES CONTRACTS
-----------------------------------------------------------------
Futures Contracts
-----------------
The Fund may enter into contracts for the purchase or
sale for future delivery of foreign currencies. U.S. futures
contracts have been designed by exchanges which have been
designated "contracts markets" by the Commodity Futures Trading
Commission ("CFTC"), and must be executed through a futures
commission merchant, or brokerage firm, which is a member of the
relevant contract market. Futures contracts trade on a number of
exchange markets, and, through their clearing corporations, the
exchanges guarantee performance of the contracts as between the
clearing members of the exchange. The Fund has claimed an
exclusion from the definition of the term "commodity pool
operator" under the Commodity Exchange Act and therefore is not
subject to regulation as a pool operator under that Act.
At the same time a futures contract is purchased or
sold, the Fund must allocate cash or securities as a deposit
payment ("initial deposit"). It is expected that the initial
deposit would be approximately 1 1/2% to 5% of a contract's face
value. Daily thereafter, the futures contract is valued and the
payment of "variation margin" may be required, since each day the
Fund would provide or receive cash that reflects any decline or
increase in the contract's value.
At the time of delivery of securities pursuant to such
a contract, adjustments are made to recognize differences in
value arising from the delivery of securities with a different
price or interest rate from that specified in the contract. In
some (but not many) cases, securities called for by a futures
contract may not have been issued when the contract was written.
Although futures contracts by their terms call for the
actual delivery or acquisition of securities, in most cases the
contractual obligation is fulfilled before the date of the
contract without having to make or take delivery of the
securities. The offsetting of a contractual obligation is
accomplished by buying (or selling, as the case may be) on a
commodities exchange an identical futures contract calling for
delivery in the same month. Such a transaction, which is effected
through a member of an exchange, cancels the obligation to make
or take delivery of the securities. Since all transactions in the
futures market are made, offset or fulfilled through a
clearinghouse associated with the exchange on which the contracts
are traded, the Fund will incur brokerage fees when it purchases
or sells futures contracts.
Stock Index Futures
-------------------
The Fund may purchase and sell stock index futures.
There are several risks in connection with the use of stock index
futures by the Fund as a hedging device. One risk arises because
of the imperfect correlation between movements in the price of
the stock index futures and movements in the price of the
securities which are the subject of the hedge. The price of the
stock index futures may move more than or less than the price of
the securities being hedged. If the price of the stock index
futures moves less than the price of the securities which are the
subject of the hedge, the hedge will not be fully effective but,
if the price of the securities being hedged has moved in an
unfavorable direction, the Fund would be in a better position
than if it had not hedged at all. If the price of the securities
being hedged has moved in a favorable direction, this advantage
will be partially offset by the loss on the index future. If the
price of the future moves more than the price of the stock, the
Fund will experience either a loss or gain on the future which
will not be completely offset by movements in the price of the
securities which are subject to the hedge. The Fund may buy or
sell fewer stock index futures contracts if the volatility over a
particular time period of the prices of the securities being
hedged is less than the volatility over such time period of the
stock index, or it is otherwise deemed to be appropriate by the
Adviser. It is also possible that, when the Fund has sold futures
to hedge its portfolio against a decline in the market, the
market may advance and the value of securities held in the Fund
may decline. If this occurred, the Fund would lose money on the
futures and also experience a decline in value in its portfolio
securities. However, over time the value of a diversified
portfolio should tend to move in the same direction as the market
indices upon which the futures are based, although there may be
deviations arising from differences between the composition of
the Fund and the stocks comprising the index.
Where futures are purchased to hedge against a possible
increase in the price of stock before the Fund is able to invest
its cash (or cash equivalents) in stocks (or options) in an
orderly fashion, it is possible that the market may decline
instead. If the Fund then concludes not to invest in stock or
options at that time because of concern as to possible further
market decline or for other reasons, the Fund will realize a loss
on the futures contract that is not offset by a reduction in the
price of securities purchased.
In addition to the possibility that there may be an
imperfect correlation, or no correlation at all, between
movements in the stock index futures and the portion of the
portfolio being hedged, the price of stock index futures may not
correlate perfectly with movement in the stock index due to
certain market distortions. Rather than meeting additional margin
deposit requirements, investors may close futures contracts
through offsetting transactions which could distort the normal
relationship between the index and futures markets. Secondly,
from the point of view of speculators, the deposit requirements
in the futures market are less onerous than margin requirements
in the securities market. Therefore, increased participation by
speculators in the futures market may also cause temporary price
distortions. Due to the possibility of price distortion in the
futures market, and because of the imperfect correlation between
the movements in the stock index and movements in the price of
stock index futures, a correct forecast of general market trends
by the investment adviser may still not result in a successful
hedging transaction over a short time frame.
Positions in stock index futures may be closed out only
on an exchange or board of trade which provides a secondary
market for such futures. Although the Fund intends to purchase or
sell futures only on exchanges or boards of trade where there
appear to be active secondary markets, there is no assurance that
a liquid secondary market on any exchange or board of trade will
exist for any particular contract or at any particular time. In
such event, it may not be possible to close a futures investment
position, and in the event of adverse price movements, the Fund
would continue to be required to make daily cash payments of
variation margin. However, in the event futures contracts have
been used to hedge portfolio securities, such securities will not
be sold until the futures contract can be terminated. In such
circumstances, an increase in the price of the securities, if
any, may partially or completely offset losses on the futures
contract. However, as described above, there is no guarantee that
the price of the securities will in fact correlate with the price
movements in the futures contract and thus provide an offset on a
futures contract.
