<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
| | Preliminary Proxy Statement
--------------------------------------------------------------------------------
|X| Definitive Proxy Statement
--------------------------------------------------------------------------------
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Sanford C. Bernstein Fund, Inc.
(Name of Registrant as Specified In Its Charter)
Sanford C. Bernstein Fund, Inc.
(Name of Person(s) Filing Proxy Statement)
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:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
-----------------------------------------------------------------------
<PAGE>
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
|_| 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.:
-----------------------------------------------------------------------
3) Filing Party:
-----------------------------------------------------------------------
4) Date Filed:
<PAGE>
Sanford C. Bernstein Fund, Inc.
767 Fifth Avenue
New York, NY 10153-0185
Notice of Special Meeting of Shareholders
To the Shareholders:
NOTICE IS HEREBY GIVEN that a special meeting (the "Meeting") of
shareholders of Sanford C. Bernstein Fund, Inc. (the "Fund") will be held on
September 25, 2000, at 10:00 a.m., Eastern time, at the offices of Sanford C.
Bernstein & Co., Inc. ("Bernstein"), 767 Fifth Avenue, 20th floor, New York, NY
10153 for the purpose of considering the following proposals with respect to the
Fund or with respect to one or more of its separate investment portfolios (each,
a "Portfolio" and collectively, the "Portfolios"), as indicated below. If
approved by shareholders, Proposal Nos. 2 and 3 will be effective only upon the
consummation of the transactions contemplated under the Acquisition Agreement
dated as of June 20, 2000, among Sanford C. Bernstein Inc., Alliance Capital
Management L.P. ("Alliance Capital") and certain of their affiliates (the
"Acquisition"). Upon the consummation of the Acquisition, investment management
services for the Fund will be performed by the Bernstein division of Alliance
Capital. The Acquisition is more fully described in the Proxy Statement attached
hereto.
1. For the Fund, to elect a slate of nine members to its Board of
Directors to hold office until their successors are duly elected and
qualified;
2. For each Portfolio separately, to approve or disapprove a new
investment management agreement between the Fund, on behalf of each
Portfolio, and Alliance Capital, the terms of which are substantially
similar to the existing investment management agreements with
Bernstein;
3. For each Portfolio separately, to approve or disapprove a new
shareholder servicing and administrative agreement between the Fund, on
behalf of each Portfolio, and Alliance Capital, the terms of which are
substantially similar to the existing shareholder servicing and
administrative agreements with Bernstein;
4. For each of the Bernstein Government Short Duration Portfolio,
Bernstein Short Duration Plus Portfolio, Bernstein Intermediate
Duration Portfolio, Bernstein New York Municipal Portfolio, Bernstein
Diversified Municipal Portfolio, and Bernstein California Municipal
Portfolio separately, to approve or disapprove eliminating the
fundamental investment restriction relating to investment in illiquid
securities and replacing it with a non-fundamental restriction;
5. For each of the Bernstein Government Short Duration Portfolio,
Bernstein Short Duration Plus Portfolio, Bernstein Intermediate
Duration Portfolio, Bernstein New York Municipal Portfolio, Bernstein
Diversified Municipal Portfolio, and Bernstein California Municipal
<PAGE>
Portfolio separately, to approve or disapprove eliminating the
fundamental investment restriction relating to investment in securities
of unseasoned issuers;
6. For each Portfolio separately, to ratify the selection of independent
accountants; and
7. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
The Board of the Fund has fixed the close of business on July 31, 2000
as the record date for determining the number of shares outstanding and the
shareholders entitled to vote at the Meeting and at any and all adjournments
thereof.
By Order of the Board of Directors,
/s/ Jean Margo Reid
-------------------
Jean Margo Reid
Secretary
August 8, 2000
EACH SHAREHOLDER IS URGED TO EXERCISE THE RIGHT TO VOTE AT THE SPECIAL MEETING
OF SHAREHOLDERS OF THE FUND BY FILLING IN, DATING AND SIGNING THE ENCLOSED PROXY
CARD(S) AND RETURNING IT IN THE RETURN ENVELOPE PROVIDED. SHAREHOLDERS ALSO HAVE
THE OPTION TO PROVIDE THEIR VOTE BY TELEPHONE OR ON THE INTERNET BY FOLLOWING
THE INSTRUCTIONS ACCOMPANYING THE PROXY CARD.
<PAGE>
August 8, 2000
SANFORD C. BERNSTEIN FUND, INC.
767 Fifth Avenue
New York, New York 10153-0185
Dear Shareholder:
On June 20, Sanford C. Bernstein Inc. ("Sanford Bernstein"), Alliance
Capital Management L.P. ("Alliance Capital") and certain of their affiliates
entered into an agreement pursuant to which the assets and liabilities of the
operating subsidiaries of Sanford Bernstein will be acquired by Alliance
Capital. When the acquisition is consummated, investment management services for
the Fund will be performed by the Bernstein division of Alliance Capital. We
expect that all key investment professionals involved in managing the Fund will
remain the same.
In connection with the Bernstein-Alliance Capital transaction, we are
asking shareholders of each Portfolio to approve new investment management and
shareholder servicing and administrative agreements. Also, to save the expense
of another meeting, you are being asked to vote on certain additional items.
Enclosed is further information relating to these matters, including a Questions
& Answers section, proxy statement and proxy card(s).
Important information about the changes:
o All of the Fund's directors, including the independent
directors---Arthur Aeder, Peter L. Bernstein, William Kristol
and Theodore Levitt--recommend that you read the enclosed
materials carefully and then vote IN FAVOR OF all proposals.
o The Bernstein-Alliance Capital transaction has no effect on
the number of shares you own or the value of those shares.
o The fees payable under the new investment management
agreement and the new shareholder servicing and
administrative agreement have not increased.
o The investment objective of each Portfolio has not changed.
What you need to do:
o Read all enclosed materials including the Questions & Answers
section.
o Vote your proxy as soon as possible -- by telephone, internet
or mail -- described in the enclosed voting instruction card.
o Complete all proxy cards enclosed. You will receive a proxy
card for each Portfolio in each account you own.
If we have not received your proxy card as the meeting date approaches,
you may receive a call from Shareholder Communications Corporation, a
professional proxy solicitation firm that has been engaged to assist in this
process. We appreciate your attention to this matter.
Sincerely,
/s/ Roger Hertog
----------------
Roger Hertog
President
Sanford C. Bernstein Fund, Inc.
<PAGE>
August 2000
IMPORTANT NEWS FOR SHAREHOLDERS OF
SANFORD C. BERNSTEIN FUND, INC.
While we encourage you to read the full text of the enclosed Proxy
Statement, here is a brief overview of some matters affecting the Sanford C.
Bernstein Fund, Inc. which require a shareholder vote.
Q & A: QUESTIONS AND ANSWERS
Q. WHAT'S HAPPENING?
A. Sanford C. Bernstein Inc. ("Sanford Bernstein"), the parent company of
Sanford C. Bernstein & Co., Inc. ("Bernstein"), your Fund's investment
manager, has entered into an agreement pursuant to which the assets and
liabilities of its operating subsidiaries will be acquired by Alliance
Capital Management L.P. ("Alliance Capital"). When the acquisition is
consummated, investment management services for the Fund will be
performed by the Bernstein division of Alliance Capital. We expect that
all key investment professionals involved in managing the Fund will
remain the same.
Alliance Capital is a leading global investment management firm best
known for its growth style of equity investing. Assets under management
of Alliance Capital at March 31, 2000 totaled $394 billion. Alliance
Capital manages retirement assets for many of the largest public and
private employee benefit plans (including 28 of the U.S. Fortune 100
companies), for public employee retirement funds in 31 out of 50
states, and for foundations, endowments, banks and insurance companies
worldwide. Alliance Capital is also one of America's largest mutual
fund sponsors, with approximately 5.8 million shareholder accounts and
a family of diversified fund portfolios that are distributed globally.
The following pages give you additional information on Alliance
Capital, the proposed acquisition and the matters on which you are
being asked to vote.
THE DIRECTORS OF YOUR FUND, INCLUDING THOSE WHO ARE NOT AFFILIATED WITH
THE FUND, ALLIANCE CAPITAL, BERNSTEIN OR SANFORD BERNSTEIN, UNANIMOUSLY
RECOMMEND THAT YOU VOTE IN FAVOR OF THESE PROPOSALS.
<PAGE>
Q. WHY DID YOU SEND ME THIS BOOKLET?
A. You are receiving these proxy materials -- a booklet that includes the
Proxy Statement and one or more proxy cards -- because you have the
right to vote on the important proposals concerning your investment in
the Fund.
Q. WHY ARE MULTIPLE CARDS ENCLOSED?
A. If you own shares of more than one Portfolio of the Fund, you will
receive a proxy card for each Portfolio in each account you own. Please
sign, date and return each proxy card you receive. If you prefer, you
may call the Fund's information agent at 1-877-504-7021 to give your
vote to a representative over the telephone. Additionally, you may call
the toll-free number listed on your proxy card or log on to
https://www.proxycard.com, enter the number listed on your proxy card
and follow the instructions to record your vote on the Internet.
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW INVESTMENT MANAGEMENT
AGREEMENT IN PROPOSAL NO. 2?
A. The Investment Company Act of 1940, which regulates investment
companies such as your Fund, requires a shareholder vote to approve a
new investment management agreement following certain types of business
transactions, such as the Bernstein - Alliance Capital transaction. The
new investment management agreement with Alliance Capital is
substantially similar to the existing management agreement with
Bernstein except for the identity of the investment adviser (and lower
fees in the case of two Portfolios).
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW SHAREHOLDER SERVICING
AND ADMINISTRATIVE AGREEMENT IN PROPOSAL NO. 3?
A. The Bernstein - Alliance Capital transaction will result in the
termination of the existing shareholder servicing and administrative
agreement between the Fund and Bernstein and therefore we are
requesting that you approve a new shareholder servicing and
administrative agreement between the Fund and Alliance Capital. The new
shareholder servicing and administrative agreement is substantially
similar to the existing shareholder servicing and administrative
agreement except for the identity of the service provider.
Q. WHAT ELSE AM I BEING ASKED TO VOTE ON?
A. You are being asked to vote to elect a Board of Directors. Also, in
order to save the expense of a subsequent meeting, you are being asked
to vote on a change to two of the Fund's fundamental investment
restrictions. Additionally, you are being asked to vote to ratify the
Directors' selection of your Fund's independent accountants.
<PAGE>
Q. HOW WILL THE BERNSTEIN - ALLIANCE CAPITAL TRANSACTION AFFECT ME?
A. Each Portfolio of the Fund and its respective investment objective will
not change as a result of the Bernstein - Alliance Capital transaction.
You will still own the same shares in the same Portfolio as you did
prior to the Bernstein - Alliance Capital transaction. Also, the
Bernstein - Alliance Capital transaction should have no impact on the
operations of the Fund. Bernstein and Alliance Capital have assured the
Directors that there will be no reduction in the nature or quality of
its services to the Fund as a result of the Bernstein - Alliance
Capital transaction, and in fact Bernstein anticipates that its
resources may be enhanced.
Q. WHAT ARE THE POTENTIAL BENEFITS OF THE BERNSTEIN - ALLIANCE CAPITAL
TRANSACTION?
A. There are several potential positive aspects of the Bernstein -
Alliance Capital transaction you may be interested in. Most notably,
the combined firm will have one of the premier equity and fixed income
investment research capabilities in the world and will combine a
recognized leader in the growth style of investing (Alliance Capital)
with a recognized leader in the value style of investing (Bernstein).
The financial strength of the combined firm coupled with the increased
breadth and depth of its resources and capabilities are advantages the
transaction brings.
Q. HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
A. After careful consideration, the Board of Directors of the Fund,
including those Directors who are not affiliated with the Fund,
Alliance Capital, Bernstein or Sanford Bernstein, recommend that you
vote IN FAVOR OF all of the proposals on the enclosed proxy card(s).
Q. WHOM DO I CALL FOR MORE INFORMATION OR TO PLACE MY VOTE?
A. Please call either the Fund's information agent, Shareholder
Communications Corporation at 1-877-504-7021 or your Bernstein advisor,
for additional information. You can vote in one of four ways:
MAIL Use the enclosed proxy card(s) to record your vote,
then return the card(s) in the enclosed postage-paid
envelope
or
PHONE Call 1-877-504-7021 to provide your vote to the
Fund's information agent
or
<PAGE>
TOUCH-TONE Call 1-877-504-7022 and enter information on your
touch-tone phone as prompted
or
INTERNET Log on to https://www.proxycard.com and follow the
instructions to record your vote on the Internet.
