This is filed pursuant to Rule 497(c).
File Nos.: 333-90261 and 811-09687
Alliance
Disciplined
Value Fund
Alliance Disciplined Value Fund, Inc. is an open-end management investment
company that offers investors the opportunity to seek long-term growth of
capital by investing primarily in stocks that Alliance believes are undervalued.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy or accuracy of this Prospectus. Any
representation to the contrary is a criminal offense.
Prospectus and Application
December 20, 1999
AllianceCapital [LOGO](R)
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Investment Products Offered
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- - Are Not FDIC Insured
- - May Lose Value
- - Are Not Bank Guaranteed
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TABLE OF CONTENTS
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Page
RISK/RETURN SUMMARY ...................................................... 3
FEES AND EXPENSES OF THE FUND ............................................ 5
GLOSSARY ................................................................. 6
DESCRIPTION OF THE FUND .................................................. 6
Investment Objective, Principal Policies and Risk
Considerations ........................................................... 6
Description of Additional Investment Practices ........................... 8
Additional Risk Considerations ........................................... 11
MANAGEMENT OF THE FUND ................................................... 13
PURCHASE AND SALE OF SHARES .............................................. 13
How The Fund Values Its Shares ........................................... 13
How To Buy Shares ........................................................ 13
How To Exchange Shares ................................................... 13
How To Sell Shares ....................................................... 14
DIVIDENDS, DISTRIBUTIONS AND TAXES ....................................... 14
DISTRIBUTION ARRANGEMENTS ................................................ 15
GENERAL INFORMATION ...................................................... 16
The Fund's investment adviser is Alliance Capital Management L.P., a global
investment manager providing diversified services to institutions and
individuals through a broad line of investments including more than 100 mutual
funds.
RISK/RETURN SUMMARY
The following is a summary of certain key information about Alliance Disciplined
Value Fund. This Summary describes the Fund's objective, principal investment
strategies, principal risks and fees. This Summary includes a short discussion
of some of the principal risks of investing in the Fund.
A more detailed description of the Fund, including the risks associated with
investing in the Fund, can be found further back in this Prospectus. Please be
sure to read this additional information BEFORE you invest. As with all
investments, you may lose money by investing in the Fund.
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OBJECTIVE:
The Fund's investment objective is long-term growth of capital through the
application of a disciplined value-oriented investment process.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in the equity securities of U.S. companies that
Alliance believes are undervalued. Alliance believes that, over time, a
company's stock price will come to reflect its intrinsic economic value.
Alliance uses a disciplined investment process to evaluate the companies in
Alliance's extensive research universe to identify the stocks of companies that
offer the best combination of value and potential for price appreciation. The
Fund may invest in companies of any size and in any industry. At different
times, the Fund's investments may be in companies with significantly different
market capitalizations and with a greater emphasis on particular industries.
The Fund expects under normal circumstances to invest primarily in equity
securities of about 75 U.S. companies. The Fund may also invest up to 15% of
its total assets in non-U.S. companies.
PRINCIPAL RISKS:
Among the principal risks of investing in the Fund is market risk, which is the
risk of losses from adverse changes in the stock markets. Depending on the
Fund's investments at a particular time, the Fund may also have industry/sector
risk, which is the risk of investments in a particular industry or group of
related industries. In addition, because the Fund may invest in small- to
mid-capitalization companies, it has capitalization risk. These investments may
be more volatile than investments in large-cap companies. To the extent the
Fund invests in non-U.S. companies, it may have foreign risk, which is the risk
of investing in issuers located in foreign countries. These investments also
have currency risk, which is the risk of losses from adverse changes in
currency exchange rates.
BAR CHART AND PERFORMANCE TABLE:
There is no bar chart or performance table for the Fund because it has not
completed a full calendar year of operations.
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FEES AND EXPENSES OF THE FUND
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This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (fees paid directly from your investment)
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
-------------- -------------- --------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.25% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or redemption
proceeds, whichever is lower) None 4.0%* 1.0%**
Exchange Fee None None None
</TABLE>
* Class B Shares automatically convert to Class A Shares after 8 years. The
CDSC decreases over time. For Class B shares, the CDSC decreases 1.00%
annually to 0% after the 4th year.
** For Class C shares, the CDSC is 0% after the 1st year.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
Operating Expenses
-------------------------------
Class A Class B Class C
------- ------- -------
Management fees .75% .75% .75%
Distribution (12b-1) fees .30% 1.00% 1.00%
Other expenses 2.29% 2.29% 2.29%
---- ---- ----
Total Fund operating expenses 3.34% 4.04% 4.04%
==== ==== ====
Fee Waiver and/or expense
reimbursement (a) (.84)% (.84)% (.84)%
---- ---- ----
Net expenses 2.50% 3.20% 3.20%
==== ==== ====
EXAMPLES
The Examples are to help you compare the cost of investing in the Fund with the
cost of investing in other funds. They assume that you invest $10,000 in the
Fund for the time periods indicated and then redeem all of your shares at the
end of those periods. They also assume that your investment has a 5% return each
year, that the Fund's operating expenses stay the same, and that all dividends
and distributions are reinvested. Your actual costs may be higher or lower.
Examples (b)
----------------------------------------------------
Class A Class B+ Class B++ Class C+ Class C++
------- -------- --------- -------- ---------
After 1 Yr. $667 $723 $323 $423 $323
After 3 Yrs. $1,200 $1,216 $1,016 $1,016 $1.016
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(a) Alliance has contractually agreed to waive its management fees and/or to
bear expenses of the Fund through December 20, 2000 to the extent
necessary to prevent total Fund operating expenses, on an annualized
basis, from exceeding the net expenses reflected in this table. The fees
waived and expenses borne by Alliance during this period may be reimbursed
by the Fund during the three years after commencement of operations. No
reimbursement payment will be made that would cause the Fund's total
annualized operating expenses to exceed the net expenses reflected in the
table or cause the total of the payments to exceed the Fund's total
initial organizational and offering expenses.
(b) These examples assume that Alliance's agreement to waive management fees
and/or to bear operating expenses is not extended beyond its initial
period.
+ Assumes redemption at the end of period.
++ Assumes no redemption at end of period.
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GLOSSARY
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This Prospectus uses the following terms.
TYPES OF SECURITIES
Convertible securities are fixed-income securities that are convertible into
common stock.
Debt securities are bonds, debentures, notes, bills, loans, other direct debt
instruments, and other fixed, floating and variable rate debt obligations, but
do not include convertible securities.
Depositary receipts include American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs") and other types of depositary receipts.
Equity securities include (i) common stocks, partnership interests, business
trust shares and other equity or ownership interests in business enterprises and
(ii) securities convertible into, and rights and warrants to subscribe for the
purchase of, such stocks, shares and interests.
Lower-rated securities are fixed-income securities rated Ba or below by Moody's
or BB or below by S&P, Duff & Phelps or Fitch, or determined by Alliance to be
of equivalent quality, and are commonly referred to as "junk bonds."
Non-U.S. company is an entity that (i) is organized under the laws of a foreign
country and conducts business in a foreign country, (ii) derives 50% or more of
its total revenues from business in foreign countries, or (iii) issues equity or
debt securities that are traded principally on a stock exchange in a foreign
country.
Qualifying bank deposits are certificates of deposit, bankers' acceptances and
interest-bearing savings deposits of banks that have total assets of more than
$1 billion and are members of the Federal Deposit Insurance Corporation.
Prime commercial paper is commercial paper rated Prime 1 by Moody's or A-1 or
higher by S&P or, if not rated, issued by companies that have an outstanding
debt issue rated Aa or higher by Moody's or AA or higher by S&P.
Rule 144A securities are securities that may be resold under Rule 144A under the
Securities Act of 1933.
U.S. Government securities are securities issued or guaranteed by the United
States Government, its agencies or instrumentalities.
RATING AGENCIES
Duff & Phelps is Duff & Phelps Credit Rating Co.
Fitch is Fitch IBCA, Inc.
Moody's is Moody's Investors Service, Inc.
S&P is Standard & Poor's Ratings Services.
OTHER
Code is the Internal Revenue Code of 1986, as amended.
Commission is the Securities and Exchange Commission.
Exchange is the New York Stock Exchange.
Securities Act is the Securities Act of 1933, as amended.
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DESCRIPTION OF THE FUND
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This section of the Prospectus provides a more complete description of the
Fund's investment objective, principal investment policies and risks. Of course,
there can be no assurance that the Fund will achieve its investment objective.
Please note that:
o Additional discussion of the Fund's investments, including the risks of
the investments that appear in bold type can be found in the discussion
under Description of Additional Investment Practices following this
section.
o The description of the Fund's risks may include risks discussed in the
Risk/Return Summary above. Additional information about risks of investing
in the Fund can be found in the discussion under Additional Risk
Considerations.
o Additional descriptions of the Fund's strategies and investments, as well
as other strategies and investments not described below may be found in
the Fund's Statement of Additional Information or SAI.
o The Fund's investment objective is fundamental and cannot be changed
without a shareholder vote and, except as noted, the Fund's investment
policies are not fundamental and thus can be changed without a shareholder
vote.
