As filed with the Securities and Exchange Commission on January 7, 2002
Registration No. 333-66084
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-14
| | Pre-Effective Amendment No. |x| Post-Effective Amendment No.1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.*
(Exact Name of Registrant as Specified in Charter)
(800) 221-5672
(Area Code and Telephone Number)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Offices)
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EDMUND P. BERGAN, JR.
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and Address of Agents for Service)
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Approximate Date of Proposed Public Offering: As soon as practicable after the
effectiveness of this Registration Statement.
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Pursuant to Rule 429 under the Securities Act of 1933, no filing fee is
required because an indefinite number of shares have previously been registered
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
*On behalf of its Total Return Portfolio, International Portfolio, Global Bond
Portfolio, Growth and Income Portfolio, Growth Portfolio, U.S. Government/High
Grade Securities Portfolio, High Yield Portfolio and Quasar Portfolio.
This Amendment to the Registration Statement on Form N-14 of Alliance Variable
Products Series Fund, Inc., originally filed with the Commission on July 27,
2001 (1933 Act Registration No. 333-66084) (the "Registration Statement"), is
being filed solely to add Exhibit 12 to the Registration Statement. No other
information in the Registration Statement, which is incorporated herein by
reference in its entirety, is amended, deleted or superseded hereby.
PART C. OTHER INFORMATION
Item 15 Indemnification
It is the Registrant's policy to indemnify its directors, officers,
employees and other agents to the maximum extent permitted by Section 2-418 of
the General Corporation Law of the State of Maryland and as set forth in Article
EIGHTH of Registrant's Articles of Incorporation, filed as Exhibit (a), Article
VII of the Registrants By-Laws filed as Exhibit (b) and Section 9 of the
Distribution Services Agreement filed as Exhibit (e)(1) and Class B Distribution
Services Agreement filed as Exhibit (e)(2). The Adviser's liability for any loss
suffered by the Registrant or its shareholders is set forth in Section 4 of the
Advisory Agreement filed as Exhibit (d)(1) in response to Item 23.
Section 2-418 of the Maryland General Corporation Law reads as follows:
2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.--(a)
In this section the following words have the meaning indicated.
(1) Directors means any person who is or was a director of a corporation
and any person who, while a director of a corporation, is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation, partnership, joint venture,
trust, other enterprise, or employee benefit plan.
(2) Corporation includes any domestic or foreign predecessor entity of a
corporation in a merger, consolidation, or other transaction in which the
predecessors existence ceased upon consummation of the transaction.
(3) Expenses include attorneys fees.
(4) Official capacity means the following:
(i) When used with respect to a director, the office of director in
the corporation; and
(ii) When used with respect to a person other than a director as
contemplated in subsection (i), the elective or appointive office in
the corporation held by the officer, or the employment or agency
relationship undertaken by the employee or agent in behalf of the
corporation.
(iii) Official capacity does not include service for any other
foreign or domestic corporation or any partnership, joint venture,
trust, other enterprise, or employee benefit plan.
(5) Party includes a person who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(6) Proceeding means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative.
(b)(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is
established that:
(i) The act or omission of the director was material to the matter
giving rise to the proceeding; and 1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2) (i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any
proceeding in which the director shall have been adjudged to be
liable to the corporation.
(3) (i) The termination of any proceeding by judgment, order or
settlement does not create a presumption that the director did not
meet the requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of
nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that
the director did not meet that standard of conduct.
(c) A director may not be indemnified under subsection (b) of this
section in respect of any proceeding charging improper personal
benefit to the director, whether or not involving action in the
directors official capacity, in which the director was adjudged to
be liable on the basis that personal benefit was improperly
received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or
otherwise, in the defense of any proceeding referred to in
subsection (b) of this section shall be indemnified against
reasonable expenses incurred by the director in connection with the
proceeding.
(2) A court of appropriate jurisdiction upon application of a
director and such notice as the court shall require, may order
indemnification in the following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order
indemnification, in which case the director shall be entitled to
recover the expenses of securing such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant
circumstances, whether or not the director has met the standards of
conduct set forth in subsection (b) of this section or has been
adjudged liable under the circumstances described in subsection (c)
of this section, the court may order such indemnification as the
court shall deem proper. However, indemnification with respect to
any proceeding by or in the right of the corporation or in which
liability shall have been adjudged in the circumstances described in
subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court
in which the proceeding involving the directors liability took
place.
(e) (1) Indemnification under subsection (b) of this section may not
be made by the corporation unless authorized for a specific
proceeding after a determination has been made that indemnification
of the director is permissible in the circumstances because the
director has met the standard of conduct set forth in subsection (b)
of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding,
or, if such a quorum cannot be obtained, then by a majority vote of
a committee of the board consisting solely of two or more directors
not, at the time, parties to such proceeding and who were duly
designated to act in the matter by a majority vote of the full board
in which the designated directors who are parties may participate;
(ii) By special legal counsel selected by the board or a committee
of the board by vote as set forth in subparagraph (i) of this
paragraph, or, if the requisite quorum of the full board cannot be
obtained therefor and the committee cannot be established, by a
majority vote of the full board in which directors who are parties
may participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. However, if the
determination that indemnification is permissible is made by special
legal counsel, authorization of indemnification and determination as
to reasonableness of expenses shall be made in the manner specified
in subparagraph (ii) of paragraph (2) of this subsection for
selection of such counsel.
(4) Shares held by directors who are parties to the proceeding
may not be voted on the subject matter under this subsection.
(f) (1) Reasonable expenses incurred by a director who is a party to
a proceeding may be paid or reimbursed by the corporation in advance
of the final disposition of the proceeding, upon receipt by the
corporation of:
(i) A written affirmation by the director of the directors good
faith belief that the standard of conduct necessary for
indemnification by the corporation as authorized in this section has
been met; and
(ii) A written undertaking by or on behalf of the director to repay
the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph
(1) of this subsection shall be an unlimited general obligation of
the director but need not be secured and may be accepted without
reference to financial ability to make the repayment.
(3) Payments under this subsection shall be made as provided
by the charter, bylaws, or contract or as specified in subsection
(e) of this section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other
rights, by indemnification or otherwise, to which a director may be
entitled under the charter, the bylaws, a resolution of stockholders
or directors, an agreement or otherwise, both as to action in an
official capacity and as to action in another capacity while holding
such office.
(h) This section does not limit the corporations power to pay or
reimburse expenses incurred by a director in connection with an
appearance as a witness in a proceeding at a time when the director
has not been made a named defendant or respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a
director to serve an employee benefit plan where the performance of
the directors duties to the corporation also imposes duties on, or
otherwise involves services by, the director to the plan or
participants or beneficiaries of the plan:
(2) Excise taxes assessed on a director with respect to an
employee benefit plan pursuant to applicable law shall be deemed
fines; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the directors duties for
a purpose reasonably believed by the director to be in the interest
of the participants and beneficiaries of the plan shall be deemed to
be for a purpose which is not opposed to the best interests of the
corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and
to the extent provided in subsection (d) of this section for a
director and shall be entitled, to the same extent as a director, to
seek indemnification pursuant to the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an
officer, employee, or agent of the corporation to the same extent
that it may indemnify directors under this section; and
(3) A corporation, in addition, may indemnify and advance
expenses to an officer, employee, or agent who is not a director to
such further extent, consistent with law, as may be provided by its
charter, bylaws, general or specific action of its board of
directors or contract.
(k) (1) A corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee, or agent
of the corporation, or who, while a director, officer, employee, or
agent of the corporation, is or was serving at the request, of the
corporation as a director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan against
any liability asserted against and incurred by
such person in any such capacity or arising out of such persons
position, whether or not the corporation would have the power to
indemnify against liability under the provisions of this section.
(2) A corporation may provide similar protection, including a
trust fund, letter of credit, or surety bond, not inconsistent with
this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a
director in accordance with this section, if arising out of a
proceeding by or in the right of the corporation, shall be reported
in writing to the stockholders with the notice of the next
stockholders meeting or prior to the meeting.
Article EIGHTH of the Registrant's Articles of Incorporation reads as
follows:
EIGHTH: To the maximum permitted by the General Corporation Law of
the State of Maryland as from time to time amended, the Corporation
shall indemnify its currently acting and its former directors and
officers and those persons who, at the request of the Corporation,
serve or have served another Corporation, partnership, joint
venture, trust or other enterprise in one or more of such
capacities. The Advisory Agreement between the Registrant and
Alliance Capital Management L.P. provides that Alliance Capital
Management L.P. will not be liable under such agreements for any
mistake of judgment or in any event whatsoever except for lack of
good faith and that nothing therein shall be deemed to protect, or
purport to protect, Alliance Capital Management L.P. against any
liability to Registrant or its security holders to which it would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties thereunder, or by
reason of reckless disregard of its obligations or duties
thereunder.
