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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
AllianceBernstein Variable Product Series Fund, 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):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[_] 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:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
1345 Avenue of the Americas, New York, New York 10105
September 29, 2005
Dear Stockholders:
The Board of Directors (the "Directors") of AllianceBernstein Variable
Products Series Fund, Inc. (the "Fund") and the series thereof (each a
"Portfolio") are pleased to invite you to the Annual Meeting of Stockholders
(the "Meeting") to be held on November 15, 2005. The accompanying Notice of
Annual Meeting of Stockholders and Proxy Statement present several Proposals to
be considered at the Meeting.
At the Meeting, stockholders will be asked to elect Directors. We are also
asking that you approve Proposals, as explained in the attached Proxy
Statement, that are intended to update and standardize the Fund's governing
documents and the Portfolios' fundamental investment policies. 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 the Portfolios and their stockholders.
The Fund was organized in 1987 and has restrictions that can be traced back to
requirements that are no longer applicable. These restrictions can limit the
Portfolio's flexibility to act efficiently.
Although not required, many Portfolios have investment objectives that are
fundamental. We are asking that you approve making these investment objectives
"non-fundamental." For some of the Portfolios, we are also asking that you
approve changes to a Portfolio's investment objective. As a non-fundamental
policy, the Portfolios' 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 of the Portfolios and unanimously recommend that you vote "FOR" the
Proposals that apply to the Portfolio in which you have an interest.
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., a
proxy solicitation firm, has been selected to assist in the proxy solicitation
process. No matter how many shares you own, your vote is important.
Sincerely,
Marc O. Mayer
President
QUESTIONS AND ANSWERS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
PROXY
Q. WHY DID YOU SEND ME THIS BOOKLET?
A. This booklet contains the Notice of Annual Meeting of Stockholders (the
"Notice") and Proxy Statement that provides you with information you should
review before voting on the Proposals that will be presented at the Annual
Meeting of Stockholders (the "Meeting") for the Portfolios of the Fund (the
"Fund") listed in the accompanying Notice (each a "Portfolio" and,
collectively, the "Portfolios").
Shares of the Portfolios are not sold directly to individuals. The
Portfolios only offer their shares through the separate accounts of life
insurance companies ("Insurers"). As a contractholder, you hold a contract
with an Insurer that offers one or more of the Portfolios as an investment
option. The Insurers are the stockholders of record. However, because you,
the contractholder, are the true beneficial owner of the investment,
Insurers will generally pass their voting rights onto you and will vote the
shares of each Portfolio that you hold through your insurance contracts in
accordance with any instructions you provide. As a contractholder, you have
the right to vote for the election of the Directors of the Fund and on the
various proposals concerning your investment in a Portfolio.
References to "you" or "stockholders" throughout the proxy materials shall
include stockholders of record (i.e., the Insurers) and contractholders.
Q. WHO IS ASKING FOR MY VOTE?
A. The Board of Directors of the Fund (the "Board") is asking you to vote at
the Meeting. The Proposals are as follows:
The first Proposal is to elect Directors of the Fund. All stockholders will
be asked to elect Directors of the Fund.
We are also asking for your approval of several other Proposals. As more
fully explained in the Proxy Statement, not all of these Proposals apply to
each Portfolio. These Proposals include the approval of:
. the amendment and restatement of the Fund's charter;
. amendment, elimination or reclassification of certain of the Portfolio's
fundamental investment policies; and
. reclassification of certain fundamental investment objectives as
non-fundamental and, in some cases, a change in a Portfolio's investment
objective.
Q. HOW DOES THE BOARD RECOMMEND I VOTE?
A. The Board recommends that you vote "FOR" all Proposals.
Q. WHO IS ELIGIBLE TO VOTE?
A. Stockholders of record at the close of business on August 24, 2005 (the
"Record Date") are entitled to vote at the Meeting or any adjournment or
postponement of the Meeting. You will be entitled to vote only on those
Proposals that apply to the Portfolio in which you have an interest on the
Record Date. If you were a contractholder of an insurance contract that held
shares in a Portfolio on the Record Date, you have the right to vote even if
you no longer invest in the Portfolio.
Q. WHAT ROLE DOES THE BOARD PLAY?
A. The Board directs the management of the business and affairs of the Fund.
Each of the Directors has an obligation to act in what he or she reasonably
believes to be the best interests of the Fund, including approv-
ing and recommending charter and policy changes such as those proposed in
the Proxy Statement. The background of each nominee for Director is
described in the Proxy Statement.
Q. WHY ARE THE DIRECTORS PROPOSING THE AMENDMENT AND RESTATEMENT OF THE FUND'S
CHARTER?
A. The Fund is organized under Maryland law. We are proposing the amendment and
restatement of the Fund's charter for your approval in order to modernize
and standardize this document and to facilitate more efficient management of
the Fund by giving it greater flexibility as permitted under Maryland law.
Q. WHY ARE THE DIRECTORS PROPOSING TO AMEND, ELIMINATE OR RECLASSIFY CERTAIN OF
THE PORTFOLIOS' FUNDAMENTAL INVESTMENT RESTRICTIONS?
A. Certain policies are required by the federal law applicable to mutual funds
to be fundamental, meaning they cannot be changed without stockholder vote.
We are proposing to standardize these required fundamental policies so that
the Portfolios will have uniform policies. Many of the Portfolios adopted
other policies as fundamental when it was not necessary to do so. We are
proposing to eliminate many of these policies because they are no longer
required due to changes in applicable law and can now be eliminated. As
explained in the Proxy Statement, certain of these fundamental policies will
be reclassified and retained as non-fundamental policies, if stockholders
approve making them non-fundamental.
These proposals would update the Portfolios' fundamental investment policies
and standardize them across the Portfolios. The Portfolios would continue to
be managed in accordance with the investment policies described in their
prospectuses (as such prospectuses are updated from time-to-time). We do not
expect that the revised policies would significantly change the way the
Portfolios are managed.
Q. WHY ARE THE DIRECTORS PROPOSING THAT YOU APPROVE RECLASSIFYING THE
PORTFOLIOS' FUNDAMENTAL INVESTMENT OBJECTIVES AND, IN SOME CASES, MODIFYING
THEM?
A. A Portfolio's investment objective generally is not required to be
fundamental. Consequently, a Portfolio is not usually required to have a
stockholder vote to change its objective under applicable laws. We propose
the reclassification of the Portfolios' fundamental investment objectives as
non-fundamental to provide the Portfolios with the flexibility to respond to
market changes without incurring the expense and delay of seeking a
stockholder vote. The reclassification would permit a Portfolio to revise
its investment objective in the event that the Board in consultation with
the Portfolios' investment adviser, Alliance Capital Management L.P.
("Alliance"), believes it is necessary or appropriate to emphasize different
strategies or portfolio allocations in light of then prevailing market
conditions or trends. The proposed changes to certain of the Portfolios'
investment objectives are intended to simplify and clarify the Portfolios'
investment objectives and to make them consistent among similar groups of
Portfolios. Any subsequent change in a Portfolio's investment objective
would be subject to prior approval by the Board. Stockholders will be given
at least 60 days' notice prior to the implementation of a material change in
an investment objective.
Q. WHY ARE THERE SO MANY PROPOSALS FOR MULTIPLE PORTFOLIOS IN ONE PROXY
STATEMENT?
A. The Portfolios are intended to offer a broad range of investment
opportunities to investors. We have included all of our Proposals in one
Proxy Statement to reduce costs. More tailored Proxy Statements would
increase printing and mailing costs significantly. We recognize that the
Proxy Statement is lengthy and have endeavored to make it as simple and
understandable as possible.
Q. HOW CAN I VOTE MY PROXY?
A. Please follow the voting instructions included on the enclosed Proxy Card.
Q. WHAT IF I WANT TO REVOKE MY PROXY?
A. You can revoke your proxy at any time prior to its exercise by (i) giving
written notice to the Secretary of the Fund at 1345 Avenue of the Americas,
New York, New York 10105, (ii) by signing and submitting another proxy of a
later date or (iii) by personally voting at the Meeting.
Q. WHOM DO I CALL IF I HAVE QUESTIONS REGARDING THE PROXY?
A. If you have questions, you can contact Computershare Fund Services, Inc., a
proxy solicitation firm, that has been selected to assist in the proxy
solicitation process. The telephone number is (866) 201-1122.
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
Americas Government Income Portfolio Money Market Portfolio
Balanced Wealth Strategy Portfolio Real Estate Investment Portfolio
Global Bond Portfolio Small Cap Growth Portfolio
Global Dollar Government Portfolio Small/Mid Cap Value Portfolio
Global Research Growth Portfolio Total Return Portfolio
Global Technology Portfolio Utility Income Portfolio
Growth Portfolio U.S. Government/High Grade Securities Portfolio
Growth and Income Portfolio U.S. Large Cap Blended Style Portfolio
High Yield Portfolio Value Portfolio
International Portfolio Wealth Appreciation Strategy Portfolio
International Value Portfolio Worldwide Privatization Portfolio
Large Cap Growth Portfolio
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1345 Avenue of the Americas, New York, New York 10105
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SCHEDULED FOR NOVEMBER 15, 2005
To the Stockholders of the series of AllianceBernstein Variable Products Series
Fund, Inc. (the "Fund"):
Notice is hereby given that an Annual Meeting of Stockholders (the
"Meeting") of the series of the Fund (each, a "Portfolio", and, collectively,
the "Portfolios") will be held at the offices of the Fund, 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 29, 2005:
1. The election of Directors of the 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 the charter for the Fund, 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 Portfolios' fundamental investment restrictions;
4. The reclassification of the Portfolios' fundamental investment
objectives as non-fundamental and, for certain of the Portfolios, a
change in the 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 Portfolio at the close of business on August
24, 2005 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 Directors. 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)
201-1122 or via the Internet as described on the enclosed Proxy Card.
The Board of Directors recommends a vote "FOR" each Proposal.
By Order of the Board of Directors,
Mark R. Manley
Secretary
New York, New York
September 29, 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 vote by telephone or through the
Internet to 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 Fund any additional cost of further proxy
solicitation and in order for the Meeting to be held as scheduled.
- --------------------------------------------------------------------------------
(R)This is a mark used under license from the owner, Alliance Capital
Management L.P.
TABLE OF CONTENTS
Page
----
Introduction 1
Proposal One -- Election of Directors 6
Proposal Two -- Amendment and Restatement of the Charter for the Fund 11
Proposal Three -- Approval of Amendment, Elimination, or Reclassification of Fundamental
Investment Restrictions 17
Proposal Four -- Reclassification of Each Portfolio's Fundamental Investment Objective as
Non-fundamental and for Certain Portfolios a Change in Investment Objective
and Reclassification of Revised Investment Objective as Non-fundamental 33
Independent Registered Public Accounting Firm 37
Proxy Voting and Stockholder Meetings 41
Officers of the Fund 42
Stock Ownership 42
Information as to the Fund's Investment Adviser and Distributor 42
Submission of Proposals for Next Meeting of Stockholders 43
Other Matters 43
Reports to Stockholders 43
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
Appendix E -- Stock Ownership E-1
PROXY STATEMENT
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
Americas Government Income Portfolio
Balanced Wealth Strategy Portfolio
Global Bond Portfolio
Global Dollar Government Portfolio
Global Research Growth Portfolio
Global Technology Portfolio
Growth Portfolio
Growth and Income Portfolio
High Yield Portfolio
International Portfolio
International Value Portfolio
Large Cap Growth Portfolio
Money Market Portfolio
Real Estate Investment Portfolio
Small Cap Growth Portfolio
Small/Mid Cap Value Portfolio
Total Return Portfolio
Utility Income Portfolio
U.S. Government/High Grade Securities Portfolio
U.S. Large Cap Blended Style Portfolio
Value Portfolio
Wealth Appreciation Strategy Portfolio
Worldwide Privatization Portfolio
1345 Avenue of the Americas
New York, New York 10105
-----------------
ANNUAL MEETING OF STOCKHOLDERS
November 15, 2005
-----------------
INTRODUCTION
This is a combined Proxy Statement for the portfolios of the
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund") listed above
(each a "Portfolio" and, collectively, the "Portfolios"). The Board of
Directors ("Board") is soliciting proxies for an Annual Meeting of Stockholders
(the "Meeting") to consider and vote on Proposals that are recommended by the
Board.
The Board is sending you this Proxy Statement to ask for your vote on
several Proposals affecting your Portfolio. The Portfolios will hold the
Meeting at the offices of the Fund, 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 Portfolios. Alliance Capital
Management L.P. is the investment adviser to the Portfolios ("Alliance"). The
Notice of Annual Meeting of Stockholders Proxy Statement and Proxy Card are
being mailed to stockholders on or about September 29, 2005.
Any stockholder of record who owned shares of a Portfolio as of the close of
business 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.
1
Shares of the Portfolios are not sold directly to individuals. The
Portfolios only offer their shares through the separate accounts of life
insurance companies ("Insurers"). Contractholders select a Portfolio as an
investment option through an insurance contract with the Insurer. The Insurer
that uses a Portfolio as a funding vehicle is, in most cases, the legal
stockholder of the Portfolio and, as such, has voting and investment power with
respect to the shares. However, the Insurer generally will pass through any
voting rights to contractholders and will vote the shares of each Portfolio in
the manner directed by a contractholder. With respect to shares for which a
contractholder fails to provide voting instructions, or shares that the Insurer
holds for its own benefit (i.e., rather than on behalf of a contractholder),
the Insurers will vote such shares in the same proportion as the shares for
which voting instructions were received from contractholders. For proxies
received with no voting instructions on how to vote, the Insurer will vote
those shares "FOR" the proposals.
We have divided the Proxy Statement into five main parts:
Part I - Overview of the Board's Proposals.
Part II - Discussionof each Proposal and an explanation of why we are requesting that you approve each
Proposal.
Part III - Informationabout the Portfolios' independent registered public accounting firm.
Part IV - Additionalinformation on proxy voting and stockholder meetings.
Part V - Otherinformation about the Fund and the Portfolios.
2
Part I - Overview of Proposals
As a stockholder of one or more of the Portfolios, you are being asked to
consider and vote on a number of Proposals. While the following list is long,
not all of the Proposals apply to each Portfolio. Many of the Proposals relate
to conforming changes that will result in standardized policies across the
Portfolios.
Proposal Portfolio(s) Affected
1.The election of the Directors, each such Director to serve a All Portfolios
term of an indefinite duration and until his or her successor is
duly elected or qualifies.
2.The amendment and restatement of the Fund's charter, which All Portfolios
will repeal in their entirety all currently existing charter provi-
sions 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 restrictions
regarding:
3.A. Diversification All Portfolios Except:
Americas Government Income
Portfolio, Global Bond Portfolio, and
Global Dollar Government Portfolio
3.B. Issuing Senior Securities and Borrowing Money All Portfolios
3.C. Underwriting Securities Global Research Growth Portfolio, Global
Technology Portfolio, Growth Portfolio,
Growth and Income Portfolio, High Yield
Portfolio, International Portfolio, Large Cap
Growth Portfolio, Money Market Portfolio,
Small Cap Growth Portfolio, Total Return
Portfolio, U.S. Government/High Grade
Securities Portfolio, and U.S. Large Cap
Blended Style Portfolio
3.D. Concentration of Investments All Portfolios
3.E. Real Estate and Companies that Deal in Real Estate All Portfolios
3.F. Commodities, Commodity Contracts and Futures All Portfolios
Contracts
3.G. Loans All Portfolios
3.H. Joint Securities Trading Accounts Americas Government Income Portfolio,
Global Bond Portfolio, Global Technology
Portfolio, High Yield Portfolio, Real Estate
Investment Portfolio, Small Cap Growth
Portfolio, Utility Income Portfolio, U.S.
