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<PAGE> PAGE 2
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SIGNATURE JOSEPH REZABEK
TITLE ASST. VICE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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</TABLE>
Alliance Bond Fund, Inc.
811-02383
Exhibit Q1(e)
INVESTMENT ADVISORY CONTRACT
ALLIANCE BOND FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
July 22, 1992
(as amended December 29, 1992 and July 1, 1999)
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. We are an open-end, diversified management investment company
registered under the Investment Company Act of 1940 (the "Act"). We are
currently authorized to issue three portfolios of shares and our Directors
are authorized to reclassify and issue any unissued shares to any number of
additional classes or series (Portfolios) each having its own investment
objective, policies and restrictions, all as more fully described in the
Prospectuses and the Statements of Additional Information constituting parts
of the Registration Statement filed on our behalf under the Securities Act of
1933 and the Act. We are engaged in the business of investing and reinvesting
our assets in securities of the type and in accordance with the limitations
specified in our Articles of Incorporation, By-Laws, Registration Statement
filed with the Securities and Exchange Commission under the Securities Act of
1933 and the Act, and any representations made in our Prospectuses and
Statements of Additional Information, all in such manner and to such extent
as may from time to time be authorized by our Directors. We enclose copies of
the documents listed above and will from time to time furnish you with any
amendments thereof.
2. (a) We hereby employ you to manage the investment and
reinvestment of the assets in each of our Portfolios as above specified, and,
without limiting the generality of the foregoing, to provide management and
other services specified below.
(b) You will make decisions with respect to all purchases
and sales of securities in each of our Portfolios. To carry out such
decisions, you are hereby authorized, as our agent and attorney-in-fact, for
our account and at our risk and in our name, to place orders for the
investment and reinvestment of our assets. In all purchases, sales and other
transactions in securities in each of our Portfolios you are authorized to
exercise full discretion and act for us in the same manner and with the same
force and effect as we might or could do with respect to such purchases,
sales or other transactions, as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such purchases,
sales or other transactions.
(c) You will report to our Directors at each meeting
thereof all changes in each Portfolio since the prior report, and will also
keep us in touch with important developments affecting any Portfolio and on
your own initiative will furnish us from time to time with such information
as you may believe appropriate for this purpose, whether concerning the
individual companies whose securities are included in our Portfolios, the
industries in which they engage, or the conditions prevailing in the economy
generally. You will also furnish us with such statistical and analytical
information with respect to securities in each of our Portfolios as you may
believe appropriate or as we reasonably may request. In making such purchases
and sales of securities in any of our Portfolios, you will bear in mind the
policies set from time to time by our Directors as well as the limitations
imposed by our Articles of Incorporation and in our Registration Statement
under the Securities Act of 1933 and the Act, the limitations in the Act and
of the Internal Revenue Code in respect of regulated investment companies and
the investment objective, policies and restrictions for each of our
Portfolios.
(d) It is understood that you will from time to time
employ or associate with yourselves such persons as you believe to be
particularly fitted to assist you in the execution of your duties hereunder,
the cost of performance of such duties to be borne and paid by you. No
obligation may be incurred on our behalf in any such respect. During the
continuance of this agreement and at our request you will provide to us
persons satisfactory to our Directors to serve as our officers. You or your
affiliates will also provide persons, who may be our officers, to render such
clerical, accounting and other services to us as we may from time to time
request of you. Such personnel may be employees of you or your affiliates. We
will pay to you or your affiliates the cost of such personnel for rendering
such services to us at such rates as shall from time to time be agreed upon
between us, provided that all time devoted to the investment or reinvestment
of securities in each of our Portfolios shall be for your account. Nothing
contained herein shall be construed to restrict our right to hire our own
employees or to contract for services to be performed by third parties.
