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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Alliance Bond Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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ALLIANCE BOND FUND, INC. -
U.S. Government Portfolio
ALLIANCE INSTITUTIONAL FUNDS, INC. -
Alliance Premier Growth Institutional Fund
Alliance Special Equity Institutional Fund
Alliance Quasar Institutional Fund
1345 Avenue of the Americas
New York, New York 10105
Toll Free (800) 221-5672
October 30, 2000
To the Stockholders of Alliance Bond Fund, Inc.--U.S. Government Portfolio
("U.S. Government"), Alliance Institutional Funds, Inc.--Alliance Premier
Growth Institutional Fund ("Premier Growth Institutional Fund"), Alliance
Institutional Funds, Inc.--Alliance Special Equity Institutional Fund ("Special
Equity Institutional"), and Alliance Institutional Funds, Inc.--Alliance Quasar
Institutional Fund ("Quasar Institutional") (collectively, the "Funds"):
The accompanying Notice of Meeting and Proxy Statement present three
proposals to be considered at the Funds' Joint Special Meeting of Stockholders
(the "Meeting") to be held on December 12, 2000. The proposals are discussed
more fully in the accompanying Proxy Statement.
The first proposal revises the Funds' fundamental investment restrictions to
permit the Funds to engage in securities lending to the full extent permitted
by the Investment Company Act of 1940 (the "1940 Act"). The last two proposals
relax or remove, in each case consistent with the 1940 Act, certain investment
restrictions that were originally required by old state "blue sky" laws that
were preempted and thus nullified by Congress in 1996. These restrictions are
not required by the 1940 Act. The Boards of Directors believe that it is in the
best interests of the Funds and their stockholders to change these policies to
provide the Funds with the investment flexibility allowed by the 1940 Act.
We welcome your attendance at the Meeting. If you are unable to attend, we
encourage you to vote your proxy promptly, in order to spare the Funds
additional proxy solicitation expenses. Shareholder Communications Corporation
("SCC"), a professional proxy solicitation firm, has been selected to assist
stockholders in the voting process. As the
<PAGE>
date of the Meeting approaches, if we have not yet received your proxy, you may
receive a telephone call from SCC reminding you to exercise your right to vote.
If you have any questions regarding the Meeting agenda or how to submit your
proxy, please call SCC at (877) 504-9595.
Sincerely,
John D. Carifa
Chairman and President
<PAGE>
[Alliance Capital Logo]
Alliance Bond Fund, Inc.--U.S. Government Portfolio
Alliance Institutional Funds, Inc.
--Alliance Premier Growth Institutional Fund
--Alliance Special Equity Institutional Fund
--Alliance Quasar Institutional Fund
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1345 Avenue of the Americas,
New York, New York 10105
Toll Free (800) 221-5672
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NOTICE OF JOINT SPECIAL MEETING OF STOCKHOLDERS
December 12, 2000
To the Stockholders of Alliance Bond Fund, Inc.--U.S. Government Portfolio
("U.S. Government"), Alliance Institutional Funds, Inc.--Alliance Premier
Growth Institutional Fund ("Premier Growth Institutional"), Alliance
Institutional Funds, Inc.--Alliance Special Equity Institutional Fund
("Special Equity Institutional"), and Alliance Institutional Funds, Inc.--
Alliance Quasar Institutional Fund ("Quasar Institutional"):
Notice is hereby given that a Joint Special Meeting of Stockholders (the
"Meeting") of U.S. Government, Premier Growth Institutional, Special Equity
Institutional, and Quasar Institutional, each a Maryland corporation or a
portfolio of a Maryland corporation (the "Funds"), will be held at the offices
of the Funds, 1345 Avenue of the Americas, 33rd Floor, New York, New York
10105, on Tuesday, December 12, 2000 at 11:00 a.m., for the following
purposes, all of which are more fully described in the accompanying Proxy
Statement dated October 30, 2000:
1. To approve an amendment of each Fund's fundamental policy to permit
each Fund to engage in securities lending to the extent permitted by the
Investment Company Act of 1940, as amended (the "1940 Act");
2. To approve the amendment of certain of the Funds' fundamental
policies, in each case consistent with the 1940 Act:
<PAGE>
2A. For Premier Growth Institutional and Special Equity Institutional,
approval of a proposal to amend a fundamental policy relating to portfolio
diversification to permit the Funds to fully use the investment latitude
for diversified funds established by the 1940 Act,
2B. For Premier Growth Institutional, approval of a proposal to amend a
fundamental investment policy relating to investments in non-U.S.
companies,
2C. For Quasar Institutional and Special Equity Institutional, approval
of a proposal to amend a fundamental policy to permit the Funds to
purchase and sell financial forward and futures contracts and options
thereon,
3. To approve the removal or reclassification of certain of the Funds'
fundamental policies as non-fundamental:
3A. For U.S. Government, approval of a proposal to reclassify the
fundamental policy regarding the writing, purchasing or selling of puts,
calls or any combination thereof to a non-fundamental policy,
3B. For U.S. Government, approval of a proposal to remove a fundamental
policy that restricts investments in unseasoned issuers,
3C. For Quasar Institutional and U.S. Government, approval of a proposal
to reclassify the fundamental policy regarding investments in illiquid
securities as non-fundamental and to revise the policy; and
4. To transact such other business as may properly come before the
Meeting.
The Boards of Directors have fixed the close of business on September 15,
2000 as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Meeting and any postponement or adjournment
thereof.
The enclosed proxy is being solicited on behalf of the Boards of Directors of
the Funds. Each stockholder who does not expect to attend the Meeting in person
is requested to complete, date, sign and promptly return the enclosed proxy
card, or to vote by telephone or via the Internet as described on the enclosed
proxy card.
<PAGE>
The Boards of Directors recommends approval of all the proposals.
By Order of the Boards of Directors,
Edmund P. Bergan, Jr.
Secretary
New York, New York
October 30, 2000
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YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the enclosed proxy card, sign and
date it, and return it in the envelope provided, which needs no postage if
mailed in the United States. You may also vote via the Internet or by
telephone. To do so, please follow the instructions on the enclosed proxy card.
Your vote is very important no matter how many shares you own. Please mark and
mail your proxy promptly or vote by telephone or through the Internet in order
to save the Fund any additional cost of further proxy solicitation and in order
for the Meeting to be held as scheduled.
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(R) This registered service mark used under license from the owner, Alliance
Capital Management L.P.