YOUR VOTE IS IMPORTANT AND WILL HELP AVOID THE ADDITIONAL
EXPENSE OF ANOTHER SOLICITATION.
THANK YOU FOR PROMPTLY RECORDING YOUR VOTE.
<PAGE>
Sanford C. Bernstein Fund, Inc.
767 Fifth Avenue
New York, NY 10153-0185
PROXY STATEMENT
Special Meeting of Shareholders
September 25, 2000, 10:00 a.m.
Sanford C. Bernstein Fund, Inc. (the "Fund") is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), and consists of 12 separate investment portfolios:
Bernstein Government Short Duration Portfolio, Bernstein Short Duration Plus
Portfolio, Bernstein Intermediate Duration Portfolio, Bernstein Short Duration
New York Municipal Portfolio, Bernstein Short Duration California Municipal
Portfolio, Bernstein Short Duration Diversified Municipal Portfolio, Bernstein
New York Municipal Portfolio, Bernstein California Municipal Portfolio,
Bernstein Diversified Municipal Portfolio, Bernstein Tax-Managed International
Value Portfolio, Bernstein International Value Portfolio II and Bernstein
Emerging Markets Value Portfolio (each, a "Portfolio," and collectively, the
"Portfolios").
Sanford C. Bernstein & Co., Inc. ("Bernstein" or the "Current
Manager"), serves as investment manager, principal underwriter, shareholder
servicing agent and administrator for each Portfolio.
A list of the proposals described in this Proxy Statement and the
Portfolios to which each applies is set forth below.
Portfolio(s) to which
Summary of Proposal Proposal Applies
------------------- ----------------
1. To elect a slate of nine members Each Portfolio voting together as a
to the Board of Directors to hold single class
office until their successors are
duly elected and qualified.
2. To approve or disapprove a new Each Portfolio voting separately
investment management agreement
between the Fund, on behalf of each
Portfolio, and Alliance Capital
Management L.P. ("Alliance Capital").
1
<PAGE>
<TABLE>
<CAPTION>
Portfolio(s) to which
Summary of Proposal Proposal Applies
------------------- ----------------
<S> <C>
3. To approve or disapprove a new Each Portfolio voting separately
shareholder servicing and
administrative agreement between the
Fund, on behalf of each Portfolio,
and Alliance Capital.
4. To approve or disapprove o Bernstein Government Short
eliminating the fundamental investment Duration Portfolio
restriction relating to investment in o Bernstein Short Duration Plus
illiquid securities and replacing it Portfolio
with a non-fundamental restriction. o Bernstein Intermediate Duration
Portfolio
o Bernstein New York Municipal
Portfolio
o Bernstein Diversified Municipal
Portfolio
o Bernstein California Municipal
Portfolio
(Each such Portfolio voting
separately)
5. To approve or disapprove o Bernstein Government Short
eliminating the fundamental investment Duration Portfolio
restriction relating to investment in o Bernstein Short Duration Plus
securities of unseasoned issuers. Portfolio
o Bernstein Intermediate Duration
Portfolio
o Bernstein New York Municipal
Portfolio
o Bernstein Diversified Municipal
Portfolio
o Bernstein California Municipal
Portfolio
(Each such Portfolio voting
separately)
6. To ratify the selection of Each Portfolio voting separately
independent accountants for the
current fiscal year.
7. To transact such other business as Each Portfolio, as applicable
may properly come before the Meeting
or any adjournments thereof.
</TABLE>
In accordance with applicable law, this Proxy Statement is being
mailed, on or about August 8, 2000 on behalf of the Board of Directors (the
"Directors" or the "Board") of the Fund, to the shareholders of the Fund in
connection with a solicitation of proxies to be used at a special meeting (the
"Meeting") of shareholders of the Fund scheduled to be held at the offices of
Bernstein, 767 Fifth Avenue, 20th floor, New York, NY 10153, on September 25,
2000, at 10:00 a.m., Eastern time. The Directors have fixed the close of
business on July 31, 2000 as the record date (the "Record Date") for determining
the number of shares outstanding and the shareholders entitled to be present at
the Meeting and vote their shares as of the Record Date.
The Fund expects that the solicitation of proxies from shareholders
will be made by mail, and solicitation also may be made by telephone
communications from officers or employees of Bernstein or its affiliates, who
will not receive any compensation therefor from the Fund. In addition,
2
<PAGE>
Shareholder Communications Corporation ("SCC"), a professional proxy
solicitation firm has been engaged to assist in the solicitation of proxies.
Bernstein will pay the fees and expenses of such solicitation.
Shareholders may also provide their proxy through telephone touch-tone
voting or Internet voting. These options require a shareholder to input a twelve
digit control number which is located on each proxy card. Subsequent to
inputting this number, shareholders will be prompted to enter their vote on each
proposal. Shareholders will have an opportunity to review their vote and make
any necessary changes before submitting their vote and terminating their
telephone call or Internet link. Shareholders who vote on the Internet, in
addition to confirming their vote prior to submission, may choose to receive an
e-mail confirming their vote.
As the Meeting date approaches, certain shareholders of the Fund may
receive a telephone call from SCC if their vote has not yet been received.
Authorization to permit SCC to execute proxies may be obtained by telephonically
transmitted instructions from shareholders of the Fund. Proxies that are
obtained telephonically will be recorded in accordance with the procedures set
forth below. The Directors believe that these procedures are reasonably designed
to ensure that the identity of the shareholder casting the vote is accurately
determined and that the voting instructions of the shareholder are accurately
determined. The cost of this assistance is expected to be approximately
$160,000 and, as stated above, will not be borne by the Fund.
In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask for each shareholder's full name, address,
social security or taxpayer identification number, title (if the shareholder is
authorized to act on behalf of an entity, such as a corporation), and the number
of shares owned and to confirm that the shareholder has received the Proxy
Statement and proxy card in the mail. If the information solicited agrees with
the information provided to SCC, then the SCC representative has the
responsibility to explain the process, read the proposals listed on the proxy
card, and ask for the shareholder's instructions on each proposal. The SCC
representative, although permitted to answer questions about the process, is not
permitted to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the Proxy Statement. The SCC representative will
record the shareholder's instructions on the card. Within 72 hours, SCC will
send the shareholder a letter or mailgram to confirm his or her vote and ask the
shareholder to call SCC immediately if his or her instructions are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Meeting, but does not
wish to give his or her proxy by any of the methods outlined above, the
shareholder may still submit the proxy card originally sent with the Proxy
Statement or attend in person. If shareholders require additional information
regarding the Proxy Statement or replacement voting proxy cards, they may
contact SCC toll-free at 1-877-504-7021. Proxies executed by shareholders may be
revoked by (i) a written instrument received by the Secretary of the Fund at any
time before it is exercised; (ii) delivery of a later-dated proxy; or (iii)
attendance at the Meeting and voting in person.
3
<PAGE>
The following tables set forth the share ownership of the Portfolios
and the Fund as a whole as of the Record Date:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Portfolio Total Number of Shares Outstanding
---------------------------------------------------------------------------------------------
<S> <C>
Bernstein Government Short Duration Portfolio 7,676,309
---------------------------------------------------------------------------------------------
Bernstein Short Duration Plus Portfolio 35,569,752
---------------------------------------------------------------------------------------------
Bernstein Intermediate Duration Portfolio 167,619,655
---------------------------------------------------------------------------------------------
Bernstein Short Duration New York Municipal
Portfolio 8,487,606
---------------------------------------------------------------------------------------------
Bernstein Short Duration California Municipal
Portfolio 5,016,444
---------------------------------------------------------------------------------------------
Bernstein Short Duration Diversified Municipal
Portfolio 13,216,394
---------------------------------------------------------------------------------------------
Bernstein New York Municipal Portfolio 52,022,835
---------------------------------------------------------------------------------------------
Bernstein California Municipal Portfolio 34,757,501
---------------------------------------------------------------------------------------------
Bernstein Diversified Municipal Portfolio 90,959,533
---------------------------------------------------------------------------------------------
Bernstein Tax-Managed International Value
Portfolio 153,272,499
---------------------------------------------------------------------------------------------
Bernstein International Value Portfolio II 96,165,797
---------------------------------------------------------------------------------------------
Bernstein Emerging Markets Value Portfolio 35,717,856
---------------------------------------------------------------------------------------------
Total Fund 700,482,180
---------------------------------------------------------------------------------------------
</TABLE>
As of the Record Date, the following shareholder owned of record or
beneficially 5% or more of the Emerging Markets Value Portfolio: New Mexico
State Investment Council, Santa Fe, NM 87505 (5,261,261 shares or 14.73%).
A quorum for the transaction of business at the Meeting is constituted
with respect to the Fund by the presence in person or by proxy of holders of
one-third of the shares of the Fund entitled to vote at the Meeting and with
respect to each Portfolio by the presence in person or by proxy of holders of
one-third of the shares of such Portfolio entitled to vote at the Meeting. If a
proxy is properly executed and returned accompanied by instructions to withhold
authority, or is marked with an abstention, the shares represented thereby will
be considered to be present at the Meeting for determining the existence of a
quorum for the transaction of business with respect to the Fund.
4
<PAGE>
Abstentions and "broker non-votes" (i.e., shares held by brokers or
nominees as to which (i) instructions have not been received from the beneficial
owners or the persons entitled to vote or (ii) the broker or nominee does not
have discretionary voting power on a particular matter) will not have an effect
on the vote of Proposal Nos. 1 and 6, but will have the effect of a negative
vote on Proposal Nos. 2, 3, 4 and 5. Unmarked voting instructions from
shareholders will be voted in favor of the proposals. The Fund may adjourn the
Meeting to the extent permitted by law, if necessary to obtain additional
proxies from shareholders. The Fund may propose one or more adjournments of the
Meeting to permit further solicitation of proxies from shareholders of the Fund
or one or more Portfolios which has not received sufficient votes in favor of
the Proposals. The persons named as proxies will vote in favor of adjournment if
they determine that such adjournment and additional solicitation are reasonable
and in the best interests of the Fund or Portfolio. Bernstein will bear the
costs of preparing and distributing to shareholders additional proxy materials,
if required in connection with any adjournment.
For Proposal No. 1, a plurality of all the votes cast at the Meeting at
which a quorum is present is sufficient to elect a nominee. Shareholders of all
Portfolios of the Fund vote together as a single class with respect to Proposal
No. 1.
Approval of Proposal Nos. 2, 3, 4 and 5, with respect to each
applicable Portfolio, requires the affirmative vote of a majority of the
outstanding voting securities of that Portfolio. "Majority" for this purpose
under the 1940 Act means the lesser of (1) more than 50% of the outstanding
shares of the Portfolio or (2) 67% or more of the shares of the Portfolio
represented at the Meeting if more than 50% of such shares are represented. Each
such proposal must be approved by shareholders of the respective Portfolio
voting separately. Approval of a Proposal with respect to one Portfolio is not
conditioned on approval by shareholders of any other Portfolio.
Approval of Proposal No. 6, with respect to each Portfolio, requires a
majority of all the votes cast in respect of that Portfolio at the Meeting at
which a quorum is present. Shareholders of each Portfolio vote separately with
respect to Proposal No. 6.
All information in the Proxy Statement about Bernstein has been
provided by Bernstein. All information in the Proxy Statement about Alliance
Capital has been provided by Alliance Capital.
The Directors do not know of any other business to be brought before
the Meeting. If any other matters properly come before the Meeting, the proxies
named by the shareholders will vote on such matters in their discretion.
--------------------------------------------
5
<PAGE>
ELECTION OF DIRECTORS
PROPOSAL No. 1
Introduction
On June 20, 2000, Sanford C. Bernstein Inc. ("Sanford Bernstein"),
Alliance Capital Management L.P. ("Alliance Capital") and certain of their
respective affiliates entered into an Acquisition Agreement (the "Agreement"),
pursuant to which it is contemplated that all of the assets and liabilities of
the operating subsidiaries of Sanford Bernstein will be acquired by Alliance
Capital (the "Acquisition"). Sanford Bernstein is the parent company of
Bernstein, the Fund's investment manager, shareholder servicing agent,
administrator and principal underwriter. Upon the consummation of the
Acquisition (the "Closing"), the investment management business formerly
conducted by Bernstein will be conducted through a division of Alliance Capital.