INVESTMENT OBJECTIVE, PRINCIPAL POLICIES AND RISK CONSIDERATIONS
Investment Objective
The Fund's investment objective is long-term growth of capital through the
application of a disciplined value-oriented investment process.
How the Fund Pursues Its Objective
In seeking to achieve its objective, the Fund invests primarily in the equity
securities of U.S. companies that Alliance believes are undervalued. Alliance
believes that, over time, a company's stock price will come to reflect its
intrinsic economic value. Alliance uses a disciplined investment process to
evaluate the companies in Alliance's extensive research universe. Through this
process, Alliance seeks to identify the stocks of companies that offer the best
combination of value and potential for price appreciation.
Alliance depends heavily upon the fundamental analysis and research of its large
internal research staff in making investment decisions for the Fund. The
research staff follows a primary research universe of approximately 500 largely
domestic companies that are significant participants in their
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particular industries. As one of the largest multi-national investment firms,
Alliance has access to considerable information concerning all of the companies
followed, an in-depth understanding of the products, services, markets and
competition of these companies and a good knowledge of the managements of most
of the companies in its research universe. Alliance's analysts prepare their own
earnings estimates and financial models for each company followed.
The disciplined value investment process is grounded in Alliance's research
capabilities. Through its research, Alliance identifies equity securities whose
current market prices do not reflect what Alliance considers to be their
intrinsic economic value. In determining a company's intrinsic economic value,
Alliance takes into account many factors it believes bear on the ability of the
company to perform in the future, including earnings growth, prospective cash
flows, dividend growth and growth in book value. Alliance then ranks, at least
weekly, each of the companies in its research universe in the relative order of
disparity between their intrinsic economic values and their stock prices, with
companies with the greatest disparities receiving the highest rankings (i.e.,
being considered the most undervalued). Alliance anticipates that, normally,
about 75 companies will be represented in the Fund's portfolio, with
substantially all of those companies ranking in the top three deciles of
Alliance's valuation model. Not every security deemed to be undervalued is
subsequently purchased by the Fund; undervalued securities are further analyzed
before being added to the Fund's portfolio. Alliance will use its research
capability to help best evaluate the potential rewards and risks of investing in
competing undervalued securities. It is the interaction between Alliance's
research capabilities and the disciplined value model's perception of value that
determines which securities will be purchased or sold by the Fund.
Alliance recognizes that the perception of what is a "value" stock is relative
and the factors considered in determining whether a stock is a "value" stock
may, and often will, have differing relative significance in different phases of
an economic cycle. Also, at different times, the Fund may be attracted to
investments in companies with different market capitalizations (i.e., large, mid
or small capitalization) or companies engaged in particular types of business
(e.g., banks and other financial institutions), although the Fund does not
intend to concentrate in any particular industries or businesses. The Fund's
portfolio emphasis upon particular industries or sectors will be a by-product
of the stock selection process rather than the result of assigned targets or
ranges.
Although the Fund intends to invest primarily in the equity securities of U.S.
companies, the Fund may also invest up to 15% of its assets in securities of
non-U.S. companies.
In addition to the principal strategies discussed above, the Fund may also:
o invest in convertible securities and rights and warrants;
o for hedging purposes, enter into forward commitments, and purchase and
sell futures contracts and options on securities, as well as options on
securities indices and options on futures contracts; and
o for hedging purposes, enter into currency swaps, forward foreign
currency exchange contracts and options on foreign currencies.
Risk Considerations
The value of an investment in the Fund changes with the values of the Fund's
investments. Many factors can affect those values. In the following summary, we
describe the principal risks that may affect the Fund's portfolio as a whole.
The Fund could be subject to additional principal risks because the types of
investments made by the Fund can change over time. This Prospectus has
additional descriptions of investments that appear in bold type in the
discussions under Description of Additional Investment Practices or Additional
Risk Considerations. Those sections also include more information about the
Fund, its investments, and related risks. Among the principal risks of
investing in the Fund are:
o Market Risk This is the risk that the value of the Fund's investments will
fluctuate as the stock or bond markets fluctuate and that prices overall
will decline over short- or long-term periods.
o Industry/Sector Risk This is the risk of investments in a particular
industry sector. If the Fund invests more of its assets in companies
engaged in a particular industry or group of related industries, market
or economic factors affecting that industry could have a more significant
effect on the value of the Fund's investments.
o Capitalization Risk This is the risk of investments in small to
mid-capitalization companies. Investments in mid-cap companies may be more
volatile than investments in large-cap companies. Investments in small-cap
companies tend to be more volatile than investments in large-cap or
mid-cap companies. The Fund's investments in smaller capitalization
companies may have additional risks because these companies often have
limited product lines, markets or financial resources.
o Foreign Risk This is the risk of investments in issuers located in foreign
countries. The Fund's investments in foreign securities may experience
rapid and extreme changes in value because the securities markets of many
foreign countries are relatively small, with a limited number of companies
representing a small number of industries. Additionally, foreign
securities issuers are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing standards
of foreign countries differ, in some cases significantly, from U.S.
standards. Also, nationalization, expropriation or confiscatory taxation,
currency blockage, and political changes or diplomatic developments could
adversely affect the Fund's investments in a foreign country. In the event
of nationalization, expropriation or other confiscation, the Fund could
lose its entire investment in that country.
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o Currency Risk This is the risk that fluctuations in the exchange rates
between the U.S. Dollar and currencies may negatively affect the value
of the Fund's investments.
o Management Risk The Fund is subject to management risk because it is an
actively managed investment portfolio. Alliance will apply its investment
techniques and risk analyses in making investment decisions for the Fund,
but there is no guarantee that its decisions will produce the intended
results.
Portfolio Turnover. The Fund is actively managed and, in some cases in response
to market conditions, the Fund's portfolio turnover may exceed 100%. A higher
rate of portfolio turnover increases brokerage and other expenses, which must
be borne by the Fund and its shareholders. High portfolio turnover also may
result in the realization of substantial net short-term capital gains, which,
when distributed, are taxable to shareholders.
Temporary Defensive Position. For temporary defensive purposes, the Fund may
reduce its position in equity securities and invest, without limit, in certain
types of short-term, liquid, high grade or high quality debt securities and in
lower-rated securities and convertible securities. These securities may include
U.S. Government securities, qualifying bank deposits, money market instruments,
prime commercial paper and other types of debt securities including notes and
bonds. Such securities also may include foreign-currency denominated securities
of the type mentioned above issued by foreign governmental entities, companies,
and supranational organizations. While the Fund invests for temporary defensive
purposes, it may not meet its investment objective.
DESCRIPTION OF ADDITIONAL INVESTMENT PRACTICES
This section describes the investment practices of the Fund and risks associated
with these practices. Unless otherwise noted, the Fund's use of any of these
practices was specified in the previous section.
Convertible Securities. Prior to conversion, convertible securities have the
same general characteristics as non-convertible securities, which generally
provide a stable stream of income with yields that are generally higher than
those of common stock of the same or similar issuers. The price of a convertible
security will normally vary with changes in the price of the underlying common
stock, although the higher yield tends to make the convertible security less
volatile than the underlying equity security. As with debt securities, the
market value of convertible securities tends to decrease as interest rates rise
and increase as interest rates decline. While convertible securities generally
offer lower interest or dividend yields than non-convertible debt securities of
similar quality, they offer investors the potential to benefit from increases in
the market price of the underlying common stock. Convertible securities that are
rated Baa or lower by Moody's or BBB or lower by S&P, Duff & Phelps or Fitch and
comparable unrated securities as determined by Alliance may share some or all of
the risks of non-convertible debt securities with those ratings.
Currency Swaps. Currency swaps involve the individually negotiated exchange by
the Fund with another party of a series of payments in specified currencies. A
currency swap may involve the delivery at the end of the exchange period of a
substantial amount of one designated currency in exchange for the other
designated currency. Therefore, the entire principal value of a currency swap is
subject to the risk that the other party to the swap will default on its
contractual delivery obligations. The Fund will not enter into any currency swap
unless the credit quality of the unsecured senior debt or the claims-paying
ability of the counterparty is rated in the highest rating category of at least
one nationally recognized rating organization at the time of entering into the
transaction. If there is a default by the counterparty to the transaction, the
Fund will have contractual remedies under the transaction agreements.
Depositary Receipts. Depositary receipts may not necessarily be denominated in
the same currency as the underlying securities into which they may be converted.
In addition, the issuers of the stock of unsponsored depositary receipts are not
obligated to disclose material information in the United States and, therefore,
there may not be a correlation between such information and the market value of
the depositary receipts. ADRs are depositary receipts typically issued by an
U.S. bank or trust company that evidence ownership of underlying securities
issued by a foreign corporation. GDRs and other types of depositary receipts are
typically issued by foreign banks or trust companies and evidence ownership of
underlying securities issued by either a foreign or an U.S. company. Generally,
depositary receipts in registered form are designed for use in the U.S.
securities markets, and depositary receipts in bearer form are designed for use
in foreign securities markets.
Forward Foreign Currency Exchange Contracts. The Fund may purchase or sell
forward foreign currency exchange contracts to minimize the risk of adverse
changes in the relationship between the U.S. Dollar and other currencies. A
forward contract is an obligation to purchase or sell a specific currency for an
agreed price at a future date, and is individually negotiated and privately
traded.
