<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ACM Government Opportunity Fund, Inc.
- ----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X / No fee required
/ / Fee computed on table below per Exchange Act Rule 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
- ----------------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
- ----------------------------------------------------------------
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is
calculated and state how it was determined):
- ----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------
(5) Total fee paid:
- ----------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
<PAGE>
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>
ACM GOVERNMENT OPPORTUNITY FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
Toll Free (800) 221-5672
February [ ], 2000
To the Stockholders of ACM Government Opportunity Fund, Inc. (the
"Fund"):
The accompanying Notice of Meeting and Proxy Statement present
proposals to be considered at the Fund's Annual Meeting of
Stockholders on March 28, 2000.
The Board of Directors recommends that you vote FOR the election
to the Board of the three current Directors who are standing for
re-election (Proposal 1), vote FOR the ratification of the
Board's selection of Ernst & Young LLP as the Fund's independent
auditors for its 2000 fiscal year (Proposal 2), and vote AGAINST
the proposal pursuant to the Fund's charter to convert the Fund
to an open-end fund (Proposal 3).
We welcome your attendance at the Annual Meeting. If you are
unable to attend, we encourage you to vote your proxy promptly,
in order to spare the Fund additional proxy solicitation
expenses. Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, has been selected to assist
stockholders in the voting process. As the date of the Meeting
approaches, if we have not yet received your proxy, you may
receive a telephone call from SCC reminding you to exercise your
right to vote. If you have any questions regarding the Meeting
agenda or how to give your proxy, please call SCC at
1-888-634-9899.
Sincerely yours,
John D. Carifa
Chairman and President
<PAGE>
ACM GOVERNMENT OPPORTUNITY FUND, INC.
(LOGO OF ALLIANCE CAPITAL APPEARS HERE)
________________________________________________________________
1345 Avenue of the Americas, New York, New York 10105
Toll Free (800) 221-5672
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 28, 2000
To the Stockholders of ACM Government Opportunity Fund, Inc.:
Notice is hereby given that the Annual Meeting of
Stockholders (the "Meeting") of ACM Government Opportunity Fund,
Inc. (the "Fund") will be held at the offices of the Fund, 1345
Avenue of the Americas, 33rd Floor, New York, New York 10105, on
Tuesday, March 28, 2000 at 11:00 a.m., for the following
purposes, all of which are more fully described in the
accompanying Proxy Statement dated February [ ], 2000:
1. To elect three Directors of the Fund, each to hold
office for a term of three years and until his or her successor
is duly elected and qualifies;
2. To ratify the selection of Ernst & Young LLP as
independent auditors of the Fund for its fiscal year ending July
31, 2000; and
3. To vote on a proposal pursuant to the Fund's Charter
to convert the Fund to an open-end investment company; and
4. To transact such other business as may properly come
before the Meeting.
The Board of Directors has fixed the close of business
on December 31, 1999 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
or any postponement or adjournment thereof. The enclosed proxy is
being solicited on behalf of the Board of Directors.
By Order of the Board of Directors,
Edmund P. Bergan, Jr.
Secretary
New York, New York
February [ ],2000
2
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________________________________________________________________
YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the enclosed
Proxy Card, sign and date it, and return it in the envelope
provided, which needs no postage if mailed in the United States.
Your vote is very important no matter how many shares you own.
Please mark and mail your proxy promptly in order to save the
Fund any additional cost of further proxy solicitation and in
order for the Meeting to be held as scheduled.
_________________________________________________________________
(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.
3
<PAGE>
PROXY STATEMENT
ACM GOVERNMENT OPPORTUNITY FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
----------------
ANNUAL MEETING OF STOCKHOLDERS
MARCH 28, 2000
----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
ACM Government Opportunity Fund, Inc., a Maryland corporation
(the "Fund"), to be voted at the Annual Meeting of Stockholders
of the Fund (the "Meeting"), to be held at the offices of the
Fund, 1345 Avenue of the Americas, 33rd Floor, New York, New York
10105, on Tuesday, March 28, 2000 at 11:00 a.m. The solicitation
will be by mail and the cost for each Fund will be borne by the
Fund. The Notice of Meeting, the Proxy Statement and the
accompanying Proxy Card are being mailed to stockholders on or
about February [ ], 2000.
The Board of Director has fixed the close of business on
December 31, 1999 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
and at any postponement or adjournment thereof. The outstanding
voting shares of the Fund as of December 31, 1999 consisted of
13,071,872 shares of common stock, each share being entitled to
one vote. All properly executed and timely received proxies will
be voted at the Meeting in accordance with the instructions
marked thereon or otherwise provided therein. Accordingly, unless
instructions to the contrary are marked, proxies will be voted
for the election of three Directors (Proposal One), for the
ratification of the selection of Ernst & Young LLP as the Fund's
independent auditors for the fiscal year ending July 31, 2000
(Proposal Two), and against the proposal submitted for
consideration pursuant to the Fund's Charter to convert the Fund
to an open-end investment company (Proposal Three). Any
stockholder may revoke that stockholder's proxy at any time prior
to exercise thereof by giving written notice to the Secretary of
the Fund at 1345 Avenue of the Americas, New York, New York
10105, by signing another proxy of a later date or by personally
voting at the Meeting.
Properly executed proxies may be returned with
instructions to abstain from voting or withhold authority to vote
an ("abstention") or represent a broker "non-vote" (which is a
4
<PAGE>
proxy from a broker or nominee indicating that the broker or
nominee has not received instructions from the beneficial owner
or other person entitled to vote shares on a particular matter
with respect to which the broker or nominee does not have the
discretionary power to vote). The shares represented by such a
proxy with respect to matters to be determined by a plurality or
majority of the votes cast on such matters (i.e., Proposals One
and Two) will be considered present for purposes of determining
the existence of a quorum for the transaction of business, but,
not being cast, will have no effect on the outcome of such
matters. With respect to Proposal Three, the adoption of which
requires the affirmative vote of a specified proportion of Fund
shares, an abstention or broker non-vote will be considered
present for purposes of determining the existence of a quorum but
will have the effect of a vote against the matter. If any
proposal, other than Proposals One, Two and Three, properly comes
before the Meeting, shares represented by the proxies will be
voted on all such proposals in the discretion of the person or
persons voting the proxies.
A quorum for the Fund for the Meeting will consist of
the presence in person or by proxy of the holders of a majority
of the shares entitled to vote at the Meeting. In the event that
a quorum is not present at the Meeting or, even if a quorum is so
present, in the event that sufficient votes in favor of the
position recommended by the Board of Directors on any proposal
described in the Proxy Statement are not timely received, the
persons named as proxies may propose and vote for one or more
adjournments of the Meeting with no other notice than
announcement at the Meeting in order to permit further
solicitation of proxies. The Meeting may be adjourned with
respect to fewer than all of the proposals in the Proxy
Statement, and a stockholder vote may be taken on any one of the
proposals prior to any adjournment if sufficient votes have been
received for approval thereof. Shares represented by proxies
indicating a vote contrary to the position recommended by the
Board of Directors on a proposal will be voted against
adjournment as to that proposal.
The Fund has engaged Shareholder Communications
Corporation, 17 State Street, New York, New York 10004, to assist
the Fund in soliciting proxies for the Meeting. Shareholder
Communications Corporation will receive a fee of $20,000 for its
services plus reimbursement of out-of-pocket expenses.
5
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, three Directors will be elected to serve
for terms of three years and until their successors are elected
and qualify. The affirmative vote of a plurality of the votes
cast at the Meeting is required to elect a Director. It is the
intention of the persons named in the enclosed proxy to nominate
and vote in favor of the election of the persons in Class Three
listed below.
Pursuant to the Charter and By-Laws of the Fund, the
Board of Directors has been divided into three classes. The terms
of the members in Class Three will expire as of the Meeting, the
terms of the members in Class One will expire as of the annual
meeting of stockholders for the year 2001, and the term of office
of the members in Class Two will expire as of the annual meeting
of stockholders for the year 2002. Upon expiration of the terms
of the members of a class as set forth above, the terms of their
successors in that class will continue until the third annual
meeting of stockholders following their election and until their
successors and duly elected and qualify. John H. Dobkin,
Clifford L. Michel and Donald J. Robinson are currently the
members constituting Class One; David H. Dievler, William H.
