United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-00204
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: July 31, 2004
Date of reporting period: July 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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Mid-Cap Blend
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[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
AllianceBernstein Mid-Cap Growth Fund
Annual Report--July 31, 2004
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or Alliance at
(800) 227-4618. Please read the prospectus carefully before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com (click on Investors/ Products & Services/
Mutual Funds).
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit Alliance Capital's web site at
www.alliancebernstein.com (click on Investors, then the "Proxy voting policies"
link or "Proxy voting records" link on the left side of the page), or go to the
Securities and Exchange Commission's, (The "Commission") web site at
www.sec.gov, or call Alliance Capital at (800) 227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. Alliance publishes full
portfolio holdings for the Fund monthly at www.alliancebernstein.com.
AllianceBernstein Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
September 20, 2004
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Mid-Cap Growth Fund (the "Fund") for the annual reporting
period ended July 31, 2004.
Investment Objective and Policies
AllianceBernstein Mid-Cap Growth Fund is an open-end, diversified investment
company that seeks long-term growth of capital and income primarily through
investments in common stocks that Alliance Capital believes will appreciate in
value. The Fund invests predominantly in the stocks of mid-capitalization
companies.
Investment Results
The table on page 4 shows the Fund's investment results for the six- and
12-month periods ended July 31, 2004. For comparison, we have also provided
performance for the Fund's benchmark, the Russell MidCap Growth Index, which is
a measure of mid-cap stock performance.
For the 12-month period ended July 31, 2004, the Fund outperformed its
benchmark, the Russell MidCap Growth Index. For the six-month period ended July
31, 2004, the Fund underperformed the Index.
For the 12-month period under review, sector selection and stock selection
contributed to the Fund's outperformance versus its benchmark. Many of the
themes in the Fund's portfolio performed well over this period. Specific
sectors that contributed to performance were the Fund's overweight positions in
energy, technology and utilities. The sectors that detracted from performance
were financial services, producer durables, auto and transportation and health
care. The Fund's overweight position in energy and takeover activity in
technology and telecommunications helped to stabilize the portfolio. The Fund's
energy services stocks had a strong first half of 2004 as the demand for oil
and gas well services increased. Technology, as a sector, underperformed the
market, but the Fund's technology stocks outperformed those in the Index by
10.8%, and as a whole added to returns. Consolidation also took place in the
wireless phone industry, sparking a rally in those shares as well. Other
sectors where stock selection added to the Fund's performance were consumer
discretionary and utilities, while the Fund's stock selection in the producer
durables, financial services and auto and transportation sectors,
underperformed those in the Index.
For the six-month period under review, the Fund's underperformance was due in
large part to its overweight position in technology. Technology was by far the
weakest sector in the Index, and although the technology names in the Fund
outperformed those in the Index, the absolute decline hampered performance. The
Fund's technology names weakened as the slowdown in China, specifically in the
Chinese handset market, crept into the market. There were also declines in the
semiconductor capital equipment names as investors discounted a cyclical
decline in the semiconductor industry. From a sector perspective, the Fund's
underweight position in health care and consumer discretionary also detracted
from returns.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 1
Market Review and Investment Strategy
The market has declined steadily over the last six months, despite an
improvement in the global economic environment in both the U.S. and around the
world. Earnings for the Standard & Poor's 500 Stock Index grew at 28.3%
year-over-year in the fourth quarter of 2003 and 27.5% year-over-year in the
first quarter of 2004. Payrolls expanded nicely, and industrial production
reached 20-year highs. By February, the markets seemed to have discounted this
good news and turned their sights on the increased risk of inflation flagged by
the sharp rise in commodity prices, oil in particular. Fears of a sudden and
significant increase in interest rates swept through the markets and were
compounded by China's recent moves toward economic restraint, not to mention
concerns about terrorism. U.S. Federal Reserve officials calmed the nerves of
anxious investors in various speeches during June and on June 30, 2004 raised
interest rates by a "measured" 25 basis points for the first time since 2000.
Higher commodity prices and interest rates, for now at least, seem to be more a
reflection of the first synchronized global expansion in more than 15 years, a
sign of strength as opposed to a harbinger of trouble. The Fund is positioned
to take advantage of this global expansion and seeks to exploit uncertainties
in the markets as they arise. The Fund also continues to be positioned to take
advantage of the broadband revolution now underway, the increasing importance
of biotechnology in the health care industry, the need to invest in energy and
the burgeoning demands of emerging markets' middle class.
2 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com
(click on Investors/Products & Services/Mutual Funds).
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or Alliance at
(800) 227-4618. You should read the prospectus carefully before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for Advisor Class shares will vary due to
different expenses associated with this class. Performance assumes reinvestment
of distributions and does not account for taxes.
Benchmark Disclosure
The unmanaged Russell MidCap Growth Index does not reflect fees and expenses
associated with the active management of a mutual fund portfolio. The Index
measures the performance of those Russell mid-cap companies with higher
price-to-book ratios and higher forecasted growth values. The stocks are also
members of the Russell 1000 Growth Index. Investors cannot invest directly in
an index, and its results are not indicative of any specific investment,
including the Fund.