The Fund may enter into a forward contract, for example, when it enters into a
contract for the purchase or sale of a security denominated in a foreign
currency in order to "lock in" the U.S. Dollar price of the security
("transaction hedge"). The Fund will not engage in transaction hedges with
respect to the currency of a particular country to an extent greater than the
aggregate amount of the Fund's transactions in that currency. When the Fund
believes that a foreign currency may suffer a substantial decline against the
U.S. Dollar, it may enter into a forward sale contract to sell an amount of that
foreign currency approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency, or when the Fund believes that
the U.S. Dollar may suffer a substantial decline against a foreign currency, it
may enter into a forward purchase contract to buy that foreign currency for a
fixed dollar amount ("position hedge"). The Fund will not position hedge with
respect to a particular currency to an extent greater than the aggregate market
value (at the time of making such sale) of the securities held in its portfolio
denominated or quoted in that currency. Instead of entering into a position
hedge, the Fund
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may, in the alternative, enter into a forward contract to sell a different
foreign currency for a fixed U.S. Dollar amount where the Fund believes that
the U.S. Dollar value of the currency to be sold pursuant to the forward
contract will fall whenever there is a decline in the U.S. Dollar value of the
currency in which portfolio securities of the Fund are denominated
("cross-hedge"). Unanticipated changes in currency prices may result in poorer
overall performance for the Fund than if it had not entered into such forward
contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates.
Illiquid Securities. The Fund will limit its investments in illiquid securities
to no more than 15% of its net assets. Illiquid securities generally include (i)
direct placements or other securities that are subject to legal or contractual
restrictions on resale or for which there is no readily available market (e.g.,
when trading in the security is suspended or, in the case of unlisted
securities, when market makers do not exist or will not entertain bids or
offers), including many individually negotiated currency swaps and any assets
used to cover currency swaps, (ii) over-the-counter options and assets used to
cover over-the-counter options, and (iii) repurchase agreements not terminable
within seven days.
Because of the absence of a trading market for illiquid securities, the Fund may
not be able to realize their full value upon sale. Alliance will monitor the
liquidity of the Fund's investments in illiquid securities. Rule 144A securities
generally will not be treated as "illiquid" for purposes of this limit on
investments.
The Fund may not be able to readily sell securities for which there is no ready
market. Such securities are unlike securities that are traded in the open market
and can be expected to be sold immediately if the market is adequate. The sale
price of illiquid securities may be lower or higher than Alliance's most recent
estimate of their fair value. Generally, less public information is available
about the issuers of such securities than about companies whose securities are
traded on an exchange. To the extent that these securities are foreign
securities, there is no law in many of the countries in which the Fund may
invest similar to the Securities Act requiring an issuer to register the sale of
securities with a governmental agency or imposing legal restrictions on resales
of securities, either as to the length of time the securities may be held or the
manner of resale. However, there may be contractual restrictions on resales of
non-publicly traded foreign securities.
Loans of Portfolio Securities. The Fund may lend its portfolio securities to
third parties for additional interest income. The risk in lending portfolio
securities, as with other extensions of credit, consists of the possible loss of
rights in the collateral should the borrower fail financially. In determining
whether to lend securities to a particular borrower, Alliance will consider all
relevant facts and circumstances. The Fund may invest any cash collateral in
portfolio securities and earn additional income or receive an agreed-upon amount
of income from a borrower who has delivered equivalent collateral. The Fund will
have the right to retain record ownership of loaned securities or equivalent
securities in order to exercise ownership rights such as voting rights,
subscription rights and rights to dividends, interest, or distributions. The
Fund may pay reasonable finders', administrative, and custodial fees in
connection with a loan.
Options on Securities. An option gives the purchaser of the option, upon payment
of a premium, the right to deliver to (in the case of a put) or receive from (in
the case of a call) the writer a specified amount of a security on or before a
fixed date at a predetermined price. A call option written by the Fund is
"covered" if the Fund owns the underlying security, has an absolute and
immediate right to acquire that security upon conversion or exchange of another
security it holds, or holds a call option on the underlying security with an
exercise price equal to or less than that of the call option it has written. A
put option written by the Fund is covered if the Fund holds a put option on the
underlying securities with an exercise price equal to or greater than that of
the put option it has written.
A call option is for cross-hedging purposes if the Fund does not own the
underlying security and is designed to provide a hedge against a decline in
value in another security that the Fund owns or has the right to acquire. The
Fund would write a call option for cross-hedging purposes, instead of writing a
covered call option, when the premium to be received from the cross-hedge
transaction would exceed that which would be received from writing a covered
call option, while at the same time achieving the desired hedge.
In purchasing an option, the Fund would be in a position to realize a gain if,
during the option period, the price of the underlying security increased (in the
case of a call) or decreased (in the case of a put) by an amount in excess of
the premium paid; otherwise the Fund would experience a loss equal to the
premium paid for the option.
If an option written by the Fund were exercised, the Fund would be obligated to
purchase (in the case of a put) or sell (in the case of a call) the underlying
security at the exercise price. The risk involved in writing an option is that,
if the option were exercised, the underlying security would then be purchased or
sold by the Fund at a disadvantageous price. Entering into a closing transaction
(i.e., by disposing of the option prior to its exercise) could reduce these
risks. The Fund retains the premium received from writing a put or call option
whether or not the option is exercised. The writing of covered call options
could result in increases in the Fund's portfolio turnover rate, especially
during periods when market prices of the underlying securities appreciate.
Options purchased or written by the Fund in negotiated transactions are illiquid
and it may not be possible for the Fund to effect a closing transaction at an
advantageous time.
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Options on Securities Indices. An option on a securities index is similar to an
option on a security except that, rather than the right to take or make delivery
of a security at a specified price, an option on a securities index gives the
holder the right to receive, upon exercise of the option, an amount of cash if
the closing level of the chosen index is greater than (in the case of a call) or
less than (in the case of a put) the exercise price of the option.
Options on Foreign Currencies. As in the case of other kinds of options, the
writing of an option on a foreign currency constitutes only a partial hedge, up
to the amount of the premium received, and the Fund could be required to
purchase or sell foreign currencies at disadvantageous exchange rates and incur
losses. The purchase of an option on a foreign currency may constitute an
effective hedge against fluctuations in exchange rates although, in the event of
rate movements adverse to the Fund's position, it may forfeit the entire amount
of the premium plus related transaction costs. See the Fund's SAI for further
discussion of the use, risks, and costs of options on foreign currencies.
Futures Contracts and Options on Futures Contracts. A "sale" of a futures
contract means the acquisition of a contractual obligation to deliver the
securities or foreign currencies or other commodity called for by the contract
at a specified price on a specified date. A "purchase" of a futures contract
means the incurring of an obligation to acquire the securities, foreign
currencies or other commodity called for by the contract at a specified price
on a specified date. The purchaser of a futures contract on an index agrees to
take or make delivery of an amount of cash equal to the difference between a
specified dollar multiple of the value of the index on the expiration date of
the contract ("current contract value") and the price at which the contract was
originally struck. No physical delivery of the securities underlying the index
is made.
Options on futures contracts are options that call for the delivery of futures
contracts upon exercise. Options on futures contracts written or purchased by
the Fund will be traded on U.S. or foreign exchanges and will be used only for
hedging purposes.
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 currencies and futures contracts subject to
outstanding options written by the Fund would exceed 50% of its total assets.
The Fund may 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. The
Fund may not purchase or sell a stock index future if, immediately thereafter,
the sum of the amount of margin deposits on the Fund's existing futures
positions would exceed 5% of the market value of the Fund's total assets.
Repurchase Agreements. A repurchase agreement arises when a buyer purchases a
security and simultaneously agrees to resell it to the vendor at an agreed-upon
future date, normally a day or a few days later. The resale price is greater
than the purchase price, reflecting an agreed-upon interest rate for the period
the buyer's money is invested in the security. Such agreements permit the Fund
to keep all of its assets at work while retaining "overnight" flexibility in
pursuit of investments of a longer-term nature. If a vendor defaults on its
repurchase obligation, the Fund would suffer a loss to the extent that the
proceeds from the sale of the collateral were less than the repurchase price. If
a vendor goes bankrupt, the Fund might be delayed in, or prevented from, selling
the collateral for its benefit. Alliance monitors the creditworthiness of the
vendors with which the Fund enters into repurchase agreements.
Rights and Warrants. The Fund will invest in rights or warrants only if Alliance
deems the underlying equity securities themselves appropriate for inclusion in
the Fund's portfolio. Rights and warrants entitle the holder to buy equity
securities at a specific price for a specific period of time. Rights are similar
to warrants except that they have a substantially shorter duration. Rights and
warrants may be considered more speculative than certain other types of
investments in that they do not entitle a holder to dividends or voting rights
with respect to the underlying securities nor do they represent any rights in
the assets of the issuing company. The value of a right or warrant does not
necessarily change with the value of the underlying security, although the value
of a right or warrant may decline because of a decrease in the value of the
underlying security, the passage of time or a change in perception as to the
potential of the underlying security, or any combination of these factors. If
the market price of the underlying security is below the exercise price of the
warrant on the expiration date, the warrant will expire worthless. Moreover, a
right or warrant ceases to have value if it is not exercised prior to the
expiration date.