The Distribution Services Agreement between the Registrant and
Alliance Fund Distributors, Inc. provides that the Registrant will
indemnify, defend and hold Alliance Fund Distributors, Inc., and any
person who controls it within the meaning of Section 15 of the
Investment Company Act of 1940, free and harmless from and against
any and all claims, demands, liabilities and expenses which Alliance
Fund Distributors, Inc. or any controlling person may incur arising
out of or based upon any alleged untrue statement of a material fact
contained in Registrants Registration Statement or Prospectus or
Statement of Additional Information or arising out
of, or based upon any alleged omission to state a material fact
required to be stated in either thereof or necessary to make the
statements in any thereof not misleading, provided that nothing
therein shall be so construed as to protect Alliance Fund
Distributors against any liability to Registrant or its security
holders to which it would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or be reason of reckless disregard of its obligations or
duties thereunder. The foregoing summaries are qualified by the
entire text of Registrants Articles of Incorporation, the Advisory
Agreement between the Registrant and Alliance Capital Management
L.P. and the Distribution Services Agreement between the Registrant
and Alliance Fund Distributors, Inc.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the Securities Act) may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of
such issue.
In accordance with Release No. IC-11330 (September 2, 1980), the
Registrant will indemnify its directors, officers, investment
manager and principal underwriters only if (1) a final decision on
the merits was issued by the court or other body before whom the
proceeding was brought that the person to be indemnified (the
indemnitee) was not liable by reason or willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office (disabling conduct) or (2) a reasonable
determination is made, based upon a review of the facts, that the
indemnitee was not liable by reason of disabling conduct, by (a) the
vote of a majority of a quorum of the directors who are neither
interested persons of the Registrant as defined in section 2(a)(19)
of the Investment Company Act of 1940 nor parties to the
proceeding (disinterested, non-party directors), or (b) an
independent legal counsel in a written opinion. The Registrant will
advance attorneys fees or other expenses incurred by its directors,
officers, investment adviser or principal underwriters in defending
a proceeding, upon the undertaking by or on behalf of the indemnitee
to repay the advance unless it is ultimately determined that he is
entitled to indemnification and, as a condition to the advance, (1)
the indemnitee shall provide a security for his undertaking, (2) the
Registrant shall be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of disinterested,
non-party directors of the Registrant, or an independent legal
counsel in a written opinion, shall determine, based on a review of
readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will
be found entitled to indemnification.
ARTICLE VII, Section 1 through Section 6 of the Registrants By-laws reads
as follows:
Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation shall indemnify its directors to the fullest extent that
indemnification of directors is permitted by the Maryland General
Corporation Law. The Corporation shall indemnify its officers to the
same extent as its directors and to such further extent as is
consistent with law. The Corporation shall indemnify its directors
and officers who while serving as directors or officers also serve
at the request of the Corporation as a director, officer, partner,
trustee, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, other enterprise or employee
benefit plan to the fullest extent consistent with law. The
indemnification and other rights provided by this Article shall
continue as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and
administrators of such a person. This Article shall not protect any
such person against any liability to the Corporation or any
stockholder thereof to which such person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office (disabling conduct).
Section 2. ADVANCES. Any current or former director or officer of
the Corporation seeking indemnification within the scope of this
Article shall be entitled to advances from the Corporation for
payment of the reasonable expenses incurred by him in connection
with the matter as to which he is seeking indemnification in the
manner and to the fullest extent permissible under the Maryland
General Corporation Law. The person seeking indemnification shall
provide to the Corporation a written affirmation of his good
faith belief that the standard of conduct necessary for
indemnification by the Corporation has been met and a written
undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In
addition, at least one of the following additional conditions shall
be met: (a) the person seeking indemnification shall provide a
security in form and amount acceptable to the Corporation for his
undertaking; (b) the Corporation is insured against losses arising
by reason of the advance; or (c) a majority of a quorum of directors
of the Corporation who are neither interested persons as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended,
nor parties to the proceeding (disinterested non-party directors),
or independent legal counsel, in a written opinion, shall have
determined, based on a review of facts readily available to the
Corporation at the time the advance is proposed to be made, that
there is reason to believe that the person seeking indemnification
will ultimately be found to be entitled to indemnification.
Section 3. PROCEDURE. At the request of any person claiming
indemnification under this Article, the Board of Directors shall
determine, or cause to be determined, in a manner consistent with
the Maryland General Corporation Law, whether the standards required
by this Article have been met. Indemnification shall be made only
following: (a) a final decision on the merits by a court or other
body before whom the proceeding was brought that the person to be
indemnified was not liable by reason of disabling conduct or (b) in
the absence of such a decision, a reasonable determination, based
upon a review of the facts, that the person to be indemnified was
not liable by reason of disabling conduct by (i) the vote of a
majority of a quorum of disinterested non- party directors or (ii)
an independent legal counsel in a written opinion.
Section 4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees and
agents who are not officers or directors of the Corporation may be
indemnified, and reasonable expenses may be advanced to such
employees or agents, as may be provided by action of the Board of
Directors or by contract, subject to any limitations imposed by the
Investment Company Act of 1940.
Section 5. OTHER RIGHTS. The Board of Directors may make further
provision consistent with law for indemnification and advance of
expenses to directors, officers, employees and agents by resolution,
agreement or otherwise. The indemnification provided by this Article
shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking indemnification
may be entitled under any insurance or other agreement or resolution
of stockholders or disinterested
directors or otherwise. The rights provided to any person by this
Article shall be enforceable against the Corporation by such person
who shall be presumed to have relied upon it in serving or
continuing to serve as a director, officer, employee, or agent as
provided above.
Section 6. AMENDMENTS. References in this Article are to the
Maryland General Corporation Law and to the Investment Company Act
of 1940 as from time to time amended. No amendment of these By-laws
shall effect any right of any person under this Article based on any
event, omission or proceeding prior to the amendment.
The Registrant participates in a joint directors and officers
liability insurance policy issued by the ICI Mutual Insurance
Company. Coverage under this policy has been extended to directors,
trustees and officers of the investment companies managed by
Alliance Capital Management L.P. Under this policy, outside trustees
and directors are covered up to the limits specified for any claim
against them for acts committed in their capacities as trustee or
director. A pro rata share of the premium for this coverage is
charged to each investment company and to the Adviser
Item 16 Exhibits.
The number of each exhibit relates to the exhibit designation in
Form N-14
1. (a) Articles of Incorporation of the Registrant - Incorporated by
reference to Exhibit (1)(a) to Post-Effective Amendment No. 22 of
Registrant's Registration Statement on Form N-1A (File Nos. 33-
18647 and 811-5398) filed with the Securities and Exchange
Commission on April 29, 1998.
(b) Articles Supplementary to the Articles of Incorporation of the
Registrant dated September 26, 1990 and filed September 28, 1990 -
Incorporated by reference to Exhibit (1)(b) to Post-Effective
Amendment No. 22 of Registrant's Registration Statement on Form N-1A
(File Nos. 33-18647 and 811- 5398) filed with the Securities and
Exchange Commission on April 29, 1998.
(c) Articles Supplementary to the Articles of Incorporation of the
Registrant dated June 25 1991 and filed June 26, 1991 - Incorporated
by reference to Exhibit (1)(c) to Post-Effective Amendment No. 22 of
Registrant's Registration Statement on Form N-1A (File Nos. 33-18647
and 811-5398) filed with the Securities and Exchange Commission on
April 29, 1998.
(d) Articles Supplementary to the Articles of Incorporation of the
Registrant dated February 16 1994 and filed February 22, 1994 -
Incorporated by reference to Exhibit (1)(d) to Post-Effective
Amendment No. 22 of Registrant's Registration Statement on Form N-1A
(File Nos. 33-18647 and 811- 5398) filed with the Securities and
Exchange Commission on April 29, 1998.
(e) Articles Supplementary to the Articles of Incorporation of the
Registrant dated August 23 1994 and filed August 24, 1994 -
Incorporated by reference to Exhibit 1(d) to Post-Effective
Amendment No. 13 of Registrant's Registration Statement on Form N-1A
(File Nos. 33-18647 and 811- 5398) with the Securities and Exchange
Commission filed on May 1, 1995.
(f) Articles of Amendment to the Articles of Incorporation of the
Registrant dated October 21, 1994 and filed November 7, 1994 -
Incorporated by reference to Exhibit 1(e) to Post-Effective
Amendment No. 13 of Registrant's Registration Statement on Form N-1A
(File Nos. 33-18647 and 811- 5398) filed with the Securities and
Exchange Commission on May 1, 1995.