Furthermore, you or your affiliates (other than us) shall furnish us without
charge with such management supervision and assistance and such office
facilities as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. You or your affiliates (other than us) shall also be responsible for
the payment of any expenses incurred in promoting the sale of our shares
(other than the portion of the promotional expenses to be borne by us in
accordance with an effective plan pursuant to Rule 12b-1 under the Act and
the costs of printing our prospectuses and other reports to shareholders and
fees related to registration with the Securities and Exchange Commission and
with state regulatory authorities).
3. It is further agreed that you will reimburse us for that
portion of the ordinary operating expenses of each of our Portfolios (except
interest, taxes, brokerage, distribution service fees paid in accordance with
an effective plan pursuant to Rule 12b-1 under the Act and extraordinary
expenses, all to the extent permitted by applicable state law and regulation)
(collectively, "Excludable Expenses") incurred by us which exceeds, as to a
Portfolio, the limits applicable to such Portfolio under the laws or
regulations of any state in which our shares of such Portfolio are qualified
for sale for the prior fiscal year.
We hereby confirm that, subject to the foregoing, we shall be
responsible and hereby assume the obligation for payment of all our other
expenses including: (a) payment of the fees payable to you under paragraph
(5) hereof; (b) custody, transfer, and dividend disbursing expenses; (c) fees
of directors who are not your affiliated persons; (d) legal and auditing
expenses; (e) clerical, accounting and other office costs; (f) the cost of
personnel providing services to us, as provided in subparagraph (d) of
paragraph 2 above; (g) costs of printing our prospectuses and shareholder
reports; (h) cost of maintenance of corporate existence; (i) interest
charges, taxes, brokerage fees and commissions; (j) costs of stationery and
supplies; (k) expenses and fees related to registration and filing with the
Securities and Exchange Commission and with state regulatory authorities; and
(l) such promotional expenses as may be contemplated by an effective plan
pursuant to Rule 12b-1 under the Act provided, however, that our payment of
such promotional expenses shall be in the amounts, and in accordance with the
procedures, set forth in such plan.
4. We shall expect of you, and you will give us the benefit
of, your best judgment and efforts in rendering these services to us, and we
agree as an inducement to your undertaking these services that you shall not
be liable hereunder for any mistake of judgment or in any event whatsoever,
except for lack of good faith, provided that nothing herein shall be deemed
to protect, or purport to protect, you against any liability to us or to our
security holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your obligations and
duties hereunder.
5. In consideration of the foregoing we will pay you a
quarterly fee, payable for the preceding quarter on the first business day of
January, April, July and October, equal to the Applicable Percentage, as
defined below, of the value of the net assets of the Portfolios listed below
at the close of business on the last business day immediately preceding such
payment date; provided, however, that for the portion of any quarter if this
agreement terminates prior to the end of such quarter, such compensation
shall be prorated according to the proportion which such portion of quarter
bears to a full quarter. The Applicable Percentage shall be, for our U.S.
Government Portfolio, .15 of 1% of the first $500,000,000, and .125 of 1% of
the excess over $500,000,000 of such Portfolio's aggregate net assets. In
consideration of the foregoing, we will pay you monthly on the last day of
each month with respect to our Corporate Bond Portfolio a fee of 1/12 of
0.625 of 1% of the first $500,000,000 of the Portfolio's average net assets,
and 1/12 of 0.50 of 1% of the excess over $500,000,000 of the average net
assets of such Portfolio; provided, however, that your compensation for the
period from the date hereof through the last day of the month in which the
effective date hereof occurs shall be prorated according to the proportion
which such period bears to such full month, and provided further that, upon
any termination of this agreement before the end of any month, such
compensation for the period from the end of the last month ending prior to
such termination to the date of termination shall be prorated according to
the proportion which such period bears to such full month and shall be
payable upon the date of termination. In consideration of the foregoing, we
will pay you monthly on the last day of each month with respect to the
Quality Bond Portfolio a fee of 1/12 of .55 of 1% of the Portfolio's average
net assets; provided, however, that your compensation for the period from the
date hereof through the last day of the month in which the effective date
hereof occurs shall be prorated according to the proportion which such period
bears to such full month, and provided further that upon any termination of
this agreement before the end of any month, such compensation for the period
from the end of the last month ending prior to such termination to the date
of termination shall be prorated according to the proportion which such
period bears to such full month and shall be payable upon the date of
termination.
