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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/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
Alliance Global Environment Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X / No fee required
/ / Fee computed on table below per Exchange Act 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:
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(LOGO) Alliance Global Environment Fund, Inc.
_________________________________________________________________
1345 Avenue of the Americas, New York New York 10105
Toll Free (800) 221-5672
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 17, 1997
To the Stockholders of Alliance Global Environment Fund, Inc.:
Notice is hereby given that the Annual Meeting of
Stockholders (the "Meeting") of Alliance Global Environment 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
Thursday, July 17, 1997 at 4:00 p.m., for the following purposes,
all of which are more fully described in the accompanying Proxy
Statement dated May 26, 1997.
1. To approve the conversion of the Fund from a closed-end
investment company to an open-end investment company, including
in connection therewith:
a. Changing the subclassification of the Fund from that of
a closed-end investment company to that of an open-end
investment company;
b. Amending the Articles of Incorporation of the Fund to:
i. provide for the conversion,
ii. eliminate certain "anti-takeover" provisions, and
iii. reclassify the outstanding shares of the Fund as
Class A shares;
c. Modifying an investment restriction of the Fund;
d. Approving an Advisory Agreement with Alliance Capital
Management L.P. (the "Adviser") to replace the Fund's
existing Investment Management and Administration
Agreement with the Adviser; and
e. Establishing a Multiple Distribution System pursuant to
which the Fund will offer its shares following such
conversion, including in connection therewith, adopting
a Rule 12b-1 distribution plan.
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2. If Proposal No. 1 is approved, to elect seven Directors,
each to hold office for an indefinite term, and until his
successor is duly elected and qualified, or, if Proposal No. 1 is
not approved, to elect three Directors, each to hold office for a
term of three years and until his successor is duly elected and
qualified.
3. To ratify the selection of Ernst & Young LLP as
independent auditors of the Fund for its fiscal year ending
October 31, 1997.
4. To transact such other business as may properly come
before the Meeting.
The Board of Directors has fixed the close of business on
May 16, 1997 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
or any 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
May 26, 1997
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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.
In order to save the Fund any additional expense of further
solicitation, please mail your proxy promptly.
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(R)This registered service mark used under license from the
owner, Alliance Capital Management L.P.
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PROXY STATEMENT
Alliance Global Environment Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
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ANNUAL MEETING OF STOCKHOLDERS
July 17, 1997
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INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
Alliance Global Environment 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 Thursday, July 17, 1997 at 4:00 p.m. The solicitation
will be by mail and the cost will be borne by the Fund. The
Notice of Meeting, Proxy Statement and Proxy Card are being
mailed to stockholders on or about May [ ], 1997.
The Board of Directors has fixed the close of business on
May 16, 1997 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting
and at any adjournment thereof. The outstanding voting shares of
the Fund as of that date consisted of [5,967,269] shares of
common stock, each share being entitled to one vote. All
properly executed proxies received prior to the Meeting 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 Proposal One, for the election of Directors and for the
ratification of the selection of Ernst & Young LLP as the Fund's
independent auditors for the fiscal year ending October 31, 1997.
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.
If a proxy properly executed is returned accompanied by
instructions to withhold authority to vote (an abstention) or
represents a broker "non-vote" (that is, a proxy from a broker or
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nominee indicating that such person has not received instructions
from the beneficial owner or other person entitled to vote shares
on a particular matter with respect to which the broker or
nominee does not have discretionary power), the shares
represented thereby, with respect to matters to be determined by
a specified majority or plurality of the votes cast on such
matters, 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 matters requiring the affirmative vote
of a specified majority of the total shares outstanding, 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 such matters.
A quorum for the Meeting will consist of a majority of the
shares outstanding and entitled to vote. In the event that a
quorum is not represented at the Meeting or, even if a quorum is
so represented, in the event that sufficient votes in favor of
any proposal set forth in the Notice of Meeting are not received
by July 17, 1997, 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, and further solicitation
of proxies with respect to such proposal may be made. Shares
represented by proxies indicating a vote against any proposal
will be voted against adjournment. [To be added: information as
of the record date as to 5% or greater beneficial owners, if
any].
PROPOSAL ONE
CONVERSION OF THE FUND FROM A
CLOSED-END INVESTMENT COMPANY TO
AN OPEN-END INVESTMENT COMPANY
At a meeting held on April 23, 1997, the Board of
Directors considered and unanimously approved a recommendation of
Alliance Capital Management L.P. (the "Adviser") to submit to
stockholders a proposal to convert the Fund from a closed-end
investment company to an open-end investment company. In
connection therewith, the Board of Directors also considered and
unanimously approved the amendment of the Fund's
subclassification under the Investment Company Act of 1940, as
amended (the "1940 Act"), from that of a closed-end investment
company to that of an open-end investment company and a related
modification of the Fund's fundamental investment restrictions,
and declared advisable and unanimously approved the amendment and
restatement of the Fund's Articles of Incorporation to provide
for such conversion. At the April 23rd meeting, the Board of
Directors also considered and unanimously approved related
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amendments to the Fund's Investment Management and Administration
Agreement.
Stockholders of the Fund are now being asked to consider
the conversion of the Fund from a closed-end to an open-end
investment company and related matters approved by the Board of
Directors in connection with the conversion. If this Proposal is
approved by the stockholders, subject to a registration statement
under the Securities Act of 1933, as amended, allowing the
continuous offering of shares of the Fund becoming effective, the
Fund will shortly thereafter be converted to an open-end
investment company. If this Proposal is not approved, the Fund
will remain as a closed-end investment company and the Board of
Directors will consider whether other action should be taken.
Conversion of the Fund to an open-end investment company
would permit the continued operation of the Fund in accordance
with its investment objective while providing stockholders with
the ability to redeem their shares at a price based on net asset
value instead of a price set in the market. The Adviser does not
anticipate that conversion of the Fund to open-end form would
require any significant portfolio restructuring either to enable
the Fund to operate as an open-end investment company or to meet
potential significant redemption requests following the
conversion.
Background of the Proposal
When the Fund was organized in 1990, the closed-end
format was chosen as most appropriate to the Fund's character and
intended method of operation because it was believed that such a
structure, among other things, would permit management of the
portfolio of the Fund consistent with its investment objective
and policies without the pressures and constraints to which open-
end investment companies are subject as a result of cash inflows
from sales of shares and cash outflows from redemptions of
shares. As shares of many closed-end funds frequently sell at a
discount from net asset value, at the outset the Board of
Directors established a policy that it is in the interest of
stockholders for the Fund to take action to attempt to reduce or
eliminate any market value discount from net asset value. In
fact, during the period October 1994 through February 1996, the
market value discount of the Fund's shares at all times exceeded
20%. Consequently, in March 1996, when the discount was
approximately 21%, the Board of Directors approved an open-market
share repurchase program involving the repurchase by the Fund,
during the ensuing twelve months, of up to 20% of its outstanding
shares.
Under the repurchase program, the Fund acquired 939,900
shares of its common stock, representing approximately 13.6% of
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its 6,907,169 shares outstanding at the commencement of the
program, at a total cost of $11,934,475 and an average cost of
$12.70 per share. These repurchases added $0.64, or 4.4% per
share, to the Fund's March 15, 1996 net asset value, providing an
antidilutive benefit to stockholders that is among the largest
resulting from any recent closed-end fund repurchase program.
Notwithstanding this benefit, during 1996 the Fund's discount
averaged 20.1%--essentially no better than before the repurchase
program either in absolute terms or in comparison to the other
closed-end funds in the "specialized equity" grouping of The Wall
Street Journal. Although the Fund's discount narrowed somewhat
in early 1997, until the proposed conversion was announced, the
discount remained [above 16%], or a full five to six percentage
points higher than the discounts of the other closed-end
"specialized equity" funds.
The Adviser informed the Board of Directors of the Fund
at the April 23 meeing that the repurchase program had not
altered the Fund's status as the only closed-end fund sponsored
by the Adviser whose discount performance over both the shorter
and longer terms has not been at least competitive with those of
comparable closed-end funds. Further, the Adviser noted that,
among the several closed-end funds sponsored by it whose shares
have in recent years consistently traded at discounts in excess
of 15%, the Fund is also the only one that possesses the ample
underlying portfolio liquidity to allow the large portfolio
security liquidations that open-ending is likely to require
without substantial detriment to remaining stockholders.
Moreover, given the Fund's excellent short-term performance
record and the Adviser's continuing conviction, which it
expressed to the Board, in the attractiveness of the Fund's basic
investment theme, the Adviser expressed its view that the Fund
could be successfully marketed in open-end form over the near
term, although it was noted that no assurances could be given as
to the results of marketing the Fund in open-end form. In light
of these factors, and following the failure of the repurchase
program as a discount reduction measure, at the April 23 meeting
the Adviser expressed its belief that the Fund's stockholders
have a reasonable expectation that further significant action
will be taken to reduce the discount and that such further action
will have a higher probability of success than the repurchase
program. Accordingly, at the April 23 meeting, as is discussed
in detail in this proxy statement, the Adviser recommended that
the Fund be converted from a closed-end investment company to an
open-end investment company and that the Board take the requisite
action in connection therewith.
At the April 23 meeting, the Adviser also stated its
view that open-ending the Fund would confer very substantial
benefits on the Fund's stockholders. The Board was informed
that, following a conversion, stockholders would be able to
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redeem their shares at net asset value less the redemption fee,
discussed below, as opposed to the approximately 84% of net asset
value (less any brokerage costs) that a seller of the Fund's
shares would realize at the discount as it existed immediately
prior to the date of the Board meeting. In addition, a
stockholder could redeem all of his or her shares without
limitation or "proration", as likely would have been the case if
the Fund were to pursue certain of the alternative
discount-reduction measures, discussed below, considered by the
Adviser and discussed with the Board. The Board was also
informed that, while conversion to open-end form most probably
would result in an initial shrinkage of the Fund resulting from
redemption requests, over the longer term conversion would create
the opportunity, which the Fund does not enjoy at its current
discount level, to achieve the benefits associated with greater
asset size through continuous sales of Fund shares following the
conversion. Further, the Board was advised that the benefits of
elimination of the Fund's discount, together with continuous
liquidity, could be expected to outweigh the potential drawbacks,
discussed below, resulting from open-ending the Fund.
The Board was informed that redemption requests
following a conversion could be substantial. The Adviser
indicated that the size of the Fund's discount as it existed on
April 23 created a strong incentive for stockholders, even many
of those who regard the environmental sector as an attractive
long-term growth opportunity, to recover the Fund's historical
discount by redeeming their shares. In addition, the Board was
advised of the Adviser's belief that a growing number of market
professionals who view closed-end funds as arbitrage
opportunities could take sizable positions in shares of the Fund
for the purpose of profiting through redemption immediately
following an open-ending. This phenomenon could serve to
increase the percentage of Fund shares subject to redemption
requests. In this regard, the Adviser stated its belief that,
with the redemption fee discussed below, the Fund could absorb
the redemption of as much as approximately 50% of its outstanding
shares during the year following a conversion without
necessitating significant alteration of the composition of its
investment portfolio and without incurring any significant
dilution from the market impact of portfolio liquidations.
Further, the Adviser informed the Board that conversion
of the Fund to open-end form and the anticipated redemption
requests would result in an immediate increase in the Fund's
expense ratio because the Fund's fixed expenses would be spread
over a smaller asset base. In addition, the Adviser stated that
continuing stockholders would pay an annual distribution fee, as
well as incremental costs associated with transfer agency fees.
It is estimated that if the Fund's net assets decrease by 50% due
to redemption requests, the Fund's expense ratio, currently
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1.56%, would increase to approximately 2.53%. The Fund's overall
expense ratio following conversion to open-end form would
increase or decrease depending on the Fund's investment
performance and its future net sales or net redemptions. The
Adviser has undertaken with the Board to assess this situation on
an ongoing basis in order to determine to what extent, if any, it
may be advisable for the Adviser or its affiliates to waive fees
or reimburse expenses in an effort to maintain the Fund's expense
ratio at a competitive level.
The levels of portfolio activity that would be
necessitated by redemption requests of 50% of the Fund's
outstanding shares during the year following a conversion could
result in the Fund's realization of significant additional
capital gains, which would be distributed to stockholders. The
Board was advised that such distributions would be taxable to the
stockholders who receive them. As of April 10, 1997, the Fund
had net realized capital gains of $1.76 per share. The Fund
estimates that if it were required to sell one-half of each of
its current portfolio positions (at their April 10, 1997
valuations) in order to meet potential redemption requests, net
realized capital gains would rise to $3.93 per share.
In its presentation at the April 23 meeting, the Adviser
also informed the Board of Directors that, although redemptions
of shares following any conversion to open-end form could be
expected to be partially offset by new sales of Fund shares, it
was not possible to predict the extent of such redemptions or new
sales or whether the net redemptions anticipated in the short run
would require the sale of significant portfolio positions. In
this regard, the Adviser noted that other closed-end funds that
had converted to open-end form had, in order to provide
stockholders with an incentive to refrain from immediately
exercising their right to redeem and to offset some of the direct
and indirect costs associated with a conversion to and operation
as an open-end fund, imposed a redemption fee that was paid by
stockholders who redeemed their shares shortly after conversion.
For these reasons, and as discussed in greater detail below, upon
the Adviser's recommendation, the Board authorized the imposition
of a 2% redemption fee during the first twelve months following
the date of any conversion. Any such fee would be retained by
the Fund and, therefore, would tend to increase its net asset
value.