(g) Articles Supplementary to the Articles of Incorporation dated
December 26, 1995 and filed December 28, 1995 - Incorporated by
reference to Exhibit 1(f) to Post-Effective Amendment No. 15 of
Registrant's Registration Statement on Form N-1A (File Nos. 33-18647
and 811-5398) filed with the Securities and Exchange Commission on
April 30, 1996.
(h) Articles Supplementary to the Articles of Incorporation dated
March 29, 1996 and filed April 12, 1996 - Incorporated by reference
to Exhibit 1(g) to Post-Effective Amendment No. 15 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-18647 and
811-5398) filed with the Securities and Exchange Commission on April
30, 1996.
(i) Articles Supplementary to the Articles of Incorporation dated
July 18, 1996 and filed July 19, 1996 - Incorporated by reference to
Exhibit 1(h) to Post-Effective Amendment No. 17 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-18647 and
811-5398) filed with the Securities and Exchange Commission on July
22, 1996.
(j) Articles Supplementary to the Articles of Incorporation dated
December 26, 1996 and filed December 30, 1996 - Incorporated by
reference to Exhibit 1(i) to Post-Effective Amendment No. 20 of
Registrant's Registration Statement on Form
N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and
Exchange Commission on February 18, 1997.
(k) Articles of Amendment to the Articles of Incorporation of the
Registrant dated January 6, 1999 and filed January 8, 1999 -
Incorporated by reference to Exhibit 1(k) to Post-Effective
Amendment No. 25 of Registrant's Registration Statement on Form N-1A
(File Nos. 33-18647 and 811- 5398) filed with the Securities and
Exchange Commission on January 11, 1999.
(l) Articles Supplementary to the Articles of Incorporation of the
Registrant dated January 6, 1999 and filed January 8, 1999 -
Incorporated by reference to Exhibit 1(l) to Post-Effective
Amendment No. 25 of Registrant's Registration Statement on Form N-1A
(File Nos. 33-18647 and 811- 5398) filed with the Securities and
Exchange Commission on January 11, 1999.
(m) Articles Supplementary to the Articles of Incorporation of the
Registrant dated January 31, 2001 and filed April 12, 2001 -
Incorporated by reference to Post-Effective Amendment No. 32 of
Registrant's Registration Statement on Form N-1A (File Nos. 33-18647
and 811- 5398) filed with the Securities and Exchange Commission on
April 27, 2001.
(m) Articles of Amendment to the Articles of Incorporation of the
Registrant dated April 6, 2001 - Incorporated by reference to
Post-Effective Amendment No. 32 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-18647 and 811- 5398) filed with
the Securities and Exchange Commission on April 27, 2001.
2. By-Laws of the Registrant - Incorporated by reference to Exhibit (2)
to Post-Effective Amendment No. 22 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-18647 and 811- 5398) filed with
the Securities and Exchange Commission on April 29, 1998.
3. Not applicable.
4. Form of Agreement and Plan of Acquisition and Termination - see
Exhibit A to Part A of this Registration Statement.
5. Not applicable.
6. (a) Investment Advisory Agreement between Registrant and Alliance
Capital Management L.P. amended as of May 1, 1997 - Incorporated by
reference to Exhibit (5)(a) to Post-Effective Amendment No. 21 of
Registrant's Registration Statement on Form N-1A (File Nos. 33-18647
and 811-5398) filed with the Securities and Exchange Commission on
May 1, 1997.
(b) Investment Advisory Agreement between Registrant and Alliance
Capital Management L.P. amended as of May 1, 2001 - Incorporated by
reference to Post-Effective Amendment No. 32 of Registrant's
Registration Statement on Form N-1A (File Nos. 33-18647 and 811-
5398) filed with the Securities and Exchange Commission on April 27,
2001.
(c) Sub-Advisory Agreement between Alliance Capital Management L.P.
and Law, Dempsey & Company Limited, relating to the Global Bond
Portfolio - Incorporated by reference to Exhibit (5)(b) to
Post-Effective Amendment No. 22 of Registrant's Registration
Statement on Form N-1A (File Nos. 33- 18647 and 811-5398) filed with
the Securities and Exchange Commission on April 29, 1998.
7. (a) Distribution Services Agreement between the Registrant and
Alliance Fund Distributors, Inc. - Incorporated by reference to
Exhibit (6) to Post-Effective Amendment No. 22 of Registrant's
Registration Statement on Form N-1A (File Nos. 33- 18647 and
811-5398) filed with the Securities and Exchange Commission on April
29, 1998.
(b) Class B Distribution Services Agreement between the Registrant
and Alliance Fund Distributors, Inc. - Incorporated by reference to
Exhibit (c)(2) to Post-Effective Amendment No. 27 of Registrant's
Registration Statement on Form N-1A (File Nos. 33- 18647 and
811-5398) filed with the Securities and Exchange Commission on May
3, 1999.
8. Not applicable.
9. (a) Custodian Contract between the Registrant and State Street Bank
and Trust Company - Incorporated by reference to Exhibit (8)(a) to
Post-Effective Amendment No. 21 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-18647 and 811- 5398) filed with
the Securities and Exchange Commission on May 1, 1997.
(b) Amendment to Custodian Contract dated June 4, 1996 -
Incorporated by reference to Exhibit (8)(b) to Post-Effective
Amendment No. 21 of Registrant's Registration Statement on Form N-1A
(File Nos. 33- 18647 and 811-5398) filed with the Securities and
Exchange Commission on May 1, 1997.
(c) Amendment to Custodian Contract dated February 1, 2001 -
Incorporated by reference to Exhibit 9(c) to Pre-Effective
Amendment No. 1 of Registrant's Registration statement on Form
N-14 (File No. 333-66084) filed with the Securities and
Exchange Commission on August 17, 2001.
10. Rule 12b-1 Class B Distribution Plan - Incorporated by reference to
Exhibit (m) to Post-Effective Amendment No. 27 of Registrant's
Registration Statement on Form N-1A (File Nos. 33- 18647 and
811-5398) filed with the Securities and Exchange Commission on May
3, 1999.
11. (a) Opinion and consent of Seward & Kissell LLP - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(b) Opinion and consent of Venable, Baetjer and Howard, LLP -
Incorporated by reference to Registrant's Registration
Statement on Form N-14 (File No. 333-66084) filed with the
Securities and Exchange Commission on July 27, 2001.
12. (a) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance Total Return Portfolio - Filed
herewith.
(b) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance International Portfolio - Filed
herewith.
(c) Opinion and consent of Ropes & Gray with respect to the
Acquisition of the Brinson Global Income Portfolio by the
Alliance Global Bond Portfolio - Filed herewith.
(d) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance Growth and Income Portfolio - Filed
herewith.
(e) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance Growth Portfolio - Filed herewith.
(f) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance U.S. Government/High Grade
Securities Portfolio - Filed herewith.
(g) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance High Yield Portfolio - Filed
herewith.
(h) Opinion and consent of Ropes & Gray with respect to the
Acquisition by the Alliance Quasar Portfolio - Filed
herewith.
(i) Opinion and consent of Ropes & Gray with respect to the
Acquisition of the Brinson Strategic Income Portfolio by the
Alliance Global Bond Portfolio - Filed herewith.
13. Transfer Agency Agreement between the Registrant and Alliance Fund
Services, Inc. - Incorporated by reference to Exhibit (9) to
Post-Effective Amendment No. 22 of Registrant's Registration
Statement on Form N-1A (File Nos. 33-18647 and 811- 5398) filed with
the Securities and Exchange Commission on April 29, 1998.
14. Consent of Ernst & Young LLP - Incorporated by reference to
Registrant's Registration Statement on Form N-14 (File No.
333-66084) filed with the Securities and Exchange Commission
on July 27, 2001.
15. Not applicable.
16. (a) Power of attorney for William Foulk, Jr. - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(b) Power of attorney for Clifford Michel - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(c) Power of attorney for Ruth Block - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(d) Power of attorney for John Dobkin - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(e) Power of attorney for Donald Robinson - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(f) Power of attorney for David Dievler - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
(g) Power of attorney for John D. Carifa - Incorporated by
reference to Registrant's Registration Statement on Form N-14
(File No. 333-66084) filed with the Securities and Exchange
Commission on July 27, 2001.
17. Not applicable.
Item 17 Undertakings
1. The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) under the Securities Act of 1933, the
reoffering prospectus will contain the information called for by the
applicable registration form for the reofferings by persons who may
be deemed underwriters, in addition to the information called for by
the other items of the applicable form.
