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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-12
Sanford C. Bernstein Fund II, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Bernstein [GRAPHIC]
Investment Research and Management
A Unit of Alliance Capital Management L.P.
ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC.
- AllianceBernstein Real Estate Investment Institutional Fund
SANFORD C. BERNSTEIN FUND II, INC.
- Bernstein Intermediate Duration Institutional Portfolio
1345 Avenue of the Americas
New York, New York 10105
September 9, 2005
Dear Stockholders:
The Boards of Directors (the "Directors") of AllianceBernstein Institutional
Funds, Inc. - AllianceBernstein Real Estate Investment Institutional Fund and
Sanford C. Bernstein Fund II, Inc. - Bernstein Intermediate Duration
Institutional Portfolio (each, a "Fund" and together, the "Funds") are pleased
to invite you to the Joint Annual Meeting of Stockholders (the "Meeting") to be
held on November 15, 2005. The accompanying Notice of Joint Annual Meeting of
Stockholders and Proxy Statement present several Proposals to be considered at
the Meeting.
At the Meeting, stockholders of each Fund will be asked to elect Directors
of that Fund. We are also asking that you approve Proposals, as explained in
the attached Proxy Statement, that are intended to update and standardize the
governing documents and fundamental investment policies of both or one of the
Funds, as applicable. Generally, fundamental policies are policies that under
federal law can only be changed by a stockholder vote.
We believe that uniform Fund governing documents and fundamental policies
will result in substantial benefits for each Fund and its stockholders. The
governing documents and fundamental policies of the Funds currently impose
restrictions that can be traced back to requirements that are no longer
applicable. These restrictions can limit a Fund's flexibility to act
efficiently.
The stockholders of AllianceBernstein Institutional Funds, Inc. -
AllianceBernstein Real Estate Investment Institutional Fund are also being
asked to approve making the Fund's investment objective "non-fundamental" and
to approve changes to the Fund's investment objective. The Fund's investment
objective is not required to be fundamental and, as a non-fundamental policy,
the Fund's investment objective can be changed with approval of the Board in
the future without the need for the delay or expense of a stockholder vote.
The Directors have concluded that the Proposals are in the best interests of
each Fund and unanimously recommend that you vote "FOR" the Proposals that
apply to the Fund or Funds in which you hold shares.
We welcome your attendance at the Meeting. If you are unable to attend, we
encourage you to vote promptly by proxy. Computershare Fund Services, Inc.
("Computershare"), a proxy solicitation firm, has been selected to assist in
the proxy solicitation process. If we have not received your proxy as the date
of the Meeting approaches, you may receive a telephone call from Computershare
reminding you to vote by proxy. No matter how many shares you own, your vote is
important.
Sincerely,
Marc O. Mayer
President
AllianceBernstein Institutional Funds, Inc. ("AIF")
- AllianceBernstein Real Estate Investment Institutional Fund
Sanford C. Bernstein Fund II, Inc. ("SCB II")
- Bernstein Intermediate Duration Institutional Portfolio
- --------------------------------------------------------------------------------
1345 Avenue of the Americas, New York, New York 10105
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NOTICE OF JOINT ANNUAL MEETING OF STOCKHOLDERS
SCHEDULED FOR NOVEMBER 15, 2005
To the Stockholders of AllianceBernstein Institutional Funds, Inc. ("AIF") -
AllianceBernstein Real Estate Investment Institutional Fund and Sanford C.
Bernstein Fund II, Inc. ("SCB II") - Bernstein Intermediate Duration
Institutional Portfolio:
Notice is hereby given that a Joint Annual Meeting of Stockholders (the
"Meeting") of AlF - AllianceBernstein Real Estate Investment Institutional Fund
("Real Estate Institutional") and SCB II - Bernstein Intermediate Duration
Institutional Portfolio ("Intermediate Duration") (Real Estate Institutional
and Intermediate Duration, each, a "Fund", or the "Funds"), will be held at the
offices of the Funds, 1345 Avenue of the Americas, 39th Floor, New York, New
York 10105, on November 15, 2005 at 3:00 p.m., Eastern Time, to consider and
vote on the following Proposals, all of which are more fully described in the
accompanying Proxy Statement dated September 9, 2005:
1. The election of Directors for each Fund, each such Director to serve for
a term of indefinite duration and until his or her successor is duly
elected and qualifies;
2. The amendment and restatement of each Fund's charter, which will repeal
in their entirety all of the currently existing charter provisions and
substitute in lieu thereof the new provisions set forth in the Form of
Articles of Amendment and Restatement attached to the accompanying Proxy
Statement as Appendix D;
3. The amendment, elimination, or reclassification as non-fundamental of
certain of the Funds' fundamental investment restrictions;
4. With respect to Real Estate Institutional, the reclassification of the
Fund's fundamental investment objective as non-fundamental and a change
in the Fund's investment objective; and
5. To transact such other business as may properly come before the Meeting
and any adjournments or postponements thereof.
Any stockholder of record of a Fund at the close of business on August 24,
2005 (the "Record Date") is entitled to notice of, and to vote at, the Meeting
or any postponement or adjournment thereof. Proxies are being solicited on
behalf of the Board of each Fund. Each stockholder who does not expect to
attend the Meeting in person is requested to complete, date, sign, and promptly
return the enclosed Proxy Card, or to submit voting instructions by telephone
at (866) 360-2513 or via the Internet as described on the enclosed Proxy Card.
The Board of Directors of each Fund recommends a vote "FOR" each Proposal.
By Order of the Boards of Directors,
Mark R. Manley
Secretary
New York, New York
September 9, 2005
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YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the enclosed Proxy Card, sign
and date it, and return it in the envelope provided, which needs no postage if
mailed in the United States. You may also by telephone or through the Internet
authorize a proxy to vote your shares. To do so, please follow the instructions
on the enclosed Proxy Card. Your vote is very important no matter how many
shares you own. Please complete, date, sign, and return your Proxy Card
promptly in order to save the Funds any additional cost of further proxy
solicitation and in order for the Meeting to be held as scheduled.
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TABLE OF CONTENTS
Page
- ----
Introduction 1
Proposal One -- Election of Directors 3
Proposal Two -- Amendment and Restatement of the Charter of Each Fund 9
Proposal Three -- Amendment, Elimination or Reclassification as Non-fundamental of Certain of the
Funds' Fundamental Investment Restrictions 13
Proposal Four -- Reclassification as Non-fundamental and change in Real Estate Institutional's
Investment Objective 21
Independent Registered Public Accounting Firms 22
Proxy Voting and Stockholder Meetings 23
Officers of the Funds 24
Stock Ownership 25
Information as to the Investment Adviser and Distributors of the Funds 25
Submission of Proposals for Next Meeting of Stockholders 25
Other Matters 25
Reports to Stockholders 26
Appendix A -- Outstanding Voting Shares A-1
Appendix B -- Additional Information Regarding Directors B-1
Appendix C -- Governance and Nominating Committee Charter C-1
Appendix D -- Form of Articles of Amendment and Restatement D-1
PROXY STATEMENT
ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC. ("AIF")
- AllianceBernstein Real Estate Investment Institutional Fund
SANFORD C. BERNSTEIN FUND II, INC. ("SCB II")
- Bernstein Intermediate Duration Institutional Portfolio
1345 Avenue of the Americas New York, New York 10105
-----------------
JOINT ANNUAL MEETING OF STOCKHOLDERS November 15, 2005
-----------------
INTRODUCTION
This is a combined Proxy Statement for the AIF - AllianceBernstein Real
Estate Investment Institutional Fund ("Real Estate Institutional") and SCB II -
Bernstein Intermediate Duration Institutional Portfolio ("Intermediate
Duration") (Real Estate Institutional and Intermediate Duration, each a "Fund",
or the "Funds"). The Boards of Directors of the Funds (each a "Board", and
together, the "Boards") are soliciting proxies for a Joint Annual Meeting of
Stockholders of each Fund (the "Meeting") to consider and vote on Proposals
that are being recommended by the Boards of their Funds.
The Boards are sending you this Proxy Statement to ask for your vote on
several Proposals affecting your Fund. The Funds will hold the Meeting at the
offices of the Funds, 1345 Avenue of the Americas, 39th Floor, New York, New
York 10105, on November 15, 2005 at 3:00 p.m., Eastern Time. The solicitation
will be made primarily by mail and may also be made by telephone. The
solicitation cost will be borne by the Funds. Alliance Capital Management L.P.
is the investment adviser to the Funds ("Alliance"). The Notice of Joint Annual
Meeting of Stockholders, Proxy Statement, and Proxy Card are being mailed to
stockholders on or about September 12, 2005.
Any stockholder who owned shares of a Fund on August 24, 2005 (the "Record
Date") is entitled to notice of, and to vote at, the Meeting and any
postponement or adjournment thereof. Each share is entitled to one vote.
We have divided the Proxy Statement into five main parts:
Part I - Overview of the Boards' Proposals.
Part II - Discussion of each Proposal and an explanation of why we are requesting that you approve each
Proposal.
Part III - Information about the Funds' independent registered public accounting firms.
Part IV - Additional information on proxy voting and stockholder meetings.
Part V - Other information about the Funds.
1
Part I - Overview of Proposals
As a stockholder of either or both of the Funds, you are being asked to
consider and vote on a number of Proposals. Not all of the Proposals apply to
both Funds. Many of the Proposals relate to conforming changes that will result
in standardized policies across the Funds.
Proposal Fund(s) Affected
1.The election of the Directors, each such Director to serve a Both Funds
term of an indefinite duration and until his or her successor is
duly elected and qualifies.
2.The amendment and restatement of the charter of each Fund, Both Funds
which will repeal in their entirety all currently existing charter
provisions and substitute in lieu thereof new provisions set
forth in the Form of Articles of Amendment and Restatement
attached to this Proxy Statement as Appendix D.
3.The amendment, elimination, or reclassification as non-
fundamental of the fundamental investment policies regarding:
3.A. Diversification Both Funds
3.B. Issuing Senior Securities and Borrowing Money Both Funds
3.C. Underwriting Securities Both Funds
3.D. Concentration of Investments Both Funds
3.E. Real Estate and Companies that Deal in Real Estate Both Funds
3.F. Commodity Contracts and Futures Contracts Both Funds
3.G. Loans Both Funds
3.H. Pledging, Hypothecating, Mortgaging, or Otherwise Both Funds
Encumbering Assets
3.I. Joint Securities Trading Accounts Real Estate Institutional
3.J. Exercising Control Real Estate Institutional
3.K. Other Investment Companies Intermediate Duration
3.L. Oil, Gas, and Other Types of Minerals or Mineral
Leases Intermediate Duration
3.M. Purchases of Securities on Margin Real Estate Institutional
3.N. Short Sales Real Estate Institutional
4.The reclassification of Real Estate Institutional's fundamental Real Estate Institutional
investment objective as non-fundamental and changes to the
Fund's investment objective.
2
Part II - Discussion of Each Proposal
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, stockholders will vote on the election of Directors of their
Funds. Each Director elected at the Meeting will serve for a term of indefinite
duration and until his or her successor is duly elected and qualifies. The
following individuals have been nominated for election as a Director of the
Funds. It is the intention of the persons named as proxies in the accompanying
Proxy Card to nominate and vote in favor of the nominees named below for
election as a Director of the Funds:
Ruth Block
David H. Dievler
John H. Dobkin
Michael J. Downey
William H. Foulk, Jr.
D. James Guzy
Marc O. Mayer
Marshall C. Turner, Jr.
Each nominee has consented to serve as a Director. The Boards know of no
reason why any of the nominees would be unable to serve, but in the event any
nominee is unable to serve or for good cause will not serve, the proxies
received indicating a vote in favor of such nominee will be voted for a
substitute nominee as the Board may recommend. Each of the Funds has a policy
generally requiring that Directors retire at the end of the calendar year in
which they reach the age of 76. The Governance and Nominating Committees and
the Boards of the Funds have waived the application of this retirement policy
as to Mr. Dievler through December 31, 2006.
Certain information concerning the nominees is set forth below.
3
Number of
Portfolios in
AllianceBernstein Other
Fund Complex Directorships
Name, Address and Years of Principal Occupation(s) Overseen by Held by
Date of Birth Service* During Past 5 Years Director Director
----------------- ------------------ ----------------------- ----------------- -------------
DISINTERESTED
DIRECTORS
Ruth Block,#,** AIF: since 1997 Formerly Executive Vice 105 None
500 SE Mizner Blvd. SCB II: since 2002 President and Chief
Boca Raton, FL 33432 Insurance Officer of The
11/7/30 Equitable Life Assurance
Society of the United
States; Chairman and
Chief Executive Officer of
Evlico (insurance); former
Governor at Large,
National Association of
Securities Dealers, Inc.
David H. Dievler,# AIF: since 1997 Independent consultant. 107 None
P.O. Box 167 SCB II: since 2002 Until December 1994 he
Spring Lake, was Senior Vice President
NJ 07762 of ACMC ("Alliance
10/23/29 Capital Management
Corporation", the general
partner of Alliance)
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 Senior
Manager at Price
Waterhouse & Co.
Member of the American
Institute of Certified Public
Accountants since 1953.
- --------
* "Years of Service" refers to the total number of years served as a Director.
There is no stated term of office for the Funds' Directors, however, the
Directors are generally subject to a policy requiring retirement at the age
of 76. With respect to Mr. Dievler, the Governance and Nominating Committees
and Boards of the Funds have waived the application of this retirement
policy through December 31, 2006.
** Ms. Block was an "interested person", as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of equity securities of a
controlling person of Alliance. Such securities were sold for approximately
$2,400 on October 21, 2004. Ms. Block received shares of The Equitable
Companies Incorporated as part of the demutualization of The Equitable Life
Assurance Society of the United States. Her Equitable shares were
subsequently converted through a corporate action into 116 American
Depositary Shares of AXA.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee of each Fund.