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PROXY STATEMENT
Alliance Bond Fund, Inc.--U.S. Government Portfolio
Alliance Institutional Funds, Inc.--Premier Growth Institutional Fund
Alliance Institutional Funds, Inc.--Special Equity Institutional Fund
Alliance Institutional Funds, Inc.--Quasar Institutional Fund
1345 Avenue of the Americas
New York, New York 10105
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JOINT SPECIAL MEETING OF STOCKHOLDERS
December 12, 2000
-----------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Boards of Directors of Alliance Bond Fund, Inc.--U.S.
Government Portfolio ("U.S. Government"), Alliance Institutional Funds, Inc.--
Alliance Premier Growth Institutional Fund ("Premier Growth Institutional "),
Alliance Institutional Funds, Inc.--Alliance Special Equity Institutional Fund
("Special Equity Institutional"), and Alliance Institutional Funds, Inc.--
Alliance Quasar Institutional Fund ("Quasar Institutional"), each a Maryland
corporation or a portfolio of a Maryland corporation (individually, a "Fund"
and collectively, the "Funds"), to be voted at the Joint Special Meeting of
Stockholders of the Funds (the "Meeting"), to be held at the offices of the
Funds, 1345 Avenue of the Americas, 33rd Floor, New York, New York 10105, on
Tuesday, December 12, 2000 at 11:00 a.m. Proxies will be solicited primarily
by mail and may also be made by telephone. Solicitation costs will be borne by
Alliance Capital Management L.P., the Funds' investment adviser ("Alliance").
The Boards of Directors have fixed the close of business on September 15,
2000 as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Meeting and at any postponement or adjournment
thereof (the "Record Date"). The outstanding voting shares of the Funds as of
the Record Date consisted of 104,371,143 shares of common stock of U.S.
Government, 25,507,098 shares of common stock of Premier Growth Institutional,
43,977,465 shares of common stock of Special Equity Institutional, and
1,278,417 shares of common stock of Quasar Institutional, representing all
classes of shares for each Fund, each share being entitled to one vote. All
properly executed and timely received proxies will be voted in accordance with
the
1
<PAGE>
instructions marked thereon or otherwise provided therein. Accordingly, unless
instructions to the contrary are marked, proxies will be voted for the
approval of an amendment to the Fund's fundamental policy to permit the
lending of securities to the extent permitted by the Investment Company Act of
1940, as amended (the "1940 Act") (Proposal One), for the approval of the
amendment of certain of the Fund's fundamental policies, in each case
consistent with the 1940 Act, (Proposal Two), and for the approval of the
removal or reclassification of certain of the Funds' fundamental policies as
non-fundamental ("Proposal Three"). (These proposals are referred to
individually as a "Proposal" and collectively as the "Proposals".) Any
stockholder may revoke that stockholder's proxy at any time prior to exercise
thereof by giving written notice to the Secretary of the Funds at 1345 Avenue
of the Americas, New York, New York 10105, by signing another proxy of a later
date or by personally voting at the Meeting.
Properly executed proxies may be returned with instructions to abstain from
voting or to withhold authority to vote (an "abstention") or represent a
broker "non-vote" (which is a proxy from a broker or nominee indicating that
the broker or nominee has not received instructions from the beneficial owner
or other person entitled to vote shares on a particular matter with respect to
which the broker or nominee does not have discretionary power to vote).
Abstentions and broker non-votes will be considered present for purposes of
determining the existence of a quorum for the transaction of business, but
will have no effect on the outcome of the Proposals. If any proposal, other
than the Proposals, properly comes before the Meeting, the shares represented
by proxies will be voted on all such proposals in the discretion of the person
or persons voting the proxies. The Funds have not received notice of, and are
not otherwise aware of, any other matter to be presented at the Meeting.
A quorum for the Meeting will consist of the presence in person or by proxy
of the holders of one-third of the shares entitled to vote for each Fund at
the Meeting. Whether or not a quorum is present at the Meeting, if sufficient
votes in favor of the position recommended by the Boards of Directors on any
Proposal are not timely received, the persons named as proxies may, but are
under no obligation to, with no other notice than announcement at the Meeting,
propose and vote for one or more adjournments of the Meeting to permit further
solicitation of proxies. The Meeting may be adjourned with respect to fewer
than all the Proposals in the Proxy Statement and a stockholder vote may be
taken on any one or more of the Proposals prior to any adjournment if
sufficient votes have been received for approval thereof. Shares represented
by
2
<PAGE>
proxies indicating a vote contrary to the position recommended by the Boards
of Directors on a Proposal will be voted against adjournment as to that
Proposal.
The Funds have engaged Shareholder Communications Corporation ("SCC"), 17
State Street, New York, New York 10004, to assist the Funds in soliciting
proxies for the Meeting. SCC will receive a fee of approximately $2,500 for
its services plus reimbursement of out-of-pocket expenses.
The Meeting is scheduled as a joint meeting of the respective stockholders
of the Funds because the stockholders of all the Funds are to consider and
vote on similar matters. Stockholders of each Fund will vote separately on
each Proposal and an unfavorable vote on a Proposal by the stockholders of one
Fund will not affect the implementation of the Proposal by any other Fund if
such Proposal is approved by the stockholders of the other Fund.
The following table summarizes the Proposals on which stockholders are being
asked to vote and indicates which stockholders are eligible to vote on each
proposal. Stockholders of each Fund voting separately by Fund will vote on the
Proposals, as applicable.
<TABLE>
<CAPTION>
PROPOSAL BRIEF DESCRIPTION OF PROPOSAL
-------- ------------------------------------------------
<S> <C>
Proposal 1 To amend a fundamental policy to permit
securities lending to the extent permitted by
the 1940 Act
Proposal 2 To amend certain fundamental policies
2A: For Premier Growth Institutional and Special
Equity Institutional, approval of a proposal to
amend a fundamental policy relating to portfolio
diversification to permit the Funds to fully use
the investment latitude for diversified funds
established by the 1940 Act,
2B: For Premier Growth Institutional, approval of a
proposal to amend a fundamental investment
policy relating to investments in non-U.S.
companies,
2C: For Quasar Institutional and Special Equity
Institutional, approval of a proposal to amend a
fundamental policy to permit the Funds to
purchase and sell financial forward and futures
contracts and options thereon,
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PROPOSAL BRIEF DESCRIPTION OF PROPOSAL
-------- ------------------------------------------------
<S> <C>
Proposal 3 To approve the removal or reclassification of
certain fundamental policies as non-fundamental
and, in certain cases, revise that policy
3A: For U.S. Government, approval of a proposal to
reclassify the fundamental policy regarding the
writing, purchasing or selling of puts, calls or
any combination thereof to a non-fundamental
policy,
3B: For U.S. Government, approval of a proposal to
remove a fundamental policy that restricts
investments in unseasoned issuers,
3C: For Quasar Institutional and U.S. Government,
approval of a proposal to reclassify the
fundamental policy regarding investments in
illiquid securities as non-fundamental and to
revise the policy.