Foulk, Jr. and Dr. James M. Hester are currently the members
constituting Class Two; and John D. Carifa, Ruth Block and Robert
C. White are currently the members constituting Class Three.
Under this classified Board structure, only those
Directors in a single class may be replaced in any one year. It
would require two years to change a majority of the Board of
Directors of a Fund, although Maryland law provides that
stockholders may remove Directors under certain circumstances
even if they are not then standing for re-election and, under
regulations of the Securities and Exchange Commission (the
"Commission"), appropriate stockholder proposals may be included
in the Fund's annual proxy statement. This classified Board
structure, which may be regarded as an "anti-takeover" provision,
may make it more difficult for the Fund's stockholders to change
the majority of Directors and, thus, have the effect of
maintaining the continuity of management.
At the Meeting, three Directors in Class Three of the
Fund, Mr. John D. Carifa, Ms. Ruth Block and Mr. Robert C. White,
are standing for re-election. Each nominee has consented to serve
as a Director. The Board of Directors knows of no reason why any
of these nominees will be unable to serve, but in the event any
nominee is unable to serve or for good cause will not serve, the
proxies received indicating a vote in favor of such nominee will
6
<PAGE>
be voted for such substitute nominee as the Board of Directors
may recommend.
Certain information concerning the Fund's Directors,
including the nominees for election as Directors, is set forth
below. Only the Class Three Directors are standing for election
as Directors.
7
<PAGE>
Names, positions and Number of shares
offices with the of the Fund
Fund, age, principal beneficially
occupations during owned
the past five years Year first Year term directly or
and other became a as Director indirectly as of
directorships Director will expire December 31,1999
_________________ _____________________ _________________
*John D. Carifa, 1988 2003++ 0
Chairman of the (Class Three)
Board, 54.
President, Chief
Operating Officer
and a Director of
Alliance Capital
Management
Corporation, the
general partner of
the Adviser
("ACMC"), which he
has been
associated with
since prior to
1995.
**+Ruth Block, 1988 2003++ 0
Director, 69. (Class Three)
Formerly an
Executive Vice
President and
Chief Insurance
Officer of The
Equitable Life
Assurance Society
of the United
States. She is a
Director of
Ecolab
Incorporated
(specialty
chemicals) and BP
Amoco Corporation
(oil and gas).
**+David H. 1988 2002 200
Dievler, (Class Two)
Director, 70.
Independent
Consultant.
Formerly a Senior
8
<PAGE>
Vice President of
ACMC until
December 1994.
- -----------------
*"Interested person," as defined in the Investment Company Act of
1940, as amended (the "Act"), of the Fund because of an
affiliation with the Fund's investment adviser, Alliance Capital
Management L.P. (the "Adviser").
**Member of the Audit Committee.
+Member of the Nominating Committee.
++If re-elected at the Meeting.
9
<PAGE>
Names, positions and Number of shares
offices with the of the Fund
Fund, age, principal beneficially
occupations during owned
the past five years Year first Year term directly or
and other became a as Director indirectly as of
directorships Director will expire December 31,1999
_________________ _____________________ _________________
**+John H. Dobkin, 1998 2001 0
Director, 58. (Class One)
President of
Historic Hudson
Valley (historic
preservation)
since prior to
1995. Previously,
he was Director of
the National
Academy of Design.
**+William H. 1998 2002 521
Foulk, Jr., (Class Two)
Director, 67.
Investment Adviser
and Independent
Consultant. He was
formerly Senior
Manager of Barrett
Associates, Inc.,
a registered
investment
adviser, with
which he had been
associated since
prior to 1995.
**+Dr. James M. 1988 2002 815
Hester, Director, (Class Two)
75. President of
The Harry Frank
Guggenheim
Foundation, with
which he has been
associated since
prior to 1994. He
was formerly
President of New
York University
and The New York
10
<PAGE>
Botanical Garden
and Rector of The
United Nations
University.
__________________
** Member of the Audit Committee
+Member of the Nominating Committee
11
<PAGE>
Names, positions and Number of shares
offices with the of the Fund
Fund, age, principal beneficially
occupations during owned
the past five years Year first Year term directly or
and other became a as Director indirectly as of
directorships Director will expire December 31,1999
_________________ _____________________ _________________
**+Clifford L. 1998 2001 1,000
Michel, (Class One)
Director, 60.
Member of the law
firm of Cahill
Gordon & Reindel,
with which he has
been associated
since prior to
1995. He is
President and
Chief Executive
Officer of Wenonah
Development
Company
(investments) and
a Director of
Placer Dome, Inc.
(mining).
**+Donald J. 1996 2001 0
Robinson, (Class One)
Director, 65.
Senior Counsel of
the law firm of
Orrick, Herrington
& Sutcliffe since
January 1995. He
was formerly a
senior partner and
a member of the
Executive
Committee of that
firm. He was also
a Trustee of the
Museum of the City
of New York from
1977-1995.
**+Robert C. 1998 2003++ 0
White, Director, (Class Three)
12
<PAGE>
79. Formerly
Assistant
Treasurer of Ford
Motor Company and,
until September
30, 1994, a Vice
President and the
Chief Financial
Officer of the
Howard Hughes
Medical Institute.
________________________
**Member of the Audit Committee.
+Member of the Nominating Committee.
++If re-elected at the Meeting.
13
<PAGE>
The Adviser has instituted a policy applicable to all
registered investment companies to which the advisor provides
investment advisory services, including the Fund (collectively,
the "Alliance Fund Complex"), contemplating that each Director
will invest specified minimum amounts and (in most cases) an
overall total of at least $150,000 in shares of investment
companies within the Alliance Fund Complex (including the Fund).
During fiscal year ended July 31, 1999, the Board of
Directors of the Fund met four times, the Audit Committee met
twice for the purposes described below in Proposal Two, and the
Nominating Committee did not meet. Both the Audit Committee and
the Nominating Committee are standing committees of the Board.
The Nominating Committee was constituted for the purpose of
selecting and nominating persons to fill any vacancies on the
Board of Directors and does not currently consider for nomination
candidates proposed by stockholders for election as Directors.
The Fund does not pay any fees to, or reimburse expenses
of, any Director during a term when such Director is considered
an "interested person" of the Fund, as defined in the Act. The
aggregate compensation paid by the Fund to each of the Directors
during the fiscal year ended July 31, 1999, the aggregate
compensation paid to each of the Directors during calendar year
1999 by all of the investment companies in the Alliance Fund
Complex, and the total number of investment companies (and
separate investment portfolios within those companies) in the
Alliance Fund Complex with respect to which each of the Directors
serves as a director or trustee, are set forth below. Neither the
Fund nor any other investment company in the Alliance Fund
Complex provides compensation in the form of pension or
retirement benefits to any of its directors or trustees.
Total Total
Number of Number of
Investment Investment
Companies Portfolios
in the within the
Total Alliance Alliance
Compensation Fund Fund
Aggregate from the Complex, Complex,
Compensation Alliance Including Including
from the Fund Fund the Fund, the Funds,
During its Complex, as to which as to which
Fiscal Including the Director the Director
Name of Year Ended the Fund, is a Director is a Director
Director July 31, 1999 During 1999 or a Trustee or a Trustee
________________ _______________ _______________ _____________ _____________
John D. Carifa $0 $0 50 103
Ruth Block $3,444 $154,263 38 80
14
<PAGE>
David H. Dievler $3,567 $210,188 45 87
John H. Dobkin $3,567 $206,488 42 84
William H. Foulk, Jr. $3,567 $246,413 45 98
Dr. James M. Hester $3,567 $164,138 39 81
Clifford L. Michel $3,567 $183,388 39 82
Donald J. Robinson $2,833 $140,813 41 92
Robert C. White $7,050 $ 85,000 10 10
As of December 31, 1999, the Directors and officers of
the Fund owned less than 1% of the shares of the Fund and the
Directors and officers of the Fund as a group owned less than 1%
of the shares of the Fund. During the Fund's most recently
completed fiscal year, none of the Fund's Directors engaged in a
purchase or sale of the securities of the Adviser, or of any of
its parents or subsidiaries, in an amount exceeding 1% of the
relevant class of outstanding securities.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" THE ELECTION OF EACH OF THE FOREGOING
NOMINEES TO SERVE AS A DIRECTOR OF THE FUND.