Options on Futures Contracts
----------------------------
The Fund intends to purchase and write options on
futures contracts for hedging purposes. The Fund is not a
commodity pool and all transactions in futures contracts and
options on futures contracts engaged in by the Fund must
constitute bona fide hedging or other permissible transactions in
accordance with the rules and regulations promulgated by the
CFTC. The purchase of a call option on a futures contract is
similar in some respects to the purchase of a call option on an
individual foreign currency. Depending on the pricing of the
option compared to either the price of the futures contract upon
which it is based or the price of the underlying debt securities,
it may or may not be less risky than ownership of the futures
contract or underlying debt securities. As with the purchase of
futures contracts, when the Fund is not fully invested it may
purchase a call option on a futures contract to hedge against
adverse market conditions.
The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
foreign currency which is deliverable upon exercise of the
futures contract. If the futures price at expiration of the
option is below the exercise price, the Fund will retain the full
amount of the option premium that provides a partial hedge
against any decline that may have occurred in the Fund's
portfolio holdings. The writing of a put option on a futures
contract constitutes a partial hedge against increasing prices of
the foreign currency which is deliverable upon exercise of the
futures contract. If the futures price at expiration of the
option is higher than the exercise price, the Fund will retain
the full amount of the option premium that provides a partial
hedge against any increase in the price of a foreign currency
which the Fund intends to purchase. If a put or call option the
Fund has written is exercised, the Fund will incur a loss which
will be reduced by the amount of the premium it receives.
Depending on the degree of correlation between changes in the
value of its portfolio securities and changes in the value of its
futures positions, the Fund's losses from existing options on
futures may to some extent be reduced or increased by changes in
the value of portfolio securities.
The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put
options on portfolio securities. For example, the Fund may
purchase a put option on a futures contract to hedge the Fund's
portfolio against the risk of rising interest rates.
The amount of risk the Fund assumes when it purchases
an option on a futures contract is the premium paid for the
option plus related transaction costs. In addition to the
correlation risks discussed above, the purchase of an option also
entails the risk that changes in the value of the underlying
futures contract will not be fully reflected in the value of the
option purchased.
Additional Risks of Options on Futures Contracts
and Forward Contracts
---------------------
Unlike transactions entered into by the Fund in futures
contracts, and forward contracts are not traded on contract
markets regulated by the CFTC or (with the exception of certain
foreign currency options) by the SEC. To the contrary, such
instruments are traded through financial institutions acting as
market-makers, although foreign currency options are also traded
on certain national securities exchanges, such as the
Philadelphia Stock Exchange and the Chicago Board Options
Exchange, subject to SEC regulation. Similarly, options on
securities may be traded over-the-counter. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there
are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a
period of time. Although the purchaser of an option cannot lose
more than the amount of the premium plus related transaction
costs, this entire amount could be lost. Moreover, the option
writer and a trader of forward contracts could lose amounts
substantially in excess of their initial investments, due to the
margin and collateral requirements associated with such
positions.
In addition, futures contracts, options on futures
contracts and forward contracts may be traded on foreign
exchanges. Such transactions are subject to the risk of
governmental actions affecting trading in or the prices of
foreign currencies or securities. The value of such positions
also could be adversely affected by (i) other complex foreign
political and economic factors, (ii) lesser availability than in
the United States of data on which to make trading decisions,
(iii) delays in the Fund's ability to act upon economic events
occurring in foreign markets during nonbusiness hours in the
United States, (iv) the imposition of different exercise and
settlement terms and procedures and margin requirements than in
the United States, and (v) lesser trading volume.
-----------------------------------------------------------------
APPENDIX B:
STATEMENT OF POLICIES AND PROCEDURES
FOR VOTING PROXIES
-----------------------------------------------------------------
Introduction
------------
As a registered investment adviser, Alliance Capital
Management L.P. ("Alliance Capital", "we" or "us") has a
fiduciary duty to act solely in the best interests of our
clients. As part of this duty, we recognize that we must vote
client securities in a timely manner and make voting decisions
that are in the best interests of our clients.
This statement is intended to comply with Rule 206(4)-6
of the Investment Advisers Act of 1940. It sets forth our
policies and procedures for voting proxies for our discretionary
investment advisory clients, including investment companies
registered under the Investment Company Act of 1940. This
statement is applicable to Alliance Capital's growth and value
investment groups investing on behalf of clients in both U.S. and
global securities.
Proxy Policies
--------------
This statement is designed to be responsive to the wide
range of subjects that can have a significant effect on the
investment value of the securities held in our clients' accounts.
These policies are not exhaustive due to the variety of proxy
voting issues that we may be required to consider. Alliance
Capital reserves the right to depart from these guidelines in
order to avoid voting decisions that we believe may be contrary
to our clients' best interests. In reviewing proxy issues, we
will apply the following general policies:
Elections of Directors: Unless there is a proxy fight for seats
on the Board or we determine that there are other compelling
reasons for withholding votes for directors, we will vote in
favor of the management proposed slate of directors. That said,
we believe that directors have a duty to respond to shareholder
actions that have received significant shareholder support. We
may withhold votes for directors that fail to act on key issues
such as failure to implement proposals to declassify boards,
failure to implement a majority vote requirement, failure to
submit a rights plan to a shareholder vote and failure to act on
tender offers where a majority of shareholders have tendered
their shares. In addition, we will withhold votes for directors
who fail to attend at least seventy-five percent of board
meetings within a given year without a reasonable excuse.
Finally, we may withhold votes for directors of non-U.S. issuers
where there is insufficient information about the nominees
disclosed in the proxy statement.
Appointment of Auditors: Alliance Capital believes that the
company remains in the best position to choose the auditors and
will generally support management's recommendation. However, we
recognize that there may be inherent conflicts when a company's
independent registered public accounting firm performs
substantial non-audit related services for the company.
Therefore, we may vote against the appointment of auditors if the
fees for non-audit related services are disproportionate to the
total audit fees paid by the company or there are other reasons
to question the independence of the company's auditors.
Changes in Capital Structure: Changes in a company's charter,
articles of incorporation or by-laws are often technical and
administrative in nature. Absent a compelling reason to the
contrary, Alliance Capital will cast its votes in accordance with
the company's management on such proposals. However, we will
review and analyze on a case-by-case basis any non-routine
proposals that are likely to affect the structure and operation
of the company or have a material economic effect on the company.
