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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Alliance Institutional Funds, Inc.
----------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rule 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
--------------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
<PAGE>
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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ALLIANCE BOND FUND, INC. -
U.S. Government Portfolio
ALLIANCE INSTITUTIONAL FUNDS, INC. -
Alliance Premier Growth Institutional Fund
Alliance Special Equity Institutional Fund
Alliance Quasar Institutional Fund
1345 Avenue of the Americas
New York, New York 10105
Toll Free (800) 221-5672
October [_], 2000
To the Stockholders of Alliance Bond Fund, Inc. - U.S. Government
Portfolio ("U.S. Government"), Alliance Institutional Funds, Inc.
- Alliance Premier Growth Institutional Fund ("Premier Growth
Institutional Fund"), Alliance Institutional Funds, Inc. -
Alliance Special Equity Institutional Fund ("Special Equity
Institutional"), and Alliance Institutional Funds, Inc. -
Alliance Quasar Institutional Fund ("Quasar Institutional")
(collectively, the "Funds"):
The accompanying Notice of Meeting and Proxy Statement
present three proposals to be considered at the Funds' Joint
Special Meeting of Stockholders (the "Meeting") to be held on
December 12, 2000. The proposals are discussed more fully in the
accompanying Proxy Statement.
The first proposal revises the Funds' fundamental investment
restrictions to permit the Funds to engage in securities lending
to the full extent permitted by the Investment Company Act of
1940 (the "1940 Act"). The last two proposals relax or remove,
in each case consistent with the 1940 Act, certain investment
restrictions that were originally required by old state "blue
sky" laws that were preempted and thus nullified by Congress in
1996. These restrictions are not required by the 1940 Act. The
Boards of Directors believe that it is in the best interests of
the Funds and their stockholders to change these policies to
provide the Funds with the investment flexibility allowed by the
1940 Act.
We welcome your attendance at the Meeting. If you are unable
to attend, we encourage you to vote your proxy promptly, in order
to spare the Funds additional proxy solicitation expenses.
Shareholder Communications Corporation ("SCC"), a professional
proxy solicitation firm, has been selected to assist stockholders
in the voting process. As the date of the Meeting approaches, if
we have not yet received your proxy, you may receive a telephone
call from SCC reminding you to exercise your right to vote. If
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you have any questions regarding the Meeting agenda or how to
submit your proxy, please call SCC at (800) 733-8481 ext.454.
Sincerely,
John D. Carifa
Chairman and President
4
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[Alliance Capital Logo]
Alliance Bond Fund, Inc. - U.S. Government Portfolio
Alliance Institutional Funds, Inc.
- Alliance Premier Growth Institutional Fund
- Alliance Special Equity Institutional Fund
- Alliance Quasar Institutional Fund
___________________________________________________________
1345 Avenue of the Americas, New York, New York 10105
Toll Free (800) 221-5672
___________________________________________________________
NOTICE OF JOINT SPECIAL MEETING OF STOCKHOLDERS
December 12, 2000
To the Stockholders of Alliance Bond Fund, Inc. - U.S. Government
Portfolio ("U.S. Government"), Alliance Institutional Funds, Inc.
- Alliance Premier Growth Institutional Fund ("Premier Growth
Institutional "), Alliance Institutional Funds, Inc. - Alliance
Special Equity Institutional Fund ("Special Equity
Institutional"), and Alliance Institutional Funds, Inc. -
Alliance Quasar Institutional Fund ("Quasar Institutional"):
Notice is hereby given that a Joint Special Meeting of
Stockholders (the "Meeting") of U.S. Government, Premier Growth
Institutional, Special Equity Institutional, and Quasar
Institutional, each a Maryland corporation (the "Funds"), will be
held at the offices of the Funds, 1345 Avenue of the Americas,
33rd Floor, New York, New York 10105, on Tuesday, December 12,
2000 at 11:00 a.m., for the following purposes, all of which are
more fully described in the accompanying Proxy Statement dated
October [__], 2000:
1. To approve an amendment of each Fund's fundamental
policy to permit each Fund to engage in securities
lending to the extent permitted by the Investment
Company Act of 1940, as amended (the "1940 Act");
2. To approve the amendment of certain of the Funds'
fundamental policies, in each case consistent with the
1940 Act;
3. To approve the removal or reclassification of certain of
the Funds' fundamental policies as non-fundamental; and
4. To transact such other business as may properly come
before the Meeting.
The Boards of Directors have fixed the close of business
on September 15, 2000 as the record date for the
determination of stockholders entitled to notice of, and
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to vote at, the Meeting and any postponement or
adjournment thereof.
The enclosed proxy is being solicited on behalf of the
Boards of Directors of the Funds. Each stockholder who does not
expect to attend the Meeting in person is requested to complete,
date, sign and promptly return the enclosed proxy card, or to
vote by telephone or via the Internet as described on the
enclosed proxy card.
The Boards of Directors recommends approval of all the
proposals.
By Order of the Boards of Directors,
Edmund P. Bergan, Jr.
Secretary
New York, New York
October [__], 2000
-------------------------------------------------------------
YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the enclosed
proxy card, sign and date it, and return it in the envelope
provided, which needs no postage if mailed in the United States.
You may also vote via the Internet or by telephone. To do so,
please follow the instructions on the enclosed proxy card. Your
vote is very important no matter how many shares you own. Please
mark and mail your proxy promptly or vote by telephone or through
the Internet in order to save the Fund any additional cost of
further proxy solicitation and in order for the Meeting to be
held as scheduled.
-----------------------------------------------------------
(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.
6
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PROXY STATEMENT
Alliance Bond Fund, Inc. - U.S. Government Portfolio
Alliance Institutional Funds, Inc.
- Premier Growth Institutional Fund
- Special Equity Institutional Fund
- Quasar Institutional Fund
1345 Avenue of the Americas
New York, New York 10105
----------------
JOINT SPECIAL MEETING OF STOCKHOLDERS
December 12, 2000
----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Boards of Directors of
Alliance Bond Fund, Inc. - U.S. Government Portfolio ("U.S.
