<PAGE>
As filed with the Securities and Exchange
Commission on September 11, 1997
File Nos. 333-30409
811-5993
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 7
Alliance Global Environment Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including
Area Code: (212) 969-1000
_____________________________
EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Copies of communications to:
Thomas G. MacDonald
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
<PAGE>
It is proposed that this filing will become effective (check
appropriate box)
____ immediately upon filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
____ on (date) pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
___ This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
The purpose of this Registration Statement is to register the
shares of the Registrant under the Securities Act of 1933 and to
declare pursuant to Section 24(f) of the Investment Company Act
of 1940 and Rule 24f-2 thereunder that an indefinite number of
its securities is being registered by this Registration
Statement.
The Registrant hereby amends this Registrant Statement under the
Securities Act of 1933 on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a
further amendment which specifically states that this
Registration Statement shall thereafter become effective in
accordance with the provisions of Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
Location in Prospectuses
N-1A Item No. (Caption)
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis The Funds at a Glance; Expense
Information
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description Description of the Fund;
of Registrant General Information
Item 5. Management of the Management of the Fund; General
Fund Information
Item 6. Capital Stock and Dividends, Distributions and
Other Securities Taxes; General Information
Item 7. Purchase of Securities Purchase and Sale of Shares;
Being Offered General Information
Item 8. Redemption or Purchase and Sale of Shares;
Repurchase General Information
Item 9. Pending Legal Not Applicable
Proceedings
Location in Statement of
Additional Information
PART B (Caption)
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. General Information Description of the Fund;
and History General Information
Item 13. Investment Objectives Description of the Fund
and Policies
<PAGE>
Item 14. Management of the Management of the Fund
Registrant
Item 15. Control Persons and Management of the Fund; General
Principal Holders of Information
Securities
Item 16. Investment Advisory and Management of the Fund,
Other Services Expenses of the Fund, General
Information
Item 17. Brokerage Allocation Brokerage and Portfolio
and Other Practices Transactions
Item 18. Capital Stock and Other General Information
Securities
Item 19. Purchase, Redemption Purchase of Shares; Redemption
and Pricing of and Repurchase of Shares;
Securities Being Offered Dividends, Distributions and
Taxes; Shareholder Services
Item 20. Tax Status Description of the Fund,
Dividends, Distributions and
Taxes
Item 21. Underwriters General Information
Item 22. Calculation of
Performance Data General Information
Item 23. Financial Statements Financial Statements; Report of
Independent Auditors
<PAGE>
ALLIANCE GLOBAL ENVIRONMENT FUND
c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
Prospectus and Application
, 1997
Table of Contents Page
The Fund at a Glance.................................... 3
Expense Information..................................... 5
Financial Highlights.................................... 7
Glossary................................................ 10
Description of the Fund................................. 11
Investment Objective................................. 11
Investment Policies.................................. 11
Additional Investment Practices...................... 13
Certain Fundamental Investment
Policies.......................................... 19
Certain Risk Considerations ......................... 19
Purchase and Sale of Shares............................. 23
Management of the Fund.................................. 29
Dividends, Distributions and Taxes...................... 32
General Information..................................... 35
Adviser
Alliance Capital Management L.P.
1345 Avenue Of The Americas
New York, New York 10105
<PAGE>
Alliance Global Environment Fund, Inc. (the "Fund") seeks long-
term capital appreciation through investment in equity securities
of companies expected to benefit from advances or improvements in
products, processes or services intended to foster the protection
of the environment.
The Fund is an open-end, non-diversified, management investment
company. This Prospectus sets forth concisely the information
that a prospective investor should know about the Fund before
investing. A "Statement of Additional Information" for the Fund
dated [ ], 1997, which provides further information
regarding certain matters discussed in this Prospectus and other
matters which may be of interest to some investors, has been
filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a free copy, call or write
Alliance Fund Services, Inc. at the indicated address or call the
"For Literature" telephone number shown above.
The Fund offers three classes of shares through this
Prospectus. These shares may be purchased, at the investor's
choice, at a price equal to their net asset value (i) plus an
initial sales charge imposed at the time of purchase (the
"Class A shares"), (ii) with a contingent deferred sales charge
imposed on most redemptions made within four years of purchase
(the "Class B shares"), or (iii) without any initial or
contingent deferred sales charge, as long as the shares are held
for one year or more (the "Class C shares"). See "Purchase and
Sale of Shares."
An investment in these securities is not a deposit or obligation
of, or guaranteed or endorsed by, any bank and is not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
Investors are advised to read this Prospectus carefully and to
retain it for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
[Alliance Logo] (R)/SM These are registered marks used under
license from the owner, Alliance Capital Management L.P.
2
<PAGE>
The Fund At A Glance
The following summary is qualified in its entirety by the more
detailed information contained inside this Prospectus.
The Fund's Investment Adviser Is . . .
Alliance Capital Management L.P. ("Alliance"), a global
investment adviser providing diversified services to institutions
and individuals through a broad line of investments including
more than 100 mutual funds. Since 1971, Alliance has earned a
reputation as a leader in the investment world with over $199
billion in assets under management as of June 30, 1997. Alliance
provides investment management services to employee benefit plans
for 29 of the FORTUNE 100 companies.
The Fund
Seeks . . . Long-term capital appreciation.
Invests principally in . . . A non-diversified portfolio of
equity securities of companies expected to benefit from advances
or improvements in products, processes or services intended to
foster the protection of the environment ("Eligible Companies").
A Word About Risk . . .
The price of shares of the Fund will fluctuate as the daily
prices of the individual stocks and other equity securities in
which it invests fluctuate, so that your shares, when redeemed,
may be worth more or less than their original cost. Because the
Fund will invest in foreign currency denominated securities,
these fluctuations may be magnified by changes in foreign
exchange rates. The Fund invests substantially all of its assets
in equity securities of Eligible Companies. As a consequence,
the Fund is subject to certain additional risks not typically
associated with funds that have more diversified portfolios and
that do not concentrate their investments in equity securities of
Eligible Companies, including potential detrimental effects on
Eligible Companies of high costs of technological development,
rapid technological change and changing regulation, in addition
to risks associated with investment in smaller companies. See
"Certain Risk Considerations" below. Investment in the Fund
involves risks not associated with funds that invest primarily in
securities of U.S. issuers. While the Fund invests principally
in common stocks and other equity securities, in order to achieve
its investment objectives the Fund may at times use certain types
of investment derivatives, such as options, futures, forwards and
swaps. These involve risks different from, and, in certain
cases, greater than, the risks presented by more traditional
3
<PAGE>
investments. These risks are more fully discussed in this
Prospectus.
Getting Started . . .
Shares of the Fund are available through your financial
representative and most banks, insurance companies and brokerage
firms nationwide. Shares can be purchased for a minimum initial
investment of $250, and subsequent investments can be made for as
little as $50. For detailed information about purchasing and
selling shares, see "Purchase and Sale of Shares." In addition,
the Fund offers several time and money saving services to
investors. Be sure to ask your financial representative about:
AUTOMATIC DIVIDEND REINVESTMENT
AUTOMATIC INVESTMENT PROGRAM
RETIREMENT PLANS
SHAREHOLDER COMMUNICATIONS
DIVIDEND DIRECTION PLANS
AUTO EXCHANGE
SYSTEMATIC WITHDRAWALS
A CHOICE OF PURCHASE PLANS
TELEPHONE TRANSACTIONS
24-HOUR INFORMATION
ALLIANCE LOGO
(R)/SM These are registered marks used under license from the
owner, Alliance Capital Management L.P.
4
<PAGE>
________________________________________________________________
EXPENSE INFORMATION
________________________________________________________________
Shareholder Transaction Expenses are one of several factors to
consider when you invest in the Fund. The following table
summarizes your maximum transaction costs and annual expenses for
each class of shares. The examples following the table show the
cumulative expenses attributable to a hypothetical $1,000
investment in each class for the periods specified.
Class A Shares Class B Shares Class C Shares
Maximum sales charge imposed
on purchases (as a percentage
of offering price)....... 4.25%(a) None None
Sales charge imposed on
dividend reinvestments... None None None
Deferred sales charge (as
a percentage of original
purchase price or
redemption proceeds,
whichever is lower)...... None(a) 4.0% during the 1% during the
first year, first year,
decreasing 1.0% 0% thereafter
annually to 0%
after the fourth
year(b)
Exchange fee............... None None None
____________________________________________________________
(a) Reduced for larger purchases. Purchases of $1,000,000 or more are not
subject to an initial sales charge but may be subject to a 1% deferred
sales charge on redemption within one year of purchase. See "Purchase
and Sale of Shares--How to Buy Shares"--page __.
(b) Class B shares automatically convert to Class A shares after eight years.
See "Purchase and Sale of Shares--How to Buy Shares"--page __.
5
<PAGE>
Operating Expenses Class A Class B Class C
Management fees 1.10% 1.10% 1.10%
12b-1 fees .30% 1.00% 1.00%
Other expenses(a) 1.13% 1.13% 1.13%
Total fund operating expenses 2.53% 3.23% 3.23%
==== ==== ====
Examples Class A Class B+ Class B++ Class C+ Class C++
After 1 year $ 67 $ 73 $ 33 $ 43 $ 33
After 3 years $118 $119 $ 99 $ 99 $ 99
After 5 years $171 $169 $169 $169 $169
After 10 years $317 $337 $337 $353 $353
___________________________________________________________
+ Assumes redemption at end of period.
++ Assumes no redemption at end of period.
(a) These expenses include a transfer agency fee payable to Alliance Fund
Services, Inc., an affiliate of Alliance, based on a fixed dollar amount
charged to the Fund for each shareholder account.
The purpose of the foregoing table is to assist the investor
in understanding the various costs and expenses that an investor
in the Fund will bear directly or indirectly. Long-term
shareholders of the Fund may pay aggregate sales charges totaling
more than the economic equivalent of the maximum initial sales
charges permitted by the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. See "Management of the
Fund--Distribution Services Agreement." The Rule 12b-1 fee for
each class comprises a service fee not exceeding .25% of the
aggregate average daily net assets of the Fund attributable to
the class and an asset-based sales charge equal to the remaining
portion of the Rule 12b-1 fee. "Other Expenses" are based on
estimated amounts for the Fund's current fiscal year. The
examples set forth above assumes reinvestment of all dividends
and distributions and utilizes a 5% annual rate of return as
mandated by Securities and Exchange Commission regulations. THE
EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIVE OF PAST OR
FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN.
6
<PAGE>
________________________________________________________________
FINANCIAL HIGHLIGHTS
________________________________________________________________
The following table presents per share income and
capital changes for a share outstanding throughout each period
indicated. No Class B or Class C shares were outstanding during
these periods. The Fund operated as a closed-end investment
company through October 3, 1997, when it converted to an open-end
investment company and all shares of its common stock then
outstanding were reclassified as Class A shares. Except as
indicated below, the information in the table has been audited by
Ernst & Young LLP, the independent auditors of the Fund. A
report of Ernst & Young LLP on the information with respect to
the Fund appears in the Fund's Statement of Additional
Information. The following information should be read in
conjunction with the financial statements and related notes which
are included in the Fund's Statement of Additional
Information.
Further information about the Fund's performance is
contained in the Fund's annual report to shareholders, which may
be obtained without charge by contacting Alliance Fund Services,
Inc. at the address or the "For Literature" telephone number
shown on the cover of this Prospectus.
7
<PAGE>
<TABLE>
<CAPTION>
Six
Months June 1,
ended 1990*
April 30, to
1997 Year Ended October 31, October 31,
(unaudited) 1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 16.48 12.37 11.74 10.97 10.78 13.12 12.46 13.83
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss) (.10)(a)(.13)(a) .03 0 .01 .01 .13 .20
Net realized and
unrealized gain
(loss) on
investments and
foreign currency
transactions .62 4.26 .60 .77 .18 (2.17) .87 (1.57)
Net increase
(decrease) in net
asset value from
operations .52 4.13 .63 .77 .19 (2.16) 1.00 (1.37)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income 0 (.02) 0 0 0 (.10) (.25) 0
Distributions from net
realized gain on
investments and
foreign currency
transactions (1.13) 0 0 0 0 (.08) (.09) 0
Total dividends and
distributions (1.13) (.02) 0 0 0 (.18) (.34) 0
------ ----- - - - ----- ----- -
Net asset value, end
of year $ 15.87 16.48 12.37 11.74 10.97 10.78 13.12 12.46
Market value, end of
year $ 14.625 13.25 9.375 9.50 9.25 9.50 11.38 10.00
======== ===== ===== ==== ==== ==== ===== =====
TOTAL RETURN
Total investment
8
<PAGE>
return based on: (b)
Market value 19.70% 41.60%(1.32)% 2.70% (2.63%)(15.22)% 17.38% (28.32)%
Net asset value 4.43% 33.48% 5.37% 7.02% 1.76%(16.59)% 8.66% (10.68)%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
year (000's omitted) $ 94,705100,271 85,416 81,102 75,805 74,442 90,61286,
041
Ratio of expenses to
average net assets 1.51%(c) 1.60% 1.57% 1.67% 1.62% 1.63% 1.49% 1.72%(c)
Ratio of net
investment income
(loss) to average
net assets (1.19)%(c) (.85)% .21% (.04)% .15% .10% .95% 3.59%(c)
Portfolio turnover
rate 167% 268% 109% 42% 25% 41% 32% 4%
Average commission
rate (d) $0.0503 $.0313 -- -- -- -- -- --
<FN>
_______________________
* Commencement of operations.
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of
common stock on the opening of the first day and a sale on
the closing of the last day of each period reported.
Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices
obtained under the Fund's Dividend Reinvestment and Cash
Purchase Plan. Generally, total investment return based on
net asset value will be higher than total investment return
based on market value in periods where there is an increase
in the discount or a decrease in the premium of the market
value to the net asset value from the beginning to the end
of such years. Conversely, total investment return based on
net asset value will be lower than total investment return
based on market value in years where there is a decrease in
the discount or an increase in the premium of the market
value to the net asset value from the beginning to the end
of such years.
(c) Annualized.
(d) For fiscal years beginning on or after September 1, 1995, a
fund is required to disclose its average commission rate per
share for trades on which commissions are charged. This
amount includes commissions paid to foreign brokers which
may materially affect the rate shown. Amounts paid in
9
<PAGE>
foreign currencies have been converted into US dollars using
the prevailing exchange rate on the date of the transaction.
</TABLE>
10
<PAGE>
________________________________________________________________
GLOSSARY
________________________________________________________________
The following terms are frequently used in this Prospectus. Many
of these terms are explained in greater detail under "Description
of the Fund - Additional Investment Practices."
Eligible Companies are companies expected to benefit from
advances or improvements in products, processes or services
intended to foster the protection of the environment.
Environmental Companies are Eligible Companies that have a
principal business involving the sale of systems or services
intended to foster environmental protection, such as waste
treatment and disposal, remediation, air pollution control and
recycling.
Beneficiary Companies are Eligible Companies whose principal
businesses lie outside the environmental sector but nevertheless
anticipate environmental regulations or consumer preferences
through the development of new products, processes or services
that are intended to contribute to a cleaner and healthier
environment, such as companies that anticipate the demand for
plastic substitutes, aerosol substitutes, alternative fuels and
processes that generate less hazardous wastes.
Equity Securities are common stocks (but not preferred stocks),
rights or warrants to subscribe for or purchase common stocks,
and preferred stocks or debt securities that are convertible into
common stocks without the payment of any further consideration.
Rule 144A securities are securities that may be resold pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act").
U.S. Government securities are securities issued or guaranteed by
the United States Government, its agencies or instrumentalities.
Depositary receipts include American Depositary Receipts
("ADRs"), Global Depositary Receipts ("GDRs") and other types of
depositary receipts.
1940 Act is the Investment Company Act of 1940, as amended.
Commission is the U.S. Securities and Exchange Commission.
Code is the Internal Revenue Code of 1986, as amended.
11
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___________________________________________________________
DESCRIPTION OF THE FUND
___________________________________________________________
The Fund is a non-diversified management investment
company. Until October 3, 1997, the Fund operated as a closed-
end investment company, and its common stock (which then
comprised a single class) was listed on the New York Stock
Exchange. The Fund's investment objective is "fundamental" and
cannot be changed without a shareholder vote. Except as noted,
the Fund's investment policies are not fundamental and thus can
be changed without a shareholder vote. The Fund will not change
these policies without notifying its shareholders. There is no
guarantee that the Fund will achieve its investment
objective.
INVESTMENT OBJECTIVE
The Fund's investment objective is long-term capital
appreciation through investment in equity securities (i.e.,
common stocks (but not preferred stocks), rights or warrants to
subscribe for or purchase common stocks, and preferred stocks or
debt securities that are convertible into common stocks without
the payment of any further consideration) of Eligible Companies.
INVESTMENT POLICIES
The Fund will invest in two categories of Eligible
Companies--"Environmental Companies" and "Beneficiary Companies."
Environmental Companies are those that have a principal business
involving the sale of systems or services intended to foster
environmental protection, such as waste treatment and disposal,
remediation, air pollution control and recycling. Under normal
circumstances, the Fund will invest at least 65% of its total
assets in equity securities of Environmental Companies.
Beneficiary Companies are those whose principal businesses lie
outside the environmental sector but nevertheless anticipate
environmental regulations or consumer preferences through the
development of new products, processes or services that are
intended to contribute to a cleaner and healthier environment.
Examples of such companies could be companies that anticipate the
demand for plastic substitutes, aerosol substitutes, alternative
fuels and processes that generate less hazardous wastes. In this
regard, the Fund may invest in an issuer with a broadly-
diversified business, only a part of which provides such
products, processes or services, when Alliance believes that
these products, processes or services will yield a competitive
advantage that significantly enhances the issuer's growth
prospects. As a matter of fundamental policy, the Fund will,
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<PAGE>
under normal circumstances, invest substantially all of its total
assets in equity securities of Eligible Companies.
A major premise of the Fund's investment approach is
that environmental concerns will be a significant source of
future growth opportunities, and that Environmental Companies
will see an increased demand for their systems and services.
Environmental Companies operate in the areas of pollution
control, clean energy, solid waste management, hazardous waste
treatment and disposal, pulp and paper recycling, waste-to-energy
alternatives, biodegradable cartons, packages, plastics and other
products, remedial projects and emergency cleanup efforts,
manufacture of environmental supplies and equipment, the
achievement of purer air, groundwater and foods and the
detection, evaluation and treatment of both existing and
potential environmental problems including, among others, air
pollution and acid rain.
The environmental services industry is generally
positively affected by increasing governmental action intended to
foster environmental protection. As environmental regulations
are developed and enforced, Environmental Companies providing the
means of compliance with such regulations are afforded
substantial opportunities for growth. Beneficiary Companies may
also derive an advantage to the extent that they have anticipated
environmental regulation and are therefore at a competitive
advantage.
In the view of Alliance, increasing public and political
awareness of environmental concerns and resultant environmental
regulations are long-term phenomena which are driven by an
emerging global consensus that environmental protection is a
vital and increasingly immediate priority. Alliance believes
that Eligible Companies based in the United States and other
economically developed countries will have increasing
opportunities for earnings growth resulting not only from an
increased demand for their existing products or services but also
from innovative responses to changing regulations and priorities
and enforcement policies. Such opportunities will arise, in the
opinion of Alliance, not only within developed countries but also
within many economically developing countries, such as those of
Eastern Europe and the Pacific Rim. These countries lag well
behind developed countries in the conservation and efficient use
of natural resources and in their implementation of policies
which protect the environment.
Alliance believes that global investing offers
opportunities for superior investment returns. The Fund intends
to spread investment risk among the capital markets of a number
of countries and will invest in equity securities of companies
based in at least three, and normally considerably more, such
13
<PAGE>
countries. The percentage of the Fund's assets invested in
securities of companies in a particular country or denominated in
a particular currency will vary in accordance with Alliance's
assessment of the appreciation potential of such securities and
the strength of that currency. As of April 30, 1997,
approximately 84% of the Fund's net assets were invested in
equity securities of U.S. companies.
The Fund may also: (i) invest up to 20% of its total
assets in warrants to purchase equity securities to the extent
consistent with its investment objective; (ii) invest in
depositary receipts; (iii) purchase and write put and call
options on foreign currencies for hedging purposes; (iv) enter
into forward foreign currency transactions for hedging purposes;
(v) invest in currency futures and options on such futures for
hedging purposes; and (vi) make secured loans of its portfolio
securities not in excess of 30% of its total assets. For
additional information on the use, risks and costs of these
policies and practices see "Additional Investment Practices".
The Fund may borrow to the maximum extent permitted under the
1940 Act in order to repurchase its shares or to meet redemption
requests. In addition, the Fund may borrow for temporary
purposes (including the purposes mentioned in the preceding
sentence) in an amount not exceeding 5% of the value of the
assets of the Fund. See "Certain Fundamental Investment
Policies."
ADDITIONAL INVESTMENT PRACTICES
The Fund may engage in the following investment
practices to the extent described above.
Rights and Warrants. Rights and warrants entitle the
holder to buy equity securities at a specific price for a
specific period of time. Rights are similar to warrants except
that they have a substantially shorter duration. Rights and
warrants may be considered more speculative than certain other
types of investments in that they do not entitle a holder to
dividends or voting rights with respect to the underlying
securities nor do they represent any rights in the assets of the
issuing company. The value of a right or warrant does not
necessarily change with the value of the underlying securities,
however, although the value of a right or warrant may decline
because of a decrease in the value of the underlying stock, the
passage of time or a change in perception as to the potential of
the underlying stock, or any combination thereof. If the market
price of the underlying stock is below the exercise price set
forth in the warrant on the expiration date, the warrant will
expire worthless. Moreover, a right or warrant ceases to have
value if it is not exercised prior to the expiration date.
14
<PAGE>
Convertible Securities. Prior to conversion,
convertible preferred stocks and convertible debt securities have
the same general characteristics as non-convertible preferred
stocks and non-convertible debt securities, which generally
provide a stable stream of income with generally higher yields
than those of common stocks of the same or similar issuers. The
price of a convertible security will normally vary with changes
in the price of the underlying common stock, although the higher
yield tends to make the price of the convertible security less
volatile than that of the underlying common stock. As with non-
convertible preferred stocks and debt securities, the market
values of convertible securities tend to decline as interest
rates increase and increase as interest rates decline. While
convertible securities generally offer lower dividend or interest
yields than non-convertible securities of similar quality, they
enable offer investors the potential to benefit from increases in
the market prices of the underlying common stocks.
Depositary Receipts. Depositary receipts may not
necessarily be denominated in the same currency as the underlying
securities into which they may be converted. In addition, the
issuers of the stock of unsponsored depositary receipts are not
obligated to disclose material information in the United States
and, therefore, there may not be a correlation between such
information and the market value of the depositary receipts.
ADRs are depositary receipts typically issued by a U.S. bank or
trust company that evidence ownership of underlying securities
issued by a foreign corporation. GDRs and other types of
depositary receipts are typically issued by foreign banks or
trust companies and evidence ownership of underlying securities
issued by either a foreign or a U.S. company. Generally,
depositary receipts in registered form are designed for use in
the U.S. securities markets and depositary receipts in bearer
form are designed for use in foreign securities markets. For
purposes of determining the country of issuance, the investments
of the Fund in depositary receipts are deemed to be investments
in the underlying securities.
Illiquid Securities. The Fund will not maintain more
than 15% of its net assets in illiquid securities. Illiquid
securities include direct placements or other securities that are
subject to legal or contractual restrictions on resale or for
which there is no readily available market (e.g. when trading in
the security is suspended or, in the case of unlisted securities,
when market makers do not exist or will not entertain bids or
offers), and many individually negotiated currency swaps.
Because of the absence of a trading market for illiquid
securities, the Fund may not be able to realize their full value
upon sale. Alliance will monitor the illiquidity of such
securities with respect to the Fund under the supervision of the
15
<PAGE>
Directors of the Fund. To the extent permitted by applicable
law, Rule 144A securities will not be treated as "illiquid" for
purposes of the foregoing restriction so long as such securities
meet liquidity guidelines established by the Fund's Directors.
The Fund may not be able to readily sell securities for
which there is no ready market. To the extent that these
securities are foreign securities, there is no law in many of the
countries in which the Fund may invest similar to the Securities
Act, requiring an issuer to register the sale of securities with
a governmental agency or imposing legal restrictions on resales
of securities, either as to length of time the securities may be
held or manner of resale. However, there may be contractual
restrictions on resale of securities.
Futures Contracts and Options on Futures Contracts. A
"sale" of a futures contract means the acquisition of a
contractual obligation to deliver the foreign currency called for
by the contract at a specified price on a specified date. A
"purchase" of a futures contract means the incurring of an
obligation to acquire the securities, foreign currency called for
by the contract at a specified price on a specified date.
Options on futures contracts written or purchased by the
Fund will be traded on U.S. or foreign exchanges or over-the-
counter. These investment techniques will be used only to hedge
against anticipated future changes in exchange rates which
otherwise might either adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities
which the Fund intends to purchase at a later date.
Options on Foreign Currencies. As in the case of other
kinds of options the writing of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium
received, and the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuations
in exchange rates although, in the event of rate movements
adverse to the Fund's position, it may forfeit the entire amount
of the premium plus related transaction costs. See the Statement
of Additional Information of the Fund for further discussion of
the use, risks and costs of options on foreign currencies.
Forward Foreign Currency Exchange Contracts. The Fund
may purchase or sell forward contracts so as to minimize the risk
to it from adverse changes in the relationship between the U.S.
dollar and other currencies. A forward contract is an obligation
to purchase or sell a specific currency for an agreed price at a
future date, and is individually negotiated and privately traded.
16
<PAGE>
The Fund may enter into a forward contract, for example,
when it enters into a contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in"
the U.S. Dollar price of the security ("transaction hedge"). The
Fund may not engage in transaction hedges with respect to the
currency of a particular country to an extent greater than the
aggregate amount of the Fund's transactions in that currency.
When the Fund believes that a foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a
forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency, or when the Fund
believes that the U.S. dollar may suffer a substantial decline
against a foreign currency, it may enter into a forward purchase
contract to buy that foreign currency for a fixed dollar amount
("position hedge"). A Fund will not position hedge with respect
to the currency of a particular country to an extent greater than
the aggregate market value (at the time of making such sale) of
the securities held in its portfolio denominated or quoted in
that particular foreign currency. Instead of entering into a
position hedge, the Fund may, in the alternative, enter into a
forward contract to sell a different foreign currency for a fixed
U.S. dollar amount where the Fund believes that the U.S. dollar
value of the currency to be sold pursuant to the forward contract
will fall whenever there is a decline in the U.S. dollar value of
the currency in which portfolio securities of the Fund are
denominated ("cross-hedge"). Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than
if it had not entered into such forward contracts.
Hedging against a decline in the value of a currency
does not eliminate fluctuations in the prices of portfolio
securities or prevent losses if the prices of such securities
decline. Such transactions also preclude the opportunity for
gain if the value of the hedge currency should rise. Moreover,
it may not be possible for the Fund to hedge against a
devaluation that is so generally anticipated that the Fund is not
able to contract to sell the currency at a price above the
devaluation level it anticipates.
Currency Swaps. Currency swaps involve the individually
negotiated exchange by the Fund with another party of a series of
payments in specified currencies. A currency swap may involve
the delivery at the end of the exchange period of a substantial
amount of one designated currency in exchange for the other
designated currency. Therefore the entire principal value of a
currency swap is subject to the risk that the other party to the
swap will default on its contractual delivery obligations. The
Fund will not enter into any currency swap unless the credit
quality of the unsecured senior debt or the claims-paying ability
of the other party thereto is rated in the highest rating
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category of at least one nationally recognized rating
organization at the time of entering into the transaction. If
there is a default by the other party to such a transaction, the
Fund will have contractual remedies pursuant to the agreements
related to the transactions.
Loans of Portfolio Securities. The risks in lending
portfolio securities, as with other extensions of credit, consist
of possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a
particular borrower, Alliance (subject to review by the Fund's
Directors) will consider all relevant facts and circumstances,
including the creditworthiness of the borrower. While securities
are on loan, the borrower will pay the Fund any income earned
thereon and the Fund may invest any cash collateral in portfolio
securities, thereby earning additional income, or receive an
agreed upon amount of income from a borrower who has delivered
equivalent collateral. The Fund will have the right to regain
record ownership of loaned securities to exercise beneficial
rights such as voting rights, subscription rights and rights to
dividends, interest or distributions. The Fund may pay
reasonable finders', administrative and custodial fees in
connection with a loan. The Fund will not lend portfolio
securities to any officer, director, employee or affiliate of the
Fund or Alliance.
General. The successful use of the foregoing investment
practices draws upon Alliance's special skills and experience
with respect to such instruments and usually depends on
Alliance's ability to forecast price movements or currency
exchange rate movements correctly. Should prices or exchange
rates move unexpectedly, the Fund may not achieve the anticipated
benefits of the transactions or may realize losses and thus be in
a worse position than if such strategies had not been used.
Unlike many exchange-traded futures contracts and options on
futures contracts, there are no daily price fluctuation limits
with respect to options on currencies and forward contracts, and
adverse market movements could therefore continue to an unlimited
extent over a period of time. In addition, the correlation
between movements in the prices of such instruments and movements
in the prices of the securities and currencies hedged or used for
cover will not be perfect and could produce unanticipated losses.
The Fund's ability to dispose of its position in futures
contracts, options and forward contracts depends on the
availability of liquid markets in such instruments. Markets in
options and futures with respect to a number of types of
securities and currencies are relatively new and still
developing, and there is no public market for forward contracts.
It is impossible to predict the amount of trading interest that
may exist in various types of futures contracts, options and
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<PAGE>
forward contracts. If a secondary market does not exist with
respect to an option purchased or written by the Fund, it might
not be possible to effect a closing transaction in the option
(i.e., dispose of the option) with the result that (i) an option
purchased by the Fund would have to be exercised in order for the
Fund to realize any profit and (ii) the Fund may not be able to
sell currencies covering an option written by the Fund until the
option expires or it delivers the underlying futures contract or
currency upon exercise. Therefore, no assurance can be given
that the Fund will be able to utilize these instruments
effectively for the purposes set forth above. Furthermore, the
Fund's ability to engage in options and futures transactions may
be limited by tax considerations. See "Dividends, Distributions
and Taxes" in the Statement of Additional Information of the
Fund.
Future Developments. The Fund may, following written
notice to its shareholders, take advantage of other investment
practices that are not currently contemplated for use by the Fund
or are not available but may yet be developed, to the extent such
investment practices are consistent with the Fund's investment
objective and legally permissible for the Fund. Such investment
practices, if they arise, may involve risks that exceed those
involved in the activities described above.
Defensive Position. For temporary defensive purposes,
the Fund may reduce its position in equity securities and
increase without limit its position in short-term, liquid, high-
grade debt securities, which may include U.S. Government
securities, bank deposits, money market instruments, short-term
debt securities, including notes and bonds, and short-term
foreign-currency denominated high-grade debt securities issued by
foreign governmental entities, companies and supranational
organizations. For a complete description of the types of
securities the Fund may invest in while in a temporary defensive
position, please see the Fund's Statement of Additional
Information.
Portfolio Turnover. Alliance anticipates that the
Fund's annual rate of turnover generally will not exceed 100%. A
100% annual turnover rate would occur if all of the securities in
the Fund's portfolio are replaced once in a period of one year.
A high rate of portfolio turnover involves correspondingly
greater brokerage and other expenses than a lower rate, which
must be borne by the Fund and its shareholders. High portfolio
turnover also may result in the realization of substantial net
short-term capital gains. See "Dividends, Distributions and
Taxes" in the Fund's Statement of Additional Information.
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<PAGE>
CERTAIN FUNDAMENTAL INVESTMENT POLICIES
The Fund has adopted certain fundamental investment
policies listed below, which may not be changed without the
approval of its shareholders. Additional investment restrictions
with respect to the Fund are set forth in its Statement of
Additional Information.
The Fund may not: (i) purchase more than 10% of the
outstanding voting securities of any one issuer; (ii) invest more
than 15% of the value of its total assets in the securities of
any one issuer or 25% or more of the value of its total assets in
the same industry, except that the Fund will invest more than 25%
of its total assets in Environmental Companies, provided that
this restriction does not apply to U.S. Government securities,
but will apply to foreign government obligations unless the
Commission permits their exclusion; (iii) borrow money or issue
senior securities, except that the Fund may borrow (a) from a
bank if immediately after such borrowing there is asset coverage
of at least 300% as defined in the 1940 Act and (b) for temporary
purposes in an amount not exceeding 5% of the value of the total
assets of the Fund; (iv) pledge, hypothecate, mortgage or
otherwise encumber its assets, except (a) to secure permitted
borrowings and (b) in connection with initial and variation
margin deposits relating to futures contracts; (v) purchase a
security (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange) if, as a result, the Fund
would own any securities of an open-end investment company or
more than 3% of the total outstanding voting stock of any closed-
end investment company, or more than 5% of the value of the
Fund's total assets would be invested in securities of any
closed-end investment company or more than 10% of such value in
closed-end investment companies in the aggregate; (vi) make short
sales of securities or maintain a short position, unless at all
times when a short position is open it owns an equal amount of
such securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of
the same issue as, and equal in amount to, the securities sold
short ("short sales against the box"), and unless not more than
5% of the Fund's net assets (taken at market value) is held as
collateral for such sales at any onetime; or (vii) buy or write
(i.e., sell) put or call options, except (a) the Fund may buy
foreign currency options or write covered foreign currency
options and options on foreign currency futures and (b) the Fund
may purchase warrants.
CERTAIN RISK CONSIDERATIONS
Investment in the Fund involves the special risk
considerations described below.
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Investing in Environmental Companies. Governmental
regulations or other action can inhibit an Environmental
Company's performance, and it may take years to translate
environmental legislation into sales and profits. Environmental
Companies generally face competition in fields often
characterized by relatively short product cycles and competitive
pricing policies. Losses may result from large product
development or expansion costs, unprotected marketing or
distribution systems, erratic revenue flows and low profit
margins. Additional risks that Environmental Companies may face
include difficulty in financing the high cost of technological
development, uncertainties due to changing regulation or rapid
technological advances, potential liabilities associated with
hazardous components and operations, and difficulty in finding
experienced employees.
Many Eligible Companies tend to be companies with total
market capitalizations of less than $500 million. Consequently,
the Fund expects that a significant portion of its assets will be
invested in equity securities of smaller companies. Investment
in smaller companies involves greater risk than is customarily
associated with the securities of more established companies.
Companies in the earlier stages of their development often have
products and management personnel which have not been thoroughly
tested by time or the marketplace; their financial resources may
not be as substantial as those of more established companies.
The securities of smaller companies may have relatively limited
marketability and may be subject to more abrupt or erratic market
movements than securities of larger companies or broad market
indices. The revenue flow of such companies may be erratic and
their results of operations may fluctuate widely and may also
contribute to stock price volatility.
Foreign Investment. The securities markets of many
foreign countries are relatively small, with the majority of
market capitalization and trading volume concentrated in a
limited number of companies representing a small number of
industries. Consequently, the Fund whose investment portfolio
includes such securities may experience greater price volatility
and significantly lower liquidity than a portfolio invested
solely in equity securities of United States companies. These
markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading
significant blocks of securities, than is usual in the United
States. Securities registration, custody and settlements may in
some instances be subject to delays and legal and administrative
uncertainties. Certain foreign countries require governmental
approval prior to investments by foreign persons or limit
investment by foreign persons to only a specified percentage of
an issuer's outstanding securities or a specific class of
securities which may have less advantageous terms (including
21
<PAGE>
price) than securities of the company available for purchase by
nationals. These restrictions or controls may at times limit or
preclude investment in certain securities and may increase the
costs and expenses of the Fund. In addition, the patriation of
investment income, capital or the proceeds of sales of securities
from certain of the countries is controlled under regulations,
including in some cases the need for certain advance government
notification or authority, and if a deterioration occurs in a
country's balance of payments, the country could impose temporary
restrictions on foreign capital remittances.
The Fund could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for
repatriation, as well as by the application to it of other
restrictions on investment. Investing in local markets may
require the Fund to adopt special procedures, which may involve
additional costs to the Fund. The liquidity of the Fund's
investments in any country in which any of these factors exists
could be affected and Alliance will monitor the effect of any
such factor or factors on the Fund's investments. Furthermore,
transaction costs including brokerage commissions for
transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the U.S.
Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are
U.S. issuers with respect to such matters as insider trading
rules, restrictions on market manipulation, shareholder proxy
requirements and timely disclosure of information. The
reporting, accounting and auditing standards of foreign countries
may differ, in some cases significantly, from U.S. standards in
important respects and less information may be available to
investors in foreign securities than to investors in U.S.
securities. Substantially less information is publicly available
about certain non-U.S. issuers than is available about U.S.
issuers.
The economies of individual foreign countries may differ
favorably or unfavorably from the U.S. economy in such respects
as growth of gross domestic product or gross national product,
rate of inflation, capital reinvestment, resource self-
sufficiency and balance of payments position. Nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes, government regulation, political or social
instability or diplomatic developments could affect adversely the
economy of a foreign country or the Fund's investments in such
country. In the event of expropriation, nationalization or other
confiscation, the Fund could lose its entire investment in the
country involved. In addition, laws in foreign countries
governing business organizations, bankruptcy and insolvency may
22
<PAGE>
provide less protection to security holders such as the Fund than
that provided by U.S. laws.
Currency Considerations. The Fund is permitted to
invest substantially all of its assets in securities denominated
in foreign currencies. A portion of the Fund's revenues
corresponding to its foreign currency denominated investments
will be received in such currencies. Therefore, the dollar
equivalent of the Fund's net assets, income and distributions
could be adversely affected by reductions in the value of certain
foreign currencies relative to the U.S. dollar. The Fund may,
however, attempt to protect itself against adverse changes in the
values of foreign currencies by engaging in certain of the
investment practices listed above. While it has this ability,
there is no certainty as to whether and to what extent it will
engage in these practices. If the value of the foreign
currencies in which the Fund receives its income falls relative
to the U.S. dollar between receipt of the income and the making
of Fund distributions, the Fund may be required to liquidate
securities in order to make distributions if it has insufficient
cash in U.S. dollars to meet distribution requirements.
Similarly, if an exchange rate declines between the time the Fund
incurs expenses in U.S. dollars and the time cash expenses are
paid, the amount of the currency required to be converted into
U.S. dollars in order to pay expenses in U.S. dollars could be
greater than the equivalent amount of such expenses in the
currency at the time they were incurred.
U.S. and Foreign Taxes. Foreign taxes paid by the Fund
may be creditable or deductible by U.S. shareholders for U.S.
income tax purposes. No assurance can be given that applicable
tax laws and interpretations will not change in the future.
Moreover, non-U.S. investors may not be able to credit or deduct
such foreign taxes. Investors should review carefully the
information discussed under the heading "Dividends, Distributions
and Taxes" and should discuss with their tax advisers the
specific tax consequences of investing in the Fund.
Non-Diversified Status. The Fund is a "non-diversified"
investment company, which means it is not limited in the
proportion of its assets that may be invested in the securities
of a single issuer. However, the Fund intends to conduct its
operations so as to qualify to be taxed as a "regulated
investment company" for purposes of the Code, which will relieve
the Fund of any liability for federal income tax to the extent
its earnings are distributed to shareholders. See "Dividends,
Distributions and Taxes--U.S. Federal Income Taxes" in the Fund's
Statement of Additional Information. To so qualify, among other
requirements, the Fund will limit its investments so that, at the
close of each quarter of the taxable year, (i) not more than 25%
of the Fund's total assets will be invested in the securities of
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a single issuer, and (ii) with respect to 50% of its total
assets, not more than 5% of its total assets will be invested in
the securities of a single issuer and the Fund will not own more
than 10% of the outstanding voting securities of a single issuer.
The Fund's investments in U.S. Government securities are not
subject to these limitations. Because the Fund, a non-
diversified investment company, may invest in a smaller number of
individual issuers than a diversified investment company, an
investment in the Fund may, under certain circumstances, present
greater risk to an investor than an investment in a diversified
investment company.
Foreign government securities are not treated like U.S.
Government securities for purposes of the diversification tests
described in the preceding paragraph, but instead are subject to
these tests in the same manner as the securities of non-
governmental issuers.
________________________________________________________________
PURCHASE AND SALE OF SHARES
________________________________________________________________
HOW TO BUY SHARES
You can purchase shares of the Fund at a price based on
the next calculation of their net asset value after receipt of a
proper purchase order either through broker-dealers, banks or
other financial intermediaries, or directly through Alliance Fund
Distributors, Inc. ("AFD"), the Fund's principal underwriter.
The minimum initial investment in each Fund is $250. The minimum
for subsequent investments in each Fund is $50. Investments of
$25 or more are allowed under the automatic investment program of
each Fund. Share certificates are issued only upon request. See
the Subscription Application and Statement of Additional
Information for more information.
Existing shareholders may make subsequent purchases by
electronic funds transfer if they have completed the Telephone
Transactions section of the Subscription Application or the
Shareholder Options form obtained from Alliance Fund Services,
Inc. ("AFS"), the Fund's registrar, transfer agent and dividend
disbursing agent. Telephone purchase orders can be made by
calling (800) 221-5672 and may not exceed $500,000.
The Fund offers three classes of shares through this
Prospectus, Class A, Class B and Class C. The Fund may refuse
any order to purchase shares. In this regard, the Fund reserves
the right to restrict purchases of Fund shares (including through
exchanges) when they appear to evidence a pattern of frequent
purchases and sales made in response to short-term considerations
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<PAGE>
Class A Shares--Initial Sales Charge Alternative
You can purchase Class A shares at net asset value plus
an initial sales charge, as follows:
Initial Sales Charge
Commission to
as % of Dealer/Agent
Net Amount as % of as % of
Amount Purchased Invested Offering Price Offering Price
Less than $100,000 4.44% 4.25% 4.00%
$100,000 to less
than $250,000 3.36 3.25 3.00
$250,000 to less
than $500,000 2.30 2.25 2.00
$500,000 to less
than $1,000,000 1.78 1.75 1.50
On purchases of $1,000,000 or more, you pay no initial sales
charge but may pay a contingent deferred sales charge ("CDSC")
equal to 1% of the lesser of net asset value at the time of
redemption or original cost if you redeem within one year;
Alliance may pay the dealer or agent a fee of up to 1% of the
dollar amount purchased. Certain purchases of Class A shares may
qualify for reduced or eliminated sales charges in accordance
with the Fund's Combined Purchase Privilege, Cumulative Quantity
Discount, Statement of Intention, Privilege for Certain
Retirement Plans, Reinstatement Privilege and Sales at Net Asset
Value programs. Consult the Subscription Application and
Statement of Additional Information.
Class B Shares--Deferred Sales Charge Alternative
You can purchase Class B shares at net asset value without an
initial sales charge. However, you may pay a CDSC if you redeem
shares within four years after purchase. The amount of the CDSC
(expressed as a percentage of the lesser of the current net asset
value or original cost) will vary according to the number of
years from the purchase of Class B shares until the redemption of
those shares.
The amount of the CDSC for the Fund is as set forth below.
Year Since Purchase CDSC
First 4.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth None
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Class B shares are subject to higher distribution fees
than Class A shares for a period of eight years (after which they
convert to Class A shares). The higher fees mean a higher
expense ratio, so Class B shares pay correspondingly lower
dividends and may have a lower net asset value than Class A
shares.
Class C Shares--Asset-Based Sales Charge Alternative
You can purchase Class C shares without any initial
sales charge. The Fund will thus receive the full amount of your
purchase, and, if you hold your shares for one year or more, you
will receive the entire net asset value of your shares upon
redemption. Class C shares incur higher distribution fees than
Class A shares and do not convert to any other class of shares of
the Fund. The higher fees mean a higher expense ratio, so Class
C shares pay correspondingly lower dividends and may have a lower
net asset value than Class A shares.
Class C shares redeemed within one year of purchase will
be subject to a CDSC equal to 1% of the lesser of their original
cost or net asset value at the time of redemption.
Application of the CDSC
Shares obtained from dividend or distribution
reinvestment are not subject to the CDSC. The CDSC is deducted
from the amount of the redemption and is paid to AFD. The CDSC
will be waived on redemptions of shares following the death or
disability of a shareholder, to meet the requirements of certain
qualified retirement plans or pursuant to a monthly, bimonthly or
quarterly systematic withdrawal plan. See the Statement of
Additional Information.
How the Fund Values its Shares
The net asset value of each Class of shares of the Fund
is calculated by dividing the value of the Fund's net assets
allocable to that class by the outstanding shares of that class.
Shares are valued each day the New York Stock Exchange (the
"Exchange") is open as of the close of regular trading (currently
4:00 p.m. Eastern time). The securities in the Fund are valued
at their current market value determined on the basis of market
quotations or, if such quotations are not readily available, such
other methods as the Fund's Directors believe would accurately
reflect fair market value.
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<PAGE>
General
The decision as to which Class of shares is more
beneficial to you depends on the amount and intended length of
your investment. If you are making a large investment, thus
qualifying for a reduced sales charge, you might consider Class A
shares. If you are making a smaller investment, you might
consider Class B shares because 100% of your purchase is invested
immediately. If you are unsure of the length of your investment,
you might consider Class C shares because there is no initial
sales charge and, as long as the shares are held for one year or
more, no CDSC. Consult your financial agent. Dealers and agents
may receive different compensation for selling Class A, Class B
or Class C shares. There is no size limit on purchases of
Class A shares. The maximum purchase of Class B shares is
$250,000. The maximum purchase of Class C shares is $1,000,000.
The Fund offers a fourth class of shares, Advisor Class
shares, by means of separate prospectus. Advisor Class shares
may be purchased and held solely by (i) accounts established
under a fee-based program sponsored and maintained by a
registered broker-dealer or other financial intermediary and
approved by AFD, (ii) a self-directed defined contribution
employee benefit plan (e.g., a 401(k) plan) that has at least
1,000 participants or $25 million in assets and (iii) certain
other categories of investors described in the prospectus for the
Advisor Class, including investment advisory clients of, and
certain other persons associated with, Alliance and its
affiliates or the Fund. Advisor Class shares are offered without
any initial sales charge or CDSC and without an ongoing
distribution fee and are expected, therefore, to have different
performance than Class A, Class B or Class C shares. You may
obtain more information about Advisor Class shares by contacting
AFS at (800) 221-5672 or by contacting your financial
representative.
A transaction, service, administrative or other similar
fee may be charged by your broker-dealer, agent, financial
intermediary or other financial representative with respect to
the purchase, sale or exchange of Class A, Class B or Class C
shares made through such financial representative. Such
financial intermediaries may also impose requirements with
respect to the purchase, sale or exchange of shares that are
different from, or in addition to, those imposed by the Fund,
including requirements as to the minimum initial and subsequent
investment amounts.
In addition to the discount or commission paid to
dealers or agents, AFD from time to time pays additional cash or
other incentives to dealers or agents, including EQ Financial
Consultants, Inc., an affiliate of AFD, in connection with the
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<PAGE>
sale of shares of the Fund. Such additional amounts may be
utilized, in whole or in part, in some cases together with other
revenues of such dealers or agents, to provide additional
compensation to registered representatives who sell shares of the
Fund. On some occasions, such cash or other incentives will be
conditioned upon the sale of a specified minimum dollar amount of
the shares of the Fund and/or other Alliance Mutual Funds during
a specific period of time. Such incentives may take the form of
payment for attendance at seminars, meals sporting events or
theater performances, or payment: for travel, lodging and
entertainment incurred in connection with travel by persons
associated with a dealer or agent and their immediate family
members to urban or resort locations within or outside the United
States. Such dealer or agent may elect to receive cash
incentives of equivalent amount in lieu of such payments.
HOW TO SELL SHARES
You may "redeem", i.e., sell your shares in the Fund to
the Fund on any day the Exchange is open, either directly or
through your financial intermediary. The price you will receive
is the net asset value (less, any applicable CDSC) next
calculated after the Fund receives your request in proper form.
Proceeds generally will be sent to you within seven days.
However, for shares recently purchased by check or electronic
funds transfer, the Fund will not send proceeds until it is
reasonably satisfied that the check or electronic funds transfer
has been collected (which may take up to 15 days).
Selling Shares Through Your Broker
Your broker must receive your request before 4:00 p.m.
Eastern time, and your broker must transmit your request to the
Fund by 5:00 p.m. Eastern time, for you to receive that days net
asset value (less any applicable CDSC). Your broker is
responsible for furnishing all necessary documentation to the
Fund and may charge you for this service.
Selling Shares Directly To The Fund
Send a signed letter of instruction or stock power form
to AFS along with certificates, if any, that represent the shares
you want to sell. For your protection, signatures must be
guaranteed by a bank, a member firm of a national stock exchange
or other eligible guarantor institution. Stock power forms are
available from your financial intermediary, AFS, and many
commercial banks. Additional documentation is required for the
sale of shares by corporations, intermediaries, fiduciaries and
surviving joint owners. For details contact:
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Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
(800) 221-5672
Alternatively, a request for redemption of shares for
which no stock certificates have been issued can also be made by
telephone to (800) 221-5672. Telephone redemption requests must
be made by 4:00 p.m. Eastern time on a Fund business day in order
to receive that day's net asset value, and may be made only once
in any 30-day period. A shareholder who has completed the
Telephone Transactions section of the Subscription Application,
or the Shareholder Options form obtained from AFS, can elect to
have the proceeds of his or her redemption sent to his or her
bank via an electronic funds transfer. Proceeds of telephone
redemptions also may be sent by check to a shareholder's address
of record. Redemption requests by electronic funds transfer may
not exceed $100,000 and redemption requests by check may not
exceed $50,000. Telephone redemption is not available for shares
held in nominee or "street name" accounts or retirement plan
accounts or shares held by a shareholder who has changed his or
her address of record within the previous 30 calendar days.