A Word About Risk
The Fund can invest in foreign securities. Foreign markets can be more volatile
than the U.S. market due to increased risks of adverse issuer, political,
regulatory, market or economic developments. In addition, fluctuations in the
value of investments in foreign currency denominated securities may be
magnified by changes in foreign exchange rates. While the Fund invests
principally in common stocks and other equity securities, in order to achieve
its investment objectives, the Fund may at times use certain types of
investment derivatives, such as options, futures, forwards and swaps. These
instruments involve risks different from, and in certain cases, greater than
the risks presented by more traditional investments. These risks are more fully
discussed in the prospectus.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK
PERIODS ENDED JULY 31, 2004
Returns
6 Months 12 Months
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AllianceBernstein Mid-Cap Growth Fund
Class A -9.43% 20.63%
Class B -9.75% 19.64%
Class C -9.77% 19.38%
Advisor Class -9.47% 20.58%
Russell MidCap Growth Index -4.24% 14.79%
GROWTH OF A $10,000 INVESTMENT IN THE FUND
7/31/94 TO 7/31/04
AllianceBernstein Mid-Cap Growth Fund Class A: $20,469
Russell MidCap Growth Index: $25,524
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED REPORT]
AllianceBernstein Mid-Cap Russell MidCap
Growth Fund Class A Growth Index
- -------------------------------------------------------------------------------
7/31/94 $ 9,575 $10,000
7/31/95 12,223 13,076
7/31/96 12,965 14,024
7/31/97 19,770 19,590
7/31/98 20,139 21,222
7/31/99 23,215 25,825
7/31/00 24,791 37,126
7/31/01 19,136 25,316
7/31/02 12,783 18,056
7/31/03 16,968 22,235
7/31/04 20,469 25,524
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Mid-Cap Growth Fund Class A shares (from 7/31/94 to 7/31/04)
as compared to the performance of an appropriate index.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
4 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF JULY 31, 2004
NAV Returns SEC Returns
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Class A Shares
1 Year 20.63% 15.45%
5 Years -2.49% -3.33%
10 Years 7.89% 7.42%
Class B Shares
1 Year 19.64% 15.64%
5 Years -3.34% -3.34%
10 Years(a) 7.19% 7.19%
Class C Shares
1 Year 19.38% 18.38%
5 Years -3.31% -3.31%
10 Years 6.94% 6.94%
Advisor Class Shares
1 Year 20.58%
5 Years -2.31%
Since Inception* 5.27%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (JUNE 30, 2004)
- -------------------------------------------------------------------------------
Class A Shares
1 Year 34.46%
5 Years -2.01%
10 Years 8.87%
Class B Shares
1 Year 35.30%
5 Years -2.02%
10 Years(a) 8.65%
Class C Shares
1 Year 38.03%
5 Years -2.03%
10 Years 8.40%
(a) Assumes conversion of Class B shares into Class A shares after eight years.
* Inception Date: 10/1/96 Advisor Class shares.
See Historical Performance disclosures on page 3.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 5
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
February 1, 2004 July 31, 2004 During Period*
- ------------------------------------------------------------------------------------------------
Class A
Actual $1,000 $ 905.72 $ 5.97
Hypothetical (5% return before expenses) $1,000 $1,018.60 $ 6.32
Class B
Actual $1,000 $ 902.54 $ 9.89
Hypothetical (5% return before expenses) $1,000 $1,014.47 $10.47
Class C
Actual $1,000 $ 902.35 $ 9.74
Hypothetical (5% return before expenses) $1,000 $1,014.62 $10.32
Advisor Class
Actual $1,000 $ 905.32 $ 4.93
Hypothetical (5% return before expenses) $1,000 $1,019.69 $ 5.22
* Expenses are equal to the classes' annualized expense ratios of 1.26%,
2.09%, 2.06% and 1.04%, respectively, multiplied by the average account value
over the period, multiplied by the number of days in the most recent fiscal
half-year/366 (to reflect the one-half year period).
6 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
PORTFOLIO SUMMARY
July 31, 2004
PORTFOLIO STATISTICS
Net Assets ($mil): $755.9
SECTOR BREAKDOWN*
- - 43.3% Technology
- - 20.0% Consumer Services [PIE CHART OMITTED]
- - 12.4% Health Care
- - 9.0% Energy
- - 5.7% Finance
- - 5.3% Consumer Manufacturing
- - 2.4% Basic Industry
- - 1.1% Consumer Staples
- - 0.8% Short-Term
* All data is as of July 31, 2004. The Fund's sector breakdown is expressed as
a percentage of total investments(excluding security lending collateral) and
may vary over time.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 7
TEN LARGEST HOLDINGS
July 31, 2004
Percent of
Company U.S. $ Value Net Assets
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Network Appliance, Inc. $35,953,579 4.8%
Juniper Networks, Inc. 33,702,915 4.4
Silicon Laboratories, Inc. 32,847,473 4.3
KLA-Tencor Corp. 31,397,775 4.2
CNET Networks, Inc. 26,823,301 3.5
Broadcom Corp. Cl. A 26,120,432 3.4
RealNetworks, Inc. 23,825,334 3.2
D.R. Horton, Inc. 22,572,246 3.0
Nabors Industries, Ltd. (Barbados) 22,311,630 3.0
Amazon.com, Inc. 21,943,874 2.9
- -------------------------------------------------------------------------------
$277,498,559 36.7%
8 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS
July 31, 2004
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-99.1%
Technology-43.2%
Communication Equipment-8.6%
Corning, Inc.(a)* 1,244,150 $ 15,377,694
JDS Uniphase Corp.(a) 4,543,420 15,674,799
Juniper Networks, Inc.(a) 1,467,897 33,702,915
------------
64,755,408
Communication Services-2.7%
Level 3 Communications, Inc.(a)* 6,832,520 20,702,536
Computer Peripherals-4.8%
Network Appliance, Inc.(a)* 1,861,915 35,953,579
Computer Software-2.4%
Autodesk, Inc. 106,530 4,282,506
PeopleSoft, Inc.(a)* 775,200 13,969,104
------------
18,251,610
Internet Media-3.2%
RealNetworks, Inc.(a)* 4,224,350 23,825,334
Semi-Conductor Capital Equipment-4.1%
KLA-Tencor Corp.(a)* 761,897 31,397,775
Semi-Conductor Components-15.4%
Broadcom Corp. Cl.A(a) 738,700 26,120,432
Micron Technology, Inc.(a)* 1,363,435 18,447,276
NVIDIA Corp.(a) 1,182,035 18,203,339
SanDisk Corp.(a)* 514,550 12,513,856
Silicon Laboratories, Inc.(a) 930,787 32,847,473
Veeco Instruments, Inc.(a)* 351,510 7,996,852
------------
116,129,228
Miscellaneous-2.0%
FEI Co.(a) 351,480 7,068,263
Itron, Inc.(a) 425,580 8,124,322
------------
15,192,585
------------
326,208,055
Consumer Services-20.0%
Broadcasting & Cable-2.1%
XM Satellite Radio Holdings, Inc. Cl.A(a) 603,595 15,928,872
Gaming-2.3%
Wynn Resorts, Ltd.(a)* 488,360 17,473,521
Restaurants & Lodging-1.0%
Starbucks Corp.(a)* 158,625 7,449,030
Retail - General Merchandise-2.9%
Amazon.com, Inc.(a)* 563,820 21,943,874
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 9
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Miscellaneous-11.7%
Apollo Group, Inc. Cl.A(a) 122,200 $ 10,209,810
CNET Networks, Inc.(a)* 2,937,930 26,823,301
Electronic Arts, Inc.(a) 312,862 15,683,772
HomeStore, Inc.(a) 1,764,250 6,218,981
Shanda Interactive Entertainment, Ltd.