For example, we will generally support proposals to increase
authorized common stock when it is necessary to implement a stock
split, aid in a restructuring or acquisition or provide a
sufficient number of shares for an employee savings plan, stock
option or executive compensation plan. However, a satisfactory
explanation of a company's intentions must be disclosed in the
proxy statement for proposals requesting an increase of greater
than one hundred percent of the shares outstanding. We will
oppose increases in authorized common stock where there is
evidence that the shares will be used to implement a poison pill
or another form of anti-takeover device, or if the issuance of
new shares could excessively dilute the value of the outstanding
shares upon issuance.
Corporate Restructurings, Mergers and Acquisitions: Alliance
Capital believes proxy votes dealing with corporate
reorganizations are an extension of the investment decision.
Accordingly, we will analyze such proposals on a case-by-case
basis, weighing heavily the views of the research analysts that
cover the company and the investment professionals managing the
portfolios in which the stock is held.
Proposals Affecting Shareholder Rights: Alliance Capital believes
that certain fundamental rights of shareholders must be
protected. We will generally vote in favor of proposals that give
shareholders a greater voice in the affairs of the company and
oppose any measure that seeks to limit those rights. However,
when analyzing such proposals we will weigh the financial impact
of the proposal against the impairment of shareholder rights.
Corporate Governance: Alliance Capital recognizes the importance
of good corporate governance in ensuring that management and the
board of directors fulfill their obligations to the shareholders.
We favor proposals promoting transparency and accountability
within a company. For example, we will vote for proposals
providing for equal access to proxies, a majority of independent
directors on key committees, and separating the positions of
chairman and chief executive officer.
Anti-Takeover Measures: Alliance Capital believes that measures
that impede takeovers or entrench management not only infringe on
the rights of shareholders but may also have a detrimental effect
on the value of the company. We will generally oppose proposals,
regardless of whether they are advanced by management or
shareholders, the purpose or effect of which is to entrench
management or dilute shareholder ownership. Conversely, we
support proposals that would restrict or otherwise eliminate
anti-takeover measures that have already been adopted by
corporate issuers. For example, we will support shareholder
proposals that seek to require the company to submit a
shareholder rights plan to a shareholder vote. We will evaluate,
on a case-by-case basis, proposals to completely redeem or
eliminate such plans. Furthermore, we will generally oppose
proposals put forward by management (including blank check
preferred stock, classified boards and supermajority vote
requirements) that appear to be intended as management
entrenchment mechanisms.
Executive Compensation: Alliance Capital believes that company
management and the compensation committee of the board of
directors should, within reason, be given latitude to determine
the types and mix of compensation and benefit awards offered.
Whether proposed by a shareholder or management, we will review
proposals relating to executive compensation plans on a
case-by-case basis to ensure that the long-term interests of
management and shareholders are properly aligned. We will analyze
the proposed plans to ensure that shareholder equity will not be
excessively diluted, the option exercise price is not below
market price on the date of grant and an acceptable number of
employees are eligible to participate in such programs. We will
generally oppose plans that permit repricing of underwater stock
options without shareholder approval. Other factors such as the
company's performance and industry practice will generally be
factored into our analysis. We will support proposals to submit
severance packages triggered by a change in control to a
shareholder vote and proposals that seek additional disclosure of
executive compensation. Finally, we will support shareholder
proposals requiring companies to expense stock options because we
view them as a large corporate expense.
Social and Corporate Responsibility: Alliance Capital will review
and analyze on a case-by-case basis proposals relating to social,
political and environmental issues to determine whether they will
have a financial impact on shareholder value. We will vote
against proposals that are unduly burdensome or result in
unnecessary and excessive costs to the company. We may abstain
from voting on social proposals that do not have a readily
determinable financial impact on shareholder value.
Proxy Voting Committees
-----------------------
Our growth and value investment groups have formed
separate proxy voting committees to establish general proxy
policies for Alliance Capital and consider specific proxy voting
matters as necessary. These committees periodically review new
types of corporate governance issues, evaluate proposals not
covered by these policies and recommend how we should generally
vote on such issues. In addition, the committees, in conjunction
with the analyst that covers the company, contact management and
interested shareholder groups as necessary to discuss proxy
issues. Members of the committees include senior investment
personnel and representatives of the Corporate Legal Department.
The committees may also evaluate proxies where we face a
potential conflict of interest (as discussed below). Finally, the
committees monitor adherence to guidelines, industry trends and
review the policies contained in this statement from time to
time.
Conflicts of Interest
---------------------
Alliance Capital recognizes that there may be a
potential conflict of interest when we vote a proxy solicited by
an issuer whose retirement plan we manage, whose retirement plan
we administer, or with whom we have another business or personal
relationship that may affect how we vote on the issuer's proxy.
We believe that centralized management of proxy voting, oversight
by the proxy voting committees and adherence to these policies
ensures that proxies are voted with only our clients' best
interests in mind. That said, we have implemented additional
procedures to ensure that our votes are not the product of a
conflict of interests, including: (i) requiring anyone involved
in the decision making process to disclose to the chairman of the
appropriate proxy committee any potential conflict that they are
aware of and any contact that they have had with any interested
party regarding a proxy vote; (ii) prohibiting employees involved
in the decision making process or vote administration from
revealing how we intend to vote on a proposal in order to reduce
any attempted influence from interested parties; and (iii) where
a material conflict of interests exists, reviewing our proposed
vote by applying a series of objective tests and, where
necessary, considering the views of a third party research
service to ensure that our voting decision is consistent with our
clients' best interests. For example, if our proposed vote is
consistent with our stated proxy voting policy, no further review
is necessary. If our proposed vote is contrary to our stated
proxy voting policy but is also contrary to management's
recommendation, no further review is necessary. If our proposed
vote is contrary to our stated proxy voting policy or is not
covered by our policy, is consistent with management's
recommendation, and is also consistent with the views of an
independent source, no further review is necessary. If our
proposed vote is contrary to our stated proxy voting policy or is
not covered by our policy, is consistent with management's
recommendation and is contrary to the views of an independent
source, the proposal is reviewed by the appropriate proxy
committee for final determination.