4
Number of
Portfolios in
AllianceBernstein Other
Fund Complex Directorships
Name, Address and Years of Principal Occupation(s) Overseen by Held by
Date of Birth Service* During Past 5 Years Director Director
----------------- ------------------ ----------------------- ----------------- -------------
John H. Dobkin,# AIF: since 1997 Consultant. Formerly 105 Municipal
P.O. Box 12 SCB II: since 2002 President of Save Venice, Art Society
Annandale, Inc. (preservation (New York
NY 12504 organization) from 2001- City)
2/19/42 2002, Senior Adviser from
June 1999 - June 2000 and
President of Historic
Hudson Valley (historic
preservation) from
December 1989 - May
1999. Previously, Director
of the National Academy
of Design and during
1988-1992, Director and
Chairman of the Audit
Committee of ACMC.
Michael J. Downey,# AIF: since 2005 Consultant since 2004. 80 Asia Pacific
c/o Alliance Capital SCB II: since 2005 Formerly managing partner Fund, Inc.;
Management L.P. of Lexington Capital, LLC and the
1345 Avenue of the (investment advisory firm) Merger Fund
Americas from 1997 until December
Attn: Philip L. Kirstein 2003. Prior thereto,
New York, NY 10105 Chairman and CEO of
1/26/44 Prudential Mutual Fund
Management (1987-1993).
Chairman of the Board AIF: since 1997 Investment adviser and 108 None
William H. Foulk, Jr.,#,+ SCB II: since 2002 independent consultant. He
2 Sound View Drive was formerly Senior
Suite 100 Greenwich, Manager of Barrett
CT 06830 Associates, Inc., a
9/7/32 registered investment
adviser, with which he had
been associated since prior
to 2000. 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.
- --------
* "Years of Service" refers to the total number of years served as a Director.
There is no stated term of office for the Funds' Directors, however, the
Directors are generally subject to a policy requiring retirement at the age
of 76. With respect to Mr. Dievler, the Governance and Nominating Committees
and Boards of the Funds have waived the application of this retirement
policy through December 31, 2006.
+ Member of the Fair Value Pricing Committee.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee of each Fund.
5
Number of
Portfolios in
AllianceBernstein Other
Fund Complex Directorships
Name, Address and Years of Principal Occupation(s) Overseen by Held by
Date of Birth Service* During Past 5 Years Director Director
----------------- ------------------ ----------------------- ----------------- -------------
D. James Guzy,# N/A Chairman of the Board of 1 Intel
P.O. Box 128 PLX Technology (semi- Corporation;
Glenbrook, conductors) and SRC Cirrus Logic
NV 89413 Computers Inc., with which Corporation;
3/7/36 he has been associated Novellus
since prior to 2000. He is Corporation;
also President of the Arbor Micro
Company (private family Component
investments). Technology;
the Davis
Selected
Advisers
Group of
Mutual
Funds; and
Logic Vision
Marshall C. Turner, Jr.,# N/A Principal of Turner Venture 1 Toppan
220 Montgomery St. Associates (venture capital Photomasks,
Penthouse 10 and consulting) since prior Inc.; the
San Francisco, to 2000. Chairman and George
CA 94104-3402 CEO, DuPont Photomasks, Lucas
10/10/41 Inc., Austin, Texas, 2003- Educational
2005, and President and Foundation;
CEO since company Chairman of
acquired, and name the Board of
changed to Toppan the
Photomasks, Inc. in 2005. Smithsonian's
National
Museum of
Natural
History
INTERESTED
DIRECTOR***
Marc O. Mayer AIF: since 2003 Executive Vice President 82 SCB
1345 Avenue of the SCB II: since 2003 of ACMC, since 2001; Partners,
Americas prior thereto, Chief Inc.; and
New York, NY 10105 Executive Officer of SCB Inc.
10/2/57 Sanford C. Bernstein &
Co., LLC (institutional
research and brokerage arm
of Bernstein & Co., Inc.)
and its predecessor since
prior to 2000.
- --------
* "Years of Service" refers to the total number of years served as a Director.
There is no stated term of office for the Funds' Directors, however, the
Directors are generally subject to a policy requiring retirement at the age
of 76. With respect to Mr. Dievler, the Governance and Nominating Committees
and Boards of the Funds have waived the application of this retirement
policy through December 31, 2006.
***Mr. Mayer is an "interested person", as defined in the 1940 Act of both
Funds due to his position as Executive Vice President of ACMC.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee of AllianceBernstein Global Technology
Fund, Inc.
6
As of August 19, 2005, to the knowledge of management, the Directors and
officers of each Fund, both individually and as a group, owned less than 1% of
the shares of any Fund. Additional information related to the equity ownership
of the Directors in each of the Funds and the compensation they received from
the Funds is presented in Appendix B. During each Fund's most recently
completed fiscal year, the Fund's Directors as a group did not engage in the
purchase or sale of more than 1% of any class of securities of Alliance or of
any of its parents or subsidiaries.
During the Fund's fiscal year ended in 2004, the Board of AIF met 13 times
and of SCB II met 13 times. Each Director attended at least 75% of the total
number of meetings of the Boards held during the fiscal year and, if a member,
at least 75% of the total number of meetings of the committees held during the
period for which he or she served. The Funds do not have a policy that requires
a Director to attend annual meetings of stockholders but the Funds encourage
such attendance.
Each Fund's Board has four standing committees: an Audit Committee, a
Governance and Nominating Committee, an Independent Directors Committee, and a
Fair Value Pricing Committee. The members of the Committees are identified
above in the table listing the Directors of the Funds. The function of the
Audit Committee of each Fund is to assist the Board in its oversight of a
Fund's financial reporting process. During the Fund's fiscal year ended in
2004, the Audit Committee of AIF met 3 times and of SCB II met 3 times.
During the Fund's fiscal year ended in 2004, the Governance and Nominating
Committee of AIF met 0 times and of SCB II met 0 times. Each Fund's Board has
adopted a charter for its Governance and Nominating Committee, a copy of which
is included as Appendix C. Pursuant to the charter of the Governance and
Nominating Committee, the Governance and Nominating Committee assists each
Board in carrying out its responsibilities with respect to governance of a Fund
and identifies, evaluates and selects and nominates candidates for that Board.
The Committee also may set standards or qualifications for Directors. The
Committee may consider candidates as Directors submitted by a Fund's current
Board members, officers, investment adviser, stockholders and other appropriate
sources.
The Governance and Nominating Committee of a Fund will consider candidates
submitted by a stockholder or group of stockholders who have owned at least 5%
of a Fund's outstanding common stock for at least two years prior to the time
of submission and who timely provide specified information about the candidates
and the nominating stockholder or group. To be timely for consideration by the
Committee, the submission, including all required information, must be
submitted in writing to the attention of the Secretary at the principal
executive offices of a Fund not less than 120 days before the date of the proxy
statement for the previous year's annual meeting of stockholders or, if an
annual meeting was not held in the previous year, all required information must
be received within a reasonable amount of time before the Fund begins to print
and mail its proxy materials. The Committee will consider only one candidate
submitted by such a stockholder or group for nomination for election at an
annual meeting of stockholders. The Committee will not consider self-nominated
candidates.
The Governance and Nominating Committee will consider and evaluate
candidates submitted by stockholders 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 and the candidate's ability to qualify as a disinterested Director. A
detailed description of the criteria used by the Committee as well as
information required to be provided by stockholders submitting candidates for
consideration by the Committee are included in Appendix C.
The function of each Fund's Fair Value Pricing Committee is to consider, in
advance if possible, any fair valuation decision of Alliance's Valuation
Committee relating to a security held by a Fund made under unique or highly
unusual circumstances not previously addressed by the Valuation Committee that
would result in a change in the Fund's net asset value ("NAV") by more than
$0.01 per share. The Fair Value Pricing Committee did not meet during either
Fund's most recently completed fiscal year.
The function of each Fund's Independent Directors Committee is to consider
and take action on matters that the Board or Committee believes should be
addressed in executive session of the disinterested Directors, such as
7
review and approval of the Advisory and Distribution Services Agreements.
During the Fund's fiscal year ended in 2004, the Independent Directors
Committee of AIF met 0 times and of SCB II met 0 times.
Each Board has adopted a process for stockholders to send communications to
the Board of their Fund. To communicate with a Board or an individual Director
of a Fund, a stockholder must send a written communication to that Fund's
principal office at the address listed in the Notice of Joint Annual Meeting of
Stockholders accompanying this Proxy Statement, addressed to the Board of that
Fund or the individual Director. All stockholder communications received in
accordance with this process will be forwarded to the Board or the individual
Director to whom or to which the communication is addressed.
Each Board unanimously recommends that the stockholders vote "FOR" each of
the nominees to serve as a Director of the applicable Fund. The election of a
nominee as a Director requires a plurality of the votes cast.
8
PROPOSAL TWO
THE AMENDMENT AND RESTATEMENT OF THE CHARTER OF EACH FUND
Each Fund is organized as a Maryland corporation and is subject to the
Maryland General Corporation Law ("MGCL"). Under the MGCL, each Fund is formed
pursuant to a charter (each a "Charter") that sets forth various provisions
relating primarily to the governance of that Fund and powers of the Fund to
conduct business. Each Fund's Board has declared advisable and recommends to
the Fund's stockholders the amendment and restatement of the Charter for that
Fund. Alliance, the Funds' investment adviser, advised the Boards that the
proposed amendments have two primary objectives. First, Alliance believes that
it is important to update the Charters to take full advantage of the
flexibility afforded by the provisions of the MGCL, as they currently exist or
may be changed in the future. Second, Alliance believes that both Charters
should be standardized so that there will be no differences among the funds in
the AllianceBernstein Fund Complex. In the past, the existence of different
Charter provisions has imposed burdens in administering the Funds and, in some
cases, limited a Board's or Fund's power to take actions that would benefit
that Fund and its stockholders.
Many of the proposed amendments are technical amendments that are designed
to allow a Fund's Board to take full advantage of the provisions of the MGCL.
Some provisions of these Charters are now obsolete because they are regulated
by the 1940 Act or the MGCL and are no longer required in the Charters. For
these reasons, Alliance recommended to the Boards the amendment and restatement
of the Charters as discussed below in order to modernize and standardize them,
which will facilitate a Board's ability to direct the management of the
business and affairs of a Fund as it deems advisable. Each Board recommends
that stockholders approve the amendment and restatement of the Charter for
their Fund./1/ The amendment and restatement of each Charter will be
accomplished by repealing in their entirety all of the existing Charter
provisions and substituting in lieu thereof the new provisions set forth in the
Form of Articles of Amendment and Restatement (each a "New Charter" and,
together, the "New Charters") attached as Appendix D. A detailed summary of the
amendments is set forth below. If a stockholder of a Fund would like a copy of
the current Charter for that Fund, please write to Dennis Bowden at Alliance
Capital Management L.P., 1345 Avenue of the Americas, New York, New York 10105.
If approved, the New Charters will give a Board more flexibility and broader
power to act than do the current Charters. This increased flexibility may allow
a Board to react more quickly to changes in competitive and regulatory
conditions and, as a consequence, may allow the Funds to operate in a more
efficient and economical manner.
While each of the New Charters of the Funds are generally the same (except
for variations with respect to authorization and classification of stock), the
actual provisions being repealed will vary between the Funds. The proposed
amendments to the Charters fall generally under four broad categories: (i)
series and class structure and related provisions; (ii) stockholder voting
provisions; (iii) mandatory and other redemption provisions; and (iv) liability
exculpation and indemnification and expense advance provisions. The following
discusses the material changes for the Funds within these broad categories,
discusses the Boards' recommendations as to each amendment, and identifies each
Fund for which each amendment is applicable.
A. Series and Class Structure and Related Provisions
Alliance recommended, and the Boards declared advisable, the proposed
amendments concerning the establishment and administration of series and
classes/2/ of the Funds' stock to update the Charters and to provide the Funds'
Boards with the broadest flexibility to act with respect to series or classes
of stock under the MGCL subject to the 1940 Act. The New Charter provisions
would clarify the classification and designation of stock and the allocation of
assets and expenses among series or classes of stock and a Board's powers with
respect to these
- --------
1. Each Fund is organized as a series fund and may have separate portfolios
that are regarded as separate investment companies under the 1940 Act.
However, all portfolios of a Fund are governed by the same charter.
Therefore, if approved by the stockholders, a New Charter (defined below)
will govern all of the portfolios operated by its Fund.
2. If a Fund is a series fund, the stockholders of each portfolio own shares of
a specific series of stock. Stock of a specific series (or portfolio) may be
divided into more than one class of shares.
9
allocations. These changes are intended to improve administration of the Funds
and would not affect the management of the Funds. The New Charter of each Fund,
except as noted, contains provisions that:
. Provide for the automatic readjustment of the number of authorized shares
of a class or series of a Fund that are classified or reclassified into
shares of another series or class of the Fund. This change is
administrative and provides for automatic readjustment in the number of
shares where changes are made to one series or class. See New Charter,
Article Fifth, Section 1.
. Clarify that redeemed or otherwise acquired shares of stock of a series
or class shall constitute authorized but unissued shares of stock of that
series or class and, in connection with a liquidation or reorganization
of a series or class of a Fund in which all outstanding shares of such
class or series are redeemed by the Fund, that all authorized but
unissued shares of such class or series shall automatically be returned
to the status of authorized but unissued shares of common stock, without
further designation as to class or series. This change is for
administrative flexibility and avoids the necessity to authorize the
issuance of additional shares when shares had been previously authorized
by the Board. See New Charter, Article Fifth, Section 10(e).
. Clarify that each Fund's Board has sole discretion to allocate the Fund's
general assets and provide that any general assets allocated to a series
or class will irrevocably belong to that series or class. This change
makes the Board's discretion explicit in the New Charter and conforms
provisions in the New Charter to the MGCL. See New Charter, Article
Fifth, Sections 3 and 4.
. With respect to AIF, clarify that debts, liabilities, obligations, and
expenses of a series or class shall be charged to the assets of the
particular series or class and to provide that a Board's determination
with respect to the allocation of all debts, liabilities, obligations and
expenses will be conclusive. This change conforms provisions in the New
Charter to the MGCL and makes the Board's powers to determine allocations
of debts, liabilities, obligations and expenses explicit. See New
Charter, Article Fifth, Section 5.