Government"), Alliance Institutional Funds, Inc. - Alliance
Premier Growth Institutional Fund ("Premier Growth
Institutional"), Alliance Institutional Funds, Inc. - Alliance
Special Equity Institutional Fund ("Special Equity
Institutional"), and Alliance Institutional Funds, Inc. -
Alliance Quasar Institutional Fund ("Quasar Institutional"), each
a Maryland corporation (individually, a "Fund" and collectively,
the "Funds"), to be voted at the Joint Special Meeting of
Stockholders of the Funds (the "Meeting"), to be held at the
offices of the Funds, 1345 Avenue of the Americas, 33rd Floor,
New York, New York 10105, on Tuesday, December 12, 2000 at 11:00
a.m. Proxies will be solicited primarily by mail and may also be
made by telephone. Solicitation costs will be borne by Alliance
Capital Management L.P., the Funds' investment adviser
("Alliance").
The Boards of Directors have fixed the close of business
on September 15, 2000 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
and at any postponement or adjournment thereof (the "Record
Date"). The outstanding voting shares of the Funds as of the
Record Date consisted of [_________] shares of common stock of
U.S. Government, [________] shares of common stock of Premier
Growth Institutional, [__________] shares of common stock of
Special Equity Institutional, and [________] shares of common
stock of Quasar Institutional, representing all classes of shares
for each Fund, each share being entitled to one vote. All
properly executed and timely received proxies will be voted in
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accordance with the instructions marked thereon or otherwise
provided therein. Accordingly, unless instructions to the
contrary are marked, proxies will be voted for the approval of an
amendment to the Fund's fundamental policy to permit the lending
of securities to the extent permitted by the Investment Company
Act of 1940, as amended (the "1940 Act") (Proposal One), for the
approval of the amendment of certain of the Fund's fundamental
policies, in each case consistent with the 1940 Act, (Proposal
Two), and for the approval of the removal or reclassification of
certain of the Funds' fundamental policies as non-fundamental
("Proposal Three"). (These proposals are referred to
individually as a "Proposal" and collectively as the
"Proposals".) Any stockholder may revoke that stockholder's
proxy at any time prior to exercise thereof by giving written
notice to the Secretary of the Funds at 1345 Avenue of the
Americas, New York, New York 10105, by signing another proxy of a
later date or by personally voting at the Meeting.
Properly executed proxies may be returned with
instructions to abstain from voting or to withhold authority to
vote (an "abstention") or represent a broker "non-vote" (which is
a proxy from a broker or nominee indicating that the broker or
nominee has not received instructions from the beneficial owner
or other person entitled to vote shares on a particular matter
with respect to which the broker or nominee does not have
discretionary power to vote). Abstentions and broker non-votes
will be considered present for purposes of determining the
existence of a quorum for the transaction of business, but will
have no effect on the outcome of the Proposals. If any proposal,
other than the Proposals, properly comes before the Meeting, the
shares represented by proxies will be voted on all such proposals
in the discretion of the person or persons voting the proxies.
The Funds have not received notice of, and are not otherwise
aware of, any other matter to be presented at the Meeting.
A quorum for the Meeting will consist of the presence in
person or by proxy of the holders of one-third of the shares
entitled to vote for each Fund at the Meeting. Whether or not a
quorum is present at the Meeting, if sufficient votes in favor of
the position recommended by the Boards of Directors on any
Proposal are not timely received, the persons named as proxies
may, but are under no obligation to, with no other notice than
announcement at the Meeting, propose and vote for one or more
adjournments of the Meeting to permit further solicitation of
proxies. The Meeting may be adjourned with respect to fewer than
all the Proposals in the Proxy Statement and a stockholder vote
may be taken on any one or more of the Proposals prior to any
adjournment if sufficient votes have been received for approval
thereof. Shares represented by proxies indicating a vote
contrary to the position recommended by the Boards of Directors
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on a Proposal will be voted against adjournment as to that
Proposal.
The Funds have engaged Shareholder Communications
Corporation ("SCC"), 17 State Street, New York, New York 10004,
to assist the Funds in soliciting proxies for the Meeting. SCC
will receive a fee of $[________] for its services plus
reimbursement of out-of-pocket expenses.
The Meeting is scheduled as a joint meeting of the
respective stockholders of the Funds because the stockholders of
all the Funds are to consider and vote on similar matters.
Stockholders of each Fund will vote separately on each Proposal
and an unfavorable vote on a Proposal by the stockholders of one
Fund will not affect the implementation of the Proposal by any
other Fund if such Proposal is approved by the stockholders of
the other Fund.
The following table summarizes the Proposals on which
stockholders are being asked to vote and indicates which
stockholders are eligible to vote on each proposal.
BRIEF DESCRIPTION OF STOCKHOLDERS WHO WILL
PROPOSAL PROPOSAL VOTE ON THE PROPOSAL
Proposal 1 To amend a fundamental Stockholders of all Funds
policy to permit voting separately by Fund
securities lending to
the extent permitted
by the 1940 Act
Proposal 2 To amend certain Stockholders of all Funds
fundamental policies voting separately by Fund
-Premier Growth
Institutional
-Special Equity
Institutional
-Quasar Institutional
Proposal 3 To approve the removal Stockholders of all Funds
or reclassification of voting separately by Fund
certain fundamental
policies as non-fundamental
and, in certain cases,
revise that policy
-U.S. Government
-Quasar Institutional
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PROPOSAL ONE
APPROVAL OF A PROPOSAL
TO AMEND A FUNDAMENTAL POLICY
TO PERMIT SECURITIES LENDING TO THE
EXTENT PERMITTED BY THE 1940 ACT
(All Funds)
The fundamental policies of each of the Funds currently
do not permit lending. Under their current policies, the Funds
generally may not make loans with certain exceptions for the
purchase of debt obligations. At its September 7, 2000 Special
Meeting, Alliance informed the Directors that it was developing,
for the Director's consideration, proposed securities lending
arrangements for many Alliance Mutual Funds, including the Funds.
Alliance noted that the proposed arrangements would enable each
participating fund to earn incremental investment income through
the lending of a portion of the Fund's portfolio securities on
terms designed to avoid any impingement of the Fund's ongoing
investment process. Alliance stated that in anticipation of
these recommendations, it was recommending the revision of the
Funds' fundamental investment restrictions generally prohibiting
the Funds from engaging in securities lending. At the September
7, 2000 Meeting, the Boards of Directors approved Alliance's
recommendation that these fundamental policies be revised to
permit the Funds to engage in securities lending to the extent
permitted by the 1940 Act. The Boards further resolved to
recommend this change to the Fund's stockholders for their
approval. The current and proposed policies are set forth in
Exhibit A.