In the course of making its presentation to the Board of
Directors, the Adviser presented the Board with information
concerning several possible alternative means of reducing the
Fund's market value discount. These included a share repurchase
program such as that previously conducted by the Fund, a tender
offer for a relatively small percentage of the Fund's outstanding
shares and "managed distribution policies," one involving minimum
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quarterly distributions, regardless of the Fund's investment
results, and the other involving the retention, as opposed to
distribution, by the Fund of net investment income and net
realized capital gains. The Adviser also presented the Board
with information concerning the possibility of converting the
Fund to "interval fund" form or conducting a major tender offer
for the Fund's shares. As to each of these alternatives, the
Board was advised that industry experience with them either has
shown them to be ineffective in reducing market value discounts
to net asset value to any meaningful degree or that industry
experience is too limited to recommend them to the Board with
confidence that they would have a high probability of eliminating
or substantially reducing the Fund's discount. The final
alternative discount reduction technique presented to the Board
of Directors was merging the Fund into an appropriate mutual fund
sponsored by the Adviser. The Board was advised that there is no
open-end fund sponsored by the Adviser that is very similar to
the Fund. Consequently, the Adviser expressed its belief that
such a merger would not be consistent with the reasonable
expectations of the Fund's stockholders, most of whom are
believed to be seeking exposure to environmental equity
securities. Accordingly, the Adviser recommended against merging
the Fund with an Adviser-sponsored open-end fund.
After taking into consideration the potential drawbacks
of a conversion of the Fund to open-end form, the Board of
Directors determined that the liquidity provided to stockholders
and the elimination of the Fund's discount as a result of such a
conversion were sufficient to outweigh such drawbacks and that
conversion to open-end form would be in the best interests of the
Fund and its stockholders.
Differences between Open-End
and Closed-End Investment Companies
The Fund is a closed-end investment company. Closed-
end investment companies neither redeem their outstanding shares
of stock nor engage in the continuous sale of new shares, and
thus operate with a relatively fixed capitalization. The shares
of closed-end investment companies are normally bought and sold
on national securities exchanges; the Fund's shares are traded on
the New York Stock Exchange, Inc. (the "Exchange"). The Fund's
shares would be delisted from the Exchange upon the conversion of
the Fund to an open-end investment company.
In contrast, open-end investment companies, commonly
referred to as "mutual funds," issue redeemable securities. The
holders of redeemable securities have the right to surrender
those securities to the mutual fund and receive an amount equal
to the net asset value of the shares (less any redemption fee or
deferred sales charge imposed by the fund). Many mutual funds
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(including the Fund, if the proposed conversion is effected) also
continuously issue new shares to investors based on the net asset
value of the shares at the time of such issuance.
Some of the legal and practical differences between
operation of the Fund as a closed-end and an open-end investment
company are as follows:
(a) Acquisition and Disposition of Shares. If the Fund
converts into a mutual fund, investors wishing to acquire
shares of the Fund would be able to purchase them either
through selected financial intermediaries or directly from
Alliance Fund Distributors, Inc., the Fund's proposed
principal underwriter (the "Principal Underwriter").
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.
The Board of Directors currently intends to impose a
fee, payable to the Fund, on Fund shares outstanding at the
time of the conversion that are redeemed or exchanged within
the first twelve months of the Fund's operation as an open-
end investment company. The fee would be equal to 2% of the
net asset value of the shares at the time of redemption or
exchange. As stated above, any such temporary redemption fee
would be retained by the Fund and would tend to increase its
net asset value. The Board of Directors believes that the
redemption fee would tend to spread out the initial
redemptions of Fund shares and thus alleviate to an extent
any possible disruptive effects on the management of the
Fund's portfolio, reduce the impact of initial redemptions
upon the facilities of the Fund and its transfer agent, and
offset some of the direct and indirect costs associated with
a conversion to and operation as an open-end fund.
(b) Voting Rights. Under Maryland corporate law,
opportunities to vote will become less frequent if the Fund
converts to open-end form, since the Fund ordinarily will not
hold stockholder meetings unless the election of Directors is
required to be acted on under the 1940 Act. Maryland
corporate law provides that, if the articles of incorporation
or by-laws of an open-end fund registered under the 1940 Act
so provide, then the fund is not required to hold an annual
stockholder meeting in any year in which the election of
directors is not required to be acted upon under the 1940
Act. The Articles of Incorporation and By-Laws of the Fund
do not so provide. The Board of Directors has, however
adopted amended and restated By-Laws, to go into effect if
this Proposal is approved, which provide that the Fund will
not be required to hold an annual meeting in any year in
which the election of Directors is not required to be acted
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upon under the 1940 Act. The Fund does not intend to hold
annual meetings in any year in which it is not so required.
By not having to hold annual stockholder meetings, the Fund
would save the costs of preparing proxy materials and
soliciting stockholders' votes on the usual proposals
contained therein. Based on the number of outstanding shares
and stockholders as of the record date for the Meeting, such
costs aggregate approximately $16,000 per year.
Nevertheless, the Fund would be required to hold a
meeting of stockholders when stockholder approvals are
necessary under the 1940 Act or Maryland law. Under the 1940
Act, the Fund would be required to hold a stockholder meeting
if the number of Directors elected by the stockholders were
less than a majority of the total number of Directors, or if
a change were sought in the fundamental investment policies
of the Fund, in the proposed Advisory Agreement of the Fund
or, in certain circumstances in the proposed Rule 12b-1
distribution plan of the Fund. Under Maryland law and the
Fund's proposed amended and restated By-Laws, 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, the Board of
Directors has 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. As discussed in
Proposal Two below, the Board of Directors has approved a
"Multiple Distribution System" involving the issuance of four
classes of shares bearing different expenses specifically
related to the distribution of shares of each class. The
four classes would have the same rights except that each
class would vote separately as a class with respect to the
proposed Rule 12b-1 distribution plan of the Fund and other
matters that affect each class differently.
(c) Determination of Net Asset Value. Securities and
Exchange Commission ("SEC") regulations 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.
(d) Expenses; Potential Net Redemptions. The Fund's
expenses may increase as a result of open-ending, whether as
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a result of the cost of additional services available to
stockholders or otherwise. Open-ending could result in
immediate, substantial redemptions and, hence, a marked
reduction in the size of the Fund, although this result
eventually could be offset by new sales of shares and
reinvestment of dividends and capital gains distributions in
shares of the Fund. An asset base of decreased size could
produce less income and lower gains per share, than are
currently being produced. Accordingly, the Fund's ratio of
operating expenses to average net assets could increase
substantially. For the fiscal year ended October 31, 1996,
the Fund's ratio of expenses, including the fee paid to the
Adviser, to average net assets was 1.56%. It is estimated
that the Fund's expense ratio would increase to approximately
2.53% due to the potential for redemption requests. In
addition, the Fund might be required to sell portfolio
securities in order to meet potential redemptions, thereby
resulting in realization of gains (or losses). As stated
above, as of April 10, 1997, the Fund had net realized
capital gains per share of $1.76. The Fund estimates that,
if it were required to sell one-half of each of its current
portfolio positions (at their April 10, 1997 valuations) in
order to meet potential redemption requests following
conversion to open-end form, net realized capital gains per
share would rise to $3.93 per share.
Significant net redemptions could also render the Fund
an uneconomical venture by virtue of its diminished size. In
the event the Fund were to become too small to be considered
economically viable, the Board of Directors might consider
alternatives to continuing the Fund's operations, ranging
from merger of the Fund with another investment company to
liquidation of the Fund. Under current condition the Fund
does not foresee that such will occur. Therefore, the Fund
has no plans to pursue such alternatives at this time, and
any such merger or liquidation would require stockholder
approval.
(e) Elimination of Discount. 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 temporary redemption
fee). It will also eliminate any possibility that the Fund's
shares will trade at a premium over net asset value. If this
Proposal 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. Indeed, the Fund's discount declined to
approximately [7]% within a week of the announcement of the
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proposed conversion (from an average of [ ]% in the [four
weeks] prior to such announcement).
(f) Dividend Reinvestment Plan. The Fund intends to
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.
Effective upon conversion to an open-end investment company,
such reinvestments in shares would be made 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).
(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. Most 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 shares. The
larger reserves of cash or cash equivalents required to
operate prudently as an open-end fund when net redemptions
are anticipated could 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. Nevertheless, the Adviser does not
expect significant changes in the Fund's investment policies
or procedures as a result of open-ending.
(h) 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 25% of total
assets, although the Fund currently has, and historically
generally has had, less than 15% if its net assets invested
in illiquid securities. If the Fund is converted to an
open-end form it will be limited to no more than 15% in
illiquid securities.
(i) 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
11
<PAGE>
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. To date, the Fund has not leveraged its assets.
The Board of Directors has approved an amendment to the
Fund's fundamental investment restrictions which would
provide that the Fund may not borrow money except from banks
and only if immediately after such borrowing there is asset
coverage of at least 300% for all borrowings of the Fund.
The Fund does not currently intend to utilize leverage after
conversion to open-end form.
(j) Shareholder Services. If Proposal One is approved,
various services will be made available to stockholders.
These will include participation in an exchange privilege
that allows stockholders to exchange their shares for shares
of the same class of other mutual funds in the Adviser's
mutual fund complex, the use of the Fund for retirement
plans, and permitting stockholders to effect various
transactions by telephone. The cost of such services will
normally be borne by the Fund rather than by individual
stockholders.
(k) Rule 12b-1 Distribution Plan. 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, the
Fund will adopt a distribution plan pursuant to Rule 12b-1 in
order to reimburse the Principal Underwriter for costs
incurred by it in distributing the shares of the Fund.
Further, if stockholders approve this Proposal, the Fund's
currently outstanding shares will be reclassified as Class A
shares and the proposed Rule 12b-1 distribution plan would
apply to that class. In addition, if stockholders approve
this Proposal, the Fund will adopt Rule 12b-1 distribution
plans for the proposed Class B shares and Class C shares of
the Fund.
(l) Minimum Investment 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 will adopt requirements that an initial
investment in Fund shares equal at least $250 and any
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<PAGE>
subsequent investment (other than upon the reinvestment of
dividends or distributions) be in a minimum amount of $50.
The Fund expects to redeem all the shares of any stockholder
whose account has remained below $200 in value for at least
90 days. Stockholders will receive 60 days' written notice
to increase the account value before the account is closed.
The Fund would be permitted to waive or reduce these minimums
for certain retirement and employee savings plans or
custodial accounts for the benefit of minors. The minimum
initial investment requirement will not apply to stockholders
holding shares at the time of conversion.
(m) Qualification as a Regulated Investment Company.
The Fund intends to continue to qualify for treatment as a
regulated investment company under the Internal Revenue Code
of 1986, as amended (the "Code"), after conversion to open-
end form. Such qualification will allow the Fund to continue
to be relieved of federal income tax on that part of its
investment company taxable income and net capital gain that
are distributed to stockholders. To so qualify, the Fund
must meet several requirements, one of which is that not more
than 30% of the Fund's gross income each taxable year may be
derived from the sale or other disposition of securities,
options or futures contracts held for less than three months.
The Adviser anticipates that the Fund would continue to be
able to meet this requirement after the conversion. No
assurance exists, however, that this requirement would be met
under all possible circumstances, particularly if the Fund is
required to sell recently acquired portfolio securities
because of unexpectedly large net redemptions or large
influxes of cash followed within a short time by significant
redemptions.
(n) Stock Certificates. If this Proposal is approved,
each certificate representing shares of the Fund as a closed-
end investment company will automatically represent the same
number of Class A shares of the Fund as an open-end
investment company. Each current stockholder will have the
right to exchange his 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.
Conversion to Open-End Form
Since shares of an open-end investment company are
offered on a continuous basis, the Board of Directors has
approved a Distribution Services Agreement between the Fund and
the Principal Underwriter to take effect at the time of the
conversion. The conversion will not be implemented until after a
registration statement under the Securities Act of 1933, as
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<PAGE>
amended, allowing the continuous offering of shares of the Fund
becomes effective.
Although management will use all practicable measures to
keep costs at a minimum, certain costs will be incurred, many of
which will be nonrecurring, in connection with the change from a
closed-end to an open-end investment company, including costs
associated with the seeking of necessary government clearances,
the preparation of a registration statement and prospectuses as
required by federal securities laws (including printing and
mailing costs) and the payment of fees under state securities
laws. The Fund estimates that these additional costs, which will
be paid by the Fund, will be approximately $300,000,or
approximately 0.30% of the Fund's current net asset value.
Management anticipates that substantially all of these costs will
be incurred by the Fund prior to the effective date of the
conversion.
In the opinion of Seward & Kissel, counsel to the Fund,
neither the Fund nor its stockholders will realize any gain or
loss for tax purposes as a result of the Fund's conversion. Such
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. If a stockholder later redeems shares,
the stockholder would recognize a gain or loss to the extent that
the redemption proceeds are greater or less than the adjusted tax
bases of the shares. Payment for redemptions is made within
seven days after receipt of a proper request for redemption (in
accordance with redemption procedures specified in the open-end
fund prospectus). 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 SEC, by order, so permits.
The Fund reserves the right to pay for redeemed shares "in kind"
if, in the opinion of the Adviser, such a redemption would be
advisable. In such event, a stockholder would receive portfolio
securities held by the Fund and would incur transaction costs in
disposing of the securities received. The Fund has no current
intention to redeem shares in kind.