General
The sale of shares is a taxable transaction for federal
tax purposes. Under unusual circumstances, the Fund may suspend
redemptions or postpone payment for up to seven days or longer,
as permitted by federal securities law. The Fund reserves the
right to close an account that through redemption has remained
below $200 for 90 days. Shareholders will receive 60 days'
written notice to increase the account value before the account
is closed.
During drastic economic or market developments, you
might have difficulty reaching AFS by telephone, in which event
you should issue written instructions to AFS. AFS is not
responsible for the authenticity of telephonic requests to
purchase, sell or exchange shares. AFS will employ reasonable
procedures to verify that telephone requests are genuine, and
could be liable for losses resulting from unauthorized
transactions if it failed to do so. Dealers and agents may
charge a commission for handling telephonic requests. The
telephone service may be suspended or terminated at any time
without notice.
SHAREHOLDER SERVICES
AFS offers a variety of shareholder services. For more
information about these services or your account, call AFS's
toll-free number, (800) 221-5672. Some services are described in
29
<PAGE>
the attached application. A shareholder manual explaining all
available services will be provided upon request. To request a
shareholder manual, call (800) 227-4618.
HOW TO EXCHANGE SHARES
You may exchange your shares of the Fund for shares of
the same class of other Alliance Mutual Funds (including AFD
Exchange Reserves, a money market fund managed by Alliance).
Exchanges of shares are made at the net asset values next
determined, without sales or service charges. Exchanges may be
made by telephone or written request. Telephone exchange
requests must be received by AFS by 4:00 p.m. Eastern time on the
Fund business day in order to receive that day's net asset value.
Shares will continue to age without regard to exchanges
for purposes of determining the CDSC, if any, upon redemption
and, in the case of Class B shares, for the purposes of
conversion to Class A shares. After an exchange, your Class B
shares will automatically convert to Class A shares in accordance
with the conversion schedule applicable to the Class B shares of
the Alliance Mutual Fund you originally purchased for cash
("original shares"). When redemption occurs, the CDSC applicable
to the original shares is applied.
Please read carefully the Prospectus of the mutual fund
into which you are exchanging before submitting the request.
Call AFS at (800) 221-5672 to exchange uncertificated shares. An
exchange is a taxable transaction for federal tax purposes. The
exchange service may be changed, suspended, or terminated on 60
days' written notice.
________________________________________________________________
MANAGEMENT OF THE FUND
________________________________________________________________
ADVISER
Alliance, which is a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York, New
York 10105, has been retained under an advisory agreement (the
"Advisory Agreement") to provide investment advice and, in
general, to conduct the management and investment program of the
Fund, subject to the general supervision and control of the
Directors of the Fund.
Alliance is a leading international investment manager
supervising client accounts with assets as of June 30, 1997 of
more than $199 billion (of which more than $71 billion
represented the assets of investment companies). Alliance's
30
<PAGE>
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds. The 54 registered investment
companies managed by Alliance comprising more than 116 separate
investment portfolios currently have over two million
shareholders. As of June 30, 1997, Alliance provided investment
management services to employee benefit plans for 31 of the
Fortune 100 companies.
Alliance Capital Management Corporation ("ACMC"), the
sole general partner of, and the owner of a 1% general
partnership interest in, Alliance, 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, which is a wholly-owned subsidiary of The
Equitable Companies Incorporated, a holding company controlled by
AXA-UAP, a French insurance holding company. Certain information
concerning the ownership and control of Equitable by AXA-UAP is
set forth in the Fund's Statement of Additional Information under
"Management of the Fund."
Under the Advisory Agreement, the Fund pays Alliance a
fee 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 fee is accrued daily and
paid monthly.
The person primarily responsible for the day-to-day
management of the Fund's portfolio since August 1995 has been
Jeremy R. Kramer, a Vice President of ACMC, with which he has
been associated since 1993. Previously, he was a securities
analyst with Neuberger & Berman.
DISTRIBUTION SERVICES AGREEMENT
Rule 12b-1 adopted by the Commission under the 1940 Act
permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a duly adopted
plan. Effective October 3, 1997, the Fund adopted a "Rule 12b-1
plan" (the "Plan") and entered into a Distribution Services
Agreement (the "Agreement") with AFD. Pursuant to the Plan, the
Fund pays to AFD for distribution expenses a Rule 12b-1
distribution services fee, which may not exceed an annual rate of
.30% of the Fund's aggregate average daily net assets
attributable to the Class A shares, 1.00% of the Fund's aggregate
average daily net assets attributable to the Class B shares and
1.00% of the Fund's aggregate average daily net assets
attributable to the Class C shares. The Plan provides that a
portion of the distribution services fee in an amount not to
exceed .25% of the aggregate average daily net assets of the Fund
31
<PAGE>
attributable to each of Class A, Class B and Class C shares
constitutes a service fee used for personal service and/or the
maintenance of shareholder accounts.
The Plan provides that AFD will use the distribution
services fee received from the Fund in its entirety for payments
(i) to compensate broker-dealers or other persons for providing
distribution assistance, (ii) to otherwise promote the sale of
shares of the Fund, and (iii) to compensate broker-dealers,
depository institutions and other financial intermediaries for
providing administrative, accounting and other services with
respect to the Fund's shareholders. In this regard, some
payments under the Plan are used to compensate financial
intermediaries with trail or maintenance commissions in an amount
equal to .25%, annualized, with respect to Class A shares and
Class B shares, and 1.00%, annualized, with respect to Class C
shares, of the assets maintained in the Fund by their customers.
Distribution services fees received from the Fund with respect to
Class A shares will not be used to pay any interest expenses,
carrying charges or other financing costs or allocation of
overhead of AFD. Distribution services fees received from the
Fund with respect to Class B and Class C shares may be used for
these purposes. The Plan also provides that Alliance may use its
own resources to finance the distribution of the Fund's shares.
The Fund is not obligated under the Plan to pay any
distribution services fee in excess of the amounts set forth
above. With respect to Class A shares of the Fund, distribution
expenses accrued by AFD in one fiscal year may not be paid from
distribution services fees received from the Fund in subsequent
fiscal years. AFD's compensation with respect to Class B and
Class C shares under the Plan is directly tied to the expenses
incurred by AFD. Actual distribution expenses for such Class B
and Class C shares for any given year, however, will probably
exceed the distribution services fees payable under the Plan and
payments received from CDSCs. The excess will be carried forward
by AFD and reimbursed from distribution services fees payable
under the Plan and payments subsequently received through CDSCs,
so long as the Plan and the Agreement are in effect.
The Plan is in compliance with rules of the National
Association of Securities Dealers, Inc. which effectively limit
the annual asset-based sales charges and service fees that a
mutual fund may pay on a class of shares to .75% and .25%,
respectively, of the average annual net assets attributable to
that class. The rules also limit the aggregate of all front-end,
deferred and asset-based sales charges imposed with respect to a
class of shares by a mutual fund that also charges a service fee
to 6.25% of cumulative gross sales of shares of that class, plus
interest at the prime rate plus 1% per annum.
32
<PAGE>
The Glass-Steagall Act and other applicable laws may
limit the ability of a bank or other depository institution to
become an underwriter or distributor of securities. However, in
the opinion of the Fund's management, based on the advice of
counsel, these laws do not prohibit such depository institutions
from providing services for investment companies such as the
administrative, accounting and other services referred to in the
Agreement. In the event that a change in these laws prevented a
bank from providing such services, it is expected that other
service arrangements would be made and that shareholders would
not be adversely affected.
________________________________________________________________
DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________
DIVIDENDS AND DISTRIBUTIONS
If you receive an income dividend or capital gains
distribution in cash you may, within 120 days following the date
of its payment, reinvest the dividend or distribution in
additional shares of the Fund without charge by returning to
Alliance, with appropriate instructions, the check representing
such dividend or distribution. Thereafter, unless you otherwise
specify, you will be deemed to have elected to reinvest all
subsequent dividends and distributions in shares of the Fund.
Each income dividend and capital gains distribution, if
any, declared by the Fund on its outstanding shares will, at the
election of each shareholder, be paid in cash or in additional
shares of the Fund having an aggregate net asset value as of the
payment date of such dividend or distribution equal to the cash
amount of such income dividend or distribution. Election to
receive income dividends and distributions in cash or shares is
made at the time shares are initially purchased and may be
changed at any time prior to the record date for a particular
dividend or distribution. Cash dividends can be paid by check
or, if the shareholder so elects, electronically via the ACH
network. There is no sales or other charge in connection with
the reinvestment of dividends and capital gains distributions.
Dividends paid by the Fund, if any, with respect to Class A,
Class B and Class C shares will be calculated in the same manner
at the same time on the same day and will be in the same amount,
except that the higher distribution services fees applicable to
Class B and C shares and any incremental transfer agency costs
relating to Class B shares, will be borne exclusively by the
class to which they relate.
While it is the intention of the Fund to distribute to
its shareholders substantially all of each fiscal year's net
33
<PAGE>
income and net realized capital gains, if any, the amount and
time of any such dividend or distribution must necessarily depend
upon the realization by the Fund of income and capital gains from
investments. There is no fixed dividend rate, and there can be
no assurance that the Fund will pay any dividends or realize any
capital gains.
If you buy shares just before the Fund deducts a
distribution from its net asset value, you will pay the full
price for the shares and then receive a portion of the price back
as a taxable distribution.
FOREIGN INCOME TAXES
Investment income received by the Fund from sources
within foreign countries may be subject to foreign income taxes
withheld at the source. To the extent that the Fund is liable
for foreign income taxes withheld at the source, the Fund
intends, if possible, to operate so as to meet the requirements
of the Code to "pass through" to the Fund's shareholders credits
for foreign income taxes paid, but there can be no assurance that
the Fund will be able to do so.
U.S. FEDERAL INCOME TAXES
The Fund intends to qualify to be taxed as a "regulated
investment company" under the Code. To the extent that the Fund
distributes its taxable income and net capital gain to its
shareholders, qualification as a regulated investment company
relieves the Fund of federal income taxes on that part of its
taxable income including net capital gains which it pays out to
its shareholders. Dividends out of net ordinary income and
distributions of net short-term capital gains are taxable to the
recipient shareholders as ordinary income. In the case of
corporate shareholders, such dividends may be eligible for the
dividends-received deduction, except that the amount eligible for
the deduction is limited to the amount of qualifying dividends
received by the Fund. A corporation's dividends-received
deduction generally will be disallowed unless the corporation
holds shares in the Fund at least 46 days during the 90-day
period beginning 45 days before the date on which the corporation
becomes entitled to receive the dividend. Furthermore, the
dividends-received deduction will be disallowed to the extent a
corporation's investment in shares of the Fund is financed with
indebtedness.
The excess of net long-term capital gains over the net
short-term capital losses realized and distributed by the Fund to
its shareholders as capital gains distributions is taxable to the
shareholders as long-term capital gains, irrespective of the
length of time a shareholder may have held his or her stock.
34
<PAGE>
Long-term capital gains distributions are not eligible for the
dividends-received deduction referred to above.
Under the current federal tax law, the amount of an
income dividend or capital gains distribution declared by the
Fund during October, November or December of a year to
shareholders of record as of a specified date in such a month
that is paid during January of the following year is includable
in the prior year's taxable income of shareholders that are
calendar year taxpayers.
Any dividend or distribution received by a shareholder
on shares of the Fund will have the effect of reducing the net
asset value of such shares by the amount of such dividend or
distribution. Furthermore, a dividend or distribution made
shortly after the purchase of such shares by a shareholder,
although in effect a return of capital to that particular
shareholder, would be taxable to him or her as described above.
If a shareholder held shares six months or less and during that
period received a distribution taxable to such shareholder as
long-term capital gain, any loss realized on the sale of such
shares during such six-month period would be a long-term capital
loss to the extent of such distribution.
A dividend or capital gains distribution with respect to
shares of the Fund held by a tax-deferred or qualified plan, such
as an individual retirement account, 403(b)(7) retirement plan or
corporate pension or profit-sharing plan, generally will not be
taxable to the plan. Distributions from such plans will be
taxable to individual participants under applicable tax rules
without regard to the character of the income earned by the
qualified plan.
Distributions by the Fund may be subject to state and
local taxes. The Fund is qualified to do business in the
Commonwealth of Pennsylvania and, therefore, is subject to the
Pennsylvania foreign franchise and corporate net income tax in
respect of its business activities in Pennsylvania. Accordingly,
shares of the Fund are exempt from Pennsylvania personal property
taxes. The Fund anticipates continuing such business activities
but reserves the right to suspend them at any time, resulting in
the termination of the exemption.
The Fund will be required to withhold 31% of any
payments made to a shareholder if the shareholder has not
provided a certified taxpayer identification number to the Fund,
or the Secretary of the Treasury notifies the Fund that a
shareholder has not reported all interest and dividend income
required to be shown on the shareholder's Federal income tax
return.
35
<PAGE>
Under certain circumstances, if the Fund realizes losses
from fluctuations in currency exchange rates after paying a
dividend, all or a portion of the dividend may subsequently be
characterized as a return of capital. See "Dividends,
Distributions and Taxes" in the Statement of Additional
Information. Shareholders will be advised annually as to the
federal tax status of dividends and capital gain and return of
capital distributions made by the Fund. Shareholders are urged
to consult their tax advisers regarding their own tax
situation.
________________________________________________________________
GENERAL INFORMATION
________________________________________________________________
PORTFOLIO TRANSACTIONS
Consistent with the Conduct Rules of the National
Association of Securities Dealers, Inc., and subject to seeking
best price and execution, the Fund may consider sales of its
shares as a factor in the selection of dealers to enter into
portfolio transactions with the Fund.
ORGANIZATION
The Fund is a Maryland corporation organized on
February 20, 1990. It commenced operations, as a closed-end
management investment company, on June 1, 1990. Effective after
the close of business on October 3, 1997, the Fund converted to
an open-end management investment company and all shares of its
common stock then outstanding were reclassified as Class A
shares. The Fund commenced a continuous public offering of its
Class A shares, Class B shares, Class C shares and Advisor Class
shares on October 6, 1997. It is anticipated that annual
shareholder meetings will not be held; shareholder meetings will
be held only when required by federal or state law. Shareholders
have available certain procedures for the removal of
Directors.
A shareholder in the Fund will be entitled to share pro
rata with other holders of the same class of shares in all
dividends and distributions arising from the Fund's assets and,
upon redeeming shares, will receive the then current net asset
value of the Fund represented by the redeemed shares less any
applicable CDSC or fee. The Fund is empowered to establish,
without shareholder approval, additional portfolios, which may
have different investment objectives, and additional classes of
shares. If an additional portfolio or class were established in
the Fund, each share of the portfolio or class would normally be
entitled to one vote for all purposes. Generally, shares of each
36
<PAGE>
portfolio and class would vote as a single series or class on
matters, such as the election of Directors, that affect each
portfolio or class in substantially the same manner. Class A,
Class B, Class C and Advisor Class shares have identical voting,
dividend, liquidation and other rights, except that each class
bears its own transfer agency expenses, each of Class A, Class B
and Class C shares bears its own distribution expenses, Class B
shares convert to Class A shares after eight years and Advisor
Class shares convert to Class A shares under certain
circumstances. Each class of shares votes separately with
respect to the Fund's Rule 12b-1 distribution plan and other
matters for which separate class voting is appropriate under
applicable law. Shares are freely transferable, are entitled to
dividends as determined by the Directors and, in liquidation of
the Fund, are entitled to receive the net assets of the Fund.
Certain additional matters relating to the Fund's organization
are discussed in its Statement of Additional Information.
REGISTRAR, TRANSFER AGENT AND
DIVIDEND-DISBURSING AGENT
AFS, an indirect wholly-owned subsidiary of Alliance,
located at 500 Plaza Drive, Secaucus, New Jersey 07094, acts as
the Fund's registrar, transfer agent and dividend-disbursing
agent for a fee based upon the number of shareholder accounts
maintained for the Fund. The transfer agency fee with respect to
the Class B shares will be higher than the transfer agency fee
with respect to the Class A shares or Class C shares.
PRINCIPAL UNDERWRITER
AFD, an indirect wholly-owned subsidiary of Alliance,
located at 1345 Avenue of the Americas, New York, New York 10105,
is the principal underwriter of shares of the Fund.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its total return,
which is computed separately for Class A, Class B and Class C
shares. Such advertisements disclose the Fund's average annual
compounded total return for the periods prescribed by the
Commission. The Fund's total return for each such period is
computed by finding, through the use of a formula prescribed by
the Commission, the average annual compounded rate of return over
the period that would equate an assumed initial amount invested
to the value of the investment at the end of the period. For
purposes of computing total return, income, dividends and capital
gains distributions paid on shares of the Fund are assumed to
have been reinvested when paid and the maximum sales charges
applicable to purchases and redemptions of the Fund's shares are
assumed to have been paid. The Fund's advertisements may quote
37
<PAGE>
performance rankings or ratings of the Fund by financial
publications or independent organizations such as Lipper
Analytical Services, Inc. and Morningstar, Inc. or compare the
Fund's performance to various indices.
ADDITIONAL INFORMATION
This Prospectus and the Statement of Additional
Information, which has been incorporated by reference herein, do
not contain all the information set forth in the Registration
Statement filed by the Fund with the Commission under the
Securities Act. Copies of the Registration Statement may be
obtained at a reasonable charge from the Commission or may be
examined, without charge, at the offices of the Commission in
Washington, D.C.
38
00250070.AT6
<PAGE>
ALLIANCE GLOBAL ENVIRONMENT FUND
c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
Prospectus and Application
[Advisor Class]
1997
Table of Contents Page
The Fund at a Glance.................................... 3
Expense Information..................................... 5
Glossary................................................ 7
Description of the Fund................................. 8
Investment Objective................................. 8
Investment Policies.................................. 8
Additional Investment Practices...................... 10
Certain Fundamental Investment
Policies.......................................... 16
Certain Risk Considerations ......................... 16
Purchase and Sale of Shares............................. 20
Management of the Fund.................................. 24
Dividends, Distributions and Taxes...................... 25
Conversion Feature...................................... 28
General Information..................................... 33
Adviser
Alliance Capital Management L.P.
1345 Avenue Of The Americas
New York, New York 10105
<PAGE>
Alliance Global Environment Fund, Inc. (the "Fund") seeks long-
term capital appreciation through investment in equity securities
of companies expected to benefit from advances or improvements in
products, processes or services intended to foster the protection
of the environment.
The Fund is an open-end, non-diversified, management investment
company. This Prospectus sets forth concisely the information
that a prospective investor should know about the Fund before
investing. A "Statement of Additional Information" for the Fund
dated [ ], 1997, which provides further information
regarding certain matters discussed in this Prospectus and other
matters which may be of interest to some investors, has been
filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a free copy, call or write
Alliance Fund Services, Inc. at the indicated address or call the
"For Literature" telephone number shown above.
This Prospectus offers the Advisor Class shares of the Fund,
which may be purchased at net asset value without any initial or
contingent deferred sales charges and without ongoing
distribution expenses. Advisor Class shares are offered solely
to (i) investors participating in fee-based programs meeting
certain standards established by Alliance Fund Distributors,
Inc., the Fund's principal underwriter, (ii) participants in
self-directed defined contribution employee benefit plans (e.g.,
401(k) plans) that meet certain minimum standards and
(iii) certain other categories of investors described in the
Prospectus, including investment advisory clients, of, and
certain persons associated with, Alliance Capital Management L.P.
and its affiliates or the Fund. See "Purchase and Sale of
Shares."
An investment in these securities is not a deposit or obligation
of, or guaranteed or endorsed by, any bank and is not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
Investors are advised to read this Prospectus carefully and to
retain it for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
[Alliance Logo] (R)/SM These are registered marks used under
license from the owner, Alliance Capital Management L.P.
2
<PAGE>
The Fund At A Glance
The following summary is qualified in its entirety by the more
detailed information contained inside this Prospectus.
The Fund's Investment Adviser Is . . .
Alliance Capital Management L.P. ("Alliance"), a global
investment adviser providing diversified services to institutions
and individuals through a broad line of investments including
more than 100 mutual funds. Since 1971, Alliance has earned a
reputation as a leader in the investment world with over $199
billion in assets under management as of June 30, 1997. Alliance
provides investment management services to employee benefit plans
for 29 of the FORTUNE 100 companies.
The Fund
Seeks . . . Long-term capital appreciation.
Invests principally in . . . A non-diversified portfolio of
equity securities of companies expected to benefit from advances
or improvements in products, processes or services intended to
foster the protection of the environment ("Eligible Companies").
A Word About Risk . . .
The price of shares of the Fund will fluctuate as the daily
prices of the individual stocks and other equity securities in
which it invests fluctuate, so that your shares, when redeemed,
may be worth more or less than their original cost. Because the
Fund will invest in foreign currency denominated securities,
these fluctuations may be magnified by changes in foreign
exchange rates. The Fund invests substantially all of its assets
in equity securities of Eligible Companies. As a consequence,
the Fund is subject to certain additional risks not typically
associated with funds that have more diversified portfolios and
that do not concentrate their investments in equity securities of
Eligible Companies, including potential detrimental effects on
Eligible Companies of high costs of technological development,
rapid technological change and changing regulation, in addition
to risks associated with investment in smaller companies. See
"Certain Risk Considerations" below. Investment in the Fund
involves risks not associated with funds that invest primarily in
securities of U.S. issuers. While the Fund invests principally
in common stocks and other equity securities, in order to achieve
its investment objectives the Fund may at times use certain types
of investment derivatives, such as options, futures, forwards and
swaps. These involve risks different from, and, in certain
cases, greater than, the risks presented by more traditional
3
<PAGE>
investments. These risks are more fully discussed in this
Prospectus.
Getting Started . . .
Shares of the Fund are available through your financial
representative. The Fund offers multiple classes of shares, of
which only the Advisor Class is offered by this Prospectus.
Advisor Class shares may be purchased at net asset value without
any initial or contingent deferred sales charges and are not
subject to ongoing distribution expenses. Advisor Class shares
may be purchased and held solely (i) through accounts established
under a fee-based program, sponsored and maintained by a
registered broker-dealer or other financial intermediary and
approved by Alliance Fund Distributors, Inc. ("AFD"), the Fund's
principal underwriter, (ii) through a self-directed defined
contribution employee benefit plan (e.g., a 401(k) plan) that has
at least 1,000 participants or $25 million in assets, (iii) by
investment advisory clients of, and certain other persons
associated with, Alliance and its affiliates or the Fund, and
(iv) through registered investment advisers or other financial
intermediaries who charge a management, consulting or other fee
for their service and who purchase shares through a broker or
agent approved by AFD and clients of such registered investment
advisers or financial intermediaries whose accounts are linked to
the master account of such investment adviser or financial
intermediary on the books of such approved broker or agent. A
shareholder's Advisor Class shares will automatically convert to
Class A shares of the Fund under certain circumstances. See
"Conversion Feature--Conversion to Class A Shares." Generally, a
fee-based program must charge an asset-based or other similar fee
and must invest in the aggregate at least $250,000 in Advisor
Class shares of the Fund in order to be approved by AFD for
investment in Advisor Class shares. For more detailed
information about who may purchase and hold Advisor Class shares
see the Statement of Additional Information. Fee-based and other
programs through which Advisor Class shares may be purchased may
impose different requirements with respect to investment in
Advisor Class shares than described above. For detailed
information about purchasing and selling shares, see "Purchase
and Sale of Shares."
ALLIANCE LOGO
(R)/SM These are registered marks used under license from the
owner, Alliance Capital Management L.P.
4
<PAGE>
________________________________________________________________
EXPENSE INFORMATION
________________________________________________________________
Shareholder Transaction Expenses are one of several factors to
consider when you invest in the Fund. The following table
summarizes your maximum transaction costs from investing in the
Advisor Class shares of the Fund and annual expenses for Advisor
Class shares of the Fund. The Example following the table below
shows the cumulative expenses attributable to a hypothetical
$1,000 investment in Advisor Class shares for the periods
specified.
Maximum sales charge imposed on
purchases (as a percentage of
offering price) None
Sales charge imposed on
dividend reinvestments None
Deferred sales charge None
Exchange fee None
________________________________________________________________
Operating Expenses
Management fees 1.10%
12b-1 fees None
Other expenses (a) 1.13
Total fund operating
expenses 2.23
=====
Example
After 1 year $22
After 3 years $69
After 5 years $118
After 10 years $254
________________________________________________________________
(a) These expenses include a transfer agency fee payable to
Alliance Fund Services, Inc., an affiliate of Alliance, based on
a fixed dollar amount charged to the Fund for each shareholder's
account.
The purpose of the foregoing table is to assist the investor in
understanding the various costs and expenses that an investor in
the Fund will bear directly or indirectly. The Example set forth
above assumes reinvestment of all dividends and distributions and
5
<PAGE>
utilizes a 5% annual rate as mandated by Commission regulations.
"Other Expenses" are based on estimated amounts for the Fund's
current fiscal year. THE EXAMPLE SHOULD NOT BE CONSIDERED
REPRESENTATIVE OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN.
6
<PAGE>
________________________________________________________________
GLOSSARY
________________________________________________________________
The following terms are frequently used in this Prospectus. Many
of these terms are explained in greater detail under "Description
of the Fund - Additional Investment Practices."
Eligible Companies are companies expected to benefit from
advances or improvements in products, processes or services
intended to foster the protection of the environment.
Environmental Companies are Eligible Companies that have a
principal business involving the sale of systems or services
intended to foster environmental protection, such as waste
treatment and disposal, remediation, air pollution control and
recycling.
Beneficiary Companies are Eligible Companies whose principal
businesses lie outside the environmental sector but nevertheless
anticipate environmental regulations or consumer preferences
through the development of new products, processes or services
that are intended to contribute to a cleaner and healthier
environment, such as companies that anticipate the demand for
plastic substitutes, aerosol substitutes, alternative fuels and
processes that generate less hazardous wastes.
Equity Securities are common stocks (but not preferred stocks),
rights or warrants to subscribe for or purchase common stocks,
and preferred stocks or debt securities that are convertible into
common stocks without the payment of any further consideration.
Rule 144A securities are securities that may be resold pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act").
U.S. Government securities are securities issued or guaranteed by
the United States Government, its agencies or instrumentalities.
Depositary receipts include American Depositary Receipts
("ADRs"), Global Depositary Receipts ("GDRs") and other types of
depositary receipts.
1940 Act is the Investment Company Act of 1940, as amended.
Commission is the U.S. Securities and Exchange Commission.
Code is the Internal Revenue Code of 1986, as amended.
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___________________________________________________________
DESCRIPTION OF THE FUND
___________________________________________________________
The Fund is a non-diversified management investment
company. Until October 3, 1997, the Fund operated as a closed-
end investment company, and its common stock (which then
comprised a single class) was listed on the New York Stock
Exchange. The Fund's investment objective is "fundamental" and
cannot be changed without a shareholder vote. Except as noted,
the Fund's investment policies are not fundamental and thus can
be changed without a shareholder vote. The Fund will not change
these policies without notifying its shareholders. There is no
guarantee that the Fund will achieve its investment
objective.
INVESTMENT OBJECTIVE
The Fund's investment objective is long-term capital
appreciation through investment in equity securities (i.e.,
common stocks (but not preferred stocks), rights or warrants to
subscribe for or purchase common stocks, and preferred stocks or
debt securities that are convertible into common stocks without
the payment of any further consideration) of Eligible Companies.
INVESTMENT POLICIES
The Fund will invest in two categories of Eligible
Companies--"Environmental Companies" and "Beneficiary Companies."
Environmental Companies are those that have a principal business
involving the sale of systems or services intended to foster
environmental protection, such as waste treatment and disposal,
remediation, air pollution control and recycling. Under normal
circumstances, the Fund will invest at least 65% of its total
assets in equity securities of Environmental Companies.
Beneficiary Companies are those whose principal businesses lie
outside the environmental sector but nevertheless anticipate
environmental regulations or consumer preferences through the
development of new products, processes or services that are
intended to contribute to a cleaner and healthier environment.
Examples of such companies could be companies that anticipate the
demand for plastic substitutes, aerosol substitutes, alternative
fuels and processes that generate less hazardous wastes. In this
regard, the Fund may invest in an issuer with a broadly-
diversified business, only a part of which provides such
products, processes or services, when Alliance believes that
these products, processes or services will yield a competitive
advantage that significantly enhances the issuer's growth
prospects. As a matter of fundamental policy, the Fund will,
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under normal circumstances, invest substantially all of its total
assets in equity securities of Eligible Companies.
A major premise of the Fund's investment approach is
that environmental concerns will be a significant source of
future growth opportunities, and that Environmental Companies
will see an increased demand for their systems and services.
Environmental Companies operate in the areas of pollution
control, clean energy, solid waste management, hazardous waste
treatment and disposal, pulp and paper recycling, waste-to-energy
alternatives, biodegradable cartons, packages, plastics and other
products, remedial projects and emergency cleanup efforts,
manufacture of environmental supplies and equipment, the
achievement of purer air, groundwater and foods and the
detection, evaluation and treatment of both existing and
potential environmental problems including, among others, air
pollution and acid rain.
The environmental services industry is generally
positively affected by increasing governmental action intended to
foster environmental protection. As environmental regulations
are developed and enforced, Environmental Companies providing the
means of compliance with such regulations are afforded
substantial opportunities for growth. Beneficiary Companies may
also derive an advantage to the extent that they have anticipated
environmental regulation and are therefore at a competitive
advantage.
In the view of Alliance, increasing public and political
awareness of environmental concerns and resultant environmental
regulations are long-term phenomena which are driven by an
emerging global consensus that environmental protection is a
vital and increasingly immediate priority. Alliance believes
that Eligible Companies based in the United States and other
economically developed countries will have increasing
opportunities for earnings growth resulting not only from an
increased demand for their existing products or services but also
from innovative responses to changing regulations and priorities
and enforcement policies. Such opportunities will arise, in the
opinion of Alliance, not only within developed countries but also
within many economically developing countries, such as those of
Eastern Europe and the Pacific Rim. These countries lag well
behind developed countries in the conservation and efficient use
of natural resources and in their implementation of policies
which protect the environment.
Alliance believes that global investing offers
opportunities for superior investment returns. The Fund intends
to spread investment risk among the capital markets of a number
of countries and will invest in equity securities of companies
based in at least three, and normally considerably more, such
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<PAGE>
countries. The percentage of the Fund's assets invested in
securities of companies in a particular country or denominated in
a particular currency will vary in accordance with Alliance's
assessment of the appreciation potential of such securities and
the strength of that currency. As of April 30, 1997,
approximately 84% of the Fund's net assets were invested in
equity securities of U.S. companies.
The Fund may also: (i) invest up to 20% of its total
assets in warrants to purchase equity securities to the extent
consistent with its investment objective; (ii) invest in
depositary receipts; (iii) purchase and write put and call
options on foreign currencies for hedging purposes; (iv) enter
into forward foreign currency transactions for hedging purposes;
(v) invest in currency futures and options on such futures for
hedging purposes; and (vi) make secured loans of its portfolio
securities not in excess of 30% of its total assets. For
additional information on the use, risks and costs of these
policies and practices see "Additional Investment Practices".
The Fund may borrow to the maximum extent permitted under the
1940 Act in order to repurchase its shares or to meet redemption
requests. In addition, the Fund may borrow for temporary
purposes (including the purposes mentioned in the preceding
sentence) in an amount not exceeding 5% of the value of the
assets of the Fund. See "Certain Fundamental Investment
Policies."
ADDITIONAL INVESTMENT PRACTICES
The Fund may engage in the following investment
practices to the extent described above.
Rights and Warrants. Rights and warrants entitle the
holder to buy equity securities at a specific price for a
specific period of time. Rights are similar to warrants except
that they have a substantially shorter duration. Rights and
warrants may be considered more speculative than certain other
types of investments in that they do not entitle a holder to
dividends or voting rights with respect to the underlying
securities nor do they represent any rights in the assets of the
issuing company. The value of a right or warrant does not
necessarily change with the value of the underlying securities,
however, although the value of a right or warrant may decline
because of a decrease in the value of the underlying stock, the
passage of time or a change in perception as to the potential of
the underlying stock, or any combination thereof. If the market
price of the underlying stock is below the exercise price set
forth in the warrant on the expiration date, the warrant will
expire worthless. Moreover, a right or warrant ceases to have
value if it is not exercised prior to the expiration date.
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<PAGE>
Convertible Securities. Prior to conversion,
convertible preferred stocks and convertible debt securities have
the same general characteristics as non-convertible preferred
stocks and non-convertible debt securities, which generally
provide a stable stream of income with generally higher yields
than those of common stocks of the same or similar issuers. The
price of a convertible security will normally vary with changes
in the price of the underlying common stock, although the higher
yield tends to make the price of the convertible security less
volatile than that of the underlying common stock. As with non-
convertible preferred stocks and debt securities, the market
values of convertible securities tend to decline as interest
rates increase and increase as interest rates decline. While
convertible securities generally offer lower dividend or interest
yields than non-convertible securities of similar quality, they
enable offer investors the potential to benefit from increases in
the market prices of the underlying common stocks.
Depositary Receipts. Depositary receipts may not
necessarily be denominated in the same currency as the underlying
securities into which they may be converted. In addition, the
issuers of the stock of unsponsored depositary receipts are not
obligated to disclose material information in the United States
and, therefore, there may not be a correlation between such
information and the market value of the depositary receipts.
ADRs are depositary receipts typically issued by a U.S. bank or
trust company that evidence ownership of underlying securities
issued by a foreign corporation. GDRs and other types of
depositary receipts are typically issued by foreign banks or
trust companies and evidence ownership of underlying securities
issued by either a foreign or a U.S. company. Generally,
depositary receipts in registered form are designed for use in
the U.S. securities markets and depositary receipts in bearer
form are designed for use in foreign securities markets. For
purposes of determining the country of issuance, the investments
of the Fund in depositary receipts are deemed to be investments
in the underlying securities.
Illiquid Securities. The Fund will not maintain more
than 15% of its net assets in illiquid securities. Illiquid
securities include direct placements or other securities that are
subject to legal or contractual restrictions on resale or for
which there is no readily available market (e.g. when trading in
the security is suspended or, in the case of unlisted securities,
when market makers do not exist or will not entertain bids or
offers), and many individually negotiated currency swaps.
Because of the absence of a trading market for illiquid
securities, the Fund may not be able to realize their full value
upon sale. Alliance will monitor the illiquidity of such
securities with respect to the Fund under the supervision of the
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<PAGE>
Directors of the Fund. To the extent permitted by applicable
law, Rule 144A securities will not be treated as "illiquid" for
purposes of the foregoing restriction so long as such securities
meet liquidity guidelines established by the Fund's Directors.
The Fund may not be able to readily sell securities for
which there is no ready market. To the extent that these
securities are foreign securities, there is no law in many of the
countries in which the Fund may invest similar to the Securities
Act, requiring an issuer to register the sale of securities with
a governmental agency or imposing legal restrictions on resales
of securities, either as to length of time the securities may be
held or manner of resale. However, there may be contractual
restrictions on resale of securities.
Futures Contracts and Options on Futures Contracts. A
"sale" of a futures contract means the acquisition of a
contractual obligation to deliver the foreign currency called for
by the contract at a specified price on a specified date. A
"purchase" of a futures contract means the incurring of an
obligation to acquire the securities, foreign currency called for
by the contract at a specified price on a specified date.
Options on futures contracts written or purchased by the
Fund will be traded on U.S. or foreign exchanges or over-the-
counter. These investment techniques will be used only to hedge
against anticipated future changes in exchange rates which
otherwise might either adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities
which the Fund intends to purchase at a later date.
Options on Foreign Currencies. As in the case of other
kinds of options the writing of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium
received, and the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuations
in exchange rates although, in the event of rate movements
adverse to the Fund's position, it may forfeit the entire amount
of the premium plus related transaction costs. See the Statement
of Additional Information of the Fund for further discussion of
the use, risks and costs of options on foreign currencies.
Forward Foreign Currency Exchange Contracts. The Fund
may purchase or sell forward contracts so as to minimize the risk
to it from adverse changes in the relationship between the U.S.
dollar and other currencies. A forward contract is an obligation
to purchase or sell a specific currency for an agreed price at a
future date, and is individually negotiated and privately traded.
12
<PAGE>
The Fund may enter into a forward contract, for example,
when it enters into a contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in"
the U.S. Dollar price of the security ("transaction hedge"). The
Fund may not engage in transaction hedges with respect to the
currency of a particular country to an extent greater than the
aggregate amount of the Fund's transactions in that currency.
When the Fund believes that a foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a
forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency, or when the Fund
believes that the U.S. dollar may suffer a substantial decline
against a foreign currency, it may enter into a forward purchase
contract to buy that foreign currency for a fixed dollar amount
("position hedge"). A Fund will not position hedge with respect
to the currency of a particular country to an extent greater than
the aggregate market value (at the time of making such sale) of
the securities held in its portfolio denominated or quoted in
that particular foreign currency. Instead of entering into a
position hedge, the Fund may, in the alternative, enter into a
forward contract to sell a different foreign currency for a fixed
U.S. dollar amount where the Fund believes that the U.S. dollar
value of the currency to be sold pursuant to the forward contract
will fall whenever there is a decline in the U.S. dollar value of
the currency in which portfolio securities of the Fund are
denominated ("cross-hedge"). Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than
if it had not entered into such forward contracts.
Hedging against a decline in the value of a currency
does not eliminate fluctuations in the prices of portfolio
securities or prevent losses if the prices of such securities
decline. Such transactions also preclude the opportunity for
gain if the value of the hedge currency should rise. Moreover,
it may not be possible for the Fund to hedge against a
devaluation that is so generally anticipated that the Fund is not
able to contract to sell the currency at a price above the
devaluation level it anticipates.
Currency Swaps. Currency swaps involve the individually
negotiated exchange by the Fund with another party of a series of
payments in specified currencies. A currency swap may involve
the delivery at the end of the exchange period of a substantial
amount of one designated currency in exchange for the other
designated currency. Therefore the entire principal value of a
currency swap is subject to the risk that the other party to the
swap will default on its contractual delivery obligations. The
Fund will not enter into any currency swap unless the credit
quality of the unsecured senior debt or the claims-paying ability
of the other party thereto is rated in the highest rating
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<PAGE>
category of at least one nationally recognized rating
organization at the time of entering into the transaction. If
there is a default by the other party to such a transaction, the
Fund will have contractual remedies pursuant to the agreements
related to the transactions.
Loans of Portfolio Securities. The risks in lending
portfolio securities, as with other extensions of credit, consist
of possible loss of rights in the collateral should the borrower
fail financially. In determining whether to lend securities to a
particular borrower, Alliance (subject to review by the Fund's
Directors) will consider all relevant facts and circumstances,
including the creditworthiness of the borrower. While securities
are on loan, the borrower will pay the Fund any income earned
thereon and the Fund may invest any cash collateral in portfolio
securities, thereby earning additional income, or receive an
agreed upon amount of income from a borrower who has delivered
equivalent collateral. The Fund will have the right to regain
record ownership of loaned securities to exercise beneficial
rights such as voting rights, subscription rights and rights to
dividends, interest or distributions. The Fund may pay
reasonable finders', administrative and custodial fees in
connection with a loan. The Fund will not lend portfolio
securities to any officer, director, employee or affiliate of the
Fund or Alliance.
General. The successful use of the foregoing investment
practices draws upon Alliance's special skills and experience
with respect to such instruments and usually depends on
Alliance's ability to forecast price movements or currency
exchange rate movements correctly. Should prices or exchange
rates move unexpectedly, the Fund may not achieve the anticipated
benefits of the transactions or may realize losses and thus be in
a worse position than if such strategies had not been used.
Unlike many exchange-traded futures contracts and options on
futures contracts, there are no daily price fluctuation limits
with respect to options on currencies and forward contracts, and
adverse market movements could therefore continue to an unlimited
extent over a period of time. In addition, the correlation
between movements in the prices of such instruments and movements
in the prices of the securities and currencies hedged or used for
cover will not be perfect and could produce unanticipated losses.
The Fund's ability to dispose of its position in futures
contracts, options and forward contracts depends on the
availability of liquid markets in such instruments. Markets in
options and futures with respect to a number of types of
securities and currencies are relatively new and still
developing, and there is no public market for forward contracts.
It is impossible to predict the amount of trading interest that
may exist in various types of futures contracts, options and
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<PAGE>
forward contracts. If a secondary market does not exist with
respect to an option purchased or written by the Fund, it might
not be possible to effect a closing transaction in the option
(i.e., dispose of the option) with the result that (i) an option
purchased by the Fund would have to be exercised in order for the
Fund to realize any profit and (ii) the Fund may not be able to
sell currencies covering an option written by the Fund until the
option expires or it delivers the underlying futures contract or
currency upon exercise. Therefore, no assurance can be given
that the Fund will be able to utilize these instruments
effectively for the purposes set forth above. Furthermore, the
Fund's ability to engage in options and futures transactions may
be limited by tax considerations. See "Dividends, Distributions
and Taxes" in the Statement of Additional Information of the
Fund.
Future Developments. The Fund may, following written
notice to its shareholders, take advantage of other investment
practices that are not currently contemplated for use by the Fund
or are not available but may yet be developed, to the extent such
investment practices are consistent with the Fund's investment
objective and legally permissible for the Fund. Such investment
practices, if they arise, may involve risks that exceed those
involved in the activities described above.
Defensive Position. For temporary defensive purposes,
the Fund may reduce its position in equity securities and
increase without limit its position in short-term, liquid, high-
grade debt securities, which may include U.S. Government
securities, bank deposits, money market instruments, short-term
debt securities, including notes and bonds, and short-term
foreign-currency denominated high-grade debt securities issued by
foreign governmental entities, companies and supranational
organizations. For a complete description of the types of
securities the Fund may invest in while in a temporary defensive
position, please see the Fund's Statement of Additional
Information.
Portfolio Turnover. Alliance anticipates that the
Fund's annual rate of turnover generally will not exceed 100%. A
100% annual turnover rate would occur if all of the securities in
the Fund's portfolio are replaced once in a period of one year.
A high rate of portfolio turnover involves correspondingly
greater brokerage and other expenses than a lower rate, which
must be borne by the Fund and its shareholders. High portfolio
turnover also may result in the realization of substantial net
short-term capital gains. See "Dividends, Distributions and
Taxes" in the Fund's Statement of Additional Information.
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<PAGE>
CERTAIN FUNDAMENTAL INVESTMENT POLICIES
The Fund has adopted certain fundamental investment
policies listed below, which may not be changed without the
approval of its shareholders. Additional investment restrictions
with respect to the Fund are set forth in its Statement of
Additional Information.
The Fund may not: (i) purchase more than 10% of the
outstanding voting securities of any one issuer; (ii) invest more
than 15% of the value of its total assets in the securities of
any one issuer or 25% or more of the value of its total assets in
the same industry, except that the Fund will invest more than 25%
of its total assets in Environmental Companies, provided that
this restriction does not apply to U.S. Government securities,
but will apply to foreign government obligations unless the
Commission permits their exclusion; (iii) borrow money or issue
senior securities, except that the Fund may borrow (a) from a
bank if immediately after such borrowing there is asset coverage
of at least 300% as defined in the 1940 Act and (b) for temporary
purposes in an amount not exceeding 5% of the value of the total
assets of the Fund; (iv) pledge, hypothecate, mortgage or
otherwise encumber its assets, except (a) to secure permitted
borrowings and (b) in connection with initial and variation
margin deposits relating to futures contracts; (v) purchase a
security (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange) if, as a result, the Fund
would own any securities of an open-end investment company or
more than 3% of the total outstanding voting stock of any closed-
end investment company, or more than 5% of the value of the
Fund's total assets would be invested in securities of any
closed-end investment company or more than 10% of such value in
closed-end investment companies in the aggregate; (vi) make short
sales of securities or maintain a short position, unless at all
times when a short position is open it owns an equal amount of
such securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of
the same issue as, and equal in amount to, the securities sold
short ("short sales against the box"), and unless not more than
5% of the Fund's net assets (taken at market value) is held as
collateral for such sales at any onetime; or (vii) buy or write
(i.e., sell) put or call options, except (a) the Fund may buy
foreign currency options or write covered foreign currency
options and options on foreign currency futures and (b) the Fund
may purchase warrants.
CERTAIN RISK CONSIDERATIONS
Investment in the Fund involves the special risk
considerations described below.
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<PAGE>
Investing in Environmental Companies. Governmental
regulations or other action can inhibit an Environmental
Company's performance, and it may take years to translate
environmental legislation into sales and profits. Environmental
Companies generally face competition in fields often
characterized by relatively short product cycles and competitive
pricing policies. Losses may result from large product
development or expansion costs, unprotected marketing or
distribution systems, erratic revenue flows and low profit
margins. Additional risks that Environmental Companies may face
include difficulty in financing the high cost of technological
development, uncertainties due to changing regulation or rapid
technological advances, potential liabilities associated with
hazardous components and operations, and difficulty in finding
experienced employees.
Many Eligible Companies tend to be companies with total
market capitalizations of less than $500 million. Consequently,
the Fund expects that a significant portion of its assets will be
invested in equity securities of smaller companies. Investment
in smaller companies involves greater risk than is customarily
associated with the securities of more established companies.
Companies in the earlier stages of their development often have
products and management personnel which have not been thoroughly
tested by time or the marketplace; their financial resources may
not be as substantial as those of more established companies.
The securities of smaller companies may have relatively limited
marketability and may be subject to more abrupt or erratic market
movements than securities of larger companies or broad market
indices. The revenue flow of such companies may be erratic and
their results of operations may fluctuate widely and may also
contribute to stock price volatility.
Foreign Investment. The securities markets of many
foreign countries are relatively small, with the majority of
market capitalization and trading volume concentrated in a
limited number of companies representing a small number of
industries. Consequently, the Fund whose investment portfolio
includes such securities may experience greater price volatility
and significantly lower liquidity than a portfolio invested
solely in equity securities of United States companies. These
markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading
significant blocks of securities, than is usual in the United
States. Securities registration, custody and settlements may in
some instances be subject to delays and legal and administrative
uncertainties. Certain foreign countries require governmental
approval prior to investments by foreign persons or limit
investment by foreign persons to only a specified percentage of
an issuer's outstanding securities or a specific class of
securities which may have less advantageous terms (including
17
<PAGE>
price) than securities of the company available for purchase by
nationals. These restrictions or controls may at times limit or
preclude investment in certain securities and may increase the
costs and expenses of the Fund. In addition, the patriation of
investment income, capital or the proceeds of sales of securities
from certain of the countries is controlled under regulations,
including in some cases the need for certain advance government
notification or authority, and if a deterioration occurs in a
country's balance of payments, the country could impose temporary
restrictions on foreign capital remittances.
The Fund could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for
repatriation, as well as by the application to it of other
restrictions on investment. Investing in local markets may
require the Fund to adopt special procedures, which may involve
additional costs to the Fund. The liquidity of the Fund's
investments in any country in which any of these factors exists
could be affected and Alliance will monitor the effect of any
such factor or factors on the Fund's investments. Furthermore,
transaction costs including brokerage commissions for
transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the U.S.
Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are
U.S. issuers with respect to such matters as insider trading
rules, restrictions on market manipulation, shareholder proxy
requirements and timely disclosure of information. The
reporting, accounting and auditing standards of foreign countries
may differ, in some cases significantly, from U.S. standards in
important respects and less information may be available to
investors in foreign securities than to investors in U.S.
securities. Substantially less information is publicly available
about certain non-U.S. issuers than is available about U.S.
issuers.
The economies of individual foreign countries may differ
favorably or unfavorably from the U.S. economy in such respects
as growth of gross domestic product or gross national product,
rate of inflation, capital reinvestment, resource self-
sufficiency and balance of payments position. Nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes, government regulation, political or social
instability or diplomatic developments could affect adversely the
economy of a foreign country or the Fund's investments in such
country. In the event of expropriation, nationalization or other
confiscation, the Fund could lose its entire investment in the
country involved. In addition, laws in foreign countries
governing business organizations, bankruptcy and insolvency may
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<PAGE>
provide less protection to security holders such as the Fund than
that provided by U.S. laws.
Currency Considerations. The Fund is permitted to
invest substantially all of its assets in securities denominated
in foreign currencies. A portion of the Fund's revenues
corresponding to its foreign currency denominated investments
will be received in such currencies. Therefore, the dollar
equivalent of the Fund's net assets, income and distributions
could be adversely affected by reductions in the value of certain
foreign currencies relative to the U.S. dollar. The Fund may,
however, attempt to protect itself against adverse changes in the
values of foreign currencies by engaging in certain of the
investment practices listed above. While it has this ability,
there is no certainty as to whether and to what extent it will
engage in these practices. If the value of the foreign
currencies in which the Fund receives its income falls relative
to the U.S. dollar between receipt of the income and the making
of Fund distributions, the Fund may be required to liquidate
securities in order to make distributions if it has insufficient
cash in U.S. dollars to meet distribution requirements.
Similarly, if an exchange rate declines between the time the Fund
incurs expenses in U.S. dollars and the time cash expenses are
paid, the amount of the currency required to be converted into
U.S. dollars in order to pay expenses in U.S. dollars could be
greater than the equivalent amount of such expenses in the
currency at the time they were incurred.
U.S. and Foreign Taxes. Foreign taxes paid by the Fund
may be creditable or deductible by U.S. shareholders for U.S.
income tax purposes. No assurance can be given that applicable
tax laws and interpretations will not change in the future.
Moreover, non-U.S. investors may not be able to credit or deduct
such foreign taxes. Investors should review carefully the
information discussed under the heading "Dividends, Distributions
and Taxes" and should discuss with their tax advisers the
specific tax consequences of investing in the Fund.