Government/High Grade Securities Portfolio,
and Worldwide Privatization Portfolio
3.I. Exercising Control All Portfolios Except:
Global Research Growth Portfolio, Growth
Portfolio, and U.S. Large Cap Blended Style
Portfolio
3
Proposal Portfolio(s) Affected
3.J. Other Investment Companies Americas Government Income Portfolio,
Global Bond Portfolio, Global Research
Growth Portfolio, Global Technology
Portfolio, Growth and Income Portfolio,
High Yield Portfolio, International Portfolio,
Money Market Portfolio, Total Return
Portfolio, Utility Income Portfolio, and U.S.
Government/High Grade Securities Portfolio
3.K. Oil, Gas, and Other Types of Minerals or Mineral Americas Government Income Portfolio,
Leases Global Bond Portfolio, Global Dollar
Government Portfolio, Global Technology
Portfolio, Money Market Portfolio, Real
Estate Investment Portfolio, Utility Income
Portfolio, and Worldwide Privatization
Portfolio
3.L. Purchases of Securities on Margin All Portfolios Except:
Balanced Wealth Strategy Portfolio, Global
Research Growth Portfolio, Growth
Portfolio, Growth and Income Portfolio,
International Value Portfolio, Large Cap
Growth Portfolio, Money Market Portfolio,
Small/Mid Cap Value Portfolio, Value
Portfolio, and Wealth Appreciation Strategy
Portfolio
3.M. Short Sales All Portfolios Except:
Balanced Wealth Strategy Portfolio, Global
Research Growth Portfolio, Growth
Portfolio, Growth and Income Portfolio,
International Value Portfolio, Small/Mid
Cap Value Portfolio, U.S. Large Cap
Blended Style Portfolio, Value Portfolio,
and Wealth Appreciation Strategy Portfolio
3.N. Pledging, Hypothecating, Mortgaging or Otherwise All Portfolios Except:
Encumbering Assets Growth Portfolio and Utility Income
Portfolio
3.O. Illiquid Securities or Restricted Securities Global Bond Portfolio, Global Technology
Portfolio, Growth and Income Portfolio,
High Yield Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market
Portfolio, Total Return Portfolio, and U.S.
Government/High Grade Securities Portfolio
3.P. Warrants Americas Government Income Portfolio and
Global Bond Portfolio
3.Q. Unseasoned Companies Global Technology Portfolio
3.R. Requirement to Invest in Specific Investments Large Cap Growth Portfolio
4
Proposal Portfolio(s) Affected
3.S. 65% Investment Limitations U.S. Government/High Grade Securities
Portfolio, Utility Income Portfolio, and
Worldwide Privatization Portfolio
3.T. Securities of Issuers in which Officers, Directors or Global Technology Portfolio, Growth and
Partners Have an Interest Income Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market
Portfolio, and Total Return Portfolio
3.U. Option Transactions Americas Government Income Portfolio,
Global Technology Portfolio, Large Cap
Growth Portfolio, and Money Market
Portfolio
3.V. Purchasing Voting or Other Securities of Issuers Growth and Income Portfolio, High Yield
Portfolio, International Portfolio, Large Cap
Growth Portfolio, Money Market Portfolio,
Total Return Portfolio, U.S. Government/
High Grade Securities Portfolio, and Utility
Income Portfolio
3.W. Repurchase Agreements Growth and Income Portfolio, High Yield
Portfolio, International Portfolio, Large Cap
Growth Portfolio, Money Market Portfolio,
Total Return Portfolio, and U.S.
Government/High Grade Securities Portfolio
3.X. Securities with Maturities Greater than One Year Money Market Portfolio
3.Y. Acquisitions of Certain Preferred Stock and Debt High Yield Portfolio and U.S. Government/
Securities High Grade Securities Portfolio
3.Z. Investments in Government Securities Consistent with U.S. Government/High Grade Securities
Internal Revenue Code Requirements Portfolio
4.
A. The reclassification of a Portfolio's fundamental Americas Government Income Portfolio,
investment objective as non-fundamental with no change to Balanced Wealth Strategy Portfolio, Global
investment objective; and Bond Portfolio, Global Dollar Government
Portfolio, Global Research Growth
Portfolio, Global Technology Portfolio,
High Yield Portfolio, International Value
Portfolio, Money Market Portfolio, Small/
Mid Cap Value Portfolio, U.S. Government/
High Grade Securities Portfolio, U.S. Large
Cap Blended Style Portfolio, Value
Portfolio, and Wealth Appreciation Strategy
Portfolio
B. The reclassification as non-fundamental and with changes 1. Global Technology Portfolio
to specific Portfolio's investment objectives 2. Growth Portfolio
3. Growth and Income Portfolio
4. International Portfolio
5. Large Cap Growth Portfolio
6. Real Estate Investment Portfolio
7. Small Cap Growth Portfolio
8. Total Return Portfolio
9. Utility Income Portfolio
10. Worldwide Privatization Portfolio
5
Part II - Discussion of Each Proposal
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, stockholders will vote on the election of Directors of the
Fund. Each Director elected at the Meeting will serve for a term of an
indefinite duration and until his or her successor is duly elected and
qualifies. The following individuals have been nominated for election as a
Director. It is the intention of the persons named as proxies in the
accompanying Proxy Card to vote in favor of the nominees named below for
election as Director of the Fund.
Ms. Ruth Block
Mr. David H. Dievler
Mr. John H. Dobkin
Mr. Michael J. Downey
Mr. William H. Foulk, Jr.
Mr. D. James Guzy
Mr. Marc O. Mayer
Mr. Marshall C. Turner, Jr.
Each nominee has consented to serve as a Director. The Board knows 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. The Fund 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 Committee and the Board have
waived the application of this policy to Mr. Dievler through December 31, 2006.
Certain information concerning the nominees is set forth below.
Number of
Portfolios in
Alliance-Bernstein 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,#,** since 1992 Formerly Executive Vice 105 None
500 SE Mizner Blvd., President and Chief Insurance
Boca Raton, FL 33432 Officer of The Equitable Life
11/7/30 Assurance Society of The
United States; Chairman and
Chief Executive Officer of
Evlico (insurance); former
Governor at Large, National
Association of Securities
Dealers, Inc.
- --------
* "Years of Service" refers to the total number of years served as a Director.
There is no stated term of office for the Fund's 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 Committee
and the Board of the Fund have waived the application of this retirement
policy through December 31, 2006.
** Ms. Block was an "interested person", as defined in the Investment Company
Act of 1940 (the "1940 Act") from July 22, 1992 until October 21, 2004 by
reason of her ownership of securities of a control person of Alliance. Ms.
Block received shares of The Equitable Companies Incorporated ("Equitable")
as part of the demutualization of The Equitable Life Assurance Society of
the United States in 1992. Ms. Block's Equitable shares were subsequently
converted through a corporate action into American Depositary Shares of AXA,
which were sold for approximately $2,400 on October 21, 2004. Equitable and
AXA are control persons of Alliance.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee.
6
Number of
Portfolios in
Alliance-Bernstein 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
----------------- ---------- ------------------------------ ------------------ -------------
David H. Dievler,# since 1990 Independent consultant. Until 107 None
P.O. Box 167, December 1994 he was Senior
Spring Lake, Vice President of ACMC
NJ 07762 ("Alliance Capital
10/23/29 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.
John H. Dobkin,# since 1992 Consultant. Formerly 105 Municipal Art
P.O. Box 12, President of Save Venice, Inc. Society (New
Annandale, (preservation organization) York City)
NY 12504 from 2001-2002, Senior
2/19/42 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,# N/A Consultant since 2004. 80 Asia Pacific
c/o Alliance Capital Formerly managing partner of Fund, Inc.;
Management L.P., Lexington Capital, LLC and the
1345 Avenue of the Americas (investment advisory firm) Merger Fund
New York, NY 10105 from 1997 until December
1/26/44 2003. Prior thereto, Chairman
and CEO of Prudential
Mutual Fund Management
(1987-1993).
- --------
* "Years of Service" refers to the total number of years served as a Director.
There is no stated term of office for the Fund's 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 Committee
and the Board of the Fund have waived the application of this retirement
policy through December 31, 2006.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee.
7
Number of
Portfolios in
Alliance-Bernstein 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
----------------- ---------- ------------------------------- ------------------ ------------------
Chairman of the Board since 1990 Investment adviser and 108 None
William H. Foulk, Jr.,#,+ independent consultant. He
2 Sound View Drive was formerly Senior Manager
Suite 100 of Barrett Associates, Inc., a
Greenwich, CT 06830 registered investment adviser,
9/7/32 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.
D. James Guzy,# N/A Chairman of the Board of 1 Intel Corporation;
P.O. Box 128, PLX Technology (semi- Cirrus Logic
Glenbrook, NV 89413 conductors) and of SRC Corporation;
3/7/36 Computers Inc., with which he Novellus
has been associated since prior Corporation;
to 2000. He is also President Micro
of the Arbor Company Component
(private family investments). Technology; the
Davis Selected
Advisers Group
of Mutual Funds;
and LogicVision
Marshall C. Turner, Jr.,# N/A Principal of Turner Venture 1 Toppan
220 Montgomery St. Associates (venture capital Photomasks, Inc.;
Penthouse 10, and consulting) since prior to the George Lucas
San Francisco, 2000. Chairman and CEO, Educational
CA 94104-3402 DuPont Photomasks, Inc., Foundation;
10/10/41 Austin, Texas, 2003-2005, and Chairman of the
President and CEO since Board of the
company acquired, and name Smithsonian's
changed to Toppan National Museum
Photomasks, Inc. of Natural History
- --------
* "Years of Service" refers to the total number of years served as a Director.
There is no stated term of office for the Fund's 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 Committee
and the Board of the Fund have waived the application of this retirement
policy through December 31, 2006.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee.
+ Member of the Fair Value Pricing Committee.
8
Number of
Portfolios in
Alliance-Bernstein 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
- ----------------- -------- ------------------------------ ------------------ ------------------
INTERESTED
DIRECTOR***
Marc O. Mayer N/A Executive Vice President of 82 SCB Partners,
1345 Avenue of the ACMC, since 2001, prior Inc.; and SCB Inc.
Americas, thereto, Chief Executive
New York, Officer of Sanford C.
New York 10105 Bernstein & Co., LLC
10/2/57 (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 Fund's 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 Committee
and the Board of the Fund 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 the Fund
due to his position as Executive Vice President of ACMC.
As of August 17, 2005, to the knowledge of management, the Directors and
officers of the Fund, both individually and as a group, owned less than 1% of
the shares of the Fund and each respective Portfolio. Additional information
related to the equity ownership of the Directors and the compensation they
received from the Fund is presented in Appendix B. During the Fund's most
recently completed fiscal year, the 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 met 12 times. Each
Director attended at least 75% of the total number of meetings of the Board
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 Fund does not have a policy that requires a Director to attend
annual meetings of stockholders but the Fund encourages such attendance.
The 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 Fund's committees are identified above in
the table listing the Directors. The function of the Audit Committee is to
assist the Board in its oversight of the Fund's financial reporting process.
The Audit Committee met two times during the Fund's most recently completed
fiscal year.
The Governance and Nominating Committee met two times during the Fund's most
recently completed fiscal year. The 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 the Board in carrying out its
responsibilities with respect to governance of the Fund and identifies,
evaluates and selects and nominates candidates for the Board. The Committee
also may set standards or qualifications for Directors. The Committee may
consider candidates as Directors submitted by the Fund's current Board members,
officers, investment adviser, stockholders and other appropriate sources.
The Governance and Nominating Committee will consider candidates submitted
by a stockholder or group of stockholders who have owned at least 5% of the
Fund's outstanding common stock or shares of beneficial interest 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
9
submission, including all required information, must be submitted in writing to
the attention of the Secretary at the principal executive offices of the Fund
not less than 120 days before the date of the proxy statement for the previous
year's annual meeting of 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 Governance and Nominating
Committee as well as information required to be provided by stockholders
submitting candidates for consideration by the Governance and Nominating
Committee are included in Appendix C.
The function of the 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 Portfolio made under unique or highly unusual
circumstances not previously addressed by the Valuation Committee that would
result in a change in the Portfolio's net asset value ("NAV") by more than
$0.01 per share. The Fair Value Pricing Committee did not meet during the
Fund's most recently completed fiscal year.
The function of the 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 review and approval
of the Advisory and Distribution Services Agreements. The Independent Directors
Committee did not meet during the Fund's most recently completed fiscal year.
The Board has adopted a process for stockholders to send communications to
the Board. To communicate with the Board or an individual Director, a
stockholder must send a written communication to the Fund's principal office at
the address listed in the Notice of Annual Meeting of Stockholders accompanying
this Proxy Statement, addressed to the Board 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.
The Board unanimously recommends that the stockholders vote "FOR" each of
the nominees to serve as a Director of the Fund. The election of a nominee as a
Director requires a plurality of the votes cast.
10
PROPOSAL TWO
THE AMENDMENT AND RESTATEMENT OF THE CHARTER
FOR THE FUND
The Fund is organized as a Maryland corporation and is subject to Maryland
General Corporation Law ("MGCL"). Under the MGCL, the Fund is formed pursuant
to a charter ("Charter") that sets forth various provisions relating primarily
to the governance of the Fund and powers of the Fund to conduct business. The
Board has declared advisable and recommends to the Fund's stockholders the
amendment and restatement of the Charter. Alliance, the investment adviser to
the Portfolios, advised the Board that the proposed amendments have two primary
objectives. First, Alliance believes that it is important to update the Charter
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 the Charter should be standardized so that there will be no
differences among the other AllianceBernstein Mutual Funds. In the past, the
existence of different Charter provisions has imposed burdens in administering
the AllianceBernstein Funds and, in some cases, limited a Board's or the Fund's
power to take actions that would benefit the Fund and its stockholders.
Many of the proposed amendments are technical amendments that are designed
to allow the Fund's Board to take full advantage of the provisions of the MGCL.
Some provisions contained in the Charter are now obsolete because they are
regulated by the 1940 Act or the MGCL and are no longer required in the
Charter. For these reasons, Alliance recommended to the Board the amendment and
restatement of the Charter as discussed below in order to modernize and
standardize it, which will facilitate the Board's ability to direct the
management of the business and affairs of the Portfolio. The Board recommends
that stockholders approve the amendment and restatement of the Charter for the
Fund. The amendment and restatement of the 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 (the "New Charter") attached as Appendix
D. A detailed summary of the amendments is set forth below. If a stockholder of
the Fund would like a copy of the current Charter, 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 Charter will give the Board more flexibility and
broader power to act than does the current Charter. This increased flexibility
may allow the Board to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the Fund to operate in a
more efficient and economical manner.
The proposed amendments to the Charter 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 Fund within
these broad categories and the additional categories, and discusses the Board's
recommendations as to each amendment.
A. Series and Class Structure and Related Provisions
Alliance recommended, and the Board declared advisable, the proposed
amendments concerning the establishment and administration of series and
classes of the Fund's stock to update the Charter to provide the Board 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 the Board's powers with respect
to these allocations. These changes are intended to improve administration of
the Portfolios and would not affect the management of the Portfolios. The New
Charter contains provisions that:
. Provide for the automatic readjustment of the number of authorized shares
of a class or series of the 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.
11
. 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 the Fund in which 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 have been previously authorized
by the Board. See New Charter, Article Fifth, Section 10(e).
. Clarify that the 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.
. 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 the 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 the Fund generally. This change would clarify that
the debts, liabilities, obligations and expenses of one series or class
of the 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 the Board may provide a specified holding period prior to
the record date for stockholders to be entitled to dividends (deleting
the 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 discretion to specify holding periods
rather than specifying them in the Charter and provides the Board with
the flexibility in the payment of dividends, whether in cash or in-kind.
See New Charter, Article Fifth, Section 7.
. Permit the Board discretion to call for the automatic conversion of any
share class into any other share class to the extent disclosed in the
applicable registration statement and permitted by applicable laws and
regulations. This change gives the Board broader flexibility to determine
class conversions between classes. See New Charter, Article Fifth,
Section 11.