In recommending this change, Alliance informed the
Boards that this absolute prohibition was not required by the
1940 Act. Alliance noted that this restriction was required by
state "blue sky" laws that were nullified by the federal
preemption of state regulation of mutual fund prospectuses passed
by Congress in 1996. Alliance noted that in order to ensure that
the Funds can continue to compete with newer funds created after
federal preemption that are not so constrained, as well as older
funds that changed their lending policies to permit securities
lending, it was recommending that this fundamental policy and a
related policy be revised so as to provide the Funds with
essentially the same investment flexibility to engage in
securities lending as is possessed by the majority of the
Alliance Mutual Funds, which are permitted to engage in
securities lending to the extent permitted by the 1940 Act.
If the proposal is approved by the stockholders of each
Fund, each Fund would, as currently permitted, be able to lend
portfolio securities up to a maximum in value of 33 1/3% of its
total assets (including collateral for any security loaned). A
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Fund would lend securities only on a fully collateralized basis
and only to borrowers deemed by Alliance to be of sound financial
standing. While any such loan is outstanding, it would be
secured by collateral in the form of cash or securities issued or
guaranteed by the U.S. Government, equal at all times to at least
100% of the current market value of the loaned securities plus,
if applicable, accrued interest. All such loans could be
terminated at any time by either the Fund (entitling the Fund to
the return of the loaned securities at the end of the customary
settlement period for the type of securities loaned) or the
borrower. It is currently expected that the transactions would
be structured so that a Fund would retain rights of ownership of
the loaned securities, including rights to dividends, interest or
other distributions on the loaned securities. Voting rights
would pass with the lending, although a Fund would be able to
call loans to vote proxies if desired.
Approval of this Proposal requires the affirmative vote
of "a majority of the outstanding voting securities" as defined
by the 1940 Act, which means the lesser of (i) 67% or more of the
voting securities of each Fund present or represented at the
Meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities
of the Fund ("1940 Act Majority"). If the stockholders of a Fund
do not approve the amendment to the Fund's fundamental policy to
permit lending to the extent permitted by the 1940 Act, that
Fund's policy will remain unchanged.
Your Board of Directors recommends that the stockholders
vote "FOR" the approval of Proposal One.
PROPOSAL TWO
APPROVAL OF PROPOSALS TO
AMEND CERTAIN
FUNDAMENTAL POLICIES
(PROPOSALS 2A-2C)
The primary purpose of Proposals 2A through 2C is to
amend certain fundamental investment restrictions of the Premier
Growth Institutional, Special Equity Institutional, and Quasar
Institutional. As discussed below, some of these restrictions
have their origin in old "blue sky" undertakings, which were
nullified by Congress in 1996. These restrictions could
conceivably serve as an impediment to a Fund's investment
process. If approved by the Funds' stockholders, the amended
fundamental policies could not be changed without a further
stockholder vote. If a proposed restriction is not approved by a
particular Fund, the current investment restriction will remain
in place as a fundamental restriction and stockholder approval
11
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(with its attendant costs and delays) will continue to be
required prior to any change in the investment restriction.
The discussions below describe each proposal and the
reasons for each recommendation. Please refer to the Exhibit B
following this discussion to compare your Fund's current policies
to the proposed policies.
PROPOSAL 2A APPROVAL OF A PROPOSAL TO AMEND A FUNDAMENTAL
POLICY RELATING TO PORTFOLIO DIVERSIFICATION TO
PERMIT CERTAIN FUNDS TO FULLY USE THE INVESTMENT
LATITUDE FOR DIVERSIFIED FUNDS ESTABLISHED BY THE
1940 ACT
(Premier Growth Institutional and Special Equity
Institutional)
Although each of Premier Growth Institutional and
Special Equity Institutional is a "diversified" investment
company under the 1940 Act, these Funds have a fundamental policy
that is more restrictive than that required of a diversified
investment company. To be "diversified" under the 1940 Act, an
investment company must not, with respect to 75% of its total
assets, invest more than 5% of its total assets in the securities
of any one issuer (the "5% limit") or acquire more than 10% of
the outstanding voting securities of any one issuer (the "10%
limit"). Up to 25% of its total assets (the "25% basket") may be
invested without regard to these restrictions (i.e., up to 25% in
one or more issuers).
Under the current fundamental policies of both Funds,
the 10% limit applies to 100% of its total assets, rather than
75% that is permitted under the 1940 Act. At its September 7,
2000 Special Meeting, the Board of Directors approved Alliance's
recommendation that this fundamental policy be revised to permit
the Funds to invest in accordance with the limits contained in
the 1940 Act for diversified investment companies. In making its
recommendation, Alliance noted that these changes would enable
the Funds to remain competitive with newer funds that are not
subject to these restrictions, as well as older funds that
changed their diversification policies to remove similar
restrictions, and would allow the Fund the flexibility to take
larger positions within its non-diversified 25% basket when
Alliance deems appropriate. Alliance stated that it believed
that the adoption of this change would not materially affect the
operation of the Funds, although it was expected that the Funds
would avail themselves of the occasional opportunities presented
by the non-diversified 25% basket. The returns of a fund that
may invest 25% of its total assets in a single issuer may be more
dependent on a single stock and may be more volatile than those
of a fund that is subject to a lower limit on such investments.
The current fundamental policies and the proposed revised
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fundamental policies are set forth in Exhibit B to this Proxy
Statement.
PROPOSAL 2B APPROVAL OF A PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICY OF PREMIER GROWTH INSTITUTIONAL
RELATING TO INVESTMENTS IN N0N-U.S. COMPANIES
(Premier Growth Institutional)
Premier Growth Institutional currently has a fundamental
policy to invest at least 85% of its total assets in equity
securities of "U. S. Companies". A "U.S. Company" is defined as
a company that (i) is organized under United States law, (ii) has
its principal office in the United States, and (iii) issues
equity securities that are traded principally in the United
States. At a meeting on September 26, 2000, the Board of
Directors of the Fund approved Alliance's recommendation to (i)
reduce the 85% limitation to 80% (ii) remove the definition of
"U.S. Company", and in lieu of defining U.S. Company, adopt a new
definition of "Non-U.S. Company" for the purposes of the policy.