Proxies of Certain Non-U.S. Issuers
-----------------------------------
Proxy voting in certain countries requires "share
blocking." Shareholders wishing to vote their proxies must
deposit their shares shortly before the date of the meeting
(usually one-week) with a designated depositary. During this
blocking period, shares that will be voted at the meeting cannot
be sold until the meeting has taken place and the shares are
returned to the clients' custodian banks. Alliance Capital may
determine that the value of exercising the vote does not outweigh
the detriment of not being able to transact in the shares during
this period. Accordingly, if share blocking is required we may
abstain from voting those shares. In such a situation we would
have determined that the cost of voting exceeds the expected
benefit to the client.
Proxy Voting Records
--------------------
Clients may obtain information about how we voted
proxies on their behalf by contacting their Alliance Capital
administrative representative. Alternatively, clients may make a
written request for proxy voting information to: Mark R. Manley,
Senior Vice President & Acting General Counsel, Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, NY 10105.
PART C
OTHER INFORMATION
ITEM 23. Exhibits
(a) (1) Articles of Incorporation of Registrant -
Incorporated by reference to Exhibit (a) to
Registrant's Registration Statement on Form N-1A
(File Nos. 333-85164 and 811-21064), filed with
the Securities and Exchange Commission on March
28, 2002.
(2) Articles of Amendment of the Registrant dated
March 19, 2003 and filed March 20, 2003 -
Incorporated by reference to Exhibit (a)(2) to
Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-85164 and 811-21064), filed with the
Securities and Exchange Commission on September
23, 2003.
(3) Articles Supplementary of the Registrant dated
June 16, 2004 and filed June 17, 2004 - Filed
herewith.
(b) By-laws of the Registrant - Filed herewith.
(c) Not applicable.
(d) Advisory Agreement between the Registrant and Alliance
Capital Management L.P. - Incorporated by reference to
Exhibit (d) to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File
Nos. 333-85164 and 811-21064), filed with the
Securities and Exchange Commission on July 12, 2002.
(e) (1) Distribution Services Agreement between the
Registrant and AllianceBernstein Investment
Research and Management, Inc. (formerly known as
Alliance Fund Distributors, Inc.) - Incorporated
by reference to Exhibit (e)(1) to Pre-Effective
Amendment No. 1 to Registrant's Registration
Statement on Form N-1A (File Nos. 333-85164 and
811-21064), filed with the Securities and Exchange
Commission on July 12, 2002.
(2) Form of Amendment to the Distribution Services
Agreement between the Registrant and
AllianceBernstein Investment Research and
Management, Inc. (formerly known as Alliance Fund
Distributors, Inc.) - Filed herewith.
(3) Form of Selected Dealer Agreement between
AllianceBernstein Investment Research and
Management, Inc. (formerly known as Alliance Fund
Distributors, Inc.) and selected dealers offering
shares of Registrant - Incorporated by reference
to Exhibit (e)(2) to Pre-Effective Amendment No. 2
to the Registration Statement on Form N-1A of
AllianceBernstein Blended Style Series, Inc. (File
Nos. 333-87002 and 811-21081), filed with the
Securities and Exchange Commission July 9, 2002.
(4) Form of Selected Agent Agreement between
AllianceBernstein Investment Research and
Management, Inc. (formerly known as Alliance Fund
Distributors, Inc.) and selected agents making
available shares of Registrant - Incorporated by
reference to Exhibit (e)(3) to Pre-Effective
Amendment No. 2 to the Registration Statement on
Form N-1A of AllianceBernstein Blended Style
Series, Inc. (File Nos. 333-87002 and 811-21081),
filed with the Securities and Exchange Commission
July 9, 2002.
(f) Not applicable.
(g) Form of Custodian Agreement between the Registrant and
The Bank of New York - Incorporated by reference to
Exhibit (g) to Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of
AllianceBernstein Blended Style Series, Inc. (File Nos.
333-87002 and 811-21081), filed with the Securities and
Exchange Commission July 9, 2002.
(h) (1) Form of Transfer Agency Agreement between the
Registrant and Alliance Global Investor Services,
Inc. - Incorporated by reference to Exhibit (h)(1)
to Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of
AllianceBernstein Blended Style Series, Inc. (File
Nos. 333-87002 and 811-21081), filed with the
Securities and Exchange Commission July 9, 2002.
(2) Expense Limitation Agreement between the
Registrant and Alliance Capital Management L.P. -
Incorporated by reference to Exhibit (h)(2) to
Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-85164 and 811-21064), filed with the
Securities and Exchange Commission on July 12,
2002.
(3) Form of Expense Limitation Undertaking by Alliance
Capital Management L.P. - Filed herewith.
(i) (1) Opinion and Consent of Seward & Kissel LLP with
respect to Class A, Class B, Class C and Advisor
Class shares - Incorporated by reference to
Exhibit (i)(1) to Post-Effective Amendment No. 1
to Registrant's Registration Statement on Form
N-1A (File Nos. 333-85164 and 811-21064), filed
with the Securities and Exchange Commission on
September 23, 2003.
(2) Opinion and Consent of Seward & Kissel LLP with
respect to Class R shares - Filed herewith.
(j) (1) Consent of Independent Auditors with respect to
Class A, Class B, Class C and Advisor Class shares
- Incorporated by reference to Exhibit (j) to
Post-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A (File Nos.
333-85164 and 811-21064), filed with the
Securities and Exchange Commission on September
23, 2003.
(2) Consent of Independent Registered Public Accounting
Firm with respect to Class R shares - Filed herewith.
(k) Not applicable.