. Add a provision that all persons who acquire stock or other securities of
the 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 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 a provision granting the Board power to increase or decrease the
number of shares in a class pursuant to classification or
reclassification.
. Deletes as obsolete a provision prohibiting the Board from reducing the
number of shares of any class below the number of outstanding shares.
. Deletes a provision permitting the Board to designate unissued Fund
shares as a class or series of preferred or special stock excluded from
the definition of "senior security."
12
B. Stockholder Voting Provisions
Alliance recommended, and the Board declared advisable, proposed minor
changes to the 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 the Fund
as a whole. These changes would not affect the management of a Portfolio. The
New Charter contains provisions that:
. Permit, as to any matter submitted to stockholders, the Fund to calculate
the number of votes to which a stockholder is entitled to cast on such
matter based on the net 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 the Board, and only if the Fund first obtains an
exemptive order from the SEC permitting the Fund to calculate votes in
this manner. This change would permit the Board to address circumstances
in which there are material disparities in NAV per share among the series
of the Fund 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 the 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 Charter provides 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 one or more series or classes of the 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 that specific class
or series, rather than for the Fund as a whole. See New Charter, Article
Seventh, Section 3.
C. Mandatory and Other Redemption Provisions
Alliance recommended, and the Board declared advisable, proposed changes to
give the Board more flexibility to redeem stockholder accounts that fall below
a certain threshold. Alliance advised that small accounts are costly for the
Fund to maintain, often at the expense of larger stockholders. Currently, the
Charter provides that the Board may cause the Fund to redeem a stockholder's
shares from the Fund if, after redemption, in certain cases, or otherwise in
other cases, the amount that the stockholder has invested in the Fund falls
below $200) or such other amount that the Board may determine. This provision
also includes a cap of $25,000 on the dollar amount that the Board may set and
a stockholder notice requirement. The amendments recommended by Alliance, and
declared advisable by the Board, would give the Board greater administrative
flexibility to determine when it is in the best interests of the 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 the Board to cause the Fund to make mandatory redemptions
for other purposes, such as a reorganization of the Fund, as now permitted by
relatively recent amendments to the MGCL. If these changes are adopted, upon
approval by the Board, the typical Fund reorganization or liquidation will
require only the stockholder approval required under the 1940 Act, if any. The
New Charter provisions:
. Clarify that the Fund may redeem shares at NAV where a stockholder fails
to maintain a minimum amount determined by the Board, in its sole
discretion. See New Charter, Article Fifth, Section 10(c).
. Provide that the Board may cause the 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).
Alliance recommended, and the Board declared advisable, the proposed changes
discussed below to clarify that the Board may impose certain fees upon
redemption. These changes would give the Board increased flexibility to impose
fees upon redemption where the Directors determine that to do so would be in
the best interests of
13
the Fund or a Portfolio. For example, under the flexibility provided by this
revision, the Board could determine to impose a redemption fee to discourage
market timing in a Portfolio. This flexibility is consistent with the
requirements of Rule 22c-2 under the 1940 Act, which requires the Board to
determine whether it is necessary or appropriate to impose a redemption fee or
whether a redemption fee is not necessary or not appropriate. In connection
therewith, the Charter also would be changed to provide that redemption
proceeds be reduced by any applicable redemption fee, "other amount" or
contingent deferred sales charge. These provisions would be extended to all
classes of shares of the Fund and would:
. Clarify that the Board may impose a redemption charge, deferred sales
charge, redemption fee or "other amount" upon redemption. See New
Charter, Article Fifth, Section 10(a).
. Clarify that redemption proceeds be reduced by any applicable redemption
fee, "other amount" or contingent deferred sales charge. See New Charter,
Article Fifth, Section 10(b).
The following changes are intended to conform the redemption provisions to
those permitted under the 1940 Act and the MGCL and to give the Board greater
administrative flexibility in managing the Fund. The changes provide the Board
with greater flexibility in the administration of the Fund and make the Board's
role in setting redemption procedures explicit. The changes would not result in
any changes in the Fund's redemption procedures. The New Charter provisions:
. Allow a Board to establish procedures for the redemption of stock. See
New Charter, Article Fifth, Section 10(a).
. Delete a provision authorizing the Fund, upon Board authorization, to buy
back shares at a price not exceeding NAV by an agreement with
stockholders.
D. Liability Exculpation and Indemnification and Expense Advance Provisions
The existing Charter or Bylaws of the Fund generally provide that, to the
maximum extent permitted by the MGCL and the 1940 Act, Directors and officers
shall not be liable to the Fund or its stockholders for money damages and shall
be indemnified by the Fund and have expenses advanced by the Fund. Alliance
recommended to the Board and the Board declared advisable, that the Fund's
Charter be revised to clarify that the 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 the Fund may provide to its Directors
and officers. Alliance advised the Board that the proposed changes to the
existing Charter are intended only to make the indemnification provisions
clearer and would not change the Fund's existing indemnification obligations to
the Fund's Directors and officers. The Fund's Board believes that it is
important for the 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 Fund. More restrictive indemnification
provisions may make it difficult to attract and retain qualified Directors and
officers. These changes update the Fund's indemnification provisions consistent
with the current industry standard as permitted under the 1940 Act and the MGCL.
The indemnification provisions in the New Charter will:
. Authorize the Fund to obligate itself to indemnify and advance expenses
to the maximum extent permitted by the MGCL. See New Charter, Article
Eighth, Section 2.
. Allow the 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.
14
. 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 the Fund's Charter or Bylaws. See
New Charter, Article Eighth, Section 4.
. Add a provision that Directors and officers are not liable to the Fund or
its stockholders for money damages to the maximum extent permitted by
law. See New Charter, Article Eighth, Section 1.
E. Other Revisions
(i) Corporate Purpose
The existing Charter enumerates a list of specific powers of the Fund. The
proposed changes would delete these provisions and provide instead that the
Fund has all powers permitted by the MGCL. The Fund is not required to list
specific powers in its Charter and the current specificity may limit the Fund's
power and may restrict the Fund's power to undertake certain activities without
incurring the cost and delay of a stockholder vote and to respond quickly to
regulatory developments to the detriment of the Fund. Changing the existing
Charter to give the Fund the powers permitted under the MGCL will give the Fund
greater flexibility. The New Charter:
. Deletes specific powers of the Fund, and provides instead that the Fund
shall have all powers conferred upon it or permitted by the MGCL.
(ii)Board of Directors
The New Charter would provide that the minimum number of Directors for the
Fund shall be one and eliminate the maximum number of Directors provided in the
existing Charter. The current Charter provides for a minimum of two and a
maximum of twenty Directors. Alliance advised the Board that this change would
give the Board flexibility to determine the number of Directors for the Fund
based on the specific needs of the Fund. The changes would also revise the
general powers of the Board and explicitly permit the Board to authorize the
issuance of stock and other securities without stockholder approval. The
proposed changes recommended by Alliance, and declared advisable by the Board,
would provide greater flexibility for the Board to oversee the Fund, especially
the power to authorize the issuance of shares to the extent permitted by the
MGCL. These changes would not affect the management of the Fund. The New
Charter:
. Provides that the minimum number of Directors for the Fund shall be one.
See New Charter, Article Sixth.
. Expands the general powers of the Board and explicitly permits the Board
to authorize the issuance of stock and other securities without
stockholder approval. See New Charter, Article Seventh, Section 1(c).
(iii)Interested Persons Provisions
The Charter currently permits contracts to provide services between the Fund
and interested persons of the Fund, including Alliance. Presumably, these
provisions were based on provisions in operating company charters that permit
such arrangements. The 1940 Act, rather than the MGCL, determines and limits
transactions between the Fund and its affiliates and sets forth specific
procedures the Fund must follow. The provisions are not required in the Fund's
Charter and may conflict with the provisions of the 1940 Act. The proposed
change will:
. Delete a provision regarding the procedures that the Fund must follow to
enter into a contract with an affiliate.
(iv)Dividends and Distributions
The 1940 Act, the MGCL and federal tax laws regulate the Fund's method and
manner of making dividends and distributions. Provisions relating to these
matters are not necessary in the Fund's Charter and may conflict with the 1940
Act and other requirements. For these reasons, Alliance recommended, and the
Board declared advisable, that certain provisions be eliminated. The proposed
changes will:
. Delete a provision permitting distribution to vary between classes for
the purpose of complying with regulatory or legislative requirements.
15
. Delete a provision permitting the Board to set apart assets for dividends
for a reserve.
The Board unanimously recommends that the stockholders of the Fund vote
"FOR" Proposal 2. Approval of Proposal 2 requires the affirmative vote of a
majority of the votes entitled to be cast.
16
PROPOSAL THREE APPROVAL OF AMENDMENT, ELIMINATION, OR RECLASSIFICATION OF
FUNDAMENTAL INVESTMENT RESTRICTIONS
Under Section 8(b) of the 1940 Act, a Portfolio 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 Portfolio may
designate any other of its policies as fundamental policies (the "Other
Fundamental Policies"). Many of the Portfolios' Other Fundamental Policies can
be traced back to federal or state securities law requirements that were in
effect when the Fund was organized. These restrictions have subsequently been
made less restrictive or are no longer applicable to the Fund. 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), so those state requirements no longer apply. As a
result, many of the current restrictions unnecessarily limit the investment
strategies available to Alliance in managing a Portfolio's assets. In addition,
the lack of uniform standards across the Portfolios leads to operating
inefficiencies and increases the costs of compliance monitoring.
The Board considered and approved Alliance's recommendation that the
Portfolios' Section 8(b) policies be replaced with standardized fundamental
policies. In some cases, Alliance recommended and the Board approved less
restrictive Section 8(b) policies. If the Proposals are approved with respect
to a Portfolio, only those investment restrictions that the 1940 specifically
requires to be fundamental, i.e., the Section 8(b) policies, as described in
Proposal 3.A. - 3.G. will remain fundamental investment restrictions of the
Portfolio. Alliance also recommended, and the Board approved, the elimination
of the Other Fundamental Policies as discussed below in Proposals 3.H to 3.Z.
None of the changes in the Section 8(b) policies or the Other Fundamental
Policies is expected to have a significant effect in the management of the
Portfolios.
Proposal 3.A.
Diversification
Applicable Portfolios:
All Portfolios Except
Americas Government Income Portfolio, Global Bond Portfolio, and
Global Dollar Government Portfolio
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policy in
effect would read:
"The Portfolio is diversified" as defined in the 1940 Act.
Discussion of Proposed Modification:
Section 8(b) of the 1940 Act requires each series of 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 Portfolio 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 amounts 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.
In making its recommendation to the Board, Alliance noted that no change is
being proposed to a Portfolio's designation as diversified. Instead, the
proposed change would modify a Portfolio's fundamental investment
17
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 the Board or stockholders taking further action, the modified
investment policy would automatically apply the requirements of
"diversification" under the 1940 Act to a Portfolio as those requirements may
be amended from time to time.
For those Portfolios that did not previously have a fundamental policy with
respect to diversification, approval of this proposed modification would result
in the adoption of this policy as a fundamental policy. To the extent that a
Portfolio has a related policy or a substantively duplicative policy or
policies with respect to diversification, that policy or policies 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 Portfolios:
All Portfolios
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policies
regarding borrowing and senior securities in effect would be combined to read:
"The Portfolio 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 Board, Alliance noted that, under
Section 18(f)(1) of the 1940 Act, a Portfolio 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 Portfolio, 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.
Most of the Portfolios' 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 Portfolio's policy
more closely to the exact statutory and regulatory requirements regarding
senior securities, as they may exist from time to time, without incurring the
time and expense of obtaining stockholder approval to change the policy. For
Portfolios that do not have a policy regarding investments in senior securities
as a fundamental policy, the new policy would, upon stockholder approval, be
added as a fundamental policy.
18
Certain of the Portfolios' fundamental policies on borrowings prohibit
borrowings or impose percentage limitations on borrowings. The proposed
fundamental policy for borrowing would permit Portfolios to borrow up to the
full extent permitted by the 1940 Act. The proposed fundamental policy for
borrowing would permit Portfolios with policies imposing the following
percentage limitations on borrowings to borrow up to the full extent permitted
by the 1940 Act:
.. Up to 15% of assets: . Americas Government Income Portfolio
. Global Bond Portfolio
. Global Dollar Government Portfolio
. Growth and Income Portfolio
. Growth Portfolio
. High Yield Portfolio
. International Portfolio
. Large Cap Growth Portfolio
. Money Market Portfolio
. Total Return Portfolio
. U.S. Government/High Grade Securities Portfolio
. Utility Income Portfolio
. Worldwide Privatization Portfolio
.. Up to 5% of assets: . Global Technology Portfolio
. Real Estate Investment Portfolio
. Small Cap Growth Portfolio
The use of leverage by a Portfolio is considered speculative and involves
risk. However, there is no current intention that any of these Portfolios will
use this increased borrowing capability.
Proposal 3.C.
Amendment of Fundamental Policy Regarding
Underwriting Securities
Applicable Portfolios:
Global Research Growth Portfolio, Global Technology Portfolio, Growth
Portfolio, Growth and Income Portfolio, High Yield Portfolio, International
Portfolio, Large Cap Growth Portfolio, Money Market Portfolio, Small Cap Growth
Portfolio, Total Return Portfolio, U.S. Government/High Grade Securities
Portfolio, and U.S. Large Cap Blended Style Portfolio
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policy
regarding underwriting securities in effect would read:
"The Portfolio may not act as an underwriter of securities, except that the
Portfolio may acquire restricted securities under circumstances in which, if
such securities were sold, the Portfolio 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 Board, Alliance noted that the purpose
of the modification is to clarify that the Portfolios are not prohibited from
acquiring "restricted securities" to the extent such investments are consistent
with a Portfolio's investment objective, even if such investments may result in
the Portfolio technically being considered an underwriter under the federal
securities laws. This amendment would not change the Portfolios' current
policies on investing in restricted securities, which are considered illiquid
securities and under current SEC guidelines are limited to 15% of a Portfolios'
investment. The modification standardizes the policy on underwriting across the
AllianceBernstein Fund Complex.
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
19
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 Portfolios need to maintain a certain
amount of liquidity to meet redemption requests, the Portfolios 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.
For Portfolios that did not previously have a fundamental policy with
respect to underwriting securities, approval of this proposed modification
would result in the adoption of this policy as a fundamental policy for those
Portfolios. To the extent that a Portfolio has a related or a substantively
duplicative policy or policies with respect to underwriting, that policy or
policies would be eliminated with the approval of this proposed modification.
Proposal 3.D.
Amendment of Fundamental Policy Regarding
Concentration of Investments
Applicable Portfolios:
All Portfolios
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policy
regarding concentration of investments in effect would read:
"A Portfolio 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 Board, 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 Portfolio'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 technology, utility or real estate industry. The proposed change
would permit investment 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
Portfolios' investment policies. For Portfolios that did not previously have a
fundamental policy with respect to concentration, approval of this proposed
modification would result in the adoption of this policy as a fundamental
policy for those Portfolios. To the extent that a Portfolio has a related or a
substantively duplicative policy or policies with respect to concentration,
that policy or policies would be eliminated with the approval of this proposed
modification.
Proposal 3.E.
Amendment of Fundamental Policy Regarding
Investment in Real Estate and Companies that Deal in Real Estate
Applicable Portfolios:
All Portfolios
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policy in
effect would read:
"The Portfolio 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 Portfolio from
investing in securities or other instruments backed by real estate or in
securities of companies engaged in the real estate business."
20
Discussion of Proposed Modification:
The 1940 Act requires a Portfolio to state a fundamental policy regarding
the purchase and sale of real estate. In making its recommendation to the
Board, Alliance noted that as a general matter, under a Portfolio's current
real estate investment policy, a Portfolio is restricted in its ability to
purchase and sell real estate even when ownership of the real estate devolves
upon the Portfolio through permissible investments. For instance, Alliance
noted that it is possible that a Portfolio 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
a Portfolio's 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 a Portfolio may invest in
real estate-related securities and real estate backed securities or instruments.