Amendment of Articles of Incorporation
If the proposed conversion to open-end form is approved,
the conversion will be accomplished by amending the Articles of
Incorporation of the Fund to authorize the issuance of redeemable
14
<PAGE>
securities at net asset value, to provide that the Fund's shares
will be redeemable at the option of the stockholders and to
otherwise reflect the change to an open-end fund. In connection
with implementation of the Multiple Distribution System, certain
technical amendments to the Articles of Incorporation and By-Laws
of the Fund will be necessary in order to authorize the Fund to
reclassify shares outstanding at the time of the conversion as
Class A shares, and to reclassify certain unissued shares as
Class B shares, Class C shares or Advisor Class shares. In
connection with the amendments to the Articles of Incorporation,
the Board of Directors will make certain conforming changes to
the By-Laws. A copy of proposed Articles of Amendment and
Restatement, which will amend the Articles of Incorporation and
thereby restate the Charter of the Fund, which reflect the
amendments contemplated by this Proposal, is attached hereto as
Exhibit A.
The stockholders are also being asked to approve
amendments to the Articles of Incorporation in order to eliminate
certain provisions that are intended to have the effect of
limiting (a) the ability of other entities and persons to acquire
control of the Fund, (b) the freedom of the Fund to engage in
certain transactions, and (c) the ability of the Board of
Directors or stockholders to amend the Articles of Incorporation
or effect changes in the management of the Fund. These
provisions may be regarded as "anti-takeover" provisions and the
stockholders are being asked to approve amendments to eliminate
them because the need for such provisions would cease to exist if
the Fund is converted to open-end form.
The stockholders are also being asked to approve an
amendment to the Articles of Incorporation providing that the
presence in person or by proxy of stockholders entitled to cast
one-third of the votes entitled to be cast constitutes a quorum
for a meeting of stockholders. Currently, the presence in person
or by proxy of stockholders entitled to cast a majority of the
votes entitled to be cast constitutes a quorum at stockholder
meetings. This amendment would bring the Fund's quorum
requirements in line with those of the other open-end investment
companies managed by the Adviser.
The stockholders are being asked to approve an amendment
to the Articles of Incorporation to declassify the Board of
Directors. Currently, the Board of Directors is divided into
three classes. Upon the expiration of the term of office of each
class, the Directors in that class are elected for a term of
three years to succeed the Directors whose terms of office had
expired. The amendment also would eliminate the requirement that
the number of Directors may not exceed twenty.
15
<PAGE>
In addition, the stockholders are being asked to approve
an amendment to the Articles of Incorporation that would
eliminate the requirement that a Director be removed only by the
affirmative vote of 75% of the votes entitled to be cast for the
election of Directors. This is higher than the majority vote
otherwise required under the Maryland Law. The amendment also
would remove provisions that limit the Fund's ability to
consolidate with or merge with or into another corporation or to
liquidate or dissolve. Under the Articles of Incorporation, the
affirmative vote of 75% (which is higher than that otherwise
required under Maryland law or the 1940 Act) of the votes
entitled to be cast by stockholders is required to authorize the
liquidation or dissolution of the Fund in the absence of approval
of the liquidation or dissolution by a majority of the Continuing
Directors (as defined for this purpose). The affirmative vote of
75% of the votes entitled to be cast by stockholders also is
generally required to authorize certain transactions involving a
corporation, person or entity that is directly, or indirectly
through affiliates, the beneficial owner of more than 5% of the
outstanding shares of the Fund, or to amend the provisions of the
Articles of Incorporation relating to such transactions.
The above-described "anti-takeover" provisions were
intended to have the effect of making it more difficult and time-
consuming to change majority control of the Board of Directors
without its consent and thus to reduce the Fund's vulnerability
to an unsolicited takeover proposal and to render more difficult
the accomplishment of a merger or the assumption of control by a
principal stockholder. The conversion of the Fund to open-end
form would eliminate the need for these precautionary measures.
Therefore, the Board of Directors has considered and unanimously
approved, subject to stockholder approval of Proposal One,
amendments to the Articles of Incorporation eliminating these
provisions.
Modification of Investment Restriction
As noted above, open-end investment companies are
precluded from incurring debt other than borrowings from banks
not in excess of the 1940 Act's 300% asset coverage limitations.
If the Fund converts to open-end form, its investment restriction
governing borrowings and the issuance of senior securities, will
have to be modified. This investment restriction is deemed
fundamental, which means it may not be changed without the
approval of a majority of the Fund's outstanding voting
securities, as such term is defined in the 1940 Act.
The proposed modification to the investment restriction
is set forth below. If Proposal One is approved, the
modification will become effective only upon conversion of the
Fund to open-end form. The Adviser does not anticipate that the
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<PAGE>
modification will materially change the current investment
practices of the Fund. (Material to be deleted is in brackets;
material to be added is underlined.)
Borrowing
The Fund will not borrow money or issue senior
securities, except that the Fund may borrow
from a bank [or other entity in a privately
arranged transaction for (i) the repurchase
and/or tenders for its shares,] if immediately
after such borrowing there is asset coverage
of at least 300% [as defined in the 1940 Act
and (ii) temporary purposes in an amount not
exceeding 5% of the value of the total assets
of the Fund] for all borrowings of the Fund.
Approval of Advisory Agreement
Alliance Capital Management L.P.
The Adviser is an Exchange-listed company with principal
offices at 1345 Avenue of the Americas, New York, New York 10105.
It has been retained under an Investment Management and
Administration Agreement (the "Management Agreement") to provide
investment advice and, in general, to conduct the management and
investment program of the Fund under the supervision and control
of the Board of Directors.
The Adviser is a leading international investment
manager supervising client accounts with assets as of December
31, 1996 of more than $182 billion (of which more than $63
billion represented the assets of investment companies). The
Adviser's clients are primarily major corporate employee benefit
funds, public employee retirement systems, investment companies,
foundations and endowment funds and included as of December 31,
1996, 34 of the FORTUNE 100 companies. As of that date, the
Adviser and its subsidiaries employed approximately 1,450
employees who operated out of domestic offices and the offices of
subsidiaries in Bombay, Istanbul, London, Paris, Sao Paolo,
Sydney, Tokyo, Toronto, Bahrain, Luxembourg and Singapore.
Fifty-three registered investment companies comprising 111
separate investment portfolios managed by the Adviser currently
have more than two million shareholders.
Alliance Capital Management Corporation ("ACMC"), the
sole general partner of, and the owner of a 1% general
partnership interest in, the Adviser, is an indirect 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 and a wholly-owned subsidiary of The
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<PAGE>
Equitable Companies Incorporated ("ECI"), a holding company
controlled by AXA, a French insurance holding company. As of
March 1, 1997, ACMC, Inc. and Equitable Capital Management
Corporation, each a wholly-owned direct or indirect subsidiary of
Equitable, together with Equitable, owned in the aggregate
approximately 58% of the issued and outstanding units
representing assignments of beneficial ownership of limited
partnership interests in the Adviser ("Units"). As of March 1,
1997, approximately 33% and 8.9% of the Units were owned by the
public and employees of the Adviser and its subsidiaries,
respectively[, including an employee of the Adviser who serves as
a Director of the Fund. Certain information concerning the
Directors and principal executive officers of ACMC is provided
below under "Information as to the Fund's Principal Officers and
the Adviser."
As of March 1, 1997 AXA-UAP and its subsidiaries owned
60.7% of the issued and outstanding shares of the capital stock
of ECI. ECI is a public company with shares traded on the
Exchange. ECI owns all of the shares of Equitable. AXA-UAP, a
French company, is the holding company for an international group
of insurance and related financial services companies. AXA-UAP's
insurance operations include activities in life insurance,
property and casualty insurance and reinsurance. The insurance
operations are diverse geographically with activities,
principally in Western Europe, North America, and the
Asia/Pacific area. AXA-UAP is also engaged in asset management,
investment banking, securities trading, brokerage, real estate
and other financial services activities principally in the United
States, as well as in Western Europe and the Asia/Pacific area.
Based on information provided by AXA-UAP, on March 1,
1997, 22.5% of the issued ordinary shares (representing 33.0% of
the voting power) of AXA-UAP were controlled directly and
indirectly by Finaxa, a French holding company. As of March 1,
1997, 61.4% of the shares (representing 72.0% of the voting
power) of Finaxa were owned by four French mutual insurance
companies (the "Mutuelles AXA") (one of which, AXA Assurances
I.A.R.D. Mutuelle, owned 34.9% of the shares, representing 40.0%
of the voting power), and 23.7% of the shares of Finaxa
(representing 14.6% of the voting power) were owned by Banque
Paribas, a French bank ("Paribas"). Including the ordinary
shares owned by Finaxa, on March 1, 1997, the Mutuelles AXA
directly or indirectly controlled 26.0% of the issued ordinary
shares (representing 38.1% of the voting power) of AXA-UAP.
Acting as a group, the Mutuelles AXA control AXA-UAP and Finaxa.
In November 1996, AXA offered (the "Exchange Offer") to
acquire 100% of the ordinary shares ("UAP Shares") of FF 10 each
of Compagnie UAP, a societe anonyme organized under the laws of
France ("UAP"), in exchange for ordinary shares ("Shares") and
18
<PAGE>
Certificates of Guaranteed Value ("Certificates") of AXA. Each
UAP shareholder that tendered UAP Shares in the Exchange Offer
received two Shares and two Certificates for every five UAP
Shares so tendered. On January 24, 1997, AXA acquired 91.37% of
the outstanding UAP Shares. AXA-UAP currently intends to merge
(the "Merger") with UAP at some future date in 1997. It is
anticipated that approximately 11,706,826 additional Shares will
be issued in connection with the Merger to UAP shareholders who
did not tender UAP Shares in the Exchange Offer. If the Merger
had been completed at March 1, 1997, Finaxa would have
beneficially owned (directly and indirectly) approximately 21.7%
of the Shares (representing approximately 32.0% of the voting
power), and the Mutuelles AXA would have controlled (directly or
indirectly through their interest in Finaxa) 25.1% of the issued
ordinary shares (representing 36.8% of the voting power) of AXA-
UAP. On January 17, 1997, AXA announced its intention to redeem
its outstanding 6% Bonds (the "Bonds"). Between February 14,
1997 and May 14, 1997, holders of the Bonds will have the option
to convert each Bond into 5.15 Shares. On May 15, 1997, each
Bond still outstanding will be redeemed into cash at FF 1,285
plus FF 9.29 accrued interest. Finaxa currently owns 418,118
Bonds which it intends to convert into 2,153,308 Shares.
Assuming all outstanding Bonds are converted into Shares and
after giving effect to the Merger as if it had been completed at
March 1, 1997, Finaxa would have beneficially owned (directly and
indirectly) approximately 21.4% of the Shares (representing 31.3%
of the voting power), and the Mutuelles AXA would have controlled
(directly or indirectly through their interest in Finaxa) 24.7%
of the issued ordinary shares (representing 36.0% of the voting
power) of AXA-UAP.
Certain other clients of the Adviser may have investment
objectives and policies similar to those of the Fund. The
Adviser may, from time to time, make recommendations that result
in the purchase or sale of a particular security by its other
clients simultaneously with the Fund. If transactions on behalf
of more than one client during the same period increase the
demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price or quantity.
It is the policy of the Adviser to allocate advisory
recommendations and the placing of orders in a manner which is
deemed equitable by the Adviser to the accounts involved,
including the Fund. When two or more of the clients of the
Adviser (including the Fund) are purchasing or selling the same
security on a given day from the same broker-dealer, such
transactions may be averaged as to price.
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<PAGE>
Management Agreement
Under the Management Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Directors and officers of
the Fund who are affiliated persons of the Adviser. The Adviser
or its affiliates also furnish the Fund, without charge,
management supervision and assistance and office facilities and
provide persons satisfactory to the Board of Directors to serve
as the officers of the Fund. For the fiscal year ended
October 31, 1996, the Adviser received fees from the Fund of
$1,073,769 pursuant to the Management Agreement. Pursuant to a
Shareholder Inquiry Agreement, Alliance Fund Services, Inc.
("AFS"), a wholly owned subsidiary of the Adviser, received
reimbursement from the Fund during the fiscal year ended
October 31, 1996 of $2,106 relating to shareholder servicing
costs. The Fund did not pay brokerage commissions during its most
recent fiscal year to any broker that is an affiliated person of
the Fund or the Adviser or any affiliated person of such a
person.
The Management Agreement is terminable without penalty
by a vote of a majority of the Fund's outstanding voting
securities (as such term is defined in the 1940 Act) or by a vote
of a majority of the Directors on 60 days' written notice, or by
the Adviser on 60 days' written notice, and automatically
terminates in the event of its assignment. The Management
Agreement provides that in the absence of willful misfeasance,
bad faith or gross negligence on the part of the Adviser, or of
reckless disregard of its obligations thereunder, the Adviser
shall not be liable for any action or failure to act in
accordance with its duties thereunder.
The Management Agreement, which was approved by the
stockholders of the Fund at a meeting held on March 31, 1992 in
anticipation of the termination of a prior management agreement
due to a technical "assignment" thereof, became effective on
July 22, 1992. The Management Agreement has continued in effect
since 1992 and by its terms is to continue in effect for
successive twelve-month periods (computed from each January 1),
provided that such continuance is specifically approved at least
annually by a vote of a majority of the outstanding voting
securities of the Fund or by the Board of Directors, including,
in either case, a majority of the Directors who are not parties
to the Advisory Agreement or interested persons of any such party
as defined by the 1940 Act.
20
<PAGE>
Advisory Agreement
On April 23, 1997, the Board of Directors, unanimously
approved an advisory agreement between the Fund and the Adviser
(the "Advisory Agreement"). The terms of the Advisory Agreement
are similar to the terms of the Management Agreement, except as
discussed below. If Proposal One is approved by the
stockholders, the Management Agreement will be terminated and the
Advisory Agreement will become effective at the time of the
conversion. The form of Advisory Agreement (with deletions from
the Management Agreement shown in brackets and additions shown by
underscoring) is attached hereto as Exhibit B.