(Cayman Islands)(ADR)(a) 537,000 10,203,000
SINA Corp. (Hong Kong)(a)* 675,480 19,149,858
------------
88,288,722
------------
151,084,019
Health Care-12.4%
Biotechnology-8.7%
Affymetrix, Inc.(a)* 543,565 14,681,691
Applera Corp.-Applied Biosystems Group* 847,405 17,532,809
Applera Corp.-Celera Genomics Group(a) 1,008,050 11,834,507
Compugen, Ltd. (Israel)(a) 1,640,150 7,872,720
Human Genome Sciences, Inc.(a) 1,406,200 14,097,155
------------
66,018,882
Medical Products-1.6%
Cerus Corp.(a) 1,785,798 3,821,608
Kinetic Concepts, Inc.(a) 182,150 8,182,178
------------
12,003,786
Medical Services-2.1%
Cepheid, Inc.(a) 1,758,150 15,629,953
------------
93,652,621
Energy-9.0%
Domestic Producers-2.5%
Noble Energy, Inc. 171,370 9,478,475
Western Gas Resources, Inc. 277,260 9,340,889
------------
18,819,364
Oil Service-6.5%
BJ Services Co.(a) 359,870 17,871,144
FMC Technologies, Inc.(a) 311,130 9,333,900
Nabors Industries, Ltd. (Barbados)(a) 479,820 22,311,630
------------
49,516,674
------------
68,336,038
Finance-5.7%
Brokerage & Money Management-4.4%
Ameritrade Holding Corp.(a)* 1,962,810 21,767,563
Janus Capital Group, Inc.* 864,700 11,465,922
------------
33,233,485
Miscellaneous-1.3%
The Chicago Mercantile Exchange* 77,290 9,699,895
------------
42,933,380
10 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
Consumer Manufacturing-5.3%
Building & Related-4.3%
D.R. Horton, Inc. 816,947 $ 22,572,246
Lennar Corp. Cl.A* 236,970 10,113,879
------------
32,686,125
Miscellaneous-1.0%
Bunge, Ltd. (Bermuda) 184,520 7,404,788
------------
40,090,913
Basic Industry-2.4%
Chemical-1.3%
Pall Corp.* 406,340 9,414,898
Mining & Metals-1.1%
Massey Energy Co.* 307,820 8,511,223
------------
17,926,121
Consumer Staples-1.1%
Retail - Food & Drug-1.1%
Whole Foods Market, Inc.* 104,820 8,628,783
Total Common Stocks
(cost $663,777,764) 748,859,930
SHORT-TERM INVESTMENT-0.8%
Time Deposit-0.8%
State Street Euro Dollar
0.65%, 8/02/04
(cost $6,243,000) $ 6,243 6,243,000
Total Investments Before Security Lending
Collateral-99.9%
(cost $670,020,764) 755,102,930
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED**-24.2%
Short-Term Investment-24.2%
UBS Private Money Market Fund, LLC, 1.27%
(cost $183,067,988) 183,067,988 183,067,988
Total Investments-124.1%
(cost $853,088,752) 938,170,918
Other assets less liabilities-(24.1%) (182,292,822)
Net Assets-100.0% $ 755,878,096
* Represents entire or partial securities out on loan.
** See Note E for securities lending information.
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 11
STATEMENT OF ASSETS & LIABILITIES
July 31, 2004
Assets
Investments in securities, at value
(cost $853,088,752--including investment of
cash collateral for securities loaned
of $183,067,988) $ 938,170,918(a)
Cash 118
Receivable for investment securities sold 12,192,492
Receivable for capital stock sold 702,035
Dividends and interest receivable 53,060
Total assets 951,118,623
Liabilities
Payable for collateral on securities loaned 183,067,988
Payable for investment securities purchased 10,441,561
Payable for capital stock redeemed 806,936
Advisory fee payable 468,913
Distribution fee payable 204,597
Transfer Agent fee payable 116,311
Accrued expenses and other liabilities 134,221
Total liabilities 195,240,527
Net Assets $755,878,096
Composition of Net Assets
Capital stock, at par $1,434,872
Additional paid-in capital 765,361,417
Accumulated net realized loss on investment
transactions (96,000,359)
Net unrealized appreciation of investments 85,082,166
$ 755,878,096
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($610,854,208 / 113,599,738 shares of capital
stock issued and outstanding) $5.38
Sales charge--4.25% of public offering price .24
Maximum offering price $5.62
Class B Shares
Net asset value and offering price per share
($74,567,421 / 16,109,645 shares of capital
stock issued and outstanding) $4.63
Class C Shares
Net asset value and offering price per share
($26,016,763 / 5,630,969 shares of capital
stock issued and outstanding) $4.62
Advisor Class Shares
Net asset value, redemption and offering price per share
($44,439,704 / 8,146,889 shares of capital
stock issued and outstanding) $5.45
(a) Includes securities on loan with a value of $168,792,308 (see Note E).
See notes to financial statements.