2. The undersigned Registrant agrees that every prospectus that is
filed under paragraph (a) above will be filed as a part of an
amendment to this Registration Statement and will not be used until
the amendment is effective, and that, in determining any liability
under the Securities Act of 1933, each post-effective amendment
shall be deemed to be a new Registration Statement for the
securities
offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
3. The Registrant agrees to file, by post-effective amendment, an
opinion of counsel or a copy of an Internal Revenue Service ruling
supporting the tax consequences of the proposed mergers described in
this Registration Statement within a reasonable time after receipt
of such opinion or ruling.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Post-Effective Amendment No. 1 to its
Registration Statement on Form N-14 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and State of
New York, on the 4th day of January 2002.
ALLIANCE VARIABLE PRODUCTS
SERIES FUND, INC.
By: John D. Carifa*
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 1 to its Registration Statement on Form N-14
has been signed below by the following persons in the capacities and on the
date indicated:
Signature Title Date
John C. Carifa* Chairman and January 4, 2002
President (Principal
Executive Officer)
MARK D. GERSTEN Treasurer and Chief January 4, 2002
- --------------- Financial Officer
Mark D. Gersten (Principal Financial
and Accounting Officer)
Ruth Block* Director January 4, 2002
John D. Carifa* Director January 4, 2002
David H. Dievler* Director January 4, 2002
John H. Dobkin* Director January 4, 2002
William H. Foulk, Jr.* Director January 4, 2002
James M. Hester* Director January 4, 2002
Clifford L. Michel* Director January 4, 2002
Donald J. Robinson* Director January 4, 2002
*By: ANDREW L. GANGOLF
---------------------
Andrew L. Gangolf
Attorney-in-Fact
Date: January 4, 2002
EXHIBIT LIST
Exhibit No. Exhibit Name
- ----------- ------------
12 (a) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
Total Return Portfolio.
12 (b) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
International Portfolio.
12 (c) Opinion and consent of Ropes & Gray with
respect to the Acquisition of the Brinson
Global Income Portfolio by the Alliance
Global Bond Portfolio.
12 (d) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
Growth and Income Portfolio.
12 (e) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
Growth Portfolio.
12 (f) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
U.S. Government/High Grade Securities Portfolio.
12 (g) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
High Yield Portfolio.
12 (h) Opinion and consent of Ropes & Gray with
respect to the Acquisition by the Alliance
Quasar Portfolio.
12 (i) Opinion and consent of Ropes & Gray with
respect to the Acquisition of the Brinson
Strategic Income Portfolio by the Alliance
Global Bond Portfolio.
EXHIBIT 12 (a)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
Total Return Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Balanced Portfolio
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, Total Return Portfolio (the
"Acquiring Portfolio") and Brinson Series Trust, a Massachusetts business trust
("Target Trust"), on behalf of one of its series, Balanced Portfolio (the
"Target Portfolio"). The Agreement describes a proposed transaction (the
"Transaction") to occur on October 26, 2001, or such other date as may be
decided by the parties (the "Closing Date"), pursuant to which Acquiring
Portfolio will acquire substantially all of the assets of Target Portfolio in
exchange for shares of beneficial interest in Acquiring Portfolio (the
"Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you
provided us with a letter dated as of the date hereof, representing as to
certain facts, occurrences and information upon which you have indicated that we
may rely in rendering this opinion (whether or not contained or reflected in the
documents and items referred to above) (the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of Target Portfolio as
an open-end investment company that seeks to achieve high return with low
volatility by investing its assets primarily in a balanced combination of
stocks, bonds, and short-term securities. The comparison using data from the
"comparison dates" (as such term is defined in paragraph 5 of the letter from
Acquiring Portfolio) demonstrated a similar breakdown between assets each
Portfolio invested in equity securities and fixed income securities (about 60
percent and 40 percent respectively). The comparison indicated that the equity
securities in which the Portfolios invested had similar characteristics - that
is, there was an overlap of issuers in which each Portfolio invested and there
was an overlap of the percentage of assets that each Portfolio invested in
securities issued by so-called "large capitalization," "mid/large
capitalization," and "mid-capitalization companies" (each as defined in
paragraph 5 of the letter from Acquiring Portfolio). The comparison also
indicated that the fixed income securities in which the Portfolios invested had
similar characteristics - that is, each Portfolio primarily invested (over 95
percent) in fixed income debt obligations issued by issuers located in North
America, each Portfolio invested a high percentage (over 80 percent) of its
assets in debt securities having similar maturities, and there was a
considerable overlap (over 75 percent) of industry sectors in which each
Portfolio invested.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction should constitute a reorganization within the
meaning of Section 368(a) of the Code. Acquiring Portfolio and
Target Portfolio should each be a "party to a reorganization" within
the meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss should be recognized
by Target Portfolio upon the transfer of Target Portfolio's assets
to Acquiring Portfolio in exchange for Acquiring Portfolio Shares
and the assumption by Acquiring Portfolio of the liabilities of
Target Portfolio, or upon the distribution of Acquiring Portfolio
Shares by Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss should be recognized
by Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction should be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares should be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss should be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction should be the same as the
basis of such assets in the hands of Target Portfolio immediately
prior to the transfer; and
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio
should include the periods during which such assets were held by
Target Portfolio.
(ix) Acquiring Portfolio should succeed to and take into account the
items of Target Portfolio described in Section 381(c) of the Code,
subject to the conditions and limitations specified in Sections 381,
382, 383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in corporate
stocks and bonds by an investment company which invested in municipal bonds.
Specifically, the IRS based its ruling on its conclusion that the business of
investing in corporate stocks and bonds is not the same line of business as
investing in municipal bonds. We believe that the IRS's conclusion in this
ruling is questionable, and that, even if the IRS's conclusion is correct, the
facts of this Transaction are distinguishable from those in the published
ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in a balanced combination of stocks, bonds, and
short-term securities to achieve a high return with low volatility. After the
Transaction, Acquiring Portfolio will continue that business for the benefit of
the stockholders of both the Target and Acquiring Portfolios. While Acquiring
Portfolio will dispose of securities formerly held by Target Portfolio in order
to conform with its criteria for the selection of equity securities and fixed
income securities, it will apply the same criteria to its own historic
investments. All proceeds generated by all such dispositions will be reinvested
in a manner fully consistent with the shared historic investment policies of
both Portfolios. In these circumstances, we are of the opinion that Acquiring
Portfolio will have continued the historic business of Target Portfolio -
investing primarily in a balanced combination of stocks, bonds, and short-term
securities to achieve high return with low volatility by investing its assets -
and
that the continuity of business enterprise doctrine should, as a result, be
satisfied. Because Revenue Ruling 87-76 is the only published ruling dealing
specifically with the application of the "continuity of business enterprise"
requirement to a reorganization involving investment companies, however, our
opinion cannot be free from doubt. No ruling has been or will be obtained from
the IRS as to the subject matter of this opinion and there can be no assurance
that the IRS or a court of law will concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (b)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
International Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Global Equity Portfolio
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, International Portfolio (the
"Acquiring Portfolio") and Brinson Series Trust, a Massachusetts business trust
("Target Trust"), on behalf of one of its series, Global Equity Portfolio (the
"Target Portfolio"). The Agreement describes a proposed transaction (the
"Transaction") to occur on October 26, 2001, or such other date as may be
decided by the parties (the "Closing Date"), pursuant to which the Acquiring
Portfolio will acquire substantially all of the assets of Target Portfolio in
exchange for shares of beneficial interest in Acquiring Portfolio (the
"Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above) (the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of Target Portfolio as
an open-end investment company that seeks long-term appreciation by investing
its assets primarily in common stocks and securities convertible into common
stocks of established non-U.S. companies (as such term is defined in paragraph 5
of the letter from Acquiring Portfolio) with a substantial percentage of such
non-U.S. companies incorporated in developed countries. The comparison using
data from the comparison dates (as such term is defined in paragraph 5 of the
letter from Acquiring Portfolio) demonstrated that Target Portfolio had
historically invested and Acquiring Portfolio invested in non-U.S. companies
predominantly incorporated in European countries and Japan (about 57 percent),
with market capitalizations over $20 billion (at least 55 percent), and
operating in the same industry sectors (at least 59 percent). As detailed in
paragraph 5 of the letter from Acquiring Portfolio, a more focused comparison
showed that these percentages were even greater when only the Portfolios'
holdings in non-U.S. companies (and not in U.S. companies) were analyzed.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction should constitute a reorganization within the
meaning of Section 368(a) of the Code. Acquiring Portfolio and
Target Portfolio should each be a "party to a reorganization" within
the meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss should be recognized
by Target Portfolio upon the transfer of Target Portfolio's assets
to Acquiring Portfolio in exchange for Acquiring Portfolio Shares
and the assumption by Acquiring Portfolio of the liabilities of
Target Portfolio, or upon the distribution of Acquiring Portfolio
Shares by Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss should be recognized
by Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction should be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares should be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss should be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction should be the same as the
basis of such assets in the hands of Target Portfolio immediately
prior to the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio
should include the periods during which such assets were held by
Target Portfolio; and
(ix) Acquiring Portfolio should succeed to and take into account the
items of Target Portfolio described in Section 381(c) of the Code,
subject to the conditions and limitations specified in Sections 381,
382, 383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B.84, published by the Internal Revenue Service ("IRS"). In that
ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in
corporate stocks and bonds by an investment company which invested in municipal
bonds. Specifically, the IRS based its ruling on its conclusion that the
business of investing in corporate stocks and bonds is not the same line of
business as investing in municipal bonds. We believe that the IRS's conclusion
in this ruling is questionable, and that, even if the IRS's conclusion is
correct, the facts of this Transaction are distinguishable from those in the
published ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in equity securities of established non-U.S. companies to
achieve long-term appreciation. After the Transaction, Acquiring Portfolio will
continue that business for the benefit of the stockholders of both the Target
and Acquiring Portfolios. While Acquiring Portfolio will dispose of securities
formerly held by Target Portfolio in order to conform with its criteria for the
selection of securities of non-U.S. companies, it will apply the same criteria
to its own historic investments. All proceeds generated by all such dispositions
will be reinvested in a manner fully consistent with the shared historic
investment policies of both Portfolios. In these circumstances, we are of the
opinion that Acquiring Portfolio will have continued the historic business of
Target Portfolio - investing in equity securities of non-U.S. companies with a
view toward long-term capital appreciation for the benefit of, among others, the
historic stockholders of Target Portfolio - and that the continuity of business
enterprise doctrine should, as a result, be satisfied. Because Revenue Ruling
87-76 is the only published ruling dealing specifically with the application of
the "continuity of business enterprise" requirement to a reorganization
involving investment companies, however, our opinion cannot be free from doubt.