Under the Advisory Agreement, the advisory fee payable
to the Adviser by the Fund would be accrued daily and paid
monthly at the annual rate of 1.10% of the Fund's average daily
net assets up to $100 million, .95% of the next $100 million of
the Fund's average daily net assets, and .80% of the Fund's
average daily net assets over $200 million. The rate of the
advisory fee under the Management Agreement is the same as the
rate under the Management Agreement except that under the
Advisory Agreement, the Adviser is paid a monthly fee at an
annual rate computed upon the Fund's average weekly net assets.
Under the Advisory Agreement, the Adviser would provide
personnel to render such clerical, accounting, administrative,
and other non-advisory services to the Fund as would be requested
from time to time by the Fund. The terms of the Advisory
Agreement, like those of the existing advisory agreements between
the Adviser and the other open-end funds sponsored by the
Adviser, provide that the cost of such personnel would be at such
rates as may be agreed to from time to time between the Fund and
the Adviser. Nonetheless, the Adviser has undertaken with the
Board of Directors, subject to subsequent notice to the Board,
not to seek reimbursement from the Fund for such personnel,
thereby waiving, for an indefinite period of time, the Adviser's
right to such payments. The Management Agreement contains a
similar provision and the Fund has never made payments to the
Adviser pursuant thereto.
The Advisory Agreement contains provisions not found in
the Management Agreement that accommodate the possible creation
of additional investment portfolios of the Fund and the adoption
of the Multiple Distribution System, including the adoption of a
Rule 12b-1 distribution plan. The Fund does not have any current
plans to establish additional investment portfolios.
21
<PAGE>
Establishment of Multiple Distribution System
At its April 23, 1997 meeting, the Board of Directors
unanimously approved the establishment of a Multiple Distribution
System (the "Multiple Distribution System") upon the conversion
of the Fund to open-end form, and in connection therewith,
approved and declared advisable (a) an amendment to the Articles
of Incorporation of the Fund classifying the authorized shares of
the Fund into four classes, (b) the adoption of a distribution
plan pursuant to Rule 12b-1 under the 1940 Act (the "Rule 12b-1
Plan") and (c) a Distribution Services Agreement (the
"Distribution Agreement") to be entered into between the Fund and
the Principal Underwriter. Rule 12b-1 under the 1940 Act
regulates the circumstances under which an open-end fund may,
directly or indirectly, bear the expenses of distributing its
shares. The Multiple Distribution System will be implemented
only if this Proposal is approved at the Meeting. The Board of
Directors recommends the Multiple Distribution System and Rule
12b-1 Plan to the stockholders for approval. The Distribution
Agreement does not require, and is not being submitted for,
stockholder approval.
The Multiple Distribution System would enable the Fund
to offer investors the option of purchasing shares subject to
varying fee arrangements. The shares to be offered by the Fund
to retail investors, Class A shares, Class B shares and Class C
shares, would enhance the attractiveness of the Fund by
permitting investors to select the distribution option that is
most suited to their particular circumstances. A fourth class of
shares, Advisor Class shares, would be available only to limited
categories of investors, including certain fee-based program
participants, self-directed defined contribution plans, certain
registered investment advisers and other financial intermediaries
and their clients, investment advisory clients of the Adviser and
the directors and trustees of the registered investment companies
sponsored by the Adviser. The Board of Directors has adopted a
plan pursuant to Rule 18f-3 under the 1940 Act which would govern
the issuance and sale of these four classes of shares.
If the Multiple Distribution System is implemented, the
Fund would classify all shares outstanding at the time of the
conversion of the Fund to open-end form, and shares sold in the
future subject to a front-end sales charge, as Class A shares,
and would create three new classes of shares, Class B, Class C
and Advisor Class. Thereafter, the Fund would offer four classes
of shares: (a) Class A shares, subject to a front-end sales
charge or a 1% contingent deferred sales charge ("CDSC") in
certain circumstances and a distribution services fee of up to
.30% (annualized on aggregate daily net assets); (b) Class B
shares, subject to a CDSC and a distribution services fee of up
to 1% (correspondingly annualized) until conversion of such
22
<PAGE>
shares to Class A shares after eight years; (c) Class C shares,
which would not be subject to a front-end sales charge, but would
be subject to a 1% CDSC for one year and to a distribution
services fee of up to 1% (also correspondingly annualized) for
the life of the investment; and (d) Advisor Class shares, which
would not be subject to either a front-end sales charge, CDSC or
distribution services fee. The four classes would each represent
interests in the Fund's investment portfolio and would be
otherwise identical, except that: (a) Advisor Class shares would
not pay a distribution services fee; (b) the distribution
services fees would be higher for Class B and Class C shares;
(c) transfer agency fees would be higher for Class B and Class C
shares; (d) only Class B and Advisor Class shares would have a
conversion feature; and (e) each class would have exclusive
voting rights with respect to matters that affect only its
interests.
Shares of the three retail classes would be sold under a
single prospectus, which would describe the Multiple Distribution
System and considerations that investors may wish to bear in mind
in selecting among the classes. A separate prospectus offering
the Advisor Class shares would describe the eligible categories
of purchasers of such shares and the different distribution
arrangements that apply to those shares.
The alternative purchase arrangements available with
respect to Class A shares, Class B shares and Class C shares
would permit retail investors to choose the method of purchasing
shares that they consider most beneficial given the amount to be
purchased, the length of time they expect to hold the shares, and
other circumstances. Investors would be able to consider
whether, during the anticipated life of their investment in the
Fund, the accumulated distribution services fee and CDSC on
Class B shares prior to conversion to Class A shares, or the
accumulated distribution services fee and CDSC on Class C shares,
would be less than the initial sales charge and accumulated
distribution services fee on Class A shares purchased at the same
time, and to what extent such differential would be offset by the
higher return on Class A shares.
Rule 12b-1 Plan
Under the Rule 12b-1 Plan, the Fund would pay to the
Principal Underwriter each month a distribution services fee that
will not exceed, on an annualized basis, .30 of 1% of the
aggregate average daily net assets of the Fund attributable to
Class A shares and 1% of the respective aggregate average daily
net assets of the Fund attributable to the Class B shares and the
Class C shares. The Rule 12b-1 Plan further provides that the
Adviser may make payments from its own resources, which may
include the advisory fees paid by the Fund or other funds managed
23
<PAGE>
by the Adviser and the Adviser's other revenues, for expenditures
under the Rule 12b-1 Plan. Expenses incurred by the Principal
Underwriter in the distribution of Advisor Class shares would be
paid by the Adviser or the Principal Underwriter from their own
resources.
If the Multiple Distribution System is implemented, the
Rule 12b-1 Plan would continue in effect from year to year with
respect to each retail class, provided that such continuance is
specifically approved at least annually by the Board of Directors
of the Fund or by vote of the stockholders of that class, and in
either case by the Directors who are not "interested persons" of
the Fund and who have no financial interest in the Rule 12b-1
Plan or any related agreement (the "Independent Directors"),
pursuant to a vote cast in person at a meeting called for that
purpose. Each class of shares would have exclusive voting rights
with respect to the provisions of the Rule 12b-1 Plan that are
applicable to that particular class.
With respect to the Class A shares, under the Rule 12b-1
Plan the Fund would not be obligated to pay any distribution
expense in excess of the distribution services fee described
above, and any distribution expenses accrued by the Principal
Underwriter in one fiscal year of the Fund may not be paid from
distribution services fees received from the Fund in subsequent
fiscal years of the Fund. It is contemplated that the amounts
expended by the Principal Underwriter upon the initial purchase
of Class B or Class C shares will be substantially in excess of
the amounts received from the distribution fee and CDSC
attributable to such shares in any given year. The Principal
Underwriter would be compensated from these sources for
distribution services over a period of years, as long as the
Board of Directors approves the continuance of the Plan from year
to year. If the Rule 12b-1 Plan were terminated by a class, no
amounts (other than amounts accrued but not yet paid) would be
owed by the Fund to the Principal Underwriter with respect to
that class.
Under the Rule 12b-1 Plan the Treasurer of the Fund
would furnish the Directors with quarterly statements of
distribution revenues and expenditures. These statements will
set forth distribution revenues and expenditures with respect to
Class A, Class B and Class C shares of the Fund. In the
statements, and on the books of the Fund, only distribution
expenditures properly attributable to the sale of a particular
class will be allocated against the distribution services fee
charged to that class. Distribution expenses attributable to the
sale of all four classes of shares will be allocated to a class
of shares based upon the ratio in which the sales of shares of
that class bears to the sales of all four classes, although, as
24
<PAGE>
discussed above, any distribution expenses allocated to the
Advisor Class shares will not be paid by the Fund.
The Rule 12b-1 Plan provides that it may not be amended
to increase materially the distribution costs that a class may
bear without stockholder approval and that any material
amendments of the Plan must be approved by the Board of Directors
or by a vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of that class, and in either case by
the Independent Directors, by vote cast in person at a meeting
called for that purpose.
The Rule 12b-1 Plan would be terminable by the Fund with
respect to a class without penalty at any time by vote of a
majority of the Independent Directors or by vote of the holders
of a majority of the outstanding voting securities of such class
upon 60 days' written notice to the Principal Underwriter, or by
the Principal Underwriter with respect to any class upon 60
days' written notice to the Fund.
The Board of Directors, in approving the Rule 12b-1
Plan, determined that there is a reasonable likelihood that it
will benefit the Fund and each of Class A, Class B and Class C
thereof and the stockholders. [In making their determination to
adopt the Rule 12b-1 Plan, the Directors considered the
following factors: (a) the need to consult independent counsel or
experts to assist them in reaching a determination whether to
adopt the Rule 12b-1 Plan; (b) the nature of the problems or
circumstances that make implementation of the Rule 12b-1 Plan
necessary or appropriate and the causes of such problems or
circumstances; (c) the way in which the Rule 12b-1 Plan would
address these problems or circumstances and how it would be
expected to resolve or alleviate them, including the nature and
approximate amount of the anticipated expenditures, the
relationship of such expenditures to the overall cost structure
of the Fund, the nature of the anticipated benefits, and the time
it would take for those benefits to be achieved; (d) the merits
of possible alternative plans; (e) the interrelationship between
the Rule 12b-1 Plan and the activities of any other person who
finances distribution of the Fund's shares, including whether any
payments by the Fund to such other person are made in such a
manner as to constitute the indirect financing of distribution by
the Fund; (f) the possible benefits of the Rule 12b-1 Plan to any
other person relative to those expected to inure to the Fund; and
(g) the effect of the Rule 12b-1 Plan on the Fund's existing
stockholders.
Operation of the Multiple Distribution System
Class A shares would be sold at net asset value plus a
conventional front-end sales load. Class B and Class C shares
25
<PAGE>
would be sold at net asset value without the imposition of a
sales load at the time of purchase. Advisor Class shares would
be sold at net asset value without the imposition of any sales
load.
The purpose of the Class B conversion feature is to
relieve the holders of Class B shares from the burden of the
higher ongoing distribution fees in those instances where the
shares have been outstanding for a time period sufficient for the
Principal Underwriter to have been compensated to a large extent
for distribution expenses related to the shares.
Class C shares would be sold at net asset value without
the imposition of a sales charge at the time of purchase.
Class C shares redeemed within one year of purchase will be
subject to a 1% CDSC. Under the Rule 12b-1 Plan, the Fund will
pay to the Principal Underwriter a distribution services fee,
which will be allocated entirely to Class C, at an annual rate of
up to 1% of the aggregate average daily net asset value of the
Class C shares. Class C shares will not convert to any other
class and will, therefore, always be subject to the 1%
distribution services fee.
Advisor Class shares would be sold at net asset value
without the imposition of a sales charge at the time of purchase
or redemption. Advisor Class shares will automatically convert
to Class A shares in the event an investor who owns Advisor Class
shares ceases to participate in an eligible fee-based program or
plan, ceases to be associated with an eligible investment adviser
or financial intermediary, or if the stockholder is otherwise no
longer eligible to purchase Advisor Class shares as described in
the Advisor Class prospectus.
The exchange privileges of each class of shares with
other mutual funds sponsored by the Adviser would also differ.
Each class of shares offered by the Fund will be exchangeable, at
any time and without a sales charge, for the same class of shares
offered by other mutual funds sponsored by the Adviser.
The net asset value per share of Class A shares, Class B
shares, Class C shares and Advisor Class shares would be
determined separately. Income or gain from investments by the
Fund and general expenses and liabilities of the Fund will be
allocated to each class based on the net asset value of each
class. Distribution expenses and transfer agency expenses and
liabilities allocable to a particular class will be allocated to
that class. Because the distribution fees and transfer agency
expenses allocable to the Class B shares and Class C shares will
be higher than those for the Class A shares and Advisor Class
shares, the net asset value of Class B shares and Class C shares
may be lower than that of the Class A shares and Advisor Class
26
<PAGE>
shares and dividends per share on Class B shares and Class C
shares are expected to be less than those on Class A shares and
Advisor Class Shares.
The Multiple Distribution System would provide retail
investors with the option of purchasing shares of the Fund
pursuant to a traditional front-end sales load method or pursuant
to several different fee arrangements. This system addresses the
differing requirements and preferences of potential retail
investors and allows each investor to choose the option that is
most beneficial under the circumstances. For example, if an
investor qualifies for a significant discount of the front-end
sales load, the investor may prefer to purchase Class A shares
rather than pay the higher distribution fee applicable to Class B
or Class C shares. If an investor does not qualify for a
discount, the investor may prefer to invest in Class B or Class C
shares and defer the payment of a sales charge. On the other
hand, if such an investor anticipates holding the shares for an
extended period of time, it may be more beneficial for the
investor to pay the initial sales charge applicable to Class A
shares than to be subject to the higher distribution fee
applicable to Class B and Class C shares.