The Board further resolved to recommend these changes to the
Fund's stockholders for their approval.
In recommending these changes, Alliance advised the
Board that in recent years many companies had become more global
in nature, expanding their business and markets outside the
United States. At the same time, many of these companies
continue to have a very significant business presence in the
United States and continue to issue securities that trade
predominately in the United States. Alliance advised the Board
that in order to enable the Fund to continue to invest in the
same companies as it has in the past, the definition of '"U.S.
Company" should be removed and, instead, Alliance proposed that
the Directors adopt a new definition of "Non-U.S. Company" to be
applicable to the Fund. One of the main goals of the proposed
definition is to address the situation of an issuer, which has in
the past been considered to be a U.S. Company, but which
reorganizes outside the U.S. or moves its principal place of
business outside the U.S. and continues to issue securities that
trade predominately in the United States. Under this new
definition, a "Non-U.S. Company" would be a company that (i) is
organized outside the United States, (ii) has a principal place
of business outside the United States, and (iii) issues
securities that are traded principally on a stock exchange in a
foreign country. Companies that did not fall within the
definition of "Non-U.S. Company" would be considered to be U.S.
companies for purposes of the Fund's fundamental policy.
Alliance advised the Directors that, as a result of these
proposals if approved, a company that was either organized or had
a principal place of business outside the United States, but
which issued securities principally traded in the United States,
would be considered to be a U.S. company.
13
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In addition, Alliance advised the Board that it was
recommending that the current fundamental requirement that the
Fund invest at least 85% of its total assets in U.S. Companies be
reduced to 80% to allow the Fund additional flexibility in
managing the Fund's portfolio. Alliance informed the Directors
it was recommending this additional change because there are some
companies in which the Fund has invested in the past that will be
considered to be "Non-U.S. Companies" even under the proposed
revised definition. This increased latitude will allow the Fund
to continue to invest in the same companies as it has in the
past. Alliance advised the Board that it did not expect that
this change would significantly affect the management of the
Fund.
PROPOSAL 2C APPROVAL OF A PROPOSAL TO AMEND A FUNDAMENTAL
POLICY TO PERMIT THE FUNDS TO PURCHASE AND SELL
FINANCIAL FORWARD AND FUTURES CONTRACTS AND OPTIONS
THEREON
(Quasar Institutional and Special Equity
Institutional)
At their September 7, 2000, Special Meeting, the Board
of Directors of Special Equity Institutional and Quasar
Institutional considered and approved Alliance's recommendation
that each of the Fund's fundamental policies be amended to permit
the use of stock index futures and options thereon for hedging
purposes.
In making its recommendation, Alliance noted that each
Fund has a fundamental policy against investment in commodities
or commodity contracts. As a result of this restriction,
Alliance noted, index futures are currently unavailable to each
of the Funds.
In making this recommendation, Alliance stated its
belief that, as the use of these instruments has become more
prevalent in the marketplace, each Fund's inability to use, at
least for hedging purposes, financial commodities including stock
index futures and options thereon places the Fund at a
competitive disadvantage. As a result, Alliance considered it in
the best interests of each Fund and its respective stockholders
to obtain stockholder action appropriately amending the
investment policies and installing more permissive non-
fundamental investment policies. The current fundamental
policies and the proposed non-fundamental policies (which may be
subsequently be changed by the Boards of Directors without a
stockholder vote) are set forth in Exhibit B to this Proxy
Statement.
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The proposed non-fundamental investment policies would
provide that each Fund may utilize financial forward and futures
contracts and options thereon only for hedging purposes. In
addition, each Fund would not enter into any futures contracts or
options on futures contracts if immediately thereafter the market
values of the outstanding futures contracts of each Fund and the
futures contracts subject to outstanding options written by a
Fund would exceed 50% of its total assets. Each Fund would not
purchase or sell a stock index futures contract if immediately
thereafter more than 30% of its total assets would be hedged with
stock index futures. Finally, each Fund would not purchase or
sell a stock index future contract if, immediately thereafter,
the sum of the amount of margin deposits on such Fund's existing
futures positions would exceed 5% of the market value of the
Fund's total assets. In connection with its purchase of stock
index futures contracts, each Fund would deposit in a segregated
account with the Fund's custodian an amount of liquid assets
equal to the market value of the futures contracts less any
amounts maintained in a margin account with the Fund's broker.
Based upon Alliance's presentation, the Board of
Directors concluded that the proposed amendment to each Fund's
fundamental investment policies to permit the use of financial
forward and futures contracts and the adoption of the non-
fundamental investment policies would be in the best interests of
each Fund and its respective stockholders. The Board further
resolved to recommend this change to the Funds' stockholders for
their approval. Adoption of this change is not expected to
materially change the operation of the Funds.
Approval of Proposal 2 requires the affirmative vote of
the holders of a 1940 Act Majority. If the stockholders of a
fund do not approve the amendment of a Funds' fundamental
policies, that Fund's policies will remain the same.
The Boards of Directors of Premier Growth Institutional,
Special Equity Institutional and Quasar Institutional recommend
that the stockholders of each of the Funds vote "FOR" the
approval of Proposal 2.
PROPOSAL THREE
APPROVAL OF PROPOSALS
TO REMOVE OR RECLASSIFY CERTAIN OF
THE FUNDS' FUNDAMENTAL
POLICIES AS NON-FUNDAMENTAL
(PROPOSALS 3A-3C)
The primary purpose of Proposals 3A-3C is to reclassify
the fundamental policy of U.S. Government regarding the writing,
purchasing or selling of puts and calls to a non-fundamental
15
<PAGE>
policy, remove a fundamental policy of U.S. Government with
respect to its investment in unseasoned issuers and to revise and
reclassify the fundamental policies of U.S. Government and Quasar
Institutional with respect to their investment in illiquid
securities as non-fundamental policies.