6. This agreement (i) shall remain in effect until June 30,
2000 in the case of the U.S. Government Portfolio and the Corporate Bond
Portfolio, (ii) shall become effective on July 1, 1999 and shall remain in
effect until June 30, 2001 in the case of the Quality Bond Portfolio, and
(iii) shall continue in effect thereafter for successive twelve-month periods
(computed from each July 1) with respect to each Portfolio provided that such
continuance is specifically approved at least annually by our Directors or by
majority vote of the holders of our outstanding voting securities (as so
defined) of such Portfolio, and, in either case, by a majority of our
Directors who are not parties to this agreement or interested persons, as
defined in the Act, of any such party (other than as Directors of the Fund)
provided further, however, that if the continuation of this agreement is not
approved as to a Portfolio, you may continue to render to such Portfolio the
services described herein in the manner and to the extent permitted by the
Act and the rules and regulations thereunder. Upon the effectiveness of this
agreement, it shall supersede all previous agreements between us covering the
subject matter hereof. This agreement may be terminated with respect to any
Portfolio at any time, without the payment of any penalty, by vote of a
majority of the outstanding voting securities (as so defined) of such
Portfolio, or by a vote of a majority of our Directors on 60 days' written
notice to you, or by you with respect to any Portfolio on 60 days' written
notice to us.
7. This agreement may not be transferred, assigned, sold or in
any matter hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale,
hypothecation or pledge by you. The terms "transfer", "assignment" and "sale"
as used in this paragraph shall have the meanings ascribed thereto by
governing law and any interpretation thereof contained in rules or
regulations promulgated by the Securities and Exchange Commission thereunder.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or restrict
your right, or the right of any of your employees, or any of the directors of
Alliance Capital Management Corporation, general partner, who may also be a
director, officer or employee of ours, or persons otherwise affiliated with
us (within the meaning of the Act) to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
(b) You will notify us of any change in the general
partners of your partnership within a reasonable time after such change.
If the foregoing is in accordance with your understanding, will
you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
Alliance Bond Fund, Inc.
By:___________________________
Agreed to and accepted as amended July 1, 1999
Alliance Capital Management L.P.
By: Alliance Capital Management Corporation,
General Partner
By:_______________________________
00250.123 #77432
1
5
Alliance Bond Fund, Inc.
811-02383
Exhibit Q1(a)
ALLIANCE BOND FUND, INC.
ARTICLES SUPPLEMENTARY
Alliance Bond Fund, Inc., a Maryland corporation having its
principal office in Maryland in the City of Baltimore (hereinafter called the
"Corporation"), certifies that:
FIRST: The Board of Directors of the Corporation hereby
increases the aggregate number of shares of capital stock that the
Corporation has authority to issue by 750,000,000 shares and classifies such
additional shares as 250,000,000 shares of Class A Common Stock of the
Quality Bond Portfolio, 250,000,000 shares of Class B Common Stock of the
Quality Bond Portfolio and 250,000,000 shares of Class C Common Stock of the
Quality Bond Portfolio. Quality Bond Portfolio is referred to herein as the
"Portfolio."
SECOND: The shares of the Class A Common Stock, Class B Common
Stock and Class C Common Stock of the Portfolio as so classified by the Board
of Directors of the Corporation shall have the preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption set forth in section
(3) of Article FIFTH of the Corporation's Articles of Incorporation, as
amended, and shall be subject to all provisions of the Charter relating to
stock of the Corporation generally, and those set forth as follows:
(1) The assets attributable to the Class A Common Stock,
Class B Common Stock and Class C Common Stock of the Portfolio shall be
invested in the same investment portfolio of the Corporation.