No ruling has been or will be obtained from the IRS as to the subject matter of
this opinion and there can be no assurance that the IRS or a court of law will
concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (c)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
Global Bond Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Global Income Portfolio
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, Global Bond Portfolio (the
"Acquiring Portfolio") and Brinson Series Trust, a Massachusetts business trust
("Target Trust"), on behalf of one of its series, the Global Income Portfolio
(the "Target Portfolio"). The Agreement describes a proposed transaction (the
"Transaction") to occur on October 26, 2001, or such other date as may be
decided by the parties (the "Closing Date"), pursuant to which Acquiring
Portfolio will acquire substantially all of the assets of Target Portfolio in
exchange for shares of beneficial interest in Acquiring Portfolio (the
"Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above)(the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of the Target Portfolio
as an open-end investment company that seeks current income and capital
appreciation by investing principally in the debt securities of the U.S.
Government and foreign governments.
The comparison using data from the comparison dates (as such term is
defined in paragraph 5 of the letter from Acquiring Portfolio) demonstrated a
significant overlap of the investment ratings of the securities in the
Portfolios (over 90% of each Portfolio was rated A or above). There was also a
substantial overlap (80.5 percent) in the general categories of maturity of the
two Portfolios. The comparison also showed a substantial overlap in the
percentage of assets that each Portfolio invested in a combination of U.S.
government securities (including securities issued by agencies of the U.S.
government) and the securities of foreign governments (over 75 percent). There
was also a substantial (50 percent) overlap in the issuers of the securities in
Acquiring Portfolio and Target Portfolio. Finally, both Portfolios were invested
mostly (over 70%) in the securities of U.S. and European issuers.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code. Acquiring Portfolio and Target
Portfolio will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss will be recognized by
Target Portfolio upon the transfer of Target Portfolio's assets to
Acquiring Portfolio in exchange for Acquiring Portfolio Shares and
the assumption by Acquiring Portfolio of the liabilities of Target
Portfolio, or upon the distribution of Acquiring Portfolio Shares by
Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss will be recognized by
Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction will be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares will be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss will be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction will be the same as the basis
of such assets in the hands of Target Portfolio immediately prior to
the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio will
include the periods during which such assets were held by Target
Portfolio; and
(ix) Acquiring Portfolio will succeed to and take into account the items
of Target Portfolio described in Section 381(c) of the Code, subject
to the conditions and limitations specified in Sections 381, 382,
383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in corporate
stocks and bonds by an investment company which invested in municipal bonds.
Specifically, the IRS based its ruling on its conclusion that the business of
investing in corporate stocks and bonds is not the same line of business as
investing in municipal bonds. We believe that the IRS's conclusion in this
ruling is questionable, and that, even if the IRS's conclusion is correct, the
facts of this Transaction are distinguishable from those in the published
ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, namely, investing for the benefit of their
respective stockholders in debt securities primarily of the U.S. Government and
foreign governments with a view toward current income and capital appreciation.
After the Transaction, Acquiring Portfolio will continue that business for the
benefit of the stockholders of both Target and Acquiring Portfolios. While
Acquiring Portfolio will dispose of securities formerly held by Target Portfolio
in order to conform with its criteria for the selection of debt securities
primarily of the U.S. Government and foreign governments, it will apply the same
criteria to its own historic investments. All proceeds generated by all such
dispositions will be reinvested in a manner fully consistent with the shared
historic investment policies of both Portfolios. In these circumstances, we are
of the opinion that Acquiring Portfolio will have continued the historic
business of Target Portfolio " investing in equity securities of non-U.S.
companies (generally in developed markets) with a view toward capital
appreciation for the benefit of, among others, the historic stockholders of
Target Portfolio " and that the continuity of business enterprise doctrine
should, as a result, be satisfied. Because Revenue Ruling 87-76 is the only
published ruling dealing specifically with the application of the "continuity of
business enterprise" requirement to a reorganization involving investment
companies, however, our opinion cannot be free from doubt. No ruling has been or
will be obtained from the IRS as to the subject matter of this opinion and there
can be no assurance that the IRS or a court of law will concur with the opinion
set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (d)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
Growth and Income Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Growth and Income Portfolio
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, Growth and Income Portfolio (the
"Acquiring Portfolio") and Brinson Series Trust, a Massachusetts business trust
("Target Trust"), on behalf of one of its series, Growth and Income Portfolio
(the "Target Portfolio"). The Agreement describes a proposed transaction (the
"Transaction") to occur on October 26, 2001, or such other date as may be
decided by the parties (the "Closing Date"), pursuant to which Acquiring
Portfolio will acquire substantially all of the assets of Target Portfolio in
exchange for shares of beneficial interest in Acquiring Portfolio (the
"Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above) (the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of Target Portfolio as
an open-end investment company that seeks long-term capital appreciation and
income by investing its assets primarily (at least 56 percent) in
dividend-paying securities and convertible securities of large capitalization
companies, with its remaining assets concentrated in mid/large capitalization
companies (at least 8 percent) and mid capitalization companies (at least 8
percent) (each market capitalization category as defined in paragraph 5 of the
letter from Acquiring Portfolio). The comparison using data from the comparison
dates (as such term is defined in paragraph 5 of the letter from Acquiring
Portfolio) showed that each Portfolio invested over 90 percent of its total
assets in companies with market capitalizations of over $5 billion, a
considerable overlap (over 70 percent) of the percentage of assets that each
Portfolio invested in the same industry sectors, and a significant similarity (a
16 percent overlap) of issuers in which the Portfolios invested.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code. Acquiring Portfolio and Target
Portfolio will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss will be recognized by
Target Portfolio upon the transfer of Target Portfolio's assets to
Acquiring Portfolio in exchange for Acquiring Portfolio Shares and
the assumption by Acquiring Portfolio of the liabilities of Target
Portfolio, or upon the distribution of Acquiring Portfolio Shares by
Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss will be recognized by
Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction will be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares will be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss will be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction will be the same as the basis
of such assets in the hands of Target Portfolio immediately prior to
the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio will
include the periods during which such assets were held by Target
Portfolio; and
(ix) Acquiring Portfolio will succeed to and take into account the items
of Target Portfolio described in Section 381(c) of the Code, subject
to the conditions and limitations specified in Sections 381, 382,
383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in
corporate stocks and bonds by an investment company which invested in municipal
bonds. Specifically, the IRS based its ruling on its conclusion that the
business of investing in corporate stocks and bonds is not the same line of
business as investing in municipal bonds. We believe that the IRS's conclusion
in this ruling is questionable, and that, even if the IRS's conclusion is
correct, the facts of this Transaction are distinguishable from those in the
published ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in dividend-paying securities and convertible securities
of large capitalization companies. After the Transaction, Acquiring Portfolio
will continue that business for the benefit of the stockholders of both the
Target and Acquiring Portfolios. While Acquiring Portfolio will dispose of
securities formerly held by Target Portfolio in order to conform with its
criteria for the selection of dividend-paying securities and convertible
securities, it will apply the same criteria to its own historic investments. All
proceeds generated by all such dispositions will be reinvested in a manner fully
consistent with the shared historic investment policies of both Portfolios. In
these circumstances, we are of the opinion that Acquiring Portfolio will have
continued the historic business of Target Portfolio - investing primarily in
dividend-paying securities and convertible securities of large capitalization
companies to achieve long-term capital appreciation and income - and that the
continuity of business enterprise doctrine should, as a result, be satisfied.