For Portfolios that did not previously have a fundamental policy with
respect to real estate investments, approval of this proposed modification
would result in the adoption of this policy as a fundamental policy for those
Portfolios. In addition, to the extent that a Portfolio has a real estate
policy that was put into place to satisfy state "blue sky" requirements, such
as those that address investment in real estate limited partnerships, any such
real estate policy would be eliminated upon the approval of this proposed
modification.
Proposal 3.F.
Amendment of Fundamental Policy Regarding
Investment in Commodities, Commodity Contracts and Futures Contracts
Applicable Portfolios:
All Portfolios
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policy in
effect would read:
"The Portfolio 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 Board, Alliance noted that the proposed
changes to a Portfolio's policy make it clear that the Portfolio 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 Portfolios' 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 Portfolio'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 Portfolio'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.
For Portfolios that previously had a non-fundamental policy with respect to
commodities, commodity contracts and futures contracts, approval of this
proposed modification would also result in the adoption of this policy as a
fundamental policy for those Portfolios. In addition, certain of the Portfolios
have a fundamental policy that does not permit investments in futures
contracts. These Portfolios are Balanced Wealth Strategy Portfolio, Global
Dollar Government Portfolio, Global Technology Portfolio, Growth Portfolio,
International Value Portfolio, Large Cap Growth Portfolio, Real Estate
Investment Portfolio, Small/Mid Cap Value Portfolio, Value
21
Portfolio, Wealth Appreciation Strategy Portfolio and Worldwide Privatization
Portfolio. If the stockholders of these Portfolios approve this proposal, these
Portfolios would have the flexibility to invest in futures contracts. The
extent to which any such Portfolio 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
Portfolios.
Proposal 3.G.
Amendment of Fundamental Policies Regarding Loans
Applicable Portfolios:
All Portfolios
Proposed New Fundamental Investment Policy: If the proposed amendment is
approved by stockholders, each Portfolio's fundamental investment policies
regarding loans in effect would read:
"The Portfolio 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 Board, Alliance noted that the proposed
change clarifies a Portfolio's ability to engage in securities lending and/or
inter-fund lending to the extent permitted by the 1940 Act and the then-current
SEC policy. The 1940 Act currently limits loans of a Portfolio's securities to
one-third of the Portfolio'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 restriction would automatically conform to those new
requirements without the need to solicit stockholders votes. The current
restrictions of most of the Portfolios are consistent with the current
limitation and the proposed amendment would not affect the Portfolio's
investment strategies. However, the restrictions are set lower than the maximum
allowed under the 1940 Act for Growth Portfolio. If this proposal is approved
by stockholders, the Portfolios 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 Portfolios.
For Portfolios that did not previously have a fundamental policy with
respect to making loans, approval of this proposed modification would result in
the adoption of this policy as a fundamental policy for those Portfolios.
Proposal 3.H.
Elimination of the Fundamental Policy Prohibiting
Joint Securities Trading Accounts
Applicable Portfolios:
Americas Government Income Portfolio, Global Bond Portfolio, Global Technology
Portfolio, High Yield Portfolio, Real Estate Investment Portfolio, Small Cap
Growth Portfolio, Utility Income Portfolio, U.S. Government/High Grade
Securities Portfolio, and Worldwide Privatization Portfolio
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 restriction on a Portfolio's
participation in a joint securities trading account was based on the
requirements formerly imposed by state "blue sky" regulators as a condition to
registration. As a result of
22
NSMIA, this policy is no longer required and may be eliminated from a
Portfolio'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 Portfolio acting as principal to effect any
transaction in which the Portfolio 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, a Portfolio
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 a Portfolio and its stockholders, there is no
need to maintain this policy.
Proposal 3.I.
Elimination of the Fundamental Policy Prohibiting
Investments for Purposes of Exercising Control
Applicable Portfolios:
All Portfolios Except
Global Research Growth Portfolio, Growth Portfolio, and U.S. Large Cap Blended
Style Portfolio
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 restriction on investing in a security for the
purpose of obtaining or exercising control over, or management of, the issuer
was based on the requirements formerly imposed by state "blue sky" regulators
as a condition to registration. As a result of NSMIA, this policy is no longer
required and may be eliminated from a Portfolio's investment policies. The
proposed amendment would not affect the Portfolios' investment strategies.
Proposal 3.J.
Elimination of the Fundamental Policy Prohibiting
Investments in Other Investment Companies
Exceeding Specified Percentage Limitations
Applicable Portfolios:
Americas Government Income Portfolio, Global Bond Portfolio, Global Research
Growth Portfolio, Global Technology Portfolio, Growth and Income Portfolio,
High Yield Portfolio, International Portfolio, Money Market Portfolio, Total
Return Portfolio, Utility Income Portfolio, and U.S. Government/High Grade
Securities Portfolio
Proposal:
It is proposed that the fundamental investment policy on investments in
other investment companies 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 investments in other investment
companies was based on requirements formerly imposed by state "blue sky"
regulators as a condition to registration. As a result of NSMIA, this policy is
no longer required to be among a Portfolio's fundamental investment policies.
Moreover, Alliance noted that in the absence of this policy, the Portfolios are
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
23
(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 2-4, 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: "A Portfolio 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 a
Portfolio's best interests, without the expense and delay of soliciting a
stockholder vote.
To the extent that a Portfolio has a related policy with respect to
investments in other investment companies, that policy would be eliminated with
the approval of this Proposal.
Proposal 3.K.
Elimination of the Fundamental Policy Prohibiting
Investments in Oil, Gas, and Other Types of Minerals or Mineral Leases
Applicable Portfolios:
Americas Government Income Portfolio, Global Bond Portfolio, Global Dollar
Government Portfolio, Global Technology Portfolio, Money Market Portfolio, Real
Estate Investment Portfolio, Utility Income Portfolio, and Worldwide
Privatization Portfolio
Proposal:
It is proposed that the fundamental investment policy prohibiting Portfolios
from purchasing oil, gas, and other types of minerals or mineral leases 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, or other types of minerals or mineral leases was based on the
requirements formerly imposed by state "blue sky" regulators as a condition to
registration. As a result of NSMIA, this policy is no longer applicable and may
be eliminated from the Portfolios' investment policies. Nevertheless, Alliance
noted that there are no current expectations that the Portfolios will engage in
such activities. In the future, should a Portfolio decide to engage in such
activities, appropriate disclosure regarding the nature and risks of such
investments would be disclosed in a Portfolio's prospectus and statement of
additional information.
Proposal 3.L.
Elimination of the Fundamental Policy Restricting
Purchases of Securities on Margin
Applicable Portfolios:
All Portfolios Except:
Balanced Wealth Strategy Portfolio, Global Research Growth Portfolio, Growth
Portfolio, Growth and Income Portfolio, International Value Portfolio, Large
Cap Growth Portfolio, Money Market Portfolio, Small/Mid Cap Value Portfolio,
Value Portfolio, and Wealth Appreciation Strategy Portfolio
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 policies on margin activities were based
on the requirements formerly imposed by state "blue sky"
24
regulators as a condition to registration. As a result of NSMIA, these policies
are no longer required and may be eliminated from the Portfolios' 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 2-4, 2005, after considering Alliance's
recommendation, the Board 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: "A Portfolio 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 Portfolio may obtain such short-term
credits as are necessary for the clearance of portfolio transactions, and the
Portfolio 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 Board has the flexibility to amend a non-fundamental policy in
furtherance of a Portfolio's best interests, without the expense and delay of a
stockholder vote.
Proposal 3.M.
Elimination of the Fundamental Policy Restricting
Short Sales
Applicable Portfolios:
All Portfolios Except:
Balanced Wealth Strategy Portfolio, Global Research Growth Portfolio, Growth
Portfolio, Growth and Income Portfolio, International Value Portfolio,
Small/Mid Cap Value Portfolio, U.S. Large Cap Blended Style Portfolio, Value
Portfolio, and Wealth Appreciation Strategy Portfolio
Proposal:
It is proposed that the fundamental investment policy on short sales 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 policies on short sales were based on the
requirements formerly imposed by state "blue sky" regulators as a condition to
registration. As a result of NSMIA, these policies are no longer required and
may be eliminated from the Fund's fundamental investment policies.
The Board has approved the use by certain of the Portfolios of short sales
as an investment strategy that is disclosed in the Portfolio's prospectuses.
The risks of short selling are also disclosed for such Portfolios in their
prospectuses. Alliance and the Board believe that it is important for a
Portfolio to have the flexibility to add or to revise these investment
strategies in furtherance of the Portfolio's best interests, without the
expense and delay of a stockholder vote that would be required if such
strategies were designated as fundamental policies.
Proposal 3.N.
Elimination of the Fundamental Policy Prohibiting
Pledging, Hypothecating, Mortgaging or Otherwise Encumbering Assets
Applicable Portfolios:
All Portfolios Except:
Growth Portfolio and Utility Income Portfolio
Proposal:
It is proposed that the fundamental investment policy prohibiting the
pledging, hypothecating, mortgaging or otherwise encumbering a Portfolio's
assets be eliminated in its entirety.
25
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate this policy, Alliance
noted that the prohibition on pledging, hypothecating, mortgaging or otherwise
encumbering a Portfolio's assets was based on the requirements formerly imposed
by state "blue sky" regulators as a condition to registration. As a result of
NSMIA, this policy is no longer required and may be eliminated from the
Portfolios' fundamental investment policies. Alliance noted that the
Portfolios' current limits on pledging may conflict with each Portfolio'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 Portfolios 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 Portfolios' 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 Portfolios may
borrow in these situations. Although Alliance currently plans, on behalf of the
Portfolios, to engage only in pledging in connection with borrowing money for
redemptions or temporary emergency purposes, pledging assets could decrease the
Portfolios' ability to liquidate assets. If the Portfolios pledged a large
portion of their assets, the ability to meet redemption requests or other
obligations could be delayed. In any event, the Portfolio's current borrowing
limits would remain consistent with limits prescribed under the 1940 Act.
Proposal 3.O.
Elimination of the Fundamental Policy Regarding
Investments in Illiquid or Restricted Securities
Applicable Portfolios:
Global Bond Portfolio, Global Technology Portfolio, Growth and Income
Portfolio, High Yield Portfolio, International Portfolio, Large Cap Growth
Portfolio, Money Market Portfolio, Total Return Portfolio, and U.S.
Government/High Grade Securities Portfolio
Proposal:
It is proposed that the fundamental investment policy prohibiting or
imposing limitations on investments in illiquid or restricted securities 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 prohibitions or limitations on investments in illiquid or
restricted securities were required to be deemed fundamental based on the
requirements formerly imposed by state "blue sky" regulators as a condition to
registration. However, as a result of NSMIA, this policy is no longer required
to be a fundamental investment restriction. Alliance does not anticipate that
the proposed change will have a material impact on the operation of the
Portfolios since the Portfolios need to maintain a certain amount of liquidity
to meet redemption requests, the Portfolios do not typically hold a significant
amount of illiquid or restricted securities because of the potential for delays
on resale and uncertainty in valuation. In addition, under current SEC
guidelines a Portfolio must limit its investments in illiquid or restricted
securities that are illiquid securities to 15% of its assets except for the
Money Market Portfolio, which must limit such investments to 10% of its assets.
At a meeting held on August 2-4, 2005, as a result of Alliance's
recommendation, the Board approved a standardized, non-fundamental policy
consistent with the current SEC guidance that would limit a Portfolio's
investment in illiquid securities, including restricted securities, to not more
than 15% of its assets or such other amount permitted by SEC guidelines.
Stockholder approval of this non-fundamental policy is not required.
26
Proposal 3.P.
Elimination of the Fundamental Policy Regarding
Investments in Warrants
Applicable Portfolios:
Americas Government Income Portfolio and Global Bond Portfolio
Proposal:
It is proposed that the fundamental investment policy regarding limitations
on investments in warrants be eliminated in its entirety.
Reasons for the Elimination of the Investment Policy:
The Portfolios listed above have fundamental policies that impose a
percentage limitation on investments in warrants (typically, 5%, except for
Worldwide Privatization Portfolio (20%) and Global Technology Portfolio,
International Value Portfolio, Real Estate Investment Portfolio, Small/Mid Cap
Value Portfolio and Value Portfolio (10%)). In making its recommendation to the
Board to eliminate this policy, Alliance noted that state "blue sky"
regulators, as a condition to registration, imposed these policies. However, as
a result of NSMIA, this restriction is no longer required to be a fundamental
investment policy. Alliance recommended that the policy restricting a
Portfolio's investments in warrants be eliminated to permit a Portfolio the
maximum flexibility to invest in warrants to the extent permissible under
applicable law. Warrants are derivative securities that entitle the holder to
purchase another security at a specified price at any time during the life of
the warrants. Investments in warrants may be considered speculative because
they do not represent any rights in the assets of an issuing company nor do
they entitle the holder to dividends or voting rights. In addition, if the
exercise price of a warrant is above the market price on, or a Portfolio fails
to exercise the warrant prior to, the expiration date, the warrant will expire
worthless.
The Portfolios may, subject to Board approval, invest in warrants if this
proposal is approved. This is an investment strategy that will be disclosed in
a Portfolio's prospectus. Elimination of the fundamental policy would give the
Board the flexibility to add or revise this investment strategy in furtherance
of the Portfolio's best interest without incurring the expense and delay of a
stockholder vote that would be required if such a strategy was designated as a
fundamental policy.
In addition, at a meeting held on August 2-4, 2005, the Board adopted a
non-fundamental policy that would govern a Portfolio's ability to invest in
warrants. Also, the Board approved a non-fundamental policy that would permit
certain of the Portfolios to invest in rights. Rights are similar to warrants
except that they have substantially shorter duration. Stockholders are not
required to approve non-fundamental policies and as a non-fundamental policy,
the Board has the flexibility to amend the policy without the expense and delay
of soliciting a stockholder vote.
Proposal 3.Q.
Elimination of the Fundamental Policy Regarding
Investments in Unseasoned Companies
Applicable Portfolios:
Global Technology Portfolio
Proposal:
It is proposed that the fundamental investment policy prohibiting
investments in issuers with less than three years of operations be eliminated
in its entirety.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board, Alliance noted that the
fundamental investment policy prohibiting investments in issuers that have been
in business for less than three years was based on the requirements formerly
imposed by state "blue sky" regulators as a condition to registration. As a
result of NSMIA, this policy is no longer
27
required and may be eliminated from a Portfolio's fundamental investment
policies. In recommending the elimination of the unseasoned issuers policy,
Alliance stated its belief that the elimination of the policy would permit a
Portfolio to further avail itself of investment opportunities in smaller
capitalization, less seasoned companies. To the extent that a Portfolio invests
in these types of issuers, it may be subject to greater risks. Such companies
may not have experience in operating through prolonged periods of economic
difficulty and, as a result, the price of their shares may be more volatile
than the shares of companies that have longer operating histories.
Related or substantively duplicative policies with respect to investment in
unseasoned issuers would be eliminated upon the approval of the Proposal.
Proposal 3.R.
Elimination of Requirement
to Invest in Specific Investments
Applicable Portfolios:
Large Cap Growth Portfolio
Proposal:
Eliminate policies that require the Portfolio to invest 80% of its assets in
a specific investment.
Reasons for the Proposed Elimination:
The Large Cap Growth Portfolio has a fundamental policy that requires that
the Portfolio normally invest at least 80% of its total assets in the equity
securities of U.S. companies.
In making its recommendation to the Board, Alliance noted that this policy
was not required to be fundamental by Rule 35d-1 (the "names rule"). The names
rule requires a fund with a name that suggests that it focuses its investments
in a particular type of investment have a policy to invest at least 80% of its
assets in the type of investments suggested by the name. The rule, however,
does not require the Portfolio's named investment policy to be fundamental.