PROPOSAL TWO
RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders
of the Fund ratify the selection of Ernst & Young LLP,
independent auditors, to audit the accounts of the Fund for its
fiscal year ending July 31, 2000. The selection of Ernst & Young
LLP was approved by the vote, cast in person, of a majority of
the Directors of the Fund, including a majority of the Directors
who are not "interested persons" of the Fund, as defined in the
Act, at a meeting held on July 14, 1999. Ernst & Young LLP has
audited the accounts of the Fund since the Fund commenced
operations and does not have any direct financial interest or any
material indirect financial interest in the Fund. The affirmative
vote of a majority of the votes cast at the Meeting is required
to ratify such selection.
A representatives of Ernst & Young LLP is expected to
attend the Meeting and to have the opportunity to make a
statement and respond to appropriate questions from the
stockholders. The Audit Committee of the Board of Directors
normally meets twice during each full fiscal year with
representatives of the independent auditors to discuss the scope
of the independent auditor's engagement and to review the
financial statements of the Fund and the results of their
examination thereof.
15
<PAGE>
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE FUND.
16
<PAGE>
PROPOSAL THREE
PROPOSAL PURSUANT TO THE FUND'S CHARTER
The Fund's Charter requires the Fund to submit to the
Fund's stockholders at the next annual meeting of stockholders a
proposal that the Fund, consistent with the Act as then in
effect, amend its Charter to convert the Fund from a closed-end
investment company to an open-end investment company if
submission of such a proposal is duly requested in writing by the
holders of 10% or more of the Fund's outstanding shares during a
calendar year in which the Fund's shares have traded on the New
York Stock Exchange at an average discount from net asset value
of more than 10% determined on the basis of the discount as of
the end of the last trading day in each week during the twelve
weeks preceding the end of such year. These conditions were
fulfilled for submission of such a proposal at the Meeting.
Accordingly, Proposal Three is to amend the Charter of the Fund
by the adoption of the Articles of Amendment set forth in
Appendix A hereto to convert the Fund from a closed-end
investment company to an open-end investment company and to
change the subclassification of the Fund from a closed-end
investment company to an open-end investment company. Pursuant to
the Fund's Charter, approval of Proposal Three requires the
affirmative vote of two-thirds of the Fund's outstanding shares.
FOR THE REASONS DISCUSSED BELOW, YOUR BOARD UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "AGAINST" PROPOSAL THREE.
Description of Proposal Three
Proposal Three would amend the Fund's Charter to convert
the Fund to open-end form. Under this form, the Fund would be
required to redeem its shares from stockholders who so request at
the then current net asset value of the shares. Payments for
redemptions, absent unusual circumstances as permitted by law,
would be made in seven days after the Fund's receipt of the
redeemed shares and could be made in cash or, at the Fund's
option, wholly or partly in portfolio securities selected by the
Fund. It is not unusual for temporary redemption fees to be
imposed after a closed-end fund converts to open-end form in
situations where large redemptions soon after the conversion are
anticipated. If amended, the Charter would permit the Board,
subject to applicable law, to impose a fee equal to a percentage
up to 2% of net asset value upon the redemption or exchange of
shares outstanding at the time of the conversion. Such a fee
could be imposed for a period of up to twenty-four months after
the conversion. The Board of Directors has not yet determined
whether to impose a redemption fee, or the rate at which and the
period for which a redemption fee might be imposed. The purpose
of the redemption fee would be to offset costs and expenses
17
<PAGE>
directly related to the redemption of Fund shares, including
turnover and other costs to be incurred by the Fund in connection
with such redemptions; to reduce the impact of initial
redemptions upon the facilities of the Fund and its transfer
agent; and to spread out initial redemptions, thus alleviating to
an extent the disruptive effects of redemptions on the management
of the Fund's portfolio and investors choosing to remain Fund
stockholders.
As discussed in Appendix B hereto, if Proposal Three is
approved, conversion of the Fund to an open-end fund would
probably take as long as four to six months, and would be
effective upon the effectiveness of the Fund's registration
statement under the Securities Act of 1933, as amended, allowing
the continuous offering of Fund shares. Appendix B also discusses
certain tax and other aspects of the conversion if Proposal Three
is approved by the stockholders.
Your Board of Directors Urges You to Vote AGAINST Proposal
Three
During the last months of 1999, the Fund and all but a
few other U.S. exchange-traded closed-end bond funds experienced
abrupt and substantial erosion of their market premiums and/or
widening of their market discounts. As the Adviser has advised
the Fund's Board of Directors, the Adviser and many other market
professionals believe that the primary cause of this event has
been tax loss selling by stockholders of such funds. While such
tax loss selling is an annual phenomenon, the Adviser believes
that this year's selling has been both unusually heavy and
abnormally concentrated in closed-end bond funds, with
correspondingly pronounced impact on closed-end bond fund market
prices. However, the market price deterioration that results
from tax loss selling tends to dissipate as such selling abates
early in a new calendar year. Such a recovery appears to have
begun; the Fund's discount, which had stood at 18.37% on December
24, 1999, has returned to [8.8%] as of the close of business on
[January 28, 2000].
In response to these developments, at its January 20,
2000 Regular Meeting, the Fund's Board of Directors (as well as
the Boards of three other closed-end bond funds sponsored by the
Adviser) considered and approved the Advisers recommendation that
the Board institute a discretionary share repurchase program for
the purposes of enhancing stockholder values and reducing the
Funds' discount. Under the program as disclosed in the Fund's
January 20 press release, repurchases are made at such times and
in such amounts as the Fund's management believes will further
the foregoing objectives, subject to board review. As of the
close of business of February 11, 2000, the Fund had repurchased
[ ]% of its originally outstanding shares. [The Adviser
18
<PAGE>
believes that these repurchases have [significantly] contributed
to the substantial narrowing of the Fund's discount in recent
weeks.]
In the Board of Directors' view, it is quite
understandable that certain large stockholders of the Fund would
request a Charter provision proposal at a time when the Fund's
discount had abruptly widened. The share repurchase program
instituted by the Board of Directors stems from its own concern
that stockholder values be preserved. It remains the policy of
the Funds Board of Directors to take such action as may be
appropriate to seek to alleviate market discounts that are not in
the best interests of the Fund and its stockholders.
At the Board's January 20, 2000 Meeting, on the basis of
the foregoing considerations, as well as the relative advantages
and disadvantages of open-ending the Fund as summarized in the
following paragraph, the Board of Directors also concluded that,
from the standpoint of the best interests of the Fund and its
stockholders, it would be inappropriate to open-end the Fund at
this time.
The Adviser believes that, open-ending the Fund would
result in a redemption of, depending upon circumstances, between
approximately one-third and two-thirds of the Fund's outstanding
shares within a few months. The one-time costs relating to the
conversion of the Fund to open-end form including printing,
mailing and professional costs, is estimated to be at least
$175,000 amounting to at least an estimated [17] basis points per
share. The Fund's per-share expense ratio would also
substantially increase, for several reasons. First, those
categories of Fund expenses that are more or less fixed
notwithstanding fluctuations in the Fund's asset size would be
spread over a substantially smaller asset base, proportionally
increasing their per-share effect. Second, for the Fund to have
any meaningful opportunity of realizing, in open-end form,
significant new sales of shares, it would be a practical
necessity for the Fund to obtain stockholder approval of the same
pricing structure as is utilized by the numerous open-end
Alliance Mutual Funds, which involves the offering of multiple
classes of shares. The class of shares with the lowest expense
ratio, Class A, is subject to an annual distribution (or "Rule
12b-1") fee of .30 of 1% (i.e., 30 basis points). If the
stockholders approve Proposal Three, stockholders would receive,
in the course of the Fund's open-ending, Class A shares which,
although free of all front-end sales charges, would be subject to
that annual distribution fee, thus increasing the expense ratio
for such shares by these 30 basis points. In the event of a
decrease in assets of between one-third and two-thirds in
connection with open-ending, it is estimated that the Fund's per-
share expense ratio for Class A shares, including such an annual
19
<PAGE>
distribution fee, would increase from its current level of 125
basis points to between approximately [186] basis points and
[229] basis points.