The brokerage and other business formerly conducted through Bernstein will be
conducted by Sanford C. Bernstein & Co., LLC ("Bernstein LLC"), a newly-formed,
indirect wholly-owned subsidiary of Alliance Capital, as the successor to
Bernstein. Alliance Capital will pay an aggregate current value of approximately
$3.5 billion, consisting of $1.4754 billion in cash and 40.8 million newly
issued limited partnership units of Alliance Capital, to Sanford Bernstein.
As described in Proposals Nos. 2 and 3 below, it is proposed that
Alliance Capital become the investment manager and shareholder servicing agent
and administrator of the Fund upon the Closing, subject to receipt of approval
from Fund shareholders. It is also proposed that Bernstein LLC become the Fund's
principal underwriter upon the Closing. The appointment of Bernstein LLC as
principal underwriter does not require shareholder approval. Bernstein and
Alliance Capital expect that all key investment professionals involved in
managing the Fund will remain the same.
The Acquisition is subject to certain regulatory approvals and other
customary conditions as well as to the approval of the Acquisition by the
unitholders of Alliance Capital Management Holding L.P. ("Alliance Holding") and
the shareholders of Sanford Bernstein. Alliance Holding has entered into voting
agreements with Sanford Bernstein shareholders representing more than 80% of the
outstanding common shares of Sanford Bernstein. Shareholders of the Fund are not
being asked to vote on the Acquisition.
Sanford Bernstein and Alliance Capital expect that the Closing will
take place during the third or fourth quarter of 2000.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act provides that an investment adviser (such
as Bernstein) to a registered investment company, and the affiliates of such
adviser, may receive any amount or benefit in connection with a sale of any
interest in such investment adviser which results in an assignment of an
investment advisory contract if the following two conditions are satisfied: (1)
for a period of three years after such assignment, at least 75% of the board of
directors of the investment company
6
<PAGE>
cannot be "interested persons" (within the meaning of Section 2(a)(19) of the
1940 Act) of the new investment adviser or its predecessor; and (2) no "unfair
burden" (as defined in the 1940 Act) may be imposed on the investment company as
a result of the assignment or any express or implied terms, conditions or
understandings applicable thereto.
Consistent with the first condition of Section 15(f), Sanford Bernstein
and Alliance Capital have agreed in the Agreement that, for a period of three
years after the Closing, they will neither take nor recommend any action that
would cause more than 25% of the Directors of the Fund to be interested persons
of the entity acting as the Fund's investment adviser.
With respect to the second condition of Section 15(f), an "unfair
burden" on an investment company is defined in the 1940 Act to include any
arrangement during the two-year period after any such transaction occurs whereby
the investment adviser or its predecessor or successor, or any interested person
of such adviser, predecessor or successor, receives or is entitled to receive
any compensation of two types, either directly or indirectly. The first type is
compensation from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company,
other than bona fide ordinary compensation as principal underwriter for such
company. The second type is compensation from the investment company or its
security holders for other than bona fide investment advisory or other services.
In the Agreement, Sanford Bernstein and Alliance Capital have agreed
neither to take nor recommend any action that would constitute an unfair burden
on the Fund or a Portfolio within the meaning of Section 15(f).
Information Regarding Nominees
At a meeting held on July 20, 2000, the Directors, including all of
those Directors who are not interested persons of Sanford Bernstein or Alliance
Capital (the "Disinterested Directors"), unanimously nominated the 9 persons
described below for election as Directors, to take office effective as of the
date of the Meeting. The Board of the Fund currently consists of six members,
all of whom are nominees. Prior to being apprised of the Acquisition, the Board
had at earlier meetings discussed the benefits of expanding the number of
Directors to include additional, qualified individuals, and had determined to do
so subject to identification of the appropriate individual or individuals. Thus,
the proposed expansion of the Board to ensure compliance with Section 15(f) of
the 1940 Act, which requires that at least 75% of the Board consist of Directors
who are not interested persons of Sanford Bernstein or Alliance Capital, is
consistent with the previously expressed intentions of the Board. If elected,
each Director will serve from the date of the Meeting until his successor is
duly elected and qualified. It is the intention of the persons named in the
accompanying form of proxy to vote for the election of each of the nominees
named below, each of whom has consented to be a nominee.
If any of the nominees become unavailable for election as a Director
before the Meeting, proxies will be voted for the other persons that the
Directors recommend.
7
<PAGE>
Principal Occupation and Other Information
Biographical and other information concerning all nominees is listed
below.
The nominees designated by an asterisk (*), Roger Hertog and Andrew S.
Adelson, are "interested persons" of the Fund, as that term is defined in the
1940 Act. Unless otherwise noted, the address of each individual listed below is
767 Fifth Avenue, New York, NY 10153-0185.
<TABLE>
<CAPTION>
Shares of Portfolio(s) Beneficially Principal Occupation(s)
Name, Age, and Owned During Past Five Years and
Address as of 6/30/00 Public Directorships
------- ------------- --------------------
<S> <C> <C>
Roger Hertog,* 58 3,200 (Bernstein Short Duration Plus President, Chief Operating Officer
Director of the Fund Portfolio) and Director-Bernstein; President
since 1988 153,944 (Bernstein Short Duration and Treasurer of Fund.
New York Municipal Portfolio)
144,064 (Bernstein Tax-Managed
International Value Portfolio)
52,215 (Bernstein Emerging Markets
Value Portfolio)
Andrew S. Adelson,* 45 114,497 (Bernstein Diversified Senior Vice President, Chief
Director of the Fund Municipal Portfolio) Investment Officer-International
since 1997 49,748 (Bernstein Tax-Managed Equities and Director-Bernstein;
International Value Portfolio) Senior Vice President of Fund.
2,502 (Bernstein Emerging Markets
Value Portfolio)
Arthur Aeder, 74 None 1987 - present: Consultant; Formerly
516 Fifth Avenue Senior Partner of Oppenheim,
New York, NY 10036 Appel, Dixon & Co. (subsequently
Director of the Fund Spicer & Oppenheim) Certified
since 1988 Public Accountants, and Chairman
of Spicer & Oppenheim
International.
Peter L. Bernstein, ** 81 36,519 (Bernstein Intermediate President and Chief Executive
575 Madison Avenue Duration Portfolio) Officer of Peter L. Bernstein, Inc.,
Suite 1006 16,185 (Bernstein Short Duration New Economic Consultants.
New York, NY 10022 York Municipal Portfolio)
Director of the Fund 64,213 (Bernstein Diversified
since 1988 Municipal Portfolio)
20,499 (Bernstein Tax-Managed
International Value Portfolio)
Irwin Engleman, 66 34,309 (Bernstein Short Duration 1998 - December 1999: Vice Chairman
625 Madison Avenue New York Municipal Portfolio) and Chief Administrative Officer,
4th Floor 80,457 (Bernstein New York Revlon, Inc.; 1992-1998:
New York, NY 10022 Municipal Portfolio) Executive Vice President and
42,061 (Bernstein Chief Financial Officer, MacAndrews & Forbes
International Value Portfolio II) Holdings, Inc.
43,120 (Bernstein Tax-Managed
International Value Portfolio)
18,321 (Bernstein Emerging Markets
Value Portfolio)
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Shares of Portfolio(s) Beneficially Principal Occupation(s)
Name, Age, and Owned During Past Five Years and
Address as of 6/30/00 Public Directorships
------- ------------- --------------------
<S> <C> <C>
Peter W. Huber, 47 None Partner, Kellogg, Huber, Hansen,
1301 K Street, N.W. Todd & Evans (law firm); Senior
Suite 1000 West Fellow, Manhattan Institute for
Washington, D.C. 20005 Policy Research; Chairman, Telecom
Policy and Analysis: a Kellogg,
Huber Consulting Group; Columnist,
Forbes Magazine.
William Kristol, 47 None June 1995 - present: Editor and
1150 17th Street, N.W. Publisher, The Weekly Standard;
5th Floor July 1995 - December 1999: Consultant,
Washington, D.C. 20036 ABC News; November 1993 - May 1995:
Director of the Fund Chairman, Project for the Republican
since 1994 Future.
Theodore Levitt, 75 None Professor Emeritus of Business
Harvard Business School Administration, Harvard University;
Cumnock 300 Director, Cordiant Communications
Boston, MA 02163 Group Ltd; 1985-1989: Editor,
Director of the Fund Harvard Business Review.
since 1988
Rosalie J. Wolf, 59 None Director, Airborne Freight Corp.
115 East 87th Street and TIAA-CREF; 1994-2000: Treasurer
New York, NY 10128 and Chief Investment Officer, The
Rockefeller Foundation.
</TABLE>
* An "interested person" of the Fund, as defined in the 1940 Act, by
virtue of his position with Bernstein and as an officer of the Fund. In
addition, Messrs. Hertog and Adelson are shareholders of Sanford
Bernstein and will share in the proceeds from the Acquisition in such
capacity.
** Not related to any person formerly or currently associated with
Bernstein.
To the knowledge of management, the Directors and the executive
officers of the Fund, both individually and as a group, owned less than 1% of
the outstanding shares of the Fund and each respective Portfolio as of the
Record Date.
The Directors of the Fund met four times during the most recent fiscal
year and each Director then in office attended at least 75% of the total number
of meetings of the Board of the Fund held during such fiscal year and, if a
member, 100% of the total number of meetings of the committees held during the
period for which he served.
Executive Officers of the Fund
The first table below sets forth certain information furnished by each
of the current principal executive officers of the Fund who are not listed above
as nominees.
9
<PAGE>
The address of each individual listed below is 767 Fifth Avenue, New
York, NY 10153-0185.
<TABLE>
<CAPTION>
Principal
Shares of Portfolio(s) Occupation(s)
Position and Year First Beneficially Owned as During Past Five
Name, Address and Age Became An Officer of 6/30/00 Years
------------------------- ---------------------------- ------------------------ ------------------------
<S> <C> <C> <C>
Francis H. Trainer, Jr., 53 Senior Vice President since 3,011 (Bernstein Senior Vice President,
1988 Short Duration Plus Chief Investment
Portfolio) Officer-Fixed Income
67,925 (Bernstein and Director-Bernstein
Tax-Managed
International Value
Portfolio)
70,232 (Bernstein
International Value
Portfolio II)
64,098 (Bernstein
Emerging Markets
Value Portfolio)
Jean Margo Reid, 54 Secretary since 1993 4,778 (Bernstein 1999 - Present: Senior Vice
Tax-Managed President, General
International Value Counsel and Director-
Portfolio) Bernstein; 1997-1999:
Vice President and
General Counsel-
Bernstein; Previously:
Vice President and
Associate General
Counsel-Bernstein
</TABLE>
All officers of the Fund are elected annually and serve until their
successors are elected and qualified.
Remuneration of Directors and Officers
Officers of the Fund receive no direct remuneration in such capacity
from the Fund or the Portfolios. During the most recent fiscal year, the Fund
paid a fee of $35,000 to each Disinterested Director in annual compensation for
acting as director to the Fund. Currently, the Fund pays a fee of $40,000 to
each Disinterested Director. Each Disinterested Director is also reimbursed for
out-of-pocket expenses in connection with attendance at meetings of the Board.
In addition, Messrs. Aeder, Hertog and Adelson currently serve on the Audit
Committee of the Board; members of the Audit Committee receive no additional
compensation from the Fund. Should they be elected, Mr. Huber and Ms. Wolf will
be invited to serve on the Audit Committee which would then consist of Messrs.
Aeder and Huber and Ms. Wolf.
The following table sets forth information summarizing the compensation
of each of the Disinterested Directors for service as Director for the most
recently completed fiscal year. The Directors who are interested persons of the
Fund receive no compensation.
10
<PAGE>
COMPENSATION TABLE
------------------
<TABLE>
<CAPTION>
Total
Pension or Estimated Compensation
Aggregate Retirement Benefits Annual from Fund
Compensation Accrued as Part of Benefits Upon Paid to
Director from Fund Fund Expenses* Retirement Directors*
--------------------------- ------------------- ------------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Arthur Aeder $35,000 $0 $0 $35,000
Peter L. Bernstein $35,000 $0 $0 $35,000
William Kristol $35,000 $0 $0 $35,000
Theodore Levitt $35,000 $0 $0 $35,000
</TABLE>
* Information is as of the Fund's most recent fiscal year end, September 30,
1999.