Alliance proposed, and the Board approved, that the Portfolio's named
investment policy be eliminated consistent with the general principle that
policies should not be fundamental where they are not required to be. As
required by the names rule, Large Cap Growth Portfolio has an 80%
non-fundamental investment policy with respect to its investments in large
capitalization companies. This policy will not be changed without 60 days'
prior written notice to stockholders.
Proposal 3.S.
Elimination of the Fundamental Policy Regarding
65% Limitations in Certain Investments
Applicable Portfolios:
U.S. Government/High Grade Securities Portfolio, Utility Income Portfolio, and
Worldwide Privatization Portfolio
Proposal:
It is proposed that a Portfolio's fundamental 65% investment policy be
eliminated.
Reasons for the Elimination of the Investment Policy:
U.S. Government/High Grade Securities Portfolio has a fundamental policy
that states that the Portfolio invests at least 65% of its total assets in (i)
U.S. Government securities, including mortgage-backed securities and repurchase
agreements relating to U.S. Government securities, and (ii) in other high-grade
debt securities rated AAA, AA, A by S&P or Fitch, Aaa, Aa or A by Moody's or,
if unrated, of equivalent quality.
Utility Income Portfolio has a fundamental policy that states that the
Portfolio normally invests at least 65% of its total assets in securities of
companies in the utilities industry.
28
Worldwide Privatization Portfolio has a fundamental policy that states that
the Portfolio invests at least 65% of its total assets in equity securities
issued by enterprises that are undergoing, or have undergone, privatization.
In making its recommendation to the Board, Alliance noted that prior to the
adoption of the names rule, SEC staff guidance required that a fund with a name
that suggests that it focuses on a particular type of investment to invest at
least 65% of its assets in such investments. Although these 65% policies were
not required to be fundamental policies, the Portfolios identified above
adopted fundamental 65% policies. After adoption of the names rule, the
Portfolios adopted 80% non-fundamental policies but did not seek a stockholder
vote to eliminate their 65% fundamental policies.
Elimination of these redundant 65% fundamental policies will give the Board
the flexibility to change names and investment strategies of the Portfolios in
response to changes in market conditions without the expense and time delay
associated with obtaining a stockholder vote, although stockholders will
receive at least 60 days' prior written notice of any change.
Proposal 3.T.
Elimination of the Fundamental Policy Regarding
Purchasing Securities of Issuers in which
Officers, Directors or Partners Have an Interest
Applicable Portfolios:
Global Technology Portfolio, Growth and Income Portfolio, International
Portfolio, Large Cap Growth Portfolio, Money Market Portfolio, and Total Return
Portfolio
Proposal:
It is proposed that the fundamental investment policy prohibiting
investments in securities of companies in which the Fund's officers or
Directors or partners have an interest 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 these prohibitions were originally adopted to address the
requirements formerly imposed by state "blue sky" regulators as a condition to
registration. As a result of NSMIA, this policy is no longer required and may
be eliminated from the Portfolios' fundamental investment policies. Eliminating
this restriction would increase Alliance's flexibility when choosing
investments on a Portfolio's behalf. Alliance further noted that it believes
that the policy is unnecessary because the Fund's Code of Ethics adequately
covers and provides for the monitoring of the Portfolio's securities purchases
and security ownership by the Fund's officers and directors. In addition,
Alliance noted that securities purchases by a Portfolio that may pose conflicts
of interest are subject to the restrictions imposed by Section 17 of the 1940
Act and the rules thereunder.
Proposal 3.U.
Elimination of the Fundamental Policy Restricting
Option Transactions
Applicable Portfolios:
Americas Government Income Portfolio, Global Technology Portfolio, Large Cap
Growth Portfolio, and Money Market Portfolio
Proposal:
It is proposed that the fundamental investment policies regarding option
transactions be eliminated in their entirety.
Reasons for the Elimination of the Investment Policies:
The Portfolios listed above have fundamental policies that impose various
restrictions on options transactions, including prohibitions on the writing of
put and call options except as in accordance with a Portfolio's
29
investment objective and policies, or the purchase of puts, calls, straddles,
spreads and combinations that exceed 5% of a Portfolio's total assets.
In making its recommendation to the Board to eliminate these policies,
Alliance noted that these restrictions were originally adopted to address the
requirements formerly imposed by state "blue sky" regulators as a condition to
registration. As a result of NSMIA, these policies are no longer required and
may be eliminated from the Portfolios' fundamental investment policies. None of
these policies are required to be fundamental under the 1940 Act. Consequently,
Alliance recommended that these policies be eliminated.
The Board may approve investments in options as an investment strategy that
is disclosed in the Portfolio's prospectus. Investments in options are
considered speculative and a Portfolio may lose the premium paid for them if
the price of an underlying security decreased or remained the same (in the case
of a call option) or increased or remained the same (in the case of a put
option). If a put or call option purchased by a Portfolio were permitted to
expire without being sold or exercised, its premium would represent a loss to
the Portfolio.
Elimination of these fundamental policies would give the Board the
flexibility to add or revise this investment strategy in furtherance of the
Portfolio's best interests without incurring the delay and expense of seeking
stockholder approval.
Proposal 3.V.
Elimination of the Fundamental Policy Regarding
Purchasing Voting or Other Securities of Issuers
Applicable Portfolios:
Growth and Income Portfolio, High Yield Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market Portfolio, Total Return Portfolio,
U.S. Government/High Grade Securities Portfolio, and Utility Income Portfolio
Proposal:
It is proposed that the fundamental investment policy regarding purchasing
voting or other securities be eliminated in its entirety.
Reasons for the Elimination of the Investment Policy:
The Utility Income Portfolio has a fundamental policy with regard to voting
securities that states that "[t]he Portfolio may not acquire more than 10% of
any class of the voting securities of any one issuer." All of the other
Portfolios have a fundamental policy that states that "[t]he Portfolio may not
acquire more than 10% of any class of the outstanding securities of any issuer."
In making its recommendation to the Board to eliminate these policies,
Alliance noted that a Portfolio is not required to have a fundamental policy on
its investment in voting or other securities except implicitly in the context
of its noting whether it is a diversified fund. 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. Alliance noted that the Large Cap
Growth Portfolio is not a diversified fund and consequently, it is not subject
to the 10% test. Because these policies are unnecessary in light of the 1940
Act's diversification tests and the Portfolios' fundamental diversification
policy, Alliance recommended that they be eliminated. Elimination of this
policy would have no effect on a Portfolio's investment strategy.
Each of the Portfolios must also meet certain diversification requirements
under the Internal Revenue Code in order to qualify for beneficial tax
treatment as a regulated investment company. These diversification requirements
provide, in part, that as to 50% of a Portfolio's assets, investments in any
one issuer cannot exceed 5% of the Portfolio's assets and the Portfolio cannot
hold more than 10% of the issuer's outstanding voting securities at the end of
each quarter. Each Portfolio intends to qualify as a regulated investment
company ("RIC") for tax purposes and elimination of the fundamental policy
regarding purchasing voting securities will not affect the Portfolio's status
as a RIC.
30
Proposal 3.W.
Elimination of the Fundamental Policy Regarding
Percentage Limitation On Investments In Repurchase Agreements
Applicable Portfolios:
Growth and Income Portfolio, High Yield Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market Portfolio, Total Return Portfolio, and
U.S. Government/High Grade Securities Portfolio
Proposal:
It is proposed that the fundamental investment policy limiting repurchase
agreements with any one dealer to 5% of the Portfolio's assets be eliminated in
its entirety.
Reasons for the Elimination of the Investment Policy:
In making its recommendation to the Board to eliminate the policy, Alliance
noted that policies limiting a Portfolio's ability to invest in repurchase
agreements are not required to be fundamental under the 1940 Act. A repurchase
agreement arises when a buyer purchases a security and simultaneously agrees to
resell it to the vendor at an agreed-upon future date, normally a day or a few
days later. The resale price is greater than the purchase price, reflecting an
agreed-upon interest rate for the period the buyer's money is invested in the
security. A repurchase agreement may be seen as a loan by the Fund secured by
the security subject to the repurchase agreement. Alliance recommended that the
policy restricting a Portfolio's investments in repurchase agreements be
eliminated to permit a Portfolio the maximum flexibility to invest in
repurchase agreements to the extent permissible under applicable law. Alliance
also recommended elimination of this fundamental policy to be consistent with
the proposed modification to a Portfolio's fundamental investment policy on
making loans. As discussed above in Proposal 3.G., the modification to the
fundamental policy on loans provides in effect that a Portfolio may enter into
repurchase agreements. That proposed policy does not impose any limitations on
a Portfolio's ability to enter into repurchase agreements but it is not
expected that this flexibility to invest without limitation subject to
applicable 1940 Act limitations will have a significant effect on the
management of the Portfolio.
Proposal 3.X.
Elimination of the Fundamental Policy Regarding
Securities with Maturities Greater than One Year
Applicable Portfolios:
Money Market Portfolio
Proposal:
It is proposed that the fundamental investment policy prohibiting purchases
of securities with maturities of greater than one year be eliminated in its
entirety.
Reasons for the Elimination of the Investment Policy:
The Money Market Portfolio has a policy that states that the Portfolio may
not purchase any security which has a maturity date more than one year from the
date of the Portfolio's purchase. In making its recommendation to the Board to
eliminate the policy, Alliance noted that Rule 2a-7 under the 1940 Act has
requirements, including maturity restrictions, that govern the investments of
money market funds. A fund relying on Rule 2a-7 cannot purchase any security
with a remaining maturity greater than 397 calendar days. Consequently, the
Portfolio's current fundamental policy is unnecessary in light of the
requirements of Rule 2a-7.
Proposal 3.Y.
Elimination of the Fundamental Policy Regarding
Acquisitions of Certain Preferred Stock and Debt Securities
Applicable Portfolios:
High Yield Portfolio and U.S. Government/High Grade Securities Portfolio
Proposal:
It is proposed that this fundamental investment policy limiting investments
in preferred stock and debt securities be eliminated in its entirety.
31
Reasons for the Elimination of the Investment Policy:
Each Portfolio has a policy that states that it may not invest more than 5%
of the value of its total assets at the time an investment is made in the
nonconvertible preferred stock of issuers whose nonconvertible preferred stock
is not readily marketable. In addition, the U.S. Government/High Grade
Securities Portfolio has a policy that limits its investment in certain
nonconvertible preferred stock and debt securities that are rated Aaa, Aa, or A
by Moody's Investors Service, Inc. or AAA, AA or A by Standard & Poor's Ratings
Services. In making its recommendation to the Board to limit these policies,
Alliance noted that the 1940 Act does not require any of these policies to be
fundamental. Elimination of these fundamental investment restrictions would
enable a Portfolio's Adviser to invest in such preferred stock and debt
securities to the extent deemed advisable and as consistent with a Portfolio's
investment program.
Proposal 3.Z.
Elimination of the Fundamental Policy Regarding
Investments in Government Securities
Consistent with Internal Revenue Code Requirements
Applicable Portfolios:
U.S. Government/High Grade Securities Portfolio
Proposal:
It is proposed that this fundamental investment policy with respect to
investments in U.S. government securities be eliminated in its entirety.
Reasons for the Elimination of the Investment Policy:
The Portfolio is subject to the diversification requirements imposed by the
U.S. Internal Revenue Code (the "Code"), which among other things, limits the
Portfolio to investing no more than 55% of its total assets in any one
investment. The Portfolio adopted a fundamental policy that it will invest at
least 45% of its total assets in U.S. Government securities. In making its
recommendation to the Board to eliminate the policy, Alliance noted that this
policy is unnecessary because of the Code's requirements.
Approval of each Proposal 3.A. - 3.Z. by a Portfolio requires the
affirmative vote of the holders of a "majority of the outstanding voting
securities" of a Portfolio as defined in the 1940 Act, which means the lesser
of (i) 67% or more of the voting securities of the Portfolio 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 Portfolio (a "1940 Act Majority") If the
stockholders of a Portfolio do not approve a Proposal regarding a fundamental
investment restriction, the Portfolio's current fundamental investment
restriction will remain the same.
The Board, including the Independent Directors, of each Portfolio
unanimously recommends that the stockholders of each Portfolio vote FOR
Proposals 3.A. through 3.Z.
32
PROPOSAL FOUR
Proposal 4.A.
Reclassification of Each Portfolio's Fundamental
Investment Objective as Non-fundamental
Applicable Portfolios:
Americas Government Income Portfolio, Balanced Wealth Strategy Portfolio,
Global Bond Portfolio, Global Dollar Government Portfolio, Global Research
Growth Portfolio, Global Technology Portfolio, High Yield Portfolio,
International Value Portfolio, Money Market Portfolio, Small/Mid Cap
Value Portfolio, U.S. Government/High Grade Securities Portfolio, U.S. Large
Cap Blended Style Portfolio, Value Portfolio and Wealth Appreciation Strategy
Portfolio
Stockholders are being asked to approve the reclassification of the
Portfolios' fundamental investment objective as non-fundamental. In making this
recommendation, Alliance advised the Board that the Portfolios' investment
objectives are not required by the 1940 Act to be a fundamental policy that is
changeable only by a stockholder vote. The Proposal to reclassify these
objectives as non-fundamental is consistent with the changes proposed above,
which are intended to eliminate or reclassify any fundamental policy of a
Portfolio that is not required to be fundamental under the 1940 Act. The
proposed reclassifications would give the Board the flexibility to revise a
Portfolio's investment objective to respond to changed market conditions or
other circumstances in a timely manner without the delay and expense of
obtaining a stockholder vote. If reclassified as a non-fundamental investment
objective, the Board may change a Portfolio's investment objective in the
future without 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 Portfolio's investment objective.
The Board, including the Independent Directors, of each Portfolio
unanimously recommends that the stockholders of each Portfolio vote FOR
Proposal 4.A. Approval of this Proposal requires the affirmative vote of the
stockholders of a 1940 Act Majority with respect to each Portfolio. If the
stockholders of a Portfolio do not approve the reclassification of the
Portfolio's fundamental investment objective, the investment objective will
remain fundamental, and the Fund would be required to solicit stockholder votes
each time it sought to modify a Portfolio's investment objective.
Proposal 4.B.
Change in a Portfolio's Investment Objective
and Reclassification of Revised Investment Objective as Non-fundamental
Applicable Portfolios:
Global Technology Portfolio, Growth Portfolio, Growth and Income Portfolio,
International Portfolio, Large Cap Growth Portfolio, Real Estate Investment
Portfolio, Small Cap Growth Portfolio, Total Return Portfolio, Utility Income
Portfolio, and Worldwide Privatization Portfolio
In addition to reclassifying the Portfolios' investment objectives as
non-fundamental, Alliance recommended that the Board change certain Portfolios'
investment objectives in order to clarify and standardize these Portfolios'
investment objectives. Also, in instances where a Portfolio's investment
objective differs from its retail counterpart offered through the
AllianceBernstein Funds, Alliance recommended the revision of the Portfolio's
investment objective to conform it to its retail counterpart.
Based on recommendations from Alliance, the Board approved and is
recommending to stockholders changes to a Portfolio's investment objective as
detailed below:
1. Global Technology Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
to provide growth of long-term growth of
capital. Current income capital.
is incidental to the
Portfolio's objective.
33
The proposed change to the Portfolio's investment objective clarifies that
income is not an objective of the Portfolio. Alliance recommended this change
to the Board in order to reflect the Portfolio's focus on long-term growth of
capital. The proposed change would have no effect on the Portfolio's investment
strategy.
2. Growth Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
to provide long-term long-term growth of
growth of capital. capital.
Current income is
incidental to the
Portfolio's objective.
The proposed change to the Portfolio's investment objective clarifies that
income is not an objective of the Portfolio. Alliance recommended this change
to the Board in order to reflect the Portfolio's focus on long-term growth of
capital. The proposed change would have no effect on the Portfolio's investment
strategy.
3. Growth and Income Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
to seek reason-able long-term growth of
current income and capital.
reasonable opportunity
for appreciation through
investments primarily in
dividend-paying common
stocks of good quality
companies.