The discussions below are a general overview of the
Fund's current policies. Please refer to Exhibit C following
this discussion to compare your Fund's current policies to the
proposed policies. The Boards of Directors of the Funds
recommend that stockholders approve the proposal.
PROPOSAL 3A APPROVAL OF A PROPOSAL TO RECLASSIFY THE
FUNDAMENTAL POLICY REGARDING THE WRITING,
PURCHASING OR SELLING OF PUTS, CALLS OR ANY
COMBINATION THEREOF TO A NON-FUNDAMENTAL POLICY
(U.S. Government)
The fundamental policies of U.S. Government currently do
not permit U.S. Government to write, purchase or sell puts, calls
or any combination thereof. The Fund is not required under the
1940 Act to have such a fundamental policy. The Directors are
recommending the reclassification of this fundamental restriction
to non-fundamental in order to preserve the flexibility of the
Fund to respond to changed market, industry or regulatory
conditions without the expense and delay of a stockholder vote.
The Directors are not proposing any substantive change in the
policy at this time. If the Proposal is adopted, the Directors
would adopt an identical non-fundamental investment policy.
PROPOSAL 3B APPROVAL OF A PROPOSAL TO REMOVE A FUNDAMENTAL
POLICY THAT RESTRICTS INVESTMENTS IN UNSEASONED
ISSUERS
(U.S. Government)
U.S. Government currently has a policy providing that
the Fund shall not invest more than 15% of its assets in
securities of companies (including predecessors) that have a
record of less than three years of continuous operation (often
called "unseasoned issuers"). The Board of Directors of U.S.
Government is recommending the removal of the policy. The Fund's
current policy is set forth in Exhibit C to this Proxy Statement.
The Fund adopted the "unseasoned issuer" restriction in
response to state "blue sky" requirements in connection with the
registration of shares of the Fund for the sale. As discussed
above, all state securities laws and regulations regarding
fundamental investment restrictions have been preempted by
federal law and no longer apply. Alliance discussed with the
Board of Directors that it recognizes that the investment in
securities of companies with less than three years of continuous
16
<PAGE>
operating history might not be appropriate for funds investing in
companies with larger capitalizations. However, for funds that
invest in securities issued by governmental agencies or
instrumentalities (some of which may involve newly created
special purpose corporations), like U.S. Government, Alliance
does not believe that a blanket prohibition against these types
of investments is in the best interest of the Fund or its
stockholders. Alliance stated that the Fund may from time to
time, consistent with its investment strategies, encounter
investment opportunities from these types of issuers in which the
Fund may desire the flexibility to invest. Based on Alliance's
recommendation, the Board of Directors of the Fund therefore
recommends that stockholders approve the removal of this
investment restriction.
PROPOSAL 3C APPROVAL OF A PROPOSAL TO RECLASSIFY THE
FUNDAMENTAL POLICY REGARDING INVESTMENTS IN
ILLIQUID SECURITIES AS NON-FUNDAMENTAL AND TO
REVISE THE POLICY
(Quasar Institutional and U.S. Government)
Each of U.S. Government and Quasar Institutional
currently has a fundamental policy applicable to investments in
illiquid securities that is more restrictive than that currently
required by the Securities and Exchange Commission ("SEC").
Under the SEC's standards, non-money market mutual funds must
limit their holdings in illiquid securities to 15% of their net
assets. This SEC position is not required to be a fundamental
policy. For the purpose of the 15% limitation, a security
generally would be considered illiquid if it could not be sold or
disposed of in the ordinary course of business within seven days
at approximately the value at which the security is valued by a
fund. Generally, Rule 144A securities that are determined by a
Fund's Board of Directors to be liquid are not considered to be
"illiquid" for purposes of these tests.
Quasar Institutional currently has a fundamental policy
limiting the Fund's investments in illiquid securities to 10% of
its net assets. U.S. Government has a fundamental policy
limiting these investments to 15% of net assets. In addition,
both Funds' fundamental policy applies to all restricted
securities, including Rule 144A securities. Because Rule 144A
securities are "restricted", each Fund's fundamental policy does
not permit the Fund to consider Rule 144A securities as liquid
and not subject to the restrictions on investments in illiquid
securities even if the Board of Directors determined them to be
liquid.
These more restrictive investment limitations grow out
of old state "blue sky" provisions, which, as discussed above, no
longer apply to funds. Quasar Institutional's policy is more
17
<PAGE>
restrictive than the SEC's current position and both Fund's
policies are a fundamental and cannot be changed without position
stockholder approval. The Boards of Directors recommends
revising each Fund's policy to conform with the SEC's guidelines
and reclassifying the Funds' fundamental policy regarding
investments in illiquid securities to a non-fundamental policy.
Each Fund's current fundamental policy and the proposed non-
fundamental policy regarding investments in illiquid securities
is set forth in Exhibit C to this Proxy Statement.
The SEC has from time to time changed the percentage
limitation applicable to a fund's investment in illiquid
securities. For example, prior to 1993, the percentage limit on
a fund's investment in illiquid securities was 10%. The proposed
non-fundamental policy of each Fund would enable the Fund to
respond to any future change in the SEC's guidelines, without the
expense and delay of a stockholder vote. Because Quasar
Institutional has never approached a 10% investment in illiquid
or restricted securities and U.S. Government has never approached
a 15% investment in illiquid or restricted securities, the Board
of Directors of each Fund do not anticipate that the proposed
change will have a material impact on the operation of the
respective Fund.
Approval of Proposal 3 requires the affirmative vote of
the holders of a 1940 Act Majority. If the stockholders of a
Fund do not approve the Proposal, that Fund will continue to be
subject to these fundamental policies.
The Boards of Directors of U.S. Government and Quasar
Institutional recommend that the stockholders of the Funds vote
"FOR" the approval of Proposal 3.
HOW TO VOTE
You may vote your shares by mail by signing and
returning the enclosed proxy card, by telephone, or over the
Internet.
Voting by Mail or in Person. If you wish to participate
at the Meeting, but do not wish to give a proxy by telephone or
via the Internet, you can complete, sign and mail the enclosed
proxy card or attend the Meeting in person.
Internet and Telephone Voting. You may give your voting
instructions via the Internet or by touch-tone telephone by
following the instructions provided with your proxy card.