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES UNDER PROPOSAL NO. 1
--------------------------------------------
APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT
MANAGEMENT AGREEMENT BETWEEN THE FUND AND ALLIANCE CAPITAL
PROPOSAL No. 2
The Board of the Fund is submitting for approval by the shareholders of
each Portfolio a new investment management agreement (the "New Management
Agreement") between the Fund, on behalf of each respective Portfolio and
Alliance Capital, the terms of which are substantially similar to the current
investment management agreements with respect to each Portfolio (collectively,
the "Existing Management Agreement").
As required by the 1940 Act, the Existing Management Agreement provides
for automatic termination upon assignment. The Closing of the Acquisition will
result in an assignment, as that term is defined in the 1940 Act, of the
Existing Management Agreement, and, consequently, its termination. Accordingly,
the New Management Agreement with Alliance Capital to take effect upon the
Closing is being proposed for approval by the shareholders of each Portfolio.
Approval of the New Management Agreement
As described below, the Board is proposing that shareholders of the
Fund approve a New Management Agreement with Alliance Capital to become
effective as of the Closing. A description of the New Management Agreement and
the services to be provided by Alliance Capital is set forth
11
<PAGE>
below. This description is qualified in its entirety by reference to the New
Management Agreement attached to this Proxy Statement as Exhibit A.
As more fully described below under "Information About the New
Management Agreement," the proposed New Management Agreement is substantially
similar to the Existing Management Agreement. That is, the two agreements
require identical services on the same terms and conditions for the same or, in
the case of two Portfolios, a lower fee rate. The only significant difference
is in the identity of Alliance Capital as the investment adviser.
At a meeting held on July 20, 2000, following presentations by
Bernstein and Alliance Capital and consideration of the factors discussed below,
the Board of Directors of the Fund, including all of the Disinterested
Directors, unanimously approved the New Management Agreement. In connection with
this approval, the Directors considered that the terms of the Acquisition do not
contemplate any increases in the management fees or any change in a Portfolio's
objectives or policies. Moreover, the Directors considered that under the New
Management Agreement, with respect to the Bernstein Tax-Managed International
Value Portfolio and Bernstein International Value Portfolio II (the
"International Value Portfolios"), the management fees would be lower than under
the Existing Management Agreement because of the inclusion of two additional
breakpoints in the annual fee rates. Among other things, the Directors also
considered the assurances of senior officers of Bernstein that there were no
expected changes in the key investment professionals involved in managing the
Fund or in the nature or quality of portfolio management services. The Board was
informed that certain key investment personnel of Bernstein had entered into
employment contracts with Alliance Capital to ensure the continuity of services.
Senior officers of Bernstein also informed the Directors that they did not
foresee any changes in their day-to-day operations and responsibilities after
the Acquisition.
As part of their deliberations, the Directors took into account, among
other factors, the nature and quality of the services provided and the results
achieved by Bernstein in the past, the high degree of continuity of services
anticipated to be provided by Alliance Capital, and the anticipated
organizational capability of Alliance Capital following the Acquisition. In this
regard, the Directors took into account the financial strength of Alliance
Capital, the management, personnel and operations of Alliance Capital, and the
commitment of Alliance Capital to the financial services industry. The Directors
also considered the additional resources that were likely to be available to the
combined firm following the Acquisition. The Directors based their
determinations in part on discussions with representatives of Alliance Capital
and Bernstein at the meeting and a review of materials provided by Alliance
Capital and Bernstein in connection with the meeting.
Recommendation of the Directors
Based on the considerations set forth above, the Directors, including
all of the Disinterested Directors, unanimously determined that it was necessary
and in the best interests of the Fund and its
12
<PAGE>
shareholders to enter into the New Management Agreement and to recommend
approval of the New Management Agreement by shareholders.
Information About Bernstein and Alliance Capital
Description of Bernstein. Bernstein is a New York corporation and is
wholly owned by Sanford Bernstein, a closely held Delaware holding corporation.
Sanford Bernstein is controlled by its Board of Directors which consists of the
following individuals: Andrew S. Adelson, Kevin R. Brine, Charles C. Cahn, Jr.,
Marilyn Goldstein Fedak, Arthur W. Fried, Michael L. Goldstein, Roger Hertog,
Thomas S. Hexner, Gerald M. Lieberman, Marc O. Mayer, Jean Margo Reid, Lewis A.
Sanders, and Francis H. Trainer, Jr. The principal business address of Bernstein
and Sanford Bernstein is 767 Fifth Avenue, New York, NY 10153-0185. Following
the Closing, Bernstein will conduct business as a division of Alliance Capital.
Executive Officers and Directors of Bernstein. The following chart
lists the executive officers and directors of Bernstein and their principal
occupations, if different from their position(s) with Bernstein.
Position(s) with Bernstein and Principal
Occupation if Different from
Name Position(s) with Bernstein
---------------------------------- ----------------------------------------
Lewis A. Sanders Director; Chairman of the Board, Chief
Executive Officer.
Roger Hertog Director; President and Chief Operating
Officer.
Andrew S. Adelson Director; Senior Vice President, Chief
Investment Officer - International Equities.
Kevin R. Brine Director; Senior Vice President - Global
Asset Management Services.
Charles C. Cahn, Jr. Director; Senior Vice President, Director of
Global Fixed Income.
Marilyn Goldstein Fedak Director; Senior Vice President, Chief
Investment Officer - U.S. Equities.
Arthur W. Fried Director; Executor, Estate of Zalman C.
Bernstein.
Michael L. Goldstein Director; Senior Vice President - Chief
Investment Strategist.
Thomas S. Hexner Director; Senior Vice President - Private
Client Services.
13
<PAGE>
Position(s) with Bernstein and Principal
Occupation if Different from
Name Position(s) with Bernstein
---------------------------------- ----------------------------------------
Gerald M. Lieberman Director; Senior Vice President - Finance
and Administration.
Marc O. Mayer Director. Senior Vice President -
Institutional Services.
Jean Margo Reid Director; Senior Vice President, General
Counsel.
Francis H. Trainer, Jr. Director; Senior Vice President, Chief
Investment Officer - Fixed Income.
Unless otherwise noted, the business address of each of the above
listed persons is 767 Fifth Avenue, New York, NY 10153-0185. In addition, Mr.
Hertog serves as President, Treasurer and Director of the Fund; Mr. Adelson
serves as Senior Vice President and Director of the Fund; Mr. Trainer serves as
Senior Vice President of the Fund; and Ms. Reid serves as Secretary of the Fund.
Description of Alliance Capital. Alliance Capital Management L.P., is a
Delaware limited partnership with principal offices at 1345 Avenue of the
Americas, New York, New York 10105. Alliance Capital Management Corporation is
the general partner of Alliance Capital and a wholly-owned subsidiary of The
Equitable Life Assurance Society of the United States ("Equitable"), one of the
largest life insurance companies in the United States. Equitable is in turn a
wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial"), a Delaware
corporation whose shares are traded on the New York Stock Exchange ("NYSE"). AXA
Financial directly and indirectly owns an approximately 62.5% partnership
interest in Alliance Capital. Alliance Holding owns an approximately 35.3%
partnership interest in Alliance Capital. Equity interests in Alliance Holding
are traded on the NYSE in the form of units. Approximately 97.9% of such
interests are owned by the public and management or employees of Alliance
Capital and approximately 2.1% are owned by ACMC, ACMC, Inc. and ECMC LLC, each
of which is a wholly-owned subsidiary of Equitable. AXA Financial serves as the
holding company for Alliance Capital, Equitable and Donaldson, Lufkin &
Jenrette, Inc., an integrated investment and merchant bank. As of June 30, 2000,
AXA, a French insurance holding company, and its subsidiaries owned
approximately 60.3% of the issued and outstanding shares of common stock of AXA
Financial. Alliance Capital is a leading global investment management firm best
known for its growth style of equity investing. Assets under management at March
31, 2000 totaled $394 billion. Alliance Capital manages retirement assets for
many of the largest public and private employee benefit plans (including 28 of
the U.S. Fortune 100 companies), for public employee retirement funds in 31 out
of 50 states, and for foundations, endowments, banks and insurance companies
worldwide. Alliance Capital is also one of America's largest mutual fund
sponsors, with approximately 5.8 million shareholder accounts and a family of
diversified fund portfolios that are distributed globally.
14
<PAGE>
Executive Officers and Directors of Alliance Capital. The following
chart lists the executive officers and directors of Alliance Capital and their
principal occupations, if different from their position(s) with Alliance
Capital.
Position(s) with Alliance and
Principal Occupation if Different
from
Name Position(s) with Alliance
---------------------------------- ------------------------------------
Dave H. Williams Chairman of the Board.
Bruce W. Calvert Vice Chairman and Chief Executive
Officer and Director of ACMC.
John D. Carifa President and Chief Operating Officer
and Director of ACMC.
Alfred Harrison Vice Chairman and Director of ACMC.
601 Second Avenue South
Suite 5000
Minneapolis, MN 55402
David R. Brewer, Jr. Senior Vice President and General
Counsel and Secretary of ACMC.
Robert H. Joseph, Jr. Senior Vice President and Chief
Financial Officer of ACMC.
Luis Javier Bastida Director, ACMC; Head of Global Asset
Management and Private Banking and a member
of the Executive Committee of Banco Bilbao
Vizcaya, Argentina S.A.
Donald H. Brydon Director, ACMC; Chairman and Chief
Executive Officer of AXA Investment
Managers, S.A.
Henri de Castries Director, ACMC; Vice Chairman-AXA
Management Board.
Kevin C. Dolan Director, ACMC; Senior Executive
Vice President, for AXA Investment
Managers, S.A. on a global basis.
Denis Duverne Director, ACMC; Group Executive
Vice President - Finance, Control and
Strategy of AXA.
Herve Hatt Director, ACMC; Senior Vice President -
Asset Management Activities and Group
Strategic Planning of AXA.
15
<PAGE>
Position(s) with Alliance and
Principal Occupation if Different
from
Name Position(s) with Alliance
---------------------------------- ------------------------------------
Michael Hegarty Director, ACMC; Senior Vice
Chairman, Chief Operating Officer and
Director of AXA Financial.
Benjamin D. Holloway Director, ACMC; Consultant to The
Continental Companies.
W. Edwin Jarmain Director, ACMC; President of Jarmain
Group Inc.
Edward D. Miller Director, ACMC; President, Chief
Executive Officer and Director of AXA
Financial.
Peter D. Noris Director, ACMC; Executive Vice
President and Chief Investment Officer
of AXA Financial.
Frank Savage Director, ACMC; Chairman of Alliance
Capital Management International, a
division of Alliance.
Peter J. Tobin Director, ACMC; Dean of the Peter J.
Tobin College of Business
Administration of St. John's University.
Stanley B. Tulin Director, ACMC; Vice Chairman and
Chief Financial Officer of AXA
Financial.
Reba W. Williams Director, ACMC; Director of Special
Projects of ACMC.
Robert B. Zoellick Director, ACMC; Resident Fellow and
Member of the Board of the German
Marshall Fund of the United States;
Research Scholar at the Belfer Center at
Harvard University; Senior International
Advisor at Goldman Sachs & Co.
Unless otherwise noted, the business address of each of the above
listed persons is 1345 Avenue of the Americas, New York, New York 10105.
16
<PAGE>
Information About the Existing Management Agreement
Pursuant to the Existing Management Agreement, Bernstein acts as
investment adviser for each of the Portfolios. Subject to the general oversight
of the Directors, and in conformity with the stated policies of each of the
Portfolios, Bernstein manages the investment of each Portfolio's assets.
Bernstein makes investment decisions for each Portfolio and places purchase and
sale orders.
The following table lists the date the Existing Management Agreement
with respect to each Portfolio was last submitted to a shareholder vote. In each
case, such submission was for the purpose of obtaining initial shareholder
approval of the Existing Management Agreement. The most recent action taken by
the Directors with respect to the Existing Management Agreement was the annual
consideration of renewal on October 7, 1999.