The proposed change to the Portfolio's investment objective eliminates any
focus on dividends or other investments, which would be disclosed in the
Portfolio's prospectus as part of its investment strategies. Alliance
recommended this change to the Board in order to simplify and standardize the
objectives as well as to reflect the Portfolio's focus on long-term growth of
capital. The proposed change would have no effect on the Portfolio's investment
strategy.
4. International Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
to seek to obtain a long-term growth of
total return on its capital.
assets from long-term
growth of capital
principally through a
broad portfolio of
market-able securities
of established
international companies,
companies participating
in foreign economies
with prospects for
growth, including U.S.
companies having their
principal activities and
interests outside the
U.S., and in foreign
government securities.
As a secondary
objective, the Portfolio
attempts to increase its
current income without
assuming undue risk.
Alliance recommended this change to the Board in order to conform the
Portfolio's investment objective to its retail fund counterpart. Alliance also
recommended the change to give the Portfolio flexibility in implementing its
investment strategies and greater ability to pursue long-term growth
opportunities.
As part of these changes, Alliance recommended that the International
Portfolio be renamed as "AllianceBernstein International Research Growth
Portfolio" and that its investment policies be conformed to those of its retail
fund counterpart. These changes will not require a stockholder vote.
34
5. Large Cap Growth Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
growth of capital by long-term growth of
pursuing aggressive capital.
investment policies.
The proposed change to the Portfolio's investment objective eliminates the
reference to a specific investment strategy, which would be disclosed in the
Portfolio's prospectus as part of its investment strategies. Alliance
recommended this change to the Board in order to reflect the Portfolio's focus
on long-term growth of capital. The proposed change would have no effect on the
Portfolio's investment strategy.
6. Real Estate Investment Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
total return from total return from
long-term growth of long-term growth of
capital and from income capital and income.
principally through
investing in equity
securities of companies
that are primarily
engaged in or related to
the real estate industry.
The proposed change to the Portfolio's investment objective focuses on
general investment objectives and eliminates the references to specific
investments, which would be disclosed in the Portfolio's prospectus as part of
its investment strategies. Alliance recommended this change to the Board in
order to reflect clearly the Portfolio's focus on long-term growth of capital
and income. The proposed change would have no effect on the Portfolio's
investment strategy.
7. Small Cap Growth Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
growth of capi-tal by long-term growth of
pursuing aggressive capital.
investment policies.
Current income is
incidental to the
Portfolio's objective.
The proposed change to the Portfolio's investment objective clarifies that
income is not an objective of the Portfolio. Alliance recommended this change
to the Board in order to reflect the Portfolio's focus on pursuing long-term
growth opportunities. The proposed change would have no effect on the Fund's
investment strategy.
8. Total Return Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
to achieve a high return total return consistent
through a combination of with reasonable risk,
current income and through a combina-tion
capital appreciation. of income and long-term
growth of capital.
The proposed change to the Portfolio's investment objective eliminates high
return as an investment objective in favor of total return. Alliance
recommended this change to the Board in order to standardize the objectives.
The proposed change would have no effect on the Portfolio's investment strategy.
As part of these changes, Alliance recommended that the Total Return
Portfolio be renamed as "AllianceBernstein Balanced Shares Portfolio" and that
its investment policies be conformed to those of its retail fund counterpart.
The changes will include the addition of a new investment policy, whereby the
Portfolio may
35
invest up to 20% of its fixed-income allocation in high yield securities
(securities rated below BBB by S&P). As an operating policy, the Portfolio will
invest no more than 25% of these investments in high yield debt securities
rated CCC or below. This new policy will broaden the array of investments
available to the Portfolio. These changes do not require a stockholder vote.
9. Utility Income Portfolio
Current Investment Proposed Investment
Objective: Objective:
(Fundamental) (Non-fundamental)
The Portfolio's The Portfolio's
investment objective is investment objective is
to seek current income current in-come and
and capital appreciation long-term growth of
by investing primarily capital.
in equity and
fixed-income securities
of companies in the
utilities industry.
The proposed change to the Portfolio's investment objective focuses on
general investment objectives and eliminates the references to specific
investments, which would be disclosed in the Portfolio's prospectus as part of
its investment strategies. Alliance recommended this change to the Board in
order to reflect the Portfolio's focus on current income and long-term growth
of capital. The proposed change would have no effect on the Portfolio's
investment strategy.
10. Worldwide Privatization Portfolio
Current Investment Objective: Proposed Investment Objective:
(Fundamental) (Non-fundamental)
The Portfolio's investment objective is long-term capital The Portfolio's investment objective is long-term
appreciation. growth of capital.
Alliance recommended this change to the Board in order to conform the
Portfolio's investment objective to its retail fund counterpart.
As part of these changes, Alliance recommended that the Worldwide
Privatization Portfolio be renamed as "AllianceBernstein International Growth
Portfolio" and that its investment policies be conformed to those of its retail
fund counterpart. These changes do not require a stockholder vote. Another
change, which is subject to stockholder approval as set forth in Proposal 3.R.,
is the elimination of its fundamental policy to invest at least 65% of its
total assets in equity securities that are issued by enterprises that are
undergoing or have undergone privatization.
The Board, including the Independent Directors, of each Portfolio
unanimously recommends that the stockholders of each Portfolio vote FOR
Proposal 4.B. Approval of this Proposal requires the affirmative vote of the
stockholders of a 1940 Act Majority with respect to each Portfolio. If the
stockholders of a Portfolio do not approve the reclassification of the
Portfolio's fundamental investment objective and the change to its investment
objective, the investment objective will remain fundamental and unchanged, and
the Fund would be required to solicit stockholder votes each time it sought to
modify a Portfolio's investment objective.
36
Part III - Independent Registered Public Accounting Firm
Approval of Independent Registered Public Accounting Firm
The Audit Committee is responsible for the appointment, compensation,
retention and oversight of the work of the Fund's independent registered public
accounting firm. In addition, at meetings held on December 14-16, 2004, the
Board, approved by the vote, cast in person, of a majority of the Directors,
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 Fund's account for the fiscal year ending December 31, 2005.
Ernst & Young LLP has audited the accounts for the Fund's last two fiscal
years, and has represented that it does not have any direct financial interest
or any material indirect financial interest in any of the Portfolios.
Representatives of Ernst & Young LLP are expected to attend the Meeting and to
have the opportunity to make a statement and respond to appropriate questions
from the stockholders.
Fees
The following table sets forth the aggregate fees billed by the independent
registered public accounting firm for each Portfolio's last two fiscal years
for professional services rendered for: (i) the audit of the Portfolio's annual
financial statements included in the Fund's annual reports to stockholders;
(ii) assurance and related services that are reasonably related to the
performance of the audit of the Portfolio's financial statements and are not
reported under (i), which include advice and education on accounting and
auditing issues and consent letters; (iii) tax compliance, tax advice and tax
return preparation; and (iv) aggregate non-audit services provided to the
Portfolio, 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
Audit for Services Fund, Alliance
Related Provided to and Service
Name of Fund Audit Fees Fees Tax Fees Fund Affiliates
------------ ---------- ------- -------- -------------- ---------------
Americas Government Income 2003 $23,500 $2,173 $8,747 n/a $910,185
Portfolio 2004 $26,000 $2,310 $7,282 n/a $967,310
Balanced Wealth Strategy Portfolio* 2003 $ 0 $ 0 $ 0 n/a $ 0
2004 $26,000 $1,843 $7,283 n/a $966,844
Global Bond Portfolio 2003 $23,500 $2,173 $8,747 n/a $910,185
2004 $26,000 $2,310 $7,282 n/a $967,310
Global Dollar Government Portfolio 2003 $23,500 $2,173 $8,747 n/a $910,185
2004 $26,000 $2,310 $7,282 n/a $967,310
Global Research Growth Portfolio** 2003 $ 0 $ 0 $ 0 n/a $ 0
2004 $ 0 $ 0 $ 0 n/a $ 0
Global Technology Portfolio 2003 $23,500 $2,173 $8,747 n/a $910,185
2004 $26,000 $2,310 $7,282 n/a $967,310
37
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
------------ ---------- ------------ -------- -------------- ---------------
Growth and Income Portfolio 2003 $23,500 $2,185 $ 8,747 n/a $910,185
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Growth Portfolio 2003 $23,500 $2,173 $ 8,747 n/a $910,185
2004 $26,000 $2,310 $ 7,282 n/a $967,310
High Yield Portfolio 2003 $23,500 $2,173 $ 8,747 n/a $910,185
2004 $26,000 $2,310 $ 7,282 n/a $967,310
International Portfolio 2003 $23,500 $2,173 $ 8,747 n/a $910,185
2004 $26,000 $2,310 $ 7,609 n/a $967,637
International Value Portfolio 2003 $23,500 $2,172 $ 8,747 n/a $910,184
2004 $26,000 $2,310 $ 7,809 n/a $967,837
Large Cap Growth Portfolio 2003 $23,500 $2,185 $ 8,747 n/a $910,197
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Money Market Portfolio 2003 $23,500 $2,173 $ 7,729 n/a $909,167
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Real Estate Investment Portfolio 2003 $23,500 $2,173 $ 8,747 n/a $910,185
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Small Cap Growth Portfolio 2003 $23,500 $2,173 $ 8,747 n/a $910,197
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Small/Mid Cap Value Portfolio 2003 $23,500 $2,172 $ 8,747 n/a $910,184
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Total Return Portfolio 2003 $23,500 $2,172 $ 8,747 n/a $910,184
2004 $26,000 $2,310 $ 7,282 n/a $967,310
U.S. Government/High Grade 2003 $23,500 $2,172 $ 8,747 n/a $910,184
Securities Portfolio 2004 $26,000 $2,310 $ 7,282 n/a $967,310
U.S. Large Cap Blended Style Portfolio 2003 $23,500 $ 822 $ 6,543 n/a $906,630
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Utility Income Portfolio 2003 $23,500 $2,172 $ 8,748 n/a $910,185
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Value Portfolio 2003 $23,500 $2,172 $ 8,747 n/a $910,184
2004 $26,000 $2,310 $ 7,282 n/a $967,310
Wealth Appreciation Strategy 2003 $ 0 $ 0 $ 0 n/a $ 0
Portfolio* 2004 $26,000 $1,843 $ 7,283 n/a $966,844
Worldwide Privatization Portfolio 2003 $23,500 $2,172 $ 8,747 n/a $910,184
2004 $26,000 $2,310 $11,789 n/a $971,817
- --------
* The Portfolio commenced operations on July 1, 2004.
** The Portfolio commenced operations on July 1, 2005.
38
TABLE 2
Fees for Non-Audit Services Provided
to the Fund, Alliance and Service
Affiliates Subject to Pre-Approval by Portion Comprised Portion Comprised
Name of Fund Audit Committee of Audit Related Fees of Tax Fees
------------ ------------------------------------- --------------------- -----------------
Americas Government Income 2003 $372,920 $364,173 $8,747
Portfolio 2004 $ 84,592 $ 77,310 $7,282
Balanced Wealth Strategy 2003 $ 0 $ 0 $ 0
Portfolio* 2004 $ 84,126 $ 76,843 $7,283
Global Bond Portfolio 2003 $372,920 $364,173 $8,747
2004 $ 84,592 $ 77,310 $7,282
Global Dollar Government 2003 $372,920 $364,173 $8,747
Portfolio 2004 $ 84,592 $ 77,310 $7,282
Global Research Growth 2003 $ 0 $ 0 $ 0
Portfolio** 2004 $ 0 $ 0 $ 0
Global Technology Portfolio 2003 $372,920 $364,173 $8,747
2004 $ 84,592 $ 77,310 $7,282
Growth Portfolio 2003 $372,920 $364,173 $8,747
2004 $ 84,592 $ 77,310 $7,282
Growth and Income Portfolio 2003 $372,932 $364,185 $8,747
2004 $ 84,592 $ 77,310 $7,282
High Yield Portfolio 2003 $372,920 $364,173 $8,747
2004 $ 84,592 $ 77,310 $7,282
International Portfolio 2003 $372,920 $364,173 $8,747
2004 $ 84,919 $ 77,310 $7,609
International Value Portfolio 2003 $372,919 $364,172 $8,747
2004 $ 85,119 $ 77,310 $7,809
Large Cap Growth Portfolio 2003 $372,932 $364,185 $8,747
2004 $ 84,592 $ 77,310 $7,282
Money Market Portfolio 2003 $371,902 $364,173 $7,729
2004 $ 84,592 $ 77,310 $7,282
Real Estate Investment 2003 $372,920 $364,173 $8,747
Portfolio 2004 $ 84,592 $ 77,310 $7,282
Small Cap Growth Portfolio 2003 $372,932 $364,185 $8,747
2004 $ 84,592 $ 77,310 $7,282
Small/Mid Cap Value Portfolio 2003 $372,919 $364,172 $8,747
2004 $ 84,592 $ 77,310 $7,282
Total Return Portfolio 2003 $372,919 $364,172 $8,747
2004 $ 84,592 $ 77,310 $7,282
U.S. Government/High Grade 2003 $372,919 $364,172 $8,747
Securities Portfolio 2004 $ 84,592 $ 77,310 $7,282
39
Fees for Non-Audit Services Provided
to the Fund, Alliance and Service
Affiliates Subject to Pre-Approval by Portion Comprised Portion Comprised
Name of Fund Audit Committee of Audit Related Fees of Tax Fees
------------ ------------------------------------- --------------------- -----------------
U.S. Large Cap Blended Style 2003 $369,365 $362,822 $ 6,543
Portfolio 2004 $ 84,592 $ 77,310 $ 7,282
Utility Income Portfolio 2003 $372,920 $364,172 $ 8,748
2004 $ 84,592 $ 77,310 $ 7,282
Value Portfolio 2003 $372,919 $364,172 $ 8,747
2004 $ 84,592 $ 77,310 $ 7,282
Wealth Appreciation Strategy 2003 $ 0 $ 0 $ 0
Portfolio* 2004 $ 84,126 $ 76,843 $ 7,283
Worldwide Privatization 2003 $372,919 $364,172 $ 8,747
Portfolio 2004 $ 89,099 $ 77,310 $11,789
- --------
* The Portfolio commenced operations on July 1, 2004.
** The Portfolio commenced operations on July 1, 2005.
Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by
the Fund's independent registered public accounting firm. The 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 the 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 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 firm
to Alliance and Service Affiliates is compatible with maintaining the
independent registered public accounting firm's independence.
40
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 (Proposal 1),
(ii) to approve the amendment and restatement of the Fund's charter (Proposal
2), (iii) for the amendment, elimination or reclassification of certain of a
Portfolio's fundamental investment restrictions (Proposals 3.A. - 3.Z.), (iv)
for the reclassification of a Portfolio's investment objective as
non-fundamental (Proposal 4.A.), and for reclassification as non-fundamental
and changes to certain of the Portfolios' investment objectives (Proposal
4.B.). Any stockholder may revoke his or her proxy at any time prior to its
exercise by giving written notice to the Secretary of the 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). The
approval of Proposal One requires a plurality of the votes cast. The approval
of Proposal Two requires an affirmative vote of a majority of the votes
entitled to be cast. The approval of Proposal Three and Proposal Four requires
a 1940 Act Majority or the affirmative vote of the holders of a "majority of
the outstanding voting securities" of a Portfolio as defined in the 1940 Act,
which means the lesser of (i) 67% or more of the voting securities of the
Portfolio present 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 Portfolio.
Abstentions and broker non-votes, if any, will be considered present for
purposes of determining the existence of 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 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 Fund has not received notice of, and is not otherwise aware of,
any other matter to be presented at the Meeting.
A quorum for the Meeting will consist of the presence in person or by proxy
of the holders of record of one-third of the shares of a Portfolio 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 Board
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 Board on a Proposal will be voted against adjournment as to that Proposal.
Alliance has engaged Computershare Fund Services, Inc., 280 Oser Avenue,
Hauppauge, New York 11788 to assist in soliciting proxies for the Meeting. It
is estimated that Computershare will receive no fee for its services from the
Fund, but the Fund will reimburse out-of-pocket expenses to Computershare.