Future Developments. The Fund may, following written notice to its shareholders,
take advantage of other investment practices that are not currently contemplated
for use by the Fund, or are not available but may yet be developed, to the
extent such investment practices are consistent with the Fund's investment
objective and legally permissible for the Fund. Such investment practices, if
they arise, may involve risks that exceed those involved in the activities
described above.
General. The successful use of the investment practices described above draws
upon Alliance's special skills and experience and usually depends on Alliance's
ability to forecast price movements, interest rates, or currency exchange rate
movements correctly. Should prices, interest rates, or exchange rates move
unexpectedly, the Fund may not achieve the anticipated benefits of the
transactions or may realize losses and thus be in a worse position than if such
strategies had not been used. Unlike many exchange-traded futures contracts and
options on futures contracts, there are no daily price fluctuation limits for
certain options and forward contracts, and adverse market movements could
therefore continue to an unlimited extent over a period of time. In addition,
the correlation between movements in the prices of futures contracts, options
and forward contracts and movements in the prices of the securities and
currencies hedged or used for cover will not be perfect and could produce
unanticipated losses.
10
<PAGE>
The Fund's ability to dispose of its position in futures contracts, options, and
forward contracts depends on the availability of liquid markets in such
instruments. Markets in options and futures with respect to a number of types of
securities and currencies are relatively new and still developing, and there is
no public market for forward contracts. It is impossible to predict the amount
of trading interest that may exist in various types of futures contracts,
options, and forward contracts. If a secondary market does not exist for an
option purchased or written by the Fund, it might not be possible to effect a
closing transaction in the option (i.e., dispose of the option), with the result
that (i) an option purchased by the Fund would have to be exercised in order for
the Fund to realize any profit and (ii) the Fund may not be able to sell
currencies or portfolio securities covering an option written by the Fund until
the option expires or it delivers the underlying security, futures contract or
currency upon exercise. Therefore, no assurance can be given that the Fund will
be able to utilize these instruments effectively. In addition, the Fund's
ability to engage in options and futures transactions may be limited by tax
considerations and the use of certain hedging techniques may adversely impact
the characterization of income to the Fund for U.S. federal income tax purposes.
ADDITIONAL RISK CONSIDERATIONS
Investment in the Fund involves the special risk considerations described below.
Currency Considerations. The Fund may receive a portion of its revenues in
foreign currencies. Therefore, the dollar equivalent of its net assets,
distributions, and income will be adversely affected by reductions in the value
of certain foreign currencies relative to the U.S. Dollar. If the value of the
foreign currencies in which the Fund receives its income falls relative to the
U.S. Dollar between receipt of the income and the making of Fund distributions,
the Fund may be required to liquidate securities in order to make distributions
if it has insufficient cash in U.S. Dollars to meet distribution requirements
that the Fund must satisfy to qualify as a regulated investment company for
federal income tax purposes. Similarly, if an exchange rate declines between the
time the Fund incurs expenses in U.S. Dollars and the time cash expenses are
paid, the amount of the currency required to be converted into U.S. Dollars in
order to pay expenses in U.S. Dollars could be greater than the equivalent
amount of such expenses in the currency at the time they were incurred. In light
of these risks, the Fund may engage in currency hedging transactions, as
described above, which involve certain special risks.
Foreign Securities. The securities markets of many foreign countries are
relatively small, with the majority of market capitalization and trading volume
concentrated in a limited number of companies representing a small number of
industries. Consequently, the Fund's portfolio may experience greater price
volatility and significantly lower liquidity than a portfolio invested solely in
equity securities of U.S. companies. These markets may be subject to greater
influence by adverse events generally affecting the market, and by large
investors trading significant blocks of securities, than is usual in the United
States. Securities settlements may in some instances be subject to delays and
related administrative uncertainties.
Certain foreign countries require governmental approval prior to investments by
foreign persons or limit investment by foreign persons to only a specified
percentage of an issuer's outstanding securities or a specific class of
securities that may have less advantageous terms (including price) than
securities of the company available for purchase by nationals. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the costs and expenses of the Fund. In addition, the
repatriation of investment income, capital, or the proceeds of sales of
securities from certain countries is controlled under regulations, including in
some cases the need for certain advance government notification or authority. If
a deterioration occurs in a country's balance of payments, the country could
impose temporary restrictions on foreign capital remittances.
The Fund also could be adversely affected by delays in, or a refusal to grant,
any required governmental approval for repatriation, as well as by the
application of other restrictions on investment. Investing in local markets may
require the Fund to adopt special procedures that may involve additional costs
to the Fund. These factors may affect the liquidity of the Fund's investments in
any country and Alliance will monitor the effect of any such factor or factors
on the Fund's investments. Furthermore, transaction costs including brokerage
commissions for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the United States.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
insider trading rules, restrictions on market manipulation, shareholder proxy
requirements, and timely disclosure of information. The reporting, accounting
and auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards in important respects and less information
may be available to investors in foreign securities than to investors in U.S.
securities. Substantially less information is publicly available about certain
non-U.S. issuers than is available about U.S. issuers.
The economies of individual foreign countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product or gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency, and balance of payments position. Nationalization,
expropriation or confiscatory taxation, currency blockage, political changes,
government regulation, political or social instability, or diplomatic
developments could affect adversely the economy of a foreign country and the
Fund's investments. In the event of expropriation, nationalization or other
confiscation, the Fund could lose its entire investment in the country involved.
In addition, laws in foreign countries governing business organizations,
bankruptcy and insolvency may provide less protection to security holders such
as the Fund than that provided by U.S. laws.
11
<PAGE>
Extreme Governmental Action; Less Protective Laws. In contrast to investing in
the U.S., foreign investment may involve in certain situations greater risk of
nationalization, expropriation, confiscatory taxation, currency blockage or
other extreme governmental action that could adversely impact the Fund's
investments. In the event of certain such actions, the Fund could lose its
entire investment in the country involved. In addition, laws in various foreign
countries governing, among other subjects, business organization and practices,
securities and securities trading, bankruptcy and insolvency may provide less
protection to investors such as the Fund than provided under United States laws.
Foreign Taxes. The Fund's investment in foreign securities may be subject to
taxes withheld at the source on dividend or interest payments.
Year 2000. Many computer systems and applications that process transactions use
two digit date fields for the year of the transaction, rather than the full four
digits. If these systems are not modified or replaced, transactions occurring
after 1999 could be processed as year "19XX", which could result in processing
inaccuracies and computer system failures at or after the Year 2000. The Fund
and its major service providers, including Alliance, utilize a number of
computer systems and applications that have been either developed internally or
licensed from third-party suppliers. In addition, the Fund and its major service
providers, including Alliance, are dependent on third-party suppliers for
certain systems applications and for the electronic receipt of information
critical to their businesses. Should any of the computer systems employed by the
Fund or its major service providers, including Alliance, fail to process Year
2000 related information properly, that could have a significant negative impact
on the Fund's operations and the services that are provided to the Fund's
shareholders. To the extent that the operations of issuers of securities held by
the Fund are impaired by the Year 2000 problem, the value of the Fund's shares
may be materially affected. In addition, for the Fund's investments in foreign
markets, it is possible that foreign companies and markets will not be as
prepared for Year 2000 as domestic companies and markets.
The Year 2000 issue is a high priority for the Fund and Alliance. During 1997,
Alliance began a formal Year 2000 initiative, which established a structured and
coordinated process to deal with the Year 2000 issue. As part of its initiative,
Alliance established a Year 2000 project office to manage the Year 2000
initiative focusing on both information technology and non-information
technology systems. The Year 2000 project office meets periodically with the
Audit Committee of the Board of Directors of Alliance Capital Management
Corporation, Alliance's general partner, and with Alliance's executive
management to review the status of the Year 2000 efforts. Alliance has also
retained the services of a number of consulting firms which have expertise in
advising and assisting with regard to Year 2000 issues. Alliance reports that by
June 30, 1998, Alliance had completed its inventory and assessment of its
domestic and international computer systems and applications, identified mission
critical systems (those systems where loss of their function would result in
immediate stoppage or significant impairment to core business units) and
nonmission critical systems and determined which of these systems is not Year
2000 compliant. All third-party suppliers of mission critical computer systems
and applications and nonmission critical systems were contacted to verify
whether their systems and applications will be Year 2000 compliant and their
responses are being evaluated. All of those contacted have responded and have
informed Alliance that their systems and applications are or will be Year 2000
compliant. All mission and nonmission critical systems supplied by third parties
have been tested. Alliance expects all testing will be completed before the end
of 1999.
Alliance has remediated, replaced or retired all of its non-compliant mission
critical systems and nonmission critical systems and applications that can
affect the Fund. After each system has been remediated, it is tested with 19XX
dates to determine if it still performs its intended business function
correctly. Next, each system undergoes a simulation test using dates occurring
after December 31, 1999. Inclusive of the replacement and retirement of some of
its systems, Alliance has completed these testing phases for all mission
critical systems and nonmission critical systems. Integrated systems tests were
conducted to verify that the systems would continue to work together. Full
integration testing of all mission critical and nonmission critical systems is
complete. Testing of interfaces with third-party suppliers has been completed.