For the foregoing reasons, the Board of Directors
strongly believes that, notwithstanding the benefit which those
stockholders who would wish to redeem their shares over the short
term would derive from open-ending the Fund, on balance the best
interests of the Fund and its stockholders would be substantially
disserved by such action.
ACCORDINGLY, YOUR BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE AGAINST PROPOSAL THREE.
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OTHER MATTERS
Management of the Fund does not know of any matters
properly to be presented at the Meeting other than those
mentioned in this Proxy Statement. If any other matter properly
comes before the Meeting, the shares represented by proxies will
be voted with respect thereto in the discretion of the person or
persons voting the proxies.
According to information filed with the Securities and
Exchange Commission, as of December 27, 1999, Aon Corporation,
Aon Advisors, Inc., Combined Insurance Company of America and
Virginia Surety Company, Inc., each with an address of 123 North
Wacker Drive, Chicago, Illinois 60606, beneficially owned an
aggregate of 4,350,000 shares, or 34.8%, of the Fund's
outstanding common stock.
INFORMATION AS TO THE FUND'S PRINCIPAL OFFICERS,
INVESTMENT ADVISER AND ADMINISTRATOR
The principal officers of the Funds, their ages and
their principal occupations during the past five years are set
forth below. Each of the officers listed below also serves as an
officer of one or more of the other registered investment
companies sponsored by the Adviser.
John D. Carifa, 54, a Director, Chairman and President
of the Fund. (See Proposal One, "Election of Directors," at page
[ ] for biographical information).
Wayne D. Lyski, 58, a Senior Vice President of the Fund,
is an Executive Vice President of ACMC, with which he has been
associated since prior to 1995.
Kathleen A. Corbet, 39, a Senior Vice President of the
Fund, is an Executive Vice President of ACMC, with which she has
been associated since prior to 1995.
Bruce W. Calvert, 53, a Senior Vice President of the
Fund, is a Director, Chairman and Chief Executive Officer, and
Chief Investment Officer of ACMC, with which he has been
associated since prior to 1995.
Thomas J. Bardong, 54, Vice President of the Fund, is a
Senior Vice President of ACMC, with which he has been associated
since prior to 1995.
Paul J. DeNoon, 37, Vice President of the Fund, is a
Vice President of ACMC, with which he has been associated since
prior to 1995.
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Christian G. Wilson, 30, a Vice President of the Fund,
is a Vice President of ACMC, with which he has been associated
since prior to 1995.
Mark D. Gersten, 49, Treasurer and Chief Financial
Officer of the Fund, is a Senior Vice President of Alliance Fund
Services, Inc. ("AFS"), with which he has been associated since
prior to 1995.
Edmund P. Bergan, Jr., 49, Secretary of the Fund, is a
Senior Vice President and the General Counsel of Alliance Fund
Distributors, Inc. and AFS, with which he has been associated
since prior to 1995.
The address of the foregoing officers, except Mr.
Gersten, is c/o Alliance Capital Management L.P., 1345 Avenue of
the Americas, New York, New York 10105. Mr. Gersten's address
is c/o Alliance Fund Services, Inc., 500 Plaza Drive, Secaucus,
New Jersey 07074.
The Fund's investment adviser and administrator is
Alliance Capital Management L.P., with principal offices at 1345
Avenue of the Americas, New York, New York 10105.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 30(h) of the Act and the rules under Section 16
of the Securities Exchange Act of 1934 require that the Directors
and officers of the Fund and the Directors of ACMC, among others,
file with the Commission and the New York Stock Exchange initial
reports of ownership and reports of changes in ownership of
shares of the Funds. For the Fund's fiscal year ended July 31,
1999, all such reports were timely filed.
SUBMISSION OF PROPOSALS FOR THE NEXT
ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at
the next annual meeting of stockholders of the Fund must be
received by the Fund by [ ], 2000 for inclusion in
the Fund's proxy statement and proxy card relating to that
meeting. The submission by a stockholder of a proposal for
inclusion in the proxy statement does not guarantee that it will
be included. Stockholder proposals are subject to certain
requirements under the federal securities laws and the Maryland
General Corporation Law and must be submitted in accordance with
the Fund's then applicable By-laws.
The persons named as proxies for the 2001 Annual Meeting
of Stockholders will with respect to proxies in effect at that
meeting have discretionary authority to vote on any matter
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presented by a stockholder for action at that meeting unless the
Fund receives notice of the matter by [ ], 2000 (or
such earlier date as may be specified by an advance notice
provision in the Fund's By-laws). If the Fund receives such
timely notice, d these persons will not have this authority
except as provided in the applicable rules of the Commission.
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REPORTS TO STOCKHOLDERS
The Fund will furnish each person to whom this Proxy
Statement is delivered with a copy of the Fund's latest annual
report to stockholders and, if applicable, such Fund's subsequent
semi-annual report to stockholders, upon request and without
charge. To request a copy, please call AFS at (800) 227- 4618 or
write Christina Santiago at Alliance Capital Management L.P.,
1345 Avenue of the Americas, New York, New York 10105.
By Order of the Boards of
Directors,
Edmund P. Bergan, Jr.
Secretary
February [ ], 2000
New York, New York
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APPENDIX A
ACM GOVERNMENT OPPORTUNITY FUND, INC.
ARTICLES OF AMENDMENT
ACM GOVERNMENT OPPORTUNITY FUND, INC., a Maryland
corporation having its principal office in the State of Maryland
in the City of Baltimore (hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and
Taxation of Maryland:
FIRST: Section (1) of Article FIFTH of the charter of
the Corporation (the "Charter") is amended to provide as follows:
(1) The total number of shares of capital stock which
the Corporation shall have authority to issue is Three Hundred
Million (300,000,000), all of which shall be Common Stock having
a par value of one cent ($.01) per share and an aggregate par
value of Three Million Dollars ($3,000,000). Until such time as
the Board of Directors shall provide otherwise in accordance with
paragraph (1)(c) of Article SEVENTH hereof, the authorized shares
of Common Stock of the Corporation shall be of the same class.1
SECOND: The following new Sections (5) through (13), in
the order set forth below, are added to Article FIFTH of the
Charter immediately following Section (4) of that Article FIFTH:
(5) As more fully set forth hereafter, the assets and
liabilities and the income and expenses of each class of the
Corporation's stock shall be determined separately from those of
each other class of the Corporation's stock and, accordingly, the
net asset value, the dividends and distributions payable to
holders, and the amounts distributable in the event of
dissolution of the Corporation to holders of shares of the
Corporation's stock may vary from class to class. Except for
these differences and certain other differences hereafter set
forth or provided for, each class of the Corporation's stock
shall have the same preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of and rights to require
redemption of each other class of the Corporation's stock except
as otherwise provided for by the Board of Directors pursuant to
paragraph (1)(c) of Article SEVENTH hereof.
_________________________
1 This revised Section (1) would add the second sentence
and delete the phrase "subject to the following
provisions:" from the end of the first sentence.
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(6) Except as otherwise provided herein, all
consideration received by the Corporation for the issuance or
sale of shares of a class of the Corporation's stock, together
with all funds derived from any investment and reinvestment
thereof, shall irrevocably remain attributable to that class for
all purposes, subject only to any automatic conversion of one
class of stock into another, as hereinafter provided for, and the
rights of creditors, and shall be so recorded upon the books of
account of the Corporation. The assets belonging to a class
shall be charged with the liabilities of the Corporation in
respect of such class and with such class' share of the general
liabilities of the Corporation, in the latter case in the
proportion that the net asset value of such class bears to the
net asset value of all classes or as otherwise determined by the
Board of Directors in accordance with law. The determination of
the Board of Directors shall be conclusive as to the allocation
of liabilities, including accrued expenses and reserves, to a
class.