18
<PAGE>
INFORMATION AS TO THE FUND'S PRINCIPAL OFFICERS
The principal officers of the Funds and their principal
occupations during the past five years are as follows:
JOHN D. CARIFA, Chairman and President, 55, President
and Chief Operating Officer and a Director of Alliance Capital
Management Corporation, the general partner of Alliance ("ACMC"),
with which he has been associated since prior to 1995.
KATHLEEN A. CORBET, Senior Vice President, 40, is an
Executive Vice President of Alliance Capital Management
Corporation ("ACMC"), with which she has been associated since
prior to 1995.
PAUL C. RISSMAN, Senior Vice President, 43, is a Senior
Vice President of ACMC, with which he has been associated since
prior to 1995.
THOMAS J. BARDONG, Vice President, 55, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1995.
FRANK V. CARUSO, Vice President, 43, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1995.
EDMUND P. BERGAN, JR., Secretary, 50, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD") and Alliance Fund Services, Inc. ("AFS"), with which
he has been associated since prior to 1995.
ANDREW L. GANGOLF, Assistant Secretary, 46, is a Senior
Vice President and Assistant General Counsel of AFD, with which
he has been associated since prior to 1995.
DOMENICK PUGLIESE, Assistant Secretary, 39, is a Senior
Vice President and Assistant General Counsel of AFD, with which
he has been associated since May 1995. Prior thereto, he was a
Vice President and Counsel of Concord Holding Corporation since
prior to 1995.
MARK D. GERSTEN, Treasurer and Chief Financial Officer,
49, is a Senior Vice President of AFS and a Vice President of
AFD, with which he has been associated since prior to 1995.
VINCENT S. NOTO, Controller, 35, is a Vice President of
AFS, with which he has been associated since prior to 1995.
The address of Messrs. Carifa, Rissman, Bardong, Caruso,
Bergan, Gangolf and Pugliese and Ms. Corbet is c/o Alliance
19
<PAGE>
Capital Management, L.P., 1345 Avenue of the Americas, New York,
New York 10105. The address of Messrs. Gersten and Noto is c/o
Alliance Fund Distributors, Inc., 500 Plaza Drive, Secaucus, New
Jersey 07094.
All of the officers of the Funds are employees of
Alliance and officers of ACMC, the general partner of Alliance,
or a wholly-owned subsidiary of Alliance. As of the Record Date,
no officer or Director of the Funds beneficially owned more than
1% of the outstanding equity securities of Alliance.
STOCK OWNERSHIP
According to information filed with the Commission, the
following persons were the beneficial owners of more than 5% of
the Fund's outstanding common stock as of the Record Date.
Percent of
Common Stock
Based on
Amount of Shares
Beneficial Outstanding
Name and Address of Ownership, as of the
Beneficial Owner and Class Record Date
[Bank of New York
AFM and EPW Fund 9
1 Wall Street
New York, NY 10005-2500] [______________
(Advisor Class)] [__%]
[Amalgamated Bank of New York
C/F TWU PVT BUS LINES
Pension Trust-Amivest
Discretionary Investment
Manager
P.O. Box 370 Cooper Station
New York, NY 10276-0370] [______________
(Advisor Class)] [___%]
[Trust for Profit Sharing
For Alliance Capital Employees
1345 Avenue of the Americas
New York, NY 10105] [______________
(Advisor Class)] [___%]
20
<PAGE>
REPORTS TO STOCKHOLDERS
The Fund will furnish each person to whom this Proxy
Statement is delivered with a copy of the Fund's latest annual
report to stockholders upon request and without charge. To
request a copy, please call Alliance Fund Services, Inc. at (800)
227-4618 or contact Reid Conway at Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, New York 10105.
By Order of the Board of Directors,
Edmund P. Bergan, Jr.
Secretary
New York, New York
October [__], 2000
21
<PAGE>
Alliance Bond Fund, Inc.
- U.S. Government Portfolio
Alliance Institutional Funds, Inc.
- Alliance Premier Growth
Institutional Fund
- Alliance Special Equity
Institutional Fund
- Alliance Quasar Institutional Fund
(LOGO)
Alliance Capital Management L.P.
NOTICE OF SPECIAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
December 12, 2000
22
<PAGE>
EXHIBIT A
CURRENT AND PROPOSED FUNDAMENTAL POLICIES
PROPOSAL ONE
Lending Policies
Fund Current Policy Proposed Policy
Alliance Bond Fund, 1. The Fund may not 1. The Fund may not
Inc. - U.S. make loans to make loans to
Government Portfolio other persons. other persons,
except that the
Fund may lend its
portfolio
securities in
accordance with
applicable law.
The acquisition
of investment
securities or
other investment
instruments shall
not be deemed the
making of a loan.
2. The Fund may not 2. The Fund may not
issue any senior issue senior
securities as securities
defined in the (except to the
Investment extent that
Company Act of securities
1940, as amended, lending may be
(except to the considered senior
extent that when- securities) or
issued securities borrow money,
transactions, except for
forward temporary or
commitments or emergency
stand-by purposes in an
commitments may amount not
be considered exceeding 5% of
senior the value of its
securities). total assets at
the time the
borrowing is
made.
Alliance 1. The Fund may not 1. The Fund may not
Institutional Funds, make loans except make loans to
Inc. - through the other persons,
23
<PAGE>
Alliance Premier purchase of debt except that the
Growth Institutional obligations in Fund may lend its
Fund accordance with portfolio
its investment securities in
objective and accordance with
policies. applicable law.
The acquisition
of investment
securities or
other investment
instruments shall
not be deemed the
making of a loan.
2. The Fund may not 2. The Fund may not
borrow money or issue senior
issue senior securities
securities except (except to the
for temporary or extent that
emergency securities
purposes in an lending may be
amount not considered senior
exceeding 5% of securities) or
the value of its borrow money
total assets at except for
the time the temporary or
borrowing is emergency
made. purposes in an
amount not
exceeding 5% of
the value of its
total assets at
the time the
borrowing is
made.
Alliance 1. The Fund may not 1. The Fund may not
Institutional Funds, make loans except make loans to
Inc. - through the other persons,
Alliance Special purchase of debt except that the
Equity Institutional obligations in Fund may lend
Fund accordance with portfolio
its investment securities in
objective and accordance with
policies. applicable law.