41
Part V - Other Information
Officers of the Fund
Certain information concerning the Fund's officers is set forth below. Each
of the Fund's officers is elected by the Board and serve for a term of one year
and until his or her successor is duly elected and qualifies.
Position(s)
Name, Address and (Month and Year
Date of Birth* Year First Elected) Principal Occupation during the past 5 years
- ----------------- ------------------- --------------------------------------------
Marc O. Mayer President and Chief Executive See biography on page 9.
10/2/57 Officer
11/03
Philip L. Kirstein Senior Vice President and Senior Vice President and Independent
5/29/45 Independent Compliance Officer Compliance Officer of the AllianceBernstein
10/04 Funds, with which he has been associated since
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 Chief Financial Senior Vice President of Alliance Global Investor
10/4/50 Officer Services, Inc. ("AGIS"),** and a Vice President of
9/90 AllianceBernstein Investment Research and
Management, Inc.,** with which he has been
associated since prior to 2000.
Thomas R. Manley Controller Vice President of ACMC,** with which he has
8/3/51 4/97 been 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 Fund's officers is 1345 Avenue of the Americas, New
York, New York 10105.
** An affiliate of the Fund.
STOCK OWNERSHIP
Information regarding person(s) who owned of record or were known by the
Fund to beneficially own 5% or more of a Portfolio's shares (or class of
shares, if applicable) on August 17, 2005 is provided in Appendix E.
INFORMATION AS TO THE FUND'S INVESTMENT ADVISER AND DISTRIBUTOR
The 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 Fund. The Fund's distributor is
AllianceBernstein Investment Research and Management, Inc., 1345 Avenue of the
Americas, New York, New York 10105.
42
SUBMISSION OF PROPOSALS
FOR NEXT MEETING OF STOCKHOLDERS
The Fund does not hold stockholder meetings annually. Any stockholder who
wishes to submit a proposal to be considered at the 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 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 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.
REPORTS TO STOCKHOLDERS
The 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 AllianceBernstein Investment Research and
Management, Inc. at (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 Board of
Directors,
Mark R. Manley
Secretary
September 29, 2005
New York, New York
43
APPENDIX A
OUTSTANDING VOTING SHARES
A list of the outstanding voting shares for each of the Portfolios as of the
close of business on the Record Date is presented below. Each share is entitled
to cast one vote at the meeting.
Portfolio Name Number of Outstanding Shares
-------------- ----------------------------
Americas Government Income Portfolio 4,441,072
Balanced Wealth Strategy Portfolio 5,616,918
Global Bond Portfolio 5,616,583
Global Dollar Government Portfolio 2,033,468
Global Research Growth Portfolio 526,563
Global Technology Portfolio 16,345,710
Growth Portfolio 14,707,947
Growth and Income Portfolio 112,768,511
High Yield Portfolio 6,575,338
International Portfolio 4,247,686
International Value Portfolio 36,272,738
Large Cap Growth Portfolio 48,074,791
Money Market Portfolio 56,765,196
Real Estate Investment Portfolio 4,989,304
Small Cap Growth Portfolio 6,677,934
Small/Mid Cap Value Portfolio 17,815,058
Total Return Portfolio 12,200,878
U.S. Government/High Grade Securities Portfolio 10,089,280
U.S. Large Cap Blended Style Portfolio 1,381,560
Utility Income Portfolio 3,410,412
Value Portfolio 13,923,759
Wealth Appreciation Strategy Portfolio 2,651,923
Worldwide Privatization Portfolio 3,127,704
A-1
APPENDIX B
ADDITIONAL INFORMATION REGARDING DIRECTORS
Ownership in the Fund
None of the Directors own securities of any of the Portfolios. 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 Portfolio AllianceBernstein Fund Complex
Director as of August 12, 2005 as of August 12, 2005
--------------------- ------------------------------------------------ ------------------------------
Ruth Block For each Portfolio None Over $100,000
David H. Dievler For each Portfolio None Over $100,000
John H. Dobkin For each Portfolio None Over $100,000
Michael J. Downey For each Portfolio None Over $100,000
William H. Foulk, Jr. For each Portfolio None Over $100,000
D. James Guzy For each Portfolio None $10,001-$50,000
Marc O. Mayer For each Portfolio None Over $100,000
Marshall C. Turner For each Portfolio None Over $100,000
Compensation From the Fund
The aggregate compensation paid by the Fund to the Directors during the
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 or
trustee and the number of investment portfolios as to which the Directors are
directors or trustees, are set forth below. Neither the Fund 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.
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, Fund, as to which Fund, as to which the
Compensation from the Fund during including the the Director is a Director is a Director
Name of Director its Fiscal Year ended in 2004 Fund, during 2004 Director or Trustee or Trustee
- ---------------- --------------------------------- ----------------- ------------------- ----------------------
Ruth Block $3,728 $223,200 39 105
David H. Dievler $3,709 $268,250 41 107
John H. Dobkin $3,896 $252,900 39 105
Michael J. Downey $ 0 $ 0 36 80
William H. Foulk, Jr. $6,339 $465,250 42 108
D. James Guzy $ 0 $ 25,350 1 1
Marc O. Mayer $ 0 $ 0 37 82
Marshall C. Turner $ 0 $ 25,350 1 1
B-1
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
C-2
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.
C-3
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
C-4
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.
C-5
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.
D-1
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
D-2
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.
D-3
(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 Corpo-
D-5
ration, 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
D-7
APPENDIX E
STOCK OWNERSHIP
The following person(s) owned of record or were known by the Fund to
beneficially own 5% or more of the Fund's shares (or class of shares, if
applicable) as of August 17, 2005.
Name and Address of Beneficial Owner
------------------------------------
Americas Government Income Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3708
Amount of Ownership 300,137
Percentage of Class 8.38%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 3,153,435
Percentage of Class 88.09%
Class B
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 882,833
Percentage of Class 99.43%
Balanced Wealth Strategy Portfolio
Class A
Alliance Capital Management LP
ATTN: Controller
1345 Avenue of the Americas
New York, NY 10105-0302
Amount of Ownership 855,997
Percentage of Class 100%
Class B
Hartford Life and Annuity
200 Hopmedow Street
P.O. Box 2999
Hartford, CT 06104-2999
Amount of Ownership 325,694
Percentage of Class 7.15%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 4,075,565
Percentage of Class 89.43%
Name and Address of Beneficial Owner
------------------------------------
Global Bond Portfolio
Class A
National Union Fire Insurance Company of
Pittsburgh PA
ATTN: Bill Tucker
80 Pine Street, Floor 39
New York, NY 10005-1704
Amount of Ownership 1,047,567
Percentage of Class 23.45%
Keyport Life Insurance
ATTN: James Joseph
P.O. Box 9133
Wellesley Hills, MA 02481-9133
Amount of Ownership 1,269,117
Percentage of Class 28.41%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 1,437,807
Percentage of Class 32.18%
Class B
Hartford Life Separate Account 1A
200 Hopmedow Street
P.O. Box 2999
Hartford, CT 06104-2999
Amount of Ownership 177,784
Percentage of Class 14.87%
Keyport Life Insurance
ATTN: James Joseph
P.O. Box 9133
Wellesley Hills, MA 02481-9133
Amount of Ownership 408,544
Percentage of Class 34.16%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 539,792
Percentage of Class 45.14%
E-1
Name and Address of Beneficial Owner
------------------------------------
Global Dollar Government Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 172,986
Percentage of Class 10.59%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 1,399,944
Percentage of Class 85.72%
Class B
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 399,653
Percentage of Class 98.62%
Global Technology Portfolio
Class A
Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
4800 Deer Lake Dr. E
Jacksonville, FL 32246-6484
Amount of Ownership 342,754
Percentage of Class 5.08%
American International Life Insurance
Company of New York
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3708
Amount of Ownership 710,434
Percentage of Class 10.53%
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 1,475,433
Percentage of Class 21.86%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 3,809,550
Percentage of Class 56.45%
Name and Address of Beneficial Owner
------------------------------------
Class B
Allmerica Financial Life Insurance &
Annuity Company
Allmerica Financial Separate Accounts
440 Lincoln Street
Mailstop S-310
Worcester, MA 01653-0001
Amount of Ownership 793,026
Percentage of Class 8.11%
Keyport Life Insurance
ATTN: James Joseph
P.O. Box 9133
Wellesley Hills, MA 02481-9133
Amount of Ownership 939,923
Percentage of Class 9.61%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 1,564,105
Percentage of Class 16.00%
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 3,598,783
Percentage of Class 36.81%
Global Research Growth Portfolio
Class A
Alliance Capital Management LP
ATTN: Controller
1345 Avenue of the Americas
New York, NY 10105-0302
Amount of Ownership 10,000
Percentage of Class 100%
Class B
Alliance Capital Management LP
ATTN: Controller
1345 Avenue of the Americas
New York, NY 10105-0302
Amount of Ownership 490,000
Percentage of Class 95.95%
Growth Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 791,278
Percentage of Class 12.29%
E-2
Name and Address of Beneficial Owner
------------------------------------
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 4,480,519
Percentage of Class 69.59%
Class B
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 699,355
Percentage of Class 8.36%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 934,570
Percentage of Class 11.17%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 2,770,308
Percentage of Class 33.10%
Allstate Life Insurance Company
300 N. Milwaukee Avenue
Vernon Hills, IL 60061-1533
Amount of Ownership 3,049,892
Percentage of Class 36.44%
Growth and Income Portfolio
Class A
Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
4800 Deer Lake Dr. E
Jacksonville, FL 32246-6484
Amount of Ownership 1,509,846
Percentage of Class 6.05%
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 4,185,134
Percentage of Class 16.76%
ING Life Insurance and Annuity Company
151 Farmington Avenue, #TN41
Hartford, CT 06156-0001
Amount of Ownership 4,663,625
Percentage of Class 18.68%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 9,104,940
Percentage of Class 36.47%
Name and Address of Beneficial Owner
------------------------------------
Class B
Travelers Insurance Company
1 Tower Square
ATTN: Shareholder Accounting #6MS
Hartford, CT 06183-0001
Amount of Ownership 5,633,063
Percentage of Class 6.39%
Allmerica Financial Life Insurance and
Annuity Company
Allmerica Financial Separate Accounts
440 Lincoln Street
Mailstop S-310
Worcester, MA 01653-0001
Amount of Ownership 7,230,526
Percentage of Class 8.21%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 7,701,909
Percentage of Class 8.74%
GE Life and Annuity Assurance Company
6610 W. Broad Street
Richmond, VA 23230-1702
Amount of Ownership 7,836,572
Percentage of Class 8.90%
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 8,638,217
Percentage of Class 9.81%
Allstate Life Insurance Company
300 N. Milwaukee Avenue
Vernon Hills, IL 60061-1533
Amount of Ownership 9,018,638
Percentage of Class 10.24%
IDS Life Insurance Corporation
1438 AXP Financial Center
Minneapolis, MN 55474-0014
Amount of Ownership 18,961,864
Percentage of Class 21.53%
High Yield Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3708
Amount of Ownership 386,397
Percentage of Class 7.67%
E-3
Name and Address of Beneficial Owner
------------------------------------
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 4,438,796
Percentage of Class 88.13%
Class B
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 1,587,726
Percentage of Class 99.96%
International Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 342,152
Percentage of Class 9.18%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 2,913,864
Percentage of Class 78.17%
Class B
Keyport Life Insurance
ATTN: James Joseph
P.O. Box 9133
Wellesley Hills, MA 02481-9133
Amount of Ownership 43,317
Percentage of Class 8.13%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 487,739
Percentage of Class 91.51%
International Value Portfolio
Class A
Nationwide Insurance Co.
C/O IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
Amount of Ownership 580,984
Percentage of Class 19.20%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 2,196,557
Percentage of Class 72.58%
Name and Address of Beneficial Owner
------------------------------------
Class B
American Enterprise Life
Insurance Company
1497 AXP Financial Center
Minneapolis, MN 55474-0014
Amount of Ownership 2,381,986
Percentage of Class 7.56%
IDS Life Insurance Corporation
1438 AXP Financial Center
Minneapolis, MN 55474-0014
Amount of Ownership 23,621,286
Percentage of Class 74.93%
Large Cap Growth Portfolio
Class A
Allmerica Financial Life
Insurance & Annuity Company
ATTN: Separate Accounts S-310
440 Lincoln Street
Worcester, MA 01653-0002
Amount of Ownership 1,290,661
Percentage of Class 5.34%
Keyport Life Insurance
ATTN: James Joseph
P.O. Box 9133
Wellesley Hills, MA 02481-9133
Amount of Ownership 1,575,836
Percentage of Class 6.52%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 5,728,109
Percentage of Class 23.70%
Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
4800 Deer Lake Dr. E
Jacksonville, FL 32246-6484
Amount of Ownership 11,900,905
Percentage of Class 49.24%
Class B
GE Life and Annuity Assurance Company
6610 W. Broad Street
Richmond, VA 23230-1702
Amount of Ownership 1,384,354
Percentage of Class 5.69%
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 1,485,156
Percentage of Class 6.11%
E-4
Name and Address of Beneficial Owner
------------------------------------
Travelers Insurance Company
1 Tower Square
ATTN: Shareholder Accounting #6MS
Hartford, CT 06183-0001
Amount of Ownership 1,660,144
Percentage of Class 6.83%
Allstate Life Insurance Company
300 N. Milwaukee Avenue
Vernon Hills, IL 60061-1533
Amount of Ownership 1,772,292
Percentage of Class 7.29%
Travelers Life & Annuity Company
1 Tower Square
ATTN: Shareholder Accounting #6MS
Hartford, CT 06183-0001
Amount of Ownership 1,977,404
Percentage of Class 8.13%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 2,919,109
Percentage of Class 12%
Allmerica Financial Life
Insurance and Annuity Company
Allmerica Financial Separate Accounts
440 Lincoln Street
Mailstop S-310
Worcester, MA 01653-0001
Amount of Ownership 4,190,116
Percentage of Class 17.23%
Money Market Portfolio
Class A
American International Life
Insurance Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 3,062,575
Percentage of Class 8.78%
Fortis Benefits
ATTN: Bruce Fiedler
P.O. Box 64284
St. Paul, MN 55164-0284
Amount of Ownership 7,286,860
Percentage of Class 20.89%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 22,747,783
Percentage of Class 65.20%
Name and Address of Beneficial Owner
------------------------------------
Class B
American International Life
Insurance Company of New York
ATTN: Ed Bacon
600 North King Street
Wilmington, DE 19801-3708
Amount of Ownership 2,245,521
Percentage of Class 9.57%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 6,902,755
Percentage of Class 29.40%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 14,047,620
Percentage of Class 59.84%
Real Estate Investment Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3708
Amount of Ownership 265,484
Percentage of Class 7.08%
Great West Life & Annuity
Insurance Company
FBO Schwab Annuities
8515 E. Orchard Road
ATTN: Investment Div. 2T2
Englewood, CO 80111-5002
Amount of Ownership 773,335
Percentage of Class 20.61%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 2,475,233
Percentage of Class 65.97%
Class B
Guardian Insurance & Annuity
Company, Inc.
3900 Burgess Place
Bethlehem, PA 18017-9097
Amount of Ownership 255,246
Percentage of Class 20.95%
E-5
Name and Address of Beneficial Owner
------------------------------------
Guardian Insurance & Annuity Company, Inc.