Because Revenue Ruling 87-76 is the only published ruling dealing specifically
with the application of the "continuity of business enterprise" requirement to a
reorganization involving investment companies, however, our opinion cannot be
free from doubt. No ruling has been or will be obtained from the IRS as to the
subject matter of this opinion and there can be no assurance that the IRS or a
court of law will concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (e)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
Growth Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Growth Portfolio
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, Growth Portfolio (the "Acquiring
Portfolio") and Brinson Series Trust, a Massachusetts business trust ("Target
Trust"), on behalf of one of its series, Growth Portfolio (the "Target
Portfolio"). The Agreement describes a proposed transaction (the "Transaction")
to occur on October 26, 2001, or such other date as may be decided by the
parties (the "Closing Date"), pursuant to which Acquiring Portfolio will acquire
substantially all of the assets of Target Portfolio in exchange for shares of
beneficial interest in Acquiring Portfolio (the "Acquiring Portfolio Shares")
and the assumption by Acquiring Portfolio of certain stated liabilities of the
Target Portfolio, following which, Acquiring Portfolio Shares received by Target
Portfolio will be distributed by Target Portfolio to its shareholders in
liquidation and termination of Target Portfolio. Capitalized terms not defined
herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for
federal income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above) (the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of Target Portfolio as
an open-end investment company that seeks long-term growth by investing its
assets primarily in equity stocks. The comparison using data from the comparison
dates (as such term is defined in paragraph 5 of the letter from Acquiring
Portfolio) demonstrated a considerable percentage of overlap in the industry
sectors, as conventionally defined, in which each Portfolio invested
(specifically, in excess of 78 percent). The comparison showed that both
Portfolios invested almost 90 percent of their respective assets in
large-capitalization companies (as defined in paragraph 5 of the letter from
Acquiring Portfolio) and almost all of the remaining 10 percent of their
respective assets in mid/large capitalization and mid capitalization companies
(each as defined in paragraph 5 of the letter from Acquiring Portfolio). The
comparison also showed an overlap on the comparison dates of about 13 percent of
the issuers in which the Portfolios invested.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code. Acquiring Portfolio and Target
Portfolio will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss will be recognized by
Target Portfolio upon the transfer of Target Portfolio's assets to
Acquiring Portfolio in exchange for Acquiring Portfolio Shares and
the assumption by Acquiring Portfolio of the liabilities of Target
Portfolio, or upon the distribution of Acquiring Portfolio Shares by
Target Portfolio to its shareholders in liquidation;
-2-
(iii) Under Section 354 of the Code, no gain or loss will be recognized by
Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction will be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares will be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss will be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction will be the same as the basis
of such assets in the hands of Target Portfolio immediately prior to
the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio will
include the periods during which such assets were held by Target
Portfolio; and
(ix) Acquiring Portfolio will succeed to and take into account the items
of Target Portfolio described in Section 381(c) of the Code, subject
to the conditions and limitations specified in Sections 381, 382,
383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in corporate
stocks and bonds by an investment company which invested in municipal bonds.
Specifically, the IRS based its ruling on its conclusion that the business of
investing in corporate stocks and bonds is not the same line of business as
investing in municipal bonds. We believe that the IRS's conclusion in this
ruling is questionable, and that, even if the IRS's conclusion is correct, the
facts of this Transaction are distinguishable from those in the published
ruling.
-3-
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in equity stocks to achieve long-term capital growth.
After the Transaction, Acquiring Portfolio will continue that business for the
benefit of the stockholders of both the Target and Acquiring Portfolios. While
Acquiring Portfolio will dispose of securities formerly held by Target Portfolio
in order to conform with its criteria for the selection of equity securities, it
will apply the same criteria to its own historic investments. All proceeds
generated by all such dispositions will be reinvested in a manner fully
consistent with the shared historic investment policies of both Portfolios. In
these circumstances, we are of the opinion that Acquiring Portfolio will have
continued the historic business of Target Portfolio - investing in equity stocks
to achieve long-term capital growth - and that the continuity of business
enterprise doctrine should, as a result, be satisfied. Because Revenue Ruling
87-76 is the only published ruling dealing specifically with the application of
the "continuity of business enterprise" requirement to a reorganization
involving investment companies, however, our opinion cannot be free from doubt.
No ruling has been or will be obtained from the IRS as to the subject matter of
this opinion and there can be no assurance that the IRS or a court of law will
concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
-4-
EXHIBIT 12 (f)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
U.S. Government/High Grade Securities Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
High Grade Fixed Income Portfolio
1285 Avenue of the Americas
NewYork, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, U.S. Government/High Grade
Securities Portfolio (the "Acquiring Portfolio") and Brinson Series Trust, a
Massachusetts business trust ("Target Trust"), on behalf of one of its series,
the High
Grade Fixed Income Portfolio (the "Target Portfolio"). The Agreement describes a
proposed transaction (the "Transaction") to occur on October 26, 2001, or such
other date as may be decided by the parties (the "Closing Date"), pursuant to
which Acquiring Portfolio will acquire substantially all of the assets of Target
Portfolio in exchange for shares of beneficial interest in Acquiring Portfolio
(the "Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above)(the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, allow us to draw the conclusion
that Acquiring Portfolio will continue the historic business of the Target
Portfolio as an open-end investment company that seeks current income consistent
with the preservation of capital by investing in U.S. Government and high grade
debt securities. Both Target Portfolio and Acquiring Portfolio (the
"Portfolios") invest primarily in U.S. Government securities and in private
securities of U.S. issuers.
The comparison using data from the comparison dates (as such term is
defined in paragraph 5 of the letter from Acquiring Portfolio) demonstrated a
significant overlap of issuers of the securities in the Portfolios (each of the
Portfolios had over 30 percent of its assets invested in U.S. government
securities and over 60 percent in a combination of U.S. government securities
and securities of financial institutions). The comparison also showed a
substantial overlap in the percentage of assets that each Portfolio invested in
specific industry sectors (over 50 percent). Both Portfolios were invested
overwhelmingly in U.S. securities and the overlap in the residence county of the
issuer of the securities in Acquiring Portfolio and Target Portfolio was almost
95 percent. Finally, there was also a substantial overlap in the maturities of
the two
Portfolios (each of the Portfolios held over 85 percent of its assets in
securities with mid- and long- term maturities).
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code. Acquiring Portfolio and Target
Portfolio will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss will be recognized by
Target Portfolio upon the transfer of Target Portfolio's assets to
Acquiring Portfolio in exchange for Acquiring Portfolio Shares and
the assumption by Acquiring Portfolio of the liabilities of Target
Portfolio, or upon the distribution of Acquiring Portfolio Shares by
Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss will be recognized by
Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction will be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares will be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss will be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction will be the same as the basis
of such assets in the hands of Target Portfolio immediately prior to
the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio will
include the periods during which such assets were held by Target
Portfolio; and
(ix) Acquiring Portfolio will succeed to and take into account the items
of Target Portfolio described in Section 381(c) of the Code, subject
to the conditions and limitations specified in Sections 381, 382,
383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in corporate
stocks and bonds by an investment company which invested in municipal bonds.