Non-Diversified Status. The Fund is a "non-diversified"
investment company, which means it is not limited in the
proportion of its assets that may be invested in the securities
of a single issuer. However, the Fund intends to conduct its
operations so as to qualify to be taxed as a "regulated
investment company" for purposes of the Code, which will relieve
the Fund of any liability for federal income tax to the extent
its earnings are distributed to shareholders. See "Dividends,
Distributions and Taxes--U.S. Federal Income Taxes" in the Fund's
Statement of Additional Information. To so qualify, among other
requirements, the Fund will limit its investments so that, at the
close of each quarter of the taxable year, (i) not more than 25%
of the Fund's total assets will be invested in the securities of
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<PAGE>
a single issuer, and (ii) with respect to 50% of its total
assets, not more than 5% of its total assets will be invested in
the securities of a single issuer and the Fund will not own more
than 10% of the outstanding voting securities of a single issuer.
The Fund's investments in U.S. Government securities are not
subject to these limitations. Because the Fund, a non-
diversified investment company, may invest in a smaller number of
individual issuers than a diversified investment company, an
investment in the Fund may, under certain circumstances, present
greater risk to an investor than an investment in a diversified
investment company.
Foreign government securities are not treated like U.S.
Government securities for purposes of the diversification tests
described in the preceding paragraph, but instead are subject to
these tests in the same manner as the securities of non-
governmental issuers.
________________________________________________________________
PURCHASE AND SALE OF SHARES
________________________________________________________________
HOW TO BUY SHARES
The Fund offers multiple classes of shares, of which
only the Advisor Class is offered by this Prospectus. Advisor
Class shares of the Fund may be purchased through your financial
representative at net asset value without any initial or
contingent deferred sales charges and are not subject to ongoing
distribution expenses. Advisor Class shares may be purchased and
held solely (i) through accounts established under a fee-based
program, sponsored and maintained by a registered broker-dealer
or other financial intermediary and approved by AFD, (ii) through
a self-directed defined contribution employee benefit plan (e.g.,
a 401(k) plan) that has at least 1,000 participants or
$25 million in assets, (iii) by investment advisory clients of,
and certain other persons associated with, Alliance and its
affiliates or the Fund, and (iv) through registered investment
advisers or other financial intermediaries who charge a
management, consulting or other fee for their service and who
purchase shares through a broker or agent approved by AFD and
clients of such registered investment advisers or financial
intermediaries whose accounts are linked to the master account of
such investment adviser or financial intermediary on the books of
such approved broker or agent. For more detailed information
about who may purchase and hold Advisor Class shares see the
Statement of Additional Information. A shareholder's Advisor
Class shares will automatically convert to Class A shares of the
Fund under certain circumstances. For a more detailed
20
<PAGE>
description of the conversion feature and Class A shares, see
"Conversion Feature."
Generally, a fee-based program must charge an asset-
based or other similar fee and must invest at least $250,000 in
Advisor Class shares of the Fund in order to be approved by AFD
for investment in Advisor Class shares. Share certificates are
issued only upon request. See the Subscription Application and
Statement of Additional Information for more information.
The Fund may refuse any order to purchase Advisor Class
shares. In this regard, the Fund reserves the right to restrict
purchases of Advisor Class shares (including through exchanges)
when there appears to be evidence of a pattern of frequent
purchases and sales made in response to short-term
considerations.
How The Fund Values its Shares
The net asset value of Advisor Class shares of the Fund
is calculated by dividing the value of the Fund's net assets
allocable to the Advisor Class by the outstanding shares of the
Advisor Class. Shares are valued each day the Exchange is open
as of the close of regular trading (currently 4:00 p.m. Eastern
time). The securities in the Fund are valued at their current
market value determined on the basis of market quotations or, if
such quotations are not readily available, such other methods as
the Fund's Directors believe would accurately reflect fair market
value.
HOW TO SELL SHARES
You may "redeem", i.e., sell your shares in the Fund to
the Fund on any day the Exchange is open, either directly or
through your financial representative. The price you will
receive is the net asset value (less, any applicable CDSC) next
calculated after the Fund receives your request in proper form.
Proceeds generally will be sent to you within seven days.
However, for shares recently purchased by check or electronic
funds transfer, the Fund will not send proceeds until it is
reasonably satisfied that the check or electronic funds transfer
has been collected (which may take up to 15 days). If you are in
doubt about what documents are required by your fee based program
or employee benefit plan, you should contact your financial
representative.
Selling Shares Through Your Financial Representative
Your financial representative must receive your request
before 4:00 p.m. Eastern time, and your financial representative
must transmit your request to the Fund by 5:00 p.m. Eastern time,
21
<PAGE>
for you to receive that days net asset value (less any applicable
CDSC). Your financial representative is responsible for
furnishing all necessary documentation to the Fund and may charge
you for this service.
Selling Shares Directly To The Fund
Send a signed letter of instruction or stock power form
to AFS along with certificates, if any, that represent the shares
you want to sell. For your protection, signatures must be
guaranteed by a bank, a member firm of a national stock exchange
or other eligible guarantor institution. Stock power forms are
available from your financial intermediary, AFS, and many
commercial banks. Additional documentation is required for the
sale of shares by corporations, intermediaries, fiduciaries and
surviving joint owners. For details contact:
Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
(800) 221-5672
Alternatively, a request for redemption of shares for
which no stock certificates have been issued can also be made by
telephone to (800) 221-5672. Telephone redemption requests must
be made by 4:00 p.m. Eastern time on a Fund business day in order
to receive that day's net asset value, and may be made only once
in any 30-day period. A shareholder who has completed the
Telephone Transactions section of the Subscription Application,
or the Shareholder Options form obtained from AFS, can elect to
have the proceeds of his or her redemption sent to his or her
bank via an electronic funds transfer. Proceeds of telephone
redemptions also may be sent by check to a shareholder's address
of record. Redemption requests by electronic funds transfer may
not exceed $100,000 and redemption requests by check may not
exceed $50,000. Telephone redemption is not available for shares
held in nominee or "street name" accounts or retirement plan
accounts or shares held by a shareholder who has changed his or
her address of record within the previous 30 calendar days.
General
The sale of shares is a taxable transaction for federal
tax purposes. Under unusual circumstances, the Fund may suspend
redemptions or postpone payment for up to seven days or longer,
as permitted by federal securities law. The Fund reserves the
right to close an account that through redemption has remained
below $200 for 90 days. Shareholders will receive 60 days'
written notice to increase the account value before the account
is closed.
22
<PAGE>
During drastic economic or market developments, you
might have difficulty reaching AFS by telephone, in which event
you should issue written instructions to AFS. AFS is not
responsible for the authenticity of telephonic requests to
purchase, sell or exchange shares. AFS will employ reasonable
procedures to verify that telephone requests are genuine, and
could be liable for losses resulting from unauthorized
transactions if it failed to do so. Dealers and agents may
charge a commission for handling telephonic requests. The
telephone service may be suspended or terminated at any time
without notice.
SHAREHOLDER SERVICES
AFS offers a variety of shareholder services. For more
information about these services or your account, call AFS's
toll-free number, (800) 221-5672. Some services are described in
the attached application. A shareholder manual explaining all
available services will be provided upon request. To request a
shareholder manual, call (800) 227-4618.
HOW TO EXCHANGE SHARES
You may exchange your Advisor Class shares of the Fund
for Advisor Class shares of other Alliance Mutual Funds
(including AFD Exchange Reserves, a money market fund managed by
Alliance). Exchanges of shares are made at the net asset values
next determined, without sales or service charges. Exchanges may
be made by telephone or written request. Telephone exchange
requests must be received by AFS by 4:00 p.m. Eastern time on the
Fund business day in order to receive that day's net asset value.
Please read carefully the Prospectus of the mutual fund
into which you are exchanging before submitting the request.
Call AFS at (800) 221-5672 to exchange uncertificated shares. An
exchange is a taxable capital transaction for federal tax
purposes. The exchange service may be changed, suspended, or
terminated on 60 days' written notice.
GENERAL
If you are a Fund shareholder through an account
established under a fee-based program, your fee-based program may
impose requirements with respect to the purchase, sale or
exchange of Advisor Class shares of the Fund that are different
from those described in this Prospectus. A transaction, service,
administrative or other similar fee may be charged by your
broker-dealer, agent, financial intermediary or other financial
representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial representative.
Such financial intermediaries may also impose requirements with
23
<PAGE>
respect to the purchase, sale or exchange of shares that are
different from, or in addition to, those imposed by the Fund,
including requirements as to the minimum initial and subsequent
investment amounts.
The Fund offers three classes of shares other than the
Advisor Class, which are Class A, Class B and Class C. All
classes of the shares of the Fund have a common investment
objective and investment portfolio. Class A shares are offered
with an initial sales charge and pay a distribution services fee.
Class B shares have a contingent deferred sales charge (a "CDSC")
and also pay a distribution services fee. Class C shares have no
initial sales charge or CDSC as long as they are not redeemed
within one year of purchase, but pay a distribution services fee.
Because Advisor Class shares have no initial sales charge or CDSC
and pay no distribution services fee, Advisor Class shares are
expected to have different performance from Class A, Class B or
Class C shares. You may obtain more information about Class A,
Class B and Class C shares, which are not offered by this
Prospectus, by contacting AFS by telephone at (800) 221-5672 or
by contacting your financial representative.
________________________________________________________________
MANAGEMENT OF THE FUND
________________________________________________________________
ADVISER
Alliance, which is a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York, New
York 10105, has been retained under an advisory agreement (the
"Advisory Agreement") to provide investment advice and, in
general, to conduct the management and investment program of the
Fund, subject to the general supervision and control of the
Directors of the Fund.
Alliance is a leading international investment manager
supervising client accounts with assets as of June 30, 1997 of
more than $199 billion (of which more than $71 billion
represented the assets of investment companies). Alliance's
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds. The 54 registered investment
companies managed by Alliance comprising more than 116 separate
investment portfolios currently have over two million
shareholders. As of June 30, 1997, Alliance provided investment
management services to employee benefit plans for 29 of the
Fortune 100 companies.
24
<PAGE>
Alliance Capital Management Corporation ("ACMC"), the
sole general partner of, and the owner of a 1% general
partnership interest in, Alliance, 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, which is a wholly-owned subsidiary of The
Equitable Companies Incorporated, a holding company controlled by
AXA-UAP, a French insurance holding company. Certain information
concerning the ownership and control of Equitable by AXA-UAP is
set forth in the Fund's Statement of Additional Information under
"Management of the Fund."
Under the Advisory Agreement, the Fund pays Alliance a
fee 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 fee is accrued daily and
paid monthly.
The person primarily responsible for the day-to-day
management of the Fund's portfolio since August 1995 has been
Jeremy R. Kramer, a Vice President of ACMC, with which he has
been associated since 1993. Previously, he was a securities
analyst with Neuberger & Berman.
DISTRIBUTION SERVICES AGREEMENT
The fund has entered into a Distribution Services
Agreement with AFD with respect to the Advisor Class shares. The
Glass-Steagal Act and other applicable laws may limit the ability
of a bank or other depository institution to become an
underwriter or distributor of securities. However, in the
opinion of the Fund's management, based on the advice of counsel,
these laws do not prohibit such depository institutions from
providing services for investment companies such as the
administrative, accounting and other services referred to in the
Agreement. In the event that a change in these laws prevented a
bank from providing such services, it is expected that other
service arrangements would be made and that shareholders would
not be adversely affected.
________________________________________________________________
DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________
DIVIDENDS AND DISTRIBUTIONS
If you receive an income dividend or capital gains
distribution in cash you may, within 120 days following the date
of its payment, reinvest the dividend or distribution in
25
<PAGE>
additional shares of the Fund without charge by returning to
Alliance, with appropriate instructions, the check representing
such dividend or distribution. Thereafter, unless you otherwise
specify, you will be deemed to have elected to reinvest all
subsequent dividends and distributions in shares of the Fund.
Each income dividend and capital gains distribution, if
any, declared by the Fund on its outstanding shares will, at the
election of each shareholder, be paid in cash or in additional
shares of the Fund having an aggregate net asset value as of the
payment date of such dividend or distribution equal to the cash
amount of such income dividend or distribution. Election to
receive income dividends and distributions in cash or shares is
made at the time shares are initially purchased and may be
changed at any time prior to the record date for a particular
dividend or distribution. Cash dividends can be paid by check
or, if the shareholder so elects, electronically via the ACH
network. There is no sales or other charge in connection with
the reinvestment of dividends and capital gains distributions.
While it is the intention of the Fund to distribute to
its shareholders substantially all of each fiscal year's net
income and net realized capital gains, if any, the amount and
time of any such dividend or distribution must necessarily depend
upon the realization by the Fund of income and capital gains from
investments. There is no fixed dividend rate, and there can be
no assurance that the Fund will pay any dividends or realize any
capital gains.
If you buy shares just before the Fund deducts a
distribution from its net asset value, you will pay the full
price for the shares and then receive a portion of the price back
as a taxable distribution.
FOREIGN INCOME TAXES
Investment income received by the Fund from sources
within foreign countries may be subject to foreign income taxes
withheld at the source. To the extent that the Fund is liable
for foreign income taxes withheld at the source, the Fund
intends, if possible, to operate so as to meet the requirements
of the Code to "pass through" to the Fund's shareholders credits
for foreign income taxes paid, but there can be no assurance that
the Fund will be able to do so.
U.S. FEDERAL INCOME TAXES
The Fund intends to qualify to be taxed as a "regulated
investment company" under the Code. To the extent that the Fund
distributes its taxable income and net capital gain to its
shareholders, qualification as a regulated investment company
26
<PAGE>
relieves the Fund of federal income taxes on that part of its
taxable income including net capital gains which it pays out to
its shareholders. Dividends out of net ordinary income and
distributions of net short-term capital gains are taxable to the
recipient shareholders as ordinary income. In the case of
corporate shareholders, such dividends may be eligible for the
dividends-received deduction, except that the amount eligible for
the deduction is limited to the amount of qualifying dividends
received by the Fund. A corporation's dividends-received
deduction generally will be disallowed unless the corporation
holds shares in the Fund at least 46 days immediately before or
immediately after the corporation becomes entitled to receive the
dividend. Furthermore, the dividends-received deduction will be
disallowed to the extent a corporation's investment in shares of
the Fund is financed with indebtedness.
The excess of net long-term capital gains over the net
short-term capital losses realized and distributed by the Fund to
its shareholders as capital gains distributions is taxable to the
shareholders as long-term capital gains, irrespective of the
length of time a shareholder may have held his or her stock.
Long-term capital gains distributions are not eligible for the
dividends-received deduction referred to above.
Under the current federal tax law, the amount of an
income dividend or capital gains distribution declared by the
Fund during October, November or December of a year to
shareholders of record as of a specified date in such a month
that is paid during January of the following year is includable
in the prior year's taxable income of shareholders that are
calendar year taxpayers.
Any dividend or distribution received by a shareholder
on shares of the Fund will have the effect of reducing the net
asset value of such shares by the amount of such dividend or
distribution. Furthermore, a dividend or distribution made
shortly after the purchase of such shares by a shareholder,
although in effect a return of capital to that particular
shareholder, would be taxable to him or her as described above.
If a shareholder held shares six months or less and during that
period received a distribution taxable to such shareholder as
long-term capital gain, any loss realized on the sale of such
shares during such six-month period would be a long-term capital
loss to the extent of such distribution.
A dividend or capital gains distribution with respect to
shares of the Fund held by a tax-deferred or qualified plan, such
as an individual retirement account, 403(b)(7) retirement plan or
corporate pension or profit-sharing plan, generally will not be
taxable to the plan. Distributions from such plans will be
taxable to individual participants under applicable tax rules
27
<PAGE>
without regard to the character of the income earned by the
qualified plan.
Distributions by the Fund may be subject to state and
local taxes. The Fund is qualified to do business in the
Commonwealth of Pennsylvania and, therefore, is subject to the
Pennsylvania foreign franchise and corporate net income tax in
respect of its business activities in Pennsylvania. Accordingly,
shares of the Fund are exempt from Pennsylvania personal property
taxes. The Fund anticipates continuing such business activities
but reserves the right to suspend them any time, resulting in the
termination of the exemption.
The Fund will be required to withhold 31% of any
payments made to a shareholder if the shareholder has not
provided a certified taxpayer identification number to the Fund,
or the Secretary of the Treasury notifies the Fund that a
shareholder has not reported all interest and dividend income
required to be shown on the shareholder's Federal income tax
return.
Under certain circumstances, if the Fund realizes losses
from fluctuations in currency exchange rates after paying a
dividend, all or a portion of the dividend may subsequently be
characterized as a return of capital. See "Dividends,
Distributions and Taxes" in the Statement of Additional
Information. Shareholders will be advised annually as to the
federal tax status of dividends and capital gain distributions
made by the Fund. Shareholders are urged to consult their tax
advisers regarding their own tax situation.
________________________________________________________________
CONVERSION FEATURE
________________________________________________________________
CONVERSION TO CLASS A SHARES
Advisor Class shares may be held solely through the
fee-based program accounts, employee benefit plans and registered
investment advisory or other financial intermediary relationships
described above under "Purchase and Sale of Shares--How to Buy
Shares," and by investment advisory clients of, and certain other
persons associated with, Alliance and its affiliates or the Fund.
If (i) a holder of Advisor Class shares ceases to participate in
the fee-based program or plan or to be associated with the
investment adviser or financial intermediary, in each case that
satisfies the requirements to purchase shares set forth under
"Purchase and Sale of Shares--How to Buy Shares" or (ii) the
holder is otherwise no longer eligible to purchase Advisor Class
shares as described in this Prospectus (each, a "Conversion
28
<PAGE>
Event"), then all Advisor Class shares held by the shareholder
will convert automatically and without notice to the shareholder,
other than the notice contained in this Prospectus, to Class A
shares of the Fund during the calendar month following the month
in which the Fund is informed of the occurrence of the Conversion
Event. The failure of a shareholder or a fee-based program to
satisfy the minimum investment requirements to purchase Advisor
Class shares will not constitute a Conversion Event. The
conversion would occur on the basis of the relative net asset
values of the two classes and without the imposition of any sales
load, fee or other charge.
DESCRIPTION OF CLASS A SHARES
The following tables set forth maximum transaction
costs, annual expenses, per share income and capital charges for
Class A shares of the Fund. Class A shares are subject to a
distribution fee that may not exceed an annual rate of .30%. The
higher fees mean a higher expense ratio, so Class A shares pay
correspondingly lower dividends and may have a lower net asset
value than Advisor Class shares.
Shareholder Transaction Expenses are one of several
factors to consider when you invest in the Fund. The following
table summarizes your maximum transaction costs from investing in
Class A shares of the Fund and annual expenses for Class A shares
of the Fund. The "Examples" following the table below show the
cumulative expenses attributable to a hypothetical $1,000
investment for the periods specified.
Class A Shares
Maximum sales charge imposed on purchases
(as a percentage of offering price)(a) None
(sales charge
waived)
Sales charge imposed on dividend
reinvestments None
Deferred sales charge (as a percentage of
original purchase price or redemption
proceeds, whichever is lower) None
Exchange Fee None
Operating Expenses
Management fees 1.10%
12b-1 fees .30%
Other expenses (b) 1.13%
Total fund operating expenses 2.53%
======
29
<PAGE>
Examples
After 1 year $ 26
After 3 years $ 79
After 5 years $135
After 10 years $287
________________________________________________________________
(a) Advisor Class shares convert to Class A shares at asset value
and without the imposition of any sales charge and
accordingly the maximum sales charge of 4.25% on most
purchases of Class A shares for cash does not apply.
(b) These expenses include a transfer agency fee payable to
Alliance Fund Services, Inc., an affiliate of Alliance, based
on a fixed dollar amount charged to the Fund for each
shareholders's account.
The purpose of the foregoing table is to assist the investor in
understanding the various costs and expenses that investor in the
Fund will bear directly or indirectly. Long-term shareholders of
Class A shares of the Fund may pay aggregate sales charges
totaling more than the economic equivalent of the maximum initial
sales charges totaling permitted by the Conduct Rules of the
National Association of Securities Dealers, Inc. The Rule 12b-1
fee for Class A comprises a service fee not exceeding .25% of the
aggregate average daily net assets of the Fund attributable to
Class A and an asset-based sales charge equal to the remaining
portion of the Rule 12b-1 fee. "Other Expenses" for Class A
shares are based on estimated amounts for the Fund's current
fiscal year. The Examples set forth above assumes reinvestment
of all dividends and distributions and utilizes a 5% annual rate
of return as mandated by Commission regulation. THE EXAMPLES
SHOULD NOT BE CONSIDERED REPRESENTATIVE OF PAST OR FUTURE
EXPENSES: ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
Financial Highlights. The following table presents per
share income and capital changes for a share outstanding
throughout each period indicated. The Fund operated as a closed-
end investment company through October 3, 1997, when it converted
to an open-end investment company and all shares of its common
stock then outstanding were reclassified as Class A shares.
Except as indicated below, the information in the table has been
audited by Ernst & Young LLP, the independent auditors of the
Fund. A report of Ernst & Young LLP on the information with
respect to the Fund appears in the Fund's Statement of Additional
Information. The following information should be read in
conjunction with the financial statements and related notes which
are included in the Fund's Statement of Additional
Information.
30
<PAGE>
Further information about the Fund's performance is
contained in the Fund's annual report to shareholders, which may
be obtained without charge by contacting Alliance Fund Services,
Inc. at the address or the "For Literature" telephone number
shown on the cover of this Prospectus.
31
<PAGE>
<TABLE>
<CAPTION>
Six
Months June 1,
ended 1990*
April 30, to
1997 Year Ended October 31, October 31,
(unaudited) 1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 16.48 12.37 11.74 10.97 10.78 13.12 12.46 13.83
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss) (.10)(a)(.13)(a) .03 0 .01 .01 .13 .20
Net realized and
unrealized gain
(loss) on
investments and
foreign currency
transactions .62 4.26 .60 .77 .18 (2.17) .87 (1.57)
Net increase
(decrease) in net
asset value from
operations .52 4.13 .63 .77 .19 (2.16) 1.00 (1.37)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income 0 (.02) 0 0 0 (.10) (.25) 0
Distributions from net
realized gain on
investments and
foreign currency
transactions (1.13) 0 0 0 0 (.08) (.09) 0
Total dividends and
distributions (1.13) (.02) 0 0 0 (.18) (.34) 0
----- ----- - - - ----- ----- -
Net asset value, end
of year $ 15.87 16.48 12.37 11.74 10.97 10.78 13.12 12.46
======= ===== ===== ===== ===== ===== ===== =====
Market value, end of
year $ 14.625 13.25 9.375 9.50 9.25 9.50 11.38 10.00
======== ===== ===== ==== ==== ==== ===== =====
TOTAL RETURN
Total investment
32
<PAGE>
return based on: (b)
Market value 19.70% 41.60%(1.32)% 2.70% (2.63%)(15.22)% 17.38% (28.32)%
Net asset value 4.43% 33.48% 5.37% 7.02% 1.76%(16.59)% 8.66% (10.68)%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
year (000's omitted) $ 94,705100,271 85,416 81,102 75,805 74,442 90,61286,
041
Ratio of expenses to
average net assets 1.51%(c) 1.60% 1.57% 1.67% 1.62% 1.63% 1.49% 1.72%(c)
Ratio of net
investment income
(loss) to average
net assets (1.19)%(c) (.85)% .21% (.04)% .15% .10% .95% 3.59%(c)
Portfolio turnover
rate 167% 268% 109% 42% 25% 41% 32% 4%
Average commission
rate (d) $0.0503 $.0313 -- -- -- -- -- --
<FN>
_______________________
* Commencement of operations.
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of
common stock on the opening of the first day and a sale on
the closing of the last day of each period reported.
Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices
obtained under the Fund's Dividend Reinvestment and Cash
Purchase Plan. Generally, total investment return based on
net asset value will be higher than total investment return
based on market value in periods where there is an increase
in the discount or a decrease in the premium of the market
value to the net asset value from the beginning to the end
of such years. Conversely, total investment return based on
net asset value will be lower than total investment return
based on market value in years where there is a decrease in
the discount or an increase in the premium of the market
value to the net asset value from the beginning to the end
of such years.
(c) Annualized.
33
<PAGE>
(d) For fiscal years beginning on or after September 1, 1995, a
fund is required to disclose its average commission rate per
share for trades on which commissions are charged. This
amount includes commissions paid to foreign brokers which
may materially affect the rate shown. Amounts paid in
foreign currencies have been converted into US dollars using
the prevailing exchange rate on the date of the transaction.
</TABLE>
________________________________________________________________
GENERAL INFORMATION
________________________________________________________________
PORTFOLIO TRANSACTIONS
Consistent with the Conduct Rules of the National
Association of Securities Dealers, Inc., and subject to seeking
best price and execution, the Fund may consider sales of its
shares as a factor in the selection of dealers to enter into
portfolio transactions with the Fund.
ORGANIZATION
The Fund is a Maryland corporation organized on
February 20, 1990. It commenced operations, as a closed-end
management investment company, on June 1, 1990. Effective after
the close of business on October 3, 1997, the Fund converted to
an open-end management investment company and all shares of its
common stock then outstanding were reclassified as Class A
shares. The Fund commenced a continuous public offering of its
Class A shares, Class B shares, Class C shares and Advisor Class
shares on October 6, 1997. It is anticipated that annual
shareholder meetings will not be held; shareholder meetings will
be held only when required by federal or state law. Shareholders
have available certain procedures for the removal of
Directors.
A shareholder in the Fund will be entitled to share pro
rata with other holders of the same class of shares in all
dividends and distributions arising from the Fund's assets and,
upon redeeming shares, will receive the then current net asset
value of the Fund represented by the redeemed shares less any
applicable CDSC or fee. The Fund is empowered to establish,
without shareholder approval, additional portfolios, which may
have different investment objectives, and additional classes of
shares. If an additional portfolio or class were established in
the Fund, each share of the portfolio or class would normally be
entitled to one vote for all purposes. Generally, shares of each
portfolio and class would vote as a single series or class on
matters, such as the election of Directors, that affect each
34
<PAGE>
portfolio or class in substantially the same manner. Class A,
Class B, Class C and Advisor Class shares have identical voting,
dividend, liquidation and other rights, except that each class
bears its own transfer agency expenses, each of Class A, Class B
and Class C shares bears its own distribution expenses, Class B
shares convert to Class A shares after eight years and Advisor
Class shares convert to Class A shares under certain
circumstances. Each class of shares votes separately with
respect to the Fund's Rule 12b-1 distribution plan and other
matters for which separate class voting is appropriate under
applicable law. Shares are freely transferable, are entitled to
dividends as determined by the Directors and, in liquidation of
the Fund, are entitled to receive the net assets of the Fund.
Certain additional matters relating to the Fund's organization
are discussed in its Statement of Additional Information.
REGISTRAR, TRANSFER AGENT AND
DIVIDEND-DISBURSING AGENT
AFS, an indirect wholly-owned subsidiary of Alliance,
located at 500 Plaza Drive, Secaucus, New Jersey 07094, acts as
the Fund's registrar, transfer agent and dividend-disbursing
agent for a fee based upon the number of shareholder accounts
maintained for the Fund.
PRINCIPAL UNDERWRITER
AFD, an indirect wholly-owned subsidiary of Alliance,
located at 1345 Avenue of the Americas, New York, New York 10105,
is the principal underwriter of shares of the Fund.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its total return,
which is computed separately for each class of shares, including
Advisor Class shares. Such advertisements disclose the Fund's
average annual compounded total return for the periods prescribed
by the Commission. The Fund's total return for each such period
is computed by finding, through the use of a formula prescribed
by the Commission, the average annual compounded rate of return
over the period that would equate an assumed initial amount
invested to the value of the investment at the end of the period.
For purposes of computing total return, income dividends and
capital gains distributions paid on shares of the Fund are
assumed to have been reinvested when paid and the maximum sales
charges applicable to purchases and redemptions of the Fund's
shares are assumed to have been paid. The Fund's advertisements
may quote performance rankings or ratings of the Fund by
financial publications or independent organizations such as
Lipper Analytical Services, Inc. and Morningstar, Inc. or compare
the Fund's performance to various indices.
35
<PAGE>
ADDITIONAL INFORMATION
This Prospectus and the Statement of Additional
Information, which has been incorporated by reference herein, do
not contain all the information set forth in the Registration
Statement filed by the Fund with the Commission under the
Securities Act. Copies of the Registration Statement may be
obtained at a reasonable charge from the Commission or may be
examined, without charge, at the offices of the Commission in
Washington, D.C.
36
00250070.AT6
<PAGE>
ALLIANCE GLOBAL
ENVIRONMENT FUND, INC.
_________________________________________________________________
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
For Literature: Toll Free (800) 227-4618
_________________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
1997
_________________________________________________________________
This Statement of Additional Information is not a
prospectus but supplements and should be read in conjunction with
the current Prospectus for Alliance Global Environment Fund, Inc.
(the "Fund") that offers the Class A, Class B and Class C shares
of the Fund dated , 1997 and the current Prospectus for
the Fund that offers the Advisor Class shares of the Fund dated
, 1997 (the "Advisor Class Prospectus" and, together with
the Prospectus for the Fund that offers the Class A, Class B and
Class C shares of the Fund, the "Prospectus"). Copies of either
Prospectus may be obtained by contacting Alliance Fund Services,
Inc. at the address or the "For Literature" telephone number
shown above.
TABLE OF CONTENTS
Page
Description of the Fund............................... 2
Management of the Fund................................ 8
Expenses of the Fund.................................. 15
Purchase of Shares.................................... 17
Redemption and Repurchase of Shares................... 35
Shareholder Services.................................. 39
Net Asset Value....................................... 46
Dividends, Distributions and Taxes.................... 47
Brokerage and Portfolio Transactions.................. 55
General Information................................... 57
(R): This registered service mark used under license from the
owner, Alliance Capital Management L.P.
<PAGE>
________________________________________________________________
DESCRIPTION OF THE FUND
________________________________________________________________
Additional Information with Respect to Global Environmental
Matters
Existing laws in the United States and Europe already
mandate remedial efforts to deal with pollution. In addition,
the Adviser believes that there is an emerging political
consensus in the United States and Western Europe that additional
governmental action to control and prevent future pollution is
vital to the environment and the global economy. In the United
States, the Environmental Protection Agency (the "EPA") has the
duty of imposing and enforcing environmental standards on
American industry. The EPA has identified over 1,000 toxic waste
sites that require immediate attention. To date, Congress has
enacted at least 20 major pieces of environmental protection
legislation covering, among other things, solid waste, water
pollution, air pollution, and nuclear waste. A Congressional
study recently estimated that the cost of cleanup of chemically
contaminated sites may be near $500 billion over the next 50
years. In addition, many state legislatures are implementing
rigorous environmental statutes that, for instance, require state
approval before closing, terminating or transferring ownership of
industrial facilities. In the private sector, a growing number
of companies have elected representatives of environmental
interests to their boards of directors. In the opinion of the
Adviser, as federal, state and local legislation becomes more
stringent, many Environmental Companies, as well as Beneficiary
Companies involved in the development and manufacture of
environmentally safe products will be afforded additional
opportunities for growth.
Existing European environmental laws are generally less
rigorous than those in the United States. Moreover, in many
industrial zones in Eastern Europe, air and water pollution have
reached unprecedented levels and, more generally, there has been
little application of the services and technologies marketed by
Environmental Companies. While there can be no assurance that
Eastern European governments will sustain environmentally
protective policies or that their weakened economies will prove
able to afford the cost of effective policies of this nature, the
Adviser believes that it is likely that over the long term many
Eligible Companies, especially those based in Western Europe,
will benefit from substantial additional demand for their goods
and services from Eastern Europe.
Environmental awareness is growing in Japan as well,
leading to new demands on the Japanese government to take steps
2
<PAGE>
to protect the environment, both in Japan and abroad, through the
funding of environmental programs and the promotion of
environmentally sensitive technologies. Japanese industry, which
developed innovate anti-pollution technologies to effectively
purify contaminated gas and wastes emitted from automobiles and
factories, is now being provided with governmental incentives
(including research grants) to develop new technologies in other
areas. As a result of its participation in the United Nations
Environment Program, Japan has recently agreed to monitor the
transboundary movement of hazardous industrial wastes in Asia.
In addition, Japan has announced plans to establish regulations
under which industrial wastes produced in Japan can be properly
processed. The Japanese government also has pledged to increase
overseas development assistance for pollution control and other
environmental projects in developing countries. In the opinion
of the Adviser, the active role of the Japanese government in the
development of environmentally sensitive technologies and its
participation in global environmental projects will provide
significant additional growth opportunities for many
Environmental Companies and Beneficiary Companies.
In other areas of the world, environmental protection
issues are also moving to the forefront. In the Pacific Rim,
countries are now experiencing the side effects of their
industrialization. For example, Australia's rain forest has been
substantially destroyed (there are tentative plans to replant one
billion trees by the year 2000) and forest damage is also
extensive in Thailand, Indonesia and the Philippines. To date,
however, government regulation in this area has been slow to
develop as a result of enforcement problems, legislative delays
and the expenses associated with compliance. In Australia,
growing political awareness of environmental issues has begun to
affect the regulatory framework. Recent measures aimed at
addressing these concerns have included, among other things, a
national review of state pollution laws aimed at achieving
uniform penalty and enforcement standards, tighter controls on
emissions affecting the ozone layer and investigations regarding
the greenhouse effect.
Additional Investment Policies and Practices
The Fund may engage in the following investment policies
and practices to the extent described in the Prospectus.
Illiquid Securities. Historically, illiquid securities
have included securities subject to contractual or legal
restrictions on resale because they have not been registered
under the Securities Act of 1933, as amended (the "Securities
Act"), securities which are otherwise not readily marketable and
repurchase agreements having a maturity of longer than seven
days. Securities which have not been registered under the
3
<PAGE>
Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer
or in the secondary market. Mutual funds do not typically hold a
significant amount of these restricted or other illiquid
securities because of the potential for delays on resale and
uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a
mutual fund might be unable to dispose of restricted or other
illiquid securities promptly or at reasonable prices and might
thereby experience difficulty satisfying redemptions within seven
days. A mutual fund might also have to register such restricted
securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a
public offering of securities.
In recent years, however, a large institutional market
has developed for certain securities that are not registered
under the Securities Act, including repurchase agreements,
commercial paper, foreign securities, municipal securities and
corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security
can be readily resold or on an issuer's ability to honor a demand
for repayment. The fact that there are contractual or legal
restrictions on resale to the general public or to certain
institutions may not be indicative of the liquidity of such
investments.
The Fund may invest in restricted securities issued
under Section 4(2) of the Securities Act, which exempts from
registration "transactions by an issuer not involving any public
offering." Section 4(2) instruments are restricted in the sense
that they can only be resold through the issuing dealer to
institutional investors and in private transactions; they cannot
be resold to the general public without registration.
Rule 144A under the Securities Act allows a broader
institutional trading market for securities otherwise subject to
restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of
the Securities Act for resales of certain securities to qualified
institutional buyers. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted
securities held by the Fund, however, could affect adversely the
marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at reasonable
prices. Rule 144A has already produced enhanced liquidity for
many restricted securities, and market liquidity for such
securities may continue to expand as a result of this regulation
and the consequent inception of the PORTAL System sponsored by
the National Association of Securities Dealers, Inc., an
4
<PAGE>
automated system for the trading, clearance and settlement of
unregistered securities of domestic and foreign issuers.
The Adviser, under the supervision of the Board of
Directors, will monitor the liquidity of restricted securities in
the Fund's portfolio. In reaching liquidity decisions, the
Adviser will consider, among other factors, the following:
(1) the frequency of trades and quotes for the security; (2) the
number of dealers making quotations to purchase or sell the
security; (3) the number of other potential purchasers of the
security; (4) the number of dealers undertaking to make a market
in the security; (5) the nature of the security (including its
unregistered nature) and the nature of the marketplace for the
security (e.g., the time needed to dispose of the security, the
method of soliciting offers and the mechanics of the transfer);
and (6) any applicable Securities and Exchange Commission (the
"Commission") interpretation or position with respect to such
type of security.
Currency Swaps. Currency swaps involve the individually
negotiated exchange by the Fund with another party of a series of
payments in specified currencies. A currency swap may involve
the delivery at the end of the exchange period of a substantial
amount of one designated currency in exchange for the other
designated currency. Therefore the entire principal value of a
currency swap is subject to the risk that the other party to the
swap will default on its contractual delivery obligations. The
net amount of the excess, if any, of the Fund's obligations over
its entitlements with respect to each currency swap will be
accrued on a daily basis and an amount of liquid assets having an
aggregate net asset value at least equal to the accrued excess
will be maintained in a segregated account by the Fund's
custodian. The Fund will not enter into any currency swap unless
the credit quality of the unsecured senior debt or the claims-
paying ability of the other party thereto is rated in the highest
rating category of at least one nationally recognized rating
organization at the time of entering into the transaction. If
there is a default by the other party to such a transaction, the
Fund will have contractual remedies pursuant to the agreements
related to the transactions.
General. The successful use of the Fund's investment
practices draws upon the Adviser's special skills and experience
with respect to such instruments and usually depends on the
Investment Adviser's ability to forecast price movements
correctly. Should prices move unexpectedly, the Fund may not
achieve the anticipated benefits of the transactions or may
realize losses and thus be in a worse position than if such
strategies had not been used. In addition, the correlation
between movements in the prices of such instruments and movements
5
<PAGE>
in the prices of the securities hedged will not be perfect and
could produce unanticipated losses.
The Fund's ability to dispose of its position in options
depends on the availability of liquid markets in such
instruments. If a secondary market does not exist with respect
to an option purchased or written by the Fund, it might not be
possible to effect a closing transaction in the option (i.e.,
dispose of the option) with the result that an option purchased
by the Fund would have to be exercised in order for the Fund to
realize any profit. Therefore, no assurance can be given that
the Fund will be able to utilize these instruments effectively
for the purposes set forth above. Furthermore, the Fund's
ability to engage in options and futures transactions may be
limited by tax considerations. See "Dividends, Distributions and
Taxes" in the Statement of Additional Information of the Fund.
Future Developments. The Fund may, following written
notice to its shareholders, take advantage of other investment
practices that are not currently contemplated for use by the Fund
or are not available but may yet be developed, to the extent such
investment practices are consistent with the Fund's investment
objective and legally permissible for the Fund. Such investment
practices, if they arise, may involve risks that exceed those
involved in the activities described above.
Defensive Position. For temporary defensive purposes,
the Fund may vary from its investment objective during periods in
which conditions in securities markets or other economic or
political conditions warrant. During such periods, the Fund may
reduce its position in equity securities and increase without
limit its position in short-term, liquid, high-grade debt
securities, which may include securities issued by the U.S.
government, its agencies and, instrumentalities ("U.S. Government
Securities"), bank deposits, money market instruments, short-term
(for this purpose, securities with a remaining maturity of one
year or less) debt securities, including notes and bonds, rated A
or higher by Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Services ("S&P"), Duff & Phelps Credit
Rating Co. ("Duff & Phelps") or Fitch Investors Service, Inc.
("Fitch") or, if not so rated, of equivalent investment quality
as determined by the Adviser.
Certain Fundamental Investment Policies
The following restrictions may not be changed without a
vote of a majority of the Fund's outstanding voting securities.
The Fund may not: (i) purchase more than 10% of the
outstanding voting securities of any one issuer; (ii) invest more
than 15% of the value of its total assets in the securities of
6
<PAGE>
any one issuer or 25% or more of the value of its total assets in
the same industry, except that the Fund will invest more than 25%
of its total assets in Environmental Companies, provided that
this restriction does not apply to U.S. Government securities,
but will apply to foreign government obligations unless the
Commission permits their exclusion; (iii) make loans except
through (a) the purchase of debt obligations in accordance with
its investment objective and policies and (b) the lending of
portfolio securities; (iv) borrow money or issue senior
securities, except that the Fund may borrow (a) from a bank if
immediately after such borrowing there is asset coverage of at
least 300% as defined in the 1940 Act and (b) for temporary
purposes in an amount not exceeding 5% of the value of the total
assets of the Fund; (v) pledge, hypothecate, mortgage or
otherwise encumber its assets, except (a) to secure permitted
borrowings and (b) in connection with initial and variation
margin deposits relating to futures contracts; (vi) purchase a
security (unless the security is acquired pursuant to a plan of
reorganization or an offer of exchange) if, as a result, the Fund
would own any securities of an open-end investment company or
more than 3% of the total outstanding voting stock of any closed-
end investment company, or more than 5% of the value of the
Fund's total assets would be invested in securities of any
closed-end investment company or more than 10% of such value in
closed-end investment companies in the aggregate; (vii) invest in
companies for the purpose of exercising control; (viii) make
short sales of securities or maintain a short position, unless at
all times when a short position is open it owns an equal amount
of such securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of
the same issue as, and equal in amount to, the securities sold
short ("short sales against the box"), and unless not more than
5% of the Fund's net assets (taken at market value) is held as
collateral for such sales at any onetime; (ix) buy or write
(i.e., sell) put or call options, except (a) the Fund may buy
foreign currency options or write covered foreign currency
options and options on foreign currency futures and (b) the Fund
may purchase warrants; or (x) (a) purchase or sell real estate,
except that it may purchase and sell securities of companies
which deal in real estate or interests therein, (b) purchase or
sell commodities or commodity contracts (except foreign
currencies, foreign currency options and futures and forward
contracts or contracts for the future acquisition or delivery of
foreign currencies and related options on futures contracts and
other similar contracts), (c) invest in interests in oil, gas, or
other mineral exploration or development programs, except that it
may purchase and sell securities of companies that deal in oil,
gas or other mineral exploration or development programs,
(d) purchase securities on margin, except for such short-term
credits as may be necessary for the clearance of transactions or
(e) act as an underwriter of securities, except that the Fund may
7
<PAGE>
acquire securities in private placements under circumstances in
which, if such securities were sold, the Fund might be deemed to
be an underwriter within the meaning of the Securities Act.
Whenever any investment restriction states a maximum
percentage of the Fund's assets which may be invested in any
security or other asset, it is intended that such maximum
percentage limitation be determined immediately after, and as a
result of the Fund's acquisition of, such securities or other
assets. Accordingly, any later increase or decrease in
percentage beyond the specified limitation resulting from a
change in values or net assets will not be considered a violation
of any such maximum.
________________________________________________________________
MANAGEMENT OF THE FUND
________________________________________________________________
Directors and Officers
The Directors and principal officers of the Fund, their
ages and their principal occupations during the past five years
are set forth below. Each such Director and officer is also a
director, trustee or officer of other registered investment
companies sponsored by the Adviser. Unless otherwise specified,
the address of each of the following persons is 1345 Avenue of
the Americas, New York, New York 10105.
Directors
JOHN D. CARIFA, 52,* Chairman and President of the Fund,
is the President, the Chief Operating Officer, the Chief
Financial Officer and a Director of Alliance Capital Management
Corporation, the general partner of the Adviser ("ACMC"), with
which he has been associated since prior to 1992.
DAVID H. DIEVLER, 67, was formerly and a Senior Vice
President of ACMC with which he had been associated since prior
to 1991 through 1994. He is currently an Independent Financial
Consultant. His address is P.O. Box 167, Spring Lake, New Jersey
07762.
JOHN H. DOBKIN, 55, has been the President of Historic
Hudson Valley (historic preservation) since 1990. He was
formerly Director of the National Academy of Design. His address
____________________
* An "interested person" of the Fund as defined in the
Investment Company Act of 1940, as amended (the "1940
Act").
8
<PAGE>
is Historic Hudson Valley, 150 White Plains Road, Tarrytown, New
York 10591.
W.H. HENDERSON, 70, joined The Royal Dutch/Shell Group
in 1948 and served in Singapore, Japan, South Africa, Hong Kong
and London. The greater part of his service was in Japan and
between 1969 and 1972 he was Managing Director and Chief
Executive Officer of The Shell Company of Hong Kong Limited.
Mr. Henderson retired from the Royal Dutch/Shell Group in 1974 in
order to establish his own oil and gas consulting business.
Mr. Henderson is currently a Director of a number of investment
companies.
STIG HOST, 70, is the Chairman and Chief Executive
Officer of International Energy Corp. (oil and gas exploration),
with which he has been associated since prior to 1991. He is
also Chairman and Director of Kriti Exploration, Inc. (oil and
gas exploration and 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), a Director of Florida Fuels, Inc.
(marine fuels) and President of Alexander Host Foundation. He is
also a Trustee of the Winthrop Focus Funds. His address is
36 Keofferam Road, Old Greenwich, Connecticut 06870.
RICHARD M. LILLY, 67, was formerly President and Chief
Executive Officer of Esso Italiana, S.p.A., Esso Europe-Africa
Services and Esso North Europe A/S since prior to 1991. His
address is 70 Palace Gardens Terrace, London W8 4RR England.
ALAN STOGA, 46, has been a Managing Director and a
member of the Board of Directors of Kissinger Associates, Inc.
since prior to 1992. His address is Kissinger Associates, Inc.,
350 Park Avenue, New York, New York 10022.
Officers
JOHN D. CARIFA, Chairman and President, see biography
above.
KATHLEEN A. CORBET, 37, Senior Vice President, is an
Executive Vice President of ACMC, with which she has been
associated since July 1993. Prior thereto, she was employed by
Equitable Capital since prior to 1992.
MARK H. BREEDON, 44, 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.
9
<PAGE>
FRANCIS P. REEVES, 24, Vice President, is a Vice
President of ACL with which he has been associated since March
1996. Prior thereto, he was an investment adviser for Citibank
and an assistant trader for Mitsubishi Finance International.
JEREMY R. KRAMER, 35, Vice President-Investments, is a
Vice President of ACMC with which he has been associated since
1993. Previously, he was a securities analyst with Neuberger &
Berman.
THOMAS BARDONG, 52, Vice President, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1992.
DANIEL V. PANKER, 58, Vice President, is a Senior Vice
President of ACMC, with which he has been associated since prior
to 1992.
EDMUND P. BERGAN, JR., 47, Secretary, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD"), and Alliance Fund Services, Inc. ("AFS"), with
which he has been associated since prior to 1992.
DOMENICK PUGLIESE, 36, Assistant Secretary, is a Vice
President and Assistant General Counsel of AFD, with which he has
been associated since May 1995. Previously, he was Vice
President and Counsel of Concord Holding Corporation since 1994
and prior thereto he was Vice President and Associate General
Counsel of Prudential Securities since 1992.
MARK D. GERSTEN, 46, Treasurer and Chief Financial
Officer, is a Senior Vice President of ("AFS"), with which he has
been associated since prior to 1992.
VINCENT S. NOTO, 32, Controller, is a Vice President of
AFS, with which he has been associated since 1992.
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 its 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 the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of registered
investment companies (and separate investment portfolios within
those companies) in the Alliance Fund Complex with respect to
which each of the Directors serves as a director or trustee, are
set forth below. Neither the Fund nor any other fund in the
Alliance Fund Complex provides compensation in the form of
10
<PAGE>
pension or retirement benefits to any of its directors or
trustees.
Total Number
Total Number of Investment
of Funds in Portfolios
the Alliance Within the
Fund Complex, Funds,
Compensation Including the Including the
From the Fund, as to Fund, as to
Alliance Fund which the which the
Name of Aggregate Complex, Director is a Director is a
Director Compensation Including the Director or Director or
of the Fund From the Fund Fund Trustee Trustee
John D. Carifa $ -0- $ -0- 50 75
David H. Dievler $ 4,900 $182,200 43 78
John H. Dobkin $ 4,900 $121,250 30 51
W.H. Henderson $10,500 $ 31,750 5 5
Stig Host $10,500 $ 31,750 5 5
Richard M. Lilly $10,500 $ 31,750 5 5
Alan Stoga $10,500 $ 31,750 5 5
As of August 21, 1997 the Directors and officers of the
Fund as a group owned less than 1% of the shares of the Fund.
Adviser
Alliance Capital Management L.P., a New York Stock
Exchange ("Exchange") listed company with principal offices at
1345 Avenue of the Americas, New York, New York 10105, has been
retained under an Advisory Agreement (the "Advisory Agreement")
to provide investment advice and, in general, to conduct the
management and investment program of the Fund, subject to the
supervision and control of the Board of Directors of the Fund.
The Adviser is a leading international investment
manager supervising client accounts with assets as of June 30,
1997 of more than $199 billion (of which more than $71 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. As of June 30, 1997, the
Adviser managed employee benefit assets for 29 of the FORTUNE 100
companies. As of that date, the Adviser and its subsidiaries
employed approximately 1,450 employees who operated out of five
domestic offices and the offices of subsidiaries in , Istanbul,
London, Mumbai, Paris, Sao Paolo, Sydney, Tokyo, Toronto,
Bahrain, Luxembourg and Singapore. The fifty-four registered
investment companies 115 separate investment portfolios managed
11
<PAGE>
by the Adviser currently have more than two million
shareholders.
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 Equitable Companies Incorporated ("ECI"), a
holding company controlled by AXA-UAP, 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 57% of the issued and outstanding units
representing assignments of beneficial ownership of limited
partnership interests in the Advisor ("Units"). As of March 31,
1997, approximately 34% and 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.
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. 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.
12
<PAGE>
In November 1996, AXA offered (the "Exchange Offer") to
acquire 100% of the ordinary shares ("UAP Shares") of FF10 each
of Compagnie UAP, a societe anonyme organized under the laws of
France ("UAP"), in exchange for ordinary shares ("Shares") and
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 had the option to
convert each Bond into 5.15 Shares. On May 15, 1997, each Bond
still outstanding was redeemed into cash at FF1,285 plus FF9.29
accrued interest. Finaxa converted the Bonds it had owed into
2,153,308 Shares. After giving effect to the conversion of all
outstanding Bonds into Shares and 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) or AXA-UAP.