</TABLE>
4
<PAGE>
PROPOSAL ONE
APPROVAL OF A PROPOSAL
TO AMEND A FUNDAMENTAL POLICY
TO PERMIT SECURITIES LENDING TO THE
EXTENT PERMITTED BY THE 1940 ACT
(All Funds)
The fundamental policies of each of the Funds currently do not permit
lending. Under their current policies, the Funds generally may not make loans
with certain exceptions for the purchase of debt obligations. At its September
7, 2000 Special Meeting, Alliance informed the Directors that it was
developing, for the Director's consideration, proposed securities lending
arrangements for many Alliance Mutual Funds, including the Funds. Alliance
noted that the proposed arrangements would enable each participating fund to
earn incremental investment income through the lending of a portion of the
Fund's portfolio securities on terms designed to avoid any impingement of the
Fund's ongoing investment process. Alliance stated that in anticipation of
these recommendations, it was recommending the revision of the Funds'
fundamental investment restrictions generally prohibiting the Funds from
engaging in securities lending. At the September 7, 2000 Meeting, the Boards of
Directors approved Alliance's recommendation that these fundamental policies be
revised to permit the Funds to engage in securities lending to the extent
permitted by the 1940 Act. The Boards further resolved to recommend this change
to the Fund's stockholders for their approval. The current and proposed
policies are set forth in Exhibit A.
In recommending this change, Alliance informed the Boards that this absolute
prohibition was not required by the 1940 Act. Alliance noted that this
restriction was required by state "blue sky" laws that were nullified by the
federal preemption of state regulation of mutual fund prospectuses passed by
Congress in 1996. Alliance noted that in order to ensure that the Funds can
continue to compete with newer funds created after federal preemption that are
not so constrained, as well as older funds that changed their lending policies
to permit securities lending, it was recommending that this fundamental policy
and a related policy be revised so as to provide the Funds with essentially the
same investment flexibility to engage in securities lending as is possessed by
the majority of the Alliance Mutual Funds, which are permitted to engage in
securities lending to the extent permitted by the 1940 Act.
If the proposal is approved by the stockholders of each Fund, each Fund
would, as currently permitted, be able to lend portfolio securities up
5
<PAGE>
to a maximum in value of 33 1/3% of its total assets (including collateral for
any security loaned). A Fund would lend securities only on a fully
collateralized basis and only to borrowers deemed by Alliance to be of sound
financial standing. While any such loan is outstanding, it would be secured by
collateral in the form of cash or securities issued or guaranteed by the U.S.
Government, equal at all times to at least 100% of the current market value of
the loaned securities plus, if applicable, accrued interest. All such loans
could be terminated at any time by either the Fund (entitling the Fund to the
return of the loaned securities at the end of the customary settlement period
for the type of securities loaned) or the borrower. It is currently expected
that the transactions would be structured so that a Fund would retain rights
of ownership of the loaned securities, including rights to dividends, interest
or other distributions on the loaned securities. Voting rights would pass with
the lending, although a Fund would be able to call loans to vote proxies if
desired.
Approval of this Proposal requires the affirmative vote of "a majority of
the outstanding voting securities" as defined by the 1940 Act, which means the
lesser of (i) 67% or more of the voting securities of each Fund present or
represented at the Meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by proxy, or (ii)
more than 50% of the outstanding voting securities of the Fund ("1940 Act
Majority"). If the stockholders of a Fund do not approve the amendment to the
Fund's fundamental policy to permit lending to the extent permitted by the
1940 Act, that Fund's policy will remain unchanged.
Your Board of Directors recommends that the stockholders vote "FOR" the
approval of Proposal One.
PROPOSAL TWO
APPROVAL OF PROPOSALS TO
AMEND CERTAIN
FUNDAMENTAL POLICIES
(PROPOSALS 2A-2C)
The primary purpose of Proposals 2A through 2C is to amend certain
fundamental investment restrictions of the Premier Growth Institutional,
Special Equity Institutional, and Quasar Institutional. As discussed below,
some of these restrictions have their origin in old "blue sky" undertakings,
which were nullified by Congress in 1996. These restrictions could conceivably
serve as an impediment to a Fund's investment process.
6
<PAGE>
If approved by the Funds' stockholders, the amended fundamental policies could
not be changed without a further stockholder vote. If a proposed restriction is
not approved by a particular Fund, the current investment restriction will
remain in place as a fundamental restriction and stockholder approval (with its
attendant costs and delays) will continue to be required prior to any change in
the investment restriction.
The discussions below describe each proposal and the reasons for each
recommendation. Please refer to the Exhibit B following this discussion to
compare your Fund's current policies to the proposed policies.
PROPOSAL 2A
APPROVAL OF A PROPOSAL TO AMEND A FUNDAMENTAL POLICY RELATING TO PORTFOLIO
DIVERSIFICATION TO PERMIT CERTAIN FUNDS TO FULLY USE THE INVESTMENT LATITUDE
FOR DIVERSIFIED FUNDS ESTABLISHED BY THE 1940 ACT
(Premier Growth Institutional and Special Equity Institutional)
Although each of Premier Growth Institutional and Special Equity
Institutional is a "diversified" investment company under the 1940 Act, these
Funds have a fundamental policy that is more restrictive than that required of
a diversified investment company. To be "diversified" under the 1940 Act, an
investment company must not, with respect to 75% of its total assets, invest
more than 5% of its total assets in the securities of any one issuer (the "5%
limit") or acquire more than 10% of the outstanding voting securities of any
one issuer (the "10% limit"). Up to 25% of its total assets (the "25% basket")
may be invested without regard to these restrictions (i.e., up to 25% in one or
more issuers).