If an investor qualifies as an eligible purchaser for
Advisor Class shares, the investor may choose to purchase these
shares and avoid paying a sales charge at the time of purchase or
redemption.
If the Fund converts to open-end form, the Board of
Directors expects the Multiple Distribution System to help
attract new investors to the Fund by creating additional purchase
method choices, which will benefit all of the Fund's stockholders
by decreasing the Fund's operating expenses per share. It is
also believed that the Multiple Distribution System will help to
discourage redemptions to a certain extent. In addition,
adoption of the Multiple Distribution System will enable the Fund
to compete with other similar mutual funds that offer similar
multiple distribution arrangements.
If the Multiple Distribution System is implemented, it
is contemplated that the amendment to the Fund's Articles of
Incorporation referred to above will become effective upon the
filing of Articles of Amendment and Restatement in the form
attached hereto as Exhibit A. The Rule 12b-1 Plan is
incorporated into the Distribution Agreement. A copy of the
provisions of the Distribution Agreement that constitute the Rule
12b-1 Plan is attached hereto as Exhibit C.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE CONVERSION OF THE FUND TO AN OPEN-END INVESTMENT
COMPANY.
27
<PAGE>
Under the Fund's Articles of Incorporation, amendments
to the Fund's Articles of Incorporation must be approved by the
holders of a majority of the Fund's outstanding shares. However,
the Fund's Articles of Incorporation provide that the conversion
of the Fund from a closed-end investment company to an open-end
investment company and the elimination of the "anti-takeover"
provisions described above requires the approval of 75% or more
of the outstanding shares. Accordingly, as all of the matters
discussed above are to be acted upon as a single proposal,
adoption of Proposal One will require the vote of 75% or more of
the outstanding shares of the Fund. This vote is higher than the
1940 Act requirement that would otherwise be necessary for the
modification of an investment restriction and the approval of the
Advisory Agreement and the Rule 12b-1 Plan. If Proposal One is
not adopted the Fund will continue to operate as a closed-end
fund, the current provisions of the Articles of Incorporation and
the Management Agreement will remain in effect, and the Board of
Directors will consider what further actions, if any, may be
appropriate.
PROPOSAL TWO
ELECTION OF DIRECTORS
If Proposal One is approved, then at the Meeting the
stockholders will be asked to elect seven Directors to office for
a term of indefinite duration and until their successors are
elected and qualified. If Proposal One is not approved, then at
the Meeting the three Directors in Class Three will be elected to
serve for a term of three years and until their successors are
elected and qualified. 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
Card to nominate and vote in favor of the election of the persons
named below.
Pursuant to the Articles of Incorporation and By-laws of
the Fund, the Board of Directors has been divided into three
classes. The term of office of Class Three expires as of the
Meeting, that of Class One will expire as of the annual meeting
of stockholders to be held in 1998 and that of Class Two will
expire as of the annual meeting of stockholders to be held in
1999. Upon expiration of the terms of office of each class as
set forth above, those persons then elected as Directors in that
class would serve until the third annual meeting of stockholders
following their election. Messrs. John H. Dobkin, W.M. Henderson
and Stig Host are members constituting Class Three; Messrs. David
H. Dievler and Alan Stoga are the members constituting Class One;
and Messrs. John D. Carifa, Richard M. Lilly, and Robert C. White
are the members constituting Class Two.
28
<PAGE>
As a result of this system, only those Directors in a
single class may be changed in any one year, and it would require
two years to change a majority of the Board of Directors
(although, under Maryland law, procedures are available for the
removal of Directors even if they are not then standing for
re-election and, under SEC regulations, procedures are available
for including appropriate stockholder proposals in management's
annual proxy statement). This system of electing Directors,
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. If Proposal One is approved, however,
the stockholders will be asked to elect seven Directors to office
for a term of indefinite duration and until their successors are
elected and qualified. If Proposal One is approved, the
stockholders would not be asked to elect Mr. Robert C. White as a
Director, as it is expected that, consistent with the retirement
policies of the open-end funds in the Adviser's complex, he would
then retire as a Director. If Proposal One is not approved, it
is expected that Mr. White would continue to serve as a Director
who is a member of Class Two.
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 of such inability, the
proxies received will be voted for such substitute nominees as
the Board of Directors may recommend.
Certain of the Fund's Directors and officers are
residents of the United Kingdom and substantially all of the
assets of such persons may be located outside of the United
States. As a result it may be difficult for U.S. investors to
effect service of process upon such Directors or officers within
the United States, or to realize judgments of courts of the
United States predicated upon civil liabilities of such Directors
or officers under the federal securities laws. The Fund has been
advised that there is substantial doubt as to the enforceability
in the United Kingdom of the civil remedies and criminal
penalties afforded by the federal securities laws. Also, it is
unclear if extradition treaties now in effect between the United
States and the United Kingdom would subject these Directors and
officers to effective enforcement of the criminal penalties of
the federal securities laws.
29
<PAGE>
Certain information concerning the Directors is set
forth below.
<TABLE>
<CAPTION>
Number of shares
beneficially owned
Name, positions and offices with the Fund, Year first Year term directly or
age, principal occupations during became a as Director indirectly as of
the past five years and other Directorships Director will expire1 May 16, 1996
___________________________________________ __________ ___________ ______________
<S> <C> <C> <C>
2 John D. Carifa, Chairman and President, 52. 1990 1999
President, Chief Operating Officer and a Director (Class Two)
of ACMC.
3 David H. Dievler, 67. Independent Financial 1990 1998
Consultant. Formerly a Senior Vice President of ACMC and (Class One)
Chairman of the Board of the Fund.
3,4 John H. Dobkin, 55. President of Historic Hudson 1992 20005
Valley (historic preservation) since 1990. He was (Class Three)
formerly Director of the National Academy of Design.
From 1987 to 1992, he was a Director of the general
partner of the Adviser.
3,4 W.H. Henderson, 70. Retired oil company executive 1990 20005
and independent oil and gas consultant. Director of (Class Three)
Fidelity Japan OTC and Regional Markets Fund.
3,4 Stig Host, 70. Chairman and Director of Kriti 1990 20005
Exploration, Inc. (oil and gas exploration and (Class Three)
production), Managing Director of Kriti Oil and
Minerals, N.V., Chairman of Kriti Properties and
Development Corporation (real estate), Chairman of
International Marine Sales, Inc. (marine fuels),
Director of Florida Fuels, Inc. (marine fuels),
President of Alexander Host Foundation and Trustee
of the Winthrop Focus Funds.
3,4 Richard M. Lilly, 66. President and Chief Executive 1992 1996
Officer of Esso Italiana, S.p.A. from 1990 to 1992. (Class Two)
From 1985 to 1989, he was President and Chief Executive
Officer of Esso Europe-Africa Services and, previously,
affiliated in other capacities with Exxon Corpora-
tion since 1957.
3,4 Alan Stoga, 46. President of Ruder-Finn- 1992 1998
Stoga, L.L.C., Managing Director and a member of (Class One)
the Board of Directors of Kissinger Associates,
Inc. He is also the President and General
Partner of Zemi Investments, L.P.
3,4 Robert C. White, 74. Formerly a Vice President and 1990 1999
Chief Financial Officer of the Howard Hughes Medical (Class Two)
Institute. Retired Director of the MEDSTAT Group
(healthcare information systems) and the Ambassador
Funds and a Retired Trustee of the St. Clair Fund
(registered investment companies). He was formerly
Assistant Treasurer of Ford Motor Company.
____________________
1 If Proposal One is approved, the terms of the Directors would be of an indefinite duration.
2 "Interested person," as defined in the 1940 Act, of the Fund because of affiliation with the
Adviser.
3 Member of the Audit Committee.
4 Member of the Nominating Committee.
5 If re-elected at the Meeting and Proposal One is not approved.
</TABLE>
30
<PAGE>
During the fiscal year ended October 31, 1996, the Board of
Directors met five times, the Audit Committee met twice for the
purposes described below in Proposal Four and the Nominating
Committee did not meet. [The Nominating Committee was
constituted for the purpose of selecting and nominating persons
to fill any vacancies on the Board of Directors.] The Nominating
Committee of the Fund does not currently consider candidates
proposed by stockholders for election as Directors. [Name any
Director who attended fewer than 75% of the aggregate of the
total number of Board meetings and total number of Committee
meetings during the most fiscal year of the Fund.]
The Fund does not pay any fees to, or reimburse expenses of,
its Directors who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Directors during the fiscal year ended October 31, 1996, the
aggregate compensation paid to each of the Directors during the
calendar year 1996 by all of the funds to which Alliance provides
investment advisory services (collectively, the "Alliance Fund
Complex") and the total number of funds 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 fund 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 Funds
Compensation in the Alliance Fund
Aggregate From the Alliance Complex, Including
Compensation Fund Complex, the Fund, as to which
Name of Director from the Fund Including the Fund a Director or Trustee
John D. Carifa $0 $0 50
David H. Dievler $ 4,900 $182,000 43
John H. Dobkin $ 4,900 $121,250 30
W.H. Henderson $10,500 $ 31,750 5
Stig Host $10,500 $ 31,750 5
Richard M. Lilly $10,500 $ 31,750 5
Alan Stoga $10,500 $ 31,750 5
Robert C. White $ 4,900 $130,750 11
Alliance has instituted a policy applicable to all funds
in the Alliance Fund Complex contemplating, in the case of the
Fund, that the Directors of the Fund will each invest at least
$10,000 in shares of the Fund, and at least $150,000 in shares of
at least five funds in the Alliance Fund Complex (including the
Fund), before the end of 1997.
As of May 16, 1997, the Directors and officers of the
Fund as a group owned less than 1% of the shares of the Fund.
31
<PAGE>
[Description to be added here of any purchases or sales of Units
of the Adviser by any of the Fund's Directors since November 1,
1995 (i.e., the beginning of the most recent fiscal year of the
Fund) with transactions involving 1% or less of the Units to be
omitted.]
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE ELECTION OF THE FOREGOING NOMINEES TO SERVE AS
DIRECTORS OF THE FUND.
PROPOSAL THREE
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 the fiscal year
ending October 31, 1997. Their selection was unanimously
approved by the vote, cast in person, of the Board of Directors
at the meeting held on April 23, 1997. The affirmative vote of a
majority of the votes cast at the Meeting is required to ratify
such selection. Ernst & Young LLP has audited the accounts of
the Fund since the Fund's commencement of operations in 1990 and
does not have any direct financial interest or any material
indirect financial interest in the Fund. A representative of
Ernst & Young LLP is expected to attend the Meeting and to have
the opportunity to make a statement and to respond to appropriate
questions from the stockholders.
The Audit Committee of the Board of Directors generally
meets twice during each fiscal year with representatives of Ernst
& Young LLP to discuss the scope of the independent accountants'
engagement and review the financial statements of the Fund and
the results of their examination thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF THE FUND.
32
<PAGE>
INFORMATION AS TO THE FUND'S PRINCIPAL OFFICERS
AND THE ADVISER
The principal officers of the Fund, their ages and their
principal occupations during the past five years are set forth
below. Each of the officers listed below currently serves as an
officer of one or more of the other registered investment
companies sponsored by the Adviser.
John D. Carifa, [52], Chairman of the Board and President
(see Proposal Three, Election of Directors, at Page [ ] for
biographical information).
Mark H. Breedon, [43], Vice President--Investments, is a
Vice President of ACMC and a Director and Senior Vice President
of Alliance Capital Limited ("ACL"), with which he has been
associated since prior to 1992.
Francis P. Reeves, [25], Vice President, is a Vice President
of ACL with which he has been associated since 1996. Previously,
he was an investment adviser with Citibank Private Bank since
1995, assistant trader of Mitsubishi Finance International since
1994. Since prior to 1992, he attended Nottingham University.
Jeremy R. Kramer, [34], Vice President--Investments, is a
Vice President of ACMC with which he has been associated since
1994. Previously, he was a securities analyst with Neuberger &
Berman.
Daniel V. Panker, [57], Vice President, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1992.
Mark D. Gersten, [45], Treasurer and Chief Financial
Officer, is a Senior Vice President of AFS, with which he has
been associated since prior to 1992.
Edmund P. Bergan, Jr., 46, Secretary, is a Senior Vice
President and the General Counsel of the Principal Underwriter
and of AFS, with which he has been associated since prior to
1992.
The investment adviser and administrator for the Fund is
Alliance Capital Management L.P., with principal offices at 1345
Avenue of the Americas, New York, New York 10105.
The Directors of ACMC are Messrs. Dave H. Williams, Luis J.
Bastida, Claude Bebear, James M. Benson, Bruce W. Calvert, John
D. Carifa, Henri de Castries, Kevin C. Dolan, Denis Duverne,
Alfred Harrison, Jean-Pierre Hellebuyck, Benjamin D. Holloway,
Joseph J. Melone, Peter D. Noris, Frank Savage, Jerry M. de St.
33
<PAGE>
Paer, Robert B. Zoellick and Mses. Madelon DeVoe Talley and Reba
White Williams.
Mr. Williams is the chairman of the Board of Directors and
Chief Executive Officer of ACMC and a Senior Executive Vice
President of AXA-UAP. Mr. Bastida is the Chief Financial Officer
of Banco Bilbao Vizcaya, S.A. Mr. Bebear is the Chairman of the
Executive Board of AXA-UAP and Chairman of ECI. Mr. Benson is a
Senior Executive Vice President and the Chief Operating Officer
of ECI, the President and Chief Executive Officer of Equitable
and a Senior Executive Vice President of AXA-UAP. Mr. Calvert is
a Vice Chairman and the Chief Investment Officer of ACMC. Mr
Carifa is the President and Chief Operating Officer of ACMC. Mr.
de Castries is a Senior Executive Vice President of AXA-UAP and a
Vice Chairman of ECI. Mr. Dolan is the Chief Executive Officer
of AXA Asset Management (France). Mr. Duverne is a Senior Vice
President of AXA-UAP. Mr. Harrison is a Vice Chairman of ACMC.