(l) Not Applicable.
(m) Rule 12b-1 Plan - See Exhibit (e)(1) hereto.
(n) Form of Amended and Restated Rule 18f-3 Plan - Filed
herewith.
(p) (1) 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.
(2) Code of Ethics for the Alliance Capital Management
L.P. and AllianceBernstein Investment Research and
Management, Inc. (formerly known as Alliance Fund
Distributors, Inc.) - Incorporated by reference to
Exhibit (p)(2) to Post-Effective Amendment No. 31
of the Registration Statement on Form N-1A of
AllianceBernstein Variable Products Series Fund,
Inc. (File Nos. 33-18647 and 811-5398), filed with
the Securities and Exchange Commission on April
27, 2001.
Other Exhibits:
(a) Powers of Attorney for Ruth Block, David H. Dievler,
John H. Dobkin, William H. Foulk, Marc O. Mayer,
Clifford L. Michel and Donald Robinson - Filed
herewith.
ITEM 24. Persons Controlled by or Under Common Control with the Fund.
None.
ITEM 25. 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) in response to Item
23, Article VII and Article VIII of the Registrant's
By-Laws filed as Exhibit (b) in response to Item 23 and
Section 10 of the Distribution Services Agreement filed
as Exhibit (e)(1) in response to Item 23, 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, and Article
VII, Section 7 and Article VIII, Section 1 through
Section 6 of the Registrant's By-Laws, 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 this Registration
Statement, 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) Permitted indemnification of director.--
(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) No indemnification of director liable for improper
personal benefit.-- 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) Required indemnification against expenses incurred
in successful defense.-- 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) Determination that indemnification is proper.--
(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 of directors 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) Payment of expenses in advance of final
disposition of action.--
(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) Validity of indemnification provision.-- 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) Reimbursement of director's expenses while
appearing as witness.-- 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) Director's service to employee benefit plan.-- 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) Officer, employee or agent.-- 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) Insurance or similar protection.--
(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) Report of indemnification to stockholders.-- 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 money
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 that 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 may do so to such
further extent as is consistent with law. The
Board of Directors may by Bylaw, 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 or she would otherwise be subject by
reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties
involved in the conduct of his or her 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 VII, Section 7 of the Registrant's By-Laws reads as
follows:
"Section 7. Insurance Against Certain Liabilities. The
Corporation shall not bear the cost of insurance that
protects or purports to protect directors and officers
of the Corporation against any liabilities to the
Corporation or its security holders to which any such
director or officer would otherwise be subject by
reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved
in the conduct of his office."
Article VIII of the Registrant's By-Laws reads as follows:
"Section 1. Indemnification of Directors and Officers.
The Corporation shall indemnify its directors to the
full extent that indemnification of directors is
permitted by the Maryland General Corporation Law. The
Corporation shall indemnify its officers to the same
extent as its directors and to such further extent as
is consistent with law. The Corporation shall indemnify
its directors and officers who, while serving as
directors or officers, also serve at the request of the
Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, other enterprise or
employee benefit plan to the full extent consistent
with law. The indemnification and other rights provided
by this Article shall continue as to a person who has
ceased to be a director or officer and shall inure to
the benefit of the heirs, executors and administrators
of such a person. This Article shall not protect any
such person against any liability to the Corporation or
any stockholder 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 conduct of his office
("disabling conduct").
"Section 2. Advances. Any current or former director or
officer of the Corporation seeking indemnification
within the scope of this Article shall be entitled to
advances from the Corporation for payment of the
reasonable expenses incurred by him in connection with
the matter as to which he is seeking indemnification in
the manner and to the full extent permissible under the
Maryland General Corporation Law. The person seeking
indemnification shall provide to the Corporation a
written affirmation of his good faith belief that the
standard of conduct necessary for indemnification by
the Corporation has been met and a written undertaking
to repay any such advance if it should ultimately be
determined that the standard of conduct has not been
met. In addition, at least one of the following
additional conditions shall be met: (a) the person
seeking indemnification shall provide a security in
form and amount acceptable to the Corporation for his
undertaking; (b) the Corporation is insured against
losses arising by reason of the advance; or (c) a
majority of a quorum of directors of the Corporation
who are neither "interested persons" as defined in
Section 2(a)(19) of the Investment Company Act of 1940,
as amended, nor parties to the proceeding
("disinterested nonparty directors"), or independent
legal counsel, in a written opinion, shall have
determined, based on a review of facts readily
available to the Corporation at the time the advance is
proposed to be made, that there is reason to believe
that the person seeking indemnification will ultimately
be found to be entitled to indemnification.
"Section 3. Procedure. At the request of any person
claiming indemnification under this Article, the Board
of Directors shall determine, or cause to be
determined, in a manner consistent with the Maryland
General Corporation Law, whether the standards required
by this Article have been met. Indemnification shall be
made only following: (a) a final decision on the merits
by a court or other body before whom the proceeding was
brought that the person to be indemnified was not
liable by reason of disabling conduct, or (b) in the
absence of such a decision, a reasonable determination,
based upon a review of the facts, that the person to be
indemnified was not liable by reason of disabling
conduct by (i) the vote of a majority of a quorum of
disinterested nonparty directors, or (ii) an
independent legal counsel in a written opinion.
"Section 4. Indemnification of Employees and Agents.
Employees and agents who are not officers or directors
of the Corporation may be indemnified, and reasonable
expenses may be advanced to such employees or agents,
as may be provided by action of the Board of Directors
or by contract, subject to any limitations imposed by
the Investment Company Act of 1940.
"Section 5. Other Rights. The Board of Directors may
make further provision consistent with law for
indemnification and advance of expenses to directors,
officers, employees and agents by resolution, agreement
or otherwise. The indemnification provided by this
Article shall not be deemed exclusive of any other
right, with respect to indemnification or otherwise, to
which those seeking indemnification may be entitled
under any insurance or other agreement or resolution of
stockholders or disinterested directors or otherwise.