Under the current fundamental policies of both Funds, the 10% limit applies
to 100% of its total assets, rather than 75% that is permitted under the 1940
Act. At its September 7, 2000 Special Meeting, the Board of Directors approved
Alliance's recommendation that this fundamental policy be revised to permit the
Funds to invest in accordance with the limits contained in the 1940 Act for
diversified investment companies. In making its recommendation, Alliance noted
that these changes would enable the Funds to remain competitive with newer
funds that are not subject to these restrictions, as well as older funds that
changed their diversification policies to remove similar restrictions, and
would allow the Fund the flexibility to take larger positions within its non-
diversified 25%
7
<PAGE>
basket when Alliance deems appropriate. Alliance stated that it believed that
the adoption of this change would not materially affect the operation of the
Funds, although it was expected that the Funds would avail themselves of the
occasional opportunities presented by the non-diversified 25% basket. The
returns of a fund that may invest 25% of its total assets in a single issuer
may be more dependent on a single stock and may be more volatile than those of
a fund that is subject to a lower limit on such investments. The current
fundamental policies and the proposed revised fundamental policies are set
forth in Exhibit B to this Proxy Statement.
PROPOSAL 2B
APPROVAL OF A PROPOSAL TO AMEND A FUNDAMENTAL INVESTMENT POLICY RELATING TO
INVESTMENTS IN NON-U.S. COMPANIES
(Premier Growth Institutional)
Premier Growth Institutional currently has a fundamental policy to invest at
least 85% of its total assets in equity securities of "U.S. Companies". A
"U.S. Company" is defined as a company that (i) is organized under United
States law, (ii) has its principal office in the United States, and (iii)
issues equity securities that are traded principally in the United States. At
a meeting on September 26, 2000, the Board of Directors of the Fund approved
Alliance's recommendation to (i) reduce the 85% limitation to 80% (ii) remove
the definition of "U.S. Company", and in lieu of defining U.S. Company, adopt
a new definition of "Non-U.S. Company" for the purposes of the policy. The
Board further resolved to recommend these changes to the Fund's stockholders
for their approval.
In recommending these changes, Alliance advised the Board that in recent
years many companies had become more global in nature, expanding their
business and markets outside the United States. At the same time, many of
these companies continue to have a very significant business presence in the
United States and continue to issue securities that trade predominately in the
United States. Alliance advised the Board that in order to enable the Fund to
continue to invest in the same companies as it has in the past, the definition
of "U.S. Company" should be removed and, instead, Alliance proposed that the
Directors adopt a new definition of "Non-U.S. Company" to be applicable to the
Fund.
Under this new definition, a "Non-U.S. Company" would be a company that (i)
is organized outside the United States, (ii) has its
8
<PAGE>
principal place of business outside the United States, and (iii) issues
securities that are traded principally in a foreign country. Companies that did
not fall within the definition of "Non-U.S. Company" would be considered to be
U.S. companies for purposes of this policy. Alliance advised the Directors
that, as a result of these proposals if approved, a company that was either
organized or had a principal place of business outside the United States, but
which issued securities principally traded in the United States, would be
considered to be a U.S. company.
In addition, Alliance advised the Board that it was recommending that the
current fundamental requirement that the Fund invest at least 85% of its total
assets in U.S. Companies be reduced to 80% to allow the Fund additional
flexibility in managing the Fund's portfolio. Alliance informed the Directors
it was recommending this additional change because there are some companies in
which the Fund has invested in the past that will be considered to be "Non-U.S.
Companies" even under the proposed revised definition. This increased latitude
will allow the Fund to continue to invest in the same companies as it has in
the past. Alliance advised the Board that it did not expect that this change
would significantly affect the management of the Fund.
PROPOSAL 2C
APPROVAL OF A PROPOSAL TO AMEND A FUNDAMENTAL POLICY TO PERMIT THE FUNDS TO
PURCHASE AND SELL FINANCIAL FORWARD AND FUTURES CONTRACTS AND OPTIONS THEREON
(Quasar Institutional and Special Equity Institutional)
At their September 7, 2000, Special Meeting, the Board of Directors of
Special Equity Institutional and Quasar Institutional considered and approved
Alliance's recommendation that each of the Fund's fundamental policies be
amended to permit the use of stock index futures and options thereon for
hedging purposes.
In making its recommendation, Alliance noted that each Fund has a fundamental
policy against investment in commodities or commodity contracts. As a result of
this restriction, Alliance noted, index futures are currently unavailable to
each of the Funds.
In making this recommendation, Alliance stated its belief that, as the use of
these instruments has become more prevalent in the marketplace,
9
<PAGE>
each Fund's inability to use, at least for hedging purposes, financial
commodities including stock index futures and options thereon places the Fund
at a competitive disadvantage. As a result, Alliance considered it in the best
interests of each Fund and its respective stockholders to obtain stockholder
action appropriately amending the investment policies and installing more
permissive non-fundamental investment policies. The current fundamental
policies and the proposed non-fundamental policies (which may be subsequently
be changed by the Boards of Directors without a stockholder vote) are set
forth in Exhibit B to this Proxy Statement.
The proposed non-fundamental investment policies would provide that each
Fund may utilize financial forward and futures contracts and options thereon
only for hedging purposes. In addition, each Fund would not enter into any
futures contracts or options on futures contracts if immediately thereafter
the market values of the outstanding futures contracts of each Fund and the
futures contracts subject to outstanding options written by a Fund would
exceed 50% of its total assets. Each Fund would not purchase or sell a stock
index futures contract if immediately thereafter more than 30% of its total
assets would be hedged with stock index futures. Finally, each Fund would not
purchase or sell a stock index future contract if, immediately thereafter, the
sum of the amount of margin deposits on such Fund's existing futures positions
would exceed 5% of the market value of the Fund's total assets. In connection
with its purchase of stock index futures contracts, each Fund would deposit in
a segregated account with the Fund's custodian an amount of liquid assets
equal to the market value of the futures contracts less any amounts maintained
in a margin account with the Fund's broker.
Based upon Alliance's presentation, the Board of Directors concluded that
the proposed amendment to each Fund's fundamental investment policies to
permit the use of financial forward and futures contracts and the adoption of
the non-fundamental investment policies would be in the best interests of each
Fund and its respective stockholders. The Board further resolved to recommend
this change to the Funds' stockholders for their approval. Adoption of this
change is not expected to materially change the operation of the Funds.
Approval of Proposals 2A, 2B and 2C requires the affirmative vote of the
holders of a 1940 Act Majority. If the stockholders of a Fund do not approve
the amendment of the Fund's fundamental policies, that Fund's policies will
remain the same.
10
<PAGE>
The Boards of Directors of Premier Growth Institutional, Special Equity
Institutional and Quasar Institutional recommend that the stockholders of each
of the Funds vote "FOR" the approval of each of Proposals 2A, 2B and 2C, as
applicable.