. Provide that debts, liabilities, obligations and expenses of a series or
class are enforceable only with respect to that series or class and not
against the assets of a Fund generally. This change would clarify that
the debts, liabilities, obligations and expenses of one series or class
of a Fund are enforceable only with respect to that series or class,
which is consistent with a provision of the MGCL that protects the
stockholders of a Fund's other series or classes of stock. See New
Charter, Article Fifth, Section 5.
. Provide that a Fund's Board may establish a specified holding period
prior to the record date for stockholders to be entitled to dividends
(deleting for the Funds a requirement that such holding period may not
exceed a maximum of 72 hours) and to provide that dividends or
distributions may be paid in-kind. This change gives the Board the
discretion to specify holding periods rather than specifying them in the
Charter and provides the Board with flexibility in the payment of
dividends, whether in cash or in-kind. See New Charter, Article Fifth,
Section 7.
. With respect to SCB II, add a provision that all persons who acquire
stock or other securities of a Fund shall acquire the same subject to the
Charter provisions and Bylaws. Consistent with Maryland law, this change
makes it explicit that the Fund's stockholders are subject to the Fund's
Charter and Bylaws. See New Charter, Article Fifth, Section 15.
In addition to the New Charter provisions discussed above, Alliance
recommended, and the Board declared advisable, that the following provisions be
deleted from the SCB II Charter because they are codified under the 1940 Act
and/or the MGCL and are not required to be included in the Charter. The New
Charter deletes provisions:
. Regarding the time the establishment and designation of a series become
effective.
. Giving the Board the power to eliminate a series or class when there are
no such outstanding shares.
. Authorizing the Board to increase or decrease the aggregate number of
shares of stock that the Fund has authority to issue.
10
B. Stockholder Voting Provisions
Alliance recommended, and the Board declared advisable, proposed minor
changes to each Fund's voting provisions. These changes are intended to give
the Board more flexibility in setting voting requirements consistent with
current MGCL provisions and the interests of stockholders. These changes also
clarify quorum requirements at meetings for specific classes or series and for
a Fund as a whole. These changes would not affect management of a Fund. The New
Charter of each Fund, except as noted, contains provisions that:
. Permit, as to any matter submitted to stockholders, a Fund to calculate
the number of votes to which a stockholder is entitled to cast on such
matter based on the NAV of shares rather than on the basis of one vote
for each share outstanding. Votes would be so calculated only if approved
in advance by a Fund's Board, and only if the Fund first obtains an
exemptive order from the Securities and Exchange Commission ("SEC")
permitting the Fund to calculate votes in this manner. This change would
permit a Board to address circumstances in which there are material
disparities in NAV per share among the series of a Fund with a number of
series resulting in inequitable voting rights among the stockholders of
the various series in relation to the value of a stockholder's
investment. See New Charter, Article Fifth, Section 8.
. Permit a Fund's Board to determine certain matters that are subject to
vote only by a specific class or series of the Fund, rather than by all
stockholders of the Fund as a single class. The Board would have this
discretion only for matters that are not otherwise prescribed under the
1940 Act or other applicable law. The existing Charters provide that
stockholders of a specific class or series of stock will vote on issues
pertaining only to that class or series of stock. The second change is
intended to clarify that the Board may make the determination of whether
an issue pertains only to a class or series where it is not otherwise
specified by law. See New Charter, Article Fifth, Section 8.
. Clarify that where the Charter (in addition to applicable laws) mandates
a separate vote by holders of one or more series or class of a Fund's
stock, a quorum will be determined by the number of shares the holders of
which are present in person or by proxy at the meeting of stockholders of
that specific class or series, rather than for the Fund as a whole. See
New Charter, Article Seventh, Section 3.
. With respect to SCB II, delete provision giving stockholders voting
rights with respect to any matter that affects the series or class to
which they have rights of automatic conversion.
C. Mandatory and Other Redemption Provisions
Alliance recommended, and the Boards declared advisable, proposed changes to
give a Board more flexibility to redeem stockholder accounts that fall below a
certain threshold. Alliance advised the Boards that small accounts are costly
for a Fund to maintain, often at the expense of larger stockholders. The
Charter of each Fund provides that its Board may cause the Fund to redeem a
stockholder from the Fund if, after redemption, in certain cases, or otherwise,
the amount that the stockholder has invested in the Fund falls below a
specified minimum dollar amount ($200 for AIF and $1,000 for SCB II) or such
other amount that the Board may determine. For AIF, the Board has approved a
minimum dollar amount of $500. This provision also includes a cap on the dollar
amount that a Board may set (up to $100,000,000) and a stockholder notice
requirement. The amendments recommended by Alliance, and declared advisable by
the Boards, would give a Board greater administrative flexibility to determine
when it is in the best interests of a Fund to redeem small accounts by giving
the Board sole discretion to set the mandatory threshold for redemption. In
addition, these amendments would delete the notice provision and permit a Board
to cause a Fund to make mandatory redemptions for other purposes, such as
reorganization of a Fund, as now permitted by relatively recent amendments to
the MGCL. If these changes are adopted, upon approval by a Board, the typical
Fund reorganization or liquidation will require only the stockholder approval
required under the 1940 Act, if any. The New Charter provisions of each Fund:
. Clarify that a Fund may redeem shares at NAV where a stockholder fails to
maintain a minimum amount determined by the Fund's Board, in its sole
discretion. See New Charter, Article Fifth, Section 10(c).
11
. Provide that a Fund's Board may cause a Fund to redeem shares for "any
other purposes", subject to the 1940 Act, such as a reorganization of the
Fund. See New Charter, Article Fifth, Section 10(c).
D. Liability Exculpation and Indemnification and Expense Advance Provisions
The existing Charter or Bylaws of each Fund generally provide that, to the
maximum extent permitted by the MGCL and the 1940 Act, Directors and officers
shall not be liable to a Fund or its stockholders for money damages and shall
be indemnified by the Fund and have expenses advanced by the Fund. Alliance
recommended to each Board, and each Board declared advisable, that each Fund's
Charter be revised to clarify, or where necessary, to specify that a Fund has
the power to indemnify and advance expenses to its Directors and officers to
the maximum extent permitted by the 1940 Act and the MGCL. The 1940 Act and the
MGCL provide extensive regulation of the indemnification that a Fund may
provide to its Directors and officers. Alliance advised the Boards that the
proposed changes to the existing Charters are intended only to make the
indemnification provisions clearer and would not change a Fund's existing
indemnification obligations to the Fund's Directors and officers. Each Fund's
Board believes that it is important for a Fund to be able to limit the
liability of its Directors and officers to the maximum extent permitted by law
and indemnify and advance expenses to the maximum extent permitted by law in
order to promote effective management and oversight of the Funds. More
restrictive indemnification provisions may make it difficult to attract and
retain qualified Directors and officers. These changes update each Fund's
indemnification provisions consistent with the current industry standard as
permitted under the 1940 Act and Maryland law.
The indemnification provisions in the New Charter of each Fund will:
. Authorize a Fund to obligate itself to indemnify and advance expenses to
the maximum extent permitted by the MGCL. See New Charter, Article
Eighth, Section 2.
. Extend a Fund's power to indemnify and advance expenses to Directors and
officers who, while serving as such for a Fund, also serve at a Fund's
request in a like position of another enterprise and are subject to
liability by reason of their service in such capacity. See New Charter,
Article Eighth, Section 2.
. Allow a Fund to indemnify and advance expenses, subject to Board
approval, to any person who served as a Director to a predecessor of the
Fund in any capacity that may be indemnified under the Fund's Charter.
See New Charter, Article Eighth, Section 2.
. Replace the specific 1940 Act limitations on exculpation, indemnification
and advance of expenses in cases of willful misfeasance, bad faith,
negligence, or reckless disregard for duties with a general reference to
limitations on exculpation, indemnification and advance of expenses
imposed under the 1940 Act. See New Charter, Article Eighth, Section 3.
. Extend the non-applicability to a Director or officer of subsequent
changes to the indemnification policies to subsequent changes made to
indemnification provisions contained in a Fund's Charter or Bylaws. See
New Charter, Article Eighth, Section 4.
The Board unanimously recommends that the stockholders of each Fund vote
"FOR" Proposal 2. Approval of Proposal 2 with respect to each Fund requires the
affirmative vote of a majority of the votes entitled to be cast.
12
PROPOSAL THREE
AMENDMENT, ELIMINATION, OR RECLASSIFICATON OF CERTAIN OF THE FUNDS' FUNDAMENTAL
INVESTMENT RESTRICTIONS
Under Section 8(b) of the 1940 Act, a Fund must disclose whether it has a
policy regarding the following: (1) diversification, as defined in the 1940
Act; (2) borrowing money; (3) issuing senior securities; (4) underwriting
securities issued by other persons; (5) purchasing or selling real estate; (6)
purchasing or selling commodities; (7) making loans to other persons; and (8)
concentrating investments in any particular industry or group of industries
(the "Section 8(b) policies"). Under the 1940 Act, these policies are
"fundamental" and may not be changed without a stockholder vote.
In addition to its Section 8(b) policies, under the 1940 Act a Fund may
designate any other of its policies as fundamental policies (the "Other
Fundamental Policies"). Many of the Funds' Other Fundamental Policies can be
traced back to federal or state securities law requirements that were in effect
when many of the AllianceBernstein Funds were organized. These restrictions
were subsequently made less restrictive. For example, the National Securities
Markets Improvement Act of 1996 ("NSMIA") preempted many investment
restrictions formerly imposed by state securities laws and regulations (these
state laws and regulations are often referred to as "blue sky" laws and
regulations). As a result, many of the current restrictions unnecessarily limit
the investment strategies available to Alliance in managing a Fund's assets. In
addition, the lack of uniform standards across the AllianceBernstein Funds
leads to operating inefficiencies and increases the costs of compliance
monitoring.
The Board of each Fund considered and approved Alliance's recommendation
that the Fund's Section 8(b) policies be replaced with standardized fundamental
policies. In some cases, Alliance recommended and the Boards approved less
restrictive Section 8(b) policies.
If the Proposals are approved with respect to a Fund, only those investment
restrictions that the 1940 Act specifically requires to be fundamental (i.e.,
the Section 8(b) policies), as described in Proposals 3.A. - 3.G. will remain
fundamental investment restrictions of the Funds. Alliance also recommended and
the Boards approved the elimination of the Other Fundamental Policies as
discussed below in Proposals 3.H. - 3.N. None of the changes in the Section
8(b) policies or the Other Fundamental Policies is expected to have a
significant effect on the management of the Funds.
Proposal 3.A.
Amendment of Fundamental Policy Regarding
Diversification
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, the Fund's fundamental investment policy in effect
would read:
"The Fund is diversified as defined in the 1940 Act."
Discussion of Proposed Modification:
Section 8(b) of the 1940 Act requires an investment company to state whether
it is "diversified" as that term is defined in the 1940 Act. Consequently, the
proposed modification is consistent with the 1940 Act, which only requires that
a Fund state whether it is diversified. The 1940 Act requires that funds
classify themselves as either diversified or non-diversified. The difference is
that diversified funds are subject to stricter percentage limits on the amount
of assets that can be invested in any one company. Specifically, a diversified
fund may not, with respect to 75% of its total assets: (1) invest more than 5%
of its total assets in the securities of one issuer, or (2) hold more than 10%
of the outstanding voting securities of such issuer.
13
In making its recommendation to the Boards, Alliance noted that no change is
being proposed to a Fund's designation as diversified. Instead, the proposed
change would modify the Fund's fundamental investment policies regarding its
sub-classification under the 1940 Act to rely on the definitions of the term
"diversified" in the 1940 Act rather than stating the relevant percentage
limitations expressed under current law. As a result, without a Fund's Board or
stockholders taking further action, the modified investment policy would
automatically apply the requirements of "diversification" under the 1940 Act to
a Fund as those requirements may be amended from time to time.
Approval of this proposed modification would result in the adoption of this
policy as a fundamental policy. In addition, Real Estate Institutional's
substantively duplicative policy with respect to diversification would be
eliminated with the approval of this proposed modification.
Proposal 3.B.
Amendment of Fundamental Policies Regarding
the Issuance of Senior Securities and Borrowing Money
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Fund's fundamental investment policies regarding
borrowing and the issuance of senior securities in effect would be combined to
read:
"The Fund may not issue any senior security (as that term is defined in the
1940 Act) or borrow money, except to the extent permitted by the 1940 Act or
the rules and regulations thereunder (as such statute, rules or regulations
may be amended from time to time) or by guidance regarding, or
interpretations of, or exemptive orders under, the 1940 Act or the rules or
regulations thereunder published by appropriate regulatory authorities."
"For the purposes of this restriction, margin collateral arrangements,
including, for example, with respect to permitted borrowings, options,
futures contracts, options on futures contracts and other derivatives such
as swaps are not deemed to involve the issuance of a senior security."
Discussion of Proposed Modification:
In making its recommendation to the Boards, Alliance noted that under
Section 18(f)(1) of the 1940 Act, a Fund may not issue senior securities,
except that it may borrow from banks, for any purpose, up to 33 1/3% of its
total assets. Under the 1940 Act, certain types of transactions entered into by
a Fund, including futures contracts, repurchase agreements, short sales, and
when-issued and delayed delivery transactions, may be considered to raise
senior securities issues. Alliance noted that currently, under SEC
interpretations, these activities are not deemed to be prohibited so long as
certain collateral or coverage requirements designed to protect stockholders
are met. The proposed modification makes it clear that collateral arrangements
are not to be deemed to be the issuance of a senior security.
The Funds' current fundamental policies with respect to senior securities
and borrowings are separate policies. The proposed modification combines the
two policies and would automatically conform a Fund's policy more closely to
the exact statutory and regulatory requirements regarding senior securities, as
they exist from time to time, without incurring the time and expense of
obtaining stockholder approval to change the policy.
Intermediate Duration's fundamental policy on borrowing permits borrowings
of up to 33 1/3% of the Fund's assets, which is the maximum currently permitted
under the 1940 Act. Real Estate Institutional's current fundamental policy
prohibits borrowings except for temporary or emergency purposes, in an amount
up to 5% of the Fund's assets. The proposed fundamental policy for borrowing
would permit both Funds to borrow up to the full extent permitted by the 1940
Act. The use of leverage by a Fund is considered speculative and involves risk.