12 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
STATEMENT OF OPERATIONS
Year Ended July 31, 2004
Investment Income
Dividends $ 1,242,383
Securities lending income 186,704
Interest 36,630 $ 1,465,717
Expenses
Management fee 5,599,082
Distribution fee--Class A 1,421,412
Distribution fee--Class B 757,902
Distribution fee--Class C 239,756
Transfer agency 1,845,772
Custodian 234,345
Printing 200,283
Audit and legal 115,121
Administrative 106,500
Registration 69,320
Directors' fees 19,500
Miscellaneous 25,581
Total expenses 10,634,574
Less: expenses waived/reimbursed by
the Adviser and the Transfer Agent
(see Note B) (75,508)
Less: expense offset arrangement
(see Note B) (130)
Net expenses 10,558,936
Net investment loss (9,093,219)
Realized and Unrealized Gain(Loss) on
Investment Transactions
Net realized gain on investment
transactions 206,659,498
Net change in unrealized
appreciation/depreciation
of investments (71,196,765)
Net gain on investment transactions 135,462,733
Net Increase in Net Assets
from Operations $ 126,369,514
See notes to financial statements.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 13
STATEMENT OF CHANGES IN NET ASSETS
Year Ended December 1, Year Ended
July 31, 2002 to November 30,
2004 July 31, 2003* 2002
-------------- -------------- --------------
Increase (Decrease) in
Net Assets from Operations
Net investment loss $ (9,093,219) $ (4,146,138) $ (7,710,224)
Net realized gain (loss) on
investment transactions 206,659,498 40,130,756 (186,108,624)
Net change in unrealized
appreciation/depreciation
of investments (71,196,765) 69,827,646 (24,491,326)
Net increase (decrease) in net
assets from operations 126,369,514 105,812,264 (218,310,174)
Capital Stock Transactions
Net decrease (461,518) (10,459,807) (141,756,741)
Total increase (decrease) 125,907,996 95,352,457 (360,066,915)
Net Assets
Beginning of period 629,970,100 534,617,643 894,684,558
End of period (including
accumulated net investment
income of $0, $0 and $0,
respectively) $ 755,878,096 $ 629,970,100 $ 534,617,643
* The Fund changed its fiscal year end from November 30 to July 31.
See notes to financial statements.
14 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 2004
NOTE A
Significant Accounting Policies
The AllianceBernstein Mid-Cap Growth Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund offers Class A, Class B, Class C and Advisor Class
shares. Class A shares are sold with a front-end sales charge of up to 4.25%
for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000
or more, Class A shares redeemed within one year of purchase may be subject to
a contingent deferred sales charge of 1%. Class B shares are currently sold
with a contingent deferred sales charge which declines from 4% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares eight years after the end of the
calendar month of purchase. Class C shares are subject to a contingent deferred
sales charge of 1% on redemptions made within the first year after purchase.
Advisor Class shares are sold without an initial or contingent deferred sales
charge and are not subject to ongoing distribution expenses. Advisor Class
shares are offered to investors participating in fee-based programs and to
certain retirement plan accounts. All four classes of shares have identical
voting, dividend, liquidation and other rights, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. The financial statements have been prepared in
conformity with U.S. generally accepted accounting principles which require
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities in the financial statements and amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates. Additional information about some of the items discussed
in these Notes to Financial Statements is contained in the Fund's Statement of
Additional Information, which is available upon request. The following is a
summary of significant accounting policies followed by the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to Alliance Capital Management, L.P. (the "Manager"), subject to the
Board's continuing oversight, certain responsibilities with respect to the
implementation of the Pricing Policies. Pursuant to the Pricing Policies,
securities for which market quotations are readily available are valued at
their current market value. In general, the market value of these securities is
determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or asked prices are quoted on such day, then the security is
valued in good faith at fair value in accordance with the Pricing Policies.
Securities listed on more than
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 15
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuations, the last available closing settlement price is used;
securities traded in the over-the-counter market, (but excluding securities
traded on NASDAQ) are valued at the mean of the current bid and asked prices as
reported by the National Quotation Bureau or other comparable sources; U.S.
Government securities and other debt instruments having 60 days or less
remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less, or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, the Pricing Policies provide that the
Adviser may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security. Securities for
which market quotations are not readily available are valued at fair value in
accordance with the Pricing Policies.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains, losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation or depreciation of investments
and foreign currency denominated assets and liabilities.
16 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Fund accretes discounts as adjustments to interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A and Advisor Class shares. Advisor Class shares have no
distribution fees.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income dividends and capital gains distributions are
determined in accordance with federal tax regulations and may differ from those
determined in accordance with U.S. generally accepted accounting principles. To
the extent these differences are permanent, such amounts are reclassified
within the capital accounts based on their federal tax basis treatment;
temporary differences, do not require such reclassification.
7. Change of Fiscal Year End
During 2003, the Fund changed its fiscal year end from November 30 to July 31.
Accordingly, the statement of changes in net assets and financial highlights
include the period from December 1, 2002 to July 31, 2003.
NOTE B
Management Fee and Other Transactions With Affiliates
Under the terms of the management agreement, the Fund pays the Manager a fee at
an annual rate of .75% on the first $500 million of average daily net assets,
..65% on the next $500 million of average daily net assets and .55% on average
daily net assets in excess of $1 billion. Such fee is accrued daily and paid
monthly.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 17
Pursuant to the management agreement, the Fund paid $106,500 to the Manager
representing the cost of certain legal and accounting services provided to the
Fund by the Manager for the year ended July 31, 2004.
For the year ended July 31, 2004, the Adviser voluntarily agreed to reimburse a
portion of certain audit fees related to the investigations described under
"Legal Proceedings" below in the amount of $2,600.
The Fund compensates Alliance Global Investor Services, Inc., (AGIS) a
wholly-owned subsidiary of the Manager, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. Such compensation amounted to $1,343,989 for the year ended July 31,
2004. In addition, AGIS agreed to waive a portion of its fees for the year
ended July 31, 2004. Such waiver amounted to $72,908.
For the year ended July 31, 2004, the Fund's expenses were reduced by $130,
under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), a wholly-owned subsidiary of the Manager, serves as the
distributor of the Fund's shares. The Distributor has advised the Fund that it
has retained front-end sales charges of $28,688 from the sale of Class A shares
and received $31,569, $131,039 and $8,665 in contingent deferred sales charges
imposed upon redemptions by shareholders of Class A, Class B and Class C
shares, respectively, for the year ended July 31, 2004.