The rights provided to any person by this Article shall
be enforceable against the Corporation by such person
who shall be presumed to have relied upon it in serving
or continuing to serve as a director, officer,
employee, or agent as provided above.
"Section 6. Amendments. References in this Article are
to the Maryland General Corporation Law and to the
Investment Company Act of 1940 as from time to time
amended. No amendment of these Bylaws shall affect any
right of any person under this Article based on any
event, omission or proceeding prior to the amendment."
The Advisory Agreement between the Registrant and
Alliance Capital Management L.P. provides that Alliance
Capital Management L.P. will not be liable under the
agreement for any mistake of judgment or in any event
whatsoever, except for lack of good faith, provided
that nothing therein shall be deemed to protect, or
purport to protect, Alliance Capital Management 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 Investment Research
and Management, Inc.(formerly known as Alliance Fund
Distributors, Inc.) provides that the Registrant will
indemnify, defend and hold AllianceBernstein Investment
Research and Management, Inc., and any person who
controls it within the meaning of Section 15 of the
Securities Act of 1933 (the "Securities Act"), free and
harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of
investigating or defending such claims, demands, or
liabilities and any counsel fees incurred in connection
therewith) which AllianceBernstein Investment Research
and Management, Inc. 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, which
is filed as Exhibit (a) and incorporated by reference
herein, and the By-Laws, the Advisory Agreement between
Registrant and Alliance Capital Management L.P. and the
Distribution Services Agreement between Registrant and
AllianceBernstein Investment Research and Management,
Inc. which are filed in response to Item 23.
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 Alliance Capital
Management 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 26. Business and Other Connections of Investment Adviser.
The descriptions of Alliance Capital Management L.P.
under the captions "Management of the Fund" in the
Prospectus and in the Statement of Additional
Information constituting Parts A and B, respectively,
of this Registration Statement are incorporated by
reference herein.
The information as to the directors and executive
officers of Alliance Capital Management Corporation,
the general partner of Alliance Capital Management
L.P., set forth in Alliance Capital Management L.P.'s
Form ADV filed with the Securities and Exchange
Commission on April 21, 1988 (File No. 801-32361) and
amended through the date hereof, is incorporated by
reference.
ITEM 27. Principal Underwriters.
(a) AllianceBernstein Investment Research and
Management, Inc. (formerly known as Alliance Fund
Distributors, Inc.), the Registrant's Principal
Underwriter in connection with the sale of shares
of the Registrant. AllianceBernstein Investment
Research and Management, Inc. also acts as
Principal Underwriter or Distributor for the
following investment companies:
AllianceBernstein All-Asia Investment Fund, Inc.
AllianceBernstein Americas Government Income Trust, Inc.
AllianceBernstein Balanced Shares, Inc.
AllianceBernstein Blended Style Series, Inc.
AllianceBernstein Bond Fund, Inc.
AllianceBernstein Capital Reserves
AllianceBernstein Disciplined Growth Fund, Inc.
AllianceBernstein Disciplined Value Fund, Inc.
AllianceBernstein Dynamic Growth Fund, Inc.
AllianceBernstein Emerging Market Debt Fund, Inc.
AllianceBernstein Exchange Reserves
AllianceBernstein Global Research Growth Fund, Inc.
AllianceBernstein Global Small Cap Fund, Inc.
AllianceBernstein Global Strategic Income Trust, Inc.
AllianceBernstein Government Reserves
AllianceBernstein Greater China '97 Fund, Inc.
AllianceBernstein Growth and Income Fund, Inc.
AllianceBernstein Health Care Fund, Inc.
AllianceBernstein High Yield Fund, Inc.
AllianceBernstein Institutional Funds, Inc.
AllianceBernstein Institutional Reserves, Inc.
AllianceBernstein Intermediate California Municipal Portfolio*
AllianceBernstein Intermediate Diversified Municipal Portfolio*
AllianceBernstein Intermediate New York Municipal Portfolio*
AllianceBernstein International Portfolio*
AllianceBernstein International Premier Growth Fund, Inc.
AllianceBernstein Mid-Cap Growth Fund, Inc.
AllianceBernstein Multi-Market Strategy Trust, Inc.
AllianceBernstein Municipal Income Fund, Inc.
AllianceBernstein Municipal Income Fund II
AllianceBernstein Municipal Trust
AllianceBernstein New Europe Fund, Inc.
AllianceBernstein Premier Growth Fund, Inc.
AllianceBernstein Real Estate Investment Fund, Inc.
AllianceBernstein Select Investor Series, Inc.
AllianceBernstein Short Duration Portfolio*
AllianceBernstein Small Cap Growth Fund
AllianceBernstein Tax-Managed International Portfolio*
AllianceBernstein Technology Fund, Inc.
AllianceBernstein Trust
AllianceBernstein Utility Income Fund, Inc.
AllianceBernstein Variable Products Series Fund, Inc.
AllianceBernstein Worldwide Privatization Fund, Inc.
Sanford C. Bernstein Fund II, Inc.
The AllianceBernstein Portfolios
---------------------------------------
* This is a retail Portfolio of Sanford C. Bernstein Fund, Inc.
(b) The following are the Directors and Officers of
AllianceBernstein Investment Research and
Management, Inc., the principal place of business
of which is 1345 Avenue of the Americas, New York,
New York, 10105.