PROPOSAL THREE
APPROVAL OF PROPOSALS
TO REMOVE OR RECLASSIFY CERTAIN OF
THE FUNDS' FUNDAMENTAL
POLICIES AS NON-FUNDAMENTAL POLICIES
(PROPOSALS 3A-3C)
The primary purpose of Proposals 3A-3C is to reclassify the fundamental
policy of U.S. Government regarding the writing, purchasing or selling of puts
and calls to a non-fundamental policy, remove a fundamental policy of U.S.
Government with respect to its investment in unseasoned issuers and to revise
and reclassify the fundamental policies of U.S. Government and Quasar
Institutional with respect to their investment in illiquid securities as non-
fundamental policies.
The discussions below are a general overview of the Fund's current policies.
Please refer to Exhibit C following this discussion to compare your Fund's
current policies to the proposed policies. The Boards of Directors of the Funds
recommend that stockholders approve the proposal.
PROPOSAL 3A
APPROVAL OF A PROPOSAL TO RECLASSIFY THE FUNDAMENTAL POLICY REGARDING THE
WRITING, PURCHASING OR SELLING OF PUTS, CALLS OR ANY COMBINATION THEREOF TO A
NON-FUNDAMENTAL POLICY
(U.S. Government)
The fundamental policies of U.S. Government currently do not permit U.S.
Government to write, purchase or sell puts, calls or any combination thereof.
The Fund is not required under the 1940 Act to have such a fundamental policy.
The Directors are recommending the reclassification of this fundamental
restriction to non-fundamental in order to preserve the flexibility of the Fund
to respond to changed market, industry or regulatory conditions without the
expense and delay of a stockholder vote. The Directors are not proposing any
substantive change in the policy at this time. If the Proposal is adopted, the
Directors would adopt an identical non-fundamental investment policy.
11
<PAGE>
PROPOSAL 3B
APPROVAL OF A PROPOSAL TO REMOVE A FUNDAMENTAL POLICY THAT RESTRICTS
INVESTMENTS IN UNSEASONED ISSUERS
(U.S. Government)
U.S. Government currently has a policy providing that the Fund shall not
invest more than 15% of its assets in securities of companies (including
predecessors) that have a record of less than three years of continuous
operation (often called "unseasoned issuers"). The Board of Directors of U.S.
Government is recommending the removal of the policy. The Fund's current policy
is set forth in Exhibit C to this Proxy Statement.
The Fund adopted the "unseasoned issuer" restriction in response to state
"blue sky" requirements in connection with the registration of shares of the
Fund for the sale. As discussed above, all state securities laws and
regulations regarding fundamental investment restrictions have been preempted
by federal law and no longer apply. Alliance discussed with the Board of
Directors that it recognizes that the investment in securities of companies
with less than three years of continuous operating history might not be
appropriate for funds investing in companies with larger capitalizations.
However, for funds that invest in securities issued by governmental agencies or
instrumentalities (some of which may involve newly created special purpose
corporations), like U.S. Government, Alliance does not believe that a blanket
prohibition against these types of investments is in the best interest of the
Fund or its stockholders. Alliance stated that the Fund may from time to time,
consistent with its investment strategies, encounter investment opportunities
from these types of issuers in which the Fund may desire the flexibility to
invest. Based on Alliance's recommendation, the Board of Directors of the Fund
therefore recommends that stockholders approve the removal of this investment
restriction.
PROPOSAL 3C
APPROVAL OF A PROPOSAL TO RECLASSIFY THE FUNDAMENTAL POLICY REGARDING
INVESTMENTS IN ILLIQUID SECURITIES AS NON-FUNDAMENTAL AND TO REVISE THE POLICY
(Quasar Institutional and U.S. Government)
Each of U.S. Government and Quasar Institutional currently has a fundamental
policy applicable to investments in illiquid securities that is
12
<PAGE>
more restrictive than that currently required by the Securities and Exchange
Commission ("SEC"). Under the SEC's standards, non-money market mutual funds
must limit their holdings in illiquid securities to 15% of their net assets.
This SEC position is not required to be a fundamental policy. For the purpose
of the 15% limitation, a security generally would be considered illiquid if it
could not be sold or disposed of in the ordinary course of business within
seven days at approximately the value at which the security is valued by a
fund. Generally, Rule 144A securities that are determined by a Fund's Board of
Directors to be liquid are not considered to be "illiquid" for purposes of
these tests.
Quasar Institutional currently has a fundamental policy limiting the Fund's
investments in illiquid securities to 10% of its net assets. U.S. Government
has a fundamental policy limiting these investments to 15% of net assets. In
addition, both Funds' fundamental policy applies to all restricted securities,
including Rule 144A securities. Because Rule 144A securities are "restricted",
each Fund's fundamental policy does not permit the Fund to consider Rule 144A
securities as liquid and not subject to the restrictions on investments in
illiquid securities even if the Board of Directors determined them to be
liquid.
These more restrictive investment limitations grow out of old state "blue
sky" provisions, which, as discussed above, no longer apply to funds. Quasar
Institutional's policy is more restrictive than the SEC's current position and
both Funds' policies are fundamental and cannot be changed without position
stockholder approval. The Boards of Directors recommends revising each Fund's
policy to conform with the SEC's guidelines and reclassifying the Funds'
fundamental policy regarding investments in illiquid securities to a non-
fundamental policy. Each Fund's current fundamental policy and the proposed
non-fundamental policy regarding investments in illiquid securities is set
forth in Exhibit C to this Proxy Statement.
The SEC has from time to time changed the percentage limitation applicable to
a fund's investment in illiquid securities. For example, prior to 1993, the
percentage limit on a fund's investment in illiquid securities was 10%. The
proposed non-fundamental policy of each Fund would enable the Fund to respond
to any future change in the SEC's guidelines, without the expense and delay of
a stockholder vote. Because Quasar Institutional has never approached a 10%
investment in illiquid or restricted securities and U.S. Government has never
approached a 15% investment in illiquid or restricted securities, the Board of
Directors of each Fund do not anticipate that the proposed change will have a
material impact on the operation of the respective Fund.
13
<PAGE>
Approval of Proposals 3A, 3B and 3C requires the affirmative vote of the
holders of a 1940 Act Majority. If the stockholders of a Fund do not approve
the Proposal, that Fund will continue to be subject to these fundamental
policies.
The Boards of Directors of U.S. Government and Quasar Institutional
recommend that the stockholders of the Funds vote "FOR" the approval of each
of Proposals, 3A, 3B and 3C, as applicable.
HOW TO VOTE
You may vote your shares by mail by signing and returning the enclosed proxy
card, by telephone, or over the Internet.