However, there is no current intention that Real Estate Institutional will use
this increased borrowing capability.
14
Proposal 3.C.
Amendment of Fundamental Policy Regarding
Underwriting Securities
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Fund's fundamental investment policy regarding
underwriting securities in effect would read:
"The Fund may not act as an underwriter of securities, except that the Fund
may acquire restricted securities under circumstances in which, if such
securities were sold, the Fund might be deemed to be an underwriter for
purposes of the Securities Act of 1933, as amended."
Discussion of Proposed Modification:
In making its recommendation to the Boards, Alliance noted that the purpose
of the modification is to clarify that the Funds are not prohibited from
acquiring "restricted securities" to the extent such investments are consistent
with a Fund's investment objective, even if such investments may result in the
Fund technically being considered an underwriter under the federal securities
laws. This amendment would not change the Funds' current policies on investing
in restricted securities, which are considered illiquid securities and under
current SEC guidelines are limited to 15% of a Fund's investments. The
modification standardizes the policy on underwriting across the
AllianceBernstein Funds.
Restricted securities are securities that have not been registered under the
Securities Act of 1933 (the "1933 Act") and are purchased directly from the
issuer or in the secondary market. Restricted securities may not be resold
unless registered under such Act or pursuant to an applicable exemption from
such registration. Restricted securities have historically been considered a
subset of illiquid securities (i.e., securities for which there is no public
market). Alliance noted that because the Funds need to maintain a certain
amount of liquidity to meet redemption requests, the Funds do not typically
hold a significant amount of restricted or other illiquid securities because of
the potential for delays on resale and uncertainty in valuation.
Proposal 3.D.
Amendment of Fundamental Policy Regarding
Concentration of Investments
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Fund's fundamental investment policy regarding
concentration of investments in effect would read:
"The Fund may not concentrate investments in an industry, as concentration
may be defined under the 1940 Act or the rules and regulations thereunder
(as such statute, rules or regulations may be amended from time to time) or
by guidance regarding interpretations of, or exemptive orders under, the
1940 Act or the rules or regulations thereunder published by appropriate
regulatory authorities."
Discussion of Proposed Modification:
In making its recommendation to the Boards, Alliance noted that even though
the 1940 Act does not define what constitutes "concentration" in an industry,
the staff of the Securities and Exchange Commission ("SEC") has taken the
position that investment of more than 25% of the value of a Fund's assets in
one or more issuers conducting their principal business activities in the same
industry (excluding the U.S. Government, its agencies or instrumentalities)
constitutes concentration. Under the SEC's guidelines, an industry
classification refers to companies that have economic characteristics that are
not materially different and does not include broad industry sectors such as
the real estate industry. The proposed change would permit investment by the
Funds in a specific industry up to the prescribed limits under the 1940 Act and
accompanying SEC interpretations, as those limits are updated from time to
time. The proposed amendment would not affect the Funds' investment policies.
15
Proposal 3.E.
Amendment of Fundamental Policy Regarding
Investment in Real Estate and Companies that Deal in Real Estate
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Fund's fundamental investment policy in effect
would read:
"The Fund may not purchase or sell real estate except that it may dispose of
real estate acquired as a result of the ownership of securities or other
instruments. This restriction does 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."
Discussion of Proposed Modification:
The 1940 Act requires a Fund to state a fundamental policy regarding the
purchase and sale of real estate. In making its recommendation to the Boards,
Alliance noted that as a general matter, under the Fund's current real estate
investment policy, a Fund is restricted in its ability to purchase and sell
real estate even when ownership of the real estate devolves upon the Fund
through permissible investments. For instance, Alliance noted that it is
possible that a Fund could, as a result of an investment in debt securities of
a company that deals in real estate, come to hold an interest in real estate in
the event of a default. The proposed modification to the Funds' policy on real
estate-related investments would permit the sale of real estate when ownership
of real estate results from permissible investments. The modification also
clarifies that the Funds may invest in real estate-related securities and real
estate backed securities or instruments.
Proposal 3.F.
Amendment of Fundamental Policy Regarding
Investment in Commodities, Commodity Contracts and Futures Contracts
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Fund's fundamental investment policy in effect
would read:
"The Fund may not purchase or sell commodities regulated by the Commodity
Futures Trading Commission under the Commodity Exchange Act or commodity
contracts except for futures contracts and options on futures contracts."
Discussion of Proposed Modification:
In making its recommendation to the Boards, Alliance noted that the proposed
changes to a Fund's policy make it clear that the Fund may use derivatives.
Futures contracts and options on futures contracts are generally accepted under
modern portfolio management and are regularly used by many mutual funds and
other institutional investors. Except as discussed below, the proposed
amendment would not affect the Funds' investment policies.
Alliance discussed certain of the risks involved in investments in
derivative instruments. Alliance noted that there is the risk that interest
rates, securities prices and currency markets will not move in the direction
that a Fund's portfolio manager anticipates and the risk of imperfect
correlation between the price of derivative instruments and movements in the
direct investments for which derivatives are a substitute. Other risks include
the possible absence of a liquid secondary market for any particular instrument
and possible exchange-imposed price fluctuation limits, either of which may
make it difficult or impossible to close out a position when desired, the risk
that adverse price movements in an instrument can result in a loss
substantially greater than the Fund's initial investment in that instrument (in
some cases, the potential loss is unlimited), and the risk that the
counterparty will not perform its obligations.
16
Real Estate Institutional has a fundamental policy that does not permit
investments in futures contracts. If the stockholders of that Fund approve this
proposal, the Fund would have the flexibility to invest in futures contracts.
The extent to which the Fund may invest in futures contracts will be disclosed
in its prospectus. It is not expected that the adoption of this less
restrictive policy will have any significant effect on the management of the
Funds.
Proposal 3.G.
Amendment of Fundamental Policies Regarding Loans
Applicable Funds:
Both Funds
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Fund's fundamental investment policies regarding
loans in effect would read:
"The Fund may not make loans except through (i) the purchase of debt
obligations in accordance with its investment objectives and policies; (ii)
the lending of portfolio securities; (iii) the use of repurchase agreements;
or (iv) the making of loans to affiliated funds as permitted under the 1940
Act, the rules and regulations thereunder (as such statutes, rules or
regulations may be amended from time to time), or by guidance regarding, and
interpretations of, or exemptive orders under, the 1940 Act."
Discussion of Proposed Modification:
In making its recommendation to the Boards, Alliance noted that the proposed
change clarifies a Fund's ability to engage in securities lending and/or
interfund lending to the extent permitted by the 1940 Act and the then-current
SEC policy. The 1940 Act currently limits loans of a Fund's securities to
one-third of the Fund's assets, including any collateral received from the
loan, provided that loans are 100% collateralized by cash or cash equivalents.
In the future, should the rules and regulations governing loans by mutual funds
change, the proposed policy would automatically conform to those new
requirements without the need to solicit stockholder approval.
The current policy for Real Estate Institutional is consistent with this
limitation. However, the current policy for Intermediate Duration (30%) is set
lower than the maximum allowed under the 1940 Act. If this proposal is approved
by stockholders, both Funds would be permitted to make loans to the maximum
extent permitted by the 1940 Act. This less restrictive lending policy is not
expected to have a significant effect on the management of the Funds.
Proposal 3.H.
Elimination of the Fundamental Policy Prohibiting Pledging, Hypothecating,
Mortgaging, or Otherwise Encumbering Assets
Applicable Funds:
Both Funds
Proposal:
It is proposed that the fundamental investment policy prohibiting pledging,
hypothecating, mortgaging, or otherwise encumbering a Fund's assets be
eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction:
In making its recommendation to the Boards to eliminate this policy,
Alliance noted that the prohibition on pledging, hypothecating, mortgaging, or
otherwise encumbering a Fund's assets is not required under the 1940 Act and
may be eliminated from the Funds' fundamental investment policies. Alliance
noted that the Funds' current limits on pledging may conflict with each Fund's
ability to borrow money to meet redemption requests or for temporary emergency
purposes or, if Proposal 3.B. is approved, for any other purpose. This conflict
arises because banks may require borrowers such as the Funds to pledge assets
in order to collateralize the amount borrowed. These collateral requirements
are typically for amounts at least equal to, and often larger than, the
principal amount of the loan. The Funds' current policies, however, could be
read to prevent these types of collateral arrangements and could therefore have
the effect of reducing the amount that the Funds may borrow in
17
these situations. Although Alliance currently plans, on behalf of the Funds, to
engage only in pledging in connection with borrowing money for redemptions or
temporary emergency purposes, pledging assets could decrease the Funds' ability
to liquidate assets. If the Funds pledged a large portion of their assets, the
ability to meet redemption requests or other obligations could be delayed. In
any event, the Funds' current borrowing limits would remain consistent with
limits prescribed under the 1940 Act.
Proposal 3.I.
Elimination of the Fundamental Policy Prohibiting
Joint Securities Trading Accounts
Applicable Funds:
Real Estate Institutional
Proposal:
It is proposed that the fundamental investment policy prohibiting
participation in a joint securities trading account be eliminated in its
entirety.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the fundamental investment policy on the Fund's participation in a
joint securities trading account is not required under the 1940 Act and may be
eliminated from the Fund's fundamental investment policies. Furthermore,
Alliance noted that Section 17(d) of the 1940 Act generally prohibits any
affiliated person of or principal underwriter for a Fund acting as principal to
effect any transaction in which the Fund is a joint or joint and several
participant with such person. Consequently, except for those transactions that
either the 1940 Act or the SEC has deemed, with the proper level of Board
oversight, to pose no problems of overreaching by an affiliate, the Fund would
be required to seek an exemptive order from the SEC before engaging in the type
of activity covered by this policy. Because the 1940 Act and related
regulations adequately protect the Fund and its stockholders, there is no need
to maintain this policy.
Proposal 3.J.
Elimination of the Fundamental Policy Prohibiting
Investments for Purposes of Exercising Control
Applicable Funds:
Real Estate Institutional
Proposal:
It is proposed that the fundamental investment policy prohibiting
investments made for purposes of exercising control over, or management of, the
issuer be eliminated in its entirety.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the investment policy on investing in a security for the purpose of
obtaining or exercising control over, or management of, the issuer is not
required under the 1940 Act and may be eliminated from the Fund's investment
policies. The proposed amendment would not affect the Fund's investment
strategies.
Proposal 3.K.
Elimination of the Fundamental Policy Prohibiting Investments in Other
Investment Companies Exceeding Specified Percentage Limitations
Applicable Funds:
Intermediate Duration
Proposal:
It is proposed that the fundamental investment policy on investments in
other investment companies be eliminated in its entirety.
18
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the fundamental investment policy on investments in other investment
companies is not required under the 1940 Act and may be eliminated from the
Fund's fundamental investment policies. Moreover, Alliance noted that, in the
absence of this policy, the Fund is still subject to the limitations on
investments in other investment companies imposed on all mutual funds under
Section 12(d)(1)(A) of the 1940 Act. In general, under that section, an
investment company ("Acquiring Fund") cannot acquire shares of another
investment company ("Acquired Fund") if, after the acquisition, (i) the
Acquiring Fund would own more than 3% of the Acquired Fund's securities; (ii)
more than 5% of the total assets of the Acquiring Fund would be invested in the
Acquired Fund; and (iii) more than 10% of the total assets of the Acquiring
Fund would be invested in other investment companies (including the Acquired
Fund).
Stockholders should note that at a meeting held on August 3, 2005, as a
result of Alliance's recommendation, the Board adopted a non-fundamental policy
to address investment in other investment companies. That policy states in
effect that: "The Fund may invest in the securities of other investment
companies, including exchange-traded funds, to the extent permitted under the
1940 Act or the rules and regulations thereunder (as such statute, rules or
regulations may be amended from time to time) or by guidance regarding,
interpretations of, or exemptive orders under, the 1940 Act or the rules or
regulations thereunder published by appropriate regulatory authorities."
Stockholders are not required to approve non-fundamental policies. The Board
has the flexibility to amend a non-fundamental policy in furtherance of the
Fund's best interests, without the expense and delay of soliciting a
stockholder vote.
Proposal 3.L.
Elimination of the Fundamental Policy Prohibiting
Investments in Oil, Gas and Other Types of Minerals or Mineral Leases
Applicable Funds:
Real Estate Institutional
Proposal:
It is proposed that the fundamental investment policy prohibiting the Fund
from purchasing oil, gas, and other types of minerals or mineral leases can be
eliminated in its entirety.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the fundamental investment policy on purchasing or selling interests
in oil, gas, and other types of minerals or mineral leases is not required
under the 1940 Act and may be eliminated from the Fund's investment policies.
Nevertheless, Alliance noted that there are no current expectations that the
Fund will engage in such activities. In the future, should the Fund decide to
engage in such activities, appropriate disclosure regarding the nature and
risks of such investments would be disclosed in the Fund's prospectus and
statement of additional information.
Proposal 3.M.
Elimination of the Fundamental Policy
Restricting Purchases of Securities on Margin
Applicable Funds:
Real Estate Institutional
Proposal:
It is proposed that the fundamental investment policy restricting the
purchase of securities on margin be eliminated.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the fundamental investment policy on margin activities is not
required under the 1940 Act and may be eliminated from the
19
Fund's fundamental investment policies. Furthermore, it is unlawful for an
investment company, in contravention of applicable SEC rules or orders, to
purchase securities on margin except for such short-term credits as are
necessary for clearing transactions. Alliance advised the Board that the SEC
has not adopted rules relating to purchasing securities on margin and the
policy is not required to be fundamental.
At a meeting held on August 3, 2005, after considering Alliance's
recommendation, the Board of the Fund adopted a non-fundamental policy that
reflects the limited exception for purchasing securities on margin and
clarifies that margin deposits in connection with certain financial instruments
do not fall within the general prohibition on purchasing securities on margin.