--------------------------------------------------------------------------------
Date Existing Management
Agreement was Last
Submitted to
Portfolio(s) Shareholder Vote
--------------------------------------------------------------------------------
o Bernstein Government Short Duration January 22, 1990
o Bernstein Short Duration Plus
o Bernstein New York Municipal
o Bernstein Diversified Municipal
o Bernstein Intermediate Duration
--------------------------------------------------------------------------------
o Bernstein California Municipal July 30, 1991
--------------------------------------------------------------------------------
o Tax-Managed International Value April 1, 1992
--------------------------------------------------------------------------------
o Short Duration California Municipal May 24, 1994
o Short Duration Diversified Municipal
o Short Duration New York Municipal
--------------------------------------------------------------------------------
o Bernstein Emerging Markets Value October 11, 1995
--------------------------------------------------------------------------------
o Bernstein International Value II February 22, 1999
--------------------------------------------------------------------------------
The annual rate of advisory fees which Bernstein is entitled to receive
from the Fund, and which will be payable to Alliance Capital following the
Closing provided the New Management Agreement is approved by the shareholders of
the Fund, is set forth below in the following section.
Information About the New Management Agreement
As stated above, the form of New Management Agreement is annexed to
this Proxy Statement as Exhibit A.
The New Management Agreement is substantially similar to the Existing
Management Agreements, except as to the identity of Alliance Capital as the
investment adviser and the effective
17
<PAGE>
date. In addition, the annual fee rate for each of the International Value
Portfolios will include two additional breakpoints. Subject to the general
oversight of the Directors, and in conformity with the stated policies of each
of the Portfolios, Alliance Capital shall manage the investment of each
Portfolio's assets, make investment decisions for each Portfolio and place
purchase and sale orders. The scope of services to be provided by Alliance
Capital under the New Management Agreement is identical to that provided by
Bernstein under the Existing Management Agreement. (Bernstein and Alliance
Capital are hereinafter sometimes referred to as an "Adviser.")
Under both the Existing and New Management Agreements (collectively,
the "Management Agreements"), each Portfolio of the Fund is responsible for the
payment of its expenses and an allocable share of the common expenses of the
Fund, including: (i) the fees payable to the Adviser under the Management
Agreement and the Shareholder Servicing and Administrative Agreement; (ii) the
fees and expenses of Directors who are not affiliated with the Adviser; (iii)
the fees and expenses of the custodian and transfer agent, including, but not
limited to, fees and expenses relating to fund accounting, pricing of fund
shares, and computation of net asset value; (iv) the fees and expenses of
calculating yield and/or performance pursuant to any independent servicing
agreement; (v) the charges and expenses of legal counsel and independent
accountants; (vi) all taxes and corporate fees payable to governmental agencies;
(vii) the fees of any trade association of which the Fund is a member; (viii)
reimbursement of each Portfolio's share of the organization expenses of the
Fund; (ix) the fees and expenses involved in registering and maintaining
registration of the Fund and the Portfolios' shares with the Securities and
Exchange Commission, registering the Fund as a broker or dealer and qualifying
the shares of the Portfolios under state securities laws, including the
preparation and printing of the registration statements and prospectuses for
such purposes, allocable communications expenses with respect to investor
services, all expenses of shareholders' and Board of Directors' meetings and
preparing, printing and mailing proxies, prospectuses and reports to
shareholders; (x) brokers' commissions, dealers' markups, and any issue or
transfer taxes chargeable in connection with the Portfolios' securities
transactions; (xi) the cost of stock certificates representing shares of the
Portfolios; (xii) insurance expenses, including, but not limited to, the cost of
a fidelity bond, directors' and officers' insurance, and errors and omissions
insurance; and (xiii) litigation and indemnification expenses, expenses incurred
in connection with mergers, and other extraordinary expenses not incurred in the
ordinary course of the Portfolios' business.
The New Management Agreement provides that as compensation for its
services, Alliance Capital will receive from each Portfolio a fee, computed
daily and payable monthly, based on the average daily net assets of each
Portfolio. The following table sets forth the rate of the management fee payable
by each Portfolio under the New Management Agreement and the total management
fees earned by Bernstein from each Portfolio pursuant to the Existing Management
Agreement for the most recently completed fiscal year.
The annual rate of the management fee under the New Management
Agreement is the same rate that was in effect under the Existing Management
Agreements, except for the International Value Portfolios, the fee rates for
which will include two additional breakpoints under the New Management
Agreement.
18
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Management Fee (as a Amount Paid for the
Portfolio percentage of daily net assets) Year Ended September 30, 1999
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bernstein Government Short 0.50% on the first $1 billion and $663,855
Duration 0.45% on assets over $1 billion
---------------------------------------------------------------------------------------------------------------
Bernstein Short Duration Plus 0.50% on the first $1 billion and $2,847,005
0.45% on assets over $1 billion
---------------------------------------------------------------------------------------------------------------
Bernstein Intermediate Duration 0.50% on the first $1 billion and $12,207,162
0.45% on assets over $1 billion
---------------------------------------------------------------------------------------------------------------
Bernstein Short Duration New 0.50% of net assets $459,860
York Municipal
---------------------------------------------------------------------------------------------------------------
Bernstein Short Duration 0.50% of net assets $488,910
California Municipal
---------------------------------------------------------------------------------------------------------------
Bernstein Short Duration 0.50% of net assets $839,410
Diversified Municipal
---------------------------------------------------------------------------------------------------------------
Bernstein New York Municipal 0.50% on the first $1 billion and $4,218,345
0.45% on assets over $1 billion
---------------------------------------------------------------------------------------------------------------
Bernstein California Municipal 0.50% on the first $1 billion and $2,931,770
0.45% on assets over $1 billion
---------------------------------------------------------------------------------------------------------------
Bernstein Diversified Municipal 0.50% on the first $1 billion and $7,059,916
0.45% on assets over $1 billion
---------------------------------------------------------------------------------------------------------------
Bernstein Tax-Managed 1.00% on the first $1 billion $43,123,530**
International Value .90% on the next $3 billion
.875% on the next $2 billion and
.85% on assets over $6 billion*
---------------------------------------------------------------------------------------------------------------
Bernstein International Value II+ 1.00% on the first $1 billion $9,459,285**
.90% on the next $3 billion
.875% on the next $2 billion and
.85% on assets over $6 billion*
---------------------------------------------------------------------------------------------------------------
Bernstein Emerging Markets 1.25% of net assets $7,259,085
Value
---------------------------------------------------------------------------------------------------------------
Total $91,558,133
---------------------------------------------------------------------------------------------------------------
</TABLE>
+ Commenced operations on April 30, 1999.
* Under the Existing Management Agreement, Bernstein is entitled to a
management fee of 1.00% up to but not exceeding $1 billion and 0.90%
over $1 billion (as a percentage of daily net assets).
** Had the New Management Agreement been in existence for the fiscal year
ended September 30, 1999, the Portfolio would have paid Bernstein the
same dollar amount of management fees. This is because the effect of
the lower fee rates, as reflected in the New Management Agreement, will
be on those assets of each Portfolio that are over $4 billion and the
assets of each Portfolio have not yet reached $4 billion.
Under the terms of both Management Agreements, the Adviser shall not be
liable to the Fund or the Portfolios for any error of judgment by the Adviser or
for any loss sustained by the Fund or the Portfolios, except in the case of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations and duties under the agreement.
19
<PAGE>
If approved by the shareholders, the New Management Agreement will
continue in effect for a period of two years from the Closing, and from year to
year thereafter for so long as such renewal is specifically approved at least
annually by (i) the vote of a majority of the Board, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
each relevant Portfolio, and (ii) the vote of a majority of Directors who are
not parties to the New Management Agreement or interested persons (as defined in
the 1940 Act) of any such party, cast in person, at a meeting called for the
purpose of voting on such approval. The New Management Agreement provides that
it may be terminated by either party without penalty upon the specified written
notice contained in the New Management Agreement. The New Management Agreement
also provides for automatic termination upon assignment.
Brokerage Commissions
The following table sets forth the brokerage commissions paid by the
Portfolios and the amounts of the brokerage commissions which were paid to
Bernstein as an affiliated broker-dealer of such Portfolios for the most
recently completed fiscal year.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Amount Paid to
Affiliated
Broker-Dealers
As a Percentage
of Portfolio's
Aggregate Amount Paid to Aggregate
Brokerage Affiliated Brokerage
Portfolio Commissions Broker-Dealers Commissions
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bernstein Government Short $0 - --
Duration
----------------------------------------------------------------------------------------
Bernstein Short Duration Plus $0 - --
----------------------------------------------------------------------------------------
Bernstein Intermediate Duration $0 - --
----------------------------------------------------------------------------------------
Bernstein Short Duration New $0 - --
York Municipal
----------------------------------------------------------------------------------------
Bernstein Short Duration $0 - --
California Municipal
----------------------------------------------------------------------------------------
Bernstein Short Duration $0 - --
Diversified Municipal
----------------------------------------------------------------------------------------
Bernstein New York Municipal $0 - --
----------------------------------------------------------------------------------------
Bernstein California Municipal $0 - --
----------------------------------------------------------------------------------------
Bernstein Diversified Municipal $0 - --
----------------------------------------------------------------------------------------
Bernstein Tax-Managed $7,858,036 $0 0%
International Value
----------------------------------------------------------------------------------------
Bernstein International Value II $1,561,250 $0 0%
----------------------------------------------------------------------------------------
Bernstein Emerging Markets $1,793,774 $90,581 5.05%
Value
----------------------------------------------------------------------------------------
Total $11,213,060 $90,581 0.81%
----------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 2
If Proposal No. 2 is not approved by the shareholders of any Portfolio
and the Closing is effectuated, the Directors will determine the appropriate
actions to be taken with respect to such Portfolio's management arrangements at
that time.
----------------------------
APPROVAL OR DISAPPROVAL OF A NEW SHAREHOLDER SERVICING AND
ADMINISTRATIVE AGREEMENT BETWEEN THE FUND AND ALLIANCE
CAPITAL
PROPOSAL No. 3
The Board of the Fund is submitting for approval by the shareholders of
each Portfolio a new Shareholder Servicing and Administrative Agreement (the
"New Administrative Agreement") between the Fund, on behalf of each respective
Portfolio, and Alliance Capital, the terms of which are substantially similar to
the current Shareholder Servicing and Administrative Agreement with respect to
each Portfolio (collectively, the "Existing Administrative Agreement"). There
are two principal differences between the Existing and New Shareholder Servicing
and Administrative Agreements. The first difference is that the New
Administrative Agreement is with Alliance Capital instead of Bernstein. The
second difference is that the New Administrative Agreement does not require
Alliance Capital to process share purchase and redemption requests. Rather, this
function will be provided at no additional cost to the Fund, the Portfolios or
shareholders by Bernstein LLC, which will become the Fund's distributor
following the closing, pursuant to the terms of a new distribution agreement.
The Existing Administrative Agreement provides for automatic
termination upon assignment. The Closing will result in an assignment, as that
term is defined in the 1940 Act, of the Existing Administrative Agreement, and,
consequently, its termination. Although shareholder approval of the New
Administrative Agreement is not technically required under the 1940 Act, the
Directors have proposed that the New Administrative Agreement with Alliance
Capital, to take effect upon the Closing, be submitted for approval by the
shareholders of each Portfolio.
Approval of the New Shareholder Servicing and Administrative Agreement
At a meeting held on July 20, 2000, the Board of Directors of the Fund,
including all of the Disinterested Directors, unanimously approved the New
Administrative Agreement. In connection with this approval, the Directors
considered that there will be no increase in the rate of fees to be paid under
the New Administrative Agreement from those payable under the Existing
Administrative Agreement. The Directors considered that the processing of
purchase and redemption requests will not be handled under the New
Administrative Agreement but rather under a new distribution agreement with
Bernstein LLC. The Directors thus determined that the elimination of this
service from the New Administrative Agreement would not result in additional
cost to the Fund, the
21
<PAGE>
Portfolios or shareholders. The Directors also took into account the factors
discussed under "Approval of the New Management Agreement" in Proposal No. 2.
Recommendation of the Directors
Based on the considerations described above, the Directors, including
all of the Disinterested Directors, unanimously determined that it was necessary
and in the best interests of the Fund and its shareholders to enter into the New
Administrative Agreement and to recommend approval of the New Administrative
Agreement by shareholders.