Under the Advisory 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 furnishes the Fund, without charge,
management supervision and assistance and office facilities and
provides persons satisfactory to the Fund's Board of Directors to
serve as the Fund's officers. Under the Advisory Agreement, the
Fund pays the Adviser a fee 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 fee is accrued daily and paid monthly.
The Advisory Agreement is terminable without penalty by
a vote of a majority of the Fund's outstanding voting securities,
or by a vote of a majority of the Fund's Directors on 60 days'
13
<PAGE>
written notice or by the Adviser on 60 days' written notice, and
will automatically terminate in the event of its assignment. The
Advisory 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 Advisory Agreement became effective on October 3,
1997 in connection with the conversion of the Fund to an open-end
investment company. The Advisory Agreement replaced an
Investment Management and Administration Agreement ("Management
Agreement") between the Fund and the Adviser. At a meeting
called for such purpose and held on April 23, 1997, the Advisory
Agreement was approved by a majority of the members of the Board
of Directors, including a majority of the Directors who are not
parties thereto nor interested persons of any such party as
defined in the 1940 Act. At a meeting held on July 17, 1997, a
majority of the outstanding voting securities of the Fund
approved the Advisory Agreement. The Advisory Agreement will
continue in effect until December 31, 1997 and thereafter for
successive twelve-month periods (computed from each January 1),
provided that such continuance is approved at least annually by a
vote of a majority of the Fund's outstanding voting securities or
by the Fund's Board of Directors, including in either case,
approval by 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.
The rate of the advisory fee payable under the Advisory
Agreement is the same as the rate payable of management fee under
the Management Agreement, except that under the Management
Agreement the Adviser was paid a monthly fee at an annual rate
computed upon the Fund's average weekly net assets. For the
fiscal years of the Fund ended in 1996, 1995 and 1994, the
Adviser received from the Fund $1,073,769, $890,857 and $865,412,
respectively, in management fees.
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 which 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
14
<PAGE>
from the same broker-dealer, such transactions may be averaged as
to price.
The Adviser may act as an investment adviser to other
persons, firms or corporations, including investment companies,
and is investment adviser to the following registered investment
companies: ACM Institutional Reserves, Inc., AFD Exchange
Reserves, The Alliance Fund, Inc., Alliance All-Asia Investment
Fund, Inc., Alliance Balanced Shares, Inc., Alliance Bond Fund,
Inc., Alliance Capital Reserves, Alliance Developing Markets
Fund, Inc., Alliance Global Dollar Government Fund, Inc.,
Alliance Global Small Cap Fund, Inc., Alliance Global Strategic
Income Trust, Inc., Alliance Government Reserves, Alliance
Greater China '97 Fund, Inc., Alliance Growth and Income Fund,
Inc., Alliance High Yield Fund, Inc., Alliance Income Builder
Fund, Inc., Alliance International Fund, Alliance Limited
Maturity Government Fund, Inc., Alliance Money Market Fund,
Alliance Mortgage Securities Income Fund, Inc., Alliance Multi-
Market Strategy Trust, Inc., Alliance Municipal Income Fund,
Inc., Alliance Municipal Income Fund II, Alliance Municipal
Trust, Alliance New Europe Fund, Inc., Alliance North American
Government Income Trust, Inc., Alliance Premier Growth Fund,
Inc., Alliance Quasar Fund, Inc., Alliance Real Estate Investment
Fund, Inc., Alliance/Regent Sector Opportunity Fund, Inc.,
Alliance Short-Term Multi-Market Trust, Inc., Alliance Technology
Fund, Inc., Alliance Utility Income Fund, Inc., Alliance Variable
Products Series Fund, Inc., Alliance World Income Trust, Inc.,
Alliance Worldwide Privatization Fund, Inc., The Alliance
Portfolios, Fiduciary Management Associates and The Hudson River
Trust, all registered open-end investment companies; and to ACM
Government Income Fund, Inc., ACM Government Securities Fund,
Inc., ACM Government Spectrum Fund, Inc., ACM Government
Opportunity Fund, Inc., ACM Managed Income Fund, Inc., ACM
Managed Dollar Income Fund, Inc., ACM Municipal Securities Income
Fund, Inc., Alliance All-Market Advantage Fund, Inc., Alliance
World Dollar Government Fund, Inc., Alliance World Dollar
Government Fund II, Inc., The Austria Fund, Inc., The Korean
Investment Fund, Inc., The Southern Africa Fund, Inc. and The
Spain Fund, Inc., all registered closed-end investment companies.
________________________________________________________________
EXPENSES OF THE FUND
________________________________________________________________
Distribution Services Agreement
The Fund has entered into a Distribution Services
Agreement (the "Agreement") with Alliance Fund Distributors,
Inc., the Fund's principal underwriter (the "Principal
Underwriter"), to permit the Principal Underwriter to distribute
15
<PAGE>
the Fund's shares and to permit the Fund to pay distribution
services fees to defray expenses associated with distribution of
its Class A, Class B and Class C shares in accordance with a plan
of distribution which is included in the Agreement and has been
duly adopted and approved in accordance with Rule 12b-1 adopted
by the Commission under the 1940 Act (the "Rule 12b-1 Plan").
Distribution services fees are accrued daily and paid
monthly and are charged as expenses of the Fund as accrued. The
distribution services fees attributable to the Class B shares and
Class C shares are designed to permit an investor to purchase
such shares through broker-dealers without the assessment of an
initial sales charge and at the same time to permit the Principal
Underwriter to compensate broker-dealers in connection with the
sale of such shares. In this regard the purpose and function of
the combined contingent deferred sales charge and distribution
services fee on the Class B shares and Class C shares are the
same as those of the initial sales charge and distribution
services fee with respect to the Class A shares in that in each
case the sales charge and/or distribution services fee provides
for the financing of the distribution of the relevant class of
the Fund's shares.
Under the Agreement, the Treasurer of the Fund reports
the amounts expended under the Rule 12b-1 Plan and the purposes
for which such expenditures were made to the Directors of the
Fund for their review on a quarterly basis. Also, the Agreement
provides that the selection and nomination of Directors who are
not "interested persons" of the Fund, as defined in the 1940 Act,
are committed to the discretion of such disinterested Directors
then in office.
The Agreement became effective on October 3, 1997. The
Agreement will continue in effect for successive twelve-month
periods with respect to a class (computed from each January 1),
provided, however, that such continuance is specifically approved
at least annually by the Directors of the Fund or by vote of the
holders of a majority of the outstanding voting securities (as
defined in the 1940 Act) of that class, and in either case, by a
majority of the Directors of the Fund who are not parties to the
Agreement or interested persons, as defined in the 1940 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
12b-1 Plan or any agreement related thereto.
The Adviser may from time to time and from its own funds
or such other resources as may be permitted by rules of the
Commission make payments for distribution services to the
Principal Underwriter; the latter may in turn pay part or all of
such compensation to brokers or other persons for their
distribution assistance.
16
<PAGE>
In the event that the Agreement is terminated or not
continued with respect to the Class A shares, Class B shares or
Class C shares, (i) no distribution services fees (other than
current amounts accrued but not yet paid) would be owed by the
Fund to the Principal Underwriter with respect to that class and
(ii) the Fund would not be obligated to pay the Principal
Underwriter for any amounts expended under the Agreement not
previously recovered by the Principal Underwriter from
distribution services fees in respect of shares of such class or
through deferred sales charges.
All material amendments to the Agreement must be
approved by a vote of the Directors or the holders of the Fund's
outstanding voting securities, voting separately by class, and in
either case, by a majority of the disinterested Directors, cast
in person at a meeting called for the purpose of voting on such
approval; and the Agreement may not be amended in order to
increase materially the costs that a particular class may bear
pursuant to the Agreement without the approval of a majority of
the holders of the outstanding voting shares of the class or
classes affected. The Agreement may be terminated (a) by the
Fund without penalty at any time by a majority vote of the
holders of the outstanding voting securities of the Fund, voting
separately by class or by a majority vote of the Directors who
are not "interested persons" as defined in the 1940 Act, or
(b) by the Principal Underwriter. To terminate the Agreement,
any party must give the other parties 60 days' written notice; to
terminate the Rule 12b-1 Plan only, the Fund need give no notice
to the Principal Underwriter. The Agreement will terminate
automatically in the event of its assignment.
Transfer Agency Agreement
Pursuant to a Transfer Agency Agreement that became
effective on October 3, 1997, Alliance Fund Services, Inc., an
indirect wholly-owned subsidiary of the Adviser, receives a
transfer agency fee per account holder of each of the Class A
shares, Class B shares, Class C shares and Advisor Class shares
of the Fund, plus reimbursement for out-of-pocket expenses. The
transfer agency fee with respect to the Class B and Class C
shares is higher than the transfer agency fee with respect to the
Class A and Advisor Class shares. Prior thereto, State Street
Bank and Trust Company, which is not affiliated with the Fund or
the Adviser, provided transfer agency services to the Fund.
17
<PAGE>
PURCHASE OF SHARES
The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Buy Shares."
General
Shares of the Fund are offered on a continuous basis at
a price equal to their net asset value plus an initial sales
charge at the time of purchase ("Class A shares"), with a
contingent deferred sales charge ("Class B shares"), without any
initial sales charge and, as long as the shares are held for one
year or more, without any contingent deferred sales charge
("Class C shares"), or, to investors eligible to purchase Advisor
Class shares, without any initial, contingent deferred or asset-
based sales charge, in each case as described below. Shares of
the Fund that are offered subject to a sales charge are offered
through (i) investment dealers that are members of the National
Association of Securities Dealers, Inc. and have entered into
selected dealer agreements with the Principal Underwriter
("selected dealers"), (ii) depository institutions and other
financial intermediaries or their affiliates, that have entered
into selected agent agreements with the Principal Underwriter
("selected agents") and (iii) the Principal Underwriter.
Advisor Class shares of the Fund may be purchased and
held solely (i) through accounts established under fee-based
programs, sponsored and maintained by registered broker-dealers
or other financial intermediaries and approved by the Principal
Underwriter, (ii) through self-directed defined contribution
employee benefit plans (e.g., 401(k) plans) that have at least
1,000 participants or $25 million in assets, (iii) by the
categories of investors described in clauses (i) through (iv)
below under "--Sales at Net Asset Value" (other than officers,
directors and present and full-time employees of selected dealers
or agents, or relatives of such person, or any trust, individual
retirement account or retirement plan account for the benefit of
such relative, none of whom is eligible on the basis solely of
such status to purchase and hold Advisor Class shares), or
(iv) by directors and present or retired full-time employees of
Koll Real Estate Services. Generally, a fee-based program must
charge an asset- based or other similar fee and must invest at
least $250,000 in Advisor Class shares of the Fund in order to be
approved by the Principal Underwriter for investment in Advisor
Class shares.
18
<PAGE>
Investors may purchase shares of the Fund either through
selected broker-dealers, agents, financial intermediaries or
other financial representatives, or directly through the
Principal Underwriter. A transaction, service, administrative or
other similar fee may be charged by your broker-dealer, agent,
financial intermediary or other financial representative with
respect to the purchase, sale or exchange of Class A, Class B,
Class C or Advisor Class shares made through such financial
representative. Such financial representative may also impose
requirements with respect to the purchase, sale or exchange of
shares that are different from, or in addition to, those imposed
by the Fund, including requirements as to the minimum initial and
subsequent investment amounts. Sales personnel of selected
dealers and agents distributing the Fund's shares may receive
differing compensation for selling Class A, Class B, Class C or
Advisor Class shares.
The Fund may refuse any order for the purchase of
shares. The Fund reserves the right to suspend the sale of its
shares to the public in response to conditions in the securities
markets or for other reasons.
The public offering price of shares of the Fund is their
net asset value, plus, in the case of Class A shares, a sales
charge which will vary depending on the purchase alternative
chosen by the investor, as shown in the table below under
"Class A Shares". On each Fund business day on which a purchase
or redemption order is received by the Fund and trading in the
types of securities in which the Fund invests might materially
affect the value of Fund shares, the per share net asset value is
computed in accordance with the Fund's Articles of Incorporation
and By-Laws as of the next close of regular trading on the New
York Stock Exchange (the "Exchange") (currently 4:00 p.m. Eastern
time) by dividing the value of the Fund's total assets, less its
liabilities, by the total number of its shares then outstanding.
A Fund business day is any day on which the Exchange is open for
trading.
The respective per share net asset values of the
Class A, Class B, Class C and Advisor Class shares are expected
to be substantially the same. Under certain circumstances,
however, the per share net asset values of the Class B and
Class C shares may be lower than the per share net asset values
of the Class A and Advisor Class shares, as a result of the
differential daily expense accruals of the distribution and
transfer agency fees applicable with respect to those classes of
shares. Even under those circumstances, the per share net asset
values of the four classes eventually will tend to converge
immediately after the payment of dividends, which will differ by
approximately the amount of the expense accrual differential
among the classes.
19
<PAGE>
The Fund will accept unconditional orders for its shares
to be executed at the public offering price equal to their net
asset value next determined (plus applicable Class A sales
charges), as described below. Orders received by the Principal
Underwriter prior to the close of regular trading on the Exchange
on each day the Exchange is open for trading are priced at the
net asset value computed as of the close of regular trading on
the Exchange on that day (plus applicable Class A sales charges).
In the case of orders for purchase of shares placed through
selected dealers, agents or financial representatives, as
applicable, the applicable public offering price will be the net
asset value as so determined, but only if the selected dealer,
agent or financial representative, receives the order prior to
the close of regular trading on the Exchange and transmits it to
the Principal Underwriter prior to 5:00 p.m. Eastern time. The
selected dealer, agent or financial representative, as
applicable, is responsible for transmitting such orders by
5:00 p.m. If the selected dealer, agent or financial
representative fails to do so, the investor's right to that day's
closing price must be settled between the investor and the
selected dealer, agent or financial representative, as
applicable. If the selected dealer, agent or financial
representative, as applicable, receives the order after the close
of regular trading on the Exchange, the price will be based on
the net asset value determined as of the close of regular trading
on the Exchange on the next day it is open for trading.
Following the initial purchase of Fund shares, a
shareholder may place orders to purchase additional shares by
telephone if the shareholder has completed the appropriate
portion of the Subscription Application or an "Autobuy"
application obtained by calling the "For Literature" telephone
number shown on the cover of this Statement of Additional
Information. Except with respect to certain omnibus accounts,
telephone purchase orders may not exceed $500,000. Payment for
shares purchased by telephone can be made only by Electronic
Funds Transfer from a bank account maintained by the shareholder
at a bank that is a member of the National Automated Clearing
House Association ("NACHA"). If a shareholder's telephone
purchase request is received before 3:00 p.m. Eastern time on a
Fund business day, the order to purchase shares is automatically
placed the following Fund business day, and the applicable public
offering price will be the public offering price determined as of
the close of business on such following business day.
Full and fractional shares are credited to a
subscriber's account in the amount of his or her subscription. As
a convenience to the subscriber, and to avoid unnecessary expense
to the Fund, stock certificates representing shares of the Fund
are not issued except upon written request to the Fund by the
shareholder or his or her authorized selected dealer or agent.
20
<PAGE>
This facilitates later redemption and relieves the shareholder of
the responsibility for and inconvenience of lost or stolen
certificates. No certificates are issued for fractional shares,
although such shares remain in the shareholder's account on the
books of the Fund.
In addition to the discount or commission amount paid to
dealers or agents, the Principal Underwriter from time to time
pays additional cash or other incentives to dealers or agents,
including EQ Financial Consultants, Inc., formerly Equico
Securities, Inc., an affiliate of the Principal Underwriter, in
connection with the sale of shares of the Fund. Such additional
amounts may be utilized, in whole or in part, to provide
additional compensation to registered representatives who sell
shares of the Fund. On some occasions, cash or other incentives
will be conditioned upon the sale of a specified minimum dollar
amount of the shares of the Fund and/or other Alliance Mutual
Funds, as defined below, during a specific period of time. On
some occasions, such cash or other incentives may take the form
of payment for attendance at seminars, meals, sporting events or
theater performances, or payment for travel, lodging and
entertainment incurred in connection with travel taken by persons
associated with a dealer or agent and their immediate family
members to urban or resort locations within or outside the United
States. Such dealer or agent may elect to receive cash
incentives of equivalent amount in lieu of such payments.
Class A, Class B, Class C and Advisor Class shares each
represent an interest in the same portfolio of investments of the
Fund, have the same rights and are identical in all respects,
except that (i) Class A shares bear the expense of the initial
sales charge (or contingent deferred sales charge, when
applicable) and Class B and Class C shares bear the expense of
the deferred sales charge, (ii) Class B shares and Class C shares
each bear the expense of a higher distribution services fee than
that borne by Class A shares, and Advisor Class shares do not
bear such a fee, (iii) Class B shares and Class C shares bear
higher transfer agency costs than those borne by Class A shares
and Advisor Class shares, (iv) each of Class A, Class B and
Class C shares has exclusive voting rights with respect to
provisions of the Rule 12b-1 Plan pursuant to which its
distribution services fee is paid and other matters for which
separate class voting is appropriate under applicable law,
provided that, if the Fund submits to a vote of the Class A
shareholders, an amendment to the Rule 12b-1 Plan that would
materially increase the amount to be paid thereunder with respect
to the Class A shares, then such amendment will also be submitted
to the Class B and the Advisor Class shareholders, and the
Class A, Class B and Advisor Class shareholders will vote
separately by class and (v) Class B and Advisor Class shares are
subject to a conversion feature. Each class has different
21
<PAGE>
exchange privileges and certain different shareholder service
options available.
The Directors of the Fund have determined that currently
no conflict of interest exists between or among the Class A,
Class B, Class C and Advisor Class shares. On an ongoing basis,
the Directors of the Fund, pursuant to their fiduciary duties
under the 1940 Act and state law, will seek to ensure that no
such conflict arises.
Alternative Retail Purchase Arrangements -- Class A, Class B and
Class C Shares**
The alternative purchase arrangements available with
respect to Class A shares, Class B shares and Class C shares
permit an investor to choose the method of purchasing shares that
is most beneficial given the amount of the purchase, the length
of time the investor expects to hold the shares, and other
circumstances. Investors should consider whether, during the
anticipated life of their investment in the Fund, the accumulated
distribution services fee and contingent deferred sales charge on
Class B shares prior to conversion, or the accumulated
distribution services fee and contingent deferred sales charge 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 of Class A shares. Class A shares
will normally be more beneficial than Class B shares to the
investor who qualifies for reduced initial sales charges on
Class A shares, as described below. In this regard, the
Principal Underwriter will reject any order (except orders from
certain retirement plans) for more than $250,000 for Class B
shares. Class C shares will normally not be suitable for the
investor who qualifies to purchase Class A shares at net asset
value. For this reason, the Principal Underwriter will reject
any order for more than $1,000,000 for Class C shares.
Class A shares are subject to a lower distribution
services fee and, accordingly, pay correspondingly higher
dividends per share than Class B shares or Class C shares.
However, because initial sales charges are deducted at the time
of purchase, investors purchasing Class A shares would not have
all their funds invested initially and, therefore, would
initially own fewer shares. Investors not qualifying for reduced
initial sales charges who expect to maintain their investment for
an extended period of time might consider purchasing Class A
shares because the accumulated continuing distribution charges on
____________________
** Advisor Class shares are sold only to investors described
above in this section under "--General."
22
<PAGE>
Class B shares or Class C shares may exceed the initial sales
charge on Class A shares during the life of the investment.
Again, however, such investors must weigh this consideration
against the fact that, because of such initial sales charges, not
all their funds will be invested initially.
Other investors might determine, however, that it would
be more advantageous to purchase Class B shares or Class C shares
in order to have all their funds invested initially, although
remaining subject to higher continuing distribution charges and
being subject to a contingent deferred sales charge for a four-
year and one-year period, respectively. For example, based on
current fees and expenses, an investor subject to the 4.25%
initial sales charge on Class A shares would have to hold his or
her investment approximately seven years for the Class C
distribution services fee to exceed the initial sales charge plus
the accumulated distribution services fee of Class A shares. In
this example, an investor intending to maintain his or her
investment for a longer period might consider purchasing Class A
shares. This example does not take into account the time value of
money, which further reduces the impact of the Class C
distribution services fees on the investment, fluctuations in net
asset value or the effect of different performance assumptions.
Those investors who prefer to have all of their funds
invested initially but may not wish to retain Fund shares for the
four-year period during which Class B shares are subject to a
contingent deferred sales charge may find it more advantageous to
purchase Class C shares.
Class A Shares
The public offering price of Class A shares is the net
asset value plus a sales charge, as set forth below.
23
<PAGE>
Sales Charge
Discount or
Commission
As % of to Dealers
As % of the or Agents
Net Public As % of
Amount of Amount Offering Offering
Purchase Invested Price Price
________ ________ ________ __________
Less than
$100,000. . . 4.44% 4.25% 4.00%
$100,000 but
less than
$250,000. . . 3.36 3.25 3.00
$250,000 but
less than
$500,000. . . 2.30 2.25 2.00
$500,000 but
less than
$1,000,000*. . . 1.78 1.75 1.50
____________________
* There is no initial sales charge on transactions of
$1,000,000 or more.
With respect to purchases of $1,000,000 or more, Class A
shares redeemed within one year of purchase will be subject to a
contingent deferred sales charge equal to 1% of the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption. Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions. The
contingent deferred sales charge on Class A shares will be waived
on certain redemptions, as described below under "--Class B
Shares." In determining the contingent deferred sales charge
applicable to a redemption of Class A shares, it will be assumed
that the redemption is, first, of any shares that are not subject
to a contingent deferred sales charge (for example, because an
initial sales charge was paid with respect to the shares, or they
have been held beyond the period during which the charge applies
or were acquired upon the reinvestment of dividends or
distributions) and, second, of shares held longest during the
time they are subject to the sales charge. Proceeds from the
contingent deferred sales charge on Class A shares are paid to
the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sales of Class A shares, such as the payment
24
<PAGE>
of compensation to selected dealers and agents for selling
Class A shares. With respect to purchases of $1,000,000 or more
made through selected dealers or agents, the Adviser may,
pursuant to the Distribution Services Agreement described above,
pay such dealers or agents from its own resources a fee of up to
1% of the amount invested to compensate such dealers or agents
for their distribution assistance in connection with such
purchases.
No initial sales charge is imposed on Class A shares
issued (i) pursuant to the automatic reinvestment of income
dividends or capital gains distributions, (ii) in exchange for
Class A shares of other "Alliance Mutual Funds" (as that term is
defined under "Combined Purchase Privilege" below), except that
an initial sales charge will be imposed on Class A shares issued
in exchange for Class A shares of AFD Exchange Reserves ("AFDER")
that were purchased for cash without the payment of an initial
sales charge and without being subject to a contingent deferred
sales charge or (iii) upon the automatic conversion of Class B
shares or Advisor Class shares as described below under "Class B
Shares - Conversion Feature" and "--Conversion of Advisor Class
Shares to Class A Shares." The Fund receives the entire net
asset value of its Class A shares sold to investors. The
Principal Underwriter's commission is the sales charge shown
above less any applicable discount or commission "reallowed" to
selected dealers and agents. The Principal Underwriter will
reallow discounts to selected dealers and agents in the amounts
indicated in the table above. In this regard, the Principal
Underwriter may elect to reallow the entire sales charge to
selected dealers and agents for all sales with respect to which
orders are placed with the Principal Underwriter. A selected
dealer who receives reallowance in excess of 90% of such a sales
charge may be deemed to be an "underwriter" under the Securities
Act of 1933.
Set forth below is an example of the method of computing
the offering price of the Class A shares. The example assumes a
purchase of Class A shares of the Fund aggregating less than
$100,000 subject to the schedule of sales charges set forth above
at a price based upon the net asset value of shares of the Fund
on April 30, 1997, the date of the most recent financial
statements of the Fund set forth herein (which was prior to the
reclassification of such shares as Class A shares).
25
<PAGE>
Net Asset Value per Class A Share at $15.87
April 30, 1997
Class A Per Share Sales Charge
4.25% of offering price (4.44% of
net asset value per share) .71
_______
Class A Per Share Offering Price to
the public $16.58
======
Investors choosing the initial sales charge alternative
may under certain circumstances be entitled to pay (i) no initial
sales charge (but may be subject in most such cases to a
contingent deferred sales charge) or (ii) a reduced initial sales
charge. The circumstances under which such investors may pay a
reduced initial sales charge are described below.
Combined Purchase Privilege. Certain persons may
qualify for the sales charge reductions indicated in the schedule
of such charges above by combining purchases of shares of the
Fund into a single "purchase," if the resulting "purchase" totals
at least $100,000. The term "purchase" refers to: (i) a single
purchase by an individual, or to concurrent purchases, which in
the aggregate are at least equal to the prescribed amounts, by an
individual, his or her spouse and their children under the age of
21 years purchasing shares of the Fund for his, her or their own
account(s); (ii) a single purchase by a trustee or other
fiduciary purchasing shares for a single trust, estate or single
fiduciary account although more than one beneficiary is involved;
or (iii) a single purchase for the employee benefit plans of a
single employer. The term "purchase" also includes purchases by
any "company," as the term is defined in the 1940 Act, but does
not include purchases by any such company which has not been in
existence for at least six months or which has no purpose other
than the purchase of shares of the Fund or shares of other
registered investment companies at a discount. The term
"purchase" does not include purchases by any group of individuals
whose sole organizational nexus is that the participants therein
are credit card holders of a company, policy holders of an
insurance company, customers of either a bank or broker-dealer or
clients of an investment adviser. A "purchase" may also include
shares, purchased at the same time through a single selected
dealer or agent, of any other "Alliance Mutual Fund" Currently,
the Alliance Mutual Funds include:
AFD Exchange Reserves
The Alliance Fund, Inc.
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
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Alliance Bond Fund, Inc.
-Corporate Bond Portfolio
-U.S. Government Portfolio
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Limited Maturity Government Fund, Inc.
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
-California Portfolio
-Insured California Portfolio
-Insured National Portfolio
-National Portfolio
-New York Portfolio
Alliance Municipal Income Fund II
-Arizona Portfolio
-Florida Portfolio
-Massachusetts Portfolio
-Michigan Portfolio
-Minnesota Portfolio
-New Jersey Portfolio
-Ohio Portfolio
-Pennsylvania Portfolio
-Virginia Portfolio
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance/Regent Sector Opportunity Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Portfolios
-Alliance Growth Fund
-Alliance Conservative Investors Fund
-Alliance Growth Investors Fund
-Alliance Strategic Balanced Fund
27
<PAGE>
-Alliance Short-Term U.S. Government Fund
Prospectuses for the Alliance Mutual Funds may be
obtained without charge by contacting Alliance Fund Services,
Inc. at the address or the "For Literature" telephone number
shown on the front cover of this Statement of Additional
Information.
Cumulative Quantity Discount (Right of Accumulation). An
investor's purchase of additional Class A shares of the Fund may
qualify for a Cumulative Quantity Discount. The applicable sales
charge will be based on the total of:
(i) the investor's current purchase;
(ii) the net asset value (at the close of business on
the previous day) of (a) all shares of the Fund
held by the investor and (b) all shares of any
other Alliance Mutual Fund held by the investor;
and
(iii) the net asset value of all shares described in
paragraph (ii) owned by another shareholder
eligible to combine his or her purchase with that
of the investor into a single "purchase" (see
above).
For example, if an investor owned shares of an Alliance
Mutual Fund worth $200,000 at their then current net asset value
and, subsequently, purchased Class A shares of the Fund worth an
additional $100,000, the sales charge for the $100,000 purchase
would be at the 2.25% rate applicable to a single $300,000
purchase of shares of the Fund, rather than the 3.25% rate.
To qualify for the Combined Purchase Privilege or to
obtain the Cumulative Quantity Discount on a purchase through a
selected dealer or agent, the investor or selected dealer or
agent must provide the Principal Underwriter with sufficient
information to verify that each purchase qualifies for the
privilege or discount.
Statement of Intention. Class A investors may also
obtain the reduced sales charges shown in the table above by
means of a written Statement of Intention, which expresses the
investor's intention to invest not less than $100,000 within a
period of 13 months in Class A shares (or Class A, Class B,
Class C and/or Advisor Class shares) of the Fund or any other
Alliance Mutual Fund. Each purchase of shares under a Statement
of Intention will be made at the public offering price or prices
applicable at the time of such purchase to a single transaction
of the dollar amount indicated in the Statement of Intention. At
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<PAGE>
the investor's option, a Statement of Intention may include
purchases of shares of the Fund or any other Alliance Mutual Fund
made not more than 90 days prior to the date that the investor
signs a Statement of Intention; however, the 13-month period
during which the Statement of Intention is in effect will begin
on the date of the earliest purchase to be included.
Investors qualifying for the Combined Purchase Privilege
described above may purchase shares of the Alliance Mutual Funds
under a single Statement of Intention. For example, if at the
time an investor signs a Statement of Intention to invest at
least $100,000 in Class A shares of the Fund, the investor and
the investor's spouse each purchase shares of the Fund worth
$20,000 (for a total of $40,000), it will be necessary to invest
only a total of $60,000 during the following 13 months in shares
of the Fund or any other Alliance Mutual Fund, to qualify for the
3.25% sales charge on the total amount being invested (the sales
charge applicable to an investment of $100,000).
The Statement of Intention is not a binding obligation
upon the investor to purchase the full amount indicated. The
minimum initial investment under a Statement of Intention is 5%
of such amount. Shares purchased with the first 5% of such
amount will be held in escrow (while remaining registered in the
name of the investor) to secure payment of the higher sales
charge applicable to the shares actually purchased if the full
amount indicated is not purchased, and such escrowed shares will
be involuntarily redeemed to pay the additional sales charge, if
necessary. Dividends on escrowed shares, whether paid in cash or
reinvested in additional Fund shares, are not subject to escrow.
When the full amount indicated has been purchased, the escrow
will be released. To the extent that an investor purchases more
than the dollar amount indicated on the Statement of Intention
and qualifies for a further reduced sales charge, the sales
charge will be adjusted for the entire amount purchased at the
end of the 13-month period. The difference in the sales charge
will be used to purchase additional shares of the Fund subject to
the rate of the sales charge applicable to the actual amount of
the aggregate purchases.
Investors wishing to enter into a Statement of Intention
in conjunction with their initial investment in Class A shares of
the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus while current
Class A shareholders desiring to do so can obtain a form of
Statement of Intention by contacting Alliance Fund Services, Inc.
at the address or telephone numbers shown on the cover of this
Statement of Additional Information.
Certain Retirement Plans. Multiple participant payroll
deduction retirement plans may also purchase shares of the Fund
29
<PAGE>
or any other Alliance Mutual Fund at a reduced sales charge on a
monthly basis during the 13-month period following such a plan's
initial purchase. The sales charge applicable to such initial
purchase of shares of the Fund will be that normally applicable,
under the schedule of sales charges set forth in this Statement
of Additional Information, to an investment 13 times larger than
such initial purchase. The sales charge applicable to each
succeeding monthly purchase will be that normally applicable,
under such schedule, to an investment equal to the sum of (i) the
total purchase previously made during the 13-month period, and
(ii) the current month's purchase multiplied by the number of
months (including the current month) remaining in the 13-month
period. Sales charges previously paid during such period will
not be retroactively adjusted on the basis of later purchases.
Reinstatement Privilege. A shareholder who has caused
any or all of his or her Class A or Class B shares of the Fund to
be redeemed or repurchased may reinvest all or any portion of the
redemption or repurchase proceeds in Class A shares of the Fund
at net asset value without any sales charge, provided that
(i) such reinvestment is made within 120 calendar days after the
redemption or repurchase date and (ii) for Class B shares, a
contingent deferred sales charge has been paid and the Principal
Underwriter has approved, at its discretion, the reinvestment of
such shares. Shares are sold to a reinvesting shareholder at the
net asset value next determined as described above. A
reinstatement pursuant to this privilege will not cancel the
redemption or repurchase transaction; therefore, any gain or loss
so realized will be recognized for federal income tax purposes
except that no loss will be recognized to the extent that the
proceeds are reinvested in shares of the Fund within 30 calendar
days after the redemption or repurchase transaction. Investors
may exercise the reinstatement privilege by written request sent
to the Fund at the address shown on the cover of this Statement
of Additional Information.
Sales at Net Asset Value. The Fund may sell its Class A
shares at net asset value (i.e., without an initial sales charge)
and without a contingent deferred sales charge to certain
categories of investors including:
(i) investment management clients of the Adviser or its
affiliates;
(ii) officers and present or former Directors of the
Fund; present or former directors and trustees of other
investment companies managed by the Adviser; present or retired
full-time employees of the Adviser, the Principal Underwriter,
Alliance Fund Services, Inc. and their affiliates; officers and
directors of ACMC, the Principal Underwriter, Alliance Fund
Services, Inc. and their affiliates; officers, directors and
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<PAGE>
present full-time employees of selected dealers or agents; or the
spouse, or a sibling, direct ancestor or direct descendant
(collectively "relatives") of any such person; or any trust,
individual retirement account or retirement plan account for the
benefit of any such person or relative; or the estate of any such
person or relative, if such shares are purchased for investment
purposes (such shares may not be resold except to the Fund);
(iii) the Adviser, the Principal Underwriter, Alliance
Fund Services, Inc. and their affiliates; certain employee
benefit plans for employees of the Adviser, the Principal
Underwriter, Alliance Fund Services, Inc. and their
affiliates;
(iv) registered investment advisers or other financial
intermediaries who charge a management, consulting or other fee
for their service and who purchase shares through a broker or
agent approved by the Principal Underwriter and clients of such
registered investment advisers or financial intermediaries whose
accounts are linked to the master account of such investment
adviser or financial intermediary on the books of such approved
broker or agent;
(v) persons participating in a fee-based program,
sponsored and maintained by a registered broker-dealer or other
financial intermediary and approved by the Principal Underwriter,
pursuant to which such persons pay an asset-based fee to such
broker-dealer or financial intermediary, or its affiliates or
agents, for services in the nature of investment advisory or
administrative services;
(vi) persons who establish to the Principal
Underwriter's satisfaction that they are investing within such
time period as may be designated by the Principal Underwriter,
proceeds of redemption of shares of such other registered
investment companies as may be designated from time to time by
the Principal Underwriter;
(vii) employer-sponsored qualified pensions or
profit-sharing plans (including Section 401(k) plans), custodial
accounts maintained pursuant to Section 403(b)(7), retirement
plans and individual retirement accounts (including individual
retirement accounts to which simplified employee pension ("SEP")
contributions are made), if such plans or accounts are
established or administered under programs sponsored by
administrators or other persons that have been approved by the
Principal Underwriter; and
(viii) persons who both (a) held shares of the Fund
at the effective time of the conversation of the Fund from a
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<PAGE>
closed-end to an open-end investment company, and (b) thereafter
have continuously held Class A shares of the Fund.
Class B Shares
Investors may purchase Class B shares at the public
offering price equal to the net asset value per share of the
Class B shares on the date of purchase without the imposition of
a sales charge at the time of purchase. The Class B shares are
sold without an initial sales charge so that the Fund will
receive the full amount of the investor's purchase payment.
Proceeds from the contingent deferred sales charge on
the Class B shares are paid to the Principal Underwriter and are
used by the Principal Underwriter to defray the expenses of the
Principal Underwriter related to providing distribution-related
services to the Fund in connection with the sale of the Class B
shares, such as the payment of compensation to selected dealers
and agents for selling Class B shares. The combination of the
contingent deferred sales charge and the distribution services
fee enables the Fund to sell the Class B shares without a sales
charge being deducted at the time of purchase. The higher
distribution services fee incurred by Class B shares will cause
such shares to have a higher expense ratio and to pay lower
dividends than those related to Class A shares.
Contingent Deferred Sales Charge. Class B shares that
are redeemed within four years of purchase will be subject to a
contingent deferred sales charge at the rates set forth below
charged as a percentage of the dollar amount subject thereto. The
charge will be assessed on an amount equal to the lesser of the
cost of the shares being redeemed or their net asset value at the
time of redemption. Accordingly, no sales charge will be imposed
on increases in net asset value above the initial purchase price.
In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.
To illustrate, assume that an investor purchased 100
Class B shares at $10 per share (at a cost of $1,000) and in the
second year after purchase, the net asset value per share is $12
and, during such time, the investor has acquired 10 additional
Class B shares upon dividend reinvestment. If at such time the
investor makes his or her first redemption of 50 Class B shares
(proceeds of $600), 10 Class B shares will not be subject to the
charge because of dividend reinvestment. With respect to the
remaining 40 Class B shares, the charge is applied only to the
original cost of $10 per share and not to the increase in net
asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds will be charged at a rate of 3.0% (the
applicable rate in the second year after purchase as set forth
below).
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<PAGE>
The amount of the contingent deferred sales charge, if
any, will vary depending on the number of years from the time of
payment for the purchase of Class B shares until the time of
redemption of such shares.
Contingent Deferred Sales Charge as a %
Year Since Purchase of Dollar Amount Subject to Charge
____________________ _______________________________________
First 4%
Second 3%
Third 2%
Fourth 1%
Fifth and thereafter None
In determining the contingent deferred sales charge
applicable to a redemption of Class B shares, it will be assumed
that the redemption is, first, of any shares that were acquired
upon the reinvestment of dividends or distributions and, second,
of shares held longest during the time they are subject to the
sales charge. When shares acquired in an exchange are redeemed,
the applicable contingent deferred sales charge and conversion
schedules will be the schedules that applied at the time of the
purchase of shares of the corresponding class of the Alliance
Mutual Fund originally purchased by the shareholder.
The contingent deferred sales charge is waived on
redemptions of shares (i) following the death or disability, as
defined in the Internal Revenue Code of 1986 as amended (the
"Code"), of a shareholder, (ii) to the extent that the redemption
represents a minimum required distribution from an individual
retirement account or other retirement plan to a shareholder who
has attained the age of 70-1/2, (iii) that had been purchased by
present or former Directors of the Fund, by the relative of any
such person, by any trust, individual retirement account or
retirement plan account for the benefit of any such person or
relative or by the estate of any such person or relative, or
(iv) pursuant to a systematic withdrawal plan (see "Shareholder
Services-Systematic Withdrawal Plan" below).
Conversion Feature. Eight years after the end of the
calendar month in which the shareholder's purchase order was
accepted, Class B shares will automatically convert to Class A
shares and will no longer be subject to a higher distribution
services fee. Such conversion will occur on the basis of the
relative net asset values of the two classes, without the
imposition of any sales load, fee or other charge. The purpose
of the conversion feature is to reduce the distribution services
fee paid by holders of Class B shares that have been outstanding
long enough for the Principal Underwriter to have been
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<PAGE>
compensated for distribution expenses incurred in the sale of
such shares.
For purposes of conversion to Class A, Class B shares
purchased through the reinvestment of dividends and distributions
paid in respect of Class B shares in a shareholder's account will
be considered to be held in a separate sub-account. Each time
any Class B shares in the shareholder's account (other than those
in the sub-account) convert to Class A, an equal pro-rata portion
of the Class B shares in the sub-account will also convert to
Class A.
The conversion of Class B shares to Class A shares is
subject to the continuing availability of an opinion of counsel
to the effect that the conversion of Class B shares to Class A
shares does not constitute a taxable event under federal income
tax law. The conversion of Class B shares to Class A shares may
be suspended if such an opinion is no longer available at the
time such conversion is to occur. In that event, no further
conversions of Class B shares would occur, and shares might
continue to be subject to the higher distribution services fee
for an indefinite period which may extend beyond the period
ending eight years after the end of the calendar month in which
the shareholder's purchase order was accepted.
Class C Shares
Investors may purchase Class C shares at the public
offering price equal to the net asset value per share of the
Class C shares on the date of purchase without the imposition of
a sales charge either at the time of purchase or, as long as the
shares are held for one year or more, upon redemption. Class C
shares are sold without an initial sales charge so that the Fund
will receive the full amount of the investor's purchase payment
and, as long as the shares are held for one year or more, without
a contingent deferred sales charge so that the investor will
receive as proceeds upon redemption the entire net asset value of
his or her Class C shares. The Class C distribution services fee
enables the Fund to sell Class C shares without either an initial
or contingent deferred sales charge, as long as the shares are
held for one year or more. Class C shares do not convert to any
other class of shares of the Fund and incur higher distribution
services fees and transfer agency costs than Class A shares and
Advisor Class shares, and will thus have a higher expense ratio
and pay correspondingly lower dividends than Class A and Advisor
Class shares.
Class C shares that are redeemed within one year of
purchase will be subject to a contingent deferred sales charge of
1%, charged as a percentage of the dollar amount subject thereto.
The charge will be assessed on an amount equal to the lesser of
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<PAGE>
the cost of the shares being redeemed or their net asset value at
the time of redemption. Accordingly, no sales charge will be
imposed on increases in net asset value above the initial
purchase price. In addition, no charge will be assessed on
shares derived from reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge on Class C
shares will be waived on certain redemptions, as described above
under "--Class B Shares." In determining the contingent deferred
sales charge applicable to a redemption of Class C shares, it
will be assumed that the redemption is, first, of any shares that
are not subject to a contingent deferred sales charge (for
example, because the shares have been held beyond the period
during which the charge applies or were acquired upon the
reinvestment of dividends or distributions) and, second, of
shares held longest during the time they are subject to the sales
charge.
Proceeds from the contingent deferred sales charge are
paid to the Principal Underwriter and are used by the Principal
Underwriter to defray the expenses of the Principal Underwriter
related to providing distribution-related services to the Fund in
connection with the sale of the Class C shares, such as the
payment of compensation to selected dealers and agents for
selling Class C shares. The combination of the contingent
deferred sales charge and the distribution services fee enables
the Fund to sell the Class C shares without a sales charge being
deducted at the time of purchase. The higher distribution
services fee incurred by Class C shares will cause such shares to
have a higher expense ratio and to pay lower dividends than those
related to Class A shares and Advisor Class shares.
Conversion of Advisor Class Shares to Class A Shares
Advisor Class shares may be held solely through the fee-
based program accounts, employee benefit plans and registered
investment advisory or other financial intermediary relationships
described above under "Purchase of Shares-- General," and by
investment advisory clients of, and by certain other persons
associated with, the Adviser and its affiliates or the Fund. If
(i) a holder of Advisor Class shares ceases to participate in the
fee-based program or plan, or to be associated with the
investment adviser or financial intermediary, in each case that
satisfies the requirements to purchase shares set forth under
"Purchase of Shares--General" or (ii) the holder is otherwise no
longer eligible to purchase Advisor Class shares as described in
the Advisor Class Prospectus and this Statement of Additional
Information (each, a "Conversion Event"), then all Advisor Class
shares held by the shareholder will convert automatically and
without notice to the shareholder, other than the notice
contained in the Advisor Class Prospectus and this Statement of
Additional Information, to Class A shares of the Fund during the
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<PAGE>
calendar month following the month in which the Fund is informed
of the occurrence of the Conversion Event. The failure of a
shareholder or a fee-based program to satisfy the minimum
investment requirements to purchase Advisor Class shares will not
constitute a Conversion Event. The conversion would occur on the
basis of the relative net asset values of the two classes and
without the imposition of any sales load, fee or other charge.
Class A shares currently bear a .30% distribution services fee
and have a higher expense ratio than Advisor Class shares. As a
result, Class A shares may pay correspondingly lower dividends
and have a lower net asset value than Advisor Class shares.
The conversion of Advisor Class shares to Class A shares
is subject to the continuing availability of an opinion of
counsel to the effect that the conversion of Advisor Class shares
to Class A shares does not constitute a taxable event under
federal income tax law. The conversion of Advisor Class shares
to Class A shares may be suspended if such an opinion is no
longer available at the time such conversion is to occur. In
that event, the Advisor Class shareholder would be required to
redeem his Advisor Class shares, which would constitute a taxable
event under federal income tax law.
________________________________________________________________
REDEMPTION AND REPURCHASE OF SHARES
________________________________________________________________
The following information supplements that set forth in
the Fund's Prospectus under the heading "Purchase and Sale of
Shares--How to Sell Shares." If you are an Advisor Class
shareholder through an account established under a fee-based
program your fee-based program may impose requirements with
respect to the purchase, sale or exchange of Advisor Class shares
of the Fund that are different from those described herein. A
transaction fee may be charged by your financial representative
with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial representative.
Redemption
Subject only to the limitations described below, the
Fund's Articles of Incorporation require that the Fund redeem the
shares tendered to it, as described below, at a redemption price
equal to their net asset value as next computed following the
receipt of shares tendered for redemption in proper form. Except
for any contingent deferred sales charge which may be applicable
to Class A, Class B or Class C shares, there is no redemption
charge. Payment of the redemption price will be made within
seven days after the Fund's receipt of such tender for
redemption. If a shareholder is in doubt about what documents
36
<PAGE>
are required by his or her fee-based program or employee benefit
plan, the shareholder should contact his or her financial
representative.
The right of redemption may not be suspended or the date
of payment upon redemption postponed for more than seven days
after shares are tendered for redemption, except for any period
during which the Exchange is closed (other than customary weekend
and holiday closings) or during which the Commission determines
that trading thereon is restricted, or for any period during
which an emergency (as determined by the Commission) exists as a
result of which disposal by the Fund of securities owned by it is
not reasonably practicable or as a result of which it is not
reasonably practicable for the Fund fairly to determine the value
of its net assets, or for such other periods as the Commission
may by order permit for the protection of security holders of the
Fund.
Payment of the redemption price will be made in cash.
The value of a shareholder's shares on redemption or repurchase
may be more or less than the cost of such shares to the
shareholder, depending upon the market value of the Fund's
portfolio securities at the time of such redemption or
repurchase. Redemption proceeds on Class A, Class B and Class C
shares will reflect the deduction of the contingent deferred
sales charge, if any. Payment received by a shareholder upon
redemption or repurchase of his shares, assuming the shares
constitute capital assets in his hands, will result in long-term
or short-term capital gains (or loss) depending upon the
shareholder's holding period and basis in respect of the shares
redeemed.
To redeem shares of the Fund for which no share
certificates have been issued, the registered owner or owners
should forward a letter to the Fund containing a request for
redemption. The signature or signatures on the letter must be
guaranteed by an "eligible guarantor institution" as defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended.
To redeem shares of the Fund represented by stock
certificates, the investor should forward the appropriate stock
certificate or certificates, endorsed in blank or with blank
stock powers attached, to the Fund with the request that the
shares represented thereby, or a specified portion thereof, be
redeemed. The stock assignment form on the reverse side of each
stock certificate surrendered to the Fund for redemption must be
signed by the registered owner or owners exactly as the
registered name appears on the face of the certificate or,
alternatively, a stock power signed in the same manner may be
attached to the stock certificate or certificates or, where
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<PAGE>
tender is made by mail, separately mailed to the Fund. The
signature or signatures on the assignment form must be guaranteed
in the manner described above.
Telephone Redemption By Electronic Funds Transfer. Each
Fund shareholder is entitled to request redemption by Electronic
Funds Transfer once in any 30 day period (except for certain
omnibus accounts) of shares for which no stock certificates have
been issued by telephone at (800) 221-5672 by a shareholder who
has completed the appropriate portion of the Subscription
Application or, in the case of an existing shareholder, an
"Autosell" application obtained from Alliance Fund Services, Inc.
A telephone redemption request may not exceed $100,000 (except
for certain omnibus accounts), and must be made by 4:00 p.m.
Eastern time on a Fund business day as defined above. Proceeds
of telephone redemptions will be sent by Electronic Funds
Transfer to a shareholder's designated bank account at a bank
selected by the shareholder that is a member of the NACHA.
Telephone Redemption By Check. Except for certain
omnibus accounts or as noted below, each Fund shareholder is
eligible to request redemption by check, once in any 30-day
period, of Fund shares for which no stock certificates have been
issued by telephone at (800) 221-5672 before 4:00 p.m. Eastern
time on a Fund business day in an amount not exceeding $50,000.
Proceeds of such redemptions are remitted by check to the
shareholder's address of record. Telephone redemption by check
is not available with respect to shares (i) for which
certificates have been issued, (ii) held in nominee or "street
name" accounts, (iii) held by a shareholder who has changed his
or her address of record within the preceding 30 calendar days or
(iv) held in any retirement plan account. A shareholder
otherwise eligible for telephone redemption by check may cancel
the privilege by written instruction to Alliance Fund Services,
Inc., or by checking the appropriate box on the Subscription
Application found in the Prospectus.
Telephone Redemptions--General. During periods of
drastic economic or market developments, such as the market break
of October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in
connection with the 1987 market break). If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information. The
Fund reserves the right to suspend or terminate its telephone
redemption service at any time without notice. Neither the Fund
nor the Adviser, the Principal Underwriter or Alliance Fund
Services, Inc. will be responsible for the authenticity of
telephone requests for redemptions that the Fund reasonably
38
<PAGE>
believes to be genuine. The Fund will employ reasonable
procedures in order to verify that telephone requests for
redemptions are genuine, including, among others, recording such
telephone instructions and causing written confirmations of the
resulting transactions to be sent to shareholders. If the Fund
did not employ such procedures, it could be liable for losses
arising from unauthorized or fraudulent telephone instructions.
Selected dealers or agents may charge a commission for handling
telephone requests for redemptions.
Temporary Fee Applicable to Redemptions and Exchanges of
Certain Class A Shares. Class A shares of the Fund that were
outstanding and reclassified as Class A shares at the time the
Fund converted to an open-end investment company and that are
redeemed or exchanged for shares of other Alliance Mutual Funds
on or prior to October 2, 1998, will be subject to a fee equal to
2% of the net asset value of such shares at the time of such
redemption or exchange. The fee will be deducted from the amount
otherwise payable to holders of such Class A shares upon
redemption or exchange and will be retained by the Fund. The fee
will not be imposed with respect to other outstanding Class A
shares of the Fund or shares issued upon reinvestment of
dividends paid on shares of the Fund. In determining the amount
of the fee with respect to a particular redemption or exchange,
it will be assumed that the redemption or exchange is first of
any shares to which the fee does not apply and second of any
shares to which the fee does apply. The fee may be reduced or
terminated at any time at the direction of the Board of Directors
of the Fund.