The acquisition
of investment
securities or
other investment
instruments shall
24
<PAGE>
not be deemed the
making of a loan.
2. The Fund may not 2. The Fund may not
borrow money from issue senior
banks or issue securities
senior securities (except to the
except for extent that
temporary or securities
emergency lending may be
purposes in an considered senior
amount not securities) or
exceeding 5% of borrow money
the value of its except for
total assets at temporary or
the time the emergency
borrowing is purposes in an
made. amount not
exceeding 5% of
the value of its
total assets at
the time the
borrowing is
made,
Alliance 1. The Fund may not 1. The Fund may not
Institutional make loans of its make loans to
Funds, Inc. - funds or assets other persons,
Alliance Quasar to any other except that the
Institutional Fund person, which Fund may lend
shall not include portfolio
the purchase of a securities in
portion of an accordance with
issue of publicly applicable law.
distributed The acquisition
bonds, of investment
debentures, or securities or
other securities, other investment
whether or not instruments shall
the purchase was not be deemed the
made upon the making of a loan.
original issuance
of the
securities;
except that the
Fund may not
purchase non-
publicly
distributed
securities
subject to the
25
<PAGE>
limitations
applicable to
restricted
securities.
2. The Fund may not 2. The Fund may not
borrow money issue senior
except for securities
temporary or (except to the
emergency extent that
purposes in an securities
amount not lending may be
exceeding 5% of considered senior
its total assets securities) or
at the time the borrow money
borrowing is except for
made. temporary or
emergency
purposes in an
amount not
exceeding 5% of
the value of its
total assets at
the time the
borrowing is
made.
26
<PAGE>
EXHIBIT B
CURRENT FUNDAMENTAL AND PROPOSED POLICIES
PROPOSAL TWO
Diversification Policies (Proposal 2A)
Fund Current Policy Proposed Policy
Alliance The Fund may not It is a fundamental
Institutional Funds, purchase more than policy of the Fund
Inc. - 10% of the that the Fund is
Alliance Premier outstanding voting required with
Growth Institutional securities of any respect to 75% of
Fund one issuer. its assets (i) to
have no more than 5%
of its assets
invested in any one
issuer and (ii) to
own not more than
10% of the
outstanding voting
securities of any
one issuer.
Alliance The Fund may not It is a fundamental
Institutional purchase more than policy of the Fund
Funds, Inc. - 10% of the that the Fund is
Alliance Special outstanding voting required with
Equity Institutional securities of any respect to 75% of
Fund one issuer. its assets (i) to
have no more than 5%
of its assets
invested in any one
issuer and (ii) to
own not more than
10% of the
outstanding voting
securities of any
one issuer.
NON-U.S. COMPANY POLICY (Proposal 2B)
Fund Current Policy Proposed Policy
Alliance The Fund invests at The Fund invests at
Institutional Funds, least 85% of its least 80% of its
Inc. - Alliance total assets in total assets in
Premier Growth equity securities in equity securities of
Institutional Fund "U. S. Companies". A U.S Companies. A
27
<PAGE>
"U.S. Company" is "Non-U.S. Company"
defined as a company is a company that
that (i) is (i) is organized
organized under outside the United
United States law, States, (ii) has a
(ii) has its principal place of
principal office in business outside the
the United States, United States, and
and (iii) issues (iii) issues
equity securities securities that are
that are traded traded principally
principally in the on a stock exchange
United States. in a foreign
country.
Commodities Policies (Proposal 2C)
Fund Current Policy Proposed Policy
Alliance The Fund may not Fundamental
Institutional Funds, purchase or sell It is a
Inc. - commodities or fundamental policy
Alliance Special commodity contracts. of the Fund not to
Equity Institutional purchase or sell
Fund commodities or
commodity contracts,
except financial
forward and futures
contracts and option
on such contracts.
Non-fundamental
It is a non-
fundamental policy
of the Fund that:
(i) the Fund
utilize futures and
options thereon only
for hedging
purposes,
(ii) the Fund will
not enter into any
futures contracts or
options on futures
contracts if
immediately
thereafter the
market values of the
outstanding futures
28
<PAGE>
contracts of the
Fund and the futures
contracts subject to
outstanding options
written by the Fund
would exceed 50% of
its total assets,
(iii) the Fund
will not purchase or
sell a stock index
future if
immediately
thereafter more than
30% of its total
assets would be
hedged by stock
index futures, and
(iv) the Fund will
not purchase or sell
a stock index future
if, immediately
thereafter, the sum
of the amount of
margin deposit on
the Fund's existing
futures positions
would exceed 5% of
the market value of
the Fund's total
assets.
29
<PAGE>
EXHIBIT B
Alliance The Fund may not Fundamental
Institutional Funds, purchase or sell It is a
Inc. - commodities or fundamental policy
Alliance Quasar commodity contracts. of the Fund not to
Institutional Fund purchase or sell
commodities or
commodity contracts,
except financial
forward and futures
contracts and option
on such contracts.
Non-fundamental
It is a non-
fundamental policy
of the Fund that:
(i) the Fund
utilize futures and
options thereon only
for hedging
purposes,
(ii) the Fund will
not enter into any
futures contracts or
options on futures
contracts if
immediately
thereafter the
market values of the
outstanding futures
contracts of the
Fund and the futures
contracts subject to
outstanding options
written by the Fund
would exceed 50% of
its total assets,
(iii) the Fund
will not purchase or
sell a stock index
future if
immediately
thereafter more than
30% of its total
assets would be
30
<PAGE>
hedged by stock
index futures, and
(iv) the Fund will
not purchase or sell
a stock index future
if, immediately
thereafter, the sum
of the amount of
margin deposit on
the Fund's existing
futures positions
would exceed 5% of
the market value of
the Fund's total
assets.
31
<PAGE>
EXHIBIT C
CURRENT INVESTMENT RESTRICTIONS
PROPOSAL THREE
Writing, Purchasing or Selling of Puts, Calls or Any Combination
(Proposal 3A)
Fund Current Policy Proposed Policy
Alliance Bond Fund, Fundamental Non-Fundamental
Inc. - The Fund may not The Fund may not
U.S. Government write, purchase or write, purchase or
Portfolio sell puts, calls or sell puts, calls or
combinations any combination
thereof. thereof.