Mr. Hellebuyck is Chairman of the Board of Directors of AXA Asset
Management (Europe). Mr. Holloway is a financial consultant.
Mr. Melone is the President and Chief Executive Officer of ECI,
the Chairman of the Board of Directors of Equitable and a Senior
Executive Vice President of AXA-UAP. Mr. Noris is an Executive
Vice President and the Chief Investment Officer of ECI and
Equitable. Mr. Savage is the Chairman of Alliance Capital
Management International. Mr. de. St. Paer is a Senior Executive
Vice President and the Chief Financial Officer of ECI and an
Executive Vice President of Equitable. Mr. Zoellick is the
Executive Vice President of the Federal National Mortgage
Association. Ms. Devoe Talley is Commissioner of the Port
Authority of New York and New Jersey. Ms. Williams is the
Director of Special Projects for ACMC.
The address of Messrs. Calvert, Carifa, Savage and Williams
and Dr. Williams is c/o Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105. The address of
Messrs. Benson, de St. Pear and Melone is c/o The Equitable Life
Assurance Society of the United States, 787 Seventh Avenue, New
York, New York 10019. The address of Mr. Harrison is c/o
Alliance Capital Management L.P., 3600 Piper Jaffray Tower,
Minneapolis, Minnesota 55402. The address of Mr. Hellebuyck is
c/o AXA, 50 Rue du Colisee, Paris, France 75008. The address of
Mr. Holloway is c/o Continental Companies, 3250 Mary Street,
Miami, Florida 33133. The address of Ms. Talley is 876 Park
Avenue, New York, New York 10021. The address of Mr. Bastida is
c/o Banco Bilbao Vizcaya, P. Castellana, 81, 25 28046 Madrid,
Spain. The address of Mr. Bebear is c/o AXA, 50 Rue du Colisee,
Paris, France 75008. The address of Mr. de Castries is c/o AXA,
50 Rue du Colisee, Paris, France. The address of Mr. Dolan is
c/o AXA, 50 Rue du Colisee, Paris. The address of Mr. Duverne is
[ ]. The address of Mr. Noris is c/o AXA, 50 Rue du
34
<PAGE>
Colisee, Paris. The address of Mr. Zoellick is c/o Fannie Mae,
3900 Wisconsin Avenue, N.W., Washington D.C. 20016.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 30(h) of the 1940 Act and the rules under Section 16
of the Securities Exchange Act of 1934, as amended, require that
the Directors and officers of the Fund and the Directors of ACMC,
among others, file with the SEC and the Exchange initial reports
of ownership of shares and reports of changes in ownership of
shares of the Fund. A report of changes in beneficial ownership
on Form 4 was inadvertently filed late by Alliance on behalf of
each of Messrs. Dievler and Host, Directors of the Fund, with
respect to a purchase of Fund shares. In each case, the
transaction occurred prior to December 1993.
SUBMISSION OF PROPOSALS FOR
MEETINGS OF STOCKHOLDERS
If Proposal One is not approved, then proposals of
stockholders intended to be presented at the next annual meeting
of stockholders of the Fund must be received by the Fund by
January 27, 1998 for inclusion in the Fund's proxy statement and
form of proxy card relating to that meeting. If Proposal One is
approved then the Fund will convert to open-end form and will not
hold annual or other regular meetings of stockholders, in which
case proposals of stockholders must be received by the Fund a
reasonable time prior to the mailing of the proxy materials for a
meeting of stockholders. 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 regulations under the federal securities laws.
OTHER MATTERS
Management of the Fund does not know of any matters to be
presented at the Meeting other than those described in this Proxy
Statement. If any other matters properly come before the
Meeting, the shares represented by proxies will be voted with
respect thereto in accordance with the best judgment of the
person or persons voting the proxies.
35
<PAGE>
REPORTS TO STOCKHOLDERS
The Fund will furnish, upon request and without charge, to
each person to whom the proxy statement is delivered with a copy
of the Fund's annual report to stockholders for the fiscal year
ended October 31, 1996, and, when it becomes available, [which is
expected to be on or about July 1, 1997,] a copy of the Fund's
semi-annual report to stockholders for the six months ended
April 30, 1997. To request a copy of one or both of these
reports, please call Alliance Fund Services, Inc. at (800)
227-4618 or contact at Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New York
10105.
By order of the Board of Directors,
Edmund P. Bergan, Jr.
Secretary
May 26, 1997
New York, New York
36
00250070.AN1
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
Alliance Global Environment Fund, Inc., a Maryland
corporation having its principal office in the City of Baltimore,
State of Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of
Maryland:
FIRST: The Charter of the Corporation is amended and
as so amended is restated in its entirety by striking out article
First through Ninth and inserting in lieu thereof the following:
"FIRST: (1) The name of the incorporator is Frank I.
Nasta.
(2) The incorporator's post office address is
One Battery Park Plaza, New York, New York 10004.
(3) The incorporator is over eighteen years
of age.
(4) The incorporator is forming the
corporation named in these Articles of Incorporation under the
general laws of the State of Maryland.
SECOND: The name of the corporation (hereinafter
called the Corporation) is Alliance Global Environment Fund, Inc.
THIRD: (1) The purpose for which the Corporation is
formed is to conduct, operate and carry on the business of an
investment company.
(2) The Corporation may engage in any other
business and shall have all powers conferred upon or permitted to
corporations by the Maryland General Corporation Law.
FOURTH: The post office address of the principal
office of the Corporation within the State of Maryland is 32
South Street, Baltimore, Maryland 21202 in care of The
Corporation Trust, Incorporated. The resident agent of the
Corporation in the State of Maryland is The Corporation Trust,
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Incorporated, 32 South Street, Baltimore, Maryland 21202, a
Maryland Corporation.
FIFTH: (1) The total number of shares of capital
stock which the Corporation shall have authority to issue is
twelve billion (12,000,000,000), all of which shall be Common
Stock having a par value of one-tenth of one cent ($.001) per
share and an aggregate par value of twelve million dollars
($12,000,000). Until such time as the Board of Directors shall
provide otherwise in accordance with paragraph (1)(d) of
Article SEVENTH hereof, three billion (3,000,000,000) of the
authorized shares of Common Stock of the Corporation are
designated as Class A Common Stock, three billion (3,000,000,000)
of such shares are designated as Class B Common Stock, three
billion (3,000,000,000) of such shares are designated as Class C
Common Stock and three billion (3,000,000,000) of such shares are
designated as Advisor Class Common Stock.
(2) 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)(d) of Article SEVENTH hereof.
(3) All consideration received by the
Corporation for the issue 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 attributable to the Class A Common Stock, the assets
attributable to the Class B Common Stock, the assets attributable
to the Class C Common Stock and the assets attributable to
Advisor Class Common Stock shall be invested in the same
investment portfolio of the Corporation.
(4) The allocation of investment income and
capital gains and expenses and liabilities of the Corporation
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among the Class A Common Stock, Class B Common Stock, Class C
Common Stock and Advisor Class Common 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 or capital gains, expenses and
liabilities (including accrued expenses and reserves) and assets
to a particular class or classes.
(5) 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 the Class A Common Stock, Class B Common Stock, Class C Common
Stock and Advisor Class Common Stock may vary with respect to
each such class to reflect differing allocations of the expenses
of the Corporation among the holders of the four classes and any
resultant differences between the net asset values per share of
the four 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 period, not to exceed 72
hours, prior to the record date of the dividend.
(6) 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 or her
name on the books of the Corporation. Subject to any applicable
requirements of the Investment Company Act of 1940, as from time
to time in effect, or rules or orders of the Securities and
Exchange Commission or any successor thereto, or other applicable
law, all 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 of the
Class A Common Stock, Class B Common Stock, Class C Common Stock
and Advisor Class Common 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 only
affects the class of Common Stock of which they are holders,
including, without limitation, the provisions of any distribution
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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 Common Stock, but not the class of which
they are holders, or with respect to any other matter that does
not affect the class of Common Stock of which they are holders.
(7) 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.
(8) (a) Each holder of stock may require the
Corporation to redeem all or any part of the stock owned by that
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 of the Corporation. 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 capital
stock of the Corporation shall be reduced by the amount of any
contingent deferred sales charge, redemption fee or other amount
payable on such redemption pursuant to the terms of issuance of
such share or provided for in the Charter of the Corporation.
(c) A redemption fee of two percent (2%)
of the then net asset value of Class A Common Stock shares shall
be imposed with respect to any Class A Common Stock shares into
which shares of the Common Stock of the Corporation have been
reclassified pursuant to Article SECOND of these Articles of
Amendment and Restatement that are redeemed or that are exchanged
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for shares of another open-end investment company sponsored by
Alliance Capital Management L.P. on or before the one year
anniversary date of the date on which these Articles of Amendment
and Restatement become effective. 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
twenty-five thousand dollars ($25,000). 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.
(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
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 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 of the Corporation.
(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.
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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.
(9) 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
Corporation) and set forth in the Corporation's Registration
Statement.
(10) 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) of the Corporation
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.
(11) 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
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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 the right, if any,
to receive a stock certificate representing fractional shares.
(12) No stockholder shall be entitled to any
preemptive right other than as the Board of Directors may
establish.
SIXTH: The Corporation currently has eight directors.
The number of directors of the Corporation may be changed
pursuant to the By-Laws of the Corporation, but shall not be less
than the number of directors under the Maryland General
Corporation law.
SEVENTH: The following provisions are inserted for the
purpose of defining, limiting and regulating the powers of the
Corporation and of the Board of Directors and stockholders.
(1) In addition to its other powers explicitly or
implicitly granted under these Articles of Incorporation, by law
or otherwise, the Board of Directors of the Corporation:
(a) is expressly authorized to make, alter,
amend or repeal the By-Laws of the Corporation;
(b) may from time to time determine whether,
to what extent, at what times and places, and under what
conditions and regulations the accounts and books of the
Corporation, or any of them, shall be open to the inspection of
the stockholders, and no stockholder shall have any right to
inspect any account, book or document of the Corporation except
as conferred by statute or as authorized by the Board of
Directors of the Corporation;
(c) is empowered to authorize, without
stockholder approval, the issuance and sale from time to time of
shares of stock of the Corporation whether now or hereafter
authorized and securities convertible into shares of stock of the
Corporation of any class or classes, whether now or hereafter
authorized, for such consideration as the Board may deem
advisable.
(d) is authorized 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 these Articles of
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Incorporation (including those in Article FIFTH hereof) shall
apply to each class of stock unless otherwise provided by the
Board of Directors prior to issuance of any shares of that class;
and
(e) is authorized to adopt procedures for
determination of and to maintain constant the net asset value of
shares of any class of the Corporation's stock.
(2) Notwithstanding any provision of the Maryland
General Corporation Law requiring a greater proportion than a
majority of the votes of all classes or of any class of the
Corporation's stock entitled to be cast in order to take or
authorize any action, any such action may be taken or authorized
upon the concurrence of a majority of the aggregate number of
votes entitled to be cast thereon 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.
(3) The presence in person or by proxy of the
holders of shares entitled to cast one-third of the votes
entitled to be cast (without regard to class) shall constitute a
quorum at any meeting of the stockholders, except with respect to
any matter which, under applicable statutes or regulatory
requirements, requires approval by a separate vote of one or more
classes of stock, in which case the presence in person or by
proxy of the holders of shares entitled to cast one-third of the
votes entitled to be cast by each class entitled to vote as a
class on the matter shall constitute a quorum.
(4) Any determination made in good faith by or
pursuant to the direction of the Board of Directors, as to the
amount of the assets, debts, obligations, or liabilities of the
Corporation as to the amount of any reserves or charges set up
and the propriety thereof, as to the time of or purpose for
creating such reserves or charges, as to the use, alteration or
cancellation of any reserves or charges (whether or not any debt,
obligation, or liability for which such reserves or charges shall
have been created shall be then or thereafter required to be paid
or discharged), as to the value of or the method of valuing any
investment owned or held by the Corporation, as to market value
or fair value of any investment or fair value of any other asset
of the Corporation, as to the allocation of any asset of the
Corporation to a particular class or classes of the Corporation's
stock, as to the charging of any liability of the Corporation to
a particular class or classes of the Corporation's stock, as to
the number of shares of the Corporation outstanding, as to the
estimated expense to the Corporation in connection with purchases
of its shares, as to the ability to liquidate investments in
orderly fashion, or as to any other matters relating to the
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issue, sale, redemption or other acquisition or disposition of
investments or shares of the Corporation, shall be final and
conclusive and shall be binding upon the Corporation and all
holders of its shares, past, present and future, and shares of
the Corporation are issued and sold on the condition and
understanding that any and all such determinations shall be
binding as aforesaid.
EIGHTH: (1) To the full extent that limitations on
the liability of directors and officers are permitted by the
Maryland General Corporation Law, no director or officer of the
Corporation shall have any liability to the Corporation or its
stockholders for money damages. This limitation on liability
applies to events occurring at the time a person serves as a
director or officer of the Corporation whether or not that person
is a director or officer at the time of any proceeding in which
liability is asserted.