Voting by Mail or in Person. If you wish to participate at the Meeting, but
do not wish to give a proxy by telephone or via the Internet, you can
complete, sign and mail the enclosed proxy card or attend the Meeting in
person.
Internet and Telephone Voting. You may give your voting instructions via the
Internet or by touch-tone telephone by following the instructions provided
with your proxy card.
INFORMATION AS TO THE FUND'S PRINCIPAL OFFICERS
The principal officers of the Funds and their principal occupations during
the past five years are as follows:
John D. Carifa, Chairman and President of each Fund, 55, is the President,
Chief Operating Officer and a Director of Alliance Capital Management
Corporation ("ACMC"), the general partner of Alliance, with which he has been
associated since prior to 1995.
Alfred Harrison, Executive Vice President of Alliance Institutional Funds,
Inc. ("AInstF"), 63, is Vice Chairman and a Director of ACMC, with which he
has been associated since prior to 1995.
Jane Mack Gould, Executive Vice President of AInstF, 62, is a Senior Vice
President of ACMC, with which she has been associated since prior to 1995.
Bruce K. Aronow, Vice President of AInstF, 34, is a Senior Vice President of
ACMC since 1999. Prior thereto, he was a Vice President at Invesco since 1998,
a Vice President at LGT Asset Management since 1996 and a Vice President at
Chancellor Capital Management since before 1995.
14
<PAGE>
Kathleen A. Corbet, Senior Vice President of each Fund, 40, is an Executive
Vice President of ACMC, with which she has been associated since prior to
1995.
Wayne D. Lyski, Senior Vice President of Alliance Bond Fund, Inc. ("ABF"),
58, is an Executive Vice President of ACMC, with which he has been associated
since prior to 1995.
Daniel G. Pine, senior Vice President of AInstF, 48, is a Senior Vice
President of ACMC, with which he has been associated since 1996. Previously,
he was a Senior Vice President of Desai Capital Management since prior to
1995.
Thomas J. Bardong, Vice President of AInstF, 55, is a Senior Vice President
of ACMC, with which he has been associated since prior to 1995.
Matthew D. W. Bloom, Vice President of ABF, 44, is a Senior Vice President
of ACMC, with which he has been associated since prior to 1995.
Paul J. Denoon, Vice President of ABF, 38, is a Senior Vice President of
ACMC, with which he has been associated since prior to 1995.
F. Jeanne Goetz, Vice President of ABF, 45, is a Senior Vice President of
ACMC, with which she has been associated since prior to 1995.
Sean Kelleher, Vice President of ABF, 39, is a Vice President of ACMC, with
which he has been associated since 1999. Previously, he was a dealer in agency
pass-throughs and managed the MBS swaps desk at Deutsche Bank from 1997 to
1998. Prior thereto, he managed the agency pass-through trading desk at
Normura Securities International and traded CMOs and pass-throughs at Merrill
Lynch. He also worked in fixed income research at Merrill since prior to 1995.
David A. Kruth, Vice President of AInstF, 35, is a Vice President of ACMC,
with which he has been associated since 1997. Prior thereto he was a Senior
Vice President of Yarmouth Group.
Daniel Nordby, Vice President of AInstF, 56, is a Senior Vice President of
ACMC, with which he has been associated since 1996. Prior thereto he was in
private practice as a consulting psychologist since prior to 1995.
Jeffrey S. Phlegar, Vice President, 34, is a Senior Vice President of ACMC
with which he has been associated since prior to 1995.
15
<PAGE>
Edmund P. Bergan, Jr., Secretary of each Fund, 50, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors, Inc. ("AFD")
and Alliance Fund Services, Inc. ("AFS"), with which he has been associated
since prior to 1995.
Andrew L. Gangolf, Assistant Secretary of each Fund, 46, is a Senior Vice
President and Assistant General Counsel of AFD, with which he has been
associated since prior to 1995.
Domenick Pugliese, Assistant Secretary of each Fund, 39, is a Senior Vice
President and Assistant General Counsel of AFD, with which he has been since
prior to 1995.
Mark D. Gersten, Treasurer and Chief Financial Officer of each Fund, 50, is
a Senior Vice President of AFS, with which he has been associated since prior
to 1995.
Vincent S. Noto, Controller of AInstF, 35, is a Vice President of AFS, with
which he has been associated since prior to 1995.
Juan J. Rodriguez, Controller of ABF, 42, is an Assistant Vice President of
AFS, with which he has been associated since prior to 1995.
The address of Messrs. Carifa, Harrison, Aronow, Lyski, Pine, Bardong,
Bloom, DeNoon, Kelleher, Kruth, Nordby, Phelgar, Bergan, Gangolf and Pugliese
and Mses. Gould, Corbet and Goetz is c/o Alliance Capital Management, L.P.,
1345 Avenue of the Americas, New York, New York 10105. The address of Messrs.
Gersten, Noto and Rodriguez is c/o Alliance Fund Distributors, Inc., 500 Plaza
Drive, Secaucus, New Jersey 07094.
All of the officers of the Funds are employees of Alliance and officers of
ACMC, the general partner of Alliance, or a wholly-owned subsidiary of
Alliance. As of the Record Date, no officer or Director of the Funds
beneficially owned more than 1% of the outstanding equity securities of
Alliance.
16
<PAGE>
STOCK OWNERSHIP
According to information filed with the Commission, the following persons
were the beneficial owners of more than 5% of the Fund's outstanding common
stock as of the Record Date.
<TABLE>
<CAPTION>
Percent of
Common Stock
Based on Shares
Outstanding as
Name and Address Amount of Beneficial of the
of Beneficial Owner Ownership and Class Record Date
------------------- ------------------------------ ---------------
<S> <C> <C>
Donaldson Lufkin & Jenrette 43,914,396 99.71%
Fidelity Mgmt. Trust (Special Equity Institutional)
82 Devonshire St. #H11D
Boston, MA 02109
MLPF&S for the Sole Benefit 18,987,075 18.19%
of its Customers (U.S. Government)
4800 Deer Lake Dr. East 2nd
Floor
Jacksonville, FL 32246-6484
Charles Schwab & Co for 5,816,567 22.80%
Exclusive Benefit of Customers (Premier Growth Institutional)
101 Montgomery St.
San Francisco, CA 94104
Trust for Profit Sharing of 2,907,085 11.40%
Alliance Capital Mgmt.--Plan H (Premier Growth Institutional)
1345 Ave. of the Americas
New York, NY 10105
Smith Barney Multi Choice 1,365,983 5.36%
c/o The Copeland Companies (Premier Growth Institutional)
Two Tower Center
PO Box 1063
E. Brunswick, NJ 08816
Woodstock 1,332,268 5.22%
PO Box 8000 (Premier Growth Institutional)
Wisconsin Rapids, WI 54495
Mellon Trust--Ameritech Savings 8,080,203 31.68%
Plan (Premier Growth Institutional)
135 Santilli Highway
Everett, MA 02149
Trust for Profit Sharing for 1,054,699 82.50%
Alliance Capital Employees (Quasar Institutional)
1345 Ave. of the Americas
New York, NY 10105
</TABLE>
17
<PAGE>
REPORTS TO STOCKHOLDERS
The Fund will furnish each person to whom this Proxy Statement is delivered
with a copy of the Fund's latest annual report to stockholders upon request and
without charge. To request a copy, please call Alliance Fund Services, Inc. at
(800) 227-4618 or contact Reid Conway at Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105.