(7) The assets attributable to all classes of stock
shall be invested in the same investment portfolio of the
Corporation. Notwithstanding the foregoing provisions of
paragraph (6) of this Article FIFTH, the allocation of investment
income and losses, realized and unrealized capital gains and
losses, expenses and liabilities of the Corporation among the
classes of the Corporation's stock shall be determined by the
Board of Directors in a manner that is consistent with the
Investment Company Act of 1940, the rules and regulations
thereunder, and the interpretations thereof, in each case as from
time to time amended, modified or superseded. The determination
of the Board of Directors shall be conclusive as to the
allocation of investment income and losses, realized and
unrealized capital gains and losses, expenses and liabilities
(including accrued expenses and reserves) and assets to a
particular class or classes.
(8) Shares of each class of stock shall be entitled to
such dividends or distributions, in stock or in cash or both, as
may be declared from time to time by the Board of Directors with
respect to such class. Specifically, and without limiting the
generality of the foregoing, the dividends and distributions of
investment income and capital gains with respect to each class of
stock may vary with respect to each such class to reflect
differing allocations of the expenses of the Corporation among
the holders of the classes and any resultant differences between
the net asset values per share of the classes, to such extent and
for such purposes as the Board of Directors may deem appropriate.
The Board of Directors may provide that dividends shall be
payable only with respect to those shares of stock that have been
held of record continuously by the stockholder for a specified
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period, not to exceed 72 hours, prior to the record date of the
dividend.
(9) Except as provided below, on each matter submitted
to a vote of the stockholders, each holder of stock shall be
entitled to one vote for each share entitled to vote thereon
standing in his, her or its name on the books of the Corporation.
Subject to any applicable requirements of the Investment Company
Act of 1940, as from time to time in effect, or rules or orders
of the Securities and Exchange Commission or any successor
thereto, or other applicable law, all holders of shares of stock
shall vote as a single class except with respect to any matter
which affects only one or more (but less than all) classes of
stock, in which case only the holders of shares of the classes
affected shall be entitled to vote. Without limiting the
generality of the foregoing, and subject to any applicable
requirements of the Investment Company Act of 1940, as from time
to time in effect, or rules or orders of the Securities and
Exchange Commission or any successor thereto, or other applicable
law, the holders of each class of stock shall have, respectively,
with respect to any matter submitted to a vote of stockholders
(i) exclusive voting rights with respect to any such matter that
affects only the class of stock of which they are holders,
including, without limitation, the provisions of any distribution
plan adopted by the Corporation pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (a "Plan") with respect to the
class of which they are holders and (ii) no voting rights with
respect to the provisions of any Plan that affects one or more of
such other classes of stock, but not the class of which they are
holders, or with respect to any other matter that does not affect
the class of stock of which they are holders.
(10) In the event of the liquidation or dissolution of
the Corporation, stockholders of each class of the Corporation's
stock shall be entitled to receive, as a class, out of the assets
of the Corporation available for distribution to stockholders,
but other than general assets not attributable to any particular
class of stock, the assets attributable to the class less the
liabilities allocated to that class; and the assets so
distributable to the stockholders of any class of stock shall be
distributed among such stockholders in proportion to the number
of shares of the class held by them and recorded on the books of
the Corporation. In the event that there are any general assets
not attributable to any particular class of stock, and such
assets are available for distribution, the distribution shall be
made to the holders of all classes in proportion to the net asset
value of the respective classes or as otherwise determined by the
Board of Directors.
(11) (a) Each holder of stock may require the
Corporation to redeem all or any part of the stock owned by that
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holder, upon request to the Corporation or its designated agent,
at the net asset value of the shares of stock next determined
following receipt of the request in a form approved by the
Corporation and accompanied by surrender of the certificate or
certificates for the shares, if any, less the amount of any
applicable redemption charge or deferred sales charge, redemption
fee or other amount imposed by the Board of Directors (to the
extent consistent with applicable law) or provided for in the
Charter. The Board of Directors may establish procedures for
redemption of stock.
(b) The proceeds of the redemption of a share (including
a fractional share) of any class of stock of the Corporation
shall be reduced by the amount of any redemption charge or
contingent deferred sales charge, redemption fee or other amount
payable on such redemption pursuant to the terms of issuance of
such share or provided for in the Charter.
(c) A redemption fee of such percentage as the Board of
Directors may specify, not exceeding 2%, of the net asset value
of shares of Common Stock when redeemed or exchanged as referred
to below shall be imposed with respect to any such shares
outstanding immediately prior to this paragraph (c) becoming
effective, which during such period immediately thereafter as the
Board may specify, not exceeding 24 months, are either redeemed
or exchanged for shares of another open-end investment company
sponsored by the investment adviser of the Corporation. The
proceeds of the aforesaid redemption fee shall be retained by the
Corporation. With the approval of the Board of Directors, the
aforesaid redemption fee may be reduced or waived, in whole or in
part, and any reductions or waivers may vary among the
stockholders.
(d) (i) The term "Minimum Amount" when used herein shall
mean two hundred dollars ($200) unless otherwise fixed by the
Board of Directors from time to time, provided that the Minimum
Amount may not in any event exceed five million dollars
($5,000,000). The Board of Directors may establish differing
Minimum Amounts for categories of holders of stock based on such
criteria as the Board of Directors may deem appropriate.
(ii) If the net asset value of the shares of a class of
stock held by a stockholder shall be less than the Minimum Amount
then in effect with respect to the category of holders in which
the stockholder is included, the Corporation may redeem all of
those shares, upon notice given to the holder in accordance with
paragraph (iii) of this subsection (d), to the extent that the
Corporation may lawfully effect such redemption under the laws of
the State of Maryland.
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(iii) The notice referred to in paragraph (ii) of this
subsection (d) shall be in writing personally delivered or
deposited in the mail, at least thirty days (or such other number
of days as may be specified from time to time by the Board of
Directors) prior to such redemption. If mailed, the notice shall
be addressed to the stockholder at his or her post office address
as shown on the books of the Corporation, and sent by first class
mail, postage prepaid. The price for shares acquired by the
Corporation pursuant to this subsection (d) shall be an amount
equal to the net asset value of such shares, less the amount of
any applicable redemption charge or deferred sales charge,
redemption fee or other amount payable on such redemptions
pursuant to the terms of issuance of such shares or imposed by
the Board of Directors (to the extent consistent with applicable
law) or provided for in the Charter.
(e) Payment by the Corporation for shares of stock of
the Corporation surrendered to it for redemption shall be made by
the Corporation within seven days of such surrender out of the
funds legally available therefor, provided that the Corporation
may suspend the right of the stockholders to redeem shares of
stock and may postpone the right of those holders to receive
payment for any shares when permitted or required to do so by
applicable statutes or regulations. Payment of the aggregate
price of shares surrendered for redemption may be made in cash
or, at the option of the Corporation, wholly or partly in such
portfolio securities of the Corporation as the Corporation shall
select, and the method of payment may differ among redeeming
stockholders as the Corporation may determine.
(12) At such times as may be determined by the Board of
Directors (or with the authorization of the Board of Directors,
by the officers of the Corporation) in accordance with the
Investment Company Act of 1940, applicable rules and regulations
thereunder and applicable rules and regulations of the National
Association of Securities Dealers, Inc. and from time to time
reflected in the registration statement of the Corporation (the
"Corporation's Registration Statement"), shares of a particular
class of stock of the Corporation or certain shares of a
particular class of stock of the Corporation may be automatically
converted into shares of another class of stock of the
Corporation based on the relative net asset values of such
classes at the time of conversion, subject, however, to any
conditions of conversion that may be imposed by the Board of
Directors (or with the authorization of the Board of Directors,
by the officers of the Corporation) and reflected in the
Corporation's Registration Statement. The terms and conditions of
such conversion may vary within and among the classes to the
extent determined by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of the
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Corporation) and set forth in the Corporation's Registration
Statement.