(2) The Corporation shall indemnify and
advance expenses to its currently acting and its former directors
to the full extent that indemnification of directors is permitted
by the Maryland General Corporation Law. The Corporation shall
indemnify and advance expenses to its officers to the same extent
as its directors and may do so to such further extent as is
consistent with law. The Board of Directors may by By-Law,
resolution or agreement make further provision for
indemnification of directors, officers, employees and agents to
the full extent permitted by the Maryland General Corporation
Law.
(3) No provision of this Article shall be
effective to protect or purport to protect any director or
officer of the Corporation against any liability to the
Corporation or its stockholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his or her office.
(4) References to the Maryland General
Corporation Law in this Article are to that law as from time to
time amended. No amendment to the Charter of the Corporation
shall affect any right of any person under this Article based on
any event, omission or proceeding prior to the amendment.
NINTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in its Charter in
the manner now or hereafter prescribed by the laws of the State
of Maryland, including any amendment which alters the contract
rights, as expressly set forth in the Charter, of any outstanding
stock, and all rights conferred upon stockholders herein are
granted subject to this reservation."
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SECOND: Each share (including for this purpose a
fraction of a share) of Common Stock issued and outstanding
immediately prior to these Articles of Amendment and Restatement
becoming effective, shall, at such effective time, be
reclassified automatically, and without any action or choice on
the part of the holder, into a share (or the same fraction of a
share) of Class A Common Stock. Shares of Class A Common Stock
resulting from the aforesaid reclassification shall be subject,
without limitation, to the redemption fee provided for in Article
FIFTH, paragraph 8(c) of the Charter of the Corporation as set
forth in Article FIRST of these Articles of Amendment and
Restatement, subject to the reduction and waiver provisions
contained therein. Outstanding certificates representing issued
and outstanding shares of Common Stock immediately prior to these
Articles of Amendment and Restatement becoming effective, shall
upon these Articles of Amendment and Restatement becoming
effective be deemed to represent the same number of shares of
Class A Common Stock. Certificates representing shares of the
Class A Common Stock resulting from the aforesaid
reclassification need not be issued until certificates
representing the shares of Common Stock so reclassified, if
issued, have been received by the Corporation or its agent duly
endorsed for transfer with the request that a new certificate be
provided. The Class A Common Stock, Class B Common Stock, Class
C Common Stock and Advisor Class Common Stock shall have the
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption as set forth in the charter of
the Corporation as herein amended and restated.
THIRD: The Corporation desires to amend and restate
its Charter as currently in effect. The provisions set forth in
these Articles of Amendment and Restatement are all the
provisions of the Charter currently in effect as herein amended.
The current address of the principal office of the Corporation,
the name and address of the Corporation's current resident agent
are as set forth herein. The number of directors is currently
set at eight and their names are John D. Carifa, David H.
Dievler, John H. Dobkin, W.H. Henderson, Stig Host, Richard M.
Lilly, Alan Stoga and Robert C. White.
FOURTH: The amendment and restatement of the Charter
of the Corporation as hereinabove set forth has been duly advised
by the Board of Directors and approved by the stockholders.
FIFTH: The total number of shares of capital stock
that the Corporation had authority to issue immediately prior to
these Articles of Amendment and Restatement becoming effective
was one hundred million (100,000,000) shares of the par value of
one cent ($.01) per share and of the aggregate par value of One
Million Dollars ($1,000,000) all of which shares were designated
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Common Stock. The total number of shares of capital stock that
the Corporation has authority to issue upon these Articles of
Amendment and Restatement becoming effective is twelve billion
(12,000,000,000) shares, all of the par value of one-tenth of one
cent ($.001) per share, and of the aggregate par value of twelve
million dollars ($12,000,000). Three billion (3,000,000,000) of
the authorized shares of Common Stock of the Corporation are
designated as Class A Common Stock, three billion (3,000,000,000)
of such shares are designated as Class B Common Stock, three
billion (3,000,000,000) of such shares are designated as Class C
Common Stock and three billion (3,000,000,000) of such shares are
designated as Advisor Class Common Stock.
SIXTH: These Articles of Amendment and Restatement
shall become effective on [ ], 1997 at [ ]
[p.m.] Eastern Time.
IN WITNESS WHEREOF, Alliance Global Environment Fund,
Inc. has caused these Articles of Amendment and Restatement to be
signed in its name and on its behalf by its President, John D.
Carifa, and witnessed by its Secretary, Edmund P. Bergan, Jr., on
[ ], 1997.
The President acknowledges these Articles of Amendment
and Restatement to be the corporate act of the Corporation and
states that to the best of his knowledge, information and belief,
the matters and facts set forth in these Articles with respect to
the authorization and approval of the amendment and restatement
of the Corporation's Articles of Incorporation are true in all
material respects and that this statement is made under penalties
of perjury.
By:___________________________
Witness:
_____________________________
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EXHIBIT B
[INVESTMENT MANAGEMENT AND ADMINISTRATION] ADVISORY
AGREEMENT
Alliance Global Environment Fund, Inc.
1345 Avenue Of The Americas
New York, New York 10105
[July 22, 1992], 1997
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
We, the undersigned Alliance Global Environment
Fund, Inc.[,] herewith confirm our agreement with you as
follows:
1. We are [a closed] an open-end, non-diversified
management investment company registered under the
Investment Company Act of 1940[(the "Act"). We propose to
engage in the business of investing and reinvesting our
assets in securities ("the portfolio assets") of the type
and in accordance with the limitations specified in our
Articles of Incorporation, By-Laws,], as amended (the
"Act"). We are currently authorized to issue separate
classes of shares and our Directors are authorized to
reclassify and issue any unissued shares to any number of
additional classes or series (portfolios) each having its
own investment objective, policies and restrictions, all as
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more fully described in the prospectus and the statement of
additional information constituting parts of the
Registration Statement filed [with the Securities and
Exchange Commission] on our behalf under the Securities Act
of 1933 [and the Act], as amended, and the Act. We propose
to engage in the business of investing and reinvesting the
assets of each of our portfolios in securities ("the
portfolio assets") of the type and in accordance with the
limitations specified in our Charter, By-Laws, Registration
Statement on Form N-1A filed with the Securities and
Exchange Commission under the Securities Act of 1933 and the
Act ("Registration Statement"), and any representations made
in our prospectus and statement of additional information,
all in such manner and to such extent as may from time to
time be authorized by our Board of Directors. We enclose
copies of the documents listed above and will from time to
time furnish you with any amendments thereof.
2. (a) We hereby employ you to manage the
investment and reinvestment of the portfolio assets as above
specified[, to act as our administrator] and, without
limiting the generality of the foregoing, to provide
management and other services specified below.
(b) You will make decisions with respect to
all purchases and sales of the portfolio assets. To carry
out such decisions, you are hereby authorized, as our agent
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and attorney-in-fact, for our account and at our risk and in
our name, to place orders for the investment and
reinvestment of the portfolio assets. In all purchases,
sales [or] and other transactions in the portfolio assets
you are authorized to exercise full discretion and act for
us in the same manner and with the same force and effect as
we might or could do with respect to such purchases, sales
or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct
of such purchases, sales or other transactions.
(c) [You will (i) at our request provide us
persons satisfactory to our Board of Directors (who may be
employees of you or your affiliates) to serve as our
officers; (ii) provide us with the services of persons
competent to perform such administrative and clerical
functions as are necessary to provide effective
administration of our corporation, including maintaining
certain books and records, such as journals, ledger accounts
and other records described in Rule 31a-1 under the Act,
initiating all money transfers from us to our custodian and
from our account to appropriate customer accounts, and
reconciling account information and balances between our
custodian and registrar, transfer and dividend disbursing
agent; (iii) oversee the performance of administrative
services rendered to us by others, including our custodian
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and registrar, transfer and dividend disbursing agent; (iv)
provide us with adequate office space and facilities; (v)
prepare financial information for the periodic updating of
our Registration Statement and for our proxy statements;
(vi) prepare our tax returns, reports to our shareholders,
and periodic reports to the Securities and Exchange
Commission; (vii) supervise the calculation of the net
assets value of our shares of common stock; and (viii)
perform such other administrative services for us as may be
reasonably requested by us.
(d).] You will report to our Board of
Directors at each meeting thereof all changes in the
portfolio assets since the prior report, and will also keep
us in touch with important developments affecting the
portfolio assets and on your own initiative will furnish us
from time to time with such information as you may believe
appropriate for this purpose, whether concerning the
individual issuers whose securities are included in [our]
the portfolio assets, the industries in which they engage,
or the conditions prevailing in the economy generally. You
will also furnish us with such statistical and analytical
information with respect to the portfolio assets as you may
believe appropriate or as we reasonably may request. In
making such purchases and sales of the portfolio assets, you
will bear in mind the policies set from time to time by our
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Board of Directors as well as the limitations imposed by our
[Articles of Incorporation] Charter and in our Registration
Statement [under the Act and the Securities Act of 1933],
the limitations in the Act and of the Internal Revenue Code
of 1986, as amended, in respect of regulated investment
companies and the investment objective, policies and
restrictions applicable to each of our portfolios.
(d)[.(e)] It is understood that you will from
time to time employ or associate with yourselves such
persons as you believe to be particularly fitted to assist
you in the execution of your duties hereunder, the cost of
performance of such duties to be borne and paid by you. No
obligation may be incurred on our behalf in any such
respect. During the continuance of this agreement and at
our request you will provide to us persons satisfactory to
our Board of Directors to serve as our officers. You or
your affiliates will also provide persons, who may be our
officers, to render such clerical, accounting and other
services to us as we may from time to time request of you.
Such personnel may be employees of you or your affiliates.
We will pay to you or your affiliates the cost of [personnel
rendering the services set forth in paragraph 2(c) above, at
such rates as shall from time to time be agreed upon
between] such personnel for rendering such services to us,
provided that all time devoted to the investment or
B-5
<PAGE>
reinvestment of the portfolio assets shall be for your
account. Nothing contained herein shall be construed to
restrict our right to hire our own employees or to contract
for services to be performed by third parties. Furthermore,
you or your affiliates shall furnish us without charge with
such management supervision and assistance and such office
facilities as you may believe appropriate or as we may
reasonably request subject to the requirements of any
regulatory authority to which you may be subject. You or
your affiliates shall also be responsible for the payment of
any expenses incurred in promoting the sale of our shares
(other than the portion of the promotional expenses to be
borne by us in accordance with an effective plan pursuant to
Rule 12b-1 under the Act and the costs of printing our
prospectuses and other reports to shareholders and fees
related to registration with the Securities and Exchange
Commission and with state regulatory authorities).
3. We hereby confirm that[, subject to the
foregoing,] we shall be responsible and hereby assume the
obligation for payment of all of our [other] expenses,
including: (a) payment of the fee payable to you under
paragraph 5 hereof; (b) [brokerage and commission expenses;
(c) Federal, state, local and foreign taxes, including issue
and transfer taxes, incurred by or levied on us; (d) interest
charges on borrowings; (e) our organizational and offering
B-6
<PAGE>
expenses, whether or not advanced by you] custody, transfer
and dividend disbursing expenses; (c) fees of directors who
are not your affiliated persons; (d) legal and auditing
expenses; (e) clerical, accounting and other office costs;
(f) the cost of personnel providing services to us, as
provided in [paragraph 2(c) above; (g) fees and expenses of
registering our shares under the appropriate Federal
securities laws and of qualifying our shares under
applicable state securities laws; (h) fees and expenses of
listing and maintaining the listing of our shares on any
securities exchange; (i) expenses of printing and
distributing reports to shareholders; (j) costs of proxy
solicitation; (k) charges and expenses of our custodian and
registrar, transfer and dividend disbursing agent; (l) the
cost of calculating the net asset value of our shares of
common stock; (m) compensation of our officers, Directors
and employees who do not devote any part of their time to
your affairs or the affairs of your affiliates other than
us; (n) legal and auditing expenses; (o) the cost of stock
certificates representing shares of our common stock; and
(p)] subparagraph (d) of paragraph 2 above; (g) costs of
printing our prospectuses and shareholder reports; (h) cost
of maintenance of our corporate existence; (i) interest
charges, taxes, brokerage fees and commissions; (j) costs of
stationery and supplies; (k) expenses and fees related to
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<PAGE>
registration and filing with the Securities and Exchange
Commission and with state regulatory authorities; and (l)
such promotional shareholder servicing and other expenses as
may be contemplated by an effective plan pursuant to Rule
12b-1 under the Act, provided, however, that our payment of
such promotional expenses shall be in the amounts, and in
accordance with the procedures, set forth in such plan.
4. We shall expect of you, and you will give us
the benefit of, your best judgment and efforts in rendering
these services to us, and we agree as an inducement to your
undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event
whatsoever, except for lack of good faith, provided that
nothing herein shall be deemed to protect, or purport to
protect, you against any liability to us or to our security
holders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing, we will pay
you a monthly fee at an annualized rate of 1.10% of our
average [weekly] daily net assets up to $100,000,000, .95%
of our next $100 million in average [weekly] daily net
assets and .80% of our average [weekly] daily assets in
excess of $200,000,000. [For purposes of the calculation of
B-8
<PAGE>
such fee, average weekly net assets shall be determined on
the basis of the average net assets of the Fund for each
weekly period (ending on Friday) ending during the month.
The net assets for each weekly period are determined by
averaging the net assets on the Friday of such weekly period
with the net assets on the Friday of the immediately
preceeding weekly period. When a Friday is not a business
day for us, then the calculation will be based on our net
assets on the business day immediately preceeding such
Friday.] Such fee shall be payable in arrears on the last
day of each calendar month for services performed hereunder
during such month. If [this agreement becomes effective
after the beginning of a month or] this agreement terminates
prior to the end of a month, such fee shall be prorated
according to the proportion which such portion of the month
bears to the full month.