That non-fundamental policy reads in effect as follows: "The Fund may not
purchase securities on margin, except (i) as otherwise provided under rules
adopted by the SEC under the 1940 Act or by guidance regarding the 1940 Act, or
interpretations thereof, and (ii) that the Fund may obtain such short-term
credits as are necessary for the clearance of portfolio transactions, and the
Fund may make margin payments in connection with futures contracts, options,
forward contracts, swaps, caps, floors, collars, and other financial
instruments". Stockholder approval of this non-fundamental policy is not
required. The Fund's Board has the flexibility to amend a non-fundamental
policy in furtherance of the Fund's best interests, without the expense and
delay of a stockholder vote.
Proposal 3.N.
Elimination of the Fundamental Policy
Restricting Short Sales
Applicable Funds:
Real Estate Institutional
Proposal:
It is proposed that the fundamental investment policy limiting short sales
or short positions to short positions that do not, when open, constitute more
than 25% of the Fund's assets held as collateral for such positions be
eliminated.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the fundamental investment policy on short sales is not required
under the 1940 Act and may be eliminated from the Fund's fundamental investment
policies.
The Board has approved the use by the Fund of short sales as an investment
strategy that is disclosed in the Fund's prospectus. The risks of short selling
are also disclosed in the Fund's prospectus. Alliance and the Board believe
that it is important for the Fund to have the flexibility to add or to revise
these investment strategies in furtherance of the Fund's best interests,
without the expense and delay of a stockholder vote that would be required if
such strategies were designated as fundamental policies.
Approval of each of Proposal 3.A. - 3.N. by a Fund requires the affirmative
vote of the holders of a "majority of the outstanding voting securities" of a
Fund as defined in the 1940 Act, which means the lesser of (i) 67% or more of
the voting securities of the Fund present or represented by proxy, if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy, or (ii) more than 50% of the outstanding voting
securities of the Fund ("1940 Act Majority"). If the stockholders of a Fund do
not approve a Proposal regarding a fundamental investment policy, the Fund's
current fundamental investment policy will remain the same.
The Board, including the Independent Directors, of each Fund unanimously
recommends that the stockholders of each Fund vote "FOR" Proposals 3.A. through
3.N.
20
PROPOSAL FOUR
RECLASSIFCATION AS NON-FUNDAMENTAL AND CHANGE IN
REAL ESTATE INSTITUTIONAL'S INVESTMENT OBJECTIVE
Stockholders are being asked to approve the reclassification of the Fund's
fundamental investment objective as non-fundamental. In making this
recommendation, Alliance advised the Board that the Fund's investment objective
is not required by the 1940 Act to be a fundamental policy that is changeable
only by a stockholder vote.
The Proposal to reclassify the objective as non-fundamental is consistent
with the changes proposed above, which are intended to eliminate or reclassify
any fundamental policy of the Fund that is not required to be fundamental under
the 1940 Act. The proposed reclassification would give the Board the
flexibility to revise the Fund's investment objective to respond to changed
market conditions or other circumstances in a timely manner without the delay
and expense of obtaining a shareholder vote. If reclassified as a
non-fundamental investment objective, the Board may change the Fund's
investment objective in the future without obtaining stockholder approval. If
this Proposal is approved, Alliance intends to provide stockholders with
advance notice of not less than 60 days of any subsequent material change to
the Fund's investment objective.
In addition to reclassifying the Fund's investment objective, Alliance
recommended that the Board change the Fund's investment objective in order to
broaden and streamline the Fund's investment objective.
Based on recommendations from Alliance, the Board is proposing to change the
Fund's investment objective as described below:
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Fund's investment The Fund's investment
objective is total objective is total
return from long-term return from long-term
growth of capital and growth of capital and
income principally income.
through investing in
equity securities of
companies that are
primarily engaged in or
related to the real
estate industry.
The proposed change to the Fund's investment objective focuses on a general
investment objective and eliminates the references to specific investments,
which would be disclosed in the Fund's prospectus as part of its investment
strategies. Alliance recommended this change to the Board in order to reflect
clearly the Fund's focus on long-term growth of capital and income. The
proposed change would have no effect on the Fund's investment strategy.
The Board, including the Independent Directors, of the Fund unanimously
recommends that the stockholders vote "FOR" Proposal 4. Approval of this
Proposal requires the affirmative vote of the stockholders of a 1940 Act
Majority. If the stockholders do not approve the reclassification of the Fund's
fundamental investment objective and the change to its investment objective,
the Fund's investment objective will remain fundamental and unchanged, and the
Fund would be required to solicit stockholder votes each time it sought to
modify the Fund's investment objective.
21
Part III - Independent Registered Public Accounting Firms
Approval of Independent Registered Public Accounting Firms by the Boards
The Audit Committee of each Fund is responsible for the appointment,
compensation, retention, and oversight of the work of the Fund's independent
registered public accounting firm. The Board of each Fund approved the
independent registered public accounting firm of each Fund as required by the
1940 Act on the dates specified below. At a meeting held on September 30, 2004,
the Board of AIF approved by the vote, cast in person, of a majority of the
Directors of the Fund, including a majority of the Directors who are not
"interested persons" of the Fund, Ernst & Young LLP, independent registered
public accounting firm to audit the accounts of AIF for the fiscal year ending
November 30, 2005.
At a meeting held on September 30, 2004, the Board of SCB II approved by the
vote, cast in person, of a majority of the Directors of the Fund, including a
majority of the Directors who are not "interested persons" of the Fund,
PricewaterhouseCoopers LLP, independent registered public accounting firm to
audit the accounts of SCB II for the fiscal year ending September 30, 2005.
Ernst & Young LLP has audited the accounts of AIF for its last two fiscal
years, and has represented that it does not have any direct financial interest
or any material indirect financial interest in the Fund.
PricewaterhouseCoopers LLP has audited the accounts of SCB II for its last
two fiscal years, and has represented that it does not have any direct
financial interest or any material indirect financial interest in the Fund.
Fees
The following table sets forth the aggregate fees billed by the independent
registered public accounting firm for each Fund's last two fiscal years for
professional services rendered for: (i) the audit of the Fund's annual
financial statements included in the Fund's annual report(s) to stockholders;
(ii) assurance and related services that are reasonably related to the
performance of the audit of the Fund's financial statements and are not
reported under (i), which include advice and education on accounting and
auditing issues, consent letters, and in the case of Real Estate Institutional,
includes multi-class distribution testing, (iii) tax compliance, tax advice,
and tax return preparation; and (iv) aggregate non-audit services provided to
the Fund, Alliance and entities that control, are controlled by or under common
control with Alliance that provide ongoing services to the Fund ("Service
Affiliates"), which include conducting an annual internal control report
pursuant to Statement on Auditing Standards No. 70. No other services were
provided to any Fund during this period.
TABLE 1
All Fees for
Non-Audit
Services
All Other Fees Provided to the
for Services Fund, Alliance
Audit Provided to and Service
Name of Fund Audit Fees Related Fees Tax Fees Fund Affiliates*
------------ ---------- ------------ -------- -------------- ---------------
Real Estate Institutional 2003 $27,000 $2,372 $12,173 n/a $ 763,510
2004 $30,000 $2,603 $24,003 n/a $1,128,338
Intermediate Duration 2003 $30,750 $6,758 $ 7,198 n/a $ 763,515
2004 $35,000 $1,400 $15,376 n/a $ 746,844
- --------
* The fees vary because they are presented based on each Fund's last two
fiscal years and reflect fees for non-audit services for different periods.
Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Funds' Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to a
22
Fund by the Fund's independent registered public accounting firm. A Fund's
Audit Committee policies and procedures also require pre-approval of all audit
and non-audit services provided to Alliance and Service Affiliates to the
extent that these services are directly related to the operations or financial
reporting of the Fund. All of the amounts for Audit Fees, Audit-Related Fees,
and Tax Fees in Table 1 are for services pre-approved by the Audit Committee.
The amounts of the Fees for Non-Audit Services provided to the Fund,
Alliance and Service Affiliates in Table 1 for each Fund that were subject to
pre-approval by the Audit Committee for 2003 and 2004 are presented below in
Table 2 (includes conducting an annual internal control report pursuant to
Statement on Accounting Standards No. 70). The Audit Committee of each Fund has
considered whether the provision of any non-audit services not pre-approved by
the Audit Committee provided by the Fund's independent registered public
accounting firms to Alliance and Service Affiliates is compatible with
maintaining the registered public accounting firms' independence.
TABLE 2
Fees for Non-Audit Services Provided
to the Fund, Alliance and Service
Affiliates Subject to Pre-Approval by Portion Comprised Portion Comprised
Audit Committee of Audit Related Fees of Tax Fees
------------------------------------- --------------------- -----------------
Real Estate Institutional 2003 $401,545 $389,372 $12,173
2004 $176,606 $152,603 $24,003
Intermediate Duration 2003 $ 13,956 $ 6,758 $ 7,198
2004 $ 16,776 $ 1,400 $15,376
Part IV - Proxy Voting and Stockholder Meetings
All properly executed and timely received proxies will be voted in
accordance with the instructions marked thereon or otherwise provided therein.
Accordingly, unless instructions to the contrary are marked, proxies will be
voted (i) for the election of each of the nominees as a Director for a Fund
(Proposal One), (ii) for the amendment and restatement of the charter of each
Fund (Proposal Two), (iii) for the amendment, elimination or reclassification
of certain of the Funds' fundamental investment restrictions (Proposal Three
(3.A. - 3.N.)), and (iv) for the reclassification of Real Estate
Institutional's investment objective as non-fundamental and change in the
Fund's investment objective (Proposal Four). Any stockholder may revoke his or
her proxy at any time prior to its exercise by giving written notice to the
Secretary of a Fund at 1345 Avenue of the Americas, New York, New York 10105,
by signing and submitting another proxy of a later date, or by personally
voting at the Meeting.
Properly executed proxies may be returned with instructions to abstain from
voting or to withhold authority to vote (an "abstention") or represent a broker
"non-vote" (which is a proxy from a broker or nominee indicating that the
broker or nominee has not received instructions from the beneficial owner or
other person entitled to vote shares on a particular matter with respect to
which the broker or nominee does not have discretionary power to vote). For
each Fund, the election of a nominee as a Director under Proposal One requires
a plurality of the votes cast. The approval of Proposal Two requires the
affirmative vote of a majority of the votes entitled to be cast for each Fund.
The approval of Proposals Three and Four requires a 1940 Act Majority or the
affirmative vote of the holders of a "majority of the outstanding voting
securities" of a Fund as defined in the 1940 Act, which means the lesser of (i)
67% or more of the voting securities of the Fund present at the Meeting or
represented by proxy, if the holders of more than 50% of the Fund's outstanding
voting securities are present or represented by proxy, or (ii) more than 50% of
the outstanding voting securities of the Fund. Abstentions and broker
non-votes, if any, will be considered present for purposes of determining a
quorum. Abstentions and broker non-votes, if any, not being votes cast, will
have no effect on the outcome of Proposal One. With respect to Proposal Two,
Proposal Three and Proposal Four, an abstention or broker non-vote, if any,
will be considered present for purposes of determining the existence of a
quorum but will have the effect of a vote against those Proposals. If any
matter other
23
than the Proposals properly comes before the Meeting, the shares represented by
proxies will be voted on all such other Proposals in the discretion of the
person or persons voting the proxies. The Funds have not received notice of,
and are not otherwise aware of, any other matter to be presented at the Meeting.
For each Fund, a quorum for the Meeting will consist of the presence in
person or by proxy of the holders of one-third of a Fund's shares outstanding
and entitled to vote at the Meeting. Whether or not a quorum is present at the
Meeting, if sufficient votes in favor of the position recommended by the Boards
on any Proposal described in the Proxy Statement are not timely received, the
persons named as proxies may, but are under no obligation to, with no other
notice than announcement at the Meeting, propose and vote for one or more
adjournments of the Meeting for up to 120 days after the Record Date to permit
further solicitation of proxies. The Meeting may be adjourned with respect to
fewer than all the Proposals in the Proxy Statement and a stockholder vote may
be taken on any one or more of the Proposals prior to any adjournment if
sufficient votes have been received for approval thereof. Shares represented by
proxies indicating a vote contrary to the position recommended by a majority of
the applicable Board on a Proposal will be voted against adjournment as to that
Proposal.
The Meeting is scheduled as a joint meeting of the stockholders of the Funds
because the stockholders of each of the Funds are to consider and vote on the
election of the same Directors. Stockholders of each Fund will vote separately
on each Proposal for their Fund and on any other business that may properly
come before the Meeting for that Fund. An unfavorable vote by the stockholders
of one Fund will not affect the vote on any Proposal or any other matter by the
stockholders of another Fund.
Alliance has engaged Computershare Fund Services, Inc. ("Computershare"),
280 Oser Avenue, Hauppauge, New York 11788, to assist in soliciting proxies for
the Meeting. It is estimated that Computershare will receive a fee of $10,000
for its services, to be paid by the Funds, plus reimbursement of out-of-pocket
expenses.
Part V - Other Information
Officers of the Funds
Certain information concerning the Funds' officers is set forth below. The
Funds' officers are elected by the respective Board and serve for a term of one
year and until his or her successor is duly elected and qualifies. The earliest
date for which an officer was elected to serve in that capacity is presented
below.
Name, Address* and
Date of Birth Position(s) Principal Occupation during the past 5 years
- ------------------ ----------- --------------------------------------------
Marc O. Mayer President and Chief Executive See biography on page 6.
10/2/57 Officer
11/03
Philip L. Kirstein Senior Vice President and Senior Vice President and Independent
5/29/45 Independent Compliance Compliance Officer of the AllianceBernstein
Officer Funds, with which he has been associated since
10/04 October 2004. Prior thereto, he was Of Counsel to
Kirkpatrick & Lockhart, LLP from October 2003
to October 2004, and General Counsel of Merrill
Lynch Investment Managers, L.P. since prior to
2000 until March 2003.
Mark D. Gersten Treasurer and Senior Vice President of Alliance Global Investor
10/4/50 Chief Financial Officer Services, Inc. ("AGIS"),** and a Vice President of
11/97 AllianceBernstein Investment Research and
Management, Inc.,** with which he has been
associated since prior to 2000.