3900 Burgess Place
Bethlehem, PA 18017-9097
Amount of Ownership 408,442
Percentage of Class 33.52%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 553,543
Percentage of Class 45.42%
Small Cap Growth Portfolio
Class A
ING Life Insurance and Annuity Company
151 Farmington Avenue, # TN41
Hartford, CT 06156-0001
Amount of Ownership 365,045
Percentage of Class 7.73%
American International Life
Insurance Company of New York
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3708
Amount of Ownership 434,960
Percentage of Class 9.21%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 3,582,728
Percentage of Class 75.84%
Class B
Sun Life Financial Futurity Retirement
Products & Services
P.O. Box 9134
Wellesley Hills, MA 02481-9134
Amount of Ownership 262,062
Percentage of Class 12.82%
GE Life and Annuity Assurance Company
6610 W. Broad Street
Richmond, VA 23230-1702
Amount of Ownership 787,622
Percentage of Class 38.53%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 965,570
Percentage of Class 47.23%
Name and Address of Beneficial Owner
------------------------------------
Small/Mid Cap Value Portfolio
Class A
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 2,900,910
Percentage of Class 38.35%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 3,525,537
Percentage of Class 46.60%
Class B
Nationwide Insurance Company
C/O IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029
Amount of Ownership 823,458
Percentage of Class 8.14%
Allmerica Financial Life Insurance and
Annuity Company
Allmerica Financial Separate Accounts
440 Lincoln Street
Mailstop S-310
Worcester, MA 01653-0001
Amount of Ownership 1,288,363
Percentage of Class 12.73%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 1,505,533
Percentage of Class 14.88%
Allstate Life Insurance Company
300 N. Milwaukee Avenue
Vernon Hills, IL 60061-1533
Amount of Ownership 2,181,473
Percentage of Class 21.56%
Lincoln Life Variable Annuity
1300 S. Clinton Street
Ft. Wayne, IN 46802-3518
Amount of Ownership 2,834,573
Percentage of Class 28.01%
Total Return Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 622,396
Percentage of Class 6.39%
E-6
Name and Address of Beneficial Owner
------------------------------------
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 8,550,186
Percentage of Class 87.74%
Class B
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 2,315,048
Percentage of Class 92.54%
Utility Income Portfolio
Class A
Great West Life & Annuity Insurance
Company
FBO Schwab Annuities
8515 E. Orchard Road
ATTN: Investment Div. 2T2
Englewood, CO 80111-5002
Amount of Ownership 203,153
Percentage of Class 6.67%
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 208,008
Percentage of Class 6.83%
Great West Life & Annuity Insurance
Company
8515 E. Orchard Road
Greenwood Village, CO 80111-5002
Amount of Ownership 252,849
Percentage of Class 8.30%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 2,271,982
Percentage of Class 74.60%
Class B
Allstate Life Insurance Company
300 N. Milwaukee Avenue
Vernon Hills, IL 60061-1533
Amount of Ownership 50,847
Percentage of Class 12.62%
Name and Address of Beneficial Owner
------------------------------------
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 348,398
Percentage of Class 86.46%
U.S. Government/High Grade Securities
Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 795,852
Percentage of Class 10.24%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 6,568,020
Percentage of Class 84.48%
Class B
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 257,274
Percentage of Class 11.65%
American Enterprise Life Insurance
Company
Minneapolis, MN 55474-0001
Amount of Ownership 328,923
Percentage of Class 14.89%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 1,600,416
Percentage of Class 72.45%
U.S. Large Cap Blended Style Portfolio
Class A
Alliance Capital Management LP
ATTN: Controller
1345 Avenue of the Americas
New York, NY 10105-0302
Amount of Ownership 100,591
Percentage of Class 100%
Class B
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 202,681
Percentage of Class 15.91%
E-7
Name and Address of Beneficial Owner
------------------------------------
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 1,068,042
Percentage of Class 83.82%
Value Portfolio
Class A
Alliance Capital Management LP
ATTN: Controller
1345 Avenue of the Americas
New York, NY 10105-0302
Amount of Ownership 466
Percentage of Class 10.15%
Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
4800 Deer Lake Dr. E
Jacksonville, FL 32246-6484
Amount of Ownership 4,121
Percentage of Class 89.85%
Class B
Hartford Life and Annuity
200 Hopmedow Street
P.O. Box 2999
Hartford, CT 06104-2999
Amount of Ownership 797,277
Percentage of Class 5.86%
ING USA Annuity and Life Insurance
Company
1475 Dunwoody Dr.
West Chester, PA 19380-1478
Amount of Ownership 883,763
Percentage of Class 6.49%
Allmerica Financial Life Insurance and
Annuity Company
Allmerica Financial Separate Accounts
440 Lincoln Street
Mailstop S-310
Worcester, MA 01653-0001
Amount of Ownership 1,075,262
Percentage of Class 7.90%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 2,338,174
Percentage of Class 17.17%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 6,032,418
Percentage of Class 44.31%
Name and Address of Beneficial Owner
------------------------------------
Wealth Appreciation Strategy Portfolio
Class A
Alliance Capital Management LP
ATTN: Controller
1345 Avenue of the Americas
New York, NY 10105-0302
Amount of Ownership 554,644
Percentage of Class 100%
Class B
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 2,034,138
Percentage of Class 99.39%
Worldwide Privatization Portfolio
Class A
American International Life Insurance
Company of New York
ATTN: Ed Bacon
2727 A-Allen Parkway
Houston, TX 77019-2115
Amount of Ownership 231,182
Percentage of Class 11.13%
AIG Life Insurance Company
ATTN: Ed Bacon
600 N. King Street
Wilmington, DE 19801-3722
Amount of Ownership 1,605,200
Percentage of Class 77.28%
Class B
Keyport Life Insurance
ATTN: James Joseph
P.O. Box 9133
Wellesley Hills, MA 02481-9133
Amount of Ownership 238,726
Percentage of Class 25.06%
Anchor National Life Insurance Company
P.O. Box 54299
Los Angeles, CA 90054-0299
Amount of Ownership 239,454
Percentage of Class 25.14%
Sun Life Financial Futurity Retirement
Products & Services
P.O. Box 9134
Wellesley Hills, MA 02481-9134
Amount of Ownership 418,215
Percentage of Class 43.90%
E-8
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
Americas Government Large Cap Growth
Income Portfolio Portfolio
Balanced Wealth Strategy Money Market Portfolio
Portfolio Real Estate Investment
Global Bond Portfolio Portfolio
Global Dollar Government Small Cap Growth
Portfolio Portfolio
Global Research Growth Small/Mid Cap Value
Portfolio Portfolio
Global Technology Total Return Portfolio
Portfolio Utility Income Portfolio
Growth Portfolio U.S. Government/High
Growth and Income Grade Securities
Portfolio Portfolio
High Yield Portfolio U.S. Large Cap Blended
International Portfolio Style Portfolio
International Value Value Portfolio
Portfolio Wealth Appreciation
Strategy Portfolio
Worldwide Privatization
Portfolio
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
Alliance Capital Management L.P.
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT September 29, 2005
FORM OF
PROXY ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 15, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIANCEBERNSTEIN
VARIABLE PRODUCTS SERIES FUND, INC. The undersigned 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 Annual Meeting of
Stockholders (the "Meeting") of the AllianceBernstein Variable Products Series
Fund, Inc. (the "Fund") to be held at 3:00 p.m., Eastern Time, on November 15,
2005 at the offices of the AllianceBernstein 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 if personally present
at such Meeting. The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and accompanying Proxy Statement (the terms of
each 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.
The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy 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 proxyholder on any other matter that may
properly come before the Meeting or any adjournment or postponement thereof.
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 the 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.
_________________________________________
Stockholder sign here
_________________________________________
Co-owner sign here
_________________________________________
Date
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
Americas Government Income Portfolio
Balanced Wealth Strategy Portfolio
Global Bond Portfolio
Global Dollar Government Portfolio
Global Technology Portfolio
Global Research Growth Portfolio
Growth Portfolio Growth and Income Portfolio
High Yield Portfolio
International Portfolio
International Value Portfolio
Large Cap Growth Portfolio
Money Market Portfolio
Real Estate Investment Portfolio
Small Cap Growth Portfolio
Small/Mid Cap Value Portfolio
Total Return Portfolio
Utility Income Portfolio
U.S. Government/High Grade Securities Portfolio
U.S. Large Cap Blended Style Portfolio
Value Portfolio
Wealth Appreciation Strategy Portfolio
Worldwide Privatization Portfolio
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:[_]
[_] To vote FOR all Proposals for the Fund mark this box. No other vote is
necessary.
For Withhold For All
All All Except
1. To elect Directors / / / / / /
of the Fund.
01. Ruth Block 05. D. James Guzy
02. David H. Dievler 06. William H. Foulk, Jr.
03. John H. Dobkin 07. Marc O. Mayer
04. Michael J. Downey 08. Marshall C. Turner, Jr.
To withhold authority to vote for any individual, mark the box "FOR ALL EXCEPT"
and write the nominee's number on the line provided. __________________________
For Against Abstain
2. To approve the amendment and / / / / / /
restatement of the Charter of the Fund
which will repeal in its 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 the Proxy Statement as
Appendix D.
All Portfolios
For Against Abstain
3. To approve the amendment, / / / / / /
elimination, or reclassification as
non-fundamental of the fundamental
investment policies regarding:
For Against Abstain
3.A. Diversification. / / / / / /
All Portfolios except Americas Government Income Portfolio, Global Bond
Portfolio, and Global Dollar Government Portfolio
For Against Abstain
3.B. Issuing Senior Securities / / / / / /
and Borrowing Money.
All Portfolios
For Against Abstain
3.C. Underwriting Securities. / / / / / /
Global Research Growth Portfolio, Global Technology Portfolio, Growth Portfolio,
Growth and Income Portfolio, High Yield Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market Portfolio, Small Cap Growth Portfolio,
Total Return Portfolio, U.S. Government/High Grade Securities Portfolio, and
U.S. Large Cap Blended Style Portfolio
For Against Abstain
3.D. Concentration of Investments. / / / / / /
All Portfolios
For Against Abstain
3.E. Real Estate and Companies / / / / / /
that Deal in Real Estate.
All Portfolios
For Against Abstain
3.F. Commodities, Commodity / / / / / /
Contracts and Futures
Contracts.
All Portfolios except Global Technology Portfolio
For Against Abstain
3.G. Loans. / / / / / /
All Portfolios
For Against Abstain
3.H. Joint Securities Trading / / / / / /
Accounts.
Americas Government Income Portfolio, Global Bond Portfolio, Global Technology
Portfolio, High Yield Portfolio, Real Estate Investment Portfolio, Small Cap
Growth Portfolio, Utility Income Portfolio, U.S. Government/High Grade
Securities Portfolio, and Worldwide Privatization Portfolio
For Against Abstain
3.I. Exercising Control. / / / / / /
All Portfolios except Global Research Growth Portfolio, Growth Portfolio, and
U.S. Large Cap Blended Style Portfolio
For Against Abstain
3.J. Other Investment Companies. / / / / / /
Americas Government Income Portfolio, Global Bond Portfolio, Global Research
Growth Portfolio, Global Technology Portfolio, Growth and Income Portfolio, High
Yield Portfolio, International Portfolio, Money Market Portfolio, Total Return
Portfolio, Utility Income Portfolio, and U.S. Government/High Grade Securities
Portfolio
For Against Abstain
3.K. Oil, Gas and Other / / / / / /
Types of Minerals or Mineral
Leases.
Americas Government Income Portfolio, Global Bond Portfolio, Global Dollar
Government Portfolio, Global Technology Portfolio, Money Market Portfolio, Real
Estate Investment Portfolio, Utility Income Portfolio, and Worldwide
Privatization Portfolio
For Against Abstain
3.L. Purchases of Securities on / / / / / /
Margin.
All Portfolios except Balanced Wealth Strategy Portfolio, Global Research Growth
Portfolio, Growth Portfolio, Growth and Income Portfolio, International Value
Portfolio, Large Cap Growth Portfolio, Money Market Portfolio, Small/Mid Cap
Value Portfolio, Value Portfolio, and Wealth Appreciation Strategy Portfolio
For Against Abstain
3.M. Short Sales. / / / / / /
All Portfolios except Balanced Wealth Strategy Portfolio, Global Research Growth
Portfolio, Growth Portfolio, Growth and Income Portfolio, International Value
Portfolio, Small/Mid Cap Value Portfolio, U.S. Large Cap Blended Style
Portfolio, Value Portfolio, and Wealth Appreciation Strategy Portfolio
For Against Abstain
3.N. Pledging, Hypothecating, / / / / / /
Mortgaging, or Otherwise
Encumbering Assets.
All Portfolios except Growth Portfolio and Utility Income Portfolio
For Against Abstain
3.O. Illiquid or Restricted / / / / / /
Securities.
Global Bond Portfolio, Global Technology Portfolio, Growth and Income Portfolio,
High Yield Portfolio, International Portfolio, Large Cap Growth Portfolio, Money
Market Portfolio, Total Return Portfolio, and U.S. Government/High Grade
Securities Portfolio
For Against Abstain
3.P. Warrants. / / / / / /
Americas Government Income Portfolio and Global Bond Portfolio
For Against Abstain
3.Q. Unseasoned Companies. / / / / / /
Global Technology Portfolio
For Against Abstain
3.R. Requirement to Invest in / / / / / /
Specific Investments.
Large Cap Growth Portfolio
For Against Abstain
3.S. 65% Investment Limitation. / / / / / /
U.S. Government/High Grade Securities Portfolio, Utility Income Portfolio, and
Worldwide Privatization Portfolio
For Against Abstain
3.T. Securities of Issuers in which / / / / / /
Officers, Directors, or Partners
Have an Interest.
Global Technology Portfolio, Growth and Income Portfolio, International
Portfolio, Large Cap Growth Portfolio, Money Market Portfolio and Total Return
Portfolio
For Against Abstain
3.U. Option Transactions. / / / / / /
Amercias Government Income Portfolio, Global Technology Portfolio, Large Cap
Growth Portfolio and Money Market Portfolio
For Against Abstain
3.V. Purchasing Voting or Other / / / / / /
Securities.
Growth and Income Portfolio, High Yield Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market Portfolio, Total Return Portfolio, U.S.
Government/High Grade Securities Portfolio, and Utility Income Portfolio
For Against Abstain
3.W. Repurchase Agreements. / / / / / /
Growth and Income Portfolio, High Yield Portfolio, International Portfolio,
Large Cap Growth Portfolio, Money Market Portfolio, Total Return Portfolio, and
U.S. Government/High Grade Securities Portfolio
For Against Abstain
3.X. Securities with Maturities / / / / / /
of Greater Than One Year.
Money Market Portfolio
For Against Abstain
3.Y. Acquisitions of Certain / / / / / /
Preferred Stock and Debt
Securities.
High Yield Portfolio, and U.S. Government/High Grade Securities Portfolio
For Against Abstain
3.Z. Investments in Government / / / / / /
Securities Consistent with
Internal Revenue Code
Requirements.
U.S. Government/High Grade Securities Portfolio
For Against Abstain
4.A. Approval of the Reclassification / / / / / /
of a Portfolio's Fundamental
Investment Objective as
Non-fundamental.
Americas Government Income Portfolio, Balanced Wealth Strategy Portfolio, Global
Bond Portfolio, Global Dollar Government Portfolio, Global Technology Portfolio,
Global Research Growth Portfolio, High Yield Portfolio, International Value
Portfolio, Money Market Portfolio, Small/Mid Cap Value Portfolio, U.S.
Government/High Grade Securities Portfolio, U.S. Large Cap Blended Style
Portfolio, Value Portfolio and Wealth Appreciation Strategy Portfolio
4.B. The Reclassification of
Revised Investment Objective
as Non-fundamental and Changes to
Specific Portfolio's Investment
Objectives.
For Against Abstain
1. Growth Portfolio / / / / / /
2. Growth and Income Portfolio / / / / / /
3. International Portfolio / / / / / /
4. Large Cap Growth Portfolio / / / / / /
5. Real Estate Investment Portfolio / / / / / /
6. Small Cap Growth Portfolio / / / / / /
7. Total Return Portfolio / / / / / /
8. Utility Income Portfolio / / / / / /
9. Worldwide Privatization Portfolio / / / / / /
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 proxyholder(s).
Please vote, date, sign and return this proxy card promptly if you are not
voting via the Internet or by telephone. You may use the enclosed envelope.
00250.0451 #592027a