Alliance reports that it has completed an inventory of its facilities and
related technology applications and has substantially completed and tested these
systems. Alliance reports that it anticipates that these systems will be fully
operable in the Year 2000. Alliance has deferred certain other planned
information technology projects until after the Year 2000 initiative is
completed. Such delay is not expected to have a material adverse effect on
Alliance's financial condition or results of operations. Alliance, with the
assistance of a consulting firm, has developed Year 2000 specific contingency
plans with emphasis on mission critical functions. These plans seek to provide
alternative methods of processing in the event of a failure.
The current cost estimate to Alliance of the Year 2000 initiative is
approximately $45 million. These costs consist principally of modification and
testing and costs to develop formal Year 2000 specific contingency plans. These
costs, which will generally be expensed as incurred, will be funded from
Alliance's operations and the issuance of debt. Through September 30, 1999,
Alliance had incurred approximately $41.0 million of costs related to the Year
2000 initiative. At this time, management of Alliance believes that the costs
associated with resolving the Year 2000 issue will not have a material adverse
effect on Alliance's results of operations, liquidity or capital resources.
There are many risks associated with Year 2000 issues, including the risks that
the computer systems and applications used by the Fund and its major service
providers will not operate as intended and that the systems and applications of
third-party providers to the Fund and its service providers
12
<PAGE>
will not be Year 2000 compliant. Likewise, there can be no assurance the
compliance schedules outlined above will be met or that actual costs incurred
will not exceed current cost estimates. Should the significant computer systems
and applications used by the Fund or its major service providers, or the
systems of their important third-party suppliers, be unable to process date
sensitive information accurately after 1999, the Fund and its service providers
may be unable to conduct their normal business operations and to provide
shareholders with required services. In addition, the Fund and its service
providers may incur unanticipated expenses, regulatory actions and legal
liabilities. The Fund and Alliance cannot determine which risks, if any, are
most reasonably likely to occur or the effects of any particular failure to be
Year 2000 compliant. Certain statements provided by Alliance in this section
entitled "Year 2000," as such statements relate to Alliance, are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. To the fullest extent permitted by law, the
foregoing Year 2000 discussion is a "Year 2000 Readiness Disclosure" within the
meaning of The Year 2000 Information and Readiness Disclosure Act, 15 U.S.C.
Sec. 1 (1998).
- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND FUND MANAGER
The Fund's investment adviser is Alliance Capital Management L.P., 1345 Avenue
of the Americas, New York, NY 10105. Alliance is a leading international
investment adviser managing client accounts with assets as of September 30, 1999
totaling more than $317 billion (of which more than $143 billion represented
assets of investment companies). As of September 30, 1999, Alliance managed
retirement assets for many of the largest public and private employee benefit
plans (including 28 of the nation's FORTUNE 100 companies), for public employee
retirement funds in 31 states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide. The 53 registered
investment companies managed by Alliance, comprising 119 separate investment
portfolios, currently have more than 4.8 million shareholder accounts.
The persons primarily responsible for the day-to-day management of the Fund are
Paul Rissman, Senior Vice President of Alliance Capital Management Corporation,
and Frank Caruso, Senior Vice President. Both Messrs. Rissman and Caruso have
been associated with Alliance Capital Management Corporation since prior to
1994.
Alliance provides investment advisory services and order placement facilities
for the Fund. For these advisory services, the Fund pays Alliance a fee at an
annualized rate of .75% of the Fund's average daily net assets. The fee will be
accrued daily and paid monthly.
- --------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
- --------------------------------------------------------------------------------
How the Fund Values Its Shares
The Fund's net asset value or NAV is calculated at 4:00 p.m., Eastern time, each
day the Exchange is open for business. To calculate NAV, the Fund's assets are
valued and totaled, liabilities are subtracted, and the balance, called net
assets, is divided by the number of shares outstanding. The Fund values its
securities at their current market value determined on the basis of market
quotations, or, if such quotations are not readily available, such other methods
as the Fund's directors believe accurately reflect fair market value.
Your order for a purchase, sale, or exchange of shares is priced at the next NAV
calculated after your order is received in proper form by the Fund. Your
purchase of Fund shares may be subject to an initial sales charge. Sales of Fund
shares may be subject to a contingent deferred sales charge or CDSC. See the
Distribution Arrangements section of this Prospectus for details.
How to Buy Shares
You may purchase the Fund's shares through broker-dealers, banks, or other
financial intermediaries. You also may purchase shares directly from the Fund's
principal underwriter, Alliance Fund Distributors, Inc., or AFD.
Minimum investment amounts are:
o Initial: $250
o Subsequent: $ 50
o Automatic Investment Program: $ 25
If you are an existing Fund shareholder, you may purchase shares by electronic
funds transfer in amounts not exceeding $500,000 if you have completed the
appropriate section of the Shareholder Application. Call 800-221-5672 to arrange
a transfer from your bank account.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not provided the
Fund with their certified taxpayer identification number. To avoid this, you
must provide your correct Tax Identification Number (Social Security Number for
most investors) on your account application.
The Fund may refuse any order to purchase shares. In particular, the Fund
reserves the right to restrict purchases of shares (including through exchanges)
when they appear to evidence a pattern of frequent purchases and sales made in
response to short-term considerations.
How to Exchange Shares
You may exchange your Fund shares for shares of the same class of other Alliance
Mutual Funds (including AFD Exchange Reserves, a money market fund managed by
Alliance). Exchanges of shares are made at the next determined NAV, without
sales or service charges. You may request an exchange by mail or telephone. You
must call by 4:00 p.m., Eastern time, to receive that day's NAV. The Fund may
change, suspend, or terminate the exchange service on 60 days' written notice.
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<PAGE>
How to Sell Shares
You may "redeem" your shares (i.e., sell your shares to the Fund) on any day the
Exchange is open, either directly or through your financial intermediary. Your
sales price will be the next-determined NAV, less any applicable CDSC, after the
Fund receives your sales request in proper form. Normally, proceeds will be sent
to you within 7 days. If you recently purchased your shares by check or
electronic funds transfer, your redemption payment may be delayed until the Fund
is reasonably satisfied that the check or electronic funds transfer has been
collected (which may take up to 15 days).
o Selling Shares Through Your Broker
Your broker must receive your sales request by 4:00 p.m., Eastern time, and
submit it to the Fund by 5:00 p.m., Eastern time, for you to receive that day's
NAV, less any applicable CDSC. Your broker is responsible for submitting all
necessary documentation to the Fund and may charge you for this service.
o Selling Shares Directly to the Fund
By Mail:
- -- Send a signed letter of instruction or stock power, along with
certificates, to:
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, N.J. 07906-1520
800-221-5672
- -- For your protection, a bank, a member firm of a national stock exchange,
or other eligible guarantor institution, must guarantee signatures. Stock
power forms are available from your financial intermediary, AFS, and many
commercial banks. Additional documentation is required for the sale of
shares by corporations, intermediaries, fiduciaries, and surviving joint
owners. If you have any questions about these procedures, contact AFS.
By Telephone:
- -- You may redeem your shares for which no stock certificates have been
issued by telephone request. Call AFS at 800-221-5672 with instructions on
how you wish to receive your sale proceeds.
- -- A telephone redemption request must be received by 4:00 p.m., Eastern
time, for you to receive that day's NAV, less any applicable CDSC.
- -- If you have selected electronic funds transfer in your Shareholder
Application, the redemption proceeds will be sent directly to your bank.
Otherwise, the proceeds will be mailed to you.
- -- Redemption requests by electronic funds transfer may not exceed $100,000
per day and redemption requests by check cannot exceed $50,000 per day.
- -- Telephone redemption is not available for shares held in nominee or
"street name" accounts, retirement plan accounts, or shares held by a
shareholder who has changed his or her address of record within the
previous 30 calendar days.
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS
AND TAXES
- --------------------------------------------------------------------------------
The income dividends and capital gains distributions, if any, declared by the
Fund on its outstanding shares will, at the election of each shareholder, be
paid in cash or in additional shares of the same class of shares of the Fund. If
paid in additional shares, the shares will have an aggregate net asset value as
of the close of business on the day following the declaration date of the
dividend or distribution equal to the cash amount of the dividend or
distribution. You may make an election to receive dividends and distributions in
cash or in shares at the time you purchase shares. Your election can be changed
at any time prior to a record date for a dividend. There is no sales or other
charge in connection with the reinvestment of dividends or capital gains
distributions. Cash dividends may be paid in check, or at your election,
electronically via the ACH network. There is no sales or other charge on the
reinvestment of Fund dividends and distributions.
If you receive an income dividend or capital gains distribution in cash you may,
within 120 days following the date of its payment, reinvest the dividend or
distribution in additional shares of the Fund without charge by returning to
Alliance, with appropriate instructions, the check representing the dividend or
distribution. Thereafter, unless you otherwise specify, you will be deemed to
have elected to reinvest all subsequent dividends and distributions in shares of
the Fund.