Brokerage commissions paid on investment transactions for the year ended July
31, 2004 amounted to $4,965,887 of which $36,562 was paid to Sanford C.
Bernstein & Co. LLC, an affiliate of the Manager.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The fees are accrued daily and paid
monthly. The directors currently limit payments under the Class A plan to .22%
of average daily net assets attributable to Class A shares. The Agreement
provides that the Distributor will use such payments in their entirety for
distribution assistance and promotional activities. The Distributor has advised
the Fund that it has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amount of $7,000,612 and $2,043,319, for Class B
and Class C shares, respectively; such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect.
18 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the Manager
may use its own resources to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the year ended July 31, 2004, were as follows:
Purchases Sales
-------------- --------------
Investment securities (excluding
U.S. government securities) $1,044,927,158 $1,058,418,858
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation are as follows:
Cost $ 881,839,408
Gross unrealized appreciation $ 101,699,560
Gross unrealized depreciation (45,368,050)
Net unrealized appreciation $ 56,331,510
NOTE E
Securities Lending
The Fund has entered into a securities lending agreement with UBS Warburg LLC
(the"Lending Agent"). Under the terms of the agreement, the Lending Agent, on
behalf of the Fund, administers the lending of portfolio securities to certain
broker-dealers. In return, the Fund receives fee income from the lending
transactions or it retains a portion of interest on the investment of any cash
received as collateral. The Fund also continues to receive dividends or
interest on the securities loaned. Unrealized gain or loss on the value of the
securities loaned that may occur during the term of the loan will be reflected
in the accounts of the Fund. All loans are continuously secured by collateral
exceeding the value of the securities loaned. All collateral consists of either
cash or U.S. government securities. The Lending Agent may invest the cash
collateral received in an eligible money market vehicle in accordance with the
investment restrictions of the Fund. The Lending Agent will indemnify the Fund
for any loss resulting from a borrower's failure to return a loaned security
when due. As of July 31, 2004, the Fund had loaned securities with a value of
$168,792,308 and received cash collateral which was invested in a money market
fund valued at $183,067,988 as included in the accompanying portfolio of
investments. For the year ended July 31, 2004, the Fund earned fee income of
$186,704 which is included in the accompanying statement of operations.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 19
NOTE F
Capital Stock
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
Shares
- -------------------------------------------------------------------------------
December 1,
Year Ended 2002 Year Ended
July 31, to July 31, November 30,
2004 2003(a) 2002
- -------------------------------------------------------------------------------
Class A
Shares sold 22,242,280 94,001,095 666,869,479
Shares converted from Class B 811,000 338,320 699,555
Shares redeemed (30,623,278) (99,957,041) (684,023,732)
Net decrease (7,569,998) (5,617,626) (16,454,698)
Class B
Shares sold 8,239,640 3,585,069 3,266,084
Shares converted to Class A (816,813) (294,203) (796,739)
Shares redeemed (5,115,444) (2,204,819) (4,391,919)
Net increase (decrease) 2,307,383 1,086,047 (1,922,574)
Class C
Shares sold 3,654,996 2,054,344 1,153,569
Shares redeemed (1,751,807) (1,694,149) (1,440,877)
Net increase (decrease) 1,903,189 360,195 (287,308)
Advisor Class
Shares sold 6,376,822 1,513,917 24,749,469
Shares redeemed (2,933,093) (309,352) (48,366,425)
Net increase (decrease) 3,443,729 1,204,565 (23,616,956)
Amount
- -------------------------------------------------------------------------------
December 1,
Year Ended 2002 Year Ended
July 31, to July 31, November 30,
2004 2003(a) 2002
- -------------------------------------------------------------------------------
Class A
Shares sold $ 121,051,440 $ 338,227,909 $ 2,604,234,397
Shares converted from Class B 4,498,313 1,115,899 2,861,398
Shares redeemed (163,486,244) (360,496,511) (2,681,824,281)
Net decrease $ (37,936,491) $ (21,152,703) $ (74,728,486)
Class B
Shares sold $ 38,206,484 $ 12,225,807 $ 11,857,211
Shares converted to Class A (4,498,313) (1,115,899) (2,861,398)
Shares redeemed (23,593,092) (6,817,276) (14,731,968)
Net increase (decrease) $ 10,115,079 $ 4,292,632 $ (5,736,155)
(a) The Fund changed its fiscal year end from November 30 to July 31.
20 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Amount
- -------------------------------------------------------------------------------
December 1,
Year Ended 2002 Year Ended
July 31, to July 31, November 30,
2004 2003(a) 2002
- -------------------------------------------------------------------------------
Class C
Shares sold $ 17,059,128 $ 6,777,317 $ 4,071,203
Shares redeemed (8,317,397) (5,137,129) (4,987,444)
Net increase (decrease) $ 8,741,731 $ 1,640,188 $ (916,241)
Advisor Class
Shares sold $ 34,878,865 $ 5,862,285 $ 112,428,321
Shares redeemed (16,260,702) (1,102,209) (172,804,180)
Net increase (decrease) $ 18,618,163 $ 4,760,076 $ (60,375,859)
(a) The Fund changed its fiscal year end from November 30 to July 31.
NOTE G
Risk Involved in Investing in the Fund
In the ordinary course of business, the Fund enters into contracts that contain
a variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these indemnification provisions and expects the risk of loss
thereunder to be remote.
NOTE H
Components of Accumulated Earnings (Deficit)
As of July 31, 2004, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
Accumulated capital and other losses $ (67,249,702)(a)
Unrealized appreciation/(depreciation) 56,331,510(b)
Total accumulated earnings/(deficit) $ (10,918,192)
(a) On July 31, 2004, the Fund had a net capital loss carryforward of
$67,249,702 that expires in the year 2010. To the extent future capital gains
are offset by capital loss carryforward, such gains will not be distributed.