(2) Shares of each of the Class A Common Stock, Class B
Common Stock and Class C Common Stock of the Portfolio shall be
entitled to such dividends or distributions, in stock or in cash or
both, as may be declared from time to time by the Board of Directors
with respect to such class. Specifically, and without limiting the
generality of the foregoing, the dividends and distributions of
investment income and capital gains with respect to the Class A Common
Stock, Class B Common Stock and Class C Common Stock of the Portfolio
shall be in such amounts, which may vary among the classes, as may be
declared from time to time by the Board of Directors of the
Corporation, and such dividends and distributions may vary among the
classes of the Portfolio to reflect differing allocations of the
expenses of the Corporation among the holders of the classes and any
resultant differences among the net asset values per share of the
classes, to such extent and for such purposes as the Board of Directors
of the Corporation may deem appropriate. The Board of Directors may
provide that dividends shall be payable only with respect to those
shares of stock that have been held of record continuously by the
stockholder for a specified period, not to exceed 72 hours, prior to
the record date of the dividend. The allocation of investment income,
realized and unrealized capital gains and losses, expenses and
liabilities of the Corporation and amounts distributable in the event
of dissolution of the Corporation or liquidation of the Corporation or
of the Portfolio among the various classes of the Portfolio shall be
determined by the Board of Directors of the Corporation in a manner
that is consistent with the Investment Company Act of 1940, the rules
and regulations thereunder, and the interpretations thereof, in each
case as from time to time amended, modified or superseded. The
determination of the Board of Directors shall be conclusive as to the
allocation of investment income and realized and unrealized capital
gains and losses, expenses and liabilities (including accrued expenses
and reserves) and assets to a particular class or classes.
(3) The proceeds of the redemption of a share (including
a fractional share) of any class of capital stock of the Portfolio
shall be reduced by the amount of any contingent deferred sales charge,
redemption fee or other amount payable on such redemption pursuant to
the terms of issuance of such share.
(4) Except as provided below, on each matter submitted to
a vote of the holders of the Class A Common Stock, Class B Common Stock
and Class C Common Stock of the Portfolio, each such holder shall be
entitled to one vote for each share standing in his or her name on the
books of the Corporation. Subject to any applicable requirements of
the Investment Company Act of 1940, as from time to time in effect, or
rules or orders of the Securities and Exchange Commission or any
successor thereto, or other applicable law, all such holders of shares
of stock shall vote as a single class except with respect to any matter
which affects only one or more (but less than all) classes of stock, in
which case only the holders of shares of the classes affected shall be
entitled to vote. Without limiting the generality of the foregoing,
and subject to any applicable requirements of the Investment Company
Act of 1940, as from time to time in effect, or rules or orders of the
Securities and Exchange Commission or any successor thereto, or other
applicable law, the holders of the Class A Common Stock, Class B
Common Stock and Class C Common Stock, respectively, of the Portfolio
shall have (i) exclusive voting rights with respect to any matter
submitted to a vote of stockholders that affects only holders of the
applicable class of the Portfolio and (ii) no voting rights with
respect to any other matter that affects one or more of such other
classes or series of Common Stock, but not the class or series of which
they are holders.
(5) At such times as may be determined by the Board of
Directors (or with the authorization of the Board of Directors, by the
officers of the Corporation) in accordance with the Investment Company
Act of 1940, applicable rules and regulations thereunder and applicable
rules and regulations of the National Association of Securities
Dealers, Inc. and from time to time reflected in the registration
statement of the Corporation (the "Corporation's Registration
Statement"), shares of a particular class of stock of the Portfolio or
certain shares of a particular class of stock of the Portfolio may be
automatically converted into shares of another class of stock of the
Portfolio based on the relative net asset values of such classes at the
time of conversion, subject, however, to any conditions of conversion
that may be imposed by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of the
Corporation) and reflected in the Corporation's Registration Statement.