While it is the intention of the Fund to distribute to its shareholders
substantially all of each fiscal year's net income and net realized capital
gains, if any, the amount and time of any dividend or distribution will depend
on the realization by the Fund of income and capital gains from investments.
There is no fixed dividend rate and there can be no assurance that the Fund will
pay any dividends or realize any capital gains.
For federal income tax purposes, the Fund's dividend distributions of net income
(or short-term taxable gains) will be taxable to you as ordinary income. Any
distributions of long-term capital gains generally will be taxable to you as
long-term capital gains. The Fund's distributions also may be subject to certain
state and local taxes.
Investment income received by the Fund from sources within foreign countries may
be subject to foreign income taxes withheld at the source.
Under certain circumstances, if the Fund realizes losses (e.g., from
fluctuations in currency exchange rates) after paying a dividend, all or a
portion of the dividend may subsequently be characterized as a return of
capital. Returns of capital are generally nontaxable, but will reduce a
shareholder's basis in shares of the Fund. If that basis is reduced to zero
(which could happen if the shareholder does not reinvest distributions and
returns of capital are significant), any further returns of capital will be
taxable as capital gain.
14
<PAGE>
If you buy shares just before the Fund deducts a distribution from its NAV, you
will pay the full price for the shares and then receive a portion of the price
back as a taxable distribution.
The sale or exchange of Fund shares is a taxable transaction for federal income
tax purposes.
Each year shortly after December 31, the Fund will send you tax information
stating the amount and type of all its distributions for the year. Consult your
tax adviser about the federal, state, and local tax consequences in your
particular circumstances.
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
- --------------------------------------------------------------------------------
Share Classes. The Fund offers three classes of shares.
Class A Shares--Initial Sales Charge Alternative
You can purchase Class A shares at NAV with an initial sales charge as follows:
Initial Sales Charge
Commission
to Dealer/
Agent
As % of as % of % of
Net Amount Offering Offering
Amount Purchased Invested Price Price
- --------------------------------------------------------------------------------
Up to $100,000 4.44% 4.25% 4.00%
$100,000 up to $250,000 3.36 3.25 3.00
$250,000 up to $500,000 2.30 2.25 2.00
$500,000 up to $1,000,000 1.78 1.75 1.50
You pay no initial sales charge on purchases of Class A Shares in the amount of
$1,000,000 or more, but may pay a 1% CDSC if you redeem your shares within 1
year. Alliance may pay the dealer or agent a fee of up to 1% of the dollar
amount purchased. Certain purchases of Class A shares may qualify for reduced or
eliminated sales charges under the Fund's Combined Purchase Privilege,
Cumulative Quantity Discount, Statement of Intention, Privilege for Certain
Retirement Plans, Reinstatement Privilege and Sales at Net Asset Value Programs.
Consult the Subscription Application and the Fund's SAI for additional
information about these options.
Class B Shares--Deferred Sales Charge Alternative
You can purchase Class B shares at NAV without an initial sales charge. The Fund
will thus receive the full amount of your purchase. Your investment, however,
will be subject to a CDSC if you redeem shares within 4 years of purchase. The
CDSC varies depending on the number of years you hold the shares. The CDSC
amounts are:
Year Since Purchase CDSC
------------------- ----
First 4.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth None
If you exchange your shares for the Class B shares of another Alliance Mutual
Fund, the CDSC also will apply to those Class B shares. The CDSC period begins
with the date of your original purchase, not the date of exchange for the other
Class B shares.
The Fund's Class B shares purchased for cash automatically convert to Class A
shares eight years after the end of the month of your purchase. If you purchase
shares by exchange for the Class B shares of another Alliance Mutual Fund, the
conversion period runs from the date of your original purchase.
Class C Shares--Asset-Based Sales Charge Alternative
You can purchase shares at NAV without an initial sales charge. The Fund will
thus receive the full amount of your purchase. Your investment, however, will be
subject to a 1% CDSC if you redeem your shares within 1 year. If you exchange
your shares for the Class C shares of another Alliance Mutual Fund, the 1% CDSC
also will apply to those Class C shares. The 1 year period for the CDSC begins
with the date of your original purchase, not the date of the exchange for the
other Class C shares.
Class C shares do not convert to any other class of shares of the Fund.
Asset-Based Sales Charge or Rule 12b-1 Fees. The Fund has adopted a plan under
Commission Rule 12b-1 that allows the Fund to pay asset-based sales charges or
distribution and service fees for the distribution and sale of its shares. The
amount of these fees for each class of the Fund's shares is:
Rule 12b-1 Fee (as a Percentage of
Aggregate Average Daily Net Assets)
-----------------------------------
Class A .30%
Class B 1.00%
Class C 1.00%
Because these fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees. Class B and Class C shares are subject to
higher distribution fees than Class A shares (Class B shares are subject to
these higher fees for a period of eight years, after which they convert to Class
A shares). The higher fees mean a higher expense ratio, so Class B and Class C
shares pay correspondingly lower dividends and may have a lower net asset value
than Class A shares.
Choosing a Class of Shares. The decision as to which class of shares is more
beneficial to you depends on the amount and intended length of your investment.
If you are making a large investment, thus qualifying for a reduced sales
charge, you might consider purchasing Class A shares. If you are making a
smaller investment, you might consider purchasing Class B shares because 100% of
your purchase is invested immediately. If you are unsure of the length of your
investment, you might consider Class C shares because there is no initial sales
charge and no CDSC as long as the shares are held for one year or more. Dealers
and agents may receive differing compensation for selling Class A, Class B, or
Class C shares. There is no size limit on purchases of Class A shares. The
maximum purchase of Class B shares is $250,000. The maximum purchase of Class C
shares is $1,000,000.
15
<PAGE>
You should consult your financial agent to assist in choosing a class of Fund
shares.
Application of the CDSC. The CDSC is applied to the lesser of the original cost
of shares being redeemed or NAV at the time of redemption (or, as to Fund shares
acquired through an exchange, the cost of the Alliance Mutual Fund shares
originally purchased for cash). Shares obtained from dividend or distribution
reinvestment are not subject to the CDSC. In the case of a partial redemption,
the shares not subject to the CDSC will be redeemed first. The Fund may waive
the CDSC on redemptions of shares following the death or disability of a
shareholder, to meet the requirements of certain qualified retirement plans, or
under a monthly, bimonthly, or quarterly systematic withdrawal plan. See the
Fund's SAI for further information about CDSC waivers.
Other. A transaction, service, administrative or other similar fee may be
charged by your broker-dealer, agent, financial intermediary, or other financial
representative with respect to the purchase, sale, or exchange of Class A, Class
B, or Class C shares made through your financial representative. The financial
intermediaries also may impose requirements on the purchase, sale, or exchange
of shares that are different from, or in addition to, those imposed by the Fund,
including requirements as to the minimum initial and subsequent investment
amounts.
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
Under unusual circumstances, the Fund may suspend redemptions or postpone
payment for up to seven days or longer, as permitted by federal securities law.
The Fund reserves the right to close an account that through redemption has
remained below $200 for 90 days. Shareholders will receive 60 days' written
notice to increase the account value before the account is closed.
During drastic economic or market developments, you might have difficulty in
reaching AFS by telephone, in which event you should issue written instructions
to AFS. AFS is not responsible for the authenticity of telephone requests to
purchase, sell, or exchange shares. AFS will employ reasonable procedures to
verify that telephone requests are genuine, and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without notice.
Shareholder Services. AFS offers a variety of shareholder services. For more
information about these services or your account, call AFS's toll-free number,
800-221-5672. Some services are described in the attached Subscription
Application. You also may request a shareholder's manual explaining all
available services by calling 800-227-4618.
Employee Benefit Plans. Certain employee benefit plans, including
employer-sponsored tax-qualified 401(k) plans and other defined contribution
retirement plans ("Employee Benefit Plans"), may establish requirements as to
the purchase, sale or exchange of shares, including maximum and minimum initial
investment requirements, that are different from those described in this
Prospectus. Employee Benefit Plans also may not offer all of the Fund's classes
of shares. In order to enable participants investing through Employee Benefit
Plans to purchase shares of the Fund, the maximum and minimum investment amounts
may be different for shares purchased through Employee Benefit Plans from those
described in this Prospectus. In addition, the Class A, Class B, and Class C
CDSC may be waived for investments made through Employee Benefit Plans.
For more information about the Fund, the following documents are available upon
request:
o Statement of Additional Information (SAI)
The Fund has an SAI, which contains more detailed information about the Fund,
including its operations and investment policies. The Fund's SAI is incorporated
by reference into (and is legally part of) this prospectus.
You may request a free copy of the SAI or make shareholder inquiries of the
Fund, by contacting your broker or other financial intermediary, or by
contacting Alliance:
By Mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
By Phone: For Information: (800) 221-5672
For Literature: (800) 227-4618
Or you may view or obtain these documents from the Commission:
o Call the SEC at 1-202-942-8090 for information on the operation of the
Public Reference Room.
o Reports and other information about the Fund are available on the EDGAR
Database on the Commission's Internet site at http://www.sec.gov.
o Copies of the information may be obtained, after paying a duplicating fee,
by electronic request at [email protected], or by writing the
Commission's Public Reference Section, Washington, DC 20549-0102.