By Order of the Board of Directors,
Edmund P. Bergan, Jr.
Secretary
New York, New York October 30, 2000
18
<PAGE>
EXHIBIT A
CURRENT AND PROPOSED FUNDAMENTAL POLICIES
PROPOSAL ONE
Lending Policies
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
-----------------------------------------------------------------------------
<S> <C> <C>
Alliance Bond Fund, Inc.-- 1.The Fund may not 1.The Fund may not
U.S. Government Portfolio make loans to other make loans to other
persons. persons, except
that the Fund may
lend its portfolio
securities in
accordance with
applicable law. The
acquisition of
investment
securities or other
investment
instruments shall
not be deemed the
making of a loan.
2.The Fund may not 2.The Fund may not
issue any senior issue senior
securities as securities (except
defined in the to the extent that
Investment Company securities lending
Act of 1940, as may be considered
amended, (except to senior securities)
the extent that or borrow money,
when-issued except for
securities temporary or
transactions, emergency purposes
forward commitments in an amount not
or stand-by exceeding 5% of the
commitments may be value of its total
considered senior assets at the time
securities). the borrowing is
made.
-----------------------------------------------------------------------------
Alliance Institutional Funds, 1.The Fund may not 1.The Fund may not
Inc.-- make loans except make loans to other
Alliance Premier Growth through the persons, except
Institutional Fund purchase of debt that the Fund may
obligations in lend its portfolio
accordance with its securities in
investment accordance with
objective and applicable law. The
policies. acquisition of
investment
securities or other
investment
instruments shall
not be deemed the
making of a loan.
2.The Fund may not 2.The Fund may not
borrow money or issue senior
issue senior securities (except
securities except to the extent that
for temporary or securities lending
emergency purposes may be considered
in an amount not senior securities)
exceeding 5% of the or borrow money
value of its total except for
assets at the time temporary or
the borrowing is emergency purposes
made. in an amount not
exceeding 5% of the
value of its total
assets at the time
the borrowing is
made.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
-----------------------------------------------------------------------------
<S> <C> <C>
Alliance Institutional Funds, 1.The Fund may not 1.The Fund may not
Inc.-- make loans except make loans to other
Alliance Special Equity through the persons, except
Institutional Fund purchase of debt that the Fund may
obligations in lend portfolio
accordance with its securities in
investment accordance with
objective and applicable law. The
policies. acquisition of
investment
securities or other
investment
instruments shall
not be deemed the
making of a loan.
2.The Fund may not 2.The Fund may not
borrow money from issue senior
banks or issue securities (except
senior securities to the extent that
except for securities lending
temporary or may be considered
emergency purposes senior securities)
in an amount not or borrow money
exceeding 5% of the except for
value of its total temporary or
assets at the time emergency purposes
the borrowing is in an amount not
made. exceeding 5% of the
value of its total
assets at the time
the borrowing is
made.
-----------------------------------------------------------------------------
Alliance Institutional 1.The Fund may not 1.The Fund may not
Funds, Inc.-- make loans of its make loans to other
Alliance Quasar Institutional funds or assets to persons, except
Fund any other person, that the Fund may
which shall not lend portfolio
include the securities in
purchase of a accordance with
portion of an issue applicable law. The
of publicly acquisition of
distributed bonds, investment
debentures, or securities or other
other securities, investment
whether or not the instruments shall
purchase was made not be deemed the
upon the original making of a loan.
issuance of the
securities; except
that the Fund may
not purchase non-
publicly
distributed
securities subject
to the limitations
applicable to
restricted
securities.
2.The Fund may not 2.The Fund may not
borrow money except issue senior
for temporary or securities (except
emergency purposes to the extent that
in an amount not securities lending
exceeding 5% of its may be considered
total assets at the senior securities)
time the borrowing or borrow money
is made. except for
temporary or
emergency purposes
in an amount not
exceeding 5% of the
value of its total
assets at the time
the borrowing is
made.
</TABLE>
20
<PAGE>
EXHIBIT B
CURRENT FUNDAMENTAL AND PROPOSED POLICIES
PROPOSAL TWO
Diversification Policies (Proposal 2A)
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
------------------------------------------------------------------------------
<S> <C> <C>
Alliance Institutional Funds, The Fund may not It is a fundamental
Inc.-- Alliance Premier Growth purchase policy of the Fund
Institutional Fund more than 10% of the that the Fund is
outstanding voting required with respect
securities of any one to 75% of its assets
issuer. (i) to have no more
than 5% of its assets
invested in any one
issuer and (ii) to
own not more than 10%
of the outstanding
voting securities of
any one issuer.
------------------------------------------------------------------------------
Alliance Institutional Funds, The Fund may not It is a fundamental
Inc.-- Alliance Special Equity purchase more than policy of the Fund
Institutional Fund 10% of the that the Fund is
outstanding voting required with respect
securities of any one to 75% of its assets
issuer. (i) to have no more
than 5% of its assets
invested in any one
issuer and (ii) to
own not more than 10%
of the outstanding
voting securities of
any one issuer.
</TABLE>
NON-U.S. COMPANY POLICY (Proposal 2B)
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
-----------------------------------------------------------------------------
<S> <C> <C>
Alliance Institutional Funds, The Fund invests at The Fund invests at
Inc.--Alliance Premier Growth least 85% of its least 80% of its
Institutional Fund total assets in total assets in
equity securities in equity securities of
"U. S. Companies". A U.S Companies. A
"U.S. Company" is "Non-U.S. Company" is
defined as a company a company that (i) is
that (i) is organized organized outside the
under United States United States, (ii)
law, (ii) has its has its principal
principal office in place of business
the United States, outside the United
and (iii) issues States, and (iii)
equity securities issues securities
that are traded that are traded
principally in the principally in a
United States. foreign country.