Specifically, the IRS based its ruling on its conclusion that the business of
investing in corporate stocks and bonds is not the same line of business as
investing in municipal bonds. We believe that the IRS's conclusion in this
ruling is questionable, and that, even if the IRS's conclusion is correct, the
facts of this Transaction are distinguishable from those in the published
ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in U.S. Government and high grade debt securities with a
view toward current income consistent with the preservation of capital. After
the Transaction, Acquiring Portfolio will continue that business for the benefit
of the stockholders of both Target and Acquiring Portfolios. While Acquiring
Portfolio will dispose of securities formerly held by Target Portfolio in order
to conform with its criteria for the selection of U.S. Government and high grade
debt securities, it will apply the same criteria to its own historic
investments. All proceeds generated by all such dispositions will be reinvested
in a manner fully consistent with the shared historic investment policies of
both Portfolios. In these circumstances, we are of the opinion that Acquiring
Portfolio will have continued the historic business of Target Portfolio "
investing in equity securities of non-U.S. companies (generally in developed
markets) with a view toward capital appreciation for the benefit of, among
others, the historic stockholders of Target Portfolio " and that the continuity
of business enterprise doctrine should, as a result, be satisfied. Because
Revenue Ruling 87-76 is the only published ruling dealing specifically with the
application of the "continuity of business enterprise" requirement to a
reorganization involving investment companies, however, our opinion cannot be
free from doubt. No ruling has been or will be obtained from the IRS as to the
subject matter of this opinion and there can be no assurance that the IRS or a
court of law will concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (g)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
High Yield Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
High Income Portfolio
1285 Avenue of the Americas
NewYork, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, High Yield Portfolio (the
"Acquiring Portfolio") and Brinson Series Trust, a Massachusetts business trust
("Target Trust"), on behalf of one of its series, the High Income Portfolio (the
"Target Portfolio"). The Agreement describes a proposed transaction (the
"Transaction") to occur on October 26, 2001, or such other date as may be
decided by the parties (the "Closing Date"), pursuant to which Acquiring
Portfolio will acquire substantially all of the assets of Target Portfolio in
exchange for shares of beneficial interest in Acquiring Portfolio (the
"Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above)(the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of the Target Portfolio
as an open-end investment company that seeks high current income by investing
primarily in high-yield fixed-income securities of U.S. issuers.
The comparison using data from the comparison dates (as such term is
defined in paragraph 5 of the letter from Acquiring Portfolio) demonstrated a
significant overlap of the maturities of the Portfolios (over 65% in the same
general categories of maturity). The comparison also showed a substantial
overlap in the percentage of assets that each Portfolio invested in specific
industry sectors (almost 50 percent). There was also a substantial (20 percent)
overlap in the issuers of the securities in Acquiring Portfolio and Target
Portfolio. Finally, both Portfolios were invested mostly in U.S. securities and
the overlap in the county of origin of the securities in Acquiring Portfolio and
Target Portfolio exceeded 95 percent.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction should constitute a reorganization within the
meaning of Section 368(a) of the Code. Acquiring Portfolio and
Target Portfolio should each be a "party to a reorganization" within
the meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss should be recognized
by Target Portfolio upon the transfer of Target Portfolio's assets
to Acquiring Portfolio in exchange for Acquiring Portfolio Shares
and the assumption by Acquiring Portfolio of
the liabilities of Target Portfolio, or upon the distribution of
Acquiring Portfolio Shares by Target Portfolio to its shareholders
in liquidation;
(iii) Under Section 354 of the Code, no gain or loss should be recognized
by Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction should be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares should be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss should be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction should be the same as the
basis of such assets in the hands of Target Portfolio immediately
prior to the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio
should include the periods during which such assets were held by
Target Portfolio; and
(ix) Acquiring Portfolio should succeed to and take into account the
items of Target Portfolio described in Section 381(c) of the Code,
subject to the conditions and limitations specified in Sections 381,
382, 383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in corporate
stocks and bonds by an investment company which invested in municipal bonds.
Specifically, the IRS based its ruling on its conclusion that the business of
investing in corporate stocks and bonds is not the same line of business as
investing in municipal bonds. We believe that the IRS's conclusion in this
ruling is questionable, and that, even if the IRS's conclusion is correct, the
facts of this Transaction are distinguishable from those in the published
ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in high-yield fixed-income securities with a view toward
high current income. After the Transaction, Acquiring Portfolio will continue
that business for the benefit of the stockholders of both Target and Acquiring
Portfolios. While Acquiring Portfolio will dispose of securities formerly held
by Target Portfolio in order to conform with its criteria for the selection of
high-yield fixed-income securities, it will apply the same criteria to its own
historic investments. All proceeds generated by all such dispositions will be
reinvested in a manner fully consistent with the shared historic investment
policies of both Portfolios. In these circumstances, we are of the opinion that
Acquiring Portfolio will have continued the historic business of Target
Portfolio " investing in equity securities of non-U.S. companies (generally in
developed markets) with a view toward capital appreciation for the benefit of,
among others, the historic stockholders of Target Portfolio " and that the
continuity of business enterprise doctrine should, as a result, be satisfied.
Because Revenue Ruling 87-76 is the only published ruling dealing specifically
with the application of the "continuity of business enterprise" requirement to a
reorganization involving investment companies, however, our opinion cannot be
free from doubt. No ruling has been or will be obtained from the IRS as to the
subject matter of this opinion and there can be no assurance that the IRS or a
court of law will concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (h)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
Quasar Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Small Cap Portfolio
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, Quasar Portfolio (the "Acquiring
Portfolio") and Brinson Series Trust, a Massachusetts business trust ("Target
Trust"), on behalf of one of its series, Small Cap Portfolio (the "Target
Portfolio"). The Agreement describes a proposed transaction (the "Transaction")
to occur on October 26, 2001, or such other date as may be decided by the
parties (the "Closing Date"), pursuant to which Acquiring Portfolio will acquire
substantially all of the assets of Target Portfolio in exchange for shares of
beneficial interest in Acquiring Portfolio (the "Acquiring Portfolio Shares")
and the assumption by Acquiring Portfolio of certain stated liabilities of
Target Portfolio, following which, Acquiring Portfolio Shares received by Target
Portfolio will be distributed by Target Portfolio to its shareholders in
liquidation and termination of Target Portfolio. Capitalized terms not defined
herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above) (the "Representations").
The facts that you have represented as to in paragraph 5 of the letter
from Acquiring Portfolio dated as of the date hereof, support the conclusion
that the Acquiring Fund will
continue the historic business of Target Portfolio as an open-end investment
company that seeks long term appreciation by investing its assets primarily in
the equity securities of small capitalization companies (as defined in paragraph
5 of the letter from Acquiring Portfolio). The comparison using data from the
comparison dates (as such term is defined in paragraph 5 of the letter from
Acquiring Portfolio) showed that a high concentration (over 60 percent) of each
Portfolios' assets was invested in micro capitalization and small capitalization
companies (each as defined in paragraph 5 of the letter from Acquiring
Portfolio). The comparison also indicated that each Portfolio invested its
remaining assets in mid/small capitalization companies and mid capitalization
companies (each as defined in paragraph 5 of the letter from Acquiring
Portfolio), but not in companies with market capitalizations greater than $10
billion. Further, the comparison showed an overlap in excess of 60 percent of
the industry sectors in which the Portfolios invested.
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and (2) the Transaction being consummated in accordance with
the Agreement, we are of the opinion that, subject to the final two paragraphs
hereof, for federal income tax purposes:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code. Acquiring Portfolio and Target
Portfolio will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss will be recognized by
Target Portfolio upon the transfer of Target Portfolio's assets to
Acquiring Portfolio in exchange for Acquiring Portfolio Shares and
the assumption by Acquiring Portfolio of the liabilities of Target
Portfolio, or upon the distribution of Acquiring Portfolio Shares by
Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss will be recognized by
Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction will be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares will be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss will be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction will be the same as the basis
of such assets in the hands of Target Portfolio immediately prior to
the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio will
include the periods during which such assets were held by Target
Portfolio; and
(ix) Acquiring Portfolio will succeed to and take into account the items
of Target Portfolio described in Section 381(c) of the Code, subject
to the conditions and limitations specified in Sections 381, 382,
383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue Ruling
87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS"). In
that ruling, the IRS held that the so-called "continuity of business enterprise"
requirement necessary to tax-free reorganization treatment was not met in the
case of an acquisition of an investment company which invested in corporate
stocks and bonds by an investment company which invested in municipal bonds.
Specifically, the IRS based its ruling on its conclusion that the business of
investing in corporate stocks and bonds is not the same line of business as
investing in municipal bonds. We believe that the IRS's conclusion in this
ruling is questionable, and that, even if the IRS's conclusion is correct, the
facts of this Transaction are distinguishable from those in the published
ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, investing for the benefit of their respective
stockholders primarily in the equity securities of small capitalization
companies to achieve long-term appreciation. After the Transaction, Acquiring
Portfolio will continue that business for the benefit of the stockholders of
both the Target and Acquiring Portfolios. While Acquiring Portfolio will dispose
of securities formerly held by Target Portfolio in order to conform with its
criteria for the selection of equity securities, it will apply the same criteria
to its own historic investments. All proceeds generated by all such dispositions
will be reinvested in a manner fully consistent with the shared historic
investment policies of both Portfolios. In these circumstances, we are of the
opinion that Acquiring Portfolio will have continued the historic business of
Target Portfolio - investing primarily in the equity stocks of small
capitalization companies to achieve long-term appreciation - and that the
continuity of business enterprise doctrine should, as a result, be satisfied.