The Fund utilized $189,359,712 of capital loss carryforward during the year.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
During the year ended July 31, 2004, permanent differences, primarily due to a
net operating loss, resulted in a new decrease in accumulated net investment
loss and a corresponding decrease in additional paid-in capital. This
reclassification had no effect on net assets.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 21
NOTE I
Legal Proceedings
As has been previously reported in the press, the staff of the U.S. Securities
and Exchange Commission ("SEC") and the NYAG have been investigating practices
in the mutual fund industry identified as "market timing" and "late trading" of
mutual fund shares. Certain other regulatory authorities have also been
conducting investigations into these practices within the industry and have
requested that the Adviser provide information to them. The Adviser has been
cooperating and will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is subject to final,
memorialized in an Assurance of Discontinuance dated September 1, 2004 ("NYAG
Order"). Among the key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; however, it is not expected that the Fund will have its fee reduced;
and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
22 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
Morgan Stanley violated federal securities laws relating to its receipt of
compensation for selling specific mutual funds and the disclosure of such
compensation. The SEC has indicated publicly that, among other things, it is
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser in connection with
this matter and the Adviser has provided documents and other information to the
SEC and is cooperating fully with its investigation.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 23
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein Mutual Funds, including the
Fund, as nominal defendants. The Aucoin Complaint was filed in the United
States District Court for the Southern District of New York by an alleged
shareholder of the AllianceBernstein Growth & Income Fund. The Aucoin Complaint
alleges, among other things, (i) that certain of the defendants improperly
authorized the payment of excessive commissions and other fees from
AllianceBernstein Fund assets to broker-dealers in exchange for preferential
marketing services, (ii) that certain of the defendants misrepresented and
omitted from registration statements and other reports material facts
concerning such payments, and (iii) that certain defendants caused such conduct
as control persons of other defendants. The Aucoin Complaint asserts claims for
violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act,
Sections 206 and 215 of the Advisers Act, breach of common law fiduciary
duties, and aiding and abetting breaches of common law fiduciary duties.
Plaintiffs seek an unspecified amount of compensatory damages and punitive
damages, rescission of their contracts with the Adviser, including recovery of
all fees paid to the Adviser pursuant to such contracts, an accounting of all
AllianceBernstein Fund-related fees, commissions and soft dollar payments, and
restitution of all unlawfully or discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on the Fund or
its ability to perform advisory services relating to the Fund.
24 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
----------------------------------------------------------------------------
December 1,
Year Ended 2002 to Year Ended November 30,
July 31, July 31, --------------------------------------------------
2004 2003(a) 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $ 4.46 $ 3.70 $ 4.79 $ 5.83 $ 7.55 $ 5.97
Income From Investment
Operations
Net investment loss(b) (.06)(c) (.03) (.04) (.04) (.04) (.03)
Net realized and unrealized
gain (loss) on investment
transactions .98 .79 (1.05) (.71) (1.04) 2.00
Net increase (decrease) in net
asset value from operations .92 .76 (1.09) (.75) (1.08) 1.97
Less: Distributions
Distributions from net realized gain
on investment transactions -0- -0- -0- (.29) (.64) (.39)
Net asset value, end of period $ 5.38 $ 4.46 $ 3.70 $ 4.79 $ 5.83 $ 7.55
Total Return
Total investment return based
on net asset value(d) 20.63% 20.54% (22.76)% (13.64)% (15.73)% 35.37%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $610,854 $540,843 $469,570 $686,445 $856,956 $1,128,166
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.25% 1.45%(e) 1.34% 1.22% 1.04% 1.06%
Expenses, before waivers/
reimbursements 1.26% 1.45%(e) 1.34% 1.22% 1.04% 1.06%
Net investment loss (1.06)%(c) (1.11)%(e) (1.03)% (.69)% (.55)% (.41)%
Portfolio turnover rate 135% 75% 183% 226% 86% 97%
See footnote summary on page 28.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 25
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
----------------------------------------------------------------------------
December 1,
Year Ended 2002 to Year Ended November 30,
July 31, July 31, --------------------------------------------------
2004 2003(a) 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $ 3.87 $ 3.23 $ 4.22 $ 5.21 $ 6.87 $ 5.51
Income From Investment
Operations
Net investment loss(b) (.09)(c) (.03) (.07) (.07) (.09) (.07)
Net realized and unrealized
gain (loss) on investment
transactions .85 .67 (.92) (.63) (.93) 1.82
Net increase (decrease) in net
asset value from operations .76 .64 (.99) (.70) (1.02) 1.75
Less: Distributions
Distributions from net realized gain
on investment transactions -0- -0- -0- (.29) (.64) (.39)
Net asset value, end of period $ 4.63 $ 3.87 $ 3.23 $ 4.22 $ 5.21 $ 6.87
Total Return
Total investment return based on
net asset value(d) 19.64% 19.81% (23.46)% (14.34)% (16.48)% 34.24%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $74,567 $53,461 $41,096 $61,816 $81,569 $101,858
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.09% 2.32%(e) 2.20% 2.08% 1.87% 1.89%
Expenses, before waivers/
reimbursements 2.10% 2.32%(e) 2.20% 2.08% 1.87% 1.89%
Net investment loss (1.90)%(c) (1.98)%(e) (1.89)% (1.54)% (1.39)% (1.23)%
Portfolio turnover rate 135% 75% 183% 226% 86% 97%
See footnote summary on page 28.