Unseasoned Issuer Policies (Proposal 3B)
Fund Current Policy Proposed Policy
Alliance Bond Fund, Fundamental No proposed policy
Inc. - The Fund will not
U.S. Government invest more than 15%
Portfolio of its total assets
in securities of
issuers which
together with any
predecessors have
been in continuous
operation for less
than 3 years.
32
<PAGE>
EXHIBIT C
Current Fundamental and Proposed Policies
Illiquid Securities Policies (Proposal 3C)
Fund Current Policy Proposed Policy
Alliance Bond Fund, The Fund will not It is a non-
Inc. - invest more than 15% fundamental policy
U.S. Government of average net of the Fund that the
Portfolio assets at the time Fund may not
of purchase in purchase any
securities which are security or enter
not readily into a repurchase
marketable including agreement if, as a
restricted result, more than
securities. 15% of its net
assets would be
invested in
repurchase
agreements not
entitling the holder
to payment of
principal and
interest within
seven days and in
securities that are
illiquid by virtue
of legal or
contractual
restrictions on
resale or the
absence of a readily
available market;
however, this
restriction will not
apply to securities
sold pursuant to
Rule 144A under the
Securities Act of
1933, so long as
such securities meet
liquidity guidelines
established from
time to time by the
Board of Directors.
Alliance The Fund may not It is a non-
Institutional Funds, invest more than 10% fundamental policy
Inc. - of its assets in of the Fund that the
33
<PAGE>
Alliance Quasar restricted Fund may not
Institutional Fund securities. purchase any
security or enter
into a repurchase
agreement if, as a
result, more than
15% of its net
assets would be
invested in
repurchase
agreements not
entitling the holder
to payment of
principal and
interest within
seven days and in
securities that are
illiquid by virtue
of legal or
contractual
restrictions on
resale or the
absence of a readily
available market;
however, this
restriction will not
apply to securities
sold pursuant to
Rule 144A under the
Securities Act of
1933, so long as
such securities meet
liquidity guidelines
established from
time to time by the
Board of Directors.
34
<PAGE>
Proxy Proxy
ALLIANCE BOND FUND, INC. - U.S. GOVERNMENT PORTFOLIO
ALLIANCE INSTITUTIONAL FUNDS, INC.
- ALLIANCE PREMIER GROWTH INSTITUTIONAL FUND
- ALLIANCE SPECIAL EQUITY INSTITUTIONAL FUND
- ALLIANCE QUASAR INSTITUTIONAL FUND
Instructions to the stockholders of Alliance Bond Fund, Inc. -
U.S. Government Portfolio ("U.S. Government"), Alliance
Institutional Funds, Inc. - Alliance Premier Growth Institutional
Fund ("Premier Growth Institutional"), Alliance Institutional
Funds, Inc. - Alliance Special Equity Institutional Fund
("Special Equity Institutional"), and Alliance Institutional
Funds, Inc. - Alliance Quasar Institutional Fund ("Quasar
Institutional" and together with U.S. Government, Premier Growth
Institutional and Special Equity Institutional, the "Funds") in
connection with a Special Meeting of Stockholders to be held on
December 12, 2000.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARDS OF DIRECTORS
The undersigned hereby appoints each of Reid Conway and Carol H.
Rappa, or either of them, as proxies for the undersigned, each
with full power of substitution, to attend the Special Meeting of
Stockholders of the Funds to be held at 11:00 a.m., Eastern Time,
on December 12, 2000 at the offices of the Funds, 1345 Avenue of
the Americas, 33rd Floor, New York, New York 10105, and any
postponement or adjournment thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at
the Special Meeting and otherwise to represent the undersigned
with all powers possessed by the undersigned if personally
present at the Special Meeting. The undersigned hereby
acknowledges receipt of the Notice of Meeting and accompanying
Proxy Statement.
VOTE BY RETURNING THE SIGNED PROXY CARD
OR
VOTE VIA THE INTERNET: https://vote.proxy-
direct.com
OR
VOTE BY TELEPHONE BY CALLING TOLL-FREE: 1-800-
597-7836
CONTROL NUMBER:
Please sign exactly as your name appears on
the books of the Fund. Joint owners should
35
<PAGE>
each sign personally. Trustees and other
fiduciaries should indicate the capacity in
which they sign, and where more than one name
appears, a majority must sign. If a
corporation, this signature should be that of
an authorized officer who should state his or
her title.
__________________________
Signature of Stockholder
_____________________________
Signature of joint owner, if any
______________________________, 2000
Dated
36
<PAGE>
If this proxy is properly executed, the votes entitled to be cast
by the undersigned will be cast in the manner directed below. If
no direction is made as regards a particular proposal or other
matter, the votes entitled to be cast by the undersigned will be
cast "FOR" proposals one through three listed below, "FOR" any
postponement or adjournment of the Special Meeting with respect
to any proposal described in the proxy statement in the event
that sufficient votes in favor of the position on such proposal
recommended by the Boards of Directors are not timely received,
and in the discretion of the Proxy holder(s) on any other matters
that may properly come before the Special Meeting or any
adjournment or postponement thereof.
Please refer to the Proxy Statement for a discussion of each of
the proposals.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
For Against Abstain
1. Approve of an amendment of each [ ] [ ] [ ]
Fund's fundamental policy to
permit each Fund to engage in
securities lending to the
extent permitted by the
Investment Company Act of 1940,
as amended (the "1940 Act").
Your Board of Directors urges you to vote "FOR" Proposal One.
For Against Abstain
2. Approve of an amendment of [ ] [ ] [ ]
certain of the Funds'
fundamental policies, in each
case consistent with the 1940
Act.
Your Board of Directors urges you to vote "FOR" Proposal Two.
For Against Abstain
3. Approve the removal or [ ] [ ] [ ]
reclassification of certain of
the Funds' fundamental policies
as non-fundamental.
Your Board of Directors urges you to vote "FOR" Proposal Three.
37
<PAGE>
PLEASE VOTE, DATE AND SIGN ON THE REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE IF YOU ARE NOT VOTING VIA THE INTERNET OR
BY TELEPHONE.
38
00250237.AQ9