(13) For the purpose of allowing the net asset value per
share of a class of the Corporation's stock to remain constant,
the Corporation shall be entitled to declare and pay and/or
credit as dividends daily the net income (which may include or
give effect to realized and unrealized gains and losses, as
determined in accordance with the Corporation's accounting and
portfolio valuation policies) attributable to the assets
attributable to that class. If the amount so determined for any
day is negative, the Corporation shall be entitled, without the
payment of monetary compensation but in consideration of the
interest of the Corporation and its stockholders in maintaining a
constant net asset value per share of that class, to redeem pro
rata from all the holders of record of shares of that class at
the time of such redemption (in proportion to their respective
holdings thereof) sufficient outstanding shares of that class, or
fractions thereof, as shall permit the net asset value per share
of that class to remain constant.
(14) The Corporation may issue shares of stock in
fractional denominations to the same extent as its whole shares,
and shares in fractional denominations shall be shares of stock
having proportionately to the respective fractions represented
thereby all the rights of whole shares, including, without
limitation, the right to vote, the right to receive dividends and
distributions, and the right to participate upon liquidation of
the Corporation, but excluding any right to receive a stock
certificate representing fractional shares.
(15) No stockholder shall be entitled to any preemptive
right other than as the Board of Directors may establish.
THIRD: Paragraphs (c), (d) and (e) of Section (1) of
Article SEVENTH of the Charter are designated as paragraphs (d),
(e) and (f), respectively, and new paragraph (c) to provide as
follows is added immediately following paragraph (b) of that
Section (1):
(c) to classify or to reclassify, from time to time, any
unissued shares of stock of the Corporation, whether now or
hereafter authorized, by setting, changing or eliminating the
preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or
terms and conditions of or rights to require redemption of the
stock. The provisions of this Charter shall apply to each class
of stock unless otherwise provided by the Board of Directors
prior to issuance of any shares of that class;
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FOURTH: The amendment of the Charter as set forth above
has been duly advised by the Board of Directors and duly approved
by the stockholders of the Corporation.
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APPENDIX B
Certain Other Aspects of the Conversion and
Subsequent Actions if Proposal Three Is Approved
Tax Matters
In the opinion of Seward & Kissel LLP, counsel to the
Fund, neither the Fund nor its stockholders would realize any
gain or loss for tax purposes upon the Fund's conversion to open-
end form, and the conversion would not affect a stockholder's
holding periods or adjusted tax basis in the stockholder's shares
of the Fund. The opinion is based upon the view that the
conversion does not, for federal income tax purposes, involve the
exchange or disposition of a stockholder's holdings in the Fund
or, even if the conversion were deemed to be such an exchange,
the exchange would not be a taxable event. A stockholder who
redeems shares of the Fund after the conversion would recognize a
gain or loss to the extent that the redemption proceeds are
greater or less than the stockholder's adjusted tax basis in the
shares. The gain or loss would be capital gain or loss if the
redeemed shares had been held as a capital asset and would be
long-term capital gain or loss if the redeemed shares had been
held for more than one year on the date of redemption.
Expenses of the Conversion
In converting from a closed-end to an open-end
investment company, the Fund would have substantial legal,
accounting and other expenses. These costs, many of which would
be nonrecurring, include costs associated with the preparation of
a registration statement and prospectus as required by federal
securities laws (including printing and mailing costs) and the
payment of fees under state securities laws. If Proposal Three is
approved, the Fund estimates that these costs, which would be
paid by the Fund, would be at least $175,000, representing
approximately [0.17]% of the Fund's current net asset value.
Substantially all of these costs would be incurred by the Fund
prior to the effective date of the conversion.
Matters for Future Consideration by the Board of Directors
If Proposal Three is approved by the stockholders, it is
contemplated that among the matters the Board of Directors would
proceed to consider would be fixing the rate and period of
application of any redemption fee as authorized by the Articles
of Amendment and referred to in the description of Proposal
Three. In addition, the Board will likely consider whether to pay
for redeemed shares partly or entirely in securities. The
Articles of Amendment would also make other changes in the Fund's
Articles of Incorporation customary for open-end investment
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companies, including authorization of the Board of Directors to
classify unissued shares to establish classes of shares of the
Fund with different preferences and rights, such as rights to
dividends and distributions, voting and redemptions. If Proposal
Three is approved, it is expected that the Board would also
proceed to consider the details of the system for the
classification and distribution of the Fund's shares, including
the approval of an appropriate distribution services agreement
between the Fund and a principal underwriter for the Fund. The
expectation is that the Board would consider these matters
expeditiously.
Matters for Future Consideration by the Stockholders
If Proposal Three is adopted, certain aspects of the
operation of the Fund subsequent to its conversion to open-end
form would have to be decided by the Fund's stockholders, and it
is to be expected that a special meeting of stockholders would be
scheduled for that purpose as soon as practicable. These matters
include conforming certain of the Fund's investment policies to
the requirements of the Act applicable to open-end investment
companies and making changes in the Fund's investment management
agreement considered appropriate for an open-end form. Also, for
probable consideration would be the adoption of a Rule 12b-1 plan
consistent with the system selected by the Board of Directors for
future distribution of the Fund's shares. The matters to be
considered at the special meeting of stockholders would not
involve reconsideration of the decision to convert the Fund to
open-end form.
Effectiveness of the Conversion
The conversion of the Fund to an open-end investment
company would be accomplished by the filing of the Articles of
Amendment with the State Department of Assessments and Taxation
of Maryland and changing the Fund's subclassification under the
1940 Act from a closed-end investment company to an open-end
investment company. The Articles of Amendment would not be filed
until the Fund's registration statement under the Securities Act
of 1933, as amended, covering the offering of shares of the Fund
became effective. Preparation of the registration statement would
commence shortly after the adoption of Proposal Three, and the
statement would be filed as soon as practicable, which should be
before the date of the special stockholders meeting. The Articles
of Amendment would become effective at the time the conversion is
implemented.
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APPENDIX C
Differences Between Closed-End and
Open-End Investment Companies
(a) Acquisition and Disposition of Shares. Closed-end
investment companies such as the Fund neither redeem their
outstanding shares of stock nor continuously offer new shares for
sale, and thus operate with a relatively fixed capitalization.
The shares of a closed-end investment company are normally bought
and sold subject to applicable brokerage commissions on a
national securities exchange at prevailing market prices, which
may be equal to, or more or less than their net asset value. In
contrast, open-end investment companies, commonly referred to as
"mutual funds," issue redeemable shares for which there is no
secondary market. The holders of the redeemable shares have the
right to surrender them to the mutual fund and receive an amount
equal to their then proportionate share of the Fund's net asset
value (less any applicable redemption fee or deferred sales
charge). Most mutual funds also continuously issue new shares to
investors at a price based on the net asset value of the shares
at the time of issuance. Regulations adopted by the Commission
generally require open-end funds to value their assets on each
business day in order to determine the current net asset value at
which shares may be redeemed by stockholders or purchased by
investors. The net asset values of most open-end funds are
published daily by leading financial publications.
If the Fund were to convert into a mutual fund,
investors wishing to acquire shares of the Fund would be able to
purchase them most probably either directly from the Fund's
principal underwriter or through financial intermediaries.
Stockholders desiring to realize the value of their shares would
be able to do so by redeeming shares at net asset value less any
applicable redemption fee or deferred sales charge. Payment for
redemptions would be made within seven days after receipt of a
proper request for redemption (in accordance with redemption
procedures to be specified in the open-end fund prospectus),
except that such payment may be postponed, or the right of
redemption suspended, at times (a) when the Exchange is closed
for other than weekends and holidays, (b) when trading on the
Exchange is restricted, (c) when an emergency exists as a result
of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for
the Fund fairly to determine the value of its net assets, or (d)
during any other period when the Commission, by order, so
permits. The Fund could pay for redeemed shares entirely or
partly "in kind" if, in the opinion of the Fund, such a payment
would be advisable. In that event, a stockholder would receive
portfolio securities held by the Fund and would incur transaction
costs in disposing of the securities received. Securities of
foreign issuers which might be received could entail risks not
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typically associated with U.S. securities, including risks of
currency fluctuation and risks of volatility and lower liquidity
associated with the relatively small and concentrated securities
markets in which the Fund invests.