Repurchase
The Fund may repurchase shares through the Principal
Underwriter, selected financial intermediaries or selected
dealers or agents. The repurchase price will be the net asset
value next determined after the Principal Underwriter receives
the request (less the contingent deferred sales charge, if any,
with respect to the Class A, Class B and Class C shares), except
that requests placed through selected dealers or agents before
the close of regular trading on the Exchange on any day will be
executed at the net asset value determined as of such close of
regular trading on that day if received by the Principal
Underwriter prior to its close of business on that day (normally
5:00 p.m. Eastern time). The financial intermediary or selected
dealer or agent is responsible for transmitting the request to
the Principal Underwriter by 5:00 p.m. If the financial
intermediary or selected dealer or agent fails to do so, the
shareholder's right to receive that day's closing price must be
settled between the shareholder and the dealer or agent. A
shareholder may offer shares of the Fund to the Principal
Underwriter either directly or through a selected dealer or
39
<PAGE>
agent. Neither the Fund nor the Principal Underwriter charges a
fee or commission in connection with the repurchase of shares
(except for the contingent deferred sales charge, if any, with
respect to Class A, Class B and Class C shares). Normally, if
shares of the Fund are offered through a financial intermediary
or selected dealer or agent, the repurchase is settled by the
shareholder as an ordinary transaction with or through the
selected dealer or agent, who may charge the shareholder for this
service. The repurchase of shares of the Fund as described above
is a voluntary service of the Fund and the Fund may suspend or
terminate this practice at any time.
General
The Fund reserves the right to close out an account that
through redemption has remained below $200 for 90 days.
Shareholders will receive 60 days' written notice to increase the
account value before the account is closed. No contingent
deferred sales charge will be deducted from the proceeds of this
redemption. In the case of a redemption or repurchase of shares
of the Fund recently purchased by check, redemption proceeds will
not be made available until the Fund is reasonably assured that
the check has cleared, normally up to 15 calendar days following
the purchase date.
________________________________________________________________
SHAREHOLDER SERVICES
________________________________________________________________
The following information supplements that set forth in
the Fund's Prospectuses under the heading "Purchase and Sale of
Shares--Shareholder Services." The shareholder services set
forth below are applicable to Class A, Class B, Class C and
Advisor Class shares unless otherwise indicated. If you are an
Advisor Class shareholder through an account established under a
fee-based program your fee-based program may impose requirements
with respect to the purchase, sale or exchange of Advisor Class
shares of the Fund that are different from those described
herein. A transaction fee may be charged by your financial
representative with respect to the purchase, sale or exchange of
Advisor Class shares made through such financial representative.
Automatic Investment Program
Investors may purchase shares of the Fund through an
automatic investment program utilizing Electronic Funds Transfer
drawn on the investor's own bank account. Under such a program,
pre-authorized monthly drafts for a fixed amount (at least $25)
are used to purchase shares through the selected dealer or
selected agent designated by the investor at the public offering
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price next determined after the Principal Underwriter receives
the proceeds from the investor's bank. In electronic form,
drafts can be made on or about a date each month selected by the
shareholder. Investors wishing to establish an automatic
investment program in connection with their initial investment
should complete the appropriate portion of the Subscription
Application found in the Prospectus. Current shareholders should
contact Alliance Fund Services, Inc. at the address or telephone
numbers shown on the cover of this Statement of Additional
Information to establish an automatic investment program.
Exchange Privilege
You may exchange your investment in the Fund for shares
of the same class of other Alliance Mutual Funds (including AFD
Exchange Reserves, a money market fund managed by Alliance). In
addition, (i) present officers and full-time employees of the
Adviser, (ii) present Directors or Trustees of any Alliance
Mutual Fund and (iii) certain employee benefit plans for
employees of the Adviser, the Principal Underwriter, Alliance
Fund Services, Inc. and their affiliates may on a tax-free basis,
exchange Class A shares of the Fund for Advisor Class shares of
the Fund. Exchanges of shares are made at the net asset value
next determined and without sales or service charges. Exchanges
may be made by telephone or written request. Telephone exchange
requests must be received by Alliance Fund Services, Inc. by
4:00 p.m. Eastern time on a Fund business day in order to receive
that day's net asset value.
Shares will continue to age without regard to exchanges
for purpose of determining the CDSC, if any, upon redemption and,
in the case of Class B shares, for the purpose of conversion to
Class A shares. After an exchange, your Class B shares will
automatically convert to Class A shares in accordance with the
conversion schedule applicable to the Class B shares of the
Alliance Mutual Fund you originally purchased for cash ("original
shares"). When redemption occurs, the CDSC applicable to the
original shares is applied.
Please read carefully the prospectus of the mutual fund
into which you are exchanging before submitting the request.
Call Alliance Fund Services, Inc. at (800) 221-5672 to exchange
uncertificated shares. Except with respect to exchanges of
Class A shares of the Fund for Advisor Class shares of the Fund,
exchanges of shares as described above in this section are
taxable transactions for federal income tax purposes. The
exchange service may be changed, suspended, or terminated on 60
days written notice.
All exchanges are subject to the minimum investment
requirements and any other applicable terms set forth in the
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Prospectus for the Alliance Mutual Fund whose shares are being
acquired. An exchange is effected through the redemption of the
shares tendered for exchange and the purchase of shares being
acquired at their respective net asset values as next determined
following receipt by the Alliance Mutual Fund whose shares are
being exchanged of (i) proper instructions and all necessary
supporting documents as described in such fund's Prospectus, or
(ii) a telephone request for such exchange in accordance with the
procedures set forth in the following paragraph. Exchanges
involving the redemption of shares recently purchased by check
will be permitted only after the Alliance Mutual Fund whose
shares have been tendered for exchange is reasonably assured that
the check has cleared, normally up to 15 calendar days following
the purchase date.
Each Fund shareholder and the shareholder's selected
dealer, agent or financial representative, as applicable, are
authorized to make telephone requests for exchanges unless
Alliance Fund Services, Inc., receives written instruction to the
contrary from the shareholder, or the shareholder declines the
privilege by checking the appropriate box on the Subscription
Application found in the Prospectus. Such telephone requests
cannot be accepted with respect to shares then represented by
stock certificates. Shares acquired pursuant to a telephone
request for exchange will be held under the same account
registration as the shares redeemed through such exchange.
Eligible shareholders desiring to make an exchange
should telephone Alliance Fund Services, Inc. with their account
number and other details of the exchange, at (800) 221-5672
before 4:00 p.m., Eastern time, on a Fund business day as defined
above. Telephone requests for exchange received before 4:00 p.m.
Eastern time on a Fund business day will be processed as of the
close of business on that day. During periods of drastic
economic or market developments, such as the market break of
October 1987, it is possible that shareholders would have
difficulty in reaching Alliance Fund Services, Inc. by telephone
(although no such difficulty was apparent at any time in
connection with the 1987 market break). If a shareholder were to
experience such difficulty, the shareholder should issue written
instructions to Alliance Fund Services, Inc. at the address shown
on the cover of this Statement of Additional Information.
A shareholder may elect to initiate a monthly "Auto
Exchange" whereby a specified dollar amount's worth of his or her
Fund shares (minimum $25) is automatically exchanged for shares
of another Alliance Mutual Fund. Auto Exchange transactions
normally occur on the 12th day of each month, or the Fund
business day prior thereto.
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None of the Alliance Mutual Funds, the Adviser, the
Principal Underwriter or Alliance Fund Services, Inc. will be
responsible for the authenticity of telephone requests for
exchanges that the Fund reasonably believes to be genuine. The
Fund will employ reasonable procedures in order to verify that
telephone requests for exchanges are genuine, including, among
others, recording such telephone instructions and causing written
confirmations of the resulting transactions to be sent to
shareholders. If the Fund did not employ such procedures, it
could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Selected dealers, agents or
financial representatives, as applicable, may charge a commission
for handling telephone requests for exchanges.
The exchange privilege is available only in states where
shares of the Alliance Mutual Fund being acquired may be legally
sold. Each Alliance Mutual Fund reserves the right, at any time
on 60 days' notice to its shareholders, to reject any order to
acquire its shares through exchange or otherwise to modify,
restrict or terminate the exchange privilege.
Retirement Plans
The Fund may be a suitable investment vehicle for part
or all of the assets held in various types of retirement plans,
such as those listed below. The Fund has available forms of such
plans pursuant to which investments can be made in the Fund and
other Alliance Mutual Funds. Persons desiring information
concerning these plans should contact Alliance Fund Services,
Inc. at the "For Literature" telephone number on the cover of
this Statement of Additional Information, or write to:
Alliance Fund Services, Inc.
Retirement Plans
P.O. Box 1520
Secaucus, New Jersey 07096-1520
Individual Retirement Account ("IRA"). Individuals who
receive compensation, including earnings from self-employment,
are entitled to establish and make contributions to an IRA.
Taxation of the income and gains paid to an IRA by the Fund is
deferred until distribution from the IRA. An individual's
eligible contribution to an IRA will be deductible if neither the
individual nor his or her spouse is an active participant in an
employer-sponsored retirement plan. If the individual or his or
her spouse is an active participant in an employer-sponsored
retirement plan, the individual's contributions to an IRA may be
deductible, in whole or in part, depending on the amount of the
adjusted gross income of the individual and his or her spouse.
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Employer-Sponsored Qualified Retirement Plans. Sole
proprietors, partnerships and corporations may sponsor qualified
money purchase pension and profit-sharing plans, including
Section 401(k) plans ("qualified plans"), under which annual tax-
deductible contributions are made within prescribed limits based
on compensation paid to participating individuals. The minimum
initial investment requirement may be waived with respect to
certain of these qualified plans.
If the aggregate net asset value of shares of the
Alliance Mutual Funds held by a qualified plan reaches $5 million
on or before December 15 in any year, all Class B or Class C
shares of the Fund held by the plan can be exchanged, at the
plan's request, without any sales charge, for Class A shares of
the Fund.
Simplified Employee Pension Plan ("SEP"). Sole
proprietors, partnerships and corporations may sponsor a SEP
under which they make annual tax-deductible contributions to an
IRA established by each eligible employee within prescribed
limits based on employee compensation.
403(b)(7) Retirement Plan. Certain tax-exempt
organizations and public educational institutions may sponsor
retirement plans under which an employee may agree that monies
deducted from his or her compensation (minimum $25 per pay
period) may be contributed by the employer to a custodial account
established for the employee under the plan.
The Alliance Plans Division of Frontier Trust Company, a
subsidiary of Equitable, which serves as custodian or trustee
under the retirement plan prototype forms available from the
Fund, charges certain nominal fees for establishing an account
and for annual maintenance. A portion of these fees is remitted
to Alliance Fund Services, Inc. as compensation for its services
to the retirement plan accounts maintained with the Fund.
Distributions from retirement plans are subject to
certain Code requirements in addition to normal redemption
procedures. For additional information please contact Alliance
Fund Services, Inc.
Dividend Direction Plan
A shareholder who already maintains, in addition to his
or her Class A, Class B, Class C or Advisor Class Fund account, a
Class A, Class B, Class C or Advisor Class account with one or
more other Alliance Mutual Funds may direct that income dividends
and/or capital gains distributions paid on the shareholder's
Class A, Class B, Class C or Advisor Class Fund shares be
automatically reinvested, in any amount, without the payment of
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any sales or service charges, in shares of the same class of such
other Alliance Mutual Fund(s). Further information can be
obtained by contacting Alliance Fund Services, Inc. at the
address or the "For Literature" telephone number shown on the
cover of this Statement of Additional Information. Investors
wishing to establish a dividend direction plan in connection with
their initial investment should complete the appropriate section
of the Subscription Application found in the Prospectus. Current
shareholders should contact Alliance Fund Services, Inc. to
establish a dividend direction plan.
Systematic Withdrawal Plan
General. Any shareholder who owns or purchases shares
of the Fund having a current net asset value of at least $4,000
(for quarterly or less frequent payments), $5,000 (for bi-monthly
payments) or $10,000 (for monthly payments) may establish a
systematic withdrawal plan under which the shareholder will
periodically receive a payment in a stated amount of not less
than $50 on a selected date. Systematic withdrawal plan
participants must elect to have their dividends and distributions
from the Fund automatically reinvested in additional shares of
the Fund.
Shares of the Fund owned by a participant in the Fund's
systematic withdrawal plan will be redeemed as necessary to meet
withdrawal payments and such payments will be subject to any
taxes applicable to redemptions and, except as discussed below,
any applicable contingent deferred sales charge. Shares acquired
with reinvested dividends and distributions will be liquidated
first to provide such withdrawal payments and thereafter other
shares will be liquidated to the extent necessary, and depending
upon the amount withdrawn, the investor's principal may be
depleted. A systematic withdrawal plan may be terminated at any
time by the shareholder or the Fund.
Withdrawal payments will not automatically end when a
shareholder's account reaches a certain minimum level.
Therefore, redemptions of shares under the plan may reduce or
even liquidate a shareholder's account and may subject the
shareholder to the Fund's involuntary redemption provisions. See
"Redemption and Repurchase of Shares--General." Purchases of
additional shares concurrently with withdrawals are undesirable
because of sales charges when purchases are made. While an
occasional lump-sum investment may be made by a holder of Class A
shares who is maintaining a systematic withdrawal plan, such
investment should normally be an amount equivalent to three times
the annual withdrawal or $5,000, whichever is less.
Payments under a systematic withdrawal plan may be made
by check or electronically via the Automated Clearing House
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("ACH") network. Investors wishing to establish a systematic
withdrawal plan in conjunction with their initial investment in
shares of the Fund should complete the appropriate portion of the
Subscription Application found in the Prospectus, while current
Fund shareholders desiring to do so can obtain an application
form by contacting Alliance Fund Services, Inc. at the address or
the "For Literature" telephone number shown on the cover of this
Statement of Additional Information.
CDSC Waiver for Class B and Class C Shares. Under a
systematic withdrawal plan, up to 1% monthly, 2% bi-monthly or 3%
quarterly of the value at the time of redemption of the Class B
or Class C shares in a shareholder's account may be redeemed free
of any contingent deferred sales charge.
With respect to Class B shares, the waiver applies only
with respect to shares acquired after July 1, 1995. Class B
shares that are not subject to a contingent deferred sales charge
(such as shares acquired with reinvested dividends or
distributions) will be redeemed first and will count toward the
foregoing limitations. Remaining Class B shares that are held
the longest will be redeemed next. Redemptions of Class B shares
in excess of the foregoing limitations will be subject to any
otherwise applicable contingent deferred sales charge.
With respect to Class C shares, shares held the longest
will be redeemed first and will count toward the foregoing
limitations. Redemptions in excess of those limitations will be
subject to any otherwise applicable contingent deferred sales
charge.
Statements and Reports
Each shareholder of the Fund receives semi-annual and
annual reports which include a portfolio of investments,
financial statements and, in the case of the annual report, the
report of the Fund's independent auditors, Ernst & Young LLP, as
well as a confirmation of each purchase and redemption. By
contacting his or her broker or Alliance Fund Services, Inc., a
shareholder can arrange for copies of his or her account
statements to be sent to another person.
________________________________________________________________
NET ASSET VALUE
________________________________________________________________
The per share net asset value is determined once daily
as of the next close of regular trading on the Exchange
(currently 4:00 p.m. Eastern time) following receipt of a
purchase or redemption order by the Fund, on each Fund business
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day on which such an order is received and trading in the types
of securities in which the Fund invests might materially affect
the value of Fund shares and on such other days as the Directors
of the Fund deem necessary in order to comply with Rule 22c-1
under the 1940 Act. A Fund business day is any day on which the
Exchange is open for trading. The net asset value is the net
worth of the Fund (assets including securities at market value
minus liabilities) divided by the number of Fund shares
outstanding.
The assets belonging to the Class A shares, the Class B
shares, the Class C shares and the Advisor Class shares will be
invested together in a single portfolio. The net asset value of
each class will be determined separately by subtracting the
accrued expenses and liabilities allocated to that class from the
assets belonging to that class.
All securities listed on an exchange for which market
quotations are readily available are valued at the closing price
on the exchange on the day of valuation or, if no such closing
price is available, at the mean of bid and ask price quoted on
such day. Other securities for which market quotations are
readily available will be valued in a like manner. Options will
be valued at such market value or fair value if no market exists.
Futures contracts will be valued in a like manner, except that
open futures contracts sales will be valued using the closing
settlement price or, in the absence of such a price, the most
recent quoted asked price. If there are no quotations available
for the day of valuations, the last available closing price will
be used. Securities and assets for which market quotations are
not readily available (including investments that are subject to
limitations as to their sale) are valued at fair value as
determined in good faith by the Fund's Board of Directors.
Short-term debt securities that mature in less than 60
days are valued at amortized cost if their term to maturity from
date of purchase was less than 60 days, or by amortizing their
value on the 61st day prior to maturity if their term to maturity
from date of purchase when acquired by the Fund was more than 60
days, unless such amortized cost is determined by the Board of
Directors not to represent fair value.
For purposes of determining the Fund's net asset value
per share, all assets and liabilities initially expressed in
foreign currencies will be converted into U.S. Dollars at the
mean of the current bid and asked prices of such currency against
the U.S. Dollar last quoted by a major bank that is a regular
participant in the foreign exchange market or on the basis of a
pricing service that takes into account the quotes provided by a
number of such major banks.
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________________________________________________________________
DIVIDENDS, DISTRIBUTIONS AND TAXES
________________________________________________________________
United States Federal Income Taxation of Dividends and
Distributions
General. The Fund intends to qualify and elect to be
treated as a "regulated investment company" under sections 851
through 855 of the Internal Revenue Code of 1986, as amended (the
"Code"). To so qualify, the Fund must, among other things,
(i) derive at least 90% of its gross income in each taxable year
from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock or
securities or foreign currency, or certain other income
(including, but not limited to, gains from options, futures and
forward contracts) derived with respect to its business of
investing in stock, securities or currency; ; and (ii) diversify
its holdings so that, at the end of each quarter of its taxable
year, the following two conditions are met: (a) at least 50% of
the value of the Fund's assets is represented by cash, U.S.
Government Securities, securities of other regulated investment
companies and other securities with respect to which the Fund's
investment is limited, in respect of any one issuer, to an amount
not greater than 5% of the Fund's assets and 10% of the
outstanding voting securities of such issuer, and (b) not more
than 25% of the value of the Fund's assets is invested in
securities of any one issuer (other than U.S. Government
Securities or securities of other regulated investment
companies); and (iii) with respect to its taxable years beginning
before November 1, 1997 derive less than 30% of its gross income
in each such taxable year from the sale or other disposition
within three months of their acquisition by the Fund of stocks,
securities, options, futures or forward contracts and foreign
currencies (or options, futures or forward contracts on foreign
currencies) that are not directly related to the Fund's principal
business of investing in stock or securities (or options and
futures with respect to stocks or securities). These
requirements, among other things, may limit the Fund's ability to
write and purchase options and futures contracts.
If the Fund qualifies as a regulated investment company
for any taxable year and makes timely distributions to its
shareholders of 90% or more of its net investment income for that
year (calculated without regard to its net capital gain, i.e.,
the excess of its net long-term capital gain over its net short-
term capital loss), it will not be subject to federal income tax
on the portion of its taxable income for the year (including any
net capital gain) that it distributes to shareholders.
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The Fund intends to also avoid the 4% federal excise tax
that would otherwise apply to certain undistributed income for a
given calendar year if it makes timely distributions to the
shareholders equal to at least the sum of (i) 98% of its ordinary
income for that year; (ii) 98% of its capital gain net income and
foreign currency gains for the twelve-month period ending on
October 31 of that year; and (iii) any ordinary income or capital
gain net income from the preceding calendar year that was not
distributed during that year. For this purpose, income or gain
retained by the Fund that is subject to corporate income tax will
be considered to have been distributed by the Fund by year-end.
For federal income and excise tax purposes, dividends declared
and payable to shareholders of record as of a date in October,
November or December of a given year but actually paid during the
immediately following January will be treated as if paid by the
Fund on December 31 of that calendar year, and will be taxable to
these shareholders for the year declared, and not for the year in
which the shareholders actually receive the dividend.
The Fund intends to make timely distributions of the
Fund's taxable income (including any net capital gain) so that
the Fund will not be subject to federal income or excise taxes.
However, exchange control or other regulations on the
repatriation of investment income, capital or the proceeds of
securities sales, if any exist or are enacted in the future, may
limit the Fund's ability to make distributions sufficient in
amount to avoid being subject to one or both of such federal
taxes.
Dividends and Distributions. Dividends of the Fund's
net ordinary income and distributions of any net realized short-
term capital gain are taxable to shareholders as ordinary income.
Dividends paid by the Fund and received by a corporate
shareholder are eligible for the dividends received deduction to
the extent that the Fund's income is derived from certain
dividends received from domestic corporations, provided the
corporate shareholder holds shares in the Fund for at least 46
days during the 90-day period beginning 45 days before the date
on which the shareholder becomes entitled to receive the
dividend. In determining the holding period of such shares for
this purpose, any period during which a shareholder's risk of
loss is offset by means of options, short sales or similar
transactions is not counted. In addition, the dividends received
deduction will be disallowed to the extent the investment in
shares of the Fund is financed with indebtedness.
The excess of net long-term capital gains over the net
short-term capital losses realized and distributed by the Fund to
its shareholders will be taxable to the shareholders as long-term
capital gains, irrespective of the length of time a shareholder
may have held his Fund shares. Any dividend or distribution
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<PAGE>
received by a shareholder on shares of the Fund will have the
effect of reducing the net asset value of such shares by the
amount of such dividend or distribution. Furthermore, a dividend
or distribution made shortly after the purchase of such shares by
a shareholder, although in effect a return of capital to that
particular shareholder, would be taxable to him as described
above. Dividends are taxable in the manner discussed regardless
of whether they are paid to the shareholder in cash or are
reinvested in additional shares of the Fund.
After the end of the taxable year, the Fund will notify
shareholders of the federal income tax status of any
distributions made by the Fund to shareholders during such year.
It is the present policy of the Fund to distribute to
shareholders all net investment income and to distribute realized
capital gains, if any, annually. There is no fixed dividend rate
and there can be no assurance that the Fund will pay any
dividends. The amount of any dividend or distribution paid on
shares of the Fund must necessarily depend upon the realization
of income and capital gains from the Fund's investments.
Sales and Redemptions. Any gain or loss arising from a
sale or redemption of Fund shares generally will be capital gain
or loss except in the case of a dealer or a financial
institution, and will be long-term capital gain or loss if such
shareholder has held such shares for more than one year at the
time of the sale or redemption; otherwise it will be short-term
capital gain or loss. In the case of an individual shareholder,
the applicable tax rate imposed on long-term capital gain differs
depending on whether the shares were held at the time of the sale
or redemption for more than eighteen months, or for more than one
year but not more than eighteen months. If a shareholder has
held shares in the Fund for six months or less and during that
period has received a distribution taxable to the shareholder as
a long-term capital gain, any loss recognized by the shareholder
on the sale of those shares during the six-month period will be
treated as a long-term capital loss to the extent of the
distribution. In determining the holding period of such shares
for this purpose, any period during which a shareholder's risk of
loss is offset by means of options, short sales or similar
transactions is not counted.
Any loss realized by a shareholder on a sale or exchange
of shares of the Fund will be disallowed to the extent the shares
disposed of are replaced within a period of 61 days beginning 30
days before and ending 30 days after the shares are sold or
exchanged. For this purpose, acquisitions pursuant to the
Dividend Reinvestment Plan would constitute a replacement if made
within the period. If disallowed, the loss will be reflected in
an upward adjustment to the basis of the shares acquired.
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Foreign Taxes. Income received by the Fund may also be
subject to foreign income taxes, including withholding taxes. The
United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of such taxes
or exemption from taxes on such income. It is impossible to
determine the effective rate of foreign tax in advance since the
amount of the Fund's assets to be invested within various
countries is not known. If more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of
stocks or securities of foreign corporations, the Fund will be
eligible and intends to file an election with the Internal
Revenue Service to pass through to its shareholders the amount of
foreign taxes paid by the Fund. However, there can be no
assurance that the Fund will be able to do so. Pursuant to this
election a shareholder will be required to (i) include in gross
income (in addition to taxable dividends actually received) his
pro rata share of foreign taxes paid by the Fund, (ii) treat his
pro rata share of such foreign taxes as having been paid by him,
and (iii) either deduct such pro rata share of foreign taxes in
computing his taxable income or treat such foreign taxes as a
credit against United States federal income taxes. Shareholders
who are not liable for federal income taxes, such as retirement
plans qualified under section 401 of the Code, will not be
affected by any such pass through of taxes by the Fund. No
deduction for foreign taxes may be claimed by an individual
shareholder who does not itemize deductions. In addition,
certain shareholders may be subject to rules which limit or
reduce their ability to fully deduct, or claim a credit for,
their pro rata share of the foreign taxes paid by the Fund.
Under legislation enacted in August 1997, a shareholder's foreign
tax credit with respect to a dividend received from the Fund will
be disallowed unless the shareholder holds shares in the Fund at
least 16 days during the 30-day period beginning 15 days before
the date on which the shareholder becomes entitled to receive the
dividend. In determining the holding period of such shares for
this purpose, any period during which a shareholder's risk of
loss is offset by means of options, short sales or similar
transactions is not counted. Each shareholder will be notified
within 60 days after the close of the Fund's taxable year whether
the foreign taxes paid by the Fund will pass through for that
year, and if so, such notification will designate (i) the
shareholder's portion of the foreign taxes paid to each such
country and (ii) the portion of dividends that represents income
derived from sources within each such country.
Backup Withholding. The Fund may be required to
withhold United States federal income tax at the rate of 31% of
all taxable distributions payable to shareholders who fail to
provide the Fund with their correct taxpayer identification
numbers or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to
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backup withholding. Corporate shareholders and certain other
shareholders specified in the Code are exempt from such backup
withholding. Backup withholding is not an additional tax; any
amounts so withheld may be credited against a shareholder's
United States federal income tax liability or refunded.
United States Federal Income Taxation of the Fund
The following discussion relates to certain significant
United States federal income tax consequences to the Fund with
respect to the determination of its "investment company taxable
income" each year. This discussion assumes that the Fund will be
taxed as a regulated investment company for each of its taxable
years.
Passive Foreign Investment Companies. If the Fund owns
shares in a foreign corporation that constitutes a "passive
foreign investment company" (a "PFIC") for federal income tax
purposes and the Fund does not elect to treat the foreign
corporation as a "qualified electing fund" within the meaning of
the Code, the Fund may be subject to United States federal income
taxation on a portion of any "excess distribution" it receives
from the PFIC or any gain it derives from the disposition of such
shares, even if such income is distributed as a taxable dividend
by the Fund to its shareholders. The Fund may also be subject to
additional interest charges in respect of deferred taxes arising
from such distributions or gains. Any tax paid by the Fund as a
result of its ownership of shares in a PFIC will not give rise to
any deduction or credit to the Fund or to any shareholder. A
PFIC means any foreign corporation if, for the taxable year
involved, either (i) it derives at least 75% of its gross income
from "passive income" (including, but not limited to, interest,
dividends, royalties, rents and annuities), or (ii) on average,
at least 50% of the value (or adjusted tax basis, if elected) of
the assets held by the corporation produce "passive income."
Under legislation enacted in August 1997, the Fund will be
permitted to elect beginning with its taxable year beginning
November 1, 1998 to "mark-to-market" stock in a PFIC. Under such
an election, the Fund would include in income each year an amount
equal to the excess, if any, of the fair market value of the PFIC
stock as of the close of the taxable year over the Fund's
adjusted basis in the PFIC stock. The Fund would be allowed a
deduction for the excess, if any, of the adjusted basis of the
PFIC stock over the fair market value of the PFIC stock as of the
close of the taxable year, but only to the extent of any net
mark-to-market gains included by the Fund for prior taxable
years. The Fund's adjusted basis in the PFIC stock would be
adjusted to reflect the amounts included in, or deducted from,
income under this election. Amounts included in income pursuant
to this election, as well as gain realized on the sale or other
disposition of the PFIC stock, would be treated as ordinary
52
<PAGE>
income. The deductible portion of any mark-to-market loss, as
well as loss realized on the sale or other disposition of the
PFIC stock to the extent that such loss does not exceed the net
mark-to-market gains previously included by the Fund, would be
treated as ordinary loss. The Fund generally would not be
subject to the deferred tax and interest charge provisions
discussed above with respect to PFIC stock for which a mark-to-
market election has been made. If the Fund purchases shares in a
PFIC and the Fund does elect to treat the foreign corporation as
a "qualified electing fund" under the Code, the Fund may be
required to include in its income each year a portion of the
ordinary income and net capital gains of the foreign corporation,
even if this income is not distributed to the Fund. Any such
income would be subject to the 90% and calendar year distribution
requirements described above.
Currency Fluctuations. "Section 988" Gains or Losses.
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund accrues
dividends or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the
Fund actually collects such receivables or pays such liabilities
are treated as ordinary income or ordinary loss. Similarly,
gains or losses from the disposition of foreign currencies or
from the disposition or a forward contract denominated in a
foreign currency which are attributable to fluctuations in the
value of the foreign currency between the date of acquisition of
the asset and the date of disposition also are treated as
ordinary gain or loss. These gains or losses, referred to under
the Code as "Section 988" gains or losses, increase or decrease
the amount of the Fund's investment company taxable income
available to be distributed to its shareholders as ordinary
income, rather than increasing or decreasing the amount of the
Fund's net capital gain. Because section 988 losses reduce the
amount of ordinary dividends the Fund will be allowed to
distribute for a taxable year, such section 988 losses may result
in all or a portion of prior dividend distributions for such year
being recharacterized as a non-taxable return of capital to
shareholders, rather than as an ordinary dividend, reducing each
shareholder's basis in his Fund shares. If such distributions
exceed such shareholder's basis, such excess will be treated as a
gain from the sale of shares.
Options and Futures Contracts. Certain listed options
and regulated futures contracts are considered "section 1256
contracts" for federal income tax purposes. Section 1256
contracts held by the Fund at the end of each taxable year will
be "marked to market" and treated for federal income tax purposes
as though sold for fair market value on the last business day of
such taxable year. Gain or loss realized by the Fund on section
1256 contracts will be considered 60% long-term and 40% short-
53
<PAGE>
term capital gain or loss. The Fund can elect to exempt its
section 1256 contracts which are part of a "mixed straddle" (as
described below) from the application of section 1256.
With respect to equity options or options traded over-
the-counter, gain or loss realized by the Fund upon the lapse or
sale of such options held by the Fund will be either long-term or
short-term capital gain or loss depending upon the Fund's holding
period with respect to such option. However, gain or loss
realized upon the lapse or closing out of such options that are
written by the Fund will be treated as short-term capital gain or
loss. In general, if the Fund exercises an option, or an option
that the Fund has written is exercised, gain or loss on the
option will not be separately recognized but the premium received
or paid will be included in the calculation of gain or loss upon
disposition of the property underlying the option.
Gain or loss realized by the Fund on the lapse or sale
of put and call options on foreign currencies which are traded
over-the-counter or on certain foreign exchanges will be treated
as section 988 gain or loss and will therefore be characterized
as ordinary income or loss and will increase or decrease the
amount of the Fund's net investment income available to be
distributed to shareholders as ordinary income, as described
above. The amount of such gain or loss will be determined by
subtracting the amount paid, if any, for or with respect to the
option (including any amount paid by the Fund upon termination of
an option written by the Fund) from the amount received, if any,
for or with respect to the option (including any amount received
by the Fund upon termination of an option held by the Fund). In
general, if the Fund exercises such an option on a foreign
currency, or such an option that the Fund has written is
exercised, gain or loss on the option will be recognized in the
same manner as if the Fund had sold the option (or paid another
person to assume the Fund's obligation to make delivery under the
option) on the date on which the option is exercised, for the
fair market value of the option. The foregoing rules will also
apply to other put and call options which have as their
underlying property foreign currency and which are traded over-
the-counter or on certain foreign exchanges to the extent gain or
loss with respect to such options is attributable to fluctuations
in foreign currency exchange rates.
Tax Straddles. Any option or futures contract or other
position entered into or held by the Fund in conjunction with any
other position held by the Fund may constitute a "straddle" for
federal income tax purposes. A straddle of which at least one,
but not all, the positions are section 1256 contracts may
constitute a "mixed straddle". In general, straddles are subject
to certain rules that may affect the character and timing of the
Fund's gains and losses with respect to straddle positions by
54
<PAGE>
requiring, among other things, that (i) loss realized on
disposition of one position of a straddle not be recognized to
the extent that the Fund has unrealized gains with respect to the
other position in such straddle; (ii) the Fund's holding period
in straddle positions be suspended while the straddle exists
(possibly resulting in gain being treated as short-term capital
gain rather than long-term capital gain); (iii) losses recognized
with respect to certain straddle positions which are part of a
mixed straddle and which are non-section 1256 positions be
treated as 60% long-term and 40% short-term capital loss;
(iv) losses recognized with respect to certain straddle positions
which would otherwise constitute short-term capital losses be
treated as long-term capital losses; and (v) the deduction of
interest and carrying charges attributable to certain straddle
positions may be deferred. The Treasury Department is authorized
to issue regulations providing for the proper treatment of a
mixed straddle where at least one position is ordinary and at
least one position is capital. No such regulations have yet been
issued. Various elections are available to the Fund which may
mitigate the effects of the straddle rules, particularly with
respect to mixed straddles. In general, the straddle rules
described above do not apply to any straddles held by the Fund
all of the offsetting positions of which consist of section 1256
contracts.
Taxation of Foreign Shareholders
The foregoing discussion relates only to United States
federal income tax law as it affects shareholders who are United
States citizens or residents or United States corporations. The
effects of federal income tax law on shareholders who are non-
resident alien individuals or foreign corporations may be
substantially different. Foreign investors should therefore
consult their counsel for further information as to the United
States tax consequences of receipt of income from the Fund.
Other Taxation
The Fund may be subject to state and local taxes.
________________________________________________________________
BROKERAGE AND PORTFOLIO TRANSACTIONS
________________________________________________________________
The management of the Fund has the responsibility for
allocating its brokerage orders and may direct orders to any
broker. It is the Fund's general policy to seek favorable net
prices and prompt reliable execution in connection with the
purchase or sale of all portfolio securities. In the purchase
and sale of over-the-counter securities, it is the Fund's policy
55
<PAGE>
to use the primary market makers except when a better price can
be obtained by using a broker. The Board of Directors has
approved, as in the best interests of the Fund and the
shareholders, a policy of considering, among other factors, sales
of the Fund's shares as a factor in the selection of broker-
dealers to execute portfolio transactions, subject to best
execution. The Adviser is authorized under the Advisory
Agreement to place brokerage business with such brokers and
dealers. The use of brokers who supply supplemental research and
analysis and other services may result in the payment of higher
commissions than those available from other brokers and dealers
who provide only the execution of portfolio transactions. In
addition, the supplemental research and analysis and other
services that may be obtained from brokers and dealers through
which brokerage transactions are affected may be useful to the
Adviser in connection with advisory clients other than the Fund.
Investment decisions for the Fund are made independently
from those for other investment companies and other advisory
accounts managed by the Adviser. It may happen, on occasion,
that the same security is held in the portfolio of the Fund and
one or more of such other companies or accounts. Simultaneous
transactions are likely when several funds or accounts are
managed by the same Adviser, particularly when a security is
suitable for the investment objectives of more than one of such
companies or accounts. When two or more companies or accounts
managed by the Adviser are simultaneously engaged in the purchase
or sale of the same security, the transactions are allocated to
the respective companies or accounts both as to amount and price,
in accordance with a method deemed equitable to each company or
account. In some cases this system may adversely affect the
price paid or received by the Fund or the size of the position
obtainable for the Fund.
Allocations are made by the officers of the Fund or of
the Adviser. Purchases and sales of portfolio securities are
determined by the Adviser and are placed with broker-dealers by
the order department of the Adviser.
The extent to which commissions that will be charged by
broker-dealers selected by the Fund may reflect an element of
value for research cannot presently be determined. To the extent
that research services of value are provided by broker-dealers
with or through whom the Fund places portfolio transactions, the
Adviser may be relieved of expenses which it might otherwise
bear. Research services furnished by broker-dealers could be
useful and of value to the Adviser in servicing its other clients
as well as the Fund; but, on the other hand, certain research
services obtained by the Adviser as a result of the placement of
portfolio brokerage of other clients could be useful and of value
to it in serving the Fund. Consistent with the Conduct Rules of
56
<PAGE>
the National Association of Securities Dealers, Inc. and subject
to seeking best execution, the Fund may consider sales of shares
of the Fund or other investment companies managed by the Adviser
as a factor in the selection of brokers to execute portfolio
transactions for the Fund.
The Fund may from time to time place orders for the
purchase or sale of securities (including listed call options)
with Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
an affiliate of the Adviser, and with brokers which may have
their transactions cleared or settled, or both, by the Pershing
Division of DLJ for which DLJ may receive a portion of the
brokerage commissions. In such instances, the placement of
orders with such brokers would be consistent with the Fund's
objective of obtaining best execution and would not be dependent
upon the fact that DLJ is an affiliate of the Adviser.
During the fiscal years ended in 1996, 1995 and 1994,
the Fund incurred brokerage commissions amounting in the
aggregate to $875,673, $347,909 and $148,540, respectively.
During the fiscal years ended November 30, 1996, 1995 and 1994,
brokerage commissions amounting in the aggregate to $0, $0 and
$0, respectively, were paid to DLJ, and brokerage commissions
amounting in the aggregate to $0, $0 and $0, respectively, were
paid to brokers utilizing the Pershing Division of DLJ. During
the fiscal year ended October 31, 1996, the brokerage commissions
paid to DLJ constituted 0% of the Fund's aggregate brokerage
commissions and the brokerage commissions paid to brokers
utilizing the Pershing Division of DLJ constituted 0% of the
Fund's aggregate brokerage commissions. During the fiscal year
ended October 31, 1996, of the Fund's aggregate dollar amount of
brokerage transactions involving the payment of commissions of 0%
were effected through DLJ and 0% were effected through brokers
utilizing the Pershing Division of DLJ. During the fiscal year
ended October 31, 1996, transactions in the portfolio securities
of the Fund aggregating $477,629,446 with associated brokerage
commissions of approximately $788,106 were allocated to persons
or firms supplying research services to the Fund or the Adviser.
________________________________________________________________
GENERAL INFORMATION
________________________________________________________________
Capitalization
The authorized capital stock of the Fund currently
consists of 3,000,000,000 shares of Class A Common Stock,
3,000,000,000 shares of Class B Common Stock, 3,000,000,000
shares of Class C Common Stock and 3,000,000,000 shares of
Advisor Class Common Stock , each having a par value of $.001 per
57
<PAGE>
share. All shares of the Fund, when issued, are fully paid and
non-assessable. The Directors are authorized to reclassify and
issue any unissued shares to any number of additional series and
classes without shareholder approval. Accordingly, the Directors
in the future, for reasons such as the desire to establish one or
more additional portfolios with different investment objectives,
policies or restrictions, may create additional classes or series
of shares. Any issuance of shares of another class or series
would be governed by the 1940 Act and the law of the State of
Maryland. If shares of another series were issued in connection
with the creation of a second portfolio, each share of either
portfolio would normally be entitled to one vote for all
purposes. Generally, shares of both portfolios would vote as a
single series on matters, such as the election of Directors, that
affected both portfolios in substantially the same manner. As to
matters affecting each portfolio differently, such as approval of
the Investment Advisory Contract and changes in investment
policy, shares of each portfolio would vote as a separate series.
At October 3, 1997, there were 5,967,269 shares of
common stock of the Fund outstanding, all of which were Class A
shares.
In a filing made with the Securities and Exchange
Commission (the "Commission") on April 7, 1997, Bowling Portfolio
Management, Inc., 2651 Observatory Avenue, Cincinnati, Ohio
45208-2040, reported beneficial ownership of 740,328 shares or
approximately 12.4%, of the Fund's common stock. As of
August 21, 1997, Nomura Securities Co. Ltd., 9-1, Nihonbashi 1-
Chrome, Chou-Ku, Tokyo 103, Japan, held of record 327,600 shares,
or approximately 5.5%, of the Fund's common stock.
Procedures for calling a shareholders' meeting for the
removal of Directors of the Fund, similar to those set forth in
Section 16(c) of the 1940 Act will be available to shareholders
of the Fund. The rights of the holders of shares of a series may
not be modified except by the vote of a majority of the
outstanding shares of such series.
Custodian
Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts 02109-3661 ("Brown Brothers") will act as the
Fund's custodian. The Fund's securities and cash are held by
Brown Brothers pursuant to a custodian agreement. Rules adopted
under the 1940 Act permit the Fund to maintain its securities and
cash in the custody of certain eligible banks and securities
depositories.
58
<PAGE>
Principal Underwriter
Alliance Fund Distributors, Inc., 1345 Avenue of the
Americas, New York, New York 10105, serves as the Fund's
Principal Underwriter, and as such may solicit orders from the
public to purchase shares of the Fund. Under the Distribution
Services Agreement, the Fund has agreed to indemnify the
Principal Underwriter, in the absence of its willful misfeasance,
bad faith, gross negligence or reckless disregard of its
obligations thereunder, against certain civil liabilities,
including liabilities under the Securities Act of 1933, as
amended.
Counsel
Legal matters in connection with the issuance of the
shares offered hereby are passed upon by Seward & Kissel, New
York, New York. Seward & Kissel has relied upon the opinion of
Venable, Baetjer and Howard, LLP, Baltimore, Maryland, for
matters relating to Maryland law.
Independent Auditors
Ernst & Young LLP, New York, New York, has been
appointed as independent auditors for the Fund.
Performance Information
From time to time the Fund advertises its "total
return." Computed separately for each class, the Fund's "total
return" is its average annual compounded total return for its
most recently completed one, five and ten-year periods (or the
period since the Fund's inception). The Fund's total return for
such a period is computed by finding, through the use of a
formula prescribed by the Securities and Exchange Commission, the
average annual compounded rate of return over the period that
would equate an assumed initial amount invested to the value of
such investment at the end of the period. For purposes of
computing total return, income dividends and capital gains
distributions paid on shares of the Fund are assumed to have been
reinvested when paid and the maximum sales charge applicable to
purchases of Fund shares is assumed to have been paid.
From June 1, 1990 through October 3, 1997, the Fund
operated as a closed-end investment company. Effective after the
close of business on that date, the Fund commenced operations as
an open-end investment company and all outstanding shares of the
Fund were reclassified as Class A shares. The Fund's average
annual compounded total return based on net asset value for
Class A shares for the one- and five-year periods ended April 30,
59
<PAGE>
1997, and from the inception of the Fund through that date, were
13.08%, 7.04% and 3.80%, respectively.
The Fund's total return is computed separately for
Class A, Class B, Class C and Advisor Class shares. The Fund's
total return is not fixed and will fluctuate in response to
prevailing market conditions or as a function of the type and
quality of the securities in the Fund's portfolio and the Fund's
expenses. Total return information is useful in reviewing the
Fund's performance, but such information may not provide a basis
for comparison with bank deposits or other investments which pay
a fixed yield for a stated period of time. An investor's
principal invested in the Fund is not fixed and will fluctuate in
response to prevailing market conditions.
Advertisements quoting performance ratings of the Fund
as measured by financial publications or independent
organizations such as Lipper Analytical Services, Inc. and
Morningstar, Inc. and advertisements presenting the historical
record of payments of income dividends by the Fund may also from
time to time be sent to investors or placed in newspapers,
magazines such as Barrons, Business Week, Changing Times, Forbes,
Investor's Daily, Money Magazine, The New York Times and The Wall
Street Journal or other media on behalf of the Fund.
Additional Information
Any shareholder inquiries may be directed to the
shareholder's broker or to Alliance Fund Services, Inc. at the
address or telephone numbers shown on the front cover of this
Statement of Additional Information. This Statement of
Additional Information does not contain all the information set
forth in the Registration Statement filed by the Fund with the
Securities and Exchange Commission under the Securities Act of
1933. Copies of the Registration Statement may be obtained at a
reasonable charge from the Securities and Exchange Commission or
may be examined, without charge, at the offices of the Securities
and Exchange Commission in Washington, D.C.
60
00250070.AT6
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-94.6%
AUSTRALIA-2.3%
Brambles Industries, Ltd. 142,000 $ 2,351,833
CANADA-6.7%
Laidlaw, Inc. Cl. B. (a) 255,000 2,996,250
Laidlaw, Inc. Cl. B. 25,000 293,635
Philip Environmental, Inc. (b) 329,000 3,422,611
------------
6,712,496
FRANCE-2.4%
Generale des Eaux 20,000 2,390,571
JAPAN-1.9%
Ebara Corp. 135,000 1,945,860
NETHERLANDS-0.6%
Thermo Eurotech (b) (c) 165,000 583,380
UNITED STATES-80.7%
Allied Waste Industries, Inc. (b) 515,000 4,667,188
American Disposal Services, Inc. (b) 675,000 10,800,000
Culligan Water Technologies, Inc. (b) 110,000 4,125,000
Cuno, Inc. (b) 60,000 960,000
Cytec Industries, Inc. (b) 109,000 3,896,750
EMCOR Group, Inc. (b) 290,000 4,241,250
GNI Group, Inc. (b) 115,000 704,375
International Alliance Services (b) 40,800 408,000
International Technology Corp. (b) 1,600,000 3,800,000
Ionics, Inc. (b) 12,000 552,000
Landec Corp. (b) 600,000 5,325,000
Newpark Resources, Inc. (b) 110,000 4,125,000
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
Osmonics, Inc. (b) 31,000 $ 658,750
Polymer Group (b) 220,000 2,805,000
Republic Industries, Inc. (b) 300,000 9,337,500
Superior Services, Inc. (b) 35,000 603,750
Tetra Technologies, Inc. (b) 70,000 1,461,250
Thermatrix, Inc. (b) 30,000 300,000
Thermo Fibergen, Inc. (b) 70,000 883,750
Thermo Power Corp. (b) 175,000 1,673,438
Trex Medical Corp. (b) 35,000 616,875
UCAR International, Inc. 90,000 3,521,250
United Waste Systems, Inc. (b) 140,000 4,812,500
U.S. Filter Corp. (b) 170,000 5,865,000
USA Waste Services, Inc. (b) 150,000 4,800,000
------------
80,943,626
Total Common Stocks
(cost $85,791,431) 94,927,766
COMMERCIAL PAPER-4.8%
UNITED STATES-4.8%
American Express Co.
5.28%, 11/07/96 (d) 3,700 3,696,744
Prudential Insurance Co. of America
5.25%, 11/05/96 (d) 1,100 1,099,358
Total Commercial Paper
(amortized cost $4,796,102) 4,796,102
TOTAL INVESTMENTS-99.4%
(cost $90,587,533) 99,723,868
Other assets less liabilities-0.6% 546,936
NET ASSETS-100% $100,270,804
(a) Foreign security denominated in U.S. dollars.
(b) Non-income producing security.
(c) Restricted security, valued at fair value. (See Notes A and E.)
(d) Market yield effective at purchase date.
See notes to financials.
5
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $90,587,533) $ 99,723,868
Cash 27,836
Receivable for investment securities sold 2,510,721
Dividends receivable 66,200
Prepaid expenses 2,880
Total assets 102,331,505
LIABILITIES
Payable for investment securities purchased 1,567,538
Payable for capital stock redeemed 210,821
Management fee payable 94,278
Accrued expenses 188,064
Total liabilities 2,060,701
NET ASSETS $100,270,804
COMPOSITION OF NET ASSETS
Capital stock, at par $ 60,850
Additional paid-in capital 84,935,027
Accumulated net realized gain on investments and foreign
currency transactions 6,138,329
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 9,136,598
$100,270,804
NET ASSET VALUE PER SHARE (based on 6,084,969 shares outstanding) $16.48
See notes to financial statements.
6
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
INVESTMENT INCOME
Dividends(net of foreign taxes withheld of $26,171) $ 568,489
Interest 159,711 $ 728,200
EXPENSES
Management fee 1,073,769
Custodian 175,519
Audit and legal 98,499
Directors' fees 66,715
Transfer agency 37,577
Registration 32,504
Printing 23,481
Miscellaneous 53,874
Total expenses 1,561,938
Net investment loss (833,738)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 20,448,020
Net realized loss on foreign currency transactions (565,933)
Net change in unrealized appreciation of:
Investments 6,304,365
Foreign currency denominated assets and liabilities (1,382)
Net gain on investments and foreign currency transactions 26,185,070
NET INCREASE IN NET ASSETS FROM OPERATIONS $25,351,332
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss) $ (833,738) $ 170,945
Net realized gain on investments and foreign
currency transactions 19,882,087 348,367
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities 6,302,983 3,795,897
Net increase in net assets from operations 25,351,332 4,315,209
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (138,142) -0-
CAPITAL STOCK TRANSACTIONS
Repurchase of fund shares (10,359,153) -0-
Total increase 14,854,037 4,315,209
NET ASSETS
Beginning of year 85,416,767 81,101,558
End of year (including undistributed net
investment income of $116,215 at
October 31, 1995) $100,270,804 $85,416,767
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Global Environment Fund, Inc. (the "Fund"), is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
All securities listed on an exchange for which market quotations are readily
available are valued at the closing price on the exchange on the day of
valuation or, if no such closing price is available, at the mean of the last
bid and ask price quoted on such day. Securities for which market quotations
are not readily available and restricted securities are valued in good faith at
fair value using methods determined by the Board of Directors. In determining
fair value, consideration is given to cost, operating and other financial data.