You also may find more information about Alliance and the Fund on the Internet
at: www.Alliancecapital.com.
16
SEC File Number: 811-09687
Alliance Disciplined Value Fund Subscription Application
TO OPEN YOUR NEW ALLIANCE ACCOUNT...
Please complete the application and mail it to:
ALLIANCE FUND SERVICES, INC.
P.O. BOX 1520
SECAUCUS, NEW JERSEY 07096-1520
For certified or overnight deliveries, send to:
ALLIANCE FUND SERVICES, INC.
500 PLAZA DRIVE
SECAUCUS, NEW JERSEY 07094
SECTION 1 YOUR ACCOUNT REGISTRATION (REQUIRED)
Complete one of the available choices. To ensure proper tax reporting to the
IRS:
x Individuals, Joint Tenants, Transfer on Death and Gift/Transfer to a Minor:
. Indicate your name(s) exactly as it appears on your social security card.
X Transfer on Death:
. Ensure that your state participates
x Trust/Other:
. Indicate the name of the entity exactly as it appeared on the notice you
received from the IRS when your Employer Identification number was assigned.
SECTION 2 YOUR ADDRESS (REQUIRED)
Complete in full.
X Non-Resident Alien:
. Indicate your permanent country of residence.
SECTION 3 YOUR INITIAL INVESTMENT (REQUIRED)
For each fund in which you are investing: 1 Write the three digit fund number
in the column titled 'INDICATE THREE DIGIT FUND NUMBER LOCATED BELOW'. 2 Write
the dollar amount of your initial purchase in the column titled 'INDICATE
DOLLAR AMOUNT'. (If you are eligible for a reduced sales charge, you must also
complete Section 4F). 3 Check off a distribution option for your dividends. 4
Check off a distribution option for your capital gains. All distributions
(dividends and capital gains) will be reinvested into your fund account unless
you direct otherwise. If you want distributions sent directly to your bank
account, then you must complete Section 4D and attach a preprinted, voided
check for that account. If you want your distributions sent to a third party
you must complete Section 4E.
SECTION 4 YOUR SHAREHOLDER OPTIONS (COMPLETE ONLY THOSE OPTIONS YOU WANT)
A. AUTOMATIC INVESTMENT PLANS (AIP) - You can make periodic investments into
any of your Alliance Funds in one of three ways. First, by a periodic
withdrawal ($25 minimum) directly from your bank account and invested into an
Alliance Fund. Second, you can direct your distributions (dividends and capital
gains) from one Alliance Fund into another Fund. Or third, you can
automatically exchange monthly ($25 minimum) shares of one Alliance Fund for
shares of another Fund. To elect one of these options, complete the appropriate
portion of Section 4A & 4D.
If more than one dividend direction or monthly exchange is desired, please call
our Literature Center to obtain a Shareholder Account Services Options Form for
completion.
B. TELEPHONE TRANSACTIONS VIA EFT - Complete this option if you would like to
be able to transact via telephone between your fund account and your bank
account.
C. SYSTEMATIC WITHDRAWAL PLANS (SWP) - Complete this option if you wish to
periodically redeem dollars from one of your fund accounts. Payments can be
made via Electronic Funds Transfer (EFT) to your bank account or by check.
D. BANK INFORMATION - If you have elected any options that involve
transactions between your bank account and your fund account or have elected
cash distribution options and would like the payments sent to your bank
account, please tape a preprinted, voided check of the account you wish to use
to this section of the application.
E. THIRD PARTY PAYMENT DETAILS - If you have chosen cash distributions and/or
a Systematic Withdrawal Plan and would like the payments sent to a person
and/or address other than those provided in section 1 or 2, complete this
option. Medallion Signature Guarantee is required if your account is not
maintained by a broker dealer.
F. REDUCED CHARGES (CLASS A ONLY) - Complete if you would like to link fund
accounts that have combined balances that might exceed $100,000 so that future
purchases will receive discounts. Complete if you intend to purchase over
$100,000 within 13 months.
SECTION 5 SHAREHOLDER AUTHORIZATION (REQUIRED) All owners must sign. If it is a
custodial, corporate, or trust account, the custodian, an authorized officer,
or the trustee respectively must sign.
IF WE CAN ASSIST YOU IN ANY WAY, PLEASE DO NOT HESITATE TO CALL US AT: (800)
221-5672 or (201) 553-3300
OR VISIT OUR WEBSITE AT: WWW.ALLIANCECAPITAL.COM
FOR LITERATURE CALL: (800) 227-4618
<PAGE>
Alliance Disciplined Value Fund Subscription Application
- --------------------------------------------------------------------------------
1. Your Account Registration (Please Print in Capital Letters and Mark Check
Boxes Where Applicable)
- --------------------------------------------------------------------------------
|_| Individual Account [ |_| Male |_| Female ] - or - |_| Joint Account - or -
|_| Transfer On Death [ |_| Male |_| Female ] - or - Gift/Transfer to a Minor
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Owner or Custodian (First Name) (MI) (Last Name)
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
(First Name) Joint Owner*, (MI) (Last Name)
Transfer On Death Beneficiary
or Minor
|_| |_| |_| - |_| |_| - |_| |_| |_| |_|
Social Security Number of Owner or Minor
(required to open account)
If Uniform Gift/Transfer
to Minor Account:
|_| |_| Minor's State of Residence
If Joint Tenants Account: * The Account will be registered "Joint Tenants with
right of Survivorship" unless you indicate otherwise below:
|_| In Common |_| By Entirety |_| Community Property
|_| Trust - or - |_| Corporation - or - |_| Other -----------------------------
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Name of Trustee if applicable (MI) (Last Name)
(First Name)
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Name of Trust or Corporation or Other Entity
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Name of Trust or Corporation or Other Entity continued
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Trust Dated (MM, DD, YYYY) Tax ID Number (required to open account)
|_| Employer ID Number - OR - |_| Social Security
Number
- --------------------------------------------------------------------------------
2. Your Address
- --------------------------------------------------------------------------------
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Street Number Street Name
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
City State Zip code
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| - |_| |_| |_| - |_| |_| |_| |_|
If Non-U.S., Specify Country Daytime Phone Number
|_| U.S. Citizen |_| Resident Alien |_| Non-Resident Alien
-------------------
-------------------
90000-DVFApp-P1 e-mail address
1
<PAGE>
- --------------------------------------------------------------------------------
3. Your Initial Investment The minimum investment is $250 per fund.
The maximum investment in Class B is $250,000; Class C is $1,000,000.
- --------------------------------------------------------------------------------
I hereby subscribe for shares of the following the Alliance Disciplined Value
Fund and elect distribution options as indicated.
- ---------------------------------------
Broker/Dealer Use Only: Wire Confirm #
|_| |_| |_| |_| |_| |_| |_| |_|
- ---------------------------------------
Dividend and Capital Gain Distribution Options:
R Reinvest distributions into my fund account.
C Send my distributions in cash to the address I have provided in Section 2.
(Complete Section 4D for direct deposit to your bank account. Complete
Section 4E for payment to a third party).
D Direct my distributions to another Alliance fund. Complete the appropriate
portion of Section 4A to direct your distributions (dividends and capital
gains) to another Alliance Fund (the $250 minimum investment requirement
applies to Funds into which distributions are directed).
- ----------- ------------- ---------------------- ---------------------------
Make all Distributions Options
checks* Indicate three *Check One*
payable to: digit Fund Indicate Dollar Amount ---------------------------
Alliance number Dividends Capital Gains
Funds located below R C D R C D
- ----------- ------------- ---------------------- ----------- -------------
|_| |_| |_| $ |__________________| |R| |C| |D| |R| |C| |D|
|_| |_| |_| $ |__________________| |R| |C| |D| |R| |C| |D|
|_| |_| |_| $ |__________________| |R| |C| |D| |R| |C| |D|
- ----------------------
Total Investment $ |__________________|
- ----------------------
* Cash and money orders are not accepted
- --------------------------------------------------------------------------------
Alliance Disciplined Value Fund Numbers
- --------------------------------------------------------------------------------
------------- -------------- ------------
Contingent
Initial Sales Deferred Sales Asset-Based
Charge Charge Sales Charge
A B C
------------- -------------- ------------
Alliance Disciplined Value Fund 102 202 302
----------------------------------------------------------------------------
90000-DVFApp-P2 Alliance Capital [LOGO](R)
The Investment Professional's Choice
2
<PAGE>
- --------------------------------------------------------------------------------
4. Your Shareholder Options
- --------------------------------------------------------------------------------
A. Automatic Investment Plans (AIP)
|_| Withdraw From My Bank Account Via EFT*
I authorize Alliance to draw on my bank account for investment in my
fund account(s) as indicated below (Complete Section 4D also for the
bank account you wish to use).