(b) New York Stock Exchange Listing; State Securities
Laws Filings. The Fund's shares are currently listed and traded
on the New York Stock Exchange (the "NYSE"). It is believed in
some investment circles that a fund listing on a U.S. stock
exchange, and, in particular, the NYSE, is an asset, especially
in terms of attracting non-U.S. investors. In addition, certain
investors, such as pension funds, are restricted as to a portion
of their portfolio which can be invested in non-listed
securities. Upon conversion to an open-end, the Fund's shares
would be immediately delisted from the NYSE. Because the Fund is
now listed on the NYSE, it is exempt from state securities
regulation. While as an open-end fund, the Fund would not be
subject to state investment restrictions, it would be required to
make state filings and pay state fees, which are expected to
exceed the current annual cost of NYSE listing. Any increased
cost or net savings to the Fund because of these different
expenses is not expected to materially affect the Fund's expense
ratio.
(c) Elimination of Discount and Preclusion of Premium.
The fact that stockholders who wish to realize the value of their
shares will be able to do so by redemption will eliminate any
market discount from net asset value (less the applicable
redemption fee). It will also eliminate any possibility that the
Fund's shares will trade at a premium over net asset value. If
Proposal Three is approved by the stockholders, the discount may
be reduced prior to the date of any conversion to the extent
purchasers of shares in the open market are willing to accept
less of a discount in anticipation of a prospective open-ending.
(d) Expenses; Potential Net Redemptions. As indicated in
the discussion of Proposal Three and in Appendix B, the Adviser
believes that open-ending will result in immediate, substantial
redemptions and, hence, a marked reduction in the size of the
Fund, although it is possible that this result eventually over a
period of time could be offset by new sales of shares and
reinvestment of dividends and capital gains distributions in
shares of the Fund. Consequences of an asset base of decreased
size on the Fund's expenses ratio are referred to in the
discussion of Proposal Three.
(e) Capital Gains. The treatment of capital gains
required under U.S. tax law can be very onerous to non-redeeming
stockholders in the event of the Fund's conversion to an open-end
fund. To raise cash to satisfy redeeming stockholders, the Fund
would be required to sell portfolio securities to satisfy
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redemption requests. If the Fund's basis in the portfolio
securities sold is less than the sale price obtained, net capital
gain may be realized. U.S. tax law imposes both an income tax and
an excise tax on net capital gain realized by closed-end and
open-end funds unless the fund distributes net capital gain to
all stockholders, in which case the stockholders would be subject
to tax on such gain. In the event of the Fund's conversion to an
open-end fund, two negative results may occur: first, because the
Fund would sell securities, non-redeeming stockholders would
recognize a greater amount of capital gain than would be the case
if the Fund held such securities; and, second, to make the
capital gains distribution necessary to avoid capital gain
recognition by the Fund, the Fund would probably need to sell
additional portfolio securities, thereby reducing further the
size of the Fund and, possibly, creating additional capital gain.
The discussion of Proposal Three includes an estimate of the
magnitude of such capital gains.
(f) Underwriting Costs; Rule 12b-1 Distribution Plan. If
the Fund converts to open-end status it will need to sell new
shares to offset redemptions; otherwise redemptions will cause
the Fund to become a diminishing asset. A principal underwriter
will be needed for selling new shares. There can be no assurance
that sufficient new sales can be generated to offset redemptions.
The cost of the underwriting would be paid either by purchasers
(in the case of a front-end sales charge) or by stockholders (in
the case of a Rule 12b-1 distribution plan). Redemption fees may
be payable upon redemption of both current and newly-issued
shares. In addition, contingent deferred sales charges may also
be payable upon redemption of newly-issued shares. In any case, a
selling effort is likely to result in increased costs to the
Fund. An open-end investment company, unlike a closed-end
investment company, is permitted to finance the distribution of
its shares by adopting a plan of distribution pursuant to Rule
12b-1 under the 1940 Act. If the Fund is converted to open-end
form, it is contemplated the Fund will adopt a distribution plan
pursuant to Rule 12b-1 in order to reimburse its principal
underwriter for costs incurred in distributing Fund shares. It is
expected that it would be proposed at the special meeting of
stockholders that the Rule 12b-1 distribution plan apply to the
Fund's shares outstanding at the time of the conversion.
(g) Portfolio Management. Unlike open-end funds,
closed-end investment companies are not subject to pressures to
sell portfolio securities at disadvantageous times in order to
meet net redemptions. Open-end funds maintain adequate reserves
of cash or cash equivalents in order to meet net redemptions as
they arise. Because closed-end investment companies do not have
to meet redemptions, their cash reserves can be substantial or
minimal, depending primarily on management's perception of market
conditions and on decisions to use fund assets to repurchase
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<PAGE>
shares. The larger reserves of cash or cash equivalents required
to operate prudently as an open-end fund when net redemptions are
anticipated would reduce the Fund's investment flexibility and
the scope of its investment opportunities. The Fund may have to
sell portfolio securities in order to accommodate the need for
larger reserves of cash or cash equivalents, resulting in an
increase in transaction costs and portfolio turnover.
Comparatively large net purchases of open-end fund shares often
occur around market highs and net redemptions around market lows,
inopportune times to invest or liquidate portfolio positions,
respectively. In a falling market, the result may be that the
more liquid securities in the Fund's portfolio would be sold
first, leaving the open-end fund with less-liquid securities not
as well suited to meeting future redemptions or changes in
investment strategy.
(h) Voting Rights. If the Fund converts to open-end
form, opportunities for stockholders to vote on particular issues
may be less frequent. As discussed in the proxy statement, it is
contemplated that at a future date the stockholders will be asked
to take action which will eliminate the need for the Fund to
elect directors each year. If the stockholders so act, the Fund
intends to hold a meeting of stockholders only when stockholder
approvals are necessary under the Act or Maryland law. Under the
Act, the Fund would be required to hold a stockholders meeting,
for example, if the number of Directors elected by the
stockholders was less than a majority of the total number of
Directors, or if a change were sought in a fundamental investment
policy of the Fund or in the advisory agreement of the Fund.
Under Maryland law and the Fund's Bylaws, a special meeting of
stockholders is required to be called upon request of the
stockholders only when requested in writing by stockholders
entitled to cast not less than a majority of all the votes
entitled to be cast at the special meeting.
Stockholders will generally continue to have one vote on
each matter submitted to a vote of stockholders if the Fund
converts to open-end form. Under Maryland law and the Articles of
Amendment, the Board of Directors would have the authority to
increase the number of shares of any class, to reclassify
unissued shares and to authorize the issuance of additional
classes of stock, in each case without the consent of
stockholders. If the Board of Directors approved a "multiple
distribution system," as discussed in this proxy statement,
involving the issuance of classes of shares bearing different
expenses specifically related to the distribution of shares of
each class, the classes would have the same voting rights except
that each class would vote separately as a class with respect to
aspects of the distribution plan of the Fund and other matters
that affect each class differently.
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<PAGE>
(i) Illiquid Securities. An open-end investment company
is subject to the 1940 Act requirement that no more than 15% of
its net assets may be invested in securities that are not readily
marketable. The Fund is currently subject to a limitation on such
"illiquid securities" of 20% of its total assets. If the Fund is
converted to an open-end form, it will be limited to no more than
15% in illiquid securities.
(j) Senior Securities and Borrowings. The 1940 Act
prohibits open-end funds from issuing "senior securities"
representing indebtedness (i.e., bonds, debentures, notes and
other similar securities), other than indebtedness to banks where
there is an asset coverage of at least 300% for all borrowings.
Closed-end investment companies, on the other hand, are permitted
to issue senior securities representing indebtedness to any
lender if the 300% asset coverage is met. In addition, closed-end
investment companies may issue preferred stock, whereas open-end
investment companies may not issue preferred stock. This greater
ability to issue senior securities may give closed-end investment
companies more flexibility than open-end funds in "leveraging"
their investments. At present, a fundamental investment policy of
the Fund prohibits borrowing except that the Fund may borrow from
a bank or other entity in a privately arranged transaction or
issue commercial paper, bonds, debentures or notes, in series or
otherwise, with such interest rates, conversion rights and other
terms and provisions as are determined by the Board if after such
borrowing or issuance the 300% asset coverage test is met, and
the Fund may also borrow for temporary purposes in an amount not
exceeding 5% of the value of the Fund's total assets. A change in
this fundamental policy to conform with the Act would be placed
before the Fund's stockholders at the envisioned future special
stockholders meeting if Proposal Three is approved.