The terms and conditions of such conversion may vary within and among
the classes to the extent determined by the Board of Directors (or with
the authorization of the Board of Directors, by the officers of the
Corporation) and set forth in the Corporation's Registration Statement.
THIRD: A. Immediately before the increase in authorized
capital stock provided for herein, the total number of shares of stock of all
classes which the Corporation had authority to issue was 1,800,000,000
shares, the par value of each class of stock being $.001 per share, with an
aggregate par value of $1,800,000, classified as follows:
Name of Series
Common Stock
Class B
Common Stock
Class C
Common Stock
Advisor Class
Common Stock
U.S.
Government
Portfolio
200,000,000*
200,000,000
200,000,000
200,000,000
Monthly Income
Portfolio**
250,000,000*
250,000,000
250,000,000
250,000,000
B. Immediately after the increase in
authorized capital stock provided for herein, the total number of
shares of stock of all classes which the Corporation has authority to
issue is 2,550,000,000 shares, the par value of each class of stock
being $.001 per share, with an aggregate par value of $2,550,000,
classified as follows:
Name of Series
Common Stock
Class B
Common Stock
Class C
Common Stock
Advisor Class
Common Stock
U.S.
Government
Portfolio
200,000,000*
200,000,000
200,000,000
200,000,000
Monthly Income
Portfolio
250,000,000*
250,000,000
250,000,000
250,000,000
Quality Bond
Portfolio
250,000,000
250,000,000
250,000,000
- - 0 -
FOURTH: The Corporation is registered as an open-end company
under the Investment Company Act of 1940.
______________
* Such shares are designated as "Class A Common Stock" for
purposes of sale to the public.
** This portfolio is designated as the "Corporate Bond Portfolio"
for purposes of sale of the shares thereof to the public.
FIFTH: The total number of shares that the Corporation has
authority to issue has been increased by the Board of Directors of the
Corporation in accordance with Section 2-105(c) of the Maryland General
Corporation Law.
SIXTH: The shares aforesaid have been duly classified by the
Corporation's Board of Directors pursuant to authority and power contained in
the Corporation's Articles of Incorporation.
Alliance Bond Fund, Inc.
811-02383
Exhibit 77e-Legal Proceedings
On December 12, 1997, The Alliance Bond Fund, Inc., along with a number
of other Plaintiffs, commenced action in the United States District
Court for the Southern District of New York against Grupo Mexican de
Desarrollo, S.A. ("GMD") and other named defendants, seeking a money
judgment for the full principal amount, with interest resulting from
GMD's default on certain Notes. On April 17, 1998, the United States
District Court for the Southern District of New York issued an Order
and Judgment to the Plaintiffs in the amount of $82,444,259 on their
breach of contract claim and ordered the Defendant to surrender certain
assets to Plaintiffs in satisfaction of the Judgment. The Defendants
chose not to appeal the judgment, but did appeal the turnover order,
which appeal is still pending.
\\acntnyc031\dept\mf_legal\kelly\abfnsarlan.299.doc
Report of Independent Auditors
To the Shareholders and Board of Directors of
Alliance Bond Fund, Inc.
In planning and performing our audit of the financial statements of Alliance
Bond Fund, Inc. (comprising the Corporate Bond and U.S. Government Portfolios)
for the year ended June 30, 1999, we considered its internal control,
including control activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR,
and not to provide assurance on the internal control.
The management of Alliance Bond Fund, Inc. is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for
external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or
more of the specific internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above at
June 30, 1999.
This report is intended solely for the information and use of the board of
directors and management of Alliance Bond Fund, Inc. and the Securities and
Exchange Commission and is not intended to be and should not be used by anyone
other than these specified parties.
ERNST & YOUNG LLP
August 6, 1999