Short-term debt securities which mature in 60 days or less are valued at
amortized cost which approximates market value, unless this method does not
represent fair value.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when earned or accrued.
Net realized loss on foreign currency transactions represents foreign exchange
gains and losses from the holding of foreign currencies, currency gains or
losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes receivable on the Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net change in unrealized appreciation
(depreciation) of foreign currency denominated assets and liabilities
represents net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates.
3. TAXES
It is the Fund's policy to meet the requirements of the U.S. Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for Federal income or excise taxes are
required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the applicable tax requirements.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
6. RECLASSIFICATION OF COMPONENTS OF NET ASSETS
As of October 31, 1996, the Fund reclassified certain components of net assets.
The reclassification resulted in a net decrease in accumulated net investment
loss of $855,665, and a net decrease in accumulated net realized gain on
investments and foreign currency transactions of $855,665. This
reclassification was the result of permanent book to tax differences resulting
from foreign currency and short-term gains and had no effect on net assets.
NOTE B: MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an Investment Management and Administration Agreement, the Fund pays
Alliance Capital Management L.P., (the "Investment Manager"), a fee calculated
weekly and paid monthly, at an annualized rate of 1.10% of the Fund's average
weekly net assets up to $100 million, .95 of 1% of the next $100 million of the
Fund's average weekly net assets, and .80 of 1% of the Fund's average weekly
net assets over $200 million. Brokerage commissions paid on securities
transactions for the year ended October 31, 1996, amounted to $875,673, none of
which was paid to affiliated brokers.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
During the year ended October 31, 1996, the Fund entered into a Shareholder
Inquiry Agreement with Alliance Fund Services, Inc. ("AFS"), an affiliate of
the Investment Manager, whereby the Fund reimburses AFS for costs relating to
servicing phone inquiries for the Fund. The Fund reimbursed AFS $2,106 during
the year ended October 31, 1996 relating to shareholder servicing costs.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
Government obligations) aggregated $257,129,565 and $273,569,819 respectively,
for the year ended October 31, 1996. There were no purchases or sales of U.S.
government or government agency obligations for the year ended October 31,
1996. At October 31, 1996, the cost of securities for federal income tax
purposes was $91,203,530. Accordingly, gross unrealized appreciation of
investments was $14,057,906 and gross unrealized depreciation of investments
was $5,537,568 resulting in net unrealized appreciation of $8,520,338,
(excluding foreign currency transactions).
During the year ended October 31, 1996 the Fund utilized its full prior year
capital loss carryforward of $12,640,912 to reduce realized gains.
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $.01 par value common stock authorized. Of the
6,084,969 shares outstanding at October 31, 1996, the Investment Manager owned
7,169 shares. On March 14, 1996, the Fund initiated a share repurchase program.
The program allows for repurchase over a twelve month period of up to 20% of
the 6,907,169 shares outstanding at March 14, 1996. To date, 822,200 shares
have been repurchased at a total cost of $10,359,153. This includes $41,110 in
commissions paid to PaineWebber Incorporated. The average discount of market
price to net asset value of shares repurchased over the period of March 15,
1996 to October 31, 1996 was 19.87%.
NOTE E: RESTRICTED SECURITY
DATE ACQUIRED COST
--------------- ---------
Thermo Eurotech 3/19/91-4/15/91 $ 529,926
The security shown above, formerly known as Beheersmaatchappij J. Amerika N.V.,
is restricted as to sale and has been valued at fair value in accordance with
the procedures in Note A.
The value of this security at October 31, 1996 was $583,380 representing 0.6%
of net assets.
10
FINANCIAL HIGHLIGHTS
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------
1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.37 $11.74 $10.97 $10.78 $13.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.13)(a) .03 -0- .01 .01
Net realized and unrealized gain (loss)
on investments
and foreign currency transactions 4.26 .60 .77 .18 (2.17)
Net increase (decrease) in net asset
value from operations 4.13 .63 .77 .19 (2.16)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.02) -0- -0- -0- (.10)
Distributions from net realized gain on
investments and foreign currency
transactions -0- -0- -0- -0- (.08)
Total dividends and distributions (.02) -0- -0- -0- (.18)
Net asset value, end of year $16.48 $12.37 $11.74 $10.97 $10.78
Market value, end of year $13.25 $9.375 $9.50 $9.25 $9.50
TOTAL RETURN
Total investment return based on: (b)
Market value 41.60% (1.32)% 2.70% (2.63)% (15.22)%
Net asset value 33.48% 5.37% 7.02% 1.76% (16.59)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $100,271 $85,416 $81,102 $75,805 $74,442
Ratio of expenses to average net assets 1.60% 1.57% 1.67% 1.62% 1.63%
Ratio of net investment income (loss)
to average net assets (.85)% .21% (.04)% .15% .10%
Portfolio turnover rate 268% 109% 42% 25% 41%
Average commission rate (c) $.0313 -- -- -- --
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each year reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment and Cash Purchase Plan. Generally, total
investment return based on net asset value will be higher than total investment
return based on market value in years where there is an increase in the
discount or a decrease in the premium of the market value to the net asset
value from the beginning to the end of such years. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in years where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such years.
(c) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for trades on which
commissions are charged.
11
<PAGE>
ALLIANCE GLOBAL ENVIRONMENT FUND
SEMI-ANNUAL REPORT
APRIL 30, 1997
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-100.1%
AUSTRALIA-5.9%
Brambles Industries, Ltd. 142,000 $ 2,569,138
Memtec, Ltd. 128,000 2,960,000
------------
5,529,138
CANADA-3.7%
Laidlaw, Inc. Cl. B. (a) 255,000 3,474,375
FRANCE-2.9%
Generale des Eaux 20,000 2,785,916
JAPAN-1.8%
Ebara Corp. 135,000 1,744,062
NETHERLANDS-0.5%
Thermo Eurotech (b) (c) 165,000 507,959
UNITED KINGDOM-1.1%
Waste Management International Plc. (a) (b) 135,000 1,063,125
UNITED STATES-84.2%
Allied Waste Industries, Inc. (b) 85,000 945,625
Allwaste, Inc. (b) 700,000 6,212,500
American Disposal Services, Inc. (b) 325,000 5,321,875
American Waste Services, Inc. (b) 500,000 875,000
Costilla Energy, Inc. (b) 240,000 2,880,000
Culligan Water Technologies, Inc. (b) 30,000 1,226,250
Cuno, Inc. (b) 96,100 1,333,388
Cytec Industries, Inc. (b) 50,000 1,881,250
Eastern Environmental Services, Inc. (b) 20,000 257,500
Flanders Corp. (b) 120,000 870,000
GNI Group, Inc. (b) 100,000 700,000
GTS Duratek, Inc. (b) 35,000 280,000
International Alliance
Services (b) 493,400 4,687,300
Wts. 12/31/00 (b) 300,000 498,300
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
International Specialty Products, Inc. (b) 150,000 $ 1,950,000
International Technology Corp. (b) 437,000 3,113,625
Ionics, Inc. (b) 22,000 1,012,000
ITEQ, Inc. (b) 300,000 1,800,000
Landec Corp. (b) 675,000 3,543,750
Morrison Knudsen Corp. (b) 150,000 1,875,000
Newpark Resources, Inc. (b) 125,000 5,609,375
NuCo2, Inc. (b) 240,000 3,300,000
Osmonics, Inc. (b) 45,000 708,750
Polymer Group (b) 139,000 1,772,250
Puro Water Group, Inc. (b) 160,000 1,120,000
Republic Industries, Inc. (b) 230,000 5,706,875
Superior Services, Inc. (b) 150,000 3,300,000
United Waste Systems, Inc. (b) 190,000 6,412,500
U.S. Filter Corp. (b) 215,000 6,530,625
USA Waste Services, Inc. (b) 120,000 3,930,000
------------
79,653,738
Total Common Stocks
(cost $93,187,838) 94,758,313
TIME DEPOSIT-2.7%
Deutsche Bank 5.65%, 5/01/97
(cost $2,600,000) $2,600 2,600,000
TOTAL INVESTMENTS-102.8%
(cost $95,787,838) 97,358,313
Other assets less liabilities-(2.8%) (2,653,373)
NET ASSETS-100% $94,704,940
(a) Foreign security denominated in U.S. dollars.
(b) Non-income producing security.
(c) Restricted security, valued at fair value. (See notes A and E.)
See notes to financials.
5
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED) ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $95,787,838) $97,358,313
Cash 59,206
Receivable for investment securities sold 2,700,417
Dividends and interest receivable 62,425
Prepaid expenses 16,740
Total assets 100,197,101
LIABILITIES
Payable for investment securities purchased 5,221,024
Management fee payable 86,711
Accrued expenses 184,426
Total liabilities 5,492,161
NET ASSETS $94,704,940
COMPOSITION OF NET ASSETS
Capital stock, at par $ 59,673
Additional paid-in capital 83,360,882
Accumulated net investment loss (588,011)
Accumulated net realized gain on investments and foreign
currency transactions 10,304,471
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 1,567,925
$94,704,940
NET ASSET VALUE PER SHARE (based on 5,967,269 shares outstanding) $15.87
See notes to financial statements.
6
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $11,029) $108,738
Interest 49,468 $ 158,206
EXPENSES
Management fee 544,602
Custodian 80,369
Audit and legal 45,288
Directors' fees 29,326
Transfer agency 17,407
Printing 12,022
Registration 6,996
Miscellaneous 10,207
Total expenses 746,217
Net investment loss (588,011)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 10,962,504
Net realized loss on foreign currency transactions (9,561)
Net change in unrealized appreciation of:
Investments (7,565,861)
Foreign currency denominated assets and liabilities (2,812)
Net gain on investments and foreign currency transactions 3,384,270
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,796,259
See notes to financial statements.
7
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
APRIL 30,1997 OCTOBER 31,
(UNAUDITED) 1996
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (588,011) $ (833,738)
Net realized gain on investments and foreign
currency transactions 10,952,943 19,882,087
Net change in unrealized appreciation of
investments and foreign currency denominated
assets and liabilities (7,568,673) 6,302,983
Net increase in net assets from operations 2,796,259 25,351,332
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -0- (138,142)
Net realized gain on investments (6,786,801) -0-
CAPITAL STOCK TRANSACTIONS
Repurchase of fund shares (1,575,322) (10,359,153)
Total increase (decrease) (5,565,864) 14,854,037
NET ASSETS
Beginning of year 100,270,804 85,416,767
End of period $ 94,704,940 $100,270,804
See notes to financial statements.
8
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Global Environment Fund (the "Fund"), is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. The following is a summary of significant accounting
policies followed by the Fund.
1. SECURITY VALUATION
All securities listed on an exchange for which market quotations are readily
available are valued at the closing price on the exchange on the day of
valuation or, if no such closing price is available, at the mean of the last
bid and ask price quoted on such day. Securities for which market quotations
are not readily available and restricted securities are valued in good faith at
fair value using methods determined by the Board of Directors. In determining
fair value, consideration is given to cost, operating and other financial data.
Short-term debt securities which mature in 60 days or less are valued at
amortized cost which approximates market value, unless this method does not
represent fair value.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the quoted bid and asked price of the respective
currency against the U.S. dollar on the valuation date.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when earned or accrued.
Net realized loss on foreign currency transactions represents foreign exchange
gains and losses from the holding of foreign currencies, currency gains or
losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes receivable on the Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net change in unrealized appreciation
(depreciation) of foreign currency denominated assets and liabilities
represents net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates.
3. TAXES
It is the Fund's policy to meet the requirements of the U.S. Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for Federal income or excise taxes are
required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the applicable tax requirements.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as an adjustment to interest income.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
For federal income tax purposes, the Fund's distributions of income and capital
gains are subject to recharacterization, which may include a tax return of
captial, at the end of the year to reflect the final investment results for
that year.
NOTE B: MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under an Investment Management and Administration Agreement, the Fund pays
Alliance Capital Management L.P., (the "Investment Manager"), a fee calculated
weekly and paid monthly, at an annualized rate of 1.10% of the Fund's average
weekly net assets up to $100 million, .95 of 1% of the next $100 million of the
Fund's average weekly net assets, and .80 of 1% of the Fund's average weekly
net assets over $200 million. Brokerage commissions paid on securities
transactions for the six months ended April 30, 1997, amounted to $270,381,
none of which was paid to affiliated brokers.
9
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Manager, the Fund
reimburses AFS for costs relating to servicing phone inquiries for the Fund.
The Fund reimbursed AFS $790 during the six months ended April 30, 1997.
NOTE C: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term and U.S.
government obligations) aggregated $82,692,805 and $86,258,901 respectively,
for the six months ended April 30, 1997. There were no purchases or sales of
U.S. government or government agency obligations for the six months ended April
30, 1997. At April 30, 1997, the cost of securities for federal income tax
purposes was $95,797,215. Accordingly, gross unrealized appreciation of
investments was $10,205,276 and gross unrealized depreciation of investments
was $8,644,178 resulting in net unrealized appreciation of $1,561,098,
(excluding foreign currency transactions).
NOTE D: CAPITAL STOCK
There are 100,000,000 shares of $.01 par value common stock authorized. Of the
5,967,269 shares outstanding at April 30, 1997, the Investment Manager owned
7,169 shares. On March 14, 1996, the Fund initiated a share repurchase program
which allowed for repurchase over a twelve month period of up to 20% of the
6,907,169 shares outstanding at March 14, 1996. During the period ended April
30, 1997, an additional 117,700 shares were repurchased at a cost of
$1,575,322. Through the duration of this program, 939,900 shares were
repurchased at a total cost of $11,934,475, representing 13.60% of the
6,907,169 shares outstanding at March 14, 1996. This includes $46,995 in
commissions paid to PaineWebber Incorporated. The average discount of market
price to net asset value of shares repurchased over the period of March 15,
1996 to March 14, 1997 was 19.6%.
NOTE E: RESTRICTED SECURITY
DATE ACQUIRED COST
--------------- ----------
Thermo Eurotech 3/19/91-4/15/91 $529,926
The security shown above, formerly known as Beheersmaatchappij J. Amerika N.V.,
is restricted as to sale and has been valued at fair value in accordance with
the procedures in Note A.
The value of this security at April 30, 1997 was $507,959 representing 0.5% of
net assets.
NOTE F: SUBSEQUENT EVENT
On April 23, 1997, Alliance Global Environment Fund, Inc. announced that its
Board of Directors has approved and recommended for stockholder approval the
conversion of the fund from a closed-end investment company to an open-end
investment company. The 1997 Annual Meeting of Stockholders of the Fund is
scheduled for July 17, 1997.
10
FINANCIAL HIGHLIGHTS ALLIANCE GLOBAL ENVIRONMENT FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1997 ------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $16.48 $12.37 $11.74 $10.97 $10.78 $13.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.10)(a) (.13)(a) .03 -0- .01 .01
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions .62 4.26 .60 .77 .18 (2.17)
Net increase (decrease) in net asset
value from operations .52 4.13 .63 .77 .19 (2.16)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.02) -0- -0- -0- (.10)
Distributions from net realized gain on
investments and foreign currency
transactions (1.13) -0- -0- -0- -0- (.08)
Total dividends and distributions (1.13) (.02) -0- -0- -0- (.18)
Net asset value, end of period $15.87 $16.48 $12.37 $11.74 $10.97 $10.78
Market value, end of period $14.625 $13.25 $ 9.375 $9.50 $ 9.25 $ 9.50
TOTAL RETURN
Total investment return based on: (b)
Market value 19.70% 41.60% (1.32)% 2.70% (2.63)% (15.22)%
Net asset value 4.43% 33.48% 5.37% 7.02% 1.76% (16.59)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $94,705 $100,271 $85,416 $81,102 $75,805 $74,442
Ratio of expenses to average net assets 1.51%(c) 1.60% 1.57% 1.67% 1.62% 1.63%
Ratio of net investment income (loss)
to average net assets (1.19)%(c) (.85)% .21% (.04)% .15% .10%
Portfolio turnover rate 167% 268% 109% 42% 25% 41%
Average commission rate (d) $.0503 $.0313 -- -- -- --
</TABLE>
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's Dividend Reinvestment and Cash Purchase Plan. Generally, total
investment return based on net asset value will be higher than total investment
return based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net asset
value from the beginning to the end of such years. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in years where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such years.
(c) Annualized.
(d) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on which
commissions are charged. This amount includes commissions paid to foreign
brokers which may materially affect the the rate shown. Amounts paid in foreign
currencies have been converted into US dollars using the prevailing exchange
rate on the date of the transaction.
11
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits.
(a) Financial Statements
Included in the Prospectus: Financial Highlights
Included in the Registrant's Statement of
Additional Information:
Portfolio of Investments - October 31, 1996
Statement of Assets and Liabilities - October 31,
1996
Statement of Operations - Year ended October 31,
1996
Statement of Changes in Net Assets - Year ended
October 31, 1996 and October 31, 1995
Notes to Financial Statements - October 31, 1996
Financial Highlights - October 31, 1996
Report of Independent Auditors
Portfolio of Investments - April 30, 1997
(unaudited)
Statement of Assets and Liabilities - April 30,
1997 (unaudited)
Statement of Operations - November 1, 1996 to
April 30, 1997 (unaudited)
Statement of Changes in Net Assets - November 1,
1996 to April 30, 1997 (unaudited)
Notes to Financial Statements - April 30, 1997
(unaudited)
Financial Highlights - (unaudited)
Included in Part C of the Registration Statement:
All other financial statements or schedules that
are not required or as to which the required
information is shown in the Statement of Assets and
Liabilities or the notes thereto.
(b) Exhibits
(1) (a) Articles of Incorporation*
(b) Certificate of Correction***
(c) Form of Articles of Amendment and
Restatement****
C-1
<PAGE>
(2) (a) By-Laws*
(b) Form of Amended and Related By-Laws****
(3) Not applicable.
(4) Not Applicable.
(5) (a) Investment Management and Administration
Agreement**
(b) Form of Advisory Agreement****
(6) (a) Form of Distribution Services Agreement****
(b) Form of Selected Dealer Agreement between
Alliance Fund Distributors, Inc. and selected
dealers offering shares of Registrant****
(c) Form of Selected Agent Agreement between
Alliance Fund Distributors, Inc. and selected
agents making available shares of
Registrant****
(7) Not applicable.
(8) Custodian Agreement***
(9) (a) Transfer Agency Agreement with State Street
Bank and Trust Company***
(b) Form of Transfer Agency Agreement with
Alliance Fund Services, Inc.****
(10) (a) Opinion and Consent of Seward & Kissel****
(b) Opinion and Consent of Venable, Baetjer and
Howard, LLP****
(11) Consent of Independent Auditors****
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) Form of Rule 12b-1 Plan - See Exhibit 6(a)
above.
C-2
<PAGE>
(16) Schedule for computation of performance
quotations****
(17) Financial Data Schedules****
(18) Form of Rule 18f-3 Plan****
Other Exhibits -- Powers of Attorney****
___________________
* Incorporated by reference from Registrant's Registration
Statement on Form N-2 File Nos. 33-33751 and 811-5993,
as filed with the Securities and Exchange Commission on
March 12, 1990.
** Incorporated by reference from Registrant's
Pre-Effective Amendment No. 1 to its Registration
Statement on Form N-2, File Nos. 33-33751 and 811-5993,
as filed with the Securities and Exchange Commission on
April 5, 1990.
*** Incorporated by reference from Registrant's Amendment
No. 3 to its Registration Statement on Form N-2, File
No. 811-5993, as filed with the Securities and Exchange
Commission on April 5, 1991.
**** Filed herewith.
C-3
<PAGE>
ITEM 25. Persons Controlled by or under Common Control with
Registrant.
ITEM 26. Number of Holders of Securities.
As of August 22, 1997, Registrant had 265 record holders
of its shares of Common Stock.
ITEM 27. Indemnification.
It is the Registrant's policy to indemnify its directors
and officers, employees and other agents to the maximum
extent permitted by Section 2-418 of the General
Corporation Law of the State of Maryland, which is
incorporated by reference herein, and as set forth in
Article EIGHTH of Registrant's Charter, filed as
Exhibit 1(c) hereto, Article VII and Article VIII of
Registrant's Amended and Restated By-Laws, filed as
Exhibit 2(b) hereto, and Section 10 of the proposed
Distribution Services Agreement, filed as Exhibit 6(a)
hereto. The Adviser's liability for any loss suffered
by the Registrant or its shareholders is set forth in
Section 4 of the proposed Advisory Agreement, filed as
Exhibit 5(b) hereto.
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection
with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of
whether such indemnification by it is against public
policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
In accordance with Release No. IC-11330 (September 2,
1980), the Registrant will indemnify its directors,
officers, investment manager and principal underwriters
only if (1) a final decision on the merits was issued by
C-4
<PAGE>
the court or other body before whom the proceeding was
brought that the person to be indemnified (the
"indemnitee") was not liable by reason or willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
office ("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the facts,
that the indemnitee was not liable by reason of
disabling conduct, by (a) the vote of a majority of a
quorum of the directors who are neither "interested
persons" of the Registrant as defined in section
2(a)(19) of the Investment Company Act of 1940 nor
parties to the proceeding ("disinterested, non-party
directors"), or (b) an independent legal counsel in a
written opinion. The Registrant will advance attorneys
fees or other expenses incurred by its directors,
officers, investment adviser or principal underwriters
in defending a proceeding, upon the undertaking by or on
behalf of the indemnitee to repay the advance unless it
is ultimately determined that he is entitled to
indemnification and, as a condition to the advance,
(1) the indemnitee shall provide a security for his
undertaking, (2) the Registrant shall be insured against
losses arising by reason of any lawful advances, or
(3) a majority of a quorum of disinterested, non-party
directors of the Registrant, or an independent legal
counsel in a written opinion, shall determine, based on
a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be found
entitled to indemnification.
The Registrant participates in a joint
trustees/directors and officers liability insurance
policy issued by the ICI Mutual Insurance Company.
Coverage under this policy has been extended to
directors, trustees and officers of the investment
companies managed by Alliance Capital Management L.P.
Under this policy, outside trustees and directors are
covered up to the limits specified for any claim against
them for acts committed in their capacities as trustee
or director. A pro rata share of the premium for this
coverage is charged to each investment company and to
the Adviser.
ITEM 28. Business and Other Connections of Investment Adviser.
The descriptions of Alliance Capital Management L.P.
under the captions "Management of the Fund" in the
Prospectus and in the Statement of Additional
Information constituting Parts A and B, respectively, of
C-5
<PAGE>
this Registration Statement are incorporated by
reference herein.
The information as to the directors and executive
officers of Alliance Capital Management Corporation, the
general partner of Alliance Capital Management L.P., set
forth in Alliance Capital Management L.P.'s Form ADV
filed with the Securities and Exchange Commission on
April 21, 1988 (File No. 801-32361) and amended through
the date hereof, is incorporated by reference.
ITEM 29. Principal Underwriters.
(a) Alliance Fund Distributors, Inc. is the
Registrant's Principal Underwriter in connection
with the sale of shares of the Registrant.
Alliance Fund Distributors, Inc. also acts as
Principal Underwriter or Distributor for the
following investment companies:
ACM Institutional Reserves, Inc.
AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Environment Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income
Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance/Regent Sector Opportunity Fund, Inc.
C-6
<PAGE>
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
Fiduciary Management Associates
The Alliance Fund, Inc.
The Alliance Portfolios
(b) The following are the Directors and officers of
Alliance Fund Distributors, Inc., the principal
place of business of which is 1345 Avenue of the
Americas, New York, New York, 10105.
Positions and Offices Positions and Offices
Name With Underwriter With Registrant
____ _____________________ _____________________
Michael J. Laughlin Chairman
Robert L. Errico President
Edmund P. Bergan, Jr. Senior Vice President, Secretary
General Counsel
and Secretary
James S. Comforti Senior Vice President
James L. Cronin Senior Vice President
Daniel J. Dart Senior Vice President
Richard A. Davies Senior Vice President
Managing Director
Byron M. Davis Senior Vice President
Anne S. Drennan Senior Vice President &
Treasurer
Mark J. Dunbar Senior Vice President
Bradley F. Hanson Senior Vice President
Geoffrey L. Hyde Senior Vice President
Robert H. Joseph, Jr. Senior Vice President
and Treasurer
Richard E. Khaleel Senior Vice President
C-7
<PAGE>
Stephen R. Laut Senior Vice President
Daniel D. McGinley Senior Vice President
Ryne A. Nishimi Senior Vice President
Antonios G. Poleondakis Senior Vice President
Robert E. Powers Senior Vice President
Richard K. Saccullo Senior Vice President
Gregory K. Shannahan Senior Vice President
Joseph F. Sumanski Senior Vice President
Peter J. Szabo Senior Vice President
Nicholas K. Willett Senior Vice President
Richard A. Winge Senior Vice President
Jamie A. Atkinson Vice President
Benji A. Baer Vice President
Kenneth F. Barkoff Vice President
Casimir F. Bolanowski Vice President
Timothy W. Call Vice President
Kevin T. Cannon Vice President
John R. Carl Vice President
William W. Collins, Jr. Vice President
Leo H. Cook Vice President
Richard W. Dabney Vice President
John F. Dolan Vice President
Sohaila S. Farsheed Vice President
William C. Fisher Vice President
C-8
<PAGE>
Gerard J. Friscia Vice President &
Controller
Andrew L. Gangolf Vice President and Assistant
Assistant General Secretary
Counsel
Mark D. Gersten Vice President Treasurer and
Chief
Financial
Officer
Joseph W. Gibson Vice President
Charles M. Greenberg Vice President
Alan Halfenger Vice President
William B. Hanigan Vice President
Daniel M. Hazard Vice President
George R. Hrabovsky Vice President
Valerie J. Hugo Vice President
Scott Hutton Vice President
Thomas K. Intoccia Vice President
Larry P. Johns Vice President
Richard D. Keppler Vice President
Gwenn M. Kessler Vice President
Donna M. Lamback Vice President
James M. Liptrot Vice President
James P. Luisi Vice President
Christopher J. MacDonald Vice President
Michael F. Mahoney Vice President
Lori E. Master Vice President
Shawn P. McClain Vice President
Maura A. McGrath Vice President
C-9
<PAGE>
Joanna D. Murray Vice President
Thomas F. Monnerat Vice President
Jeanette M. Nardella Vice President
Nicole Nolan-Koester Vice President
John C. O'Connell Vice President
John J. O'Connor Vice President
Robert T. Pigozzi Vice President
James J. Posch Vice President
Domenick Pugliese Vice President and Assistant
Assistant General Secretary
Counsel
Bruce W. Reitz Vice President
Dennis A. Sanford Vice President
Karen C. Satterberg Vice President
Robert C. Schultz Vice President
Raymond S. Sclafani Vice President
Richard J. Sidell Vice President
Andrew D. Strauss Vice President
Michael J. Tobin Vice President
Joseph T. Tocyloski Vice President
Martha D. Volcker Vice President
Patrick E. Walsh Vice President
William C. White Vice President
Emilie D. Wrapp Vice President and Assistant
Special Counsel Secretary
Charles M. Barrett Assistant Vice President
Robert F. Brendli Assistant Vice President
C-10
<PAGE>
Maria L. Carreras Assistant Vice President
John P. Chase Assistant Vice President
Russell R. Corby Assistant Vice President
John W. Cronin Assistant Vice President
Ralph A. DiMeglio Assistant Vice President
Faith C. Dunn Assistant Vice President
John C. Endahl Assistant Vice President
John E. English Assistant Vice President
Duff C. Ferguson Assistant Vice President
John Grambone Assistant Vice President
Brian S. Hanigan Assistant Vice President
James J. Hill Assistant Vice President
Edward W. Kelly Assistant Vice President
Michael Laino Assistant Vice President
Nicholas J. Lapi Assistant Vice President
Patrick Look Assistant Vice President
& Assistant Treasurer
Richard F. Meier Assistant Vice President
Catherine N. Peterson Assistant Vice President
Carol H. Rappa Assistant Vice President
Clara Sierra Assistant Vice President
Vincent T. Strangio Assistant Vice President
Wesley S. Williams Assistant Vice President
Christopher J. Zingaro Assistant Vice President
Mark R. Manley Assistant Secretary
(c) Not applicable. Registrant is a newly organized
corporation.
C-11
<PAGE>
ITEM 30. Location of Accounts and Records.
The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the rules thereunder
are maintained as follows: journals, ledgers,
securities records and other original records are
maintained principally at the offices of Alliance Fund
Services, Inc., 500 Plaza Drive, Secaucus, New Jersey,
07094 and at the offices of Brown Brothers Harriman &
Co., the Registrant's custodian, 40 Water Street,
Boston, Massachusetts 02109. All other records so
required to be maintained are maintained at the offices
of Alliance Capital Management L.P., 1345 Avenue of the
Americas, New York, New York, 10105.
ITEM 31. Management Services.
Not applicable.
ITEM 32. Undertakings.
(b) Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest report to shareholders, upon
request and without charge.
The Registrant undertakes to provide assistance to
shareholders in communications concerning the
removal of any Director of the Fund in accordance
with Section 16 of the Investment Company Act of
1940.
C-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in The City of New York and the State
of New York, on the 11th day of September, 1997.
Alliance/Global Environment Fund, Inc.
/s/ John D. Carifa
__________________________________
John D. Carifa
Chairman and President
Pursuant to the requirements of the Securities Act of
1933, as amended, this Registration Statement has been signed
below by the following persons in the capacities and on the date
indicated.
Signature Title Date
(1) Principal Executive Officer:
/s/ John D. Carifa Chairman and September 11, 1997
______________________ President
John D. Carifa
(2) Principal Financial
and Accounting Officer:
/s/ Mark D. Gersten Treasurer and September 11, 1997
_____________________ Chief Financial
Mark D. Gersten Officer
(3) A majority of the Directors
John D. Carifa
David H. Dievler
John H. Dobkin
W.H. Henderson
Stig Host
Richard M. Lilly
Alan Stoga
By: /s/ Edmund P. Bergan, Jr. Secretary September 11, 1997
__________________________
Edmund P. Bergan, Jr.
(Attorney-in-fact)
C-13
<PAGE>
INDEX TO EXHIBITS
(1)(c) Form of Articles of Amendment and Restatement
(2)(b) Form of Amended and Related By-Laws
(5)(b) Form of Advisory Agreement
(6)(a) Form of Distribution Services Agreement
(6)(b) Form of Selected Dealer Agreement
(6)(c) Form of Selected Agent Agreement
(9)(b) Form of Transfer Agency Agreement with Alliance Fund
Services, Inc.
(10)(a) Opinion and Consent of Seward & Kissel
(10)(b) Opinion and Consent of Venable, Baejter and Howard, LLP
(11) Consent of Independent Auditors
(15) Form of Rule 12b-1 Plan - See Exhibit 6(a) above
(16) Schedule for computation of performance quotations
(17) Financial Data Schedules
(18) Rule 18f-3 Plan
Other Exhibits - Powers of Attorney
C-14
00250070.AT6
<PAGE>
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,
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
<PAGE>
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
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
2
<PAGE>
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
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
3
<PAGE>
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 or other
amount imposed by the Board of Directors (to the extent
consistent with applicable law). 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.
(c) (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
4
<PAGE>
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 (c), 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 (c) 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 (c) shall
be an amount equal to the net asset value of such shares.
(d) Payment by the Corporation for
shares of stock of the Corporation surrendered to it for
redemption shall be made by the Corporation within seven days of
such surrender out of the funds legally available therefor,
provided that the Corporation may suspend the right of the
stockholders to redeem shares of stock and may postpone the right
of those holders to receive payment for any shares when permitted
or required to do so by applicable statutes or regulations.
Payment of the aggregate price of shares surrendered for
redemption may be made in cash or, at the option of the
Corporation, wholly or partly in such portfolio securities of the
Corporation as the Corporation shall select.
(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
5
<PAGE>
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
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:
6
<PAGE>
(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
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
7
<PAGE>
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
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
8
<PAGE>
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."
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. 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.
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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 ($1,000,000) all of which shares were designated
Common Stock. The total number of shares of capital stock that
the Corporation has authority to issue upon these Articles of
Amendment and Restatement becoming effective is twelve billion
(12,000,000,000) shares, all of the par value of one-tenth of one
cent ($.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
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material respects and that this statement is made under penalties
of perjury.
By:___________________________
John D. Carifa
President
Witness:
_____________________________
Edmund P. Bergan, Jr.
Secretary
11
00250070.AL5
<PAGE>
Amended and Restated
Effective [ ], 1997
BY-LAWS
OF
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
________________
ARTICLE I
Offices
Section 1. Principal Office in Maryland. The
Corporation shall have a principal office in the City of
Baltimore, State of Maryland.
Section 2. Other Offices. The Corporation may have
offices also at such other places within and without the State of
Maryland as the Board of Directors may from time to time
determine or as the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
Section 1. Place of Meeting. Meetings of stockholders
shall be held at such place, either within the State of Maryland
or at such other place within the United States, as shall be
fixed from time to time by the Board of Directors.
Section 2. Annual Meetings. Annual meetings of
stockholders shall be held on a date fixed from time to time by
the Board of Directors not less than ninety nor more than one
hundred twenty days following the end of each fiscal year of the
Corporation, for the election of directors and the transaction of
<PAGE>
any other business within the powers of the Corporation;
provided, however, that the Corporation shall not be required to
hold an annual meeting in any year in which the election of
directors is not required to be acted on by stockholders under
the Investment Company Act of 1940. If the Corporation is so
required to hold a meeting to elect directors, the meeting shall
be held no later than 120 days after the event requiring the
meeting, and the meeting shall be designated as the annual
meeting of stockholders for that year.
Section 3. Notice of Annual Meeting. Written or
printed notice of the annual meeting, stating the place, date and
hour thereof, shall be given to each stockholder entitled to vote
thereat and each other stockholder entitled to notice thereof not
less than ten nor more than ninety days before the date of the
meeting.
Section 4. Special Meetings. Special meetings of
stockholders may be called by the chairman, the president or by
the Board of Directors and shall be called by the secretary upon
the written request of holders of shares entitled to cast not
less than a majority of all the votes entitled to be cast atsuch
meeting. Such request shall state the purpose or purposes of
such meeting and the matters proposed to be acted on thereat. In
the case of such request for a special meeting, upon payment by
such stockholders to the Corporation of the estimated reasonable
cost of preparing and mailing a notice of such meeting, the
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<PAGE>
secretary shall give the notice of such meeting. Notwithstanding
the foregoing, special meetings of stockholders for the purpose
of voting upon the question of removal of any director or
directors of the Corporation shall be called by the secretary
upon the written request of holders of shares entitled to cast
not less than ten percent of all the votes entitled to be cast at
such meeting.
Section 5. Notice of Special Meeting. Written or
printed notice of a special meeting of stockholders, stating the
place, date, hour and purpose thereof, shall be given by the
secretary to each stockholder entitled to vote thereat and each
other stockholder entitled to notice thereof not less than ten
nor more than ninety days before the date fixed for the meeting.
Section 6. Business of Special Meetings. Business
transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice thereof.
Section 7. Quorum. The holders of shares entitled to
cast one-third of the votes entitled to be cast thereat, present
in person or represented by proxy, shall constitute a quorum at
all meetings of the stockholders for the transaction of business,
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 one-third of the
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<PAGE>
shares of stock of each class required to vote as a class on the
matter shall constitute a quorum.
Section 8. Voting. When a quorum is present at any
meeting, the affirmative vote of a majority of the votes cast,
or, with respect to any matter requiring a class vote, the
affirmative vote of a majority of the votes cast of each class
entitled to vote as a class on the matter, shall decide any
question brought before such meeting (except that directors may
be elected by the affirmative vote of a plurality of the votes
cast), unless the question is one upon which by express provision
of the Investment Company Act of 1940, as from time to time in
effect, or other statutes or rules or orders of the Securities
and Exchange Commission or any successor thereto or of the
Articles of Incorporation a different vote is required, in which
case such express provision shall govern and control the decision
of such question.
Section 9. Proxies. Each stockholder shall at every
meeting of stockholders be entitled to one vote in person or by
proxy for each share of the stock having voting power held by
such stockholder, but no proxy shall be voted after eleven months
from its date, unless otherwise provided in the proxy.
Section 10. Record Date. In order that the Corporation
may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, to
express consent to corporate action in writing without a meeting,
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<PAGE>
or to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date which shall be not more than
ninety days and, in the case of a meeting of stockholders, not
less than ten days prior to the date on which the particular
action requiring such determination of stockholders is to be
taken. In lieu of fixing a record date, the Board of Directors
may provide that the stock transfer books shall be closed for a
stated period, but not to exceed, in any case, twenty days. If
the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a
meeting of stockholders, such books shall be closed for at least
ten days immediately preceding such meeting. If no record date
is fixed and the stock transfer books are not closed for the
determination of stockholders: (1) The record date for the
determination of stockholders entitled to notice of, or to vote
at, a meeting of stockholders shall be at the close of business
on the day on which notice of the meeting of stockholders is
mailed or the day thirty days before the meeting, whichever is
the closer date to the meeting; and (2) The record date for the
determination of stockholders entitled to receive payment of a
dividend or an allotment of any rights shall be at the close of
business on the day on which the resolution of the Board of
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<PAGE>
Directors, declaring the dividend or allotment of rights, is
adopted, provided that the payment or allotment date shall not be
more than sixty days after the date of the adoption of such
resolution.
Section 11. Inspectors of Election. The directors, in
advance of any meeting, may, but need not, appoint one or more
inspectors to act at the meeting or any adjournment thereof. If
an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an
inspector fails to appear or act, the vacancy may be filled by
appointment made by the directors in advance of the meeting or at
the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best
of his ability. The inspectors, if any, shall determine the
number of shares outstanding and the voting power of each, the
shares represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate
all votes, ballots or consents, determine the result, and do such
acts as are proper to conduct the election or vote with fairness
to all stockholders. On request of the person presiding at the
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<PAGE>
meeting or any stockholder, the inspector or inspectors, if any,
shall make a report in writing of any challenge, question or
matter determined by him or them and execute a certificate of any
fact found by him or them.
Section 12. Informal Action by Stockholders. Except to
the extent prohibited by 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, any action
required or permitted to be taken at any meeting of stockholders
may be taken without a meeting if a consent in writing, setting
forth such action, is signed by all the stockholders entitled to
vote on the subject matter thereof and any other stockholders
entitled to notice of a meeting of stockholders (but not to vote
thereat) have waived in writing any rights which they may have to
dissent from such action, and such consent and waiver are filed
with the records of the Corporation.
Section 13. Adjournment. Any meeting of the
stockholders may be adjourned from time to time, without notice
other than by announcement at the meeting at which the
adjournment was taken. In the absence of a quorum, the
stockholders present in person or by proxy, by majority vote of
those present and without notice other than by announcement at
the meeting, may adjourn the meeting from time to time as
provided for in this Section 13 of Article II. At any adjourned
meeting at which a quorum shall be present, any action may be
7
<PAGE>
taken that could have been taken at the meeting originally
called. A meeting of the stockholders may not be adjourned
without further notice to a date more than 120 (one hundred and
twenty) days after the original record date determined pursuant
to Section 10 of this Article II.
ARTICLE III
Board of Directors
Section 1. Number of Directors. The number of
directors constituting the entire Board of Directors (which
initially was fixed at one in the Corporation's Articles of
Incorporation) may be increased or decreased from time to time by
the vote of a majority of the entire Board of Directors within
the limits permitted by law but at no time may be more than
twenty, but the tenure of office of a director in office at the
time of any decrease in the number of directors shall not be
affected as a result thereof. The directors shall be elected to
hold offices at the annual meeting of stockholders as provided
for in Section 2 of Article II, except as provided in Section 2
of this Article, and each director shall hold office until his
successor is elected and qualified. Any director may resign at
any time upon written notice to the Corporation. Any director
may be removed, either with or without cause, at any meeting of
stockholders duly called and at which a quorum is present by the
affirmative vote of the majority of the votes entitled to be cast
thereon, and the vacancy in the Board of Directors caused by such
8
<PAGE>
removal may be filled by the stockholders at the time of such
removal. Directors need not be stockholders.
Section 2. Vacancies and Newly-Created Directorships.
Any vacancy occurring in the Board of Directors for any cause
other than by reason of an increase in the number of directors
may be filled by a majority of the remaining members of the Board
of Directors although such majority is less than a quorum. Any
vacancy occurring by reason of an increase in the number of
directors may be filled by a majority of the entire Board of
Directors then in office prior to the increase. A director
elected by the Board of Directors to fill a vacancy shall be
elected to hold office until the next annual meeting of
stockholders as provided in Section 2 of Article II or until his
successor is elected and qualifies.
Section 3. Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the
Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these By-Laws
conferred upon or reserved to the stockholders.
Section 4. Meetings. The Board of Directors of the
Corporation or any committee thereof may hold meetings, both
regular and special, either within or without the State of
Maryland. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time
9
<PAGE>
to time be determined by the Board of Directors. Special
meetings of the Board of Directors may be called by the chairman,
the president or by two or more directors. Notice of special
meetings of the Board of Directors shall be given by the
secretary to each director at least three days before the meeting
if by mail or at least 24 hours before the meeting if given in
person or by telephone or by telegraph. The notice need not
specify the business to be transacted.
Section 5. Quorum and Voting. During such times when
the Board of Directors shall consist of more than one director, a
quorum for the transaction of business at meetings of the Board
of Directors shall consist of two of the directors in office at
the time but in no event shall a quorum consist of less than one-
third of the entire Board of Directors. The action of a majority
of the directors present at a meeting at which a quorum is
present shall be the action of the Board of Directors. If a
quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 6. Committees. The Board of Directors may
appoint from among its members an executive committee and other
committees of the Board of Directors, each committee to be
composed of one or more of the directors of the Corporation. The
Board of Directors may delegate to such committees any of the
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<PAGE>
powers of the Board of Directors except those which may not by
law be delegated to a committee. Such committee or committees
shall have the name or names as may be determined from time to
time by resolution adopted by the Board of Directors. Unless the
Board of Directors designates one or more directors as alternate
members of any committee, who may replace an absent or
disqualified member at any meeting of the committee, the members
of any such committee present at any meeting and not disqualified
from voting may, whether or not they constitute a quorum, appoint
another member of the Board of Directors to act at the meeting in
the place of any absent or disqualified member of such committee.
At meetings of any such committee, a majority of the members or
alternate members of such committee shall constitute a quorum for
the transaction of business and the act of a majority of the
members or alternate members present at any meeting at which a
quorum is present shall be the act of the committee.
Section 7. Minutes of Committee Meetings. The
committees shall keep regular minutes of their proceedings.
Section 8. Informal Action by Board of Directors and
Committees. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed
by all members of the Board of Directors or of such committee, as
the case may be, and such written consent is filed with the
minutes of proceedings of the Board of Directors or committee,
11
<PAGE>
provided, however, that such written consent shall not constitute
approval of any matter which pursuant to the Investment Company
Act of 1940 and the rules thereunder requires the approval of
directors by vote cast in person at a meeting.
Section 9. Meetings by Conference Telephone. The
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or committee
by means of a conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other at the same time and such
participation shall constitute presence in person at such
meeting, provided, however, that such participation shall not
constitute presence in person with respect to matters which
pursuant to the Investment Company Act of 1940 and the rules
thereunder require the approval of directors by vote cast in
person at a meeting.
Section 10. Fees and Expenses. The directors may be
paid their expenses of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors, a stated salary as director or
such other compensation as the Board of Directors may approve.
No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be
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<PAGE>
allowed like reimbursement and compensation for attending
committee meetings.
ARTICLE IV
Notices
Section 1. General. Notices to directors and
stockholders mailed to them at their post office addresses
appearing on the books of the Corporation shall be deemed to be
given at the time when deposited in the United States mail.
Section 2. Waiver of Notice. Whenever any notice is
required to be given under the provisions of the statutes, of the
Articles of Incorporation or of these By-Laws, a waiver thereof
in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be
deemed the equivalent of notice and such waiver shall be filed
with the records of the meeting. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting
except when the person attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or
convened.
ARTICLE V
Officers
Section 1. General. The officers of the Corporation
shall be chosen by the Board of Directors at its first meeting
after each annual meeting of stockholders as provided in Section
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2 of Article II and shall be a chairman of the Board of
Directors, a president, a secretary and a treasurer. The Board
of Directors may choose also such vice presidents and additional
officers or assistant officers as it may deem advisable. Any
number of offices, except the offices of president and vice
president and chairman and vice president, may be held by the
same person. No officer shall execute, acknowledge or verify any
instrument in more than one capacity if such instrument is
required by law to be executed, acknowledged or verified by two
or more officers.
Section 2. Other Officers and Agents. The Board of
Directors may appoint such other officers and agents as it
desires who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
Section 3. Tenure of Officers. The officers of the
Corporation shall hold office at the pleasure of the Board of
Directors. Each officer shall hold his office until his
successor is elected and qualifies or until his earlier
resignation or removal. Any officer may resign at any time upon
written notice to the Corporation. Any officer elected or
appointed by the Board of Directors may be removed at any time by
the Board of Directors when, in its judgment, the best interests
of the Corporation will be served thereby. Any vacancy occurring
14
<PAGE>
in any office of the Corporation by death, resignation, removal
or otherwise shall be filled by the Board of Directors.
Section 4. Chairman of the Board of Directors. The
chairman of the Board of Directors shall preside at all meetings
of the stockholders and of the Board of Directors. He shall be
the chief executive officer and shall have general and active
management of the business of the Corporation and shall see that
all orders and resolutions of the Board of Directors are carried
into effect. He shall be ex officio a member of all committees
designated by the Board of Directors except as otherwise
determined by the Board of Directors. He shall execute bonds,
mortgages and other contracts requiring a seal, under the seal of
the Corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.
Section 5. President. The president shall act under
the direction of the chairman and in the absence or disability of
the chairman shall perform the duties and exercise the powers of
the chairman. He shall perform such other duties and have such
other powers as the chairman or the Board of Directors may from
time to time prescribe. He shall execute on behalf of the
Corporation, and may affix the seal or cause the seal to be
affixed to, all instruments requiring such execution except to
the extent that signing and execution thereof shall be expressly
15
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delegated by the Board of Directors to some other officer or
agent of the Corporation.
Section 6. Vice Presidents. The vice presidents shall
act under the direction of the chairman and in the absence or
disability of the president shall perform the duties and exercise
the powers of the president. They shall perform such other
duties and have such other powers as the chairman or the Board of
Directors may from time to time prescribe. The Board of
Directors may designate one or more executive vice presidents or
may otherwise specify the order of seniority of the vice
presidents and, in that event, the duties and powers of the
president shall descend to the vice presidents in the specified
order of seniority.
Section 7. Secretary. The secretary shall act under
the direction of the chairman. Subject to the direction of the
chairman he shall attend all meetings of the Board of Directors
and all meetings of stockholders and record the proceedings in a
book to be kept for that purpose and shall perform like duties
for the committees designated by the Board of Directors when
required. He shall give, or cause to be given, notice of all
meetings of stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be
prescribed by the chairman or the Board of Directors. He shall
keep in safe custody the seal of the Corporation and shall affix
16
<PAGE>
the seal or cause it to be affixed to any instrument requiring
it.
Section 8. Assistant Secretaries. The assistant
secretaries in the order of their seniority, unless otherwise
determined by the chairman or the Board of Directors, shall, in
the absence or disability of the secretary, perform the duties
and exercise the powers of the secretary. They shall perform
such other duties and have such other powers as the chairman or
the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The treasurer shall act under
the direction of the chairman. Subject to the direction of the
chairman he shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to
the credit of the Corporation in such depositories as may be
designated by the Board of Directors. He shall disburse the
funds of the Corporation as may be ordered by the chairman or the
Board of Directors, taking proper vouchers for such
disbursements, and shall render to the chairman and the Board of
Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as
treasurer and of the financial condition of the Corporation.
Section 10. Assistant Treasurers. The assistant
treasurers in the order of their seniority, unless otherwise
17
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determined by the chairman or the Board of Directors, shall, in
the absence or disability of the treasurer, perform the duties
and exercise the powers of the treasurer. They shall perform
such other duties and have such other powers as the chairman or
the Board of Directors may from time to time prescribe.
ARTICLE VI
Certificates of Stock
Section 1. General. Every holder of stock of the
Corporation who has made full payment of the consideration for
such stock shall be entitled upon request to have a certificate,
signed by, or in the name of the Corporation by, the chairman,
the president or a vice president and countersigned by the
treasurer or an assistant treasurer or the secretary or an
assistant secretary of the Corporation, certifying the number
and, if additional shares of stock should be authorized, the
class of whole shares of stock owned by him in the Corporation.
Section 2. Fractional Share Interests. The Corporation
may issue fractions of a share of stock. Fractional shares of
stock shall have proportionately to the respective fractions
represented thereby all the rights of whole shares, including the
right to vote, the right to receive dividends and distributions
and the right to participate upon liquidation of the Corporation,
excluding, however, the right to receive a stock certificate
representing such fractional shares.
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Section 3. Signatures on Certificates. Any of or all
the signatures on a certificate may be a facsimile. In case any
officer who has signed or whose facsimile signature has been
placed upon a certificate shall cease to be such officer before
such certificate is issued, it may be issued with the same effect
as if he were such officer at the date of issue. The seal of the
Corporation or a facsimile thereof may, but need not, be affixed
to certificates of stock.
Section 4. Lost, Stolen or Destroyed Certificates. The
Board of Directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of any affidavit of that
fact by the person claiming the certificate or certificates to be
lost, stolen or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate
or certificates, or his legal representative, to give the
Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with
respect to the certificate or certificates alleged to have been
lost, stolen or destroyed.