Information About the New Administrative Agreement
As stated above, the form of New Administrative Agreement is annexed to
this Proxy Statement as Exhibit B.
The New Administrative Agreement is substantially similar to the
Existing Administrative Agreement, except as to the identity of the service
provider, the effective date and the elimination of one service, which will
instead be performed by the Fund's distributor. Subject to the general oversight
of the Directors, and in conformity with the stated policies of each of the
Portfolios, under both the New and Existing Administrative Agreements, Bernstein
or Alliance Capital, as the case may be (the "Administrator") provides
shareholder servicing to the Fund, the Portfolio, or its shareholders,
including, (i) proxy solicitations and providing information to shareholders
concerning their mutual fund investments; and (ii) dealing with shareholder
complaints and correspondence. The Administrator may enter into agreements with
other organizations whereby some or all of its duties in this regard may be
delegated. Under both the New and Existing Administrative Agreements, the
Administrator also manages the corporate affairs of each Portfolio, including
(i) providing office facilities, clerical and administrative services which are
not provided by State Street Bank and Trust Company, the Fund's Custodian and
Transfer Agent; (ii) supervising those responsible for the financial and
accounting records required to be maintained by the Fund; and (iii) overseeing
the performance of services provided to the Fund by others.
The New Administrative Agreement provides that as compensation for its
services, Alliance Capital will receive from each Portfolio a fee, computed
daily and payable monthly, based on the average daily net assets of each
Portfolio. The annual rate of the fee under the New Administrative Agreement is
the same rate that was in effect under the Existing Administrative Agreement.
The following table sets forth the rate of the fee payable by each Portfolio
under the New Administrative Agreement and the total fees incurred by Bernstein
from each Portfolio pursuant to the Existing Administrative Agreement for the
most recently completed fiscal year.
22
<PAGE>
-----------------------------------------------------------------------
Amount Paid to
Bernstein Under the
Existing
Administrative
Portfolio Fee Rate Agreement
-----------------------------------------------------------------------
Bernstein Government Short 0.10% $132,771
Duration
-----------------------------------------------------------------------
Bernstein Short Duration Plus 0.10% $569,401
-----------------------------------------------------------------------
Bernstein Intermediate Duration 0.10% $2,601,592
-----------------------------------------------------------------------
Bernstein Short Duration New 0.10% $91,972
York Municipal
-----------------------------------------------------------------------
Bernstein Short Duration 0.10% $97,782
California Municipal
-----------------------------------------------------------------------
Bernstein Short Duration 0.10% $167,882
Diversified Municipal
-----------------------------------------------------------------------
Bernstein New York Municipal 0.10% $843,669
-----------------------------------------------------------------------
Bernstein California Municipal 0.10% $586,354
-----------------------------------------------------------------------
Bernstein Diversified Municipal 0.10% $1,457,759
-----------------------------------------------------------------------
Bernstein Tax-Managed 0.25% $11,539,641
International Value
-----------------------------------------------------------------------
Bernstein International Value II+ 0.25% $2,511,141
-----------------------------------------------------------------------
Bernstein Emerging Markets 0.25% $1,451,817
Value
-----------------------------------------------------------------------
Total $22,051,781
-----------------------------------------------------------------------
+ Commenced operations on April 30, 1999.
Under the terms of both the New and Existing Administrative Agreements,
the Administrator shall not be liable to the Fund or the Portfolios for any
error of judgment or mistake of law or for any loss arising out of the
performance or non-performance of duties under the applicable agreement, except
for willful misfeasance, bad faith or gross negligence in the performance of, or
by reason of reckless disregard of, obligations and duties under the agreement.
If approved by the shareholders, the New Administrative Agreement will
continue in effect for a period of two years from the Closing, and from year to
year thereafter for so long as such renewal is specifically approved at least
annually by (i) the vote of a majority of the Board, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
each relevant Portfolio, and (ii) the vote of a majority of Directors who are
not parties to the New Administrative Agreement or interested persons (as
defined in the 1940 Act) of any such party, cast in person, at a meeting called
for the purpose of voting on such approval. The New Administrative Agreement
provides that it may be terminated by either party without penalty upon the
specified written notice contained in the New Administrative Agreement. The New
Administrative Agreement also provides for automatic termination upon
assignment.
23
<PAGE>
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 3
If Proposal No. 3 is not approved by the shareholders of any Portfolio
and the Closing is effectuated, the Directors will determine the appropriate
actions to be taken with respect to such Portfolio's shareholder service and
administrative arrangements at that time.
---------------------------
APPROVAL OR DISAPPROVAL OF ELIMINATION OF FUNDAMENTAL
INVESTMENT RESTRICTION RELATING TO INVESTMENT IN ILLIQUID
SECURITIES, AND REPLACEMENT WITH A NON-FUNDAMENTAL RESTRICTION
(Bernstein Government Short Duration, Bernstein Short Duration Plus, Bernstein
Intermediate Duration, Bernstein New York Municipal, Bernstein Diversified
Municipal and Bernstein California Municipal Portfolios only)
PROPOSAL No. 4
Subject to approval by the shareholders at the Meeting, the Board of
the Fund at a meeting held on July 20, 2000 approved a proposal, with respect to
the Portfolios listed above, to eliminate a fundamental investment restriction
concerning investment in illiquid securities, including securities that are not
readily marketable and/or securities subject to certain restrictions on
disposition ("restricted securities") under the Securities Act of 1933, as
amended (the "Securities Act"). The Directors have also approved a proposal to
replace each applicable Portfolio's fundamental investment restriction relating
to illiquid securities (assuming elimination of such restriction is approved by
the applicable Portfolio's shareholders) with a non-fundamental investment
limitation relating to illiquid securities generally, as described below. This
will result in all of the Fund's Portfolios being subject to the same policy
relating to illiquid securities.
Proposed Change
Shareholders of each of the named Portfolios are being asked to approve
the elimination of the Portfolio's fundamental investment restriction relating
to investment in illiquid securities, and the replacement of such fundamental
policy with a non-fundamental policy as follows:
24
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Proposed Non-Fundamental
Investment Restriction Investment Limitation
-------------------------------------------- -------------------------------------------
<S> <C>
Each applicable Portfolio may not: Each applicable Portfolio may not:
Purchase any security if, as a result, Purchase any security if, as a result, the
the Portfolio would then have more Portfolio would then have more than
than 10% of its net assets (at current 15% of its net assets (at current value)
value) invested in securities restricted invested in securities restricted as to
as to disposition under federal disposition under federal securities
securities laws or otherwise illiquid laws (excluding restricted securities
or not readily marketable, including eligible for resale pursuant to Rule
repurchase agreements with maturities 144A under the Securities Act of 1933("144A
of more than 7 days. Securities") that have been determined
to be liquid under procedures
adopted by the Board of
Directors based on the trading
market for the security) or
otherwise illiquid or not
readily marketable, including
repurchase agreements with
maturities of more than 7 days.
</TABLE>
Discussion
Approval of this Proposal No. 4 will result in changing each applicable
Portfolio's investment restriction relating to illiquid securities from a
fundamental restriction, which may be changed only with both board and
shareholder approval, to a non-fundamental investment limitation, which may be
changed by the Directors without shareholder approval. The Directors believe
that this change will benefit the Portfolios by permitting them to respond more
quickly (and without the expense of a shareholders' meeting) to future legal,
regulatory and market developments regarding illiquid securities.
The proposed amendment to each applicable Portfolio's investment
restriction would also allow the Portfolio to increase the percentage of its
assets that currently may be invested in illiquid or restricted securities from
10% to 15%. The proposed amendment would permit a Portfolio more flexibility to
make investments. For example, approval of this Proposal No. 4 will permit each
Portfolio to take greater advantage of Rule 144A under the Securities Act ("Rule
144A"). Restricted securities traded under Rule 144A may be treated as liquid
for purpose of a Portfolio's investment limitations if the Board of Directors
determines that the securities are, in fact, liquid. Rule 144A was adopted to
facilitate efficient trading among institutional investors and allows for a
broader institutional trading market for certain restricted securities.
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 4
25
<PAGE>
Disapproval of Proposal No. 4 by shareholders of one Portfolio will not
affect the approval of Proposal No. 4 by any other Portfolio.
---------------------------
APPROVAL OR DISAPPROVAL OF ELIMINATION OF FUNDAMENTAL
INVESTMENT RESTRICTION RELATING TO INVESTMENT IN SECURITIES OF
UNSEASONED ISSUERS
(Bernstein Government Short Duration, Bernstein Short Duration Plus, Bernstein
Intermediate Duration, Bernstein New York Municipal, Bernstein Diversified
Municipal and Bernstein California Municipal Portfolios only)
PROPOSAL No. 5
Subject to approval by the shareholders at the Meeting, the Board of
the Fund at a meeting held on July 20, 2000 approved a proposal, with respect to
the Portfolios listed above, to eliminate a fundamental investment restriction
concerning investment in securities of companies less than three years old
("unseasoned issuers"). This will allow all of the Fund's Portfolios to have a
consistent policy on unseasoned issuers and eliminate a fundamental investment
restriction with no demonstrable investor protection purpose in the context of
the named Portfolios.
Proposed Change
Shareholders of each of the named Portfolios are being asked to approve
the elimination of the Portfolio's fundamental investment restriction relating
to investment in unseasoned issuers. Currently, such fundamental investment
restriction states that the applicable Portfolios may not:
Purchase any security if, as a result, the Portfolio would then have
more than 5% of its total assets (taken at current value) invested in
securities of companies (including predecessors) less than three years
old.
Discussion
Approval of this Proposal No. 5 will result in eliminating each
applicable Portfolio's investment restriction relating to investment in
unseasoned issuers. In the past, the securities laws of some states imposed
limitations on a fund's ability to invest in companies which had been in
business for less than three years. However, these laws are no longer in effect.
The Portfolios of the Fund which commenced operations after the elimination of
these laws do not impose any fundamental restriction on investment in unseasoned
issuers. The concept of "unseasoned issuer" is not generally applicable to the
kinds of fixed-income securities in which each named Portfolio primarily
invests, particularly given the credit analysis that is performed in connection
with all securities purchased for the Portfolios. Rather, management believes
that the purpose of the fundamental restriction limiting investment in
unseasoned issuers was to minimize the risks of investing in equity securities
of small companies with developing products or inexperienced
26
<PAGE>
management. The elimination of this restriction with respect to the Portfolios
listed above will thus result in a consistent policy for all of the Fund's
Portfolios, without sacrificing any investment protection for shareholders of
the named Portfolios. Therefore, the Board has recommended eliminating this
fundamental restriction relating to unseasoned issuers.
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 5
Disapproval of Proposal No. 5 by shareholders of one Portfolio will not
affect the approval of Proposal No. 5 by any other Portfolio.
----------------------------
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
PROPOSAL No. 6
Subject to ratification by the shareholders at the Meeting, the Board
of the Fund (including all the Disinterested Directors) at a meeting held on
October 7, 1999 approved the selection of PricewaterhouseCoopers LLP as the
independent accountants for the fiscal year ending September 30, 2000.
The firm of PricewaterhouseCoopers LLP has extensive experience in
investment company accounting and auditing and has served as independent
accountants to the Fund since its inception. The financial statements included
in the Fund's Annual Report have been examined by PricewaterhouseCoopers LLP. It
is not expected that a representative of PricewaterhouseCoopers LLP will be
present at the Meeting.
PricewaterhouseCoopers LLP and its members do not have any direct or
indirect material financial interest in or connection with a Fund in any
capacity other than as independent accountants.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 6
-------------------------------
GENERAL INFORMATION
OTHER MATTERS
The Directors know of no matters to be presented at the Meeting other
than those specified in the attached Notice of Meeting. However, if any other
matters come before the Meeting, it is intended that the proxies will vote
thereon in their discretion.