24
Name, Address* and
Date of Birth Position(s) Principal Occupation during the past 5 years
- ------------------ ----------- --------------------------------------------
Vincent S. Noto Controller Vice President of AGIS,** with which he has been
12/14/64 11/97 associated since prior to 2000.
Mark R. Manley Secretary Senior Vice President, Deputy General Counsel
10/23/62 12/03 and Chief Compliance Officer of ACMC,** with
which he has been associated since prior to 2000.
- --------
* The address for the Funds' officers is 1345 Avenue of the Americas, New
York, New York 10105.
** An affiliate of each of the Funds.
STOCK OWNERSHIP
The following person(s) owned of record or were known by a Fund to
beneficially own 5% or more of the Intermediate Duration's shares as of August
19, 2005:
Percent of Common
Name and Address of Amount of Beneficial Stock Based on Shares
Beneficial Owner Ownership Outstanding
------------------- -------------------- ---------------------
Intermediate Duration
Halifax Staffing, Inc. 2,999,880 7.48%
Attn: Mr. Edward J. Heverin
303 N. Clyde Morris Blvd.
P.O. Box 2830
Daytona Beach, FL 32120-2830
INFORMATION AS TO THE INVESTMENT ADVISER AND DISTRIBUTORS OF THE FUNDS
Each Fund's investment adviser is Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105. The investment adviser also
provides certain administrative services to the Funds. The Funds' distributors
are Sanford C. Bernstein & Co., LLC and AllianceBernstein Investment Research
and Management, Inc., 1345 Avenue of the Americas, New York, New York 10105.
SUBMISSION OF PROPOSALS
FOR NEXT MEETING OF STOCKHOLDERS
The Funds do not hold stockholder meetings annually. Any stockholder who
wishes to submit a Proposal to be considered at a Fund's next meeting of
stockholders should send the Proposal to the Fund so as to be received within a
reasonable time before the Board makes the solicitation relating to such
meeting (or, in accordance with any advance notice requirements in the Bylaws
then in effect), in order to be included in the Fund's proxy statement and form
of proxy card relating to such meeting.
OTHER MATTERS
Management of each Fund does not know of any matters properly to be
presented at the Meeting other than those mentioned in this Proxy Statement. If
any other matters properly come before the Meeting, the shares represented by
proxies will be voted with respect thereto in the discretion of the person or
persons voting the proxies.
25
REPORTS TO STOCKHOLDERS
Each Fund will furnish each person to whom this Proxy Statement is delivered
with a copy of its latest annual report to stockholders and its subsequent
semi-annual report to stockholders, if any, upon request and without charge. To
request a copy, please call (800) 227-4618 or write to Dennis Bowden at
Alliance Capital Management L.P., 1345 Avenue of the Americas, New York, New
York 10105.
By Order of the Boards of
Directors,
Mark R. Manley
Secretary
September 9, 2005
New York, New York
26
APPENDIX A
OUTSTANDING VOTING SHARES
A list of the outstanding voting shares for each of the Funds as of the
close of business on the Record Date is presented below. Each share is entitled
to cast one vote at the Meeting:
Real Estate Institutional 52,600,336
Intermediate Duration 40,377,816
A-1
APPENDIX B
ADDITIONAL INFORMATION REGARDING DIRECTORS
Ownership in the Funds
The dollar range of the Funds' securities owned by each Director and the
aggregate dollar range of securities owned in the AllianceBernstein Fund
Complex are set forth below.
Aggregate Dollar Range
of Equity Securities in
the Funds in the
Dollar Range of Equity Securities in a Fund AllianceBernstein Fund Complex
Director as of August 12, 2005 as of August 12, 2005
- -------- ------------------------------------------- ------------------------------
Ruth Block Real Estate Institutional: None Over $100,000
Intermediate Duration: None
David H. Dievler Real Estate Institutional: None Over $100,000
Intermediate Duration: None
John H. Dobkin Real Estate Institutional: None Over $100,000
Intermediate Duration: None
Michael J. Downey Real Estate Institutional: None Over $100,000
Intermediate Duration: None
William H. Foulk, Jr. Real Estate Institutional: None Over $100,000
Intermediate Duration: None
D. James Guzy Real Estate Institutional: None $10,001-$50,000
Intermediate Duration: None
Marc O. Mayer Real Estate Institutional: None Over $100,000*
Intermediate Duration: None
Marshall C. Turner, Jr. Real Estate Institutional: None Over $100,000
Intermediate Duration: None
- --------
* Includes unvested ownership amounts through Alliance Deferred Compensation
Plan.
Compensation From the Funds
The aggregate compensation paid by a Fund to the Directors during the Funds'
respective fiscal year ended in 2004, the aggregate compensation paid to the
Directors during calendar year 2004 by all of the investment companies in the
AllianceBernstein Fund Complex, and the total number of investment companies in
the AllianceBernstein Fund Complex as to which the Directors are a director and
the number of investment portfolios as to which the Directors are directors,
are set forth below. Neither the Funds nor any other investment company in the
AllianceBernstein Fund Complex provides compensation in the form of pension or
retirement benefits to any of its Directors.
B-1
Number of Number of
Investment Investment
Companies in the Portfolios within
Compensation AllianceBernstein the AllianceBernstein
from the Fund Complex, Fund Complex,
AllianceBernstein including the including the
Fund Complex, Funds, as to which Funds, as to which
Compensation from a Fund during including the the Director is a the Director is a
Name of Director its Fiscal Year ended in 2004 Funds, during 2004 Director Director
- ---------------- ------------------------------- ------------------ ------------------ ---------------------
Ruth Block $2,943 Real Estate
Institutional $223,200 39 105
$2,201 Intermediate Duration
David H. Dievler $2,922 Real Estate
Institutional $268,250 41 107
$2,179 Intermediate Duration
John H. Dobkin $2,930 Real Estate
Institutional $252,900 39 105
$2,187 Intermediate Duration
Michael J. Downey $ 0 Real Estate
Institutional $ 0 36 80
$ 0 Intermediate Duration
William H. Foulk, Jr. $4,514 Real Estate
Institutional $465,250 42 108
$3,483 Intermediate Duration
D. James Guzy $ 0 $ 25,350 1 1
Marc O. Mayer $ 0 $ 0 37 82
Marshall C. Turner, Jr. $ 0 $ 25,350 1 1
B-2
APPENDIX C
GOVERNANCE AND NOMINATING COMMITTEE CHARTER
FOR
REGISTERED INVESTMENT COMPANIES IN THE ALLIANCE COMPLEX
(EACH, A "COMPANY")
The Board of Directors/Trustees (the "Board") of the Company, has adopted
this Charter to govern the activities of the Governance and Nominating
Committee (the "Committee") of the Board. This Charter supersedes the
Nominating Committee Charter previously adopted by the Board.
Statement of Purposes and Responsibilities
The purpose of the Committee is to assist the Board in carrying out its
responsibilities with respect to governance of the Company and the selection,
nomination, evaluation and compensation of members of the Board in accordance
with applicable laws, regulations, stock exchange requirements and industry
best practices. The primary responsibilities of the Committee are:
. to monitor and evaluate industry and legal developments affecting
corporate governance and recommend from time to time appropriate policies
and procedures for adoption by the Board;
. to monitor, evaluate and make recommendations to the Board with respect
to the structure, size and functioning of the Board and its committees;
. to identify, consider and recommend to the Board for nomination and
re-nomination individuals who are qualified to become and continue as
members of the Board or its committees, and to propose qualifications,
policies and procedures relating thereto, including modifications to
those set forth in the Company's Bylaws, resolutions of the Board and
this Charter;
. to assist the Board in establishing standards and policies for continuing
Board membership and procedures for the evaluation of the performance of
the Board and its committees;
. to review and make recommendations to the Board regarding compensation of
Board and committee members and staffing for Board and committee
chairmen; and
. review and recommend to the Board appropriate insurance coverage.
Organization and Operation
The Committee shall be composed of as many members as the Board shall
determine in accordance with the Company's Bylaws, but in any event not less
than two. The Committee must consist entirely of Board members who are not
"interested persons" of the Company ("Independent Directors"), as defined in
Section 2(a)(19) of the Investment Company Act of 1940 (the "1940 Act"). The
Board may remove or replace any member of the Committee at any time in its sole
discretion. One or more members of the Committee may be designated by the Board
as the Committee's chairman or co-chairman, as the case may be.
Committee meetings shall be held in accordance with the Company's Bylaws as
and when the Committee or the Board determines necessary or appropriate. Except
as may be otherwise set forth in the Company's Bylaws or the Board may
otherwise provide, the chairman, a co-chairman or any two members of the
Committee may set the time and place of its meeting.
The Committee may, in its discretion, delegate all or a portion of its
duties and responsibilities to subcommittees of the Committee, which may
consist of one or more members.
The Committee shall have the resources and authority appropriate to
discharge its duties and responsibilities, including the authority to select,
retain, terminate and approve the fees and other retention terms of special
counsel or other experts or consultants, as it deems appropriate, without
seeking approval of the Board or management.
C-1
Governance and Evaluation
The Committee will assist the Board in vetting the independence of Board
members and the financial expertise of Audit Committee members. It will review
and make recommendations to the Board from time to time on corporate governance
matters, such as:
. size of the Board and desired qualifications and expertise of Board
members;
. appropriate Board committees, their size and membership;
. scheduling, agendas and minuting of Board and committee meetings;
. adequacy and timeliness of information provided to the Board and
committees;
. expectations of Board members, including attendance at meetings,
continuing education and ownership of shares of the Company;
. periodic evaluations of Board and committee performance; and
. retirement, rotation and re-nomination policies for Board and committee
members.
Nominations for Board Membership
The Committee will identify, evaluate and recommend to the Board candidates
for membership on the Board in accordance with policies and procedures of the
Company in effect from time to time. The Committee may, but is not required to,
retain a third party search firm at the Company's expense to identify potential
candidates.
Qualifications for Nominees to the Board
The Committee may take into account a wide variety of factors in considering
candidates for membership on the Board, including (but not limited to): (i) the
candidate's knowledge in matters relating to the investment company industry;
(ii) any experience possessed by the candidate as a director/trustee or senior
officer of other public companies; (iii) the candidate's educational
background; (iv) the candidate's reputation for high ethical standards and
personal and professional integrity; (v) any specific financial, technical or
other expertise possessed by the candidate, and the extent to which such
expertise would complement the Board's existing mix of skills and
qualifications; (vi) the candidate's perceived ability to contribute to the
on-going functions of the Board, including the candidate's ability and
commitment to attend meetings regularly, work collaboratively with other
members of the Board and carry out his or her duties in the best interests of
the Company; (vii) the candidate's ability to qualify as an Independent
Director for purposes of the 1940 Act and any other standards of independence
that may be relevant to the Company; and (viii) such other factors as the
Committee determines to be relevant in light of the existing composition of the
Board and any anticipated vacancies or other factors. It is the Board's policy
that Board members normally may not serve in a similar capacity on the board of
a registered investment company that is not sponsored by the Company's
investment adviser or its affiliates.
Identification of Nominees
In identifying potential nominees for the Board, the Committee may consider
candidates recommended by one or more of the following sources: (i) the
Company's current Board members, (ii) the Company's officers, (iii) the
Company's investment adviser(s), (iv) the Company's shareholders (see below)
and (v) any other source the Committee deems to be appropriate. The Committee
will not consider self-nominated candidates.
Consideration of Candidates Recommended by Shareholders
The Committee will consider and evaluate nominee candidates properly
submitted by shareholders on the same basis as it considers and evaluates
candidates recommended by other sources. Appendix A to this Charter, as it may
be amended from time to time by the Committee, sets forth qualifications and
procedures that must be
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met or followed by shareholders to properly submit a nominee candidate to the
Committee (recommendations not properly submitted will not be considered by the
Committee).
Compensation and Insurance
The Committee shall evaluate periodically, and make recommendations to the
Board with respect to, the level and structure of the compensation of Board
members (including compensation for serving on committees of the Board or as
chairman or co-chairman of the Board or a committee) and the appropriateness
and level of staffing for the Chairman of the Board and committee chairmen. The
Committee shall consider, to the extent reasonably available, industry
practices for compensation of members and chairmen of boards and committees and
in providing staff to such chairmen.
The Committee shall also evaluate periodically and make recommendations to
the Board with respect to the adequacy and appropriateness of insurance
coverage and premiums.
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Appendix A
Procedures for the Committee's Consideration of Candidates
Submitted by Shareholders
(Amended and restated as of February 8, 2005)
A candidate for nomination as a Board member submitted by a shareholder will
not be deemed to be properly submitted to the Committee for the Committee's
consideration unless the following qualifications have been met and procedures
followed:
1. A shareholder or group of shareholders (referred to in either case as a
"Nominating Shareholder") that, individually or as a group, has
beneficially owned at least 5% of the Company's common stock or shares
of beneficial interest for at least two years prior to the date the
Nominating Shareholder submits a candidate for nomination as a Board
member may submit one candidate to the Committee for consideration at an
annual meeting of shareholders.
2. The Nominating Shareholder must submit any such recommendation (a
"Shareholder Recommendation") in writing to the Company, to the
attention of the Secretary, at the address of the principal executive
offices of the Company.
3. The Shareholder Recommendation must be delivered to or mailed and
received at the principal executive offices of the Company not less than
120 calendar days before the date of the Company's proxy statement
released to shareholders in connection with the previous year's annual
meeting. If an annual meeting of shareholders was not held in the
previous year, the Shareholder Recommendation must be so delivered or
mailed and received within a reasonable amount of time before the
Company begins to print and mail its proxy materials. Public notice of
such upcoming annual meeting of shareholders may be given in a
shareholder report or other mailing to shareholders or by any other
means deemed by the Committee or the Board to be reasonably calculated
to inform shareholders.