26 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Financial Highlights
Class C
----------------------------------------------------------------------------
December 1,
Year Ended 2002 to Year Ended November 30,
July 31, July 31, --------------------------------------------------
2004 2003(a) 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $ 3.87 $ 3.22 $ 4.21 $ 5.20 $ 6.86 $ 5.50
Income From Investment
Operations
Net investment loss(b) (.09)(c) (.03) (.06) (.07) (.09) (.08)
Net realized and unrealized
gain (loss) on investment
transactions .84 .68 (.93) (.63) (.93) 1.83
Net increase (decrease) in net
asset value from operations .75 .65 (.99) (.70) (1.02) 1.75
Less: Distributions
Distributions from net realized gain
on investment transactions -0- -0- -0- (.29) (.64) (.39)
Net asset value, end of period $ 4.62 $ 3.87 $ 3.22 $ 4.21 $ 5.20 $ 6.86
Total Return
Total investment return based
on net asset value(d) 19.38% 20.19% (23.52)% (14.37)% (16.51)% 34.31%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $26,017 $14,415 $10,860 $15,391 $20,068 $28,025
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.06% 2.27%(e) 2.16% 2.04% 1.86% 1.86%
Expenses, before waivers/
reimbursements 2.07% 2.27%(e) 2.16% 2.04% 1.86% 1.86%
Net investment loss (1.87)%(c) (1.94)%(e) (1.85)% (1.51)% (1.34)% (1.22)%
Portfolio turnover rate 135% 75% 183% 226% 86% 97%
See footnote summary on page 28.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 27
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
----------------------------------------------------------------------------
December 1,
Year Ended 2002 to Year Ended November 30,
July 31, July 31, --------------------------------------------------
2004 2003(a) 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $4.52 $3.74 $4.83 $5.86 $7.58 $5.98
Income From Investment
Operations
Net investment loss(b) (.05)(c) -0- (.03) (.03) (.02) (.01)
Net realized and unrealized
gain (loss) on investment
transactions .98 .78 (1.06) (.71) (1.06) 2.00
Net increase (decrease) in net
asset value from operations .93 .78 (1.09) (.74) (1.08) 1.99
Less: Distributions
Distributions from net realized gain
on investment transactions -0- -0- -0- (.29) (.64) (.39)
Net asset value, end of period $5.45 $4.52 $3.74 $4.83 $5.86 $7.58
Total Return
Total investment return based
on net asset value(d) 20.58% 20.86% (22.57)% (13.39)% (15.66)% 35.66%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $44,440 $21,251 $13,092 $131,032 $8,304 $9,970
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.04% 1.23%(e) 1.08% 1.08% .83% .85%
Expenses, before waivers/
reimbursements 1.05% 1.23%(e) 1.08% 1.08% .83% .85%
Net investment loss (.85)%(c) (.89)%(e) (.81)% (.64)% (.35)% (.20)%
Portfolio turnover rate 135% 75% 183% 226% 86% 97%
(a) The Fund changed its fiscal year end from November 30 to July 31.
(b) Based on average shares outstanding.
(c) Net of expenses waived/reimbursed by the Adviser and the Transfer Agent.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares. Total
investment return calculated for a period of less than one year is not
annualized.
(e) Annualized.
28 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Report to Independent Registered Public Acccounting Firm
To the Board of Directors and Shareholders of
AllianceBernstein Mid-Cap Growth Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of AllianceBernstein Mid-Cap Growth
Fund, Inc. (the "Fund") at July 31, 2004 the results of its operations for the
year then ended, the changes in its net assets for the year ended July 31,
2004, for the period December 1, 2002 through July 31, 2003 and for the year
ended November 30, 2002 and the financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States), which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at July 31, 2004 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
September 24, 2004
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 29
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Marc O. Mayer, President
Thomas J. Bardong, Vice President
John L. Blundin, Vice President
Alan E. Levi, Vice President
Catherine Wood(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Custodian
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Toll-Free (800) 221-5672
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
(2) Ms. Wood is the person primarily responsible for the day-to-day management
of the Fund's investment portfolio.
30 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
PRINCIPAL IN FUND OTHER
NAME, AGE OF DIRECTOR, OCCUPATION(S) COMPLEX DIRECTORSHIPS
ADDRESS DURING OVERSEEN BY HELD BY
(YEARS OF SERVICE*) PAST 5 YEARS DIRECTOR DIRECTOR
- -------------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
William H. Foulk, Jr., #+, Investment Adviser and an 113 None
72 Independent Consultant. He was
2 Sound View Drive formerly Senior Manager of Barrett
Suite 100 Associates, Inc., a registered
Greenwich, CT 06830 investment adviser, with which he
(11) had been associated since prior to
(Chairman of the Board) 1999. He was formerly Deputy
Comptroller and Chief Investment
Officer of the State of New York and,
prior thereto, Chief Investment Officer
of the New York Bank for Savings.
Ruth Block, #+, 73 Formerly Executive Vice President 94 None
500 S.E. Mizner Blvd. and Chief Insurance Officer of The
Boca Raton, FL 33432 Equitable Life Assurance Society of
(14) the United States; Chairman and
Chief Executive Officer of Evlico.
Formerly a Director of Avon, BP (oil
and gas), Ecolab Incorporated
(specialty chemicals), Tandem Financial
Group and Donaldson, Lufkin & Jenrette
Securities Corporation and former
Governor at Large, National Association
of Securities Dealers, Inc.
David H. Dievler, #+, 74 Independent Consultant. Until 98 None
P.O. Box 167 December 1994, Senior Vice
Spring Lake, NJ 07762 President of ACMC responsible for
(22) mutual fund administration. Prior to
joining ACMC in 1984, he was Chief
Financial Officer of Eberstadt Asset
Management since 1968. Prior to that, he
was a Senior Manager at Price Waterhouse
& Co. Member of the American Institute of
Certified Public Accountants since 1953.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 31
PORTFOLIOS
PRINCIPAL IN FUND OTHER
NAME, AGE OF DIRECTOR, OCCUPATION(S) COMPLEX DIRECTORSHIPS
ADDRESS DURING OVERSEEN BY HELD BY
(YEARS OF SERVICE*) PAST 5 YEARS DIRECTOR DIRECTOR
- -------------------------------------------------------------------------------------------------------------------
John H. Dobkin, #+, 62 Consultant. He was formerly 96 None
P.O. Box 12 President of Save Venice, Inc.
Annandale, NY 12504 (preservation organization) from
(12) 2001-2002, Senior Advisor from
June 1999-June 2000 and President
of Historic Hudson Valley (historic
preservation) from December 1989-May
1999. Previously, Director of the
National Academy of Design and during
1988-1992, he was Director and Chairman
of the Audit Committee of ACMC.
Clifford L. Michel, #+, 65 Senior Counsel to the law firm of 96 Placer Dome, Inc.