27
<PAGE>
SHAREHOLDER PROPOSALS AND SHAREHOLDER MEETINGS
Notwithstanding the approval or disapproval of the proposals described
above, as in the past, the Board does not intend to hold annual meetings of
shareholders of the Fund. The Board will call a meeting of shareholders as may
be required under the 1940 Act (such as to approve a new management agreement
for the Fund) or as they may determine in their discretion. The Board will call
a meeting of shareholders to elect additional Directors if more than 50% of the
Directors were not elected by shareholders. The By-laws of the Fund require the
Board to call a meeting of shareholders when requested in writing to do so by
shareholders entitled to vote not less than 25% of all the votes entitled to be
cast at meeting. In addition, pursuant to Section 16(c) of the 1940 Act, a
meeting requested exclusively for the stated purpose of removing a Director
shall be called when requested in writing to do so by the record holders of not
less than 10% of the outstanding shares. However, no meeting need be called upon
the request of the holders of shares entitled to cast less than a majority of
all votes entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any meeting of the same
shareholders held during the preceding twelve months. If a shareholder wishes to
present a proposal to be included in the proxy statement for the next meeting of
shareholders of the Fund, such proposal must be received by the Fund a
reasonable time before the solicitation is to be made.
Reports to Shareholders and Financial Statements
The Fund will furnish, without charge, a copy of the most recent Annual
and Semi-Annual Report to Shareholders of the Fund. Copies of such reports may
be obtained by contacting the Fund in writing at the address on the cover of
this Proxy Statement, or by calling (212) 756-4097 collect.
SHAREHOLDERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE PROXY CARD(S)
AND RETURN IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE. SHAREHOLDERS ALSO HAVE
THE OPTION TO PROVIDE THEIR VOTE BY CALLING AN AGENT OF THE FUND OR SHAREHOLDERS
MAY VOTE BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE
INSERT ACCOMPANYING THE PROXY CARD(S).
Board of Directors,
Sanford C. Bernstein Fund, Inc.
August 8, 2000
28
<PAGE>
EXHIBIT LIST
Exhibit A Form of New Management Agreement Between the Fund and Alliance
Capital
Exhibit B Form of New Administrative Agreement Between the Fund and
Alliance Capital
29
<PAGE>
EXHIBIT A
---------
SANFORD C. BERNSTEIN FUND, INC.
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT, dated as of [ ] between SANFORD C.
BERNSTEIN FUND, INC., a Maryland Corporation, (the "Fund"), on behalf of the
Bernstein Government Short Duration Portfolio, the Bernstein Short Duration
Plus Portfolio, the Bernstein Intermediate Duration Portfolio, the Bernstein
Diversified Municipal Portfolio, the Bernstein California Municipal
Portfolio, the Bernstein New York Municipal Portfolio, the Bernstein Short
Duration Diversified Municipal Portfolio, the Bernstein Short Duration
California Municipal Portfolio, the Bernstein Short Duration New York
Municipal Portfolio, the Bernstein Tax-Managed International Value Portfolio,
the Bernstein International Value Portfolio II, and the Bernstein Emerging
Markets Value Portfolio (the "Portfolios") and ALLIANCE CAPITAL MANAGEMENT
L.P., a Delaware Limited Partnership (the "Adviser" or "Alliance").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Duties of the Adviser. The Adviser shall manage the investment
operations of the Portfolios and the Fund including, but not limited to,
continuously providing the Portfolios with investment management, including
investment research, advice and supervision, determining which securities or
other investments including, but not limited to, debt and equity securities,
options, and futures and options on futures, shall be purchased or sold by the
Portfolios, making purchases and sales of securities and such other investments
on behalf of the Portfolios and determining how voting and other rights with
respect to securities and other investments owned by the Fund on behalf of the
Portfolios shall be exercised, subject in each case to oversight by the Board of
Directors of the Fund (the "Directors" or the "Board") and in accordance with
the investment objectives and policies of the Fund and of the Portfolios set
forth in the Registration Statement and the current Prospectus and Statement of
Additional Information relating to the Fund or the Portfolio, as amended from
time to time, the requirements of the Investment Company Act of 1940, as amended
(the "Act") and other applicable law. The Fund understands that the Adviser may
also act as the investment manager to other persons or entities, including other
investment companies.
2. Limitation of Liability. Subject to Section 36 of the Act, the Adviser
and the directors, officers and employees of the Adviser, shall not be liable to
the Fund or the Portfolios for any error of judgment or mistake of law or for
any loss arising out of any investment or the performance or non-performance of
duties under this Agreement, except for willful misfeasance, bad faith or gross
negligence in the performance of, or by reason of reckless disregard of,
obligations and duties under this Agreement.
3. Indemnification. The Fund, on behalf of the Portfolio, shall indemnify
and hold harmless the Adviser and the directors, officers, and employees of the
Adviser, against any loss, liability, claim, damage or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damage or expenses and reasonable counsel fees incurred in connection
therewith) arising out of the performance or non-performance of any duties under
this
30
<PAGE>
Agreement, provided, however, that nothing herein shall be deemed to protect the
Adviser or any director, officer or employee thereof against any liability to
the Fund or its stockholders, to which the Adviser or any director, officer or
employee thereof would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties under this Agreement.
4. Expenses. The Adviser shall pay all of its expenses arising from the
performance of its obligations under Section 1 of this Agreement and shall pay
any salaries, fees and expenses of the Directors who are employees of the
Adviser. The Adviser shall not be required to pay any other expenses of the Fund
or a Portfolio, including (a) the fees payable to Alliance under this Agreement
and the Shareholder Servicing and Administrative Agreement; (b) the fees and
expenses of Directors who are not affiliated with Alliance; (c) the fees and
expenses of the Custodian and Transfer Agent including but not limited to fees
and expenses relating to Fund accounting, pricing of the Portfolios' shares, and
computation of net asset value; (d) the fees and expenses of calculating yield
and/or performance of the Portfolios; (e) the charges and expenses of legal
counsel and independent accountants; (f) all taxes and corporate fees payable to
governmental agencies; (g) the fees of any trade association of which the Fund
is a member; (h) reimbursement of the Portfolios' share of the organization
expenses of the Portfolios or the Fund; (i) the fees and expenses involved in
registering and maintaining registration of the Fund and the shares of the
Portfolios with the Securities and Exchange Commission, registering the Fund as
a broker or dealer and qualifying the shares of the Portfolios under state
securities laws, including the preparation and printing of the registration
statements and prospectuses for such purposes, allocable communications expenses
with respect to investor services, all expenses of shareholders' and Board of
Directors' meetings and preparing, printing and mailing proxies, prospectuses
and reports to shareholders; (j) brokers' commissions, dealers' mark-ups and any
issue or transfer taxes chargeable in connection with the Portfolios'
transactions; (k) the cost of stock certificates representing shares of the
Portfolios; (l) insurance expenses, including, but not limited to, the cost of a
fidelity bond, directors and officers insurance and errors and omissions
insurance; and (m) litigation and indemnification expenses, expenses incurred in
connection with mergers, and other extraordinary expenses not incurred in the
ordinary course of the Portfolios' business.
5. Compensation.
(a) As compensation for the services performed and the facilities and
personnel provided by the Adviser pursuant to Section 1 of this Agreement, the
Fund, on behalf of the Bernstein Government Short Duration Portfolio, the
Bernstein Short Duration Plus Portfolio, the Bernstein Intermediate Duration
Portfolio, the Bernstein Diversified Municipal Portfolio, the Bernstein
California Municipal Portfolio, and the Bernstein New York Municipal Portfolio,
will pay the Adviser, promptly after the end of each month:
1. A fee assessed at an annual rate of .50 of 1% of the amount of each
Portfolio's average daily net assets that is up to, but not
exceeding, $1,000,000,000; and
31
<PAGE>
2. A fee assessed at an annual rate of .45 of 1% of the amount of each
Portfolio's average daily net assets that exceeds $1,000,000,000.
If the Adviser shall serve hereunder for less than the whole of any month,
the fee hereunder shall be prorated.
(b) As compensation for the services performed and the facilities and
personnel provided by the Adviser pursuant to Section 1 of this Agreement, the
Fund, on behalf of the Bernstein Short Duration Diversified Municipal Portfolio,
the Bernstein Short Duration California Municipal Portfolio, and the Bernstein
Short Duration New York Municipal Portfolio, will pay the Adviser, promptly
after the end of each month a fee assessed at an annual rate of .50 of 1% of the
average daily net assets of each Portfolio during the month. If the Adviser
shall serve hereunder for less than the whole of any month, the fee hereunder
shall be prorated.
(c) As compensation for the services performed and the facilities and
personnel provided by the Adviser pursuant to Section 1 of this Agreement, the
Fund, on behalf of the Bernstein Tax-Managed International Value Portfolio, and
the Bernstein International Value Portfolio II, will pay the Adviser, promptly
after the end of each month:
1. A fee assessed at an annual rate of 1% of the amount of the
Portfolio's average daily net assets that is up to, but not
exceeding, $1,000,000,000;
2. A fee assessed at an annual rate of .90 of 1% of the amount of the
Portfolio's average daily net assets that is in excess of
$1,000,000,000 up to, but not exceeding, $4,000,000,000;
3. A fee assessed at an annual rate of .875 of 1% of the amount of the
Portfolio's average daily net assets that is in excess of
$4,000,000,000 up to, but not exceeding, $6,000,000,000; and
4. A fee assessed at an annual rate of .85 of 1% of the Portfolio's
average daily net assets that exceed $6,000,000,000.
If the Adviser shall serve hereunder for less than the whole of any month,
the fee hereunder shall be prorated.
(d) As compensation for the services performed and the facilities and
personnel provided by the Adviser pursuant to Section 1 of this Agreement, the
Fund, on behalf of the Bernstein Emerging Markets Value Portfolio, will pay to
the Adviser, promptly after the end of each month, a fee assessed at an annual
rate of 1.25% of the average daily net assets of the Portfolio during the month.
If the Adviser shall serve hereunder for less than the whole of any month, the
fee hereunder shall be prorated.
6. Purchase and Sale of Securities. The Adviser shall purchase securities
from or through and sell securities to or through such persons, brokers, or
dealers as the Adviser shall deem appropriate in order to carry out the policy
with respect to portfolio transactions as set forth in the Registration
Statement and the current Prospectus or Statement of Additional Information
covering the respective Portfolios, as amended from time to time, or as the
Directors may direct from time to time. Nothing herein shall prohibit the
Directors from approving the payment by the Fund of additional compensation to
others for consulting services, supplemental research and security and economic
analysis.
32
<PAGE>
7. Term of Agreement. This Agreement shall continue in effect with respect
to any Portfolio for a period of more than two years from the date hereof only
so long as such continuance is specifically approved at least annually in
conformity with the requirements of the Act with regard to investment advisory
contracts; provided, however, that this Agreement may be terminated at any time
without the payment of any penalty, on behalf of any or all of the Portfolios,
by the Fund, by the Board or, with respect to any Portfolio, by vote of a
majority of the outstanding voting securities (as defined in the Act) of any
Portfolio, or by the Adviser on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall terminate automatically
in the event of its assignment (as defined in the Act).
8. Miscellaneous. The Fund hereby agrees that if at any time the Adviser
shall cease to act as investment adviser to any Portfolio or to the Fund, at the
request of the Adviser (or its successor) the Fund shall take all steps
necessary under law to change its corporate name to delete the reference to
Sanford C. Bernstein or to delete the reference to Bernstein from the name of
the Portfolio, and shall thereafter refrain from using such name with reference
to any such Portfolio and, if applicable, the Fund.
This Agreement contains the entire agreement between the parties hereto
and supersedes all prior agreements, understandings and arrangements with
respect to the subject matter hereof. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Anything herein
to the contrary notwithstanding, this Agreement shall not be construed to
require, or to impose any duty upon, either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund, on behalf of the Portfolios, and the Adviser
have caused this Agreement to be executed by their duly authorized officers as
of the date first above written.
SANFORD C. BERNSTEIN FUND, INC.
By:
--------------------------------
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management Corporation, General Partner
By:
--------------------------------
33
<PAGE>
EXHIBIT B
---------
SANFORD C. BERNSTEIN FUND, INC.
SHAREHOLDER SERVICING AND ADMINISTRATIVE AGREEMENT
SHAREHOLDER SERVICING AND ADMINISTRATIVE AGREEMENT, dated as of ( ),
between SANFORD C. BERNSTEIN FUND, INC., a Maryland Corporation (the "Fund"), on
behalf of the Bernstein Government Short Duration Portfolio, the Bernstein Short
Duration Plus Portfolio, the Bernstein Intermediate Duration Portfolio, the
Bernstein Diversified Municipal Portfolio, the Bernstein California Municipal
Portfolio, the Bernstein New York Municipal Portfolio, the Bernstein Short
Duration Diversified Municipal Portfolio, the Bernstein Short Duration
California Municipal Portfolio, the Bernstein Short Duration New York Municipal
Portfolio, the Bernstein Tax-Managed International Value Portfolio, the
Bernstein International Value Portfolio II, and the Bernstein Emerging Markets
Value Portfolio (the "Portfolios"), and ALLIANCE CAPITAL MANAGEMENT L.P., a
Delaware limited partnership ("Alliance").