6. This agreement shall become effective on the
date hereof and shall [continue] remain in effect until
[December 31, 1992] [ ] and may be continued for
successive twelve-month periods (computed from each
[January 1)] [ ] 1 thereafter) with respect to each
portfolio provided that such continuance is specifically
approved at least annually by [our] the Board of Directors
or by [majority] the vote of [the holders of our] a majority
of the outstanding voting securities of such portfolio (as
B-9
<PAGE>
defined in the Act), and, in either case, by a majority of
[our] the Board of Directors who are not parties to this
agreement or interested persons, as defined in the Act, of
any party to this agreement (other than as Directors of our
corporation), provided further, however, that if the
continuation of this agreement is not approved as to a
portfolio, you may continue to render to such portfolio the
services described herein in the manner and to the extent
permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this agreement, it
shall supersede all previous agreements between us covering
the subject matter hereof. This agreement may be terminated
with respect to any portfolio at any time, without the
payment of any penalty, by vote of a majority of [our] the
outstanding voting securities (as so defined) of such
portfolio, or by a vote of [our] the Board of Directors on
60 [days] days' written notice to you, or by you [on 60
days] with respect to any portfolio on 60 days' written
notice to us.
7. This agreement may not be transferred,
assigned, sold or in any manner hypothecated or pledged by
you and this agreement shall terminate automatically in the
event of any such transfer, assignment, sale, hypothecation
or pledge by you. The [term] terms "transfer", "assignment"
and "sale" as used in this paragraph shall have the meanings
B-10
<PAGE>
ascribed [hereto] thereto by governing law and any
interpretation thereof contained in rules or regulations
promulgated by the Securities and Exchange Commission
thereunder.
8. (a) Except to the extent necessary to perform
your obligations hereunder, nothing herein shall be deemed
to limit or restrict your right, or the right of any of your
employees, or any of the officers or directors of Alliance
Capital Management Corporation, your general partner, who
may also be a Director, officer or employee of ours, or
persons otherwise affiliated with us (within the meaning of
the Act) to engage in any other business or to devote time
and attention to the management or other aspects of any
other business, whether of a similar or dissimilar nature,
or to render [service] services of any kind to any other
trust, corporation, firm, individual or association.
(b) You will notify us of any change in the
general [partner] partners of your partnership within a
reasonable time after such change.
9. If you cease to act as our investment adviser,
or, in any event, if you so request in writing, we agree to
take all necessary action to change our name to a name not
including the term "Alliance["]." You may from time to time
make available without charge to us for our use such marks
or symbols owned by you, including marks or symbols
B-11
<PAGE>
containing the term "Alliance" or any variation thereof, as
you may consider appropriate. Any such marks or symbols so
made available will remain your property and you shall have
the right, upon notice in writing, to require us to cease
the use of such mark or symbol at any time.
10. This Agreement shall be construed in
accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being
inconsistent with the Act.
B-12
<PAGE>
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
ALLIANCE GLOBAL
ENVIRONMENT FUND, INC.
By__________________________
[Name:]
[Title:]
Agreed to and accepted
as of the date first set forth above
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its [General Partner] general
partner
By_______________________________
[Name:]
[Title:]
B-13
<PAGE>
EXHIBIT C
PROVISIONS OF THE FUND'S
DISTRIBUTION SERVICES AGREEMENT
COMPRISING THE FUND'S DISTRIBUTION PLAN
SECTION 5. Plan of Distribution.
(a) It is understood that Sections 5, 12, and 16 hereof
together constitute a plan of distribution (the "Plan")within the
meaning of Rule 12b-1 adopted by the Securities and Exchange
Commission under the Investment Company Act ("Rule 12b-1") .
(b) Except as may be required by NASD rules and
interpretations, the Fund will pay to the Underwriter each month
a distribution services fee with respect to each portfolio of the
Fund ("Portfolio") that will not exceed, on an annualized
basis,.30% of the aggregate average daily net assets of the Fund
attributable to the Class A shares, 1.00% of the aggregate
average daily net assets of the Fund attributable to the Class B
shares and 1.00% of the aggregate average daily net assets of the
Fund attributable to the Class C shares. With respect to each
Portfolio, the distribution services fee will be used in its
entirety by the Underwriter to make payments (i) to compensate
broker-dealers or other persons for providing distribution
assistance, (ii) to otherwise promote the sale of shares of each
Portfolio, including payment for the preparation, printing and
distribution of prospectuses and sales literature or other
promotional activities, and (iii) to compensate broker-
dealers,depository institutions and other financial
intermediaries for providing administrative, accounting and other
services with respect to each Portfolio's shareholders. A portion
of the distribution services fee that will not exceed, on an
annualized basis, .25% of the aggregate average daily net assets
of the Fund attributable to each of the Class A shares, Class B
shares and Class C shares will constitute a service fee that will
be used by the Underwriter for personal service and/or the
maintenance of shareholder accounts within the meaning of NASD
rules and interpretations.
(c) Alliance Capital Management L.P., the Fund's
investment adviser (the "Adviser"), may make payments from time
to time from its own resources for the purposes described in
Section 5(b) hereof.
(d) Payments to broker-dealers, depository institutions
and other financial intermediaries for the purposes set forth in
Section 5(b) are subject to the terms and conditions of the
written agreements between the Underwriter and each broker-
dealer, depository institution or other financial intermediary.
C-1
<PAGE>
Such agreements will be in a form satisfactory to the Directors
of the Fund.
(e) The Treasurer of the Fund will prepare and furnish
to the Fund's Directors, and the Directors will review, at least
quarterly, a written report complying with the requirements of
Rule 12b-1 setting forth all amounts expended hereunder and the
purposes for which such expenditures were made.
(f) The Fund is not obligated to pay any distribution
expense in excess of the distribution services fee described
above in Section 5(b) hereof. Any expenses of distribution of the
Fund's Class A shares accrued by the Underwriter in one fiscal
year of the Fund may not be paid from distribution services fees
received from the Fund in respect of Class A shares in another
fiscal year. Any expenses of distribution of the Fund's Class B
shares or Class C shares accrued by the Underwriter in one fiscal
year of the Fund may be carried forward and paid from
distribution services fees received from the Fund in respect of
such class of shares in another fiscal year. No portion of the
distribution services fees received from the Fund in respect of
Class A shares may be used to pay any interest expense, carrying
charges or other financing costs or allocation of overhead of the
Underwriter. The distribution services fees received from the
Fund in respect of Class B shares and Class C shares may be used
to pay interest expenses, carrying charges and other financing
costs or allocation of overhead of the Underwriter to the extent
permitted by Securities and Exchange Commission rules,
regulations or Securities and Exchange Commission staff no-action
or interpretative positions in effect from time to time. In the
event this Agreement is terminated by either party or is not
continued with respect to a class as provided in Section 12
below: (i) no distribution services fees (other than current
amounts accrued but not yet paid) will be owed by the Fund to the
Underwriter with respect to that class, and (ii) the Fund will
not be obligated to pay the Underwriter for any amounts expended
hereunder not previously reimbursed by the Fund from distribution
services fees in respect of shares of such class or recovered
through deferred sales charges. The distribution services fee of
a particular class may not be used to subsidize the sale of
shares of any other class.
* * * * *
SECTION 12. Term of Agreement.
(a) This Agreement shall become effective on the date
hereof and shall continue in effect until December 31,1997, and
thereafter for successive twelve-month periods(computed from each
January 1) with respect to each class;provided, however, that
such continuance is specifically approved at least annually by
C-2
<PAGE>
the Directors of the Fund or by vote of the holders of a majority
of the outstanding voting securities (as defined in the
Investment Company Act)of that class, and, in either case, by a
majority of the Directors of the Fund who are not parties to this
Agreement or interested persons, as defined in the Investment
Company Act, of any such party (other than as directors of the
Fund)and who have no direct or indirect financial interest in the
operation of the Plan or any agreement related thereto;provided
further, however, that if the continuation of this Agreement is
not approved as to a class or a Portfolio, the Underwriter may
continue to render to such class or Portfolio the services
described herein in the manner and to the extent permitted by the
Act and the rules and regulations thereunder. Upon effectiveness
of this Agreement, it shall supersede all previous agreements
between the parties hereto covering the subject matter hereof.
This Agreement may be terminated (i) by the Fund with respect to
any class or Portfolio at any time, without the payment of any
penalty, by the vote of a majority of the outstanding voting
securities (as so defined) of such class or Portfolio, or by a
vote of a majority of the Directors of the Fund who are not
interested persons, as defined in the Investment Company Act, of
the Fund (other than as directors of the Fund) and have no direct
and indirect financial interest in the operation of the Plan or
any agreement related thereto, in any such event on sixty days'
written notice to the Underwriter; provided, however, that no
such notice shall be required if such termination is stated by
the Fund to relate only to Sections 5 and 16 hereof (in which
event Sections 5 and 16 shall be deemed to have been severed
herefrom and all other provisions of this Agreement shall
continue in full force and effect), or (ii) by the Underwriter
with respect to any Portfolio on sixty days' written notice to
the Fund.
(b) This Agreement may be amended at any time with the
approval of the Directors of the Fund, provided that (i) any
material amendments of the terms hereof will become effective
only upon approval as provided in the first proviso of the first
sentence of Section 12(a) hereof, and (ii) any amendment to
increase materially the amount to be expended for distribution
services fees pursuant to Section 5(b) hereof will be effective
only upon the additional approval by a vote of a majority of the
outstanding voting securities as defined in the Investment
Company Act of class or Portfolio affected.
* * * * *
C-3
<PAGE>
TABLE OF CONTENTS Page
- ----------------------------------------------------------------
Introduction.....................................
Proposal One: Conversion of the Fund from
a Closed-End Investment Company to an
Open-End Investment Company....................
Proposal Two: Election of Directors..............
Proposal Three: Ratification of Selection
of Independent Auditors........................
Information as to the Fund's Principal
Officers and the Adviser.......................
Submission of Proposals for
Meetings of Stockholders.......................
Other Matters....................................
Reports to Stockholders..........................
Exhibit A (Articles of Amendment and
Restatement)................................... A-1
Exhibit B (Advisory Agreement)................... B-1
Exhibit C (Rule 12b-1 Distribution Plan)......... C-1
Alliance Global Environment Fund, Inc.
- -----------------------------------------------------------------
Alliance Capital Management L.P.
- -----------------------------------------------------------------
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
July 17, 1997
<PAGE>
APPENDIX
PROXY PROXY
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JULY 17, 1997.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE FUND.
The undersigned hereby appoints each of Domenick Pugliese and
Carol H. Rappa as proxies, each with the power to appoint his or
her substitute, and authorizes each of them to represent and to
vote, as designated on the reverse hereof, all the Common Stock
of Alliance Global Environment Fund, Inc. (the "Fund") held of
record by the undersigned on May 16, 1997 at the Annual Meeting
of Stockholders of the Fund to be held at 4:00 p.m., Eastern
Standard Time, on July 17, 1997 at the offices of the Fund, 1345
Avenue of the Americas, 33rd Floor, New York, New York, 10105,
and at all adjournments thereof. The undersigned hereby
acknowledges receipt of the Notice of Meeting and accompanying
Proxy Statement and hereby instructs said proxies to vote said
shares as indicated hereon.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
Change of Address or Comments Mark Here
NOTE: Please sign this proxy exactly as your name appears on the
books of the Fund. 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, this signature should be that of an
authorized officer who should state his or her title.
___________________________
Signature
___________________________
Signature (if held jointly)
___________________________
Date
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS. THE
DIRECTORS RECOMMEND VOTING "FOR" ALL PROPOSALS.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
1. APPROVAL OF THE CONVERSION OF THE FUND FROM A CLOSED-END
INVESTMENT COMPANY TO AN OPEN-END INVESTMENT COMPANY,
INCLUDING IN CONNECTION THEREWITH:
(a) Changing the subclassification of the Fund from that of
a closed-end investment company to that of an open-end
investment company;
(b) Amending the Articles of Incorporation of the Fund;
(c) Modifiying of an Investment Restriction of the Fund;
(d) Approving an Advisory Agreement to replace the Fund's
existing Investment Management and Administration
Agreement; and
(e) Establishing a Multiple Distribution System
For Against Abstain
/ / / / / /
2. Election of Directors For All Withhold For All
If Proposal No. 1 is Nominees Authority Nominees
approved, to elect the Listed For All Except
following seven Directors: Below Nominees / /
/ / / /
John D. Carifa
David H. Dievler
John H. Dobkin
W.H. Henderson
Stig Host
Richard M. Lilly
Alan Stoga
If Proposal No. 1 is not For All Withhold For All
approved, to elect the Nominees Authority Nominees
following Class Two Listed For All Except
Directors Term Expiring Below Nominees / /
in 2000: / / / /
John H. Dobkin
W.H. Henderson
Stig Host
<PAGE>
IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" ANY PARTICULAR
NOMINEE, MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH
THAT NOMINEE'S NAME. YOUR SHARES SHALL BE VOTED FOR THE
REMAINING NOMINEES.
3. RATIFICATION OF THE For Against Abstain
SELECTION OF ERNST & / / / / / /
YOUNG LLP AS INDEPENDENT
AUDITORS OF THE FUND FOR
ITS FISCAL YEAR ENDING
OCTOBER 31, 1997.
4. In their discretion, on For Against Abstain
all such other matters / / / / / /
that may properly come
before the Meeting or
any adjournments thereof.
Mark box at right if comments or address change / /
have been noted on the reverse side of the card.
Please Sign, Date and Return Promptly in the Enclosed Envelope --
No Postage is Required.
2
00250070.AN1