15 St. Bernard's Road Cahill Gordon & Reindel since
Gladstone, NJ 07934 February 2001 and a partner of
(19) that firm for more than 25 years prior
thereto. He is President and Chief
Executive Officer of Wenonah
Development Company (investments) and
a Director of Placer Dome, Inc. (mining).
Donald J. Robinson, #+, Senior Counsel to the law firm of 95 None
70 Orrick, Herrington & Sutcliffe LLP
98 Hell's Peak Road since prior to 1999. Formerly a
Weston, VT 05161 senior partner and a member of the
(7) Executive Committee of that firm.
He was formerly a member and Chairman of
the Municipal Securities Rulemaking Board
and a Trustee of the Museum of the City
of New York.
* There is no stated term of office for the Fund's Directors.
# Member of the Audit Committee.
+ Member of the Nominating Committee.
32 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Management of the Fund
Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, POSITION(S) PRINCIPAL OCCUPATION
ADDRESS* AND AGE HELD WITH FUND DURING PAST 5 YEARS**
- -----------------------------------------------------------------------------------------------------------------------------
Marc O. Mayer, 46 President Executive Vice President of ACMC since 2001; prior
thereto, Chief Executive Officer of Sanford C.
Bernstein & Co., LLC ("SCB & Co.") and its
predecessor since prior to 1999.
Thomas J. Bardong, 59 Vice President Senior Vice President of ACMC,** with which he has been
associated since prior to 1999.
John L. Blundin, 62 Vice President Executive Vice President of ACMC,** with which he has
been associated since prior to 1999.
Alan E. Levi, 54 Vice President Senior Vice President of ACMC,** with which he has been
associated since 1999.
Catherine Wood, 48 Vice President Senior Vice President of ACMC,** and Chief Investment
Officer, Regent Investor Services, a division of
Alliance Capital since 2001. Previously she was a
General Partner, co-managing global equity-oriented
portfolios at Tupelo Capital Management since prior to
1999.
Mark R. Manley, 41 Secretary Senior Vice President and Chief Compliance Officer of
ACMC,** with which he has been associated since prior
to 1999.
Andrew L. Gangolf, 50 Assistant Secretary Senior Vice President and Assistant General Counsel of
AllianceBernstein Investment Research and Management,
Inc. ("ABIRM"),** with which he has been associated
since prior to 1999.
Mark D. Gersten, 53 Treasurer and Chief Senior Vice President of Alliance Global
Financial Officer Investor Services, Inc. ("AGIS")** and Vice
President of ABIRM,** with which he has been associated
since prior to 1999.
Vincent S. Noto, 39 Controller Vice President of AGIS,** with which he has been
associated since prior to 1999.
* The address for each of the Fund's officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM, and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information (SAI) has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at (800) 227-4618 for a free prospectus or SAI.
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 33
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy*
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy**
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Small Cap Growth Fund
Technology Fund
Global & International
All-Asia Investment Fund
Global Research Growth Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
- --------------------------------------------
Intermediate Municipal Bond Funds
- --------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
- --------------------------------------------
Closed-End Funds
- --------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,# which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. Please read the prospectus carefully before you invest or send
money.
* Formerly Growth Investors Fund.
** Formerly Conservative Investors Fund.
# An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
34 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
NOTES
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 35
NOTES
36 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
(SM) This service mark used under license from
the owner, Alliance Capital Management L.P.
ALLAR0704
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting officer.
A copy of the registrant's code of ethics is filed herewith as Exhibit 11(a)(1).
(b) During the period covered by this report, no material amendments were made
to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers to
the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table sets forth the aggregate fees billed by the
independent auditor, PricewaterhouseCoopers LLP, for the Fund's last two fiscal
years for professional services rendered for: (i) the audit of the Fund's annual
financial statements included in the Fund's annual report to stockholders; (ii)
assurance and related services that are reasonably related to the performance of
the audit of the Fund's financial statements and are not reported under (i),
which include advice and education on accounting and auditing issues, and
consent letters; (iii) tax compliance, tax advice and tax return preparation;
and (iv) aggregate non-audit services provided to the Fund, the Fund's Adviser
and entities that control, are controlled by or under common control with the
Adviser that provide ongoing services to the Fund ("Service Affiliates"). No
other services were provided to the Fund during this period.
All Fees for
Non-Audit Services
Provided to the
Portfolio, the
Adviser
Audit-Related and Service
Audit Fees Fees Tax Fees Affiliates
- -------------------------------------------------------------------------------
2003*: $37,600 $5,053 $15,238 $ 544,011
2004: $39,000 $1,560 $14,790 $ 743,424
* Fiscal year 2003 was comprised of only eight calendar months due to a
change in fiscal year end from November 30 to July 31.
Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by the
Fund's independent auditors. The Fund's Audit Committee policies and procedures
also require pre-approval of all audit and non-audit services provided to the
Adviser and Service Affiliates to the extent that these services are directly
related to the operations or financial reporting of the Fund. Accordingly, all
of the amounts in the table for Audit Fees, Audit-Related Fees and Tax Fees for
the entire period ended 2003 and 2004 are for services pre-approved by the
Fund's Audit Committee. The amounts of the Fees for Non-Audit Services provided
to the Fund, the Adviser and Service Affiliates in the table for the Fund, that
were subject to pre-approval by the Audit Committee for the entire period ended
2003 and 2004 were as follows:
Non-Audit Services Pre-Approved
by the Audit Committee
---------------------------------------
Audit
Related Tax
Fees Fees Total
-------- ------- ---------
2003 $5,053 $15,238 $20,291
2004 $1,560 $14,790 $16,350
The Audit Committee of the Fund has considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditor to the Adviser and Service Affiliates is compatible
with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last provided
disclosure in response to this item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no significant changes in the registrant's internal controls
that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- -----------------------
11 (a) (1) Code of ethics that is subject to the disclosure of
Item 2 hereof
11 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Mid-Cap Growth Fund, Inc.
By: /s/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: September 29, 2004
---------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
---------------------
Marc O. Mayer
President
Date: September 29, 2004
---------------------
By: /s/ Mark D. Gersten
---------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: September 29, 2004
---------------------