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT
---- ----------- ----------
Directors
Marc O. Mayer Chairman of the Board
and Director
Mark R. Manley Director
Officers
Marc O. Mayer Chairman of the Board
Ranjani Nagaswami Vice Chairman
Frederic L. Bloch Executive Vice President
Richard A. Davies Executive Vice President
& Managing Director
Kurt H. Schoknecht Executive Vice President
Andrew L. Gangolf Senior Vice President Assistant
and Assistant General Secretary
Counsel
Emily D. Wrapp Senior Vice President
and Assistant General
Counsel
Daniel A. Notto Senior Vice President,
Counsel and Assistant
Secretary
Frank Speno Executive Vice President
Audie G. Apple Senior Vice President
Colin C. Aymond Senior Vice President
Adam J. Beaudry Senior Vice President
Matthew F. Beaudry Senior Vice President
Amy I. Belew Senior Vice President
John R. Bonczek Senior Vice President
William W. Collins, Jr. Senior Vice President
Russell R. Corby Senior Vice President
Mark J. Dunbar Senior Vice President
John C. Endahl Senior Vice President
John Edward English Senior Vice President
Donald N. Fritts Senior Vice President
John A. Gagliano Senior Vice President
Bradley F. Hanson Senior Vice President
Scott Hutton Senior Vice President
Geoffrey L. Hyde Senior Vice President
Robert H. Joseph, Jr. Senior Vice President
Victor Kopelakis Senior Vice President
Joseph R. LaSpina Senior Vice President
Henry Michael Lesmeister Senior Vice President
James F. Lyons Senior Vice President
Susan L. Matteson-King Senior Vice President
Daniel D. McGinley Senior Vice President
Thomas F. Monnerat Senior Vice President
Patrick J. Mullen Senior Vice President
Joanna D. Murray Senior Vice President
Jeffrey A. Nye Senior Vice President
Peter J. O'Brien Senior Vice President
John J. O'Connor Senior Vice President
Danielle Pagano Senior Vice President
Catherine N. Peterson Senior Vice President
Mark A. Pletts Senior Vice President
Robert E. Powers Senior Vice President
Stephen C. Scanlon Senior Vice President
John P. Schmidt Senior Vice President
Raymond S. Sclafani Senior Vice President
Eileen B. Sebold Senior Vice President
Gregory K. Shannahan Senior Vice President
Richard J. Sidell Senior Vice President
Scott C. Sipple Senior Vice President
Peter J. Szabo Senior Vice President
Joseph T. Tocyloski Senior Vice President
David R. Turnbough Senior Vice President
Craig E. Welch Senior Vice President
Richard A. Winge Senior Vice President
Keith A. Yoho Senior Vice President
Mark D. Gersten Vice President and Treasurer
Treasurer and Chief
Financial
Officer
Patrick E. Ryan Vice President and
Chief Financial Officer
Margaret M. Bagley Vice President
Peter J. Barber Vice President
Kenneth F. Barkoff Vice President
Charles M. Barrett Vice President
Troy E. Barton Vice President
Laura J. Beedy Vice President
Andrew Berger Vice President
Gregory P. Best Vice President
John C. Bianchi Vice President
Robert F. Brendli Vice President
Alan T. Brum Vice President
Kevin T. Cannon Vice President
John P. Chase Vice President
Jean A. Coomber Vice President
Dwight P. Cornell Vice President
Michael R. Crimmins Vice President
John W. Cronin Vice President
Robert J. Cruz Vice President
Daniel J. Deckman Vice President
Sherry V. Delaney Vice President
Jennifer M. DeLong Vice President
Faith C. Deutsch Vice President
Janet B. DiBrita Vice President
Joseph T. Dominguez Vice President
William J. Dorough Vice President
Richard P. Dyson Vice President
Adam E. Engelhardt Vice President
Michele C. Eschert Vice President
Johnson
Sohaila S. Farsheed Vice President
John J. Fennessy Vice President
Joao P. Fior Vice President
Eric W. Frasier Vice President
Mark A. Gessner Vice President
Thomas R. Graffeo Vice President
Marci Green Vice President
Alan Halfenger Vice President
Michael S. Hart Vice President
George R. Hrabovsky Vice President
David A. Hunt Vice President
Dinah J. Huntoon Vice President
Anthony D. Ialeggio Vice President
Theresa Iosca Vice President
Oscar J. Isoba Vice President
Kumar Jagdeo II Vice President
Danielle M. Klaskow Vice President
Robert I. Kurzweil Vice President
Donna M. Lamback Vice President
James D. Lathrop Vice President
Eric. L. Levinson Vice President
Laurel E. Lindner Vice President
James M. Liptrot Vice President
Armando C. Llanes Vice President
James P. Luisi Vice President
Silvia Manz Vice President
Kathryn Austin Masters Vice President
David W. Monroe Vice President
Doris T. Ciliberti
Muller Vice President
John F. Multhauf Vice President
Michael F. Nash, Jr. Vice President
Jamie A. Nieradka Vice President
David L. Nitz Vice President
Nicole Nolan-Koester Vice President
Timothy J. O'Connell Vice President
Albert Orokos Vice President
David D. Paich Vice President
Todd P. Patton Vice President
James J. Posch Vice President
Carol H. Rappa Vice President
Arlene L. Reddington Vice President
Bruce W. Reitz Vice President
James A. Rie Vice President
Miguel A. Rozensztroch Vice President
Matthew J. Scarlata Vice President
Stephanie Seminara Vice President
Stuart L. Shaw Vice President
Teris A. Sinclair Vice President
Karen Sirett Vice President
Rayandra E. Slonina Vice President
Bryant B. Smith Vice President
Elizabeth M. Smith Vice President
Jeffrey C. Smith Vice President
Eileen Stauber Vice President
Elizabeth K. Tramo Vice President
Benjamin H. Travers Vice President
Keith T. Truex Vice President
Marie R. Vogel Vice President
Wayne W. Wagner Vice President
William K. Weese Vice President
Mark E. Westmoreland Vice President
Paul C. Wharf Vice President
Scott Whitehouse Vice President
Peter H. Whitlock Vice President
Matthew Witschel Vice President
Richard J. Appaluccio Assistant Vice
President
Omar J. Aridi Assistant Vice
President
Joseph D. Asselta Assistant Vice