(k) Stockholder Services. Various services are sometimes
made available to stockholders of open-end funds and not to
closed-end fund stockholders. These services may include
participation in an exchange privilege that allows stockholders
to exchange their shares for shares of the same class of other
mutual funds advised by the same adviser, the use of the fund for
retirement plans, and permitting stockholders to effect exchange
and redemption transactions by telephone. The cost of such
services is normally borne by the fund rather than by individual
stockholders. No decision has been made as to what, if any, such
services would be made available to stockholders of the Fund if
Proposal Three is approved.
(l) Dividend Reinvestment Plan. It is expected that as
an open-end fund, the Fund would continue to provide the
opportunity for stockholders to receive income dividends and
capital gains distributions in cash or, at no charge to
stockholders, in shares of the Fund. Such reinvestments in shares
C-5
<PAGE>
would be made, however, at net asset value, rather than, as is
currently the case, at market value (if Fund shares are trading
at a discount from net asset value) or at the greater of net
asset value or 95% of market value (if Fund shares are trading at
or above net asset value).
(m) Minimum Investments and Involuntary Redemptions. If
the Fund is converted to open-end form, in order to reduce the
administrative burdens incurred in monitoring numerous small
accounts, it is expected that the Fund would adopt requirements
that an initial investment in Fund shares equal at least $250 and
that any subsequent investment (other than upon the reinvestment
of dividends or distributions) be in a minimum amount of $50. The
Articles of Amendment would authorize the Fund to redeem all the
shares of any stockholder the value of whose account has remained
below $200 (or such other amount as may be determined by the
Board) for at least 90 days. Stockholders would receive prior
written notice to increase the account value before the account
was closed. The Fund would be permitted to waive or reduce these
minimums for certain retirement plans or custodial accounts for
the benefit of minors. The minimum initial investment requirement
would not apply to stockholders holding shares at the time of
conversion.
(n) Stock Certificates. If Proposal Three is approved,
each certificate representing shares of the Fund as a closed-end
investment company will automatically represent the same number
of shares of the Fund as an open-end investment company. Each
stockholder at the time of conversion will have the right to
exchange the stockholder's old certificates for new certificates
as an open-end fund or to surrender the certificates and have the
shares maintained in book-entry form by the Fund's transfer
agent.
C-6
<PAGE>
TABLE OF CONTENTS................Page
- -------------------------------------
Introduction.....................[ ]
Proposal One: Election of
Directors......................[ ]
Proposal Two: Ratification of
Selection of Independent
Auditors.......................[ ]
Proposal Three: Proposal
Pursuant to
the Fund's Charter.............[ ] ACM Government Opportunity Fund, Inc.
Description of Proposal
Three........................[ ] __________________________________
Your Board of Directors
Urges You to Vote AGAINST ... (LOGO OF ALLIANCE CAPITAL APPEARS
Proposal Three...............[ ] HERE)
Other Matters....................[ ]
Information as to the Fund's
Principal Officers,
Investment Adviser and
Administrator..................[ ] Alliance Capital Management L.P.
Submission of Proposals for the __________________________________
Next Annual Meeting of
Stockholders...................[ ] NOTICE OF ANNUAL MEETING OF
Reports to Stockholders..........[ ] STOCKHOLDERS AND PROXY STATEMENT
Appendix A (Articles of MARCH 28, 2000
Amendment).....................[ ]
Appendix B (Certain Other
Aspects of the Conversion
and Subsequent Actions if
Proposal Three is Approved)....[ ]
Appendix C (Differences Between
Closed-End and Open-End
Investment Companies)..........[ ]
<PAGE>
PROXY ACM GOVERNMENT OPPORTUNITY FUND, INC. PROXY
PROXY IN CONNECTION WITH THE ANNUAL MEETING OF
STOCKHOLDERS TO B HELD ON MARCH 28, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF THE CORPORATION
The undersigned stockholder of ACM Government Opportunity Fund,
Inc., a Maryland corporation (the "Corporation"), hereby
instructs each of Carol H. Rappa and Christina Santiago, or
either of them, as proxies for the undersigned, each with full
power of substitution, to attend the Annual Meeting of
Stockholders of the Corporation to be held at 3 p.m., Eastern
Time, on March 28, 2000 at the offices of the Corporation, 1345
Avenue of the Americas, 33rd Floor, New York, New York 10105, and
any postponement or adjournment thereof, to cast on behalf of the
undersigned all votes that the undersigned is entitled to cast at
the meeting and otherwise to represent the undersigned with all
powers possessed by the undersigned if personally present at such
meeting. The undersigned hereby acknowledges receipt of the
Notice of Meeting and accompanying Proxy Statement.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST
BY THE UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE
REVERSE SIDE HEREOF. IF NO DIRECTION IS MADE AS REGARDS A
PARTICULAR PROPOSAL OR OTHER MATTERS, SUCH VOTES ENTITLED TO BE
CAST BY THE UNDERSIGNED WILL BE CAST "FOR" THE ELECTION OF THE
NOMINEES REFERRED TO IN PROPOSAL ONE AS DIRECTORS, "FOR" THE
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS THE
INDEPENDENT AUDITORS FOR THE CORPORATION (PROPOSAL TWO),
"AGAINST" THE PROPOSAL (PROPOSAL THREE) PURSUANT TO THE
CORPORATION'S CHARTER TO CONVERT THE CORPORATION TO AN OPEN-END
INVESTMENT COMPANY AS DESCRIBED IN THE PROXY STATEMENT, "FOR" ANY
POSTPONEMENT OR ADJOURNMENT OF THE MEETING WITH RESPECT TO ANY
PROPOSAL DESCRIBED IN THE PROXY STATEMENT IN THE EVENT THAT
SUFFICIENT VOTES IN FAVOR OF THE POSITION ON SUCH PROPOSAL
RECOMMENDED BY THE BOARD OF DIRECTORS ARE NOT TIMELY RECEIVED,
AND IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF.
NOTE: Please sign this proxy exactly as your name(s) appear(s)
on the books of the Corporation. Joint owners should each sign
personally. Trustees and other fiduciaries should indicate the
capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, the signature
should be that of an authorized officer who should state his or
her title.
<PAGE>
Please refer to the Proxy Statement for a discussion of each of
the Proposals.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN
THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
2
<PAGE>
ACM GOVERNMENT OPPORTUNITY FUND, INC.
Please mark votes as in this example: /X/
1. Election of Directors FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
/ / / / / /
Class Three Directors
(term expires 2003):
John D. Carifa NOTE: If you do not wish your shares
Ruth Block voted "FOR" any particular Nominee, mark
Robert C. White the "For All Except" box and strike a
line through the name(s) of the
Nominee(s). Your shares will be voted
for the remaining Nominees(s).
Your Board of Directors urges
you to vote "FOR" the election
of all Nominees.
2. Ratification of the selection of FOR AGAINST ABSTAIN
Ernst & Young LLP as the / / / / / /
independent auditors for the
Corporation for the fiscal year
ending July 31, 2000.
Your Board of Directors urges
you to vote "FOR" Proposal Two.
3. To approve a proposal FOR AGAINST ABSTAIN
(Proposal Three) pursuant / / / / / /
to the Corporation's Charter
to convert the Corporation to an
open-end investment company.
Your Board of Directors urges
you to vote "AGAINST" Proposal
Three.
4. In their discretion upon any FOR AGAINST ABSTAIN
other matters that may properly / / / / / /
come before the Annual Meeting
or any postponement or
adjournment thereof, as
described in the Proxy
Statement.
______________________________________
(Signature of Stockholder)
______________________________________
3
<PAGE>
(Signature of joint owner, if any)
Dated _______________, 2000
4
00250127.AI2