1 - |_| |_| |_| |_| |_| |_| |_| |_| |_| , |_| |_| |_|.00 |_|
Fund Number Beginning Date Amount ($25 minimum) Frequency
(MM,DD)
2 - |_| |_| |_| |_| |_| |_| |_| |_| |_| , |_| |_| |_|.00 |_|
Fund Number Beginning Date Amount ($25 minimum) Frequency
(MM,DD)
3 - |_| |_| |_| |_| |_| |_| |_| |_| |_| , |_| |_| |_|.00 |_|
Fund Number Beginning Date Amount ($25 minimum) Frequency
(MM,DD)
Frequency: M = monthly Q = quarterly A = annually
* Electronic Funds Transfer. Your bank must be a member of the
National Automated Clearing House Association (NACHA)
|_| Direct My Distributions As indicated in Section 3, I would like my
dividends and/or capital gains directed to the same class of shares of
another Alliance Fund.
FROM: |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| - |_|
Fund Number Account Number (If existing)
TO: |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| - |_|
Fund Number Account Number (If existing)
|_| Exchange My Shares Monthly I authorize Alliance to transact monthly
exchanges, within the same class of shares, between my fund accounts as
listed below.
FROM: |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| - |_|
Fund Number Account Number (If existing)
|_| |_| , |_| |_| |_|.00 |_| |_|
Amount ($25 minimum) Day of Exchange**
TO: |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| - |_|
Fund Number Account Number (If existing)
** Shares exchanged will be redeemed at the net asset value on the "Day of
Exchange" (If the "Day of Exchange" is not a fund business day, the
exchange transaction will be processed on the next fund business day). The
exchange privilege is not available if stock certificates have been
issued.
B. Purchases and Redemptions Via EFT
You can call our toll-free number 1-800-221-5672 and instruct Alliance
Fund Services, Inc. in a recorded conversation to purchase, redeem or
exchange shares for your account. Purchase and redemption requests will be
processed via electronic funds transfer (EFT) to and from your bank
account.
Instructions: o Review the information in the Prospectus about
telephone transaction services.
o If you select the telephone purchase or redemption
privilege, you must write "VOID" across the face
of a check from the bank account you wish to use
and attach it to Section 4D of this application.
|_| Purchases and Redemptions via EFT
I hereby authorize Alliance Fund Services, Inc. to effect the purchase
and/or redemption of Fund shares for my account according to my telephone
instructions or telephone instructions from my Broker/Agent, and to
withdraw money or credit money for such shares via EFT from the bank
account I have selected.
- --------------------------------------------------------------------------------
For shares recently purchased by check or electronic funds transfer
redemption proceeds will not be made available until the Fund is
reasonably assured the check or electronic funds transfer has been
collected, normally 15 calendar days after the purchase date.
- --------------------------------------------------------------------------------
90000-DVFApp-P3
3
<PAGE>
- --------------------------------------------------------------------------------
4. Your Shareholder Options (CONTINUED)
- --------------------------------------------------------------------------------
C. Systematic Withdrawal Plans (SWP)
In order to establish a SWP, you must reinvest all dividends and capital
gains.
|_| I authorize Alliance to transact periodic redemptions from my fund
account and send the proceeds to me as indicated below.
1 - |_| |_| |_| |_| |_| |_| |_| |_| |_| , |_| |_| |_|.00 |_|
Fund Number Beginning Date Amount ($25 minimum) Frequency
(MM,DD)
2 - |_| |_| |_| |_| |_| |_| |_| |_| |_| , |_| |_| |_|.00 |_|
Fund Number Beginning Date Amount ($25 minimum) Frequency
(MM,DD)
3 - |_| |_| |_| |_| |_| |_| |_| |_| |_| , |_| |_| |_|.00 |_|
Fund Number Beginning Date Amount ($25 minimum) Frequency
(MM,DD)
Frequency: M = monthly Q = quarterly A = annually
Please send my SWP proceeds to:
|_| My Address of Record (via check)
|_| The Payee and address specified in section 4E (via check) (Medallion
Signature Guarantee required)
|_| My checking account-via EFT (complete section 4D) Your bank must be
a member of the National Automated Clearing House Association
(NACHA) in order for you to receive SWP proceeds directly into your
bank account. Otherwise payment will be made by check
D. Bank Information This bank account information will be used for:
|_| Distributions (Section 3)
|_| Automatic Investments (Section 4A)
|_| Telephone Transactions (Section 4B)
|_| Withdrawals (Section 4C)
- --------------------------------------------------------------------------------
Please Tape a Pre-printed Voided Check Here*
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
* The above services cannot be established without a pre-printed voided
check.
For EFT transactions, the fund requires signatures of bank account owners
exactly as they appear on bank records. If the registration at the bank
differs from that on the Alliance mutual fund, all parties must sign in
Section 5.
|_| |_| |_| |_| |_| |_| |_| |_| |_|
Your Bank's ABA Routing Number
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Your Bank Account Number
|_| Checking Account |_| Savings Account
90000-DVFApp-P4
4
<PAGE>
- --------------------------------------------------------------------------------
4. Your Shareholder Options (CONTINUED)
- --------------------------------------------------------------------------------
E. Third Party Payment Details Your signature(s) in Section 5 must be
Medallion Signature Guaranteed if your account is not maintained by a
broker/dealer. This third party payee information will be used for:
|_| Distributions (section 3) |_| Systematic Withdrawals (section 4C)
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Name (First Name) (MI) (Last Name)
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
Street Number Street Name
|_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_| |_|
City State Zip code
F. Reduced Charges (Class A only) If you, your spouse or minor children own
shares in other Alliance funds, you may be eligible for a reduced sales
charge. Please complete the Right of Accumulation section or the Statement
of Intent section.
|_| A. Right of Accumulation
Please link the tax identification numbers or account numbers
listed below for Right of Accumulation privileges, so that this and
future purchases will receive any discount for which they are
eligible.
________________________ ________________________
________________________ ________________________
Tax ID or Account Number Tax ID or Account Number
________________________
________________________
Tax ID or Account Number
|_| B. Statement of Intent
I want to reduce my sales charge by agreeing to invest the
following amount over a 13-month period:
|_| $100,000 |_| $250,000 |_| $500,000 |_| $1,000,000
If the full amount indicated is not purchased within 13 months, I
understand that an additional sales charge must be paid from my
account.
- --------------------------------------------------------------------------------
Dealer/Agent Authorization - For selected Dealers or Agents ONLY.
- --------------------------------------------------------------------------------
We hereby authorize Alliance Fund Services, Inc. to act as our agent in
connection with transactions under this authorization form; and we guarantee the
signature(s) set forth in Section 5, as well as the legal capacity of the
shareholder.
____________________________________ ______________________________________
Dealer/Agent Firm Authorized Signature
___________________________ |_| ______________________________________
Representative First Name MI Last Name
____________________________________ ______________________________________
Dealer/Agent Firm Number Representative Number
____________________________________ ______________________________________
Branch Number Branch Telephone Number
______________________________________________________________________________
Branch Office Address
____________________________________ |_| |_| ____________________________
City State Zip Code
90000-DVFApp-P5
5
<PAGE>
- --------------------------------------------------------------------------------
5. Shareholder Authorization -- This section MUST be completed
- --------------------------------------------------------------------------------
Telephone Exchanges and Redemptions by Check
Unless I have checked one or both boxes below, these privileges will
automatically apply, and by signing this application, I hereby authorize
Alliance Fund Services, Inc. to act on my telephone instructions, or on
telephone instructions from any person representing himself to be an
authorized employee of an investment dealer or agent requesting a
redemption or exchange on my behalf. (NOTE: Telephone exchanges may only
be processed between accounts that have identical registrations.)
Telephone redemption checks will only be mailed to the name and address of
record; and the address must not have changed within the last 30 days. The
maximum telephone redemption amount is $50,000 for redemptions by check.
|_| I do not elect the telephone exchange service
|_| I do not elect the telephone redemption by check service
By selecting any of the above telephone privileges, I agree that neither
the Fund nor Alliance, Alliance Fund Distributors, Inc., Alliance Fund
Services, Inc. or other Fund Agent will be liable for any loss, injury,
damage or expense as a result of acting upon telephone instructions
purporting to be on my behalf, that the Fund reasonably believes to be
genuine, and that neither the Fund nor any such party will be responsible
for the authenticity of such telephone instructions. I understand that any
or all of these privileges may be discontinued by me or the Fund at any
time. I understand and agree that the Fund reserves the right to refuse
any telephone instructions and that my investment dealer or agent reserves
the right to refuse to issue any telephone instructions I may request.
For non-residents only: Under penalties of perjury, I certify that to the
best of my knowledge and belief, I qualify as a foreign person as
indicated in Section 2.
I am of legal age and capacity and have received and read the Prospectus
and agree to its terms.
I certify under penalty of perjury that the number shown in Section 1 of
this form is my correct tax identification number or I am waiting for a
number to be issued to me and that I have not been notified that this
account is subject to backup withholding.
The Internal Revenue Service does not require your consent to any
provision of this document other than the certification required to avoid
backup withholding.
- ----------------------------------------------------------- -------------
Signature Date
- ----------------------------------------------------------- -------------
Signature Date
- --------------------------------------------
Medallion Signature Guarantee required if
completing Section 4E and your mutual
fund is not maintained by a broker dealer
90000-DVFApp-P6 Alliance Capital [LOGO](R)
The Investment Professional's Choice
6
<PAGE>