Because Revenue Ruling 87-76 is the only published ruling dealing specifically
with the application of the "continuity of business enterprise" requirement to a
reorganization involving investment companies, however, our opinion cannot be
free from doubt. No ruling has been or will be obtained from the IRS as to the
subject matter of this opinion and there can be no assurance that the IRS or a
court of law will concur with the opinion set forth above.
Very truly yours,
Ropes & Gray
EXHIBIT 12 (i)
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MA 02109-2624
PHONE: (617) 951-7000
FAX: (617) 951-7050
October 26, 2001
Alliance Variable Products Series Fund, Inc.
Global Bond Portfolio
1345 Avenue of Americas
New York, New York 10105
Brinson Series Trust
Strategic Income Portfolio
1285 Avenue of the Americas
NewYork, New York 10019
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Acquisition and Termination made as of October 18, 2001 (the "Agreement"),
between Alliance Variable Products Series Fund, Inc., a Maryland corporation
("Alliance") on behalf of one of its series, Global Bond Portfolio (the
"Acquiring Portfolio") and Brinson Series Trust, a Massachusetts business trust
("Target Trust"), on behalf of one of its series, the Strategic Income Portfolio
(the "Target Portfolio"). The Agreement describes a proposed transaction (the
"Transaction") to occur on October 26, 2001, or such other date as may be
decided by the parties (the "Closing Date"), pursuant to which Acquiring
Portfolio will acquire substantially all of the assets of Target Portfolio in
exchange for shares of beneficial interest in Acquiring Portfolio (the
"Acquiring Portfolio Shares") and the assumption by Acquiring Portfolio of
certain stated liabilities of Target Portfolio, following which, Acquiring
Portfolio Shares received by Target Portfolio will be distributed by Target
Portfolio to its shareholders in liquidation and termination of Target
Portfolio. Capitalized terms not defined herein are defined in the Agreement.
Target Portfolio is a series of Target Trust, which is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Shares of Target Portfolio are redeemable at net
asset value at each shareholder's option. Target Portfolio has elected to be a
regulated investment company for federal income tax purposes under Section 851
of the Internal Revenue Code of 1986, as amended (the "Code").
Acquiring Portfolio is a series of Alliance, which is registered under the
1940 Act as an open-end management investment company. Shares of Acquiring
Portfolio are redeemable at net asset value at each shareholder's option.
Acquiring Portfolio has elected to be a regulated investment company for federal
income tax purposes under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Prospectus/Proxy Statement, the Registration Statement (including the items
incorporated by reference therein), and such other items as we have deemed
necessary to render this opinion. In addition, you provided us with a letter
dated as of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering this
opinion (whether or not contained or reflected in the documents and items
referred to above)(the "Representations").
The facts you have represented as to in paragraph 5 of the letter from
Acquiring Portfolio, dated as of the date hereof, support the conclusion that
Acquiring Portfolio will continue the historic business of the Target Portfolio
as an open-end investment company that seeks current income and capital
appreciation by investing in the debt securities of the U.S. Government and
foreign governments.
The comparison using data from the comparison dates (as such term is
defined in paragraph 5 of the letter from Acquiring Portfolio) demonstrated a
significant overlap of the quality ratings and maturities of the securities in
the Portfolios. As of the comparison date, each of the Portfolios held over 75
percent of its total assets in debt securities with a BB or Ba or higher rating.
The comparison also showed a substantial overlap in the percentage of assets
that each Portfolio invested in a combination of U.S. government securities
(including securities issued by agencies of the U.S. government) and the
securities of foreign governments (over 60 percent). There was also a
substantial (25 percent) overlap in the issuers of the securities in Acquiring
Portfolio and Target Portfolio. Both Portfolios were invested mostly in
securities of U.S. and European issuers and the overlap in the county of origin
of the securities in Acquiring Portfolio and Target Portfolio was about 70
percent. Finally, each Portfolio had approximately 90 percent of its assets in
securities with mid- or long-term maturities
Based on the foregoing Representations and our review of the documents and
items referred to above, and conditioned on (1) the Representations being true
on the Closing Date and
(2) the Transaction being consummated in accordance with the Agreement, we are
of the opinion that, subject to the final two paragraphs hereof, for federal
income tax purposes:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code. Acquiring Portfolio and Target
Portfolio will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(ii) Under Section 361 of the Code, no gain or loss will be recognized by
Target Portfolio upon the transfer of Target Portfolio's assets to
Acquiring Portfolio in exchange for Acquiring Portfolio Shares and
the assumption by Acquiring Portfolio of the liabilities of Target
Portfolio, or upon the distribution of Acquiring Portfolio Shares by
Target Portfolio to its shareholders in liquidation;
(iii) Under Section 354 of the Code, no gain or loss will be recognized by
Target Portfolio shareholders upon the exchange of their Target
Portfolio Shares for Acquiring Portfolio Shares;
(iv) Under Section 358 of the Code, the aggregate basis of Acquiring
Portfolio Shares that a Target Portfolio shareholder receives in
connection with the Transaction will be the same as the aggregate
basis of his or her Target Portfolio Shares exchanged therefor;
(v) Under Section 1223(1) of the Code, a Target Portfolio shareholder's
holding period for his or her Acquiring Portfolio Shares will be
determined by including the period for which he or she held the
Target Portfolio Shares exchanged therefor, provided that he or she
held such Target Portfolio Shares as capital assets;
(vi) Under Section 1032 of the Code, no gain or loss will be recognized
by Acquiring Portfolio upon the receipt of the assets of Target
Portfolio in exchange for Acquiring Portfolio Shares and the
assumption by Acquiring Portfolio of the liabilities of Target
Portfolio;
(vii) Under Section 362(b) of the Code, the basis in the hands of
Acquiring Portfolio of the assets of Target Portfolio transferred to
Acquiring Portfolio in the Transaction will be the same as the basis
of such assets in the hands of Target Portfolio immediately prior to
the transfer;
(viii) Under Section 1223(2) of the Code, the holding periods of the
assets of Target Portfolio in the hands of Acquiring Portfolio will
include the periods during which such assets were held by Target
Portfolio; and
(ix) Acquiring Portfolio will succeed to and take into account the items
of Target Portfolio described in Section 381(c) of the Code, subject
to the conditions and limitations specified in Sections 381, 382,
383, 384 of the Code and the Regulations thereunder.
In connection with this opinion we call your attention to Revenue
Ruling 87-76, 1987-2 C.B. 84, published by the Internal Revenue Service ("IRS").
In that ruling, the IRS held that the so-called "continuity of business
enterprise" requirement necessary to tax-free reorganization treatment was
not met in the case of an acquisition of an investment company which invested in
corporate stocks and bonds by an investment company which invested in municipal
bonds. Specifically, the IRS based its ruling on its conclusion that the
business of investing in corporate stocks and bonds is not the same line of
business as investing in municipal bonds. We believe that the IRS's conclusion
in this ruling is questionable, and that, even if the IRS's conclusion is
correct, the facts of this Transaction are distinguishable from those in the
published ruling.
We believe that Acquiring Portfolio and Target Portfolio are both engaged
in the same line of business, namely, investing for the benefit of their
respective stockholders primarily debt securities primarily of the U.S.
Government and foreign governments with a view toward current income and capital
appreciation. After the Transaction, Acquiring Portfolio will continue that
business for the benefit of the stockholders of both Target and Acquiring
Portfolios. While Acquiring Portfolio will dispose of securities formerly held
by Target Portfolio in order to conform with its criteria for the selection of
debt securities primarily of the U.S. Government and foreign governments, it
will apply the same criteria to its own historic investments. All proceeds
generated by all such dispositions will be reinvested in a manner fully
consistent with the shared historic investment policies of both Portfolios. In
these circumstances, we are of the opinion that Acquiring Portfolio will have
continued the historic business of Target Portfolio " investing in equity
securities of non-U.S. companies (generally in developed markets) with a view
toward capital appreciation for the benefit of, among others, the historic
stockholders of Target Portfolio " and that the continuity of business
enterprise doctrine should, as a result, be satisfied. Because Revenue Ruling
87-76 is the only published ruling dealing specifically with the application of
the "continuity of business enterprise" requirement to a reorganization
involving investment companies, however, our opinion cannot be free from doubt.
No ruling has been or will be obtained from the IRS as to the subject matter of
this opinion and there can be no assurance that the IRS or a court of law will
concur with the opinion set forth above.
Very truly yours,
Ropes & Gray