Companies that do not
fall within the
definition of "Non-
U.S. Company" would
be considered to be
U.S. Companies for
purposes of this
policy.
</TABLE>
21
<PAGE>
Commodities Policies (Proposal 2C)
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
------------------------------------------------------------------------------
<S> <C> <C>
Alliance Institutional Funds, The Fund may not Fundamental It is a
Inc.-- Alliance Special Equity purchase or sell fundamental policy of
Institutional Fund commodities or the Fund not to
commodity contracts. purchase or sell
commodities or
commodity contracts,
except financial
forward and futures
contracts and option
on such contracts.
Non-fundamental It is
a non-fundamental
policy of the Fund
that:
(i) the Fund utilize
futures and options
thereon only for
hedging purposes,
(ii) the Fund will
not enter into any
futures contracts or
options on futures
contracts if
immediately
thereafter the market
values of the
outstanding futures
contracts of the Fund
and the futures
contracts subject to
outstanding options
written by the Fund
would exceed 50% of
its total assets,
(iii) the Fund will
not purchase or sell
a stock index future
if immediately
thereafter more than
30% of its total
assets would be
hedged by stock index
futures, and
(iv) the Fund will
not purchase or sell
a stock index future
if, immediately
thereafter, the sum
of the amount of
margin deposit on the
Fund's existing
futures positions
would exceed 5% of
the market value of
the Fund's total
assets.
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C>
Alliance Institutional Funds, The Fund may not Fundamental
Inc.-- purchase or sell It is a fundamental
Alliance Quasar Institutional commodities or policy of the Fund
Fund commodity contracts. not to purchase or
sell commodities or
commodity contracts,
except financial
forward and futures
contracts and option
on such contracts.
Non-fundamental
It is a non-
fundamental policy of
the Fund that:
(i) the Fund utilize
futures and options
thereon only for
hedging purposes,
(ii) the Fund will
not enter into any
futures contracts or
options on futures
contracts if
immediately
thereafter the market
values of the
outstanding futures
contracts of the Fund
and the futures
contracts subject to
outstanding options
written by the Fund
would exceed 50% of
its total assets,
(iii) the Fund will
not purchase or sell
a stock index future
if immediately
thereafter more than
30% of its total
assets would be
hedged by stock index
futures, and
(iv) the Fund will
not purchase or sell
a stock index future
if, immediately
thereafter, the sum
of the amount of
margin deposit on the
Fund's existing
futures positions
would exceed 5% of
the market value of
the Fund's total
assets.
</TABLE>
23
<PAGE>
EXHIBIT C
CURRENT INVESTMENT RESTRICTIONS
PROPOSAL THREE
Writing, Purchasing or Selling of Puts, Calls or Any Combination (Proposal 3A)
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
------------------------------------------------------------------------
<S> <C> <C>
Alliance Bond Fund, Inc.-- Fundamental Non-Fundamental
U.S. Government Portfolio The Fund may not The Fund may not
write, purchase or write, purchase or
sell puts, calls or sell puts, calls or
combinations thereof. any combination
thereof.
</TABLE>
Unseasoned Issuer Policies (Proposal 3B)
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
-----------------------------------------------------------------------
<S> <C> <C>
Alliance Bond Fund, Inc.-- Fundamental No proposed policy
U.S. Government Portfolio The Fund will not
invest more than 15%
of its total assets
in securities of
issuers which
together with any
predecessors have
been in continuous
operation for less
than 3 years.
</TABLE>
24
<PAGE>
EXHIBIT C
Current Fundamental and Proposed Policies
Illiquid Securities Policies (Proposal 3C)
<TABLE>
<CAPTION>
Fund Current Policy Proposed Policy
-----------------------------------------------------------------------------
<S> <C> <C>
Alliance Bond Fund, Inc.-- The Fund will not It is a non-
U.S. Government Portfolio invest more than 15% fundamental policy of
of average net assets the Fund that the
at the time of Fund may not purchase
purchase in any security or enter
securities which are into a repurchase
not readily agreement if, as a
marketable including result, more than 15%
restricted of its net assets
securities. would be invested in
repurchase agreements
not entitling the
holder to payment of
principal and
interest within seven
days and in
securities that are
illiquid by virtue of
legal or contractual
restrictions on
resale or the absence
of a readily
available market;
however, this
restriction will not
apply to securities
sold pursuant to Rule
144A under the
Securities Act of
1933, so long as such
securities meet
liquidity guidelines
established from time
to time by the Board
of Directors.
-----------------------------------------------------------------------------
Alliance Institutional Funds, The Fund may not It is a non-
Inc.-- invest more than 10% fundamental policy of
Alliance Quasar Institutional of its assets in the Fund that the
Fund restricted Fund may not purchase
securities. any security or enter
into a repurchase
agreement if, as a
result, more than 15%
of its net assets
would be invested in
repurchase agreements
not entitling the
holder to payment of
principal and
interest within seven
days and in
securities that are
illiquid by virtue of
legal or contractual
restrictions on
resale or the absence
of a readily
available market;
however, this
restriction will not
apply to securities
sold pursuant to Rule
144A under the
Securities Act of
1933, so long as such
securities meet
liquidity guidelines
established from time
to time by the Board
of Directors.
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
----------------- ----
<S> <C>
Introduction.............................................................. 1
Proposal One: Approval of a Proposal to Amend a Fundamental Policy to
Permit Securities Lending to the Extent Permitted by the 1940 Act....... 5
Proposal Two: Approval of Proposals to Amend Certain Fundamental Policies. 6
Proposal Three: Approval of Proposals to Remove or Reclassify Certain of
the Funds' Fundamental Policies as Non-Fundamental Policies............. 11
How to Vote............................................................... 14
Information as to the Funds' Principal Officers........................... 14
Stock Ownership........................................................... 17
Report to Stockholders.................................................... 18
Exhibit A................................................................. 19
Exhibit B................................................................. 21
Exhibit C................................................................. 24
</TABLE>
Alliance Bond Fund, Inc.--U.S. Government Portfolio
Alliance Institutional Funds, Inc.
--Alliance Premier Growth Institutional Fund
--Alliance Special Equity Institutional Fund
--Alliance Quasar Institutional Fund
--------------------------------------------------------------------------------
(LOGO)
Alliance Capital Management L.P.
--------------------------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
December 12, 2000