4. The Shareholder Recommendation must include: (i) a statement in writing
setting forth (A) the name, date of birth, business address and
residence address of the person recommended by the Nominating
Shareholder (the "candidate"); (B) any position or business relationship
of the candidate, currently and within the preceding five years, with
the Nominating Shareholder or an Associated Person of the Nominating
Shareholder; (C) the class or series and number of all shares of the
Company owned of record or beneficially by the candidate, as reported to
such Nominating Shareholder 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 members of the Board
pursuant to Section 20 of the 1940 Act and the rules and regulations
promulgated thereunder; (E) whether the Nominating Shareholder believes
that the candidate is or will be an "interested person" of the Company
(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 Company to make such determination; and (F) information as to the
candidate's knowledge of the investment company industry, experience as
a director/trustee or senior officer of public companies, memberships 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 member of the Board if elected;
(iii) the written and signed agreement of the candidate to complete a
directors'/trustees' and officers' questionnaire if elected; (iv) the
Nominating Shareholder's name as it appears on the Company's books and
consent to be named as such by the Company; (v) the class or series and
number of all shares of the Company owned beneficially and of record by
the Nominating Shareholder and any Associated Person of the Nominating
Shareholder and the dates on which such shares were acquired, specifying
the number of shares owned beneficially but not of record by each and
identifying the nominee holders for the Nominating Shareholder and each
such Associated Person of the Nominating Shareholder; and (vi) a
description of all arrangements or understandings between the Nominating
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Shareholder, the candidate and/or any other person or persons (including
their names) pursuant to which the recommendation is being made by the
Nominating Shareholder. "Associated Person of the Nominating
Shareholder" as used in this paragraph 4 means any person required to be
identified pursuant to clause (vi) and any other person controlling,
controlled by or under common control with, directly or indirectly, the
Nominating Shareholder or any person required to be identified pursuant
to clause (vi).
5. The Committee may require the Nominating Shareholder to furnish such
other information as it may reasonably require or deem necessary to
verify any information furnished pursuant to paragraph 4 above or to
determine the qualifications and eligibility of the candidate proposed
by the Nominating Shareholder to serve on the Board. If the Nominating
Shareholder fails to provide such other information in writing within
seven days of receipt of written request from the Committee, the
recommendation of such candidate as a nominee will be deemed not
properly submitted and will not be considered by the Committee.
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APPENDIX D
FORM OF ARTICLES OF AMENDMENT AND RESTATEMENT
[ ]
FORM OF ARTICLES OF AMENDMENT AND RESTATEMENT
1. [ ], a Maryland corporation (the "Corporation"), desires to
amend and restate its charter as currently in effect and as hereinafter amended.
2. The following provisions are all the provisions of the charter currently
in effect and as hereinafter amended:
FIRST: (1) The name of the incorporator is [ ].
(2) The incorporator's post office address is [ ].
(3) The incorporator is over eighteen years of age.
(4) The incorporator is forming the corporation named in these
Articles of Incorporation under the general laws of the State of Maryland.
SECOND: The name of the corporation (hereinafter called the
"Corporation") is [ ].
THIRD: (1) The purposes for which the Corporation is formed are to
conduct, operate and carry on the business of an investment company.
(2) The Corporation may engage in any other business and shall
have all powers conferred upon or permitted to corporations by the Maryland
General Corporation Law.
FOURTH: The post office address of the principal office of the
Corporation within the State of Maryland is 300 East Lombard Street, Baltimore,
Maryland 21202 in care of The Corporation Trust Incorporated. The resident
agent of the Corporation in the State of Maryland is The Corporation Trust
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202, a Maryland
corporation.
FIFTH: (1) The Corporation is authorized to issue [ ]
([ ]) shares, all of which shall be Common Stock, $[ ] par value per
share (the "Common Stock"), and having an aggregate par value of [ ]
dollars ($[ ]), classified and designated as follows:
Class [ ] Class [ ] Class [ ] Class [ ]
Name of Series Common Stock Common Stock Common Stock Common Stock
-------------- ------------ ------------ ------------ ------------
[Portfolio] and any other portfolio hereafter established are each referred
to herein as a "Series." The Class [ ] Common Stock of a Series, the Class
[ ] Common Stock of a Series, the Class [ ] Common Stock of a Series,
the Class [ ] Common Stock of a Series and any Class of a Series hereafter
established are each referred herein as a "Class." If shares of one Series or
Class of stock are classified or reclassified into shares of another Series or
Class of stock pursuant to this Article FIFTH, paragraph (2), the number of
authorized shares of the former Series or Class shall be automatically
decreased and the number of shares of the latter Series or Class shall be
automatically increased, in each case by the number of shares so classified or
reclassified, so that the aggregate number of shares of stock of all Series and
Classes that the Corporation has authority to issue shall not be more than the
total number of shares of stock set forth in the first sentence of this Article
FIFTH, paragraph (1).
(2) The Board of Directors may classify any unissued shares of
Common Stock from time to time in one or more Series or Classes of stock. The
Board of Directors may reclassify any previously classified but unissued shares
of any Series or Class of stock from time to time in one or more Series or
Class of stock.
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Prior to issuance of classified or reclassified shares of any Series or Class,
the Board of Directors by resolution shall: (a) designate that Series or Class
to distinguish it from all other Series or Classes of stock of the Corporation;
(b) specify the number of shares to be included in the Series or Class; (c) set
or change, subject to the express terms of any Series or Class of stock of the
Corporation outstanding at the time, the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms and conditions of redemption for each
Series or Class; and (d) cause the Corporation to file articles supplementary
with the State Department of Assessments and Taxation of Maryland ("SDAT"). Any
of the terms of any Series or Class of stock set or changed pursuant to clause
(c) of this paragraph (2) may be made dependent upon facts or events
ascertainable outside the charter of the Corporation (the "Charter"), including
determinations by the Board of Directors or other facts or events within the
control of the Corporation, and may vary among holders thereof, provided that
the manner in which such facts, events or variations shall operate upon the
terms of such Series or Class of stock is clearly and expressly set forth in
the articles supplementary or other charter document filed with the SDAT.
(3) As more fully set forth hereafter, the assets and liabilities
and the income and expenses of each Series or Class of the Corporation's stock
shall be determined separately from those of each other Series or Class of the
Corporation's stock and, accordingly, the net asset value, the dividends and
distributions payable to holders, and the amounts distributable in the event of
liquidation or dissolution of the Corporation to holders of shares of the
Corporation's stock may vary from Series to Series or Class to Class. In the
event that there are any assets, income, earnings, profits or proceeds which
are not readily identifiable as belonging to any particular series
(collectively, "General Assets"), such General Assets shall be allocated by or
under the direction of the Board of Directors to and among one or more Series
and Classes in such a manner and on such basis as the Board of Directors in its
sole discretion shall determine.
(4) Except as otherwise provided herein, all consideration
received by the Corporation for the issuance or sale of shares of a Series or
Class of the Corporation's stock, together with all funds derived from any
investment and reinvestment thereof and any General Assets allocated to such
Series or Class, shall irrevocably belong to that Series or Class for all
purposes, subject only to any automatic conversion of one Series or Class of
stock into another, as hereinafter provided for, and to the rights of creditors
of such Series or Class, and shall be so recorded upon the books of account of
the Corporation, and are herein referred to as "assets belonging to" such
Series or Class.
(5) The assets belonging to each Series or Class shall be charged
with the debts, liabilities, obligations and expenses incurred or contracted
for or otherwise existing with respect to such Series or Class and with such
Series' or Class' share of the general liabilities of the Corporation, in the
latter case in the proportion that the net asset value of such Series or Class
bears to the net asset value of all Series and Classes or as otherwise
determined by the Board of Directors in accordance with applicable law. The
determination of the Board of Directors shall be conclusive as to the
allocation of debts, liabilities, obligations and expenses, including accrued
expenses and reserves, to a Series or Class. The debts, liabilities,
obligations and expenses incurred or contracted for or otherwise existing with
respect to a Series or Class are enforceable with respect to that Series or
Class only and not against the assets of the Corporation generally or any other
Series or Class of stock of the Corporation.
(6) The assets attributable to the Classes of a Series shall be
invested in the same investment portfolio of the Corporation, and
notwithstanding the foregoing provisions of paragraphs (4) and (5) of this
Article FIFTH, the allocation of investment income and realized and unrealized
capital gains and losses and expenses and liabilities of the Corporation and of
any Series among the Classes of Common Stock of each Series shall be determined
by the Board of Directors in a manner that is consistent with the Investment
Company Act of 1940, the rules and regulations thereunder, and the
interpretations thereof, in each case as from time to time amended, modified or
superseded (the "Investment Company Act"). The determination of the Board of
Directors shall be conclusive as to the allocation of investment income and
realized and unrealized capital gains and losses, expenses and liabilities,
including accrued expenses and reserves, and assets to one or more particular
Series or Classes.
(7) Shares of each Class of stock shall be entitled to such
dividends or distributions, in cash, property or additional shares of stock or
the same or another Series or Class, as may be authorized from time to
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time by the Board of Directors (by resolution adopted from time to time, or
pursuant to a standing resolution or resolutions adopted only once or with such
frequency as the Board of Directors may determine, after providing that such
dividend or distribution shall not violate Section 2-311 of the Maryland
General Corporation Law) and declared by the Corporation with respect to such
Class. The nature of in-kind property distributions may vary among the holders
of a Class or Series, provided that the amount of the distribution per share,
as determined by the Board of Directors, shall be equivalent for all holders of
such Class or Series. Specifically, and without limiting the generality of the
foregoing, the dividends and distributions of investment income and capital
gains with respect to the different Series and with respect to the Class may
vary with respect to each such Series and Class to reflect differing
allocations of the expenses of the Corporation and the Series among the holders
of such Classes and any resultant differences between the net asset values per
share of such Classes, to such extent and for such purposes as the Board of
Directors may deem appropriate. The Board of Directors may determine that
dividends may be payable only with respect to those shares of stock that have
been held of record continuously by the stockholder for a specified period
prior to the record date of the date of the distribution.
(8) Except as provided below, on each matter submitted to a vote
of the stockholders, each holder of stock shall be entitled to one vote (1) for
each share standing in such stockholder's name on the books of the Corporation
or (2) if approved by the Board of Directors and pursuant to the issuance of an
exemptive order from the Securities and Exchange Commission, for each dollar of
net asset value per share of a Class or Series, as applicable. Subject to any
applicable requirements of the Investment Company Act, or other applicable law,
all holders of shares of stock shall vote as a single class except with respect
to any matter which the Board of Directors shall have determined affects only
one or more (but less than all) Series or Classes of stock, in which case only
the holders of shares of the Series or Classes affected shall be entitled to
vote. Without limiting the generality of the foregoing, and subject to any
applicable requirements of the Investment Company Act, or other applicable law,
the holders of each of the Classes of each Series shall have, respectively,
with respect to any matter submitted to a vote of stockholders (i) exclusive
voting rights with respect to any such matter that only affects the Series or
Class of Common Stock of which they are holders, including, without limitation,
the provisions of any distribution plan adopted by the Corporation pursuant to
Rule 12b-1 under the Investment Company Act (a "Plan") with respect to the
Class of which they are holders and (ii) no voting rights with respect to the
provisions of any Plan that affects one or more of such other Classes of Common
Stock, but not the Class of which they are holders, or with respect to any
other matter that does not affect the Class of Common Stock of which they are
holders.
(9) In the event of the liquidation or dissolution of the
Corporation, stockholders of each Class of the Corporation's stock shall be
entitled to receive, as a Class, out of the assets of the Corporation available
for distribution to stockholders, but other than General Assets not
attributable to any particular Class of stock, the assets attributable to the
Class less the liabilities allocated to that Class; and the assets so
distributable to the stockholders of any Class of stock shall be distributed
among such stockholders in proportion to the number of shares of the Class held
by them and recorded on the books of the Corporation. In the event that there
are any General Assets not attributable to any particular Class of stock, and
such assets are available for distribution, the distribution shall be made to
the holders of all Classes of a Series in proportion to the net asset value of
the respective Classes or as otherwise determined by the Board of Directors.
(10)(a) Each holder of stock may require the Corporation to redeem
all or any shares of the stock owned by that holder, upon request to the
Corporation or its designated agent, at the net asset value of the shares of
stock next determined following receipt of the request in a form approved by
the Corporation and accompanied by surrender of the certificate or certificates
for the shares, if any, less the amount of any applicable redemption charge,
deferred sales charge, redemption fee or other amount imposed by the Board of
Directors (to the extent consistent with applicable law). The Board of
Directors may establish procedures for redemption of stock.
(b) The proceeds of the redemption of a share (including a
fractional share) of any Class of capital stock of the Corporation shall be
reduced by the amount of any contingent deferred sales charge, redemption fee
or other amount payable on such redemption pursuant to the terms of issuance of
such share.
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(c) Subject to the requirements of the Investment Company Act,
the Board of Directors may cause the Corporation to redeem at net asset value
all or any proportion of the outstanding shares of any Series or Class from a
holder (1) upon such conditions with respect to the maintenance of stockholder
accounts of a minimum amount as may from time to time be established by the
Board of Directors in its sole discretion or (2) upon such conditions
established by the Board of Directors in its sole discretion, for any other
purpose, including, without limitation, a reorganization pursuant to the
Investment Company Act.
(d) Payment by the Corporation for shares of stock of the
Corporation surrendered to it for redemption shall be made by the Corporation
within seven days of such surrender out of the funds legally available
therefor, provided that the Corporation may suspend the right of the
stockholders to redeem shares of stock and may postpone the right of those
holders to receive payment for any shares when permitted or required to do so
by applicable statutes or regulations. Payment of the aggregate price of shares
surrendered for redemption may be made in cash or, at the option of the
Corporation, wholly or partly in such portfolio securities of the Corporation
as the Corporation shall select.
(e) Subject to the following sentence, shares of stock of any
Series and Class of the Corporation which have been redeemed or otherwise
acquired by the Corporation shall constitute authorized but unissued shares of
stock of such Series and Class. In connection with a liquidation or
reorganization of any Series or Class in which all of the outstanding shares of
such Series or Class are redeemed by the Corporation, upon any such redemption
all such shares and all authorized but unissued shares of the applicable Series
or Class shall automatically be returned to the status of authorized but
unissued shares of Common Stock, without further designation as to Series or
Class.