President
Gian D. Bernardi Assistant Vice
President
Susan Bieber Assistant Vice
President
Heath A. Black Assistant Vice
President
Michael J. Bodnar Assistant Vice
President
Richard A. Brink Assistant Vice
President
Mark S. Burns Assistant Vice
President
Alice L. Chan Assistant Vice
President
Judith A. Chin Assistant Vice
President
Jorge Ciprian Assistant Vice
President
Lynne K. Civita Assistant Vice
President
Jeffrey T. Coghan Assistant Vice
President
Kenneth J. Connors Assistant Vice
President
Michael C. Conrath Assistant Vice
President
Shawn Conroy Assistant Vice
President
Reid W. Conway Assistant Vice
President
Robert A. Craft Assistant Vice
President
Marc DiFilippo Assistant Vice
President
Ralph A. DiMeglio Assistant Vice
President
Bernard J. Eng Assistant Vice
President
Michael J. Eustic Assistant Vice
President
Efrain Fernandez Assistant Vice
President
Anthony P. Fiore Assistant Vice
President
Robert A. Fiorentino Assistant Vice
President
Brian S. Gold Assistant Vice
President
Michael F. Greco Assistant Vice
President
Kelly P. Guter Assistant Vice
President
Junko Hisamatsu Assistant Vice
President
Luis Martin Hoyas Assistant Vice
President
Arthur F. Hoyt, Jr. Assistant Vice
President
Dwayne A. Javier Assistant Vice
President
Elizabeth E. Keefe Assistant Vice
President
Edward W. Kelly Assistant Vice
President
Thomas J. Khoury Assistant Vice
President
Charles Kim Assistant Vice
President
Jung M. Kim Assistant Vice
President
Junko Kimura Assistant Vice
President
Ted R. Kosinski Assistant Vice
President
Stephen J. Laffey Assistant Vice
President
Gary M. Lang Assistant Vice
President
Christopher J. Larkin Assistant Vice
President
Evamarie C. Lombardo Assistant Vice
President
Andrew J. Magnus Assistant Vice
President
Osama Mari Assistant Vice
President
Daniel K. McGouran Assistant Vice
President
Christine A. McQuinlan Assistant Vice
President
Steven M. Miller Assistant Vice
President
Christina A. Morse Assistant Vice President
and Counsel
Troy E. Mosconi Assistant Vice
President
Alex E. Pady Assistant Vice
President
Wandra M. Perry- Assistant Vice
Hartsfield President
Irfan A. Raja Assistant Vice
President
Rizwan A. Raja Assistant Vice
President
David J. Riley Assistant Vice
President
Christopher P. Rodney Assistant Vice
President
Peter V. Romeo Assistant Vice
President
Jessica M. Rozman Assistant Vice
President
John Scialabba Assistant Vice
President
Orlando Soler Assistant Vice
President
Arthur C. Terry Assistant Vice
President
Nancy D. Testa Assistant Vice
President
Richard L. Tocyloski Assistant Vice
President
Kari-Anna Towle Assistant Vice
President
Kayoko Umino Assistant Vice
President
Elsia M. Vasquez Assistant Vice
President
Nina C. Wilkinson Assistant Vice
President
Joanna Wong Assistant Vice
President
Eric J. Wright Assistant Vice
President
Maureen E. Yurcisin Assistant Vice
President
Thomas M. Zottner Assistant Vice
President
Mark R. Manley Assistant Secretary
Colin T. Burke Assistant Secretary
Adam R. Spilka Assistant Secretary
(c) Not applicable.
ITEM 28. Location of Accounts and Records.
The majority of the accounts, books and other
documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the rules thereunder are
maintained as follows: journals, ledgers, securities records and
other original records are maintained principally at the offices
of Alliance Global Investor Services, Inc., P.O. Box 786003, San
Antonio, Texas 78278-6003 and at the offices of The Bank of New
York, the Registrant's Custodian, One Wall Street, New York, New
York, 10286. All other records so required to be maintained are
maintained at the offices of Alliance Capital Management L.P.,
1345 Avenue of the Americas, New York, New York, 10105.
ITEM 29. Management Services.
Not applicable.
ITEM 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant certifies that it has duly caused this
Post-Effective Amendment No. 2 to its Registration Statement to
be signed on its behalf by the undersigned, duly authorized, in
the City of New York and State of New York, on the 23rd day of
June, 2004.
ALLIANCEBERNSTEIN GLOBAL RESEARCH
GROWTH FUND, INC.
By: /s/ Marc O. Mayer
--------------------------
Marc O. Mayer
President
Pursuant to the requirements of the Securities Act of
1933, as amended, this Post-Effective Amendment No. 2 to the
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:
/s/ Marc O. Mayer President and Chief
------------------- Executive Officer June 23, 2004
Marc O. Mayer
2. Principal Financial and
Accounting Officer:
/s/ Mark D. Gersten Treasurer and June 23, 2004
------------------- Chief Financial
Mark D. Gersten Officer
3. All of the Directors:
Ruth Block*
David H. Dievler*
John H. Dobkin*
William H. Foulk, Jr.*
Marc O. Mayer
Clifford L. Michel*
Donald J. Robinson*
By: /s/ Marc O. Mayer June 23, 2004
---------------------
Marc O. Mayer
*By: /s/ Andrew L. Gangolf June 23, 2004
---------------------
Andrew L. Gangolf
As Attorney-in-Fact
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Index to Exhibits
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Exhibit No. Description of Exhibits
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(a)(3) Articles Supplementary of the Registrant
(b) Bylaws of the Registrant
(e)(2) Form of Amendment to the Distribution Services Agreement
(h)(3) Form of Expense Limitation Undertaking
(i)(2) Opinion and Consent of Seward & Kissel LLP with respect to
Class R shares
(j)(2) Consent of Independent Registered Public Accounting Firm
with respect to Class R shares
(n) Form of Amended and Restated 18f-3 Plan
Other Exhibits: Powers of Attorney
00250.0442.489491
Dates Referenced Herein and Documents Incorporated by Reference
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