Section 5. Transfer of Shares. Upon request by the
registered owner of shares, and if a certificate has been issued
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to represent such shares upon surrender to the Corporation or a
transfer agent of the Corporation of a certificate for shares of
stock duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the
duty of the Corporation, if it is satisfied that all provisions
of the Articles of Incorporation, of the By-Laws and of the law
regarding the transfer of shares have been duly complied with, to
record the transaction upon its books, issue a new certificate to
the person entitled thereto upon request for such certificate,
and cancel the old certificate, if any.
Section 6. Registered Owners. The Corporation shall be
entitled to recognize the person registered on its books as the
owner of shares to be the exclusive owner for all purposes
including voting and dividends, and the Corporation shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise provided by the laws of Maryland.
ARTICLE VII
Miscellaneous
Section 1. Reserves. There may be set aside out of any
funds of the Corporation available for dividends such sum or sums
as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet
contingencies, or for such other purpose as the Board of
20
<PAGE>
Directors shall think conducive to the interest of the
Corporation, and the Board of Directors may modify or abolish any
such reserve.
Section 2. Dividends. Dividends upon the stock of the
Corporation may, subject to the provisions of the Articles of
Incorporation and of applicable law, be declared by the Board of
Directors at any time. Dividends may be paid in cash, in
property or in shares of the Corporation's stock, subject to the
provisions of the Articles of Incorporation and of applicable
law.
Section 3. Capital Gains Distributions. The amount and
number of capital gains distributions paid to the stockholders
during each fiscal year shall be determined by the Board of
Directors. Each such payment shall be accompanied by a statement
as to the source of such payment, to the extent required by law.
Section 4. Checks. All checks or demands for money and
notes of the Corporation shall be signed by such officer or
officers or such other person or persons as the Board of
Directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the
Corporation shall be fixed by resolution of the Board of
Directors.
Section 6. Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Maryland." The seal
21
<PAGE>
may be used by causing it or a facsimile thereof to be impressed
or affixed or in another manner reproduced.
Section 7. Insurance Against Certain Liabilities. The
Corporation shall not bear the cost of insurance that protects or
purports to protect directors and officers of the Corporation
against any liabilities to the Corporation or its security
holders to which any such director or officer 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 office.
ARTICLE VIII
Indemnification
Section 1. Indemnification of Directors and Officers.
The Corporation shall indemnify its directors to the full extent
that indemnification of directors is permitted by the Maryland
General Corporation Law. The Corporation shall indemnify its
officers to the same extent as its directors and to such further
extent as is consistent with law. The Corporation shall
indemnify its directors and officers who while serving as
directors or officers also serve at the request of the
Corporation as a director, officer, partner, trustee, employee,
agent or fiduciary of another corporation, partnership, joint
venture, trust, other enterprise or employee benefit plan to the
full extent consistent with law. The indemnification and other
rights provided by this Article shall continue as to a person who
22
<PAGE>
has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a
person. This Article shall not protect any such person against
any liability to the Corporation or any stockholder thereof to
which such person 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 office ("disabling
conduct").
Section 2. Advances. Any current or former director or
officer of the Corporation seeking indemnification within the
scope of this Article shall be entitled to advances from the
Corporation for payment of the reasonable expenses incurred by
him in connection with the matter as to which he is seeking
indemnification in the manner and to the full extent permissible
under the Maryland General Corporation Law. The person seeking
indemnification shall provide to the Corporation a written
affirmation of his good faith belief that the standard of conduct
necessary for indemnification by the Corporation has been met and
a written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not
been met. In addition, at least one of the following additional
conditions shall be met: (a) the person seeking indemnification
shall provide a security in form and amount acceptable to the
Corporation for his undertaking; (b) the Corporation is insured
against losses arising by reason of the advance; or (c) a
23
<PAGE>
majority of a quorum of directors of the Corporation who are
neither "interested persons" as defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended, nor parties to
the proceeding ("disinterested non-party directors"), or
independent legal counsel, in a written opinion, shall have
determined, based on a review of facts readily available to the
Corporation at the time the advance is proposed to be made, that
there is reason to believe that the person seeking
indemnification will ultimately be found to be entitled to
indemnification.
Section 3. Procedure. At the request of any person
claiming indemnification under this Article, the Board of
Directors shall determine, or cause to be determined, in a manner
consistent with the Maryland General Corporation Law, whether the
standards required by this Article have been met.
Indemnification shall be made only following: (a) a final
decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (b) in the absence of
such a decision, a reasonable determination, based upon a review
of the facts, that the person to be indemnified was not liable by
reason of disabling conduct by (i) the vote of a majority of a
quorum of disinterested non-party directors or (ii) an
independent legal counsel in a written opinion.
24
<PAGE>
Section 4. Indemnification of Employees and Agents.
Employees and agents who are not officers or directors of the
Corporation may be indemnified, and reasonable expenses may be
advanced to such employees or agents, as may be provided by
action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940.
Section 5. Other Rights. The Board of Directors may
make further provision consistent with law for indemnification
and advance of expenses to directors, officers, employees and
agents by resolution, agreement or otherwise. The
indemnification provided by this Article shall not be deemed
exclusive of any other right, with respect to indemnification or
otherwise, to which those seeking indemnification may be entitled
under any insurance or other agreement or resolution of
stockholders or disinterested directors or otherwise. The rights
provided to any person by this Article shall be enforceable
against the Corporation by such person who shall be presumed to
have relied upon it in serving or continuing to serve as a
director, officer, employee, or agent as provided above.
Section 6. Amendments. References in this Article are
to the Maryland General Corporation Law and to the Investment
Company Act of 1940 as from time to time amended. No amendment
of these By-laws shall affect any right of any person under this
Article based on any event, omission or proceeding prior to the
amendment.
25
<PAGE>
ARTICLE IX
Amendments
The Board of Directors shall have the power to make,
alter and repeal By-laws of the Corporation.
26
00250070.AL8
<PAGE>
ADVISORY AGREEMENT
Alliance Global Environment Fund, Inc.
1345 Avenue Of The Americas
New York, New York 10105
, 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 an open-end, non-diversified management
investment company registered under the Investment Company Act of
1940, 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 more
fully described in the prospectus and the statement of additional
information constituting parts of the Registration Statement
filed on our behalf under the Securities Act of 1933, 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
<PAGE>
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 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 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 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 report to our Board of Directors at
each meeting thereof all changes in the portfolio assets since
2
<PAGE>
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 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 Board of
Directors as well as the limitations imposed by our Charter and
in our Registration Statement, 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) 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.
3
<PAGE>
You or your affiliates will also provide persons, who may be our
officers, to render such clerical, accounting and other services
to us as we may from time to time request of you. Such personnel
may be employees of you or your affiliates. We will pay to you
or your affiliates the cost of such personnel for rendering such
services to us, provided that all time devoted to the investment
or 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 we shall be responsible and
hereby assume the obligation for payment of all of our expenses,
including: (a) payment of the fee payable to you under
4
<PAGE>
paragraph 5 hereof; (b) custody, transfer and dividend disbursing
expenses; (c) fees of directors who are not your affiliated
persons; (d) legal and auditing expenses; (e) clerical,
accounting and other office costs; (f) the cost of personnel
providing services to us, as provided in subparagraph (d) of
paragraph 2 above; (g) costs of printing our prospectuses and
shareholder reports; (h) cost of maintenance of our corporate
existence; (i) interest charges, taxes, brokerage fees and
commissions; (j) costs of stationery and supplies; (k) expenses
and fees related to registration and filing with the Securities
and Exchange Commission and with state regulatory authorities;
and (l) such promotional 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
5
<PAGE>
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 daily
net assets up to $100,000,000, .95% of our next $100 million in
average daily net assets and .80% of our average daliy assets in
excess of $200,000,000. 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 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 remain in effect until [ ] and may be
continued for successive twelve-month periods (computed from each
[ ] 1 thereafter) with respect to each portfolio provided
that such continuance is specifically approved at least annually
by the Board of Directors or by the vote of a majority of the
outstanding voting securities of such portfolio (as defined in
the Act), and, in either case, by a majority of 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
6
<PAGE>
approved as to a portfolio, you may continue to render to such
portfolio the services described herein in the manner and to the
extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this agreement, it shall
supersede all previous agreements between us covering the subject
matter hereof. This agreement may be terminated with respect to
any portfolio at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities (as so
defined) of such portfolio, or by a vote of the Board of
Directors on 60 days' written notice to you, or by you with
respect to any portfolio on 60 days' written notice to us.
7. This agreement may not be transferred, assigned,
sold or in any 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
terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing
law and any interpretation thereof contained in rules or
regulations promulgated by the Securities and Exchange Commission
thereunder.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your employees, or
any of the officers or directors of Alliance Capital Management
Corporation, your general partner, who may also be a Director,
7
<PAGE>
officer or employee of ours, or persons otherwise affiliated with
us (within the meaning of the Act) to engage in any other
business or to devote time and attention to the management or
other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other
trust, corporation, firm, individual or association.
(b) You will notify us of any change in the general
partners of your partnership within a reasonable time after such
change.
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 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.
8
<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__________________________
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
By_______________________________
9
00250070.AL6
<PAGE>
DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of _______________, 1997 between
ALLIANCE GLOBAL ENVIRONMENT FUND, INC., a Maryland corporation
(the "Fund"), and ALLIANCE FUND DISTRIBUTORS, INC., a Delaware
corporation (the "Underwriter").
WITNESSETH
WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"),
as a non-diversified, open-end management investment company and
it is in the interest of the Fund to offer its shares for sale
continuously;
WHEREAS, the Underwriter is a securities firm engaged in
the business of selling shares of investment companies either
directly to purchasers or through other securities dealers;
WHEREAS, the Fund and the Underwriter wish to enter into
an agreement with each other with respect to the continuous
offering of the Fund's shares in order to promote the growth of
the Fund and facilitate the distribution of its shares;
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Appointment of the Underwriter. The Fund
hereby appoints the Underwriter as the principal underwriter and
distributor of the Fund to sell to the public shares of its
Class A Common Stock (the "Class A shares"), Class B Common Stock
(the "Class B shares"), Class C Common Stock (the "Class C
shares"), Advisor Class Common Stock (the "Advisor Class shares")
and shares of such other class or classes as the Fund and the
Underwriter shall from time to time mutually agree in writing
shall become subject to this Agreement ("New shares") (the
Class A shares, the Class B shares, the Class C shares, the
Advisor Class shares and New shares shall be collectively
referred to herein as the "shares") and hereby agrees during the
term of this Agreement to sell shares to the Underwriter upon the
terms and conditions herein set forth.
SECTION 2. Exclusive Nature of Duties. The Underwriter
shall be the exclusive representative of the Fund to act as
principal underwriter and distributor of the shares except that
the rights given under this Agreement to the Underwriter shall
not apply to shares issued in connection with (a) the merger or
consolidation of any other investment company with the Fund,
(b) the Fund's acquisition by purchase or otherwise of all or
substantially all of the assets or stock of any other investment
<PAGE>
company or (c) the reinvestment in shares by the Fund's
shareholders of dividends or other distributions.
SECTION 3. Purchase of Shares from the Fund.
(a) The Underwriter shall have the right to buy from
the Fund the shares needed to fill unconditional orders for
shares of the Fund placed with the Underwriter by investors or
securities dealers, depository institutions or other financial
intermediaries acting as agent for their customers. The price
which the Underwriter shall pay for the shares so purchased from
the Fund shall be the net asset value, determined as set forth in
Section 3(d) hereof, used in determining the public offering
price on which such orders are based.
(b) The shares are to be resold by the Underwriter to
investors at a public offering price, as set forth in Section
3(c) hereof, or to securities dealers, depository institutions or
other financial intermediaries acting as agent for their
customers having agreements with the Underwriter upon the terms
and conditions set forth in Section 8 hereof.
(c) The public offering price of the shares, i.e., the
price per share at which the Underwriter or selected dealers or
selected agents (each as defined in Section 8(a) below) may sell
shares to the public, shall be the public offering price
determined in accordance with the then current Prospectus and
Statement of Additional Information of the Fund (the "Prospectus"
and "Statement of Additional Information," respectively) under
the Securities Act of 1933, as amended (the "Securities Act"),
relating to such shares, but not to exceed the net asset value at
which the Underwriter is to purchase such shares, plus, in the
case of Class A shares, an initial sales charge equal to a
specified percentage or percentages of the public offering price
of the Class A shares as set forth in the Prospectus. Class A
shares may be sold without such a sales charge to certain classes
of persons as from time to time set forth in the Prospectus and
Statement of Additional Information. All payments to the Fund
hereunder shall be made in the manner set forth in Section 3(f)
hereof.
(d) The net asset value of shares of the Fund shall be
determined by the Fund, or any agent of the Fund, as of the close
of regular trading on the New York Stock Exchange on each Fund
business day in accordance with the method set forth in the
Prospectus and Statement of Additional Information and guidelines
established by the Directors of the Fund.
(e) The Fund reserves the right to suspend the offering
of its shares at any time in the absolute discretion of its
Directors.
2
<PAGE>
(f) The Fund, or any agent of the Fund designated in
writing to the Underwriter by the Fund, shall be promptly advised
by the Underwriter of all purchase orders for shares received by
the Underwriter. Any order may be rejected by the Fund;
provided, however, that the Fund will not arbitrarily or without
reasonable cause refuse to accept or confirm orders for the
purchase of shares. The Fund (or its agent) will confirm orders
upon their receipt, will make appropriate book entries and upon
receipt by the Fund (or its agent) of payment thereof, will
deliver deposit receipts or certificates for such shares pursuant
to the instructions of the Underwriter. Payment shall be made to
the Fund in New York Clearing House funds. The Underwriter
agrees to cause such payment and such instructions to be
delivered promptly to the Fund (or its agent).
SECTION 4. Repurchase or Redemption of Shares
by the Fund.
(a) Any of the outstanding shares may be tendered for
redemption at any time, and the Fund agrees to redeem or
repurchase the shares so tendered in accordance with its
obligations as set forth in Section 8(d) of ARTICLE FIFTH of its
Articles of Amendment and Restatement and in accordance with the
applicable provisions set forth in the Prospectus and Statement
of Additional Information. The price to be paid to redeem or
repurchase the shares shall be equal to the net asset value
calculated in accordance with the provisions of Section 3(c)
hereof, less any applicable sales charge. All payments by the
Fund hereunder shall be made in the manner set forth below. The
redemption or repurchase by the Fund of any of the Class A shares
purchased by or through the Underwriter will not affect the
initial sales charge secured by the Underwriter or any selected
dealer or compensation paid to any selected agent (unless such
selected dealer or selected agent has otherwise agreed with the
Underwriter), in the course of the original sale, regardless of
the length of the time period between purchase by an investor and
his tendering for redemption or repurchase.
The Fund (or its agent) shall pay the total amount of
the redemption price and, except as may be otherwise required by
the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") and any interpretations thereof ("NASD
rules and interpretations"), the deferred sales charges, if any,
pursuant to the instructions of the Underwriter in New York
Clearing House funds on or before the seventh business day
subsequent to its having received the notice of redemption in
proper form.
(b) Redemption of shares or payment may be suspended at
times when the New York Stock Exchange is closed, when trading
thereon is closed, when trading thereon is restricted, when an
3
<PAGE>
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 during any other period when the Securities
and Exchange Commission, by order, so permits.
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.
4
<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 6. Duties of the Fund.
(a) The Fund shall furnish to the Underwriter copies of
all information, financial statements and other papers that the
Underwriter may reasonably request for use in connection with the
distribution of shares of the Fund, and this shall include one
certified copy, upon request by the Underwriter, of all financial
statements prepared for the Fund by independent public
accountants. The Fund shall make available to the Underwriter
5
<PAGE>
such number of copies of the Prospectus as the Underwriter shall
reasonably request.
(b) The Fund shall take, from time to time, but subject
to the necessary approval of its shareholders, all necessary
action to fix the number of authorized shares and such steps as
may be necessary to register the same under the Securities Act,
to the end that there will be available for sale such number of
shares as the Underwriter reasonably may be expected to sell.
(c) The Fund shall use its best efforts to qualify and
maintain the qualification of an appropriate number of its shares
under the securities laws of such states as the Underwriter and
the Fund may approve. Any such qualification may be withheld,
terminated or withdrawn by the Fund at any time in its
discretion. As provided in Section 9(b) hereof, the expense of
qualification and maintenance of qualification shall be borne by
the Fund. The Underwriter shall furnish such information and
other material relating to its affairs and activities as may be
required by the Fund in connection with such qualification.
(d) The Fund will furnish, in reasonable quantities
upon request by the Underwriter, copies of annual and interim
reports of the Fund.
SECTION 7. Duties of the Underwriter.
(a) The Underwriter shall devote reasonable time and
effort to effect sales of shares of the Fund, but shall not be
obligated to sell any specific number of shares. The services of
the Underwriter to the Fund hereunder are not to be deemed
exclusive and nothing in this Agreement shall prevent the
Underwriter from entering into like arrangements with other
investment companies so long as the performance of its
obligations hereunder is not impaired thereby.
(b) In selling shares of the Fund, the Underwriter
shall use its best efforts in all material respects duly to
conform with the requirements of all federal and state laws
relating to the sale of such securities. Neither the
Underwriter, any selected dealer, any selected agent nor any
other person is authorized by the Fund to give any information or
to make any representations, other than those contained in the
Fund's Registration Statement on Form N-1A (the "Registration
Statement"), as amended from time to time, under the Securities
Act and the Investment Company Act or the Prospectus and
Statement of Additional Information or any sales literature
specifically approved in writing by the Fund.
(c) The Underwriter shall adopt and follow procedures,
as approved by the officers of the Fund, for the confirmation of
6
<PAGE>
sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales,
and the cancellation of unsettled transactions, as may be
necessary to comply with the requirements of the NASD, as such
requirements may from time to time exist.
SECTION 8. Selected Dealer and Agent Agreements.
(a) The Underwriter shall have the right to enter into
selected dealer agreements with securities dealers of its choice
("selected dealers") and selected agent agreements with
depository institutions and other financial intermediaries of its
choice ("selected agents") for the sale of shares and fix therein
the portion of the sales charge that may be allocated to the
selected dealers and selected agents; provided, that the Fund
shall approve the forms of agreements with selected dealers and
selected agents and the selected dealer and selected agent
compensation set forth therein and shall evidence such approval
by filing said forms and amendments thereto as exhibits to its
then currently effective Registration Statement. Shares sold to
selected dealers or through selected agents shall be for resale
by such selected dealers and selected agents only at the public
offering price set forth in the Prospectus and Statement of
Additional Information.
(b) Within the United States, the Underwriter shall
offer and sell shares only to such selected dealers as are
members in good standing of the NASD.
SECTION 9. Payment of Expenses.
(a) The Fund shall bear all costs and expenses of the
Fund, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of its
Registration Statement and Prospectus and Statement of Additional
Information, and all amendments and supplements thereto, and
preparing and mailing annual and interim reports and proxy
materials to shareholders (including but not limited to the
expense of setting in type any such registration statements,
prospectuses, annual or interim reports or proxy materials).
(b) The Fund shall bear the cost of expenses of
qualification of shares for sale, and, if necessary or advisable
in connection therewith, of qualifying the Fund as an issuer or
as a broker or dealer, in such states of the United States or
other jurisdiction as shall be selected by the Fund and the
Underwriter pursuant to Section 6(c) hereof and the cost and
expenses payable to each such state for continuing qualification
therein until the Fund decides to discontinue such qualification
pursuant to Section 6(c) hereof.
7
<PAGE>
SECTION 10. Indemnification.
(a) The Fund agrees to indemnify, defend and hold the
Underwriter, and any person who controls the Underwriter within
the meaning of Section 15 of the Securities Act, free and
harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Underwriter or
any such controlling person may incur, under the Securities Act,
or under common law or otherwise, arising out of or based upon
any alleged untrue statement of a material fact contained in the
Fund's Registration Statement, Prospectus or Statement of
Additional Information in effect from time to time under the
Securities Act or arising out of or based upon any alleged
omission to state a material fact required to be stated in any
one thereof or necessary to make the statements in any one
thereof not misleading; provided, however, that in no event shall
anything herein contained be so construed as to protect the
Underwriter against any liability to the Fund or its security
holders to which the Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of the Underwriter's
reckless disregard of its obligations and duties under this
Agreement. The Fund's agreement to indemnify the Underwriter and
any such controlling person as aforesaid is expressly conditioned
upon the Fund's being notified of the commencement of any action
brought against the Underwriter or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its principal office in New York, New York, and
sent to the Fund by the person against whom such action is
brought within ten days after the summons or other first legal
process shall have been served. The failure to so notify the
Fund of the commencement of any such action shall not relieve the
Fund from any liability which it may have to the person against
whom such action is brought by reason of any such alleged untrue
statement or omission otherwise than on account of the indemnity
agreement contained in this Section 10. The Fund will be
entitled to assume the defense of any suit brought to enforce any
such claim, and to retain counsel of good standing chosen by the
Fund and approved by the Underwriter. In the event the Fund does
not elect to assume the defense of any such suit and retain
counsel of good standing approved by the Underwriter, the
defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but
in case the Fund does not elect to assume the defense of any such
suit, or in case the Underwriter does not approve of counsel
chosen by the Fund, the Fund will reimburse the Underwriter or
the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel
retained by the Underwriter or such persons. The indemnification
8
<PAGE>
agreement contained in this Section 10 shall remain operative and
in full force and effect regardless of any investigation made by
or on behalf of the Underwriter or any controlling person and
shall survive the sale of any of the Fund's shares made pursuant
to subscriptions obtained by the Underwriter. This agreement of
indemnity will inure exclusively to the benefit of the
Underwriter, to the benefit of its successors and assigns, and to
the benefit of any controlling persons and their successors and
assigns. The Fund agrees promptly to notify the Underwriter of
the commencement of any litigation or proceeding against the Fund
in connection with the issue and sale of any of its shares.
(b) The Underwriter agrees to indemnify, defend and
hold the Fund, its several officers and directors, and any person
who controls the Fund within the meaning of Section 15 of the
Securities Act, free and harmless from and against any and all
claims, demands, liabilities, and expenses (including the cost of
investigating or defending such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the
Fund, its officers or directors, or any such controlling person
may incur under the Securities Act or under common law or
otherwise, but only to the extent that such liability, or expense
incurred by the Fund, its officers, directors or such controlling
person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact
contained in information furnished in writing by the Underwriter
to the Fund for use in its Registration Statement, Prospectus or
Statement of Additional Information in effect from time to time
under the Securities Act, or shall arise out of or be based upon
any alleged omission to state a material fact in connection with
such information required to be stated in the Registration
Statement, Prospectus or Statement of Additional Information or
necessary to make such information not misleading. The
Underwriter's agreement to indemnify the Fund, its officers and
directors, and any such controlling person as aforesaid is
expressly conditioned upon the Underwriter being notified of the
commencement of any action brought against the Fund, its officers
or directors or any such controlling person, such notification to
be given by letter or telegram addressed to the Underwriter at
its principal office in New York, and sent to the Underwriter by
the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been
served. The Underwriter shall have a right to control the
defense of such action, with counsel of its own choosing,
satisfactory to the Fund, if such action is based solely upon
such alleged misstatement or omission on its part, and in any
other event the Underwriter and the Fund, and their officers and
directors or such controlling person, shall each have the right
to participate in the defense or preparation of the defense of
any such action. The failure so to notify the Underwriter of the
commencement of any such action shall not relieve the Underwriter
9
<PAGE>
from any liability which it may have to the Fund, to its officers
and trustees, or to such controlling person by reason of any such
untrue statement or omission on the part of the Underwriter
otherwise than on account of the indemnity agreement contained in
this Section 10.
SECTION 11. Notification by the Fund.
The Fund agrees to advise the Underwriter immediately:
(a) of any request by the Securities and Exchange
Commission for amendments to the Fund's Registration Statement,
Prospectus or Statement of Additional Information or for
additional information,
(b) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the
effectiveness of the Fund's Registration Statement, Prospectus or
Statement of Additional Information or the initiation of any
proceeding for that purpose,
(c) of the happening of any material event which makes
untrue any statement made in the Fund's Registration Statement,
Prospectus or Statement of Additional Information or which
requires the making of a change in any one thereof in order to
make the statements therein not misleading, and
(d) of all actions of the Securities and Exchange
Commission with respect to any amendments to the Fund's
Registration Statement, Prospectus or Statement of Additional
Information which may from time to time be filed with the
Securities and Exchange Commission under the Securities Act.
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 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
10
<PAGE>
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 the class or Portfolio affected.
SECTION 13. No Assignment. This Agreement may not be
transferred, assigned, sold or in any manner hypothecated or
pledged by either party hereto and this Agreement shall terminate
automatically in the event of any such transfer, assignment,
sale, hypothecation or pledge. The terms "transfer",
"assignment", and "sale" as used in this paragraph shall have the
meanings ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
SECTION 14. Notices. Any notice required or permitted
to be given hereunder by either party to the other shall be
deemed sufficiently given if sent by registered mail, postage
prepaid, addressed by the party giving such notice to the other
party at the last address furnished by such other party to the
party given notice, and unless and until changed pursuant to the
foregoing provisions hereof addressed to the Fund or the
Underwriter.
11
<PAGE>
SECTION 15. Governing Law. The provisions of this
Agreement shall be, to the extent applicable, construed and
interpreted in accordance with the laws of the State of New York.
SECTION 16. Disinterested Directors of the Fund. While
the Agreement is in effect, the selection and nomination of the
Directors who are not "interested persons" of the Fund (as
defined in the Investment Company Act) will be committed to the
discretion of such disinterested Directors.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement.
ALLIANCE GLOBAL
ENVIRONMENT FUND, INC.
By:________________________
John D. Carifa
Chairman
ALLIANCE FUND DISTRIBUTORS,
INC.
By:________________________
Robert L. Errico
President
Accepted as to
Sections 5, 12 and
16 as of __________, 1997:
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management Corporation,
General Partner
By:___________________________
John D. Carifa
President
12
00250070.AR5
<PAGE>
ALLIANCE FUND DISTRIBUTORS, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(800) 221-5672
(LOGO)
, 1997
Selected Dealer Agreement
For Broker/Dealers (other than Bank Subsidiaries)
Dear Sirs:
As the principal underwriter of shares of certain
registered investment companies presently or hereafter managed by
Alliance Capital Management L.P., shares of which companies are
distributed by us pursuant to our Distribution Services
Agreements with such companies (the "Funds"), we invite you to
participate as principal in the distribution of shares of any and
all of the Funds upon the following terms and conditions:
1. You are to offer and sell such shares only at the
public offering prices which shall be currently in effect, in
accordance with the terms of the then current prospectuses and
statements of additional information of the Funds. You agree to
act only as principal in such transactions and shall not have
authority to act as agent for the Funds, for us, or for any other
dealer in any respect. All orders are subject to acceptance by
us and become effective only upon confirmation by us.
2. On each purchase of shares by you from us, the
total sales charges and discount to selected dealer, if any,
shall be as stated in each Fund's then current prospectus.
Such sales charges and discount to selected dealers are
subject to reductions under a variety of circumstances as
described in each Fund's then current prospectus and statement of
additional information. To obtain these reductions, we must be
notified when the sale takes place which would qualify for the
reduced charge.
There is no sales charge or discount to selected dealers
on the reinvestment of dividends.
3. As a selected dealer, you are hereby authorized
(i) to place orders directly with the Funds for their shares to
be resold by us to you subject to the applicable terms and
<PAGE>
conditions governing the placement of orders by us set forth in
the Distribution Services Agreement between each Fund and us and
subject to the applicable compensation provisions set forth in
each Fund's then current prospectus and statement of additional
information and (ii) to tender shares directly to the Funds or
their agent for redemption subject to the applicable terms and
conditions set forth in the Distribution Services Agreement.
4. Repurchases of shares will be made at the net asset
value of such shares in accordance with the then current
prospectuses and statements of additional information of the
Funds.
5. You represent that you are a member of the National
Association of Securities Dealers, Inc. and that you agree to
abide by the Rules of Fair Practice of such Association.
6. This Agreement is in all respects subject to
Rule 26 of the rules of Fair Practice of the National Association
of Securities Dealers, Inc. which shall control any provisions to
the contrary in this Agreement.
7. You agree:
(a) To purchase shares only from us or only from
your customers.
(b) To purchase shares from us only for the
purpose of covering purchase orders already
received or for your own bona fide investment.
(c) That you will not purchase any shares from
your customers at prices lower than the
redemption or repurchase prices then quoted by
the Fund. You shall, however, be permitted to
sell shares for the account of their record
owners to the Funds at the repurchase prices
currently established for such shares and may
charge the owner a fair commission for handing
the transaction.
(d) That you will not withhold placing customers'
orders for shares so as to profit yourself as
a result of such withholding.
(e) That if any shares confirmed to you hereunder
are redeemed or repurchased by any of the
Funds within seven business days after such
confirmation of your original order, you shall
forthwith refund to us the full discount
allowed to you on such sales. We shall notify
2
<PAGE>
you of such redemption or repurchase within
ten days from the date of delivery of the
request therefor or certificates to us or such
Fund. Termination or cancellation of this
Agreement shall not relieve you or us from the
requirements of this subparagraph.
8. We shall not accept from you any conditional orders
for shares. Delivery of certificates for shares purchased shall
be made by the Funds only against receipt of the purchase price,
subject to deduction for the discount reallowed to you and our
portion of the sales charge on such sales. If payment for the
shares purchased is not received within the time customary for
such payments, the sale may be cancelled forthwith without any
responsibility or liability on our part or on the part of the
Funds (in which case you will be responsible for any loss,
including loss of profit, suffered by the Funds resulting from
your failure to make payment as aforesaid), or, at our option, we
may sell the shares ordered back to the Funds (in which case we
may hold you responsible for any loss, including loss of profit
suffered by us resulting from your failure to make payment as
aforesaid).
9. You will not offer or sell any of the shares except
under circumstances that will result in compliance with the
applicable Federal and State securities laws and in connection
with sales and offers to sell shares you will furnish to each
person to whom any such sale or offer is made a copy of the
applicable then current prospectus. We shall be under no
liability to you except for lack of good faith and for
obligations expressly assumed by us herein. Nothing herein
contained, however, shall be deemed to be a condition,
stipulation or provision binding any persons acquiring any
security to waive compliance with any provision of the Securities
Act of 1933, or of the Rules and Regulations of the Securities
and Exchange Commission, or to relieve the parties hereto from
any liability arising under the Securities Act of 1933.
10. From time to time during the term of this Agreement
we may make payments to you pursuant to one or more of the
distribution plans adopted by certain of the Funds pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act")
in consideration, with respect to each such Fund, of your
furnishing distribution services hereunder and providing
administrative, accounting and other services, including personal
service and/or the maintenance of shareholder accounts. We have
no obligation to make any such payments and you waive any such
payment until we receive monies therefor from the Fund. Any such
payments made pursuant to this Section 10 shall be subject to the
following terms and conditions:
3
<PAGE>
(a) Any such payments shall be in such amounts as
we may from time to time advise you in writing
but in any event not in excess of the amounts
permitted by the plan in effect with respect
to each particular Fund. Any such payments
shall be in addition to the selling
concession, if any, allowed to you pursuant to
this Agreement. Such payments shall include a
service fee in the amount of .25 of 1% per
annum of the average daily net assets of
certain Funds attributable to your clients.
Any such service fee shall be paid to you
solely for personal service and/or the
maintenance of shareholder accounts.
(b) The provisions of this Section 10 relate to
the plan adopted by a particular Fund pursuant
to Rule 12b-1. In accordance with Rule 12b-1,
any person authorized to direct the
disposition of monies paid or payable by a
Fund pursuant to this Section 10 shall provide
the Fund's Board of Directors, and the
Directors shall review, at least quarterly, a
written report of the amounts so expended and
the purposes for which such expenditures were
made.
(c) The provisions of this Section 10 applicable
to each Fund shall remain in effect for not
more than a year and thereafter for successive
annual periods only so long as such
continuance is specifically approved at least
annually in conformity with Rule 12b-1 and the
Act. The provisions of this Section 10 shall
automatically terminate with respect to a
particular Plan in the event of the assignment
(as defined by the Act) of this Agreement, in
the event such Plan terminates or is not
continued or in the event this Agreement
terminates or ceases to remain in effect. In
addition, the provisions of this Section 10
may be terminated at any time, without
penalty, by either party with respect to any
particular Plan on not more than 60 days' nor
less than 30 days' written notice delivered or
mailed by registered mail, postage prepaid, to
the other party.
11. No person is authorized to make any representations
concerning shares of the Funds except those contained in the
current prospectus, statement of additional information, and
4
<PAGE>
printed information issued by each Fund or by us as information
supplemental to each prospectus. We shall supply prospectuses
and statements of additional information, reasonable quantities
of reports to shareholders, supplemental sales literature, sales
bulletins, and additional information as issued. You agree to
distribute prospectuses and reports to shareholders of the Funds
to your customers in compliance with the applicable requirements,
except to the extent that we expressly undertake to do so on your
behalf. You agree not to use other advertising or sales material
relating to the Funds, unless approved in writing by us in
advance of such use. Any printed information furnished by us
other than the then current prospectus and statement of
additional information for each Fund, periodic reports and proxy
solicitation materials are our sole responsibility and not the
responsibility of the Funds, and you agree that the Funds shall
have no liability or responsibility to you in these respects
unless expressly assumed in connection therewith.
12. In connection with your distribution of shares of a
Fund, you shall conform to such written compliance standards as
we have provided you in the past or may from time to time provide
to you in the future.
13. We, our affiliates and the Funds shall not be
liable for any loss, expense, damages, costs or other claim
arising out of any redemption or exchange pursuant to telephone
instructions from any person or our refusal to execute such
instructions for any reason.
14. Either party to this Agreement may cancel this
Agreement by giving written notice to the other. Such notice
shall be deemed to have been given on the date on which it was
either delivered personally to the other party or any officer or
member thereof, or was mailed postpaid or delivered to a
telegraph office for transmission to the other party at his or
its address as shown below. This Agreement may be amended by us
at any time and your placing of an order after the effective date
of any such amendment shall constitute your acceptance thereof.
5
<PAGE>
15. This Agreement shall be construed in accordance
with the laws of the State of New York and shall be binding upon
both parties thereto when signed by us and accepted by you in the
space provided below.
Very truly yours,
ALLIANCE FUND DISTRIBUTORS, INC.
By:_____________________________
(Authorized Signature)
Bank or Firm Name _______________________________________________
Address _________________________________________________________
City _____________________ State ____________ Zip Code __________
ACCEPTED BY (signature) _____________________ Title _____________
Name (print) ________________________________ Title _____________
Date _____________________ 199__ Phone # ________________________
Please return two signed copies of this Agreement (one of
which will be signed above by us and thereafter returned to you)
in the accompanying return envelope to:
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas, 38th Floor
New York, NY 10105
6
00250070.AR2
<PAGE>
ALLIANCE FUND DISTRIBUTORS, INC.
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(800) 221-5672
(LOGO)
, 1997
Selected Agent Agreement
For Depository Institutions and Their Subsidiaries
Dear Sirs:
As the principal underwriter of shares of certain
registered investment companies presently or hereafter managed by
Alliance Capital Management L.P., shares of which companies are
distributed by us pursuant to our Distribution Services
Agreements with such companies (the "Funds"), we invite you,
acting as agent for your customers, to make available to your
customers shares of any or all of the Funds upon the following
terms and conditions:
1. The customers in question will be for all purposes
your customers. We shall execute transactions in shares of the
Funds for each of your customers only upon your authorization, it
being understood in all cases that (a) you are acting as the
agent for the customer; (b) each transaction is initiated solely
upon the order of the customer; (c) each transaction is for the
account of the customer and not for your account; (d) the
transactions are without recourse against you by the customer;
(e) except as we otherwise agree, each transaction is effected on
a fully disclosed basis; (f) as between you and the customer, the
customer will have full beneficial ownership of the shares;
(g) you shall provide no investment advice and exercise no
investment discretion regarding the purchase, sale, or redemption
of the shares; and (h) you shall make appropriate disclosure to
your customers that any Fund's shares are not endorsed by you, do
not constitute your obligation and are not entitled to federal
deposit insurance.
2. You are to sell shares of the Funds only at the
public offering prices which shall be currently in effect, in
accordance with the terms of the then current prospectuses and
statements of additional information of the Funds. You agree to
act only as agent for your customers in such transactions and
shall not have authority to act as agent for the Funds or for us
<PAGE>
in any respect. All orders are subject to acceptance by us and
become effective only upon confirmation by us.
3. On each purchase of shares of a Fund authorized by
you, the total sales charge and commission, if any, shall be as
stated in the Fund's then current prospectus. Such sales charges
and commissions are subject to reductions under a variety of
circumstances as described in each Fund's then current prospectus
and statement of additional information. To obtain such a
reduction, you must provide us with such information as we may
request to establish that a particular transaction qualifies for
the reduction. There is no sales charge or commission to
selected agents on the reinvestment of dividends.
4. As a selected agent, you are hereby authorized
(i) to place orders directly with the Funds for their shares to
be resold by us through you subject to the applicable terms and
conditions governing the placement of orders by us set forth in
the Distribution Services Agreement between each Fund and us and
subject to the applicable compensation provisions set forth in
each Fund's then current prospectus and statement of additional
information, and (ii) to tender shares directly to the Funds or
their agent for redemption or repurchase subject to the
applicable terms and conditions set forth in the Distribution
Services Agreement.
5. Redemptions and repurchases of shares will be made
at the net asset value of such shares in accordance with the then
current prospectuses and statements of additional information of
the Funds.
6. You represent that you are either:
(a) a bank as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended
(the "1934 Act"), duly authorized to engage in
the transactions to be performed hereunder and
not required to register as a broker-dealer
pursuant to the 1934 Act; or
(b) a bank (as so defined) or an affiliate of a
bank, in either case registered as a broker-
dealer pursuant to the 1934 Act and a member
of the National Association of Securities
Dealers, Inc., and that you agree to abide by
the rules and regulations of the National
Association of Securities Dealers, Inc.
2
<PAGE>
7. You agree:
(a) to order shares of the Funds only from us and
to act as agent only for your customers;
(b) to order shares from us only for the purpose
of covering purchase orders already received;
(c) that you will not purchase any shares from
your customers at prices lower than the
redemption or repurchase prices then quoted by
the Funds, provided, however, that you shall
be permitted to sell shares for the accounts
of their record owners to the Funds at the
repurchase prices currently established for
such shares and may charge the owner a fair
commission for handling the transaction;
(d) that you will not withhold placing customers'
orders for shares so as to profit yourself as
a result of such withholding; and
(e) that if any shares confirmed through you
hereunder are redeemed or repurchased by any
of the Funds within seven business days after
such confirmation of your original order, you
shall forthwith refund to us the full
commission reallowed to you on such sales. We
shall notify you of such redemption or
repurchase within ten days from the date of
delivery of the request therefor or
certificates to us or such Fund. Termination
or cancellation of this Agreement shall not
relieve you or us from the requirements of
this subparagraph.
8. We shall not accept from you any conditional orders
for shares. Delivery of certificates for shares purchased shall
be made by the Funds only against receipt of the purchase price,
subject to deduction for the commission reallowed to you and our
portion of the sales charge on such sale. If payment for the
shares purchased is not received within the time customary for
such payments, the sale may be cancelled forthwith without any
responsibility or liability on our part or on the part of the
Funds (in which case you will be responsible for any loss,
including loss of profit, suffered by the Funds resulting from
your failure to make payment as aforesaid).
9. You will not accept orders for shares of any of the
Funds except under circumstances that will result in compliance
with the applicable Federal and State securities laws and banking
3
<PAGE>
laws, and in connection with sales of shares to your customers
you will furnish, unless we agree otherwise, to each customer who
has ordered shares a copy of the applicable then current
prospectus. We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by us
herein. Nothing herein contained, however, shall be deemed to be
a condition, stipulation or provision binding any persons
acquiring any security to waive compliance with any provision of
the Securities Act of 1933 or of the rules and regulations of the
Securities and Exchange Commission, or to relieve the parties
hereto from any liability arising under the Securities Act of
1933.
10. From time to time during the term of this Agreement
we may make payments to you pursuant to one or more of the
distribution plans adopted by certain of the Funds pursuant to
rule 12b-1 under the Investment Company Act of 1940 (the "Act"),
to compensate you with respect to the shareholder accounts of
your customers in such Funds for providing administrative,
accounting and other services, including personal service and/or
the maintenance of such accounts. We have no obligation to make
any such payments and you waive any such payment until we receive
monies therefor from the fund. Any such payments made pursuant
to this Section 10 shall be subject to the following terms and
conditions:
(a) Any such payments shall be in such amounts as
we may from time to time advise you in writing
but in any event not in excess of the amounts
permitted by the plan in effect with respect
to each particular Fund. Such payments shall
include a service fee in the amount of .25 of
1% per annum of the average daily net assets
of certain Funds attributable to your clients.
Any such service fee shall be paid to you
solely for personal service and/or the
maintenance of shareholder accounts.
(b) The provisions of this Section 10 relate to
the plan adopted by a particular Fund pursuant
to Rule 12b-1. In accordance with Rule 12b-1,
any person authorized to direct the
disposition of monies paid or payable by a
Fund pursuant to this Section 10 shall provide
the Fund's Board of Directors, and the
Directors shall review, at lest quarterly, a
written report of the amounts so expended and
the purposes for which such expenditures were
made.
4
<PAGE>
(c) The provisions of this Section 10 applicable
to each Fund remain in effect for not more
than a year and thereafter for successive
annual periods only so long as such
continuance is specifically approved at least
annually in conformity with Rule 12b-1 and the
Act. The provisions of this Section 10 shall
automatically terminate with respect to a
particular Plan in the event of the assignment
(as defined by the Act) of this Agreement, in
the event such Plan terminates or is not
continued or in the event this Agreement
terminates or ceases to remain in effect. In
addition, the provisions of this Section 10
may be terminated at any time, without
penalty, by either party with respect to any
particular Plan on not more than 60 days' nor
less than 30 days' written notice delivered or
mailed by registered mail, postage prepaid, to
the other party.
11. No person is authorized to make any representation
concerning shares of the Funds except those contained in the
current prospectus, statement of additional information, and
printed information issued by each Fund or by us as information
supplemental to each prospectus. We shall supply prospectuses
and statements of additional information, reasonable quantities
of reports to shareholders, supplemental sales literature, sales
bulletins, and additional information as issued. You agree to
distribute prospectuses and reports to shareholders of the Funds
to your customers in compliance with applicable requirements,
except to the extent that we expressly undertake to do so on your
behalf. You agree not to use other advertising or sales material
relating to the Funds except in compliance with all laws and
regulations applicable to you and unless approved in writing by
us in advance of such use. Any printed information furnished by
us other than the then current prospectus and statement of
additional information for each Fund, periodic reports and proxy
solicitation materials are our sole responsibility and not the
responsibility of the Funds, and you agree that the Funds shall
have no liability or responsibility to you in these respects
unless expressly assumed in connection therewith.
12. In connection with your making shares of a Fund
available to your customers, you shall conform to such written
compliance standards as we have provided you in the past or may
from time to time provide to you in the future.
13. We, our affiliates and the Funds shall not be
liable for any loss, expense, damages, costs or other claim
arising out of any redemption or exchange pursuant to telephone
5
<PAGE>
instructions from any person or our refusal to execute such
instructions for any reason.
14. Either party to this Agreement may cancel this
Agreement by giving written notice to the other. Such notice
shall be deemed to have been given as of the date on which it was
either delivered personally to the other party or any officer or
member thereof, or was mailed postpaid or delivered to a
telegraph office for transmission to the other party at his or
its address as shown below. This Agreement may be amended by us
at any time and your placing of an order after the effective date
of any such amendment shall constitute your acceptance thereof.
If you are a bank or an affiliate of a bank, this Agreement will
automatically terminate if you cease to be, or the bank of which
you are an affiliate ceases to be, a bank as defined in the 1934
Act.
15. This Agreement shall be construed in accordance
with the laws of the State of New York and shall be binding upon
both parties hereto when signed by us and accepted by you in the
space provided below.
Very truly yours,
ALLIANCE FUND DISTRIBUTORS, INC.
By:_____________________________
(Authorized Signature)
Bank or Firm Name _______________________________________________
Address _________________________________________________________
City _____________________ State ____________ Zip Code __________
ACCEPTED BY (signature) _____________________ Title _____________
Name (print) ________________________________ Title _____________
Date _____________________ 199__ Phone # ________________________
Please return two signed copies of this Agreement (one of
which will be signed by us and thereafter returned to you)
in the accompanying return envelope to:
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas, 38th Floor
New York, NY 10105
6
00250070.AR4
<PAGE>
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
TRANSFER AGENCY AGREEMENT
AGREEMENT, dated as of ___________, 1997, between
ALLIANCE GLOBAL ENVIRONMENT FUND, INC., a Maryland
corporation and an open-end investment company registered
with the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940 (the "Investment
Company Act"), having its principal place of business at
1345 Avenue of Americas, New York, New York 10105 (the
"Fund"), and ALLIANCE FUND SERVICES, INC., a Delaware
corporation registered with the SEC as a transfer agent
under the Securities Exchange Act of 1934, having its
principal place of business at 500 Plaza Drive, Secaucus,
New Jersey 07094 ("Fund Services"), provides as follows:
WHEREAS, Fund Services has agreed to act as
transfer agent to the Fund for the purpose of recording the
transfer, issuance and redemption of shares of each series
of the shares of [common stock] of the Fund ("Shares" or
"Shares of a Series"), transferring the Shares, disbursing
dividends and other distributions to shareholders of the
Fund, and performing such other services as may be agreed to
pursuant hereto;
NOW THEREFORE, for and in consideration of the
mutual covenants and agreements contained herein, the
parties do hereby agree as follows:
<PAGE>
SECTION 1. The Fund hereby appoints Fund Services
as its transfer agent, dividend disbursing agent and
shareholder servicing agent for the Shares, and Fund
Services agrees to act in such capacities upon the terms set
forth in this Agreement. Capitalized terms used in this
Agreement and not otherwise defined shall have the meanings
assigned to them in SECTION 30.
SECTION 2.
(a) The Fund shall provide Fund Services with
copies of the following documents:
(1) Specimens of all forms of certificates for
Shares;
(2) Specimens of all account application forms and
other documents relating to Shareholders' accounts;
(3) Copies of each Prospectus;
(4) Specimens of all documents relating to
withdrawal plans instituted by the Fund, as described in
SECTION 16; and
(5) Specimens of all amendments to any of the
foregoing documents.
(b) The Fund shall furnish to Fund Services a
supply of blank Share Certificates for the Shares and, from
time to time, will renew such supply upon Fund Services'
request. Blank Share Certificates shall be signed manually
or by facsimile signatures of officers of the Fund
2
<PAGE>
authorized to sign by law or pursuant to the by-laws of the
Fund and, if required by Fund Services, shall bear the
Fund's seal or a facsimile thereof.
SECTION 3. Fund Services shall make original
issues of Shares in accordance with SECTIONS 13 and 14 and
the Prospectus upon receipt of (i) Written Instructions
requesting the issuance, (ii) a certified copy of a
resolution of the Fund's Directors authorizing the issuance,
(iii) necessary funds for the payment of any original issue
tax applicable to such Shares, and (iv) an opinion of the
Fund's counsel as to the legality and validity of the
issuance, which opinion may provide that it is contingent
upon the filing by the Fund of an appropriate notice with
the SEC, as required by Rule 24f-2 of the Investment Company
Act, as amended from time to time.
SECTION 4. Transfers of Shares shall be registered
and, subject to the provisions of SECTION 10 in the case of
Shares evidenced by Share Certificates, new Share
Certificates shall be issued by Fund Services upon surrender
of outstanding Share Certificates in the form deemed by Fund
Services to be properly endorsed for transfer, which form
shall include (i) all necessary endorsers' signatures
guaranteed by a member firm of a national securities
exchange or a domestic commercial bank or through other
procedures mutually agreed to between the Fund and Fund
3
<PAGE>
Services, (ii) such assurances as Fund Services may deem
necessary to evidence the genuineness and effectiveness of
each endorsement and (iii) satisfactory evidence of
compliance with all applicable laws relating to the payment
or collection of taxes.
SECTION 5. Fund Services shall forward Share
Certificates in "non-negotiable" form by first-class or
registered mail, or by whatever means Fund Services deems
equally reliable and expeditious. While in transit to the
addressee, all deliveries of Share Certificates shall be
insured by Fund Services as it deems appropriate. Fund
Services shall not mail Share Certificates in "negotiable"
form, unless requested in writing by the Fund and fully
indemnified by the Fund to Fund Services' satisfaction.
SECTION 6. In registering transfers of Shares,
Fund Services may rely upon the Uniform Commercial Code as
in effect from time to time in the State in which the Fund
is incorporated or organized or, if appropriate, in the
State of New Jersey; provided, that Fund Services may rely
in addition or alternatively on any other statutes in effect
in the State of New Jersey or in the state under the laws of
which the Fund is incorporated or organized that, in the
opinion of Fund Services' counsel, protect Fund Services and
the Fund from liability arising from (i) not requiring
complete documentation in connection with an issuance or
4
<PAGE>
transfer, (ii) registering a transfer without an adverse
claim inquiry, (iii) delaying registration for purposes of
an adverse claim inquiry or (iv) refusing registration in
connection with an adverse claim.
SECTION 7. Fund Services may issue new Share
Certificates in place of those lost, destroyed or stolen,
upon receiving indemnity satisfactory to Fund Services; and
may issue new Share Certificates in exchange for, and upon
surrender of, mutilated Share Certificates as Fund Services
deems appropriate.