In consideration of the mutual agreements herein made, the parties hereto agree
as follows:
1. Duties of Alliance.
a. Shareholder Servicing.
Alliance shall provide shareholder servicing to the Fund, the Portfolios, or
their shareholders, including, but not limited to: (i) proxy solicitations and
providing information to shareholders concerning their mutual fund investments,
systematic withdrawal plans, dividend payments and reinvestments, shareholder
account or transaction status, net asset value of shares, Portfolio performance,
Fund services, plans and options, investment policies, Portfolio holdings and
distributions and the taxation thereof; and (ii) dealing with shareholder
complaints and correspondence directed to or brought to the attention of
Alliance. Alliance may enter into agreements with other organizations whereby
some or all of Alliance's duties in this regard may be delegated, and such
organizations will be compensated therefor by Alliance.
b. Administration.
Alliance shall also manage the corporate affairs of the Fund and the Portfolios
including, but not limited to (i) providing office space, clerical, secretarial,
and administrative services (exclusive of, and in addition to, any such service
provided by any others retained by the Fund on behalf of the Portfolios) and
executive and other personnel necessary for the operations of the Fund and of
the Portfolios, (ii) supervising those responsible for the financial and
accounting records required to be maintained by the Fund and (iii) overseeing
the performance of services provided to the Fund on behalf of the Portfolios by
others, including the Custodian and Transfer Agent. Alliance's performance of
its duties under this Agreement shall be subject in each case to oversight by
the Board of Directors of the Fund (the "Board") and in accordance with the
objectives and policies set forth in the Registration Statement and the current
Prospectus and Statement of Additional Information relating to the Fund or the
Portfolios, as amended from
37
<PAGE>
time to time, the requirements of the Investment Company Act of 1940, as amended
(the "Act") and other applicable law.
2. Limitation of Liability. Subject to Section 36 of the Act, Alliance, and the
directors, officers and employees of Alliance, shall not be liable to the Fund
or the Portfolios for any error of judgment or mistake of law or for any loss
arising out of the performance or non-performance of duties under this
Agreement, except for willful misfeasance, bad faith or gross negligence in the
performance of, or by reason of reckless disregard of, obligations and duties
under this Agreement.
3. Indemnification. The Fund, on behalf of the Portfolios, shall indemnify and
hold harmless Alliance, and the directors, officers, and employees of Alliance,
against any loss, liability, claim, damage or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damage or
expenses and reasonable counsel fees incurred in connection therewith) arising
out of the performance or non-performance of any duties under this Agreement,
provided, however, that nothing herein shall be deemed to protect Alliance or
any director, officer or employee thereof against any liability to the Fund or
its stockholders, to which Alliance or any director, officer or employee thereof
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement.
4. Expenses. Alliance shall pay all of its expenses arising from the performance
of its obligations under Section 1 of this Agreement and shall pay any salaries,
fees and expenses of the Directors who are employees of Alliance. Alliance shall
not be required to pay any other expenses of the Fund or the Portfolios,
including (a) the fees payable to Alliance under this Agreement and the
Investment Management Agreement; (b) the fees and expenses of Directors who are
not affiliated with Alliance; (c) the fees and expenses of the Custodian and
Transfer Agent, including but not limited to fees and expenses relating to Fund
accounting, pricing of the shares of the Portfolios and computation of net asset
value; (d) the fees and expenses of calculating yield and/or performance of the
Portfolios; (e) the charges and expenses of legal counsel and independent
accountants; (f) all taxes and corporate fees payable to governmental agencies;
(g) the fees of any trade association of which the Fund is a member; (h)
reimbursement of the Portfolios' share of the organization expenses of the
Portfolios or the Fund; (i) the fees and expenses involved in registering and
maintaining registration of the Fund and the Portfolios' shares with the
Securities and Exchange Commission, registering the Fund as a broker or dealer
and qualifying the shares of the Portfolios under state securities laws,
including the preparation and printing of the registration statements and
prospectuses for such purposes, allocable communications expenses with respect
to investor services, all expenses of shareholders' and Board of Directors'
meetings and preparing, printing and mailing proxies, prospectuses and reports
to shareholders; (j) brokers' commissions, dealers' mark-ups and any issue or
transfer taxes chargeable in connection with the Portfolios' transactions; (k)
the cost of stock certificates representing shares of the Portfolios; (l)
insurance expenses, including, but not limited to, the cost of a fidelity bond,
directors and officers insurance and errors and omissions insurance; and
38
<PAGE>
(m) litigation and indemnification expenses, expenses incurred in connection
with mergers, and other extraordinary expenses not incurred in the ordinary
course of the Portfolios' business.
5. Compensation.
(a) As compensation for the services performed and the facilities and
personnel provided by Alliance pursuant to Section 1 of this Agreement, the
Fund, on behalf of the Bernstein Government Short Duration Portfolio, the
Bernstein Short Duration Plus Portfolio, the Bernstein Intermediate Duration
Portfolio, the Bernstein Diversified Municipal Portfolio, the Bernstein
California Municipal Portfolio, the Bernstein New York Municipal Portfolio, the
Bernstein Short Duration Diversified Municipal Portfolio, the Bernstein Short
Duration California Municipal Portfolio, and the Bernstein Short Duration New
York Municipal Portfolio, will pay to Alliance, promptly after the end of each
month, a fee assessed at an annual rate of 0.10 of 1% of the average daily net
assets of each Portfolio during the month. If Alliance shall serve hereunder for
less than the whole of any month, the fee hereunder shall be prorated. Nothing
herein shall prohibit the Directors from approving the payment by the Fund, or
any of the Portfolios, of additional compensation to others for consulting
services, supplemental research and security and economic analysis.
(b) As compensation for the services performed and the facilities and
personnel provided by Alliance pursuant to Section 1 of this Agreement, the
Fund, on behalf of The Bernstein Emerging Markets Value Portfolio, the Bernstein
International Value Portfolio II, and the Bernstein Tax-Managed International
Value Portfolio, will pay to Alliance, promptly after the end of each month, a
fee assessed at an annual rate of 0.25 of 1% of the average daily net assets of
each Portfolio during the month. If Alliance shall serve hereunder for less than
the whole of any month, the fee hereunder shall be prorated. Nothing herein
shall prohibit the Directors from approving the payment by the Fund, or any of
the Portfolios, of additional compensation to others for consulting services,
supplemental research and security and economic analysis.
6. Term of Agreement. This Agreement shall continue in effect with respect to
any Portfolio for a period of more than two years from the date hereof only so
long as such continuance is specifically approved at least annually in
conformity with the requirements of the Act with regard to investment advisory
contracts; provided, however, that this Agreement may be terminated at any time
without the payment of any penalty, on behalf of any or all of the Portfolios,
by the Fund, by the Board or, with respect to any Portfolio, by vote of a
majority of the outstanding voting securities (as defined in the Act) of that
Portfolio, or by Alliance, on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall terminate automatically
in the event of its assignment (as defined in the Act).
7. Miscellaneous. This Agreement may be amended by mutual written consent. This
Agreement contains the entire agreement between the parties hereto and
supersedes all prior agreements, understandings and arrangements with respect to
the subject matter hereof. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to
39
<PAGE>
require, or to impose any duty upon, either of the parties to do anything in
violation of any applicable laws or regulations. Alliance may perform the same
services for other persons or entities, including other investment companies.
IN WITNESS WHEREOF, the Fund, on behalf of the Portfolios, and Alliance have
caused this Agreement to be executed by their duly authorized officers as of the
date first above written.
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management Corporation, General Partner
By:
-------------------------------------------------
SANFORD C. BERNSTEIN FUND, INC.
By:
-------------------------------------------------
40
<PAGE>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER |X| USING
BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK
--------------------------------------------------------------------------------
THIS PROXY CARD, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS, PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE
PROPOSALS.
Bernstein Government Short Duration, Bernstein Short Duration Plus, Bernstein
Intermediate Duration, Bernstein New York Municipal, Bernstein Diversified
Municipal and Bernstein California Municipal Portfolios
Summary of Proposal
<TABLE>
<CAPTION>
FOR WITHHOLD FOR ALL
Election of Directors ALL ALL EXCEPT
<S> <C> <C> <C>
1. Roger Hertog, Andrew S. Adelson, Arthur Aeder, Peter L. |_| |_| |_|
Bernstein, Irwin Engelman, Peter W. Huber, William Kristol,
Theodore Levitt, Rosalie J. Wolf
To withhold authority to vote, mark "for all except"
and write the nominee's name on the line below:
----------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve or disapprove a new investment management |_| |_| |_|
agreement between the Sanford C. Bernstein Fund, Inc. (the
"Fund"), on behalf of each Portfolio, and Alliance Capital
Management L.P. ("Alliance Capital").
3. To approve or disapprove a new shareholder servicing and |_| |_| |_|
administrative agreement between the Fund, on behalf of each
Portfolio, and Alliance Capital.
4. To approve or disapprove eliminating the fundamental |_| |_| |_|
investment restriction relating to investment in illiquid
securities and replacing it with a non-fundamental restriction.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
5. To approve or disapprove eliminating the fundamental |_| |_| |_|
investment restriction relating to investment in securities of
unseasoned issuers.
6. For each Portfolio separately, to ratify the selection of |_| |_| |_|
independent accountants for the current fiscal year.
7. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
</TABLE>
<PAGE>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER |X| USING
BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK
--------------------------------------------------------------------------------
THIS PROXY CARD, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS, PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE
PROPOSALS.
Bernstein Short Duration New York Municipal Portfolio, Bernstein Short
Duration California Municipal Portfolio, Bernstein Short Duration
Diversified Municipal Portfolio, Bernstein Tax-Managed International
Value Portfolio, Bernstein International Value Portfolio II and
Bernstein Emerging Markets Value Portfolio
Summary of Proposal
<TABLE>
<CAPTION>
FOR WITHHOLD FOR ALL
Election of Directors ALL ALL EXCEPT
<S> <C> <C> <C>
1. Roger Hertog, Andrew S. Adelson, Arthur Aeder, Peter L. |_| |_| |_|
Bernstein, Irwin Engleman, Peter W. Huber, William Kristol,
Theodore Levitt, Rosalie J. Wolf
To withhold authority to vote, mark "for all except" and
write the nominee's name on the line below:
-----------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve or disapprove a new investment management |_| |_| |_|
agreement between the Sanford C. Bernstein Fund, Inc. (the
"Fund"), on behalf of each Portfolio, and Alliance Capital
Management L.P. ("Alliance Capital").
3. To approve or disapprove a new shareholder servicing and |_| |_| |_|
administrative agreement between the Fund, on behalf of each
Portfolio, and Alliance Capital.
4. Not applicable.
5. Not applicable.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
6. For each Portfolio separately, to ratify the selection of |_| |_| |_|
independent accountants for the current fiscal year.
7. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
</TABLE>
<PAGE>
PLEASE MARK YOUR PROXY CARD, DATE AND SIGN IT WHERE INDICATED, AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
THESE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A PROXY CARD IS
PROVIDED FOR THE PORTFOLIO IN WHICH YOU OWN SHARES AS OF JULY 31, 2000.
The undersigned hereby instructs Jean Margo Reid and Jill Purdy Sarkozi to vote
the shares of the Portfolio which the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held at the offices of the Fund, 767 Fifth
Avenue, New York, NY 10153-0185 at 10:00 a.m., Eastern Standard Time, September
25, 2000, and any adjournments thereof, as indicated on the reverse side.
Dated:
PLEASE SIGN IN BOX BELOW
If shares are owned jointly, all parties should sign. If only one signs, his or
her signature will be binding. If the shareholder is a corporation, the
President or a Vice President should sign in his or her own name, indicating
title. If the shareholder is a partnership, a partner should sign in his or her
own name, indicating that he or she is a partner.
-------------------------------------
Signature(s) Title(s), if applicable