(11) At such times as may be determined by the Board of Directors
(or with the authorization of the Board of Directors, by the officers of the
Corporation) in accordance with the Investment Company Act and applicable rules
and regulations of the National Association of Securities Dealers, Inc. and
from time to time reflected in the registration statement of the Corporation
(the "Corporation's Registration Statement"), shares of a particular Series or
Class of stock of the Corporation or certain shares of a particular Class of
stock of any Series of the Corporation may be automatically converted into
shares of another Class of stock of such Series of the Corporation based on the
relative net asset values of such Classes at the time of conversion, subject,
however, to any conditions of conversion that may be imposed by the Board of
Directors (or with the authorization of the Board of Directors, by the officers
of the Corporation) and reflected in the Corporation's Registration Statement.
The terms and conditions of such conversion may vary within and among the
Classes to the extent determined by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of the Corporation)
and set forth in the Corporation's Registration Statement.
(12) Pursuant to Article SEVENTH, paragraph (1)(d), upon a
determination of the Board of Directors that the net asset value per share of a
Class shall remain constant, the Corporation shall be entitled to declare and
pay and/or credit as dividends daily the net income (which may include or give
effect to realized and unrealized gains and losses, as determined in accordance
with the Corporation's accounting and portfolio valuation policies) of the
Corporation attributable to the assets attributable to that Class. If the
amount so determined for any day is negative, the Corporation shall be
entitled, without the payment of monetary compensation but in consideration of
the interest of the Corporation and its stockholders in maintaining a constant
net asset value per share of that Class, to redeem pro rata from all the
holders of record of shares of that class at the time of such redemption (in
proportion to their respective holdings thereof) sufficient outstanding shares
of that Class, or fractions thereof, as shall permit the net asset value per
share of that Class to remain constant.
(13) The Corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares in fractional
denominations shall be shares of stock having proportionately to the respective
fractions represented thereby all the rights of whole shares, including,
without limitation, the right to vote, the right to receive dividends and
distributions, and the right to participate upon liquidation of the
Corporation, but excluding any right to receive a stock certificate
representing fractional shares.
(14) No stockholder shall be entitled to any preemptive right
other than as the Board of Directors may establish.
D-4
(15) The rights of all stockholders and the terms of all stock are
subject to the provisions of the Charter and the Bylaws.
SIXTH: The number of directors of the Corporation shall be [______]. The
number of directors of the Corporation may be changed pursuant to the Bylaws of
the Corporation. The names of the individuals who shall serve as directors of
the Corporation until the next annual meeting of stockholders and until their
successors are duly elected and qualify are:
[____________________]
SEVENTH: The following provisions are inserted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
Board of Directors and stockholders.
(1) In addition to its other powers explicitly or implicitly
granted under the Charter, by law or otherwise, the Board of Directors of the
Corporation:
(a) has the exclusive power to make, alter, amend or repeal the
Bylaws of the Corporation;
(b) subject to applicable law, may from time to time determine
whether, to what extent, at what times and places, and under what conditions
and regulations the accounts and books of the Corporation, or any of them,
shall be open to the inspection of the stockholders, and no stockholder shall
have any right to inspect any account, book or document of the Corporation
except as conferred by statute or as authorized by the Board of Directors of
the Corporation;
(c) is empowered to authorize, without stockholder approval,
the issuance and sale from time to time of shares of stock of any Series or
Class of the Corporation whether now or hereafter authorized and securities
convertible into shares of stock of the Corporation of any Series or Class,
whether now or hereafter authorized, for such consideration as the Board of
Directors may deem advisable;
(d) is authorized to adopt procedures for determination of and
to maintain constant the net asset value of shares of any Class or Series of
the Corporation's stock.
(2) Notwithstanding any provision of the Maryland General
Corporation Law requiring a greater proportion than a majority of the votes
entitled to be cast by holders of shares of all Series or Classes, or any
Series or Class, of the Corporation's stock in order to take or authorize any
action, any such action may be taken or authorized upon the concurrence of
holders of shares entitled to cast a majority of the aggregate number of votes
entitled to be cast thereon, subject to any applicable requirements of the
Investment Company Act.
(3) The presence in person or by proxy of the holders of shares
entitled to cast one-third of the votes entitled to be cast (without regard to
Series or Class) shall constitute a quorum at any meeting of the stockholders,
except with respect to any matter which, under applicable statutes, regulatory
requirements or the Charter, requires approval by a separate vote of one or
more Series or Classes of stock, in which case the presence in person or by
proxy of the holders of shares entitled to cast one-third of the votes entitled
to be cast by holders of shares of each Series or Class entitled to vote as a
Series or Class on the matter shall constitute a quorum.
(4) Any determination made in good faith by or pursuant to the
direction of the Board of Directors, as to the amount of the assets, debts,
obligations, or liabilities of the Corporation, as to the amount of any
reserves or charges set up and the propriety thereof, as to the time of or
purpose for creating such reserves or charges, as to the use, alteration or
cancellation of any reserves or charges (whether or not any debt, obligation,
or liability for which such reserves or charges shall have been created shall
be then or thereafter required to be paid or discharged), as to the value of or
the method of valuing any investment owned or held by the Corporation, as to
market value or fair value of any investment or fair value of any other asset
of the Corporation, as to the allocation of any asset of the Corporation to a
particular Class or Classes of the Corporation's stock, as to the charging of
any liability of the Corporation to a particular Class or Classes of the
Corporation's stock, as to the number of shares of the Corporation outstanding,
as to the estimated expense to the Corporation in connection with purchases of
its shares, as to the ability to liquidate investments in orderly fashion, or
as to any other matters relating to the issue, sale, redemption or other
acquisition or disposition of investments or shares of the
D-5
Corporation, shall be final and conclusive and shall be binding upon the
Corporation and all holders of its shares, past, present and future, and shares
of the Corporation are issued and sold on the condition and understanding that
any and all such determinations shall be binding as aforesaid.
EIGHTH: (1) To the maximum extent that Maryland law in effect from time
to time permits limitation of the liability of directors and officers of a
corporation, no present or former director or officer of the Corporation shall
be liable to the Corporation or its stockholders for money damages.
(2) The Corporation shall have the power, to the maximum extent
permitted by Maryland law in effect from time to time, to obligate itself to
indemnify, and to pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to, (a) any individual who is a present or former
director or officer of the Corporation or (b) any individual who, while a
director or officer of the Corporation and at the request of the Corporation,
serves or has served as a director, officer, partner or trustee of another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise from and against any claim or
liability to which such person may become subject or which such person may
incur by reason of his status as a present or former director or officer of the
Corporation. The Corporation shall have the power, with the approval of the
Board of Directors, to provide such indemnification and advancement of expenses
to a person who served a predecessor of the Corporation in any of the
capacities described in (a) or (b) above and to any employee or agent of the
Corporation or a predecessor of the Corporation.
(3) The provisions of this Article EIGHTH shall be subject to
the limitations of the Investment Company Act.
(4) Neither the amendment nor repeal of this Article EIGHTH, nor
the adoption or amendment of any other provision of the Charter or Bylaws
inconsistent with this Article EIGHTH, shall apply to or affect in any respect
the applicability of the preceding sections of this Article EIGHTH with respect
to any act or failure to act which occurred prior to such amendment, repeal or
adoption.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in its Charter in the manner now or hereafter
prescribed by the laws of the State of Maryland, including any amendment which
alters the contract rights, as expressly set forth in the Charter, of any
outstanding stock, and all rights conferred upon stockholders herein are
granted subject to this reservation.
1. The amendment and restatement of the Charter as hereinabove set forth
have been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.
2. The current address of the principal office of the Corporation within
the state of Maryland is as set forth in Article FOURTH of the foregoing
amendment and restatement of the Charter.
3. The name and address of the Corporation's current resident agent is
as set forth in Article FOURTH of the foregoing amendment and restatement of
the Charter.
4. The number of directors of the Corporation and the names of those
currently in office are as set forth in Article SIXTH of the foregoing
amendment and restatement of the Charter.
5. The total number of shares of stock which the Corporation has
authority to issue is not changed by the foregoing amendment and restatement of
the Charter.
The undersigned President acknowledges these Articles of Amendment and
Restatement to be the corporate act of the Corporation and, as to all matters
or facts required to be verified under oath, the undersigned President
acknowledges that, to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
D-6
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
and Restatement to be signed in its name and on its behalf by its President and
attested to by its Secretary on this day of , 200 .
ATTEST: [ ]
By:____________________ (SEAL)
- ----------
Secretary President
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AllianceBernstein Institutional Funds, Inc. ("AIF")
--AllianceBernstein Real Estate Investment Institutional Fund
Sanford C. Bernstein Fund II, Inc. ("SCB II")
--Bernstein Intermediate Duration Institutional Portfolio
NOTICE OF JOINT ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
November 15, 2005
FORM OF
PROXY CARD PROXY CARD
ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC.
SANFORD C. BERNSTEIN FUND II, INC.
JOINT ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 15, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARDS OF DIRECTORS OF
ALLIANCEBERNSTEIN INSTITUTIONAL FUNDS, INC. - ALLIANCEBERNSTEIN REAL ESTATE
INVESTMENT INSTITUTIONAL FUND AND THE SANFORD C. BERNSTEIN FUND II, INC. -
BERNSTEIN INTERMEDIATE DURATION INSTITUTIONAL PORTFOLIO. The undersigned
stockholder hereby appoints Christina A. Morse and Carol H. Rappa, or either of
them, as proxies for the undersigned, with full power of substitution in each of
them, to attend the Joint Annual Meeting of Stockholders (the "Meeting") of the
AllianceBernstein Institutional Funds, Inc. ("AIF") - AllianceBernstein Real
Estate Investment Institutional Fund and Sanford C. Bernstein Fund II, Inc.
("SCB II") - Bernstein Intermediate Duration Institutional Portfolio (each a
"Fund", and together, the "Funds") to be held at 3:00 p.m., Eastern Time, on
November 15, 2005 at the offices of the Funds, 1345 Avenue of the Americas, 39th
Floor, New York, New York 10105, and any postponements or adjournments thereof,
to cast on behalf of the undersigned all votes that the undersigned is entitled
to cast at the Meeting and otherwise to represent the undersigned at the Meeting
with all powers possessed by the undersigned as if personally present at such
Meeting. The undersigned hereby acknowledges receipt of the Notice of Joint
Annual Meeting and the accompanying Proxy Statement (the terms of which are
incorporated by reference herein), revokes any proxy heretofore given with
respect to such Meeting and hereby instructs said proxies to vote said shares as
indicated on the reverse side hereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA THE TELEPHONE: 1-866-290-1383
Note: Please sign exactly as name(s) appear(s) on the records of a Fund. Joint
owners should each sign personally. Trustees and other representatives should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation or another entity, the signature should
be that of an authorized officer who should state his or her full title.
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Stockholder sign here
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Co-owner sign here
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Date SCB_15609
The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy Card is executed but no instruction is given, the votes
entitled to be cast by the undersigned will be cast "FOR" each of the nominees
for director and "FOR" each of the other proposals as described in the Proxy
Statement. Additionally, the votes entitled to be cast by the undersigned will
be cast in the discretion of the proxy holder(s) on any other matter that may
properly come before the Meeting or any adjournment thereof.
The proxy covers all shares held in the following fund(s):__________________
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: |_|
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[_] To vote FOR all Proposals for all Funds mark this box. No other vote is
necessary.
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For Withhold For All
All All Except
1. Election of Directors. /__/ /__/ /__/
Both Funds
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01. Ruth Block 02. David H. Dievler 03. John H. Dobkin 04. Michael J. Downey
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05. William H. Foulk, Jr. 06. D. James Guzy 07. Marc O. Mayer 08. Marshall C. Turner, Jr.
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To withhold authority to vote for any individual, mark the box "FOR ALL EXCEPT"
and write the nominee's number on the line provided below.
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For Against Abstain
2. To approve the amendment and restatement /__/ /__/ /__/
of the Charter of each Fund.
Both Funds
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For Against Abstain
3. To approve the amendment, elimination, or /__/ /__/ /__/
reclassification as non-fundamental of
certain of the fundamental investment
policies regarding:
For Against Abstain
3.a. Diversification. /__/ /__/ /__/
Both Funds
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For Against Abstain
3.b. Issuing Senior Securities and /__/ /__/ /__/
Borrowing Money.
Both Funds
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For Against Abstain
3.c. Underwriting Securities. /__/ /__/ /__/
Both Funds
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For Against Abstain
3.d. Concentration of Investments. /__/ /__/ /__/
Both Funds
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For Against Abstain
3.e. Real Estate and Companies that /__/ /__/ /__/
Deal in Real Estate.
Both Funds
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For Against Abstain
3.f. Commodity Contracts and Future /__/ /__/ /__/
Contracts.
Both Funds
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For Against Abstain
3.g. Loans. /__/ /__/ /__/
Both Funds
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For Against Abstain
3.h. Pledging, Hypothecating, /__/ /__/ /__/
Mortgaging, or Otherwise
Encumbering Assets.
Both Funds
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For Against Abstain
3.i. Joint Securities Trading Accounts. /__/ /__/ /__/
AIF - Real Estate Investment Institutional Fund
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For Against Abstain
3.j. Exercising Control. /__/ /__/ /__/
AIF - AllianceBernstein Real Estate
Investment Institutional Fund
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For Against Abstain
3.k. Other Investment Companies. /__/ /__/ /__/
SCB II-Bernstein Intermediate Duration
Institutional Portfolio
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For Against Abstain
3.l. Oil, Gas, and Other Types of /__/ /__/ /__/
Minerals or Mineral Leases.
AIF - AllianceBernstein Real Estate
Investment Institutional Fund
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For Against Abstain
3.m. Purchases of Securities on /__/ /__/ /__/
Margin.
Both Funds
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For Against Abstain
3.n. Short Sales. /__/ /__/ /__/
Both Funds
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For Against Abstain
4. The Reclassification of Real Estate /__/ /__/ /__/
Institutional's fundamental Investment
Objective as Non-fundamental and Changes
to the Fund's Investment Objective.
5. To vote and otherwise represent the undersigned on any other matter that
may properly come before the meeting or any adjournment or postponement
thereof in the discretion of the proxy holder(s).
PLEASE VOTE, SIGN AND DATE THIS PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
00250.0451 #592032