SECTION 8. Unless otherwise directed by the Fund,
Fund Services may issue or register Share Certificates
reflecting the signature, or facsimile thereof, of an
officer who has died, resigned or been removed by the Fund.
The Fund shall file promptly with Fund Services' approval,
adoption or ratification of such action as may be required
by law or by Fund Services.
SECTION 9. Fund Services shall maintain customary
stock registry records for Shares of each Series noting the
issuance, transfer or redemption of Shares and the issuance
and transfer of Share Certificates. Fund Services may also
maintain for Shares of each Series an account entitled
"Unissued Certificate Account," in which Fund Services will
record the Shares, and fractions thereof, issued and
outstanding from time to time for which issuance of Share
5
<PAGE>
Certificates has not been requested. Fund Services is
authorized to keep records for Shares of each Series
containing the names and addresses of record of
Shareholders, and the number of Shares, and fractions
thereof, from time to time owned by them for which no Share
Certificates are outstanding. Each Shareholder will be
assigned a single account number for Shares of each Series,
even though Shares for which Certificates have been issued
will be accounted for separately.
SECTION 10. Fund Services shall issue Share
Certificates for Shares only upon receipt of a written
request from a Shareholder and as authorized by the Fund.
If Shares are purchased or transferred without a request for
the issuance of a Share Certificate, Fund Services shall
merely note on its stock registry records the issuance or
transfer of the Shares and fractions thereof and credit or
debit, as appropriate, the Unissued Certificate Account and
the respective Shareholders' accounts with the Shares.
Whenever Shares, and fractions thereof, owned by
Shareholders are surrendered for redemption, Fund Services
may process the transactions by making appropriate entries
in the stock transfer records, and debiting the Unissued
Certificate Account and the record of issued Shares
outstanding; it shall be unnecessary for Fund Services to
reissue Share Certificates in the name of the Fund.
6
<PAGE>
SECTION 11. Fund Services shall also perform the
usual duties and function required of a stock transfer agent
for a corporation, including but not limited to (i) issuing
Share Certificates as treasury Shares, as directed by
Written Instructions, and (ii) transferring Share
Certificates from one Shareholder to another in the usual
manner. Fund Services may rely conclusively and act without
further investigation upon any list, instruction,
certification, authorization, Share Certificate or other
instrument or paper reasonably believed by it in good faith
to be genuine and unaltered, and to have been signed,
countersigned or executed or authorized by a duly-
authorized person or persons, or by the Fund, or upon the
advice of counsel for the Fund or for Fund Services. Fund
Services may record any transfer of Share Certificates which
it reasonably believes in good faith to have been duly
authorized, or may refuse to record any transfer of Share
Certificates if, in good faith, it reasonably deems such
refusal necessary in order to avoid any liability on the
part of either the Fund or Fund Services.
SECTION 12. Fund Services shall notify the Fund of
any request or demand for the inspection of the Fund's share
records. Fund Services shall abide by the Fund's
instructions for granting or denying the inspection;
provided, however, Fund Services may grant the inspection
7
<PAGE>
without such instructions if it is advised by its counsel
that failure to do so will result in liability to Fund
Services.
SECTION 13. Fund Services shall observe the
following procedures in handling funds received:
(a) Upon receipt at the office designated by the
Fund of any check or other order drawn or endorsed to the
Fund or otherwise identified as being for the account of the
Fund, and, in the case of a new account, accompanied by a
new account application or sufficient information to
establish an account as provided in the Prospectus, Fund
Services shall stamp the transmittal document accompanying
such check or other order with the name of the Fund and the
time and date of receipt and shall forthwith deposit the
proceeds thereof in the custodial account of the Fund.
(b) In the event that any check or other order for
the purchase of Shares is returned unpaid for any reason,
Fund Services shall, in the absence of other instructions
from the Fund, advise the Fund of the returned check and
prepare such documents and information as may be necessary
to cancel promptly any Shares purchased on the basis of such
returned check and any accumulated income dividends and
capital gains distributions paid on such Shares.
(c) As soon as possible after 4:00 p.m., Eastern
time or at such other times as the Fund may specify in
8
<PAGE>
Written or Oral Instructions for any Series (the "Valuation
Time") on each Business Day, Fund Services shall obtain from
the Fund's Adviser a quotation (on which it may conclusively
rely) of the net asset value, determined as of the Valuation
Time on that day. On each Business Day, Fund Services shall
use the net asset value(s) determined by the Fund's Adviser
to compute the number of Shares and fractional Shares to be
purchased and the aggregate purchase proceeds to be
deposited with the Custodian. As necessary but no more
frequently than daily (unless a more frequent basis is
agreed to by Fund Services), Fund Services shall place a
purchase order with the Custodian for the proper number of
Shares and fractional Shares to be purchased and promptly
thereafter shall send written confirmation of such purchase
to the Custodian and the Fund.
SECTION 14. Having made the calculations required
by SECTION 13, Fund Services shall thereupon pay the
Custodian the aggregate net asset value of the Shares
purchased. The aggregate number of Shares and fractional
Shares purchased shall then be issued daily and credited by
Fund Services to the Unissued Certificate Account. Fund
Services shall also credit each Shareholder's separate
account with the number of Shares purchased by such
Shareholder. Fund Services shall mail written confirmation
of the purchase to each Shareholder or the Shareholder's
9
<PAGE>
representative and to the Fund if requested. Each
confirmation shall indicate the prior Share balance, the new
Share balance, the Shares for which Stock Certificates are
outstanding (if any), the amount invested and the price paid
for the newly-purchased Shares.
SECTION 15. Prior to the Valuation Time on each
Business Day, as specified in accordance with SECTION 13,
Fund Services shall process all requests to redeem Shares
and, with respect to each Series, shall advise the Custodian
of (i) the total number of Shares available for redemption
and (ii) the number of Shares and fractional Shares
requested to be redeemed. Upon confirmation of the net
asset value by the Fund's Adviser, Fund Services shall
notify the Fund and the Custodian of the redemption, apply
the redemption proceeds in accordance with SECTION 16 and
the Prospectus, record the redemption in the stock registry
books, and debit the redeemed Shares from the Unissued
Certificates Account and the individual account of the
Shareholder.
In lieu of carrying out the redemption procedures
described in the preceding paragraph, Fund Services may, at
the request of the Fund, sell Shares to the Fund as
repurchases from Shareholders, provided that the sale price
is not less than the applicable redemption price. The
redemption procedures shall then be appropriately modified.
10
<PAGE>
SECTION 16. Fund Services will carry out the
following procedures with respect to Share redemptions:
(a) As to each request received by the Fund from
or on behalf of a Shareholder for the redemption of Shares,
and unless the right of redemption has been suspended as
contemplated by the Prospectus, Fund Services shall, within
seven days after receipt of such redemption request, either
(i) mail a check in the amount of the proceeds of such
redemption to the person designated by the Shareholder or
other person to receive such proceeds or, (ii) in the event
redemption proceeds are to be wired through the Federal
Reserve Wire System or by bank wire pursuant to procedures
described in the Prospectus, cause such proceeds to be wired
in Federal funds to the bank or trust company account
designated by the Shareholder to receive such proceeds.
Fund Services shall also prepare and send a confirmation of
such redemption to the Shareholder. Redemptions in kind
shall be made only in accordance with such Written
Instructions as Fund Services may receive from the Fund.
The requirements as to instruments of transfer and other
documentation, the determination of the appropriate
redemption price and the time of payment shall be as
provided in the Prospectus, subject to such additional
requirements consistent therewith as may be established by
mutual agreement between the Fund and Fund Services. In the
11
<PAGE>
case of a request for redemption that does not comply in all
respects with the requirements for redemption, Fund Services
shall promptly so notify the Shareholder and shall effect
such redemption at the price in effect at the time of
receipt of documents complying with such requirements. Fund
Services shall notify the Fund's Custodian and the Fund on
each Business Day of the amount of cash required to meet
payments made pursuant to the provisions of this paragraph
and thereupon the Fund shall instruct the Custodian to make
available to Fund Services in timely fashion sufficient
funds therefor.
(b) Procedures and standards for effecting and
accepting redemption orders from Shareholders by telephone
or by such check writing service as the Fund may institute
may be established by mutual agreement between Fund Services
and the Fund consistent with the Prospectus.
(c) For purposes of redemption of Shares that have
been purchased by check within fifteen (15) days prior to
receipt of the redemption request, the Fund shall provide
Fund Services with Written Instructions concerning the time
within which such requests may be honored.
(d) Fund Services shall process withdrawal orders
duly executed by Shareholders in accordance with the terms
of any withdrawal plan instituted by the Fund and described
in the Prospectus. Payments upon such withdrawal orders and
12
<PAGE>
redemptions of Shares held in withdrawal plan accounts in
connection with such payments shall be made at such times as
the Fund may determine in accordance with the Prospectus.
(e) The authority of Fund Services to perform its
responsibilities under SECTIONS 15 and 16 with respect to
the Shares of any Series shall be suspended if Fund Services
receives notice of the suspension of the determination of
the net asset value of the Series.
SECTION 17. Upon the declaration of each dividend
and each capital gains distribution by the Fund's Directors,
the Fund shall notify Fund Services of the date of such
declaration, the amount payable per Share, the record date
for determining the Shareholders entitled to payment, the
payment and the reinvestment date price.
SECTION 18. Upon being advised by the Fund of the
declaration of any income dividend or capital gains
distribution on account of its Shares, Fund Services shall
compute and prepare for the Fund records crediting such
distributions to Shareholders. Fund Services shall, on or
before the payment date of any dividend or distribution,
notify the Fund and the Custodian of the estimated amount
required to pay any portion of a dividend or distribution
which is payable in cash, and thereupon the Fund shall, on
or before the payment date of such dividend or distribution,
instruct the Custodian to make available to Fund Services
13
<PAGE>
sufficient funds for the payment of such cash amount. Fund
Services will, on the designated payment date, reinvest all
dividends in additional shares and promptly mail to each
Shareholder at his address of record a statement showing the
number of full and fractional Shares (rounded to three
decimal places) then owned by the Shareholder and the net
asset value of such Shares; provided, however, that if a
Shareholder elects to receive dividends in cash, Fund
Services shall prepare a check in the appropriate amount and
mail it to the Shareholder at his address of record within
five (5) business days after the designated payment date, or
transmit the appropriate amount in Federal funds in
accordance with the Shareholder's agreement with the Fund.
SECTION 19. Fund Services shall prepare and
maintain for the Fund records showing for each Shareholder's
account the following:
A. The name, address and tax identification
number of the Shareholder;
B. The number of Shares of each Series held by
the Shareholder;
C. Historical information including dividends
paid and date and price for all transactions;
D. Any stop or restraining order placed against
such account;
14
<PAGE>
E. Information with respect to the withholding of
any portion of income dividends or capital gains
distributions as are required to be withheld under
applicable law;
F. Any dividend or distribution reinvestment
election, withdrawal plan application, and correspondence
relating to the current maintenance of the account;
G. The certificate numbers and denominations of
any Share Certificates issued to the Shareholder; and
H. Any additional information required by Fund
Services to perform the services contemplated by this
Agreement. Fund Services agrees to make available
upon request by the Fund or the Fund's Adviser and to
preserve for the periods prescribed in Rule 31a-2 of the
Investment Company Act any records related to services
provided under this Agreement and required to be maintained
by Rule 31a-1 of that Act, including:
(i) Copies of the daily transaction register for
each Business Day of the Fund;
(ii) Copies of all dividend, distribution and
reinvestment blotters;
(iii) Schedules of the quantities of Shares of
each Series distributed in each state for purposes of any
state's laws or regulations as specified in Oral or Written
15
<PAGE>
Instructions given to Fund Services from time to time by the
Fund or its agents; and
(iv) Such other information, including Shareholder
lists, and statistical information as may be agreed upon
from time to time by the Fund and Fund Services.
SECTION 20. Fund Services shall maintain those
records necessary to enable the Fund to file, in a timely
manner, form N- SAR (Semi-Annual Report) or any successor
report required by the Investment Company Act or rules and
regulations thereunder.
SECTION 21. Fund Services shall cooperate with the
Fund's independent public accountants and shall take
reasonable action to make all necessary information
available to such accountants for the performance of their
duties.
SECTION 22. In addition to the services described
above, Fund Services will perform other services for the
Fund as may be mutually agreed upon in writing from time to
time, which may include preparing and filing Federal tax
forms with the Internal Revenue Service, and, subject to
supervisory oversight by the Fund's Adviser, mailing Federal
tax information to Shareholders, mailing semi-annual
Shareholder reports, preparing the annual list of
Shareholders, mailing notices of Shareholders' meetings,
proxies and proxy statements and tabulating proxies. Fund
16
<PAGE>
Services shall answer the inquiries of certain Shareholders
related to their share accounts and other correspondence
requiring an answer from the Fund. Fund Services shall
maintain dated copies of written communications from
Shareholders, and replies thereto.
SECTION 23. Nothing contained in this Agreement is
intended to or shall require Fund Services, in any capacity
hereunder, to perform any functions or duties on any day
other than a Business Day. Functions or duties normally
scheduled to be performed on any day which is not a Business
Day shall be performed on, and as of, the next Business Day,
unless otherwise required by law.
SECTION 24. For the services rendered by Fund
Services as described above, the Fund shall pay to Fund
Services an annualized fee at a rate to be mutually agreed
upon from time to time. Such fee shall be prorated for the
months in which this Agreement becomes effective or is
terminated. In addition, the Fund shall pay, or Fund
Services shall be reimbursed for, all out-of-pocket expenses
incurred in the performance of this Agreement, including but
not limited to the cost of stationery, forms, supplies,
blank checks, stock certificates, proxies and proxy
solicitation and tabulation costs, all forms and statements
used by Fund Services in communicating with Shareholders of
the Fund or especially prepared for use in connection with
17
<PAGE>
its services hereunder, specific software enhancements as
requested by the Fund, costs associated with maintaining
withholding accounts (including non-resident alien, Federal
government and state), postage, telephone, telegraph (or
similar electronic media) used in communicating with
Shareholders or their representatives, outside mailing
services, microfiche/microfilm, freight charges and off-site
record storage. It is agreed in this regard that Fund
Services, prior to ordering any form in such supply as it
estimates will be adequate for more than two years' use,
shall obtain the written consent of the Fund. All forms for
which Fund Services has received reimbursement from the Fund
shall be the property of the Fund.
SECTION 25. Fund Services shall not be liable for
any taxes, assessments or governmental charges that may be
levied or assessed on any basis whatsoever in connection
with the Fund or any Shareholder, excluding taxes assessed
against Fund Services for compensation received by it
hereunder.
SECTION 26.
(a) Fund Services shall at all times act in good
faith and with reasonable care in performing the services to
be provided by it under this Agreement, but shall not be
liable for any loss or damage unless such loss or damage is
18
<PAGE>
caused by the negligence, bad faith or willful misconduct of
Fund Services or its employees or agents.
(b) The Fund shall indemnify and hold Fund
Services harmless from all loss, cost, damage and expense,
including reasonable expenses for counsel, incurred by it
resulting from any claim, demand, action or suit in
connection with the performance of its duties hereunder, or
as a result of acting upon any instruction reasonably
believed by it to have been properly given by a duly
authorized officer of the Fund, or upon any information,
data, records or documents provided to Fund Services or its
agents by computer tape, telex, CRT data entry or other
similar means authorized by the Fund; provided that this
indemnification shall not apply to actions or omissions of
Fund Services in cases of its own bad faith, willful
misconduct or negligence, and provided further that if in
any case the Fund may be asked to indemnify or hold Fund
Services harmless pursuant to this Section, the Fund shall
have been fully and promptly advised by Fund Services of all
material facts concerning the situation in question. The
Fund shall have the option to defend Fund Services against
any claim which may be the subject of this indemnification,
and in the event that the Fund so elects it will so notify
Fund Services, and thereupon the Fund shall retain competent
counsel to undertake defense of the claim, and Fund Services
19
<PAGE>
shall in such situations incur no further legal or other
expenses for which it may seek indemnification under this
paragraph. Fund Services shall in no case confess any claim
or make any compromise in any case in which the Fund may be
asked to indemnify Fund Services except with the Fund's
prior written consent.
Without limiting the foregoing:
(i) Fund Services may rely upon the advice of the
Fund or counsel to the Fund or Fund Services, and upon
statements of accountants, brokers and other persons
believed by Fund Services in good faith to be expert in the
matters upon which they are consulted. Fund Services shall
not be liable for any action taken in good faith reliance
upon such advice or statements;
(ii) Fund Services shall not be liable for any
action reasonably taken in good faith reliance upon any
Written Instructions or certified copy of any resolution of
the Fund's Directors, including a Written Instruction
authorizing Fund Services to make payment upon redemption of
Shares without a signature guarantee; provided, however,
that upon receipt of a Written Instruction countermanding a
prior Instruction that has not been fully executed by Fund
Services, Fund Services shall verify the content of the
second Instruction and honor it, to the extent possible.
Fund Services may rely upon the genuineness of any such
20
<PAGE>
document, or copy thereof, reasonably believed by Fund
Services in good faith to have been validly executed;
(iii) Fund Services may rely, and shall be protected
by the Fund in acting, upon any signature, instruction,
request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent,
order, or other paper or document reasonably believed by it
in good faith to be genuine and to have been signed or
presented by the purchaser, the Fund or other proper party
or parties; and
(d) Fund Services may, with the consent of the
Fund, subcontract the performance of any portion of any
service to be provided hereunder, including with respect to
any Shareholder or group of Shareholders, to any agent of
Fund Services and may reimburse the agent for the services
it performs at such rates as Fund Services may determine;
provided that no such reimbursement will increase the amount
payable by the Fund pursuant to this Agreement; and provided
further, that Fund Services shall remain ultimately
responsible as transfer agent to the Fund.
SECTION 27. The Fund shall deliver or cause
to be delivered over to Fund Services (i) an accurate list
of Shareholders, showing each Shareholder's address of
record, number of Shares of each Series owned and whether
such Shares are represented by outstanding Share
21
<PAGE>
Certificates or by non- certificated Share accounts and (ii)
all Shareholder records, files, and other materials
necessary or appropriate for proper performance of the
functions assumed under this Agreement (collectively
referred to as the "Materials"). The Fund shall indemnify
Fund Services and hold it harmless from any and all
expenses, damages, claims, suits, liabilities, actions,
demands and losses arising out of or in connection with any
error, omission, inaccuracy or other deficiency of such
Materials, or out of the failure of the Fund to provide any
portion of the Materials or to provide any information in
the Fund's possession needed by Fund Services to
knowledgeably perform its functions; provided the Fund shall
have no obligation to indemnify Fund Services or hold it
harmless with respect to any expenses, damages, claims,
suits, liabilities, actions, demands or losses caused
directly or indirectly by acts or omissions of Fund Services
or the Fund's Adviser.
SECTION 28. This Agreement may be amended from
time to time by a written supplemental agreement executed by
the Fund and Fund Services and without notice to or approval
of the Shareholders; provided this Agreement may not be
amended in any manner which would substantially increase the
Fund's obligations hereunder unless the amendment is first
approved by the Fund's Directors, including a majority of
22
<PAGE>
the Directors who are not a party to this Agreement or
interested persons of any such party, at a meeting called
for such purpose, and thereafter is approved by the Fund's
Shareholders if such approval is required under the
Investment Company Act or the rules and regulations
thereunder. The parties hereto may adopt procedures as may
be appropriate or practical under the circumstances, and
Fund Services may conclusively rely on the determination of
the Fund that any procedure that has been approved by the
Fund does not conflict with or violate any requirement of
its Articles of Incorporation or Declaration of Trust, By-
Laws or Prospectus, or any rule, regulation or requirement
of any regulatory body.
SECTION 29. The Fund shall file with Fund Services
a certified copy of each operative resolution of its
Directors authorizing the execution of Written Instructions
or the transmittal of Oral Instructions and setting forth
authentic signatures of all signatories authorized to sign
on behalf of the Fund and specifying the person or persons
authorized to give Oral Instructions on behalf of the Fund.
Such resolution shall constitute conclusive evidence of the
authority of the person or persons designated therein to act
and shall be considered in full force and effect, with Fund
Services fully protected in acting in reliance therein,
until Fund Services receives a certified copy of a
23
<PAGE>
replacement resolution adding or deleting a person or
persons authorized to give Written or Oral Instructions. If
the officer certifying the resolution is authorized to give
Oral Instructions, the certification shall also be signed by
a second officer of the Fund.
SECTION 30. The terms, as defined in this Section,
whenever used in this Agreement or in any amendment or
supplement hereto, shall have the meanings specified below,
insofar as the context will allow.
(a) Business Day: Any day on which the Fund is
open for business as described in the Prospectus.
(b) Custodian: The term Custodian shall mean the
Fund's current custodian or any successor custodian acting
as such for the Fund.
(c) Fund's Adviser: The term Fund's Adviser shall
mean Alliance Capital Management L.P. or any successor
thereto who acts as the investment adviser or manager of the
Fund.
(d) Oral Instructions: The term Oral Instructions
shall mean an authorization, instruction, approval, item or
set of data, or information of any kind transmitted to Fund
Services in person or by telephone, vocal telegram or other
electronic means, by a person or persons reasonably believed
in good faith by Fund Services to be a person or persons
authorized by a resolution of the Directors of the Fund to
24
<PAGE>
give Oral Instructions on behalf of the Fund. Each Oral
Instruction shall specify whether it is applicable to the
entire Fund or a specific Series of the Fund.
(e) Prospectus: The term Prospectus shall mean a
prospectus and related statement of additional information
forming part of a currently effective registration statement
under the Investment Company Act and, as used with the
respect to Shares or Shares of a Series, shall mean the
prospectuses and related statements of additional
information covering the Shares or Shares of the Series.
(f) Securities: The term Securities shall mean
bonds, debentures, notes, stocks, shares, evidences of
indebtedness, and other securities and investments from time
to time owned by the Fund.
(g) Series: The term Series shall mean any series
of Shares of the common stock of the Fund that the Fund may
establish from time to time.
(h) Share Certificates: The term Share
Certificates shall mean the stock certificates for the
Shares.
(i) Shareholders: The term Shareholders shall
mean the registered owners from time to time of the Shares,
as reflected on the stock registry records of the Fund.
(j) Written Instructions: The term Written
Instructions shall mean an authorization, instruction,
25
<PAGE>
approval, item or set of data, or information of any kind
transmitted to Fund Services in original writing containing
original signatures, or a copy of such document transmitted
by telecopy, including transmission of such signature, or
other mechanical or documentary means, at the request of a
person or persons reasonably believed in good faith by Fund
Services to be a person or persons authorized by a
resolution of the Directors of the Fund to give Written
Instruction shall specify whether it is applicable to the
entire Fund or a specific Series of the Fund.
SECTION 31. Fund Services shall not be liable for
the loss of all or part of any record maintained or
preserved by it pursuant to this Agreement or for any delays
or errors occurring by reason of circumstances beyond its
control, including but not limited to acts of civil or
military authorities, national emergencies, fire, flood or
catastrophe, acts of God, insurrection, war, riot, or
failure of transportation, communication or power supply,
except to the extent that Fund Services shall have failed to
use its best efforts to minimize the likelihood of
occurrence of such circumstances or to mitigate any loss or
damage to the Fund caused by such circumstances.
SECTION 32. The Fund may give Fund Services sixty
(60) days and Fund Services may give the Fund (90) days
written notice of the termination of this Agreement, such
26
<PAGE>
termination to take effect at the time specified in the
notice. Upon notice of termination, the Fund shall use its
best efforts to obtain a successor transfer agent. If a
successor transfer agent is not appointed within ninety (90)
days after the date of the notice of termination, the
Directors of the Fund shall, by resolution, designate the
Fund as its own transfer agent. Upon receipt of written
notice from the Fund of the appointment of the successor
transfer agent and upon receipt of Oral or Written
Instructions Fund Services shall, upon request of the Fund
and the successor transfer agent and upon payment of Fund
Services reasonable charges and disbursements, promptly
transfer to the successor transfer agent the original or
copies of all books and records maintained by Fund Services
hereunder and cooperate with, and provide reasonable
assistance to, the successor transfer agent in the
establishment of the books and records necessary to carry
out its responsibilities hereunder.
SECTION 33. Any notice or other communication
required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in
person or sent by first-class mail, postage prepaid, to the
respective parties.
Notice to the Fund shall be given as follows until
further notice:
27
<PAGE>
Alliance Global Environment Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
Attention: Secretary
Notice to Fund Services shall be given as follows
until further notice:
Alliance Fund Services, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094
SECTION 34. The Fund represents and warrants to
Fund Services that the execution and delivery of this
Agreement by the undersigned officer of the Fund has been
duly and validly authorized by resolution of the Fund's
Directors. Fund Services represents and warrants to the
Fund that the execution and delivery of this Agreement by
the undersigned officer of Fund Services has also been duly
and validly authorized.
SECTION 35. This Agreement may be executed in more
than one counterpart, each of which shall be deemed to be an
original, and shall become effective on the last date of
signature below unless otherwise agreed by the parties.
Unless sooner terminated pursuant to SECTION 32, this
Agreement will continue until December 31, 1997 and will
continue in effect thereafter for successive 12 month
periods only if such continuance is specifically approved at
least annually by the Directors or by a vote of the
stockholders of the Fund and in either case by a majority of
the Directors who are not parties to this Agreement or
28
<PAGE>
interested persons of any such party, at a meeting called
for the purpose of voting on this Agreement.
SECTION 36. This Agreement shall extend to and
shall bind the parties hereto and their respective
successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the
written consent of Fund Services or by Fund Services without
the written consent of the Fund, authorized or approved by a
resolution of the Fund's Directors. Notwithstanding the
foregoing, either party may assign this Agreement without
the consent of the other party so long as the assignee is an
affiliate, parent or subsidiary of the assigning party and
is qualified to act under the Investment Company Act, as
amended from time to time.
SECTION 38. This Agreement shall be governed by
the laws of the State of New Jersey.
WITNESS the following signatures:
ALLIANCE GLOBAL ENVIRONMENT
FUND, INC.
BY: __________________________
John D. Carifa
President
ALLIANCE FUND SERVICES, INC.
BY: ___________________________
George Hrabovsky
President
29
00250070.AT5
ARTICLES OF DISSOLUTION
FOR
THE TURKISH GROWTH FUND, INC.
The undersigned, for the purpose of dissolving THE
TURKISH GROWTH FUND, INC. (the "Corporation"), a corporation
formed under the laws of the State of Maryland on July 12,
1991 and existing under the laws of the State of Maryland,
does make and file these Articles of Dissolution in writing
pursuant to Section 3-406 of the Maryland General
Corporation Law and does hereby certify as follows:
FIRST: The name of the Corporation and address of
its principal office in Maryland is:
THE TURKISH GROWTH FUND, INC.
c/o The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
SECOND: The name and address of the resident agent
of the Corporation in the State of Maryland, who shall serve
for one year after dissolution and until the affairs of the
Corporation are wound up, is as follows:
The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
-1-
THIRD: The name and address of the sole Director
of the Corporation is:
Dave H. Williams
1345 Avenue of the Americas
New York, New York 10105
FOURTH: Dave H. Williams is President of the
Corporation, Edmund P. Bergan, Jr. is Secretary of the
Corporation and their address is Alliance Capital Management
Corporation, 1345 Avenue of the Americas, New York, New York
10105. Mark D. Gersten is Treasurer of the Corporation and
his address is Alliance Fund Services, Inc. 500 Plaza Drive,
Secaucus, New Jersey 07094.
FIFTH: There are no shares of stock either
outstanding or subscribed for entitled to vote on the
dissolution of the Corporation. The dissolution of the
Corporation has been approved by resolution adopted by the
sole Director of the Corporation. The dissolution of the
Corporation was approved in the manner and by the vote
required by law and the Charter of the Corporation.
SIXTH: The Corporation has no known creditors.
SEVENTH: Upon the filing and acceptance of these
Articles of Dissolution the Corporation is hereby dissolved.
IN WITNESS WHEREOF, the undersigned, being the sole
Director of the Corporation, has executed these Articles of
Dissolution on this day of May, 1996. The undersigned
acknowledges these Articles to be the corporate act of the
Corporation and states that to the best of his knowledge,
information and belief the matters and facts relating to the
authorization and approval hereof are true in all material
respects under penalties for perjury.
__________________________
Dave H. Williams
Sole Director
-2-
00250070.AK0
The Turkish Growth Fund, Inc.
Consent and Action in Lieu of Meeting
of
Board of Directors
The undersigned, being the sole director of The
Turkish Growth Fund, Inc., a Maryland corporation (the
"Corporation"), pursuant to Section 2-408(c) of the General
Corporation Law of the State of Maryland, does hereby
consent and agree, by signing this written consent, to the
adoption of the following resolutions and the filing of same
with the minutes of proceedings of the Board of Directors,
with the same effect as if such action had been taken by
unanimous vote at a meeting of the Board of Directors duly
called and held:
RESOLVED, that the sole director of the
Corporation hereby declares it advisable that
the Corporation be dissolved; and
RESOLVED, that the officers of the
Corporation be and each is authorized and
directed, in the name and on behalf of the
Corporation, to cause to be prepared and
executed and cause to be filed with the
Maryland State Department of Assessments and
Taxation Articles of Dissolution and to do all
other things which any of them may deem
necessary or desirable in connection
therewith.
Dated: May , 1996
__________________________
Dave H. Williams
00250018.AK0
<PAGE>
September 11, 1997
Seward & Kissel
One Battery Park Plaza
New York, NY 10004
Re: Alliance Global Environment Fund, Inc.
Ladies and Gentlemen:
We have acted as special Maryland counsel for
Alliance Global Environment Fund, Inc., a Maryland
corporation (the "Fund"), in connection with the conversion
of the Fund from a closed-end investment company to an open-
end investment company and the issuance of shares of its
Class A Common Stock, Class B Common Stock, Class C Common
Stock and Advisor Class Common Stock, par value $.001 per
share (each a "Class" and, collectively the "Shares").
As special Maryland counsel for the Fund, we are
familiar with its current Charter and Bylaws. We are also
familiar with the proposed Articles of Amendment and
Restatement of the Charter approved by its Board of
Directors and submitted to its shareholders (the "Articles
of Amendment and Restatement") and the related Amended and
Restated Bylaws approved by its Board of Directors. We have
examined the prospectuses included in its Registration
Statement on Form N-1A, File Nos. 333-30409, 811-5993 (the
"Registration Statement"), substantially in the form in
which it is to become effective (the "Prospectuses"). We
have further examined and relied upon a certificate of the
Maryland State Department of Assessments and Taxation
("SDAT") to the effect that the Fund is duly incorporated
and existing under the laws of the State of Maryland and is
in good standing and duly authorized to transact business in
the State of Maryland.
We have also examined and relied upon such
corporate records of the Fund and other documents and
certificates with respect to factual matters as we have
deemed necessary to render the opinion expressed herein. We
have assumed, without independent verification, the
genuineness of all signatures on documents submitted to us,
the authenticity of all documents submitted to us as
originals, and the conformity with originals of all
documents submitted to us as copies.
<PAGE>
Seward & Kissel
September 11, 1997
Page 2
Based on such examination, we are of the opinion
that:
1. The Fund is duly organized and validly
existing as a corporation in good standing
under the laws of the State of Maryland.
2. When the Articles of Amendment and Restatement
have been duly approved by the stockholders of
the Fund and accepted for record by SDAT and
become effective, the Shares of the Fund to be
offered for sale pursuant to the Prospectuses
will be, to the extent of the respective
number of Shares of each Class then authorized
to be issued by the Fund in its Charter, duly
authorized and, when thereafter sold, issued
and paid for as contemplated by the
Registration Statement, will have been validly
and legally issued and will be fully paid and
nonassessable under the laws of the State of
Maryland.
This letter expresses our opinion with respect to
the Maryland General Corporation Law. It does not extend to
the securities or "blue sky" laws of Maryland, to federal
securities laws or to other laws.
You may rely upon our foregoing opinion in
rendering your opinion to the Fund that is to be filed as an
exhibit to the Registration Statement. We consent to the
filing of this opinion as an exhibit to the Registration
Statement and to the reference to us in the Statement of
Additional Information supplementing the Prospectuses under
the caption "Counsel". We do not thereby admit that we are
"experts" within the meaning of the Securities Act of 1933
and the regulations thereunder.
Very truly yours,
/s/Venable, Baetjer and Howard, LLP
00250070.AU3
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Financial Highlights", "Shareholder Services - Statements and
Reports" and "General Information - Independent Auditors" and to
the use of our report dated December 12, 1996, included in this
Registration Statement (Form N-1A No. 333-30409) of Alliance
Global Environment Fund, Inc.
/s/ Ernst & Young LLP
New York, New York
September 11, 1997
00250070.AT7
<PAGE>
EXHIBIT 16
ALLIANCE GLOBAL ENVIRONMENT FUND, INC
COMPUTATION OF AVERAGE ANNUAL COMPOUNDED TOTAL RETURN
n
ERV = P(1+T)
Definitions:
P=Initial investment by shareholder
T=Average annual total return
ERV=Ending redeemable value of shareholder investment
n=Number of periods
Formula to solve for "T"
ERV
For year one T= --- -1
P
ERV
*For subsequent years T= square root of ( --- -1)
P
To solve for ERV:
1. Take an initial shareholder investment of $1,000 on 10/31/97
at a hypothetical maximum offering price of $10.00. The
result is 100 shares.
2. Assume that all dividends and distributions by the Fund are
reinvested on reinvest date for the creation of additional
shares. (2.766 shares created).
3. Add initial share balance to additional shares created due
to reinvestment and multiply by ending net asset value
(11/30/97) to obtain ending redeemable value (ERV).
(100+2.766=102.766 x $9.64=$991)
(ERV)
991
T= --- -1
1,000
T=.991 -1
<PAGE>
T=(.009)
T=(0.9%)
T=Average annual total return
* For subsequent years repeat steps 1 through 3 for the required
periods and apply to formula shown above.
00250070.AS0
<PAGE>
[ARTICLE]6
[MULTIPLIER]1
<TABLE>
<S> <C>
[PERIOD-TYPE] Year
[FISCAL-YEAR-END] 0ct-31-1996
[PERIOD-START] Nov-01-1995
[PERIOD-END] 0ct-31-1996
[INVESTMENTS-AT-COST] 90,587,533
[INVESTMENTS-AT-VALUE] 99,723,868
[RECEIVABLES] 2,576,921
[ASSETS-OTHER] 30,716
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 102,331,505
[PAYABLE-FOR-SECURITIES] 1,567,538
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 493,163
[TOTAL-LIABILITIES] 2,060,701
[SENIOR-EQUITY] 60,850
[PAID-IN-CAPITAL-COMMON] 84,935,027
[SHARES-COMMON-STOCK] 6,084,969
[SHARES-COMMON-PRIOR] 6,907,169
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 6,138,329
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 9,136,598
[NET-ASSETS] 100,270,804
[DIVIDEND-INCOME] 568,488
[INTEREST-INCOME] 159,711
[OTHER-INCOME] 0
[EXPENSES-NET] 1,561,938
[NET-INVESTMENT-INCOME] (833,739)
[REALIZED-GAINS-CURRENT] 19,882,087
[APPREC-INCREASE-CURRENT] 6,302,984
[NET-CHANGE-FROM-OPS] 25,351,332
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (138,142)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 14,854,037
[ACCUMULATED-NII-PRIOR] 116,215
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] (12,888,093)
[GROSS-ADVISORY-FEES] 1,073,769
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,561,938
<PAGE>
[AVERAGE-NET-ASSETS] 97,728,631
[PER-SHARE-NAV-BEGIN] 12.37
[PER-SHARE-NII] (.13)
[PER-SHARE-GAIN-APPREC] 4.26
[PER-SHARE-DIVIDEND] (.02)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 16.48
[EXPENSE-RATIO] 1.60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
00250070.AP8
<PAGE>
[ARTICLE]6
[MULTIPLIER]1
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-Mos
[FISCAL-YEAR-END] Oct-31-1997
[PERIOD-START] Nov-01-1996
[PERIOD-END] Apr-30-1997
[INVESTMENTS-AT-COST] 95,787,838
[INVESTMENTS-AT-VALUE] 97,358,313
[RECEIVABLES] 2,822,048
[ASSETS-OTHER] 16,740
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 100,197,101
[PAYABLE-FOR-SECURITIES] 5,221,024
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 271,137
[TOTAL-LIABILITIES] 5,492,161
[SENIOR-EQUITY] 59,673
[PAID-IN-CAPITAL-COMMON] 83,360,882
[SHARES-COMMON-STOCK] 5,967,269
[SHARES-COMMON-PRIOR] 6,084,969
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] (588,011)
[ACCUMULATED-NET-GAINS] 10,304,471
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,567,925
[NET-ASSETS] 94,704,940
[DIVIDEND-INCOME] 108,738
[INTEREST-INCOME] 49,468
[OTHER-INCOME] 0
[EXPENSES-NET] 746,217
[NET-INVESTMENT-INCOME] (588,011)
[REALIZED-GAINS-CURRENT] 10,952,943
[APPREC-INCREASE-CURRENT] (7,568,673)
[NET-CHANGE-FROM-OPS] 2,796,259
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 6,786,801
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 1,575,322
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] (5,565,864)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 6,138,329
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 544,602
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 746,217
<PAGE>
[AVERAGE-NET-ASSETS] 99,396,479
[PER-SHARE-NAV-BEGIN] 16.48
[PER-SHARE-NII] (.10)
[PER-SHARE-GAIN-APPREC] .62
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] (1.13)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 15.87
[EXPENSE-RATIO] 1.51
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
00250070.AR8
<PAGE>
ALLIANCE GLOBAL ENVIRONMENT FUND, INC.
Plan pursuant to Rule 18f-3
under the Investment Company Act of 1940
This Plan (the "Plan") pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the "Act") of Alliance Global
Environment Fund, Inc. (the "Fund"), which sets forth the general
characteristics of, and the general conditions under which the
Fund may offer, multiple classes of shares of its now existing and
hereafter created portfolios.* This Plan may be revised or
amended from time to time as provided below.
Class Designations
The Fund** may from time to time issue one or more of the
following classes of shares: Class A shares, Class B shares,
Class C shares and Advisor Class shares. Each of the four classes
of shares will represent interests in the same portfolio of
investments of the Fund and, except as described herein, shall
have the same rights and obligations as each other class. Each
class shall be subject to such investment minimums and other
conditions of eligibility as are set forth in the prospectus or
statement of additional information through which such shares are
issued, as from time to time in effect (the "Prospectus").
Class Characteristics
Class A shares are offered at a public offering price
that is equal to their net asset value ("NAV") plus an initial
sales charge, as set forth in the Prospectus. Class A shares may
also be subject to a Rule 12b-1 fee, which may include a service
fee and, under certain circumstances, a contingent deferred sales
charge ("CDSC"), as described in the Prospectus.
Class B shares are offered at their NAV, without an
initial sales charge, and may be subject to a CDSC and a Rule
12b-1 fee, which may include a service fee, as described in the
Prospectus.
_________________________
*. This Plan is intended to allow the Fund to offer multiple
classes of shares to the full extent and in the manner
permitted by Rule 18f-3 under the Act (the "Rule"), subject to
the requirements and conditions imposed by the Rule.
**. For purposes of this Plan, if the Fund has existing more than
one portfolio pursuant to which multiple classes of shares are
issued, then references in this Plan to the "Fund" shall be
deemed to refer instead to each portfolio.
<PAGE>
Class C shares are offered at their NAV, without an
initial sales charge, and may be subject to a CDSC and a Rule
12b-1 fee, which may include a service fee, as described in the
Prospectus.
Advisor Class shares are offered at their NAV, without
any initial sales charge, CDSC or Rule 12b-1 fee.
The initial sales charge on Class A shares and CDSC on
Class A, B and C shares are each subject to reduction or waiver as
permitted by the Act, and as described in the Prospectus.
Allocations to Each Class
Expense Allocations
The following expenses shall be allocated, to the extent
practicable, on a class-by-class basis: (i) Rule 12b-1 fees
payable by the Fund to the distributor or principal underwriter of
the Fund's shares (the "Distributor"), and (ii) transfer agency
costs attributable to each class. Subject to the approval of the
Fund's Board of Directors, including a majority of the independent
Directors, the following "Class Expenses" may be allocated on a
class-by-class basis: (a) printing and postage expenses related to
preparing and distributing materials such as shareholder reports,
prospectuses and proxy statements to current shareholders of a
specific class,*** (b) SEC registration fees incurred with
respect to a specific class, (c) blue sky and foreign registration
fees and expenses incurred with respect to a specific class,3
(d) the expenses of administrative personnel and services required
to support shareholders of a specific class (including, but not
limited to, maintaining telephone lines and personnel to answer
shareholder inquiries about their accounts or about the Fund),
(e) litigation and other legal expenses relating to a specific
class of shares, (f) Directors' fees or expenses incurred as a
result of issues relating to a specific class of shares,
(g) accounting and consulting expenses relating to a specific
class of shares, (h) any fees imposed pursuant to a non-Rule 12b-1
shareholder services plan that relate to a specific class of
shares, and (i) any additional expenses, not including advisory or
custodial fees or other expenses related to the management of the
Fund's assets, if these expenses are actually incurred in a
different amount with respect to a class, or if services are
provided with respect to a class that are of a different kind or
_________________________
***.For Advisor Class shares, the expenses of preparation,
printing and distribution of prospectuses and shareholder
reports, as well as other distribution-related expenses, will
be borne by the investment adviser of the Fund (the "Adviser")
or the Distributor from their own resources.
2
<PAGE>
to a different degree than with respect to one or more other
classes.
All expenses not now or hereafter designated as Class
Expenses ("Fund Expenses") will be allocated to each class on the
basis of the net asset value of that class in relation to the net
asset value of the Fund.
Waivers and Reimbursements
The Adviser or Distributor may choose to waive or
reimburse Rule 12b-1 fees, transfer agency fees or any Class
Expenses on a voluntary, temporary basis. Such waiver or
reimbursement may be applicable to some or all of the classes and
may be in different amounts for one or more classes.
Income, Gains and Losses
Income, and realized and unrealized capital gains and
losses shall be allocated to each class on the basis of the net
asset value of that class in relation to the net asset value of
the Fund.
Conversion and Exchange Features
Conversion Features
Class B shares of the Fund automatically convert to
Class A shares of the Fund after a certain number of months or
years after the end of the calendar month in which the
shareholder's purchase order was accepted as described in the
Prospectus. Class B shares purchased through reinvestment of
dividends and distributions will be treated as Class B shares for
all purposes except that such Class B shares will be considered
held in a separate sub-account. Each time any Class B shares in
the shareholder's account convert to Class A shares, an equal pro-
rata portion of the Class B shares in the sub-account will also
convert to Class A shares.
Advisor Class shares of the Fund automatically convert to
Class A shares of the Fund during the calendar month following the
month in which the Fund is informed that the beneficial owner of
the Advisor Class shares has ceased to participate in a fee-based
program or employee benefit plan that satisfies the requirements
to purchase Advisor Class shares as described in the Prospectus or
is otherwise no longer eligible to purchase Advisor Class shares
as provided in the Prospectus.
The conversion of Class B and Advisor Class shares to
Class A shares may be suspended if the opinion of counsel obtained
by the Fund that the conversion does not constitute a taxable
3
<PAGE>
event under current federal income tax law is no longer available.
Class B and Advisor Class shares will convert into Class A shares
on the basis of the relative net asset value of the two classes,
without the imposition of any sales load, fee or other charge.
In the event of any material increase in payments
authorized under the Rule 12b-1 Plan (or, if presented to
shareholders, any material increase in payments authorized by a
non-Rule 12b-1 shareholder services plan) applicable to Class A
shares, existing Class B and Advisor Class shares will stop
converting into Class A shares unless the Class B and Advisor
Class shareholders, voting separately as a class, approve the
increase in such payments. Pending approval of such increase, or
if such increase is not approved, the Directors shall take such
action as is necessary to ensure that existing Class B and Advisor
Class shares are exchanged or converted into a new class of shares
("New Class A") identical in all material respects to Class A
shares as existed prior to the implementation of the increase in
payments, no later than such shares were previously scheduled to
convert to Class A shares. If deemed advisable by the Directors
to implement the foregoing, such action may include the exchange
of all existing Class B and Advisor Class shares for new classes
of shares ("New Class B" and "New Advisor Class," respectively)
identical to existing Class B and Advisor Class shares, except
that New Class B and New Advisor Class shares shall convert to New
Class A shares. Exchanges or conversions described in this
paragraph shall be effected in a manner that the Directors
reasonably believe will not be subject to federal income taxation.
Any additional cost associated with the creation, exchange or
conversion of New Class A, New Class B and New Advisor Class
shares shall be borne by the Adviser and the Distributor. Class B
and Advisor Class shares sold after the implementation of the fee
increase may convert into Class A shares subject to the higher
maximum payment, provided that the material features of the
Class A plan and the relationship of such plan to the Class B and
Advisor Class shares are disclosed in an effective registration
statement.
Exchange Features
Shares of each class generally will be permitted to be
exchanged only for shares of a class with similar characteristics
in another Alliance Mutual Fund and shares of certain Alliance
money market funds, except that certain holders of Class A shares
of the Fund eligible to purchase and hold Advisor Class shares of
the Fund may also exchange their Class A shares for Advisor Class
shares. If the aggregate net asset value of shares of all
Alliance Mutual Funds held by an investor in the Fund reaches the
minimum amount at which an investor may purchase Class A shares at
net asset value without a front-end sales load on or before
December 15 in any year, then all Class B and Class C shares of
4
<PAGE>
the Fund held by that investor may thereafter be exchanged, at the
investor's request, at net asset value and without any front-end
sales load or CDSC for Class A shares of the Fund. All exchange
features applicable to each class will be described in the
Prospectus.
Dividends
Dividends paid by the Fund with respect to its Class A,
Class B, Class C and Advisor Class shares, to the extent any
dividends are paid, will be calculated in the same manner, at the
same time and will be in the same amount, except that any Rule
12b-1 fee payments relating to a class of shares will be borne
exclusively by that class and any incremental transfer agency
costs or, if applicable, Class Expenses relating to a class shall
be borne exclusively by that class.
Voting Rights
Each share of a Fund entitles the shareholder of record
to one vote. Each class of shares of the Fund will vote
separately as a class with respect to the Rule 12b-1 plan
applicable to that class and on other matters for which class
voting is required under applicable law. Class A, Class B and
Advisor Class shareholders will vote as three separate classes to
approve any material increase in payments authorized under the
Rule 12b-1 plan applicable to Class A shares.
Responsibilities of the Directors
On an ongoing basis, the Directors will monitor the Fund
for the existence of any material conflicts among the interests of
the four classes of shares. The Directors shall further monitor
on an ongoing basis the use of waivers or reimbursement by the
Adviser and the Distributor of expenses to guard against cross-
subsidization between classes. The Directors, including a
majority of the independent Directors, shall take such action as
is reasonably necessary to eliminate any such conflict that may
develop. If a conflict arises, the Adviser and Distributor, at
their own cost, will remedy such conflict up to and including
establishing one or more new registered management investment
companies.
Reports to the Directors
The Adviser and Distributor will be responsible for
reporting any potential or existing conflicts among the four
classes of shares to the Directors. In addition, the Directors
will receive quarterly and annual statements concerning
distributions and shareholder servicing expenditures complying
with paragraph (b)(3)(ii) of Rule 12b-1. In the statements, only
5
<PAGE>
expenditures properly attributable to the sale or servicing of a
particular class of shares shall be used to justify any
distribution or service fee charged to that class. The
statements, including the allocations upon which they are based,
will be subject to the review of the independent Directors in the
exercise of their fiduciary duties. At least annually, the
Directors shall receive a report from an expert, acceptable to the
Directors, (the "Expert"), with respect to the methodology and
procedures for calculating the net asset value, dividends and
distributions for the classes, and the proper allocation of income
and expenses among the classes. The report of the Expert shall
also address whether the Fund has adequate facilities in place to
ensure the implementation of the methodology and procedures for
calculating the net asset value, dividends and distributions for
the classes, and the proper allocation of income and expenses
among the classes. The Fund and the Adviser will take immediate
corrective measures in the event of any irregularities reported by
the Expert.
Amendments
The Plan may be amended from time to time in accordance
with the provisions and requirements of Rule 18f-3 under the Act.
Adopted by action of the Board of Directors on this th day of
___________________________, 1997 effective upon the conversion of
the Fund to an open-end investment company under the Act.
By: ______________________
Edmund P. Bergan, Jr.
Secretary
6
00250070.AR6
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ John D. Carifa
________________________
John D. Carifa
Dated: June 30, 1997
00250070.AU1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ David H. Dievler
________________________
David H. Dievler
Dated: June 30, 1997
00250070.AU1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ John H. Dobkin
_______________________
John H. Dobkin
Dated: June 30, 1997
00250070.AU1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ W. H. Henderson
________________________
W. H. Henderson
Dated: June 30, 1997
00250070.AU1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ Stig Host
_____________________
Stig Host
Dated: June 30, 1997
00250070.AU1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ Richard M. Lilly
__________________________
Richard M. Lilly
Dated: June 30, 1997
00250070.AU1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person
whose signature appears below hereby revokes all prior powers
granted by the undersigned to the extent inconsistent herewith
and constitutes and appoints John D. Carifa, Edmund P. Bergan,
Jr., Andrew L. Gangolf, Emilie D. Wrapp and Domenick Pugliese,
and each of them, to act severally as attorneys-in-fact and
agents, with power of substitution and resubstitution, for the
undersigned in any and all capacities, solely for the purpose of
signing the Registration Statement, and any amendments thereto,
on Form N-1A of Alliance Global Environment Fund, Inc. and filing
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
/S/ Alan Stoga
_____________________
Alan Stoga
Dated: June 30, 1997
00250070.AU1
